FEDERAL COURT OF AUSTRALIA Graham v Repatriation Commission [2001] FCA 422 veteraNs affairs – claim for service pension – meaning of allotted for duty – circumstances in which repealed definition will apply by virtue of transitional provision Veterans' Affairs Legislation Amendment Act 1990 (Cth), s 93(1) ERNEST WILLIAM GRAHAM v REPATRIATION COMMISSION N 517 OF 2000 WHITLAM J 12 APRIL 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 517 OF 2000 On appeal from the Veterans' Appeals Division of the Administrative Appeals Tribunal BETWEEN: ERNEST WILLIAM GRAHAM APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: WHITLAM J DATE OF ORDER: 12 APRIL 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The decision of the Administrative Appeals Tribunal given on 1 May 2000 is affirmed. 2. The appeal is dismissed with costs. 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 517 OF 2000 On appeal from the Veterans' Appeals Division of the Administrative Appeals Tribunal BETWEEN: ERNEST WILLIAM GRAHAM APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: WHITLAM J DATE: 12 APRIL 2001 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal") affirming a determination that the applicant has not rendered qualifying service for the purposes of Part III of the Veterans' Entitlements Act 1986 ("the Act"). 2 The applicant served in the Navy between 8 January 1948 and 7 January 1960. He lodged a claim for a service pension under Part III of the Act on 20 September 1996. A delegate of the respondent ("the Commission") decided on 10 October 1996 that the applicant was not eligible for a service pension because he had not rendered "qualifying service" within the meaning of s 7A of the Act. The applicant requested a review of his claim for qualifying service, and on 9 December 1996 another delegate of the Commission affirmed the earlier decision. 3 On 18 December 1996 the applicant lodged an application for review with the Tribunal, which affirmed the second delegate's decision on 2 July 1998. However, that decision of the Tribunal was set aside by Sackville J on 5 February 1999. The Tribunal heard the case again and, on 1 May 2000, affirmed the decision given on 9 December 1996. 4 The question of law raised on this appeal concerns the effect of s 93(1) of the Veterans' Affairs Legislation Amendment Act 1990 ("the VALA Act"). Section 93 of the VALA Act provides: "93. (1) If: (a) a person has made a claim under the Veterans' Entitlements Act 1986 or an application under the Defence Service Homes Act 1918; and (b) the claim or application was granted on or before 8 November 1990 on the basis that the person was allotted for duty in an operational area or was a member of a unit of the Defence Force that was allotted for duty in an operational area; subsection 5B(2) of the Veterans' Entitlements Act 1986 applies in relation to the person as if the amendments made by section 19 of the Veterans' Entitlements (Rewrite) Transition Act 1991 (as it relates to subsection 5B(2)) had not been made. (2) If: (a) a person has made a claim under the Veterans' Entitlements Act 1986 or an application under the Defence Service Homes Act 1918 on or before 8 November 1990; and (b) the claim or application has not been finally determined before 9 November 1990; the claim or application is to be determined as if the amendments made by section 19 of the Veterans Entitlements (Rewrite) Transition Act 1991 (as it relates to subsection 5B(2)) had not been made." [Emphasis added] 5 In the present case the definition of qualifying service in s 7A(1)(a)(iii) of the Act relevantly required the applicant, who served in Malaya, to have done so as a person who was "allotted for duty" in that operational area. The expression "allotted for duty" is defined by s 5B(2) of the Act. At the rehearing before the Tribunal the applicant submitted that he did not have to satisfy that definition because he had the benefit of s 93(1) of the VALA Act. The applicant submitted, and the Tribunal found, that an application made by him under the Defence Service Homes Act 1918 ("the DSH Act") was granted before 8 November 1990 on the basis that he was "allotted for duty in an operational area". However, the Tribunal held [63]: "In the matter now before the Tribunal s 93(1) has no role beyond that of protecting the Applicant's war service homes loan. It does not defeat the scheme of eligibility for service pension that rests on the Applicant having rendered qualifying service." 