SKVR and Repatriation Commission (Veterans' entitlements)
[2017] AATA 1158
•27 July 2017
SKVR and Repatriation Commission (Veterans' entitlements) [2017] AATA 1158 (27 July 2017)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2016/2409
VETERANS' APPEALS DIVISION )Re: SKVR
Applicant
And: Repatriation Commission
RespondentCORRIGENDUM
TRIBUNAL: Andrew Nikolic, Senior Member
DATE: 8 August 2017
PLACE: Melbourne
The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:
- The last sentence on the formal decision reading The application is remitted to the Respondent for the assessment of pension is to be removed.
...................................................................
Senior Member
Division:VETERANS' APPEALS DIVISION
File Number(s): 2016/2409
Re:SKVR
APPLICANT
Repatriation CommissionAnd
RESPONDENT
DECISION
Tribunal:Senior Member A. Nikolic AM CSC
Date:27 July 2017
Place:Melbourne
The decision under review is set aside and in substitution it is decided that the Applicant is entitled to pension paid at the Special Rate. The date of effect is 22 May 2014. The application is remitted to the Respondent for the assessment of pension.
........................................................................
Senior Member
CATCHWORDS
VETERANS’ ENTITLEMENTS — special rate pension – disabling condition PTSD – disabling condition major depressive disorder – disabling condition alcohol abuse – ceased work aged 39 – whether by reason of incapacity resulting from war-caused disabilities – whether veteran incapable of undertaking remunerative work for more than 8 hours per week – whether non-war caused preventative factors – “alone test” – decision under review set aside
LEGISLATION
Administrative Appeals Tribunal Act 1975
Veterans' Entitlements Act 1986
Safety, Rehabilitation and Compensation Act 1988
Cases
Chambers v Repatriation Commission (1995) FCA 1144; (1995) 55 FCR 9
Repatriation Commission v Richmond (2014) 226 FCR 21
Smith v Repatriation Commission (2014) FCAFC 53
Flentjar v Repatriation Commission (1997) 48 ALD 1
Repatriation Commission v Smith (1987) FCR 327
Re Repatriation Commission and Delkou (No 2) (1986) 9 ALD 358
Re Easton and Repatriation Commission (1987) 12 ALD 777
Re Repatriation Commission and Falkner (1987) 12 ALD 87
McDonald and Director-General of Social Security (1984) 1 FCR 354SECONDARY MATERIALS
Robin Creyke and Peter Sutherland, Veterans’ Entitlements and Military Compensation Law (Federation Press, 2016)
Guide to the Assessment of the Degree of Permanent Impairment (Edition 2.1)
REASONS FOR DECISION
Senior Member A. Nikolic AM CSC
27 July 2017
Pursuant to section 35 of the Administrative Appeals Tribunal Act 1975, both parties have consented to a pseudonym being used for the Applicant in these proceedings. He is hereafter referred to as ‘SKVR’.
SKVR made an application for review with the Administrative Appeals Tribunal in relation to a decision to deny him pension at the Special Rate.
For the reasons that follow, I set aside the decision under review and decide in substitution that SKVR is entitled to pension at the Special Rate.
Background to the Application
SKVR is 42 years of age and served in the Australian Regular Army from 11 September 1995 until 31 July 2000, encompassing operational service in East Timor. On 12 June 2014 he applied for an increase in his disability pension under section 15 of the Veterans’ Entitlements Act 1986 (the Act). He contended that his previously-accepted disabilities had worsened and concurrently claimed two new disabilities: Gastro Oesophageal Reflux Disease (GORD) and Irritable Bowel Syndrome (IBS).
On 21 August 2014 a delegate of the Repatriation Commission accepted SKVR’s claim for GORD, rejected his claim for IBS, and increased his disability pension from 50 per cent to 60 per cent of the General Rate. Dissatisfied with that decision, SKVR requested a review by the Veterans’ Review Board (VRB), contending that his impairment deserved a pension increase to 80 per cent of the General Rate, which would then enable consideration of a pension ‘above the general rate.’ He also requested the VRB review the rejection of his claim for IBS.
SKVR’s application was considered by the VRB on 16 November 2015, which affirmed the rejection of his claim for IBS. Consideration of his request for a pension increase was adjourned under section 151(1)(b) of the Act, because SKVR was not available to give evidence. His application was subsequently heard on 30 March 2016 by a differently constituted VRB, which decided to increase his pension to 80 per cent of the General Rate. But the VRB determined SKVR was not eligible for either the Intermediate Rate or Special Rate of pension, because he did not satisfy the ‘alone test’.
LEGISLATIVE FRAMEWORK
Special Rate
The relevant legislation is contained in section 24 of the Act, which states:
24 Special rate of pension
(1) This section applies to a veteran if:
(aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab) the veteran had not yet turned 65 when the claim or application was made; and
(a) either:
(i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b) the veteran is totally and permanently incapacitated, that is to say, the veteran’s incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and
(d) section 25 does not apply to the veteran.
(2) For the purpose of paragraph (1)(c):
(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reason of that incapacity if:
(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or
(ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; and
(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.It is not disputed that SKVR’s claim satisfies the requirements of sections 24(1)(aa) and 24(1)(aab) of the Act, because he made a valid application for a pension increase under section 15 of the Act and had not yet turned 65 when making his claim. Because the VRB has determined SKVR’s degree of service-related incapacity is 80 per cent, he also satisfies section 24(1)(a) of the Act.
Sections 24(1)(b) and 24(1)(c) of the Act are the two key provisions in contention between the parties in this matter:
(a)Section 24(1)(b). For this section to be satisfied, SKVR must be totally and permanently incapacitated, meaning that his war-caused incapacity, of itself alone, renders him incapable of undertaking remunerative work for periods aggregating more than eight hours per week. This section is amplified by section 28 of the Act, which provides that the only factors a decision-maker shall have regard to in determining the kind of remunerative work SKVR could reasonably undertake, is:
(a) the vocational, trade and professional skills, qualifications and experience of the veteran;
(b) the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and
(c) the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).
(b)Section 24(1)(c). This section of the Act is often referred to as the ‘alone test.’ Pursuant to section 24(2) of the Act, SKVR would not satisfy the alone test if he ceased to engage in remunerative work for reasons other than his war-caused incapacity, or was incapacitated or prevented from engaging in remunerative work for some other reason.
Intermediate Rate
Eligibility for a pension payable at the Intermediate Rate is provided for at section 23 of the Act, which has the same eligibility criteria as section 24, except that the veteran has a capacity for more than eight but no more than 20 hours work per week. As required by section 23(1)(d), however, it is necessary to consider eligibility for the Special Rate first, before turning to the Intermediate Rate. In effect, Section 23 only applies if section 24 or 25 does not apply to the veteran.
To qualify for the Intermediate Rate, a veteran must be rendered incapable of undertaking remunerative work other than on a part-time or intermittent basis. If the veteran is capable of undertaking work of a particular kind for 50 per cent of the time ordinarily worked by persons engaged in work of that kind on a full-time basis, or for 20 hours or more per week, they do not qualify.
Temporary Payment at Special Rate
The special rate of pension can be paid on a temporary basis under section 25 of the Act if the veteran is incapacitated to such an extent that they can meet all of the tests within section 24 except that instead of requiring that the incapacity be permanent (section 24(1)(b)), it is only temporary. Section 25 of the Act provides that:
Temporary payment at special rate
(1)Where the Commission is satisfied that:
(a) a veteran is temporarily incapacitated from war-caused injury or war-caused disease, or both; and
(b) if the veteran were so incapacitated permanently, the veteran would be a veteran to whom section 24 applies;
the Commission shall determine the period during which, in its opinion, that incapacity is likely to continue and this section applies to the veteran in respect of that period.
(2) Where this section applies to a veteran in respect of a period, the rate at which pension is payable to the veteran in respect of that period is the rate that would have been applicable under subsection 24(4), (5), (5A) or (6) if section 24 applied to the veteran.
