Repatriation Commission v Maloney, L.V

[1993] FCA 764

REPATRIATION COMMISSION v. LAURENCE VINCENT MALONEY
No. NG280 of 1993
FED No. 764
Number of pages - 8
Veterans Entitlements
(1993) 117 ALR 622
(1993) 18 AAR 216
(1993) 30 ALD 449
(1993) 45 FCR 563

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
WILCOX, FOSTER and WHITLAM JJ

CATCHWORDS

Veterans Entitlements- Increase of pension because of acceptance of additional war-related disabilities - Power of Administrative Appeals Tribunal to back-date increased pension - Increase awarded by Tribunal in a different proceeding.

Veterans' Entitlements Act 1986, ss.19, 20, 175, 176 and 177

Administrative Appeals Tribunal Act 1975, ss.29 and 43

HEARING

SYDNEY, 29 September 1993

#DATE 28:10:1993

Counsel for the Applicant: S J Gageler

Solicitors for the Applicant: Australian Government

Solicitor

Counsel for the Respondent: M B Smith

Solicitors for the Respondent: Vardanega Roberts

ORDER

The court orders that:<:

1. The appeal be allowed.

2. The orders made by Einfeld J on 16 April 1993 be set aside.

3. The appeal to the Court of the Repatriation Commission in relation to the decision made by the Administrative Appeals Tribunal on 1 October 1991 be allowed, the said decision be set aside and in lieu thereof it be determined that the decision under review by the Administrative Appeal Tribunal is affirmed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

WILCOX , FOSTER and WHITLAM JJ This is an appeal from a decision of a Judge of the Court dismissing an appeal by the present appellant, the Repatriation Commission, from a decision of the Administrative Appeals Tribunal ("the AAT"). The case arises out of claims made by the respondent, Laurence Vincent Maloney, pursuant to the Veterans' Entitlements Act 1986. The history of the claims is complex, but it is not necessary to set out all its detail in order to deal with the limited issue posed for our consideration.

1. Prior to 5 February 1986, the Repatriation Commission accepted claims by Mr Maloney for two war-related conditions, malaria and bilateral otitis externa. On 5 February 1986, Mr Maloney submitted claims for eleven other conditions. The claims for four conditions were either withdrawn or rejected by the Veterans' Review Board ("VRB"). Mr Maloney did not appeal to the AAT against those rejections, so they need not be considered further. Seven claims remained. They were for carcinoma of the rectum, cervical spondylosis, impotence, intermittent diarrhoea, depressive reaction, chronic bronchitis and papilloma of the left hand. The Commission accepted the last two claims. Taking these claims with the two previously accepted claims, the Commission assessed Mr Maloney's entitlement at 40% of the General Rate provided by s.22 of the Act. Mr Maloney appealed against this assessment and the VRB increased it to 50%.

2. Mr Maloney also challenged the Commission's rejection of his other claims. The VRB accepted the claim of depressive reaction. The case was remitted to the Commission for assessment. Taking into account this condition, the Commission increased Mr Maloney's entitlement to 90% of the General Rate. At about the same time, the VRB accepted the claims for cervical spondylosis and intermittent diarrhoea. Adding these claims to those already accepted, the Commission assessed Mr Maloney's entitlement at 100% of the General Rate, backdated to 5 November 1985; that is, three months before the claims were lodged. This decision was made on 21 February 1989.

3. On 5 May 1989, Mr Maloney appealed to the VRB against the Commission's assessment. He desired to obtain benefits at the Special Rate: see s.24 of the Veterans' Entitlements Act. The appeal was unsuccessful. On 30 January 1991, the VRB affirmed the Commission's decision.

