Spargo v Repatriation Commission

[2001] FCA 1763

FEDERAL COURT OF AUSTRALIA

Spargo v Repatriation Commission [2001] FCA 1763

VETERANS’ AFFAIRS – veterans’ entitlements – pension – injury suffered on ship in course of journey to Korea – injured serviceman returned to Australia from Japan – no actual service rendered in operational area – whether deemed to have rendered operational service

WORDS AND PHRASES – “operational service”

Veterans’ Entitlements Act 1986 (Cth) ss 5B, 5C(1), 6(1)(e), 6C, 7, 13(1), 13(11), Sch 2
Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB
Veterans’ Affairs (1995-96 Budget Measures) Legislation Amendment Act 1995 (Cth)
Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 (Cth)

Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 cited
Repatriation Commission v Hayes (1982) 64 FLR 423 cited
Starcevich v Repatriation Commission (1987) 18 FCR 221 cited
Roberts v Repatriation Commission (1992) 39 FCR 420 cited
Repatriation Commission v Hawkins (1993) 45 FCR 205 distinguished
Muller v Dalgety & Co Ltd (1909) 9 CLR 693 referred to
Commissioner of Taxation v Comber (1986) 10 FCR 88 cited
Wiest v Director of Public Prosecutions (1988) 23 FCR 472 cited
East Finchley Pty Ltd v Federal Commissioner of Taxation (1989) 90 ALR 457 cited

RAYMOND FRANKLIN SPARGO v REPATRIATION COMMISSION
N 460 of 2001

SPENDER, GRAY AND BRANSON JJ
12 DECEMBER 2001
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 460 of 2001

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RAYMOND FRANKLIN SPARGO APPELLANT
AND:	REPATRIATION COMMISSION RESPONDENT
JUDGES:	SPENDER, GRAY AND BRANSON JJ
DATE OF ORDER:	12 DECEMBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.   The appeal be dismissed.

2.   The appellant pay the respondent’s costs of the appeal.

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

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 460 of 2001

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	RAYMOND FRANKLIN SPARGO APPELLANT
AND:	REPATRIATION COMMISSION RESPONDENT

JUDGES:	SPENDER, GRAY AND BRANSON JJ
DATE:	12 DECEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:

1. This appeal is from a judgment of a single judge of the Federal Court of Australia, who set aside a decision of the Administrative Appeals Tribunal (“the AAT”).  The judge held that the appellant was not entitled to a pension pursuant to the Veterans’ Entitlements Act 1986 (Cth) (“the VE Act”) because the appellant was not rendering “operational service” when he suffered the relevant injury.

   The legislation

2. By s 13(1) of the VE Act, where a veteran has become incapacitated from a war-caused injury or a war-caused disease, the Commonwealth is, subject to the VE Act, liable to pay pension by way of compensation to the veteran in accordance with the VE Act. By s 13(11), the reference to a veteran is to be read as a reference to a person who, because of s 7, is taken to have rendered eligible war service. Section 7(1)(a) provides that a person who has rendered operational service shall be taken to have been rendering eligible war service while the person was rendering operational service. There are various provisions of the VE Act that define operational service in relation to different hostilities in which Australian service personnel have been involved. For the purposes of this case, the definition of operational service is found in s 6C, which provides relevantly as follows:

   “Operational service¾post World War 2 service in operational areas

   (1)      Subject to this section, a member of the Defence Force who has
   rendered continuous full-time service in an operational area as:

   
   

   (a)       a member who was allotted for duty in that area; or

   (b)       a member of a unit of the Defence Force that was allotted for
   duty in that area;

   
   

   is taken to have been rendering operational service in the operational
   area while the member was so rendering continuous full-time service.

   
   

   …

   (3)      For the purposes of subsection (1), a member of the Defence Force is,
   subject to subsection (4), taken to have rendered continuous full-time
   service in an operational area during the period commencing on:

   
   
   

   (a)       if the member was in Australia on the day (relevant day) from
   which the member, or the unit of the member, was allotted for
   duty in that area¾on the day on which the member left the
   last port of call in Australia for that service; or

   
   
   
   

   (b)       if the member was outside Australia on the relevant day¾on
   that day;

   
   

   and ending at the end of:

   (c)       if the member, or the unit of the member, ceased to be allotted
   for duty¾the day from which the member, or the unit, ceased
   to be allotted for duty; or

   
   
   

   (d)       if the member, or the unit of the member, was assigned for duty
   from the operational area to another area outside Australia
   (not being an operational area)¾the day from which the
   member, or the unit, was assigned to that other area, or the
   day on which the member, or the unit, arrived at that other
   area, whichever is the later; or

   
   
   
   
   
   

   (e)       in any other case¾the day on which the member arrived at
   the first port of call in Australia on returning from operational
   service.

