Strange and Repatriation Commission
[2000] AATA 695
•5 July 2000
DECISION AND REASONS FOR DECISION [2000] AATA 695
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1998/1322
VETERANS' APPEALS DIVISION )
Re WILLIAM EDWARD STRANGE
Applicant
And REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Senior Member M D Allen Dr P D Lynch, Member
Date5 July 2000
PlaceSydney
ADMINISTRATIVE APPEALS TRIBUNAL ) No N1998/1322
)
VETERANS' APPEALS DIVISION )
Re WILLIAM EDWARD STRANGE
Applicant
AndREPATRIATION COMMISSION
Respondent
DECISION
Tribunal Senior Member M.D. Allen
Dr P Lynch, Member
Date 5 July 2000
Place Sydney
DecisionFOR the reasons given orally at the conclusion of the hearing in this matter, the decision under review is SET ASIDE and the Tribunal substitutes in lieu thereof its decision, namely THAT:
The Applicant, William Edward Strange, is entitled to pension at the Special Rate as and from 31 October 1997.
(Sgd) M.D. ALLEN
.............................
Senior Member
CATCHWORDS
VETERANS' ENTITLEMENTS - Special Rate pension. Formerly member of a partnership and permitted unlimited drawings from partnership account. Ceased to play an active role in the partnership and placed on a retainer. Whether Applicant suffered loss of earnings on his own account.
Veterans' Entitlements Act 1986
Repatriation Commission v Smith 15 FCR 327
Re Cavell and Repatriation Commission 9 AAR 534
Repatriation Commission v Bowman 38 ALR 650
Re Panke v Director-General of Social Services 4 ALD 179
Re Williams and Director-General of Social Security 6 ALN at N336
Repatriation Commission v Greenwood 12 AAR 408
Re Fahey v Repatriation Commission 5 AAR 274
REASONS FOR DECISION
Senior Member M D Allen
At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Respondent of a copy of the decision that was in fact made, the Respondent pursuant to Sub-section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Respondent a statement in writing of the reasons of the Tribunal for its decision.
The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service. Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.
The said transcript is annexed hereunto and furnished to the Respondent and to the Applicant as it is the reasons for the Tribunal's decision.
I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:
Senior Member M D Allen
Signed: Kwai-Ling Wong
....................................................................................Associate
Date of Hearing 5 July 2000
Date of Decision 5 July 2000Solicitor for Applicant Mr R Sherlock,
Legal Aid Commission of NSW
Advocate for Respondent Ms M Doggett, Department of Veterans' AffairsDRAFT DECISION
ADMINISTRATIVE APPEALS TRIBUNAL
Matter No N1998/1322
By MR M.D. ALLEN, SENIOR MEMBER
DR LYNCH, Member
STRANGE and repatriation department
SYDNEY, WEDNESDAY, 5 JULY 2000MR ALLEN: By application made the 17th day of September, 1998 the applicant sought review of a decision by the respondent made 7 November 1997 and affirmed by the Veterans' Review Board which increased his disability pension to 90 per cent of the general rate but did not assess him as entitled to any of income related rates of pension. That is to say it was held that he was not entitled either to the intermediate rate of pension pursuant to section 23 of the Veterans' Entitlements Act 1986 as amended or to the special rate of pension which is prescribed pursuant to section 24 of the said Act.
The criteria for the grant of pension of a special rate in the applicant's case are set out in subsection (1) of section 24 of the Veterans' Entitlements Act. That section provides inter alia the special rate pension applies if the veteran, not having turned 65; (a) is in receipt of a pension of at least 70 per cent of the general rate and that much is conceded in this matter; (b) the veteran is totally and permanently incapacitated, that is to say the veteran's incapacity from war caused injury or from war caused disease of both, is of such a nature as, of itself alone to render the veteran incapable of undertaking remunerative work for periods aggregating more than eight 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.
The evidentiary provisions applying in this matter are set forth in subsection (4) of section 120 of the Veterans' Entitlements Act, that subsection providing inter alia that before the Tribunal can award a pension in excess of the 90 per cent presently granted to the applicant we must be reasonably satisfied that the criteria leading to the grant of either the intermediate rate or special rate pension have been met. In Repatriation Commission v Smith 35 FCR, the Full Court of the Federal Court equated the term "reasonable satisfaction" to the civil standard of proof.
