FEDERAL COURT OF AUSTRALIA Fogarty v Repatriation Commission [2003] FCAFC 136 VETERAN'S ENTITLEMENTS – generalisedanxiety disorder – claim for a pension in respect of a war-caused disease – appeal from a decision at first instance affirming a decision of the Administrative Appeals Tribunal that, inter alia, the generalised anxiety disorder was not a war-caused disease for the purposes of s 9(1) of the Veterans' Entitlements Act – diagnosis of the disease in issue – failure by the Tribunal to determine to its reasonable satisfaction as a preliminary matter whether the veteran suffered from a generalised anxiety disorder – uncertainty in the standard applied by the Tribunal in making the finding that the veteran did not develop the disorder as a result of service – failure of the Tribunal to consider a medical report – failure of the Tribunal to consider a Statement of Principles in force at the time of its decision – material errors shown Veterans' Entitlements Act 1986 (Cth), ss 5D(1), 9(1), 13(1), 120, 120A, 196, 196B Federal Court of Australia Act 1976 (Cth), s 43(2) Carr and Another v Finance Corporation of Australia Limited (No. 1) (1981) 147 CLR 246 referred to Repatriation Commission v Deledio (1998) 83 FCR 82 applied Benjamin v Repatriation Commission (2001) 70 ALD 622 followed Repatriation Commission v Cooke (1998) 90 FCR 307 referred to Repatriation Commission v Budworth (2001) 116 FCR 200 followed Repatriation Commission v Hill (2002) 69 ALD 581 referred to Repatriation Commission v Gosewinckel (1999) 59 ALD 690 referred to Repatriation Commission v Smith (1987) 15 FCR 327 referred to Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (1986) 162 CLR 24 followed Repatriation Commission v Gorton (2001) 110 FCR 321 followed Repatriation Commission v Keeley (2000) 98 FCR 108 referred to OLIVE MILDRED FOGARTY v REPATRIATION COMMISSION V 904 of 2002 SPENDER, TAMBERLIN & KENNY JJ 20 JUNE 2003 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 904 OF 2002 On appeal from a single Judge of the Federal Court of Australia BETWEEN: OLIVE MILDRED FOGARTY Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: SPENDER, TAMBERLIN & KENNY JJ DATE OF ORDER: 20 JUNE 2003 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be allowed. 2. Orders 3 and 4 of the orders of the learned primary judge be set aside. 3. The following orders be substituted for order 3 of the orders of the learned primary judge: (a) The decision of the Veterans' Appeals Division of the Administrative Appeals Tribunal made on 24 August 2000 to the extent that it decided that the veteran's generalised anxiety disorder was not war-caused be set aside; and (b) The matter be remitted to the Tribunal for further hearing (with or without additional evidence, as the Tribunal may direct) and determination according to law. 4. The respondent pay the appellant's costs of the appeal and of the application before the primary judge. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 904 OF 2002 On appeal from a single Judge of the Federal Court of Australia BETWEEN: OLIVE MILDRED FOGARTY Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: SPENDER, TAMBERLIN & KENNY JJ DATE: 20 JUNE 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT SPENDER J: 1 I agree with the reasons for judgment of Kenny J and the orders her Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. Associate: Dated: 20 June 2003 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 904 OF 2002 On appeal from a single Judge of the Federal Court of Australia BETWEEN: OLIVE MILDRED FOGARTY Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: SPENDER, TAMBERLIN & KENNY JJ DATE: 20 JUNE 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT TAMBERLIN J: 2 I concur with the reasons for judgment of Kenny J and the orders her Honour proposes. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. Associate: Dated: 20 June 2003 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 904 OF 2002 On appeal from a single Judge of the Federal Court of Australia BETWEEN: OLIVE MILDRED FOGARTY Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: SPENDER, TAMBERLIN AND KENNY JJ DATE: 20 JUNE 2003 PLACE: MELBOURNE REASONS FOR JUDGMENT KENNY J: 3 This is an appeal from the judgment of a judge of the Court that, amongst other things, affirmed the decision of the Administrative Appeals Tribunal ("the Tribunal") that the generalised anxiety disorder suffered by the late Mr William Francis Fogarty ("the veteran") was not a war-caused disease as defined in s 9(1) of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). The appellant, who is the widow of the veteran, also appeals against the primary judge's order that there be no order as to costs. 4 On 13 May 2003, some seven days after the hearing of the appeal, under cover of a letter of the same date, the respondent forwarded to the Court a copy of its counsel's memorandum, which was dated 12 May 2003. In par 1 of this memorandum, counsel stated: In the course of the hearing on 6 May 2003, the Court expressed concern about paragraph 67 of the Tribunal's reasoning … . The Commission has given further consideration to the matters raised by the Court in relation to that paragraph; and has instructed that it will consent to the following orders: 1.1 That the appeal be allowed. 1.2 That Order 3 made by the primary Judge be set aside. 