McMillan and Repatriation Commission

[2004] AATA 1172

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1172

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2003/870

VETERANS' APPEALS  DIVISION		)
Re		JEFFREY McMILLAN

Applicant

And REPATRIATION COMMISSION

Respondent

DECISION

Tribunal Mr J Handley, Senior Member

Date9 November 2004

PlaceMelbourne

Decision The Tribunal sets aside the decision under review.

(Sgd)  John Handley

Senior Member

ADMINISTRATIVE APPEALS TRIBUNAL         )
  )          No.    V2003/870
GENERAL ADMINISTRATIVE DIVISION          )                   

Re :JEFFREY McMILLAN

Applicant

And :REPATRIATION COMMISSION

Respondent

CORRIGENDUM [2004] AATA 1172

Tribunal :Mr J. Handley, Senior Member

Date :10 November 2004

Place :Melbourne

Decision :Pursuant to s.43AA of the Administrative Appeals Tribunal Act 1975 the “Decision” as recorded on the cover of the Reasons for Decision delivered on 9 November 2004 is amended by adding the following words after the word “review”:

“and in substitution the applicant has been entitled to pension at the special rate from the commencement of the assessment period”.

(Sgd)John Handley

Senior Member

VETERANS’ AFFAIRS – Vietnam veteran – receives pension at 100% of special rate – applicant owned a farm in partnership with his wife and earned income from salaried employment – retrenched in 1996 – retrenchment voluntary – divorced in 2000 – continued to own farm and earn income from it – not worked or earned income elsewhere since 1996 – main farming income from milk sales – milking completed by applicant’s son – accepted disabilities of PTSD, ischaemic heart disease and deafness – coronary surgery in 1993 – health deteriorating prior to retrenchment – claim for increased pension made in March 2001 – whether a loss of earnings by war-caused injuries alone – decision set aside

Veterans’ Entitlements Act 1986 (Cth) s24

Counsel v Repatriation Commission (2002) 72 ALD 204

Flentjar v Repatriation Commission (1997) 48 ALD 1

Repatriation Commission v Hendy [2002] FCAFC 424

Cavell v Repatriation Commission (1989) 9 AAR 534

REASONS FOR DECISION

9 November 2004 Mr J Handley, Senior Member      

1.      The applicant applies to review a decision of the Veterans’ Review Board (“VRB”) made on 2 January 2003.  The VRB then decided to affirm a decision previously made by the respondent on 3 September 2002 to continue to pay pension at 100% of the General Rate to Mr McMillan.  In effect the respondent (as affirmed by the VRB) refused his application for an increase in pension.  This review in effect concerns a claim for pension payable at the special rate.

2.      Mr McMillan is presently 59 years of age and is a Vietnam Veteran.  He suffers the accepted disabilities of:

Sensorineural deafness with tinnitus
Ischaemic Heart Disease

Post Traumatic Stress Disorder

He does not suffer any disabilities which have been rejected as war-caused although it is alleged that he suffers injuries to his back, left hip and left knee.

3.      In support of the application for special rate pension it was alleged by Mr De Marchi who appeared on behalf of Mr McMillan on the first day of hearing in Ballarat that the only issue of relevance was whether the applicant suffered a loss of income.

4.      Mr Rudge on behalf of the respondent submitted that the applicant does not satisfy the “alone” test under s24 of the Veterans’ Entitlements Act 1986 (“the Act”) because his back, left hip and left knee injuries contribute to his incapacity.

5.      The particulars of the applicant’s income and expenses from farming and other sources will be summarised later.  Those particulars have been obtained from the income tax returns for the years 1998 to 2003 which were received into evidence and which were the subject of cross-examination.  The applicant’s work history will also be described together with a summary of the medical data contained within a number of medical reports received into evidence.

6.      The first day of the proceedings were adjourned part-heard and resumed in Melbourne on 23 August 2004 to hear evidence from Doctors Horsley and Walton. 

jeffrey john mcmillan

7.      Mr McMillan was a member of the Australian Army who served in Vietnam until 1967.  Upon return from service he sought and obtained employment as a stock and station agent which he described as his “life’s ambition”.  He said he sought this work as a career and ultimately intended to become an auctioneer.  However he recalled that he was “pig headed”, he had a fall out with other co-employees and was asked to resign.  Thereafter he obtained employment in a rock crushing plant, initially working on a loader but eventually he became a foreman.  He recalled that he had “problems” with other workmates because he was frequently irritable.  He was frequently disciplined by his superiors and ultimately his employment was terminated.

8.      Mr McMillan later obtained employment with the Creswick Shire (“the Shire”) as a labourer and a grader driver.  He recalled that he had a number of “run ins” with other employees because of continuing irritability.  Mr McMillan said that he had frequent discussions with his supervisor Ray Coppick who alerted him to the potential of rural council amalgamations in the late 1990’s in Victoria.  He was advised that by reason of his temperament it was unlikely he would have good working relationships with other employees and that it was most unlikely that he would have a satisfactory working relationship with a new foreman.  When he received this advice Mr McMillan decided to resign his employment.  He then obtained employment with another contractor but was required to perform work using a shovel.  He was unable to undertake that work because of his ischaemic heart disease (“IHD”) and having endured a double by-pass operation in 1994.  Dr Chaudhary, his treating cardiologist in Ballarat, recommended that he undertake clerical or computer training but Mr McMillan said that he would not be able to undertake that work “for ten minutes”.

9.      Throughout the time he was employed with both the Shire and in the rock crushing plant, Mr McMillan owned and operated a farm in partnership with his wife.  He enjoyed farming but eventually realised that he was unable to undertake that work because of the combined effects of his coronary illness and his post traumatic stress disorder (“PTSD”).  He said that he realised that he was unable to complete work that he commenced and his concentration rapidly deteriorated.  In recent years he has operated “in partnership” with his son and whilst he has attempted to perform tasks around the farm he acknowledges that he “gets in the way”.

10.     Mr McMillan said that the farm which currently comprises of 400 acres, is heavily in debt, that he has received letters of demand from lending institutions and has a mortgage over the property of approximately $550,000. 

11.     Mr McMillan acknowledged that the farming property has earned income in recent years in fact escalating from gross receipts of $80,000 in 2001 to the sum of $128,000 in 2002 but said that this occurred as a result of increased effort and labour undertaken by his son and because of favourable seasons.  However the gross receipts for the 2003 year were $61,000.  Mr McMillan said that he is unable to work the farm and income is not able to be realised at a level that it would but for his war-caused injuries.  He acknowledged that Dr Horsely, reported that his back and hip injuries affect his ability to work and therefore earn income.  However Mr McMillan said that those injuries would not “stop” him from working and have “never worried” him.  He said that he suffers chest pain and shortness of breath which he associates with IHD and his PTSD impairs his ability to concentrate.  These conditions only, on his evidence, affect his ability to work.

12.     In cross-examination Mr McMillan said that he has suffered a “minor back problem” for a number of years and wears a brace when driving a motor vehicle for long periods.  He said the brace is worn only to avoid the presence of pain.  Despite the “minor back problem” he said that he is able to bend and perform light work.  He denied that he had any hip injury or left knee injury.  He said that Dr Horsely did not examine his hip or his knee when he attended her.  He said that his predominant injuries were shortness of breath and chest pain and an inability to concentrate and poor memory.  He said that he is unable to remember phone numbers and frequently writes notes to remind him of daily events.

13.     Despite his poor memory and inability to concentrate Mr McMillan acknowledged that he has been the President of the Creswick RSL Branch for 35 years, he is the Vice-President of the 20^th District Board of Combined Regional RSL Branches, he is the State President of the Sportsmens’ Association of Victoria and has previously held casual work with the Victorian and Australian Electoral Commission attending at polling booths on the days that State and Federal elections were held.  Mr McMillan said that these positions did not suggest that he is able to effectively cope with other persons and have meaningful relationships.  He said that his association with RSL Members is satisfactory because he and other Members have common interests.  Additionally he said that he was selective of who he does associate with and who he chooses as his friends.

