Pye and Repatriation Commission

[2008] AATA 1165

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 1165

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/2601

VETERANS' APPEALS DIVISION		)
Re		JOHN PYE

Applicant

And REPATRIATION COMMISSION

Respondent

DECISION

Tribunal Mrs Josephine Kelly, Senior Member
Dr MEC Thorpe, Member

Date23 December 2008

PlaceSydney

Decision The reviewable decision is set aside and substituted for that decision is the decision that Mr Pye is entitled to the special rate of pension with effect from 14 November 2005.

..................[sgd]..........................

Presiding Member
  Mrs Josephine Kelly, Senior Member

CATCHWORDS

VETERANS’ AFFAIRS – War pension – Application for increase to special rate – Claim accepted – Conditions rejected as war-caused for Internal Derangement of the Left Knee and Bilateral Trochanteric Bursitis – Pension reduced to general rate – Remunerative work – Whether war-caused conditions the only factor preventing from undertaking remunerative work – Whether ceased work for reasons other than accepted conditions – Held war-caused conditions only factor – Did not cease work for reasons other than accepted conditions -Decision affirmed

Administrative Appeals Tribunal Act 1975, s 37

Veterans’ Entitlements Act 1987, ss 5Q, 24, 120

Flentjar v Repatriation Commission (1997) 48 ALD 1

Re Forrester and Repatriation Commission (AAT 12510, 22 December 1997)

Sheehy v Repatriation Commission (1996) 66 FCR 569

REASONS FOR DECISION

23 December 2008 Mrs Josephine Kelly, Senior Member
Dr MEC Thorpe, Member  

SUMMARY

1.      Mr John Pye served in the regular army from 1963 until 1978.  He trained as a vehicle mechanic and served in Vietnam between 5 December 1967 and 3 December 1968.  Mr Pye lodged claims for pension for incapacity for various conditions in November 2005, January 2006 and February 2006, when he was under 65. On 24 March 2006 a delegate of the Repatriation Commission (the Commission) made a decision accepting various conditions and granted Mr Pye the special rate of pension with effect from 14 November 2005

2.      However on 7 June 2006 another delegate reviewed the decision and decided to reduce disability pension to 100 per cent of the general rate with effect from November 2005.  Mr Pye seeks the review of that decision which was affirmed by the Veterans' Review Board on 26 June 2006.   In short, Mr Pye seeks a pension above the general rate.

3.      For the reasons that follow, we set aside the reviewable decision and decide that Mr Pye qualifies for the special rate with effect from 14 November 2005. 

THE ISSUES

4. These proceedings concern the application of s 24 of the Veterans' Entitlements Act 1986 (the Act).   The Commission conceded that:

(a)   Mr Pye has a degree of incapacity of at least 70 per cent (s 24(1)(a) of the Act); and

(b)  His incapacity from war-caused injury or war-caused conditions is of such a nature as, of itself alone, to render him incapable of undertaking remunerative work for periods aggregating more than 8 hours per week (s 24(1)(b) of the Act).  

5. The issues arise in relation to s 24(1)(c) of the Act which was considered in Flentjar v Repatriation Commission.  The Full Federal Court set out four questions that s 24(1)(c) requires to be answered:

(i)    What was the remunerative work Mr Pye was undertaking? This is in dispute.

(ii)  Is Mr Pye, by reason of the war-caused incapacity, prevented from continuing to undertake the work that he was undertaking?  The Commission concedes that the answer to this second question is "yes". 

(iii)  Is the war-caused injury or disease, or both, the only factor or factors preventing Mr Pye from continuing to undertake that work?  This is also in dispute.

(iv)   If the answers to each of questions (ii) and (iii) is yes, is Mr Pye, by reason of being prevented from continuing to undertake that work, suffering a loss of salary, or wages or earnings on his own account that he would not be suffering if he were free of that incapacity?   This is also in dispute.

THE CASE FOR THE COMMISSION

6. Mr Purcell, counsel appearing for the Commission, contended that Mr Pye does not satisfy s 24(1)(c) of the Act. His principal arguments were that Mr Pye had left his last remunerative work as a maintenance engineer for reasons other than his war-caused disabilities and that other medical conditions contributed to his inability to work. He also argued Mr Pye's evidence was unreliable because he has made inconsistent statements, for example to doctors he has seen.

