Withers and Repatriation Commission (Veterans' entitlements) - [2024] AATA 30

Withers and Repatriation Commission (Veterans' entitlements) [2024] AATA 30 (18 January 2024)
Division:VETERANS’ APPEALS DIVISION

File Number(s) 2022/6489
Re:Ernest Withers
APPLICANT

Repatriation CommissionAnd
RESPONDENT

INTERLOCUTORY DECISION
Tribunal:Mr S. Webb, Member
Date:18 January 2024
Place:Canberra

Application refused.
…[SGD]……………………………………………………………………………………
Mr S. Webb, Member
Catchwords
VETERANS ENTITLEMENTS – defence caused disease – degree of incapacity – rate of pension determined at 100 percent of the general rate – claim for increase in rate of pension – intermediate rate – special rate – extreme disablement adjustment – applicable impairment and lifestyle rating thresholds – conjunctive criteria – ‘alone’ tests – application to narrow issues refused
Legislation
Administrative Appeals Tribunal Act 1975, ss 25, 43
Veterans’ Entitlements Act 1986, ss 5D, 21A, 22, 23, 24, 68, 70, 73, 120, 120B
Cases
Flentjar v Repatriation Commission [1997] FCA 1200
Repatriation Commission v Richmond [2014] FCAFC 124
Smith v Repatriation Commission [2014] FCAFC 53
Summers v Repatriation Commission [2015] FCAFC 36
Mr S. Webb, Member
17 January 2024

