Sinclair and Defence Force Retirement and Death Benefits Authority

[2005] AATA 334

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 334

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2003/309

GENERAL ADMINISTRATIVE  DIVISION		)
Re		MICHAEL SINCLAIR

Applicant

And DEFENCE FORCE RETIREMENT AND DEATH BENEFITS AUTHORITY

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date15 April 2005

PlaceMelbourne

Decision

The decision under review is set aside and in substitution it is decided:

(i)       The applicant has no capacity for civil employment; and

(ii)      The retirement impairment was constituted by injuries to the applicant’s right foot, abdomen, sacrum, scalp, right humerus and back; and

(iii)     To classify Mr Sinclair as 60% or more (Class A) incapacity from 15 January 1970.

(Sgd) John Handley

Senior Member

DEFENCE FORCE RETIREMENT AND DEATH BENEFITS – applicant extensively injured in Vietnam – ‘administratively discharged’ in 1970 – later learnt of DFRB entitlement – discharge classification changed to ‘invalidity’ legislation and administration of scheme existing in 1970 amended by legislation in 1973 – s8 Acts Interpretation Act – applicant employed by his parents – nature and type of work examined ‑ capacity for civil employment – classification and description of injuries giving rise to invalidity – assessment of class of incapacity – decision set aside

Defence Force Retirement and Death Benefits Act 1948 (C’th) s51 and s53
Defence Force Retirement and Death Benefits Act 1973 (C’th)
Acts Interpretation Act 1901 (C’th) s8 and s50

Commonwealth of Australia and Another v Esber (1991) 101 ALR 35

Defence Force Retirement and Death Benefits Authority v Heffernan (1978)

21 ALR 709

Esber v Commonwealth of Australia (1992) 106 ALR 577

Freeman v Defence Force Retirement and Death Benefits Authority (1985)

5 AAR 156

Re Bos and Defence Forces Retirement and Death Benefits Authority (1977)

20 ALR 663

Re Costello and Secretary, Department of Transport (1979) 2 ALD 934

Cox v O’Donnell and Others (1992) 106 ALR 145

Dillaway v Defence Force Retirement and Death Benefits Authority (1984)

2 AAR 294

Re X and Defence Force Retirement and Death Benefits Authority (1983) 3 ALN N58

Re Thomson and Defence Force Retirement and Death Benefits Authority (1987)

6 AAR 424

Defence Force Retirement and Death Benefits Authority v House (1989) 91 ALR 286

Re Greer and Defence Force Retirement and Death Benefits Authority [2003]

AATA 6

Re Greer and Defence Force Retirement and Death Benefits Authority (2001)

63 ALD 282

Re Levin and Defence Force Retirement and Death Benefits Authority (1997)

48 ALD 664

Esber v Commonwealth of Australia and Another (1992) 174 CLR 430

Whiteford v Commissioner For Superannuation (1987) 6 AAR 70

REASONS FOR DECISION

15 April 2005 Mr John Handley, Senior Member           

1.      On 8 October 1968, Mr Sinclair who was then a conscripted member of the Australian Army suffered extensive injuries when he was blown up by a Claymore mine when on patrol in Vietnam.  He and members of his party were then ambushed.  The incident resulted in multiple deaths and many other persons were severely injured. 

2.      Mr Sinclair suffered extensive injuries to his right foot together with shrapnel wounds to his abdomen, sacrum, scalp and right humerus.  He subsequently underwent a period of extensive treatment in Australia and was “administratively” discharged from service on 14 January 1970 (T29/42).  In following years, Mr Sinclair ultimately qualified for pension under the Veterans’ Entitlements Act 1986 (“the Veterans’ Entitlements Act”), initially at 100 per cent of the general rate and later, at the special rate.

3.      Mr Sinclair learnt in 2001 that he may have had an entitlement under the Defence Force Retirements and Death Benefits Scheme (“the DFRDB Scheme”).  He was of the belief that the description of his discharge (‘administratively’) caused an anomaly with respect to his entitlement under DFRDB Scheme because in order to qualify for benefits he understood that he needed to have been discharged by reason of “incapacity”.  Mr Sinclair wrote to the Chief of the Australian Army, General Cosgrove, on 20 February 2001 seeking his assistance.  General Cosgrove passed the applicant’s correspondence to the Director of Entitlements within the Personnel Executive Branch of the Department of Army.  Mr Sinclair wrote another letter to the Personnel Branch (T32/46), in March 2001 which, omitting irrelevant parts, included the following:

Rather I would like to focus on the fact that after spending an extra 348 days in the Army in an attempt to reach a medical condition that would allow me to be employed.  I was discharged as “Having completed the period of service in the ARAS (NS)”.

At the time of discharge I was still chronically effected [sic] by explosive injuries with fracture to the right foot, shrapnel wounds to the abdomen, sacrum, scalp & right humerus.

I most definitely was not employable as an infantry soldier as I could barley [sic] walk.  As a clerk I would have found it difficult to hold a pen in my right hand because of the injury to my right elbow (humerus), as well as the wound to my back (sacrum) mm from my spine making sitting uncomfortable.  As a driver I could not keep my right foot in an accelerator position because of the nerve grafts that where [sic] designed to give me some feeling in my foot and the fact my right heel was missing.  The head wound just gave me headaches and would have made me a very irritable Batman.

4.      Mr Sinclair was also able to provide statements from former Vietnam veterans, one of whom attested that he had been injured in Vietnam, that he had been classified as medically unfit upon discharge and had qualified for DFRBA benefits.

5.      Eventually, the Defence Personnel Executive made a request on behalf of Mr Sinclair for consideration under s51(6) of the Defence Force Retirement and Death Benefits Act 1948 (“the 1948 Act”) to regard Mr Sinclair as having been discharged on the grounds of physical or mental incapacity to perform his duties (T37/56).  That application was made pursuant to s51(6) of the 1948 Act.

6.      On 16 July 2002, a “Committee of Alternates” convened under the 1948 Act and deemed Mr Sinclair as having retired on the grounds of invalidity or of physical or mental incapacity to perform his duties and he became entitled to an invalidity benefit.  A certificate was issued under s51 of the 1948 Act.

7.      The Committee of Alternates concluded, in the follow terms (T50/87):

(e)Accordingly having regard to Mr Sinclair’s vocational, trade and professional skills, qualifications and experience, the kinds of civil employment a person with those skills, qualifications and experience might reasonably undertake and the degree to which is impairment which was the cause of the invalidity or incapacity by reason of which he had been retired had diminished his capacity to undertake those kinds of civil employment, the person authorised by the Commissioner for Superannuation determined that his incapacity in relation to civil employment at discharge was 30% and that he be classified under section 51 as Class B with effect from 14 Jan 1970 and that his incapacity in relation to civil employment as at 14 Jul 1970 was 20% and that he be re-classified under section 53 as Class C on and from 14 July 1970.

8.      Mr Sinclair sought a review of that decision and on 14 February 2003 the respondent reconsidered the decision of the Committee of Alternates and decided to vary the decision in the following terms (T64/137-138):

The Authority’s decisions

35.The Authority resolved under subsection 51(2) of the Act:

(a)to determine that the relevant kinds of civil employment were storeperson and security officer;

(b)that shrapnel wounds right foot constituted Mr Sinclair’s retirement impairment; and

(c)to CONFIRM the decision made by the Committee of Alternates on 16 July 2002 to classify Mr Sinclair as 30% Class B with effect from 15 January 1970.

The Authority also resolved under section 53 of the Act:

(a)to determine that the relevant kinds of civil employment were storeperson and security officer;

(b)that shrapnel wounds right foot constituted Mr Sinclair’s prescribed impairment; and

(c)to VARY the decision made by the Committee of Alternates on 16 July 2002 under section 53 to reclassify Mr Sinclair as 20% Class C with effect from 14 July 1970 by setting aside that decision, and further to determine that Mr Sinclair’s percentage of incapacity with effect from 16 July 2002 is 40%.

9.      Mr Sinclair seeks a review of the decision made by the respondent on 14 February 2003.  Mr White of counsel appeared on behalf of the applicant at the hearing and Mr Dillon appeared on behalf of the respondent.  A number of documents were received into evidence and will be referred to in these reasons.  The legal and factual issues in dispute were complex and were the subject of extensive closing submissions.  Mr Sinclair gave evidence which will be summarised later.

the legislation

10.     At all relevant times the applicable legislation was the Defence Force Retirement and Death Benefits Act 1948 as amended, by an Act of the same name, in 1973.

