VIVIAN HOHN and REPATRIATION COMMISSION
[2013] AATA 487
[2013] AATA 487
Division VETERANS' APPEALS DIVISION File Number
2012/5636
Re
VIVIAN HOHN
APPLICANT
And
REPATRIATION COMMISSION
RESPONDENT
DECISION
Tribunal Senior Member Dr K S Levy, RFD
Date 11 July 2013 Place Brisbane The decision under review is set aside and substituted. The applicant qualifies for the pension at the special rate.
……………..[SGD]……….……..
Senior Member Dr K S Levy, RFD
CATCHWORDS
VETERANS' AFFAIRS – Pensions and benefits – Special rate of pension – Relevant remunerative work – Substantial loss of remunerative work – Loss of remunerative work due to accepted war-caused conditions – Loss of salary, wages or earnings due solely to war-caused disability – Decision under review set aside and substituted
LEGISLATION
Veterans' Entitlements Act 1986 (Cth) s 24, 120
CASES
Banovich v Repatriation Commission (1986) 69 ALR 395
Bertram and Repatriation Commission [1986] AATA 526
Cavell v Repatriation Commission (1988) 9 AAR 534
Flentjar v Repatriation Commission (1997) 48 ALD 1
Re Stuart and Repatriation Commission (1989) 17 ALD 678Starcevich v Repatriation Commission (1987) 76 ALR 449
REASONS FOR DECISION
Senior Member Dr K S Levy, RFD
INTRODUCTION
The applicant, Mr Vivian Hohn, made an application dated 1 November 2011 for an increase in the rate of his disability pension. That application was rejected by the Repatriation Commission on 16 November 2011. He then appealed to the Veterans’ Review Board, which, after adjourning the matter for a considerable period, also rejected the application on 28 November 2012. On 13 December 2012, Mr Hohn made application to this Tribunal for further review.
ISSUE
The issue for determination in this case is:
Is Mr Hohn’s disability pension correctly assessed at the present 100% of the general rate or is he entitled to the special rate under s 24 of the Veterans’ Entitlements Act 1986 (Cth) (“the Act”)?
EVIDENCE
Mr Hohn
Mr Hohn is now 65 years old. At the date of his application to the Repatriation Commission he was 63 years old.
By way of background, the Tribunal had evidence that Mr Hohn attended school in Toowoomba and completed Grade 12. He then undertook an apprenticeship as an electrician for a period. It appears that, through the evidence of his wife, he did not complete that apprenticeship. However, at the age of 23, he joined the Royal Australian Air Force (RAAF). He qualified in the RAAF as an instrument fitter and served there for 20 years, being discharged on 14 October 1990.
Mr Hohn has been awarded a disability pension assessed at 100% of the general rate as he has the following recognised disabilities:
·Sensorineural hearing loss;
·Non melanotic neoplasm of the skin;
·Diabetes mellitus;
·Cerebral ischaemia;
·Depressive disorder; and
·Solar keratosis.
After discharge, Mr Hohn worked initially as a civilian contractor to the RAAF. That position lasted 18 months after which he was made redundant. He worked then as a correctional officer for 20 months and then returned to working as an instrument fitter for six years until 1999, the last employer being Boeing.
Concurrently with working as an instrument fitter with Boeing, Mr Hohn also started a small farm growing olives (the table variety). In 1999, after establishing the olive farm for approximately four years, he and his wife wanted to pursue development of this venture more comprehensively. His wife resigned from Telstra, her then employer, and Mr Hohn resigned from Boeing to be able to deal with an effective business arrangement for the olive farm. In oral evidence, he said he and his wife went to Western Australia to learn more about table olives, in particular the growing and marketing of them.
The olive farm up to that point consisted of 500 olive trees which Mr Hohn had planted and he expected they would take seven years to mature. These trees had produced three crops of olives but not much product. However, he had made some small sales by sending them interstate.
Mr Hohn’s evidence was that he could not get long-service leave or leave without pay from Boeing as he had not worked there for the required period. Therefore, his only option was to resign to pursue the olive farm development. That evidence was complemented by his other evidence that he had intended to return to Boeing after he had visited Western Australia and set up the business assistance required. Unfortunately, after he left Boeing and went to Western Australia, he suffered a number of severe cerebrovascular accidents while he was there. It then took three months before he could be released from hospital and a further nine months rehabilitation. He has residual difficulties with concentration, mood disorders, memory impairment, reduced dexterity and impaired attention to detail.
