Mooi and Repatriation Commission
[2007] AATA 18
•15 January 2007
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 18
ADMINISTRATIVE APPEALS TRIBUNAL ) No Q2005/311
VETERANS’ APPEALS DIVISION )
Re PAUL MOOI Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Ms M J Carstairs, Senior Member Date15 January 2007
PlaceBrisbane
Decision The Tribunal affirms the decision under review
...........[Sgd]...........
M J Carstairs
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS - special rate pension – service in Royal Australian Navy - war-caused disability – business failed due to two cyclones – back injury – applicant prevented from continuing in remunerative work for other reasons including effects of cyclones – decision affirmed
Veterans’ Entitlements Act 1986 s19, 24.
Forbes v Repatriation Commission (2000) 171 ALR 131
Flentjar v Repatriation Commission (1997) 48 ALD 1
Cavell v Repatriation Commission (1988) 9 AAR 534
Repatriation Commission v Hendy (2002) 76 ALD 47
REASONS FOR DECISION
15 January 2007 Ms M J Carstairs, Senior Member 1. Mr Paul Mooi applied for an increase in his rate of pension in June 2003. Mr Mooi has been assessed as eligible for payment at 90% of the general rate of pension and he now seeks the higher, loss-of-earnings related payment, called special rate.
2. Entitlement to the special rate of pension requires, amongst other things, that a person is prevented from continuing to undertake remunerative work, and cannot work more than 8 hours per week, by reason of war-caused disability.[1] The respondent says that Mr Mooi is not entitled to special rate for a number of reasons, chief amongst these being that Mr Mooi’s inability to earn is related to physical and other disabilities that are not war-caused. In addition, the respondent says Mr Mooi’s age - being almost sixty five at the date of his claim - is a relevant factor to take into account, as well as his business having effectively failed after two cyclones destroyed his stock, working library and other infrastructure.
[1] Section 24 of the Veterans’’ Entitlements Act 1986
BACKGROUND
3. The respondent has accepted that Mr Mooi’s conditions of lumbar intervertebral disc degeneration with laminectomy, tinnitus and hearing loss are due to his service with the Royal Australian Navy. Mr Mooi served in the RAN from 1961 to 1973. His main medical condition relates to his back. Mr Mooi has had two laminectomies, one undertaken in 1960 before he joined the navy and the next one being undertaken in 1981. The latter, while undertaken after he left the Navy in 1973, has been accepted as the result of an injury he sustained while engaged in service.
MR MOOI’S WORK HISTORY
4. Mr Mooi was educated to Year 12 and has completed a 1st year of electronic engineering course as well as tertiary courses in maths, physics, information technology and English at TAFE.[2] Mr Mooi said that immediately after leaving school he took up employment with Queensland Rail, initially as a porter.[3] He sustained his first back injury in the course of that employment when he was thrown from the side of a wagon being shunted through a goods shed. That led to the first laminectomy which successfully relieved him of all back pain. He then joined the Navy where he trained in communications and electrical engineering, rising to the rank of chief petty officer.
[2] T18
[3] Exhibit A1
5. Mr Mooi sustained his second major back injury in the Navy in 1973 during an exercise where he was descending a ladder in a hatch when two sailors jumped on the hatch lid. This caused a hyperextension injury as Mr Mooi took the force of the impact through his spine. Mr Mooi said that after this he had ongoing problems with his back and in June 1973 decided to leave the Navy.
6. Mr Mooi then worked for short periods with a private firm making marine transceivers; next for EMI, fixing televisions; and then as a technician for Channel 9. In 1976 he set up an electronics repair business operating from his home in Brisbane, but rising home loan interest rates forced him to sell his home in Brisbane and move to Townsville. It seems that the business in Townsville, which operated under the name Electronic Communications, was a successful venture: Mr Mooi expanded and took on staff.
7. But by 1980 Mr Mooi’s ongoing back pain was limiting him physically and he elected to have further surgery. He said that, at that time, his condition reduced his capacity to be fully engaged in his business, even in a managerial role. He observed that business was becoming less profitable, he could not cover the wages and outgoings, and he decided to close operations.