Ernest Withers served in the Royal Australian Air Force. He has accepted defence-caused diseases which result in incapacity, in respect of which he was paid a compensatory pension. Mr Withers claimed an increase in the rate of pension. The Repatriation Commission (Commission) determined he is entitled to 100 percent of the general rate of pension. Mr Withers requested review by the Veterans Review Board (VRB). The VRB decided to affirm the Commission’s decision. Mr Withers applied to the Tribunal for review.
In the course of the proceedings, Mr Withers’ advocate, James Wain, applied to the Tribunal under s 25 of the Administrative Appeals Tribunal Act 1975 (AAT Act) to narrow the scope of the review to issues under s 24(2)(b) of the Veterans’ Entitlements Act 1986 (VE Act).
It is this issue, alone, that is the subject of this interlocutory decision.
In order to resolve the issue, it is not necessary to discuss the background facts of the case in any detail as the issue raised turns on a question of statutory construction.
The relevant key facts are:
(a)Mr Withers has ‘defence service’ as defined in s 68 of the VE Act from 21 July 1980 to 13 November 1990;
(b)he has incapacity from the following accepted defence-caused diseases[1]:
[1] See definitions in s 5D of the VE Act.
(i)Osteoarthritis affecting both knees; and
(ii)Lumbar spondylosis;
(c)he has other conditions which are not accepted as defence-caused, including:
(i)Torticollis; and
(ii)Osteoarthritis affecting both shoulders;
(d)on 7 June 2021, Mr Withers lodged a claim for an increase in the rate of his pension;
(e)on 31 August 2021, the Commission decided to increase the rate of his pension to 100 percent of the general rate;
(f)on 29 September 2021, Mr Withers applied for review of this decision by the VRB;
(g)on 28 June 2022, the VRB decided to affirm the Commission’s decision;
(h)on 4 August 2022, Mr Withers lodged an application for review of this decision by the Tribunal in which he stated the following reason for the application:
The VRB did not accept our contention that the ameliorating provisions in S24(2)(b) applied to Mr Withers.
(i)In the course of the proceedings, on 6 October 2023, Mr Withers made the following interlocutory application:
That Registry [sic] defines the scope of the appeal under s 25 of the AAT Act 1975 by agreeing that the only questions at issue are contained in s24 (2) (b) of the VEA 1986 and suggest an outreach date for submissions by the Respondent and the Applicant.
(j)On 13 December 2023, the Commission informed the Tribunal it did not agree to Mr Withers’ interlocutory application to narrow the scope of the review;
(k)on 28 December 2023, Mr Withers lodged written submissions in support of his interlocutory application under s 25 of the AAT Act.
The Tribunal’s power to narrow the review is conferred by s 25 of the AAT Act:
(1) An enactment may provide that applications may be made to the Tribunal:
(a) for review of decisions made in the exercise of powers conferred by that enactment; or
(b) for the review of decisions made in the exercise of powers conferred, or that may be conferred, by another enactment having effect under that enactment.
…
(4A) The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.
…
The starting point for consideration of the discretion thus conferred is to consider the ambit of the Tribunal review.
In a matter of the present kind, involving a claim to increase the rate of a veteran’s pension, the ambit of the Tribunal review is framed by the legislative scheme for determination of the rate of the pension, where eligibility is established under s 70 of the VE Act in respect of a defence-caused disease. This is set out in Divisions 4 and 5 of Part II of the VE Act which, by operation of s 73 of the VE Act, apply to veterans’ pension claims in respect of defence-caused injuries and defence-caused diseases resulting in incapacity. In such cases, the claim is to be decided on the reasonable satisfaction standard of proof in s 120(4) and s 120B of the VE Act.
On review, the Tribunal is required to step into the shoes of the previous decision-maker and to make the correct or preferable decision, addressing all of the matters the decision-maker was authorised to decide under applicable sections of the VE Act. This is so whether or not any particular issue was decided in a manner favourable to the particular veteran.
Generally, under s 43 of the AAT Act, the Tribunal must:
(1) For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing:
(a) affirming the decision under review;
(b) varying the decision under review; or
(c)   setting aside the decision under review and:
(i)    making a decision in substitution for the decision so set aside; or
(ii)   remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal.
…
(6) A decision of a person as varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a person, shall, for all purposes (other than the purposes of applications to the Tribunal for a review or of appeals in accordance with section 44), be deemed to be a decision of that person and, upon the coming into operation of the decision of the Tribunal, unless the Tribunal otherwise orders, has effect, or shall be deemed to have had effect, on and from the day on which the decision under review has or had effect.
Furthermore, the Tribunal is required to give reasons for its decision, setting out findings on material questions of fact and the evidence to which it has had regard on which the findings are made.
In order to determine Mr Withers’ claim for an increase in the rate of his pension, the Tribunal must determine:
(a)the degree of incapacity resulting from Mr Withers’ defence-caused diseases for the purposes of s 21A and s 22(2) of the VE Act;
(b)whether Mr Withers has an impairment rating of at least 70 points and a lifestyle rating of at least 6 points, each determined in accordance with the Approved Guide to the Assessment of Rates of Veterans’ Pensions for the purposes of s 22(4) of the VE Act;
(c)whether the thresholds in s 23 of the VE Act are met, such that Mr Withers would be entitled to an intermediate rate of pension; and
(d)whether the thresholds in s 24 of the VE Act are met, such that Mr Withers would be entitled to a special rate of pension.
Mr Withers’ application to narrow the review refers only to questions at issue under s 24(2)(b) of the VE Act. Distilling and isolating such questions for the purposes of narrowing the Tribunal review is problematic for 2 key reasons. Paragraph 24(2)(b) is unseverably tied to and is expressly for the purpose of paragraph 24(1)(c); and paragraph 24(1)(c) is one of several conjunctive conditions, all of which must be satisfied to qualify the veteran for a special rate of pension.
In order to properly comprehend the issues to be decided by the Tribunal under s 24, it is necessary to consider relevant terms of the section the Tribunal must apply:
(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)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
(d)section 25 does not apply to the veteran.
(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.
As can be seen, s 24(1) sets out a number of conjunctive paragraphs containing criteria which must all be satisfied for the section to be applicable. The word ‘and’ cannot be construed as ‘or’: each of the thresholds must be met. The ‘alone’ test in s 24(1)(b) must be satisfied, as must the ‘alone’ test in s 24(1)(c). Subsection 24(2) sets out provisions for the purpose of paragraph 24(1)(c).
