O'Donnell, W.G. v Repatriation Commission

[1993] FCA 742

Re: WILMA GLORIA O'DONNELL v. REPATRIATION COMMISSION
No. ACTG23 of 1993
FED No. 742
Number of pages - 16
Administrative Law - Veterans' Affairs
(1993) 117 ALR 680
(1993) 18 AAR 285
(1993) 30 ALD 479
(1993) 48 FCR 548

COURT

IN THE FEDERAL COURT OF AUSTRALIA

AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
NEAVES J

CATCHWORDS

Administrative Law - Appeal from Administrative Appeals Tribunal - Recreation transport allowance payable under Veterans' Entitlements Act 1986 (Cth) - Eligibility of veteran for payment of allowance - Veteran suffering specified incapacity due to war-caused disease - Veteran cared for in nursing home - Expense of treatment met partly by Commonwealth and partly by veteran - Whether veteran being cared for "at public expense".

Veterans' Affairs - Application for recreation transport allowance - Eligibility - Veteran suffering specified incapacity due to war-caused disease - Veteran cared for in nursing home - Expense of treatment met partly by Commonwealth and partly by veteran - Whether veteran being cared for "at public expense".

Administrative Appeals Tribunal Act 1975 (Cth), subs.44(1)

Veterans' Entitlements Act 1985 (Cth), subs.104(4)

HEARING

CANBERRA, 22 September 1993

#DATE 18:10:1993

Counsel for the applicant : Mr I.W. Nash

Solicitors for the applicant : Hargraves

Counsel for the respondent : Mr P. Hanks

Solicitor for the respondent : Australian Government

Solicitor

ORDER

The Court orders that:

1. The decision of the Administrative Appeals Tribunal given on 25 February 1993 be set aside and in lieu thereof it be determined that Cyril George O'Donnell was not, during the period from 30 March 1992 to the date of the Tribunal's decision and continuing, a veteran who, within the meaning of subs.104(4) of the Veterans' Entitlements Act 1986 (Cth), was being cared for, at public expense, in a hospital or other institution.

2. The matter be remitted to the Administrative Appeals Tribunal to determine the period between 30 March 1992 and the date of Cyril George O'Donnell's death in respect of which recreation transport allowance was payable and the amount thereof.

3. The respondent pay the costs of Cyril George O'Donnell and Wilma Gloria O'Donnell of and incidental to the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

NEAVES J This proceeding by way of appeal pursuant to subs.44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal ("the Tribunal") given on 25 February 1993 was commenced in this Court by Cyril George O'Donnell on 26 March 1993. However, shortly before the proceeding came on for hearing on 22 September 1993, Mr O'Donnell died. An order was made on the latter date that his widow, Wilma Gloria O'Donnell, be substituted as the applicant.

1. The application raises a point of statutory construction. The relevant statutory provision is subs.(4) of s.104 of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). That section authorises, in the circumstances there prescribed, the grant by the Repatriation Commission ("the Commission") to a veteran who is suffering an incapacity from a war-caused injury, or a war-caused disease, of a kind described in the table set out in subs.(1) of the section, of an allowance called in the section "recreation transport allowance". The incapacities described in the table include (item 2):
   

"Negligible powers of locomotion so as to be capable of moving, with the aid of crutches or walking sticks, for short distances only"

and (item 3):

"Handicapped with regard to locomotion to a degree that, in the opinion of the Commission, is similar to the degree of handicap with regard to locomotion associated with a disability described in item ... 2."

Subsection 104(3) provides that recreation transport allowance is payable to a veteran, in respect of the costs incurred by the veteran in travelling for recreation purposes, at the rate relevantly prescribed in the table in subs.104(1). Subsection 104(4) provides that recreation transport allowance is not payable to a veteran under subs.104(1) in the circumstances there set out. Paragraph (a) of that subsection provides that the allowance is not payable "in respect of any period during which the veteran is being cared for, at public expense, in a hospital or other institution". The critical words for present purposes are the words "at public expense" where they appear in that paragraph.

1. The basic facts are not in dispute. It is common ground that at all material times Mr O'Donnell was a "veteran" within the meaning of that expression in the Act. For some time prior to 6 May 1991, he was in receipt of a pension under the Act at the rate of 40% of the general rate, the pension being payable in respect of a number of conditions accepted as being war-caused (see s.22 of the Act). As from 6 May 1991 the rate was increased to 100% of the general rate. On 28 May 1992, he was granted the extreme disablement adjustment pursuant to s.22(4) of the Act with effect from 5 February 1992. It is also common ground that, subject only to the operation of subs.104(4) and to the quantification of the amount, recreation transport allowance was payable to Mr O'Donnell during the whole or part of the period from 30 March 1992 to the date of his death, viz. 4 September 1993.

