FEDERAL COURT OF AUSTRALIA Van Ewijk v Repatriation Commission [2004] FCA 17 VETERANS' AFFAIRS – disability pension – special rate – application of s 24(1)(c) and s 24(2) of the Veterans' Entitlements Act 1986 (Cth) Administrative Appeals Tribunal Act 1975 (Cth) s 44(1) Income Tax Assessment Act 1936 (Cth) s 196 Veterans' Entitlements Act 1986 (Cth) ss 24(1), 24(2) Cavel v Repatriation Commission (1988) 9 AAR 534 discussed Flentjar v Repatriation Commission (1997) 48 ALD 1 followed Forbes v Repatriation Commission (2000) 101 FCR 50 discussed Leane v Repatriation Commission [2003] FCA 889 cited Repatriation Commission v Hendy [2002] FCAFC 424 discussed TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 discussed PETER VAN EWIJK v REPATRIATION COMMISSION Q 108 OF 2003 STONE J 30 JANUARY 2004 SYDNEY (Heard in Brisbane) IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 108 OF 2003 ON APPEAL FROM THE VETERANS' APPEALS DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY MEMBER WAY BETWEEN: PETER VAN EWJIK APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: STONE J DATE OF ORDER: 30 JANUARY 2004 WHERE MADE: SYDNEY (Heard in Brisbane) THE COURT ORDERS THAT: 1. The application be dismissed. 2. The applicant pay the respondent's costs of the application. 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 108 OF 2003 ON APPEAL FROM THE VETERANS' APPEALS DIVISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL CONSTITUTED BY MEMBER WAY BETWEEN: PETER VAN EWJIK APPLICANT AND: REPATRIATION COMMISSION RESPONDENT JUDGE: STONE J DATE: 30 JANUARY 2004 PLACE: SYDNEY (Heard in Brisbane) REASONS FOR JUDGMENT 1 On 28 September 1999 the Repatriation Commission assessed the applicant's disability pension at 100 per cent of the general rate of pension rather than at the higher special rate provided for by s 24 of the Veterans' Entitlements Act 1986 (Cth) ('Veterans Act'). The decision was affirmed by the Veterans' Review Board on 19 September 2000 and subsequently by the Administrative Appeals Tribunal ('Tribunal'). The applicant now appeals to this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ('AAT Act'). Statutory framework 2 A veteran who satisfies the criteria in s 24 of the Veterans' Act is entitled to a pension at a special rate. Section 24 provides: '(1) This section applies to a veteran if: … (a) either: (i) the degree of incapacity of the veteran from war-caused injury or war-caused disease, or both, is determined under section 21A to be at least 70% or has been so determined by a determination that is in force; or (ii) the veteran is, because he or she has suffered or is suffering from pulmonary tuberculosis, receiving or entitled to receive a pension at the general rate; and (b) the veteran is totally and permanently incapacitated, that is to say, the veteran's incapacity from war-caused injury or war-caused disease, or both, is of such a nature as, of itself alone, to render the veteran incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and (c) the 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 and is, by reason thereof, suffering a loss of salary or wages or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and (d) … (2) For the purpose of paragraph (1)(c): (a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her account, 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; and (b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, 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.' Background to the appeal 3 The applicant was born on 27 August 1946. He was conscripted into the Australian Regular Army by way of the National Service scheme from 27 May 1968 and was discharged on 26 May 1970. His service included a period of service in Vietnam from 9 April 1969 to 5 March 1970. The applicant's accepted service related disabilities are: post traumatic stress disorder ('PTSD'); gastro-oesophageal reflux disease; hypertension; alcohol dependence or alcohol abuse; diabetes mellitus; ischaemic heart disease; chronic solar skin damage; and bilateral sensorineural hearing loss. The applicant's claim for a disability pension and medical treatment was lodged on 12 August 1999. 