Pearce and Repatriation Commission - [2001] AATA 246

DECISION AND REASONS FOR DECISION [2001] AATA 246

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2000/874

VETERANS' APPEALS DIVISION       )
           Re      FREDERICK PEARCE
  Applicant
           And    REPATRIATION COMMISSION
  Respondent

DECISION

Tribunal Mrs Joan Dwyer, Senior Member Mr I.L. Campbell, Member Assoc. Professor J Maynard, Member

Date16 March 2001
PlaceMelbourne

Decision      The Tribunal varies the decision under review to provide: (i) That as conceded by the respondent the applicant's lumbo-sacral disc prolapse with lumbo sacral disc degeneration is a war-caused disease with effect from 6 October 1999. (ii) That the applicant, Mr Pearce, is entitled to the special rate of pension under s 24 of the Veterans' Entitlements Act 1986 ("the Act") with effect from 6 October 1999.
  (Sgd) Joan Dwyer
  Senior Member

VETERANS' AFFAIRS – special rate pension – accepted war-caused conditions of intervertebral disc prolapse at L5-S1, lumbo-sacral disc degeneration – anxiety depressive reaction and post-traumatic stress disorder – applicant worked after service until he further injured his back – whether that disqualified him because of the "alone test" or whether it constituted "a novus actus interveniens" – whether the accepted back condition is the same condition as that resulting in incapacity for work – decision set aside – entitled to special rate pension

Veterans' Entitlements Act 1986 ss 24(1)(c), 24(2)(a)(ii) and 24(2)(b)

Repatriation Commission v Sheehy, (1995) 39 ALD 286

REASONS FOR DECISION

16 March 2001 Mrs Joan Dwyer, Senior Member Mr I.L. Campbell, Member Assoc. Professor J Maynard, Member

This is an application for review of a decision of the Repatriation Commission made 21 January 2000 and affirmed by the Veterans' Review Board on 23 June 2000. The Repatriation Commission decided to reject a claim lodged on 6 January 2000 for "chronic back strain intervertebral disc prolapse." The Repatriation Commission referred to the claimed conditions as "intervertebral disc prolapse at L4-L5, intervertebral disc prolapse at L5-S1, sprain or strain of the back region."
Mr Pearce attributed the back problems to his service. He said in his claim for his chronic back strain, "caused as a result of slipping when mounting a vehicle in South Vietnam, see previous application and attached reports", and he said of the cause of the intervertebral disc prolapse "contributed to by the above injury and recurred after stressful trauma suffered in (date illegible)." The claim lodged by Mr Pearce on 6 January 2000 contained the question:
Have the disabilities you are now claiming affected your employment or your ability to seek employment at any time?

Mr Pearce answered that question "Yes," and added:

Due to nervous anxiety and trauma suffered to my back I am unable to be employed.