11.     At the date of the applicant’s discharge from service (his retirement), his rights were then administered by the Defence Forces Retirement and Benefits Board (“the Board”).  The Board was established under the 1948 Act.  The scheme of pension and compensation was abolished at 1 October 1972 by the introduction of the Defence Force Retirement and Death Benefits Act 1973 (“the 1973 Act”) which appointed an Authority for the administration of the 1973 Act.  In this application, counsel for the applicant submitted that the relevant legislation was that applying at the date of retirement in 1970, being the 1948 Act.

12.     Counsel for the respondent also acknowledged that the 1948 Act applied as subsequently amended by the 1973 Act.

13.     An analysis of the submissions made by both representatives as to the applicability of legislation, relevant Federal Court decisions and Second Reading Speeches of the Parliament, will be detailed later but at this stage, s51 of the 1948 Act and s53 (as amended) of the 1948 Act are relevantly reproduced as follows:

51 Classification in respect of incapacity 

(1)Subject to subsection (3), where: 

(a)a member who is a contributor has been retired before attaining the retiring age for the rank held by him;

. . .

on the ground of invalidity or of physical or mental incapacity to perform his duties (not, in the opinion of the Authority, due to wilful action on his part for the purpose of obtaining pension or other benefit), he is entitled to benefit in accordance with sections 52, 52A and 53, but, subject to section 60, is not otherwise entitled to benefit under this Act.

2)Where a person (not being a person to whom section 52A applies) is, or is about to become, entitled to benefit by virtue of subsection (1), the Authority shall determine the percentage of total incapacity of the person in relation to civil employment and shall classify the person according to the percentage of incapacity as follows:

Percentage of Incapacity  Class  

60 or overA 

30 or over but less than 60  B  

Less than 30  C 

53 Reclassification in respect of incapacity 

(1)The Authority may, from time to time, if it is satisfied that the percentage of incapacity in relation to civil employment of a pensioner classified under section 51 is such that the classification of the pensioner should be altered, reclassify him in the appropriate classification set out in subsection 51(2) according to the percentage of his incapacity in relation to civil employment.

(1AA) If, at a time when the Authority is reviewing, but has not yet determined, for the purposes of subsection (1), the percentage of incapacity in relation to civil employment of a pensioner, the pensioner dies:

(a) the Authority must determine what was, immediately before the pensioner's death, his or her percentage of incapacity in relation to civil employment; and

(b) where the Authority is satisfied, having regard to that percentage of incapacity, that, if the pensioner had not died, the pensioner would be reclassified and given a classification higher than that of the pensioner at the time of his or her death, the Authority must reclassify the pensioner under subsection (1) according to that percentage of incapacity, as if the pensioner had not died.

(1A) In determining:

(aa) what is the percentage of incapacity in relation to civil employment of a pensioner; or

(aab) what was, immediately before his or her death, the percentage of incapacity in relation to civil employment of a pensioner who has died;

the Authority shall have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the pensioner;

(b) the kinds of civil employment which a person with skills, qualifications and experience referred to in paragraph (a) might reasonably undertake;

(c) the degree to which any physical or mental impairment of the pensioner, being a prescribed physical or mental impairment, has or had diminished the capacity of the pensioner to undertake the kinds of civil employment referred to in paragraph (b);

(d) such other matters (if any) as are prescribed for the purposes of this subsection.

(1B) In subsection (1A), prescribed physical or mental impairment, in relation to a pensioner or a deceased pensioner, means:

(a) a physical or mental impairment of the pensioner that was the cause, or one of the causes, of the invalidity or physical or mental incapacity by reason of which the pensioner was retired, whether or not that impairment changed, for better or worse, since that retirement; or

(b) any other physical or mental impairment of the pensioner causally connected with a physical or mental impairment referred to in paragraph (a).

michael sinclair

14.     Mr Sinclair was born in 1946 and is presently 59 years of age.  He was educated to year 10 at Beechworth High School and lived in the town of Beechworth in North Eastern Victoria where his parents owned a small supermarket.  When he left school, Mr Sinclair commenced training as a pilot which he intended as his future vocation.  He worked in his parents’ supermarket to earn money to meet the costs of flight training.  Flying classes were completed by correspondence and practical flying at the Albury Flying Club and at the Wangaratta Flying Club.  In 1967 he obtained a restricted pilot’s licence but was then conscripted into the Army.  Army training was initially undertaken in Victoria and later in Queensland and on 22 May 1968, Mr Sinclair was posted for service in Vietnam.

15. Mr Sinclair was severely injured in an ambush on 8 October 1968. He was medi-evaced from Vietnam to Australia after some initial treatment in a Field Hospital. Mr Sinclair was admitted to the Repatriation General Hospital (“the RGH”) in Melbourne and was routinely admitted and discharged following bouts of surgery. On 24 December 1968, Mr Sinclair was discharged from hospital against his wishes because of a policy then prevailing that patients should be returned home at Christmas. Mr Sinclair recalled that he then had weeping infected wounds and was returned to Beechworth in a departmental car where he lay prone on the back seat. He was readmitted to hospital shortly after Christmas for further surgery and nerve grafts. He was eventually discharged from the RGH on 11 December 1969 after more than 300 days of inpatient treatment. Eventually Mr Sinclair was directed to attend for final Medical Board assessment at the Watsonia Barracks in Melbourne. Mr Sinclair said that it was about this time that he was granted pension under the Veterans’ Entitlements Act at 100 per cent of the general rate. He said he could not recall making an application for it and assumed that it was made by someone else on his behalf. He did recall a medical examination where a “young doctor” assessed him as being eligible for total and permanent incapacity (“TPI”) benefits under the veterans’ legislation but upon examination by a senior doctor, it was decided that by reason of his and because he had a sympathetic employer (his parents), the TPI finding was overruled.

16.     After discharge from the Army the applicant continued to need treatment from time to time because of recurring abscesses on his back and pelvis because of the continual discharge of shrapnel.  When not undergoing treatment he did “work” in his parents’ supermarket performing storeroom work which required him to stack shelves, serve customers and maintain stock control.  Mr Sinclair said that he did not work full time because he was in continuous pain and discomfort.  He initially attempted to ease himself back into work and although he was paid a full time wage by his parents, he was frequently absent from work or worked a shorter working day.

17.     Mr Sinclair described the condition of his right foot as having an absent heel.  He said that he is unable to walk properly because of the deformity in his right foot and attempts to walk by gripping his toes to the sole of his shoes.  By reason of tendon damage in his foot, he finds that he is unstable on his feet, his foot moves within his shoe, he frequently has skin missing from his foot and toes because of rubbing and his foot often swells and sweats.  He said he has a permanent ache at the back of his right foot and in his lower back which becomes “chronic” after periods of standing.  Mr Sinclair said that there had been many occasions when he was forced to leave work early or not attend work at all because “discs would pop in (his) lower back”.  He was frequently required to rest and lie flat and consumed Naprosin and other painkilling medication.  He has attempted exercising, including the provision of a frame where he straps himself to it and is suspended upside down to relieve back pain.  It eventually produced increased right foot and ankle pain and he has ceased to use it.

18.     Mr Sinclair acknowledged that he was fortunate to be employed by his parents because he could come and go from work dependent on the extent of pain and discomfort that he suffered and was also able to take extended lunch breaks to rest during the day.  He was also given the opportunity to work frequently in an office in a seated position where on many occasions his foot would be inserted into a bucket of warm salty water.  He said this would assist in drying recurring infections and reduce swelling but it produced increased back pain because of periods of being seated.

19.     Mr Sinclair did not regard himself as having “worked”.  Rather he preferred the expression that he “turned up” for work.  He said in the 1970’s he was working about 30 hours a week which, when compared to other employees of his parents’ business, was regarded as 50 per cent of normal weekly work.  Mr Sinclair recalled that whilst he was serving in Vietnam, his father employed another person to replace him but when he returned to work that person was laid off.  About two years after resuming employment his father did employ another person to work as a storeman (in about February 1973) because Mr Sinclair was no longer able to perform work involving standing, walking or lifting.  Mr Sinclair was then employed by his parents as a “supervisor”.

