Oldmeadow and Repatriation Commission (Veterans' entitlements)
[2017] AATA 1813
•20 October 2017
Oldmeadow and Repatriation Commission (Veterans' entitlements) [2017] AATA 1813 (20 October 2017)
Division:VETERANS' APPEALS DIVISION
File Number(s): 2015/4504
Re:John Oldmeadow
APPLICANT
AndRepatriation Commission
RESPONDENT
DECISION
Tribunal:Ms N Isenberg, Senior Member
Date:20 October 2017
Place:Sydney
The Tribunal sets aside the decision under review, and in place of that decision determines that the Applicant is entitled to pension at the Intermediate Rate provided for in s 23 of the Veterans’ Entitlements Act 1986 (Cth) with effect from 15 July 2013.
..................................[sgd]...................................
Ms N Isenberg, Senior Member
CATCHWORDS
VETERANS AFFAIRS — disability pension — application for increase in pension – intermediate rate of pension – whether veteran’s defence-caused incapacity renders the Applicant incapable of undertaking remunerative work other than on a part-time basis or intermittently – whether veteran capable of undertaking work for 20 or more hours per week – decision under review set aside and substituted.
LEGISLATION
Veterans' Entitlements Act 1986 (Cth) ss 5Q(1), 23(1)(b), 24(1)(b), 24(1)(c), 28(a), 28(b), 28(c)
CASES
Chambers v Repatriation Commission [1995] FCA 1144; (1995) 129 ALR 219
Counsel v Repatriation Commission [2002] FCAFC 201; (2002) 122 FCR 476; 72 ALD 204
Flentjar v Repatriation Commission [1997] FCA 1200; (1997) 48 ALD 1
Forbes v Repatriation Commission [2000] FCA 328
Re Cavell and Repatriation Commission (1986) 10 ALN N233
Re Fahey and Repatriation Commission (1986) 10 ALD 338
Repatriation Commission v Buckingham [1996] FCA 1218
Repatriation Commission v Butcher [2007] FCAFC 36
Repatriation Commission v Hendy (2002) 76 ALD 47
Repatriation Commissionv Richmond [2014] FCAFC 124
Smith v Repatriation Commission [2014] FCAFC 53
REASONS FOR DECISION
Ms N Isenberg, Senior Member
20 October 2017
Background
The Applicant, John Oldmeadow, served in the Royal Australian Air Force (‘RAAF’) from 1971 to 1983. He had a number of conditions accepted as service-caused: Post-Traumatic Stress Disorder (‘PTSD’), Tinnitus, Sensorineural Hearing Loss and Lumbar Spondylosis. 20 October 2017On 15 July 2013, he applied for an increase in the rate of his disability pension, in particular, he sought the Special Rate of pension, on the basis that, as a result of his service-caused disabilities alone, he had a degree of incapacity of at least 70%, and was unable to work more than 8 hours a week. He was said to be suffering a loss of earnings due to having to hire staff to do work for his motel business that he had previously undertaken himself but could no longer perform due to the worsening of his accepted disabilities alone.
His application for the Special Rate was refused and his pension was continued at 100% of the General Rate (‘the decision’). That decision was affirmed on review by the Veterans’ Review Board (‘VRB’) on 2 July 2015. On 28 August 2015, the Applicant applied to the Tribunal for review of the decision.
At the hearing, the Applicant made an alternative submission, namely that, should his application for the Special Rate, fail, he was eligible to be paid the Intermediate Rate.
LEGISLATION
The criteria for payment of the Special Rate of pension are set out in s 24 of the Veterans’ Entitlements Act (1986) (‘the Act’). Generally speaking, if any one of the criteria is not met, an Applicant will not be eligible for payment of pension at that rate. The Tribunal has no discretion in this regard. To qualify for pension at the Special Rate, s 24 requires that the Applicant be in receipt of pension of at least 70% of the General Rate. The Respondent acknowledged that the Applicant satisfies this criterion; there was no dispute that the appropriate General Rate of pension was 100% of the General Rate.
In addition, the Applicant must meet other specific tests.
