it CATCHWORDS Repatriation - Whether "incapacity" means physical or mental disability rather than inability to work or earn wages - Test adopted to determine the extent of war related disabilities ~ Whether consideration should be given to whether applicant would be equally unable to earn if he were free of his war related disability - Relevance of decisions under workers' compensation legislation. Repatriation Act 1920, ss.23, 24, 35, 101, 85, Schedules 1 and 2. REPATRIATION COMMISSION v. THOMAS WILLIAM BOWMAN Qld. No. G19 of 1981 Bowen C.J., Deane and Lockhart JJ. 25 November 1981 Brisbane. IN THE FEDERAL COURT OF AUSTRALIA) QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION JUDGES MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: 1. The appeal be dismissed. ) } No. G19 of 1981 ) ON APPEAL from a single Judge of the Federal Court of Australia BETWEEN: REPATRIATION COMMISSION Appellant AND: THOMAS WILLIAM BOWMAN Respondent RDER Bowen C.J., Deane and Lockhart JJ. 25 November 1981 Brisbane. 2. The decision of the Repatriation Review Tribunal be set aside. 3. The matter be remitted to the Tribunal to be heard and decided according to law after the hearing of such further evidence as it may decide to receive. 5. The order of Ellicott J. that the Repatriation Commission pay the costs of Thomas William Bowman of appeal No. G16 of 1980 be set aside. The Repatriation Commission pay the costs of Thomas William Bowman of this appeal and of the appeal from the decision of the Tribunal to this Court heard by Ellicott J. in each case in matter No. G17 of 1980. vs IN THE FEDERAL COURT OF AUSTRALIA) QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION ) } No. G19 of 1981 ) ON APPEAL from a single Judge of the Federal Court of Australia BETWEEN: REPATRIATION COMMISSION Appellant AND: THOMAS WILLIAM BOWMAN Respondent CORAM: Bowen C.J., Deane and Lockhart JJ. 25 November 1981. REASONS FOR JUDGMENT Thomas William Bowman was injured in the siege of Tobruk when a shell exploded a few feet away from him. He was a "member of the Forces" within Division 6 of Part LII of the Repatriation Act 1920. The Repatriation Act in Part III deals with entitlement to pensions. Speaking broadly, Division 1 covers those who served in the First World War, Division 6 those who served in the Second World War. Sections 24 and 101 respectively are ts the sections on which entitlement is based. Section 101 provides, for those who are covered by it, including Mr. Bowman, that the Commonwealth shall be liable to pay pensions in accordance with Division 1. Section 35 in Division 1 provides that the rates of pension payable under Division 1 and Divisions 6-10 (inclusive) are those specified in the Schedules. The relevant Schedules are 1 and 2. Under Schedule 1 various rates are specified. The "pension payable on total incapacity" appears in Column 3. It is known as the "general rate". It was the rate being paid to Mr. Bowman at the time of his application for an increase which is the subject of the present proceedings. Schedule 1 contains two paragraphs as follows: "3. Where a member of the Forces is temporarily totally incapacitated to such an extent as to be precluded from earning other than a negligible percentage of a living wage while he is so incapacitated, and where the aggregate of the rate of pension payable to that member under Column 3 of the table in this Schedule and the amount (if any) payable to him under Schedule 5 is less than the Special Rate of Pension specified in Schedule 2, the Commission may grant an additional pension to a member at a rate not exceeding the amount of the difference between that aggregate sum and that Special Rate of Pension for such period, whether in excess of six months or not, as the Commission determines." This is known as the "temporarily totally incapacitated" (T.T.1.) rate. "6. Where the incapacity of a member of the Forces is such that he is unable to earn a living wage by reason that he is unable to engage in a remunerative occupation except on a part-time basis or intermittently, the amount specified in Column 3 of the table in this Schedule shall, in its application in relation to him, be deemed to be ..." This is known as the "intermediate" rate. The first paragraph of Schedule 2 provides a special rate as follows: "The Special Rate of Pension may be granted to members of the Forces who have been blinded as the result of War Service, and to members who are totally and permanently incapacitated (i.e. incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a living wage)." This is known as the "totally permanently incapacitated" (T.P.1I.) rate. Mr. Bowman's claim for an increase in pension appears to have been advanced in the alternative under each of the provisions quoted. It was rejected by a Repatriation Board on 13. December 1979. He appealed to the Repatriation Review Tribunal who decided on 6 August 1980: "The Tribunal is satisfied, beyond reasonable doubt, that the Board!s decision of 13 December 1979 is the decision that the Tribunal would have made if it had conducted the proceeding in which the Board's decision was made. The Tribunal therefore affirms that decision of the Board." In their reasons the Tribunal stated, amongst other things: "Notwithstanding the Applicant's misgivings concerning his ability to do any remunerative work and the advocate's submission that the Applicant is totally and permanently incapacitated, the Tribunal finds from its consideration of all of the evidence that the Applicant could cope with suitable full- time sedentary employment in a low. stress environment if such work could be found for him. In reaching this finding the Tribunal took account of the fact that coping with the full time employment of the above description would include taking "frequent brief (hours/days) breaks" as envisaged by Dr. Apel." Mr. Bowman appealed to the Federal Court. The matter was heard by Ellicott J. who, on 5 May 1981, upheld the appeal and ordered that the