4. Within the prescribed period of three months (see s.29 of the Administrative Appeals Tribunal Act 1975 as amended by s.176(4)(a) of the Veterans' Entitlements Act) Mr Maloney filed an appeal to the AAT against the VRB's confirmation of the Commission's assessment. This appeal was numbered P91/222. Before the appeal came to be heard, there were developments in connection with the outstanding claims for carcinoma of the rectum and impotence. The VRB had rejected these claims on 17 January 1989. Mr Maloney was notified of this decision on 15 March 1989 but he did not appeal to the AAT against the Board's decision within the prescribed period. However, within 12 months of the decision, he made an application for an extension of time to appeal: see s.29 of the Administrative Appeals Tribunal Act and s.176(4)(b) of the Veterans' Entitlements Act. This application was granted on 24 May 1990. The appeal was numbered P89/866. In accordance with its usual procedure, the AAT held a preliminary conference concerning the matter. As a result, the matter was settled. On 8 July 1991, Mr M T Lewis, a Senior Member of Tribunal, made a consent order in these terms:
   

"NOW THEREFORE the Tribunal:

1. Sets aside the decision of the Repatriation Commission dated 1 August 1986, determining that carcinoma of the rectum was not war-caused; and

2. In substitution therefor decides that the Applicant's carcinoma of the rectum is war-caused within the meaning of section 9 of the Veterans' Entitlements Act 1986 and that pension is payable at the Special Rate on and from the 28 February 1989;

The Tribunal makes this decision without prejudice to the Applicant's rights in matter number P91/222, an application for review of a decision of the Repatriation Commission currently before the Tribunal."

1. As a result of this order, when P91/222 came to be heard Mr Maloney was already receiving a pension at the maximum rate provided by the Act. But he wanted his Special Rate pension to be back-dated to a date three months before the lodgment of his initial claim; not merely to the date referred to in the P89/866 consent order. The Commission did not agree and it fell to Deputy President B J McMahon to determine whether this course should be taken. In his reasons for decision dated 1 October 1991, Mr McMahon expressed the parties' position in this way:
   

"3. The applicant now seeks to have the decision of 21 February 1989 set aside and to have it replaced with a finding that he is entitled to be paid pension at the Special Rate from 5 November 1985, 3 months prior to the date of his original claim for the miscellany of disabilities. The respondent asks for the decision under review to be varied, to provide for payment of pension at 100 per cent of the General Rate from 5 November 1985 until 23 February 1989, and for pension to be paid at the Special Rate thereafter."

Mr McMahon said that the Commission's case was that "there is no power in the Act to backdate the payments" and that the date of operation of the Special Rate was fixed by the existing consent order. He noted an agreement between the parties:

"that the existence of the carcinoma was crucial to the entitlement to the Special Rate. Unless that disability had been accepted as a war-caused disease, it was agreed that the applicant would not have been entitled to the higher rate".

1. Mr McMahon referred to the provisions in the Act governing the making and assessment of claims. He quoted s.19. That section requires the Commission to determine whether a claimant is entitled to a pension (s.19(3)) and, if so, the relevant rate (s.19(5)). Section 19(7) provides, in effect, that where a person already has a pension and a claim is accepted in respect of a new injury or disease, the Commission shall not grant a new pension but shall re-assess the amount of the existing pension in the light of its allowance of the new claims. Mr McMahon took from these provisions the conclusion that:
   

"(p)rima facie therefore, this Tribunal, standing in the shoes of the Commission, should have regard to the applicant's carcinoma when reviewing the assessment decision of the respondent of 5 February 1986, notwithstanding the fact that the carcinoma had not been accepted as a disability at the date of the initial decision."

1. After referring to some Tribunal decisions, Mr McMahon turned to s.20 of the Act. That section provides:
   

"20(1) Where a claim in accordance with section 14 for a pension is granted, the Commission may, subject to this Act, approve payment of the pension from and including a date not earlier than 3 months before the date on which the claim for a pension, in accordance with a form approved for the purposes of paragraph 14(3)(a) was received at an office of the Department in Australia.

(2) Where:

(a) a person makes a claim for a pension in writing, but otherwise than in accordance with a form approved for the purposes of paragraph 14(3)(a);

(b) the person subsequently makes a claim for the pension in accordance with a form so approved:

(i) at a time when the person had not been notified by the Department in writing that it would be necessary to make the claim in accordance with a form so approved; or

(ii) within 3 months after the person had been so notified; and

(c) a pension is granted to the person upon consideration of that claim in accordance with a form so approved; the Commission may, subject to this Act, approve payment of the pension from and including a date not earlier than 3 months before the date on which the claim referred to in paragraph (a) was received at an office of the Department in Australia.

(3) Nothing in this section empowers the Commission to approve payment of a pension to a person from a date before the person became eligible to be granted the pension."