20.     Mr Sinclair recalled that he continued to suffer from right foot and ankle pain and swelling together with chronic low back pain.  He also suffered recurring discomfort in his stomach because of discharging shrapnel from his abdomen and pelvis and he frequently suffered severe infections and fevers.  He was persistently consuming antibiotics and he recalled that in 1980 – 12 years after he was injured in Vietnam – shrapnel continued to be discharged from his abdomen.  Indeed at the present time bone fragments continued to discharged from his right foot.

21.     Mr Sinclair’s parents sold their supermarket in 1986.  He recalled that they were becoming elderly and were unable to manage the business.  Mr Sinclair then ceased employment.  He recalled that he was then very depressed and anxious and had been attempting to manage his parents’ business in their absence.  He said that he was then “breaking down emotionally” and he was frustrated.  He recalled that he had a “physical and mental breakdown” and at about that time he was diagnosed with post-traumatic stress disorder and was eventually granted special rate pension under the Veterans’ Entitlements Act.

22.     In 1993, Mr Sinclair commenced a computer business course at the Wodonga TAFE which required him to travel from Beechworth for two and a half days each week.  He said he completed the course and obtained a certificate but found that he could not engage in employment despite these new found qualifications because periods of sitting caused increased back pain and the continual presence of foot and ankle pain caused an inability to concentrate.

23.     Mr Sinclair said that as he has become older, he is finding it difficult to walk and when he does, he finds it difficult to maintain his balance.  He noticed that on occasions he is unable to walk in a straight line.  He said that his right leg is two inches shorter than his left and he walks with a limp and frequently loses balance.

24.     Mr Sinclair said that his pilot licence lapsed when he was in the Army because he was unable to attend routine medical examinations and undertake minimum flying hours.  He said that even if he had attended for medical examinations he would not have been passed fit to fly and his pilot’s licence would have been cancelled.

25.     Mr Sinclair was taken to the medical examinations of July 1969 and October 1969, which are recorded at T17 and T23 respectively.  Each report (being a completed questionnaire) records the “disabilities of which you complain” as “R foot” (T17) and “remote fracture R heel” (T23).  The other injuries suffered are separately noted despite them being recorded as having occurred in the explosion which caused the foot injury.  At each examination, the examining medical officer was required to assess the “extent of the incapacity in the labour market from each disability”.  The doctor on July 1969 assessed 100 per cent.  The doctor in October 1969 assessed 35 per cent.  In cross-examination Mr Sinclair said he assumed that by October 1969 it was thought that he had improved and was “probably less likely to die”.  He noted an assessment in January 1970 (T26) of 33⅓ per cent for the right foot only.  He thought the infection in his foot was then better managed and not weeping as frequently as previously.

26.     Although the assessment of January 1970 found incapacity of 33⅓ per cent, Mr Sinclair noted that a Repatriation Department medical examination of 6 January 1970 recorded “shrapnel wounds to the abdomen sacrum scalp and right arm” at 20 per cent and the injuries to the right foot at 80 per cent.  Mr Sinclair thought that at January 1970, 50 per cent of his incapacity was due to his foot injury and 50 per cent was due to a combination of the other injuries.

27.     Mr Sinclair was then taken to repatriation medical examinations conducted in May 1970 where it was recorded that he was capable of performing light sedentary work for 5 days of each week.  Mr Sinclair said that he was then performing light work but was not working full time.  He said he had attempted to perform his pre-enlistment work but was unable to undertake it because of the extent of his injuries.  He noted that at a further examination on 10 June 1971 it was noted that he was unable to undertake regular work because of right foot and ankle pain and the continuing discharge of bone fragments in his right foot.  Despite this Mr Sinclair acknowledged that the examining medical officer recorded the opinion “seems now able to work much better and assessment could be reduced”.  Despite that assessment a repatriation medical examination of 18 May 1972 recorded that the applicant was unable to complete a full day’s work and he was assessed as having an ability to work six hours per day on five days per week.

28.     Mr Sinclair said that he attempted to work on a full time basis but physically he found that he was unable to do so.  He recalled that he was taking a lot of time off work because of a combination of intense pain in his foot and back.  He acknowledged that he was paid a full time salary but he did not work on a full time basis.  Mr Sinclair said that prior to his enlistment he did not perform any book keeping because his parents engaged an accountant for that purpose.  He said that he did perform some stocktaking work with other employees yet very little paperwork was involved.  Mr Sinclair acknowledged that his employment history with the Army (T46/81) records him being employed as a regimental orderly yet he said he completed that work for one day only.  He acknowledged having completed a computer training course at the Wodonga TAFE and said that the correspondence within the Exhibits and the T-documents, was completed by him on a computer but remaining seated caused lower back pain.  He acknowledged that prior to enlistment he had successfully undertaken all study associated with his training as a pilot but did not believe that he could maintain any employment now, or into the future, where he was required to remain seated.

29.     Mr Sinclair said that he has attempted scuba diving and regarded it initially as being one of the few things that he could successfully undertake because he was able to become buoyant and have weight removed from his back and lower leg.  However he was forced to cease it because the weight of the scuba equipment and air tanks, when out of the water, aggravated his back pain.  Mr Sinclair acknowledged that he is able to maintain activity around his home but is unable to sustain it.  He said that he does not perform household activities on a regular or routine basis but only when he is able and then after, or before, frequent periods of rest.

medical and like evidence

30.     Doctors were not called to give evidence in these proceedings but an extensive number of documents were received into evidence with respect to the applicant’s medical history.  For the purposes of the following analysis the references to documents identified as “T” are found within the T-documents received as Exhibit B.  The documents identified as “A” are from a bundle of documents received into evidence as Exhibit A and were lodged by the applicant’s solicitor.  The remaining document which will be discussed was a medical report from Mr Jeffrey Mander who provided a medico-legal opinion on 22 July 2003 at the request of the Australian Government Solicitor representing the respondent.

31.     On 8 October 1968 an “operation sheet” was prepared (T5/10), I presume shortly after the applicant was admitted for treatment following the injuries he sustained on that day in Vietnam.  He was found to have extensive bodily injuries to his right heel, right elbow, scalp, back, back of right lower leg and (illegible).  Emergency surgery was performed and a number of metal fragments were surgically removed.  The operation sheet specifically records the removal of two large metal fragments from the applicant’s abdomen.  On 12 October 1968, whilst the applicant remained in Vietnam (T7/12), his wounds were reopened with further debridement of his right foot, right leg and lower back.  Similar procedures were again undertaken on 14 October 1968 (T8/13) and on 17 October 1968 (T9/14).  On 19 October 1968 the applicant’s right foot and heel was found to be swollen and fractured and a plaster of paris cast was applied.

32.     On 25 October 1968 the applicant was admitted to the RGH in Melbourne having been medi-evaced from Vietnam via Butterworth in Malaysia.  An extensive history is recorded at T12/17 where under the diagnosis of “multiple injuries” the applicant was then found to have extensive shrapnel wounds to his abdomen, back and right heel together with a fracture of his lower right femor.  The applicant was eventually discharged with the intention of returning two weeks later for further surgery.  Surgery was again conducted in February and April 1969.  In a medical history report found at A/1-3, a summary of the applicant’s treatment up to 27 October 1969 is found.

33.     On 6 May 1969 A/7-10, a medical report was completed in what appears to be a claim then being made upon the Repatriation Commission for a pension.  Shrapnel wounds were noted as having affected the applicant’s abdomen, sacrum, scalp and right humerus together with “explosion injuries with fractures of right foot”.  The applicant was then found to have an impairment of 100 per cent and the injuries were found to have been sustained in Vietnam on 8 October 1968.

34.     On 25 July 1969, the applicant underwent an examination by an Australian Defence Forces “Final” Medical Board (T17/23-26).  The questionnaire records that the “disability or disabilities of which you complained” were “disability R foot Oct 68 Vietnam”.  Other injuries recorded as having been suffered during service include “internal, head, R elbow injuries, mine explosion Oct 68 Vietnam”.  The diagnosis of the “invaliding disability or disabilities” is recorded as “Multiple shrapnel wounds” and the “extent of the incapacity in the general labour market from each disability” is recorded as being “100% (illegible)”.  The report details the extent of the injuries suffered in Vietnam and there is an abbreviation also of the treatment subsequently undertaken.

35.     On 14 October 1969, the applicant again participated in a “Final” Medical Board assessment where the disability is recorded as “remote fracture R heel (under treatment still) October 68 SVN”.  “Other disabilities” having been suffered in service were recorded to be “compound fractures R foot, fragmentation wounds to upper sacrum, fracture right humerus, abdominal wounds, superficial fragment wounds October 68 SVN”.  There is another summary of the injuries sustained and the treatment to that date.  The diagnosis then recorded of the invaliding disabilities is “multiple fragmentation wounds” and the extent of the incapacity in the general labour market from “each disability” was found to be “35% p.t.”.