An Applicant's incapacity from accepted disabilities must be of such a nature as, of itself alone, to render the applicant incapable of undertaking remunerative work for more than 8 hours a week (for Special Rate), or 20 or more hours a week (for Intermediate Rate).[1] This requires a consideration of:
·the Applicant's trade and professional skills, qualifications and experience;
·the kinds of work a person with those skills, etc., might reasonably undertake; and
·the effect of the applicant's accepted disabilities on his capacity to do such work: s 28
[1] : s 24(1)(b) and s 23(1)(b)
An Applicant must also:
·have been prevented from continuing to undertake a kind of remunerative work that he was undertaking because of incapacity from accepted disabilities alone;
·and because of this, have suffered a loss of salary, wages or earnings on his own account.[2]
[2] ss 24(1)(c) and 23(1)(c)
Applicant’s evidence
The Applicant said that his work in the RAAF was as a hospital clerk, undertaking medical administration, which was a paper-based role. He supervised a team of staff between 4 and 10.
He said that he injured his back in 1973 playing football for the RAAF and, from that time, suffered mild to severe sciatica and lumbosacral back pain. Over many years, during and after, his service he consulted general practitioners and was prescribed anti-inflammatory medications and, at times, opiates for severe outbreaks of sciatica. He would avoid situations involving bending, stretching, lifting, sitting or standing for long periods.
In August 2008, he was diagnosed with PTSD occasioned by having participated in the recovery of three deceased airmen killed in a helicopter crash near RAAF Base Williamtown in August 1981. He had experienced symptoms of PTSD, he said, since approximately 1982 including depression, social withdrawal, experiencing difficulty displaying affection to his wife and three children, alcohol abuse, agoraphobia, OCD amongst other things but had not attributed those symptoms to the event. It had had a profound effect on his personal life. He is on a maintenance dose of antidepressants to alleviate his symptoms of PTSD and expects to continue with these on a permanent basis.
On leaving the RAAF, he joined the Australian Taxation Office (‘ATO’). His work was at first in the field cross checking business records against the ATO’s records to confirm appropriate GST payments had been made. Laptops were used from the late 1990s. When he was moved to an inside job, he was allocated special ergonomic furniture following a workplace assessment.
He left the ATO in September 2008 after almost 22 years. The reason he left, he said, was because he could no longer handle the stress of a full time job as it was exacerbating his PTSD symptoms and he was unwilling to disclose his diagnosis of PTSD. His preference would have been to work part-time or in less stressful work area but it was unlikely to be available.
In December 2008, he obtained a part time sedentary job with Linfox Armaguard for up to 15-20 hours per week as a cash processor counting money, mainly notes. He did not disclose his medical conditions because he believed he would not have secured the job. Within a few months, the job required multi-skilling and he was transferred to the ‘coin room’ which involved some manoeuvring of bags of coins. He would often stumble, and trip over bags of coin because of his leg; he would lose balance off a step. He avoided heavy lifting by breaking units into smaller loads which took longer. The nerve pain in his right foot he had been experiencing for some years was like an electric shock and he was continuing to get pins and needles in his feet and sciatic pain down his leg although his driving ability was unaffected at that time.
By September 2009, his back condition had worsened and he could no longer keep up with the physical demands of the job, so he resigned. In particular, because of increasing problems differentiating between the brake and accelerator pedals due to loss of sensation in his right foot, it became impractical for him to drive; he then had to rely on his wife to drive him to work, including shifts which often commenced at 5am.
The Beach House Holiday Apartments 2010 - 2015
In January 2010, he and his wife, as partners, bought the rights as resident managers of a small holiday apartment complex in Port Macquarie. This included purchasing the on-site residence. He regarded this as having “purchased a job” where he could work from home and therefore could better manage aspects of his PTSD such as agoraphobia and social withdrawal. However, it proved to be a “24/7” job because of managing bookings and arrivals at all hours.