   
   
   

   (4)      If, while rendering continuous full-time service in an operational area,
   a member of the Defence Force has:

   
   

   (a)       returned to Australia in accordance with the Rest and
   Recuperation arrangements of the naval, military or air forces;
   or

   
   
   

   (b)       returned to Australia on emergency or other leave granted on
   compassionate grounds; or

   
   

   (c)       returned to Australia on duty; or

   (d)       returned to Australia for the purpose of receiving medical or
   surgical treatment as directed by the medical authorities of the
   Defence Force;

   
   
   

   only so much of the period of service of the member within Australia
   after his or her return and while the member:

   
   

   (e)       continued to be allotted for duty in an operational area; or

   
   
   

   (f)       continued to be a member of a unit of the Defence Force
   allotted for duty in an operational area;

   
   

   as does not exceed 14 days is taken, for the purposes of subsection (1),
   to be a period when the member was rendering continuous full-time
   service in the operational area.”

   
   
   

3. Section 5B contains definitions, including definitions of some terms used in s 6C. The relevant provisions of s 5B are as follows:

   “(1)     In this Act, unless the contrary intention appears:

   allotted for duty

   in an operational area has the meaning given by
   subsection (2).

   
   

   operational area

   means an area described in column 1 of Schedule 2
   during the period specified in column 2 of Schedule 2 opposite to the
   description of the area in column 1.

   
   
   

   period of hostilities means:

   …

   (c)       the period of hostilities in respect of Korea from 27 June 1950
   to 19 April 1956 (both included);

   
   

   …

   (2)      A reference in this Act to a person, or a unit of the Defence Force, that
   was allotted for duty in an operational area is a reference:

   
   

   (a)       in the case of duty that was carried out in an operational area
   described in item 1, … of Schedule 2 (in column 1)¾to a
   person, or unit of the Defence Force, that is allotted for duty in
   the area (whether retrospectively or otherwise) by written
   instrument issued by the Defence Force for use by the
   Commission in determining a person’s eligibility for
   entitlements under this Act”.

   
   
   
   
   
   
   

4. In Sch 2 to the VE Act, item 1 contains in column 1 a description of an operational area in the following terms:

   “The area of Korea, including the waters contiguous to the coast of Korea for a distance of 185 kilometres seaward from the coast.”

   Opposite that description, in column 2, the period specified is:

   “The period from and including 27 June 1950 to and including 19 April 1956”.

5. Section 6C(1) also uses the phrase “continuous full-time service”. For present purposes, it is necessary only to set out part of the definition of that term in s 5C(1):

   “continuous full-time service means:

   (a)in relation to a member of the Defence Force:

   (i)service in the Naval Forces of the Commonwealth of the kind known as continuous full-time naval service”.

   The history of the proceeding

6. On 29 July 1996, the appellant made a formal claim for pension.  On 10 October 1996, a delegate of the respondent, the Repatriation Commission, made a decision granting the appellant a pension with effect from 29 April 1996, on the basis that the appellant was on operational service from 1 December 1950 to 1 January 1952.  Subsequently, an internal review of that decision took place.  On 18 April 1998, another delegate of the respondent made a determination cancelling the payment of pension with effect from 21 May 1998.  This delegate made a finding that, as the appellant did not actually serve within 185 kilometres (100 nautical miles) of the coast of Korea, he did not undertake operational service.

7. The appellant applied for a review of that decision. On 8 January 1999, the Veterans’ Review Board affirmed the decision. The appellant then applied to the AAT. On 10 April 2000, the AAT set aside the decision affirmed by the Veterans’ Review Board and remitted the matter to the Repatriation Commission, to be dealt with in accordance with the AAT’s directions that the appellant had rendered operational service and was entitled to pension for war-caused injuries and diseases as from the date from which his pension had been cancelled. The Repatriation Commission appealed to the Court on a question of law. The learned primary judge allowed the appeal, set aside the decision of the AAT and remitted the case to the AAT to be heard and decided again. His Honour took the view that, on the proper construction of s 6C of the VE Act, it could not be said that the appellant had rendered operational service at the relevant time. It is from that judgment that the appellant has brought this appeal.