The operation of s 24(1) (c) and s 24(2) was addressed in the oft cited case of Flentjar v Repatriation Commission (Flentjar)[2] in which the following questions were distilled:
(1) What was the relevant “remunerative work that the veteran was undertaking” within the meaning of s 24(1)(c)?
(2) Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?
(3) If the answer to question 2 is “yes”, is 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 the answer to questions 2 and 3 are, in each case, “yes”, is 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?
[2] [1997] FCA 1200.
The matter was revisited in Smith v Repatriation Commission (Smith),[3] in which Buchanan J (with whom Rares J agreed) said:
47. Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.
48. The operation of s 24(1)(c) is capable of being informed by the provisions of s 24(2). The overall effect of s 24(1)(c) may be summarised as one which requires a demonstrated loss of earnings as the direct result of the war-related incapacity, and only for that reason. Section 24(2)(a) supplements the requirements of s24(1)(c) by identifying specific circumstances which will cause it not to be satisfied. Those circumstances, in effect, state the opposite to the conditions in s 24(1)(c) itself. Thus, there is no established loss of earnings by reason of the incapacity if remunerative work was ceased for other reasons (s 24(2)(a)(i)), or if the veteran is also incapacitated or prevented from doing remunerative work for some other reason (s 24(2)(a)(ii)). In this assessment, of course, it continues to be accepted that the veteran is actually incapacitated in any event (“a veteran who is incapacitated ...”). The purpose of the enquiry is to see whether, nevertheless, there are other explanations for economic loss so that the incapacity is not the only reason for it.
49. Section 24(2)(b) provides some relief from the potentially harsh consequences of this arrangement. It applies where remunerative work is not being done. In my view, it accommodates a cessation of earlier remunerative work, as well as a circumstance where a veteran has not worked since injury, or since the development of the incapacity. In all those circumstances, in my view, a veteran may demonstrate genuine efforts to obtain work which are made fruitless by the incapacity. That is, the efforts would continue but for the incapacity and the incapacity is the substantial cause of inability to obtain work. Those circumstances are taken to satisfy the basic test in s 24(1)(c) of being actually prevented by the incapacity from continuing remunerative work. Economic loss (i.e. loss of the opportunity for economic gain by way of income) follows naturally enough from this scenario. The search is for remunerative work. The economic consequence of failure to obtain it is the result of the incapacity.
[3] [2014] FCAFC 53.
The majority judgment in Smith was reaffirmed in Repatriation Commission v Richmond,[4] in which the Court extensively review relevant authorities,[5] and the construction was found to be correct by the subsequent Full Court in Summers v Repatriation Commission.[6]
[4] [2014] FCAFC 124 at [23]-[24], [50]-[54] and [91].
[5] Ibid at [57]-[101].
[6] [2015] FCAFC 36 at [194].
Consistent with these authorities, and on a plain reading of the legislation, where the thresholds set out in s 24(2)(b), including the ‘but for’ and ‘substantial cause’ elements in respect of incapacity, are met, the deeming effect is that the veteran is treated as having been prevented from ‘continuing to undertake remunerative work’ by the incapacity for the purposes of s 24(1)(c).
Mr Withers’ written submissions on 28 December 2023 acknowledge he might not meet the ‘alone’ tests in s 24(1)(b) or (c). If this is correct and he does not meet either threshold, he cannot satisfy the essential preconditions for payment of pension at the special rate under s 24 of the VE Act. In such circumstances, it would then be necessary to decide if he qualifies for an intermediate rate of pension under s 23 or an extreme disablement adjustment under s 22(4).
As I understand Mr Withers’ submissions, he contends his non-accepted conditions do not materially affect his level of functioning or his capacity to undertake office-based remunerative work, and it is on this basis he relies upon the deeming provision in s 24(2)(b). If that is correct, the issue squarely raises the ‘alone’ test in s 24(1)(c).
Even if Mr Withers could meet the ‘alone’ test in s 24(1)(c), the ‘alone’ test in s 24(1)(b) is a separate consideration which must also be positively satisfied for Mr Withers to be paid pension at the special rate. The sharp focus of s 24(1)(c) is on the financial impact of war-caused (or presently defence-caused) incapacity, whereas the focus of s 24(1)(b) is on the impact of war-caused (or in this case defence-caused) disease on the veteran’s level of health and capacity to undertake remunerative work. Thus, it can be understood, the provisions in s 24(2)(a) and (b) expressly apply only for the purposes of s 24(1)(c).
As I comprehend the parties’ respective cases, the question whether Mr Withers meets the ‘alone’ test in s 24(1)(b) is controversial. So much is clear from Mr Withers’ written submissions. Absent an acceptable agreement between the parties on this point, it will need to be decided by the Tribunal on the basis of relevant probative material.
While in some cases it may be appropriate for the Tribunal to proceed on the basis of concessions of a party, or agreement on particular points between the parties, Mr Withers’ interlocutory application under s 25(4A) of the AAT Act runs on different ground. By it he is seeking to exclude matters from consideration and determination by the Tribunal without agreement. Mr Withers has not provided any compelling reason why this should be accepted where the matters are controversial and determination of them is essential to a proper determination of the correct rate of pension in his case.
In a matter of this kind, I do not consider it appropriate to narrow the review in the manner for which Mr Withers contends. Each of the conditions in s 24(1)(b) and (c) of the VE Act must be considered and relevant findings made on the materials placed before the Tribunal. The same can be said in respect of the degree of incapacity, including the impairment and lifestyle ratings under s 21A, and the rate of pension under s 22. It will also be necessary for the Tribunal to make relevant findings under s 23.
It may yet be possible for the parties to come to terms on particular issues in this case. If that occurs, it will be for the Tribunal to determine if it is appropriate to accept the concession or the agreement.
Presently, Mr Withers’ interlocutory application is not made out or accepted. It would require consideration of matters relevant to s 24(2)(b) of the VE Act in isolation, severed from other considerations which are relevant to his claim for an increase to the rate of his pension. It is not appropriate to proceed in such a manner.
Interlocutory decision
Application refused.

I certify that the preceding 28 (twenty-eight) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member.

...[SGD]....................................................................
Associate

Dated: 18 January 2024

Date final submissions received:

28 December 2023

Representative for Applicant:
Mr James Wain

Solicitor for Respondent: Mr Will Sharpe, HWL Ebsworth Lawyers