Schulz and Repatriation Commission
[2000] AATA 403
•23 May 2000
DECISION AND REASONS FOR DECISION [2000] AATA 403
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1999/1199
VETERANS' APPEALS DIVISION )
Re GEOFFREY RAYMOND SCHULZ
Applicant
And REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Mr B.J. McMahon (Deputy President) Dr P.D. Lynch (Member)
Date23 May 2000
PlaceSydney
Decision The decision of the Veterans Review Board of 5 July 1999 is set aside and the matter is remitted to the respondent with the following directions: The claims for post-traumatic stress disorder, eczema, irritable bowel syndrome and miliaria should be accepted. The claims for migraine, presbyopia and hypertension should be rejected. The appropriate rate of pension is the special rate and the date of effect should be 16 March 1998, being nine months after the formal termination of the applicant's services with the Club.
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BJ McMahon
Deputy President
VETERANS' AFFAIRS – disability pension – post-traumatic stress disorder – eczema – irritable bowel syndrome – miliaria – migraine – presbyopia – hypertension – whether war-caused disabilities - assessment – whether entitled to special rate
Veterans' Entitlements Act 1986 – s 23, 24
REASONS FOR DECISION
Mr B.J. McMahon (Deputy President) Dr P.D. Lynch (Member)
On 18 November 1998, the Repatriation Commission made certain decisions in relation to the applicant's pension. With one exception, this decision was affirmed by the Veterans' Review Board on 5 July 1999. As a result of negotiations between the parties, the issues have been considerably narrowed. To understand them, however, it is necessary to review the history of Mr Schulz's applications in relation to particular disabilities.
On 23 June 1997, the Commission accepted bilateral sensorineural hearing loss with tinnitus and chronic obstructive airways disease as war-caused diseases. On 16 March 1998, it accepted four further conditions. They were:
post traumatic stress disorder (PTSD);
psychoactive substance abuse or dependence involving alcohol;
fatty liver – alcoholic; and
gastro-oesophageal reflux disease.
On 18 November 1998, the Commission rescinded its finding in relation to PTSD. The Veterans' Review Board decision of 5 July 1999 set aside that rescission. At the time the present application came on for hearing, therefore, one of the issues was a review of the decision whether PTSD existed and whether it was a war-caused disease. By the time of the commencement of the hearing, the respondent had conceded the issue in the applicant's favour. The concession involved consequential concessions in relation to other disabilities.
The 1998 application also considered five disabilities which were rejected. The applicant does not seek to have that part of the decision reviewed. The disabilities were:
Plantar fasciitis of the right foot;
Conductive hearing loss in the left ear;
Varicose veins/varicose eczema of the right leg;
Tachycardia; and
Lumbar spondylosis.
Migraine was also rejected in the 1998 decision, although, in the preparation for the hearing, this remained one of the issues outstanding. The applicant indicated at the hearing that he did not wish to re-visit that part of the Commission's decision.
The applicant also withdrew his request to review that part of the 1998 decision relating to presbyopia and hypertension.
For its part, the respondent conceded that the condition of irritable bowel syndrome dealt with and rejected in the 1998 decision should now be conceded as a consequence of the concession relating to PTSD.
The only medical issue outstanding, therefore, was that relating to two skin conditions, namely eczema and miliaria. The respondent continued to support its decision rejecting these two conditions as accepted disabilities.
The other principal issue concerned with this application is the appropriate rate of pension. The Commission decided on 18 November 1998 that the disability pension should be calculated at 100% of the general rate. This decision was affirmed by the Veterans Review Board. On the basis of the accepted disabilities therefore, the pension will be at a minimum of 100% of the general rate. The applicant, however, contended that because of circumstances which will be later examined, he was entitled to be paid at either the intermediate or special rate provided for in sections 23 and 24 of the Veterans' Entitlements Act 1986.
