Re Smith and Repatriation Commission
[2004] AATA 1223
•19 November 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 1223
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2003/192
VETERANS' APPEALS DIVISION ) Re PHILIP STEVEN SMITH Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date19 November 2004
PlaceAdelaide
Decision The decision under review is set aside, and in place of that decision the Tribunal determines that the applicant is eligible for pension at the special rate payable pursuant to s 24 of the Veterans’ Entitlements Act 1986 (Cth) with effect from and including 24 May 2002.
D.G. Jarvis
(Signed)
Deputy President
ADMINISTRATIVE APPEALS TRIBUNAL )
) No. S2003/192
VETERANS’ APPEALS DIVISION )
Re: PHILIP STEVEN SMITH
Applicant
And: REPATRIATION COMMISSION
Respondent
CORRIGENDUM TO DECISION [2004] AATA 1223
TribunalDeputy President Jarvis
Date of Decision 19 November 2004
Date of Corrigendum 30 November 2004
PlaceAdelaide
Corrigendum:
That the date “24 May 2002” appearing in the decision and in paragraph 48 of the reasons for decision be deleted and ‘24 February 2002’ be inserted in its place.
D G Jarvis
(Signed)Deputy President
CATCHWORDS
VETERANS’ ENTITLEMENTS – disability pension – rate of pension payable – special rate – unpaid work previously undertaken by applicant became paid work subsequently – applicant prevented by war-caused disease alone from continuing to undertake that work – applicant ceased to engage in remunerative work after his last paid employment – reason for ceasing last paid employment no longer operative – decision under review set aside.
Veterans’ Entitlement Act 1986 (Cth) s 24(1)(c) and s 24(2)(a)(i)
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Smith (1987) 15 FCR 327
Banovich v Repatriation Commission (1986) 69 ALR 395
Doig v Repatriation Commission, Federal Court, 18 December 1996, 1106/96
Starcevich v Repatriation Commission (1987) 18 FCR 221
Repatriation Commission v Graham [2004] FCA 1287
Hill v Repatriation Commission [2004] FCA 832
Counsel and Repatriation Commission (2002) 122 FCR 476
Re Thatcher and Repatriation Commission [2004] AATA 519
Re Bertram and Repatriation Commission (AAT 2783, 29 July 1986)
DC Pearce and RS Geddes, Statutory Interpretation in Australia, 5th Ed, Butterworths, Australia, 2001, at [9.2] and [9.3]
Anderson v Repatriation Commission [2004] FCA 1009
Stuart and Repatriation Commission (1989) 17 ALD 678
Cavell v Repatriation Commission (1988) 9 AAR 534
Forbes v Repatriation Commission (2000) 101 FCR 50
Repatriation Commission v Hendy (2002) 76 ALD 47
Re Reilly and Repatriation Commission (1987) 12 ALD 533
Hall v Repatriation Commission (1994) 33 ALD 454
Re Hornery and Repatriation Commission (1998) 52 ALD 317
REASONS FOR DECISION
19 November2004 Deputy President Jarvis 1. Philip Steven Smith enlisted in the Royal Australian Air Force on 16 May 1966 and was discharged on 17 May 1983. He served in Vietnam from 4 June 1968 to 4 June 1969. The Repatriation Commission has accepted that he has a number of war-caused or defence-caused disabilities, namely lumbar spondylosis, a cyst on his left knee, osteoarthritis of his big toes, bilateral sensorineural hearing loss and post- traumatic stress disorder (“PTSD”) with alcohol dependence. The Commission does not accept that three further conditions, namely refractive error, asthma and adhesive capsulitis of the left shoulder, were war-caused or defence-caused, and the Commission’s position was not challenged in the proceedings before me.
2. On 24 May 2002 Mr Smith lodged an application for an increase in the disability pension he was then receiving for certain of his accepted disabilities. On 22 October 2002, the Commission increased his disability pension from 40% of the General Rate (being the figure which had been applicable since 1 June 1993) to 100% of the General Rate. The Veterans’ Review Board (“VRB”) affirmed this decision on 11 April 2003. Mr Smith has applied to this Tribunal for review of the decision, and claims to be entitled to pension at the special rate provided for in s 24 of the Veterans’ Entitlements Act 1986 (“VE Act”).