CONSIDERATION

Non- Contentious Matters

7.      The standard of proof in these proceedings is the balance of probabilities test (s 120(4) of the Act).  The assessment period is between the date of claim and when we make our decision (s 19 of the Act).

8.      The following is not contentious. Mr Pye was born on 18 February 1947.  After leaving the Army in 1978, he had a number of  jobs over the following years, until 1995 when he began working at Chep, which is a division of Brambles Australia Limited. In 1980 or 1986 he spent some months in St John of God Hospital being treated for depression, following a suicide attempt.  He worked with Chep from 1995 until the end of September 2003 as what is described in his evidence and that of his former employer respectively, as a maintenance engineer or pallet repairer.

9.      While Mr Pye was working at Chep he suffered a heart attack, an injury to his penis and scrotum on 6 July 1996, and on 23 February 2000, a dislocated left shoulder.   A statement of claim was filed against Brambles Australia in the District Court of New South Wales on 26 November 2001 for injuries Mr Pye suffered while working for Chep.  On 10 October 2003, terms of settlement were lodged in that Court, including a term that Mr Pye's voluntary resignation was effective immediately.   A PAYG Payment summary shows that Mr Pye stopped work on 23 September 2003.  The settlement was for a considerable sum, from which Mr Pye received about $370,000.  When he left Chep, Mr Pye was living at Macquarie Fields (next to Ingleburn) in western Sydney.

10.     Mr and Mrs Pye moved to the Central Coast, probably in about November 2003.  After settling in and having a holiday, they purchased an existing business  which I will call the nursery business, which they ran from about July 2004 to January 2005.  Mr Pye then worked for a cleaning company, cleaning a school at St Ives from 27 January 2005 to 8 April 2005 for 16 hours per week.   On the PAYG Payment Summary his address was given as Kincumber.  His last employment was with Specialty Cereals during the period 11 May to 30 June 2005.  The PAYG payments summary for this employment listed his address as Briens Road, Northmead.

11.     Mr Pye's first application for disability pension was received by the Department of Veterans' Affairs on 1 November 2005.   He and Mrs Pye had moved back to Sydney and were living at Leppington by that time. In a hand-written document sent to the Department, I infer, after the decision to reduce his pension to the general rate, Mr Pye stated that he moved back to Sydney in August 2005.

12.     Mr Pye's accepted war-caused disabilities are:

Ischaemic Heart Disease

Hypertension

Post Traumatic Stress Disorder

Chronic Bronchitis and Emphysema

Osteoarthrosis of the Right Knee

Alcohol Dependence

Bilateral Sensorineural Hearing Loss

Bilateral Tinnitus

Lumbar Spondylosis

Depressive Disorder

13.     His rejected disabilities are:

Internal Derangement of the Left Knee

Bilateral Trochanteric Bursitis

Contentious Matters

14. Section 24(1)(c) of the Act provides:

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; and

…

15. Section 24(2) of the Act provides:

(2) For the purpose of paragraph (1)(c):

(a)  a veteran who is incapacitated from war-caused injury or war-caused disease, or not, 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)  has he ceased to engage in remunerative work for reasons other than his incapacity from that war-caused injury or war-caused disease; 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.

What was the remunerative work that Mr Pye was undertaking?

16.      Remunerative work includes “any remunerative activity” (s 5Q of the Act).

17.     The Commission contended that the remunerative work that Mr Pye was undertaking was maintenance engineer. If that were so, Mr Pye would not succeed because he ceased that job as a term of settlement of litigation.  We understand the case for Mr Pye to be that the kinds of relevant remunerative work were nursery operator, cleaner and process worker.

18.     Mr Purcell, counsel appearing for the Commission, argued that each of the jobs Mr Pye did when living on the Central Coast was a casual job similar to the job considered by Matthews P in Re Forrester and Repatriation Commission, and is therefore not relevantly remunerative work that Mr Pye was undertaking.   He argued that those positions did not have long term prospects of employment for Mr Pye.  Mr Purcell argued that the nursery business was not profitable and that was the reason or a reason why Mr Pye gave it up.  He argued that the cleaning job was in a school and was only for a school term, and the process worker job was short term because Mr Pye had made the decision to leave the Central Coast and return to Sydney. 

