Nigel Longhorn and Repatriation Commission
[2013] AATA 854
[2013] AATA 854
Division VETERANS' APPEALS DIVISION File Number
2013/2072
Re
Nigel Longhorn
APPLICANT
And
Repatriation Commission
RESPONDENT
DECISION
Tribunal Dr P McDermott RFD, Senior Member
Date 29 November 2013 Place Brisbane The decision under review is affirmed.
.......................[Sgd].................................................
Dr P McDermott RFD, Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – Service pension – Special rate of pension – Whether applicant ceased remunerative work for reasons other than his war-caused incapacity – Whether applicant is suffering a loss of salary or wages, or of earnings – Decision affirmed
LEGISLATION
Veterans’ Entitlements Act 1986 (Cth) ss 5Q, 24, 120
CASES
Counsel v Repatriation Commission (2002) 72 ALD 204
Flentjar v Repatriation Commission (1997) 48 ALD 1
Willis v Repatriation Commission (2012) 202 FCR 323
REASONS FOR DECISION
Dr P McDermott RFD, Senior Member
29 November 2013
INTRODUCTION
Mr Nigel Longhorn (“the applicant”) has made a claim for an increase in the disability pension paid to him in respect of conditions previously accepted by the Repatriation Commission (“the Commission”) in relation to his service in the Australian Army.
Those conditions are internal derangement of the left knee, foreign body left shoulder, sprain or strain of the back region, osteoarthrosis of the right and left knees, posttraumatic stress disorder (“PTSD”), rotator cuff syndrome of the right shoulder, bilateral sensorineural hearing loss and tinnitus. On 17 August 2012 a delegate of the Commission made a decision in which the applicant’s pension was assessed at 100% of the general rate with effect from 10 October 2011. On 22 February 2013 the Veterans’ Review Board affirmed this decision. The applicant has made an application to this Tribunal for review of the decision.ISSUES
The applicant has sought payment of the special rate of pension from 10 January 2012, which is the date when he made his application for an increase in the rate of his pension. I must determine whether the applicant meets the requirements of s 24 of the Veterans’ Entitlements Act1986 (Cth) (“the Act”). The Commission concedes that the applicant meets the requirements of s 24(1)(aa), (aab) and (a) of the Act. At issue is whether the applicant meets the requirements of s 24(1)(b) and (c) of the Act which provide:
(1) This section applies to a veteran if:
...
(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;
Section 19 of the Act provides that the rate of pension payable to the applicant has to be determined during the “assessment period”, which is the period starting on 10 January 2012 when he made his claim and ending when the claim is determined.
I am required by s 120(4) of the Act to determine any issues to my reasonable satisfaction. This provision has been held to require that any issues are determined on the balance of probabilities.
EVIDENCE
At the hearing of the application oral evidence was given by the applicant and
Dr Jonathan Hargreaves.Applicant
The applicant was discharged from the Australian Army in 1985. When he was discharged he did security work for a number of different companies. He started his own firm (N & L Security) which from 1991 traded under the name Electronic Security. In 1995 the business became incorporated as Electronic Security (Qld) Pty Ltd (“ESQ”). The applicant in giving his evidence said that his security business was a hobby business. He stated that he worked in the business to keep active. The business was created to monitor alarms on behalf of installers; the monitoring fees were split between his business and the installers.
The applicant stated that the security monitoring business was active for 24 hours per day. He would be present in the business premises all the time but would not be working all the time. The business operated from Fortitude Valley and then later moved to Geebung. He stated that the manager of the business was a lady who handled the accounts. There were two staff on duty at night and two staff on duty during the day. The applicant stated that he did not draw any wages from the company which paid his security licence. The applicant stated that he lived in the building where the business was conducted from. The applicant confirmed that the moneys earned by the company were paid into a trust which is no longer operational but has not been closed down.
The applicant stated that when he worked for ESQ, the entity paid for the rent of the property where he lived. The applicant stated that he never paid any tax. Any profits of ESQ went back into the business as well as paying for him to go to security shows in Sydney and the United States of America. The building at Geebung was subject to a mortgage to which he is personally paying $2,300 per month.
