FEDERAL COURT OF AUSTRALIA Magill v Repatriation Commission [2002] FCA 744 social welfare – Veterans' affairs – disability pension – whether veteran entitled to pension at special rate – applicant suffering from post traumatic stress disorder and alcohol dependence – Tribunal accepted applicant's disabilities but considered that one of the causes for taking early retirement was unrelated to his war-caused disabilities – whether Tribunal erred by failing to properly construe the term "remunerative work that the veteran was undertaking" – whether Tribunal erred by failing to take into account relevant considerations Administrative Appeals Tribunal Act 1975 (Cth) s 44(1) Veterans' Entitlements Act 1986 (Cth) ss 24(1)(c), 24(2)(b), 24(2)(a) Banovich v Repatriation Commission (1986) 69 ALR 395 applied Forbes v Repatriation Commission (2000) 171 ALR 131 at 133 followed Minister for Immigration and Multicultural Affairs v Yusuf (2001) 180 ALR 1 at [69] applied ROY PETER MAGILL v REPATRIATION COMMISSION Q 167 OF 2001 DRUMMOND J 12 JUNE 2002 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 167 OF 2001 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: ROY PETER MAGILL APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: DRUMMOND J DATE OF ORDER: 12 JUNE 2002 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Decisions (c) and (d) of the Administrative Appeals Tribunal made herein on 2 July 2001 be set aside. 2. The case, in so far as it relates to the applicant's claim to a pension at the special rate provided for by s 24 the Veterans' Entitlements Act 1986 (Cth), be remitted to be heard and decided again, either with or without further evidence, by the Administrative Appeals Tribunal, differently constituted, in accordance with law. 3. The respondent pay the applicant's costs of and incidental to this appeal, including reserved costs if any. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 167 OF 2001 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL BETWEEN: ROY PETER MAGILL APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: DRUMMOND J DATE: 12 JUNE 2002 PLACE: BRISBANE REASONS FOR JUDGMENT 1 This is an appeal under s 44(1) the Administrative Appeals Tribunal Act 1975 (Cth) from the decision of the Administrative Appeals Tribunal ("the Tribunal") in respect of a claim brought under the Veterans' Entitlements Act 1986 (Cth) ("the VEA"). 2 On 20 January 1998, Mr Magill made a claim to the Repatriation Commission to have post traumatic stress disorder ("ptsd") and psychoactive substance abuse or dependence involving alcohol ("alcohol dependence") accepted as war-caused conditions within s 9 the VEA. The Commission had previously accepted a range of other disabilities suffered by Mr Magill as war-caused conditions. But it rejected the claims in respect of ptsd and alcohol dependence. Mr Magill's request of the Commission for internal review was refused and the Veterans' Review Board affirmed the Commission's decision in May 1999. However, the Commission then changed its attitude to Mr Magill's claim and, at the hearing before the Tribunal, conceded that: "(a) post traumatic stress disorder and psychoactive substance abuse or dependence should be accepted as war caused conditions within section 9 of the Act; (b) the said conditions should be accepted with effect from 28 March 1998; (c) it should also be accepted disability pension is payable at 100 per cent of the general rate with effect from 28 March 1998; and (d) paragraph 24(1)(a) and 24(1)(b) of the Act should be accepted as having been satisfied at all relevant times." 3 Recognition of Mr Magill's ptsd and alcohol dependence as war-caused conditions has the result that his degree of incapacity as determined under s 21A is in excess of 70%. In consequence, the only issue litigated before the Tribunal was whether Mr Magill was entitled to a pension at the special rate in accordance with s 24 the VEA. (If not, he is still entitled to a pension, but only at the lower, general rate.) It determined this issue against Mr Magill. But, in view of the concessions made by the Commission, the Tribunal made determinations in accordance with pars (a) to (c) set out above and remitted the matter to the Commission to give effect to the Tribunal's determination. 4 Mr Magill appeals against the Tribunal's rejection of his entitlement to a pension at the special rate on a number of grounds, each said to involve error of law. 5 In order to qualify for a pension at the special rate, a veteran must satisfy the criteria in s 24(1) the VEA. The date at which the criteria are to be satisfied is the date of the application to the primary decision-maker for the grant of the special rate pension: Banovich v Repatriation Commission (1986) 69 ALR 395 ("Banovich") at 404. I understand this to be 20 January 1998. 