Phillips and Repatriation Commission - [2002] AATA 747

DECISION AND REASONS FOR DECISION [2002] AATA 747

ADMINISTRATIVE APPEALS TRIBUNAL        Nº V2000/1166
VETERANS'     APPEALS       DIVISION
  Re:         JOHN MICHAEL PHILLIPS
  Applicant
  And:       REPATRIATION COMMISSION
  Respondent

DECISION

Tribunal:       G.D. Friedman, Member
Date:             30 August 2002
Place:            Melbourne

Decision:The Tribunal sets aside the decision under review and substitutes a decision that the applicant is entitled to pension at the special rate with effect from 7 February 1998.

(sgd) G.D. Friedman
Member
VETERANS' AFFAIRS - veterans' entitlements - post traumatic stress disorder - alcohol dependence - ability to work - whether special rate applies
Veterans' Entitlements Act 1986 s9, 24, 28
Fox v Repatriation Commission (1997) 45 ALD 317

REASONS FOR DECISION

30 August 2002 G.D. Friedman, Member

This is an application by John Michael Phillips (the applicant) for review of a decision of the Veterans' Review Board (VRB) dated 31 July 2000. The VRB affirmed a decision of a delegate of the Repatriation Commission (the respondent) dated 18 May 1998 to increase the disability pension to 80% of the general rate.
At the hearing of this matter on 23 May 2002 and 26 August 2002 Mr D. De Marchi, solicitor, represented the applicant, and Mr G. Purcell of Counsel represented the respondent. The issue before the Tribunal was whether the applicant should be assessed as eligible for pension at the special rate.
BACKGROUND
The applicant was born on 26 February 1945. He left school at the age of 14 to work with his father growing onions. Later he worked as a jackeroo, shearer and fencer before joining the Australian Army in 1964. He served in Brunei, Sabah and Sarawak from 25 April 1965 to 29 June 1966 and in Vietnam from 12 December 1967 to 24 September 1968, and this service is operational service as defined in s9 of the Veterans' Entitlements Act 1986 (the Act). After his discharge on medical grounds, he was self-employed in a number of small business ventures.
After five years the applicant moved to Tasmania where he established a successful waste management business, which he operated for twelve years before selling it to Pacific Waste Management which later employed him as a consultant. After his marriage ended in 1995 the applicant completed a cooking course and on 15 May 1996 he commenced employment as a cook at the Rocky Cape Tavern. In October 1996 he ceased this employment and commenced as a chef with Alice's Seafood Diner in Rocky Cape. On 22 February 1997 the applicant resigned and the business closed. He has not worked since.
On 24 January 1997 the applicant lodged a claim for disability pension, and on 1 August 1997 the respondent determined that bilateral sensorineural hearing loss, post traumatic stress disorder (PTSD), hypertension and psychoactive substance abuse or dependence were war-caused. Pension was assessed at 60% of the general rate with effect from 24 October 1966. On 18 May 1998 the respondent determined that bruxism was war-caused and increased the pension to 80% of the general rate with effect from 7 February 1998. On 18 August 1998 the applicant applied to the VRB for review and following the decision of the VRB to affirm the decision, the applicant lodged an application with the Tribunal on 27 September 2000 for review of the decision.
EVIDENCE
The Tribunal received into evidence the documents lodged under s37 of the Administrative Appeals Tribunal Act 1975 (T1 to T24), together with six exhibits lodged by the applicant (Exhibits A1 to A6) and six lodged by the respondent (Exhibits R1 to R6).
In written statements dated 7 September 2001 (Exhibit A4) and 26 September 2001 (Exhibit A5) the applicant outlined his employment history. In oral evidence he told the Tribunal that he was a professional soldier and was upset when discharged on medical grounds because of his postulo-cystic acne. He said that after his army service he became frustrated, angry and resentful in his dealings with people. He admitted that he consumed alcohol to excess and that his relationship with his family began to suffer because of poor communication and conflict. The applicant said that at the time he did not believe in concepts such as PTSD, and blamed others for his problems.
