FEDERAL COURT OF AUSTRALIA Repatriation Commission v Budworth [2001] FCA 1421 VETERANS' ENTITLEMENTS – standard of proof to be applied to claims – whether the respective tests as to the reverse onus upon Commission as to satisfaction beyond reasonable doubt concerning war-caused injury and as to civil onus as to remaining elements required for decision-making operated in mutual exclusive way – issue resolved in affirmative. Veterans' Entitlement Act 1986 (Cth) s 120 Benjamin v Repatriation Commission [2001] FCA 522 approved Repatriation Commission v Gosewinckel (1999) 59 ALD 690 approved Repatriation Commission v Cooke (1998) 90 FCR 307 applied REPATRIATION COMMISSION v RONALD JAMES BUDWORTH N 427 OF 2001 RYAN, MARSHALL AND CONTI JJ SYDNEY 10 OCTOBER 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 427 of 2001 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: REPATRIATION COMMISSION APPELLANT AND: RONALD JAMES BUDWORTH RESPONDENT JUDGES: RYAN, MARSHALL AND CONTI JJ DATE OF ORDER: 10 OCTOBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed and the Order of Madgwick J of 29 March 2001 be affirmed. 2. The appellant pay the respondent's costs of the appeal, such costs to be taxed in default of agreement. 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 427 of 2001 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: REPATRIATION COMMISSION APPELLANT AND: RONALD JAMES BUDWORTH RESPONDENT JUDGES: RYAN, MARSHALL AND CONTI JJ DATE: 10 OCTOBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: 1 This is an appeal from the judgment of a Judge of the Court delivered on 29 March 2001. The primary Judge allowed thereby an application by way of appeal by the present respondent, Mr Budworth, from the Administrative Appeals Tribunal ("the AAT") which affirmed two decisions of the Veterans Review Board ("the VRB"). The result of the VRB's decisions was that Mr Budworth became entitled to a veteran's pension from 18 October 1992 at a modest rate, and not from an earlier date for which claim had originally been made. Background 2 Mr Budworth had several periods of "eligible war service" as described in s 7 of the Veterans' Entitlements Act 1986 (Cth) ("the Act"). He undertook five voyages to Vietnam as a member of the Royal Australian Navy on HMAS Sydney and HMAS Melbourne, at times when those vessels were engaged in carrying Australian troops to serve in Vietnam. 3 On 10 May 1988 Mr Budworth lodged a claim for a pension in respect of claimed disabilities which he described as "hearing loss, constant back pain, severe nerves, insomnia, arthritis and headache". A delegate of the present appellant, the Repatriation Commission ("the Commission"), found that the material before him raised a reasonable basis for connecting Mr Budworth's "post-traumatic stress disorder with chronic pain syndrome" with his eligible war service. A pension at 80% of the General Rate was assessed to be payable from 10 February 1988. The delegate's reasons for determination were delivered on 3 November 1989. 4 On 5 December 1989 Mr Budworth applied to the VRB to review the delegate's determination seeking, amongst other things, an increase in the rate at which his pension had been assessed. On 30 August 1993, the hearing of this application was adjourned by the VRB, pursuant to a request by the VRB made to the Department to arrange for the making of further investigations relating to the claim. 5 Later, Mr Budworth lodged a further claim for additional disabilities, including "anxiety attacks". The Commission found that "anxiety attacks" comprised the same disability as the post-traumatic stress disorder with chronic pain syndrome; which it had recognised in 1989. The Commission determined that other disabilities suffered by Mr Budworth were war caused and granted the new claim with the result that his pension was increased to the Special Rate (Totally and Permanently Incapacitated) with effect from 18 October 1992. 6 On 4 April 1995 the VRB heard Mr Budworth's application for a review of the Commission's 5 December 1989 determination. The VRB set aside the decision of 3 November 1989 and substituted for it a decision that Mr Budworth's pension be assessed at nil from 10 February 1988 and at 90% of the General Rate from 18 October 1992. The VRB was not satisfied that Mr Budworth suffered from post traumatic stress disorder. On 6 July 1995, Mr Budworth made an application for review of such VRB decision by the AAT. 7 On 6 August 1996 the Commission reviewed its decision of 3 November 1989 and set it aside, the effect of which was to expose Mr Budworth to a liability to repay a substantial amount of the pension which he had previously received. On 18 December 1996 the VRB affirmed that decision of the Commission. On 7 January 1997 Mr Budworth applied to the AAT for a review of the VRB's decision. 