Because of the relatively narrow issues, it will not be necessary to trace the applicant's career in detail. So far as his service is concerned, it is necessary only to note that he served in the army for six years, which included a period of operational service between 28 September 1961 and 27 May 1963 and from 28 May 1963 to 2 July 1963 in Malaya.
The applicant contended that he had contracted eczema and miliaria during the course of that service. This view was supported by Dr Bills, his general practitioner, which was expressed in the Veterans' Review Board application for review dated 5 June 1998. In that form, the applicant described his symptoms and diagnosis of both conditions. These were unconditionally accepted by Dr Bills, who also recommended consultation with a dermatologist.
Dr Freeman, a specialist dermatologist, examined Mr Schulz on 29 September 1998. He took a history of the occurrence of miliaria first in Malaya, which continued to appear in Australia both in summer and in winter, after the applicant had returned to this country. Dr Freeman observed that there was no miliaria present at the examination but noted Mr Schulz's history that it "still comes and goes". Dr Freeman did not query the credibility of such a history. The fact that a condition was not present at a particular examination does not, in our view, indicate that it does not exist. Dr Freeman found eczema on examination which affected both sides of the abdomen and the left and right flanks. He reported:
"On examination there was eczema affecting both sides of the abdomen and left and right flanks. There was also eczema and lichen simplex chronicus affecting the right thigh and right lower leg and the right ankle and foot. Therefore the dermatitis on the feet appears to be the same as the eczema on the right lower limb and trunk."
He concluded:
"In summary he has a number of skin conditions of long standing. He suffers from miliaria but this is episodic. He has suffered from 3 episodes of shingles (herpes zoster). It is unlikely that this will recur.
He suffers from eczema affecting the trunk and right lower leg, as well as the right foot. I suggested that he treat this eczema with soap and hot water avoidance, washing with Dove and Elocon ointment mane as well as Sorbolene whenever necessary as a moisturizer. This will probably settle the dermatitis quite well and he should be able to control it easily.
There were changes on the left sole, secondary to sweating. Also on the left sole there was a purplish nodule which is probably an angioma as well as a junctional naevus. These lesions can be observed. He served in Malay in 1962 and 1963. Some of his skin problems started in Malaya and some of them began a year or two later."
On behalf of the respondent, Mr Shulz was examined by another dermatologist, Dr Kocsard. He concluded that those practitioners who had examined the applicant had misdiagnosed his condition. He reported:
"The only visible pathology affects the skin of his right thigh, right leg and the sole of his right foot. There are venous varicosities over this extremity and reddish-bluish macular eruption with sharp irregular margins. These colour changes extend to part of his right sole. This condition is characteristic of the rare complication of venous varicosities: Acroangiodermatitis (Mali). This condition is known also as pseudo Kaposi. If you look up page 18 of the files submitted where the state at enlistment is described you will find on the distinctive marks the note "extensive staining of the skin of the right leg, thigh and foot". This shows that the condition which was misdiagnosed all the time as eczema and lichen simplex chronicus existed before his service in the army."
None of the doctors was required for cross examination. Dr Kocsard claims a special experience with acroangiodermatitis, having published a paper on the subject. He may be readier than others to see it. It seems to us a bold assumption to make that this rare condition can be confirmed as having existed prior to enlistment, simply from a few clinical observations some forty years ago. In our view, the opinions of the specialist dermatologist, and particularly the general practitioner who has treated the applicant for this condition, are to be preferred.
The principal question to be determined in this application is the appropriate rate. After Mr Schulz was discharged in 1964, he worked in a garage as a general hand for some two years. He then found a position with Northern Riverina County Council, where he stayed for the next nineteen and a half years. Originally, he was appointed to a trainee linesman position. His behavioural problems associated with disabilities, which are now accepted, resulting in anger and difficulties in relationships, led to his being moved from that job to one of a pole inspector where he could work on his own.
Towards the end of that job he suffered a back injury in the course of his employment. He was supported by periodical payments until his employer's liability was redeemed by a lump sum payment in January 1991. He did not work for the next two years. His wife was then in employment.