He initially worked alongside his wife; his contribution in terms of hours worked, he said, was about 12-20 hours per week. He said in cross-examination that he would work about 5 hours a day, which included about 3-4 hours of ‘manual’ work. He was limited to these hours by his back pain and some immobility, as he would trip easily from the weakness in his leg. He could still do some non-sedentary domestic-like duties in the apartments such as cleaning windows, stacking linen, stripping beds, folding sheets, toilet cleaning, sweeping, vacuuming and simple maintenance such as changing light bulbs, garbage bins, pool cleaning plus some light gardening. The balance of the work included managing the bookings and the website, business activity statements and other accounting tasks, and attending to guests as well as managing contractors and staff. Being unable to drive was an inconvenience but manageable because he relied on his wife. His application to have DVA install hand controls to the Applicant’s car was successful and he could then drive; but that particular vehicle only.
He was referred, in cross-examination, to the lifestyle questionnaire he completed on 29 March 2010, approximately two months after taking over the business. There, he had written that he had difficulty with minor house repairs and light gardening and could only do them if he took his time. He wrote that he could only do house cleaning with help, and if he took his time. He wrote that he was unable to do any lawn mowing, car washing or lifting. He agreed that on acquiring the business, the plan was to have contractors do the heavier work. He denied that it was an inappropriate business choice.
His back worsened from mid to late 2011 resulting in some falls because of instability. He was, he said, becoming markedly affected – he had more severe nerve pain, lower leg weakness, numbness and difficulty controlling specific leg and foot muscles. He lost the reflexes in both knees and ankles. He was becoming increasingly reliant on a walking stick and the physical aspects of the work were becoming impossible. He was therefore relying more on his wife and their regular casual cleaner.
In December 2012, he hired a handyman to perform tasks that he could no longer carry out on a day-to-day basis. These included maintaining the pool and gardens, operating the garden equipment, stacking linen, moving garbage bins, vacuuming, cleaning windows and stairwells. He was employed for 8 hours per week from February 2013 until the beginning of 2015 when he was replaced by another male employee.
By February 2013, the Applicant’s pain and mobility became so affected, he said, he was only able to do three to five hours of work per week. His balance was so bad he could not stand on a stool to replace a light bulb. He needed support with a walking stick if on uneven ground or hilly terrain although his leg would still sometimes spontaneously collapse on even terrain. He engaged the existing cleaners to undertake additional hours in order to cover the hours that he could no longer work due to his worsening back condition.
Nonetheless, in August 2014, the Applicant accepted re-appointment for 10 years as manager and caretaker of the premises. He denied that the increase in the gross earnings and the contract extension precipitated the decision to sell the business, in early 2015. He said the decision to sell was solely due, he said, to the deterioration in his medical condition. By this time, his mobility was greatly reduced and despite approximately three years of regular physiotherapy (up to three times per week), his leg strength was not restored due to the effects of long term lumbar spinal nerve root damage.
He agreed he could have continued increasing the reliance on contractors but said to do so would have sent him bankrupt. He said he had always planned to have to engage staff or contractors, but not the extent, it turned out he needed them, thereby affecting the business’ profitability.
His mobility difficulties and pain level made it impossible to keep up a reasonable work input to the business. It was getting to the stage where a casual employee would be earning more than he was and he could no longer sustain the loss being suffered. The only alternative to selling was to employ more workers which, he said, did not make financial sense. He denied that the increase in the staffing requirements was because of an increase in the business.
The Applicant produced a report by Ken T. Window & Associates, an independent accountant dated 23 December 2014, who assessed the business for the purposes of sale. The role was identified as one which could reasonably be performed by a two person resident management team.
Solicitors were engaged in July 2015, that is, two years after he applied for an increase in disability pension to above General Rate level.
In September 2015, he fell down stairs onto his right knee and landed with his left arm outstretched. His knee was only grazed and he initially thought his shoulder was just bruised. However, as it was interfering with his ability to use the knob fitted on to the steering wheel of his car and he needed to use his right hand to lift his left arm, he eventually consulted his GP, who referred him to an orthopaedic surgeon.
Settlement in the sale of the business, the manager’s residence, occurred on 12 January 2016. The sale involved a handover period of a few weeks to settle in.