The applicant stated that when he sold his waste management business and became an employee, he disagreed with the direction and policies of the new management, and eventually he left the company because he felt he could no longer work there. He stated that when he commenced work as a cook at the Rocky Cape Tavern he was unhappy because the heat in the kitchen caused problems with his acne, and the availability of alcohol led him to continue to drink too much. In addition, he considered that the involvement of the manager's wife amounted to interference with his responsibilities. For these reasons he resigned after several months and commenced employment at Alice's Seafood Diner. The applicant said that he tried hard to run the business successfully, but problems arose in his relationship with the owner, and after four months he resigned, after which the owner closed the business in February 1997.
The applicant told the Tribunal that there had been longstanding difficulties in his marriage and that his wife, a psychiatric nurse, had attempted on many occasions to persuade him to seek professional assistance for his anger and other problems. He said that when she finally left him in about 1995 he decided to follow her advice, and he obtained psychiatric treatment including medication. The applicant stated that he recognised that PTSD was real and began to understand the nature of his disabilities.
In relation to his current lifestyle, the applicant stated that he has difficulty sleeping and has recurrent nightmares and night sweats, which make him tired and angry. He said that he is irritable with other people and avoids contact wherever possible. He lives alone and spends his time working on projects around his house. The applicant said that while he would prefer to obtain paid employment, this would be impossible because he would be unable to pass a medical examination as a result of his war-caused conditions such as PTSD, alcohol dependence and hypertension. He stated further that consultancy work or home-based employment would not be feasible.
In a written report dated 13 March 2002 (Exhibit A2) Dr E. Cole, psychiatrist, noted that the applicant suffers from chronic PTSD and alcohol abuse or dependence, and stated that in his opinion the applicant would be unable to work for more than eight hours a week. In cross-examination Dr Cole said that he based his opinion on the contents of documents provided to him, together with information given by the applicant during the consultation on 20 February 2002. Dr Cole described the applicant as capable and resourceful, but would be unable to operate his own business because he would have difficulty relating to clients.
In a written statement dated 16 October 2001 (Exhibit R5) Peter Bramich, licensee and manager, Rocky Cape Tavern, Tasmania, stated that he employed the applicant as a cook from May to October 1996 after an approach to the owner of the tavern by the applicant. In oral evidence he said that the applicant performed adequately but left after several months following disagreements with Mr Bramich's wife and the owner. In cross-examination Mr Bramich said that at the time of the employment he was not aware of the applicant's war-caused conditions, and that these may explain some of the applicant's difficulties in the performance of his duties and in relating to people.
In a written report dated 12 April 2001 (Exhibit A1) Dr I. Parkin, consultant psychiatrist, stated:
I believe that this man is unlikely to ever work again beyond eight hours a week. In fact I think he is unlikely to ever again have gainful employment.
I believe that his alcohol dependence and his Post Traumatic Stress Disorder are the prime if not the sole reasons for this.
In reality I do not believe that he is capable of working at this stage.
In a written report dated 25 May 2001 (Exhibit R1) Dr L. Walton, consultant psychiatrist, stated:
…Mr Phillips has opted to largely isolate himself from others but he remains constructively involved in renovating his small home as well as what amounts to landscape gardening, albeit self-paced and not involving interaction with others, but he does report being able to put in up to 28 hours per week towards those endeavours.
…
I could not state with authority that Mr Phillips would be capable of consistently working more than 20 hours per week but I believe that he does remain capable of performing at least eight hours' duties per week.

In his report Dr Walton stated that there are factors other than the psychiatric conditions (such as the accepted physical disabilities) which may have relevance to his work capacity. He noted the applicant's self-assessment of work capacity as:

I'd get into too much trouble. I'd end up in gaol. I can't tolerate incompetence.

