McKenzie v Repatriation Commission

Case [2014] FCA 777

FEDERAL COURT OF AUSTRALIA

McKenzie v Repatriation Commission [2014] FCA 777

Citation: McKenzie v Repatriation Commission [2014] FCA 777
Appeal from: McKenzie v Repatriation Commission [2013] AATA 216
Parties: DAWN WILKIE MCKENZIE v REPATRIATION COMMISSION
File number: VID 348 of 2013
Judge: MURPHY J
Date of judgment: 25 July 2014
Catchwords: ADMINISTRATIVE LAW – appeal from the Administrative Appeals Tribunal – veteran’s entitlements – widow’s pension claim – whether tribunal erred in finding there is no material to show a reasonable hypothesis – whether the asserted hypothesis is consistent with the template in Statement of Principles – nature of Tribunal’s function at that stage of the inquiry – whether Tribunal misapplied s 120(3) of Veterans’ Entitlements Act1986 (Cth) – appeal allowed
Legislation: Administrative Appeals Tribunal Act 1975 (Cth)
Repatriation Legislation Amendment Act 1985 (Cth)
Veterans’ Entitlements Act 1986 (Cth)
Cases cited:

Bawden v Repatriation Commission (2013) 134 ALD 68
Borrett v Repatriation Commission [2000] FCA 1829
Bull v Repatriation Commission (2001) 66 ALD 271
Bushell v Repatriation Commission (1992) 175 CLR 408
Byrnes v Repatriation Commission (1993) 177 CLR 564
Collins v Administrative Appeals Tribunal (2007) 163 FCR 35
Comcare v Etheridge (2006) 149 FCR 522
Deledio v Repatriation Commission (1997) 47 ALD 261
Dixon v Repatriation Commission [1999] FCA 582
East v Repatriation Commission (1987) 16 FCR 517
Elliott v Repatriation Commission (2002) 73 ALD 377
Forrester v Repatriation Commission [2013] FCA 898
Gleeson v Repatriation Commission (1994) 34 ALD 505
Harradine v Secretary, Department of Social Security (1989) 25 FCR 35
McKenna v Repatriation Commission (1999) 86 FCR 144
McKenzie v Repatriation Commission [2013] AATA 216
Repatriation Commission v Deledio (1998) 83 FCR 82
Repatriation Commission v O’Brien (1985) 155 CLR 422
Repatriation Commission v Patterson (2006) 94 ALD 66
Riley v Repatriation Commission [2008] FCA 531
Secretary, Department of Community Services and Health v Theologidis (1991) 33 FCR 186
Tunks v Repatriation Commission (2008) 102 ALD 274
Vetter v Lake Macquarie City Council (2001) 202 CLR 439
Woodward v Repatriation Commission (2003) 131 FCR 473
Date of hearing: 2 April 2014
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 83
Counsel for the Applicant: Ms F Ryan
Solicitor for the Applicant: Williams Winter
Counsel for the Respondent: Ms E James
Solicitor for the Respondent: Australian Government Solicitor


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 348 of 2013

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:

DAWN WILKIE MCKENZIE
Applicant
AND:

REPATRIATION COMMISSION
Respondent

JUDGE:

MURPHY J

DATE:

25 JULY 2014

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

A.       INTRODUCTION

  1. The applicant, Dawn McKenzie, is the widow of the late Howard McKenzie who was a member of the Royal Australian Air Force (“RAAF”) from 1942 to 1946 during World War II, and served in the Philippines in 1945.  On 27 July 2009 Mrs McKenzie applied to the respondent, the Repatriation Commission (“Commission”), for a widow’s pension under the Veterans’ Entitlements Act 1986 (Cth) (“the Act”). The essence of her claim is that,…

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AGLC
McKenzie v Repatriation Commission [2014] FCA 777
Case
[2014] FCA 777
Decision Date

CaseChat Overview and Summary

The case of McKenzie v Repatriation Commission involved a widow's pension claim made by Mrs McKenzie on behalf of her deceased husband, Mr McKenzie. The primary issue before the court was whether the Administrative Appeals Tribunal (AAT) erred in its determination that there was no material to support a reasonable hypothesis that Mr McKenzie's smoking habit, which began during his operational service, was connected to his subsequent death from cardiomyopathy. The court also had to consider whether the Tribunal misapplied section 120(3) of the Veterans’ Entitlements Act 1986 (Cth). The court found that the Tribunal had indeed misapplied the statutory framework by engaging in impermissible fact-finding at a stage where it should only have been assessing the material to form an opinion on the reasonableness of the hypothesis. This misapplication contravened the principles established in Deledio v Repatriation Commission, which delineate the roles and limitations of the Tribunal at various stages of the inquiry process.

