Sullivan and Repatriation Commission
[2008] AATA 868
•30 September 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 868
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2007/0291
VETERANS' APPEALS DIVISION ) Re GEORGE SULLIVAN Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Ms Robin Hunt, Senior Member
Dr Ion Alexander, MemberDate30 September 2008
PlaceSydney
Decision The tribunal affirms the decision under review.
...................[Sgd]....................
Ms Robin Hunt
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – benefits and entitlements – claim for increased pension – special and intermediate rates of pension – ceased remunerative work – incapacity from war-caused injury “alone” did not prevent the veteran from undertaking remunerative work – incapacity not substantial cause of inability to obtain remunerative work – decision affirmed.
Veterans’ Entitlements Act 1986 (Cth) ss 5Q, 15, 19(9), 23, 24, 120(4)
Chambers and Repatriation Commission (1995) 129 ALR 219
Flentjar v Repatriation Commission (1997) 48 ALD 1Forbes v Repatriation Commission (2000) 101 FCR 50
Leane v Repatriation Commission (2004) 81 ALD 625
Peacock v Repatriation Commission (2004) 40 AAR 143
Repatriation Commission v Graham (2004) 85 ALD 572
Repatriation Commission v Hendy (2002) 76 ALD 47
Repatriation Commission v Smith (1987) 15 FCR 327REASONS FOR DECISION
30 September 2008 Ms Robin Hunt, Senior Member
Dr Ion Alexander, Memberintroduction
1. Mr Sullivan, on 22 June 2005, applied for an increase in his rate of service pension by claiming the special rate. At the time of his application, Mr Sullivan was receiving 100% of the general rate of pension with effect from 8 May 2002. The 100% rate resulted from acceptance by the Veterans’ Review Board (‘the VRB’), on 27 August 2004, of cervical spondylosis and osteoarthrosis of the right knee as service related in addition to previously accepted conditions. We have decided that Mr Sullivan is not entitled to payment of the special rate or the intermediate rate. As a result, the decision under review is affirmed.
background
2. Mr Sullivan recently wound up his business, which he operated as sole director and shareholder with a small number of employees. Mr Sullivan sought a higher rate of pension after he ceased to run the business, claiming this was due to the effects of war-caused injury.
3. Mr Sullivan was born on 6 August 1952 and had recently turned 56. There is a discrepancy between Mr Sullivan’s claim that he enlisted in the Australian Army in 1970 and the respondent’s records before us, which show Mr Sullivan served in the Australian Army during 1972 and 1973. However, there is no doubt Mr Sullivan performed qualifying service. Mr Sullivan told the tribunal he is married and has six adult children, including a stepson.
4. When he lodged his claim for an increased rate of disability pension on 22 June 2005, the Repatriation Commission had already accepted Mr Sullivan had the following war-caused medical conditions:
·Striae atrophicae;
·Haemorrhoids;
·Cervical spondylosis; and
·Osteoarthrosis of the right knee.
5. The Commission made it plain at the hearing that it was not contesting Mr Sullivan’s already accepted conditions nor his entitlement to 100% of the general rate. Further, as he was receiving more than 70% of the general rate, there was no contest about his satisfying this criterion for intermediate or special rate pursuant to subsections 23(1)(a) and 24(1)(a) of the Veterans’ Entitlements Act 1986 (‘the VE Act’).
issues
6. The tribunal is required to determine whether Mr Sullivan should be paid an increased rate of pension in view of his accepted disabilities. In particular, is he entitled to pension at special rate or, failing this, at intermediate rate? In his statement of facts and contentions, Mr Sullivan sought special rate. At the hearing, his counsel asked that we consider both special and intermediate rate.
7. In reaching our decision, we considered:
(a) Is Mr Sullivan by reason of war-caused injury or disease, or both, alone, prevented from continuing to undertake remunerative work that he was undertaking?
(b) Is Mr Sullivan, by reason thereof, suffering a loss of salary or wages, or of earnings on his own account, that he would not be suffering if he were free of that incapacity?
consideration
8. Subsection 15(1) of the VE Act provides that a veteran who is in receipt of a pension under this Part in respect of the incapacity may apply, in accordance with subsection (3) of this section, for an increase in the rate of the pension on the ground that the incapacity of the veteran has increased since the rate of the pension was assessed or last assessed. Mr Sullivan did so apply. Subsection 120(4) of the VE Act requires us to determine the application to our reasonable satisfaction.
9. On 22 June 2005, Mr Sullivan lodged an application for an increase in his disability pension. The application was made in writing and accompanied by evidence in accordance with subsections 15(1) and (3). In answer to the question in the claim form which asks, “(W)hich of your accepted disabilities have become worse since they were last assessed by the Department and in what way?”, Mr Sullivan answered:
I have severe effects of arthritis in my pelvis area and my hands and shoulder. My driving ability is restricted and my writing and typing skills are extremely limited. I am in constant pain.
10. The Commission’s records show Mr Sullivan was assessed for a pension claim in 2004, when a delegate of the Repatriation Commission decided that his rate of pension should be increased to 100% of the general rate of pension. On 1 October 2004, when the delegate decided to increase the rate to 100%, the delegate added two previously unaccepted conditions to those already accepted as war-caused disabilities. In the reasons for this decision, the delegate assessed a degree of incapacity of 100% after calculating an impairment rating of 60 points and a lifestyle rating of 4 points. The delegate noted that Mr Sullivan was still working and refused the special rate on this basis.