(3) The Commission may, under this section:
(a)determine a period that commenced before the date on which the determination is made; and
(b)determine a period in respect of a veteran that commenced or commences upon the expiration of a period previously determined by the Commission under subsection (1) in respect of the veteran.
Standard of proof and assessment period
In accordance with section 19(9) of the Act, the assessment period for SKVR’s eligibility commenced on 12 June 2014, which is the date he lodged his application for an increase in pension, and continues until determination of this matter by the Tribunal. Under section 120(4) of the Act, the standard of proof for assessment or reassessment of the rate of pensions is ‘reasonable satisfaction,’ which is also referred to as the ‘balance of probabilities.’ To be reasonably satisfied, a decision-maker must consider that a piece of evidence is more likely than not to be true. Beaumont J (Northrop and Spender JJ concurring), explained in Repatriation Commission v Smith (1987) FCR 327 (at 335) that the Tribunal should ask itself:
‘...whether on the facts of the case, it was persuaded on the civil standard. There is, in this connection, a distinction of substance to be drawn between the probabilities on the one hand and mere possibilities, even if they are real as distinct from fanciful, on the other…’
KEY CONTENTIONS AND ISSUES BEFORE THE TRIBUNAL
SKVR contends that he satisfies the criteria in section 24 of the Act and, accordingly, his pension should be increased to the Special Rate. He submits that:
(a)he has not undertaken remunerative work since 21 May 2014, which he attributes solely to his accepted war-caused conditions;
(b)his non-accepted medical conditions have not contributed in any way to his cessation of remunerative work; and
(c)there is a consensus of opinion from consultant psychiatrists that he has no capacity to undertake remunerative work in the future as a consequence of chronic symptoms from his accepted conditions.
The Respondent submits that SKVR is not qualified for either the Intermediate or Special Rates of pension, because he does not satisfy the alone test under section 24(1)(c) of the Act. Although the VRB was satisfied that SKVR satisfied section 24(1)(b) of the Act relating to total and permanent incapacity, in this hearing, the Respondent contends he does not satisfy this requirement. The Respondent submits that at 42 years of age, the evidence does not establish ‘that [SKVR] is permanently incapacitated for work.’
The issues for determination, therefore, are whether SKVR’s war-caused incapacity of itself alone:
(a) renders him incapable of undertaking remunerative work for the periods necessary to qualify for either the Special or Intermediate rates of pension; and
(b) prevents him from continuing to undertake remunerative work that he was undertaking and whether he is thereby suffering a loss of income that he would otherwise not be suffering.
SKVR’S ACCEPTED AND NON-ACCEPTED DISABILITIES
SKVR’s pension is paid for four accepted disabilities under the Act: Chronic Post Traumatic Stress Disorder; Major Depressive Disorder; Alcohol Abuse - Early Remission; and GORD. He has one disability accepted under the Safety, Rehabilitation and Compensation Act 1988, namely: Recurrent Inversion Injuries to Right Ankle Resulting in Evans Repair. He also suffers from non-accepted disabilities, namely: Sensorineural Hearing Loss, Tinnitus, IBS, and Left Knee Patella Tendinopathy.
SKVR’S POST-ARMY WORK HISTORY
After his discharge from the Army in 2000, SKVR undertook a 12-month working holiday in Europe, briefly worked for his father’s painting business and other short-term jobs (such as a security guard), then worked in a number of supervisory and managerial roles. His post-Army work history is summarised below:
DATES ROLE EMPLOYER 2000-01 Facilities and Security Coordinator Prudential Insurance (UK) 2003-04 Security Supervisor Protocol Security 2004-09 Manager Coles Supermarkets 2009-11 Zone Manager Coles City Cleaning Services 2011-12 Compliance Manager Swan Hill Property Services 2012-2014 Integrated Services Manager Deakin University Glad Group
The Applicant’s Statement of Facts and Contentions dated 25 January 2017 describes SKVR’s increasing responsibility at Coles over seven years, where he became the Zone Cleaning and Maintenance Manager for New South Wales, South Australia and the Northern Territory. This included supervision of maintenance and cleaning staff at approximately 116 stores. SKVR contends that although the official records show he left Coles in or about October 2011 on the grounds of redundancy, the actual reason related to serious misconduct for assaulting his manager.
SKVR submits that after leaving Coles, he found new employment with Swan Hill Property Services approximately a month later. In that role he again oversaw quality control of maintenance and cleaning services. He states this was a six-month fixed term contract that was not renewed, and that he had time off work during this period due to his PTSD.
Following treatment as an inpatient in the psychiatric ward at the Austin and Repatriation Medical Centre, SKVR was employed in October 2012 as Integrated Services Manager for Deakin University. In that role he managed the University’s cleaning contract at five campuses. He submits that he resigned from this role on 21 May 2014 on the advice of his treating psychiatrists, following an extended psychiatric admission. He has not worked since.
It is not contested between the parties that SKVR’s post-Army work life has largely centred on facilities management and the management of cleaning contracts in several large companies, or that these roles have been largely sedentary and office-based.
EVIDENCE
This matter was heard in Melbourne on 8 June 2017. I had previously received the Applicant’s Statement of Facts and Contentions and the Respondent’s Statement of Facts and Contentions. The Applicant was represented by Ms Fiona Spencer of counsel instructed by Williams Winter. The Respondent was represented by Mr Ken Rudge, a solicitor of the DVA Review Branch. The documents admitted into evidence at the hearing were:
APPLICANT RESPONDENT A1 Statement by SKVR dated 27 April 2017 R1 T-documents numbering 197 pages - dated 8 June 2016 A2 Statement by SKVR’s wife dated 20 January 2017 R2 Clinical Notes – Patient Health Summary numbering 36 pages -Printed 1 July 2016 A3 Report from Dr D. Weissman dated 4 November 2016 R3 Transcript – Veterans’ Review Board dated 30 March 2016 R4 SRCA Documents - Inpatient Record Summary numbering 35 pages R5 Report from Dr P. Farnbach dated 4 November 2016 R6 Report from Dr R. Horsley dated 26 October 2016 Evidence of SKVR’s Wife
SKVR’s wife provided a statement dated 30 January 2017, gave evidence at the hearing and was cross-examined. She stated that she met her husband in 2013 and there has not been a time during the intervening period that she would describe him as ‘well.’ She claims to have personally witnessed her husband become threatening and aggressive with others, and also to her, particularly when he is ‘put under pressure and confronted.’ SKVR’s wife said she encourages her husband’s attendance at social events, but they do not go out often. At home she ‘directs traffic,’ asking him to do things and leaving notes to remind him of tasks because of his poor memory and ability to concentrate. She said he sleeps a lot, watches a lot of television, and apart from visits to the local coffee shop, generally spends most of his time at home.
SKVR’s wife contends that her husband’s mental health has deteriorated in recent times, particularly after receiving Electroconvulsive Therapy, which was the worst she had seen him. She described SKVR’s regime of regular medication and its debilitating side effects, alcohol abuse, monthly visits with consultant psychiatrist Dr Velakoulis, and the counselling he had attended individually and they had attended as a couple. In relation to his non-psychiatric conditions, particularly his right ankle, she states that while he rolled his ankle frequently in the early days of their relationship when doing a lot of walking, it had not been an issue since early 2014 when he stopped doing longer walks. She states that her last memory of any ankle problems was when he rolled it playing basketball in 2014, but that he had never previously referred to an ankle injury at work. In relation to her husband’s work capacity, she claims to know his previous work roles well and in her view, ‘he couldn’t return to work.’ Her evidence in that regard mirrors SKVR’s contention that he is incapable of working. I found SKVR’s wife to be a witness of truth and well placed to convey the significant impact of his war-caused symptoms on their family life. But I do not accept her evidence simpliciter regarding SKVR’s present inability to return to work, because this matter does not turn on that point, but on whether his war-caused incapacity alone renders him incapable of returning to work.
