Repatriation Commission v Maloney, L.V

[1993] FCA 212

Re: REPATRIATION COMMISSION
And: LAURENCE VINCENT MALONEY
No. NG666 of 1991
FED No. 212
Number of pages - 17
Administrative Law
(1993) 29 ALD 684

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Einfeld J(1)

CATCHWORDS

Administrative Law - appeal from Administrative Appeals Tribunal's backdating of special rate of pension to three months before original claim for condition for which it was made - disease not found to be war-caused until more than five years after claim during appeal to AAT - whether out of time appeal limited entitlement to retrospective operation of pension where matter being considered was cumulative incapacity from many conditions of ill health dating at least from original claim

Veterans' Entitlements Act 1986 ss 19(5), 19(7), 20(1), 20(3), 175(1), 177(2)(a), 177(2)(b)

Administrative Appeals Tribunal Act 1975 s. 29(7), 43

Vaughan v Repatriation Commission (1989) 10 AAR 161

Walsh v Repatriation Commission (1989) 10 AAR 166

Hanley v Repatriation Commission (1984) 2 RPD 345

Roberts v Repatriation Commission unreported Administrative Appeals Tribunal (O'Connor J, President) 4 March 1992

HEARING

SYDNEY, 29 July 1992

#DATE 16:4:1993

Counsel and solicitor for the applicant: Mr S. Gageler instructed by

Australian Government Solicitor

Counsel and solicitor for the respondent: Mr B. Smith instructed by

Vardanega Roberts

ORDER

1. Appeal dismissed.

2. Applicant to pay respondent's costs.

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

JUDGE1

EINFELD J This is a matter of some complexity. The respondent Laurence Vincent Maloney was born on 24 January 1922. During a period of service as an Army engineer in New Guinea during World War 2 he contracted malaria, and on 19 November 1946 this condition was accepted as a pensionable war-caused disease under what later became, and was at the relevant time for this case, the Veterans' Entitlements Act 1986 (the Act). Later, on 18 November 1976, a condition of bilateral otitis externa was also accepted. On 5 February 1986, when he was receiving a percentage of the general rate of pension payable at the time, Mr Maloney made claims for an increase in his pension because of carcinoma of the rectum, left supraspinatus tendonitis, degeneration of the rotator cuff of the right shoulder, cervical spondylosis, impotence, diarrhoea, allergic pharyngitis, a dentigerous cyst, depression, chronic bronchitis and a papilloma in the left hand. On 1 August 1986 the applicant Commission accepted the last two conditions as war-caused and reassessed Mr Maloney in the light of the two earlier accepted conditions as entitled to 40% of the general rate of pension payable from 5 November 1985. The remaining claims were rejected.

1. On 20 August 1986, he appealed to the Veterans' Review Board (the Board) in respect of the rejected conditions and the 40% reassessment. After a hearing on 12 June 1987, the pension was raised to 50% of the general rate and the Board upheld the appeal in respect of the nervous depression. It rejected the claim for the pharyngitis and the claim for the cyst was withdrawn. The appeal in respect of all the other conditions was adjourned. The pension entitlement was reassessed on 18 March 1988, in the light of the nervous condition, at 90% of the general rate dating from 5 November 1985. After a further adjournment of the cancer and impotence claims on 27 November 1987, the Board rejected them on 17 January 1989, almost two and a half years after their rejection by the Commission. Mr Maloney was informed of this rejection on or about 15 March 1989, and on 31 August 1989 he sought a review by the Administrative Appeals Tribunal (the first appeal). This matter, numbered P89/66 in the Tribunal, was out of time but on 24 May 1990 the Tribunal extended the time.

2. On the same day as it adjourned for the second time the claims for the cancer and the impotence, namely on 27 November 1987, the Board accepted the neck condition and diarrhoea as pensionable conditions and rejected the tendonitis and right shoulder claims. On 21 February 1989, the Commission increased the pension rate to 100% of the general rate, also backdated to 5 November 1985, to take account of these newly accepted conditions. Mr Maloney was immediately notified and on 5 May 1989 he appealed to the Board against this decision, seeking an additional or special pension for the combined disabling effects of all his accepted conditions. On 30 January 1991, the Board affirmed the Commission's assessment of 100% of the general rate, so on 10 April 1991 Mr Maloney appealed to the Tribunal against the refusal to award him a special rate of pension (the second appeal). This became matter number P91/222 in the Tribunal. Both appeals were made under section 175(1) of the Act.