11. Mr Sullivan must meet various work tests pursuant to section 24 for the special rate or pursuant to section 23 for the intermediate rate. To qualify for the special rate of pension he must satisfy the criterion that he has war-caused incapacity for remunerative work for more than 8 hours per week, pursuant to subsection 24(1)(b). A further test under subsection 24(1)(c) involves incapacity to continue to undertake the remunerative work that he was undertaking when free of the relevant incapacity. The tests set out under subsection 24(1) are cumulative.
12. Similarly, to qualify for the intermediate rate of pension, Mr Sullivan must satisfy the criterion that he has war-caused incapacity for remunerative work otherwise than on a part-time basis or intermittently [subsection 23(1)(b)] and is prevented from continuing to undertake remunerative work that he was undertaking [subsection 23(1)(c)]. Briefly, these tests additionally require that the war-caused incapacity is alone responsible for the inability to do the remunerative work or the substantial cause.
mr sullivan’s work history
13. In giving oral evidence, Mr Sullivan informed us that he worked at various jobs before enlisting in the army. These included working for Dubbo City Abattoirs, being part of a rock band and working in a paint factory. Mr Sullivan told us he established his own business, Sutter Pty Ltd (‘Sutter’), in 1993 and was sole director and shareholder. He had continued to run this business until he stopped working altogether due to his war-caused injuries.
14. Mr Sullivan’s evidence about exactly when he ceased work was imprecise. Mr Sullivan first told us he ceased work sometime in 2004. Later, Mr Sullivan said he stopped, physically or actively, going to work at the end of the 2003/2004 financial year. He told us he remained a director of the company and sole shareholder but did not draw a salary after he ceased doing the work. Mr Sullivan gave further evidence that the company eventually ceased trading in February 2006. He gave evidence to the effect that the company continued to exist but he had not worked at all since he handed over its management to his stepson, Jason Cooper. According to Mr Sullivan, Mr Cooper “had been working for the company and he had a parallel company in that he was supplying computer supplies and so on, to a small part of that industry”. This made it convenient for Mr Cooper to deliver tapes for Sutter to his own established clients.
15. Mr Sullivan gave further evidence that when Sutter ceased trading he spoke to the bookkeepers, and asked them what he should do to dissolve the company. They gave him the name of a receiver/liquidator whom he rang. This person proceeded to wind the company up and it was officially wound up in February 2008, although it ceased trading in February 2006. Mr Sullivan said he signed any necessary papers.
16. Mr Sullivan told us he also used to perform voluntary work with his local RSL and was on the board of directors until the end of 2002 or beginning of 2003. He found it more difficult to work as time went by due to his arthritis becoming more painful. He said he had to increase medication and the pain and medication meant he was unable to perform his duties. One of his duties was to type letters for the company but he could not sit for long. He began drinking heavily and was depressed.
17. In the claim form, which he completed and lodged on 22 June 2005, Mr Sullivan wrote he had ceased work on 12 November 2004. In a copy of a lifestyle questionnaire signed by Mr Sullivan on 11 April 2005, Mr Sullivan states he stopped working in 2005 due to “ill health”. In a later version of a lifestyle questionnaire lodged with the Department on 8 July 2005, Mr Sullivan again says he stopped work in 2005. In the July 2005 questionnaire, where asked “(W)hy did you stop working?”, with boxes for “Age, Ill-health or Other”, Mr Sullivan says he ceased working due to “other” reasons, being “inability to continue to carry out my duties due to pain & discomfort”. He wrote a letter, which accompanied the 22 June 2005 claim, saying that it was his second attempt to have the matter reviewed and that he had lodged a previous claim in March 2005. No earlier claim form is in the tribunal documents but it may explain why there are two complete lifestyle questionnaires.
18. Also in the July 2005 lifestyle questionnaire, Mr Sullivan wrote he was “more irritable” in answer to a question about any change in the way he got on with other people. Where asked if his disabilities stopped him working in any way, Mr Sullivan wrote of inability to lift products, drive to clients, sit at his desk and carry out complex thought processes due to constant pain. Where asked at question 17 how well he could carry out certain things, Mr Sullivan responded that he could do shopping and cooking easily, did light gardening and lifting with difficulty, minor house repairs if he took his time, could not clean the house, do heavy gardening or wash the car and that lawn mowing was one of the nominated tasks that was not applicable.
19. With his application for an increase, Mr Sullivan also provided an employer report dated 6 July 2005. The next record is one made on 21 September 2005, when a claims assessor made a file note of a conversation with Mr Sullivan. The assessor referred to a letter dated 20 September 2005, which is not included in papers before the tribunal. The assessor recorded that Mr Sullivan was responding to a letter of this date which was “re: work ability report”. The assessor went on to record that Mr Sullivan said he had discussed the matter with his doctor and wanted to let his application go for the time being. The file note further records that Mr Sullivan indicated he would contact the Department again if things deteriorated.
20. The next document on file is an “AGR Audit Report” dated 22 May 2006. This report concluded that Mr Sullivan would not qualify for the special rate for various reasons. As well, a combined impairment report was prepared on 22 May 2006 in which Mr Sullivan’s impairment rating (rounded) was assessed at 55 points. This is 5 points less than the impairment rating assessed when the delegate made the determination of 1 October 2004. In other words, the delegate who rejected Mr Sullivan’s claim for an increase in 2006 actually reduced the assessment of his incapacity compared to the earlier assessment in 2004.