4 The applicant's employment history, including his attempts to gain employment and his medical history are described in detail at [13] – [37] of the Tribunal's reasons. For present purposes it is sufficient to say that from 1962 to 1967 the applicant was an apprentice fitter and turner with BHP in Newcastle. On his return from Vietnam he again worked with BHP as a marine engineer from 1971 but was dismissed in 1977 because of excessive drinking. From 1978 to 1979 the applicant was a marine engineer with Dublin Shipping in Ireland. From 1980 to 1981 he was a partner with Mr Harry Jenkins in a fishing business. His duties in the partnership seem mainly to have involved using his skills as a marine engineer to keep the vessel in good order. Following that he worked for six months in New Guinea as a slipway superintendent. During this period he had good relations with the local workers but not with the expatriate workers. He was unemployed during 1982 but from 1983 he worked as a marine engineer with Condreco Dredging in Brisbane until he was made redundant in 1987. From late 1988 to 1991 the applicant was a marine engineer with Pioneer Dredging in Brisbane. 5 In October 1991, whilst working for Pioneer Concrete (Qld) Pty Ltd ('Pioneer') the applicant injured his back when he jumped onto a barge and slipped on some gravel on its deck. He has not worked since he sustained that injury. On 10 March 1992 he was advised that his job with Pioneer could no longer be held open for him and was retrenched. The applicant received workers' compensation payments from 1991 to 1993. He gave evidence that he made several attempts to start his own business but was unable to do so either because the ventures contemplated were not feasible or he was not able to raise the necessary capital. The Medical Evidence 6 The Tribunal summarised some of the more recent medical evidence before it as follows: 'Dr P Sharwood, Orthopaedic Surgeon, examined the applicant on 16 November 2001 and provided a written report (Exhibit A2). Dr Sharwood opined: "Reviewing this patient's reports and the list of conditions which have been accepted as being due to his military service, I do not think this patient is in anyway restricted in his activities by the problems in his back. His current problems seem to be most likely cerebral damage, almost certainly secondary to alcoholism. He has carpal tunnel syndrome which is most likely secondary to his diabetes, he has some back pain which reflects the fact that he has had surgery to his back in the past, but this is in no way sufficient I believe to prevent his doing at least four hours work per day in a physical capacity. He would not be able to be employed doing four hours work today mainly because of his other conditions, specifically his neurological state and his post-traumatic stress disorder. Although his back would prevent his doing his original job as a Marine Engineer, it would certainly not prevent his doing up to four hours light engineering work per day. I am fairly certain though that he would be unable to do such work because of his other conditions, specifically his neurological problems." Dr G Apel, Psychiatrist, saw the applicant on 27 November 2001 and 5 December 2001 and provided a written report dated 21 September 2002 (Exhibit A1). Dr Apel diagnosed the applicant as suffering war-caused PTSD and chronic type alcohol dependence and concluded: "3. It is entirely comprehsible [sic] that these psychological a symptoms and functional disability arose since physical incapacity subsequent to his back injury in 1991. 4. As noted in the report [of] Dr Sharwood [the applicant] has recovered well and he has a physical capacity for at least light engineering work. Dr Sharwood is very clear that his back problems are not the major reason for his current unemployable status. 5. I concur with this opinion from a psychiatric point of view Mr Van Ewijk showing a capacity a significant degree of physical activity but psychologically has proven uncapable [sic] of remaining in the work force. 6. I see his alcohol dependence as a directly secondary to his post traumatic stress disorder." Dr J Prentis, Orthopaedic Surgeon, performed a discectomy on the applicant on 4 April 1992 and on review of the applicant on 10 June 1993 stated (T4/11): "I do not envisage that he will be able to return to a heavy, manual job, or a job that required repetitive lifting. His previous employment was one of maintenance work – marine engineering activity. It is quite unlikely that he will be able to return to this, as this requires some strength and mobility in getting himself into positions. At this stage, he is 47 years of age, and the best alternative for him would be to retrained in some lighter form of duty. I believe he would be capable of carrying out light salesperson, clerical work, and if a suitable job could be found for him – a very light, manual job." On further review of the applicant on 23 March 2000, Dr Prentis commented (T4/155-156): "The gentleman has sustained an injury to his lower back and has required a discectomy for this in 1992. He recovered reasonably well following this and is currently exhibiting some of the signs of the back injury and disc injury. They have left him with an incapacity in his spine