McLucas and Repatriation Commission
[2003] AATA 922
•19 September 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 922
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2001/860
VETERANS' APPEALS DIVISION ) Re TOM McLUCAS Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Senior Member K L Beddoe Date19 September 2003
PlaceBrisbane
Decision The Tribunal affirms the decision under review.
. (Sgd) K L Beddoe
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – benefits and entitlements – assessment – application for increase in pension – whether applicant ceased remunerative work after he had turned 65 – meaning of “remunerative work” - section 24(2A)(f) of the Veterans’ Entitlements Act 1986
Veterans’ Entitlements Act 1986 ss 5, 24, 25, 120
Federal Commissioner of Taxation v McClelland (1969) 118 CLR 353
REASONS FOR DECISION
19 September 2003 Senior Member K L Beddoe 1. The applicant seeks review of a decision of the respondent continuing disability pension at 90% of the General Rate. That decision was subsequently varied by a section 31 review so as to increase the rate to 100% effective from 27 January 2000. That decision, as varied, was affirmed by a Veterans’ Review Board.
2. At the hearing Mr Clark appeared for the applicant and Mr Stoner represented the respondent. The documents lodged in the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were before the Tribunal as the T documents.
3. Document T4/1-9 is a copy of the applicant’s claim for pension increase dated 24 January 2000.
4. At the time of application the applicant was 74 years of age having been born on 30 August 1925.
5. The applicant joined the Army at age 18 in 1943, saw overseas service at Tarakan and Moratai and was discharged from the Army on 29 October 1946.
6. Soon after (1947) the applicant found he could not settle back into his pre-war employment as a bank officer. At that time he consulted his General Practitioner about being overly anxious.
7. In the result the applicant and his wife moved to Bundaberg and the applicant went to work in a poultry farm business conducted by his wife’s family at Bundaberg. The applicant made the move into the poultry business on the advice of his father-in-law who was a World War I veteran, and, it seems, thought he understood the applicant’s problem.
8. The applicant and his wife eventually took over running of the family business. In connection with the business the applicant purchased 121 hectares (300 acres) of land at Tantitha for the dual purposes of expanding the poultry business and with a view to the future subdivision and resale of the land. In Exhibit A the applicant describes the latter purpose as “sub-divide for profit”.
9. The original poultry business was, and continued to be, conducted at a property on Bourbong Street, Bundaberg and expansion of the business was not possible at that address. That property was zoned residential and of limited area. The expansion of the business at Tantitha occupied 4 hectares (10 acres).
10. Clearly the applicant made a large investment in the poultry business and I accept his evidence that it was his intention to carry on the business indefinitely and in particular beyond his 65th birthday.
11. However, by June 1989, when he was 63 years of age, his health had deteriorated to the point where he felt he could no longer carry on the business. The business was sold for $132,000. In essence he sold the egg quota but retained the real property. Since selling the business he has been demolishing the business sheds etc and selling the resulting materials.
12. The applicant has also been selling parcels of land for the purpose of providing capital for him to live off.
13. When he sold the business in 1989 the applicant’s intention was to subdivide the land at Tantitha into 242 small acreage blocks. A plan of subdivision was prepared that met with objections from neighbours because of a dispute over water rights. While the land was in Gumburra Shire it seems the water supply came from the City of Bundaberg.
14. In 1990 the applicant made an informal approach to Council about the plan of subdivision but was told it had no prospect of approval by the Council. In the result, proposals to subdivide all the land were not proceeded with by the applicant.
15. A minor sub-division did take place for the benefit of family members and one subdivided block was sold for the applicant’s benefit in 1999 resulting in a profit of $39,000.
16. In Exhibit A the applicant says “our plan always was to sell off the 300 acres which would came (sic) to 242 individual plots of land. This would take quite a bit of time but the income would see me through my retirement”.
17. Later in his statement the applicant said “at the first indication of resistance in the process of sub-dividing the land, I found that I was unable to cope with the pressure and had to stop the process”. The applicant attributes his inability to cope to his accepted disability (PTSD).
18. The applicant said that he had previously sub-divided land at Millbank and had done so successfully. This sub-division had been undertaken before his 65th birthday but I am unable to find a more precise time.
The Medical Evidence
19. Document T4/50 is a copy of a report by Dr Somerville, psychiatrist, dated 10 March 1968 and apparently obtained for the respondent. Dr Sommerville diagnosed “Chronic anxiety state”. The report is ambivalent as to whether the condition was war caused.
20. Document T5/58-9 is a copy of a report by Dr Jenkins, psychiatrist, dated 20 February 2000 and addressed to the applicant’s then advocate. While helpful in determining assessment of the applicant’s disability pension I have found it irrelevant for present purposes. I accept as relevant Dr Jenkins’ report dated 10 July 2001 (T5/61) where he reports that the applicant “is now no longer able to work even eight hours per week, as a result of his PTSD”.
21. A more detailed report was provided to the Department of Veterans’ Affairs by Dr Hurley, also a psychiatrist. The report is dated 4 August 2000 (T4/36A-D). Dr Hurley had been treating the applicant since January 1998. He clearly diagnosed PTSD but refrains from commenting on the applicant’s capacity to work because he “has long since retired from work in 1990”.
Consideration
22. In this matter the Tribunal is required to decide all relevant matters to its reasonable satisfaction, that is on the balance of probabilities (section 120(4) of the Veterans’ Entitlements Act 1986 (“the Act”)).