   The facts

8. In the AAT, the matter was dealt with on the basis of a statement of agreed facts.  Both the AAT and the learned primary judge made their findings of fact on the basis of this statement.  The following is a summary of the agreed facts, to the extent necessary for the resolution of this appeal.

9. The appellant rendered full-time continuous service in the Royal Australian Navy from 8 January 1948 to 8 January 1958.  He was allotted for duty in an operational area, namely Korea, as a member of a unit of the defence forces that was allotted for duty in that area.  He was a member of the crew of HMAS Sydney, which was allotted for duty in that operational area from 31 August 1951 to 22 February 1952.  The appellant was serving on HMAS Sydney when she departed Australia for Korea on 31 August 1951.  He was seriously injured before the vessel arrived in Japan.  On arrival at the port of Kure in Japan, the appellant was transferred to a British ship, HMS Glory, on 30 September 1951 for passage to Australia.  He arrived in Australia on 17 October 1951.  He did not therefore come within a distance of 185 kilometres seaward from the coast of Korea.

   The construction of section 6C

10. In the context of this case, the competing constructions of s 6C depend upon the extent to which the deeming provision in s 6C(3) qualifies the provisions of s 6C(1). In its terms, subs (3) provides that, for the purposes of subs (1), a person is “taken to have rendered continuous full-time service in an operational area” during the period specified. In normal circumstances, the period runs from departure from Australia until return to Australia.

11. If subs (3) is a true deeming provision, its function is to require that a particular state of affairs must be treated as another state of affairs, which it otherwise could not or would not be treated as being.  A true deeming provision creates a legislative fiction.  On this basis, allotment for duty in an operational area would give rise to the fiction that the person who had been so allotted, and had left Australia following that allotment, must be regarded as having rendered continuous full-time service in the operational area, even if that person did not in fact render any service in that area.  This is the operation for which the appellant contended.

12. The alternative construction, for which counsel for the respondent contended, is that the deeming effect of subs (3) is intended only to have the effect of extending the period of service when actual service was rendered in an operational area.  On this view, the nature of the fiction is different.  It is only that the time occupied in travelling to and from the operational area must be regarded as part of the service in the operational area, when there has been such service. 

13. Each of these two constructions is reasonably open on the face of the provisions of s 6C. It may therefore be said that the section is ambiguous. See Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 449. In the resolution of the ambiguity in the construction of s 6C, competing principles apply. On the one hand, the VE Act is intended to confer benefits on those who have served in the armed forces, and should be construed beneficially if its terms permit such a construction. See Repatriation Commission v Hayes (1982) 64 FLR 423 at 426, Starcevich v Repatriation Commission (1987) 18 FCR 221 at 225 per Fox J, Roberts v Repatriation Commission (1992) 39 FCR 420 at 423 and Repatriation Commission v Hawkins (1993) 45 FCR 205 at 211.

14. On the other hand is the principle that a deeming provision should be construed strictly and in accordance with its purpose.  In Muller v Dalgety & Co Ltd (1909) 9 CLR 693 at 696, Griffith CJ said:

    “The word “deemed” may be used in either sense, but it is more commonly used for the purpose of creating what James L.J. and Lord Cairns L.C. called a “statutory fiction” (see Hill v. East and West India Dock Co.), that is, for the purpose of extending the meaning of some term to a subject matter which it does not properly designate.  When used in that sense it becomes very important to consider the purpose for which the statutory fiction is introduced.”

    See also Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96 per Fisher J, Wiest v Director of Public Prosecutions (1988) 23 FCR 472 at 502 per Burchett J and East Finchley Pty Ltd v Federal Commissioner of Taxation (1989) 90 ALR 457 at 478.

15. In addition, s 15AA(1) of the Acts Interpretation Act 1901 (Cth) (“the Acts Interpretation Act”) requires that, in the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object

    
    

    is expressly stated in the Act or not) is to be preferred to a construction that would not promote that purpose or object.

16. It is plain that the purpose or object of s 6C(3) is to extend the benefits of the VE Act to service personnel who suffered injury or disease whilst on the way to, or on the way home from, an operational area. It is likely that the thinking behind such an extension has to do with the increased risk to which service personnel were subjected because of having to be on a war footing throughout the journey. It is reasonable to suppose that the normal level of consideration for the individual safety of each serving person is overridden to a degree by the need to be ready for action throughout the whole journey. The expectation of a hostile encounter is increased because the journey is undertaken to enable participation in hostilities.