6 In view of the concessions made by the Commission, Mr Magill would be entitled to a special rate pension if he could satisfy the two limbs of s 24(1)(c) the VEA, which must be read with s 24(2). As RD Nicholson J pointed out in Forbes v Repatriation Commission (2000) 171 ALR 131 at 133, s 24(1)(c) the VEA is best understood by dividing it into its two limbs and relating those limbs to the relevant portions of s 24(2). The first limb of s 24(1)(c) reads: "[T]he veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking …" 7 This must be read with s 24(2)(b), which can be said in this way: Where a veteran who has not been engaged in remunerative work satisfies the Commission - · that he or she has been genuinely seeking to engage in remunerative work, and · that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work, and · that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking. 8 Section 24(2)(b) was correctly described by counsel for the Commission as "an ameliorative provision". If the veteran satisfies the criterion contained in s 24(1)(c) - that the war-related incapacity "alone" has prevented the veteran from continuing to work - it is unnecessary to consider s 24(2)(b). If, however, a veteran has not been engaged in remunerative work at the relevant date, he or she will still be able to satisfy the "alone" criterion in s 24(1)(c) even though the war-related incapacity is not the sole cause of the veteran's inability to obtain work, provided the veteran nevertheless meets the requirements of s 24(2)(b). 9 The second limb of s 24(1)(c) provides: "[T]he veteran is … by reason thereof [ie, by reason of incapacity from that war-caused injury or war-caused disease], suffering a loss of … earnings … that the veteran would not be suffering if the veteran were free of that incapacity …" 10 The loss of earnings referred to in this provision may be caused either by a loss of existing employment or by an inability to obtain new employment: Banovich at 402. This second limb must be read with s 24(2)(a), which provides: "[A] veteran who is incapacitated from war-caused injury or war-caused disease … shall not be taken to be suffering a loss of … earnings … by reason of that incapacity if: (i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or (ii) the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason …" 11 Unlike s 24(2)(b), which ameliorates the operation of the first limb of s 24(1)(c), s 24(2)(a) only explicates the second limb of s 24(1)(c) by emphasising that a veteran will not be able to satisfy that limb if, though suffering a loss of earnings that may be causally related to a war-related injury or disease, there are other reasons that are also causally related to the veteran's having ceased to engage in work or related to the veteran's being prevented from engaging in work. 12 The Tribunal made the following findings with respect to Mr Magill's activities after his discharge from the Royal Australian Air Force in 1978: "15. On 8 February 1981 the applicant commenced employment by the Queensland Government at the Law Courts complex, Townsville. The employment related to security of the Courts complex. The applicant said in his statement that he worked 24 hour shifts but I have inferred that he worked shifts which had a 24 hour cycle. Since 1984 he was employed as a member of the State Government Protective Security Service. 16. The applicant undertook increased responsibilities over the years and became the officer-in-charge of security services at the Courts complex. He said this meant that he was less physically active but he had difficulty coping with stresses engendered by his supervisory responsibilities. Those responsibilities had been increased to a point where he was concerned that he was no longer able to perform his duties to the desired standard. He attributed this to his war caused disabilities. 17. In particular he was aware that he was alcohol dependent with consumption of alcohol during working hours together with analgesics. The consequence was that the applicant asked to be relieved of his responsibilities as officer-in-charge of the security services but this request was refused. 18. Rather than relieve the applicant of responsibilities they were in effect increased by a reduction of security staff in 1997 for the Courts' complex. The result was the applicant sought and was granted a voluntary early retirement by the State Government and he ceased work in November 1997. At the time of his retirement he was not being treated by a psychiatrist." 