36.     On 23 December 1969, the applicant was again examined.  Despite a summary of his medical history having included a reference to the wounds suffered in Vietnam, the only diagnosis recorded was “shrapnel wounds R foot” and the degree of incapacity was recorded at 33⅓ per cent (T26/39).  That assessment assumed some considerable significance because on 12 April 2001 when the applicant was applying to have his reasons for retirement reclassified as “invalidity”, it was found that an incapacity of 33⅓ per cent converted to a capacity of 66⅔ per cent “to perform duties in the Army and in the general labour market”.  It was then thought that the reasons for discharge, as claimed by Mr Sinclair, should not be allowed (T34/49). 

37.     On 10 September 2001 the interpretation of the opinion of 23 December 1969 as found in the Minute at T39/49 was overruled and was found to be “clearly incorrect”.  Commander J Sparrow recorded that Mr Sinclair was “unfit to perform his duties as a rifleman and therefore he could have been medically discharged” (T36/55).  Major Tattersall accepted the opinions of Commander Sparrow and recommended to the respondent that the applicant be discharged from service on the grounds of physical or mental incapacity to perform his duties (T37/61).

38.     The degree of incapacity found at the examination on 23 December 1969 (T26/39) is noteworthy in the context of a Repatriation Department medical examination of the applicant on 6 January 1970 (approximately two weeks later) where Mr Sinclair was then found to have an incapacity of 80 per cent with respect to his foot injuries and an incapacity of 20 per cent with respect to all of his other injuries.  That examination occurred approximately one week prior to the date of the applicant’s discharge from the Army (14 January 1970).  The medical officer on 6 January 1970 commented that the applicant was to “try light work after discharge from the Army next week”.  He found that the applicant was fit to undertake light work and was capable of completing “a full week’s work” (A/11-14).

39.     On 7 March 1970 the Repatriation Department arranged for the applicant’s back to be X-rayed and it was found that there were scattered metallic foreign bodies in three different areas over the right side of the sacrum (A19).  On 23 April 1970 the applicant was examined by Dr Collins, his LMO in Beechworth, who recorded a history of “right side sacrum pain worse on lifting”. 

40.     On 26 November 1976, the applicant was readmitted to Wangaratta Hospital under the care of Mr Stanistreet where a history was recorded of back pain over the previous 12 months.  Mr Stanistreet was aware that the applicant had suffered penetrating shrapnel wounds to his sacrum and at L4 and had previously had extensive treatment.  He noted that an X-ray of November 1976 found that metallic fragments were observed in the abdomen close to L4, and in the applicant’s pelvis.

41.     In March 2001, the applicant wrote to the Defence Personnel Executive of the Department of Defence giving his authority to allow access to his medical history.  He recorded that at discharge he was “still chronically effected by explosive injuries with fracture to the right foot, shrapnel wounds to the abdomen, sacrum, scalp and right humerus” (T32/46).

42.     On 14 February 2003 following a request by the applicant to reconsider the decision made by the Committee of Alternates, the Statement of Reasons completed by the review officer referred to a report of a Dr Miller dated 12 April 2001 who recorded that at the pre-discharge medical examination on 23 December 1969 (T26 – refer earlier) “the only disability noted was shrapnel wounds to right foot giving rise to a 33⅓% incapacity” (T64/124).  The review officer also relied upon a recommendation made by the Director of Entitlements dated 13 December 2001 (T37 – refer earlier).  The respondent was of the view that at the time of discharge “Mr Sinclair’s only disability that could have been the ground for invalidity retirement was his shrapnel wounds to his right foot.  Whilst other conditions which had recently been treated may have been present, the balance of the medical evidence and advice was that they were not at that time sufficient to have justified invalidity retirement” (T64/126).  The Authority also found that the description of injury namely “shrapnel wounds right foot” to be a more appropriate description than “compound fracture right foot” as was the diagnosis made at the RGH.  It was again noted that the respondent was of the view that the only impairment present at the time of discharge was the “right foot condition”.  The balance of the Reasons for Decision concerned the applicant’s capacity to undertake civil employment as a store person and as a security officer and to this extent the respondent noted the opinions expressed by Mr Jeffrey Mander, a medico-legal orthopaedic surgeon who examined at the request of the respondent on 19 December 2002.  The review officer later found that the applicant’s back injuries were not “causally connected with the member’s retirement impairment” because there did not exist “a causal relationship between the one impairment and the other” (T64/132).  This was despite an opinion expressed by Mr Mander in his opinion of 19 December 2002 that “one must include the back as a causally connected impairment” (T64/133).  The review officer concluded this part of the decision by a finding:

In the absence of a causal link between the foot condition and the back condition, the Authority considered that the only connection between the two conditions was that they had been caused by the same mine explosion.  The Authority had already observed that if the most that could be said is that there is an association between the retirement impairment and another impairment, the other impairment is not “causally connected” with the retirement impairment.  A link or an association between the two conditions is not enough” (T64/134).

43.     The Authority eventually decided to vary the decision made by the Committee of Alternates.  It concluded that the relevant kinds of civil employment were store person and security officer and that shrapnel wounds of the right foot constituted the applicant’s prescribed impairment.  It confirmed the decision made by the Committee of Alternates to classify Mr Sinclair at 30 per cent Class B with effect from 15 January 1970 but varied the decision to assess him at 20 per cent as Class C with effect from 14 July 1970 setting that part of the decision aside and determining that from 16 July 2002 his percentage degree of incapacity was 40 per cent thereby giving an entitlement to Class B.  In effect the varied decision gave Mr Sinclair an entitlement to Class B pension from the date of his retirement being 16 January 1970.  It is that decision, and the reasons giving rise to that decision, that are the subject of this review.

classification/degree of impairment and work capacity

44.     A number of assessments of incapacity were made by treating doctors in 1968 and 1969 (refer earlier).  The applicant was then having extensive treatment, mainly as an inpatient at RGH.  After he was discharged, the first document that I could locate describing the extent of the applicant’s incapacity is found at A/12 (January 1970) where the impairment is recorded as 80 per cent with respect to the right foot and 20 per cent for the remaining injuries.  The examining doctor records that the applicant was intending to attempt light work.  On 13 May 1970 upon review, the Repatriation Medical Officer (“RMO”) recorded the applicant’s right ankle was painful, that he was unable to complete a full day’s work and his work was then noted as necessitating standing and lifting “all day” (A/16).  The medical officer recorded that the applicant then was able to undertake light sedentary work and was able to complete a “full week’s work” was able to “do a full day’s work”.  Despite those opinions, the examining officer also recorded that the accepted disabilities were the “sole reason for his inability to work or for his restricted capacity for work” (A/17(a)).

45.     On 17 December 1970 the applicant was examined by Dr “V E Dunlop”, a person well known in repatriation medicine.  Dr Dunlop recorded the applicant having had a history of shrapnel wounds to his abdomen, sacrum, scalp and right humerus together with explosive injuries and fracture of his right foot.  He obtained a history of the applicant having sacral pain which seemed to “grind on the base of the spine” (A/4).

46.     On 10 June 1971 the applicant was again examined by a RMO who continued to find an impairment of 100 per cent being 80 per cent with respect to the foot and 20 per cent for the remaining injuries.  The history recorded was of the applicant being unable to work on a regular basis because prolonged standing increased pain in the right foot and ankle.  It was noted the applicant was frequently taking time off, pieces of bone were being discharged from his foot and he was consuming painkillers and was suffering swelling of the ankle.  It was noted that the applicant was wearing special shoes and was using elastic bandages.  His occupation was recorded as storeman (A/23).  An opinion then expressed was the degree of impairment “couldn’t be reduced” and the consultant orthopaedic specialist who examined the applicant recommended that there be no change in the assessment of impairment (A/25).

47.     On 18 May 1972 the applicant was then again assessed by an RMO who recorded that the shrapnel wounds, the abdomen, sacrum, scalp and right elbow were “less severe than previously”.  However, it was found that the fractured right foot revealed gross scarring, the applicant being unable to walk distances and pain was produced by standing.  The assessment of 80/20 per cent as previously recorded was again found.  It was noted that the “condition” appeared to be “improving slowly” and it was thought that the applicant might be able to work longer hours in the future.  It was then noted that he was then working approximately 30 hours per week (A/25(a)).  The applicant was then assessed as having a capacity to undertake light sedentary work but not on a full time basis and he then had an inability to complete a “full day’s work” (A/25(b)).