1.3 That so much of the decision of the Administrative Appeals Tribunal … made on 24 August 2000 as determined that the veteran's generalised anxiety disorder was not war-caused be set aside and, to that extent, the matter be remitted to the Tribunal to be heard and determined according to law. 1.4 That the Respondent pay the Appellant's costs of the application before the primary Judge and of the appeal. In six subsequent paragraphs, counsel set out the basis upon which the respondent consented to these orders. 5 I am of the opinion that the appeal should be allowed, and orders made substantially in the form now proposed by the respondent. I set out my reasons below. These reasons overlap to some extent (though not completely) with the submissions recently filed by the respondent. It should be borne in mind that the Court has not given leave to the respondent to file these further submissions, and the submissions are not filed with the appellant's consent: cf Carr and Another v Finance Corporation of Australia Limited (No. 1) (1981) 147 CLR 246, at 257-258 per Mason J. In this circumstance, it is appropriate to set out my own reasons for allowing this appeal. background facts (a) Service History 6 The veteran, who was born on 1 June 1922, rendered operational service (and, therefore, eligible war service) in the Royal Australian Navy from 30 September 1940 to 4 January 1946. The veteran died on 13 July 2001, after instituting a proceeding in this Court. 7 Amongst other things, the veteran served on board ships in south-west Pacific waters. The veteran was a signalman. Between 1941 and 1942, he served at signal stations in southern Victoria and, subsequently, aboard the SS Victoria (in 1942-1943); HMAS Marawah (about 1943); HMAS Kalgoorlie (about 1943); HMAS Allenwood (in 1943-1944) and HMAS Quickmatch (from 1944 until discharge). The SS Victoria was an examination vessel. In his evidence before the Tribunal on 5 July 2000, the veteran said: I think the worst of the lot, strangely, was the examination vessel, the Victoria, when after the mines were swept off the Victorian coast, they just popped a box about 12 feet by 10 feet on the back of it and put about signalman and a couple of telegraphists on. … . [W]e would do a fortnight [at] sea, wouldn't come ashore at all, then we would come ashore and be relieved and do a fortnight in depot … . I think the living conditions on the Victoria were the worst. 8 In connection with the Allenwood, the veteran said: [T]he Allenwood was a coastal vessel commissioned by the Navy. It had a crew of about six but as a minesweeper it had a crew of about 24, very low draft. The conditions there were terrible. As to the Quickmatch, the veteran's evidence was: [T]he Quickmatch was one of the two … Australian destroyers in the British fleet. Now that – the British fleet assembled in Manus in early '45 and took part in the Okinawa Sakishima islands campaign with two American fleets. There [were] four carriers, one got hit first up, … and was replaced so it still made four and we were at sea for three months … . You were under attack from Kamikaze aircraft and all four carriers were hit, most of them more than once. … I was signalman. You were either on the bridge or on the flag deck. … . In an earlier written statement made on 6 August 1999, the veteran said: The conditions on board the minesweepers and destroyers were very stressful and horrendous, especially when I experienced kamikaze attacks whilst screening the Aircraft carrier 'Formidable', both ships were hit twice on separate occasions. I lost some friends during these attacks, although my ship experienced no direct hits, some were close. … . 9 After his discharge from the Navy, the veteran worked as a cabinet-maker and then as a worker at meat works. He later became a union official and, in the almost 16 years prior to his retirement, he was a member of the Parliament of the State of Victoria, and served as Deputy Speaker. (b) Relevant medical history 10 Before the Tribunal, counsel who was then acting for the veteran specifically asked him about his anxiety condition. In answer, the veteran said: Well that trouble started early '46 and I went to a Dr Rowe … . And I had flushes and vomiting and things like that. And he said 'Look', he said 'I think you have got malaria'. I said 'I couldn't have' because when we were at Manus we anchored off in … harbour. I don't think the mosquitoes flew that far. And he said 'I will send you to a bloke that is doing a study of it out at Brunswick.' And I just told the chap, I said 'I can't have malaria'. And Rowe, he said, you have got a nervous condition and then he sent me to a public hospital. … [B]ut Dr Rowe was the first indication that something was really – was wrong but, like, after five and a half years, you come to civil life again, there is the adjustment and everything like that had to take place. 11 In cross-examination, the veteran said that, to his knowledge, he had not been diagnosed with a psychiatric condition, but that two general practitioners (Doctors Cass and Phillips) had told him, in the mid to late 1950s, that they considered he had a generalised anxiety disorder. Since then, their view had been confirmed in psychiatric reports. His evidence, in cross-examination, was that, in the 1950s, he had been prescribed some "little pills". He said that, after he came out of the Navy, he had been anxious about his health because he "wasn't feeling too good". 