2. The Tribunal determined that recreation transport allowance was not payable to Mr O'Donnell in respect of the period that commenced on 30 March 1992 and was continuing when the Tribunal made its decision on 25 February 1993 because, during that period, Mr O'Donnell was, in terms of par.(a) of subs.104(4), being cared for, at public expense, in a hospital or other institution.

3. The material before the Tribunal established to its satisfaction that on 30 March 1992 Mr O'Donnell suffered a cerebrovascular accident (subsequently determined to be a war-caused disease within the meaning of s.9 of the Act - see Exhibit 2 before the Tribunal) as a result of which he was admitted to The McCaughey Memorial Hospital ("the hospital") at Urana in the State of New South Wales where he remained until the date on which the matter was heard by the Tribunal. The material also established that between 30 March 1992 and 28 April 1992 Mr O'Donnell was classified by that hospital as an "acute patient" and from 29 April 1992 as a "private nursing home type patient". In a letter dated 12 February 1993 to Mr O'Donnell's solicitors (part of Exhibit 4 before the Tribunal), the hospital stated that the latter classification meant "that Mr O'Donnell, himself, pays $23.05 per day and Veterans' Affairs pays $68 per day", those amounts totalling $91.05 per day. The Tribunal accepted that this was the situation. It might be noted, in passing, that the letter dated 12 February 1993 contained language suggesting that the amount of $23.05 per day was paid by the Department of Veterans' Affairs. It was conceded by counsel for the Commission during the course of the hearing before the Tribunal that that amount was, in fact, paid by Mr O'Donnell out of his own money. It was stated that Mr O'Donnell's pension was paid into a bank account and that the bank, pursuant to an authorization given to it by Mr O'Donnell, paid to the hospital from that account each fortnight an amount calculated at the rate of $23.05 per day.

4. In a letter dated 24 February 1993 (part of Exhibit 6 before the Tribunal), the Department of Veterans' Affairs stated:
   

"The Department of Veterans' Affairs (DVA) is meeting the nursing home costs minus the resident/patient contribution of Mr Cyril O'Donnell's continuing care as a nursing home type patient in McCaughey Memorial Hospital at Urana, NSW ...

The $23.45 (sic - scil. $23.05) per day that Mr O'Donnell contributes is known as the Statutory Minimum Resident Contribution. All residents in approved nursing homes are required to pay the resident contribution, which is no more than 87.5% of the single rate Age or Service pension plus rent assistance. The resident's contribution represents a contribution towards the board and lodging component of nursing home care, the cost of which patients would normally incur living in their own homes or rented accommodation.

The Commonwealth Government as represented by the Department of Health, Housing and Community Services

(DHHandCS) and DVA, pays the remaining amount of the nursing home costs. Approved nursing homes are funded through the Care Aggregated Module/Standard Aggregated Module (CAM/SAM) system. Approved nursing homes are also known as non-government nursing homes. Mr O'Donnell is receiving nursing home care in a non-government institution with nursing home facilities. The CAM component of this system provides funding for the nursing home on the basis of the resident's personal care needs. Residents are classified under 1 of 5 categories, each of which allocates a different number of hours of care to each resident based on their assessed personal care needs. The standard hourly rate paid for each category of care is different for each State. The SAM component provides for the infrastructure costs of the nursing home such as domestic and administration wages, food, laundry, cleaning, plant and equipment and so on, as well as a return on investment. SAM is a set uniform national amount per resident per day. There is also funding for Other Cost Reimbursable Expenditure (OCRE) which reimburses each nursing home the actual expenditure on occupational superannuation and long service leave for Nursing and Personal care staff; and workers' compensation insurance premiums and payroll tax for staff. Loadings are also added to or subtracted from the Commonwealth benefit.

Thus the Commonwealth benefit payable to an approved nursing home consists of the CAM component, the SAM component, the OCRE component and the loadings, minus the statutory resident contribution. In Mr O'Donnell's case the Commonwealth benefit payable is $68 per day."

In a letter dated 25 February 1993 (also part of Exhibit 6 before the Tribunal), the Department of Veterans' Affairs added that the amount of $68 per day was paid directly to the hospital by the Branch Office in Sydney of that Department.