On 31 October 2000 Mr Pearce attended Mr Dooley for examination and report. Mr Dooley in his report dated 1 November 2000 wrote:
1.What is the appropriate diagnosis of the Applicant's back condition?
Lumbo-sacral disc prolapse associated with lumbo-sacral disc degeneration.
2.What was the cause of the condition?
The injury in June 1970 contributed significantly to the development of the lumber disc rupture, i.e. suffering trauma to the relevant disc at the lumbo-sacral level at the time of the clinical onset of intervertebral disc prolapse. The condition settled down, causing minor symptoms only, until the injury in 1982 (work-related injury), which led to the two operations.
3.The back condition from which the applicant suffered in 1970 is the same as the back condition from which he now suffers. However, over 75% of his current impairment and work capability stems from the 1982 injury at work.
4.Insofar as they are relevant to the diagnosis, do the circumstances of the Applicant's service in Vietnam satisfy any of the causal factors in Statement of Principles No. 130 of 1996 for intervertebral Disc Prolapse?
Yes. Factor 5A - suffering from trauma to the relevant disc, namely the lumbo-sacral disc at the time of the clinical onset of intervertebral disc prolapse. The progression of the disc degenerative changes in time have led to lumber spondylosis.
5.Does the Applicant's back condition prevent him from undertaking remunerative work for more than eight hours per week?
The answer is yes, but this largely relates to the 1982 work-related injury and the subsequent surgery.
6. Does the Applicant's back condition prevent him from undertaking remunerative work for more than twenty hours per week?
The answer is yes.
7.Are there any other factors which prevent the Applicant from undertaking remunerative work for more than eight hours or twenty hours per week?
Again, the 1982 incident has been the major causative factor in the development of his current state as far as his back condition is concerned, with continuing back pain, with marked restriction of lumbar spinal movement and incomplete recovery following surgery.
8.The applicant has been unable to engage in work for more than twenty hours per week since the 1982 injury.
In my opinion, the diagnosis of Mr Pearce's condition does not require further CT scans, MRIs or x-ray, or any other tests.
Finally, I believe that the initial onset of this man's chronic back problem was following a fall in Vietnam in June 1970 probably associated with a lumbo-sacral disc prolapse in a degenerate lumbo-sacral disc. At least three-quarters of his current disability relates to the work-related injury in 1982, and the two lots of surgery in 1983 and 1984.
His inability to carry out regular paid work since 1983 is due to the work-related injury.
Similarly, with his current impairment assessment, at least 75% relates to the Worker's Compensation injury in 1982, and less than one quarter to the original injury.
On 8 January 2000 Mr Pearce was advised by letter from the Department of Veterans' Affairs:
The respondent concedes that the applicant's lumbo-sacral disc prolapse with lumbo-sacral disc degeneration is a war-caused disease with effect from 6 October 1999. We have reviewed the assessment of pension. The applicant is currently on pension of 100% of the General Rate. The applicant does not qualify for the Special Rate pension because of the alone test. He has not worked since 1983 and this factor would prevent him from obtaining employment during the assessment period.
Thus when this matter came before the Tribunal the sole issue was entitlement to special rate pension under s 24 of the Veterans' Entitlements Act 1986 ("the Act"). At the hearing Mr Moore of counsel appeared for Mr Pearce. Mr Herman, an advocate with the Department of Veterans' Affairs, appeared for the Repatriation Commission. The Tribunal had before it the documents ("the T documents") lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act") and the exhibits tendered during the hearing. Mr Pearce gave evidence.
Mr Pearce described the incident when he slipped while trying to climb into the cabin of his truck in Vietnam and fell onto his back. He said that he felt sharp pain at the time and then had bruising and a niggly pain which he felt every time he got into the truck. He said that after discharge the pain was still niggly, it did not stop him working as a carpet layer and floor tiler after his discharge, but he had to watch what he was doing. If he turned sharply he got pain in his lower back.
Mr Pearce said he gave up carpet laying because he could not handle the contact with people. He has "anxiety depressive reaction" and "post-traumatic stress disorder" both accepted as war-caused diseases under the Act. After leaving carpet laying Mr Pearce started with Repco Australia as a storeman in about 1976 or 1977. He became a supervisor there and coped with the work until one day in 1982 when he injured his back trying to lift an empty gas cylinder approximately nine inches in diameter and four foot six inches high from or onto a trolley. Mr Pearce picked up the cylinder in a bear hug and his back cracked, he said. He had sharp pain in the back and down both legs. He had two weeks off work and then went back to work but the pain returned. Eventually he underwent two lumbo-sacral fusions.
Mr Pearce returned to work but Repco had closed in 1981 and he started as a supervisor at Gilbarco Australia Ltd where he worked for two and a half years. He left Gilbarco because he could not cope with the walking required to perform his duties. Exhibit R1 page 1 indicates that he stopped work on 20 June 1985 after having unsuccessfully attempted another storeman's job with Evans Equipment Company which he had to leave after five weeks as he could not cope with the duties.
In 1986 Mr Pearce settled a compensation claim against Repco for $200,000. He claimed invalid pension from the Department of Social Security on 20 June 1985. With the proceeds of his compensation claim Mr and Mrs Pearce purchased a 50 acre hobby farm at Toolamba near Shepparton, they lived there until they sold it and moved to Shepparton in 1999.
The Statements of Facts and Contentions lodged by both parties made it appear that the issues would be whether Mr Pearce was entitled to special rate pension, because he could not continue with his farm due to his accepted war-caused lumbo-sacral disc prolapse with lumbo-sacral disc degeneration. However, the way Mr Moore opened the case and took Mr Pearce through his evidence suggested to the Tribunal that he was not relying on incapacity from the war-caused back conditions as preventing Mr Pearce continuing to undertake work on his farm. The reason for that was that it was Mr Pearce's evidence that he had never made a profit from his farm and that he had no financial records relating to the farm. Thus he could not show any loss of earnings by reason of the fact that he could not continue with the farm, after his son who had been helping on the farm moved to Melbourne to work.
