FEDERAL COURT OF AUSTRALIA Repatriation Commission v Sergeant [2007] FCA 1408 VETERANS ENTITLEMENTS – appeal from the Administrative Appeals Tribunal – application of the four-step test articulated by the Full Court of the Federal Court in Repatriation Commission v Deledio (1998) 83 FCR 82 – Tribunal did not identify the relevant hypothesis – even if hypothesis could be identified all the links in the hypothesis were not supported by Statements of Principles – conceded by the respondent's counsel – guidance for the Tribunal in rehearing the matter COSTS–whether the Court should exercise its discretion pursuant to section 6 Federal Proceedings (Costs) Act 1981 (Cth) to grant a costs certificate – relevance of respondent's husband being a war veteran – whether new issue of law arose – whether costs limited by respondent's concessions – timing of concessions Held: Appeal allowed. The matter be remitted for hearing. No costs certificate granted. The respondent pay the applicant's costs of the appeal. Federal Proceedings (Costs) Act 1981 (Cth) s 6 Veterans' Entitlements Act 1986 (Cth) s 9 McKenna v Repatriation Commission (1999) 86 FCR 144 applied Repatriation Commission v Cornelius [2002] FCA 930 referred to Repatriation Commission v Deledio (1998) 83 FCR 82 applied REPATRIATION COMMISSION v JOYCE SERGEANT QUD111 OF 2007 COLLIER J 10 SEPTEMBER 2007 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QUD111 OF 2007 BETWEEN: REPATRIATION COMMISSION Applicant AND: JOYCE SERGEANT Respondent JUDGE: COLLIER J DATE OF ORDER: 10 SEPTEMBER 2007 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The decision of the Tribunal whereby the Tribunal set aside the decision of the Veterans' Review Board made on 22 November 2005 and decided "that the death of the late Mr Charles Sergeant is war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986" be set aside. 2. The matter be remitted to the Tribunal to have the question whether the death of the late Mr Charles Sergeant is war-caused heard and decided again. 3. The respondent pay the applicant's costs of the appeal. 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 QUD111 OF 2007 BETWEEN: REPATRIATION COMMISSION Applicant AND: JOYCE SERGEANT Respondent JUDGE: COLLIER J DATE: 10 SEPTEMBER 2007 PLACE: BRISBANE REASONS FOR JUDGMENT 1 On 5 September 2007 this matter came before me for hearing. At the hearing I ordered that the decision of the Administrative Appeals Tribunal ("the Tribunal") in this matter be set aside and the matter be remitted to the Tribunal for rehearing, and reserved my decision as to costs. Although this order followed a concession by counsel for Ms Sergeant that the matter should be remitted to the Tribunal, I informed counsel that I would provide short reasons for the decision to assist the Tribunal at the rehearing. This judgment contains those reasons, in addition to my decision as to costs in this matter. Background 2 The decision under review is a decision of Tribunal constituted by Senior Member McDermott delivered 21 March 2007. The Tribunal had set aside the decision of the Veterans Review Board of 25 November 2005, which had affirmed the decision of the Repatriation Commission dated 27 September 2004. In making its decision, the Tribunal found that the death of a Veteran, Mr Charles Harvey Michael Sergeant, on 28 April 2004 aged 78 years, was war-caused within the meaning of s 9 Veterans' Entitlements Act 1986 (Cth) ("the Act"). The respondent, Mrs Sergeant, is the widow of the Veteran. 3 In this Court, the applicant Repatriation Commission sought the following orders: 1. the decision of the Tribunal whereby the Tribunal set aside the decision of the Veterans' Review Board made on 22 November 2005 and decided "that the death of the late Mr Charles Sergeant is war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986" be set aside. 2. the matter be remitted to the Tribunal to have the question whether the death of the late Mr Charles Sergeant is war-caused heard and decided again. 3. the respondent pay the applicant's costs of the appeal. The hearing 4 The course of reasoning which ss 120 and 120A of the Act require a decision-maker to take in relation to a claim lodged under the Act for a pension arising out of operational service rendered by a Veteran was authoritatively articulated by the Full Court in Repatriation Commission v Deledio (1998) 83 FCR 82. The relevant principles are as follows: 1. The Tribunal must consider all the material which is before it and determine whether that material points to a hypothesis connecting the injury, disease or death with the circumstances of the particular service rendered by the person. No question of fact finding arises at this stage. If no such hypothesis arises, the application must fail. 2. If the material does raise such a hypothesis, the Tribunal must then ascertain whether there is in force a Statement of Principles determined by the Authority under s 196B(2) or (11). If no such Statement of Principles is in force, the hypothesis will be taken not to be reasonable and, in consequence, the