The new owners then offered him administrative work for four to five hours per week commencing 25 January 2016. He subsequently worked at the resort tor two weeks for 4.5 hours per week from 29 January 2016 to 9 February 2016. He said he found the job difficult to do when he was mainly undertaking sedentary duties as there are many occasions which required associating with guests at reception. If inspecting different areas of the complex, he was risking a fall.
He underwent a shoulder tendon repair on 10 February 2016. His surgeon issued him with a medical certificate as “unfit for work from 10 February 2016 to Friday 17 June 2016”. When he sought to resume work, in mid to late June 2016, the new managers informed him that they no longer required his services as they were capable of running the business with two people and that, in view of his work restrictions arising from his accepted disabilities, they were unable to offer him any ongoing work.
Since that time, the Applicant said, he applied for a similar role at another hotel complex in Port Macquarie on 21 June 2016, however following an interview, he was advised in writing that there was no suitable position, given his job restrictions, as recommended by his general practitioner and the two medico-legal consultations arranged by the Department of Veterans’ Affairs (‘DVA’). He had also left his resume with some recruitment agencies but received only acknowledgement and he was he was not otherwise contacted. He said he had also tried dropping into businesses to ask for work by leaving his resume, however he had not received any replies.
He and his wife had intended to move to Newcastle, but it was too expensive. Instead, they moved to Nelson Bay, where Mr Oldmeadow has family. He denied that the business had been sold in order to move closer to his family.
As to what work he could do now, the Applicant said he could type for 4-5 hours a week, with “occasional 8 hours”. He thought he could ‘possibly’ do 8 hours per week, but no more.
Medical evidence
Dr Carol Webster, the Applicant’s General Practitioner, in her report dated 7 August 2013, states that the Applicant is fit for work under 4 hours week “because of his lumbar spine damage and PTSD”. Dr Webster stated in her report of 21 January 2016, that after recovery from his shoulder surgery, he was able to undertake some part time work, but less than 8 hours a week.
A medico-legal report was provided by Dr Richard Powell, orthopaedic surgeon dated 10 June 2014. At that time, the Applicant told Dr Powell that he was working 8-10 hours per week in a sedentary role. If an appropriate role could be identified Dr Powell considered the Applicant capable of working 3-4 hours a day, 5 days a week.
Dr Tim Anderson, occupational physician, in his report dated 4 October 2016, stated that the Applicant would not be able to work “anything like eight hours a week” due to his incapacity from accepted disabilities alone. Dr Anderson noted that while the Applicant is capable of undertaking some administrative work, a great difficulty arises with the practicalities of work. For example, he would “have great difficulty in getting from his home to any place of work” and that even in an office environment, “his mobility is very reduced”.
Dr Anderson stated that due to the Applicant’s war-caused incapacity alone he is unable to undertake more than 8 hours of work a week. Dr Anderson stated that the Applicant is not able to “leave his home and go to an employed position in an office-based environment to do an occupation, which could reasonably be considered as commercially and competitively viable”.
Dr Eddie Price, occupational physician provided two reports dated 11 April 2016 and 14 March 2017. Dr Price considered the Applicant fit for 4 hours work a day, 5 days a week of sedentary work, provided he could take regular rest breaks. His disabilities prevent him from taking on physical roles that include bending, lifting and carrying objects over 5 kg.
Dr Anderson and Dr Price gave evidence concurrently. They produced a joint statement about the matters upon which they agreed and disagreed:
AGREE
1. Improvement of motivation and attitude would assist his condition and capacity.
2. Capacity to work in sedentary home-based duties, with no urgent time pressure on tasks (hours disputed).
3. Applicant could limit any deterioration by undertaking self-directed rehabilitation program, especially with aquatic exercise.
4. PTSD is controlled and does not appear to impact on capacity to work.
5. Shoulder condition does not appear to impact on capacity to work.
DISAGREE
1. Whether the Applicant has capacity to perform office based work for an employer.
2. The amount of hours the Applicant can work per week.
3. The rate of any deterioration of the Applicant’s condition.
Both doctors thought the Applicant spent a lot of time during their consultations focussing on ‘proving himself to be unwell’ and that he was not motivated to work. In the course of their evidence, they referred on several occasions to the Applicant’s apparent lack of interest in working. Both considered work to be therapeutic for him.