6 The applicant submits that the Tribunal erred in its interpretation because it failed to address the language and purpose revealed by the immediate legislative background of s 93(1) of the VALA Act. There was, it is said, no need to protect any benefit conferred in the past. The purpose of s 93(1) was, rather, to "grandfather" the "allotted for duty" status of persons who had already obtained a war service benefit so that they would not be disentitled from further benefits as a result of a new definition being applied to them in future in relation to entitlements under either the Act or the DSH Act. 7 The legislative history is instructive. The VALA Act amended the Act and the DSH Act. Section 37(b) and (c) of the VALA Act retrospectively amended s 5(12) of the Act, which defined references in the Act to persons or units of the Defence Force allotted for duty in an operational area. The definition of "Australian soldier" in s 4(1) of the DSH Act, which affected eligibility under that Act, depended to some extent on s 5(12) of the Act. Accordingly s 7 of the VALA Act also amended s 4(1) of the DSH Act to pick up persons allotted for duty within the meaning of s 5(12) of the Act in Namibia and in the Persian Gulf. The amendment made by s 37 of the VALA Act was intended to alter the meaning attributed by a Full Court of this Court to the expression "allotted for duty" in s 5(12) of the Act: see Repatriation Commission v Doessel (1990) 95 ALR 704. As originally enacted, s 93(1) of the VALA Act did not employ the words that I have highlighted in [4] above. Instead of those words, it provided: "subsection 5(12) of the Veterans' Entitlement Act 1986 continues to apply in relation to the person as if the amendments made by paragraphs 37(b) and (c) of this Act had not been made." 8 Section 5 of the Act was repealed by s 3 of the Veterans' Entitlements Amendment Act 1991 ("the 1991 Amendment Act"), which inserted s 5B(2) in the Act. The provision, so inserted, was in substantially the same terms as s 5(12) was prior to its amendment by s 37 of the VALA Act. The 1991 Amendment Act commenced on 1 July 1991. 9 However, the Act was also amended by the Veterans' Entitlements (Rewrite) Transition Act 1991 ("the Rewrite Act"), which also commenced on 1 July 1991 immediately after the commencement of the 1991 Amendment Act. Section 19 of the Rewrite Act amended the Act, inter alia, by omitting s 5B(2), as inserted by the 1991 Amendment Act, and substituting a new s 5B(2) in substantially the same terms as s 5(12) was after its amendment by s 37 of the VALA Act. (The references to s 5(12) of the Act in s 4(1) of the DSH were amended by s 21 of the Rewrite Act and subsequently by s 88 of the Veterans' Affairs Legislation Amendment Act 1992 with effect from 1 July 1991.) Section 21 of the Rewrite Act also amended s 93(1) of the VALA Act by omitting the words that I have set out in [7] above and substituting the words that I have earlier highlighted in [4]. 10 The applicant submits that the words "applies in relation to the person" used in s 93(1) of the VALA Act are aimed at future decision-making. I can see how that may be so up to a point. For example, a service pension under Part III of the Act may not be payable at any given time to a person who may yet remain eligible for payment of such a pension in the future by virtue of a claim granted on or before 8 November 1990 on the basis stipulated in par (b) of s 93(1). So too, a person who has had an application under the DSH Act granted before the cut-off date on such a basis will have that finding in respect of his eligibility preserved in any later review of a subsidy that was cancelled. However, I reject the application's submission that, by virtue of s 93(1), the former s 5B(2) may apply to claims or applications that were not granted on or before 8 November 1990. There is no good reason why Parliament would favour persons some of whose claims had been granted by the cut-off date over those who had claims pending at that date and for whom s 93(2) of the VALA Act made beneficial provision. Contrary to the emotive tone of the applicant's submissions, this interpretation does not "disentitle" a person to any benefit under the Act or the DSH Act. On the contrary, it preserves the advantage of the old definition for all the persons covered by s 93 of the VALA Act. In my opinion, the Tribunal did not err in its construction of this transitional provision. 11 The notice of appeal purports to raise a further question, namely, whether the Commission was estopped or precluded from contending before the Tribunal for the very construction of s 93(1) of the VALA Act that I have now upheld. This question was said to depend on the appeal heard by Sackville J in respect of the Tribunal's decision of 2 July 1998. This is a silly argument. Sackville J made it clear in his reasons for judgment [10] - [11] that, in its first decision, the Tribunal had not adverted to s 93(1) of the VALA Act and that the matter would have to be remitted to the Tribunal for the relevant facts to be found. There was no error of law on the part of the Tribunal. 12 The decision of the Tribunal will be affirmed and the appeal dismissed with costs. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Whitlam. Associate: Dated: 12 April 2001 Counsel for the applicant: MB Smith Solicitors for the applicant: Rockliffs Counsel for the respondent: NJD Green QC with RM Henderson and LJ Karp Solicitor for the respondent: Australian Government Solicitor Date of hearing: 10 October 2000 Date of judgment: 12 April 2001