Evidence of SKVR
In addition to his statement dated 27 April 2017, SKVR gave evidence at the hearing and was cross-examined. He traversed the deteriorating history of his mental health dating back to 2000-01, when he claims to have first sought counselling from the Vietnam Veterans Counselling Service (VVCS). On moving to Melbourne in 2007, he sought further VVCS counselling and sought medical advice for worsening depressive moods, aggression, and over-consumption of alcohol. He attempted suicide in 2010.
SKVR also described his employment history since leaving the Army, particularly his work at Coles and other managerial positions until ceasing remunerative work on 21 May 2014 on the recommendation of his treating psychiatrist. He states that his position at Coles required him to manage the performance of five contracted companies, which meant he ‘never left his desk,’ worked ’65-70 hours a week,’ and was ‘getting calls 24/7.’ He stated that his job at Coles and those that followed did not require prolonged standing, walking or manual physical work. SKVR described a number of occasions at work where his aggression became uncontrolled and he assaulted a work supervisor and a cleaner that he had found asleep on duty. He contends that his drinking increased considerably and his symptoms became so severe between 2012 and 2015, that he required four admissions as a psychiatric inpatient. After his six-month contract ended at Swan Hill Property Services, he submits that he ‘couldn’t sleep because of nightmares, depression and alcohol,’ and ‘stayed in bed for a week.’ During an inpatient psychiatric admission in April 2014, he referred to the consensus recommendation of his treating psychiatrists that he should resign from work, because the risk of him becoming violent in the workplace was too high. When asked about his work intentions were it not for his psychiatric conditions, SKVR said he would ‘be working right now,’ and had ‘wanted to continue working till he retired at 65-70.’ In response to questions about the impact of his left knee and right ankle conditions, SKVR contended they had never stopped him from working and he had never taken time off work because of problems with his knee or ankle. He said that the most he had ever taken for these conditions was ‘Nurofen or Panadol,’ that they only caused him difficulty if he had to walk more than 300 metres, and he was not currently taking any painkillers.
During cross-examination, SKVR was asked about the inconsistencies in his evidence regarding his right ankle and left knee, given previous responses to treating doctors and in a Comcare Non-Economic Loss Questionnaire. In particular, he was asked to respond to his claims in 2015 that his right ankle pain is ‘continuous…during any walking, which stops any exercise,’ that he ‘reinjures the ankle constantly,’ that he ‘requires a disabled car space,’ and was ‘unable to play with [his] children or family due to [his] ankle injury.’
SKVR conceded that a number of his responses in the Questionnaire were ‘not accurate.’ In relation to the claim that he needed ‘a disabled car space’ because of his ankle injury, he responded: ‘I don’t know what I’ve written there, it’s a bunch of bullshit really…I don’t know why I’ve written that.’ In response to why he claimed not to be able to walk ‘any distance,’ SKVR responded: ‘I’ve written the wrong thing I guess…it’s not accurate, I’ve told a lie on the form.’ In response to my question about what other responses on the Questionnaire were inaccurate, he stated:
‘The [response to] the disabled car space is inaccurate completely, it’s a falsehood…and in relation to I can’t walk any distance without fear of re-injury, well that’s changed considerably now, but at the time it might have been a possible issue I was experiencing, but it’s not completely accurate – it’s not inaccurate, but it’s not the whole truth…I can walk the distances, but there was a fear there for a while that I was going to re-injure it…as for playing with the kids, [name of child] would have been 13 and [name of child] was 11. They were very active and if we were to play, they were running around and jumping on me and that sort of thing, then yes I’d be very worried about injuring my ankle…I’m not going to use any excuses like medication…I think I was pretty down at the time and just wrote whatever I thought would be the best answer as opposed to what was accurate.’
SKVR contended that the requirement for him to stand for prolonged periods or walk in his managerial roles was limited and that he was virtually ‘desk-bound.’ He said that he relied on subordinate site managers to undertake the site inspections required. He said that his walking tolerance on flat surfaces was unimpaired, that he could negotiate stairs, and the longest walk he had to negotiate was to and from the car park. He said that he put up with any ankle or knee pain, and had never taken time off work as a result of these conditions. He said the sort of activities he found difficult were not work-related, but to do with his home life, such as long walks with his wife and their dog ‘over several kilometres,’ which he no longer undertook. Since ceasing remunerative work in May 2014, he claimed that his right ankle had settled substantially.
TRIBUNAL’S CONSIDERATION
Does SKVR’s war-caused incapacity alone render him incapable of undertaking remunerative work for the periods necessary to qualify for either rate of pension?
To satisfy section 24(1)(b) of the Act, SKVR must be ‘totally and permanently incapacitated’ by his war-caused conditions, which alone prevent him from continuing to undertake remunerative work for periods aggregating more than eight hours per week. In that regard, I note the following medical evidence:
Psychiatric Conditions
Reports by Dr Velakoulis
(a)Three reports by Dr Velakoulis were accepted into evidence:
(i)Report dated 18 September 2012: In this report, Dr Velakoulis makes a number of recommendations regarding SKVR’s work capacity following a psychiatric admission:
‘In my opinion his PTSD, depression, irritability and alcohol intake have led to a significantly altered career trajectory, in that his combined mental health morbidity means that he is far less capable of career advancement than he otherwise would have been…I feel that he is very likely to deteriorate given ongoing excessive stress, which would acutely affect his work capacity…he is not capable of working more than 24 hours per week in the medium to longer term as a compliance manager without a significant impact on his mental health.
The factors affecting his work capability are his PTSD (60%), Major Depression (30%) and Alcohol Abuse (10%). His potential to cope with intense work over the medium term is poor, given his PTSD, mood symptoms, significant anxiety, his irritability and difficulty dealing with people interpersonally, his sporadic alcohol intake and the fact that he has already received treatment for some years with only limited gains.
His psychiatric conditions alone would prevent him from returning to fulltime work in the longterm. It is likely that even with intensive treatment, although [SKVR] should make mild to moderate clinical gains over a period of months to years, an overwhelming positive impact on his work capacity is unlikely. As such, and on the balance of probabilities, I would conclude that his work incapacity is permanent.’
(ii)Report dated 8 August 2014: Dr Velakoulis states:
‘I would suggest that he is currently incapable of working more than 8 hours per week in the short to medium term as a cleaning contract compliance manager. The factors affecting his work capability are his PTSD (50%), Major Depression (30%) and Alcohol Abuse (20%).
…His assault of a staff member in early 2014 represents a barometer of his symptom and stress load, and reduced frustration tolerance.
His psychiatric conditions alone currently prevent him from returning to any part or full time work in the short to medium term over the next 6 to 9 months. Given his clinical trajectory to date it is likely that with intensive treatment [SKVR] should make mildtomoderate clinical gains over a period of months to years, but any marked impact on his work capacity is unlikely.’
(iii)Report dated 16 August 2015: Dr Velakoulis states:
‘I would suggest that he currently remains incapable of working more than 8 hours per week in the short to medium term as a cleaning contract compliance manager. The factors affecting his work capability over 2014-15 remain his PTSD (50%), Major Depression (40%) and Alcohol Abuse (10%).
His potential to cope with return to work in the medium term remains poor given his PTSD, recurrent depressive episodes, high baseline anxiety, interpersonal irritability, sporadic alcohol intake and the fact that despite intense inpatient and outpatient treatment he has achieved no substantial clinical gains.
His psychiatric conditions alone currently prevent him from returning to any part or full time work in the short and medium term. Given his clinical trajectory to date it is likely that with intensive treatment [SKVR] should make mild to moderate clinical gains over a period of months to years, but any marked impact on his work capacity is unlikely.