Both doctors were impressed with the Applicant’s organisational skills and ‘ordered brain’ and noted that he had produced a large volume of coherent and succinct material in support of his application.
Dr Anderson could not see him being employed because there would be an expectation that he would be willing to do the job and able to perform within timeframes. Also, he would need a job with nearby facilities, e.g., a toilet, which he could readily access. He was better suited to home-based work, without time constraints where he could work at his own pace. In those circumstances, he thought he could work about 8 hours per week. Dr Price was of the view that he could do office-based work for 20 hours per week, especially if he were well motivated.
Dr Anderson thought the Applicant would have been able to continue in the resort management business, which is different to being an employee. Dr Anderson was of the view that he could work at a computer based job with a modified workstation. He thought 2 hours a day to be reasonable for the Applicant to be able to produce accurate work. Breaks would further assist.
CONSIDERATION
The legislation requires that the evidence before the Tribunal must satisfy a number of tests; if any one of the criteria is not met, the Applicant will not be eligible for payment of pension at the Special or Intermediate Rate. There is no discretion in this regard. Firstly, the Applicant's degree of incapacity from defence-caused conditions must be at least 70% of the General Rate.[3] There was no dispute that the Applicant met this test.
[3] : s 24(1)(a) and s 23(1)(a) of the VEA
Secondly, for a person aged under 65, as in this case, s 24(1)(b) and s 23(1)(b) of the Act require that an Applicant's incapacity from service-caused conditions, must be of such a nature as, of itself alone, to render him incapable of undertaking remunerative work for more than 8 hours per week (or 20 hours a week, or, 50% of what is ordinarily worked in a particular kind of work for the Intermediate Rate). This test requires an examination of the veteran’s incapacity from his service-caused conditions to determine whether or not that incapacity is such, of itself alone, to render him incapable of undertaking remunerative work for the relevant duration. This does not require an examination of other causes that might render him unable to undertake remunerative work, but merely whether the service-caused disabilities, on their own, are sufficient to render him incapable of undertaking such work.
In Smith v Repatriation Commission [2014] FCAFC 53, the Full Court said in relation to s 24 that:
Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than 8 hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity. The operation of s 24(1)(c) is capable of being informed by the provisions of s 24(2).
Section 28 provides assistance in determining whether an Applicant is incapable of undertaking remunerative work by setting out the only matters that regard can be had to in deciding that question.
What are the Applicant’s trade and professional skills, qualifications and experience?[4]
[4] s 28(a)
Subsections 24(1)(b) and 23(1)(b) require an examination of the Applicant’s capacity to undertake remunerative work which he is physically and mentally able to carry out; the test is not limited to the type of work previously undertaken or for which the veteran is qualified by training or experience: Chambers v Repatriation Commission [1995] FCA 1144; (1995) 129 ALR 219, where the Court said at 235:
... A person's skills are not confined to those acquired informal training or by virtue of experience in particular employment. They include innate aptitude for tasks and abilities acquired or developed independently of employment or training. For example, a person may never have used computers at work and have no formal computer training. If that person has self-taught word processing skills, he or she nonetheless has skills that may well enhance opportunities for remunerative work. Similarly "qualifications" means (Oxford Shorter Dictionary and Macquarie Dictionary) "a quality or accomplishment which qualifies or fits a person for some office or function”. The word is not confined to qualifications obtained as the result of formal training or work experience. Again, a person's experience is not necessarily restricted to that acquired in employment or formal training.
The Applicant was first a medical orderly in the RAAF, where he supervised a number of staff and managed the medical orderly room. He then worked for many years in the ATO where his role included cross-checking business records against the ATO’s records to confirm appropriate GST payments had been made, and presumably reporting accordingly. He started using a laptop from the late 1990s. Next, he worked as a cash processor, counting money.
His final job was from January 2010 when he and his wife became resort managers. It was a ‘24/7’ job because of managing bookings and arrivals at all hours. His work included a mix of ‘manual’ work such as domestic-like duties associated with providing accommodation and basic maintenance. The balance of the work included using the computer to manage the bookings, maintaining the website, business activity statements and other accounting tasks, as well as attending to guests, and managing contractors and staff. As he grew less physically capable, he was, on his evidence, required to supervise more staff and contractors.