Issues for Determination
3. The issue before me is whether Mr Smith satisfies s 24(1)(c) of the VE Act, that is:
· whether he is, by reason of incapacity from his war-caused injuries alone, prevented from continuing to undertake remunerative work that he had been undertaking; and
· whether in consequence he is suffering a loss of wages or earnings on his own account which he would not be suffering if he were free of that incapacity.
4. It was common ground that Mr Smith satisfies the first criterion under s 24 (namely, a determination of entitlement to a pension at a rate higher than 70% of the general rate), and the second criterion (namely, an incapacity from war-caused conditions of such a nature as, of themselves alone, to render him incapable of undertaking remunerative work for periods aggregating more than eight hours per week). These criteria are contained in s 24(1)(a)(i) and s 24(1)(b) respectively of the VE Act.
5. Mr Smith ceased work in 1999. There was no evidence that Mr Smith had been seeking to engage in remunerative work after that, and it was accepted that the ameliorative provisions of s 24(2)(b) have no application.
Evidence and Findings
6. I make the following findings from the oral and documentary evidence before me, and I accept the evidence, as narrated below, which was largely undisputed.
7. Mr Smith is aged 58 years having been born on 29 October 1946. He went to school at Murray Bridge High School, and after leaving school worked for Woolworths and later became an assistant manager of Woolworths in Adelaide. He joined the Royal Australian Air Force when he was 19, and went to South Vietnam when he was 21. He was posted to the RAAF base at Vung Tau, and was involved in classified signals work. He experienced a number of stressful events in Vietnam, and drank heavily and abused alcohol. He also suffered physical injuries in Vietnam when a bus ran over his left foot. Upon his return to Australia he was nervy, distressed and angry, he drank heavily and he had difficulties in sleeping.
8. After returning from Vietnam Mr Smith was posted to the Edinburgh base in South Australia in June 1969. In December 1976 he was posted to Butterworth in Malaysia. While serving there he married his third wife, Rebecca Kessler, a Malaysian woman. He returned to Australia in 1979, and he and his third wife had two children, a son born in May 1980 and a daughter born in January 1982. Mr Smith and his third wife separated late in 1980 as a consequence of his abusive behaviour, but his wife came back to live with him in 1981 for about two months, when their daughter was conceived. She then left him permanently as a result of his abusive behaviour.
9. After he returned to Australia in 1979, Mr Smith’s duties with the RAAF included working as a shift supervisor at the Communications Centre at Victoria Barracks, Melbourne, for about three years. He also worked as an instructor at the RAAF School of Radio for about 18 months. This involved teaching all aspects of communication, including typing, computer work and coding. He said that he was not aware of any difficulties with students, and he enjoyed the work.
10. On 3 December 1981 Mr Smith was apprehended for drink driving, and disqualified from holding a driver’s licence for two years. This happened while he was stationed at Victoria Barracks. He was later transferred to the Laverton Base in Victoria. Mr Smith had previously had a top security clearance for his work in cryptology, but he lost this security clearance while he was at Laverton due to misconduct, and this meant that he could not continue to do his previous work.
11. In March 1983, also while he was working at the Laverton Base, Mr Smith was convicted of driving whilst disqualified. This gave rise to an official adverse report. After taking into account this offence and a lamentable and very extensive history of misconduct, which included a number of offences under the Air Force Act 1923, failing to pay various debts, cashing cheques without having sufficient funds in his account and failing to pay the fine imposed on his 1981 conviction, he was summarily discharged under the terms of regulation 115(r) of the Air Force Regulations 1927, being the category “services being no longer required” (exhibit A5). Mr Smith made a grievance complaint against this decision, and a copy of his complaint and submissions was tendered as exhibit A6. He submitted, amongst other things, that he had nearly served 17 years with the RAAF, and that if the discharge stood he would lose the pension and lump sum benefit that would be payable to him after he had served for 20 years. His submission also referred to the personal circumstances which had given rise to his financial pressures and gambling, and said that he had added pressure because he was then pursuing legal custody of his son. He further requested that should discharge be the “only way out”, then the discharge should be under AFR 115(p) (discharge on termination of period of enlistment) with effect from 15 May 1983. As a result of Mr Smith’s submission, it appears that the effective date of Mr Smith’s discharge was slightly extended, to 17 May 1983, but this did not enable him to achieve 20 years service, and the ground of his discharge, namely service being no longer required, was confirmed.