13 In explaining how it reached its decision adverse to Mr Magill, the Tribunal recorded its satisfaction that his accepted disabilities (which included his ptsd and alcohol dependence) had "a very significant impact on [his] capacity to continue remunerative employment" and said: "31. The difficulty with this case is that, on the applicant's own evidence, he became dissatisfied with his employment at the Courts' complex because of increasing responsibility. That was before the diagnosis and treatment of his Post Traumatic Stress Disability. That is not to say the condition did not play a part in the applicant's decision to accept the offer of early retirement from employment in the Courts complex. But it remains a fact that he did not seek medical assistance for the condition until after his retirement. 32. Dr Likely makes it clear in his report of 12 April 2000 (Exhibit C) that the pre-existing anxiety state and the self medication with alcohol were to be explained by the post traumatic stress disorder. In my view that is a reasonable explanation for the applicant's behaviour pattern and I accept Dr Likely's explanation. 33. The applicant said, and I accept, that he was averse to accepting additional responsibility in his work hence his decision to accept the offer of early retirement. That decision to accept early retirement to avoid the additional responsibility would preclude a finding that paragraph 24(1)(c) was satisfied unless the decision can be attributed to the accepted disabilities. 34. Paragraph 24(1)(c) refers to 'remunerative work that the veteran was undertaking'. In Banovich v Repatriation Commission (1986) 69 ALR 395 the Full Court said that the phrase was to be read as a reference to the type of work which the veteran previously undertook and not to any particular job. In Repatriation Commission v Smith (1987) 74 ALR 537 a different Full Court followed the dicta of the Full Court in Banovich. That the Courts were referring to type of work rather than a particular job was made clear in Flentjar v Repatriation Commission (1977) 26 AAR 93 at 95. 35. It follows, in my view that the fact of the applicant not wanting to continue in the particular position at the Courts complex because of increasing responsibility is not the answer to paragraph 24(1)(c). The applicant said that he wished to continue working as a security officer but without supervisory responsibility but his employer did not make this option available. The employer offered early retirement and the applicant accepted that offer. 36. While I am satisfied that the applicant made desultory enquiries about other security work, I am not satisfied that he pursued these enquiries and preferred to retire from the workforce. It follows that I am not satisfied that paragraph 24(2)(b) applies on the facts of this case. In particular the applicant's evasive answers in response to questions by Mr Stoner left me with the impression of a desultory effort to obtain remunerative employment after his early retirement. That was the situation at the date of application and nothing has changed since. 37. By his own evidence the applicant was able to engage in remunerative work. His doctor told him not to do so but the applicant said he could continue if he did not have the additional responsibilities of supervision. 38. In the result, I am satisfied, on the balance of probabilities, that the applicant decided to accept the offer of early retirement from his employment by the Queensland Government and also decided to retire from the workforce unless employment to his liking became available. I accept that the applicant made enquiries about employment but I am not satisfied that those enquiries extended beyond that, ie they were simply enquiries which do not satisfy me that the applicant was genuinely seeking to engage in remunerative work. 39. Further the offer of voluntary early retirement accepted by the applicant cannot be ignored when considering the alone test in paragraph 24(1)(c). There is no evidence that it was the undiagnosed condition of post traumatic stress disorder together with, or without, the other accepted disabilities that alone prevented the applicant continuing to undertake remunerative work. The offer of early voluntary retirement at age 62 is, by itself, a relevant causative factor brought about by the applicant's desire to avoid increased responsibilities. The war caused disabilities were also, as between them, factors of varying importance in the decision to accept early retirement and the decision to seek to avoid the additional responsibilities. 40. I am not satisfied however that it was the war caused disabilities alone, which prevented the applicant undertaking remunerative employment. He had maintained employment for many years with those disabilities. By January 1998 there was the concomitant factor of the acceptance of early retirement which has satisfied me that the alone test in paragraph 24(1)(c) was not satisfied at the time of application (cf Gauntlett v Repatriation Commission (1991) 24 ALD 79)." 