FEDERAL COURT OF AUSTRALIA McKenna v Repatriation Commission [1999] FCA 323 VETERANS' AFFAIRS – Veterans' Entitlement Act 1986 (Cth) – war-caused disease – Statements of Principle – hypothesis including sub-hypotheses – whether each sub-hypothesis required to be supported by a Statement of Principle. Veterans' Entitlement Act 1986 (Cth), ss 9, 120, 120A, 196B Bushell v Repatriation Commission (1992) 175 CLR 408, considered Byrnes v Repatriation Commission (1993) 177 CLR 564, considered Repatriation Commission v Deledio (1998) 27 AAR 144, considered KEVIN JOHN McKENNA v REPATRIATION COMMISSION VG 353 of 1998 BRANSON, SUNDBERG AND KENNY JJ 29 MARCH 1999 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 353 OF 1998 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KEVIN JOHN McKENNA Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: BRANSON, SUNDBERG and KENNY JJ DATE OF ORDER: 29 MARCH 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be dismissed. 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 VG 353 OF 1998 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KEVIN JOHN McKENNA Appellant AND: REPATRIATION COMMISSION Respondent JUDGES: BRANSON, SUNDBERG and KENNY JJ DATE: 29 MARCH 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 The appellant ("Mr McKenna") has appealed from a judgment of a judge of this Court (Justice Goldberg) whereby his Honour set aside a decision of the Administrative Appeals Tribunal ("the Tribunal"). The Tribunal had affirmed a decision of the Veterans' Review Board ("the Board") which had set aside a decision of the Repatriation Commission ("the Commission") and in lieu thereof determined that Mr McKenna's ischaemic heart disease and atherosclerotic peripheral vascular disease were each a "war-caused disease" within the meaning of s 9 of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). The judgment of Goldberg J ordered that Mr McKenna's application to the Board for review of the decision of the Commission be dismissed. The effect of his Honour's judgment is that Mr McKenna's ischaemic heart disease and atherosclerotic peripheral vascular disease are not to be regarded as war-caused diseases within the meaning of s 9 of the Act. 2 The grounds of the appeal from his Honour's judgment are as follows: "(a) The Judge misdirected himself as to the provision of the Veterans' Entitlements Act 1986 ("the Act") particularly sections 120, 120A, 196B(14) and the Statements of Principles being instrument numbers 87 of 1995, number 140 of 1996 and number 77 of 1997 in that he held that it was necessary on a proper construction of the Act and the relevant Statements of Principles ("SoP's") that in satisfying the requirement that a "factor" in an SoP be "related to service" that a further SoP (relating to hypertension) was applicable. (b) The Judge misdirected himself when he confined the Applicant's position to necessarily rely upon a hypothesis that the Applicant's hypertension was "brought on or caused by stress, anxiety or psychiatric disturbances suffered by him as a result of his war experiences". (c) The Judge misdirected himself when he failed to identify that the material before the Tribunal satisfied the relevant factors in the relevant SoPs (in accordance with the principles laid down in Bushell v Repatriation Commission (1992) 175 CLR 408, Byrnes v Repatriation Commission (1993) 177 CLR 564, Repatriation Commission v Deledio (unreported 22 April, 1998) and in particular that such material "raised facts" which satisfied the relevant factors. (d) The Judge failed to hold that a determination made on 21 November 1985 that the Applicant was suffering from an incapacity resulting from essential hypertension which condition was accepted under section 101 of the Repatriation Act 1920 (Cth) ("the 1985 determination") was sufficient to amount to a "raised fact" for the purpose of satisfying a "factor" in the relevant SoPs." 3 Mr McKenna is a veteran who is to be taken to have rendered operational service from 2 January 1942 to 22 May 1946. He suffers from hypertension, ischaemic heart disease and atherosclerotic peripheral vascular disease. In 1985 Mr McKenna's hypertension was accepted as service-related under s 101 of the Repatriation Act 1920 (Cth) with effect from 29 August 1984. On 9 December 1994 Mr McKenna made a claim under Part II of the Act for a disability pension in respect of his incapacity from ischaemic heart disease and atherosclerotic peripheral vascular disease. Legislative Scheme 4 Section 120A of the Act, the terms of which, so far as they are presently relevant, are set out below, was introduced into the Act by the Veterans' Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994 (Cth) ("the Amendment Act"). The Explanatory Memorandum in relation to the Bill for the Amendment Act indicates that the Amendment Act was intended, amongst other things, "to ensure a more equitable and consistent system of determining claims for disability pensions for veterans and their dependants." The Explanatory Memorandum contained the following statements: "The new provisions deal with the determination of claims for pensions made on or after 1 June 1994 by reference to Statements of Principles. They will still require certain claims to be determined on the basis of a "reasonable hypothesis