19.     We do not accept Mr Purcell's submission.  The limited evidence about the financial viability of the nursery business is ambiguous.  Mrs Pye gave evidence that she and her husband had a good lifestyle while running that business and that there was plenty of money. Mr Pye said that he worked while living at the Central Coast because he wanted to work rather than because he needed the money.  Mr Colborne, who appeared for Mr Pye, argued that the money was being reinvested in the business and one cannot infer that it was unprofitable. 

20.     Mr Pye left his cleaning job.  The reason he gave to his employer for leaving  was that he wanted a job closer to where he lived.  We do not accept that the job had come to an end with no further prospect of employment because it was for a school term. 

21.      We do not consider that because the process work job was for a period of several weeks, it was not relevantly remunerative work that Mr Pye was undertaking. 

22.     We also accept Mr Colborne's submission that Mr Pye successfully undertook each of those jobs in the sense discussed in Sheehy v Repatriation Commission.  

Are Mr Pye's war-caused disabilities the only factor preventing Mr Pye from continuing to undertake that work?

23.     We understood Mr Purcell to argue for the Commission that conditions not accepted as war caused also prevented Mr Pye from continuing to undertake that work.  The included Mr Pye's left knee, left shoulder and trochanteric bursitis in both hips.  Although by the end of the case, we understood Mr Purcell to press only the left knee.  There was little if any evidence to support the submission in relation to either the left shoulder or trochanteric bursitis.

24.     We do not agree with Mr Purcell's submission. He relied on the evidence of Dr Maxwell, orthopaedic surgeon, who examined Mr Pye on 13 February 2006.  In his written report of the same date Dr Maxwell estimated that Mr Pye's left knee contributed 15% to his incapacity for work.  When Dr Maxwell saw Mr Pye, he complained that his left knee has being "playing up" particularly for the last four or five years and that  it has been "jumping out of joint" over the last few years and has developed swelling over the last three years which is intermittent, and he experiences a jamming and locking feeling which occurs 8 to 9 times per year.  He has to manipulate it which makes it "clunk" when he straightens it.  It was swelling more than his right knee.  On that basis Dr Maxwell assessed the left knee condition as contributing 15% to his incapacity or work.   Dr Maxwell found that because of his general condition he would have difficulty working more than 8 hours per week.   During his oral evidence, more than two years later, Dr Maxwell stated that the left knee condition would not have prevented Mr Pye from working.  Dr Maxwell did not consider the left shoulder at all.

25.     Dr Rosenthal, occupational physician, prepared a report 27 June 2007 and gave oral evidence. In his opinion, Mr Pye was excluded from working more than eight hours per week due to his PTSD, IHD, Chronic Bronchitis, Osteoarthrosis of the right knee and lumbar spondylosis.  Further, in his opinion Mr Pye cannot do machinery maintenance, or process work as a machine operator in a cereal company because of his accepted medical conditions.   In answer to the question: to what extent is Mr Pye prevented from seeking remunerative activity due to his non-accepted conditions, Dr Rosenthal answered that the non-accepted conditions were that of the left knee and the left shoulder. He conceded there were minor symptoms on the left knee, but there was not any significant impact on his ability to stand and walk. In Dr Rosenthal’s opinion, there was nil affect of his left knee or left shoulder condition impacting on his ability to seek remunerative employment.

26.     Dr Chase, occupational physician, saw Mr Pye on 19 July 2007 at the Commission’s request.  He commented on Mr Pye’s unreliability as a witness. However, on the history given he expressed the opinion that Mr Pye was "incapable of undertaking remunerative work for periods aggregating more than eight hours per week" primarily due to the accepted conditions of IHD, hypertension and chronic airways disease, and to a lesser extent, the osteoarthrosis of the right knee.  In response to the question ‘Did the applicant cease work for reasons other than his accepted disabilities,’ Dr Chase noted that Mr Pye had tended to overstate his symptoms (particularly with respect to his workers compensation claim). The doctor indicated he thought cardiovascular factors resulted in him ceasing work, in combination with the osteoarthritis of the right knee. Dr Chase accepted that the main reasons Mr Pye ceased work was because of his accepted disabilities, though other problems may have contributed.   It was not clear to us what those "other problems" may have been.