12 A number of medical reports supported the veteran's claim. Amongst them was a report dated 17 February 1997 by Dr John Cronin, a consultant psychiatrist. Dr Cronin stated, amongst other things, that: In my opinion Mr Fogarty does have a Generalised Anxiety Disorder which, from his account, dates from the war and I think it is reasonable to accept that his wartime experiences would have been sufficient to cause the anxiety. As is often the case he has little documentation to support this but on clinical grounds it is a reasonable supposition. On the basis of Dr Cronin's evidence, the Veterans' Review Board ("the Board") accepted that the veteran suffered from a generalised anxiety disorder, but it was "unable to find any evidence that the claimed condition manifested within the two years of a stressful event, as required by the [relevant] SoP". 13 Further reports were presented to the Tribunal. In a report dated 12 March 1999, Dr David Sime, a consultant forensic psychiatrist, stated: 1/ In my view there are clear indications of a generalised anxiety state present. In relation to causation I would say that his war time experiences, both in the setting of the kamikaze attacks and also the stress over living in confined smoke ridden atmospheres, have contributed to his chest problems. However, the main thrust, I think, of his generalised anxiety state is linked to the anxieties generated from his physical illness and probably particularly in relation to his chest problems which have been a continuing process since coming out of the Navy. I think it is likely that from an early stage after coming out of the Navy there has been a psychosomatic component to a number of his symptoms and this may well have applied to the supposed malaria and the run of eye symptoms during the first year after coming out of the Navy. 2/ As I understand it, in order to accept the condition as war related, the material before the Board requires a reasonable hypothesis to connect the illness condition to the circumstances of service rendered. I would certainly advance the proposition that this generalised anxiety state was present at the time of discharge from the Navy and that this can be regarded as a reasonable hypothesis to explain his generalised anxiety state. 14 Dr Edward Cole, also a psychiatrist, expressed a similar opinion. In a report dated 23 November 1999, he expressed the view that the veteran was suffering from "a chronic generalised anxiety disorder, which was in evidence when he was discharged from the Navy and is to be attributed to his war service". Dr Cole added: There was no suggestion that he might be exaggerating his symptoms, and, on the contrary, I think he is inclined to deny to himself the full extent of his anxieties. His nervous disorder is mild, does not call for psychiatric treatment and appears to have stabilised. In a subsequent report, dated 3 March 2000, Dr Cole said that the veteran's chronic generalised anxiety disorder "would also have had the effect of causing him to drink more than he might otherwise have done". Dr Cole confirmed these opinions in evidence before the Tribunal. 15 The opinion of the psychiatrists was not, however, unanimous. Dr Barrie Kenny, also a consultant psychiatrist, differed from Dr Cole (and also Doctors Cronin and Sime), stating, in a report dated 22 July 1999, that: I could not possibly see this man as having a generalised anxiety disorder. He is an intelligent, well-adjusted, mature man, without (in my view) any significant symptoms whatsoever of psychiatric disturbance. In his evidence before the Tribunal, Dr Kenny said: I thought that his anxiety and concern [about his health] was perfectly appropriate to the severity and reality of what I understood to be his physical health problems. the legislative context 16 Pursuant to s 13(1) of the Act, the Commonwealth is liable to pay a pension to a veteran where a veteran has become incapacitated from a war-caused injury or disease. The condition of "generalised anxiety disorder" claimed by the veteran in this case is a "disease" within the meaning of the Act: see s 5D(1). Section 9 of the Act sets out the circumstances in which a disease is taken to be war-caused. For present purposes, it suffices to note that s 9(1)(a) and (b) provide, in substance, that, for the purposes of the Act, a disease contracted by a veteran shall be taken to be a war-caused disease if the disease resulted from an occurrence that happened while the veteran was rendering operational service, or the disease arose out of, or was attributable to, the veteran's eligible war service. 17 Provision is made in s 120 of the Act for the standard of proof to be applied by the Commission, and on review by the Board or Tribunal, in connection with questions arising on a pension claim. The effect of s 120(4) is that the Commission, or the reviewing body, must decide whether a veteran suffers, or suffered, from a disease by reference to its "reasonable satisfaction". Subsection 120(1) and (3) further provide: (1) Where a claim under Part II for a pension in respect of the incapacity from … disease of a veteran … relates to the operational service rendered by the veteran, the Commission shall determine … that the disease was a war-caused disease … unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination. … (3) In applying subsection (1) … in respect of the incapacity of a person from … disease … related to service rendered by the person, the Commission shall be satisfied, beyond reasonable doubt, that there is no sufficient ground for determining: … (b) that the disease was a war-caused disease …; … … if the Commission, after consideration of the whole of the material before it, is of the opinion that the material before it does not raise a reasonable hypothesis connecting the … disease … with the circumstances of the particular service rendered by the person. Sub-section 120(6) provides that nothing in the Act "shall be taken to impose … any onus of proving any matter that is, or might be, relevant to the determination of the claim …". 