application must fail. 3. If a Statement of Principles is in force, the Tribunal must then form the opinion whether the hypothesis raised is a reasonable one. It will do so if the hypothesis fits, that is to say, is consistent with the "template" to be found in the Statement of Principles. The hypothesis raised before it must thus contain one or more of the factors which the Authority has determined to be the minimum which must exist, and be related to the person's service (as required by ss 196B(2)(d) and (e)). If the hypothesis does contain these factors, it could neither be said to be contrary to proved or known scientific facts, nor otherwise fanciful. If the hypothesis fails to fit within the template, it will be deemed not to be "reasonable" and the claim will fail. 4. The Tribunal must then proceed to consider under s 120(1) whether it is satisfied beyond reasonable doubt that the death was not war-caused, or in the case of a claim for incapacity, that the incapacity did not arise from a war-caused injury. If not so satisfied, the claim must succeed. If the Tribunal is so satisfied, the claim must fail. It is only at this stage of the process that the Tribunal will be required to find facts from the material before it. In so doing, no question of onus of proof or the application of any presumption will be involved. 5 I note that, in interpreting and applying ss 120(3) and 120A(3) of the Act, the Tribunal is required to ask and answer the question whether there is in force a Statement of Principles, or multiple Statements of Principles, determined under s 196B of the Act, that upholds the whole, not just part, of the Veteran's hypothesis: McKenna v Repatriation Commission (1999) 86 FCR 144 at 150-151. Further, a relevant hypothesis must consist of a link or links which connect, at one end, the type of death suffered by the Veteran, which is the basis of the claim under the Act, with, at the other end, the circumstances of the particular service rendered by the Veteran: McKenna 86 FCR at 151. Each of these links must be upheld by a Statement of Principles and, if need be, more than one Statement of Principles: McKenna 86 FCR at 151. 6 In this case the cause of death on the Veteran's death certificate was stated to be: "1. (a) ?Cerebrovascular accident with ?seizure (b) Hypertension (c) Epilepsy 2. Ischaemic heart disease, cerebral haemorrhage, transient ischaemic attack." Findings of the Tribunal 7 In this case the Tribunal found that: · on the balance of probabilities, a cerebrovascular accident was a main cause of the death of the Veteran (Tribunal decision at [16]); and · the whole of the material pointed to a hypothesis connecting the death of the Veteran with the circumstances of his service, and accordingly the first Deledio step was satisfied (Tribunal decision at [39]). 8 The Tribunal did not identify the relevant hypothesis. This was conceded by the respondent. However, as Ms Bowskill for the applicant submitted, the relevant hypothesis may be inferred as: · that the Veteran's death was caused by cerebrovascular accident · the cerebrovascular accident was caused by hypertension · the hypertension was caused by either an anxiety disorder or panic disorder suffered by the Veteran · the anxiety disorder or panic disorder was caused by the Veteran's operational service. 9 The Tribunal identified that three Statements of Principles were relevant in relation to this claim, namely: · Statement of Principles for Cerebrovascular Accident (Instrument No 57 of 2003 and Instrument No 51 of 2006) · Statement of Principles for Ischaemic Heart Disease (Instrument No 53 of 2003, as amended by Instrument No 9 of 2004) · Statement of Principles for Hypertension (Instrument No 35, as amended by Instrument No 3 of 2004). 10 I note that the Tribunal in its decision referred to these Statements of Principles as relevant to a hypothesis connecting the death of the Veteran to the circumstances of the case, and found that in this respect the second Deledio step was satisfied (Tribunal decision at [41]). Necessity to consider all "links" in hypothesis 11 Ms Bowskill for the applicant submitted that the Act requires more than a factual linking between, in this case, hypertension and operational service. As made clear in McKenna 86 FCR 144, all "links" in the hypothesis must be supported by Statements of Principles. Accordingly, having regard to the links contained in the hypothesis advanced before the Tribunal in addition to the three Statements of Principle already mentioned, it was also necessary for the Tribunal to have regard to the Statements of Principles concerning anxiety disorder (Instrument No 1 of 2000) and panic disorder (Instrument No 9 of 1999). However, no reference was made by the Tribunal to the Statements of Principles concerning anxiety disorder and panic disorder. Accordingly, it follows from that submission that, contrary to the finding of the Tribunal, the second Deledio step was not satisfied. 