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©Auscript Pty Ltd 2000Both subsection (b) and (c) of subsection (1) of section 24 refer to an incapacity from war caused injury or disease alone. The so called alone test was addressed by Burchett J in Cavell v Repatriation Commission 9 AAR 534 at 539 where his Honour said that:
The task of the Tribunal 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 on nice philosophical distinctions but to an eye to reality and as a matter in respect of which commonsense is a proper guide.
In this matter, the applicant gave evidence today as to his experience and training. That is in a convenient form, set forth in the report of Dr Mark Burns of 18 April 1999, furnished to the respondent which became exhibit R2 in these proceedings. Generally speaking, the applicant left school at the age of 15 because his mother required him to work on the family property. He worked that property and also did some shearing work, living by himself on the property.
In 1964, he realised that he was going to lead a very restricted life if he continued working on the property at Cobar so he joined the Australian Regular Army. As a result of that, he did two tours of Vietnam, both with the 1st Battalion Royal Australian Regiment.
After returning from Vietnam, he had some time in Malaysia with that Batallion, then left the Army. He reasons for leaving generally speaking were that, having been to Vietnam he couldn't see much sense in a peacetime army, it was simply training for activities which he had already participated in.
After leaving the Army, he drove a truck for the then Postmaster General's Department for some time, then he and his wife ran a small roadside hotel in Northern Queensland. They left that after a family tragedy, he then worked as a tradesman's assistant underground in a mine at Cobar. He was retrenched from that position and he then took over the running of his wife's parent's property. That suffered from the drought and they, in his words, "just struggled on". His wife took a job in Cobar at the high school library to make ends meet and he saw her only on weekends.
So far as the necessary paperwork for the property was concerned, that was carried out by his wife in town, as he put it, all letters went to the town address and she did the accounts. They sold the property in late 1983 during a good season. They then conducted a roadhouse at Cobar. The applicant performed manual duties filling cars with either petrol or diesel,
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©Auscript Pty Ltd 2000cleaning windows. They employed some female staff to do some cooking and his wife, after she had finished her duties as a librarian at the high school, did the banking, supervision and the accounts.
After some five years the roadhouse got too much for them so they purchased a nursery business at Batemans Bay. That business consisted of three subdivisions, a hot house and products were on sale to other nurseries, a retail area which sold plants to the public and a landscaping yard which sold items such as soil, gravel, woodchips etcetera to the public.
The applicant used to deliver plants to Canberra from the hot house but he was also in charge of the landscaping yard. This continued until about 1997 when, because of arguments with customers, he finally gave up any interest in the business.
The applicant has accepted as war caused incapacities, right otitis externa, psychoneurosis, tinapeadis, gastro oesophageal reflux and irritable bowel syndrome. Those particular disabilities are addressed in the reports of Dr Baz, occupational physician. That report is A2 in these proceedings.
So far as Dr Baz is concerned, she states:
He describes considerable difficulty coping with work over the last 10 years. He has had increased difficulty due to problems with interpersonal relationships, irritability and depression. In my opinion, he is unfit to run his own business or work on a self employed basis because of the depression and irritability. He is unable to work effectively in contact with the public and has considerable difficulty with relationships with staff and co-workers due to psychiatric disorder.
I do not consider that he would be able to effectively run a nursery nor to undertake other than occasional tasks at his wife's direction within that business. I consider him to be unfit to work in an employed capacity and do not believe he would be able to maintain employment if offered work because of his irritability and social withdrawal.
In my opinion, Mr Strange is unfit for work of eight or more hours duration weekly. I consider this as the result of the accepted disabilities alone, in particular the psychiatric disorder. While he has other disabilities which physically impact on his work capacity, they do not preclude him from working on a full time basis.
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©Auscript Pty Ltd 2000He was also examined by Dr Mark Burns, I have referred to his earlier report. In his second report dated 5 October 1999, Dr Burns said:
I continue to believe that Mr Strange would be capable of doing up to 20 hours administrative work per week in a low stress environment, but due to accepted disability of psycho neurosis (and alcohol abuse) it is extremely unlikely that he would be able to obtain such work in an open workforce. In other words, no employer would employ him due to his psychological problems.
I simply comment in passing, that the applicant's own statement says of the nursery business:
I started to drink more and neglect customers to the stage where sometimes I just could not be bothered to talk to them.
In Repatriation Commission v Bowman 38 ALR 650, the Full Court of the Federal Court in dealing with an appeal from Ellicott J said:
On the hearing before us counsel for the Commission challenged the correctness of remitting the matter to the Tribunal to be heard and decided according to the law laid down in the judgment of Ellicott J. The first aspect of his Honour's reasons which was challenged before us concerned his reference to cases decided under other legislation and the use which he stated might be made of these cases.
