Tanner and Repatriation Commission
[2004] AATA 363
•7 April 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 363
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/701
VETERANS APPEALS DIVISION ) Re NOEL TANNER Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Senior Member B J McCabe Date7 April 2004
PlaceBrisbane
Decision The Tribunal sets aside the decision under review. ...........Sgd...........................
Senior Member
CATCHWORDS
VETERANS’ AFFAIRS – pensions and benefits – special rate of pension under s24 Veterans’ Entitlements Act 1986 - whether applicant was engaged in remunerative work – whether applicant is prevented from continuing remunerative work by reason of war caused injury or disease alone – whether applicant is suffering a loss of earnings – decision set aside
Veterans’ Entitlements Act 1986
Hill and Repatriation Commission [2000] FCA 929
Counsel v Repatriation Commission [2002] FCAFC 201
REASONS FOR DECISION
7 April 2004
Senior Member B J McCabe 1. This is an application for review of a decision of the Veterans’ Review Board (“the VRB”) dated 22 July 2002. The VRB affirmed an earlier decision on 1 July 2002 to allocate the applicant a disability pension at 90% of the general rate.
2. The Tribunal heard the matter on 4 February 2004. The applicant was represented by Mr O’Gorman. The respondent was represented by Mr Williams, a departmental advocate.
3. The Tribunal was provided with documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (“the T-documents”). Also in evidence were:
· Two statements of the applicant dated 30 January 2003 and 21 July 2003;
· A statement of the applicant’s wife dated 15 July 2003;
· Two reports of Dr Gelb dated 25 September 2002 and 28 March 2003,
· The applicant’s group certificates for the years 1988-89, 1990-91, 1991-92, and the tax return for business (profit and loss schedule) for the applicant’s business for 1996;
· A bundle of documents described as the applicant’s ‘work records’;
· Documents containing quotes and sketches in relation to the applicant’s business;
· An undated report of Dr Frazer, apparently written in 1991;
· The applicant’s personal tax returns for the years 1994, 1995, 1996, 2001 and 2002.
The Facts before the Tribunal
4. The applicant served in the Australian Army from 1967 until 1990. He rendered operational service in Vietnam from May 1968 until May 1969, and defence service from December 1972 until his discharge. During his service the applicant witnessed several incidents, which subsequently gave rise to Post Traumatic Stress Disorder (PTSD).
5. After his discharge the applicant commenced carpentry/cabinet-making/handyman activities (hereafter the “activities”). He registered a business name, “Mountain Top Furniture” in 1991. His activities continued until 1998. The applicant states his activities ceased due solely to his PTSD.
6. The Repatriation Commission accepted the applicant’s PTSD was war-caused, in a decision dated 1 July 2000 (ff. M-Q of the T-documents). Since then the applicant has been in receipt of a disability pension of 90% of the General Rate.
Facts surrounding The Applicant’s Activities
7. The Tribunal had to consider whether the applicant’s activities were merely a hobby, or constituted remunerative work.
8. Between 1991 and 1992 the applicant began what he calls his cabinet-making business. He admits sales were low for the first couple of years. This is supported by tax documents received into evidence.
9. From 1993 to 1996, the applicant’s activities continued “at a medium pace” (per exhibit 3). They were never profitable: while he made sales in 1995 and 1996, he derived a net loss of $1913 in 1994, a net loss of $2012 in 1995, and in 1996 he derived a net loss of $834 (exhibit 11).
10. From 1996 to 1998 the applicant states his work continued at “about the same pace” (exhibit 3). Tax returns for the years 1997 and 1998 were not provided as exhibits. I infer the business’ profitability remained the same.
11. The applicant ceased his activities in 1998.
12. The applicant carried out his activities in a shed, 13 metres long and 7 metres wide (exhibit 3). The applicant estimated in exhibit 10 in 1996 that he devoted 60% of the shed to personal (non-business) uses. The applicant queried the accuracy of this in cross-examination.
13. In his activities the applicant used some commercial grade and some ‘handy man’ grade tools and machines. He asserted he formulated a business plan (exhibit 3). A report of Dr Frazer supports this. The doctor writes the applicant “had extensive career plans which included the establishment of a furniture making business” (exhibit 12). Finally it is worth noting the applicant advertised his business, albeit in a very limited fashion: he printed business cards and distributed them at a local social club.