1. Neither the Tribunal nor the Court was referred to the provisions, statutory or contractual, under which Mr O'Donnell became liable to pay to the hospital amounts calculated at the rate of $23.05 per day. Nor, apart from the general statement in the letter dated 24 February 1993 to which reference has been made, was there any material before the Tribunal to show how the amount of $23.05 per day was calculated. Some reference was, however, made before the Court to the provisions of Part V of the Act headed "Medical and Other Treatment" with particular reference to ss.84, 85 and 90 within that Part. Section 84 provides that the Commission may arrange for the provision of treatment for veterans and other persons eligible to be provided with treatment under Part V, "treatment" being defined in subs.80(1) to mean treatment provided, or action taken, with a view to -
   

(a) restoring a person to, or maintaining a person in, physical or mental health;

(b) alleviating a person's suffering; or

(c) ensuring a person's social well-being.

Section 85 sets out the circumstances in which a veteran is eligible to be provided with treatment under that Part. Section 90 provides that the Commission may, from time to time, prepare a written document, to be known as the "Treatment Principles", setting out circumstances in which, and conditions subject to which, treatment of a particular kind, or included in a particular class of treatment, may be provided under Part V. The material before the Tribunal did not include any document so prepared.

1. The Tribunal, in its reasons for decision, referred to Departmental guidelines dated September 1992 - guidelines having no statutory force - headed "Part 3 - Recreation Transport Allowance". The Tribunal set out the terms of par.3.8.5 from those guidelines, that paragraph reading:
   

"A veteran is not entitled to be paid RTA (Recreation Transport Allowance) in respect of any period when he or she is being cared for in a hospital or other institution (such as a nursing home) at public expense. A veteran in a nursing home will be regarded as being cared for at public expense if all or part of the patient contribution is paid by the Commonwealth. Where the full patient contribution charged by the nursing home is paid by the veteran, the veteran is not being cared for at public expense..."

1. It is not entirely clear that the "patient contribution" referred to in the guidelines is the same as the "resident/patient contribution" referred to in the letter dated 24 February 1993 the text of which is set out above. The comment may be made that, if the guidelines are referring to the "resident/patient contribution" to which the letter refers, the guidelines would provide no support for the view that Mr O'Donnell was being cared for in the hospital "at public expense" as it is clear that no part of the resident/patient contribution referred to in the letter was, in the case of Mr O'Donnell, paid by the Commonwealth. The fact that Mr O'Donnell paid that contribution out of the pension payable to him under the Act would not, in my view, warrant the conclusion that the contribution was being paid "by the Commonwealth".

2. Immediately following the reference to the guidelines, the Tribunal set out its conclusion. That conclusion was expressed in the following terms:
   

"Now, clearly, the $68 per day paid by the Department of Veterans' Affairs is, in my view, a public expense and I take the view that paragraph (a) of subsection 4 of section 104 in which the words 'at public expense' occur mean at some public expense, not de minimis, not minimal, not necessarily substantial, not necessarily the main part but significant and that in my view the $68 per day paid by the Department of Veterans' Affairs does constitute a situation in which Mr O'Donnell is being cared for at public expense so that under the circumstances I will affirm the decision under review."

1. Counsel for the respondent informed the Court that provision, within the repatriation system, for the payment of a recreation transport allowance had been in place since 22 September 1927. Between that date and the coming into operation on 14 December 1950 of reg.104A of the Repatriation Regulations (see Statutory Rules 1950, No.96), the allowance was payable pursuant to decisions of the Cabinet unsupported by legislative provision other than the relevant Appropriation Acts. Precise details of the circumstances in which the allowance was payable under the various Cabinet directives were not before the Tribunal and are not before the Court. Reference in general terms to the payment of the allowance over the period from 1927 to 1970 is, however, contained in the Report of the Independent Enquiry into the Repatriation System prepared by the Honourable Mr Justice P.B. Toose, CBE, then a Judge of the Supreme Court of New South Wales, and dated June 1975. At pp 366-7, the report states:
   

"An allowance was initially authorised by a decision of Cabinet on 22 September 1927, which approved the recommendation of the Minister:

'... that the Repatriation Commission be empowered to provide suitable transport (or arrange for suitable transport at a cost not exceeding 10 pounds per month per man) for recreation under Departmental medical advice for those soldiers totally and permanently incapacitated as the result of spinal, head, pelvic or hip injury, organic cerebral or spinal disease, and to double amputation cases above or at the knee, whose means of locomotion, because of war disablement is permanently restricted to wheeled chairs or cots.'

