Thurlow and Repatriation Commission
[2002] AATA 723
•23 August 2002
DECISION AND REASONS FOR DECISION [2002] AATA 723
ADMINISTRATIVE APPEALS TRIBUNAL )
) No T2001/96
VETERANS' APPEALS DIVISION )
Re FRANCIS DALE THURLOW
Applicant
And REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Ms A F Cunningham (Part-time Member)
Date23 August 2002
PlaceHobart
Decision The Tribunal sets aside the decision under review and determines that the applicant is entitled to the Special Rate of pension under s24 of the Act.
..............................................
Part-Time Member
CATCHWORDS
Veterans' entitlements - special rate of pension – war-caused incapacity – prevented from continuing to undertake remunerative work – whether suffering a loss of salary, wages or earnings.
Re Fahey and Repatriation Commission (1986) 10 ALD 338
Veterans' Entitlements Act 1986 – s24(1)(b)(c)
REASONS FOR DECISION
23 August 2002 Ms A F Cunningham (Part-time Member)
The applicant has sought the review of a decision made by the Repatriation Commission on 15 June 2000, increasing his pension to 100 per cent of the General Rate with effect from 16 November 1999. The decision was subsequently affirmed by the Veterans' Review Board (VRB) on 19 April 2001.
The applicant was represented by Mr R Webster and the respondent was represented by Mr Castle. Oral evidence was given by the applicant, his wife, Joy Marie Thurlow, and Dr Eric Vaughan Ratcliff on behalf of the applicant. The respondent called no oral evidence. The T documents were tendered pursuant to s37 of the Administrative Appeals Tribunal Act 1975. Dr Ratcliff's proof of evidence and that of Dr Janette Christine Radford, the applicant's treating medical practitioner both received by the Tribunal on 29 April 2002, were also tendered in evidence.
The applicant's claim for an increase in his pension rate is made pursuant to the provisions of the Veterans' Entitlements Act 1986 ("the Act") and in particular the provisions of s24 of the Act. The applicable standard of proof is that provided in sub-section 120(4) of the Act, being that the Tribunal must decide each issue to its reasonable satisfaction.
In accordance with the requirements of s24(1) of the Act, it was agreed between the parties that (1), when the applicant lodged his claim under s14 of the Act on 16 February 2000, he had not obtained the age of 65 years; and (2) that his degree of incapacity was in excess of 70 per cent, his accepted disabilities being bilateral sensori neural hearing loss, bilateral tinnitus, tinea and post-traumatic stress disorder.
After hearing the evidence, Mr Castle conceded on behalf of the respondent, that the applicant had ceased his employment in 1993 as a result of his accepted war-caused disability of post-traumatic stress disorder. Mr Castle said that what was in contention was whether the applicant was thereby suffering a loss. It was Mr Castle's contention that the rental monies received by the applicant from the lease of the applicant's premises were equal to, if not, slightly in excess of the annual income that the applicant was deriving from his business prior to his ceasing to operate it.
The provisions of s24(1)(c) provide:
" (1) This section applies to a veteran if:
(aa) the veteran has made a claim under section 14 for a pension, or an application under section 15 for an increase in the rate of the pension that he or she is receiving; and
(aab) the veteran had not yet turned 65 when the claim or application was made; and
(a) either:
(I) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or
(ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and
(b)veteran's incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and
(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking and is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity."
The applicant's evidence was that he had operated a business as a scrap-metal merchant in Launceston for nearly 30 years until 1993 when he decided to lease it out because of his health problems. The applicant gave evidence of violent outbursts and his concern about the effect of his behaviour on his customers.
The applicant said that the business was not run successfully and he subsequently agreed to release the lessees from the lease. His son offered to take over the business and managed to operate it very successfully. The applicant said that he understood that the initial rental amount was around $500 per week, but that his wife made these arrangements. Mrs Thurlow gave evidence that the original arrangement with her son was that he would pay the sum of $2,400 per month, but during the last 12 months this had been reduced to $1,500 per month because he had taken on another business.
The applicant was unable to give very reliable evidence as to the income that he earned at around the time of his ceasing work in 1993. The T documents at T13 indicate that the applicant's taxable income for the period ended 30 June 1993, the year when he ceased working, was $10,667. A copy of the income tax return for the year ended 30 June 1992 indicate a taxable income of $12,394 and an assessment notice for the year ended 30 June 1991, states the applicant's taxable income as being $21,537. A further assessment notice dated 11 March 1991, presumably for the year ended 30 June 1990 states that the applicant's taxable income was $18,649.