12. Mr Smith gave evidence in the present proceedings that he was pretty angry at losing his security clearance and was upset with everybody, and his life went down hill from there. He said after leaving the RAAF he was distraught because his “whole life had been kicked out of (him)”. He said that he was in debt, he had no money and no job. He went back to South Australia with his son, who was then three, and he obtained a sole parent pension. He looked for work straight away and applied for countless jobs, and did exams to enter the public service in 1984. He said that he did not hear back in response to most of his applications, but on a couple of occasions he did start work.
13. The first work he obtained was with Country Catering Services as a barman at functions, but he only worked on two nights. On each occasion he was drinking while he was working, and on the second occasion he had an argument with his employer’s wife, and his services were terminated. This work is referred to in exhibit A1, T21, page 117, and it appears that Mr Smith undertook this work in December 1986. He also worked for Darryl Squires Milk Supply in March 1992, in a position which involved filling shelves at supermarkets, but this job only lasted for one week, again because of issues arising from Mr Smith’s drinking problem, and because his back and knees made lifting difficult.
14. Mr Smith said that in the late 1990’s, he did some “volunteer” work for an employment agency, Nastec Solutions. This position was offered to him, and he accepted it in the hope that this would lead to long-term paid employment. He said that he worked at Nastec as a canteen manager for about 15 months or a bit longer. He worked for 20 hours a week, from about 10.00am until 2.00pm, on Mondays to Fridays. He said that he finally did receive an offer of paid employment from the company, involving increased hours of up to 50 hours a week. However, by then even the shorter hours he was working were causing problems with his back and feet, and he decided that he was unable to continue working with Nastec even for the shorter period of 20 hours per week. He therefore left Nastec Solutions without taking up their offer, and said that he has not worked since then, and is unable to do so.
15. Further information regarding the position at Nastec is contained in a letter dated 17 September 1999 from its chief executive officer. This letter confirms that Mr Smith had worked as a volunteer for approximately 20 hours per week for the preceding 15 months as manager of the canteen, and says that he was paid $60.00 per week for out-of-pocket expenses. The letter proceeds:
“Although Mr Smith suffered from various injuries to his back, legs and feet, it was my intention to offer him a full-time paid position. Because of his excellent organisational abilities we were hopeful of retaining him despite his obvious discomfort.
However, on consultation with Phil regarding the extra hours and duties he would be required to perform he informed me that due to worsening pain he would be unable even to continue with his volunteering work past the end of the week.
Subsequently by mutual agreement our offer of permanent employment was retracted.”
16. Mr Smith gave evidence that because of his accepted disabilities, he could not sit or stand for long periods and could not walk for long distances. He said that he was “unreliable” with alcohol, and his lumbar spondylosis caused aching which extended down his legs. He also said that he regularly felt depressed and was pretty sad most of the time, and regularly had flash-backs arising from his memories of Vietnam.
17. The documents before me include a medical report from Dr W Ducrou dated 5 November 2001. This describes Mr Smith’s previous medical history, including his chronic progressive low back pain and the osteoarthritis of his big toes. The report records that he has moderate to severe loss of mobility and stability, and records his current medical situation. Dr Ducrou also expresses the opinion that Mr Smith was then not able to work at any full-time work, and was not suitable for rehabilitation into a full-time light job, “due to chronic pain, loss of mobility, stability, manual efficiency and postural intolerance” (exhibit A1, T4, page 25). The T Documents also include other medical information, including departmental forms provided by Dr G W Tassie in November 1990, and Dr Kim Yong in September 2002.
18. I also received psychiatric evidence from Dr M Ewer, who prepared reports dated 6 September 2002 (exhibit A1, T10, pages 51-57), 2 March 2004 and 16 April 2004 (exhibit A2). Dr Ewer diagnosed Mr Smith as suffering from chronic PTSD and alcohol dependence, and he gave evidence confirming his diagnosis and the matters covered in his reports.