In regards to the issue of permanence of his current work incapacity, I would now conclude that on the balance of probabilities it is more probable than not probable that his current work incapacity to work more than 8 hours per week in the medium to longer term as a cleaning contract compliance manager is permanent.’
(iv)Oral Evidence: In his oral evidence, Dr Velakoulis confirmed that SKVR has been under his care since May 2008 and in the intervening period has received support from the Veterans and Veterans Families Counselling Service, and also from the VVCS, ‘but not recently.’ Dr Velakoulis detailed SKVR’s current symptoms and medications, stating that he sees him regularly for symptom and medication review, and provides psychotherapy designed to clinically-stabilise his symptoms. In response to the question of whether there has been a change in SKVR’s symptoms since his 2015 report, Dr Velakoulis stated he typically continues to suffer the majority of previously-reported symptoms with varying intensity. These include intrusive dreams, daytime intrusion, hyper-vigilance, anxiety, irritability, poor concentration, and generally low mood with suicidal ideation at times. He describes these symptoms as severely disabling and unpredictably triggered. He states that SKVR remains particularly unwell, causing ‘regular marital tension’ and remains totally incapacitated for remunerative work.
(v)Dr Velakoulis said he stood by his 2015 assessment that on the balance of probabilities, SKVR was not able to work more than eight hours per week in his former role as a cleaning contract compliance manager. He said that after nine years under his direct care and years of psychological therapy before that, SKVR currently remained at ‘the opposite end of work capacity.’
(vi)In response to questions about whether telling a 42 year old patient they were permanently unfit for work was itself psychologically detrimental, Dr Velakoulis said ‘there is always some potential for hope’ that SKVR’s psychiatric conditions would stabilise to the point where he could return to work, but wasn’t ‘sure what the probability of that would be.’ He said that his treatment plan remained focussed on improving SKVR’s ‘mood, anger and marital function – just to get him out of the house.’ Dr Velakoulis said he was ‘loathe to permanently label someone as permanently incapacitated if it were made prematurely, because it might put them on a trajectory that is less than ideal.’ He explained that an assessment of permanent incapacity, however, ‘can also come with a degree of relief,’ with the ‘validation of the severity of their illness.’ In response to questions about whether future improvement in SKVR’s psychological state could result in him returning to a less stressful role that was consistent with his established skillset, Dr Velakoulis said he was uncertain:
‘…as to…a lesser intensity role, I’m not sure how probable that is…but in 5, 10 years, whether he had a part-time capacity, I’m not sure I can make that decision at this particular point…I hope it will result in some clinical improvement…I’m not sure whether that clinical improvement will then translate to an increase in work capacity...It may or may not translate to improved work capacity in the future…but sometimes the clinical improvement is premised on them not going back to a stressful environment…In [SKVR’s] case the reactivation of the disorder doesn’t just relate to trauma exposure. General stress may reactivate many of his symptoms.’
Letter by Dr de Plater
(b)A letter from Dr Greg de Plater, senior psychiatry registrar, dated 20 May 2014, states:
‘It is considered that [SKVR] remains unfit to return to work and this is likely to remain the case for the foreseeable future. This is been very disappointing for him, but he has accepted the recommendation, and will therefore shortly submit his formal resignation on medical grounds.’
Report by Dr Farnbach
(c)Dr Peter Farnbach, consultant psychiatrist, saw SKVR on a single occasion on 30 August 2016 as requested by the Respondent. He had access to: SKVR’s statement dated 27 April 2016; clinical notes from his general practitioner between 2005 to July 2016; and three reports from Dr Velakoulis. Dr Farnbach states in his report dated 4 November 2016:
‘Despite adequate and appropriate and extensive treatment over several years (including hospitalisation and electroconvulsive therapy) [SKVR] remains with significant symptomology that significantly limits his interpersonal and recreational functioning. He does not have a work capacity.
With regard to prognosis…[SKVR’s] condition can reasonably be regarded as stable and unlikely to improve any further.
…
…[SKVR] has significant symptomology over several years…I do not expect him to regain a work capacity. Further treatment is unlikely to alter the situation.
Report by Dr Weissman
(d)Dr David Weissman, consultant psychiatrist, saw SKVR on a single occasion on 4 November 2016 as requested by SKVR’s solicitor and completed a report dated the same day. He had access to: SKVR’s statement dated 27 April 2016; the VRB decision; two letters dated 2014 from Dr de Plater; a work ability report from Dr Chia; three reports from Dr Velakoulis; the schedule of questions completed by Dr Velakoulis on 31 May 2015; and extracts from SKVR’s records from Austin Health. Dr Weissman records that on the date of their consultation, SKVR was in a ‘severely unwell psychiatric state.’ Dr Weissman also records SKVR’s claim that he was made redundant at Coles for assaulting his supervisor and that:
‘he has tended to end up in a lot of fights with members of the public. There have been no charges. He told me that there was one “big incident” involving a road rage incident against him. He told me that the perpetrator was using ice and damaged [SKVR]’s car with a cricket bat. [SKVR] got out of his car, removed the cricket bat from the perpetrator and broke the perpetrator’s cheekbone with his fists and knocked that person’s teeth out.’
(e)Dr Weissman records a fluctuation in the severity of SKVR’s symptoms over time, encompassing his employment with Swan Hill Property Services, before he again ‘got sick and ended up in hospital.’ Dr Weissman states: ‘He told me that he then “got better” for a period of time and started working at Deakin University.’ Dr Weissman’s report concludes that SKVR’s ‘psychiatric symptoms, conditions and impairment have stabilised,’ and that his ‘psychiatric prognosis…is extremely uncertain and guarded and extremely poor, negative and unfavourable, if not bleak.’ He states that:
‘[SKVR] is suffering from a very severe group of claim-related psychiatric conditions and mental injuries that clearly, totally and permanently incapacitate him for all work for the foreseeable future (indefinitely).
Not only does he not have a work capacity for eight hours of so-called suitable duties per week, [SKVR] has absolutely no capacity for any work at all.
He has no capacity for any remunerative work whatsoever on account of his claim-related psychiatric conditions and mental injuries. He is totally and permanently disabled.’
(f)General practice records relating to SKVR detail a number of visits to SKVR’s general practitioner, including for depression or PTSD on: 23 April 2007; 14 April 2008; 5 November 2008; 7 November 2008; 20 November 2009; 14 December 2012; and 13 September 2013).
(g)The available evidence also records SKVR’s inpatient admissions as a voluntary psychiatric patient as follows:
(i)Austin Health (30 July 2012 – 8 October 2012). I note that during this admission, Dr Bronwyn Cooke notes in SKVR’s discharge summary that: ‘[SKVR] was successfully able to rally himself, attend several job interviews while an inpatient and got a job. Following this he gradually improved, became more reactive and his mood stabilised.’ At the hearing, SKVR confirmed that he was able to secure this role while an inpatient at Austin Health and commenced at Glad Group on 15 October 2012 on a full-time basis as Integrated Services Manager at Deakin University;
(ii)Austin Health (7 April 2014 – 23 May 2014). SKVR was referred for this admission by Dr Velakoulis ‘following worsening mood and PTSD symptoms as well as concern about persistent alcohol abuse. This followed an incident at work during which [SKVR] physically assaulted an employee (a cleaner who had fallen asleep on the job).’ It was during this admission that Dr de Plater records in SKVR’s discharge summary that he had accepted ‘the consensus that the risk of him becoming violent in the workplace was too high for him to safely return to work. Although there is distress and uncertainty associated with this, he has taken positive steps towards pursuing a review of his DVA TPI status and, in the interim, ensuring that he is able to receive Centrelink benefits.’ The evidence shows that SKVR acted on this recommendation, by resigning from Glad Group on 21 May 2014.