Dr Walton gave oral evidence to the Tribunal. He stated that the applicant did not cope well when working with other people. Dr Walton said that the applicant might be able to undertake employment in which he gives advice in an area related to his previous experience in the field of waste management.
In a written report dated 2 May 2001 (Exhibit R2) Dr R. Horsley, occupational physician, referred to the applicant's physical disabilities and limitations, and stated:
I believe that provided his job role took into account these limitations, he would be fit to work 8 hours or 20 hours per week.
…the impact of his psychological status upon capacity for work needs to be ascertained by a psychiatrist/psychologist.

In her report Dr Horsley noted that a significant barrier for the applicant is the fact that he has not worked for five years, and at his age the appeal to a new employer would be diminished. In oral evidence Dr Horsley stated that she was unsure whether the applicant was motivated to seek employment.

In a written statement dated October 2001 (Exhibit R6) Ms A. Dennis, manager/owner of the Detention River Shop, Rocky Cape, Tasmania, stated that she and her late partner employed the applicant as a cook in October 1996 in Alice's Seafood Diner until the business closed on 22 February 1997. She described him as a wonderful cook who had great rapport with the clients. She said that the reason for the diner's closure was that the business was not making money, and that the applicant left on good terms. In oral evidence Ms Dennis stated that she had a number of difficulties with the applicant's work and his approach to his position at the restaurant. In cross-examination she agreed that she and the applicant had a personality clash and that she was aware of his background and that he suffered from PTSD.
CONSIDERATION OF THE ISSUES
Section 24 of the Act provides for a special rate of pension for a veteran who satisfies the criteria laid down in s24:
24(1) This section applies to a veteran if:
(aa)the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab)the veteran had not yet turned 65 when the claim or application was made; and
(a)either:
(i)the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii)the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(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; and
(d)section 25 does not apply to the veteran.
(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:
(i)the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(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.

Section 28 of the Act provides that:

28 In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war-caused injury or war-caused disease, or both, is incapable of undertaking remunerative work, and in determining for the purposes of section 24A whether a veteran who is so incapacitated is capable of undertaking remunerative work, the Commission shall have regard to the following matters only:
(a)the vocational, trade and professional skills, qualifications and experience of the veteran;
(b)the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and
(c)the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).

Mr De Marchi, on behalf of the applicant, submitted that in accordance with s24(2)(b) of the Act, the applicant has not attained the age of 65 years and that his war-caused conditions were the major contributing factors to his inability to undertake employment. He referred to the three factors in s24(2)(b) of the Act (which clarifies s24(1)(c)) that need to be satisfied. Mr De Marchi submitted that the applicant had genuinely sought to engage in remunerative work that would be suited to his qualifications and experience. Mr De Marchi referred to the evidence by the applicant, Mr Bramich and Ms Dennis, and submitted that the applicant would continue to seek to engage in remunerative work but for the incapacity caused by PTSD and other war-caused conditions.
Mr Purcell, on behalf of the respondent, referred to s28 of the Act and submitted that for the purposes of s24(1)(b) the applicant had expertise in the field of waste management rather than cooking. He said that on the evidence of Dr Cole, Dr Horsley and Dr Walton the applicant was capable of undertaking employment for more than 8 hours per week in a type of remunerative work that he had undertaken successfully in the past.
Mr Purcell stated that the friction between the applicant and both Mr Bramich and Ms Dennis was the result of differences over the applicant's working style and performance, and was not connected directly to the accepted conditions. He also said that the employment at the tavern and the restaurant demonstrated that the applicant had the capacity to work long hours, which is relevant to s24(1)(b) of the Act. In other submissions Mr Purcell noted the Deed of Agreement (Exhibit R4) which placed restrictions on the ability of the applicant to seek employment in the waste industry, and said that the applicant had not suffered from a loss of earnings in the relevant period as required in s24(1)(c) as a result of an incapacity to work.
In reaching its decision the Tribunal takes into account the written and oral evidence and submissions made. The Tribunal finds the applicant to be an honest witness who gave evidence in a frank and forthright manner. The Tribunal notes that Dr Parkin concluded that the applicant was unlikely ever again to have meaningful employment and that alcohol dependence and PTSD were the prime if not the sole reasons. The Tribunal also notes that Dr Cole clarified his written report by stating that the applicant would not be able to work for more than 8 hours per week because of PTSD and alcohol abuse.
In his evidence Dr Walton appears to have based his conclusion that the applicant is capable of working for more than 8 hours per week on the work undertaken by the applicant in his garden. The Tribunal takes into account that such work has not been regular and that the applicant faces particular difficulties in dealing with people. The Tribunal also notes that Dr Horsley's conclusion about the number of hours that the applicant was capable of working was based on his physical limitations.
With regard to the evidence from Mr Bramich and Ms Dennis, the Tribunal does not accept the submission by Mr Purcell that the friction between them and the applicant was a result solely of differences over cooking style or other matters not connected to the accepted conditions. The Tribunal takes the view that the symptoms of PTSD and alcohol abuse contributed to the inability of the applicant to maintain a satisfactory relationship with both witnesses and led to the cessation of his employment.
The Tribunal takes into account Fox v Repatriation Commission (1997) 45 ALD 317 which noted that the interpretation of s24(2)(b) of the Act is a question of fact to be determined by the Tribunal. At p319-320 Kiefel J stated:
…
The words "the substantial cause" require that, if the incapacity is not of itself productive of the inability to obtain work, it is nevertheless the operative factor which, more than any other, explains it. That something might be a "substantial cause" has regard to the situation where there may be a number of factors operating which are of sufficient causal significance to qualify as "substantial"… The definite article in s24(2)… requires a stronger and more direct causal connexion between the incapacity and the inability to obtain remunerative work…