48.     On 28 November 1985 the applicant then claimed an increase in the rate of pension being paid to him by the Department of Veterans’ Affairs (“DVA”).  Mr Sinclair recorded then that he had an “inability to work due to increased pain from accepted disabilities, stress, anxiety and depression” (A/33).  He also reported that he had been “unable to put in a full day’s work for approximately 18 months/2 years if it was not for the fact that I’ve been employed in a family business my employment would have been terminated long ago”.  Whilst acknowledging that he was then depressed, Mr Sinclair also recorded “when in a period of depression I can’t cope with extra activities and the personal relationships involved as well as the physical difficulties” (A/34).

49.     On 11 June 2002 Mr Sinclair was examined by a medical officer appointed by ComSuper (T47/82) where the injuries then found were “shrapnel wounds right foot”.  The examination was to assess the applicant’s ability to undertake work as a storeman or security officer.  The medical officer in a report of 14 June 2002 found that the applicant then had a “moderate” degree of incapacity with respect to both occupations and found the degree of impairment then as between 30 and 39 per cent.  It was found that the applicant then had “reduced mobility and capacity to stand for long periods, (illegible), climb, bend, lift or carry loads”.  On 16 July 2002 the opinion of the medical officer of 14 June 2002 was the subject of consideration by the Committee of Alternates which met on that date (T49/84).

50.     The Committee of Alternates was satisfied that the foot injury only was responsible for the applicant’s medical discharge and it was also satisfied that the remainder of the applicant’s injuries had “largely resolved themselves” (T50/86).

51.     In his request for reconsideration of the decision of the Committee of Alternates, Mr Sinclair advised that his “other injuries” had not “largely resolved” at discharge.  He also asked for consideration of the employment that had been provided by his parents and submitted that the significance of that employment should be reconsidered (T53/91).

52.     In September 2002 an officer of ComSuper requested a medical report from the applicant’s LMO, Dr Sharp, in Beechworth (Dr Sharp had taken over the practice from Dr Collins).  Dr Sharp was advised that the impairment of the applicant was “shrapnel wounds right foot” and the kinds of employment were recorded as being storeman and security officer.  Dr Sharp was asked to comment upon the nature of any restrictions resulting from “the impairment” which the applicant would experience when undertaking employment as a storeman or security officer at 14 January 1970.  Despite being asked to comment upon whether there was any other impairment, Dr Sharp referred to the applicant’s right foot and ankle injuries only in a report of 18 September 2002.  He recorded the extent of disability as “moderate”.  He reported the impairment giving rise to that assessment as between 30 and 60 per cent and concluded that “the disability” had “remained unchanged since recovering from his original injury” (T55/95).

53.     On 2 November 2002 Mr Sinclair wrote to ComSuper advising that the records of Dr Collins had been difficult to locate however he had been able to find a note, written in 1976 that he had been treated for “pelvic abscess” (refer T59/50 and T63/114).  This would appear to be consistent with the X-ray findings of 25 November 1976 (A/29). 

54.     Mr Mander provided a report to ComSuper (T62/107) on 19 December 2002 and recorded:

Although I am required to discuss shrapnel wounds of the right foot, I have to report that he has had a sacral sinus which was still present at the time of leaving the Service.  He developed chronic back pain and has required frequent needs for antibiotics for the shrapnel wounds of his back.  In 1980 he underwent an operation for removal of shrapnel from his sacrum.  Since then he has had fairly constant back pain of a variable nature from 3 up to as much as 8/10 on the quality stakes on sudden movements, on walking long distances and has required fairly constant medication for the discomfort.

55.     At page 4 of his report Mr Mander noted (T62/110):

SUMMARY AND ASSESSMENT:

Mr Sinclair was blown up when he stepped on a mine in Vietnam in 1968 suffering severe multiple shrapnel wounds, fractures of his right arm and femur and a compound wound to his right heel requiring extensive surgery and multiple antibiotics.  He was discharged from the Service in 1970 still with an open wound in his ankle and recurrent shrapnel embedded in his body.  Since then he has required repeated antibiotic therapy for his heel and back.  He has had a piece of shrapnel removed from his sacrum in 1980.

Currently he is still suffering from constant back and right ankle pain.

He is on a TPI and is not able to perform any work of any sort and is unfit for any work.  His situation is currently stable.

56.     Mr Mander also recorded in his report that the applicant was severely restricted “in his abilities to stand and walk not only due to the wound in his foot but also due to the chronic back pain from which he is suffering”.  His assessment of work as a storeman, from the point of view of the right foot and ankle only, equated with an impairment of “moderate” and the impairment with respect to work as a security officer was “large” being “60% to less than 100%”.  Mr Mander made that finding because he was satisfied that work as a security officer would involve standing or walking “fairly constantly throughout the working day”.  He thought the applicant’s impairment was unlikely to improve and may deteriorate.  He also found that the applicant’s back injury should be considered when assessing impairment and it was his opinion that the back injury was “a causally connected impairment”.

57.     In a further report prepared by Mr Mander on 22 July 2003 (Exhibit C), he was apparently asked to review his previous opinion and he reported:

Mr Sinclair reported to me that as a result of the problems with his heel he found it very difficult due to pain to stand for longer than 30 minutes without having to sit down for a rest.  He could walk approximately one block before pain required him to sit down and he was experiencing constant pain in his right ankle on weight bearing.  He described occasional experiences of severe jabs of pain up to 8 or 10 on the Visual Analogue Scale and there was only ease of pain when at rest.  He had considerable difficulty controlling the throttle with his right foot when driving and apart from household duties he had not been gainfully occupied since leaving the service.

Irrespective of any other medical problem it is my opinion that the right foot impairment alone is responsible for Mr Sinclair’s inability to work.  I note that I am required to give an impairment assessment regarding employment as either a storeperson or a security officer.  In the presence of severe discomfort on weight bearing, discomfort increasing after short periods of standing and discomfort on activities such as driving I described in my report on 9 December and I quote:

“With regard to assessment to work as storeman, from the point of view of the wound to the right foot and ankle, I consider that his impairment is moderate – 30 to less than 60%.”

With regard to his employment as a security officer I stated and I quote again:

“As far as employment as a security officer is concerned, I consider that his impairment is large – 60% to less than 100% as he would not be able to perform a job which involves standing or walking fairly constantly throughout the working day.”

However having reviewed the examination of 19 December and considering totally the effect on Mr Sinclair’s capability of working from the point of view of the injury to his right foot as a storeman not only would be be standing for long periods of time he would be frequently having to lift and carry varying weights of materials and could well have to climb ladders or steps.  I consider I should revise my assessment as far as a storeman to 60% to less than 100%.

In answering these questions I have taken into consideration paragraph 18 in your report which states and I quote:

“The Authority has also determined, having regard to the applicant’s trade and professional skills, qualifications and experience that the kinds of employment which a person with those skills might reasonably undertake are store person and security officer.”

I trust that the foregoing meets your requirements regarding this patient.  Please do not hesitate to contact me if I can be of any further assistance.

58.     In the context of the type of civil employment to which Mr Sinclair might reasonably undertake, the Committee of Alternates decided that his right foot injury constituted the physical impairment and diminished his capacity to undertake work as a storeman and as a security officer “each to a small degree” with effect from 14 July 1970 (T50/87).

59.     The Australian Standard Classification of Occupations defines the nature of the duties that would be undertaken by a “store persons” and by “guards and security officers”.  The duties are listed at pages 175 and 176 of T68.