8 In its decision on 23 February 2000 the AAT affirmed each of the VRB decisions under review relating to post-traumatic stress disorder. The AAT determined that the rate of pension be nil from 10 February 1988 until 18 October 1992 and from that time be at 90% of the General Rate until 1 November 1997, and thereafter at 100% of the General Rate. Agreed difficulties with the AAT's decision 9 At the hearing of the appeal, counsel for the Commission accepted that the AAT had erred in failing to consider the exercise of its discretion not to reduce Mr Budworth's pension retrospectively. It was conceded that the primary Judge's reasoning in this respect was correct and that the matter must be remitted to the AAT for reconsideration on this ground alone. Ultimately, counsel for the Commission also conceded that the primary Judge was correct in deciding that the AAT had a duty to consider whether Mr Budworth suffered from any disease other than post traumatic stress disorder and that the matter ought be remitted to the AAT for consideration of that issue as well. The Issue on the Appeal 10 In the light of the concessions on behalf of the Commission to which we have referred, the issue remaining for consideration on appeal was how the AAT should have differentiated between matters as to which the Commission was subject to the "reverse onus" of proof beyond reasonable doubt erected by s 120(1) and qualified by s 120(3) and the matters as to which the Appellant bore the ordinary civil onus imposed by s 120(4) of the Act. 11 The learned primary Judge duly acknowledged the need just indicated for the AAT to differentiate that which had been identified by a Full Court of this Court in Repatriation Commission v Cooke (1998) 90 FCR 307. However, the primary Judge went on to say that the choice between the matters in respect of which the different burdens and standards of proof to be found within s 120 were imposed was not to be made by applying which he called a "bright line test" in circumstances where "the diagnosis of a particular condition may be dependent upon its supposed wartime causation". His Honour further concluded that the AAT had mistakenly approached Mr Budworth's claim as involving a "rolled up" issue of causation. 12 From the premise thus established, the primary Judge concluded: "The reasoning of the AAT, as I understand it, is that although the applicant may, and even probably appears to, suffer some type of mental ailment, when regard is had to his actual experiences during his Vietnam service, there is no evidence of a sufficiently intense subjective fear or of an extremely traumatic stressor to enable the diagnosis of PTSD, the disease his advisors claimed he had. This clearly goes to issues of causation and should have been determined on the reverse criminal standard." 13 It is appropriate to extract below the full text of s 120 of the Act for case of reference: "120 Standard of proof (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. Note: This subsection is affected by section 120A. (2) Where a claim under Part IV: (a) in respect of the incapacity from injury or disease of a member of a Peacekeeping Force or of the death of such a member relates to the peacekeeping service rendered by the member; or (b) in respect of the incapacity from injury or disease of a member of the Forces, or of the death of such a member, relates to the hazardous service rendered by the member; the Commission shall determine that the injury was a defence-caused injury, that the disease was a defence-caused disease or that the death of the member was defence-caused, as the case may be, unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination. Note 1: For member of a Peacekeeping Force, peacekeeping service, member of the Forces and hazardous service see subsection 5Q(1A). Note 2: This subsection is affected by section 120A. (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. Note: This subsection is affected by section 120A. (4) Except in making a determination to which subsection (1) or (2) applies, the Commission shall, in making any determination or decision in respect of a matter arising under this Act or the regulations, including the assessment or re-assessment of the rate of a pension granted under Part II or Part IV, decide the matter to its reasonable satisfaction. Note: This subsection is affected by section 120B. (5) Nothing in the provisions of this section, or in any other provision of this Act, shall entitle the Commission to presume that: (a) an injury suffered by a person is a war-caused injury or a defence-caused injury; (b) a disease contracted