The court's reasoning hinged on the established principles that at steps 1-3 of the Deledio process, the Tribunal is not to engage in fact-finding or resolve evidentiary conflicts. Instead, it is required to form an opinion based on the material presented, considering whether it raises a reasonable hypothesis and whether this hypothesis is consistent with any relevant Statements of Principles (SoP). The court found that the Tribunal had selectively dealt with the evidence, effectively rejecting certain evidence without proper justification, which is impermissible at this stage. The Tribunal’s conclusion that there was "no material" pointing to Mr McKenzie’s smoking habits was seen as an improper fact-finding rather than an assessment of the material. This misstep led to an incorrect application of the statutory provisions, resulting in the appeal being allowed.

The court's final orders were to set aside the Tribunal's decision and remit the matter back to the Tribunal for reconsideration in light of the court's findings. The Tribunal was instructed to reassess the evidence without engaging in impermissible fact-finding and to properly apply the Deledio process, ensuring that all material is considered at the appropriate stage.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

His Honour said (at 275):…it is necessary to repeat that the SoP has no function in relation to the proof or disproof (under s 120(1)) of the particular facts of a veteran’s case. The SoPs function is limited to prescribing a medical-scientific standard with which a hypothesis must be consistent - so that the SoP can “uphold” the hypothesis. In the words of the minister (Hansard, 9 June 1994, at 1808) the SoPs were intended to “provide the template within which the individual claims will be determined”. Put another way, the SoP is a subset of proved (Bushell at 414) or known (Byrnes at 571) scientific fact. Where an SoP is applicable, it is a statute-backed declaration of what is proved or known scientific fact…The particular claim then has to fit the template laid down in the SoP. The Byrnes methodology is applied. Do the facts raised by the claimant give rise to a reasonable hypothesis? Proof of facts is not in issue at this point. The hypothesis will not be reasonable if it is:(i)contrary to proved or known scientific facts;(ii)obviously fanciful, impossible, incredible, absurd, ridiculous, not tenable, too remote or too tenuous; or(iii)(since 1994) inconsistent with (not upheld by) an applicable SoP. (Emphasis added.) His Honour’s approach was upheld on appeal in Deledio. As I have said, since then the four step Deledio process has been followed in numerous single judge and appellate decisions. The authorities show that proof of facts is not required at steps 1-3 of the Deledio process, and that fact finding at these stages is impermissible. For example in Dixon v Repatriation Commission [1999] FCA 582 at [25] Wilcox J held:The question whether a decision maker reaches a conclusion adverse to a claimant at the step 3 stage or the step 4 stage is not a mere technicality. If belief is addressed at the step 3 stage, there is a risk that the decision maker will rule against a claimant simply because he or she is not persuaded the claimant’s story is probably true… This would defeat the protection for veterans embodied in s 120(1), whereby a claim which fits within the factors in the relevant Statement of Principles must be accepted unless the decision maker is satisfied, beyond reasonable doubt, that it is without justification. (Emphasis in original.)See also Elliott at [5] per Stone J; Riley at [11] per Edmonds J. In Collins at [8] Lindgren J confirmed that the resolution of evidentiary conflict was impermissible in the first three stages of the Deledio process. His Honour said:At the first three stages, the Tribunal is required to deliberate at a level of abstraction and it is only at the fourth stage that it is required to descend to the resolution of evidentiary conflict, and it is then required to do so according to the “beyond reasonable doubt” standard. At [48]-[49] Allsop J, with the approval of Lindgren and Emmett JJ, explained the decision-maker’s task under ss 120(3) and 120A in the following terms:Without seeking to qualify the authorities to which I have referred, I take the following to be settled and uncontroversial principles concerning the undertaking of the task in s 120(3) as affected by the existence of a SoP under s 196B and by s 120A(3):(a)The Tribunal must consider the whole of the material before it: s 120(3).(b)The Tribunal is to form an opinion whether the material raises a reasonable hypothesis connecting the injury, disease or death with the circumstances of service: s 120(3).(c)The formation of that opinion involves consideration as to whether a relevant SoP upholds the hypothesis: s 120A(3).(d)At the stage of formation of the opinion in (b), involving the consideration in (c), no question of fact finding arises: Deledio 83 FCR at 97.(e)The formation of the opinion involves the reaching of a factual conclusion: Bull 4 AAR 326; 188 ALR 756 at [17]-[25] and involves the assessment of all the material before the Tribunal, but not the finding of facts or rejecting material: Bull 4 AAR 326; 188 ALR 756 at [22]. As has been shown in a number of cases concerning ss 120(3) and 120A, the dividing line between impermissible fact finding and required assessment of all the material in the formation of an opinion as to whether a hypothesis is reasonable in connecting the injury, disease or death with the circumstances of service and as to whether a relevant SoP upholds the hypothesis is not necessarily easy to discern. The kinds of fine questions that can arise were discussed in Elliott v Repatriation Commission (2002) 73 ALD 377; Cameron v Repatriation Commission (2003) 77 ALD 81; Repatriation Commission v Bey (1997) 79 FCR 364; and Gleeson v Repatriation Commission 34 ALD 505… (Emphasis added.)