60.     The tasks of a store person are defined as including:

the unloading of vehicles;

opening of packages and removing of contents;

receiving and checking of incoming goods;

stacking of goods in despatch areas;

assisting with stocktaking and cleaning;

use of materials; and

handling equipment

61.     The tasks defined of a security officer include:

Patrols;

Issue of security passes;

Monitoring of alarms;

Preparing reports;

Questioning of suspects and obtaining statements and giving evidence in court;

Patrolling railway yards and railway stations to prevent vandalism;

Checking persons and their hand luggage for concealed weapons and explosives;

Carrying out of crowd control.

submissions

62.     Mr White submitted that the legislation that should apply to this review is the 1948 Act as it existed at the date of the applicant’s discharge on 14 January 1970.  Mr White relied on the decisions of Re Costello and Secretary, Department of Transport (1979) 2 ALD 934 and Commonwealth of Australia and Another v Esber (1991) 101 ALR 35 and Esber v Commonwealth of Australia (1992) 106 ALR 577. It was submitted that the combined effects of s8 and s50 of the Acts Interpretation Act 1901 preserved the applicant’s rights and liabilities prior to the repeal or amendment of applicable legislation.  It was noted that the Defence Force (Retirement and Death Benefits Amendments) Act 1979 contained a transitional provision at s6 by providing that if prior to the commencement of the amending Act a person is deemed to have been classified as Class A, B or C by reason of having been reclassified as Class A, B or C under s53(1) of the principle Act, then the principle Act as amended shall only apply after the date of the amendment as if the person had been reclassified under the amending Act.  By reason of Mr White having submitted that the applicant should have been Class A from the date of his discharge, nothing for practical purposes turns on this issue.

63.     It was submitted that entitlement to benefit under the 1948 Act is dependent upon classification under s51(2) of the percentage of total incapacity of the person in relation to civil employment (refer Re Bos and Defence Forces Retirement and Death Benefits Authority (1977) 20 ALR 663). It was submitted that classification is to occur initially at the date of discharge and not at the date of injury and reclassification is to be assessed at the date of application for reclassification (refer Freeman v Defence Force Retirement and Death Benefits Authority (1985) 5 AAR 156) (“Freeman”).

64.     Mr White noted the decision of the Full Federal Court in Defence Force Retirement and Death Benefits Authority v Heffernan (1978) 21 ALR 709 where the Full Court comprising Brennan, Deane and Fisher JJ found that s53(1) as it previously existed did not preclude consideration of material, facts or events which occurred subsequent to an initial classification. It was noted that by reason of that decision the Minister for Defence in a Second Reading Speech of 1 March 1979 (introducing the amending 1979 Act) intended to prevent recognition of disabilities which occurred subsequent to discharge and which were not connected with service.

65.     It was submitted that the Tribunal, with respect to post 1979 reclassification applications, was required to assess the applicant’s condition at the time of retirement and was not confined to the material that was before the Medical Boards.  Indeed it was submitted that the obligation of the Tribunal was to consider all of the information available at the time of retirement (refer Cox v O’Donnell and Others (1992) 106 ALR 145.

66.     It was submitted that “civil employment” comprehended the ability of a person to engage in employment, together with the ability to earn remuneration.  Again relying on the decision of Bos, Mr White submitted that incapacity in relation to civil employment existed if the opportunity to engage in the employment and to derive benefits from it were restricted by the impairment.  Additionally it was submitted that consideration of incapacity involved inquiry into whether there had been lost opportunities to engage in various kinds of employment and a comparison between lost opportunity and the range of employment opportunities provided the measure for the percentage of incapacity.  Similar considerations applied in the event of reclassification and relevant enquiries are to be made at the date of the application for reclassification.  Further in order to determine whether there were lost opportunities for employment, it is necessary to establish the range of employment opportunities that would have been open to an applicant and to assess the extent of the diminution of those lost opportunities (refer Re X and Defence Force Retirement and Death Benefits Authority (1983) 3 ALN N58.

67.     Reliance was made upon the decision of Dillaway v Defence Force Retirement and Death Benefits Authority (1984) 2 AAR 294 and it was submitted that the legislation intended to make a proper provision with respect to the needs of retiring service personnel. Whilst the percentage system was arbitrary and impossible to apply precisely, those difficulties should not defeat the objective of the legislation. By reference to the decision in Re Thomson and Defence Force Retirement and Death Benefits Authority (1987) 6 AAR 424(“Thomson”) it was submitted that of s53(1A) (if it applies) does not restrict consideration to the type of employment that an applicant had or would be likely to undertake but the kinds of civil employment which a person with his skills, qualifications and experience might reasonably undertake.

68.     In conclusion it was submitted that at the date of discharge the applicant could barely walk and he remains affected by the injuries suffered in 1968, particularly affecting his abdomen, sacrum and right foot.  He has difficulty holding a pen, he has constant back pain, spinal movement was grossly limited, he had an open discharging ankle and foot wound and right ankle pain.  He was restricted in his ability to stand and walk because of back and foot pain and worked only because of the benevolence of his parents who were his employers.  He did not work full time, he was frequently away from work and would not have obtained employment, or if he had, he would not have been able to maintain it were not for his family’s business.  It was noted that the respondent did not challenge the assessments made by Mr Mander with respect to the inability of the applicant to engage in the occupation of storeman or security guard and whilst it was asserted that the applicant was fit for clerical duties, there was no challenge to his inability to hold a pen, to sit or to concentrate.

69.     It was submitted that the applicant had lost his opportunity to work as a commercial pilot and he had no capacity to retain employment elsewhere.  On balance it was submitted that at the date of discharge the applicant should have been classified as Class A and at all times subsequently should be deemed as Class A classification.

70.     Mr Dillon on behalf of the respondent submitted that the legislation applying to this review was the 1948 Act as subsequently amended.  He submitted that s51 of the 1948 Act cited that a member’s entitlement shall be determined by the degree of incapacity for civil employment classified under Class A, B or C with its corresponding degrees of incapacity.  Additionally it was submitted that s53(1A) and (1B) (having subsequently been inserted into the 1948 Act by subsequent amendments) prescribe the basis upon which a member’s classification is to be found.  Additionally s53(2) requires specification of a date from which reclassification (if at all) shall have effect. 

71.     Mr Dillon submitted that the degree of the applicant’s incapacity for civil employment was to be assessed (in the present application) at 14 January 1970, 14 July 1970 and 16 July 2003.  It was acknowledged that s51 does not provide a specific basis upon which to assess the degree of incapacity however the amended provision of s53(1A) sets out a number of basis upon which incapacity is to be determined.  It was submitted that only the matters found at s53(1A) may be considered and issues such as the state of a labour market, a person’s age or the shortage of skilled persons were not factors which could be considered.  In fact it was submitted that the appropriate focus should be on “what a hypothetical person with the relevant skills, qualifications and experience might reasonably undertake” (refer Defence Force Retirement and Death Benefits Authority v House (1989) 91 ALR 286 (“House”).

72.     Additionally it was submitted that the 1948 Act does not provide a mechanism for calculating the percentage or degree of impairment with respect to civil employment and it was acknowledged that this was a difficult issue to be resolved under s51.  Mr Dillon drew attention to the decision of Davies J in Thomson at 433 where, although the focus was upon s30 and 34 of the 1973 Act, the discussion was equally applicable to s51 and 53 of the 1948 Act. It was submitted that His Honour had decided that impairment might not reduce the range of employment opportunities, but may reduce the opportunity to work on a full time basis. The assessment of percentage impairment was not to be regarded as a mathematical calculation but rather a “valued judgment” taking into account only the matters set out at s53(1A) by reason of the prescribed physical or mental impairments.

73.     It was acknowledged that the present application was unusual to the extent that the retirement from defence service occurred under the operation of the 1948 Act where the scheme of benefits then existing ceased at 1 October 1972.  Apparently it was not envisaged that other members would subsequently have been retired under s51 of the 1948 Act and subsequent amendments were not made retrospective.  It was acknowledged that under s51 of the 1948 Act, only the percentage of total incapacity with respect to civil employment need be considered and there was no requirement then to examine whether the incapacity was the reason for the member’s retirement.  However it was submitted that s53 of the 1948 Act restricted the assessment of the capacity of a member to undertake civil employment to the injuries or illnesses giving rise to the physical or mental impairment causing the incapacity which caused the retirement.  It followed therefore that the intention of Parliament under s51 would not have been to permit classification of impairments which were not related to retirement.  The policy, which may be found in the Second Reading Speech introducing the 1979 amendments, should be followed when applying s51.

