FEDERAL COURT OF AUSTRALIA Repatriation Commission v McDermid [2016] FCAFC 179 Appeal from: McDermid v Repatriation Commission [2016] FCA 372, (2016) 150 ALD 55 File number: QUD 341 of 2016 Judges: KENNY, FLICK AND RANGIAH JJ Date of judgment: 14 December 2016 Catchwords: VETERANS' ENTITLEMENT – compensation payable for incapacity in respect of spine condition – pension also sought under Veterans' Entitlements Act – claimed incapacity from same condition – reduction of pension by reason of compensation already being received STATUTORY INTERPRETATION – natural and ordinary meaning of words – no ambiguity Legislation: Compensation (Commonwealth Government Employees) Act 1971 (Cth) Safety, Rehabilitation and Compensation Act 1988 (Cth) Veterans' Entitlements Act 1986 (Cth), ss 5D(2), 13, 13(1)(b), 19, 19(7), 21A, 22, 71(3), 72, 73, 74, 74(2), 74(2)(a), 74(2)(b), 75, 76, 77, 78, 79 Cases cited: Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 Canute v Comcare [2006] HCA 47, (2008) 226 CLR 535 Commonwealth v Smith [2009] FCAFC 175, (2009) 180 FCR 569 McDermid v Repatriation Commission [2016] FCA 372, (2016) 150 ALD 55 Owen v Repatriation Commission (1995) 59 FCR 93 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355 Woodside Energy Ltd v Zaghloul [2015] FCAFC 135 Date of hearing: 22 November 2016 Registry: Queensland Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 26 Counsel for the Appellant: Mr T Howe QC with Ms R Henderson Solicitor for the Appellant: Australian Government Solicitor Counsel for the Respondent: Mr R Derrington QC with Mr A Harding Solicitor for the Respondent: Woods Prince Lawyers ORDERS QUD 341 of 2016 BETWEEN: REPATRIATION COMMISSION Appellant AND: WILLIAM JOHN MCDERMID Respondent JUDGES: KENNY, FLICK AND RANGIAH JJ DATE OF ORDER: 14 DECEMBER 2016 THE COURT ORDERS THAT: 1. No later than 2:15 pm on Friday 16 December 2016, the Appellant, having conferred with the Respondent, file an agreed minute of proposed orders to give effect to the reasons for judgment delivered on Wednesday 14 December 2016. 2. In the event that the parties disagree about the proposed orders, each party file short submissions (limited to 3 pages) no later than 2:15 pm on Friday 16 December 2016 in support of the orders that party proposes, together with a minute of proposed orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT THE COURT: 1 Mr William McDermid was a member of the Royal Australian Navy from 1965 to 1985. 2 During the course of his service he suffered a number of injuries for which he claimed compensation. For present purposes, it has been accepted that: one of those injuries, a lumbar spine condition, was accepted in 1984 as compensable under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) and that compensation remained payable under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the "Compensation Act"); the incapacity from that injury was also accepted in 1984 as compensable under the Repatriation Act 1920 (Cth), the predecessor legislation to the current Veterans' Entitlements Act 1986 (Cth) (the "Veterans' Entitlements Act"); and that Mr McDermid suffered a number of other injuries which have been accepted as compensable under the Veterans' Entitlements Act. 3 In June 1999 the Repatriation Commission accepted a claim made by Mr McDermid under s 14 of the Veterans' Entitlement Act. The Commission further determined, however, that when consideration was given to the rate of pension payable in respect to his lumbar spine condition under the Compensation Act his rate of pension should be reduced from the "special rate" to "100% of the general rate". That reduction was attributed, so the Commission determined, to s 74 of the Veterans' Entitlements Act. 4 Section 74 was relevantly amended with effect from 15 September 2011. 5 Mr McDermid sought to review the decision of the Commission. A Judge of this Court determined (inter alia) that prior to 15 September 2011 the amount of pension payable under the Veterans' Entitlements Act was not affected by the compensation payable under the Compensation Act and that the Commission erred in reducing the quantum of the pension payable: McDermid v Repatriation Commission [2016] FCA 372, (2016) 150 ALD 55. 6 The Commission appeals from that part of the decision of the primary Judge. 7 The appeal is to be allowed. Section 74 8 At the time when the delegate of the Commission made the decision in June 1999, and up until it was relevantly amended by the Veterans' Entitlements Amendment Act 2011 (Cth) with effect from 15 September 2011, s 74(2) provided as follows: This section applies in relation to a member of the Forces … in respect of the … incapacity of the member from a defence-caused injury … if: (a) a person is entitled … to receive payments by way of compensation in respect of the … incapacity of the member from that injury …; and (b) subject to this section, pension under this Part is being paid or is payable to a person … in respect of the … incapacity of the member from that injury or disease. Section 5D(2) also provided as follows: In this Act, unless the contrary intention appears: (a) a reference to the incapacity of a veteran from a war-caused injury or a war-caused disease; or (b) a reference to the incapacity of a person who is a member of the Forces, or a member of a Peacekeeping Force (as defined by subsection 68(1)), from a defence-caused injury or a defence-caused disease; is a reference to the effects of that injury or disease and not a reference to the injury or disease itself. Compensation in respect of that injury 9 When applied to the terms of s 74(2), the facts of Mr McDermid's case were such that: he was a "member of the Forces" who had an "incapacity from a defence-caused injury" and, accordingly, fell within the opening words of s 74(2); for the purpose of s 74(2)(a), he was entitled to receive payments under the Compensation Act in respect of his lumbar spine condition; and for the purposes of s 74(2)(b), as from June 1999 he was entitled to receive a pension under the Veterans' Entitlements Act in respect of his incapacity from a number of injuries, including the lumbar spine condition. So much was common ground between the parties. 