standard of proof", but with questions of medical causation to be determined in accordance with the amendments … The initiative will see the establishment of the Repatriation Medical Authority. It has become apparent that lay tribunals do not deal with medical-scientific issues consistently and that the adversarial approach to fact finding applied in administrative tribunals is inappropriate for determining medical-scientific issues that call for detailed technical knowledge. The Repatriation Medical Authority will provide the appropriate forum for the resolution of technical medical-scientific issues. This will ensure that there will be consistency on medical-scientific issues at all levels of the determining system. The Authority will prepare Statements of Principles based on sound medical-scientific evidence that will exclusively state what factors related to service must exist to establish a causal connection between particular diseases, injuries or death and service. … This change is aimed at ensuring that medical opinions supported by little or no medical-scientific evidence do not prevail over the carefully developed mass of medical-scientific opinion." 5 It seems plain enough that the enactment of the Amendment Act reflected legislative dissatisfaction with the then operation of s 120 of the Act, which addresses the standard of proof of, relevantly, a claim under Part II of the Act for a pension in respect of a veteran's incapacity from disease relating to the operational service rendered by the veteran. 6 Section 120 relevantly provides as follows: "120(1) Where a claim under Part II for a pension in respect of the incapacity from injury or disease of a veteran, or of the death of a veteran, relates to the operational service rendered by the veteran, the Commission shall determine that the injury was a war-caused injury, that the disease was a war-caused disease or that the death of the veteran was war-caused, as the case may be, unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination. … (3) In applying subsection (1) or (2) in respect of the incapacity of a person from injury or disease, or in respect of the death of a person, related to service rendered by the person, the Commission shall be satisfied, beyond reasonable doubt, that there is no sufficient ground for determining: (a) that the injury was a war-caused injury or a defence-caused injury; (b) that the disease was a war-caused disease or a defence-caused disease; or (c) that the death was war-caused or defence-caused; as the case may be, 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 injury, disease or death with the circumstances of the particular service rendered by the person. 7 The manner of operation of s 120 before the enactment of the Amendment Act has been authoritatively considered on a number of occasions (see, for example, Bushell v Repatriation Commission (1992) 175 CLR 408; Byrnes v Repatriation Commission (1993) 177 CLR 564.) 8 In Byrnes v Repatriation Commission, a case concerning injury rather than disease, the High Court stated at 571: "The position may be summarised as follows: (1) First, subsection (3) of s 120 is applied: do all or some of the facts raised by the material before the Commission give rise to a reasonable hypothesis connecting the veteran's injury with war service? The hypothesis will not be reasonable if it is contrary to known scientific facts or is obviously fanciful or untenable. If the hypothesis is not reasonable, the claim fails. Proof of facts is not in issue at this point. (2) If a reasonable hypothesis is established, subsection (1) of s 120 is applied. The claim will succeed unless: (a) one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt; or (b) the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis." 9 Section 120A of the Act has modified the operation of s 120 so far as claims made after 1 June 1994 are concerned. Section 120A, so far as is here relevant, provides: "120A (1) This section applies to any of the following claims made on or after 1 June 1994: (a) a claim under Part II that relates to the operational service rendered by a veteran; (b) a claim under Part IV that relates to: (i) the peacekeeping service rendered by a member of a Peacekeeping Force; or (ii) the hazardous service rendered by a member of the Forces. (2) If the Repatriation Medical Authority has given notice under section 196G that it intends to carry out an investigation in respect of a particular kind of injury, disease or death, the Commission is not to determine a claim in respect of the incapacity of a person from an injury or disease of that kind, or in respect of a death of that kind, unless or until the Authority: (a) has determined a Statement of Principles under subsection 196B(2) in respect of that kind of injury, disease or death; or (b) has declared that it does not propose to make such a Statement of Principles. (3) For the purposes of subsection 120(3), a hypothesis connecting an injury suffered by a person, a disease contracted by a person or the death of a person with the circumstances of any particular service rendered by the person is reasonable only if there is in force: (a) a Statement of Principles determined under subsection 196B(2) or (11); or (b) a determination of the Commission under subsection 180A(2); that