14 What the Tribunal said in par 35 about the applicant's wishes not being the answer to s 24(1)(c) must, I think, be understood as meaning that Mr Magill's desire to escape from his supervisory position was not by itself sufficient to bring him within s 24(1)(c). 15 How the Tribunal arrived at its decision adverse to Mr Magill is clear. The Tribunal accepted that Mr Magill had long suffered from war-related ptsd, which had also caused his recurrent anxiety/depressive state and alcohol dependence. It also accepted that these disabilities did play a part in his decision to accept the offer of early retirement (pars 31 and 39). But because it considered that his desire to avoid increased responsibilities was unrelated to his war-caused disabilities (pars 33 and 39) and because that desire was one of the causes for his accepting the offer of early retirement (pars 33, 35 and 37 to 40), he could not satisfy s 24(1)(c). 16 In par 31, the Tribunal referred to "the difficulty with this case" being "that, on the applicant's own evidence, he became dissatisfied with his employment at the Courts' complex because of increasing responsibility". In par 33, the Tribunal correctly recognised that Mr Magill's decision to accept early retirement to avoid the additional responsibility would not preclude a finding that par 24(1)(c) was satisfied if that decision could be attributed to Mr Magill's accepted disabilities. It was alert to the fact that there was medical opinion touching on this: it referred, in par 37, to Mr Magill's doctor telling him not to remain in employment. But it is clear enough that it found that the critical attribution could not be made for a number of reasons, viz, that Mr Magill himself asserted repeatedly that he was able to engage in remunerative work as a security officer if only he did not have to deal with the additional responsibility, that he was able to maintain his employment including that of security officer with the additional responsibilities for many years, despite his accepted disabilities and that he did not seek medical assistance for his ptsd until after his retirement. Importantly, the Tribunal, in determining that the decision to retire could not be attributed to the disabilities, recorded its opinion in par 39 that there was no evidence that it was the undiagnosed condition of ptsd by itself or together with Mr Magill's other accepted disabilities that alone prevented him continuing to undertake remunerative work. 17 Mr Magill contends that the Tribunal fell into error by failing to properly construe the term "remunerative work that the veteran was undertaking" in s 24(1)(c) and that it incorrectly read that phrase as meaning, in the context of this case, security work rather than work of the more complex kind that Mr Magill was doing at the time of his retirement, viz, security work with supervisory and other duties. 18 As appears from its reference to the relevant authorities in par 34 of its reasons, the Tribunal correctly identified the meaning to be given to the phrase "remunerative work that the veteran was undertaking" in s 24(1)(c). However, it is not, I think, clear whether the Tribunal identified the kind of work relevant to s 24(1)(c) in the context of this case as work as a security officer simpliciter, or work as a security officer with supervisory and other responsibilities. Despite referring to authorities dealing with the proper interpretation of the phrase "remunerative work that the veteran was undertaking" in the sub-section, the Tribunal may, in truth, not have attempted to identify just what was the relevant kind of work. The critical finding that it made was that one of Mr Magill's reasons for giving up his job was his desire to avoid the extra responsibilities that had been imposed on him over the years: since this desire was not, in the Tribunal's view, related to his war-caused disabilities, he could not satisfy s 24(1)(c). It is, I think, necessary, if Mr Magill is to succeed in this case, to show error of law by the Tribunal in making this particular finding. If this finding stands, it does not, I think, matter whether the kind of work relevant to s 24(1)(c) is the simple job of security officer or the more complex one of supervising security officer. If the relevant work is of the former kind, the Tribunal can be seen to have rejected Mr Magill's claim because it took the view that, despite his war-caused disabilities, he was capable of performing that narrow category of work, but gave up his job for another reason unrelated to his disabilities, viz, a desire to avoid the extra responsibilities. If, however, the relevant work is of the latter kind, the Tribunal can be seen to have rejected Mr Magill's claim because it took the view that despite his disabilities, he could still have performed the more complex job, but he had a reason unrelated to his disabilities, viz, his desire to avoid the extra responsibilities, which was one motivation for his decision to accept the offer of voluntary retirement. 