Mr Hohn was 52 years old at the time of his cerebrovascular accidents. His condition is described by occupational physician Dr John Sowby in a report dated 31 August 2012.[1] Dr Sowby’s report was compiled after seeing the applicant and also his wife who was important in the clinical history taking given that Mr Hohn has some difficulties with recall. Dr Sowby provided a comprehensive report and described the impact of the cerebrovascular accidents on his functional capacities at the present time and concluded:
Mr Hohn is unfit to return to work in any capacity, based on the multiple levels of residual impairment associated with his cerebrovascular accident.
[1] Exhibit 3, T-documents, pp. 72-79.
Dr Sowby said also that while there were no significant non-medical issues in respect of Mr Hohn:
it is likely that the effects of aging are now also starting to impact upon his capacity for work, with reported continued deterioration in dexterity and lower limb difficulties.
After ceasing employment in 1999, Mr Hohn has never returned to Boeing and neither has he applied to return to work there.
Mrs Hohn
Mrs Hohn gave sworn evidence. She told the Tribunal she and her husband resigned from their employers in 1999 to go to Western Australia to learn more of the business issues surrounding successful olive farming. Up to that point, they had intended that the farm would be conducted to provide them with a part-time income in retirement. There was no harvest prior to that – the trees were then about three years old.
The applicant and his wife expected that the period in Western Australia to learn more about olive farming would take some weeks or months. She had just retired from Telstra prior to them visiting Western Australia. She told the Tribunal that it was their intention that she would look after the farm during the week and that her husband would do the larger jobs on the farm on weekends.
Mrs Hohn told the Tribunal that they had not considered a possibility of Mr Hohn not being able to get a job at Boeing as “he had always been able to get work”. Upon returning from Western Australia after Mr Hohn’s release from hospital, she found the farm was too much for her to manage alone and Mr Hohn was not capable of doing much work.
Mr Greg Currier
Mr Currier gave telephone evidence at the hearing and was affirmed. He was called by the applicant and Mr Currier said that he was now retired. Prior to his retirement, Mr Currier had been the “cell leader” at Boeing where Mr Hohn worked. Mr Currier retired from Boeing also.
Mr Currier provided a letter, dated 19 December 2008, stating that Mr Hohn worked for him for about a year. He said he would have been happy to re-employ Mr Hohn if there was a job available.
In cross-examination, Mr Currier said that Mr Hohn worked for him until 1999 on the F111 program. He also told the Tribunal that the program was phased out in 2006. Those who worked in that area at the time were subsequently employed either on another project or in service support. The service support work was phased out in 2010. He said any workers still remaining “probably got redundancy”. Mr Kelly, for the respondent, also put to Mr Currier whether he could recommend Mr Hohn being re-employed or whether he had the authority to employ him. Mr Currier said “yes in most cases” that they would delegate the authority to him.
CONSIDERATION
The relevant legislative powers are contained in s 24 of the Act, and read:
24 Special rate of pension
(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
…
(b) the veteran is totally and permanently incapacitated, that is to say, the 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; and
…
(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.
It is common ground that s 24(1)(a) and (b) of the Act are satisfied in respect of the applicant. The real dispute between the parties is whether s 24(1)(c) of the Act applies. The respondent says that as the applicant resigned from Boeing, he was unemployed at the time of his cerebrovascular accidents. The respondent argues, therefore, that Mr Hohn does not satisfy the “alone” test in s 24(1)(c). The respondent also says he did not suffer a loss of wages due to his accepted disability “alone”.
The applicant’s counsel argues that Mr Hohn had not ceased remunerative work and was working in an alternative business, that is, his developing an olive farm business.
Determination of this question is arrived at by application of the four tests set down in Flentjar v Repatriation Commission (1997) 48 ALD 1 (Flentjar), which are:
1. What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c) of the Act?
2. Was [the veteran] by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
3. If so, was the war-caused injury or war-caused disease, or both, the only factor or factors preventing [the veteran] from continuing to undertake that work?
4. If so, was [the veteran] by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?
In relation to Question 1 in Flentjar regarding “remunerative work”, this is not to be read narrowly as a particular job or the veteran’s last job. Instead, as submitted by counsel for the applicant, the principles to be adopted are:
(a)One should look to the type of work which the veteran previously undertook;
(b)Consequent upon (a), “loss of particular employment for a reason unrelated to a war disability would never destroy a member’s subsequent entitlement to claim a special rate of pension”; and
(c)“the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity – and by that incapacity alone – from continuing in that field of remunerative activity” (Banovich v Repatriation Commission (1986) 69 ALR 395 at 402-403) (Banovich).