by a person is a war-caused disease or a defence-caused disease; (c) the death of a person is war-caused or defence-caused; or (d) a claimant or applicant is entitled to be granted a pension, allowance or other benefit under this Act. (6) Nothing in the provisions of this section, or in any other provision of this Act, shall be taken to impose on: (a) a claimant or applicant for a pension or increased pension, or for an allowance or other benefit, under this Act; or (b) the Commonwealth, the Department or any other person in relation to such a claim or application; any onus of proving any matter that is, or might be, relevant to the determination of the claim or application. (7) In this section: (b) a reference to hazardous service shall be read as a reference to service in the Defence Force of a kind determined by the Minister for Defence, by instrument in writing, to be hazardous service for the purposes of this section." 14 The issue before the Full Court in Cooke was whether the AAT had applied the correct standard of proof in determining whether a veteran suffered from the disease of "anxiety state". The AAT had applied the "reverse criminal" standard, concluding that it should be satisfied as to the existence of the claimed disease, unless satisfied beyond reasonable doubt that there was no sufficient ground for finding that the claimed disease existed. After careful examination of s 120(1) of the Act the Full Court held at 310 that: "The subject matter and purpose of the sub-section are confined to the standard of proof of war-causation." And at 312 the Full Court further held that the reverse criminal standard of proof applied to the question whether the disease was war-caused, and the civil standard of proof referred to in s 120(4) of the Act applied to the question whether or not there was a disease. 15 Counsel for Mr Budworth argued that Cooke was incorrectly decided or clearly wrong and invited us not to follow it. We decline to take that course because we find the reasoning in Cooke persuasive. In our view, s 120(1) of the Act assumes the existence of a relevant injury or disease and provides a standard of proof for the determination of whether that injury or disease was war-caused. When the Commission, or the AAT on review, is required to determine whether a veteran is suffering from the claimed injury or disease, that issue must be decided to the "reasonable satisfaction" of the decision maker in accordance with s 120(4) of the Act. 16 In Repatriation Commission v Gosewinckel (1999) 59 ALD 690, Weinberg J rejected a submission that Cooke was incorrectly decided. Although bound to apply Cooke in any event, his Honour carefully considered at 700-702 [39] - [49] of his reasons whether Cooke identified the correct standard of proof to be applied in determining whether a relevant disease or injury exists. We reproduce those paragraphs which we regard as a persuasive analysis of why Cooke was correctly decided: "Ground (a) – Did the tribunal apply the wrong standard of proof to the diagnosis issue? Mr Hanks, who appeared on behalf of the applicant, submitted that I was bound by the decision of the Full Court in Repatriation Commission v Cooke, above, to hold that the AAT had erred in law in applying the wrong standard of proof to the determination of whether the veteran was suffering from generalised anxiety disorder. Although the tribunal was bound to follow the decision of Beazley J in Preston at the time it delivered its reasons for decision on 29 October 1998, Preston was overruled by the judgment of the Full Court in Cooke, delivered on 23 December 1998. Cooke must therefore be taken to have declared the law definitively as it was, although not known to be, at the time the AAT determined the present proceeding. In that sense, Mr Hanks submitted, the issue before the Court was a simple one. The error of law was clearly demonstrated. Mr Croyle, on behalf of the veteran, made what he initially described as a formal submission that the decision of the Full Court in Cooke was erroneous. While conceding that I was bound to follow the Full Court's decision, he wished to protect his rights in the event that this matter went on appeal. Mr Croyle did not ultimately confine his submission in that way. He submitted, in the alternative, that a careful reading of the decision of the High Court in Byrnes demonstrated that, whatever might have been thought to be the position before Byrnes, the High Court had, in that case, given its imprimatur to the approach adopted by Brennan J in Bushell. Mr Croyle drew attention to a passage in the joint judgment of Mason CJ, Gaudron and McHugh JJ in Byrnes, above, which he submitted made good this contention. Their Honours