14.     Mr McMillan was then taken to the clinical notes of Dr Hepper, his treating local medical officer (“LMO”).  He acknowledged that in the early 1990’s he was managing full time salaried employment and operating a 400 acre farm.  Nonetheless Mr McMillan said that he sub-divided the property and 116 acres had been transferred to his son.  He agreed that Dr Hepper had accurately recorded that at the time he suffered a myocardial infarction in the early 1990’s he was working full time and operating his farm.  Mr McMillan also acknowledged notes from Dr Stickland a general practitioner who recorded on 27 May 1994 that despite having undertaken by-pass surgery in early 1994 he had resumed farming and his work with the Shire.  When asked whether he agreed that at June 1994 (according to the notes of Dr Stickland) he was working full time with the Shire and operating his farm, Mr McMillan said that he could not recall.  When he was asked to confirm that Dr Stickland had no history at May 1995 of any chest pain, shortness of breath or distress upon exertion – whilst at the same time noting that Mr McMillan was undertaking full time employment and operating his farm – he again replied that he could not recall.  Mr Rudge acknowledged that Dr Stickland recorded in August 1995 that Mr McMillan was “tiring easily upon exertion”.  It was noted that at September 1995 an exercise test arranged by Dr Stickland reported a “negative for IHD” outcome.  Mr McMillan said that he could either not recall that outcome or he was not advised of it.  He agreed that he ceased all salaried employment on 4 October 1996.

15.     A bundle of notes from the Hepburn Shire Council were received into evidence which confirmed that the Hepburn Shire and The Shire was amalgamated in the mid-1990’s.  The notes confirm that a number of persons engaged by both Shires were to be offered redundancy and the position previously undertaken by Mr McMillan was part of that redundancy proposal.  Mr McMillan said that he agreed to resign his employment because the only employment that would have been available to him upon the amalgamation of both Shires was working “on a shovel” which he said he would be unable to undertake because of his coronary illness.  He agreed that he gave evidence at the VRB that he enjoyed good working relationships with other employees and said that younger employees “looked after him” and undertook heavy work.  Nonetheless he agreed that the administration and supervision under the amalgamation would have resulted in a different managerial regime which would not “suit” him and he agreed to resign.

16.     Mr McMillan was also acquainted with the notes of Dr Haughton, a treating psychiatrist who did not record in 1996 that the effects of his PTSD was the reason for ceasing working.  When he was informed that Dr Hepper had not ever recorded that PTSD was the reason for ceasing work Mr McMillan said that he could not recall the advice that his doctors were then giving him.  Mr McMillan did agree that his age, rural domicile and difficulty locating employment were factors that would have been relevant in obtaining employment elsewhere.

17.     Mr McMillan was then challenged as to whether, in fact, he did not perform work over his farm but rather he had been actively involved over it subsequent to his retirement from Shire employment.  It was noted that in January 1999 Dr Stewart recorded that Mr McMillan had undergone surgery to repair a hernia which was associated with heavy lifting.  Mr McMillan denied lifting at all and also denied being “heavily involved” (as the doctor recorded) in his farm.  He said that he was “mentally” involved but he did not perform physical activity.  He said that he could not recall having hernia surgery and whilst he acknowledged that he was hospitalised in April 1998 with reported symptoms of vertigo and nausea, Mr McMillan thought that it was then by reason of a middle ear infection.

18.     When he was then again acquainted with the notes of Dr Stickland who reported in December 2000 that he did not then suffer from recurrent angina but was suffering shortness of breath, Mr McMillan said that he could not recall.  At March 2001 when it was recorded by Dr Stickland that shortness of breath had resolved and his coronary symptoms were “intermittent”, Mr McMillan said “I don’t know and I can’t answer this”.  When he was advised that Dr Chaudhary had reported on 26 February 2002 that he suffered symptoms of angina when he was “pushing hard” on his farm (and that this suggested that he had been performing “physical exertion”) Mr McMillan said that the proposition was unfair, that he was not performing heavy work but he suffered chest pain by reason of emotional stress and worry.  He said that he could not recall the reports of another stress test in June 2002 which was reported as being “negative”.  Despite the doctors reassuring Mr McMillan, (refer doctors’ notes) he said he could not recall being given this advice.  When asked to comment on the sick leave records of the Shire recording that on average he had taken between 6 and 8 sick days per annum whilst in employment, Mr McMillan said that he “didn’t take sickies”.

19.     The applicant was then asked to comment on extracts from his income tax records that were interpreted by Mr Rudge as demonstrating a consistency of income between 1995 and 2003.  Indeed it was suggested that in latter years his income as declared from his farm had progressively increased.  Mr McMillan said that his memory of farm income was the reverse.  He understood that he had consistently earned less income in each year as his expenses (and therefore his losses) increased.  When asked to comment upon relative stability in his income from milk sales between 1995 and 2003 – thereby indicating continuing consistency in farming income – Mr McMillan said that milk income was seasonal and milk prices were beyond his control.

20.     Mr McMillan was then asked to comment upon the income as derived from the sale of sheep and cattle which again indicated consistency of income and of better income in recent years.  Mr McMillan again said that he had no recollection of those trends, but in his opinion income from sales of sheep and cattle had declined and were subject to price fluctuations, consumer demand and the affect of climate and seasons.

21.     The applicant said that he and his wife dissolved their partnership in 2000 when they separated and were divorced.  From that time his son assumed greater responsibility for the farm, despite him having a full time job.  He said his son completed milking each morning and night and worked Saturday and Sundays on the farm.  When he was asked to comment whether he supervised the farming activity, Mr McMillan preferred to describe his role as an “advisor”.  He agreed that he paid the farming bills and dealt with banks, the accountant, stock and feed suppliers and a local milk factory.  He said there was little work involved in these activities and said that some accounts were payable once a year only.  He agreed that he arranged for wool sales to be undertaken by a local agent on one occasion per year and his main daily function was to inspect stock which he said was not “physical” but kept him “sane”.

22.     Mr McMillan was asked to comment on a Statement completed by Mr Coppick, his former supervisor, dated 1997 which reads as if it had been completed prior to the amalgamation of the Hepburn and The Shires.  (It was in fact dated after the amalgamation and after Mr McMillan had been retrenched).  The applicant said he could not explain why the Statement was written in those terms.

23.     In re-examination Mr McMillan said that if it were not for the amalgamation of the two neighbouring Shires he would have been retained and would have had ongoing employment.  He said that had he been retained he would not have been able to continue with the work because of its physical demands and because of the unsatisfactory relationships he had with superiors.

24.     When asked to comment upon the income over his farm in recent years Mr McMillan said that there had not been improvement but “it is looking better because my son is maturing, has more commitment and has a better attitude”.  He said that his son (Scott) “wants to succeed” and said that the 2002 year was particularly good but only because “Scott put in more hours”.  Additionally he said that his son “has not taken anything out of it” and “if I didn’t have Scott I would be in diabolical trouble”.

25.     Mr McMillan said that milking was the major operation over the farm and was the major source of income.  He acknowledged that income from milk sales had declined in recent years despite the increased effort of his son.  Mr McMillan said that if he were able to work full time over his farm “it would be up and running”.  He said that he would be performing work which is not now being undertaken and which Scott does not have time to undertake.  He said that he now does not work more than 8 hours per week on the farm.

26.     In answer to some questions from me (in an attempt to clarify the nature of the farming operation) Mr McMillan said that the farm presently comprises 440 acres of which 114 are registered in the name of Scott.  The income declared in Mr McMillan’s tax returns was the income generated from the whole of the 440 acres.  He was unable to explain why the accountants had completed tax returns in this form, that is why there had not been any division of income over the property owned by Mr McMillan and over the property owned by Scott.  He denied that there was any documented partnership between he and Scott and was adamant that the income earned was derived from the whole of the 440 acres.  Mr McMillan said that both he and Scott “were at risk” from foreclosure from the lender who holds a mortgage over the property.

27.     Were it not for his war-caused disabilities Mr McMillan said that he and Scott would possess a greater number of milking cows and thereby generate greater income.  He said that there would be “a lot of cropping” of oats and other grains of up to 60 acres per year which would reduce feed costs.  He said on the present acreage, even allowing for increased cropping, 250 acres would be reserved for pasture.  Presently stock numbers comprise 46 milking cows, 80 sheep and 25 beef cattle whereas if the farm was better managed and more effort was able to be put into it, he was confident of being able to run 80 milking cows, 25 beef cattle and 300 sheep.  Additionally he and Scott presently lease 300 acres in order to allow their own property to be rejuvenated and with proper rotation, greater stock could be managed and accommodated.