8. Mr Mooi next obtained employment in Canberra with the Department of Defence as a technical officer and worked there for over ten years between 1982 and 1993, working primarily in communications and electronic warfare. When the area of Defence in which he worked was rationalised he took a redundancy package in about 1990, but he was able to obtain employment in another branch of Defence, the Directorate of Air Engineering where he worked from 1990 to 1993. He said that these final years with the Directorate of Air Engineering were frustrating for him because he was insufficiently trained or experienced in aeronautical engineering. He decided to leave in 1993. He moved to Innisfail, hoping to obtain paid employment, but when this did not happen readily, he took advice proffered by Centrelink, to start his own computer business. The first business name registered was Innisfail Computers, later changed to Daragee Computers and Electronics.
MR MOOI’S BUSINESS
9. The evidence indicates that Mr Mooi was receiving social security benefits from 1993 and in 1996. He then applied for and was granted a service pension on the basis of being permanently incapacitated for, and unable to engage in, remunerative work. He was then aged 58. A file note dated 31 December 1996 recorded that Mr Mooi attended at a Veterans’ Affairs office and reported that his business was not making any money and he had sold only one computer. He is recorded as having said that he would keep the equipment as a hobby and if he had any sales he would consider it a bonus. However in 1998 he reported (in a claim for increase in pension) that he was working between 20 and 60 hours per week in part-time self employment.
10. Mr Mooi’s plans for his computer and electronics business were affected by damage sustained in cyclones that have struck North Queensland since he commenced his operations. He told the Veterans' Review Board that the business was flooded in 1997, 1999 and in 2004. These were the dates respectively of Cyclone Justin (May 1997), Cyclone Rona (February 1999) and Cyclone Grace (March 2004). Mr Mooi’s business operated from under his house. Mr Mooi said to the Veterans' Review Board that he was totally inundated with flood waters in 1997 and he lost all his equipment and library. Apparently the water levels rose to 5 ft on two occasions.
11. Mr Mooi told me that after Cyclone Justin he attempted to salvage what he could, and after a clean-up period, continued to operate his business. However he stated that he was not seeking new work because I was not in a position to take on any significant amounts of work while I cleaned up the office.[4] Mr Mooi said after the first cyclone he had problems with insurance and he discovered that he was not covered for flooding with Cyclone Rona. He said that at that time he started to tell people that he was not operating his business. Mr Mooi maintained that his last paid job was in 2003. However he had told the Veterans' Review Board that well before this he had lost everything in the business, as a result of Cyclone Rona in particular.
[4] Exhibit A1
12. Mr Mooi has stated that if he did not have the back problem he would have continued his business:
If I did not have my back problem I have no doubt that I would have continued my business. I had put a lot of work and effort into setting up the business and building it up and would have continued it on to the point where, if I wanted to get out I could have sold it off to recoup my set up costs and maybe make a profit. …The cyclones occurred but I persevered and continued my business each time.[5]
[5] Exhibit A1
13. A main complaint arising from the condition of Mr Mooi’s back seems to be the resultant leg weakness, causing him to limp and drag one leg, as well as experiencing alteration of sensation in his feet. Pain has not featured strongly in his presentation, as reported to Dr Lowe in 2003.[6] Mr Mooi told the Veterans' Review Board that at the time of his claim pain had not featured prominently, but was increasing by the time of that hearing (end of 2004). I accept, as Mr Mooi said, that he was finding the physical side of computer work too difficult with his back, not so much with carrying computers, but with the flexibility needed when scrambling under desks and disconnecting leads.
[6] T 23 folio 89: Report of Dr B Low 22 October 2003.
THE EVIDENCE CONCERNING WHEN THE BUSINESS CEASED
14. Little in the written materials supported a view that Mr Mooi was still operating his business in 2003. In a document supplied to the respondent on Mr Mooi’s behalf by an RSL pension’s officer, it was stated that Mr Mooi’s business had commenced in 1994 but after flooding in the two cyclones, Justin and Rona, Mr Mooi had to close the business. The letter continued the only thing he kept going from the business was his business registration even though he was no longer trading.[7] In his claim form received on 18 June 2003,[8] Mr Mooi said in answer to a question concerning his employment history that from 1993 to 1998 he was self employed in computer repairs and from 1998 to present his type of work was NIL.