19 Mr Magill also submits that the Tribunal's decision is affected by error of law because it failed in reaching that decision to take into account relevant considerations: I accept this submission. I think it can be said that the Tribunal's statement in par 39 that there was no evidence that it was his undiagnosed ptsd by itself or with his other accepted disabilities that alone prevented him continuing to undertake work shows that it ignored the evidence to that very effect and thereby made an error of law that affected its decision. 20 There was an abundance of such evidence. The Tribunal made no reference to it in that part of its reasoning to its conclusion that Mr Magill's ptsd, by itself or together with his other accepted disabilities, was not the sole cause of him being unable to continue to undertake remunerative work. It can therefore be inferred that the Tribunal did not consider this evidence to be material to its decision: Minister for Immigration and Multicultural Affairs v Yusuf (2001) 180 ALR 1 at [69]. 21 It is surprising that the Tribunal should fail to take into account this evidence: it correctly appreciated in par 33 the need to consider whether Mr Magill's decision to accept early retirement to avoid the additional responsibility was attributable to his accepted disabilities; it expressly accepted, in par 32, the evidence of the psychiatrist, Dr Likely, that Mr Magill's longstanding anxiety state and abuse of alcohol were the consequence of his longstanding ptsd (though this was only diagnosed in January 1998, ie, two months after Mr Magill retired). And in par 17, it accepted that he was induced by awareness of his ptsd-related alcohol dependence to ask that he be relieved of his supervisory responsibilities. 22 Dr Likely saw Mr Magill in mid January 1998 at the request of the latter's general practitioner, less than two months after his retirement. He then diagnosed him as having "chronic post traumatic stress disorder, complicated by a major depressive disorder". He also then described Mr Magill's problems as: "Post traumatic stress disorder (chronic). Major depressive disorder (recurrent). Alcohol abuse." It was he who advised Mr Magill to make the claim, which he did later in January 1998, that has led to the present litigation. In his report of February 1998 to the Department of Veterans' Affairs, Dr Likely described Mr Magill's condition in a little more detail as follows: "Post traumatic stress disorder (chronic). Major depressive disorder (recurrent), arising as a complication of and not in isolation from his post traumatic stress disorder. Alcohol abuse." 23 The Department obtained a report from another psychiatrist, Dr Richards, in January 2000 in connection with this litigation. Dr Richards did not think Mr Magill was suffering from ptsd but he did consider that Mr Magill suffered long-term alcohol abuse/dependence, which returned "due to the stress of security work at the Townsville Supreme Court". He also expressed the following opinions: "Mr Magill suffers alcohol abuse/dependence. Alcohol abuse was first manifest during his Ubon posting. … Co-morbid anxious and depressive symptoms are a function of his inability to cope with life without alcohol and led to his original referral to Dr Likely. Treatment and prognosis … His present optimal emotional state is dependent on the supervision of his psychiatrist, the support of his wife and the continuance of a stress free and rather vegetable retirement. His age, relative inertia and early decrepitude make his employment on the general labour market unlikely, but should he be fortunate to find employment he would be unable to cope and increase in his alcohol dependence and relapse of co-morbid anxiety and depression would occur. Because of his chronic alcohol dependence his (sic) is permanently unfit for appropriate labour market re-employment." 