28.     When asked to explain the remarkable increase in income in the 2002 financial year Mr McMillan assumed that it was from the sales of cattle.  He also assumed that there had been good rains in March, April and May of 2001 which had contributed to a more than satisfactory spring pasture growth in 2001 permitting greater production of milk and therefore greater returns of income from milk sales.  He could not recall having greater numbers of milking cattle in 2002 but thought that by reason of good spring growth in 2002 there had been greater cropping of hay and fodder thereby reducing feed costs in that year.

29.     Mr McMillan said that he and other farmers were subject to fluctuations in stock prices and said that presently calves and bullocks are sold by weight whereas steers are sold by carcass.  It follows that if stock were in good condition because of poor pasture, prices were lower.  The income from the 2003 year was thought by Mr McMillan to be less than the previous year because of the effects of drought causing lesser numbers of stock to be carried and therefore lesser income.

Raymond Coppick

30.     Mr Coppick was the author of a Statement received into evidence as Exhibit C and which is reproduced in entirety as follows:

1.    I have known Jeff McMillan since about 1979, when he was an employee of the Creswick Shire.  I was his foreman for about 5-6 years

2.    During the time I worked with Jeff I found him to suffer considerably from his post traumatic stress disorder.  He was a loner, had problems with the other men, as he was argumentative and inclined to loose [sic] his temper.

3.    I was very understanding of him and made allowances for him.  Because of his disability, Jeff was alright working independently and in an isolated work environment.

4.    When it became inevitable that the Shire of Creswick was to be amalgamated with another Shire, I had some reservations about Jeff’s ability to continue his employment working in a more structured environment.  We had some discussions in relation to his future working life and discussed the problems and difficulties he was likely to have with co-workers.  I recommended to him that he would be better off retiring and taking a redundancy package.

5.    I believe that if Jeff had been free of his condition of post traumatic stress disorder, he would have made the transition to working for the amalgamated council and would not have retired.

31.     At the hearing, Mr Coppick said that he has known Mr McMillan since 1979 when they were both employed by The Shire and when he was employed as a superintendent.  He remembered Mr McMillan as being an efficient, dependable and trustworthy employee who had little time off work by sickness.  He understood that Mr McMillan did suffer from PTSD and made allowances for him.  He recalled that he and others would approach Mr McMillan “differently” to other employees.  He acknowledged that he did have a short temper and was frequently irritable.

32.     He recalled that the Creswick and Hepburn Shires amalgamated in the 1990’s and he recalled that he thought that the proposed amalgamation and re-employment would be “too stressful” for Mr McMillan and that he would “not be able to cope”.  He agreed that he recommended that redundancy be taken.  Since that time he said that he has not kept in contact with Mr McMillan.  He recalled that he was a person who suffered frequent and extreme “swings of mood” and he did not believe that his temperament would be accommodated by supervisors after amalgamation.

33.     In cross-examination Mr Coppick said “my hand was forced” when he spoke of the Shire amalgamations.  He said that he did not wish to leave and did seek employment upon restructuring but he was made redundant in 1995 and recalled that Mr McMillan was made redundant in 1996.  He recalled that the plans to amalgamate both Shires had been spoken of for many years prior to 1995 and recalled that the proposed new structure would have been “very different” to that which they both previously enjoyed with the Shire.  He said he did not mix socially with Mr McMillan, that he did not see much of him after they were both made redundant and knew nothing of his health after redundancy.

34.     Mr Coppick agreed that he also completed a Statement on 17 March 1997 (T-documents p78) and was unable to explain why it was completed in the present tense when in fact it referred to past events.  He said that he must have overlooked the date at the time that he signed it and agreed that it was a mistake.

35.     Mr Coppick recalled that the Statement was presented to him by Mr McMillan.  He was not aware whether it was prepared by Mr McMillan or someone else.  He recalled that the Statement was to be used – so far as he could recall – for the purposes of a pension claim.

dr robyn horsley

36.     When the matter resumed on 23 August 2004, Dr Horsley who is an Occupational Physician was called to give evidence.  She examined Mr McMillan on 27 November 2003 and provided a report dated 30 November 2003.  She provided a comprehensive report but concluded that the capacity of Mr McMillan to work for more than eight or 20 hours per week would depend upon his cardiac function.  She indicated that she had not been provided with any documented information concerning his cardiac history or its current treatment.  Additionally she reported that whilst she thought that PTSD would have an affect upon his capacity for work, she would prefer to defer to the opinion of a psychiatrist.

37.     In evidence Dr Horsley said – having been acquainted with a report of Dr Chaudhary - that Dr Chaudhary would have clinical data which would indicate the current state of the applicant’s cardiac function and would, based on possession of that information, be in a position to express an opinion on the capacity of the applicant to engage in employment.

38.     Dr Horsley said that she did obtain a history from Mr McMillan that he was having difficulty in his former employment with the Shire of Creswick and with relationships with other workmates.  She said that Mr McMillan had told her that he had volunteered to accept a redundancy package.

39.     With respect to the condition of PTSD Dr Horsley said that she would defer to the opinions of psychiatrists with respect to the applicant’s capacity to work.  She said that she did obtain a history of Mr McMillan’s circumstances in Vietnam and also obtained a history that he subsequently suffered from poor sleep and nightmares.  She said that this would cause him to be tired the following day which may have an impact on his ability to work.  She also had a history of him consuming six to eight pots of beer per night but she did not have any history that it caused him to be aggressive nor had he ever lost his driver’s licence because of consumption of alcohol in this quantity.  She also thought that his concentration was impaired and this may affect his ability to work.  When she learnt that one of the doctors who had provided a report at the request of the respondent thought that Mr McMillan might be capable of undertaking a computer course she said that whilst she would prefer to defer to the opinion of a psychiatrist, she noted that Mr McMillan was educated to Year 10 only, that he was currently 57 years of age and did not have any clerical skills or prior work history where he had used clerical skills.

40.     Dr Horsley also noted that Mr McMillan suffers from sensorineural hearing loss which she found apparent at interview.  She said that Mr McMillan told her that he was reluctant to wear his hearing aid, that he found it difficult to communicate with others and that he suffered from tinnitus.

41.     She also noted that he suffered from lumbar spondylosis which produced intermittent back pain but which was managed by the use of a back brace.  She also noted the presence of degenerative changes in the applicant’s left knee and left hip, however Mr McMillan had informed her that those injuries did not cause him any discomfort.

42.     In cross-examination Dr Horsley said that she had not been provided with the notes or reports from Dr Hepper or from Dr Stickland.

43.     Mr Rudge notified her of the contents of some of those reports and she noted that at June 1994 Dr Stickland had reported that the applicant had returned to work within three months of cardiac surgery.  She thought that this would be indicative of him having had a good recovery but she was unable to indicate whether he had then regained full capacity.  When she learnt that Dr Stickland had later reported that Mr McMillan was working “hard at both jobs full time” she said that would indicate that he had achieved a full recovery and had also achieved good cardiac function.  Later when a report from Dr Stickland indicated that Mr McMillan was then engaged in “both jobs” (grader driving and farming) without any exercise induced chest pain she thought that would then indicate the absence of any cardiac disease.  In September 1995 when Dr Stickland reported that an exercise tolerance test reported that he was “negative for IHD” she interpreted those comments to mean that there was nothing to indicate the presence then of IHD.  Dr Horsley was unable to say why Dr Stickland would have then reported that there was the presence of “slight angina”.  In April 1998 when there was a report of “episodic vertigo and nausea” Dr Horsley said that she could not express an opinion about whether those symptoms would be related to his prior cardiac history.