The Applicant has undertaken several, quite diverse roles during his career, which have equipped him with a number of skills. Firstly, he has long-standing experience of managing subordinates. His work at the ATO equipped him with computer skills, and he has maintained that skill in the management of the resort business. He also acquired significant organisational and writing skills, as was evident by his personal preparation for this case and for his medico-legal consultations; the doctors were impressed by those skills. As a resort manager, he undertook duties associated with providing accommodation as well as basic maintenance. He also managed bookings and the website, book-keeping type activities and attended to the needs of guests, as well as the management of multiple staff members and contractors.
What kinds of remunerative work might a person with the Applicant’s skills, qualifications and experience reasonably undertake?[5]
[5] s 28(b)
The test requires an examination of all of the different kinds of work that a hypothetical person with the relevant skills and experience of the Applicant might reasonably undertake: Repatriation Commission v Buckingham [1996] FCA 1218. The term "remunerative work" is broadly defined to include "any remunerative activity".[6]
[6] s 5Q(1) VEA
In Repatriation Commission v Butcher [2007] FCAFC 36 at [7], the Full Court said:
It is settled law that the subsection requires consideration of ‘remunerative work’ by having regard not to particular tasks and duties involved in specific jobs, but rather to the type of substantive work undertaken by the veteran considered at a higher level of generality...
It is clear that the Applicant has significant administrative skills and a role involving such tasks would be reasonable, given the Applicant’s skills, qualifications and experience.
To what degree do the Applicant’s service-caused conditions reduce his capacity to undertake the kinds of remunerative work referred to above?[7]
[7] : s28(c)
The Tribunal must decide whether the Applicant’s incapacity from his service-caused conditions alone prevent him from working more than 8 hours per week for the Special Rate or, for the Intermediate Rate, 20 hours a week (or 50% of what is ordinarily worked in a particular kind of work), in any kinds of work that a person with his skills, qualifications and experience might reasonably undertake.
The Tribunal places no weight on the evidence of the Applicant’s GP because her two accounts were inconsistent, given the Applicant’s evidence of deterioration in his back condition. The Tribunal prefers the evidence of the occupational physicians.
The only real point of contention between the doctors was whether the Applicant’s work ability due to his accepted disabilities alone is less than 8 or less than 20 hours per week.
Both occupational physicians eliminated the Applicant’s accepted disability of PTSD as impacting on his workability, as it is well-managed. This is at odds with the Applicant’s account of his handover role, and, in this respect, the Tribunal prefers the doctors’ view. They considered the Applicant capable of working in sedentary home-based duties, albeit with no urgent time pressure on tasks. Dr Anderson considered the Applicant capable of undertaking administrative work, but had reservations about the practicalities of placement in an office. He specifically mentioned that the Applicant would have transportation difficulties, although I note the Applicant has his own modified car. Dr Anderson’s observation was that the Applicant’s employability was limited. This, however, is not the test, and labour market considerations are not relevant in this test: Chambers. Further, the test is one of work ability, not employability.
The Tribunal accepts the medical evidence that the Applicant’s disabilities prevent him from taking on physical roles that include bending, lifting and carrying objects over 5 kg. Dr Anderson considered that the Applicant is to undertake no more than 8 hours of work a week but thought the Applicant would have been able to continue in the resort management business because he could work at his own pace and take breaks. Dr Price considered the Applicant fit to work for 4 hours a day, 5 days a week sedentary work, provided he could take regular rest breaks.
That both doctors were impressed with the Applicant’s organisational skills and ‘ordered brain’ supports a finding that the Applicant has the ability to undertake an administrative role.
Most relevantly, in my view, Dr Anderson was of the view that the Applicant would have been able to continue in the resort management business. Contrary to his evidence before me, when the Applicant said that, by February 2013 he could only work 3-5 hours a week in the business, in June 2014 he told Dr Powell, that, at that time he was working 8-10 hours per week. Dr Powell also considered that, in an appropriate role, the Applicant was capable of working 3-4 hours a day, 5 days a week.