21. Mr Sullivan’s application for an increase was refused formally on 22 May 2006 and the VRB affirmed this decision on 15 January 2007. As we noted above, the delegate refused his claim on the basis that Mr Sullivan was still working. In his application for review by the VRB dated 27 June 2006, which was date stamped by the Department on 29 June 2006, Mr Sullivan says that his doctor had wrongly assumed that he was in full time employment. We note that this admission is at odds with his claim that he was unable to work due to accepted disabilities. It suggests that his doctor did not form an opinion that Mr Sullivan could not work.
medical evidence about mr sullivan’s ability to work
22. In his June 2005 application form, Mr Sullivan listed details of his medical treatment from 12 November 2004 to 18 November 2004 and gave the name of his treating GP, Dr Adrian Sheen, and of a physiotherapist, Dr Sorial, setting these names out in question 24 of the claim form. With the claim, he furnished medical impairment assessment forms completed by Dr Sheen in July 2005. We do not have any similar material about Mr Sullivan when the increase in his pension was made in October 2004 or any material dating back before the determination of 1 October 2004. Additionally, there are no further medical impairment assessments after those furnished in July 2005.
23. In the assessment sheet for the accepted condition, striae atrophicae, dated 6 July 2005, Dr Sheen writes that it has been present for 12 months. This indicates the condition was present when the first assessment was made on 1 October 2004. In answer to question 5, Dr Sheen reports the condition does not restrict Mr Sullivan’s use of either upper limb, walking, dressing, hygiene or feeding.
24. Dr Sheen filled out a similar assessment form regarding “lower limb condition” in which one of the questions asks about Mr Sullivan’s osteoarthrosis of the right knee. The questions asked of the doctor do not address the length of time over which the condition was present. The doctor reports that Mr Sullivan experiences pain in his right knee when walking, sitting and driving a car. He says this is moderate to severe. The doctor says Mr Sullivan can walk 200 metres without resting. When ascending or descending stairs, Dr Sheen reports that Mr Sullivan relies on a handrail and has pain. Where the doctor is asked to rate the joint loss in a table ranging from minor through 25%, 50%, 75% to ankylosis, he rates it as “minor”.
25. Another sheet of the medical impairment assessment which Dr Sheen completed asks for comment on whether any of Mr Sullivan’s conditions cause him embarrassment in public places. All of Mr Sullivan’s accepted conditions are listed and Dr Sheen responds that Mr Sullivan is caused embarrassment by “continued perianal itch”.
26. As to cervical spondylosis, Dr Sheen reports minor loss of range of movement, no crush fractures, and pain in the joints. The level of pain reported is “often present at rest but which improves after several hours rest or responds to medication or therapeutic measures”. The assessment notes an altered sensation but no loss of function of either upper limb. Dr Sheen reports that Mr Sullivan can use both upper limbs efficiently for normal tasks but he has ticked the box for “major loss of digital dexterity causing marked difficulty in handwriting or manipulation of everyday domestic objects”, in respect to the right hand. For the left hand, Dr Sheen reports minor loss of digital dexterity. The question about digital dexterity allows for five categories of loss. The boxes ticked for Mr Sullivan’s degree of loss is the second for the right hand and the first for the left hand in a scale where the degree of loss gets worse from one to five. The third is poor digital coordination, the fourth is major limitations and the fifth is nil or minimal use of hands. Where the form asks about grip strength of hands, Dr Sheen ticks the box for reduced grip strength in both the right hand and the left hand. Mr Sullivan’s reduced grip strength, as reported, is the second degree of loss of grip strength, the first being “minor”. The scale set out in the form ends with the fifth degree which is “unable to grip”. In other words, the loss suffered is not major in the context of the scale considered. He says the condition does not cause excessive fatigue. He certifies that Mr Sullivan’s symptoms are 100% due to the cervical spondylosis.
27. Another assessment completed by Dr Sheen reports that Mr Sullivan’s haemorrhoids are very severe but his bowel control is normal. Overall, in our view, the symptoms and difficulties detailed by Mr Sullivan and addressed by Dr Sheen do not suggest that his incapacity has increased since he was last assessed in 2004, with effect from 8 May 2002. The 2004 decision took into account all the conditions accepted by the respondent before Mr Sullivan’s claim for an increase in 2005, including the additional conditions of cervical spondylosis and osteoarthrosis of the right knee. We also note that arthritis in the pelvis and hands and shoulder to which Mr Sullivan referred in response to the question in the claim form about in what way his condition had worsened, were not otherwise addressed in the application and supporting material Mr Sullivan lodged. They are also not accepted conditions. In the face of these deficiencies and lack of any medical evidence of worsening of any accepted disabilities experienced by Mr Sullivan, we are not reasonably satisfied that Mr Sullivan’s incapacity has increased. We find, on balance, that Mr Sullivan’s incapacity has not increased since he was assessed in 2004. This means he has not met the first requirement for his claim in accordance with subsection 15(1). It follows that he cannot succeed in his claim for an increased pension.
28. The expert medical opinions before us essentially are in agreement. Dr Sophia Lahz, rehabilitation physician, furnished a report dated 7 August 2007 and gave oral evidence at the tribunal hearing. We note that the conclusions in Dr Lahz’s report, with regard to Mr Sullivan’s fitness to work, are based on Mr Sullivan’s own assessment of his capabilities with no independent assessment. Dr Lahz made no assessment of Mr Sullivan’s work activities since he ceased paid employment in 2004. Dr Lahz conceded in her oral evidence that her conclusions were based on Mr Sullivan’s history alone.
29. Dr Lahz referred in her report to material before her, noting the handwritten GP records of Dr Sheen from 1982 to 2006 and the various conditions mentioned in these notes. Medical conditions mentioned included the conditions accepted by the respondent and several others including right hip bursitis. As to the latter condition, Dr Lahz recorded that he was diagnosed with right top anterior bursitis several years ago and had received a series of glucose injections with only transient relief. The doctor gave oral evidence that she thought from memory that it was mainly lateral hip pain in the right hip, and Mr Sullivan told her that, for the last year, his hip symptoms had abated since he’d starting sleeping with a pillow between his legs. This suggests that Mr Sullivan’s hip symptoms improved between August 2006 and August 2007, which is when Dr Lahz saw Mr Sullivan.