74.     In the examination of relevant case law, Mr Dillon submitted that the respondent – and therefore the Tribunal upon review – must exercise its own discretion in assessing the degree of incapacity and not substitute for that function the decision that was made when permitting invalidity retirement.  Nonetheless the Authority – and therefore the Tribunal upon review – may examine “the true cause of the incapacity” (refer paragraph 24 of written submissions) which is to be regarded as a question of fact.  It was acknowledged that “there may well be a necessity to redescribe the impairment in light of the later evidence as this may have a significant influence on the member’s classification”.  Whilst that concession was made upon the decision of Whiteford v Commissioner For Superannuation (1987) 6 AAR 70, Mr Dillon also acknowledged in his oral submissions that it was open to the Tribunal to find that a combination of the applicant’s foot and back injury and any of the other injuries constituted impairments causing retirement incapacity. It therefore followed that it was permissible to “redefine” the retirement impairment (refer Transcript pages 16 and 17).  Upon this issue Mr Dillon emphasised that any “redefinition” must have regard only to the impairment which caused the incapacity to perform his or her duties in service and which subsequently gave rise to invalidity.  It was not permissible to focus upon injuries which have subsequently occurred or emerged (refer Re Greer and Defence Force Retirement and Death Benefits Authority [2003] AATA 6). In that application the Tribunal found that a member was not suffering from hemochromatosis at retirement and that condition therefore was not a retirement impairment. However in an earlier decision of Re Greer and Defence Force Retirement and Death Benefits Authority (2001) 63 ALD 282 it was decided that there was an obligation on the part of the Authority – and therefore upon the Tribunal – to determine the invalidity or physical or mental impairment, which caused a member to be retired.

75.     In the event that it was determined that s53(1B) had relevance to these proceedings, Mr Dillon referred to the expression “causally connected”.  He drew attention to the expression “connected with” as found within a number of decisions under review of the Commissioner of Superannuation and submitted that the word “causally” required the connection to be more than “correlation”.  By reference to a Tribunal decision of Re Levin and Defence Force Retirement and Death Benefits Authority (1997) 48 ALD 664 the causal connection between impairments must be one having the effect or consequence of the other.

76.     Upon the issue of incapacity, whilst it was again submitted that only the criteria under s53(1A) can be considered, there was no requirement under the legislation to consider earning capacity because the measure of incapacity was the degree by which a person’s ability to undertake civil employment had been diminished.  However it was acknowledged that there could be circumstances where a member could be working with difficulty or under stress where an appropriate examination of those circumstances would conclude that there was no “real capacity” to undertake the work.  It was suggested on the basis of this type of scenario and by reference to the Full Federal Court decision of Freeman that the “kindness of an employer or of fellow employees or both or because of his ability at least for the time being (may) mask his disabling condition”.

conclusion and reasons for decision

77.     This is a very unfortunate application.  Having heard the evidence of the applicant and observing him at the hearing, having also read the extensive documentation lodged and having had the benefit also of the submissions of the representatives, I am satisfied that the decision under review in these proceedings should be set aside.

78.     I would acknowledge at the outset that this is an unusual application to the extent that the applicant’s retirement occurred during the period of a regime of member benefits which no longer exists.  I would also acknowledge that there has been significant alterations to the legislation subsequently.  Nonetheless there should be a beneficial approach to the interpretation of the legislation which create the rights of former members of the Defence Services who have suffered injury and consequent impairment and incapacity.

79.     I would agree with the submissions made by both Counsel that the legislation existing in 1970, when invalidity retirement was deemed to have occurred by force of the legislation then existing, was more liberal or less restrictive than the amendments subsequently made to the Act.

80. Section 8 of the Acts Interpretation Act 1901 is in the following terms:

8.        Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not: 

(a)revive anything not in force or existing at the time at which the repeal takes effect; or 

(b)affect the previous operation of any Act so repealed, or anything duly done or suffered under any Act so repealed; or 

(c)affect any right privilege obligation or liability acquired accrued or incurred under any Act so repealed; or 

(d)affect any penalty forfeiture or punishment incurred in respect of any offence committed against any Act so repealed; or 

(e)affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid; 

and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed.

81.     I can see nothing from the 1973 Act or the 1979 amendments which is intended to have retrospective effect.  That is to say, I cannot determine that there is any “contrary intention” by the subsequent legislation to have the subsequent amendments affect the applicant’s rights at 1970.  The applicant did, in my view, have a “right”, a “privilege” and the entitlement to “liability” which was “acquired, accrued or incurred” under the 1948 Act as it existed in 1970.

82.     Esber v Commonwealth of Australia and Another (1992) 174 CLR 430 involved an examination of the rights, privileges and liabilities acquired, accrued or incurred to an injured worker under the Compensation (Commonwealth Government Employees’) Act 1971 when at the time of hearing before the AAT that legislation had been repealed and replaced by the Safety, Rehabilitation and Compensation Act 1988.

83.     In Esber the majority of the High Court decided (refer pages 440 to 441):

Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely "a power to take advantage of an enactment". Nor was it a mere matter of procedure; it was a substantive right. Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, "although that right might fairly be called inchoate or contingent". This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s 8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act.

84.     The rights available to Mr Sinclair, existing at all times prior to the 1973 Act, although not exercised, remain open to him and are not lost or taken from him by subsequent legislation changes.

85.     Section 51 is largely unaffected by amendments subsequent to 1970 and provides that a determination of the percentage of total incapacity of a person in relation to civil employment should be classified according to the percentage of incapacity as determined by three different classes.  Those classes are:

60 per cent or over	Class A
30 per cent or over but less than 60 per cent	Class B
Less than 30 per cent	Class C

86.     Initially – and bearing in mind that the primary determination was made in July 2002, some 32 years after deemed invalidity retirement, Mr Sinclair was classified by combination of Class B and C at differing times.  The reconsidered decision made on 14 February 2003 varied the primary decision in effect to grant invalidity benefit at Class B from 1970 to the present.

87.     The T-documents extensively record, in some detail, the extent of the applicant’s injuries from the explosion in Vietnam and the extent of his treatment.  The injuries are recorded with some precision and their existence could not reasonably have been in dispute or in doubt.  A feature of this review has been an examination – and I would acknowledge with the benefit of hindsight – of the manner in which the applicant’s injuries have been assessed over the years for the purposes of assessing impairment, I think it would be correct to say that there has been a failure over the years to comprehend all of the applicant’s injuries for the purposes of assessing his impairment.

88.     In the year following the explosion the applicant was found by a medical officer ‑ who assessed at the request of the Repatriation Department ‑ as then having an incapacity of 100 per cent by a combination of shrapnel wounds to the abdomen, sacrum, scalp and right humerus and by “explosion injuries with fractures of his right foot”.  There was some evidence that that opinion was later overruled but on 6 January 1970 – being approximately two weeks prior to the actual “administrative discharge”, another repatriation doctor assessed the applicant again as having a 100 per cent incapacity by a combination of all of the above injuries.  I would readily acknowledge that the Repatriation Department doctors may have been assessing under particular legislation then existing with respect to the rights of injured veterans.  I would also acknowledge that doctors in the assessment of impairment, or incapacity, may differ in the manner in which they would exercise their discretions.  No criticism is intended by that comment.  Nonetheless it is difficult to reconcile how a repatriation doctor could assess 100 per cent incapacity on 6 January 1970 for a combination of all of the injuries, yet, another doctor, on 23 December 1969 found that there was a degree of incapacity of 33⅓ per cent for the “discovered” disability of “shrapnel wounds R foot” (T26/39).  The differing exercise of discretion may of course be highlighted by the repatriation doctor (A/12) finding incapacity for the right foot at 80 per cent in January 1970 yet another doctor finding an incapacity for the right foot of 33⅓ per cent in the previous month.  What is not apparent is why the doctor of December 1969 – and most of the doctors subsequently – assessed incapacity only with respect to the right foot.  This is despite the documents containing extensive and detailed information which respect to all of the other injuries.  There are variations in the comments recorded as to the incapacitating effects of the other injuries and the affect of those injuries upon the applicant’s ability to work.  Nonetheless the persisting assessment of the applicant’s incapacity by reference to right foot only remains unclear and I think, unfair.

89.     It would also appear that the opinions expressed by those doctors that concentrated upon the right foot only considered impairment and incapacity by a scheme within the Defence Forces known as “PULHEEM”.  A number of doctors have referred to this methodology as being a scheme containing criteria giving various ratings by number which when accumulated creates a score which will apparently permit a finding of ability to work.

90.     Nonetheless, whilst again acknowledging different methods of assessment of incapacity between the Defence Forces and the Repatriation Department, I am satisfied on balance that had there been a proper assessment and appreciation of the totality of the applicant’s injuries, there would have been a finding at a much earlier point of time of the true extent of the applicant’s impairment by reason of the totality of those injuries.