(iii)Austin Health (19 February 2015 – 25 March 2015). In the section of his discharge summary titled ‘History of presenting problem,’ it states in part: ‘…Multiple psychosocial stressors including wife returning to work after birth of now 5 month old male child…Ongoing issues with application for pension via DVA, ambivalent about being seen as permanently incapacitated at such a young age. Increased anger and irritability, increased hyperarousal and hypervigilance…multiple previous presentations and multiple failures of medication management. Referred for elaboration of mental state and possible addition of augmenting medication to improve PTSD.’
(iv)Austin Health (17 July 2015 – NFI). The T-documents (Exhibit R1) contain a letter from Austin Health confirming a fourth voluntary psychiatric admission on 17 July, but no further information is available regarding the specific nature of SKVR’s presenting problem on this occasion or the date of discharge.
SKVR’s Non-Psychiatric Conditions
Report by Dr Horsley
(a) Occupational physician Dr Robyn Horsley states in her report dated 26 October 2016, that her clinical examination and opinion related primarily to SKVR’s physical disabilities. Dr Horsley concluded that at the time of their consultation, ‘there did not appear to be any other physical disabilities that prevent or restrict him from undertaking remunerative work for more than 20 hours per week. His primary disability is his psychiatric status.’
Right Ankle and Left Knee
(b)In addition to the medical reports contained in the T-documents, a bundle of documents relating to the history of SKVR’s right ankle injury were accepted into evidence. They detail surgery to his ankle in July 1996 after an initial inversion injury while playing volleyball in December 1995. Because of a post-operative infection of his right ankle that spread to his right leg, SKVR’s recovery was slower than anticipated. After leaving the Army, he attended occupational physician, Dr Peter Vyrnwy-Jones on 11 October 2001 for an assessment of his ankle. Dr Vyrnwy-Jones reported:
‘Unfortunately the right ankle remains unstable. The operative repair was, therefore, only partially successful.
Prior to being discharged, [SKVR] was able to perform his basic fitness test and combat fitness test. He is able to walk for reasonable distances but complains of occasional pain in the right ankle, particularly over the right lateral ligament.
…
[SKVR] notes a decreased range of motion in his right angle, particularly in dorsi- flexion.
…
In accordance with table 9.2 [SKVR] has a 5% impairment, as he has a minor loss of motion in the right ankle of less than half the normal range.
(c)Clinical Notes by Dr R. Chia.
(i)Dr Chia’s clinical note dated 20 January 2014 records that she saw SKVR in relation to his right ankle and left knee. She states in part:
‘rolls ankle a lot
left knee catches and grinding
difficulty running ankle and knee both swell up
exam DP in left foot
knee some crepitus…
…
r v with ortho
needs physio’
(ii)Dr Chia’s clinical note dated 14 February 2014 states in part:
‘results – patella tendonitis, full tear right ankle atl and also anterior ankle impingement.’
(iii)Dr Chia ordered tests of SKVR’s right ankle and left knee, writing in her referral: ‘Right ankle injury in 1996 in army. Had a modified Evans, ankle still loose, possible fragment fracture of navicular. Also left knee pain since injury. Clinically some pain in the medial menisci on testing and ?patellofemoral syndrome.’ Radiological results dated 14 February 2014 included an ultrasound and x-ray of the left knee and right ankle, which showed:
Left Knee
‘The left pattelar tendon is focally thickened and hypoechoic at the proximal attachment, suggestive of mild to moderate tendinopathy.
…
Impression: Proximal patellar tendinopathy, which accounts for the anterior knee pain.’
Right Ankle
Impression: Chronic complete tear of the anterior talofibular ligament. Changes in lateral malleolus related to prior surgical procedure. Mild changes of anterior ankle impingement.(iv)Dr Chia’s clinical note dated 30 January 2015 states in part:
‘chronic knee/ankle pain secondary to injury during active service’
(d)Report by Dr H.J.P. Khursandi, consultant orthopaedic surgeon: A report by Dr Khursandi dated 12 November 2014 noted SKVR’s description of his symptoms as:
‘…constant ache of the right ankle mainly on the lateral aspect with prolonged standing. Moving the ankle whilst driving and using the accelerator and brake of a car also precipitates pain. His walking is restricted to 300 m on level ground due to pain. The ankle also gives way and swells at times.
His current treatment is with paracetamol six to eight tablets or Nurofen six to eight tablets daily. He also uses ice periodically on the right ankle.
e)In his report, Dr Khursandi diagnosed ‘post operative fibrosis with partial loss of movement of the right ankle following reconstruction surgery for sprain of the lateral ligament complex.’ He found that SKVR was ‘partially incapacitated’ for work as a result of his ankle injury and that the incapacity would continue indefinitely. Consistent with Dr Vyrnwy-Jones’ assessment, Dr Khursandi found that SKVR had a 5% ‘whole person impairment’ under Table 9.2 of the Guide to the Assessment of the Degree of Permanent Impairment (Edition 2.1). He assessed, however, that the ankle injury did not prevent him from returning to any form of employment for ‘more than 40 hours per week in appropriate employment.’ In relation to specific work restrictions, Dr Khursandi stated: ‘It would be advisable for [SKVR] to seek employment that does not involve prolonged standing, walking, ascending slopes, inclines on stairs, running, jogging or carrying heavy loads and working in confined spaces.’ There is no suggestion in the available evidence, however, that SKVR’s managerial roles at Coles, or Swan Hill Property Services or Glad Group involved or required these activities.
(f)Report by Dr F.G. Machart, orthopaedic surgeon. In preparing his report dated 27 April 2015, Dr Machart considered a Non-Economic Loss Questionnaire that SKVR had completed prior to their consultation. SKVR agreed during the hearing that the handwritten responses in the questionnaire were his, and that he claimed the following impairment effect arising from his ankle condition:
‘Continuos (sic) pain during any walking which stops any exercise. I have gained additional weight, I no longer participate in sporting clubs and it contributes to my depressive state.
I re injury (sic) the ankle constantly. Once reinjured it takes several weeks to recover.
As a result of my ankle injury, I need to rest regularly. I require a disabled car space… I generally do not go out as a result of the injury.
I cannot walk any distance without fear of re-injuring my ankle…
Unable to play with my children, or family due to my ankle injury.
(g)Dr Machart states the following in relation to SKVR’s right ankle and left knee conditions:
Onset of Symptoms, Subsequent Events, Treatment
Right Ankle: …[SKVR] was better for a while. He went through a fitness program. He found that the ankle kept rolling progressively with increasing severity over the subsequent years. [SKVR] told me that the severity of the condition of his right ankle had increased over the last couple of years.
Left Knee: He developed left knee pain, which was apparently diagnosed as patellar tendonitis. Doctors told him that this was because of “overuse”.
Current SymptomsRight Ankle: Pain laterally, instability, frequently giving way and rolling. His walking tolerance on the flat was not impaired. He puts up with the pain. He experienced difficulties walking down steps, walking one step at a time and hanging on railing. He was unable to run or play sport.
Left Knee: [SKVR] continues to suffer from left knee pain.
Current Treatment[SKVR] was referred by general practitioner to see a specialist. He never proceeded with the referral. He appears to be frightened of such appointments. Further surgical assessment or reconstruction was therefore not conducted. He puts up with the pain.
PHYSICAL EXAMINATIONGeneral
There was mild limp evident when walking on the flat. When walking up and down steps, he hung onto railing and descending, he walked very carefully, one step at a time.
Right Ankle
There was swelling over the anterior aspect of the right ankle joint. There was tenderness over the anterior talofibular ligament. There was restriction of flexion by a quarter and mild restriction to extension. There was restriction to inversion by a third and to eversion by a quarter, when compared to the opposite asymptomatic side.
Left Knee
There was tenderness over the patellar ligament. There was full range of movement and no tibiofibular tenderness and no ligament laxity.
INVESTIGATIONS
[SKVR] presented with a report on ultrasound which suggested a rupture of the ATFL in the right ankle. X-rays showed no osteoarthritis. There were changes of anterior impingement.