44.     Dr Horsley was then taken to opinions expressed by Dr Stewart, Dr Chaudhary and Dr Hoffland, all of whom expressed opinions as to the applicant’s capacity for work.  Dr Horsley was cautious to comment upon the opinions expressed in the absence of clinical data and in the absence of having examined Mr McMillan at the time that those doctors had consulted him.  She did note however that it was apparent from the opinions expressed that from about December 2002 the applicant’s cardiac state had commenced to deteriorate when there was early signs of myocardial failure with increasing references to left ventricular dysfunction, shortness of breath, angina and cardiomyopathy.  Despite these symptoms and despite Dr Chaudhary reporting the presence of these symptoms at February 2002, she thought that the applicant would then be capable of undertaking sedentary type work although she acknowledged that those symptoms would probably cause him to be lethargic.  On balance Dr Horsley was of the opinion that until 2002 the applicant did appear to have a capacity for some work and subsequently she thought that he would be capable of performing some work around his farm, inspecting stock, fencing and supervising.  She noted that his walking tolerance would be limited to about 30 minutes prior to resting (because of shortness of breath) however if he was able to drive a vehicle he could do so with the use of a back brace.  She thought that Mr McMillan could physically undertake work associated with paying accounts and undertaking other clerical work concerning the operation of the farm subject to lethargy.

45.     On balance Dr Horsley said that her greatest concern with respect to the applicant’s capacity for employment was his cardiac function.

46.     In re-examination Dr Horsley said that she did obtain a history of the applicant being able to work with the use of a back brace.  She said that on examination of his left knee there were signs of degeneration and she thought that a combination of his back, left knee and left hip would restrict work activities over his farm.

47.     Dr Horsley was then acquainted with a report written by Dr Hoffland of 9 December 2002.  She agreed that the combination of PTSD, cardiac disease and impairment of left ventricular function would in combination affect the ability of the applicant to work but she preferred to defer to the opinion of the psychiatrist with respect to the impact of PTSD upon capacity.  She agreed that a local general practitioner who had frequent contact with the applicant would be in a good position to assess capacity for work.  She then became acquainted with an opinion expressed by Dr Hepper (the applicant’s LMO) in a report of 12 May 2004 who concluded that a combination of the above illnesses and diseases would incapacitate the applicant from working eight hours per week.

dr lester walton

48.     Dr Walton is a consultant psychiatrist who examined the applicant at the request of the respondent on 13 January 2004 and provided a report dated 9 February 2004.  In his report he concluded that Mr McMillan was capable of working more than eight hours per week but less than 20 hours per week.  In evidence he said that he formed this opinion based on a judgement he made having regard to the severity of his symptoms, the applicant’s work history, his current daily activities and his service on a number of RSL Committees.  He thought that working beyond 20 hours per week would affect the applicant’s mood, his ability to concentrate and impact upon lethargy presently suffered which he thought would particularly cause safety concerns when working on a farm.

49.     In cross-examination Dr Walton said that he assessed the applicant’s capacity for work upon psychiatric factors only and did not take into account any cardiac impairment.  He was not aware of the opinion expressed by Dr Hepper in his report of 12 May 2004 and whilst acknowledging that Dr Hepper had concluded that the applicant’s capacity for work was restricted to less than eight hours per week by combination of illnesses and diseases, Dr Walton did not depart from the opinion that he had previously expressed.  He again affirmed that his opinion was provided having regard to psychiatric illness only.

documents lodged

50.     A number of documents were lodged as exhibits in these proceedings.  The following is an extract from those documents.  The authors of the opinions expressed hereunder were not called as witnesses in these proceedings.

51.     Dr John Stickland is a physician in Ballarat to whom Mr McMillan was referred by his general practitioner Dr Hepper.  In a report of 23 March 1994, being three weeks after coronary artery bypass grafting Dr Stickland reported that the applicant was then well, that he was walking five kilometres and there had not been a recurrence of angina.  On 27 May 1994 he reported that the applicant “remains very well indeed, is starting to do his farm work, but he has asked for another month off work from the council work”.  Angina was again noted to be absent.  On 9 August 1994 he reported – being five months subsequent to surgery – that the applicant was “very well indeed without any angina at all.  Chest pains have resolved and is now working hard at both jobs full time”.  On 10 March 1995 Dr Stickland reported that it was then 12 months subsequent to surgery and the applicant was “very well indeed”.  He reported that there was some low retro sternal discomfort if the applicant was worried but he was then “running two jobs and burning the candle at both ends, there is no sign whatsoever of exercise induced pain.  He recently chased a cow without any difficulties”.  He noted that Mr McMillan then requested a medical report to qualify him as a crane driver and dogman.  Dr Stickland noted that there appeared to be no reason not to certify the applicant as having that capacity and he did not “place any restrictions on his activities”.

52.     On 31 August 1995 Dr Stickland reported that Mr McMillan then complained of being tired easily on physical exertion, particularly if he was unable to rest and there was some recurrent angina.  He also noted that the applicant then expressed a wish to retire “from the Shire and I think that under the circumstances this is reasonable”.  On 8 September 1995 Dr Stickland reported that he had supervised the applicant undertaking an exercise test and whilst it was noted that the applicant ceased that test because of shortness of breath and tired legs there was no complaint of chest pain or ECG changes.  He noted that there was a recurrence of angina which he regarded as mild.  He noted the absence of any ischaemia.

53.     Dr Stickland saw Mr McMillan again in December 2000 and obtained a history of tiredness, lethargy and shortness of breath for approximately six weeks.  An ECG showed sinus rhythm with multiple ventricular ectopic beats and some dilation of the left ventricle.  He thought that the applicant had recent myocardial failure on the basis of wide spread ischaemic myocardial damage.  Treatment in the form of medication only was prescribed.  In March 2001 Dr Stickland reported to Dr Hepper that a chest x-ray of December 2000 had confirmed the presence of mild left ventricular failure but a history taken at consultation in March 2001 revealed that shortness of breath had resolved and there was no cardiac failure.  The applicant was discharged with medication.

54.     In a claim made by the applicant upon the respondent in March 1998, Dr Hepper, in support, recorded that the “major diagnosis” of the applicant was IHD, hearing loss and tinnitus.  He found that the “minor diagnosis” was mild anxiety and depression.  He recorded that the applicant’s last occupation was as a plant operator for the Shire of Creswick and the reasons for leaving that employment was “chest pains and redundancy – October 96”.  It was his opinion that the war-caused disabilities of “chest pains” and “difficulty in hearing” reduced the applicant’s ability to work.  Additionally he was of the opinion that the applicant was then capable of working for “1/2 day for 5/7 at 20/week”.  In his opinion other factors that interfered with the applicant’s capacity to engage in employment was “age/52; economic activities in country”.

55.     On 23 March 1998 – six days after the opinions expressed by Dr Hepper (above) Dr Houghton a psychiatrist in Ballarat provided a report at the request of the respondent.  He noted that the applicant had ceased employment in October 1996 having accepted a redundancy package.  He reported “he just pokes around his small 270 acre dairy farm.  He says he just turns up.  He just does a few hours here and there.  He has to stop with the angina”.  Dr Houghton obtained a comprehensive history of stressful events during Vietnam service and concluded “with increasing angina he has had to give away any heavy labouring jobs and just walks about the farm in a supervising capacity.  His son has to bring extra help for heavy tasks on the dairy farm as Mr McMillan is no longer able to help.  He claims he works less than eight hours per week.  His post-traumatic stress disorder also tends to affect his work capacity as he tends to worry and be impatient, irritable, depressed and anxious.  I cannot see him being able to work more than eight hours per week indefinitely”.

56.     On 29 January 1999 Mr Stewart a surgeon in Ballarat reported to Dr Hepper that Mr McMillan had been referred to him for treatment of a right inguinal hernia.  He described Mr McMillan as “quite a character” and he also noted “we had quite a chat regarding the vagaries of dairying and merino farming”.  He reported that Mr McMillan had requested that hernia repair be undertaken laparoscopically which was eventually undertaken on 2 March 1999.  On 23 April 1999 he reported to Dr Hepper that the surgery had been completed successfully and the applicant “is very well and is pretty much back to normal activities”.