17. The identification of this purpose does not resolve the ambiguity in s 6C. It does not answer the question whether the benefits available under the VE Act are intended to be extended to all service personnel involved, irrespective of whether they were present in the operational area.

18. Section 15AB(1)(b)(i) of the Acts Interpretation Act permits reliance on extrinsic material to assist in the ascertainment of the meaning of an ambiguous provision of an Act. Section 15AB(2)(e) specifically permits reliance on an explanatory memorandum relating to the bill containing the provision, laid before or furnished to the members of either House of Parliament by a Minister before the time when the provision was enacted. Counsel for the respondent relied upon two explanatory memoranda relating to amendments at two different times in the evolution of the present s 6C of the VE Act. To determine the effect of these explanatory memoranda, it is necessary to know something of the legislative history of s 6C.

19. As originally enacted in 1986, the VE Act contained a provision in s 6(1)(e) in the following terms:

    “a person who has, as a member of the Defence Force, rendered continuous full-time service outside Australia¾

    (i)        as a member of a unit of the Defence Force that was allotted
    for duty; or

    
    

    (ii)       while the person was allotted for duty,

    in an operational area, shall be taken to have been rendering operational service while the person was so rendering continuous full-time service”.

    The use of the words “continuous full-time service outside Australia” in the context of that provision tended to suggest that allotment for duty in an operational area, coupled with service outside Australia while so allotted, was sufficient to attract the deeming effect of s 6(1)(e).  Actual service in the operational area was unnecessary.

20. Section 6(1)(e) was amended on several occasions before 1995.  Those amendments were not of great significance.  By the Veterans’ Affairs (1995-96 Budget Measures) Legislation Amendment Act 1995 (Cth) (“the 1995 amending Act”), s 6(1)(e) was repealed and substituted by the following provision:

    “subject to subsections (5) and (6), a person who has, as a member of the Defence Force, rendered continuous full-time service outside Australia in an operational area (not being service rendered, as a member of the Naval Forces in the complement of a sea-going vessel, in the area described in item 2 or 3 of Schedule 2 (in column 1) while that area was an operational area) as:

    (i)        a member of a unit of the Defence Force that was allotted for
    duty; or

    
    

    (ii)       a person who was allotted for duty;

    in that operational area, is taken to have been rendering operational service during the period in which the person or the unit was so allotted for duty”.

    The provisions of subss (5) and (6) were in terms similar to those of the present s 6C(3) and (4) respectively.

21. It will be noted that the substituted s 6(1)(e) contained the words “in an operational area” immediately following the words “continuous full-time service outside Australia”.  The explanatory memorandum that accompanied the bill which became the 1995 amending Act contained the following passage:

    “Paragraph 6(1)(e) has occasionally been misread.  As explained in the Explanatory Memorandum to the Veterans’ Entitlements Bill 1986, it is intended to cover ‘service as a member of the Defence Force outside Australia in an operational area’.  The key to understanding its meaning is to understand the meaning of the words allotted for duty. These words are dealt with in subsection 5B(2). That section makes it clear that these words when used about an operational area in the VE Act can only have the meaning given in the subsection. Thus from both paragraphs (a) and (b), whenever allotted for duty in an operational area is used in the Act, it must carry with it the meaning that it was duty that ‘was carried out in an operational area’.  It is clearly impossible to carry out duty in an operational area without ever being in that operational area.

    Thus paragraph 6(1)(e) should not be read as merely involving service anywhere outside Australia while allotted for duty in an operational area.  Because allotted for duty is defined, it must be read as involving service carried out in an operational area while allotted for duty in that operational area.

    Thus in summary, if the service was not carried out in the operational area:

    ·it will not be operational service;

    ·it will therefore not be eligible war service;

    ·it will therefore not make the person a veteran; and

    ·neither the person, nor the dependant of a deceased veteran, will be eligible for benefits under Part II of the VE Act.”

1. By the Veterans’ Affairs Legislation Amendment (Budget and Compensation Measures) Act 1997 (Cth) (“the 1997 amending Act”), s 6 of the VE Act was repealed. It was replaced by a series of sections, ss 6A to 6F, dealing with operational service in various wars. One of these was s 6C, dealing with operational service after World War 2. The explanatory memorandum accompanying the bill that became the 1997 amending Act contained the following passage:

   “The rewritten and restructured operational service provisions involve no change in policy.  The new provisions are intended to cover exactly the same service as was covered by the repealed section 6.”

   It should be noted that the words “outside Australia” have been omitted from s 6C(1). The relevant terminology is now “continuous full-time service in an operational area”.