OPINION
Right ankle, chronic ankle ligament sprain, loss of proprioception, recurrent sprains causing pain, stiffness and instability.
(h)Consistent with Dr Vyrnwy-Jones and Dr Khursandi, Dr Machart determined that SKVR’s ankle condition warranted 5% ‘whole person impairment’ under Table 9.2, in that there was less than half the range of movement restriction. However, he also determined that in light of his observed difficulties with grades and steps, he allocated a further 10% whole person impairment under Table 9.5.
Tribunal’s Consideration
I note a number of inconsistencies in relation to the documentary and oral evidence available for the hearing of this matter, including:
(a)SKVR’s claims about the impairment effect of his right ankle and left knee have varied over time. His claims about the impairment effect of those conditions in 2015 are at odds with more recent claims in 2016 and the physical assessments he has undertaken. Dr Horsley’s October 2016 report, for example, includes her contention that his ‘walking tolerance and dynamic standing tolerances are normal.’ Dr Horsley concludes ‘there do not appear to be any physical disabilities that prevent or restrict him from undertaking remunerative work for more than 20 hours per week. His primary disability is his psychiatric status.’ SKVR’s contentions about his right ankle to Dr Horsley, however, are inconsistent with his earlier claims to Dr Khursandi and Dr Machart, which were in the context of a separate claim. Given the concession SKVR made about the unreliability of his claims to Dr Machart and Dr Khursandi, I have therefore decided to treat his evidence about the physical impairment of his left knee and right ankle conditions with caution, and rely instead on the assessments of Dr Horsley, Dr Khursandi and Dr Machart.
(b)In relation to SKVR’s mental health, Dr Weissman concludes that SKVR’s ‘psychiatric symptoms, conditions and impairment have stabilised.’ Dr Farnbach similarly concludes that SKVR’s ‘condition can reasonably be regarded as stable and unlikely to improve any further.’ In his 2015 report, however, Dr Velakoulis describes ‘episodic depressive deteriorations,’ and in his oral evidence, confirmed that even after nine years under his psychiatric care, SKVR’s symptoms were still not stable in a clinical sense. Where any inconsistencies have arisen between the three consultant psychiatrist reports, I have placed more weight on the opinion of Dr Velakoulis, who knows SKVR best as his treating psychiatrist since May 2008, except for a 12 month hiatus when SKVR resided in Adelaide.
(c)In his statement and oral evidence, SKVR repeats the claim that his redundancy at Coles was not bona fide, with the real reason for his departure being that he gave his boss a ‘backhander…I slapped his face’. His evidence was that there were no witnesses to the incident, because ‘it was he and I in the stairwell.’ In her report, Dr Horsley records SKVR’s claim that he ‘punched his boss in the face,’ causing him to be ‘made redundant.’ In his report, Dr Weissman records SKVR’s claim that he ‘he choked his boss and slapped him.’ Dr Weissman also records his claim about engaging in a lot of fights with members of the public, including fracturing a person’s cheekbone and knocking their teeth out with his fists during a road rage incident. In addition to the Coles incident, SKVR claimed at the hearing that he had assaulted a cleaner who he had found asleep while on duty. He said he ‘punched his lights out…I punched him in the face…he went to sleep.’ SKVR also claims to have threatened other co-workers and to have grabbed another while working at Swan Hill Property Services. In response to my questions regarding the multiple assaults he claims to have committed and whether he was subsequently contacted by the police, SKVR submitted he had not. In relation to the incident with the cleaner, he contended that because most of the cleaners were migrants, the assault probably wasn’t reported by the victim for fear of losing his job. SKVR submitted that he was ‘not aware’ of any police action in relation to these incidents, but contended ‘there have been police reports, but…no charges laid for other issues.’ In his report, Dr Farnbach records SKVR’s claim that he’d ‘been spoken to a couple of times…[but had been]…lucky,’ and had never been charged with any offences. I note that beyond SKVR’s account of these violent encounters at work, there is no independent evidence before me as to why he left his role at Coles, or in relation to the other violent interactions he said resulted from symptoms arising from his war-caused conditions. On the balance of probabilities, however, the evidence supports a finding that SKVR’s aggression, irritability and intolerance of others, which resulted from his war-caused conditions, caused significant problems for him at work and in other settings, consistent with the violent encounters reported in the consultant psychiatrist’s reports.
(d)In relation to the impairment effect of his right ankle and left knee conditions, SKVR maintains that his ankle and knee injuries never stopped him ‘from working…from doing anything,’ that he had never taken time off work because of these complaints, and that both conditions had settled substantially since he stopped working. In response to questions from Ms Spencer regarding the extent to which his ankle and knee conditions impacted his work ability, SKVR gave the following responses:
Counsel: Did you have to walk in your work?
SKVR: ‘No’
Counsel: If you had to stand up, for how long did you have to stand up in your work?
SKVR: ‘Minutes’
Counsel: Did your left knee or right ankle impede you in terms of your actual work duties in terms of walking or standing?
SKVR: ‘No’
Counsel: However, in relation to non-work duties such as playing with your children or if you wanted to run or go for longer walks, would your right ankle or your left knee impede or prevent you from doing any of these things?
SKVR: ‘Yes’
In light of my finding that SKVR’s evidence about the impairment effect of his right ankle and left knee conditions must be treated with caution, I do not accept his contention that he did not have to walk or stand for more than ‘minutes’ in relation to previous roles managing facilities and contracts. That is clearly exaggerated considering SKVR’s own description of the nature of some post-Army work roles, which at Glad Group required him to travel and engage with multiple stakeholders at multiple university campuses ‘five days a week.’ But notwithstanding the inconsistences relating to SKVR’s right ankle and left knee conditions, I accept there is insufficient evidence to support a finding that his work capacity at Coles, Swan Hill Property Services or Glad Group was affected because of his left knee or right ankle, or that he took time off work as a result of these conditions, or that his departure from the managerial roles he undertook was in any way influenced by these conditions. SKVR performed largely sedentary, office-based roles and the available evidence shows his right ankle and left knee complaints were not preventative factors in his ability to continue undertaking remunerative work. This finding is supported by the reports of both Dr Khursandi and more recently Dr Horsley.
In relation to SKVR’s psychiatric conditions, the evidence shows that the severity of his incapacity became increasingly apparent in 2012 following a psychiatric admission. Dr Velakoulis foreshadowed a significant deterioration in SKVR’s work capacity, resulting from the friction between his work stress and worsening psychiatric symptoms. Dr Velakoulis predicted this would ‘acutely affect his work capacity’ over time. In his report approximately two years later, Dr Velakoulis noted that deterioration had occurred. In both of these reports, Dr Velakoulis attributed SKVR’s accepted conditions as entirely responsible for his deteriorating work capacity. Dr Velakoulis again foreshadowed SKVR’s work potential over the medium term was poor, given the limited gains he had made following almost a decade of treatment under his care. Sadly, Dr Velakoulis prognosis has been realised, as detailed in the November 2016 reports by consultant psychiatrists Dr Farnbach and Dr Weissman.
It is to SKVR’s credit that he was able to attend interviews and win a job with Glad Group in 2012 while a psychiatric inpatient. But the evidence shows that his psychiatric health was episodic and deteriorated significantly within 18 months. This required another psychiatric admission, during which he received a consensus medical recommendation that he should resign from his job at Glad Group, because the risk of him becoming violent in the workplace was too high. On 21 May 2014 SKVR acted on that advice, tendering his immediate resignation. He has not worked since.