were dealing with the question of whether the veteran's claim was dependent on proof that he had sustained a severe injury. They stated at 571-2: "If the appellant had been able to prove that he sustained a severe injury to his neck, part of the hypothesis would have been proved. Indeed, proof of a severe injury would have been the factual foundation of another hypothesis leading to the same conclusion but with a higher degree of probability than the hypothesis upon which the appellant was forced to rely. Similarly, proof beyond reasonable doubt that the appellant had not suffered a severe injury would have disproved the hypothesis put forward by Dr Rowden. In the absence of proof that the appellant had or had not sustained a severe injury, however, his case had to be determined by examining whether it was a reasonable hypothesis that his spondylosis was caused by an injury to his neck which occurred when he dived into a shallow pool causing him to be hospitalized for three days. His case could succeed even though there was no evidence that the 1943 incident had resulted in severe injury. Sustaining severe injury was part of the hypothesis; it was not a matter for proof or evidence in his case." Mr Croyle submitted that, in this passage, the High Court had at least tacitly approved the approach to the standard of proof on matters of diagnosis adopted by Brennan J in Bushell. He submitted that the question whether a severe injury had been sustained (or a disease contracted) had been treated by their Honours as an issue to be dealt with in accordance with the reasonable hypothesis approach set out in ss 120(1) and (3) of the VE Act, and not the reasonable satisfaction approach in s 120(4) of that Act. It followed that the decision of the Full Court in Cooke had been delivered per incuriam. The members of the Full Court in that case had failed to appreciate that the High Court in Byrnes had determined that the appropriate standard of proof in matters of diagnosis was the reasonable hypothesis standard. Beazley J had therefore correctly determined this issue in Preston. Mr Croyle further submitted that the decision of the Full Court in Cooke was also erroneous because it had been delivered without reference to the earlier decision of the Full Court in Deledio, above, which, he contended, also supported the views of Beazley J in Preston. I am unable to accept the submission that the decision of the Full Court in Cooke was delivered per incuriam. I see nothing in the passage in Byrnes to which Mr Croyle has referred which suggests that the High Court in that case gave approval to the observations of Brennan J in Bushell. The passage in the joint judgment, when read in context, is not a statement of principle which addresses the standard of proof in matters of diagnosis. It deals with proof of injury in the distant past; not with the veteran's present condition where that alone is in dispute. It is important to note that in Byrnes it was "assumed" that the injury in question had occurred, whereas the very diagnosis of "generalised anxiety disorder" is in dispute in the present case. Byrnes does not concern, or at least does not directly concern, the question of diagnosis of present illness or injury. If I am wrong about the nature of the issues addressed by their Honours in the passage referred to in the joint judgment in Byrnes, I would still say that the particular reasoning was not integral to the outcome of the appeal in that case. However authoritative a pronouncement of the law by the High Court may be, a dictum of that Court is not binding upon me when I am faced with a decision of the Full Court of the Federal Court which is directly on point. It should be noted that in Cooke, at 21, the Full Court referred in terms to the decision of the High Court in Byrnes and, in particular, to 571 of the judgment. That page contains the very passage upon which Mr Croyle relied in support of his contention that in Byrnes the Court had endorsed the views of Brennan J in Bushell. It is plain that the Full Court in Cooke did not understand the joint judgment in Byrnes to have endorsed those views. Neither do I. I see nothing in the judgment of the Full Court in Deledio which is in any way supportive of the views of Beazley J in Preston, or in any way inconsistent with the judgment of the Full Court in Cooke. Even if I were persuaded that Deledio and Cooke were in conflict, I would unhesitatingly follow the decision in Cooke. Cooke was decided more recently than Deledio, and deals specifically with the very issue before me. Deledio at best does so only by implication. The question of which standard of proof should be applied when determining whether a veteran is injured, or is suffering from a disease, was neither addressed nor resolved in either Byrnes or Deledio. In my opinion, the principles which govern the resolution of this question are correctly stated by the Full Court in Cooke, a decision which, in any event, is binding upon me. Accordingly, the applicant must succeed in relation to this first, and primary, ground of appeal." 