The Tribunal finds that, overall, the evidence does not support a finding that the Applicant is only capable of working in an administrative role for less than 8 hours per week. The Tribunal does accept, however, that the Applicant’s accepted disabilities alone prevent him from working more than 20 hours per week.
Is Mr Oldmeadow’s incapacity from his accepted disabilities the only factor preventing him from continuing to undertake the remunerative work he was undertaking, and is he thereby suffering a loss?[8]
[8] s 24(1)(c)
The Full Federal Court in Flentjar v Repatriation Commission [1997] FCA 1200; (1997) 48 ALD 1 , identified the following questions to be asked in making this determination (albeit in relation to s 24(1)(c)):
(i)What was the relevant ‘remunerative work that the veteran was undertaking’ within the meaning of s 24(1)(c) of the Act?
(ii)Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
(iii)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?
(iv)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?
What was the relevant ‘remunerative work that the veteran was undertaking’ within the meaning of s 24(1)(c) of the Act?
The Applicant was undertaking work as a resort manager.
Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
The Applicant has significant orthopaedic problems which I accept would prevent him from continuing to undertake that work, given that, on the evidence, that work is both a physical and sedentary role.
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?
The word “alone” as it appears in s 24(1)(c) requires a practical consideration on whether the Applicant’s loss of remunerative work is attributable to his service-related incapacities, and not to something else as well; and any factor having employment consequences which plays a part in his inability to work or to obtain and hold remunerative employment, is sufficient to displace his case for pension at the Special or Intermediate Rate: Re Cavell and Repatriation Commission (1986) 10 ALN N233.
In Forbes v Repatriation Commission [2000] FCA 328, RD Nicholson J said at [39]:
The question whether the veteran by reason of the war-caused condition "alone" has been prevented from continuing to undertake remunerative work can only be answered by reference to all the circumstances in which the war-caused condition exists.
The correct approach to the “alone” test, and the potential relevance of other factors which might prevent a veteran from continuing to undertake the relevant remunerative work, was further explained in Repatriation Commission v Hendy (2002) 76 ALD 47 at [36] - [37] as follows:
The Tribunal’s task was to assess what the Veteran probably would have done, if he had none of the service disabilities during the assessment period. The requirement to consider “remunerative work that the veteran was undertaking” does not mean a particular job with a particular employer but the substantive remunerative work that the Veteran had undertaken in the past. That is the exercise that the Tribunal undertook. The Tribunal was not bound to limit its consideration to the last employment that the Veteran actually undertook.
The consideration of what a veteran would probably have done, absent the service disabilities, is a hypothetical exercise. The language of s24(1)(c) of the Act directs attention to the question of whether incapacity from the relevant condition alone prevents a veteran from continuing to undertake remunerative work. The provision does not contemplate that other factors are only to be taken into account if they, of themselves, prevent the Veteran from working. The decision-maker is required to take into account any factor that plays a part or contributes to a veteran's being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period. So long as the Tribunal performs this exercise, the conclusions drawn from the assignment of the relative impact the various factors on the ability of the veteran to continue in remunerative work is not reviewable, except in exceptional circumstances. Moreover, having considered any or all of the factors which may have contributed to a veteran's incapacity, the Tribunal is then required to determine whether it is the veteran's war-caused injury or war-caused disease, or both, alone which prevent the veteran from continuing to undertake remunerative work.
With regard to the “alone” test, in an interpretation approved on appeal by the Full Court, the Federal Court stated in Repatriation Commissionv Richmond [2014] FCAFC 124 at [37]:
... if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the alone prevented test will not be satisfied.
The Applicant’s only non-accepted disabilities are seborrheic dermatitis and gastro-oesophageal reflux disease. There was no evidence that either of those conditions impacted upon his work ability. As to his left shoulder injury, that also is not a factor preventing him from continuing to working. Dr Kennedy, his orthopaedic surgeon, reported that the Applicant has fully recovered from his left shoulder surgery as at 29 September 2016. The Applicant was assessed by Dr Anderson at the same date.