[7] T 23 folio 87
[8] T14
15. In answer to the question have disabilities..affected your employment? Mr Mooi stated: Have not worked since 1998. Mr Mooi told the Veterans' Review Board[9] that the date should have been 1999.
[9] Exhibit R4 p9
16. Against these indications of business ceasing at a date in the late 1990’s was the content of a form completed by Mr Mooi in August 2003[10] in which he stated that he was self-employed in electronics maintenance and electronics life cycle management, working 1-2 hours per day (10-15 hours per week) and stating that from 1999 he had worked part time because his back problems prevented him moving heavy equipment. When it was put to him in cross-examination that he was not doing 10-15 hours per week at that time, he agreed that perhaps he was not. Certainly an examination of his financial records indicates that he was not.
[10] T18
LEGISLATION
17. The requirements for special rate of pension are set out in a series of provisions in s24 of Veterans’ Entitlements Act 1986. Also relevant is s19(5C)(a) of the Act which requires the rate of a pension to be determined during the assessment period. That term is defined in s19(9) of the Act as meaning:
….the period starting on the application day and ending when the claim or application is determined.
18. The application day in this case was 16 June 2003 and the assessment period runs from that day. At the application day, Mr Mooi was a month short of his 65th birthday.
19. Mr Mooi meets the first requirement of s24 of the Act, which in s24(1)(a) requires that his general rate entitlement to pension is more than 70%.
20. The next requirement is that the person is unable to undertake remunerative work of 8 hours duration per week by reason, alone, of war caused disability. Dr J Di Palma certified that Mr Mooi is unable to work for more than 8 hours per week by reason only of his intervertebral disc degeneration and laminectomy alone[11]. Dr Di Palma said other conditions such as diabetes, hypertension, psoriasis, and allergic rhinitis did not affect Mr Mooi’s capacity to work.
[11] Document T31
21. There was debate about differentiating that part of Mr Mooi’s back injury that is properly attributable to service, from that which related to injury during Mr Mooi’s civilian employment which pre-dated his service. Despite best attempts by those called upon to comment in the case, the evidence on this point was confused and, in my view, ultimately unresolvable. Much time now has passed since both laminectomies were undertaken; the medical practitioners who carried them out are no longer in practice. The evidence was unclear about which segment of the spine was involved in each laminectomy. Some of the evidence suggested that the 1960 laminectomy was at L5/S1. That assumption underpinned a recent report of Dr Williams dated 9 November 2005.[12] However when Dr Williams was shown other evidence, including that of Dr L Newcombe in 1983[13] which indicated that the L5/S1 fusion was the site of the 1981 laminectomy rather than the 1960, Dr Williams acknowledged that, if so, his conclusions in his report would be reversed. That is he would attribute 80% of the state of Mr Mooi’s back to service-related injury, and also he would attribute Mr Mooi’s nerve root function and secondary calf weakness accordingly to service-related component of back injury.
[12] Exhibit R1
[13] Exhibit
22. I note that when conducting the general rate assessment of the back condition the respondent does not seem to have distinguished between levels of spinal involvement that were attributable to service and those that were not. In the absence of clearer evidence allowing attribution to be made about incapacity arising from different levels of Mr Mooi’s spine, I prefer to accept the evidence of Mr Mooi’s general practitioner, Dr R Di Palma which provides a global assessment of the effects of Mr Mooi’s inter-vertebral disc degeneration. I note, in preferring Dr Di Palma’s opinion that Mr Mooi’s intervertebral disc degeneration prevents Mr Mooi working 8 hours per week that Dr Williams did not comment on Mr Mooi’s capacity to work.
23. I was satisfied that this evidence was sufficient to conclude that Mr Mooi satisfies s24(1)(b) of the Act and he is unable to work more than 8 hours per week by reason of war-caused disability alone.