30. Radiological investigations Dr Lahz mentioned involved x-ray of the right knee in 2004, x-ray of the right hip in 2004, ultrasound of the right hip in 2004, undisclosed method of investigation of the cervical spine in 2005, which showed degenerative changes, and another x-ray of the right knee in 2006 which showed no sign of degenerative arthritis, loose body or joint effusion. However, Dr Lahz in oral evidence explained she did not sight the original x-rays on which these reports were based.
31. Dr Lahz also referred to notes of Dr Hearn GP made in 2006, which again mentioned a painful right hip and knee along with other conditions. Other material listed by Dr Lahz dealt with conditions which were not raised in connection with the present claim, such as sleep apnoea and weight. She set out in her report the assessment of Dr Sheen about the right knee made on 6 July 2005 and made no further assessment. Similarly, she summarised the assessment of Dr Sheen made on 6 July 2005 for cervical spondylosis and osteoarthriosis of the knee among other things. She referenced the report of Dr Robin Chase, occupational physician, dated 29 June 2007, and took a history herself from Mr Sullivan. Upon examination, Dr Lahz observed that Mr Sullivan could walk around the room for a short time with no apparent difficulty. He could not walk on his heels or tiptoe due to combined effects of knee pain and poor balance. Active neck movements were reduced by 60% and were slowly and cautiously performed. There was localised neck tenderness over C2-3 and C5-7. At the right knee, there were 10-115 degrees of active movement. There were 10 degrees of fixed flexion deformity. Hip movements were preserved and pain free.
32. Dr Chase saw Mr Sullivan for the respondent. Dr Chase acknowledged that Mr Sullivan had the conditions he complained of but he did not accept that these conditions were so significant that they would prevent Mr Sullivan from working. He took the view that Mr Sullivan had overstated his symptoms and the associated disability. Dr Chase considered there were many jobs that Mr Sullivan could do that were administrative or clerical or supervisory or anything like that, and furthermore, as a young man and intelligent, he could certainly undergo retraining or even vocational redirection.
33. Dr Chase gave evidence that his opinion was based on his experience as an occupational physician, physical examination and the history he obtained from Mr Sullivan. In particular, when making his assessment, he took into account Mr Sullivan’s activities in maintenance of his Mudgee property. He noted objective evidence of significant manual labour in the form of calluses on both hands and the left knee. In oral evidence, Dr Chase agreed that weight might affect the formation of calluses on the knees when kneeling but observed that Mr Sullivan would still have to be kneeling quite a lot to get the thickening of the skin over the knee and, furthermore, he would have to maintain that activity as well.
34. About Mr Sullivan’s callused hands, Dr Chase gave evidence that the appearance of calluses on the hands was consistent with Mr Sullivan’s having done some gardening and added that he must have been doing quite a lot of gardening. He further observed that, with calluses, if a person stopped doing an activity the calluses eventually peeled off and left soft skin underneath. Only with quite a lot of activity using those skin surfaces did a person actually maintain calluses. When asked how long it would take for existing calluses to resolve, Dr Chase said there would be some individual variation but he supposed a couple of months.
35. When asked about the presence of calluses, Mr Sullivan gave evidence that he never leant on his right knee so, if he did anything and bearing in mind those calluses may well have been there from his time in the military, the left knee was the one to lean on “when you’re a mortar-man”. He denied that he did any activities which involved kneeling on the left knee on a day-to-day basis or regularly. As to the doctor describing him as having heavy wear and tear on his hands with well-formed calluses, Mr Sullivan disagreed with that description. He said that having been in a management role for about 30 years or so he did not have calluses and did not believe he ever had them.
36. The clinical notes of Dr Sheen contain approximately 30 entries between January 2003 and June 2006. During that time, a single entry in September 2004 noted that osteoarthritis of the knee and cervical spondylosis were accepted as war-related by the Department. There were no other entries referring to these conditions either with reference to symptoms or treatment. Relevantly in March 2003, Mr Sullivan complained of pain in the right hip which was treated with “Mobic”, an anti-inflammatory medication. In October 2004, recurring symptoms with the right hip led to a diagnosis of trochanteric bursitis and treatment with glucose 10% injections. These symptoms persisted through 2005 and early 2006.
37. The new GP Mr Sullivan consulted after the move to Mudgee, Dr Hearn, noted in July 2006, “[A]t present pain in right hip, right elbow. Both are tendonitis with element of bursitis-trochanteric. Treatment Mobic”. The next entry on 6 November 2006 stated “hip better knee worse”. An x-ray of the right knee was reported as a normal examination. The sum of the evidence taken from the medical notes of Drs Sheen and Hearn indicates that Mr Sullivan experienced some pain and recurring symptoms with the right hip in 2004 and continuing into 2006. There is no corroborative evidence from the GP clinical records that would support Mr Sullivan’s having constant disabling pain. In fact, during the relevant period the evidence supports a conclusion that his right “hip” was the predominant source of any difficulties with undertaking his usual work-related activities.
what work tests must mr sullivan satisfy?
38. The substance of Mr Sullivan’s claim is that in mid-2004 or early 2005 he was unable to continue working due to constant incapacitating pain which he attributed to osteoarthrosis of the right knee and cervical spondylosis, both these conditions being accepted disabilities. Furthermore, Mr Sullivan claimed that his inability to work was because of these conditions alone. We note that, in his claim form, Mr Sullivan also referred to severe effects of arthritis in his pelvic area, hands and shoulder. He stated his driving ability was restricted and writing and typing skills extremely limited as well as his being in constant pain. In support of his claim, Mr Sullivan referred to the report and opinion of Dr Lahz.