The applicant also discussed his voluntary work. He stated that he does voluntary work for the Vietnam Veterans Motorcycle Club working as treasurer, as well as conducting secretarial and welfare work. The club meets every Friday; he works on the accounts from a quiet room. The applicant also stated that he does secretarial work for the Harley Davidson Club which meets once per month. When he rides with these clubs he takes plenty of rest stops. The applicant stated that his work as a justice of the peace mainly involves him certifying documents for the benefit of veterans who are lodging claims. That work is for about 20 minutes per week. The applicant also stated that in the past he gave voluntary lectures in road safety.
The applicant stated that after the divorce he did not want to pay his wife any maintenance, but that he paid child support for his children. Under cross-examination the applicant was asked about the comments recorded by Dr Hargreaves who noted that the applicant remarked that he “decided against earning further in the workforce so as to prevent having to pay his ex-wife”.[1] The applicant said that the statement was an “extract”. He stated that he did not want to pay his wife any “extra moneys”. It was put to the applicant that he did not want to take a salary as he did not want to pay maintenance to his ex-wife. The applicant confirmed that he did not dispute the accuracy of the written comment by Dr Hargreaves.
[1] Exhibit A, p. 95.
Under cross-examination the applicant was referred to the report dated 10 May 2010 of Dr Peter Johnstone, orthopaedic surgeon, who wrote: “Mr Longhorn currently undertakes up to 20-25 hours per week of voluntary work”.[2] The applicant stated that
Dr Johnstone had asked him what he did with his time and what had he done in the past. The applicant was asked about the report being issued some six months after he ceased working at ESQ. The applicant stated that road safety lectures, a component of the voluntary work, were then not being carried out.[2] Exhibit E.
Under cross-examination the applicant confirmed that he still is the sole director and shareholder of ESQ. which is still registered. The applicant was shown a profile of ESQ and he confirmed that both he and the company were successful.[3] The applicant agreed that the profile was his personal CV. The applicant also agreed that it would be fair to describe his employment after leaving the Army as a manager of an electronic security company. The applicant also confirmed that he had skills in the management of some voluntary organisations and that he had some management and economic skills.
[3] Exhibit A, p 169.
The applicant was asked whether people would come to him for electronic security.
He stated that he would not now provide advice but that he was helpful to some companies. He still has a current security licence from the Office of Fair Trading, to keep that licence he has to meet first aid requirements.
Under cross-examination the applicant was referred to his statement in which he discussed the business which ceased in November 2009.[4] He stated that he decided to withdraw from meetings and shows but continued to work on maintenance and the “hook-up” of equipment. The applicant was asked about the tax returns that show, for example, that for the year ended 30 June 2006 the company had a gross income of about one million dollars and expenses in excess of that amount.[5] The applicant mentioned that there were high labour costs as the business had to be run on a 24 hour basis with a number of operators on duty at a time. The applicant was asked about his comment that the “new Qld licence requirements for operators was the last straw”.[6] It was put to the applicant that the “red tape” with the licensing requirements was one of the reasons why he ceased operating the business. He did not deny that contention.
[4] Exhibit A, p 10.
[5] Exhibit A, pp. 154-155.
[6] Exhibit A, p 10.
Under cross-examination the applicant was asked who had title to the building the company operated from, the applicant confirmed that the building was owned by the company. The applicant stated that the property is worth more than $400,000.
The applicant confirmed that he was a beneficiary and that the property is a trust asset. He applicant confirmed that he is in negotiations with the Australian Taxation Office about winding up the affairs of the business. The applicant was asked whether his decision not to accept a wage would prevent him from obtaining a wage or distribution from the company. The applicant replied that it would be a “nice thought” but he would have to pay superannuation guarantee debts and the bank.Medical evidence
Dr Jonathan Hargreaves, consultant psychiatrist, was called by the Commission.