which would approximately a 25% maximum loss of the efficient function of his spine as a whole. This would preclude him from returning to any heavy manual work, work that required repetitive bending and lifting. He would be able to if he could find same, carry out light duty activities. Jobs where he doesn't have to bend or lift and where he can change his position from sitting to standing at reasonably frequent intervals, e.g. console operator, clerical work, teaching type activities. So his back limits him to carrying out these light duties but he would not be able to carry out heavy duties." Dr Wong, LMO, on examining the applicant's capacity to work on 8 May 1998 and 6 July 1988 commented that the applicant "was not able to work due to PTSD". Dr Leong, Consultant Psychiatrist, on 15 June 2000, also opined that the applicant's accepted psychiatric conditions precluded him from working more than eight hours per week.' The Tribunal's decision 7 Before the Tribunal it was not in contention that the applicant satisfied the special pension criteria in s 24(1)(a) and (b) of the Act and, on this basis and on the material before it, the Tribunal so found. The respondent submitted however that the applicant did not satisfy the criteria in s 24(1)(c) of the Act or the ameliorating provisions of s 24(2)(b) because his inability to engage in remunerative work was not caused by his war-caused disabilities. It was also submitted that the applicant ceased to engage in remunerative work because of his back injury and consequently he could not, pursuant to s 24(2)(a), satisfy s 24(1)(c) of the Act. 8 The applicant submitted that his incapacity for work was a result of his PTSD rather than his back injury and that he therefore satisfied s 24(1)(c). In respect of s 24(2)(a) the applicant submitted that the loss of his job with Pioneer (see [5] above) is not the crucial factor. Rather, the question is whether his incapacity for remunerative work, whatever it be, resulted from his war-caused disabilities, relevantly, PTSD. The applicant contended that although he may have lost his job with Pioneer because of his back injury, his present inability to undertake remunerative employment resulted from PTSD which was a consequence of his service in Vietnam. Conversely the respondent attributed the applicant's difficulties to his back condition, lack of skills, tightness in the labour market and lack of business capital. 9 The Tribunal accepted that the applicant has trade qualifications and experience as a fitter and turner in the field of marine engineering and as a marine engineer and supervisor of ship maintenance, as well as experience in conducting small business ventures related to the marine environment. The Tribunal noted that it needed to bear in mind these types of work in determining whether the applicant's war-caused disabilities were the cause of him ceasing to engage in remunerative work and whether they prevented him from continuing to undertake or seek remunerative work. 10 The Tribunal considered each form of employment mentioned at [9] above. It concluded that the applicant ceased work with BHP and in the fishing partnership because of his alcoholism which was accepted as war-caused. With respect to all the other forms of employment, however, the Tribunal took a different view and held that the applicant's employment had ceased for reasons unrelated to his war-caused disabilities. In relation to the applicant's position in New Guinea the Tribunal referred to his dislike of the expatriate community and its way of life. It said that the applicant's attempt to commence his own business failed because of commercial difficulties, such as lack of capital, not his war-caused disabilities. Finally, the Tribunal was satisfied that the applicant's employment with Pioneer Concrete ceased because of his back injury. 11 In deciding whether the applicant's loss of remunerative employment was attributable only to his service-related incapacities the Tribunal expressly adopted the approach advocated by Burchett J in Cavell v Repatriation Commission (1988) 9 AAR 534 at 539. His Honour said that such a decision, '[S]hould not be made upon nice philosophical distinctions, but with an eye to reality, and as a matter in respect of which common sense is the proper guide.' 