18 Because the veteran's claim was lodged after 1 June 1994, s 120A applies to his claim: see s 120A(1). Subsection 120A(3) relevantly provides that, for the purposes of s 120(3), a hypothesis connecting a disease contracted by a veteran with the circumstances of his particular service is reasonable only if there is in force a Statement of Principles (determined under sub-ss 196B(2) or (11)) that upholds the hypothesis. A Statement of Principles ("SoP") is made by the Repatriation Medical Authority under s 196B of the Act in respect of particular kinds of injury, disease or death. 19 In support of his claim for a pension on account of his generalised anxiety disorder, the veteran relied principally on SoP No 48 of 1994 ("the 1994 SoP"). The 1994 SoP was made under s 196B(2) of the Act. Where a SoP is made under s 196B(2), the SoP must set out the factors that must as a minimum exist, and which of those factors must be related to service, before it can be said that a reasonable hypothesis has been raised connecting an injury, disease or death of the relevant kind with the circumstances of that service. 20 According to cl 1 of the 1994 SoP "the factors that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting generalised anxiety disorder … with the circumstances of … service" included "experiencing a stressful event not more than two years before the clinical onset of generalised anxiety disorder": see cl 1(b). The veteran in this case relied on cl 1(b) of the 1994 SoP. 21 The term "generalised anxiety disorder" is defined in cl 4 of the 1994 SoP as meaning – a psychiatric disorder that is a generalised anxiety disorder attracting ICD code 300.02, and which meets the following description (derived from DSM-IV): (a) excessive anxiety and worry … occurring more days than not for at least six months, about a number of events or activities … which: (i) the person finds difficult to control; and (ii) which is associated with three or more of the following six symptoms, at least some of which are present for more days than not for the previous six months: (A) restlessness or feeling keyed up or on edge; (B) being easily fatigued; (C) concentration difficulties or mind going blank; (D) irritability; (E) muscle tension; (F) sleep disturbance (difficulty falling or staying asleep, or restless unsatisfying sleep); and (iii) the focus of which is not confined to features of an Axis I disorder …; and (iv) it does not occur exclusively during Post-Traumatic Stress Disorder; and (v) either the anxiety or worry, or physical symptoms, cause clinically significant distress or impairment in social, occupational, or other important areas of functioning; and (b) which is not due to the direct physiological effects of: (i) a drug of abuse; or (ii) a medication; or (iii) a general medical condition …; and (c) which does not occur exclusively during a Mood Disorder, a Psychotic Disorder, or a Pervasive Developmental Disorder. "DSM-IV" is a reference to the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (4th ed): see cl 4. Clause 4 defines the term "stressful event" as meaning "an occurrence which evokes feelings of anxiety or stress". By virtue of cl 2 of the 1994 SoP the factor set out in cl 1(b) must be related to the service rendered by the veteran. the decision of the tribunal 22 At the outset of its reasons dated 24 August 2000, the Tribunal stated that the veteran's claim for generalised anxiety disorder gave rise to two issues. They were, first, whether the disorder was war-caused within the meaning of s 9 of the Act; and, secondly, if it was, what was the appropriate rate of pension. Before the Tribunal, the same questions also arose in connection with the veteran's claimed ischaemic heart disease but, for reasons appearing below, this claim does not fall for consideration on this appeal. 23 The veteran's case before the Tribunal was that he had a generalised anxiety disorder, which was attributable to his experiences in the Navy, including conditions aboard ships and his exposure to Japanese aerial attacks. The Tribunal heard evidence from the veteran, and Doctors Cole and Kenny. It also had before it the medical reports referred to above. 24 After summarising much of the evidence before it and setting out a key passage from the decision of the Full Court in Repatriation Commission v Deledio (1998) 83 FCR 82 ("Deledio"), at 97-98 (which summarised the effect of ss 120(1) and (3), as well as s 120A(3)) the Tribunal stated, at [61] to [67]: [61] After consideration of the whole of the material before us, we determine that such material points to hypotheses connecting the claimed disabilities with the circumstances of the particular service rendered by Mr Fogarty. … [63] In our opinion … the hypotheses pointed to by the material before us are not reasonable. That is to say the hypotheses, which are in respect of [ischaemic heart disease] and [generalised anxiety disorder], do not contain one or more of the factors determined by the RMA in the relevant SoPs, to be the minimum which must exist, and be related to the person's service. This includes the factors upon which Mr Fogarty relies. In other words, the hypotheses fail to fit within the 'template' to be found in the relevant SoP's, and thus the claims must fail. … … [66] Finally, as we have recorded Mr Fogarty relies upon factor 1(b) of SoP No. 48 of 1994 in