12 Ms Skennar for the respondent conceded that the Tribunal did not specifically identify the hypothesis upon which it relied. Ms Skennar submitted that the hypothesis identified by Ms Bowskill was one hypothesis that could be inferred from the Tribunal's reasons, although there were other hypotheses which could also be inferred. In particular, an alternative submission which was made in writing by Ms Skennar was that the hypothesis in this case was reasonable because the Tribunal at [19] specifically identified the ingestion of salt from the time of the Veteran's operational service as a factor in the Statement of Principles for Hypertension upon which reliance could be placed in reviewing the decision of the Veterans Review Board. Ms Skennar submitted that, while there was no specific expression of the ingestion of salt being the basis for hypertension, nonetheless the Tribunal found on the material available that hypertension was satisfied and therefore it was open to the Tribunal to find that the hypothesis was reasonable. However as submitted by Ms Bowskill, it is clear from the transcript of the hearing before the Tribunal that the possibility that the Veteran's hypertension was caused by the ingestion of salt, which could be related back to his war service, was specifically not pressed by counsel for the respondent before the Tribunal. I note that counsel before the Tribunal was not Ms Skennar. However, I accept the submission by Ms Bowskill that the issue concerning the ingestion of salt was unambiguously abandoned by Counsel at the hearing (transcript before the Tribunal, 4 October 2006, p 55 l 24). 13 Critically, Ms Skennar conceded that, if I were to accept that the no hypothesis had been identified by the Tribunal which connected the hypertension with the Veteran's operational service, the appropriate order was that the matter should be remitted to the Tribunal for a rehearing. 14 In my view it is appropriate that the decision of the Tribunal be set aside and the matter be remitted to the Tribunal for a rehearing, not only for the reason conceded by Ms Skennar, but also on the basis that, to the extent that any hypothesis is identifiable in circumstances where the Tribunal has not specifically identified an hypothesis, the Tribunal has not properly identified and addressed Statements of Principles that uphold the whole of that hypothesis. If, for example, the hypertension of the Veteran was caused by anxiety or a panic disorder, that link in the hypothesis needs to be supported by the relevant Statements of Principles. The link between the war service and the hypertension is not substantiated nor supported by identified Statements of Principles in these proceedings as required by McKenna 86 FCR 144. In any event, I also note that any possible hypothesis referable to ingestion of salt by the Veteran could not, in circumstances where the point was unequivocally abandoned, have properly formed the basis for decision by the Tribunal. Costs 15 In light of the usual rule that costs follow the event, the success of the Repatriation Commission, and the fact that the Repatriation Commission has sought an order that its costs be paid by the respondent, it follows that an appropriate order is that the Repatriation Commission's costs of the appeal be met by the respondent. However at the hearing, Ms Skennar for the respondent submitted that the Court should exercise its discretion pursuant to s 6 Federal Proceedings (Costs) Act 1981 (Cth) to grant a costs certificate. Section 6 provides, so far as relevant: "(1) Subject to this Act, where a Federal appeal succeeds on a question of law, the court that heard the appeal may, on the application of a respondent to the appeal, grant to the respondent a costs certificate in respect of the appeal. ... (3) The certificate that may be granted under subsection (1) or (2) by a court to a respondent to a Federal appeal is a certificate stating that, in the opinion of the court, it would be appropriate for the Attorney-General to authorise a payment under this Act to the respondent in respect of: (a) the costs incurred by the respondent in relation to the appeal; and (b) any costs incurred by an appellant in relation to the appeal that have been, or are required to be, paid by the respondent to the appellant in pursuance of an order of the court, not being costs to which a costs certificate granted under section 7 relates." 16 It is not in contention that s 6 is enlivened in this case. The matter before me is a Federal appeal, and it has succeeded on a question of law. The issue however is whether the Court should exercise its discretion to grant the certificate. 17 In summary, Ms Skennar has submitted that relevant factors for the Court to consider in exercising its discretion are: · the fact that the respondent's husband was a war veteran: Repatriation Commission v Cornelius [2002] FCA 930 · by making appropriate concessions, the respondent limited the appeal to a short point · although no new issue of law has arisen in this matter, the appeal results in a confirmation of the steps that must be taken in considering an application such as this, particularly in circumstances where there is more than one hypothesis connecting the veteran's death to his war service · the critical issue in this matter is that the Tribunal failed to give appropriate reasons identifying each of the steps taken · a further concession in relation to the ingestion of salt might have been forthcoming if the Repatriation Commission had provided further submissions with respect to the hearing before the Tribunal to Ms Skennar prior to the hearing before this Court, rather than providing relevant documents to her the morning of the hearing. 