FEDERAL COURT OF AUSTRALIA Repatriation Commission v Spargo [2001] FCA 380 VETERANS AFFAIRS – meaning of operational service – member of Defence Force allotted for duty in operational area, but injured en route and never actually served in that area – whether deemed to have rendered service in that area. Veterans' Entitlements Acts 1986 (Cth), s 6C. Repatriation Commission v Hawkins (1993) 45 FCR 205, considered. REPATRIATION COMMISSION v RAYMOND FRANKLIN SPARGO N 455 of 2000 WHITLAM J 4 APRIL 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 455 OF 2000 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER M D ALLEN AND REAR ADMIRAL A R HORTON BETWEEN: REPATRIATION COMMISSION APPLICANT AND: RAYMOND FRANKLIN SPARGO RESPONDENT JUDGE: WHITLAM J DATE OF ORDER: 4 APRIL 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal is allowed. 2. The decision of the Administrative Appeals Tribunal is set aside. 3. The case is remitted to the Administrative Appeals Tribunal to be heard and decided again. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 455 OF 2000 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY SENIOR MEMBER M D ALLEN AND REAR ADMIRAL A R HORTON BETWEEN: REPATRIATION COMMISSION APPLICANT AND: RAYMOND FRANKLIN SPARGO RESPONDENT JUDGE: WHITLAM J DATE: 4 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") setting aside a decision made by a delegate of the applicant ("the Commission") to cancel a pension granted to the respondent under Part II of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). The question of law raised on the appeal concerns the Tribunal's finding that the respondent rendered "operational service" within the meaning of s 6C of the Act. 2 The respondent was enlisted in the Navy on 8 January 1948. He became a member of the company of the aircraft carrier HMAS Sydney on 2 September 1950. HMAS Sydney was allotted for duty in Korea from 31 August 1951 to 22 February 1952. The respondent was serving in HMAS Sydney when she departed from Sydney for Korea on 31 August 1951. However, he was injured en route, and in Japan on 30 September 1951 (three days before HMAS Sydney commenced her first operational patrol off Korea) he was transferred to the British Navy vessel HMS Glory for passage to Australia. HMS Glory arrived in Fremantle on 17 October 1951, on which date the respondent was re-allotted from duty in Korea. On 8 January 1952 he was discharged from the Navy. 3 On 29 July 1996 the respondent made a claim for a pension under Part II of the Act. On 10 October 1996 the Commission's delegate granted him a pension with effect from 29 April 1996. The delegate found that the respondent was on operational service from 1 December 1950 to 1 January 1952. 4 Upon a review under s 31 of the Act, on 18 April 1998, another delegate of the Commission cancelled the payment of the pension with effect from 21 May 1998. This delegate found that, as the respondent did not serve within 100 nautical miles of the coast of Korea, he did not undertake operational service for the purposes of the Act. The respondent applied for a review of that decision. On 8 January 1999 the Veterans' Review Board ("the Board") affirmed the second delegate's decision. In its reasons for decision the Board said: "The Board felt considerable sympathy for Mr Spargo. There was no suggestion that he had acted improperly at any stage and his good faith in this matter is unquestioned. The fact that the nature of his RAN service in 1951 has been called into question over 45 years later is, to say the least, most unfortunate and, no doubt, quite distressing." However, after referring to s 6C(1) of the Act, it concluded: "The significance of the foregoing definition of 'operational service' in respect of Mr Spargo's circumstances will be readily apparent. Whilst there can be no question that he had rendered continuous full time service as a member of the Defence Force (Royal Australia Navy) in 1951 and that he or his unit, HMAS SYDNEY, had been allotted for service in Korea, the service documents (and Mr Spargo's own account) make it clear that he did not render continuous full time service in the operational area (Korea). Clearly, then, Mr Spargo did not render operational service in Korea and, therefore, did not render eligible war service in terms of the Act. It followed that he was not a veteran for the purposes of s 13 of the Act." 5 As I mentioned at the beginning, the decision so affirmed by the Board was set aside by the Tribunal. Its decision was made on 10 April 2000. The Tribunal found that, from 31 August 1951 when the respondent left Australia "until he arrived back in Australia, being a casualty on board HMAS [sic] Glory, for the whole of that period he was on operational service." The Tribunal arrived at this conclusion by applying s 6C(3) of the Act. It had earlier noted the agreement of the parties that the respondent "was allotted for duty in an operational area, namely Korea". The Tribunal relied upon the construction accorded a provision of the Act by a Full Court in Repatriation Commission v Hawkins (1993) 45 FCR 205 at 212. The Tribunal said that the provision there in question (which has since been repealed) "equates to" s 6C(3) of the Act. 6 It is convenient now to consider s 6C of the Act. Relevantly it provides: "(1) Subject to this section, a member of the Defence Force who has rendered continuous full-time service in an operational area as: (a) a member who was allotted for duty in that area; or (b) a member of a unit of the Defence Force that was allotted for duty in that area; is taken to have been rendering operational service in the operational area while the member was so rendering continuous full-time service. (2) … (3) For the purposes of subsection (1), a member of the Defence Force is, subject to subsection (4), taken to have rendered continuous full-time service in an operational area during the period commencing on: (a) if the member was in Australia on the day (relevant day) from which the member, or the unit of the member, was allotted for