Rather, the case put by Mr Moore was that but for Mr Pearce's war-caused back condition he would still be working in paid employment as a storeman or storeman supervisor or something similar. Mr Moore said it was not disputed that there was a discrete incident when Mr Pearce was working at Repco and that as a result his condition became worse, but he said one cannot ignore the fact that there was a significant back condition which predisposed Mr Pearce to further injury at Repco. That back condition is conceded to be war-caused by the Department of Veterans' Affairs by letter dated 8 January 2000 well after the injury at Repco. Mr Moore said there was no break in the chain of causation. The Repco incident was a sequelae or consequence of the original back injury.
Mr Herman in his addressed submitted that we should find that Mr Pearce would still be working were it not for the serious injury he sustained at Repco and thus that we should find that he ceased work for non-service related reasons. He acknowledged that it is difficult to "unscramble the omelette of back pain" but said that the Repco incident should be characterised as a "novus actus inverteniens" which breaks the chain of causation. Mr Pearce's own analysis was set out by him in the statement he put before the Veterans' Review Board which reads in part (T20 p81):
I genuinely believe that the accident in 1980 aggravated the damage done in Vietnam 10 years previous, because from 1970 onwards I have suffered severe back pain. I have seen many doctors over the years, and despite surgery, obviously unsuccessful, the pain persists. I should also state that because of persistent problems with my back, I have been unable to work since the mid eighties which has caused a strain in my marital, family relationships.
In conclusion, I wish to state in the strongest possible terms, that it is my genuine belief that my employment and family problems started with the fall from that vehicle in Vietnam. To ease the constant pain I drank heavily but all this did was worsen my domestic situation.
As stated above, despite surgery I still suffer constant pain to this day and I am still unable to work.
Two legal issues arise. The first is whether the fact that lumbo-sacral disc prolapse with lumbo-sacral disc degeneration is now accepted as a war-caused disease means that we must treat that condition as having been war-caused at all relevant times. We consider that is the effect of the decision to accept the condition as war-caused.
The second issue is whether the accepted condition is the same condition which is now resulting in incapacity for work. Mr Dooley in his report of 1 November 2000 diagnosed Mr Pearce as suffering from lumbo-sacral disc prolapse associated with lumbo-sacral disc degeneration. That is exactly the same condition as that which has now been accepted as war-caused, and is the condition which Mr Dooley said prevented Mr Pearce undertaking remunerative work for more than eight hours a week.
Although Mr Dooley did say that the incapacity largely relates to the 1982 injury he said the injury in 1970 contributed significantly to the development of the lumber disc rupture. Mr Dooley said that the condition from which the applicant suffered in 1970 is the same as the back condition from which he now suffers (R3 paragraph 3).
The respondent in its Statement of Facts and Contentions relied on ss 24(1)(c) and 24(2)(b) of the Act. Once it became clear that Mr Moore was focusing on incapacity to continue remunerative work as an employee rather than farm earnings, Mr Herman also relied on s 24(2)(a)(ii). Those provisions read as follows:
24 Special rate of pension
(1) This section applies to a veteran if:
. . .
(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;
(2) For the purpose of paragraph (1)(c):
(a)a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(ii)the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b)where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.
The first issue under s 24(1)(c), is whether Mr Pearce is prevented by reason of incapacity from his war-caused lumbo-sacral disc prolapse and disc degeneration from continuing to undertake remunerative work that he was undertaking. Mr Pearce, who is now 53, said that if it were not for his incapacity due to his lumbo-sacral disc prolapse he would still be working. He is a comparatively young man. His work history shows that he worked hard so long as he could and changed from being a carpet layer to work as a storeman/supervisor when he could not continue with the carpet laying.
We accept his evidence and find that were it not for his back problems he would still be working as a storeman, or storeman/supervisor, or something similar. We find that it was these back problems which made him give up his employment at Gilbarco and his subsequent employment at Evans. Mr Dooley did state that Mr Pearce, because of lumbo-sacral disc prolapse and lumbo-sacral disc degeneration would not be able to undertake remunerative work for more than eight hours a week.
The second issue is whether Mr Pearce is thereby suffering a loss of wages that he would not be suffering if he were free of incapacity from his back condition. He now receives invalid pension. Mr Herman did not challenge the Tribunal's suggestion that clearly that would be less than a storeman or supervisor's wages. There is no issue about the fact that Mr Pearce is totally and permanently incapacitated from war-caused disease and satisfies the other parts of s 24(1) of the Act.
However, Mr Herman submitted that Mr Pearce was disqualified by reason of s 24(2)(a)(ii). That section precludes a veteran who is incapacitated from war-caused injury or disease if he is incapacitated or prevented from engaging in remunerative work for some reason other than that incapacity from war-caused injury or disease. Mr Herman submitted that the relevant other reason was the Repco injury. However, as Mr Dooley wrote, the incapacity results from lumbo-sacral disc prolapse and lumbo-sacral disc degeneration, those are the very conditions which have been accepted as war-caused, although they have been aggravated by the Repco injury.
We do not find that the Repco injury is some other reason which disqualifies Mr Pearce from receiving special rate pension. It is the war-caused injury or disease, although in an aggravated state, which prevents him continuing to undertake his remunerative work we find. The respondent's Statement of Facts and Contentions also relied on s 24(2)(b) of the Act. It is true that Mr Pearce has not, since June 1985, been genuinely seeking to engage in remunerative work, but we find there was no point in him continuing to seek to engage in remunerative work.
Mr Pearce had been forced to leave Gilbarco because of his back pain. He then found another storeman's job with Evans Brothers, but only lasted five weeks at that, once again because of his back problem. Mr Pearce was asked why he did not continue to look for a job after 1985. He said it was because he would never get another job with his condition which had never stabilised. He said he would be in employment but for his back problems. He said because he is not the type to do nothing, he currently works in his shed, "making kids' toys for the Salvation Army", and spends one afternoon a week counselling Vietnam veterans. He said when he needs a break from working in his shed he comes out and goes away. Mr Pearce said he works about two hours a day in the shed. Justice Sackville, in Repatriation Commission v Sheehy, (1995) 39 ALD 286 at 295, discussed the operation of s 24(2)(b) of the Act. He said:
When the veteran is under the age of 65, it is enough if he or she is prevented from obtaining remunerative work by reason of the war-caused incapacity.