3. During the period prior to the first appeal, the Commission agreed to accept the rectal cancer as a war-caused condition and to pay Mr Maloney a special rate of pension from 28 February 1989. A consent order of the Tribunal to give effect to that agreement was handed down on 8 July 1991 in matter number P89/66 (the consent order), almost five and a half years after the claim was first made. Although the impotence was not mentioned, the consent order apparently finalised the first appeal. It was expressed to be made "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".

4. Taking into account that the pension paid in relation to the previously accepted conditions operated from 5 November 1985, the Tribunal determined in the second appeal on 1 October 1991 that the special rate payable after the consent order should also commence from that date. The Commission now appeals to this Court from that backdating decision. The date 5 November 1985 was chosen because it is three months before the date on which the pension was originally claimed for the condition of rectal cancer, and for the combined incapacity of all the conditions claimed at the same time or earlier which were at some time accepted as pensionable. Three months is the maximum backdating permitted by the Act in such circumstances.

5. A statement of agreed facts was made to the Tribunal. The additional matters not yet summarised included:
   1. Mr Maloney worked full time as a self employed concrete truck
   

driver until 1979. In 1980 he commenced part time work as a driver escort with Mayne Nickless Armaguard but his ill health caused his hours to decrease over time until he ceased work altogether in October 1985.

2. The rectal cancer was first diagnosed about this time. Since then

Mr Maloney's accepted conditions and his cancer incapacitated him to the extent that he was incapable of undertaking remunerative work for periods aggregating more than eight hours per week.

3. There were no other factors between October 1985 and February 1989

that prevented him from undertaking his previous work.

1. The extraordinary and unhappy saga of Mr Maloney's health problems is matched only by the complexity of the statutory procedure required to be followed by the Tribunal standing in the Commission's shoes. By its amended notice of appeal, the Commission stated the grounds of its appeal as:
   1. The Tribunal erred in law in assessing the special rate of pension
   

to be payable to Mr Maloney in respect of all his war-caused incapacity, including carcinoma of the rectum, from a date before he was entitled to be paid a pension in respect of that condition.

2. The Tribunal was estopped by reason of its orders on 8 July 1991

in matter number P89/66 from assessing a special rate of pension to be payable to Mr Maloney in respect of incapacity including from carcinoma of the rectum from a date earlier than 28 February 1989.

1. As argued, these grounds did not raise essentially different issues, but reliance on another type of "cause of action" estoppel was sought to be included in this appeal by way of an application for leave to file a second amended notice of appeal out of time. This application was rejected or withdrawn at the hearing for reasons given then that do not now need repetition. This appeal was ultimately contested only on the question whether on the true construction of the Act, backdating to 5 November 1985 was permissible.

2. Claims for veterans' pensions are, or were at the relevant time, made under Part II Division 3 of the Act which includes sections 14 and 15. Section 14 provides for original claims. Section 15 applies to applications for increases in pensions due to increased incapacity. It also applies to claims for pensions not yet being paid even though the relevant disease or injury has been accepted as war-caused, but where there has been an increase in, since an earlier finding of insufficiency for a pension of, incapacity. The Commission's argument was somewhat confusing but as I understood it, it proceeded along these actual or presumed lines:
   1. The matter before the Court is, presumably, a section 15 claim.
   

It is not a section 14 claim with its express extensive facility for retrospectivity of pensions provided by section 20.

2. The relevant scheme of the Act is to limit the backdating of

pensions: see ss 20, 157 and 177. The purpose of this regime is to avoid delays, ensure continuity and achieve speedy final resolution: Vaughan v Repatriation Commission (1989) 10 AAR 161 at 164; Walsh v Repatriation Commission (1989) 10 AAR 166 at 168-9. Such commendable goals could hardly be found achieved in this case.

3. The special rate having been approved under the provisions of

section 19(5), the date of operation was to be found in section 20.

4. Section 20(1) confers a discretion to backdate a pension to three

months before the time when the condition in question was first claimed for and should have been accepted as war-caused. This discretion must be exercised having regard to the circumstances of the case and the statutory policy of limits to retroactivity: see Vaughan per Davies J at 164 and the editor's note which follows the case report at 168-9; Hanley v Repatriation Commission (1984) 2 RPD 345 at 352-3.

5. By backdating Mr Maloney's special pension to 5 November 1985, the

Tribunal failed to exercise the relevant discretion appropriately or consider the circumstances of the case. In fact the Tribunal was not permitted to exercise a discretion to backdate before 28 February 1989 because of section 20(3).