upholds the hypothesis. (4) Subsection (3) does not apply in relation to a claim in respect of the incapacity from injury or disease, or the death, of a person if the Authority has neither determined a Statement of Principles under subsection 196B(2), nor declared that it does not propose to make such a Statement of Principles, in respect of: (a) the kind of injury suffered by the person; or (b) the kind of disease contracted by the person; or (c) the kind of death met by the person; as the case may be." 10 The Repatriation Medical Authority ("the Authority") is established by s 196A of the Act. The functions of the Authority are set out in s 196B of the Act. Section 196B(2) relevantly provides as follows: "196B(2) If the Authority is of the view that there is sound medical-scientific evidence that indicates that a particular kind of injury, disease or death can be related to: (a) operational service rendered by veterans; or (b) … (c) … the Authority must determine a Statement of Principles in respect of that kind of injury, disease or death setting out: (d) the factors that must as a minimum exist; and (e) which of those factors must be related to service rendered by a person; before it can be said that a reasonable hypothesis has been raised connecting an injury, disease or death of that kind with the circumstances of that service." 11 Section 196B(14) governs when a factor causing, or contributing to, an injury, disease or death is related to service rendered by a person. For present purposes it is sufficient to note that paragraph (b) of that subsection provides that a factor causing or contributing to, an injury, disease or death is related to service rendered by a person if "it arose out of, or was attributable to, that service." Statements of Principles 12 The Authority has determined Statements of Principles in respect of hypertension, atherosclerotic peripheral vascular disease and ischaemic heart disease respectively. Each of these Statements of Principles identifies, as s 196B(2) of the Act requires it to do, the factors that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting the particular disease with which the particular Statement of Principles is concerned with, relevantly, the circumstances of operational service rendered by veterans. In each case the Statement of Principles lists a number of alternative factors. The Statements of Principles concerning atherosclerotic peripheral vascular disease and ischaemic heart disease each identify as a factor "suffering from hypertension before the clinical onset" of the disease with which the particular statement is concerned. However, it is accepted by the parties that McKenna's case features none of the factors that the Statement of Principles concerning hypertension lists as the factors that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting hypertension with the circumstances of operational service. In particular the Statement of Principles concerning hypertension does not list stress, anxiety or psychiatric disturbance as factors which may support a hypothesis connecting hypertension with the circumstances of operational service rendered by a veteran. Tribunal Decision 13 The Tribunal noted that there was no dispute about the fact that Mr McKenna suffers from hypertension which was present and diagnosed before the clinical onset of both his ischaemic heart disease and his atherosclerotic peripheral vascular disease. The Tribunal concluded that the material before it raised reasonable hypotheses connecting Mr McKenna's ischaemic heart disease and his atherosclerotic peripheral vascular disease respectively with his service. It then gave consideration to whether either hypothesis was disproved beyond reasonable doubt, or the truth of a fact inconsistent with either hypothesis was proved beyond reasonable doubt. Having regard to evidence in a report from Professor Pitt that there is a body of medical thought supporting the theory that Mr McKenna's hypertension may be related to his stress during service, the Tribunal concluded that there was no evidence before it that disproved "the fact" that Mr McKenna's present hypertension is related to his service, nor was any fact inconsistent with that hypothesis proved beyond reasonable doubt. The Tribunal accepted that a claim made after 1 June 1994 in respect of hypertension would have to be assessed in the light of s 120A of the Act. However, it concluded that the issue before it was whether the Commission had proved beyond reasonable doubt that Mr McKenna did not suffer from hypertension related to service before the clinical onset of his ischaemic heart disease and his atherosclerotic peripheral vascular disease. It concluded that the Commission had not done so. The Primary Judge 14 As is mentioned above, Goldberg J allowed the appeal against the decision of the Tribunal. 15 His Honour observed that it was fundamental to any enquiry under ss 120 and 120A of the Act to identify the relevant hypothesis. His Honour stated: "In this case the hypothesis is that the respondent [Mr McKenna] is suffering from ischaemic heart disease and atherosclerotic peripheral vascular disease, that before the clinical onset of these diseases he was suffering from hypertension and that his hypertension is related to or connected with operational service rendered by him. It is part of this hypothesis that the respondent's hypertension is related to operational service rendered by him because it was brought on or caused by stress, anxiety or psychiatric disturbances suffered by him as a result of his war experiences." 