decision of the Tribunal be set aside and the matter be remitted to the Tribunal to be heard and decided again according to law in the manner he had indicated in his reasons, after hearing such further evidence as it might decide to receive. He ordered the Commission to pay Mr. Bowman's costs of the appeal and also of an appeal No. G16 of 1980. The Commission appealed against this decision to the Full Court of the Federal Court. On the hearing before us Counsel for the Commission challenged the correctness of remitting the matter to the Tribunal to be heard and decided according to the law laid down in the judgment of Ellicott J. The first aspect of his Honour's reasons which was challenged before us concerned his reference to cases decided under other legislation and the use which he stated might be made of these cases. Ellicott J., in his reasons, referred to cases decided by the House of Lords yore on the phrases "incapacity for work" and "ability to earn" in the Workers Compensation Act 1906 (U.K.) (Ball v. William Hunt and Sons Limited [1912] A.c. 496; and Birch Brothers Limited v. Brown [1931] A.c. 605) and to cases decided by the High Court on the phrase "incapacity for work" in the Workers Compensation Act 1926 (N.S.W.) (Thompson v. Armstrong and Royse Proprietary Limited (1950) 81 C.L.R. 585) and the phrase "total and permanent disablement" in the same Act (Wicks v. Union Steamship Company of New Zealand Limited (1933) 50 C.L.R. 328. He referred also to Cardiff Corporation v. Hall [1911] 1 K.B. 1009. Referring to these cases his Honour commented as follows: "These cases, which relate to other statutes, should, of course, only be used as a guide to the proper construction of the relevant provisions of Schedules 1 and 2 of the Repatriation Act. If anything, however, those provisions are clearer in requiring earning capacity to be considered than the provisions of Worker's Compensation legislation. Each of them in its terms requires an assessment to be made of the effect of an applicant's mental and physical incapacity on his or her ability to earn and this can only be gauged by reference to the market in which the applicant might expect to earn." The main challenge to his Honour's judgment concerned his interpretation of paragraphs 3 and 6 of Schedule 1 and the first paragraph of Schedule 2 and the application of these to the facts. His Honour said: "In my opinion therefore, the Tribunal is bound in law in applying those provisions to take into account the effect of an applicant's physical or ae Kay mental disability on his or her capacity to earn remuneration by employment or otherwise in any market reasonably accessible to the applicant. It is not enough simply to form a view that an applicant in a physical sense can still undertake work despite war related injuries. The incapacity so arising may well have destroyed or impaired his or her earning capacity in the market place. It is from such circumstances that the relevant provisions are designed to protect the applicant. Needless to say, in applying them, regard must be had to the specific tests contained in them." Counsel for the Commission argued that the workers' compensation cases were inapplicable. They dealt with legislation which sought to compensate persons for the loss of earning capacity whereas the Repatriation Act, in Schedules 1 and 2, was dealing with the right to pension for physical or mental impairment viewed as a condition. Counsel contrasted the different way in which the Repatriation Act dealt with service pensions in Division 5 of Part III with the way in which it dealt with war related disability pensions in Schedules 1 and 2. Thus, under s.85(2)(a), a member of the Forces might be granted a service pension irrespective of age, if he or she was permanently unemployable. The phrase "permanently unemployable" was defined in s.23. Such a pension is conditioned upon a man having served in a theatre of war, or a woman having served in a theatre of war or abroad or embarked for service abroad. However, it might be granted even though the unemployability was totally unrelated to war service. The services pension is a recognition by the legislature that members of the Services who have served their country deserve a consideration beyond that accorded to * others. The disability pension, on the other hand, had the objective of compensating for injuries received as a result of war service. Any inability to earn a living wage as a basis for the grant of a disability pension must find its cause ina war related disability. Before such a pension can be paid, the extent of the disability has to be determined. The word "incapacity" is defined by s.23 as "includes incapacity of a member of the Forces that arose from disease, not due to the serious default of the member, contracted by him while employed on war service". Although not itself conclusive of the question, the definition supports the view, which is reinforced by the Act as a whole and the Schedules, that the word "incapacity" means a physical or mental disability rather than an inability to work or earn wages. This is the view expressed by Fisher J. in Collins v. Repatriation Commission (1980) 32 A.L.R. 581 at p-583 and by Ellicott J. in the present case. We agree with it. The proper interpretation and application of the words of Schedules 1 and 2 was at the heart of the present litigation. It was argued that the interpretation and application adopted by Ellicott J. required an examination of the labour market as it applied to the applicant with his disabililties, viewed in isolation. Counsel for the Commission did not contend that it was proper to disregard the labour market and in this respect he could not support the course taken by the Tribunal. However, he submitted the proper test to be applied was a Fee comparison in the labour market of the applicant with another person of the same age, sex, background and abilities, without the war related disability. If neither could