24 Dr Likely, who by then had been treating Mr Magill for some years, was asked to comment on Dr Richards' report by Mr Magill's lawyers. In his final report of April 2000, Dr Likely said: "… Dr Richards states that in his opinion, Mr Magill suffers from alcohol abuse and dependence and that alcohol abuse was first manifested during his Ubon posting. I agree with these comments. I disagree however with Dr Richards' contention that 'comorbid anxious and depressive symptoms are a function of his inability to cope with life without alcohol and led to his original referral to Dr Likely'. Indeed, I would see the situation as being the reverse to this. My contention would be that Mr Magill's development of post traumatic stress disorder has been associated with comorbid diagnoses of major depressive disorder and alcohol abuse. This is commonly the case amongst veterans … I also agree with Dr Richards in that Mr Magill's 'present optimal emotional state is dependent on the supervision of his Psychiatrist, the support of his wife and the continuance of a stress free … retirement'. I also agree with Dr Richards' contention that Mr Magill is permanently unfit for appropriate labour market employment, but I believe that the cause of this is Mr Magill's post traumatic stress disorder alone." 25 The Tribunal expressly preferred Dr Likely's opinion to the effect that Mr Magill had war-caused ptsd and that his recurrent anxiety and depression symptoms and his alcohol dependence and abuse were caused by his ptsd. The Commission has now conceded that the ptsd and alcohol abuse were war-caused conditions. Dr Richards did not consider Mr Magill to be suffering from ptsd, but he was nevertheless of the opinion that his alcohol abuse/dependence and his anxiety and depression symptoms were such as to make his employment on the general labour market unlikely and, importantly, such as to prevent him holding down a job if he should find one, with the result that, because of his chronic alcohol dependence, he was permanently unfit for appropriate labour market re-employment. Dr Likely expressed exactly the same opinion as to Mr Magill's permanent incapacity for employment, though he went further than Dr Richards and diagnosed ptsd which he considered was the cause of the anxiety and depression symptoms and alcohol dependence/abuse which Dr Richards identified. Far from there being no evidence that the undiagnosed condition of ptsd alone prevented the applicant continuing to undertake remunerative work, that was Dr Likely's express opinion, and it was supported in large part by Dr Richards. Neither psychiatrist saw any need to distinguish between Mr Magill's capacity, asserted by him to exist, to work as a simple security officer and his capacity to undertake the added responsibilities he was given at the Supreme Court: they both thought his medical problems, which included his ptsd, conceded by the Commission as war-caused, by themselves were such as to render him generally and permanently unemployable. 26 The Tribunal appears to have been distracted from considering this powerful body of uncontradicted evidence, directly relevant to an issue on which expert opinion is clearly of assistance to a decision-maker, by what Mr Magill said, overly optimistically in the opinions of both psychiatrists, about his ability to work and by his demonstrated ability to struggle on with his job into late 1997. (It was only then that he acknowledged that he could not cope further, sought relief and was offered early retirement.) 27 Because the Tribunal wrongly considered there was no evidence that Mr Magill's undiagnosed condition of ptsd (and associated war-caused disabilities) was the sole cause of his not being able to engage in remunerative employment either as a security officer or as a supervising security officer and in consequence ignored that evidence, the Tribunal's decision must be set aside. The applicant does not dispute that the matter must be remitted to the Tribunal, differently constituted, for redetermination. This should be done with or without other evidence. 28 It remains only to note that, having found that Mr Magill's war-caused disabilities did not alone prevent him from continuing to undertake remunerative work, the Tribunal correctly went on to consider whether, notwithstanding that conclusion, Mr Magill might still be able to satisfy s 24(1)(c) by bringing himself within s 24(2)(b). The Tribunal found that he could not do this because he had not genuinely sought to engage in remunerative work after retiring from the Supreme Court. However, the Tribunal's decision that his war-caused disabilities did not alone prevent him from continuing to undertake remunerative work is flawed with error of law. If he can persuade the Tribunal, on reconsideration, that his disabilities were the sole reason for his not being able to continue to undertake remunerative work, it will, for the reasons given, be irrelevant for the Tribunal to consider whether he made genuine attempts to seek work after leaving the Supreme Court in November 1997. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond. Associate: Dated: 12 June 2002 Counsel for the Applicant: Mr DW Honchin Solicitor for the Applicant: Purcell Taylor Lawyers Counsel for the Respondent: Ms E Ford Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 12 March 2002 Date of Judgment: 12 June 2002