Facts concerning the effect of the Applicant’s PTSD on his Activities
14. Factual issues regarding the applicant’s PTSD also warrant close examination. If his claim is to succeed, he must show his war-caused injury alone prevented him from undertaking remunerative work (the “alone” test): s24(1)(c). The applicant has several accepted war-caused injuries. He asserts it was his PTSD alone that prevented him from undertaking remunerative employment.
15. Four medical reports were received into evidence. Three reports were prepared by Dr. Gelb (exhibits 5 dated 25 September 2002, exhibit 6 dated 28 March 2003, and ff. 33-39 of the T-documents dated 30 May 2000). Dr. Gelb was also called as a witness. Another report was prepared by Dr. Frazer, following the applicant’s discharge from the army (exhibit 12). I will deal with these reports in turn.
16. Dr Gelb’s reports all indicate the applicant suffers greatly from the symptoms of PTSD. Relevant to the applicant’s ability to undertake remunerative work, Dr Gelb states the applicant:
· Has a significant impairment in his memory and concentration, cannot get motivated, and quit his cabinet making in 1998 because he was “unable to deal with stress” (ff.37-38 of the T-documents);
· Could work at his cabinet-making at only a “relaxed pace because of his stress-related symptoms”, had a lack of motivation, memory loss, and an inability to complete a job estimate or design a simple project (exhibit 5).
17. Dr Gelb appeared as a witness. His oral testimony supported his reports.
18. The report of Dr Frazer (exhibit 12) presented a markedly different picture of the applicant’s condition. Dr Frazer states the applicant “has no symptoms of post traumatic stress disorder”. Dr Frazer did not appear as a witness.
19. It is clear this Tribunal cannot unconditionally accept both the opinion of Dr Gelb and that of Dr Frazer. I prefer the opinion of Dr Gelb to that of Dr Frazer. Dr Gelb had a longer relationship with the applicant. His reports and testimony are more revealing and reliable, because they were prepared more recently. Dr Frazer’s sole report was written in 1991, long before the applicant ceased work.
The Law
20. The issue before this Tribunal is whether the applicant is entitled to pension at the special rate, pursuant to s24 of the Veterans’ Entitlements Act 1986 (the Act).
21. In order to be eligible for the special rate of pension, a veteran must satisfy a three-stage test: the requirements of s24(1)(a), s24(1)(b), and s24(1)(c) of the Act.
22. The respondent accepts the applicant meets the first two requirements, in s24(1)(a) and s24(1)(b). The dispute lies in whether he satisfies s24(1)(c).
23. Section 24(1)(c) of the Act provides that special rate is payable if:
The veteran 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 of that incapacity
24. The respondent submitted that s24(1)(c) has not been satisfied for several reasons:
· The applicant does not satisfy the ‘alone’ test: other factors contribute to preventing him from engaging in remunerative employment (including his age, time out of the workforce, and other disabilities);
· The applicant’s activities were a mere hobby. They cannot be defined as “remunerative work”;
· The applicant cannot be said to be suffering a loss of earnings, because the financial records from his activity demonstrate his activity has not resulted in any income or benefit to him.
Findings of the Tribunal
Applicant’s activities – Mere Hobby or Remunerative Work?
25. In assessing the scale and seriousness of the applicant’s self-employment, I considered all relevant evidence, including the applicant’s testimony, and various documents submitted as exhibits which included work-records and tax returns.
26. I note that in 1991 the applicant registered a business name, “Mountain Top Furniture”. This business was de-registered some years later. However the applicant says he continued to trade under the same name. The applicant advertised his business, albeit in a very limited form. He conducted his activities in a work-shed with a range of sophisticated tools, separate from his living area. In testimony the applicant stated he formed a business plan. The report of Dr Frazer supports this. More compelling was the evidence of the organisation and professional manner in which the applicant approached his activities. I derived this impression from the various work records submitted into evidence (exhibits 8 and 9).
27. The applicant’s activities were more than a mere hobby. The activities were organised. He kept accounts. The cabinet-making side of the business was conducted in a large shed built especially for the purpose, with its own power supply. The applicant’s testimony, his wife’s testimony, and the report of Dr Frazer all indicate he intended for his activities to constitute a business. I find the applicant’s activities satisfy the definition of “remunerative work” in s24(1)(c).