In terms of the sort of work that SKVR might be able to do in the future pursuant to the amplifying requirements of section 28 of the Act, no specific evidence was presented in this regard. Mr Rudge referred me to Chambers v Repatriation Commission[1995] FCA 1144; (1995) 55 FCR 9 (Chambers), where the Full Court of the Federal Court broadly interpreted the skills and qualifications to be considered. Mr Rudge submitted that in light of Dr Velakoulis evidence, there was at least the potential of SKVR undertaking a ‘less stressful job’ at some stage in the future, contending it could be ‘…something in the admin field, that wasn’t so lowly it affected his self-esteem…something reasonably in the field he was working in.’ This submission was based on Dr Velakoulis’ conditional judgement about SKVR’s work capacity, which employed a legal rather than medical descriptor (‘on the balance of probabilities’), and conveyed uncertainty about SKVR’s potential to regain work capacity in the future. As Ms Spencer conceded in her closing submissions, Dr Velakoulis was certainly less emphatic in his assessment than the other consultant psychiatrists, by stating he ‘wasn’t sure’ about the probability of SKVR being able to undertake a ‘lesser intensity role…in a part-time capacity,’ at some stage in the future.
Ms Spencer submitted, however, that Dr Velakoulis’ opinion did not extend to a probable return to work, but was more an expression of ‘hope’ that continuing intensive treatment was designed to, and may, clinically stabilise his symptoms over time. She further submitted that the possibility of SKVR’s symptoms being stabilised, followed by an improvement in his work capacity, which might be inferred from Dr Velakoulis’ evidence, was improbable at best. She contended that Dr Velakoulis was simply conveying he did not have a crystal ball and was therefore unwilling to make predictions about an uncertain and, on the evidence, improbable outcome in the future. Moreover, Ms Spencer pointed out that no specific jobs had been identified that SKVR might be able to return to at an indeterminate point in the future, on which the Respondent’s submission rested.
It is not in dispute that SKVR has leadership, management, clerical and administrative skills and experience, gained from his Army service and from increasingly senior managerial positions in his post-Army career. As Dr Horsley and Dr Khursandi reported, there also do not appear to be any physical disabilities restricting SKVR from undertaking remunerative work. But as Dr Horsley noted and the expert psychiatric evidence shows, SKVR’s incapacity for work arises entirely from his war-caused psychiatric conditions.
SKVR’s capacity for work has progressively deteriorated since 2012 as a result of his chronic, war-caused symptoms, including irritability, aggression, alcohol abuse, poor concentration, and social withdrawal. The intensity of his symptoms has fluctuated and the episodic nature of his inpatient admissions reflects those periods when his symptoms have been most severe. On the medical evidence I am reasonably satisfied that his war-caused conditions are of themselves alone of such nature, that they render him incapable of undertaking remunerative work for more than eight hours per week. I also accept that the prognosis of SKVR returning to work in the foreseeable future remains guarded, unfavourable and improbable.
I accept that Dr Velakoulis’ evidence in particular does not entirely discount the possibility that SKVR’s war-caused conditions might respond to the intensive treatment he has planned in the weeks and months ahead. The intent of that treatment is to stabilise SKVR’s severe symptoms and improve his lifestyle. Dr Velakoulis states that stabilisation of his symptoms may result in improved work capacity, which Mr Rudge points to as supporting his contention that SKVR’s incapacity for work might be considered temporary rather than permanent. Moreover, the evidence shows that SKVR previously won a senior managerial position while an inpatient at Austin Health in 2012. On discharge following that admission, his clinical notes confirm that winning that job was the catalyst for a significant improvement in his mood, symptoms and capacity, following which he was able to successfully perform relatively senior managerial functions for the next 18 months. There is certainly a discernable tension in the evidence as to whether SKVR’s war-caused conditions can be regarded as permanent or temporary.
In that regard, I was invited by Mr Rudge to consider the appropriateness of temporary payment of Special Rate of pension for SKVR, pursuant to section 25 of the Act. This submission was premised on the potential raised by Dr Velakoulis’ evidence, of an eventual stabilisation of SKVR’s severe symptoms, enabling him to recoup some work capacity. I have decided not to accept that submission because Dr Velakoulis only raised a potential improvement as a possibility, while assessing that outcome had a low probability. That is because SKVR’s incapacity remains severe after almost a decade of expert psychiatric care. There is also no evidence from Dr Velakoulis or the other two consultant psychiatrists of a specific period of time during which SKVR might regain work capacity. Dr Weissman is definitive in his assessment that SKVR ‘has absolutely no capacity for any work at all’ and is ‘totally and permanently disabled.’ Taken together, the consensus view of the three consultant psychiatrists is that a stabilisation of SKVR’s war-caused symptoms, enabling any return to work is highly improbable.
Moreover, in considering how one might determine ‘permanent’ versus ‘temporary’ incapacity, a range of factors have to be assessed. The dictionary at section 5Q of the Act is of little assistance in this regard, but similar legislation dealing with ‘special rate’ circumstances exists within the Social Security context, which is applicable to sections 24 and 25 of the Act. In McDonald and Director-General of Social Security (1984) 1 FCR 354, Woodward and Northrop JJ explained the distinction between ‘temporary’ and ‘permanent’ incapacity in the context of the Social Security Act, which helps inform my consideration of this application (at 360):
The vital contrast between temporary and permanent incapacity must be based upon an assessment of future prospects at the time the decision is made. It is not inconsistent with the notion of permanent incapacity that the…position should be reviewed from time to time. Unexpected improvement in the person's condition, advances in medical science, the achievement of fresh skills, or even changes in the labour market, could bring to an end an incapacity which had been thought to be permanent.
In my view the true test of a permanent, as distinct from temporary, incapacity is whether in the light of the available evidence, it is more likely than not that the incapacity will persist in the foreseeable future. (Cf. Re Tiknaz and Director-General of Social Services 1981 4 ALN N44.)
Their Honours held that assessing the likelihood of persistence required two factors to be weighed together; the: ‘degree of likelihood of improvement and time-span for that improvement.’ The longer the time-span and the less probable the improvement, the more appropriate it would be to make a finding of permanent incapacity. In those cases falling in the ‘difficult borderline region between temporary and permanent incapacity,’ their Honours further held that ‘it is not necessary to have a “settled expectation” of permanency before so finding; a belief - even on a fine balance – that indefinite duration is more likely than foreseeable termination, will suffice.’[1]
[1] Administrative Law Decisions, 1982-84, Volume 6, p.7
In relation to the specific circumstances of SKVR’s case, ‘permanent’ for a 42 year-old veteran means longer than a few years. Given that SKVR has been under the care of a consultant psychiatrist for almost a decade, his war-caused conditions have deteriorated substantially since 2012, he resigned from work followed a consensus recommendation by his treating psychiatrist, and three consultant psychiatrists agree his return to work is highly improbable, I find that SKVR satisfies the permanency criteria at section 24(1)(b) of the Act.
Does SKVR’s war-caused incapacity of itself alone prevent him from continuing to undertake remunerative work that he was undertaking and is he thereby suffering a loss of income that he would otherwise not be suffering?
Submissions of the Respondent – Alone Test
The Respondent submits that SKVR does not satisfy the alone test in section 24(1)(c) of the Act, because his evidence to the VRB on 30 March 2016 indicates his left knee and right ankle disabilities contributed to his incapacity for remunerative work. During the hearing Mr Rudge highlighted SKVR’s inconsistent presentation of the impairment effects resulting from his ankle and knee conditions, particularly to Dr Khursandi, Dr Machart and in documents submitted in the context of an earlier claim. Mr Rudge submitted that the decision of the Full Court of the Federal Court in Repatriation Commission v Richmond [2014] FCAFC 124; (2014) 226 FCR 21 (Richmond), required that the interpretation of the alone test at section 24(1)(c) was to be more strictly applied. In Richmond it was held at [37] that:
... if there is a non war-caused factor which prevents, or contributes to preventing, the veteran from continuing to undertake the relevant remunerative work, even if it is only of secondary weight and insufficient in itself to prevent the veteran from continuing, the alone prevented test would not be satisfied.
Mr Rudge submitted that the following exchanges, as recorded in the VRB transcript, demonstrate there are non war-caused factors impacting SKVR’s capacity for work:
SKVR: “Yes…Walking around was a problem. Standing up was a problem.