1. Mr McMahon noted that the Commission argued "that liability was limited by other statutory provisions". He did not immediately identify them, but commented that the limitation in s.20 "appears to be inapplicable in the present circumstances". He apparently meant by this that s.20 did not operate as a bar to the claim for back-dating now made by Mr Maloney, the reason being that all the disabilities taken into account in assessing that Mr Maloney was entitled to a Special Rate pension were claimed on 5 February 1986; accordingly, the proposed date of commencement (5 November 1985) was within the period of three months permitted by s.20(1).

2. One of the provisions relied on by the Commission was s.177 of the Veterans' Entitlements Act. Section 177 falls within Part X of the Act, a Part dealing with AAT decisions. Section 175 permits applications for AAT review of decisions of the Commission or the VRB. Section 176 applies the provisions of the Administrative Appeals Tribunal Act (with variations) to such a review. Section 177 is entitled "Effective dates of payment of pension or increased pension". It covers a number of situations. It is only necessary to set out subss. (1) and (2):
   

"177(1) This section is in addition to, and not in substitution for, any of the provisions of section 43 of the Administrative Appeals Tribunal Act 1975 in their application to proceedings for a review by the Administrative Appeals Tribunal of a reviewable decision.

(2) Where the Administrative Appeals Tribunal, upon application made under subsection 175(1) for a review of a decision of the Commission that has been affirmed or varied by a decision of the Board or a decision of the Board made in substitution for a decision of the Commission, grants a pension (not being a service pension) or attendant allowance, or increases the rate at which a pension (not being a service pension) is to be paid, the Tribunal may approve payment of the pension or of attendant allowance, or payment of the pension at the increased risk, as the case may be:

(a) if the application is made within 3 months after service on the applicant of a document setting out the terms of that decision of the Board - from a date not earlier than the earliest date as from which the Board could, if it had granted a pension or attendant allowance or increased the rate of the pension, have approved payment of the pension or attendant allowance, or payment of the pension at an increased rate, as the case may be; or

(b) in any other case:

(i) if the review relates to a claim in accordance with section 14 - from a date not more than 6 months before the date on which the application under sub-section 175(1) was made; or

(ii) if the review relates to an application in accordance with section 15, or to an application for attendant allowance - from the date on which the application under subsection 175(1) was made."

1. Mr McMahon dealt with s.177 in this way:
   

"11. The respondent argued that s.177 had application. The present application for review was not made to this Tribunal within the 3 months referred to in paragraph (a) of sub-section 177(2). It was in fact lodged on 31 August 1989. On 24 May 1990, an extension of time was ordered by the Tribunal pursuant to the provisions of s.29(7) of the AAT Act unconditionally. It may well be that the making of such an order will have a retrospective effect when considering compliance with s.177(2). However it is not necessary to determine that point in the present application. The terms of s.177 grant a discretion to the Tribunal. The power to approve in accordance with the section is expressed to be in addition to the general power to vary to be found in s.43 of the AAT Act. Furthermore the power is granted in discretionary, not mandatory, terms. The fact that the Tribunal may approve payment on certain conditions does not, it seems to me, cut back its power to approve unconditionally in accordance with another section of the same Act. If this results in an unintended consequence, then the remedy lies with Parliament. Once the applicant has achieved status before the Tribunal and once the Tribunal is vested with jurisdiction, the clear provisions of s.19 require that all war-caused diseases are to be taken into account, whenever they were established, in determining the rate of pension payable pursuant to the decision under review. It is trite law to say that administrative review must take account of facts occurring subsequent to the decision to be reviewed and must take account of all relevant circumstances, whether or not they were made known to the original decision maker and whether or not they existed at the time the original decision was made. The process of administrative review is to be regarded as a continuum, as Davies J put it in Jebb v Repatriation Commission 80 ALR 329 and later in Freeman v Secretary, Department of Social Security 15 ALD 671 at 673. In exercising the Commission's power under s.19, I must be guided by the terms of sub-section

(7). In effect, although the original decision maker was not aware of it, indeed could not have been aware of it, his assessment of a rate of pension of 100 per cent of the General Rate has now been shown to be wrong. That original decision should now reflect later developments.