6. This is because the matter before the Tribunal was not Mr

Maloney's eligibility for the special pension at the time of the original application in February 1986, but an application under section 175(1) of the Act for review of the Board's 1989 affirmation of the Commission's 1986 decision that the cancer was not war-caused. This was lodged on 31 August 1989, more than three months after notice of it was served on him on 15 March

1989. This made him subject to the provisions of section 177(2).

7. By section 177(2)(b)(i) no pension may be made to operate prior to

six months before the date on which the application for review by the Tribunal under section 175(1) is made. This limitation is to be strictly applied: Roberts v Repatriation Commission unreported Administrative Appeals Tribunal (O'Connor J, President) 4 March 1992.

1. The date 28 February 1989 in the consent order therefore seems to be explained this way. Mr Maloney was only qualified for the special rate of pension because the consent order added his cancer to other accepted conditions causing his accumulated incapacity. In other words, the eligibility arose only by reason of the consent order of 8 July 1991. That the consent order determined the special rate to be payable from 28 February 1989 was because the appeal was lodged more than three months after notice of the prior rejection. In such circumstances, section 177(2)(b)(i) displaces section 20(1), thus permitting the Tribunal to backdate a pension only to six months before the appeal's lodgment, instead of three months before the original claim. The consent order did not amount to a finding that Mr Maloney's cancer entitled him to a special pension when it was originally claimed.

2. The Tribunal considered that this approach to the matter was flawed. I agree. It was common ground that Mr Maloney was not entitled to the special rate unless and until the cancer was accepted as war-caused. It was also not disputed that once a condition is found to be war-caused, it must be assumed that it had always been war-caused. The parties also agreed that Mr Maloney was entitled to the special rate from and after 28 February 1989. As Mr Maloney put to the Tribunal, his entitlement then fell to be dealt with under section 19 in the light of presently known facts and all accepted war-caused disabilities.

3. The relevant provisions of section 19 are or were at the time:
   

(1) Where a claim or application is submitted to the Commission in accordance with subsection 17(2), the Commission shall:

(a) consider all matters that, in the Commission's opinion, are relevant to the claim or application; and

(b) subject to this section, determine the claim as provided by subsection (3) or the application as provided by subsection (4).

...

(3) The Commission shall determine a claim for a pension as follows:

(a) first, the Commission shall determine whether the claimant is entitled to be granted a pension in respect of:

(i) the incapacity of a veteran from war-caused injury or war-cause disease, or both; or

(ii) the death of a veteran that was war-caused:

(b) then, if the Commission determines that the claimant is so entitled, the Commission shall proceed as set out in subsection (5). ...

(5) Where paragraph (3)(b) applies in respect of a claim or sub-section (4) applies in respect of an application, the Commission shall assess, in accordance with whichever of sections 22, 23, 24, 25, 27 and 30 are applicable:

(a) the rate or rates at which the pension would have been payable from time to time during the assessment period; and

(b) subject to subsection (6), the rate at which the pension is payable from the date of the determination;

and shall make a determination approving the payment of pension in accordance with that assessment. ...

(7) Where:

(a) the Commission, upon considering a claim for a pension in respect of the incapacity of a veteran from injury or disease determines, or is satisfied, that the veteran suffered the injury or contracted the disease as claimed and that the injury is war-caused injury or the disease is a war-caused disease, as the case may be; and

(b) the Commission is also satisfied a determination under this Act is in force determining that the veteran has suffered an injury or contracted a disease (not being the injury or disease referred to in paragraph (a) and that:

(i) that injury is a war-caused injury, or is, in accordance with subsection 70(3), a defence-caused injury for the purposes of subsection 70(1); or

(ii) that disease is a war-caused disease, or is, in accordance with subsection 70(3), a defence-caused disease for the purposes of subsection 70(1);

as the case may be, whether or not a pension under Part II or Part IV, as the case requires, has been granted in respect of that injury or disease; the Commission shall not, in a case where the claimant is in receipt of a pension under Part II or Part IV in respect of incapacity resulting from the injury or disease referred to in paragraph (b), grant a separate and additional pension to the claimant in respect of incapacity resulting from the injury or disease referred to in paragraph (a), but the Commission shall, having regard to any incapacity resulting from the injury or disease referred to in paragraph (a) and any incapacity resulting from the injury or disease referred to in paragraph (b) and treating any such defence-caused injury as war-caused injury and any such defence-caused disease as war-caused disease;

(c) if the claimant is not in receipt of a pension under Part II or Part IV - determine whether the claimant is entitled to be granted a pension under Part II and, if it determines that the claimant is entitled to be granted such a pension, assess the rate of the pension to be granted to the claimant in accordance with the preceding provisions of this section; or

(d) if the claimant is in receipt of a pension under Part II or Part IV - reassess the rate of that pension in accordance with the preceding provisions of this section.