Legislation
19. Section 24(1)(c) of the VE Act provides as follows:
“24(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
…”
20. The second aspect of s 24(1)(c), namely that the veteran, by reason of being prevented from undertaking remunerative work in consequence of his war-caused condition, is suffering a loss of salary or earnings which the veteran would not otherwise be suffering, is affected by the deeming provisions s 24(2)(a) of the VE Act. This provides:
“24(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
…”
The expression “remunerative work” is defined in s 5Q(1) of the VE Act to mean “any remunerative activity”.
Parties’ Submissions
21. Mr Crowe for the Commission submitted that Mr Smith had ceased to engage in remunerative work when he was discharged from the RAAF in 1983, and that he ceased that work for reasons other than his incapacity from his accepted conditions, namely his behavioural problems, including in particular his offence of driving whilst disqualified and his gambling habits which led, in turn, to his financial difficulties. Mr Crowe contended that as a result, Mr Smith should not be taken to be suffering from a loss of salary or wages, or earnings on his own account, because of the deeming provisions of s 24(2)(a)(i) of the VE Act. He further submitted that, on the evidence of Dr Ewer, these behavioural problems were at least, in part, due to Mr Smith’s choice to behave in the way that he did, even though the behavioural problems were also due to his condition of PTSD.
22. Mr Swan for the applicant argued that no such problems existed before Mr Smith went to Vietnam, and there is no suggestion in the present matter that he had any pre-existing personality problems which would have caused the behavioural problem leading to the cessation of his employment by the RAAF, so that the cessation of that employment should be regarded as being solely due to his war-caused condition of PTSD, in the sense that if he had not had PTSD he would not have been discharged from the RAAF.
Consideration
23. The Commission, and this Tribunal standing in the shoes of the Commission when determining an application for review, must determine the application made by Mr Smith in accordance with s 19 of the VE Act. Under s 19(5C) it is necessary to assess the rate or rates at which the pension would have been payable from time to time during the “assessment period”. That expression is defined in s 19(9) of the VE Act to mean period starting on the application day (namely 24 May 2002) and ending when the application is determined.
24. In considering the application of s 24(1)(c) of the VE Act, I refer first to the analysis of Branson J (with whom the other members of the Full Court of the Federal Court agreed) in Flentjar v Repatriation Commission (1997) 48 ALD 1 at 4.9. Her Honour said that a proper consideration of s 24(1)(c) required responses to the following four questions:
“1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?
2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3. 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?
4. 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 account that he would not be suffering if he were free of that incapacity?”
25. A determination of the responses to these questions entails an examination of the facts relevant to each question. Under s 120(4) of the VE Act, the Tribunal must decide these issues to its reasonable satisfaction, a standard which equates with proof on the balance of probabilities: Repatriation Commission v Smith (1987) 15 FCR 327. Neither party has an onus of proof (s 120(6) of the VE Act), and the Tribunal must act according to substantial justice, and the substantial merits of the case, without regard to legal form and technicalities (s 119(1)(g)).
26. As regards the first question in Flentjar, the reference to “remunerative work that the veteran was undertaking” is to be read as a reference to the type of work which the veteran had previously undertaken, and not to any particular job: Banovich v Repatriation Commission (1986) 69 ALR 395. Accordingly, the loss of a particular job for reasons unrelated to the war-caused condition is immaterial: Doig v Repatriation Commission, Federal Court, 18 December 1996, 1106/96. The remunerative work does not have to be the last work undertaken by the veteran (unless the veteran is over 65 at the time of a claim or application): Starcevich v Repatriation Commission (1987) 18 FCR 221 at 454 per Fox J. It is relevant to consider any “substantive” remunerative work that the veteran has undertaken in the past, but this may not necessarily include work that the veteran had undertaken in the far distant past, as this may not be a relevant comparison: Repatriation Commission v Graham [2004] FCA 1287.