12. The decision under review is therefore set aside and the matter is remitted to the respondent with the direction that the applicant is entitled to be paid pension at the Special Rate from 5 November 1985 until 28 February 1989." (Original emphasis)

1. As indicated, the learned primary Judge upheld Mr McMahon's conclusion. With respect to them both, we do not agree. There are factual inaccuracies in the second, third and fourth sentences of the quoted passage. The application before Mr McMahon was P91/222. That application was made within the stipulated three months, so s.29(7) of the Administrative Appeals Tribunal Act was irrelevant. The statements made in the second, third and fourth sentences applied to matter 89/866, which had been disposed of by the consent order made on 8 July 1991. But our disagreement goes to a more fundamental matter. The quoted passage fails to appreciate the significance of the limitations contained in s.177(2).

2. We accept that s.19(7) requires the Commission to make an assessment of a veteran's entitlement having regard to all his/her war-related disabilities. We also accept that the Commission is entitled under s.20 to back-date a payment to a date not earlier than three months before the claim was received. In the case of a claim for an additional disability, this provision entitles the Commission to back-date payment of the increased amount to a date three months before receipt of the claim for the additional disability. We also agree that s.43 of the Administrative Appeals Tribunal Act, referred to in s.177(1) of the Veterans' Entitlements Act, prescribes a general rule that may be metaphorically stated by saying that, whilst exercising jurisdiction under the Veterans' Entitlements Act, the AAT stands in the shoes of the Commission. But that general rule must give way to any contrary special provision. In framing Part X, Parliament was apparently unwilling to give the AAT the general discretion on back-dating conferred on the Commission by s.20. Perhaps Parliament foresaw the possibility of a lengthy delay between the making of a relevant decision and the veteran lodging an appeal to the AAT. Parliament was prepared to allow an extension of time for the lodgment of the appeal, up to twelve months; but not to permit such an extension to enable a payment ultimately ordered by the AAT to be back-dated to a time before lodgment of the initial claim. Accordingly, it enacted s.177(2) to provide special rules regarding back-dating by the AAT. This case falls to be determined by reference to those special rules, not the general powers conferred on the Commission by ss.19 and 20 of the Act.

3. When the matter is considered in this way, it becomes apparent that Mr McMahon had no power to back-date the Special Rate pension to 5 November 1985. Mr Maloney made two separate applications to the AAT under s.175(1). In the first of these cases (P89/866), the Tribunal constituted by Mr Lewis increased "the rate at which a pension ... is to be paid" to the Special Rate. Accordingly, the AAT had power, in that proceeding, to approve payment of the increased rate of pension in accordance with para.(a) or para.(b) of s.177(2), whichever was applicable. Because the application for review (P89/866) was not made within three months after service on Mr Maloney of the Board's decision, para.(a) did not apply. Paragraph (b) did apply. The parties seem to have understood this. They agreed to back-date the increase to the Special Rate to a date six months before Mr Maloney's application to the AAT for an extension of time to appeal: see s.177(2)(b)(i).

4. There was no delay in lodgment of appeal P91/226. But the AAT ought not to have reached the point of choosing between paras. (a) and (b). Its power to make an order back-dating a particular increase depends upon it having granted the increase in the review - that is, the particular proceeding - in which the order is made. It is not enough that the AAT had granted the increase pursuant to an earlier application for review. The subsection is clear:
   

"(w)here the Administrative Appeals Tribunal, upon application made under subsection 175(1) for a review of a decision, increases the rate at which a pension is to be paid, the Tribunal may (back-date)". (Emphasis added)

1. In reaching the conclusion that he had a discretionary power to back-date payment of the Special Rate pension to 5 November 1985, Mr McMahon erred in law. His decision to take that course should have been set aside by the primary Judge. There was no point in remitting the matter to the AAT. As the AAT had no power to make a more favourable order than that already enjoyed by Mr Maloney, it would have no alternative but to affirm the decision under review. His Honour should have ordered that this course be taken. That order not having been made, we will so order.

1. Counsel for the Commission indicated that his client did not seek an order for costs, if the appeal succeeded. The primary Judge ordered costs against the Commission. That order should be set aside. Having regard to the Commission's attitude, there will be no order regarding costs, here or below.