57.     Dr Chaudhary is a cardiologist in Ballarat who took over the treatment of Mr McMillan from Dr Stickland.  In a report of 26 February 2002 he described Mr McMillan as a “delightful 57 year old dairy farmer” who was then complaining of exertional tiredness “but otherwise remains active”.  On 19 June 2002 he found that there was borderline septal left ventricular hypertrophy but there was no significant valve disease.  He noted that Mr McMillan denied “any cardiac symptoms”.  On 2 April 2003 he reported that there was moderate left ventricular systolic dysfunction evident upon echo cardiogram with significant left ventricle dilation.  In November 2003 he reported that Mr McMillan was “progressing well without any new cardiac complaints” and a repeat echo cardiogram did not show any further deterioration in left ventricular systolic dysfunction.

58.     In a report of 14 April 2004 addressed to the respondent Dr Chaudhary reported that subsequent to coronary artery grafting at Epworth Hospital in 1994 there had been “further exertional angina only on pushing hard” (Exhibit 4).  He repeated the summaries given in his earlier reports although it was noted that at a stress test on 4 June 2002 the applicant exhibited suffered shortness of breath.  Dr Chaudhary concluded (p2):

With regards to your third question, Jeff’s ischaemic heart disease and subsequent impairment of left ventricular function is preventing him from undertaking any amount of work (referring to his previous usual work as a plant operator for the Shire).  In other words, he is totally incapacitated to undertake his previous work as a grader operator or plant operator which is fairly manual.

I must categorically state that despite successful coronary artery grafting, Jeff is left with significant impairment of heart function which is persisting over the number of years for which he is taking multiple cardiac medications.  He is permanently incapable of handling his previous work, but if suitably and sufficiently trained, he should be able to handle non physical, office or computer work. . . .

59.     With respect to the applicant’s cessation of employment from the Shire, the respondent lodged a Memorandum dated 23 September 1996 completed by the Director of Customer Services and addressed to Mr McMillan.  Omitting irrelevant parts that Memorandum reads in the following terms (Exhibit 5, page 9):

As you are aware, Council has awarded the Local and Main Roads Maintenance contracts to the in-house unit which submitted the successful bids.

The bids were premised and costed on the basis of the revised organisational structure which has eighteen positions less than the former structure.  The adoption of the new structure has the effect of making your former position redundant and I regret to advise that a similar position does not exist in the recently adopted structure.

During the course of recent discussions, we reached agreement that you would accept the option of being made redundant and that you would terminate your employment with Council on Friday, October 4, 1996

You are currently classified as a Municipal Employee Band 4 Level A and as the anniversary of your annual review was September 11, 1996, your redundancy and other entitlements will be based on your reclassification to Band 4 Level B effective from that date.

Please liaise with Council’s Director Corporate Services, . . . , in respect of all issues related to your G17 redundancy benefit and other entitlements and I wish you and your family every success and happiness in your future endeavours.

60.     In his evidence to the VRB (as evident from the transcript of those proceedings) Mr McMillan said that he lives alone in a house approximately two kilometres from the farm at Broomfield.  He said that a “caretaker” lives in a caravan adjacent to the dairy on the farm being a 65 year old pensioner.  He said that person performs maintenance around the farm and lives there for “security”.

61.     Contrary to his evidence on the first day of hearing, Mr McMillan told the Members of the VRB that his son Scott had purchased 114 acres prior to June 2003 (when he gave his evidence to the VRB).  He said that Scott “does all the work”.  Mr McMillan told the Members of the VRB that he would “mainly drive around or walk around” and when asked whether he travels to the farm during the day Mr McMillan said “Yes . . . Lots of hours over there – poking around”.  When asked whether he was involved “in any sort of the business side of it?  Accounts or making relevant calls ordering in feed that sort of thing?”  Mr McMillan said “No not much.  No he is under control with that.  You’ve got to be careful of those sorts of things, we found that if I start doing that and he has done it you are doubling up so it is better for one person to do it . . .”.  Mr McMillan agreed that he is described in his tax return as a “farmer”.  When asked about the operation of the farm after he ceased employment with the Shire, Mr McMillan said that he would undertake milking in the morning “and a bit of work at the weekend” (p18).  He said that Scott would undertake evening milking.  When Mr McMillan was asked when did he cease milking?  He said “About three years ago, probably four years ago.  I’m not quite sure now”.

62.     When asked by another Member of the VRB about his activities presently over the farm, Mr McMillan said that he attends it “every day” and “it is the only thing keeps me going, just poking around – and I would most probably be an alcoholic or . . .”.  Later when asked specifically how long he would spend at the farm each day he said “Probably 10 minutes”.

submissions

63. Mr De Marchi submitted that by reason of Dr Walton conceding that the applicant could satisfy s23(1)(b) of the Act that it necessarily followed that the applicant would satisfy s24(1)(b). He said when the applicant’s cardiac symptoms are also considered s24(1)(c), is also satisfied.

64.     It was submitted that the PTSD and the IHD and its consequences were alone responsible for the inability of the applicant to undertake employment.  With respect to economic loss it was submitted that the financial statements of themselves indicated an inability on the part of the applicant to be engaged in farm activity which consequently caused loss of remuneration.  Additionally it was put that by reason of the applicant previously being engaged in two occupations – as a grader driver and as a farmer – that the cessation of one of those occupations would necessarily cause economic loss.

65. Mr De Marchi also submitted that a combination of s24(1)(c), read in conjunction with the deeming provisions of s24(2)(b) and the beneficial intent of the Act permitted a finding that the applicant was entitled to special rate pension. It was submitted that the applicant should be found as a person who is unable by reason of war-caused injuries alone from undertaking activity over the farm and by reason of the absence of that activity, income has been lost.

66.     As to the cessation of employment with the Shire it was submitted that were it not for the applicant’s accepted disabilities, principally PTSD, Mr McMillan would have remained employed with the amalgamated shire and would have also been able to manage his farm.

67.     Mr Rudge on behalf of the respondent submitted that the applicant could not satisfy the “alone” test under s24 of the Act. It was submitted that the applicant elected to receive a redundancy package which caused his employment to end when the Shires of Hepburn and Creswick amalgamated. It was submitted that the war-caused injury of PTSD had no bearing on the redundancy because the letter received into evidence from the Shire clearly indicated that employment would not be offered to Mr McMillan upon restructure. Additionally it was submitted that the evidence of Mr Coppick was so unreliable that it should be disregarded. It was also noted that the statement of Mr Coppick was signed in the year after Mr McMillan had accepted redundancy but it was drafted as if those events had not occurred. Additionally it was learnt whilst Mr Coppick was giving his own evidence that he in fact had accepted redundancy.

68.     It was submitted that following cessation of employment with the Shire, Mr McMillan had capacity for employment and was in fact working.  Mr Rudge referred to the various medical reports received where doctors had obtained histories of the applicant actually working subsequent to his redundancy with the Shire.

69.     With respect to the farming activities Mr Rudge submitted that there were two principal issues namely, whether the applicant was capable of working more than eight hours per week and whether he could demonstrate a loss of earnings.  He conceded that Dr Walton had given an opinion that the applicant was incapable of working more than 20 hours per week and the applicant’s cardiac disease would impact upon his ability to undertake employment.  However it was submitted that the cardiac symptoms commenced to deteriorate in December 2002 and the shortness of breath suffered by the applicant only became symptomatic during the assessment period.

70.     It was submitted that the applicant is capable of working more than eight hours per week and does work more than eight hours per week.  Mr Rudge urged a finding that the applicant is the proprietor of a substantial farming venture where he makes significant decisions concerning its operation and undertakes inspections over it on a regular routine basis.  It was submitted that an examination of the profit and loss statements and the balance sheets indicate significant earnings from milk sales and the sale of sheep and cattle.  It was also submitted that the actual numbers of stock as disclosed to the Tax Office from year to year indicated a venture of size and significance which would require involvement by Mr McMillan at a level greater than was disclosed.

71.     Additionally it was submitted that an examination of the financial records indicate that Mr McMillan did have a good recovery from bypass surgery in the mid-1990’s and thereafter there was no discernible change in the income generated from the farm.  It therefore follows that Mr McMillan was unable to establish that he suffered loss by reason of accepted disabilities alone.