Around 1993 or 1994, he was engaged by Betty Burns who then had the contract to clean the Queanbeyan RSL Memorial Bowling Club premises. Mr Schulz said that he was pleased to be able to find something he could do. Ms Burns needed time off occasionally and Mr Schulz was engaged to fill in during her breaks. For the next couple of years, he was involved in cleaning toilets, the club yard, the bar area and restaurant and wherever else he was directed by Ms Burns to work. On those days that he did work, he started very early so that the cleaning could be finished by the time club opened at 10am.
In 1996 Ms Burns told Mr Schulz that she no longer wanted the contract. It was agreed that he should take over from her. He continued to employ her for a further 12 months. There were no documents before us relating to this arrangement. In particular, there was no evidence that the club called for tenders when Ms Burns sought a release from her contract. All the evidence seems to indicate that the arrangement was a quasi-employment arrangement with the Club. All the cleaning equipment was supplied by the Club and later documents refer to Mr Schulz's status as an employee. Whether as contractor or as employee, he was in charge of cleaning the Club premises between 1 March 1996 and 3 June 1997.
During that time, he had a poor relationship with the President and the Board which so deteriorated that eventually, he and the President did not speak to each other. The behaviour towards others was directly attributable to a combination of PTSD and alcohol dependence, both of which are accepted disabilities.
During this 15 month period, Mr Booby was the Secretary Manager. He provided a written statement in these words:
"During my employment as Secretary Manager of the Queanbeyan R.S.L. Memorial Bowling Club it was one of my duties to employ Mr Geoffrey Schulz. This period of employment was on a contract basis and duties included General office duties and toilet cleaning for approximately 20 hours per week.
Whilst Mr Schulz's work ethics were satisfactory for a short period of time, they soon deteriorated to the extent of being warned on several occasions for his poor work performance and in particular his attitude towards members and management staff. Mr Schulz's lack of discipline and continued presence on club premises was discussed at length at more than one Board meeting.
At the time of my severance of employment from the Queanbeyan R.S.L. Club it was my belief that as a result of Mr Schulz's attitude towards his work commitments and general lack of consideration for staff and members of the club had deteriorated to such an extent that it was foreseeable that his contract would be in severe jeopardy."
Mr Booby confirms the evidence given by Mr Schulz that he was called into Mr Booby's office on several occasions and was warned about abusive language to staff and to members. After work and at night, Mr Schulz used to frequent the club where some of this abusive behaviour took place.
Ms Burns also provided a written statement as follows:
"I had the cleaning contract of the QRSL Memorial Bowling Club and Geoff Schulz worked for me – but in 1996 Geoff took over the contract and I worked for him. I noticed he became abusive towards Board members and staff. He was reprimanded by the Sec Manager for this. He also told me e was being picked on by the Chairman of the Club. Geoff told me he was sacked by the club in 1997."
Neither Ms Burns nor Mr Booby was required for cross examination. Their evidence is therefore uncontroverted. It is clear from Mr Booby's evidence in particular, that upon the expiry of Mr Schulz's contract (if it was a contract) it would be unlikely to be renewed. In fact, tenders were called for the renewal. On the evidence of Mr Booby it seems unlikely that Mr Schulz's tender would have been accepted even if it appeared to be the most favourable.
The respondent's case is that Mr Schulz's engagement as an employee or as a contractor was not brought about by a manifestation of his accepted disabilities but simply by an expiry of his contract.
The respondent's advocate's office wrote to Ms Leanne Taunton, who was described as "Office Assistant" at the Bowling Club. Although the letter was sent on 4 January 2000, she did not respond until 7 April. She had previously provided a letter dated 12 May 1999 in connection with the Veterans' Review Board proceedings in these terms:
"Whilst I was acting in the position of Chief Executive Officer of the Queanbeyan R.S.L. Memorial Bowling Club Limited, Mr Geoff Schulz was employed as a contract cleaner at the Club.