respect of his claim for [generalised anxiety disorder], that is to say experiencing a stressful event not more than two years before the clinical onset of [generalised anxiety disorder]. [67] While we accept that Mr Fogarty experienced stressful service in the Navy, we have, however, formed the opinion that he never developed a [generalised anxiety disorder] as a result of any aspect of his service. Indeed, his own evidence makes it very clear that since his naval service, Mr Fogarty has enjoyed not only a long and happy family life but also a most successful and rewarding working life, particularly while at the Trades Hall and then later in politics. The Tribunal therefore affirmed the decision of the Board in so far as it rejected the veteran's claim for a generalised anxiety disorder. the decision of the primary judge 25 Before the primary judge, the Repatriation Commission conceded that the veteran's challenge to the Tribunal's decision should succeed in respect of the claimed condition of ischaemic heart disease. Accordingly, the learned primary judge ordered that so much of the Tribunal's decision as determined that the veteran's ischaemic heart disease was not war-caused be set aside and, to this extent, the matter be remitted to the Tribunal to be heard and determined according to law. For the reasons discussed below, his Honour affirmed the balance of the decision, relating to the condition of a generalised anxiety disorder. 26 As his Honour observed, at [14] and [16]: It is now settled law that the essential task is to take, in order, the four steps formulated in Deledio. However, the reasoning in Deledio starts from the premise that the veteran is suffering, or at the time of his or her death was suffering, from a disease. Where it is not common ground as to what (if any) disease is or was suffered by the veteran a first, or preliminary, question must be answered to the reasonable satisfaction of the decision-maker. That is 'From what collection of symptoms is or was the veteran suffering?'; Repatriation Commission v Cooke (1998) 90 FCR 307 at 310. While considering this preliminary question, medical labels, commonly understood terms for specific conditions and the elements of any SoP are irrelevant and should be disregarded. … Before anything else, the Tribunal must find to its 'reasonable satisfaction' that a disease exists; [Repatriation Commission v Budworth (2001) 116 FCR 200 at 204-205]. It is not confined to considering only those diseases or conditions contended for by one or other party before it, and should not test the existence of a postulated disease by reference to any SoP while conducting this first inquiry; see [Benjamin v Repatriation Commission (2001) 34 AAR 270 at 280-282]. 27 Further, as his Honour said, it is only after the preliminary question has been resolved that the next four steps, set out by the Full Court in Deledio, at 97-98, are to be taken. His Honour concluded, at [27]-[28], that: An analysis of the Tribunal's reasons must start from the proposition that the Tribunal found, to its reasonable satisfaction, as a matter of fact, no collection of symptoms corresponding to clinically significant social or occupational impairment. That was a conclusion open to the Tribunal on the material before it, and the Court is not entitled to disturb that finding. I can infer, reasonably clearly, that, when the Tribunal arrived at the third step of the Deledio process there was nothing to point to an essential element of the SoP, and it could therefore not regard the hypothesis as reasonable and so it proceeded no further. It would have been of considerable assistance if the Tribunal had formulated a clear statement of what symptoms it found to be present (or not to be present) in the veteran, but that omission was not fatal to the finding of fact to which I have just adverted. Nevertheless, despite the finding of fact just mentioned, I am not persuaded that the Tribunal ever took the preliminary step of identifying the collection of symptoms of a disease from which the veteran may have suffered. It appears to have treated the existence of any mental disorder as in dispute, but has not properly carried out the exercise described in Budworth and Benjamin …; that is, the Tribunal did not consider the existence of any symptoms of mental disorder and determine to its reasonable satisfaction what symptoms were actually exhibited by the veteran before taking the successive steps described in Deledio. Rather, it went straight to the Deledio process with the exclusionary criteria of the GAD SoP in mind. That was clearly an error of law, but the question remains whether it materially affected the result at which the Tribunal arrived. The primary judge held that this error of law was not material. 28 The primary judge also accepted, at [29], that the Tribunal erred by failing to consider SoP Instrument 1 of 2000 ("the 2000 SoP"), since the 2000 SoP was in force when the Tribunal made its decision. His Honour also held that this failure was not material to the result. the parties' submissions 29 The case for the appellant was that the Tribunal erred in law: (a) in failing to determine, as a preliminary matter, whether the veteran suffered from the claimed psychiatric condition in accordance with s 120(4) of the Act; (b) in deciding that the veteran did not develop a generalised anxiety disorder in the course of forming an opinion as to whether the hypothesis raised by the material (and connecting the disease to the veteran's war service) was a reasonable one; (c) in failing to make an enquiry as to whether the raised hypothesis was a reasonable one in accordance with subss 120(1) and (3), and s 120A(3) of the Act; (d) in failing to consider Dr Sime's report (referred to above); and (e) in failing to consider the 2000 SoP. The appellant also submitted that the primary judge had erred in finding that none of the errors of law made by the Tribunal affected the result. 