2. By itself, the legislative history is indicative of an intention to restrict the extended benefit in cases of injury or disease suffered on the way to, or on the way from, an operational area to persons who have actually rendered service in the operational area. The addition of the words “in an operational area” after the words “continuous full-time service outside Australia” by the 1995 amending Act disclosed that intention. The retention of the words “in an operational area” and the omission of the words “outside Australia” in the present s 6C(1) confirmed that intention. If it were necessary, the two explanatory memoranda make the intention absolutely clear. It is plain from the memorandum accompanying the bill that became the 1995 amending Act that the benefit was intended only to be available to a person who has actually carried out service in an operational area while allotted for duty in that operational area. The memorandum accompanying the bill that became the 1997 amending Act discloses the same intention.

3. Counsel for the appellant relied on the judgment of the Full Court in Repatriation Commission v Hawkins (1993) 45 FCR 205. Mr Hawkins was a member of the crew of HMAS Sydney when it was allotted for duty in Vietnam.  He began smoking on the journey towards Vietnam, because of his apprehension about the mission.  He developed a smoking habit, which led to ischaemic heart disease, which the Court held to have been war-caused.  The learned judge at first instance in the present case distinguished Hawkins on the obvious ground that Mr Hawkins had reached the operational area in Vietnam, in accordance with the allotment for duty.  There are passages in the judgment of the Full Court that might be taken to suggest that the result did not turn on this fact, and that Mr Hawkins might have succeeded even if, for some reason, he had not reached Vietnam.  Those passages, however, must be read in the light of the fact that s 6(1)(e) was in the form in which it stood prior to the passing of the 1995 amending Act, at the time when Hawkins was decided.  Mr Hawkins only had to show that he had rendered “continuous full-time service outside Australia” while allotted for duty in an operational area, in order to succeed.  Hawkins is therefore of no assistance in construing the present legislation.

4. Counsel for the appellant also argued that to construe s 6C as applying only when the person concerned has actually rendered service in the operational area is to produce anomalies. If the appellant had suffered his injury in exactly the same way as he did, but on the return journey to Australia from Korea, there would have been no doubt as to his eligibility for a pension. Similarly, if he had suffered his injury before reaching Japan, but had remained on board the ship in his injured state while it performed its allotted duty within 185 kilometres of the Korean coast, his entitlement to a pension would have been unquestionable. Further if, like the Argentinian vessel General Belgrano, HMAS Sydney had been sunk by enemy action on its way to the operational area, surviving members of the crew, and the dependents of deceased members of the crew, would have been wholly without entitlement to pension. If the sinking occurred on the return journey, all would have been entitled. No doubt other anomalies could be envisaged. It is true that the construction of s 6C that restricts its effect to those who have actually carried out service in the operational area is potentially productive of such anomalies. If that is the intended construction, however, and Parliament intended that such anomalies should arise, the Court cannot construe the VE Act in some other way so as to avoid them.

5. Counsel for the appellant also argued that s 6C should be construed by analogy with legislation relating to workers’ compensation, which commonly covers workers in respect of injuries suffered whilst on the journey to and from work. In the case of the journey to work, an injury suffered is generally compensable even if it has the result that the worker concerned is prevented from arriving at the place of employment on the day in question. Reliance on analogy is very often a dangerous way of resolving legal issues. It is particularly so when the analogy relied on arises from legislation adopting a deliberate policy and is sought to be relied on in relation to legislation of a wholly different nature. In such circumstances, the only safe guide is the legislative intention of the provision to be construed. In the present case, that legislative intention is made apparent both by the history of amendments to the relevant legislation and by the explanatory memoranda accompanying the significant amendments.

   Conclusion

6. The result is that s 6C must be construed as providing that operational service was rendered only by a person who actually rendered service in an operational area, and not by someone injured in the course of a journey towards the operational area, who does not reach that area. This means that the AAT reached an incorrect conclusion in relation to the appellant’s case. The learned judge at first instance was correct to set aside the decision of the AAT and to remit the matter to the AAT to be heard and decided again. The appeal to this Court must be dismissed. The appellant should be ordered to pay the respondent’s costs of the appeal.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated:             12 December 2001

Counsel for the Appellant:	Mr N Williams with Mr C Colborne
Solicitor for the Appellant:	Legal Aid Commission of NSW
Counsel for the Respondent:	Mr DEJ Ryan SC
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	13 August 2001
Date of Judgment:	12 December 2001