39. To qualify for payment of an increased rate of pension, Mr Sullivan must satisfy several criteria set out in sections 23 or 24 of the VE Act and he must meet these criteria during the assessment period. The “assessment period” starts on the day Mr Sullivan made his application to increase the rate of his pension and finishes on the day his application is determined [see subsection 19(9)]. The assessment period in this case commences on 22 June 2005, which is the date Mr Sullivan made his claim for an increase in his pension. The standard of proof we must apply in deciding Mr Sullivan’s claim is prescribed by subsection 120(4) of the VE Act (reasonable satisfaction). Mr Sullivan must satisfy us, on balance, that he meets the requirements of sections 24 or 23 of the VE Act in order to achieve an increase to his pension by reference to the special rate or to the intermediate rate.
40. Section 24 of the VE Act provides, in part:
(1) This section applies to a veteran if:
…; 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) …
(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.
our assessment of mr sullivan and work
41. Mr Sullivan’s assessment period commences in June 2005 when he lodged his claim. It is possible for a veteran who is unable to satisfy the work tests in section 24 of the VE Act at the start of the assessment period to later qualify. Mr Sullivan’s accepted war-caused conditions might be presented as having deteriorated later in the assessment period so that he satisfies the tests. Mr Sullivan meets some of the essential criteria for special rate such as age and level of incapacity being over 70%. Although the medical evidence before us is not all in agreement, the Commission is not disputing his entitlement to 100% of the general rate on the basis of total and permanent incapacity. This description might suggest that Mr Sullivan cannot work at all but more is required in order to qualify for special rate or intermediate rate.
42. For the purposes of subsection 24(1)(c), we have examined whether Mr Sullivan is by reason of incapacity from war‑caused injury or disease, being his accepted conditions, alone, prevented from continuing to undertake remunerative work that he was undertaking. For this exercise, we have started with whether Mr Sullivan has ceased remunerative work.
did mr sullivan cease remunerative work?
43. Subsection 24(1)(c) addresses the type of work we need to consider in relation to a particular veteran. The criteria in subsection 24(1)(c) when read with subsection 24(2)(a) necessitate that we first establish if Mr Sullivan has ceased remunerative work and what type of remunerative activity he was undertaking before he ceased. According to section 5Q of the VE Act, the term “remunerative work” includes “any remunerative activity”.
44. Mr Sullivan told us his last remunerative work was carried out for Sutter and that he had to stop because of his accepted conditions. The employer report on the respondent’s file, dated 6 July 2005, states that Mr Sullivan is no longer employed due to “inability to continue duties” and states that he ceased paid employment on 1 July 2004. This form is signed but the name of the employer is not shown. Mr Sullivan told the tribunal he thought it must have been signed by his stepson.
45. We are unable to pinpoint accurately when Mr Sullivan ceased to undertake his remunerative activities in business as Mr Sullivan’s evidence is contradictory. However, on balance, we accept that he no longer was the managing director of Sutter by the time he applied for an increased pension in June 2005. He had ceased to work for the company or significantly reduced his involvement. We find that Mr Sullivan has ceased remunerative work and no longer continues to undertake the remunerative work that he was undertaking. Further, for this reason, he is suffering a loss of salary or wages, or of earnings.
did mr sullivan cease work due to war-caused injuries alone?
46. Problems that Mr Sullivan told us had caused him to cease his involvement in the business of Sutter were heavy lifting and long distance driving to see clients. Mr Sullivan told us the job became too physically draining. He said he had been averaging 75,000 kilometres per annum in a motor vehicle and about the same in aircraft, travelling backwards and forwards between bases. He was unable to continue sitting at his desk doing administrative work, as in data entry and so on, because “I was on painkillers for my cervical spondylosis and it’s a constant pain”. Mr Sullivan added that his right knee also was a constant pain and quite often “very distracting as well as painful”. He gave oral evidence he was taking panadeine forte, which “knocks me crazy” and made him unable to concentrate on marketing and technical aspects of his work. What stopped him “getting out and about” was severe pain in the neck region and muscular problems related to cervical spondylosis and the right knee, both accepted conditions.
47. Mr Sullivan’s evidence that, at the time he ceased work in mid-2004 or thereabouts, his pain was so severe that he was taking panadeine forte 2 tablets three to four times per day is not borne out in Dr Lahz’s report dated 7 August 2007. She noted that he took paracetamol up to four tablets per day with occasional panadeine forte. This indicates a significant difference in the alleged severity of pain and the medication Mr Sullivan told us he took.
48. In the claim form dated 20 June 2005, Mr Sullivan indicated he was suffering “… severe effects of arthritis in my pelvis area and my hands and shoulder. My driving ability is restricted and my writing and typing skills are extremely limited. I am in constant pain”. Mr Sullivan included a note referring to ongoing physiotherapy for bursitis. In a subsequent lifestyle questionnaire received by the Department on 8 July 2005, Mr Sullivan stated “due to both cervical spondylosis and osteoarthritis driving long distances is limited” and “all activities are done with constant pain”.
49. When asked if his hip caused difficulty in driving, Mr Sullivan gave oral evidence that “my hip was a thing that came and went, but my specific constant problem with driving was relating to … my knee, because that’s a constant, whereas the hip was a thing that’s come and gone”. When asked where he suffered aches and pains and twinges, to which he had referred in oral evidence, Mr Sullivan said he sometimes had some pain “in my shoulder blades, hips, back”. He agreed he had been to the doctor to complain at various times about his hip. On occasions, he had complained that this along with his right knee was sufficient to disrupt his capacity to drive. His knee and hip were hurting at the same time. He thought he had last seen Dr Sheen about his hip in May 2006, or maybe 2005. He also thought the doctor diagnosed bursitis and gave him an injection. Mr Sullivan also agreed that he had complained at various times to doctors about his weight.