30 At the hearing of the appeal on 6 May 2003, the respondent submitted that the Tribunal's finding (that the veteran was not suffering from a generalised anxiety disorder because there was no clinically significant social or occupational impairment) was made on the appropriate standard. Whilst there was, the respondent conceded, a degree of methodological confusion on the Tribunal's part, the finding was open to the Tribunal and was sufficient to decide the matter adversely to the veteran. The respondent contended that any error of law was inconsequential, because the finding precluded a decision that the claimed disease was a war-caused disease. According to the respondent, there was nothing in the 2000 SoP that could have led to a different result, because there was no material difference between the 1994 SoP and the 2000 SoP. 31 As already noted, in the documents filed on 13 May 2003, the respondent changed its position. Although it continued to maintain that the Tribunal's finding that the veteran did not have the claimed disease was made on the appropriate standard (namely, its reasonable satisfaction), the respondent conceded that: Where there is evidence before the Tribunal that a veteran suffers from an ailment, disorder, defect or morbid condition (as 'disease' is defined in s 5D(1) of the VE Act), the Tribunal cannot properly dispose of the claim by finding that the veteran's symptoms do not answer the symptoms of a particular disease. … . In deciding whether a veteran is suffering from a disease, the Tribunal should not confine itself to a disease as defined in an SoP: it should first ask whether the veteran's symptoms constitute an injury or disease as defined in the VE Act; and, if they do, it should then ask whether there is an SoP in force in respect of the disease … . In the present case, it appears that the Tribunal did not go beyond asking (and deciding, to its reasonable satisfaction) whether the veteran displayed the symptoms of generalised anxiety disorder, as defined in the relevant SoP (or in DSM-IV). That was not a sufficient inquiry. The Tribunal was bound to decide whether the veteran's symptoms constituted a disease (which might have been a disease for which an SoP had been made or might have been a disease for which no SoP had been made). material errors of law 32 I accept that the reasons of the Tribunal establish more than mere methodological confusion. For the reasons set out below, they establish material errors of law. 33 I begin by observing that the Tribunal's finding, at [67] of its reasons (set out above), that the veteran did not develop a generalised anxiety disorder as a result of his service is inherently ambiguous. Did the Tribunal reject the veteran's claim that he suffered from the disease? Alternatively, did the Tribunal accept that the veteran suffered from the disease but reject his claim that it was causally connected to his service? The Tribunal's reference, by way of explaining the finding, to the veteran's evidence about his family and working life strongly indicates that the Tribunal was rejecting his claim to suffer from the disease, and not merely the causal connection with his service, because the evidence relates to the existence of the condition of "generalised anxiety disorder", as defined in the 1994 SoP: see par (a)(v) of the definition in cl 4. Perhaps, the Tribunal's statement in its reasons, at [7], of the issues before it supports a different conclusion, but, as the Tribunal's summary of the evidence shows, the matter of the veteran's diagnosis was very much in issue. 34 If, as I accept, the Tribunal, in making the finding it did, was rejecting the existence of the disease (and, consequently, any supposed connection with service) then the Tribunal necessarily fell into error. As noted already, although the Board accepted the veteran's claim to suffer from a generalised anxiety disorder, the evidence before the Tribunal, especially that of Dr Kenny, very clearly raised doubt about the diagnosis of the disease. The authorities establish that, where there is an issue as to whether or not a veteran is suffering from a claimed injury or disease, then the Commission (and, on review, the Board or the Tribunal) must decide the issue to its reasonable satisfaction, as required by s 120(4) of the Act: see Benjamin v Repatriation Commission (2001) 70 ALD 622 ("Benjamin"), at 634 (Moore, Emmett and Allsop JJ); Repatriation Commission v Cooke (1998) 90 FCR 307, at 310-311 (French, Drummond and Carr JJ); Repatriation Commission v Budworth (2001) 116 FCR 200, at 204-205 (Ryan, Marshall and Conti JJ); Repatriation Commission v Hill (2002) 69 ALD 581 ("Hill"), at 598-599 (Black CJ, Drummond and Kenny JJ); and Repatriation Commission v Gosewinckel (1999) 59 ALD 690, at 700-702 per Weinberg J. 35 As the Full Court said in Benjamin, at 634: Section 120(1) of the Act assumes the existence of a relevant injury or disease and provides a standard of proof for the determination of whether that injury or disease was war-caused. When the [C]ommission, or the [T]ribunal on review, is required to determine whether a veteran is suffering from a particular injury or disease, that issue must be decided to the reasonable satisfaction of the decision-maker, in accordance with s 120(4) of the Act: see Repatriation Commission v Budworth (2001) 116 FCR 200 at 204, [15]; 66 ALD 285 at 289. Although the Tribunal is not bound by the rules of evidence, the Full Court held in Repatriation Commission v Smith (1987) 15 FCR 327, at 335, that the requirement in s 120(4) that the Tribunal must be "reasonably satisfied" imports the civil standard of proof. 