27. In the present matter, Mr Smith has not engaged in many different jobs since leaving school. The types of work which he has previously undertaken and which are potentially relevant are as follows:
(a) work as an assistant manager in large store or supermarket;
(b) work in the RAAF as a communications officer; and
(c) work as a canteen manager.
28. There was no evidence before me as to the nature of the work which Mr Smith did at Woolworths, but in any event, he did this work when he first left school many years ago, and it was not suggested that this would be relevant work for the purposes of applying s 24(1)(c) of the VE Act. Further, I find that future work with the RAAF would not be available either, because of the circumstances in which he was discharged. If the type of work undertaken by Mr Smith with the RAAF is given a more general characterisation (such as working in the field of electronics and computers, as suggested by Mr Crowe) I find that as both the period for which Mr Smith has been out of the workforce and his age increased, it would have become progressively more difficult for him to have obtained work in this field, and I further find that his age and time out of the workforce were factors which contributed to his inability to continue the alternative type of work suggested by Mr Crowe. He is not therefore prevented from engaging in this type of remunerative work because of his war-caused conditions alone.
29. As regards work as a canteen manager, the question arises as to whether this work can be taken into account, because his work at Nastec Solutions was “volunteer” work entailing a notional weekly payment of an amount sufficient merely to cover Mr Smith’s expenses in going to work. The issue of whether certain activities constitute remunerative work where those activities have not produced a profit, or have produced a very small or nominal profit, has been considered in a number of cases, and the outcome has varied according to the facts in each case. I refer, for example, to Counsel v Repatriation Commission (2002) 122 FCR 476, Re Thatcher and Repatriation Commission [2004] AATA 519 and Anderson v Repatriation Commission [2004] FCA 1009. Very often the work under consideration in such cases was work which the veteran had previously undertaken, and which the veteran asserts would have continued if the veteran had not been prevented from continuing to undertake it. The analysis of the financial benefits of the work concerned was therefore relevant to a consideration of whether the veteran had suffered a loss as a result of being prevented from continuing to undertake the work in question; if the work was not “remunerative” work, then the veteran was not able to show that by being prevented from continuing to undertake that work he had suffered a loss of wages or earnings on his own account that he would not otherwise have suffered. However, the present case is different from the situation in such cases, because the work under consideration was effectively not paid work while it was being undertaken by Mr Smith, but the same type of work later became available to him as paid work. The unpaid work he had done previously was transformed into remunerative work, and he had undertaken this work previously, even though in an unpaid capacity.
30. I have reached the conclusion that the prospective paid work at Nastec Solutions, which Mr Smith was prevented from undertaking because of his accepted disabilities, should properly be regarded as “remunerative work” which Mr Smith had previously undertaken, and it does not matter that when Mr Smith was undertaking that work, it was not remunerated. In other words, the requirement that the work has to be remunerative work is a characteristic of the prospective work which the veteran is prevented from undertaking, and it is sufficient if the veteran has undertaken that type of work in the past, even though it was not paid work when he undertook it. In my opinion, this conclusion is consistent with the proposition that the inquiry to be made under s 24(1)(c) is to determine the type of work which the veteran has successfully undertaken in the past, and the section does not refer to any particular job previously undertaken by the veteran; and it is sufficient if the past work is “substantive”, or if the veteran has successfully undertaken it (see the cases referred to in Thatcher (supra) at [33] to ]36]).
31. In support of this conclusion I also refer to Hill v Repatriation Commission [2004] FCA 832, where Mansfield J (at [45] and [48]) pointed out that the purpose of the VE Act is, in the circumstances to which it applies, to the same general effect as the compensatory provisions of various workers’ compensation enactments; that a common thread through the enactments has been the entitlement to compensation for “incapacity for work” as a result of work related injury or disease; and the expression “incapacity for work” means incapacity to earn wages. His Honour further pointed out at [44] that the VE Act should be construed liberally, as it falls within the category of beneficial legislation. This characterisation of the legislation does not, of course, permit decision-makers to provide a benefit to a veteran where this would not be available from the language employed in the Act, but if there is ambiguity it is appropriate to construe the Act liberally in a manner favourably to the veteran: see DC Pearce and RS Geddes, Statutory Interpretation in Australia, 5th Ed, paragraphs 9.2 and 9.3, and the cases there cited. I think that the conclusion I have reached is consistent with the objectives of the VE Act, and the beneficial nature of it.