10 What divided the parties focussed upon the meaning of the phrase "that injury" in s 74(2). 11 In contest was whether or not the fact that Mr McDermid's pension entitlements under the Veterans' Entitlements Act included a pension in respect of his incapacity from his lumbar spine condition and other injuries meant that that pension was not in respect of the same injury as that for which he received compensation under the Compensation Act. 12 Contrary to the conclusion of the primary Judge, that question is to be resolved in favour of the Commission's decision to reduce the rate of pension payable to Mr McDermid. 13 This conclusion is reached for either of two reasons. 14 First, if attention is confined to the terms of s 74(2), the conclusion — it is respectfully considered — gives effect to the natural and ordinary meaning of the terms employed in that sub-section. When reference is made to the phrase "that injury" in s 74(2)(b), it is a reference to the same "injury" referred to in s 74(2)(a) (Commonwealth v Smith [2009] FCAFC 175 at [27], (2009) 180 FCR 569 at 574 per Black CJ, Moore and Middleton JJ). Further, the references in s 74(2)(a) and (b) to "that injury" each refer back to the "defence-caused injury" in the introductory words to s 74(2). 15 On the facts of Mr McDermid's case, he was a "member of the Forces" who suffered an incapacity "from a defence-caused injury". The fact that his incapacity under the Veterans' Entitlements Act may have arisen from more than one injury did not preclude him from being a "member" who suffered an incapacity by reason of his lumbar spine condition. In respect of that injury he was entitled to receive compensation under the Compensation Act: s 74(2)(a). And in respect of that same injury he was also entitled to payment of a pension under the Veterans' Entitlements Act: s 74(2)(b). 16 Just as the concept of "an injury" is of "pivotal importance in the structure" of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (Canute v Comcare [2006] HCA 47 at [8], (2006) 226 CLR 535 at 539 to 540 per Gummow A-CJ, Kirby, Callinan, Heydon and Crennan JJ), the concept of an injury — and a particular injury — is equally pivotal to the Veterans' Entitlements Act. 17 Secondly, the phrase "defence-caused injury" and the phrase "that injury" should be construed in a manner which gives effect to the object and purpose of the Veterans' Entitlements Act as a whole: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28, (1998) 194 CLR 355 at 381. In respect to the correct manner of construing a statutory provision, McHugh, Gummow, Kirby and Hayne JJ there observed: [69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos [(1955) 92 CLR 390 at 397], Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. (footnotes omitted) See also: Woodside Energy Ltd v Zaghloul [2015] FCAFC 135 at [39] per Siopis, Rares and McKerracher JJ. 18 In the present statutory context the "architecture" of the Veterans' Entitlements Act, as correctly submitted on behalf of the Commission, was to focus attention on a pension being payable in respect of an incapacity resulting from a particular injury rather than an incapacity resulting from a more "generically" expressed injury. The focus throughout the Act, Senior Counsel submitted, was always on an incapacity from a particular injury. Applied to the terms of s 74(2)(b), Senior Counsel correctly submitted that the phrase "that injury" focussed on a particular injury and recurred throughout the "architecture" of the Act. In this case that injury was the lumbar spine condition and not a more "generic" reference to that particular injury and other injuries. 19 That "architecture" was exposed by numerous provisions throughout the Veterans' Entitlements Act, including ss 13, 19 (as modified by s 71(3) for the purposes of Part IV of the Act), 21A (and the Guide to the Assessment of Rates of Veterans' Pensions), 22, 72, 73, 75, 76, 77, 78 and 79. 