18 However, Ms Bowskill for the applicant submitted in summary that the Court should not exercise its discretion pursuant to s 6 because: · appeals of this nature from the Tribunal only involve questions of law, so they can only ever succeed on a question of law · the material with respect to the ingestion of salt, in particular the transcript of the hearing before the Tribunal, was material to which the respondent's legal representatives would already have had access · the decision of Branson J in Cornelius [2002] FCA 930 serves to support the submission that it is not appropriate to grant a costs certificate in this case. 19 In my view there are no circumstances in this case which warrant departure from the usual rule that costs follow the event. I make this finding for the following reasons. 20 First, as pointed out by Branson J in Cornelius [2002] FCA 930, a submission that a costs certificate should be granted only because a Veteran is a party to the proceeding, is not sustainable. Her Honour continued: "I am unable to discern any such legislative intent in the Act. Section 6 of the Act, in my view, requires that each application for a certificate, including each application made on behalf of a war veteran, be considered individually and on its merit. [9] This is not to discount the significance of 'the special contribution made by war veterans to protecting Australian society in time of war'. Parliament has given recognition to this special contribution in the Veterans' Entitlements Act 1986 (Cth) by, amongst other things, providing for a relatively low standard of proof to be applied in the determination of whether a veteran's death, injury or disease is war-caused. The Executive Government has given recognition to the special contribution in the formulation of the Commonwealth guidelines for the administration of legal aid. It seems to me that the status of a respondent as a war veteran is a factor which may be taken into account in the exercise of the discretion to grant a certificate under s 6 of the Act. However, I am not persuaded that it is a factor which either compels, or necessarily suggests strongly in favour of, the grant of a certificate. As indicated above, each application must be considered on its merits. [10]" 21 Second, although it is commendable that the respondent made appropriate concessions thus limiting the appeal to a short point, the obvious response is that such an approach has the beneficial effect of limiting costs which may arise in the appeal rather than justifying a complete relief from the obligation to pay costs. 22 Third, no new issue of law arose in this litigation, and indeed I have found that the reasons for setting aside the decision of the Tribunal were that not only was there a failure to articulate a hypothesis as required by the first Deledio step, but also that relevant Statements of Principles had not been identified to support each link in that hypothesis as required by the second Deledio step. 23 Finally, although I understand Ms Skennar's submission concerning the stage in the proceedings before me at which the Repatriation Commission had drawn her attention to concessions made by the respondent's counsel below, in my view this is answered by Ms Bowskill's submission that the material with respect to the ingestion of salt, in particular the transcript of the hearing before the Tribunal, was material to which the respondent's legal representatives - in particular the solicitors - would already have had access. 24 As no circumstances exist which warrant the Court exercising its discretion pursuant to s 6 Federal Proceedings (Costs) Act 1981 (Cth), the appropriate order is that the respondent pay the applicant's costs of the appeal. THE COURT ORDERS THAT: 1. The decision of the Tribunal whereby the Tribunal set aside the decision of the Veterans' Review Board made on 22 November 2005 and decided "that the death of the late Mr Charles Sergeant is war-caused within the meaning of s 9 of the Veterans' Entitlements Act 1986" be set aside. 2. The matter be remitted to the Tribunal to have the question whether the death of the late Mr Charles Sergeant is war-caused heard and decided again. 3. The respondent pay the applicant's costs of the appeal. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. Associate: Dated: 10 September 2007 Counsel for the Applicant: H Bowskill Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: D Skennar Solicitor for the Respondent: Files Stibbe Date of Hearing: 5 September 2007 Date of Judgment: 10 September 2007