50. There are several references in the clinical notes of Dr Sheen to pain in the right leg. These occurred in 5 and 8 October 2004. One reference read:
…pain in the right leg to query trochanteric bursitis.
51. In a subsequent visit, Dr Sheen noted “glucose 10% for trochanteric bursitis”. Mr Sullivan confirmed that Dr Sheen gave him several glucose injections as treatment for his hip. Mr Sullivan thought he may possibly have seen his doctor on 5 October 2004 in relation to his hip or, at least, complained of problems with his hip on that occasion, although he was unsure of actual dates. When it was put to him that the doctor’s notes indicated that he had seen the doctor again a few months later on 20 June 2005 complaining of bursitis, Mr Sullivan was unable to recall dates but agreed that he had consulted his doctor on more than one occasion about his hip and had received several glucose injections as treatment for his hip.
52. He had some trouble recalling seeing a doctor around 31 January 2006 when the doctor recorded that he fell backwards and had some trauma to the right hip, and then had an x-ray which showed a fractured rib. Mr Sullivan thought this was when “my right knee had locked up on me, and I think I was on a stairs - that I had fallen backwards and broken my ribs and bruised my hip. Yes.” He was not sure if that took place in Mudgee or Penrith. However, as he noted, there were only a couple of steps in one area at Mudgee, so he thought he must have fallen on the stairs in Penrith. He thought he last saw Dr Sheen on 9 June 2006 as “we still owned the property at that time”.
53. Mr Sullivan recalled seeing Dr Chase at the request of the respondent. Dr Chase recorded in his report of 29 June 2007 that:
In the right hip he suffers from constant pain.
Mr Sullivan told the tribunal that he may well have indicated that to Dr Chase.
54. Dr Sophia Lahz on 7 August 2007 wrote that Mr Sullivan was permanently unfit for any work in which he had training or experience. She referred to his “significantly reduced physical tolerances for walking, sitting, driving, computer-based tasks, lifting and carrying on the basis of right knee pain, neck pain and striae atrophica affecting the groins.” She did not provide any detailed analysis of how or why these conditions prevented any work capacity. In oral evidence, Dr Lahz agreed that she had based her conclusion on the history which she took from Mr Sullivan. Similarly, Dr Lahz’s conclusion as to why Mr Sullivan had ceased to work and was prevented from engaging in such work was based on Mr Sullivan’s own account. Dr Lahz wrote in her report that “Mr Sullivan gives no reasons for ceasing work beyond the effects of severe neck pain, right knee pain and striae atrophica”. Dr Lahz has not made an independent judgment of Mr Sullivan’s capacity.
55. The level of incapacity indicated by the impairment assessments furnished by Dr Sheen do not support a finding that Mr Sullivan’s impairments were sufficiently severe to prevent him from continuing to undertake the business of Sutter. Dr Lahz’s record of the level of pain medication Mr Sullivan was taking also does not indicate his pain was as severe as he claims. Dr Chase also reported in 2007 that Mr Sullivan’s impairments, war-caused and other medical conditions, were not sufficient to prevent his working.
56. We accept that it would have become increasingly difficult for Mr Sullivan to continue with the heavy workload he described once his cervical spondolysis and knee problems reached the level which led to his being granted 100% of the general rate. However, the contemporaneous medical records and the report of Dr Chase indicate that Mr Sullivan’s problems with his right hip also affected his capacity to continue working. Nevertheless, Dr Chase clearly stated that Mr Sullivan was able to work despite his medical conditions. As well, the report of Dr Lahz on which Mr Sullivan sought to rely is based on the history which Mr Sullivan gave her and is flawed as Dr Lahz was not fully informed and did not rely on her own clinical examination.
57. We have formed the opinion, on balance, and taking the medical evidence into account as well as Mr Sullivan’s account, that Mr Sullivan did not cease the remunerative work he had been undertaking, that is, his activities for Sutter, by reason of his war-caused injury or disease alone. In consequence, we find that Mr Sullivan did not cease his last remunerative employment because of his war-caused incapacity alone.
is mr sullivan prevented from seeking remunerative work that he was undertaking?
58. While we have found Mr Sullivan did not cease to work for Sutter due to war-caused conditions alone, pursuant to subsection 24(1)(c), we must make a finding whether he is, by reason of incapacity from his accepted war‑conditions, alone, prevented from continuing to undertake remunerative work that he was undertaking.
59. For this exercise, the Full Federal Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 said that the following questions should be asked:
·What was the relevant remunerative work the veteran was undertaking?
·Was he or she prevented by reason of war-caused injury from continuing to undertake that work?
·If so, was he or she prevented by reason of war-caused injury alone from continuing to undertake that work?
·Once these points have been established by the veteran, and only then, do we ask whether a loss of salary, wages or earnings on his or her own account results from the relevant incapacity?
60. In his last position at Sutter, Mr Sullivan said he was responsible for administration, marketing, selling, stock control, pricing, warehouse control and other functions. He also made some deliveries. The company employed between six and ten people at any time. There were clients “stretching from Perth, Geelong, up onto the north coast of New South Wales, Broken Hill, Canberra, all over”. Mr Sullivan explained he set prices, established clients’ requirements, visited their premises, walked through the tape storage areas, and assessed what was there. Marketing was not just selling and promotions but also buying used product which the company could resell. He would pick up a number of samples, maybe two or three hundred tapes. The tapes were Beta format and ran up to two hours. Each tape weighed about 2.2 kilos. He would take these back to the office, process them, analyse them and sort out whether they were going to buy any of that product. However, he could no longer drive to see the clients and could no longer lift the heavy loads involved.