His Honour explained, at page 292, that there are three steps which must be taken in order for that provision to apply:

(i) that the veteran has been genuinely seeking to engage in remunerative work;
(ii)that the veteran, but for the incapacity, would be continuing to seek to engage in remunerative work; and
(iii)that the incapacity is the "substantial cause" of the veteran's inability to obtain remunerative work in which to engage.

We find each of those three conditions has been satisfied. It is true that Mr Pearce ceased to seek to engage in remunerative work well before the beginning of the assessment period after his unsuccessful five week attempt to work at Evans in 1985. But we find that but for incapacity from the accepted back condition, he would in all probability have found, or otherwise be continuing to seek to engage in remunerative work, and that incapacity from war-caused conditions is the substantial cause of his inability to obtain remunerative work in which to engage.

This is not a case where age has intervened or where there has been time out of the workforce for reasons other than the incapacity from the accepted war-caused condition. The decision under review will be varied to provide:

that as conceded by the respondent the applicant's lumbo-sacral disc prolapse with lumbo-sacral disc degeneration is a war-caused disease with effect from 6 October 1999;
that Mr Pearce is entitled to the special rate of pension under s 24 of the Act, with effect from 6 October 1999.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Joan Dwyer, Senior Member, Mr I.L. Campbell, Member and Assoc. Professor J Maynard, Member
Signed:         Grace Carney
  Associate
Date/s of Hearing  16 March 2001
Date of Decision  16 March 2001
Counsel for the Applicant        Mr G Moore
Solicitor for the Applicant         Geoffrey Tobin
Counsel for the Respondent    Nil
Solicitor for the Respondent    Nil
Departmental Advocate           Mr K Herman