72.     Mr Rudge relied on the Full Federal Court decision of Counsel v Repatriation Commission (2002) 72 ALD 204 (“Counsel”) and submitted a focus should be upon the gross earnings of the applicant and whether any loss of gross income was “a loss of earnings on the applicant’s own account” (refer Gray J at paragraph 21).  Additionally Mr Rudge relied on the decision of Goldberg J where at paragraphs 77 and 79 His Honour referred to the loss of revenue or a cash flow stream.  At paragraph 81 His Honour extended this analysis and decided that the reference to “earnings” as it appears at s24(2A)(e) of the Act causes enquiry into whether war-caused injuries have prevented a veteran from undertaking remunerative work that was undertaken and whether there has been a cessation of generation of an income stream which previously existed.

73.     In reply Mr De Marchi drew attention to paragraph 80 of the decision of Goldberg J in Counsel and submitted that “earnings” as that word appears at s24(2A)(e) is a reference to cash flow by personal exertion of a veteran. In the present case it was submitted that the applicant has demonstrated a loss of remuneration because he is unable to generate a cash flow by reason of his accepted disabilities.

conclusion and reasons for decision

74. In this application Mr McMillan seeks special rate pension. It follows that he must satisfy the qualifying provisions of s24 of the Act which is relevantly reproduced as follows:

(1)This section applies to a veteran if: 

(aa)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and 

(aab)the veteran had not yet turned 65 when the claim or application was made; and 

(a)   either: 

(i)the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or 

(ii). . .

(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; and 

(c)the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and 

(d) . . .

75. Mr McMillan is presently in receipt of pension at 100 per cent of the general rate and accordingly s24(1)(a) is satisfied. The remaining parts of s24(1) are in dispute namely, whether there is incapacity, if there is incapacity is it by war-caused injuries alone, whether the incapacity prevents the applicant from working periods aggregating more than eight hours per week and whether there is a loss of earnings on his own account were it not for the incapacity (if any).

76.     The applicant was employed by The Shire until he was made redundant in October 1996.  The evidence heard in these proceedings suggests that by reason of an amalgamation between the Creswick and Hepburn Shires, Mr McMillan, together with others, would become redundant.  It would appear that Mr McMillan did volunteer for redundancy.  Nonetheless he said thereafter he obtained employment in a rock crushing plant but when he learnt that some work involved the use of a shovel he ceased that employment.  Mr McMillan said that employment of that type had an adverse affect upon him by reason of the presence of IHD.

77.     An examination of the income tax records lodged in these proceedings for the income years of 1996 and 1997 fails to disclose any employment beyond that of the Shire.  The 1996 returns indicate that salary was earned from employment with the Creswick and Hepburn Shires.  That income year would have concluded on 30 June 1996 when the applicant was then in full time salaried employment.  In the following year an amount is recorded as having been received in salary from “Hepburn Creswick” and a considerable amount is disclosed as a “lump sum payment”.  For the purposes of this exercise it is assumed that the lump sum payment was the redundancy payment received upon ending employment with the Hepburn or the Creswick Shire.  The redundancy occurred in October 1996 which would have been within the 1997 year of income.  However there is no income declared from employment with any employer after redundancy.

78.     It was suggested in evidence that Mr McMillan had been given assistance in his former employment by other workmates who were aware of his physical limitations in undertaking heavy work.  It was also clear from the evidence that Mr McMillan was frequently irritable and argumentative and the relationships within the workplace would have been unpleasant.  The physical limitations upon him together with his irritable personality were alleged to be associated with his war-caused injuries of IHD and PTSD.  Whether Mr McMillan would have been able to work elsewhere beyond October 1996 is of course an issue in these proceedings.

79.     A summary of the medical evidence indicates that at March 1994 the applicant was reported within three weeks of his open heart surgery as “doing well”.  He was found to be walking five kilometres per day with minimum angina.  By August 1995, Dr Stickland found that Mr McMillan was reporting symptoms of increased tiredness and angina on effort.  He had a history of the applicant discussing whether he should continue in employment and whether retrenchment should be considered.  Dr Stickland again saw Mr McMillan in September 1995 where he was found to be short of breath on exertion.  At December 2000 Mr McMillan was again found to be short of breath and in March 2001 he was found to have left ventricular failure.

80.     In March 1998, Dr Hepper, the applicant’s LMO found that “his major diagnosis” was IHD and the “minor” diagnosis was PTSD.  He concluded that the applicant was fit to undertake work at 20 hours per week.  Dr Houghton, a consultant treating psychiatrist, reported also in March 1998 that the applicant’s predominant injury was in fact PTSD with increasing complaints of angina.  He noted that the applicant was then attending his farm from time to time and was “walking around” and “supervising”.  Dr Chaudhary reported in June 2002 that the applicant was totally incapacitated from undertaking “greater work” but was suitable for retraining.  Dr Walton, in a report to the respondent, assessed the applicant as having a capacity for no more than 20 hours of work per week but by reason of his PTSD only.   He declined to express an opinion with respect to the impact on the capacity for work by the other injuries or illnesses.  Dr Horsley understood that her role was to assess the applicant’s capacity to work at either eight or 20 hours per week but she said it was dependent upon the applicant’s cardiac function yet she was not provided with any reports from the applicant’s treating doctors.  She also acknowledged that the applicant’s capacity for work would depend on his psychiatric state but said that she preferred to defer to the opinion of consultant psychiatrists.  She also found the applicant had lumbar spondylosis with degeneration present in his left hip and his left knee.  She recorded that until the year 2002 the applicant had a capacity to work on his farm but such work was limited to “inspecting”, “supervising” and “fencing”.  She thought the applicant’s back pain caused by lumbar spondylosis was managed by the wearing of a lumbar brace.  Dr Hoffland provided a report to the applicant’s advocate who appeared at the VRB (T-documents pp68-70).  She reported that the applicant was unable to work by reason of his cardiovascular illnesses together with the symptoms of PTSD which she regarded as being “significant”.  She reported that the applicant’s “limitation” upon employment was permanent, that his capacity for work would not improve and that he was unable to work due to his accepted disabilities alone.

81.     Only Doctors Walton and Horsley gave evidence personally in these proceedings.  This was despite the first day of evidence being heard in Ballarat where many of the applicant’s treating physicians continue to practice.  Accordingly an assessment of the applicant’s capacity can only be made by reference to the applicant’s evidence together with the evidence of Dr Walton and Dr Horsley together with the comments and opinions expressed by the other doctors in their reports.  I should add at this stage the evidence of Dr Horsley in the circumstances was disappointing.  In fairness she was not provided with copies of the reports of treating doctors and had an inadequate or absent history.  In the alternative it was unexplained why she did not call for that information when expressing her opinions as to the applicant’s capacity to undertake work or self employment.

82.     So far as can be determined from the reports and by the above summary, I am satisfied that Mr McMillan underwent cardiac surgery in 1994 which on all accounts initially produced a good result.  Within a matter of weeks he was found to be able to walk five kilometres daily and was reported as “doing well”.  He returned to work with the Shire and worked until October 1996 when he elected to be made redundant.  It would appear until that time his health was deteriorating because at August 1995 – six months after surgery he was reported to have increasing symptoms of “tiredness”, “angina on effort” and “was short of breath”.  He had at that stage a discussion with his doctors about the ability to continue in employment.  He was also assisted in the completion of heavy work by co-workers and it would appear that at August 1995 – more than 12 months prior to redundancy the health of Mr McMillan was deteriorating.

83.     It was alleged against the applicant that the cessation of employment in October 1996 was voluntary and incapacity beyond that date offended the “alone” test within s24. That is to say it was alleged that the applicant could not demonstrate incapacity by reason of war-caused injuries beyond October 1996 because he elected to resign from his employment.

84.     It is true that at that date the applicant did accept redundancy but it is also true that he had been notified that upon amalgamation of neighbouring shires employment would not be made available to him.  Equally it was true that the applicant’s health was deteriorating considerably and there is much to suggest that at October 1996 he would not have been able to continue in employment by reason of his war-caused injuries, alone.  The history taken by the doctors 12 months earlier of increasing shortness of breath, angina on effort and reports of increasing tiredness suggests that the applicant’s health was deteriorating.  There is nothing to suggest that his health improved beyond that date until redundancy.  It follows that even if his health in October 1996 was the same as was demonstrated to the doctors in August and September 1995 it is most unlikely that Mr McMillan would have been able to continue as a member of a road maintenance crew even with the assistance being provided to him by co-workers.  Whether employment was undertaken elsewhere after redundancy remains a mystery.  Whilst Mr McMillan said in evidence that he did obtain employment with another contractor but was unable to continue it, the income tax returns did not disclose a declaration of income earned in that employment.