1. As Mr Maloney was already receiving a pension under Part II, section 19(7)(d) required or permitted, whenever a new disability was found to be war-caused, a reassessment of his pension in the light of all other accepted disabilities. Thus the Tribunal considered that its task in this case was to commence with a review of the Commission's decision of 1 August 1986 to reject the cancer as a war-caused condition and the upholding of that decision by the Board on 17 January 1989, and to apply section 20 to them, now that the cancer had been accepted. Section 20 provided at the relevant time:
   

(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. The Tribunal's opinion was, presumably, that this was therefore a section 14, not a section 15, claim and that section 20(3) had no application to this case because what was really being considered was whether the combined incapacitating effect of all the conditions that were or should have been accepted in February 1986 entitled Mr Maloney to the special pension then. The special pension only arose from a reassessment of total disability from all accepted conditions, and that total disability was actually the claim made in February 1986. The backdating of the special pension is only now sought to three months before that original claim, even though it was not actually granted until the consent order. The Tribunal said that because the original decision-maker in 1986 did not know that the cancer was war-caused and incapacitating, he could not have awarded Mr Maloney the special rate. Despite this, as the Tribunal now knows the facts, it should apply section 19(7) to them. It therefore directed that the special rate be paid from 5 November 1985 which was the earliest date from which the original decision-maker could have dated its commencement, and was the date from which the cumulative incapacitating effects of all the conditions accepted by the consent order had in fact, as it has turned out, been pensionable.

2. The Tribunal rejected the Commission's argument that section 177 operates to prevent the requested retroactivity. At the relevant time, that section stated in part:
   

(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 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 rate, 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 subsection 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. The Tribunal held that the discretions provided for in section 177(2) are expressed to be additional to its power to vary the decision appealed from under section 43 of the Administrative Appeals Tribunal Act 1975 (AAT Act), and that the extension of time to appeal granted under section 29(7) of the AAT Act was unconditional. The Tribunal said:
   

The fact that the tribunal may approve payment on certain conditions does not ... cut back its power to approve unconditionally in accordance with another section of the same Act.

(Appeal book p 156)

1. As I see it, section 19 applies to all diseases which are found to be war-caused at any time. The decision-maker's task is to identify the incapacity resulting from these conditions, i.e. all the incapacity from all conditions accepted as war-caused, including from conditions existing before the determination(s) that they were war-caused. In addition to the clear policy which lies behind section 19, this conclusion must also flow from the use of words in subsection (7)(b) of the section, "whether or not a pension under Part II or Part IV ... has been granted in respect of that injury or disease". The pension thereafter awarded commences from the date of the claims for these conditions and this incapacity, but may by section 20(1) be backdated to three months before the claim, presumably provided that the conditions and the incapacity existed then.

2. In other words, the substantive eligibility of any claimant is entirely defined by the effects of the findings made each time subsections (5) and (7) of section 19 are and are required to be activated. The commencement of payments from 5 November 1985 was fixed by the Commission and affirmed by the Board when they reassessed the cervical, diarrhoeal and nervous conditions. When the cancer was added, the agreed facts operated to establish that all the conditions in combination entitled Mr Maloney to the special rate. That rate could not have been fixed to operate on and from any date other than the date on which they were first claimed, except that if the conditions and incapacity for which the special rate was to be paid were in existence three months earlier, this statutory maximum retrospectivity could also be allowed.

3. The consent order determined that the cancer was and always had been, since its appearance and diagnosis, a war-caused disease. Because it was limited to the cancer alone and arose from the first appeal to the Tribunal seeking its acceptance as war-caused, the consent order could only have backdated the increased payments to 28 February 1989. The decision under this second appeal arose under quite a distinct and different claim seeking the taking into account and reassessment, as sections 19 and 20 require, of all accepted incapacities as and from three months before they were claimed to be war-caused and sufficiently disabling as to be pensionable at the special rate.

4. The Act maintains a regime of repeated reassessments of incapacity with retroactive quantifications of pensions. The Commission's arguments would read into that regime a limitation by reason of circumstances surrounding other quite limited proceedings, P89/66, as if this were an appeal from the consent order made on 8 July 1991. If this viewpoint were correct, it is difficult to understand why the Commission qualified the order it consented to on that date with the "without prejudice" addendum. Whatever enforceable exclusion was actually achieved by these words in fact and law, the addendum seems to have been designed to preserve Mr Maloney's presumed rights to something additional to what the consent order itself granted him. That could only have meant increased retrospective operation of the special pension. In my opinion this was his real statutory entitlement.

5. The Tribunal's interpretation and construction of this very difficult statute and case was correct. The appeal will be dismissed with costs.