32. I also refer to the analysis of the concept of remunerative work in Re Bertram and Repatriation Commission (AAT 2783, 29 July 1986), where Deputy President McMahon said:
“‘Remunerative work’ does not mean necessarily profitable employment or profitable undertakings. It is a term used to distinguish activities from private or domestic work or from voluntary non-profit activities. It means activities in which the aim is to make a profit, whether or not that aim is successful. Remunerative work is intended to recompense in money terms. It is the intention that gives to the work its distinctive character. It is work that one would not normally carry out, unless one at least hoped to be recompensed. It is the very antithesis of voluntary work, for example, carried out on behalf of a charity. It bears no relationship to the physical or mental difficulty of the work. The creation of a new garden at home can be demanding but could not be described as remunerative work. A genealogical research project can absorb much time and energy. If it is merely for the information of one’s family, it is not remunerative work. On the other hand poorly paid employment which affords no net economic benefit, because, for example, of excessive fares, cost of clothing or meals, would nevertheless properly be described as remunerative work. Self employment may be so classified as well, whether or not it results in a net economic benefit. The consultant who hopes to advise clients for money, but does not succeed in attracting enough to pay the rent, nevertheless, in our view, engages in remunerative work.”
33. I consider further that my above interpretation of s 24(1)(c) is also consistent with the conclusion of this Tribunal in Re Stuart and Repatriation Commission (1989) 17 ALD 678, where the veteran had been employed in the aeronautical industry and proposed to set up an aeronautical engineering consultancy after he retired. He had numerous contacts in the industry, and he converted a room in his house into a study and consulting room, arranged for necessary typing, and had a business card printed. However, soon after his retirement he realised that his war-caused disabilities would prevent him undertaking certain aspects of his proposed consultancy work, and his plans never materialised. The Tribunal found, nevertheless, that his proposals to undertake the relevant work satisfied the requirements of s 24(1)(c).
34. Similarly, Mr Smith undertook the work at Nastec in the hope, and with the intention, of securing paid employment. The organisation for which he worked was a commercial organisation. He worked regular hours, and his working arrangements were regimented, unlike the more casual or informal arrangements usually entailed in volunteer work for a charitable organisation. The type of work he had carried out was not private or domestic work. It could properly be said that the type of work which Mr Smith had undertaken as a canteen manager was remunerative work, even though he was not paid for the work he actually did for Nastec. Mr Smith’s efforts culminated in the offer of paid work with Nastec, and I consider that in all of the circumstances this work constituted remunerative work for the purposes of s 24(1)(c).
35. I next refer to the second question in Flentjar (supra). As I have recorded in paragraph 4 above, the Commission acknowledges that s 24(1)(b) has been satisfied, and I also refer to my findings in paragraph 39 below. I am satisfied that Mr Smith, by reason of his war-caused injury, was prevented from continuing to undertake work as a canteen manager.
36. The third question in Flentjar refers to the “alone” test in s 24(1)(c). On the authority of Cavell v Repatriation Commission (1988) 9 AAR 534, and the analysis of Burchett J’s judgment in that case in Forbes v Repatriation Commission (2000) 101 FCR 50 at [33], the word “alone”, in the absence of ambiguity, should not have other words substituted for it. The word “alone” as it appears in s 24(1)(c) requires a practical decision as to whether the veteran’s loss of remunerative work is attributable to his or her service-related incapacities, and not to something else as well; and any factor having employment consequences which plays a part in the veteran’s inability to work or to obtain and hold remunerative employment is sufficient to displace the veteran’s case for pension at the special rate.
37. In Cavell (supra, at page 539), Burchett J said further that the true task of the Administrative Appeals Tribunal, in applying the “alone” test in s 24(1)(c) of the VE Act, was:
“… to make a practical decision whether the veteran’s loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide”.
In Forbes (supra), 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”.
38. 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 as follows (at [37]):
“The language of s 24(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 s 24(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. … [H]aving 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.”