36 There is nothing in the Tribunal's reasons to indicate that it ruled upon the veteran's claim to be suffering from a generalised anxiety disorder in accordance with the standard mandated by s 120(4) of the Act. There is no reference to this provision in the Tribunal's reasons. Further, instead of determining this issue of diagnosis as a preliminary matter (as the Act and the authorities require) the Tribunal first turned to issues properly arising only after it had ruled on the existence of the condition and in the veteran's favour: see Benjamin,at 634 and Budworth,at 204-205. 37 That is, the Tribunal first turned to the issues arising under subss 120(1) and (3) (and, in this case, s 120A(3)) of the Act, concerning the standard of proof for establishing a causal connection between the veteran's injury or disease and his war service, before deciding the issue of diagnosis. It is, however, only after a decision-maker determines that a veteran is suffering from a particular injury or disease (or this fact is agreed or conceded) that the question arises as to whether the particular injury or disease is war-caused (within the meaning of s 9 of the Act). The standard of proof that applies at this stage of the decision-making process, by reason of subss 120(1) and (3) (and s 120A(3)) is different from that mandated by s 120(4) of the Act (and applicable to the issue of diagnosis). The Full Court in Hill recently discussed these provisions, and referred to the observations in Deledio reiterated by the Tribunal in this case: see [29] above. 38 As the judge at first instance noted, the first step taken in the Tribunal's reasoning in this case was the first step referred to in Deledio. That is, the Tribunal considered whether the material before it pointed to a hypothesis connecting the disease with the circumstances of the veteran's particular service, and determined that it did. This step assumed that the Tribunal had found, in the veteran's favour, that he suffered from a generalised anxiety disorder. The second and third steps in the Tribunal's reasons looked like the second and third steps in Deledio. They also assumed that the Tribunal had found that the veteran suffered from the disorder. The Tribunal purported to determine whether the hypothesis was a reasonable one in the sense that it fitted the template to be found in the 1994 SoP. It did not, however, complete this part of its task by deciding that, although the veteran suffered from the disease, there was no reasonable hypothesis connecting the disease with the veteran's service, because the hypothesis did not contain one or more of the factors that the SoP required as a minimum to exist before the disease could be related to his service. Although the Tribunal expressly mentioned cl 1(b) of the 1994 SoP and reiterated its effect, it made no specific finding about the veteran's "experiencing a stressful event" as it might have done. Instead, after acknowledging that the veteran "experienced stressful service in the Navy", it found, apparently as part of the same inquiry, that the veteran did not have the claimed psychiatric condition. 39 It is difficult to determine with confidence why the Tribunal chose to state this finding at this stage in its reasons or what standard it applied in making the finding. As already noted, its reasons contain no reference to s 120(4) of the Act. Bearing this in mind, and that, on one view, it was purporting to apply the second and third steps set down in Deledio, it is unlikely that the Tribunal was applying the test of reasonable satisfaction in determining that the veteran did not suffer from the disorder. Perhaps, as the primary judge commented, the Tribunal's finding is properly understood as merely a finding that nothing in the material pointed to an essential element of the 1994 SoP. Its finding is not, however, made in these terms. Rather, it is expressed as a definitive finding of fact. Further, the evidence of Dr Cole, including his report, might well be thought to constitute material at least pointing to these elements. Perhaps, without expressly acknowledging the fact, the Tribunal had advanced to the final stage in its inquiry, namely, the inquiry under s 120(1) of the Act. At what the Court in Deledio nominated the fourth stage, the Tribunal was to consider whether it was satisfied beyond reasonable doubt that the disease was not war-caused. Only if so satisfied, would the claim fail. It was only at this stage that the Tribunal was to find facts from the material before it. Had the Tribunal moved to this stage, one would, however, have expected some additional indication in its reasons that it had done so. 40 Where the Tribunal has not made an important step in its inquiry at the correct point in its analysis, but it has subsequently made a relevant finding on an uncertain standard, I would conclude that there has been an error of law. It has not been shown that the error was immaterial. Although it was open to the Tribunal on the evidence to find to its reasonable satisfaction that the disease did not exist, I would not, in