24. The real source of contention was whether Mr Mooi satisfies s24(1)(c) of the Act during the assessment period. Section 24(1)(c) deals with the question of whether any loss of remunerative work is attributable to service-related incapacities and not to something else as well. The Federal Court in Flentjarv Repatriation Commission (1997) 48 ALD 1 has said that s24(1)(c) of the Act poses the following questions :
1. What was the relevant "remunerative work that the veteran was undertaking".?
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?
25. The operation of s24(1)(c) is ameliorated for those aged under 65 by the provisions of s24(2)(b) of the Act, which permits veterans, who might not have met the special rate tests at the time they ceased working, to retain their eligibility if they are genuinely seeking work and their service-related incapacity remains the substantial cause of the inability to undertake remunerative work. However no reliance was placed on this provision, and there was no evidence that Mr Mooi has been seeking work in the assessment period.
26. The questions from Flentjar also must be addressed within the assessment period, not with reference to the time when the veteran might have given up work, although evidence about ceasing in particular jobs may assist in reaching conclusions about why a person ceased remunerative work or is unable to continue in remunerative work.
WAS MR MOOI PREVENTED FROM CONTINUING TO ENGAGE IN REMUNERATIVE WORK?
27. Turning to the first of the Flentjar questions I was mindful that remunerative work does not have to be the last work undertaken by the veteran, and Mr Mooi can rightfully claim an extensive range of remunerative experience, both as an employee and in self employment. I accept Mr Honchin’s submission that Mr Mooi’s remunerative work included that which entailed his own business as a sole trader electronic repair technician and computer repair technician cum IT consultant. It also includes his extensive background as an employed defence technical specialist.
28. I accept, based on the medical evidence and Mr Mooi’s evidence, that he was prevented by reason of his war caused incapacity from continuing in the remunerative work represented by his business activities. I accept his evidence that this work, in which he was a sole trader, required a level of flexibility and dexterity that was beyond him because of his back.
29. There was scant evidence that addressed whether Mr Mooi was prevented from continuing in other remunerative work which he had undertaken, as an employee, in the specialist roles in Defence. Mr Mooi did not claim that war caused incapacity was any part of his reasons for ceasing his employment with the Department of Defence, and his special rate case was not made with reference to that kind of remunerative work. It may be that Mr Mooi’s war caused incapacity would have less impact on continuing that kind of remunerative work, however I was satisfied that by the start of the assessment period, other factors would have ruled out that kind of remunerative work. Mr Mooi was about to turn 65 years of age. This age is well recognised as an impediment to employment, particularly where, as here, Mr Mooi had no recent experience in what is a specialised area. It was the sort of work in which up to date knowledge would be mandatory. I was satisfied, with reference to that kind of remunerative work, that Mr Mooi ceased to engage in it for other reasons and was prevented by reasons other than war caused disability: s24(2)(a).
30. As to his remunerative work represented by his business, I was also satisfied that there were reasons other than war caused disability that account for him ceasing to engage in it. It is a well recognised that there are two limbs to the test in s24(1)(c) of the Act: the first must be read subject to s24(2)(b) and the second limb must be read with s24(2)(a).[14] The most significant issues for determining Mr Mooi’s claim seem to me to arise under s24(2)(a).
[14] Forbes v Repatriation Commission (2000) 171 ALR 131
31. In Cavell v Repatriation Commission (1988) 9 AAR 534 at 539, the Federal Court said that in applying the alone test in s24(1)(c) it is necessary to make a practical decision whether the veteran’s loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.
32. The problem for Mr Mooi’s claim is not so much his age at the start of the assessment period, although it might have been a factor given that he was 65 at the start of the assessment period and is 68 now. There was no evidence about what Mr Mooi’s intentions might have been about a retirement age and I can make no findings in that regard. But it is clear that his business was a potential vehicle that could render his age an irrelevant factor, so long as he was well enough to continue. As was said in Repatriation Commission v Hendy (2002) 76 ALD 47, the Tribunal’s task is to carry out the hypothetical exercise of assessing what the veteran would have done if he had none of the service disabilities during the assessment period.