20 Particular reference should perhaps be made to ss 13 and 19. As it stood in 1999, s 13 set forth the eligibility requirements for receipt of a pension, including the requirement that a "veteran has become incapacitated from a war-caused injury": s 13(1)(b). Section 19(7) assumes importance by reason of the fact that it constrains the Commission to the making of a single pension aggregating the individual claims that have been accepted, and prohibits the Commission from granting "separate and additional pension[s]" in respect to each incapacity. Section 71(3) provides a mirror provision in respect to pensions payable under Part IV of the Veterans' Entitlements Act. 21 This focus of the Veterans' Entitlements Act upon consideration being given to a particular injury is consistent with the interpretation given to the "scheme of the Act" as analysed by Finn J in Owen v Repatriation Commission (1995) 59 FCR 93 at 100 to 101. The veteran in that case had claimed a pension on account of an incapacity arising from three designated war-caused injuries or diseases. The Commission rejected those claims. On review before the Administrative Appeals Tribunal, the veteran sought to rely upon an injury which had not been the subject of any prior examination and assessment. Finn J concluded that the Tribunal could not entertain that claimed injury as it had not been the subject of any decision of the Commission. If the veteran wanted to have the newly identified incapacity assessed he could do so — but only by submitting a claim in respect of that new incapacity. In so concluding, Finn J set forth three observations in respect to the "scheme of the Act": To avoid any misunderstanding as to what is being held here I would make the following observations which express my own conclusions as to the scheme of the Act and as to the place of s 24 in it. 1. Section 24 presupposes that a determination has been made that an injury has been war-caused. Its concern in subs (1)(c) is with an effect of the incapacity resulting from that injury … 2. Where it is suggested a new injury is war-caused because it is causally related to, or has been contributed to by, an already determined war-caused injury, it is open to a veteran to make a claim under the Act for a determination that that new injury is in fact war-caused within the terms of the Act, s 9. In other words the legislative scheme itself allows for an injury causally related to a war-caused injury to be found to be a war-caused injury … 3. The wording of s 24(1)(c) in its reference to the veteran being prevented from continuing to undertake remunerative work "by reason of incapacity from that war-caused injury ... alone" likewise precludes a converse form of reasoning which would allow the effects of an injury which was not determined to be war-caused to be attributed wholly to an injury that was so determined merely because the two injuries could be shown to be causally related. For the purposes of s 24(1)(c) the relevant incapacity is that of the injury determined to be war-caused alone and not that as well of any causally related but not war-caused determined injury. The emphasis, it will be noted, was upon the necessity to make a claim for a particular incapacity and for a decision to be made in respect to that incapacity. 22 Any contrary construction of s 74(2)(b), as it then stood, requires the statutory phrase "that injury" to be construed as meaning (for example) "that injury alone" or "that injury to the exclusion of other injuries" for which a pension may also be payable. It is to be accepted that words are not to be "read into" a statutory provision unless there is a clear need to do so: cf. Bermingham v Corrective Services Commission of New South Wales (1988) 15 NSWLR 292 at 302 per McHugh JA. Given the "architecture" of the Veterans' Entitlements Act, there is no clear need to either "read words into" s 74(2), or to construe s 74(2) other than in the manner that the natural and ordinary meaning of those words convey. Indeed, the contrary construction of the primary Judge and as urged upon this Court by Senior Counsel for Mr McDermid would only be to endorse "double dipping" — with Mr McDermid receiving the entirety of the compensation payable under the Compensation Act and the pension payable under the Veterans' Entitlements Act free of any reduction in quantum. CONCLUSIONS 23 In these circumstances, it is unnecessary to consider the further submissions made by Senior Counsel for the Commission concerning the principles to be applied in resolving statutory ambiguity. As set out above, this Court does not discern any relevant ambiguity. It is unnecessary to refer to s 23(b) of the Acts Interpretation Act 1901 (Cth), which does not operate to displace the ordinary meaning of the language of the relevant statutory provisions in the context of the statute as a whole. Nor is it helpful to discuss s 74(2) as amended by the Veterans' Entitlements Amendment Act 2011 (Cth), the history of which was referred to by the learned primary Judge: see McDermid [2016] FCA 372 at [62] to [64], (2016) 150 ALD 55 at 71 to 72. There was, of course, no appeal from that part of his Honour's judgment that concerned the operation of the Veterans' Entitlement Act as amended on and from 15 September 2011. 24 The appeal should be allowed. 25 Senior Counsel for the Commission accepted that in the event that the Commission met with success on appeal it did not seek either its costs at first instance or its costs on appeal. But it sought an order that the costs order made against it at first instance should be set aside. 26 That approach was endorsed by Senior Counsel for Mr McDermid. THE ORDERS OF THE COURT ARE: 1. No later than 2:15 pm on Friday 16 December 2016, the Appellant, having conferred with the Respondent, file an agreed minute of proposed orders to give effect to the reasons for judgment delivered on Wednesday 14 December 2016. 2. In the event that the parties disagree about the proposed orders, each party file short submissions (limited to 3 pages) no later than 2:15 pm on Friday 16 December 2016 in support of the orders that party proposes, together with a minute of proposed orders. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kenny, Flick and Rangiah. Associate: Dated: 14 December 2016