Ellicott J, in his reasons, referred to cases decided by the House of Lords on the phrases, "Incapacity for work and ability to work" in the Workers Compensation Act 1907, United Kingdom. It's a reference to a well known case then in the decision of Bull v William Hunt and Sons, (1912) Appeal Cases 496.
The Full Court of the Federal Court went on to say:
The main challenge to his Honour's judgment concerning his interpretation of paras 3 and 6 of schedule 1 and the first paragraph of schedule 2 and the application of these to the facts, his Honour said, "In my opinion, therefore, the Tribunal is bound in the law in applying those provisions to take into account the effect of an applicant's physical or mental disability on his or her capacity to earn remuneration by employment or otherwise in any market reasonably accessible to the applicant. It is not enough simply to form a view that an applicant, in a physical sense, can still undertake work despite war-related injuries. The incapacity so
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©Auscript Pty Ltd 2000arising may well have destroyed or impaired his or her earning capacity in the market place.
It is from such circumstances that the relevant provisions are designed to protect the applicant. Needless to say in applying them regard must be had to the specific test contained in them.
The Full Court continued at page 654:
We cannot see Ellicott Js conclusion of the Workers Compensation cases which he cited might appropriately be used as a guide was wrong.
The expression also found further expression in a case decided by the former President of the Tribunal, Davies J, in Re Panke v Director-General of Social Services 4 ALD at page 179. At page 181 his Honour referred with approval to the case of Ball v William Hunt & Sons, Ltd [1912] AC 496 and the passage which reads:
The earning of wages depends as much on the demand for the workman's labour as it does upon his physical ability to work. If because of his apparent physical defects no one will employ him, however efficient he may be in fact, he has lost the power to earn wages as completely as if he was paralysed in every limb.
If it be then the paramount object of the Act to compensate for the loss of the power to earn wages, the workman whom because of the injury caused by an accident, nobody will employ, comes within its purview as much as one who is rendered unable to do any work at all.
His Honour then went on significantly to say a similar view was expressed by Ellicott J in Bowman v The Repatriation Commission, delivered 12 May 1981. His Honour there said:
Each of them in its terms requires an assessment to be made of the effect of an applicant's mental and physical incapacity on his or her ability to earn and this can only be gauged by reference to the market in which the applicant might expect to earn.
…
It is not enough simply to form a view that an applicant in a physical sense can still undertake work despite war related injuries. The incapacity so arising may well have destroyed or impaired his or her earning capacity in the market place.
It then continued, quoting from the decision on Bowman:
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©Auscript Pty Ltd 2000Mr Bowman is 60. After considering his war related disabilities the Tribunal formed the view that he can cope with suitable full time sedentary employment in a low stress environment but that this employment would involve his taking frequent breaks of hours or perhaps days. The Tribunal qualified its finding by the statement "if such work could be found for him". In the absence of evidence it must at least be open to doubt whether it could be found. If not available full-time, it would be necessary to enquire whether it is available on a temporary, part-time or intermittent basis and, if so, what remuneration he is likely to earn …
The only other comment that needs to be made on this particular aspect is the remarks of Senior Member Balmford, as she then was, in Re Williams and Director-General of Social Security 6 ALN at N336, who quoted the decision in Re Panke, supra, and stated:
But what is in issue is not Mr Williams' ability to undertake employment (given that he has a medical condition from which his incapacity derives) it is his "ability to attract an employer who is prepared to engage and to remunerate" him, which is not the same thing.
Now, in this matter we have referred previously to the remarks of Dr Baz that he cannot do eight hours, and even Dr Burns in his report to the respondent said:
That it is extremely unlikely he would be able to obtain such work in an open workforce. In other words, no employer would employ him due to his psychological problems.
The only other suggestion from the respondent was that perhaps he could be self employed and in line with Dr Burns' earlier comments, he could do some administrative work.
To suggest that the applicant could do administrative work is to totally ignore his background and experience and to totally ignore the provisions of section 28 of the Veterans' Entitlements Act, which refers to an applicant's background, experience, training, etcetera. There is also much force in the submissions by the applicant's representative that even to do administrative work in a low stress environment involves interacting with other people and it is quite clear from the reports before us that that is simply something that he cannot do.
For completeness we would also refer to the reports of the applicant's treating psychiatrist, Dr Koller, which occur at document T12. Dr Koller is succinct. That report dated 29 September 1997 says:
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©Auscript Pty Ltd 2000I have been attending Mr Strange since my report dated 29 March 1995. At work he is extremely irritable and this irritability has spilled over into the marriage. He has come to the stage where he is unable to work. The customers intensely annoy him. His wife has moved out of the marital bed. Separation is mooted. He is unemployable.