Evidence

Evidence Before The Court

Some, but not all, of the clinical notes of Mr McKenzie’s treating medical practitioners contain references to Mr McKenzie’s smoking history, which are as follows:(a)South West Health Care clinical notes:(i)29 October 1980 - “Non-smoker”;(ii)3 November 1999 – “Non-smoker for 50 years”;(iii)21 May 2004 – “Former, 60 years ago”;(iv)2 January 2005 - “Former”;(v)16 February 2009 - “Ever? Yes. Stopped? 60 years ago”;(vi)26 April 2009 – “Never”;(vii)27 April 2009 - “Ever? Yes. Stopped? 1950”; and(viii)6 July 2009 - “Former 60 years ago”.(b)Epworth Health Care - 31 March 2003 - “Past 50 years ago”; and(c)Dr Menzies’ - 18 June 2003 - “Smoked 60 years ago”.The Tribunal’s treatment of the evidence As I have set out above, Mrs McKenzie gave uncertain and inconsistent evidence about her knowledge of the number of cigarettes that Mr McKenzie smoked per day. However, Mrs McKenzie’s evidence includes that she had been expressly told by Mr McKenzie that he commenced smoking while on operational service in the Philippines and that he smoked 10-15 cigarettes per day from then until he stopped smoking in about 1952. The Tribunal was required to consider her evidence together with:(a)the evidence of Janene McKenzie that Mr McKenzie told her that on his return from service he smoked at work to the extent that it became inconvenient to do so, that he was a “keen smoker” and that he smoked “a lot”; and(b)Mr McKenzie’s letters which, amongst other things, indicate that he was issued with a packet of 20 American cigarettes a day, that he had also bought a pipe which he smoked, and that some of his fellow servicemen had moved out of his tent because of the smell of the pipe. This also indicates that he smoked a lot. The Tribunal was obliged to consider all of the evidence before it, not just some of it. It was not permitted at step 3 of the Deledio process to reject some of the evidence or to engage in fact finding: see generally Gleeson v Repatriation Commission (1994) 34 ALD 505 at 509; Bull v Repatriation Commission (2001) 66 ALD 271 (“Bull”) at [21] per Emmett and Allsop JJ. Yet the Tribunal’s conclusion (at [59]) that there is “no material” pointing to Mr McKenzie having smoked the required minimum quantity of cigarettes and/or other tobacco products must be seen as a rejection of Mrs McKenzie’s evidence that he expressly told her that he smoked 10-15 cigarettes per day. The Tribunal’s conclusion (at [60]) that Mrs McKenzie did not know how many cigarettes Mr McKenzie smoked and that her evidence as to his cigarette consumption was “speculation” must also be seen as a rejection of that evidence. These conclusions indicate that the Tribunal evaluated and selectively dealt with the material before it, and that it was finding facts rather than simply identifying the raised facts: Bull at [3] per Moore J. I note too that in finding that there was “no material” the Tribunal used the language of fact finding to describe the material before it. The Tribunal’s characterisation of Mrs McKenzie’s evidence as “speculation” was a qualitative assessment of her evidence redolent of the language of fact finding: see Repatriation Commission v Patterson (2006) 94 ALD 66 at [24] per Kiefel, Sundberg and Edmonds JJ.