It was felt that, by the introduction of this benefit, it would be possible for an eligible member, whether he was resident in a metropolitan or country district, or at a home or in an institution, to lead a brighter life and to be closer to the normal activities of life than would otherwise be possible. In some cases the Commission authorised the accumulation of the allowance for a period of up to six months so that a lump sum could be available towards the cost of purchase of an appropriate vehicle by the member. (Repatriation Commission Annual Report, 1928)

In February 1930, eligibility was expanded to include those who suffered disabilities affecting both knees and who, as a consequence, were restricted to wheeled chairs or cots.

During the period of the financial emergencies of the 1930's, the 10 pounds per month allowance was criticised by the Commission, Treasury and the Auditor-General as being excessively generous, and the suggestion was made that it should be reduced to 5 pounds a month. The suggestion was not acted upon. However, in December 1935 (Cabinet Decision of 9.12.1935) Cabinet approved an additional category, comprising members 'who have suffered the double amputation of one leg above and the other below the knee', for which an allowance of 5 pounds a month was provided. It appears that the lower level was established on the basis that these members would have less frequent and less expensive requirements for recreation transport than those to whom the higher level of allowance was paid. The practice of allowing the accumulation of the allowance was discontinued in 1937 when it was found that several members who had been assisted in this manner were in financial difficulties arising from the purchase of a motor vehicle.

In 1944, recreation transport allowance was extended to members who served in the 1939-45 War. In 1950, Cabinet introduced a further category into the lower level, namely, 'amputation of both arms at or above the wrist'. (Cabinet Decision of 14.7.1950) At the same time, it was directed that the provisions relating to the allowance be incorporated in the Regulations, which led to the insertion of Regulation 104A. (Statutory Rules 1950, No.96) The regulation extended the eligibility criteria to cover cases where the disablement rendered effects similar to that of the specified amputations and other designated incapacities. Further categories of disabilities were added to the lower level:

(a) from 1953, amputation of both legs below the knees; loss of one arm at or above the wrist and loss of one leg above or below the knee; and disablement having similar effects to the designated incapacities (Statutory Rules 1960, No.56 (effective from 1.6.1953)); and

(b) in 1970, blindness. (Statutory Rules 1970, No.150)"

1. Regulation 104A of the Repatriation Regulations was further amended on a number of occasions after 1970. It ceased to have any operation by reason of the statutory repeals effected by s.3 of the Veterans' Entitlements Act 1986 (Cth) (Act No. 27 of 1986). That Act came into operation on 22 May 1986. Prior to that date, there was no limitation on the eligibility for the allowance similar to that contained in par.(a) of subs.104(4) of the Act. When enacted in 1986, that Act provided that the allowance was not payable to a veteran under subs.104(1) in respect of any period during which the veteran was "being cared for, at public expense, in a public hospital or other public institution". The provision was amended by s.93 of the Social Security and Veterans' Affairs (Miscellaneous Amendments) Act 1986 (Cth), the only amendment relevant for present purposes being the deletion of the word "public" where it appeared before the words "hospital" and "institution". Section 104 has been further amended on a number of occasions since 1986 but not in any respect directly material for present purposes. In particular, no amendment has been made to the words "being cared for at public expense". The rationale behind the limitation on the eligibility of a veteran for the payment of the allowance that is contained in par.(a) of subs.104(4) of the Act has not been explained.

1. In my opinion, having regard to the beneficial nature of the legislative provision in question, a veteran can properly be said to be a veteran who is being cared for, at public expense, in a hospital or other institution only if it can be said of him that the expense of his care in the hospital or other institution, that is to say the whole of that expense, is being met from the public purse. It would, in my view, require some gloss or qualification to be placed on the words of the provision in order to reach the conclusion that a veteran the expense of whose care in a hospital or other institution is being met partly from the public purse and partly from his own resources is a veteran who is being cared for, at public expense, in that hospital or institution. The Tribunal placed a gloss or qualification on the words of the provision in holding that a veteran was being cared for, at public expense, in a hospital or other institution if a significant part of the expense was being met from the public purse and it appears to have done so by relying to some extent upon the terms of the Departmental guidelines. In so doing, the Tribunal, in my opinion, fell into error.

2. In the result, the decision of the Tribunal is set aside and in lieu thereof it is determined that Mr O'Donnell was not, during the period from 30 March 1992 to the date of the Tribunal's decision on 25 February 1993 and continuing, a veteran who, within the meaning of subs.104(4) of the Act, was being cared for, at public expense, in a hospital or other institution. The matter is remitted to the Tribunal to determine the period between 30 March 1992 and the date of Mr O'Donnell's death in respect of which recreation transport allowance was payable and the amount thereof. The respondent is to pay the costs of Cyril George O'Donnell and Wilma Gloria O'Donnell of and incidental to the application.