duty in that area—on the day on which the member left the last port of call in Australia for that service; or (b) if the member was outside Australia on the relevant day—on that day; and ending at the end of: (c) if the member, or the unit of the member, ceased to be allotted for duty—the day from which the member, or the unit, ceased to be allotted for duty; or (d) if the member, or the unit of the member, was assigned for duty from the operational area to another area outside Australia (not being an operational area)—the day from which the member, or the unit, was assigned to that other area, or the day on which the member, or the unit, arrived at that other area, whichever is the later; or (e) in any other case—the day on which the member arrived at the first port of call in Australia on returning from operational service. (4) If, while rendering continuous full-time service in an operational area, a member of the Defence Force has: (a) returned to Australia in accordance with the Rest and Recuperation arrangements of the naval, military or air forces; or (b) returned to Australia on emergency or other leave granted on compassionate grounds; or (c) returned to Australia on duty; or (d) returned to Australia for the purpose of receiving medical or surgical treatment as directed by the medical authorities of the Defence Force; only so much of the period of service of the member within Australia after his or her return and while the member: (e) continued to be allotted for duty in an operational area; or (f) continued to be a member of a unit of the Defence Force allotted for duty in an operational area; as does not exceed 14 days is taken, for the purposes of subsection (1), to be a period when the member was rendering continuous full-time service in the operational area." 7 The statement in Hawkins, to which the Tribunal in this case referred, concerned a provision fixing a period of operational service. However, in that case it was expressly conceded that the sailor had rendered service in an operational area, namely Vietnam, and the issue for determination was when such operational service commenced. The provision there under consideration fixed that day by reference to "the day from which the person was allotted for duty" in an operational area. The Full Court held (at 211) that such a provision included both a personal allotment and an allotment by virtue of a "unit" of which the person was a member being allotted for duty in that area. Accordingly that sailor's operational service commenced when his ship was allotted for duty. 8 The Act has been extensively amended since the decision in Hawkins. Section 6C(3) of the Act addresses specifically the situation where "the unit of a member" is allotted for duty. More importantly, in the present case there is no doubt that the respondent was allotted for duty in Korea between 31 August and 17 October 1951. What distinguishes this case from Hawkins is that the respondent never actually served in the operational area in question. 9 Counsel for the Commission submits that the Tribunal's construction of s 6C(3) was erroneous. It is said that s 6C(3) serves to identify the dates on which a period of continuous full-time service in an operational area begins and ends. The time spent on the journey to and from that service is thus deemed to be part of the service. Counsel submits that the Tribunal mistakenly treated s 6C(3) as a deeming provision which overrides the fundamental requirement set out in the opening words of s 6C(1), that is, that the member of the Defence Force be a person "who has rendered continuous full-time service in an operational area". 10 Counsel for the respondent submits that s 6C(3) is intended to extend the eligibility provided in s 6C(1) by deeming persons allotted to serve in an operational area to have been in that area when in fact they were not there. He says that subs (3) describes a factual situation necessarily outside what is described in subs (1), and deems or "takes" that situation to be equivalent with the situation described in subs (1). Subsection (3) is not subject to satisfaction of subs (1). The two subsections provide separate and complementary eligibility. 11 In my opinion, the Tribunal did err in its construction of s 6C of the Act. The submissions on behalf of the respondent merely highlight the flaws implicit in the Tribunal's approach. I accept the submissions made by counsel for the Commission. Subsection 6C(1) is expressed to be "[s]ubject to this section", and the clause introduced by the conjunction "while" in that subsection identifies a period of what is taken to be operational service. That clause and that period are what is modified by subs (3). Furthermore, subs (3) is itself expressed to be "subject to subsection (4)" and that subsection begins by referring to a member "while rendering continuous full-time service in an operational area". Contrary to the submission of the respondent, subs (3) never deems a physical presence by any person in an operational area. In this case the Board was correct in holding that the respondent never passed the test provided by subs (1) of being a member of "who has rendered continuous full-time service in an operational area". 12 The period of operational service assumes significance because of the so-called "occurrence" provisions in ss 8 and 9 of the Act. Subsections (3) and (4) of s 6C make provision in respect of the period of operational service that plainly permits the generous construction of the Act to which the Full Court referred in Hawkins (at 211). 13 The appeal will be allowed, the decision of the Tribunal set aside and the case remitted to be heard and decided again by the Tribunal. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam. Associate: Dated: 4 April 2001 Counsel for the applicant: R M Henderson Solicitor for the applicant: Australian Government Solicitor Counsel for the respondent: M B Smith Solicitor for the respondent: Legal Aid Commission of NSW Date of hearing: 1 September 2000 Date of judgment: 4 April 2001