MR REGAN: And that was the left knee rather than right ankle, or was it both?
SKVR: Both
MR WRAY:What about now, [SKVR]?...I know you are not working, but is your left knee still giving you problems?
SKVR: Yes; swells up. There’s chronic tendinitis, and I’ve got some cartilage issues in there.
…
MR WRAY:How often would it flare up, do you think, on average?
SKVR: If I do any walking it flares up.
MR WRAY:…Do you have much trouble with the irritable bowel these days?
SKVR: Yes…I still have rotating between diarrhoea and constipation.
MS BAFUL:…just wanted to highlight volume 46 with that workability report. It did say that [SKVR’s] right ankle and left knee injury will impede his physical work to a minor to moderate degree.”
Submissions of the Applicant – Alone Test
Ms Spencer also drew my attention to Richmond [at 60], regarding the need for a common sense interpretation of the alone test:
His Honour, correctly in our view, rejected the use of other descriptions in substitution for “alone” such as “sole, unique and absolute cause” and explained (at 539) that the Tribunal’s task was:
…to make a practical decision whether the veteran’s loss of remunerative work is attributable to his service-related incapacities, and not to something else as well. It is a decision that should not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.
In a similar vein, I note that Rares J in Smith v Repatriation Commission [2014] FCAFC 53, held [at 16] that consideration of whether a war-caused injury alone brought about a veteran’s inability to work, was ‘a question of fact, informed by commonsense…’.
Ms Spencer further submitted that as previously held by the Federal Court, it was relevant to make ‘hypothetical enquiries’ in determining if SKVR was suffering a loss of earnings by reason of war-caused injury or incapacity alone. In this regard I note Richmond at [68-69]:
His Honour found support for this construction in Repatriation Commission v Smith (1987) 15 FCR 327 (“Smith 1987”) at 337 where Beaumont J, with whom Northrop and Spender JJ agreed, said:
As has been said, the question posed by s 24(1)(c) is one of hypothetical fact. The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service disabilities. The starting point is an examination of the prospects of employment, including self-employment, in southern Tasmania in early 1985 for a healthy sixty-nine-year-old plumber… (Emphasis added.)
However the Full Court in Flentjar (at 5) treated Beaumont J’s statement as relating to the second limb of s 24(1)(c) and not to the first limb. We are inclined to see it as expressing a practical rolled-up approach to the operation of both limbs. In any event, later Full Court decisions in Hendy and Butcher provide that if non war-caused factors play a part in or contribute to preventing a veteran from engaging in remunerative work, even if those preventative factors are of secondary importance and not of themselves sufficient to prevent remunerative work, the “alone” requirement will not be satisfied. It is the case that the drafting of s 24(1)(c) has created a “nearly impenetrable shroud” over its meaning (Smith at [26]) but we respectfully take a different view to Bromberg J.
The evidence in SKVR’s case reveals that he ceased work because of his war-caused conditions only and that his right ankle or left knee had no preventative effect. SKVR may have experienced difficulty undertaking long walks with his wife or negotiating uneven ground, but his work duties did not involve these activities, or prolonged standing, or manual labour. The evidence reveals only scant medical attendances for these physical complaints, for which SKVR did not require prescription painkillers or physiotherapy, or time off work. As detailed in Dr Machart’s report, SKVR ‘puts up with the pain.’ On the other hand, SKVR’s medical history reveals both continuity and increasing severity of his war-caused psychiatric symptoms, which alone caused his eventual resignation from remunerative work – and his continuing incapacity to re-engage in such work.
Consideration – Alone Test
Professors Robin Creyke and Peter Sutherland have summarised the key requirements of the alone test in Veterans’ Entitlements and Military Compensation Law (Federation Press, 2016) at 219, as follows:
Whether the person meets the “alone” test in s 24(1)(c) is frequently the principal substantive issue in an application for special rate pension. Other issues which must be considered for the purposes of s 24(1)(c) are whether the veteran is under 65 at the time of claim, when the ameliorating terms of s 24(2) must be considered….There are two limbs to s 24(1)(c):
•“the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking”;
•“is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity”.
In that sense, there is a nexus between section 24(1)(b) and section 24(1)(c) of the Act. The tests require that SKVR’s loss of employment results from his accepted war-caused disabilities pursuant to section 24(1)(b), and that his subsequent inability to engage in remunerative employment does not result from other non war-caused incapacity: Smith v Repatriation Commission (2014) per Rares J at [8]:
‘…Once the effect of the war-caused injury on the veteran suffices to satisfy s 24(1)(b), the effect of his or her incapacity must then be assessed under s 24(1)(c). The latter section has these elements:
·the veteran is prevented by reason only of the effect of his or her injury found under s 24(1)(b) from continuing to undertake remunerative work;
·that preventative effect alone causes him or her to suffer a loss of income; and
·the veteran would not be suffering from that loss if he or she was not affected by the war-caused injury.’
In Flentjar v Repatriation Commission (1997) 48 ALD 1 (Flentjar), Branson J, for the Full Federal Court, said that a proper consideration of s 24(l)(c) required responses to four questions (at 2):
1.What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(l)(c) of the Act?
2.Was F, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3.If so, was the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?
4.If so, was F by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
As previously found, SKVR’s post-Army work life encompassed predominantly managerial, office-based roles, centred on facilities management and managing cleaning contracts in several large companies. The collective opinions of three clinical psychiatrists and an occupational physician, support a finding that SKVR is prevented from undertaking that remunerative work by reason of his war-caused conditions alone. Moreover, the available evidence shows that his right ankle and left knee conditions were not preventative factors in his ability to continue undertaking that remunerative work. The preventative effect in SKVR’s case arose entirely from his war-caused incapacity alone. After resigning on the advice of his treating psychiatrists, SKVR continues to suffer a loss of salary, which he would not be suffering were it not for his war-caused incapacity.
I have considered the ameliorating provisions in section 24(2)(b) of the Act, which applies to veterans under the age of 65 and contains exclusionary provisions for the purpose of the alone test. In that regard, I find the evidence shows SKVR genuinely sought to engage in paid work, including while he was a voluntary psychiatric inpatient in 2012. He attended interviews and secured a managerial role with Glad Group. He left that job within 18 months based on the consensus recommendation of his treating psychiatrists. But for the incapacity arising from his accepted war-caused disabilities, I am satisfied that he would still be engaged in paid work or actively seeking it.
In considering the appropriateness of temporary payment of pension at the Special Rate for SKVR, a brief discussion ensued at the hearing regarding a possible date of effect. Mr Rudge stated that in the event of a decision to pay SKVR pension under the temporary provisions of section 25 of the Act, an appropriate date of effect was 22 May 2014. That was the day after SKVR resigned from his last remunerative work on the advice of his doctors. I am therefore satisfied that the date of effect of my decision should apply from the same date.
Conclusion
I find that SKVR satisfies the requirements of section 24 of the Act and is eligible to be paid pension at the Special Rate.
Decision
It therefore follows that I set aside the decision under review and decide in substitution that SKVR is entitled to the payment of pension at the Special Rate. The date of effect is 22 May 2014.
I certify that the preceding 58 (fifty-eight) paragraphs are a true copy of the reasons for the decision herein of Senior Member A. Nikolic AM CSC
[sgd]............................................................
Associate
Dated: 27 July 2017
Date of hearing: 8 June 2017 Counsel for the Applicant: Ms Fiona Spencer Solicitors for the Applicant: Williams Winter Solicitors for the Respondent: Mr Ken Rudge, DVA Review Branch
Key Legal Topics
Areas of Law
-
Administrative Law
-
Statutory Interpretation
Legal Concepts
-
Judicial Review
-
Statutory Construction
-
Remedies
-
Standing
-
Procedural Fairness
-
Appeal
0
5
0