The Respondent contended that the Applicant could not meet the “alone” test because the Applicant built up the business and sold it at a profit, and that his accepted disabilities were co-incidental to the sale. The Tribunal does not find there to be any evidence to support that contention, and accepts the Applicant’s evidence that it was his physical limitations that led him to the decision to sell the business.
The Tribunal also rejects the Respondent’s contention that the Applicant sold the business to move to Nelson Bay to be nearer his family.
The Tribunal also does not accept that the shoulder injury played any part in the sale of the business as it occurred well after the decision was made to appoint solicitors for sale of the business, which occurred in July 2015. Therefore, the dates clearly show there was no correlation between the decision to sell and his fall resulting in the debilitating recovery period of the operation.
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?
From 2010, the Applicant (with his wife) managed a resort. His evidence, which I accept, was that, at first, his duties included maintaining the pool and gardens, operating the garden equipment, moving bins, vacuuming, cleaning windows and stairwells, as well as the administrative duties associated with the business.
The Tribunal also accepts the Applicant’s evidence that, as his back condition worsened, he hired someone for 8 hours per week to perform tasks that he could no longer complete. The Tribunal also accepts that the Applicant was also required to increase the hours of existing employees to cover work he could no longer do, such as cleaning and mowing.
From the partnership’s business records which were produced, the total subcontractors, wages, and associated superannuation expenses were:
2011: $8,734
2012: $13,591
2013: $17,024
2014: $22,676
2015: $23,288
The Respondent contended that the increase in paid assistance was reflective of the growth of the business. In that respect, the Respondent noted that the gross income of the business steadily increased as follows:
2011 $50,478
2012 $63,571
2013 $67,010
2014 $69,419
2015 $76,650
In those circumstances, the Respondent contended, it was entirely reasonable that the costs associated with running the business, in particular, costs associated with staff and contractors, should similarly increase.
The Tribunal conducted a comparison of the percentage of wage and contractor expenses as a percentage of the gross income of the business:
2011: 17.3%
2012: 21.4%
2013: 25.4%
2014: 32.7%
2015: 30.4%
The comparison supports the Applicant’s contention that his wage expenses continued to increase such that the decision was made in 2014 to sell the business. Further, the independent valuation identified the management role as one which could reasonably be performed by a two person resident management team. Clearly, this was not what was occurring in the business, and the Tribunal accepts that this was due to the Applicant’s physical limitations.
This case therefore is not like Counsel v Repatriation Commission [2002] FCAFC 201; (2002) 122 FCR 476; 72 ALD 204, where the Full Court held that the veteran has suffered a loss of earnings on his own account in circumstances where his business had operated at a loss for a number of years. The Court held that “earnings” in this context meant gross earnings to which the partners had access from time to time rather than net earnings. In the present matter, the evidence was that the gross earnings of the business steadily increased, but that the return to the Applicant and his wife reduced because of the need to increase staff. Loss is given its plain meaning as a diminution of what a person might reasonably be expected to earn had the person not been incapacitated: Cavell. In Re Fahey and Repatriation Commission (1986) 10 ALD 338, the test was a loss of remuneration, in particular earnings of a business, profession or trade as a result of remunerative work.
The Tribunal therefore accepts that the Applicant is suffering a loss of earnings or wages by way of paying employees and contractors to undertake the role he could otherwise do but for his accepted disabilities.
Therefore, the Applicant satisfies s 24(1)(c).
Conclusion
The Tribunal is therefore reasonably satisfied that the Applicant meets all the criteria for the Intermediate Rate of pension for the whole of the period under review, that is, from 15 July 2013.
DECISION
The Tribunal sets aside the decision under review, and in place of that decision, determines that the Applicant is entitled to pension at the Intermediate Rate provided for in s 23 of the Veterans’ Entitlements Act 1986 (Cth) with effect from 15 July 2013.
I certify that the preceding 84 (eighty- four) paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
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Associate
Dated: 20 October 2017
Date of hearing: 30 August 2017 Counsel for the Applicant: Mr C Micali Solicitors for the Respondent: Ms E Baggett, Moray & Agnew Lawyers
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