12 The Tribunal expressed its findings as follows: 'The Tribunal is therefore satisfied that the applicant, for the last ten years or so of his working life, undertook a number of jobs all of which he ceased for reasons other than his war-caused injury/disease.' … [T]he Tribunal is reasonably satisfied that the applicant ceased … to engage in remunerative work for reasons other than his incapacity from war-caused injury or war-caused disease and the Tribunal finds that the veteran is not suffering a loss of salary or wages or of earnings on his account by reason of his war-caused incapacity.' On the basis of the above findings the Tribunal concluded that the applicant could not meet the requirements of s 24(1)(c) of the Act, specifically the second limb see ([14] – [15] below) and therefore was not entitled to be paid a pension at the special rate. This appeal 13 In Flentjar v Repatriation Commission (1997) 48 ALD 1 ('Flentjar') Branson J (with whom Beaumont and Merkel JJ agreed), at 4–5, identified four questions pertinent to the application of s 24(1)(c) of the Act: '1. What was the relevant "remunerative work that the veteran was undertaking" within the meaning of s 24(1)(c) of the Act? 2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work? 3. If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work? 4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?' 14 These questions are a helpful guide to the application of s 24(1)(c) but it is clear that they were not intended, and must not be used, as a substitute for a consideration of the actual words of the Act. Relevant to the construction of s 24(1)(c) is s 24(2), sometimes referred to as an 'ameliorating' provision. The relationship between the two subsections is complex and, like Finn J in Leane v Repatriation Commission [2003] FCA 889 at [7], I find it helpful to approach the problem in the manner of Nicholson J in Forbes v Repatriation Commission (2000) 101 FCR 50 at 52-3. Nicholson J said of s 24(1)(c): 'That paragraph is best understood by dividing it into its two limbs and relating those limbs to the relevant portions of what follows in s 24(2). The first limb of s 24(1)(c) reads: "(c) the 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 …" That limb must be read subject to the application of s 24(2)(b) which reads: "(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, 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." The second limb of s 24(1)(c) reads: "(c) … is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and" This is to be read in conjunction with s 24(2)(a) which provides: "(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, 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".' 15 Both limbs of s 24(1)(c) must be satisfied if the section is to apply to a veteran. In this case the Tribunal decided that the second limb of s 24(1)(c), read in conjunction with s 24(2)(a) was not satisfied. The Tribunal decided that the applicant could not be taken as suffering a loss of salary or wages or earnings on his own account as it was not satisfied that he had ceased to engage in remunerative work because of his war-caused disabilities. Although the Tribunal referred to the submissions that had been put to it concerning the application of the first limb of s 24(1)(c) and the factual issues relevant to that issue, it expressly based its decision on the applicant's failure to meet the requirements of the second limb. Its finding in relation to the second limb was fatal to the applicant's claim. 16 The applicant does not suggest that the Tribunal applied the wrong legal principles or that it misdirected itself in the application of the correct legal principles. Nor did the applicant allege any lack of bona fides on the part of the Tribunal. Rather, as counsel for the respondent submits, 'the appeal asserts that the Tribunal reached a conclusion that was not open and was against the weight of the evidence'. 17 Counsel for the applicant acknowledged the difficulties that this case poses for his client in light of s 44(1) of the AAT Act which is discussed below. Section 44(1) states: 'A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.' In TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 Gummow J, at 178, contrasted s 44(1) with the old s 196 of the Income Tax Assessment Act 1936 (Cth). That section provided for appeals from the Board of Review which 'involved' a question of law: 'The result was that if some question of law was involved, the whole of the decision of the Board was open to review, not merely the question of law. … That is to say, if the condition as to jurisdiction were met, (that is there was a question of law involved) the whole of the "matter" or controversy between the taxpayer and the Commissioner came before the court. This no longer will be the case with appeals brought to this court under s 44 of the AAT Act. The existence of a question of law is … not merely a qualifying condition to ground the appeal, but also the subject matter of the appeal itself…' 18 In the light of these comments and the frank concession of counsel noted at [16] above, it is difficult to