28. I was directed by the respondent to the decision of Wilcox J in Hill v Repatriation Commission [2000] FCA 929. There the applicant’s dog-breeding business was held to be a mere hobby. I can distinguish that decision from the present case on a number of grounds. The size, scale and level of professionalism of the applicant in this case are far greater than those of the applicant in Hill.
29. I think the intentions of the applicant are also highly important. Did the applicant intend for the activity to be more than a hobby, to be in fact a business? Further, was this intention reasonable? Most businesses will suffer losses in their initial years. In Hill, Wilcox J found
there is no basis in the evidence for a conclusion that…the dog breeding activity would have yielded Mr Hill a profit, either immediately or in the longer term.
30. Though Mr Hill had a subjective intention to create a business, it was not a reasonable one. He would never have turned a profit. Thus his dog-breeding activities could not be called ‘remunerative work’. In the present case, it is clear there was plenty of work available for the applicant. Except for his disabilities, he could realistically have turned a profit. He had an intention to create a business. This intention was reasonable.
31. When I assess the scale, level of professionalism and reasonable subjective intention of the applicant, I find his activities amounted to ‘remunerative work’.
Is the Applicant Suffering a Loss of Earnings?
32. It is accepted the applicant’s business was never profitable. The applicant’s activity in Hill v Repatriation Commission was similarly unprofitable, but that case is of no guidance here. Wilcox J found Mr Hill’s activity was a mere hobby, and his Honour’s inquiry went no further. Here, I have found the applicant’s activity was more than mere hobby; it was a business.
33. The decision in Counsel v Repatriation Commission [2002] FCAFC 201 is instructive. Carr J stated
The [Veterans’ Entitlements Act 1986] is clearly beneficial legislation and, in my view, the word “earnings” should be construed favourably to the veteran: Wilson v Wilson’s Tile Works Pty Ltd (1960) 104 CLR 328. Accordingly it should be construed as meaning gross earnings, even before deducting the cost of the goods sold.
34. The authority is quite clear. The applicant suffered a loss each year. However his gross earnings (calculated before deducting the costs of the goods sold) were not insignificant. While the business suffered a net loss each year, I find the applicant was suffering a loss of earnings on his own account, within the meaning of s24(1)(c).
The “Alone” Test
35. In order to satisfy s24(1)(c), the applicant must be prevented from engaging in remunerative work by war-caused injury alone.
36. The respondent submitted factors other than the applicant’s PTSD prevent him from working. The respondent reasons that the applicant ceased remunerative work in 1991 on leaving his service with the army. He did not quit his employment with the army for reasons of his war-caused injury alone. The report of Dr Frazer was submitted in support of this.
37. This argument must fail for I find the applicant’s cabinet-making activities constituted remunerative work.
38. In the alternative the respondent argued that were the Tribunal to find the applicant is entitled to the benefit conferred by s24(2)(b) of the Act, factors other than war-caused impairment are more operative as regards the applicant’s inability to obtain remunerative work.
39. This argument also fails because the applicant does not have to rely on s24(2)(b). The applicant’s activities did not represent his “genuinely seeking” to engage in remunerative work. They were of themselves remunerative work.
40. In any event, I prefer the three reports of Dr Gelb, as well as the oral testimony of the applicant and his wife, to the opinion of Dr Frazer. This evidence indicates the applicant is prevented from undertaking remunerative work by reason of his PTSD alone.
Conclusion
41. The applicant has satisfied the requirements of s24(1)(c). It is already accepted he satisfies s24(1)(a)-(b).
42. In those circumstances, the Tribunal sets aside the Veterans' Review Board decision and decides in favour of the applicant. This matter is to be remitted to the respondent for reconsideration in accordance with the Tribunal’s reasons for decision.
43. The date of effect of this determination is 26 January 2000.
I certify that the 43 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: ......................(Sgd)....................................................
Associate: Thomas RitchieDate/s of Hearing: 4 February 2004, 5 February 2004.
Date of Decision: 7 April 2004
The Applicant was represented by Mr Marks, and Mr O’Gorman of counsel
The Respondent was represented by Mr Williams, a departmental advocate.
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