He commenced duties 1st March 1996 and he's employment was terminated 3rd June 1997 due to unsatisfactory work practice and general behaviour to towards Board Members and staff. He did not receive any redundancy payment upon termination from the Club."
In her reply, Ms Taunton (now described as "Office Manager") said on 7 April 2000:
"In reference to the above I advise the Club call for new tenders for the Cleaning contract in which they received over 30 applications and one of was from Mr Schulz as the Board of Directors made the decision Mr Schultz tender was not accepted.
While Mr Schulz contract was in place yes he was responsible for cleaning of the Club in all areas including vacuuming, toilets etc and his duties were carried out after hours while the club was closed."
Following a further telephone conversation with the advocate's office, Ms Taunton wrote a third letter on 20 April 2000 in these terms:
"In reference to our recent telephone conversation concerning Mr Schulz unsatisfactory work practice and general behaviour towards the Board members of the Club was instigated when Mr Schulz tender was not accepted when the Board the of Directors made a decision.
The decision was not made on a personal matter it was purely business as Mr Schulz tender price was not within the Clubs budget along with approximately 29 others.
Mr Schulz then lost his temper with the Board and President and left the Club on his own accord."
There is no evidence that Ms Taunton was present when Mr Schulz left the Club premises. His evidence (which we accept) was that no cleaning contract prior to his had been terminated. He had a reasonable expectation that his would be renewed and was angry that he was called upon to submit a tender for what he regarded as his own contract. When he was told that he was unsuccessful, he threw the keys at a Board member and stormed out, overturning tables on the way. At the President's request, he continued for a couple of weeks until the replacement could be organised. He refused to have anything further to do with the Club after that, indicating that if they wished to get the keys they could retrieve them from his letterbox without coming to his house. Ms Schulz lost his temper after the new contract was awarded. On his evidence (which we accept) this was a normal aspect of his behaviour. Although his cleaning work may not have been satisfactory, it seems clear to us that irrespective of the quality of his work, his aggressive and abusive behaviour would have ensured a termination of his association with the Club at the first legally available opportunity.
Since that episode, Mr Schulz has not looked for work. He said he has no "self respect or get up and go". He was referred to Dr Altman, a psychiatrist, and has been receiving treatment from him for the past two years. He comes to Sydney for consultation every six weeks. In January 1999, Dr Altman arranged for his admission to hospital for psychiatric treatment for a period of six weeks. He is still on appropriate medication.
Despite his treatment, he still drinks heavily. Other accepted disabilities have deteriorated. His chronic obstructive airways disease has now progressed to the stage where he requires oxygen at night and in the afternoon. He is also, of course, on puffers. His breathing difficulties have increased since the cleaning job ended. His irritable bowel syndrome requires him to be near a toilet at all times. His lumbar spondylosis precludes him from doing any work.
We have concluded that the applicant meets the requirements of paragraph 24(1)(c) in that his war-caused diseases prevent him from continuing to undertake remunerative work that he was then undertaking and that he is, therefore, suffering a loss of earnings on his own account which he would not have suffered had he been free of that incapacity. We do not consider that he ceased to engage in remunerative work for any other reasons. He is certainly now incapable of undertaking remunerative work on a full-time basis. The only question to be determined is whether his incapacity is such as to render him incapable of undertaking remunerative work for more than eight hours per week. On this question, there are three medical opinions. Dr Baz, an occupational health consultant, came to this conclusion:
"Mr Schulz has worked for almost 20 years as an Electricity Commission pole inspector. He worked for 2 years in a garage and served 6 years in the Army prior to that employment. He has been unemployed for some years before working as a cleaner for about 12 months. He worked in that capacity for 20 hours per week. His employer discontinued his employment contract because of unsatisfactory work performance and behaviour.
In my opinion Mr Schulz was unable to continue with his work as a contract cleaner primarily because of the post-traumatic stress disorder.