In this case, Mr Hohn ceased employment voluntarily and, as such, there was not a “loss” of employment as referred to in the extract from Banovich on behalf of the applicant.
The evidence shows Mr Hohn left Boeing and intended to return. The witness, Mr Currier, said he would employ him if he re-applied. There was no certainty about this and Mr Currier made it clear in his evidence that his willingness to re-employ Mr Hohn depended on there being a vacancy at any particular time. Also, Mr Currier was tentative when asked by Mr Kelly if he had authority to re-hire a person such as Mr Hohn. He replied that “sometimes” his superiors allowed him to. In this respect, I found Mr Currier unconvincing as his response was unspecific and I regarded that answer as being of not great weight. But this is probably not of any real importance as the evidence of re-application and re-employment was all merely conjecture.
However, the alternative, and perhaps more legally substantive, argument is that Mr Hohn did have a business which would be regarded as a business entity under taxation laws and in any event he had established his farm and planted 500 trees and had watched them mature for 3-4 years. He had a very small crop until that time. Even though the business was intended to be run part-time, the applicant and his wife had both resigned from their employment and regarded their research venture to Western Australia on a full-time basis as part of this developing business. I think this demonstrates the applicant must be regarded as being self-employed in his olive farm business in the period after ceasing to work for Boeing and travelling to Western Australia to enable his farm to become profitable.
Therefore, from the time he ceased working at Boeing and then travelled to Western Australia, at which time he suffered a number of cerebrovascular accidents, he was undertaking the work of an olive farm business which had been in existence for three to four years and which he intended to ultimately make profitable for his retirement years.
The term in s 24(1)(c) of the Act, “remunerative work that the veteran was undertaking” means that type of work the veteran previously undertook and does not refer to any particular job (Banovich v Repatriation Commission (1986) 69 ALR 395 at 402-403). But the type of work previously undertaken is not restricted to the last job and therefore may include a different type of work before the veteran ceased work altogether (Starcevich v Repatriation Commission (1987) 76 ALR 449 (Starcevich)
In this case, the applicant has two previous types of work – that of an avionics instrument fitter and also that of an olive farmer. But as stated by Fox J in Starcevich, at 454, “… the applicant must have suffered a substantial loss of remuneration consequent alone upon the incapacity referred to in ss 24(1)(a) and (b). The loss must be real …”.
As the olive farm business was not really in production at the time of the applicant’s cerebrovascular accidents, olive farming does not meet the requirements of s 24(1)(c) as referred to by Fox J above.
At the time of the cerebrovascular accidents, Mr Hohn was not working for Boeing but intended to return there. For the purposes of the first question in Flentjar, it’s sufficient to find that the type of remunerative work applicable to Mr Hohn was that of an avionics instrument fitter.
In relation to Question 2 of Flentjar, this is concerned as to whether Mr Hohn is prevented from continuing to undertake work because of war-caused injury or disease.
Counsel for the applicant referred me to the report by Dr Sowby. Mr Hohn was 52 years old when he had the cerebrovascular accidents. He had an interest in continuing to work, ultimately full-time at Boeing and part-time on the farm. If he did not get a job a Boeing or his farm was more successful than expected, he would at least still be farming. If he had succeeded in either of those ventures, his cerebrovascular accidents could be regarded as having prevented him from continuing to undertake that work, which would in those circumstances be regarded as remunerative work.
Dr Sowby’s report was produced in August 2012 – some 13 years after Mr Hohn became incapacitated. Dr Sowby points out that while the stroke resulted in his unfitness to work at the time, the residual effects of the stroke make him “unfit to return to duty”. I accept that would have been so for the whole period after the cerebrovascular accidents. He also noted that “the effects of aging are now also starting to impact on his capacity to work, with reported continued deterioration in dexterity and lower limb difficulties”.
Taking account of Mr Hohn’s age at the time he became incapacitated, and even though he had been out of work for thirteen years, I think he must be regarded as being prevented from undertaking any remunerative work as a result of those strokes.
I therefore answer Question 2 – “Yes”.
In relation to Question 3 of the Flentjar methodology, the question for the Tribunal is whether the applicant’s war-caused cerebral ischaemia is the only factor preventing him from continuing to undertake the type of work referred to in Question 1.