In applying these comments and in view of the Tribunal's assessment of the medical and other evidence, the Tribunal prefers the conclusions reached by Dr Cole and Dr Parkin, and finds that the incapacity due to PTSD and the other war-caused conditions was the substantial cause of the inability of the applicant to obtain remunerative work.

As a result of these findings, the Tribunal gives less weight to the reports from Dr Horsley and Dr Walton. In considering relevant matters in s28 of the Act the Tribunal is satisfied that the applicant has made a genuine effort to obtain employment in positions that would be appropriate for a person with his skills, qualifications and experience, including positions similar to his previous employment in the fields of waste management and cooking.
On the available evidence the Tribunal finds that the applicant's incapacity from war-caused injury or disease is of such nature alone, as to render the applicant incapable of undertaking remunerative work for periods aggregating more than 8 hours per week. Therefore the applicant satisfies s24(1)(b) of the Act.

Applying the test set out in Fox and taking the requirements of s28 of the Act into consideration, the Tribunal finds that, despite the existence of other factors such as the applicant's age, remote location from potential areas of employment, and the length of time since his previous employment, on the balance of probabilities there is a strong causal relationship between the war-caused incapacity and the inability to obtain remunerative work.
Therefore the Tribunal finds that the applicant is, by reason of incapacity from war-caused injury or disease, alone, prevented from continuing to undertake remunerative work that the applicant was undertaking. The Tribunal is persuaded that the applicant did suffer a loss of earnings or income that would otherwise not be suffered if he were free of the incapacity. The Tribunal finds that the applicant satisfies s24(1)(c) of the Act. For similar reasons the Tribunal finds that the applicant has been genuinely seeking to engage in remunerative work and that the incapacity is the substantial cause of his inability to obtain remunerative work in which to engage. The Tribunal finds that the applicant satisfies s24(2)(b) of the Act and therefore meets the requirements of s24 for eligibility for special rate of pension.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision that the applicant is entitled to pension at the special rate with effect from 7 February 1998.

I certify that the thirty [30] preceding paragraphs are a true copy of the reasons for the decision of:
G.D.Friedman, Member
(sgd)       Olympia Sarrinikoloau
              Clerk
Date of hearing:  23 May 2002, 26 August 2002
Date of decision:  30 August 2002
Advocate for applicant:                Mr D. De Marchi, Solicitor
Solicitor for applicant:                  De Marchi & Associates
Advocate for respondent:            Mr G. Purcell

Solicitor for respondent: Advocacy Section, Department of Veterans' Affairs