33. Taking a practical “eye to reality” approach to the facts here, it seems to me abundantly clear that the real preventing factor for Mr Mooi continuing in remunerative work as a computer specialist was the impact of the cyclones on the business. His business was effectively destroyed by two natural disasters in 1997 and 1999. His business assets and infrastructure were wiped out, as he described in his evidence to the Veterans' Review Board. He lost all his stock under water and he only retrieved his own computer.[15] He told the Veterans' Review Board that his accountants were wrong in recording in the 2001 tax return that there were business assets of some $100,000 because he had no assets apart from his computer. He agreed at that hearing that he could not carry on the business without the equipment.
[15] Exhibit R4 p10
34. I was mindful in reaching the conclusion that I have that Mr Mooi has made different statements about when he ceased in business. His business records are informative in that regard. It appears that tax returns were not lodged until the respondent in 2003 requested evidence about business operations. I do not regard the lodging of tax returns, in those circumstances, as evidence that the business was operating. The returns show that the business made a loss in each year between 1999 and 2005. Nil income was shown for the tax years ending 1999 and 2000.
35. Mr Mooi offered the explanation that that he was carrying out work that he was not charging for, because if he had costed and charged his hours fully, the price would be too high. I do not accept that explanation. On the amount of income recorded in the 2001 tax return, taking into account Mr Mooi’s hourly charge-out rate, only about 19 hours work for the whole year is attributable his computer business. I was satisfied that at the most, after the second cyclone in 1999, Mr Mooi answered calls for help or other IT assistance from past customers and I do not accept that this was activity demonstrating his business was in existence. The continuity of activity that, amongst other things, characterises a “business” had ceased. I concluded that Mr Mooi thereafter was simply doing a few favours for old customers.
36. I note that Mr Mooi was earning some income from the sale of eggs, an activity about which remarkably detailed records were produced, with every sale of eggs and expenditure related to this activity itemised. I note also that Mr Mooi identified to the Veterans' Review Board that income showing on his 2001 tax return was from sales of eggs and fruit. This activity from primary production is not argued as being Mr Mooi’s remunerative work; in any event there was no suggestion that this activity had ceased. But it seems to me quite telling that there were no similar records available to show that Daragee Computers was conducting business in any real sense after 1999. I was satisfied that if there was such business activity, Mr Mooi would have recorded it.
37. Some account needs to be taken of what Mr Mooi has said from time to time about ceasing his business. That documentary material has been referred to above. He has made statements on several occasions indicating that his business ceased about the time of the second cyclone. I see no reason not to accept his evidence given at those earlier times, particularly as his financial records reflect it as true.
38. As the case of Cavell points out, a commonsense approach must be taken. In Forbes v Repatriation Commission (2000) 171 ALR 131, the Court said that any factor having employment consequences which played a part in the applicant’s inability to work or to retain and hold remunerative employment is sufficient to displace the case for pension at the special rate.
39. I was satisfied that there were other reasons for Mr Mooi ceasing to be in remunerative work throughout the assessment period and Mr Mooi does not pass the third and fourth of the Flentjar tests. It cannot be said that war caused injury alone prevented his continuing in remunerative work nor does it account for his loss of earnings – the second limb of 24(1)(c). Mr Mooi cannot be taken to have suffered a loss of earnings on his own account, because s24(2)(a) requires me to have regard to any other reasons. I was satisfied that the other reasons include the effects of the cyclones on his business.
40. I would say also, that on the medical evidence suggesting at least a 20% contribution from the non war-caused component of his back condition, this would be another factor sufficiently significant to disentitle Mr Mooi to pension at the special rate.
DECISION
41.The Tribunal affirms the decision under review.
I certify that the preceding 41 paragraphs are a true copy of the reasons for the decision herein of Senior Member M J Carstairs.
Signed: ………………………………………….
AssDates of Hearing 31 October 2006
Date of Decision 15 January 2006
Counsel for the Applicant Mr D Honchin
Solicitor for the Applicant Purcell Taylor
For the Respondent Mr J Stoner, Departmental Advocate
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