85.     After the applicant was made redundant in October 1996 it would appear that his health continued to deteriorate.  Dr Hepper expressed opinions in March 1998 of the applicant’s capacity for work being influenced by IHD and PTSD and he assessed capacity then at 20 hours per week only.  In the same month Dr Houghton the psychiatrist found that the predominant injury was PTSD with increasing angina upon effort.  Dr Chaudhary reported in April 2004 that following a stress test completed in June 2002 Mr McMillan was then short of breath, had left ventricular impairment and/or failure and at that time the applicant was totally incapacitated to undertake work as a grader operator or plant operator.  Dr Chaudhary reported that whilst the artery grafting of 1994 was regarded as being successful he noticed significant impairment of heart function “which is persisting over the number of years . . .”.

86.     The claim for pension which has ultimately given rise to these proceedings was made in January 2002.  For the purposes of this review the assessment period then commenced.  At that time the applicant had not been engaged in salaried employment since October 1996 (subject to whether there was employment beyond redundancy with The Shire) and ordinarily there would be enquiry as to whether the absence from the salaried workforce of five or six years would offend the “alone” standard within s24. I would be satisfied for the purposes of these proceedings - having regard to the evidence heard and read – that such a finding would not be appropriate. I am satisfied that at October 1996, despite the applicant then being in salaried employment he was then in deteriorating health and was given considerable assistance by workmates. Beyond that date I would regard the applicant as having been incapacitated for the manual employment that he was previously undertaking. I am satisfied on the opinions expressed by the doctors variously throughout this file that the applicant’s health continued to deteriorate and he had been incapacitated for some time prior to January 2002. By way of example the applicant gave evidence at the VRB in June 2003 that he had ceased milking three or four years earlier. That is inconsistent with the history taken by Dr Houghton that at March 1998 the applicant was “supervising” only.  Whilst the applicant clearly did have a very poor memory – a review of his answers to questions in these proceedings would bear testament to this – I would be more confident in adopting the contemporary history of Dr Houghton in March 1998 than the evidence given to the VRB in June 2003.  It follows therefore that at March 1998 the applicant would have been supervising only because he was then incapable of milking.  At March 1998 the applicant had been redundant for about 18 months only.

87.     Further to the above, the applicant would have been 51 years of age in 1998.  He had a history of employment with road making and rock crushing equipment.  He had also obtained a crane and dogman’s licence.  Were it not for his war-caused injuries or disabilities it would have been my view that the hypothetical position in which Mr McMillan would have found himself suggests that he would have been able to obtain employment elsewhere.

88.     Dr Horsley said that she would be influenced by opinions expressed by the applicant’s LMO who had seen him frequently and over many years.  Likewise I would also be influenced by such opinions – although it remains unexplained why Dr Hepper was not called to give evidence.  I note that he reported in March 1998 that the applicant was fit to undertake work at 20 hours per week but at April 2004 he concluded that the war-caused injuries prevented the applicant from working eight hours per week.  This would again indicate a deterioration in the applicant’s health.

89.     After the applicant was made redundant attempts were made by him to manage and maintain his farm on a full-time basis.  This was an unrealistic expectation having regard to the severity of the applicant’s health.  It was the applicant’s evidence that most of his time was spent supervising the activity undertaken by his son and that he did not undertake work that would normally be expected of a self employed farmer.  It is worthy to note that despite Mr McMillan being described in his income tax returns as a “farmer”, Dr Houghton had a history in March 1998 of him (then) “supervising”.  Dr Horsley said in evidence that the applicant had a capacity to supervise over his farm.  She also said that he would have the capacity to undertake fencing.  For the purposes of that evidence I assume that Dr Horsley is not familiar with the physical nature of fencing.  There is nothing to permit any finding – having regard to the applicant’s cardiac state that he would have any capacity at all to undertake fencing.  Having regard therefore to the evidence in 1998 and 2004 of the applicant having a capacity to supervise – and having regard also to the limited periods of time over which the applicant attends his farm and undertakes “supervision”, I would be satisfied, and find as a fact, that the incapacity for war-caused injury or disease does prevent Mr McMillan from undertaking remunerative work for periods aggregating more than eight hours per week.  Dr Horsley reported that the applicant suffered from lumbar spondylosis and had degeneration in his left hip and left knee.  She reported that whilst the back injury caused pain which did not result in cessation of work, it would have an affect on the capacity to return to the workforce.  She also reported that there was some discomfort upon clinical movement of the left hip and left knee, nonetheless she concluded that the applicant’s capacity for work for either more than eight or 20 hours per week would depend on his cardiac function. 

90.     Mr McMillan said that he wears a lumbar brace only when driving a motor vehicle for long periods and to avoid the onset of pain.  He agreed that he had a “minor back problem” but he was able to bend and perform light work if needed.  He denied any injury or discomfort in his left hip and left knee.

91.     On balance I would be satisfied that the presence of lumbar spondylosis together with degenerative disease in the applicant’s left knee and left hip would not interfere with his capacity to undertake employment or work on his farm were it not for the war-caused injuries.

92. In regard to the above I am satisfied that the incapacity suffered by Mr McMillan is total and permanent, that it is by the war-caused injuries alone and he has been incapable of undertaking remunerative work for periods aggregating more than eight hours per week. I am therefore satisfied that s24(1)(b) is satisfied.

93.     I acknowledge that the applicant does undertake some administrative work associated with the farm and has some involvement in the RSL and another community organisation.  I would be satisfied on the evidence heard that the time spent on these activities is so intermittent and spasmodic that it should not be interpreted or deemed as being indicative of the applicant’s capacity to undertake clerical or other similar type work.  I would be satisfied that having regard to the applicant’s age and his absence of any clerical skills or training that employment of that type would be beyond his capacity.

94.     I would also conclude this part and find, realistically, that despite the applicant’s “supervision”, he is totally and permanently incapacitated.  I heard nothing that would allow a finding that the “supervision”, as described converts to a finding of capacity to work or earn.

95. The focus of this review must then turn to s24(1)(c).

96.     Prior to redundancy from The Shire the applicant and his former wife operated a farm in partnership.  The applicant and his wife later separated and a decree nisi of dissolution of marriage became absolute in June 2000.  An examination of the income tax records indicate that until the 1998 financial year, the applicant and his former wife each equally shared a distribution, as partners, with respect to the farming property but thereafter the distribution was allocated at 100 per cent to Mr McMillan alone.  From the year 2001 he has lodged income tax returns in his own name only.

97.     It was learnt in these proceedings that the farm presently comprises approximately 400 acres yet some of it had been “transferred” to the applicant’s son.  Nonetheless the applicant gave evidence that the income tax returns lodged concern the income and expenses concerning the farming operation over the whole of the 400 acres.  It was unexplained why neither the applicant and his son operated the farm as a partnership or in some other legal entity.  In the alternative it was unexplained why the applicant’s son has not been declaring income and expenses over the property allocated to him.  Additionally the applicant’s inability or failure to explain movements in the receipts from milk, cattle and sheep sales was unsatisfactory save that he asserted that but for his war-caused injuries he would have devoted more time, energy and effort into the properties and would have earned more in income.  It followed – and this was submitted by Mr De Marchi – that the applicant has “suffered a loss . . . of earnings on his . . . own account” (refer s24(1)(c)).

98.     In Counsel the Full Federal Court comprising Gray, Carr and Goldberg JJ decided an appeal referrable to a veteran who was in partnership with his wife over a farm but who had ceased to trade.  One of the issues on appeal was the meaning to be given to the word “earnings” as it appeared in s24(2A)(e) of the Act. Although s24(1)(c) is presently under consideration the decision of the Federal Court is no less relevant.

99.     Although each of the three Judges gave separate judgments they were unanimous that the word “earnings” was referrable to gross receipts and not the amount achieved after expenses were deducted.

100.   In Counsel the veteran (and his wife in partnership) had ceased operating their farm because of the effects of war-caused injuries.  Upon cessation of farming activity gross income from it also ceased.