In evidence were reports from Dr Hargreaves dated 10 March 2011, 15 September 2011 and 29 February 2012. Dr Hargreaves stated that the applicant first attended him on10 November 2010, and later on 23 December 2010 and 24 March 2011. Dr Hargreaves stated that he wrote his first report some three months after having seen the applicant on 23 December 2010.[7] In this report Dr Hargreaves noted the applicant had stated in November 2009 that he “couldn’t face it anymore”. Dr Hargreaves confirmed that he was aware of the nature of the security monitoring business which provided a response to an alarm for home security. Dr Hargreaves stated that he understood the applicant worked for long hours and that the monitoring business operated on a 24 hour basis.[7] Exhibit A, p. 99.
Dr Hargreaves confirmed that his clinical notes for 12 May 2011 recorded the applicant’s involvement with motorcycles clubs (Vietnam Veterans Motorcycle Club Club and the Harley Davidson Club). Dr Hargreaves confirmed his clinical notes for 21 November 2012 record that applicant attended a Harley owners rally in Canberra and that he understood the applicant rode his bike there. Dr Hargreaves also confirmed that the entry for that date recorded that the applicant attended a rally in Hervey Bay and had rode his bike there also. Dr Hargreaves confirmed that the applicant would have taken five hours to arrive there.
Dr Hargreaves was referred to the report dated 10 May 2010 from Dr Johnstone.
Dr Johnstone reported that the applicant does voluntary work of 20-25 hours per week of voluntary work for road safety in the community and organisation of motorcycle events. Dr Hargreaves was asked whether he was surprised with that level of activity.
Dr Hargreaves stated that the applicant could work away from voluntary work which had less stress.Dr Hargreaves was asked about the comments in his report dated 11 March 2011 in which he reported the applicant: “decided against earning further in the workforce so as to prevent having to pay his ex-wife”. Dr Hargreaves confirmed that when he wrote to the Department of Veterans’ Affairs on 14 July 2011 he made an error when he stated that he made no comment in his report in relation to the applicant’s child support arrangements as a factor in his decision to stop work.[8] He confirmed that he wrote that letter without having first reviewed his clinical notes.
[8] See Exhibit B.
The applicant asked Dr Hargreaves to confirm whether he still considered that the applicant was unable to engage in remunerative work for more than 8 hours per week.
Dr Hargraves confirmed that was still the case. Dr Hargreaves replied that he considered that the PTSD condition prevented the applicant from working for more than 8 hours per week. Dr Hargreaves remarked that he based his opinion on the fact that the applicant’s PTSD would interfere with his capacity to perform at the level that would be required for the sort of work that he was doing. Dr Hargreaves referred to the fact that the applicant would have difficulty in concentrating, as well as his; irritability, difficulty in getting on with people, tiredness, dreams and sleep disturbance, loss of interest in the work that he was doing, loss of motivation, depressed moods, tendency to avoid people, discomfort with people, tendency to clash with people, getting annoyed with people, difficulty in focusing, distress when reminded about Vietnam, and hyper arousal and hyper vigilance.CONSIDERATION
I am satisfied that the requirements of s 24(1)(b) of the Act have been met during the assessment period. Dr Hargreaves has given cogent reasons why the PTSD condition of the applicant,[9] which is an accepted disability, renders him incapable of undertaking remunerative work for periods aggregating more than 8 hours per week.
[9] See [20] above.
There is also the report of Dr Peter Johnstone, consultant orthopaedic surgeon, who reported on 10 May 2010 that the applicant “cannot work for between 8-20 hours per week”.
In making my finding about the application of s 24(1)(b) of the Act I have considered the fact that the applicant does a considerable amount of voluntary work but I accept the explanation of Dr Hargreaves that this voluntary work would not be as stressful as remunerative work. The applicant can walk away from the voluntary work at any time. Dr Johnstone’s report indicates that he was aware of this voluntary work when he wrote his report.
I am next required to consider whether the requirements of s 24(1)(c) of the Act are met. This requires consideration of the following questions articulated in Flentjar v Repatriation Commission (1997) 48 ALD 1 (“Flentjar”) at 4-5:
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?