61. Until he stopped work, Mr Sullivan said he was involved in the marketing, production, labour, accounting and secretarial duties of the company. Mr Sullivan described the business of Sutter, which is the last remunerative work which Mr Sullivan says he undertook, as involving tapes used in making TV shows. He found that tapes were capable of re-use thereby making savings. He said he had invented some equipment during his previous employment with another company and bought some tapes from the United States that he was able to recycle. He analysed tapes that had been used, certified them, and then either resold them or used them on a contractual basis with certain clients. He said, initially, “we were saving Channel Seven 1.5 million per annum intake costs” and it was their only client. By 2002, Sutter had a hundred and forty-something clients, ranging from a small cameraman operation doing news stories through to the Seven Network.
what relevant remunerative work was mr sullivan undertaking?
62. Mr Sullivan agreed his professional background could be described as a mixture of sales, managerial and marketing experience. As well, he said he had technical expertise in the magnetic recording industry. Mr Sullivan told the tribunal he had gained experience and training during his career with two main employers before he set up his own business. He had training and completed technical courses relating to magnetic recording within one of these corporations. He had travelled to the United States for some of this training. He also had obtained a Diploma of Marketing from Penrith TAFE. It was a three year course but because he did various other subjects as well, he studied over a period of about eight years.
63. Mr Sullivan has a wide range of skills demonstrated in his career in Sutter as well as his earlier background. Dr Chase thought he could still perform the various tasks involved in the management and operation of Sutter and has been exposed to many and varied types of work experience. In the service, Mr Sullivan told us he was involved in mortar. He gave evidence about various civilian jobs he undertook such as abattoir work and being in a rock band. His last remunerative work he told us involved sales and marketing as well as management and administration of his own business and technical expertise with magnetic tape. We consider this the most relevant work for our forming a view about what is relevant work in Mr Sullivan’s case as he has been performing this role since 1993 and also has difficulties with heavy lifting, which restricts his possible physical work. While we accept that Mr Sullivan cannot cope with heavy lifting, we have already found Mr Sullivan is not prevented from continuing in other remunerative employment by his various health conditions, although he may have to reduce his hours or time spent sitting or driving or tasks that cause him discomfort.
64. The only assessment before us of remunerative work which Mr Sullivan might still perform is in Dr Chase’s report. Dr Chase was of the opinion that Mr Sullivan could continue to perform the work he was previously doing in his business and also the type of work he was doing on his property in Mudgee. On balance and in the absence of any compelling evidence to the contrary, we agree with Dr Chase’s conclusion that Mr Sullivan could undertake the duties of a sales person or managerial and administrative tasks with some modifications to adjust to his medical conditions. He has also, in our view, capacity to perform physical tasks required to run the property in Mudgee, albeit with some limitations. The degree to which he may need to modify his activities has also been addressed only by Dr Chase. Dr Chase suggests some modification but not to any greater degree than that of most persons who are Mr Sullivan’s age and who suffer similar physical disabilities.
is mr sullivan prevented from working due to accepted conditions alone?
65. Mr Sullivan gave evidence that his hip no longer troubled him and he could not work due to his accepted conditions alone. But there are other circumstances which affect his position in our view. Mr Sullivan drew attention to economic factors and lack of work in rural Australia because of the drought. He has not made any effort to find work by his own admission. While times are difficult, the Full Federal Court in Chambers and Repatriation Commission (1995) 129 ALR 219 ruled that we should disregard temporary effects on the labour market. As well, Mr Sullivan had not yet moved to Mudgee when he sought an increase to his pension in June 2005.
66. Mr Sullivan is still aged in his 50s and well short of the usual retirement age of 65 or thereabouts. He has not been out of the workforce for a lengthy period, finishing in mid-2004 at the earliest or when Sutter was wound up, until 2008, according to his own oral evidence.
67. Dr Chase expressed an opinion that, Mr Sullivan’s impairments are not much different from that of any man of his age. Dr Lahz conceded in oral evidence that she based her opinion that Mr Sullivan could not work on Mr Sullivan’s account rather than her own evaluation. Dr Chase gave Mr Sullivan an impairment rating of 39 with a lifestyle rating of 3 giving a final incapacity of 70% as opposed to the 100% awarded by the delegate and the VRB. The doctor made this assessment after a detailed consideration and setting out of appropriate tables under the Guide to the Assessment of Rates of Veterans’ Pensions (GARP). Dr Chase noted that Mr Sullivan’s daily routine included gardening, general maintenance and feeding his three horses, nine sheep, four cows and two dogs. He noted Mr Sullivan had a tractor, two dams and a ride-on lawn mower. Dr Chase concluded that Mr Sullivan’s osteoarthritis was “little more than one would expect in a 54 year old man” but well within “normal” range. Most people with such symptoms, Dr Chase reported, got on with their lives and coped by modifying activity and judicious use of analgesics. He saw no reason why Mr Sullivan could not work in a sales role or any sort of administrative or managerial position.
68. On 17 March 2008, Dr Chase furnished a supplementary report which he made after reading Dr Lahz’s report. Dr Chase was asked to comment on her report and wrote:
I disagree with her report. I do not see how the striae atrophicae, the haemorrhoidectomy, the GORD, obesity, right scapularis spasm, sleep apnoea or right trochanteric bursitis could render him unfit for work. Therefore, her reasons for him being unfit for work basically settled down to the right knee and the neck.