Decision

Reasons for decision

It is well-established that the Act is intended to operate beneficially for veterans and their dependants. As Heerey J said in Deledio v Repatriation Commission (1997) 47 ALD 261 (“Deledio v Repatriation Commission”) at 263:Australian repatriation legislation has long contained provisions for the resolution of disputed claims unusually favourably to claimants, as compared with claims for other government benefits. These procedural advantages are only understandable as a national acceptance that volunteering to put life and health at risk for the nation demands special recognition when that risk eventuates. Amongst other things, legislation introduced in the 1970s required a reverse criminal burden of proof; the claim had to be disproved by the relevant authority and, not only that, disproved beyond reasonable doubt… [A]n Australian volunteer being wrongly denied a benefit is seen as so unjust that, to avoid it, society will accept a system which results sometimes in payment of unjustified claims… [T]he element of national gratitude helps to explain a consistent theme in Australian repatriation legislation, a linkage between the risks undergone in service and the ease of proof of claims… (Emphasis added.)See also Bawden v Repatriation Commission (2013) 134 ALD 68 at [21] per Gray J; Forrester v Repatriation Commission [2013] FCA 898 (“Forrester”) at [19] per Mortimer J. This legislative purpose must be kept in mind in construing the Act.C. THE TRIBUNAL DECISION It is plain from the decision that in determining Mrs McKenzie’s claim the Tribunal purported to follow the Deledio process.The uncontentious determinations At [36]-[52] the Tribunal determined four issues in favour of Mrs McKenzie’s claim. These findings are not the subject of appeal and I set them out under the headings used in the Tribunal decision so as to put the appeal in its context.Issue 1: Did Mr McKenzie render operational service and if so, when? The Tribunal found at [36] that Mr McKenzie rendered operational service in the period 10 July 1942 until 25 January 1946. However the Commission notes (and Mrs McKenzie did not dispute) that this is an error and that the correct period of his operational service in the Philippines was 1 August 1945 to 27 October 1945.Issue 2: What was the kind of death met by Mr McKenzie? On the basis of the death certificate and autopsy report together with the evidence of several treating and consultant medical practitioners the Tribunal found at [37]-[38] that Mr McKenzie died of cardiomyopathy which was contributed to by his treatment for oesophageal cancer.Issue 3: Considering all the material before the Tribunal, does it point to a hypothesis connecting the death with the circumstances of the operational service? The Tribunal considered this issue as step 1 of the Deledio process. Before the Tribunal Mrs McKenzie contended that the evidence pointed to the hypothesis that:(a)Mr McKenzie commenced smoking during his period of operational service as a result of peer group pressure, stress, boredom, and as a result of cigarettes and other tobacco products being supplied to him as part of his rations during his service and otherwise been readily available;(b)he smoked tobacco from approximately 1942 until 1952;(c)his smoking habit caused him to suffer cancer of the oesophagus; and(d)he died from cardiomyopathy to which his treatment for oesophageal cancer contributed.

Ratio Decidendi

Legal Principle Established

On the basis of the death certificate and autopsy report together with the evidence of several treating and consultant medical practitioners the Tribunal found at [37]-[38] that Mr McKenzie died of cardiomyopathy which was contributed to by his treatment for oesophageal cancer.Issue 3: Considering all the material before the Tribunal, does it point to a hypothesis connecting the death with the circumstances of the operational service? The Tribunal considered this issue as step 1 of the Deledio process. Before the Tribunal Mrs McKenzie contended that the evidence pointed to the hypothesis that:(a)Mr McKenzie commenced smoking during his period of operational service as a result of peer group pressure, stress, boredom, and as a result of cigarettes and other tobacco products being supplied to him as part of his rations during his service and otherwise been readily available;(b)he smoked tobacco from approximately 1942 until 1952;(c)his smoking habit caused him to suffer cancer of the oesophagus; and(d)he died from cardiomyopathy to which his treatment for oesophageal cancer contributed. At [42]-[43] the Tribunal decided that the material before it pointed to a hypothesis connecting Mr McKenzie’s death to his operational service. The Tribunal found that the material indicated that Mr McKenzie smoked for a period of about 10 years which commenced after his enlistment and ended before he met Mrs McKenzie. In addition the Tribunal found that there was material pointing to cigarettes being supplied to Mr McKenzie as part of his service rations and that he developed a particular interest in smoking to which he referred on several occasions in the letters to his family.Issue 4: Is there a relevant Statement of Principles in force? The Tribunal considered this issue as step 2 of the Deledio process. Having decided that the material before it pointed to a hypothesis connecting Mr McKenzie’s death to his operational service, step 2 of the process required the Tribunal to ascertain whether there was an applicable SoP in force. The Tribunal held at [45] of its decision that there were two relevant Statements of Principles in force, being SoP No. 23 of 2007 concerning Cardiomyopathy and SoP No. 41 of 2007 concerning Malignant Neoplasm of the Oesophagus. It is common ground that two Statements of Principles may operate sequentially to uphold a hypothesis: McKenna v Repatriation Commission (1999) 86 FCR 144 at 151-152 per Branson, Sundberg and Kenny JJ. SoP No. 23 concerning Cardiomyopathy relevantly provides:4.The Repatriation Medical Authority is of the view that there is sound medical-scientific evidence that indicates that cardiomyopathy and death from cardiomyopathy can be related to relevant service rendered by veterans……6.The factor that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting cardiomyopathy or death from cardiomyopathy with the circumstances of a person’s relevant service is:…(zs)undergoing a course of therapeutic radiation involving the mediastinum before the clinical worsening of cardiomyopathy;