16 Having concluded that it was necessary to identify whether there is in force a Statement of Principles which upholds the whole, and not just part of the relevant hypothesis, Goldberg J concluded that it was fatal to Mr McKenna's claim that "there was no Statement of Principles which upholds the hypothesis that there is a factor which exists which indicates that a reasonable hypothesis has been raised connecting hypertension with the circumstances of operational service." Consideration 17 In Repatriation Commission v Deledio (1998) 27 AAR 144 at 159-160 the Full Court has authoritatively stated the course of reasoning that ss 120 and 120A require a decision-maker to take in relation to a claim lodged under Part II of the Act for a pension arising out of operational service rendered by a veteran. That course is as follows: "1. The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail. 2. If the material does raise such a hypothesis, the Tribunal must then ascertain whether there is in force an SoP determined by the Authority under s 196B(2) or (11) of the 1986 Act. If no such SoP is in force, the hypothesis will be taken not to be reasonable and, in consequence, the application must fail. 3. If an SoP is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the "template" to be found in the SoP. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by s 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could neither be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be "reasonable" and the claim will fail. 4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved." 18 The first step that the Tribunal was required to take was to consider all of the material before it and determine whether that material pointed to a hypothesis or hypotheses connecting Mr McKenna's ischaemic heart disease and his atherosclerotic peripheral vascular disease with the circumstances of the particular service rendered by him (see ss 120(3) and 120A(3)). As Goldberg J pointed out, a relevant hypothesis had to consist of a link or links which connected, at the one end, the disease which was the basis of Mr McKenna's claim under Part II of the Act with, at the other end, the circumstances of the particular service rendered by Mr McKenna. The fact that in 1985 Mr McKenna's hypertension was accepted as service-related under s 101 of the Repatriation Act 1920 (Cth) thus had no direct relevance so far as the identification of a relevant hypothesis for the purposes of s 120(3) of the Act was concerned. 19 We accept, as his Honour did, that the material before the Tribunal pointed to hypotheses connecting Mr McKenna's ischaemic heart disease and atherosclerotic peripheral vascular disease with the circumstances of the particular service rendered by him. As to each of the two relevant diseases suffered by Mr McKenna, the hypothesis included the link of the further disease of hypertension. That is, in each case the hypothesis linking the two end positions comprised two sub-hypotheses: one which linked Mr McKenna's ischaemic heart disease or, as the case may be, his atherosclerotic peripheral vascular disease, with his disease of hypertension, and the other which linked his disease of hypertension with the circumstances of the particular service rendered by Mr McKenna via the psychiatric factors of stress or anxiety. 20 Since the Authority had determined Statements of Principles in respect of the kinds of diseases suffered by Mr McKenna (s 120A(4)(b)), the next step which the Tribunal was required to take was to form an opinion whether the hypotheses pointed to by the material before the Tribunal were reasonable. It was only entitled to form the opinion that they were reasonable if they were upheld by, in the sense of consistent with, the relevant Statements of Principles. In our view, for either of the hypotheses to be upheld by a Statement of Principles, as required by s 120A(3) of the Act, each of its sub-hypotheses would have to be so upheld. A complex hypothesis (ie one comprising more than one element or part) can be no stronger than each of its elements or parts. 21 We can see no difficulty in the way of interpreting s 120A(3) of the Act as allowing a hypothesis to be upheld by more than one Statement of Principles. Section 23 of the Acts Interpretation Act 1901 (Cth) relevantly provides: "23. In any Act, unless the contrary intention appears: (a) … (b) words in the singular number include the plural and words in the plural number include the singular." 