It is not tenable that a 54 year old man could be totally unfit for work because of osteoarthrosis of the right knee or cervical spondylosis.
69. Dr Chase went on to say he acknowledged these conditions would cause him pain but not cause significant impairment. They would prevent him from performing heavy manual work but they would not prevent him from working altogether. Dr Chase stood by his comments that Mr Sullivan continues to engage in activities that could be considered work.
70. Mr Sullivan has not unfortunately explored any of his options other than ceasing remunerative work. We do not accept, after taking into account the medical records and opinions before us and Mr Sullivan’s oral evidence, that he is by reason of incapacity that is war-caused unable to continue to undertake the remunerative work that he last performed. We are satisfied that he ceased remunerative employment for reasons other than his service-related conditions alone. His osteoarthrosis of the knee and cervical spondylosis were simply contributing factors and are not so severe as to prevent his working in the capacities outlined by Dr Chase.
71. In view of Mr Sullivan’s evidence about his previous work experience and his daily activities on his farm, limited though they may be, and the medical records and opinions about Mr Sullivan’s capabilities, we find, on balance, that Mr Sullivan is not prevented from working or from seeking work that he was undertaking. He does not satisfy subsection 24(1)(c) in this respect.
72. Even if we had found that war-caused conditions were the only factors preventing Mr Sullivan from undertaking work, we would have found against him when considering if, had he not suffered accepted war-caused conditions, he would have been earning remuneration. We are required to consider the position had Mr Sullivan not suffered from the war-caused conditions, but other conditions that might impact on his capacity for remunerative work.
73. If his war-caused conditions are disregarded, we are satisfied that Mr Sullivan would not have been in employment during the assessment period even if he had had none of his war-caused conditions. Subsection 24(2)(b) of the VEAct, which operates in some circumstances to ameliorate the conclusion that subsection 24(1)(c) is not satisfied, does not in our view assist Mr Sullivan. We accept that Mr Sullivan has suffered a loss of earnings but this is relevant only if the veteran has established he is unable to perform previous remunerative work. Only then is the next question whether a loss of salary, wages or earnings on his own account results from the relevant incapacity.
74. The requirement that war-caused injury or disease alone prevents a veteran from continuing to undertake remunerative work he was undertaking is not satisfied if the war-caused injury or disease alone were sufficient to prevent the veteran from engaging in work regardless of other causes. Nor does subsection 24(1)(c) contemplate that other factors are only to be taken into account if they, of themselves, prevent a veteran from working. It is sufficient to exclude an entitlement to special rate if one or more other factors restrict a veteran's capacity to engage in relevant remunerative work. See Repatriation Commission v Hendy (2002) 76 ALD 47 at 54, [37]; Leane v Repatriation Commission (2004) 81 ALD 625 at 631, [20]; and Repatriation Commission v Graham (2004) 85 ALD 572 at 583, [31].
75. It is necessary to take account of prospects of obtaining that kind of employment during the assessment period. In Hendy at 54-5, [37] the Full Federal Court stated:
The decision-maker is required to take into account any factor that plays a part or contributes to a veteran's being prevented from continuing to engage in remunerative work. If a period of time elapses after a veteran ceases remunerative work and before the commencement of the assessment period, lack of recent work experience, time out of the workforce and increasing age will be relevant for consideration under s 24(1)(c) of the Act. The decision-maker is required to consider the effect, contribution to, and relative weight to be attached to any or all of those factors during the assessment period.
76. There is no evidence Mr Sullivan at any time during the assessment period was genuinely seeking to engage in remunerative work. Mr Sullivan told us he could not work, even limiting his activities on his farm. He further gave evidence that it was unlikely he would find any remunerative work since he moved to Mudgee because there were few opportunities. He gave no evidence of any efforts to find work. Therefore, there is no basis on which we might make any finding that the ameliorative provisions of subsection 24(2) could operate.
77. It follows that we are satisfied that Mr Sullivan is not suffering a loss of salary, wages or earnings that he would not be suffering if he were free of the accepted conditions. Mr Sullivan’s accepted conditions are not the substantial cause of his failing to obtain remunerative work in which to engage. Accordingly, we are satisfied that subsection 24(1)(c) is not made out in his case. This means Mr Sullivan does not qualify for payment of the special rate of pension.
78. Subsection 23(1)(c) contains a similar provision requiring the veteran to show that he or she is, by reason of incapacity from 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 from that incapacity. We are satisfied for the same reasons as set out above that Mr Sullivan does not satisfy this requirement for payment of intermediate rate. This means he does not qualify for the intermediate rate of pension.
79. Mr Sullivan is, therefore, not entitled to a disability service pension at special rate nor at intermediate rate. We have not explored the rest of the criteria such as hours of work Mr Sullivan could perform as he must meet the cumulative tests for special rate or intermediate rate in order to qualify. It is unnecessary to make a finding on every test. The decision under review must be affirmed on the grounds that Mr Sullivan’s incapacity has not increased since the assessment in 2004 and that he is not prevented from performing remunerative work of the kind he was previously undertaking by his war-caused conditions.
decision
80. The tribunal affirms the decision under review.
I certify that the 80 preceding paragraphs are a true copy of the reasons for the decision herein of Ms Robin Hunt, Senior Member and Dr Ion Alexander, Member
Signed: .........................[Sgd].............................
Jennifer Wong, AssociateDate/s of Hearing 27 June 2008
Date of Decision 30 September 2008
Counsel for the Applicant Ms E WoodAdvocate for the Applicant Legal Aid Commission NSW – Veterans' Advocacy Service
Solicitor for the Respondent Sparke Helmore Lawyers
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