27.     The medical evidence persuades us that Mr Pye's war-caused disabilities are the only factor preventing Mr Pye from continuing to undertake the remunerative work he was undertaking.  We do not consider that the evidence of Dr Chase or Dr Maxwell is contrary to our conclusion.  In coming to this conclusion, we have taken into account that we find Mr Pye's evidence unreliable, as explained shortly.

Is Mr Pye by reason of being prevented from continuing to undertake that work, suffering a loss of salary, or wages or earnings on his own account that he would not be suffering if he were free of that incapacity?

28.     We understand the fourth question set out in Flentjar to include the question  whether Mr Pye ceased to engage in remunerative work for reasons other than his incapacity from his war-caused disabilities (s 24(2)(a)(i) of the Act). If that is so he will not be taken to be suffering a loss of wages on his own account by reason of his incapacity (s 24(2)(a)).

29.     This question is difficult to answer because we find Mr Pye's evidence unreliable because of numerous inconsistencies.  For example, during 2002 and 2003 when he was pursing his personal injury claim for the injuries he suffered at Chep, Mr Pye told various doctors and others that he had not suffered psychological problems after his admission to St John of God Hospital.  He told Dr Clark, consultant forensic psychiatrist, that treatment that he had at St John of God Hospital was very effective and his resentment to Vietnamese was smoothed out.  Dr Clark diagnosed PTSD as a result of the injury to Mr Pye's penis and scrotum.  Mr Pye told Dr Lowy, a sexual health physician, that he had had no psychological problems related to war since his admission to St John of God Hospital.  He gave a person carrying a functional assessment a similar history.  He also told that person that he was only an occasional drinker of light beer and has never had any problems with alcohol.  These histories are very different to what he apparently told Dr Altman, Dr Dinnen and Dr Roberts, psychiatrists whom he saw in relation to the claim the subject of the current proceedings.

30.     There were other instances of inaccurate or less then complete histories being given to doctors in relation to the present claim.  For example, neither Dr Altman or Maxwell recorded a history of the injuries Mr Pye suffered while working at Chep, the subsequent legal proceedings and settlement.  Mr Pye did mention the cleaning job to Dr Altman but, he told both Dr Altman and Dr Maxwell that he had stopped work in 2002, which was clearly a reference to ceasing work at Chep, although an incorrect date.   

31.     However, despite this difficulty, we find that the evidence is that Mr Pye kept on trying to work because working was important to him.  He seems to have had few interests outside working. This was also reflected in comments he made to doctors he saw for the purpose of the proceedings against Chep.   He told us that he could no longer work because of war-caused disabilities.  There is no other reason that emerges from the evidence.  We do not accept, as we understood Mr Purcell to contend, that it was a shortage of money that required him to continue to work. 

32.     We accept Mrs Pye's evidence that they moved back to Sydney because Mr Pye's war-caused medical conditions required that he be close to his doctors in order to receive medical attention and also so that she could have support from her family in order to look after Mr Pye.  On the evidence before us, we are satisfied Mr Pye did not cease work for reasons other than his accepted conditions.  In relation to his last job as a process worker, we take into account that the decision to move to Sydney had been made before he stopped working in that job.  However, we find that Mr and Mrs Pye had recognised that Mr Pye could not continue working due to his accepted conditions and needed help to overcome them, but he pressed on for some further time after they made the decision to move.

33.     We did not understand Mr Purcell to argue that if we found as we have, Mr Pye was not suffering a loss of salary, wages or earnings.  In any event, we find that he has suffered such a loss.

CONCLUSION

34.     For the above reasons, we set aside the reviewable decision and find that Mr Pye is entitled to the special rate of pension with effect from 14 November 2005.

I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Mrs Josephine Kelly and Dr MEC Thorpe, Member.

Signed: ………[sgd]….…..

Steven Mulipola, Associate

Date of hearing:  23 and 24 July 2008

Date of decision:  23 December 2008

Counsel for the Applicant:    Mr C Colborne

Counsel for the Respondent:  Mr G Purcell

Representative for the Respondent:       Advocacy Section, Department of Veterans’ Affairs