22 As is mentioned above, the Statements of Principles concerning, respectively, ischaemic heart disease and atherosclerotic peripheral vascular disease each identified the suffering from hypertension before the clinical onset of the disease as a factor that must as a minimum exist before it can be said that a reasonable hypothesis has been raised connecting the disease with the circumstances of a veteran's operational service. To that extent, these Statements of Principles upheld the relevant hypotheses of Mr McKenna. However, in each case, the Statement of Principles also required Mr McKenna's hypertension to be related to the service rendered by him. 23 The hypotheses pointed to by the material before the Tribunal postulated a causal relationship between Mr McKenna's hypertension and stress and anxiety suffered by him attributable to the service rendered by him. This postulated relationship was a link in each of the hypotheses, or, as we have called it, a sub-hypothesis forming part of each hypothesis. Whilst it is open to be argued that this sub-hypothesis is itself "a hypothesis connecting … a disease contracted by a person … with the circumstances of any particular service rendered by the person" within the meaning of s 120A(3) of the Act, we consider that the preferable view is that the hypothesis referred to in s 120A(3) is the same hypothesis as that referred to in s 120(3). That is, in the circumstances of this case, the hypothesis connecting Mr McKenna's ischaemic heart disease, or his atherosclerotic peripheral vascular disease, with the circumstances of the particular service rendered by him. 24 However, the sub-hypothesis linking Mr McKenna's hypertension with stress and anxiety attributable to his service was crucial to the hypotheses raised by the material before the Tribunal. In our view, neither of these hypotheses could be said to be upheld unless the sub-hypothesis was also upheld. 25 Neither of the Statements of Principles concerning ischaemic heart disease, or atherosclerotic peripheral vascular disease upholds the sub-hypothesis of a causal relationship between hypertension and stress and anxiety attributable to Mr McKenna's service. However, for the reason given above, we see no reason to construe s 120A(3) as necessitating a hypothesis to be upheld by reference to one Statement of Principles only. If it were the case that the Statement of Principles concerning hypertension identified stress and anxiety attributable to service as a factor relating hypertension to service, we do not doubt that this additional Statement of Principles could be seen, together with the Statement of Principles concerning ischaemic heart disease and atherosclerotic peripheral vascular disease, as upholding the hypotheses pointed to by the material before the Tribunal. However, the Statement of Principles concerning hypertension does not uphold the hypothesis of a causal relationship between hypertension and stress and anxiety attributable to service. No other Statement of Principles has been identified which operates in such a situation. 26 In the circumstances it was, in our view, not open to the Tribunal to form the opinion that the sub-hypotheses linking Mr McKenna's hypertension with the service rendered by him was reasonable. For the reasons given above, if it was not open to the Tribunal to form the opinion that the sub-hypothesis linking Mr McKenna's hypertension with stress and anxiety were reasonable, it was not open to it to conclude that the hypotheses raised by the material before it were reasonable. 27 This case does not call for consideration to be given to the situation in which a hypothesis raised by the material before the decision maker consists of two or more sub-hypotheses and at least one, but not all of the of the sub-hypotheses, relates to a kind of injury, disease or death concerning which the Authority has neither determined a Statement of Principles nor declared that it does not propose to make such a Statement of Principles. Neither party made submissions touching on this eventuality. We do not consider it appropriate in the circumstances to give consideration to the way in which ss 120 and 120A would operate in such a situation. It may be, however, that insufficient consideration was given by those who drafted the Amendment Act to the possibility of complex hypotheses and to the interrelationship of ss 120A(3) and (4) in such circumstances. 28 In view of the mischief which the Amendment Act was intended to address, as revealed by the Explanatory Memorandum, it is not a matter of surprise that ss 120 and 120A of the Act may have an operation which is inconsistent with a determination made before the enactment of the Amendment Act. In effect, a new and quite different forum has been identified as the appropriate place for the resolution of difficult issues of medical causation arising on or after 1 June 1994. Having regard to the terms of s 196B(2) of the Act, it must be concluded that the Authority has formed the view, contrary to the expert view advanced before the Tribunal, that the factors of stress and anxiety are not factors which can establish a causal link between operational service rendered by veterans and hypertension. However, it is of importance to note that the validity of determinations reached before s 120A of the Act came into operation is not undermined by the 1994 amendments to the Act. They remain in full force and effect. 29 In our view this appeal must be dismissed. The respondent does not seek an order for costs in its favour. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 29 March 1999 Counsel for the Appellant: Mr M.J. Croyle Solicitor for the Appellant: Williams Winter & Higgs Counsel for the Respondent: Mr P.J. Hanks Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 18 February 1999 Date of Judgment: 29 March 1999