find employment, the applicant's inability to earn a living wage could not be attributed to his disability. Only if the hypothetical man without the disability could find employment while the applicant could not, would the test be satisfied. This test was modelled on the test applied in the United Kingdom to assess the degree of disablement due to war service. It was prescribed by Royal Warrant dated 24 May 1949 (Cmd 7699 Article 10(1)). It is now found in Statutory Instrument 1978 No. 1525. Counsel for Mr. Bowman supported the use made by Ellicott J. of the workers' compensation cases. He agreed, in effect, that the interpretation of Schedules 1 and 2 was at the heart of the present litigation. He questioned that the provisions in Division 5 relating to service pensions threw any useful light on their interpretation. He said that the present application was for a Schedule 2 pension or, alternatively, for an intermediate pension under paragraph 6 of Schedule 1. He rejected the suggestion that one should compare a hypothetical man with the applicant when applying the Schedules. He submitted that the interpretation of Schedules 1 and 2 adopted by Ellicott J., which would require the Tribunal to take into account the effect of the war related disability on capacity to earn a living wage in any market reasonably accessible to the applicant, was the proper test. ou We find ourselves in agreement with the orders of Ellicott J. and with the reasons which he gave for them. His conclusion that the Tribunal had failed to consider Mr. Bowman's capacity to earn remuneration by employment by finding work for which it was said he was fit, was not really challenged before us. Even if the test of comparing the capacity to earn of a hypothetical man with the capacity of Mr. Bowman were the correct test, the Tribunal has simply not entered upon any such enquiry. We cannot see that Ellicott J's conclusion that the workers' compénsation cases which he cited might appropriately be used as a guide was wrong. It is true, as Counsel for the Commission submitted, that the disability pensions dealt with in Schedules 1 and 2 are concerned with compensating for war related injury whereas the workers' compensation legislation is concerned to compensate for loss of earning capacity. The point is that the Schedules adopt loss of earning capacity (one way or another) as the measure of the extent of the war related disability. It is in relation to this aspect, that is to say, using loss of earning capacity to measure the extent of disability, that the workers' compensation cases may be regarded as furnishing some guidance. It is in this sense that we read what Ellicott J. has said. He said- also that they should be applied with caution. This warning is appropriate in times when it is simplistic to speak in general terms of an "economic downturn". In present times boom conditions may be accompanied by rising unemployment. Again, 'es - 10 - rapid technological change may occur and have a direct effect on the employment market. We should add that we do not read his Honour's judgment, as did Counsel for the Commission, as requiring examination of the labour market as it applies to the applicant with his Gisability viewed in isolation. The Schedules and his Honour's judgment are concerned with the proper way to assess the extent of an applicant's war related disability by reference to his ability to earn. It is fundamental to such an enquiry that any inability to earn should be due to the war related disability. If the circumstances proved in a particular case showed that the applicant could not earn even if he were not suffering from the war related disability, then his claim for the particular pension would fail. We are reluctant to let loose another hypothetical man in the corriders of judicial administration. It does not appear to us to be necessary to do so. It is sufficient in testing whether an applicant's inability to earn is due to his war related disability to consider whether he would be equally unable to earn if he were free of this disability. The only hypothesis involved in this would be the consideration of the applicant free of his disability. A further point raised before Ellicott J. was that the Tribunal on the evidence before it had erred in law in being satisfied beyond reasonable doubt that the decision of the Board was the decision the Tribunal itself would have made. His Honour concluded that as he was remitting the matter to - ll + the Tribunal it was unnecessary and probably undesirable for him to express a view on this aspect. We agree. Presumably, when the Tribunal comes to consider the matter remitted to it, the evidence will not remain in the same state. The Tribunal will then have the decision of the High Court in Repatriation Commission v. Law (16 October 1981) to guide them on the question of satisfaction beyond reasonable doubt. One other matter requires mention. Two appeals were ledged by Mr. Bowman against the decision of the Tribunal. One appeal named the Tribunal as respondent (G16 of 1980). The other named the Commission as respondent (G17 of 1980). It was the latter appeal that was dealt with by his Honour and which has come before us. However, his Honour said: "It was agreed at the hearing of the appeals that I should proceed with the appeal No. G17 of 1980 and that the decision in that would determine appeal No. G16 of 1980." He ordered the Commission to pay to Mr. Bowman his costs ef both appeals. It appears his Honour may have misunderstood something said to him by Counsel to the effect that the decision on appeal number G17 would determine both appeals. Counsel for Mr. Bowman did not seek to support the order for costs in appeal number G16 of 1980 and the order in that respect should be set aside. In the result we would dismiss the appeal to this Court with costs. . bcerity cise" res JO ci weeding ; pages are a tide cc, of the reasons for Juaement heres of the Court eon eee Associate Dated 24 «1 PI