23. The relevant provisions to be satisfied in this matter are found in sub-section 24(2A) of the Act. This section applies to a veteran who has made a claim for increase in disability pension and the veteran has turned 65 years of age before the claim was made and the degree of incapacity has been assessed by an in-force determination to be at least 70% and:
§ where:
“(b)the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week;…” (section 24(1)(b))
§and where:
“(d)the veteran is, because of incapacity from war-caused injury or war-caused disease or both, alone, prevented from continuing to undertake the remunerative work (last paid work) that the veteran was last undertaking before he or she made the claim or application; and
(e)because the veteran is so prevented from undertaking his or her last paid work, the veteran is suffering a loss of salary or wages, or of earnings on his or her own account, that he or she would not be suffering if he or she were free from that incapacity; and
(f)the veteran was undertaking his or her last paid work after the veteran had turned 65; and
(g)when the veteran stopped undertaking his or her last paid work, the veteran:
(i)if he or she was then working as an employee of another person—had been working for that person, or for that person and any predecessor or predecessors of that person; or
(ii)if he or she was then working on his or her own account in any profession, trade, employment, vocation or calling—had been so working in that profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned 65; and
(h) section 25 does not apply to the veteran.” (section 24(2A))
24. Paragraph 24(2A)(e) is subject to subsection (2B) which reads as follows:
“(2B) For the purposes of paragraph (2A)(e), a veteran who is incapacitated from war-caused injury or war-caused disease or both, is not taken to be suffering a loss of salary or wages, or of earnings on his or her own account, because of that incapacity if:
(a)the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(b)the veteran is incapacitated, or prevented from engaging in remunerative work for some other reason.”
25. In the light of Dr Jenkins’ report I am satisfied and find that paragraph 24(1)(b) and therefore paragraph 24(2A)(c) has been satisfied, there being no dispute that there is in force a determination that the degree of incapacity is at least 70%.
26. The difficulty in this case is to determine what was the remunerative work (last paid work) that the applicant was last undertaking before he made the claim for increase in pension.
27. Section 5Q of the Act defines “remunerative work” so as to include any remunerative activity.
28. The question is whether the applicant, by entering upon a scheme to develop and sell the Tantitha land, was engaged in remunerative work. This is not a case of having sold the poultry business the applicant then entered into a scheme that was nothing more than a plan to realise the land to the best advantage. (Barwick CJ in Federal Commissioner of Taxation v McClelland (1969) 118 CLR 353 at 372; that was a view adopted on appeal by the Privy Council (1970) 120 CLR 487 at 491).
29. In this case, on the applicant’s evidence, the land had been purchased for a dual purpose. The primary purpose appears to have been for expansion of the poultry business. The secondary purpose, at least in a temporal sense, was subdivision and sale of the land. It would be reasonable to infer that the secondary purpose included a purpose of sale at a profit rather than mere realisation of a capital asset as in McClelland.
30. While the applicant had engaged in subdivision and sale of land at Millbank, I am not satisfied that he ever reached the stage of subdividing and selling the Tantitha land so that it could be characterised as remunerative work. Insofar as three blocks were subdivided for the benefit of family members and for the benefit of the applicant, as to one block, that was, in my view, not part of the original scheme to subdivide the land and should be characterised as no more than a mere realisation of a portion of a capital asset, not in the nature of remunerative work.
31. When the Council informally refused the proposed plan of sub-division in 1990 the applicant either had not entered upon the scheme, or he thereby ceased a scheme for subdivision and sale of the land. I am not satisfied that thereafter he had entered upon remunerative work albeit that initially he may have intended to enter upon a scheme to sell subdivided land at a profit. There never was any remunerative work in relation to that scheme by the applicant. If there was, then it was the Council’s rejection that caused the cessation.
32. I am satisfied that the relevant remunerative employment was the business carried on as poultry farmers. That means that the last remunerative work the applicant was undertaking before he made the claim for increased pension was the business of poultry farming.
33. It seems to be clear, on the evidence, that the poultry business was closed down in June 1989 when the egg quota licence was sold.
34. The only other activity conducted by the applicant was the demolition of sheds etc and sale of the second-hand materials. That was, in my view, also a mere realisation of a capital asset and not in the nature of remunerative work. The applicant’s accounts indicate that the income from this source was minimal and, it might be inferred, was no more than realisation of the value of the second-hand materials.
35. I am satisfied that the applicant satisfies the terms of sub-section 25(1)(b) because of the report of Dr Jenkins. Sub-section 25(1)(a) is satisfied.
36. I am also satisfied that the applicant, being 74 years of age when he applied for the increase in pension, satisfies the terms of all of the paragraphs in sub-section 24(2A) except paragraph 24(2A)(f).
37. Paragraph 24(2A)(f) requires that the veteran was undertaking his last paid work after he had turned 65 years of age. Being satisfied that the applicant’s last paid work was as a poultry farmer and he ceased that work at age 63 I am not satisfied that he meets the test in paragraph 24(2A)(f).
38. For those reasons the decision under review must be affirmed.
I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K L Beddoe
Signed: .......................................................................................
AssociateDate of Hearing 3 December 2002
Date of Decision 19 September 2003
Counsel for the Applicant Mr Clark
Solicitor for the Applicant Gilshenan & Luton
For the Respondent Mr Stoner, Departmental Advocate
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