the circumstances, be confident that this is in fact what the Tribunal did. 41 As noted above, counsel for the veteran's widow submitted that the Tribunal had erred by failing to have regard to Dr Sime's report. I accept that the Tribunal was bound to take the report into account, in the sense explained by Mason J in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (1986) 162 CLR 24, at 39, in deciding whether or not the veteran suffered from a generalised anxiety disorder. Providing it did so, it was for the Tribunal to determine what weight should attach to the report. There is, however, no mention of the report in the Tribunal's reasons. On account of this, and on account of the Tribunal's failure at the outset to address the diagnosis issue by reference to the evidence, and on account of the "methodological confusion" (as the respondent termed it) in the Tribunal's reasons generally, I would infer that the Tribunal indeed failed to have regard to Dr Sime's report. In the circumstances of the case, this failure constitutes a material error of law. 42 Finally, did the Tribunal commit an error of law in failing to consider the 2000 SoP? When the Tribunal made its decision on 24 August 2000, the 2000 SoP was in force, and the earlier SoPs concerning generalised anxiety disorder (including the 1994 SoP) had been revoked. In Repatriation Commission v Gorton (2001) 110 FCR 321, the Full Court declined to overrule the decision in Repatriation Commission v Keeley (2000) 98 FCR 108. Keeley held that a claimant for a pension under the Act had an accrued right to have his claim determined by the Tribunal in accordance with the SoP in force at the time his claim was made, notwithstanding that the SoP had been revoked by the time the Tribunal came to make its decision. At the same time, the Full Court in Gorton held that the Tribunal was also "bound to apply the SoP current at the time of the hearing before it": see Gorton, at 334 per Allsop J (with whose reasons Emmett J agreed) and 331-2 per Heerey J. It follows that the Tribunal in this case was obliged to consider both the 1994 SoP and the 2000 SoP before reaching a decision adverse to the veteran. The Tribunal erred in law in failing to consider the 2000 SoP. 43 Was this error of law a material error? Pursuant to s 196B(2) of the Act, the 2000 SoP set out, in cl 5, the factors that "must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting anxiety disorder … with the circumstances of [the veteran's] relevant service". These factors included "experiencing a severe psychosocial stressor within the two years immediately before the clinical onset of anxiety disorder" (cl 5(a)(ii) - a factor resembling cl 1(b) of the 1994 SoP) and "having a major illness or injury within the two years immediately before the clinical onset of anxiety disorder" (cl 5(a)(iv)). Before the primary judge, counsel for the veteran's widow contended that the Tribunal erred by failing to consider whether the veteran had a major illness within the period stipulated in cl 5(a)(iv) of the 2000 SoP immediately before "the clinical onset" of the veteran's anxiety disorder. His Honour rejected this submission. No error is shown in this. The veteran did not refer to this factor in his claim before the Tribunal, and there was no material before the Tribunal requiring consideration of it. 44 Although cl 5(a)(iv) of the 2000 SoP added little to the veteran's case, there is another feature of the 2000 SoP that may have been more favourable to him. The 2000 SoP expressly concerned "anxiety disorder" (as well as "death from anxiety disorder"). The term "anxiety disorder" was defined, in cl 2(b), as "the anxiety spectrum disorders of generalised anxiety disorder, or anxiety disorder due to a general medical condition, or anxiety disorder not otherwise specified, attracting ICD-10-AM code F06.4, F41.1, F41.8 or F41.9". Pursuant to cl 8, "generalised anxiety disorder" is defined in much the same terms as in the 1994 SoP, but the expression "anxiety disorder not otherwise specified" is new. This latter expression, which did not appear in the 1994 SoP, was defined in cl 8 of the 2000 SoP as "a psychiatric disorder with prominent anxiety … that does not meet criteria for any specified anxiety disorder … ". This definition raises the possibility that a claim may satisfy the description "anxiety disorder not otherwise specified" even though it does not satisfy the description of "a generalised anxiety disorder". In this case, the Tribunal's failure to consider this possibility may have materially affected its decision. summary 45 For the reasons stated above, the decision of the Tribunal involved at least one, if not more, material errors of law. Accordingly, I would allow the appeal. 46 As noted at the outset of these reasons, the appellant also challenged the primary judge's order that there be no order as to costs. Bearing in mind the disposition of the case below, an order of this kind was entirely within the discretion conferred by s 43(2) of the Federal Court of Australia Act 1976 (Cth). Bearing in mind that the appellant has succeeded on the appeal, however, I would order that the respondent pay the appellant's costs of the appeal and of the application before the primary judge. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. Associate: Dated: 20 June 2003 Counsel for the Appellant: Mr D De Marchi Solicitor for the Appellant: De Marchi & Associates Counsel for the Respondent: Mr P Hanks QC Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 6 May 2003 Date of Judgment: 20 June 2003