The issue for the Tribunal to determine is what is meant by the phrase, appearing in sub-section 24(1)(c) "suffering a loss of salary or wages, or of earnings on his or her own account". It was Mr Webster's contention that rental monies received by the applicant from his son for the lease of his business premises could not be classed as monies "earned by the applicant". Mr Webster referred the Tribunal to the decision of Re Fahey and Repatriation Commission (1986) 10 ALD 338 where it was stated at page 342:
"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. And 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"
It was Mr Webster's contention that the phrase "suffering a loss of salary or wages, or earnings on his or her account" did not intend that any monies earned by the veteran after he has give up remunerative work should be compared with the earnings derived by him from the business he was operating at the relevant time. Whilst the veteran may still be deriving an income from other sources e.g. the investment of shares, receipt of rental or mortgage money, it was contended that the subsection requires that the applicant is suffering a loss of "earnings" as opposed to a loss of "income". In other words, the term "earnings" refers to monies derived or earned by the veteran from remunerative work which he is prevented from continuing by reason of accepted disability.
Mr Castle urged the Tribunal to distinguish the cases cited by Mr Webster on the basis that the applicant has retained ownership of his asset from which he is now deriving an income, whereas in the cases cited by Mr Webster, the veteran had sold his property and invested the proceeds from which he was then deriving an income.
The Tribunal sees no justification in distinguishing the present case from the cases referred to by Mr Webster. The full Tribunal in Re Fahey found that the applicant was unable to continue to perform the remunerative work of running a farm by reason of his incapacity from his war-caused disabilities, and although he had transposed his investment in the farm into investments in a house and an interest bearing deposit, the Tribunal found that he suffered a loss of earnings within the meaning of s24 of the Act and was entitled to the Special Rate pension. The Tribunal said at page 342:
"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. And 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". It is worthy of note that, looking at the legislation as a whole, especially in relation to Service Pensions, one can see that the legislature has elsewhere employed the term "income": see, for example, ss.35(1), 37, 47, 48, 50(1)(a), 52, 53, 55(2), 56(2), 57(1), 82(1) and 85(5). It is reasonable to conclude that, not having used that term in s.24, it was not intended to cover all that is covered by the term "income".
Similarly in the decision in Re House and Repatriation Commission (1991) 22 ALD 763, the Tribunal found that the term "earnings" was a more restrictive concept than the term "income" and followed the decision in Re Fahey.
The Tribunal's decision in Re Fahey was also followed in Repatriation Commission v Greenwood (1990) 22 ALD 289, where the Federal Court found that the income earned by the applicant from investments was not income in the nature of salary, wages or earnings within the meaning of s24.
The Tribunal does not accept that any distinction should be drawn from the above cases and the present facts where the applicant retained ownership of his business premises. The fact remains that the applicant was prevented from continuing to undertake remunerative work in his business by reason of his war-caused incapacities and by reason thereof, suffered a loss of earnings. Whilst the applicant continued to derive an income from payments by his son for the use of the business premises which may at times have been in excess of the income he was previously deriving from operating the business, it seems clear on the above authorities that it is not a loss of income that is intended by the legislation, but a loss of earnings from remunerative work.
As it is clear from the cases cited that the earnings derived by the applicant must relate to remunerative work, the Tribunal accordingly finds the lease monies received by the applicant from his son do not come within the meaning of s24(1)(c). The Tribunal accepts that the applicant is by reason of incapacity from his war-caused injuries prevented from undertaking remunerative work which he was undertaking and by reason thereof is suffering a loss of earnings on his account that he would not be suffering if he were free of that incapacity.
The Tribunal having so found does not need to consider whether the applicant was genuinely seeking to engage in remunerative work in accordance with the provisions of s24(2)(b). The Tribunal sets aside the decision under review and determines that the applicant is eligible for the Special Rate of pension under s24 of the Act.
I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Part-time Member)
Signed: .....................................................................................
Administrative AssistantDate/s of Hearing 5 June 2002
Date of Decision August 2002
Counsel for the Applicant Mr R M Webster
Solicitor for the Applicant
Counsel for the Respondent Mr M Castle
Solicitor for the Respondent Department of Veterans' Affairs
0
0