see how the jurisdiction of the Court under s 44(1) is enlivened. If the applicant's case amounts to an invitation for this Court to engage in merits review it must fail. 19 The applicant's counsel submitted that although the Tribunal accepted the medical evidence it did not properly consider this evidence and the failure to do so led the Tribunal to the wrong conclusion. In other words, it was submitted that the Tribunal has not engaged in the reasoning process necessary to sustain its conclusion. The applicant's argument is essentially that, on the evidence, the Tribunal could not, had it properly performed its task, reached the conclusion that it did. 20 A similar claim to that made here was made in Repatriation Commission v Hendy [2002] FCAFC 424. In relation to a claim that the Tribunal in that case misunderstood the medical evidence or failed to give adequate reasons explaining the process by which it reached its decision, the Full Court said at [33]: 'While it may be an error of law for an administrative decision-maker to fail to give proper, genuine and realistic consideration to the question before it, reaching an erroneous conclusion after a genuine consideration of the evidence is not an error of law.' 21 In its written reasons the Tribunal summarised the medical evidence as previously quoted (see [6] above) however, there is little discussion of that evidence. As summarised by the Tribunal and as documented in the court book, the medical evidence shows that the experts were essentially in agreement on a number of issues, namely: (a) that the applicant's back injury would prevent him from returning to work as a marine engineer and from doing the type of work he had done at BHP, at Condreco, in New Guinea and in the fishing partnership with Mr Harry Jenkins; (b) that the applicant's back injury would not prevent him doing approximately four hours work daily of some lighter kind – various options being suggested; and (c) that the applicant's war-caused psychological disabilities totally incapacitate him from undertaking remunerative work. The evidence before the Tribunal also showed that the precipitating cause of the applicant ceasing to engage in remunerative work was the injury to his back. 22 Given the extent of agreement between the medical experts, the Tribunal cannot be criticised for accepting the medical evidence with little comment. It must also be remembered that the medical evidence was not the only evidence before the Tribunal. There was also the evidence of the applicant concerning his employment history. It was this history, in combination with the medical evidence, that was crucial to the Tribunal's conclusion in respect of the second limb of s 24(1)(c). 23 The evidence showed not only that the applicant was not able to return to work as a marine engineer as a result of his back injury but that he had not worked at all since that injury. The Tribunal commented in respect of the applicant's employment with Pioneer Concrete ceasing: 'It is clear from the letter from Pioneer Concrete terminating his services that it was on his advice that his back injury precluded him from resuming his duties in the foreseeable future, that the company was no longer prepared to hold his job vacant.' 24 Counsel for the respondent accepted that ceasing to engage in remunerative work is wider than ceasing to do a particular job but submitted that the reason why a veteran left his or her last job is nonetheless relevant. I accept that this is so. In this case however, the Tribunal also based its decision on the applicant's own evidence as to why he was not able to set up his own business, namely his inability to secure capital for the purpose. The Tribunal also pointed to the applicant's evidence as to why he left his job in New Guinea, namely that he did not like the way of life. 25 Given the above analysis, the claim that there was no evidence to support the Tribunal's conclusion or that no reasonable Tribunal could have come to that conclusion cannot be sustained. The Tribunal undertook the task that was required of it; it considered the evidence before it and, on the basis of that evidence, formed its own view of the merits of the Tribunal's claim. It is not to the point that another person might have decided the matter differently. 26 For these reasons I consider that the application by way of appeal should be dismissed with costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. Associate: Dated: 30 January 2004 Counsel for the Applicant: Mr R Clutterbuck Solicitor for the Applicant: Streeting Haney Lawyers Counsel for the Respondent: Mr R Derrington Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 26 November 2003 Date of Judgment: 30 January 2004