101.   In the present case the applicant was initially operating the farm in partnership with his wife whilst he was a salaried employee of the Shire.  He did not ever work on the farm on a full-time basis prior to his redundancy in October 1996.

102.   An examination of the income tax records between 1995 and 2003 indicate that the three principal sources of gross revenue were from the sales of milk, sheep and cattle.   In 1995 and 1996 the receipt from milk sales was relatively modest compared to an escalation in milk revenue in 1997 which remained relatively static until 2001 - the range of income extended between $40,861 (in 1998) to a maximum of $48,638 (in 1999).  In 2002 sales of milk provided receipts of $85,204 but reduced to $39,857 in 2003.

103.   An examination of the income from the sale of cattle indicated modest receipts until 1998 but significant receipts of income between 1999 and 2002 except for a reduction in that income in years 2000 and 2003.  Conversely in years 2000 and 2003 income from the sale of sheep increased compared to previous years.

104.   Accordingly it is not the case of the applicant that he has ceased to earn income from his farm by reason of his war-caused injuries.  It is the applicant’s case that by reason of his war-caused injuries he has been prevented from undertaking work over the farm which, had he been able to do so, would have permitted a greater return of income.  It followed on that analysis that he has suffered a loss of earnings on his own account.

105.   An examination of farming enterprises is notoriously difficult when attempting to ascertain whether fluctuations in income are associated with the incapacity of a veteran or by other seasonal or external factors associated with primary production.  It is no secret that most of Australia has been subject to drought in recent years which have had an adverse affect on farming income.  The absence of rain causes a reduction in available feed which in turn either causes a reduction in stock numbers or exposes farmers to increased costs of purchase of feed.  In the present case there was a remarkable increase in the receipts from milk sales in the 2002 year rising from $47,005 in the previous year to $85,204.  In the 2003 year milk sales dropped to $39,857.  In the 2002 year an examination of the income tax records indicates that 76 head of cattle were sold at $31,577 yet in the 2003 year 79 head of cattle were sold at $14,913.  The sale of livestock would indicate – subject to the quality of the stock – that farmers were affected by prices at market yet the remarkable return on milk sales in the 2002 year in the present case remains relatively unexplained.  Mr McMillan said that in that year it was a “good season” where his son “put in more hours”.  He also said that in that year, Scott was more committed and had a “better attitude”.  The returns on milk sales would suggest that either more cattle were milked or there was better pasture permitting the dairy cattle to produce greater quantities of milk.  Mr McMillan thought that there were good spring rains in 2001 which produced better pasture in 2002.

106.   It was the applicant’s case that were it not for his injuries he would not only devote more hours to the farm but would crop more extensively to reduce the costs of purchase of feed and in conjunction with 300 other acres which are presently leased more stock could be acquired with appropriate rotation between properties.

107. Although s24(1)(c) refers to loss of earnings, it does not refer to the absence of earnings. It therefore follows that if a veteran is unable to earn an amount which might reasonably be achieved were it not for war-caused injuries – but continues to earn some income – a loss of earnings nonetheless occurs. As Gray J decided in Counsel (at paragraph 18) the statutory context of s24 of the Act is to cause pension to be paid to veterans who have suffered a diminution in earning capacity. Further to this the amount of pension payable is not calculated by reference to an amount of any actual loss. I can find nothing from his Honour’s analysis, nor from the Act, which permits a finding of a veteran suffering a loss on his or her own account only when there has been a total absence of income earned.

108.   The “hypothetical position” therefore in which Mr McMillan is placed is that of a person, who, but for war-caused injuries, would have been able to devote more time, effort and energy into his farm with a consequent increase in the gross receipts of income.  I am satisfied that Mr McMillan is a witness of truth, that farming is his preferred occupation and but for the war-caused injuries he would have earned more in gross receipts than have presently been realised.  It therefore follows that he has suffered a loss of earnings on his own account.

109.   Perhaps a further complication to this analysis is identification of the “remunerative work the veteran was undertaking” within the meaning of s24(1(c). In Flentjar v Repatriation Commission (1997) 48 ALD 1 at 5, Branston, Beaumont and Merkel JJ, posed four questions in the context of s24(1)(c), namely:

1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?

2.     Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?

3.     If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?

4.     If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?

110.   I am satisfied that the relevant remunerative work that Mr McMillan was undertaking was that of a road construction worker and plant operator which ceased at October 1996.  I am also satisfied that the veteran was undertaking the work of a farmer in partnership initially with his wife and in recent years, alone.  For reasons given earlier I am satisfied that the applicant has been prevented from continuing both the work as a road construction employee and as a farmer by reason of his war-caused injuries.  Again for reasons given earlier I am satisfied that the war-caused injuries are the only factors preventing him from continuing to undertake his former work and as a consequence he has suffered a loss of salary and wages by his incapacity from undertaking work as a road construction worker and has suffered a loss of earnings on his own account by being unable to farm.

111.   A Full Federal Court of Whitlam, Emmet and Stone JJ, in Repatriation Commission v Hendy [2002] FCAFC 424 discussed the “hypothetical exercise” of “what a veteran would probably have done absent the service disabilities” (paragraph 37).  At paragraph 36 the Court decided that “the tribunal’s task was to assess what the veteran probably would have done if he had none of his service disabilities during the assessment period”.

112.   I am satisfied that but for the war-caused injuries, the applicant would have returned to farming on a full time basis.  His age, injuries, temperament and rural domicile would make it most unlikely that salaried employment, within his limited range of skills, would have been found.  Hypothetically, farming would have been undertaken by the applicant.  Having regard to his mood and temperament, it would have suited him.  But for his war-caused injuries, his effort would have either generated greater income or reduced the cost of engaging others.  It therefore follows that his “loss of . . . earnings”, would not have been as great.  Put alternatively, he would have earned more from his farming.  In making these findings, I repeat that on balance, I am satisfied, despite redundancy, the applicant could not have continued his salaried employment, by reason of his war-caused injuries.  Additionally, I am not satisfied that the back, leg and hip injuries would have prevented the applicant from farming.  His incapacity has occurred because of his war-caused injuries, alone.

113.   Faced with redundancy, the opportunity to earn income from self employment as a farmer was a distinct and viable option for the applicant.  He would not have been subject to regular hours, could rest when needed or if necessary and would not have to deal with other people.  His ability to earn income would have existed, but for his accepted disabilities and the income earned would have been greater, than actually achieved.  I am satisfied of this because most of the income has been earned by the labours of the applicant’s son only.  That is to say, if the applicant had been able to work on his farm the returns would have been greater.  This is consistent with his evidence, which I accept.

114.   The respondent submitted that the “alone” test has not been achieved by a combination of retrenchment, time out of the workforce, period of time prior to claiming and back hips and leg injuries, to name a few.  But “alone” does not mean “sole, unique and absolute” and circumstances should be viewed with an “eye to reality” and guidance by “common sense” (refer Cavell v Repatriation Commission (1989) 9 AAR 534 at 539).  For the reasons given above, the “alone” test, in my view is not offended by the circumstances of this application.

115.   The present review has not been without obstacle.  I would have preferred to have heard from the doctors who have treated the applicant and the failure to call them in Ballarat where the first day of this hearing was convened remains unexplained.  Additionally I would have preferred to have heard more about the arrangement presently operating between the applicant and his son over the relevant farming property.  The failure to provide Dr Horsely with background medical data significantly impaired her ability to give a reasoned opinion and the applicant’s poor or inadequate memory prevented some detail as to the farming operation remaining unclear.

116.   Doing the best I can on the evidence heard, and from an interpretation of the documents, and by application of a beneficial interpretation of the legislation, I am satisfied that the decision under review should be set aside and from the commencement of the assessment period the applicant has been entitled to pension at the special rate.  It therefore follows that the decision under review should be set aside.

I certify that the 116 preceding paragraphs are a true copy of the reasons for the decision herein of
Mr J Handley, Senior Member

Signed:         Holly Weston
  Associate

Dates of Hearing  20 May and 23 August 2004
Date of Decision  9 November 2004
Solicitor for the Applicant          Mr D De Marchi
Departmental Advocate            Mr K Rudge