He was unfit for his previous work as a pole inspector due to the low back injury. This also impacted on his ability to undertake all the cleaning tasks required, but he was able to manage this by engaging another employee to do the heavier tasks. Although his General Practitioner reports problems with right wrist osteoarthritis, left foot fascitis, and low back pain, the current clinical assessment does not reveal any significant musculoskeletal disabilities. In particular, no muscle wasting, reduced power, reflect changes or sensory loss were identified in the lower limbs.
In my opinion if not for the intolerance, irritability and depression Mr Schulz could have continued working as a contract cleaner despite his musculoskeletal disabilities.
The employer's description of inappropriate behaviour and unsatisfactory performance is consistent with the history Mr Schulz gives of intolerance and irritability and the clinical information provided by Dr Altman.
In my opinion Mr Schulz's work capacity has been restricted for many years by the difficulty he has experienced with interpersonal relationships which is part of his accepted psychiatric disability. In my opinion in the absence of the psychiatric disability he could have continued in the workforce even with the development of musculoskeletal conditions.
Conclusions
In my opinion Mr Schulz is unfit for 8 or more hours duration weekly because of the post-traumatic stress disorder and alcohol abuse.
While he has other musculoskeletal disabilities which impact on the physical activity which he can undertake I do not consider that these disabilities are the substantial cause for his inability to continue at work.
In my opinion the substantial cause for his unfitness for work is the accepted disabilities."
Dr Dinnen, a consultant psychiatrist, gave as his opinion:
"I do not believe that the patient could engage in any paid work as much as 8 hours a week because of his chronic psychiatric illness – post traumatic stress disorder and alcohol dependence. I do not believe he will benefit from any retraining or that there is any prospect of significant improvement in his ability to work. For all intents and purposes he is totally and permanently incapacitated due to his war caused psychiatric disability."
His own treating psychiatrist reported (using the old terminology):
"In summary, in my opinion as a result of his experience in the Far East Strategic Reserve in Malaya Mr Schultz suffers from a severe chronic Post-traumatic Stress Disorder with an associated Major Depression and Alcohol Dependence. In my opinion his psychiatric impairment according to Table 4 from the Guide to the Assessment of Rates of Veterans' Pensions is 50 points. Please find attached the two page Emotional and Behavioural Medical Impairment Worksheet from this fifth edition. Furthermore in my opinion as a result of the above mentioned war-related psychiatric disorders alone he is totally and permanent unfit to work and in my opinion he should be placed on the "T&PI" disability pension."
Against these opinions, the respondent relies on a report by Dr Hession, a medico-legal consultant. In a follow-up report dated 27 April 2000, Dr Hession responded to a number of questions (which were not in evidence). He did say, however, that:
"He is considered totally and permanently incapacitated for work for more than 20 hours each week".
Dr Hession was not specific in asserting that Mr Schulz could work "up to" 20 hours each week.
Against the rather slim evidence from Dr Hession is the comprehensive evidence to which we have referred, including that of the applicant's treating psychiatrist. In our view, this evidence should be preferred. The consequence is that in our opinion, the applicant complies with paragraph 21(1)(b) and is therefore entitled to the special rate of pension. It is not necessary in the present circumstances to consider the application of the so-called ameliorative provision in section 24.
Our decision will therefore be as follows:
The decision of the Veterans Review Board of 5 July 1999 is set aside and the matter is remitted to the respondent with the following directions:
The claims for post-traumatic stress disorder, eczema, irritable bowel syndrome and miliaria should be accepted.
The claims for migraine, presbyopia and hypertension should be rejected.
The appropriate rate of pension is the special rate and the date of effect should be 16 March 1998, being nine months after the formal termination of the applicant's services with the Club.
I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of Mr B.J. McMahon (Deputy President)
Dr P Lynch (Member)Signed: .....................................................................................
Dominika Rajewski, AssociateDate of Hearing 4 May 2000
Representative for the Applicant Neale Dawson
Representative for the Respondent Peter Godwin
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