The first Flentjar question requires me to consider the relevant remunerative work that the applicant was undertaking. The term remunerative work is defined in s 5Q(1) of the Act as including “any remunerative activity”. I accept the submission of the applicant that as the director and owner of ESQ the remunerative work that he was undertaking could be regarded as that of a security manager. In giving his evidence the applicant confirmed that after leaving the Army his employment could be described as a manager of an electronic security company.
Although the applicant was not entitled to a salary from the company, I accept the submission of Ms Smith, for the respondent, that the applicant did receive benefits from his work with the company as he was provided with accommodation, a vehicle and other benefits. I am not prepared to narrowly construe the meaning of remunerative work.
In Counsel v Repatriation Commission[10] the Full Court of the Federal Court of Australia has emphasised that the Act is beneficial legislation.[10] (2002) 72 ALD 204 at 209.
The second Flentjar question requires me to consider whether the accepted disabilities of the applicant are such that, in the assessment period, they would have prevented him from continuing to undertake that remunerative work. I would answer this question “yes”. I rely upon the report of Dr Hargreaves who considers that the applicant is prevented from working for more than 8 hours per week by reason of his accepted condition.
I am next required to consider what is often referred to as the “alone test” in s 24(1)(c) of the Act. In Willis v Repatriation Commission,[11] Bromberg J remarked:[12]
The existence of other factors which prevent the veteran from working has a disqualifying result for an application for a pension at the special rate. The war-related incapacity must be the lone factor which prevents continued employment. That is what is meant by “alone”.
[11] (2012) 202 FCR 323.
[12] (2012) 202 FCR 323 at 329.
Having reviewed all of the evidence before me I consider that there were a number of reasons why the ESQ business ceased operations. One factor which was emphasised by the applicant in his statement to the Veterans’ Review Board was that the new Qld licensing requirements “was the last straw”.[13] It was fairly put to the applicant that the “red tape” imposed by the new licensing requirements was one of the reasons why he ceased operating the business, this was not denied by the applicant. In his statement the applicant remarked that the “structure of the government licence application and training requirement led to the drain of operators from my hobby and I decided that it was time to end it, which occurred in November 2009”.[14] I find that the existence of the then new Qld licensing requirements was a substantial factor which caused the applicant to cease the continued operation of the business and which prevented the applicant “from continuing to undertake the remunerative work that the veteran was undertaking”: s 24(1)(c). This is why I consider that the applicant cannot satisfy the “alone” test. I would answer the third Flentjar question “No”.
[13] Exhibit A, p 10.
[14] Ibid.
Having regard to that last answer it is not necessary that I answer the fourth Flentjar question. However, that question can, in my opinion, only be answered in the negative because there is no evidence that the applicant is suffering a loss of salary or wages, or of earnings on his own account.
I have earlier mentioned that the Commission has conceded that the applicant satisfies
s 24(1)(aab) of the Act in that he had not yet turned 65 years of age when he made his claim. This has the consequence that I should consider the possible application of the ameliorating provision of s 24(2) of the Act. However, to satisfy this provision the applicant must satisfy the Commission that he has been genuinely seeking to engage in remunerative work: s 24(2)(b). There is no evidence that this has been the case.I am of the opinion that the applicant is not entitled to payment of the special rate of pension because the applicant does not satisfy the requirements of ss 24(1)(c) and 24(2) of the Act. I should for the sake of completeness record that while the applicant did not make a claim for payment of the intermediate rate of pension, the applicant would not be entitled to pension at that rate as he does not satisfy the requirements of s 23(1)(c) of the Act which is in the same terms as s 24(1)(c) of the Act.
DECISION
I affirm the decision under review.
I certify that the preceding 33 (thirty -three) paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott RFD, Senior Member .........................[Sgd]...............................................
Associate
Dated 29 November 2013
Date of hearing 15 October 2013 Advocate for the Applicant Ms Helen Smith Counsel for the Respondent Mr Gerald Purcell
0