17 Nothing will be achieved by our stating in different language why we, too, have been persuaded to apply Cooke. Moreover we are unable to accept that the differentiation between the application of the burden and standard of proof identified in subss (1), (2) and (3) of s 120 on the one hand and those indicated in subs (4) thereof on the other is to be qualified in the way which the primary Judge outlined in para [11-12] above. In that regard, we respectfully adopt this dictum of Whitlam J in Benjamin v Repatriation Commission [2001] FCA 522 at [24], as follows: "In Cooke the Full Court said (at 310) that s 120(1) and (3) of the Act assume the present existence of the relevant disease. This must, as the Full Court had earlier indicated (at 308), be a claimed disease. With respect, I do not agree with the views about the ratio in Cooke adopted in Budworth v Repatriation Commission [2001] FCA 317 and Meehan v Repatriation Commission [2001] FCA 597, which do not refer to the "narrow issue of law" so identified by the Full Court. In my opinion, it should be borne in mind that a claim for a pension under Part II of the Act is required by s 14(5) to be made in respect of incapacity from "a particular injury or disease". That means for present purposes that it is first necessary to determine whether the veteran contracted the disease "as claimed". That important qualification is acknowledged in the language of s 19(7)(a) of the Act." 18 It is important, moreover, to bear in mind, that s 5D of the Act relevantly defines "disease" as meaning; "any physical or mental ailment, disorder, defect or morbid condition (whether of sudden onset or gradual development);…" 19 The expression "as claimed" in s 19(7) to which Whitlam J drew attention in the passage from Benjamin which we have just cited, qualifies the whole clause to which it is attached, namely, "that the veteran suffered the injury or contracted the disease." This means, we consider, that the decision-maker has to identify the collection of relevant symptoms which he or she is satisfied constituted the disease which the veteran contracted. It is not a matter of nomenclature or attaching a traditional medical label to the collection of symptoms. That, as the conflicting expert psychiatric evidence of Dr Knox and Dr Dent on the one hand and Dr Spragg on the other, shows in relation to the label "Post Traumatic Stress Disorder", may turn on questions of causation or aetiology. Once the decision-maker has identified, to his or her reasonable satisfaction, the collection of relevant symptoms from which an applicant suffers, the question of whether those symptoms were war-caused has to be resolved by imposing on the Commission the reverse onus of proof on the criminal standard in accordance with s 120(1) as qualified by s 120(3). 20 It was also submitted in the alternative by counsel for Mr Budworth, that if Cooke was correctly decided, it is not authority for "the approach of the appellant". We disagree. We regard Cooke as decisive of the critical issue on this appeal, namely what standard of proof is to be applied when determining whether a claimed injury or disease exists. Consequently we consider that the primary Judge erred in concluding that the reverse criminal standard of proof contained in s 120(1) of the Act was relevantly applicable. Although therefore we affirm the order of the primary Judge that the matter be remitted to the AAT to be heard and determined according to law, such determination will require reconsideration of the matters referred to in [9] above, and the appropriate application of the correct standard of proof as to whether the claimed disease exists. Costs 21 Since the appeal was incapable of succeeding in whole because a significant part of the challenge to the judgment below was abandoned, and because of the Commission's wider interest in the resolution of the issue concerning appropriate application of the standard of proof, the Commission should pay Mr Budworth's costs of the appeal. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Court. Associate: Dated: 10 October 2001 Counsel for the Appellant: MB Smith with CHP Colborne Solicitor for the Appellant: Legal Aid Commission of NSW Counsel for the Respondent: DEJ Ryan SC with PJ Hanks QC Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 8 August 2001 Date of Judgment: 10 October 2001