Given all that it seems to us quite clear that he meets the provisions of paragraph 24(1)(b), and that is because of war caused incapacity alone.
It was then argued by the respondent that the applicant has not suffered a loss of salary or wages of earnings on his own account. The basis of this submission is that the applicant and his wife were in partnership at all relevant times in the nursery business. The tax returns of both the applicant and the partnership for the tax years ending 30th of June 1996/97 and 98 show that the applicant did not draw any wages but that he received a share of the partnership profits.
The manner in which the partnership accounts were drawn up was not before the Tribunal, however we are not prepared to assume otherwise but that they were a proper drawing up of returns for the Commissioner of Taxation.
The applicant's evidence was that while he was actually working within the partnership business he had free access to draw from the business such moneys as he required from time to time. After he withdrew from active participation in the business his wife, who continued to do the accounts of the business as she had done for all businesses throughout the marriage, his wife put him on a retainer of $150 a week. Now, the only work he does in the business is simply when he is available. He takes the banking of the business to the bank on Mondays and Fridays. It seems that certainly wouldn't amount to eight hours of work, in any event. So the situation is that the applicant has gone from being able to draw on the accounts of the business to simply receiving a retainer.
This type of matter was discussed by his Honour, Davies J, on appeal from the Tribunal in Repatriation Commission v Greenwood, 12 AAR 408. At page 413 his Honour said:
It was contended that Mr Greenwood did not suffer a loss of salary or wages or earnings by reason of having to give up physical work for he continued to receive salary or wages from R & B Greenwood Pty Ltd. It was submitted, moreover, that no loss was shown as the proceeds of investment were as high as would have been the proceeds from any building activity that R & b Greenwood Pty Ltd might have undertaken. I think that this was the substance of the argument put though I have not used counsel's precise words.
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©Auscript Pty Ltd 2000A similar submission was rejected by an Administrative Appeals Tribunal in Re Fahey v Repatriation Commission, 5 AAR 274. In that case the Tribunal said at pages 277, 278:
While that submission covered many points, essentially it was that, by reason of the applicant's transposition of his investment in the farm into investments in a house in Boorowa township and into a deposit of money at interest, he was not suffering a loss of income and had in fact managed to produce a higher income than the farm had returned. It seems to us that the question is not one of loss of income, that is to say of reduced support, but rather of loss of (i) salary, (ii) wages, or (iii) earnings on the veteran's own account, that the veteran would not be suffering if he or she had been free of the incapacity. It is all in the context of being "prevented from continuing to undertake remunerative work". The phrase here relevant, namely "earnings on his or her own account", was in our opinion clearly inserted to cover the case of a person who derived not salary or wages, but rather the earnings of a business profession or trade as a result of remunerative work.
There is a loss of salary or wages, or of earnings on one's own account, when one does suffer a loss of remuneration properly so described. It seems to us to be nothing to the point that a person has sold a business that was run by the sweat of his brow because of ill health and invested in shares in BHP. What that person receives in dividends can be said to be "earned", but no definition of the word "earnings" can, given that the legislation speaks of "earnings on his or her own account" and puts that phrase into the context of what is received as the product of remunerative work, lead to a conclusion that a person like the present applicant has not suffered a loss of earnings on his own account when he has had to give up the remunerative work which produced such earnings for him. It would have been very easy for the legislature to have said "loss of income" if that was what was meant. Instead the legislature has used a more lengthy formula which, on a fair reading, is more restrictive in its scope. It would not be correct to subvert the legislative intent by giving "earnings on his own account" an interpretation so expansive that it, together with "wages and salary", adds up to mean "income".
His Honour continued:
I agree with the approach taken in that passage.
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©Auscript Pty Ltd 2000In this matter, as we have referred to previously, the applicant was entitled to draw from the company without apparent restriction. He then changed the nature and also he was paid a retainer, he did suffer a loss of earnings on his own account. He therefore fulfils the criteria of subsection 24(1) of the Veterans' Entitlements Act and is entitled to pension at the special rate.
As we understand the evidence and this was the submission of the applicant's representative that the time he ceased work was sometime in October and that they would contend that he is entitled to pension as and from the 31st day of October 1997.
The decision under review will therefore be set aside and the Tribunal substitutes in lieu thereof, its decision that the applicant is entitled to pension at the special rate as and from the 31st day of October 1997.
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