39. On the evidence before me in the present matter, I find that Mr Smith’s various accepted disabilities resulted in his being incapacitated to continue his part-time work at Nastec, and it was not suggested that any disabilities other than his accepted disabilities were a factor in his ceasing this work. When he left Nastec he was aged 53, and having regard to his age, his earlier continued attempts to obtain work and his objective in commencing this work (namely to endeavour to obtain paid work with Nastec), I find that if it had not been for his accepted disabilities alone, Mr Smith would have continued to work with Nastec up to the commencement of, and during, the assessment period.
40. The fourth question in Flentjar entails an examination of the argument made by Mr Crowe on behalf of the Commission to the effect that Mr Smith ceased to engage in remunerative work for reasons other than his incapacity from his accepted disabilities. Mr Crowe referred in this regard to his cessation of his work with the RAAF. On this argument, Mr Smith was deemed by virtue of s 24(2)(a)(i) of the VE Act not to have suffered a loss. I accept Mr Crowe’s submission that Mr Smith effectively ceased to engage in his work with the RAAF because he chose to drive while he was disqualified, and that this triggered his discharge from the RAAF. In view of Dr Ewer’s evidence in relation to this matter, I find that Mr Smith could have chosen to have obeyed the law, and could have stopped his gambling and drinking habits, notwithstanding his condition of PTSD. As regards driving whilst disqualified, it appears that Mr Smith took a conscious decision to take his chances on not being caught, having regard to the very short distance between his place of residence and the RAAF base at Laverton. He also apparently drove for other purposes, such as to do the shopping, and he did so notwithstanding his then wife’s pleas for him to stop drinking and driving after he had lost his licence (exhibit A3).
41. However, in my view it could not be said that Mr Smith had ceased to engage in remunerative work within the meaning of s 24(2)(a)(i) at the time when he was discharged from the RAAF. In applying this paragraph of the VE Act, the first step is to identify the time when the veteran has ceased to engage in remunerative work. As mentioned above, it is clear from the authorities that it is not appropriate under s 24(1)(c) to consider the cessation of particular employment with a particular employer. In my opinion, under s 24(2)(a) it is necessary to consider whether a state of affairs has been reached where it can be said that the veteran is no longer engaged in remunerative work. In the present matter, the applicant was only 36 years of age when he was dismissed from the RAAF. He did not himself intend to give up remunerative work after that. This is evidenced by the fact that when he returned to Adelaide, he made many attempts to obtain remunerative work, but was unsuccessful. He said he was unaware why his attempts were unsuccessful, and there is no evidence before me as to the reasons for this.
42. In my view a veteran cannot necessarily be said to have ceased to engage in remunerative work for the purposes of s 24(2)(a)(i) at the time when the veteran stopped working in his or her last job, since a veteran may stop working in his or her last job in a variety of circumstances. For example, a veteran whose work consisted of a series of short-term contracts would stop working as each contract came to an end, and this would of course be a reason for ceasing work that would not be related to a war-caused incapacity. However, it would be inconsistent with the purpose of s 24(1)(c) of the VE Act for such a veteran not to be entitled to a pension at the special rate if after the end of a particular contract the veteran was prevented from continuing to undertake remunerative work in the form of a new contract because of his or her war-caused incapacity alone. I refer in this regard to Re Reilly and Repatriation Commission (1987) 12 ALD 533, where the Tribunal referred to other possible reasons for cessation of work, such as a person being on long service leave, sick leave or being imprisoned, or unable to work through a temporary illness or being in between jobs. The Tribunal pointed out at [30] that “par 24(2)(a) must be looked at in the context of the provisions of par 24(1)(c) from which it flows”.