91.     I would acknowledge also that there are some reports in the T-documents that may not have been in the possession of the respondent at relevant times.  For example, the report of December 1970 from Sir Edward Dunlop detailing the applicant’s back injuries was addressed to the War Pensions Assessment Appeal Tribunal.  Additionally the reports of Mr Stanistreet in 1976 and 1980 detailing the back injury, the presence of shrapnel at the applicant’s pelvis and sacrum and he surgical removal of shrapnel and treatment of abscess associated with the shrapnel were addressed to the Department of Veterans’ Affairs.  Nonetheless those reports show that the applicant did have a number of injuries other than his right foot alone which did require ongoing treatment over a long period of time for which I am not satisfied proper regard has been given.

92.     I am therefore satisfied on balance that the invalidity retirement of Mr Sinclair should not have been deemed as arising out of his foot injury only but should have been deemed to have been a combination of all of his injuries in service.  In the context of reclassification I am satisfied also that a combination of all of those injuries should have been brought into account in assessing the degree of impairment and incapacity.

93.     In the measure of the percentage of incapacity in relation to civil employment, regard should be had to the extent and severity of the applicant’s injuries and the impact upon him.

94.     Mr Sinclair was 20 years of age when he suffered these injuries in Vietnam.  He had left school at a relatively early age and did not have any trade skills or qualifications.  He worked in his father’s supermarket and by correspondence and some practical training was seeking to obtain a commercial pilot’s licence.  He had obtained a restricted licence at the time he was called up for service, but by reason of service, and the subsequent injuries, he was not able to resume that study indeed there was evidence that the injuries he did suffer in service would have prohibited him from succeeding in a medical examination to qualify as a pilot.

95.     After more than 12 months of intensive treatment, Mr Sinclair resumed working at his parents’ supermarket but that concept should be not understood as a resumption of pre-enlistment duties.  Mr Sinclair did return to his parents’ supermarket and was paid a salary but on any reasonable and fair minded interpretation of the relationship then existing between him as an employee and his parents as an employer, the situation could only be described as one of benevolence and a recognition that it was inconceivable that Mr Sinclair could have ever attracted another employer.  He then had gross disabling injuries which effectively prevented him from engaging in any work that required walking, standing or climbing or any work that would have exposed him to bending or lifting weights.  Certainly he did attempt work of that type at his parents’ supermarket but a noticeable feature of the employment was the latitude given to him to attend the workplace only when he was able and leave it (more often than not) when he could no longer reasonably remain.  There was evidence of lengthy periods of absence from the workplace and frequently having to leave to return home (which was nearby) to rest.  There was evidence of the applicant attempting to perform some paperwork and having his right foot inserted into a bucket of warm salty water in an attempt to heal the infections and abscess in his right foot.  I cannot imagine that any other employer would have permitted Mr Sinclair to remain as an employee having regard to his pain and discomfort and to his need to absent himself from the workplace on such a frequent basis.

96.     The applicant did earn a salary as if he was a full time employee and again that may be explained by the relationship between him and his “employer”.  Nonetheless the circumstances of Mr Sinclair’s employment with his parents appears to mirror the hypothetical situation discussed by Sheppard J in Freeman at 164 where His Honour discussed that actual earning capacity may be a relevant factor when deciding the percentage of incapacity but concluded:

. . . there may be cases where, although a member is employed, he is doing his work with such difficulty or under such stressful circumstances that it is plain that he has not any real capacity for it. The fact that he is in employment may be due to the kindness of an employer or of fellow employees or both, or because of his ability, at least for the time being, to mask his disabling condition.

97.     In Re X a member worked only by reason of concealing his disabilities.  It was held that assessment of the percentage of incapacity should not have regard to the injuries being concealed, but rather there should be an assessment as if those injuries had not been concealed.  Accordingly the Tribunal reclassified the member from Class B to Class A.

98.     At the end of 1985, Mr Sinclair ceased all employment.  That coincided with the closure of his parents’ supermarket.  It is true that at that time, Mr Sinclair did qualify for special rate pension under the Veterans’ Entitlements Act.  He qualified for that benefit by other injuries being considered and upon a qualification different to the qualification required under the legislation in issue in these proceedings.  Nonetheless from that date, assessment of employment and capacity to undertake employment would expose the applicant to the hypothetical situation as discussed by the Full Federal Court of Davies, Burchett and Hill JJ, in House at 289 (although it involved an examination of the amending sub-section (1A) of s53). The question asked was what a hypothetical person might do with relevant skills, qualifications and experience. In 1985, Mr Sinclair was 47 years of age and did not have any trade skills or qualifications. He was not qualified or fit to return to his intended employment as a commercial pilot and would not have been permitted to resume his studies because he would not have passed a medical examination. His former “employment” with his parents in their supermarket would hardly have qualified him for potential employment elsewhere.  I think it is inconceivable with the injuries that he suffered that he would have attracted an employer elsewhere.

99.     I think that the breadth of the applicant’s disabilities realistically precluded him from all employment.  Unlike the applicant in Thomson, other employment was either not open to Mr Sinclair nor was he hypothetically able to work elsewhere.  In Re Thomson the applicant was retired from the RAAF by reason of a left hand injury however he subsequently worked and it was acknowledged that although the range of work to which he was fit to undertake had been reduced by 50 per cent.  He was not precluded from other manual work, he was in employment at the time of review and was earning an income.

100.   The types of civil employment suggested by the respondent initially as being suitable for Mr Sinclair were as a storeman and as a security guard.  The duties required in those jobs would have clearly been beyond the capacity of Mr Sinclair and no real submission was made by the respondent at the hearing or subsequently that the applicant was suited for that work.  It was work clearly certified by Mr Mander as being beyond the capacity of the applicant.  There was a suggestion made shortly prior to the commencement of the hearing that the applicant would be fit to engage in clerical type work but I am of the view that that would have also been beyond the applicant’s capacity.  I would acknowledge that he has subsequent to the closure of the supermarket in 1985 undertaken a course in computer studies at the Wodonga TAFE and is apparently computer literate having regard to some of the correspondence that he has written.  I am satisfied however, on the evidence heard, that remaining seated causes increased back pain and the presence of pain from both his back and his foot causes an impaired concentration.  I would think that Mr Sinclair could work for short periods of time in a seated position performing clerical type duties with or without the use of a computer but I think the frequency of those occasions when he could work and – perhaps more to the point – the frequency of his absences from being able to perform that work – would be such that a finding overwhelmingly of incapacity should be made.

101.   A finding of qualification as Class A does not require a finding of total invalidity.  It requires a finding only of incapacity of 60 per cent or over.  I have little doubt that from the date of the applicant’s discharge from service he has been incapacitated by 60 per cent or over (Mr Mander assessed incapacity as between 60-100% from the right foot injury only).  It follows that from the date of his retirement from service the applicant should have been assessed at Class A and I am satisfied that that degree of incapacity continues.  For those reasons I am satisfied that the decision under review should be set aside.

102.   I would say in conclusion and by way of alternative, even if I were to find (which I do not) that s53(1A) applies, that all of the criteria found therein would have also permitted a finding of the applicant being of Class A since his retirement from service.  The applicant effectively does not have any vocational trade and professional skills, qualifications and experience that would equip him for civil employment.  His limited past work skills would not permit him being attractive to another employer.  The work that he previously did undertake, in my view, could not reasonably “be undertaken elsewhere” having regard to the need to have frequent periods of rest and absence from the workplace.  For the purposes of this analysis I would have found that the prescribed impairments were all of the injuries suffered in Vietnam which have been the subject of subsequent treatment.  I would have found that those physical impairments, being “prescribed” within the meaning of sub-section (1B), had diminished his capacity for civil employment to the extent that a Class A finding from the date of retirement would have been appropriate.

103.   All for the reasons above I am satisfied that the decision under review should be set aside and in substitution it is decided:

(i)The applicant has no capacity for civil employment; and

(ii)The retirement impairment was constituted by injuries to the applicant’s right foot, abdomen, sacrum, scalp, right humerus and back; and

(iii)To classify Mr Sinclair as 60% or more (Class A) incapacity from 15 January 1970.

I certify that the 103 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior Member

Signed:         Alice Beattie
  Associate

Dates of Hearing  26 May and 14 July 2004
Date of Decision  15 April 2005
Counsel for the Applicant         Mr E White
Solicitor for the Applicant          KCI Lawyers
Counsel for the Respondent     Mr A Dillon
Solicitor for the Respondent     Australian Government Solicitor