I accept the applicant’s submission that he was working in an alternative business venture, although, as I have referred to earlier, I do not think that can be regarded as being “remunerative work” as no remuneration was then being generated and no certainty existed as to future income. Therefore, for the purposes of s 24(1)(c), he cannot be said “by reason thereof” to be “suffering loss of salary or wages”. But even though he was not then working at Boeing, he had a long career as an avionics instrument fitter and intended to continue in that occupation until retirement or until his olive farm was profitable. He had the cerebrovascular accidents at 52 years of age and might have expected until 2010 (based on the evidence of Mr Currier) to be able to be re-employed there.
Counsel referred me to Cavell v Repatriation Commission (1988) 9 AAR 534 at 539 (Cavell) where Burchett J said that the decision maker, in determining this question, must make a practical decision “but with an eye to reality, and is a matter in respect of which common sense is the proper guide”.
Considering the state of development of the olive farm, the only reason Mr Hohn ceased that work (or perhaps did not return to work at Boeing) is because of the cerebrovascular accidents which have been accepted as a war-caused disability. That appears to be the only reason, as a matter of logic and common sense, which explains his not continuing to work as an olive farmer or as an instrument fitter with Boeing, in the unique circumstances of this case.
The standard of proof is the balance of probabilities.[2] The olive farm was clearly a legitimate venture which was a “business”. Therefore, I find the recognised war-caused disability of cerebral ischaemia is the only factor which prevented the applicant from continuing to work at the “remunerative work” of an avionics instrument fitter (or alternatively, as an olive farmer if the olive farming did become profitable in a reasonable time, or at all).
[2] See s 120(4) of the Act and Repatriation Commission v Smith (1987) 15 FCR 327 at 335 per Beaumont J.
.
Therefore, the answer to Question 3 is – “Yes”.
In relation to Question 4 in Flentjar, the question is whether he applicant is also suffering a loss of salary wages or earnings. The applicant’s counsel submitted that “if he did not suffer from his accepted condition, he would have continued working” (in particular, for the RAAF or as an olive farmer).
In my view, the relevant remunerative activity is work as an avionics instrument fitter. At the time of the cerebrovascular accidents, he was not actually earning income from the farm. It was in its development or loss phase.
Therefore, for the purpose of s 24(1)(c) of the Act, Mr Hohn was not “by reason thereof, suffering a loss of salary or wages or of earnings” that he would not be suffering from if he did not have that incapacity.
The applicant’s counsel referred me to re Bertram and Repatriation Commission [1986] AATA 526 and ReStuart and Repatriation Commission [1989] 17 ALD 678. Those cases show that a self-employed person who establishes a business and who was ready to provide a service but does not make sufficient income even to pay the rent can be regarded as “remunerative work”. Equally, a consultancy business which never really commenced due to the applicant’s disability could also be regarded as being “remunerative work”.
Those cases, however, are different to the present case both in timing and development of a business ready to operate. The state of Mr Hohn’s olive farm was not ready to provide a service (or products) and was not at a stage of generating revenue (whether or not it might have made a loss).
In this case, the remunerative work was that of an avionics instrument fitter, which Mr Hohn intended to continue with when he returned from Western Australia. Unfortunately, he suffered several cerebrovascular accidents while there and was prevented from working again. Had that not occurred, he would reasonably have been expected to return to Boeing as an avionics instrument fitter. In Hall v Repatriation Commission (1994) 33 ALD 454, Spender J, at 454, referred to Banovich and that loss of particular employment for a reason unrelated to a war-caused disability would never prevent a veteran’s subsequent entitlement under s 24(1)(c) to the special rate of pension. His Honour also said, at 460, that a veteran’s subsequent disablement for work could not be attributed “in any sensible way” to any earlier motivation or decision of the veteran which affected his present earning capacity.
On the basis of the principles in Cavell and Hall, I do not regard the applicant’s inability to work again in the “type of work” recognised in Question 1 of Flentjar, to be caused by any factor other than his war-caused disability.
I find Question 4 is also satisfied.
The applicant therefore satisfies s 24(1)(c) of the Act.
DECISION
In the circumstances the decision under review is set aside. Mr Hohn qualifies for the pension at the special rate.
I certify that the preceding 52 (fifty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr K S Levy, RFD. .........................[SGD].........................................
Associate
Dated 11 July 2013
Date of hearing 15 May 2013 Counsel for the Applicant Mr P C M Vangrinsven Solicitors for the Applicant Cockburn Legal Advocate for the Respondent Mr Jeff Kelly, Departmental Advocate
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