43. I also refer to Hall v Repatriation Commission (1994) 33 ALD 454, where the veteran resigned his commission from the Army in 1986, when he was 50, in order to maximise the superannuation benefits available to him by resigning before the effects of his war-caused condition forced him to resign. It was found that by 1990 he was prevented from continuing to undertake remunerative work of the kind he had once engaged in as a result of a war-caused condition. The Tribunal decided that the veteran was not entitled to the special rate of pension, on the grounds that s 24(2)(a) of the VE Act applied to the veteran, and in addition he did not satisfy s 23(1)(c), because his decision to retire was motivated by financial considerations, namely his desire to maximise his pension benefits. Spender J allowed an appeal from this decision. His Honour referred to the proposition that the remunerative work referred to in s 24(1)(c) was not particular employment, and repeated the dictum from Banovich (supra) to the effect that a veteran’s loss of particular employment for a reason unrelated to a war disability would never destroy a veteran’s subsequent entitlement to claim a special rate pension. He said that the applicant’s desire to maximise his superannuation benefits was a circumstance that applied in 1986, but the veteran’s inability to obtain remunerative work after March 1990 (when he was found to be totally disabled as a result of his accepted condition) could not “in any sensible way be attributed to any motivation concerning commutation of portion of the pension”. His Honour concluded:
“In my view, the position that obtained prior to Mr Hall’s resignation from the Army tainted the Tribunal’s consideration of the position after Mr Hall’s health had significantly deteriorated in 1989, and the position at the time of Dr Sharwood’s assessment in March 1990.”
Spender J appears in his judgment to focus on s 24(1)(c) of the Act, rather than the argument based on s 24(2)(a). However, the outcome in Hall is consistent with the analysis of s 24(2)(a) in Reilly (supra), and in particular with the approach of the Tribunal in that case to look at s 24(2)(a) in the context of the provisions of s 24(1)(c) from which it flows. Spender J looked at the position during the assessment period rather than the historical reason why the applicant’s previous employment had ceased, and he found, in effect, that that historical reason was not operative during the assessment period.
44. A similar result was reached by this Tribunal (comprising Senior Member Eyre and Member Dr Lynch) in Re Hornery and Repatriation Commission (1998) 52 ALD 317, where the veteran ceased work in 1981. He injured his back in civilian employment in 1976, and his resulting non-war-caused back condition played a major role in his incapacity for work from 1982 until at least 1986. He was diagnosed with PTSD in 1995. It was found that by then his back condition was not preventing him from engaging in remunerative work, and that he was prevented by war-caused conditions alone (namely, PTSD and an internal derangement of his knee) from continuing to undertake remunerative work. The Tribunal decided that the applicant was suffering a loss of salary or earnings on his own account by reason of his war-caused incapacity. It pointed out, after referring to Banovich (supra), that the “loss” referred to may be caused either by a loss of existing employment or by an inability to obtain new employment. It then concluded (at [62]):
“The tribunal has already found that the fact that a veteran has at a previous point of time ceased to engage in remunerative work for reasons other than his or her incapacity from war-caused disability does not prevent eligibility arising later. Section 24(2)(a)(i) does not operate so as to bar Mr Hornery’s entitlement to pension at the special rate.”
45. On the facts of the present matter, I do not think it could be said that Mr Smith ceased to engage in remunerative work when he was discharged from the RAAF, for the reasons referred to above. I consider that it was only once he realised that he was unable to continue to work with Nastec Solutions as a canteen manager that Mr Smith ceased to engage in remunerative work, and this was because of the effects of his accepted disabilities alone.
46. In the alternative, if I am wrong in the analysis referred to in the preceding paragraph, then on the basis of Hall and Hornery (supra) I consider that the non-war-caused reason for his discharge from the RAAF had ceased to be an operative reason for his inability to work during the assessment period, and so that deeming provisions of s 24(2)(a) have no application.
47. I further find that Mr Smith has suffered a loss of wages because he was prevented from taking up the offer of paid remuneration from Nastec Solutions to which I have referred above.
Decision
48. For the above reasons, the decision under review is set aside, and in place of that decision I determine that the applicant is eligible for pension at the special rate payable pursuant to s 24 of the VE Act with effect from and including 24 May 2002.
I certify that the 48 preceding paragraphs are a
true copy of the reasons for the decision herein
of Deputy President JarvisSigned: .....................................................................................
N Quirke AssociateDate/s of Hearing 22 and 23 April 2004 and 25 May 2004
Date of Decision 19 November 2004
Counsel for the Applicant Mr C Swan
Solicitor for the Applicant Swan Lawyers
Advocate for the Respondent Mr A Crowe
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