Smith and Repatriation Commission [2015] AATA 27 (21 January 2015)

Last Updated: 21 January 2015

[2015] AATA 27

Division VETERANS’ APPEALS DIVISION

File Number 2010/3388

Re Kenneth Smith

APPLICANT

And Repatriation Commission

RESPONDENT

DECISION

Tribunal Deputy President S A Forgie

Date 21 January 2015

Place Melbourne

The Tribunal decides to:

(1) set aside the respondent’s decision dated 28 May 2009; and

(2) substitute a decision that the applicant is entitled to be paid disability pension at the special rate under s 24 of the Veterans’ Entitlements Act 1986 with effect from 31 December 2008.

...[sgd] S A Forgie...

Deputy President

CATCHWORDS – VETERANS’ AFFAIRS – remittal – general disability pension paid to veteran – application for increase in rate – accepted PTSD war-caused injury – whether veteran by reason of incapacity alone prevented from continuing to undertake remunerative work and so is suffering loss of salary or wages or earnings – veteran satisfied s 24(1)(c) –decision set aside

CATCHWORDS – VETERANS’ AFFAIRS – interpretation of the law – differing roles assigned to courts and Tribunal – need for an administrative decision-maker to identify principles underlying conclusions of law in order to apply it in reaching decisions on related issues – examination of principles underlying separate judgments given by Full Court of Federal Court

LEGISLATION

Acts Interpretation Act 1901; section 15AB

Administrative Appeals Tribunal 1975; sections 37, 44

Repatriation Act 1920; Schedule 2

Repatriation Legislation Amendment Act 1985

Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994

Veterans’ Entitlements Act 1986; sections 5C,5D, 5Q, 6C, 7, 9, 13, 14, 15, 18, 19, 21, 21A, 22, 23, 24, 24A, 25,120

Veterans’ Entitlement Bill 1985

Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Bill 1994

CASES

Attorney-General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1; 93 ALR 1; 64 ALJR 327; 18 ALD 77

Banovich v Repatriation Commission [1986] FCA 397; (1986) 69 ALR 395; 6 AAR 113

Brennan v Comcare [1994] FCA 1147; (1994) 50 FCR 555

CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; 141 ALR 618

Collector of Customs v Agfa-Gevaert Ltd [1996] HCA 36; (1996) 186 CLR 389; 141 ALR 59; 43 ALD 193; 35 ATR 249; 24 AAR 282

Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135; 169 ALR 400; 74 ALJR 490; 60 ALD 342; 106 LGERA 419

Damjanovic & Sons Pty Ltd v The Commonwealth [1968] HCA 42; (1968) 117 CLR 390

Federal Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Ltd [2007] FCAFC 16; (2007) 158 FCR 325

Flentjar v Repatriation Commission [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93

Giesen v Repatriation Commission [2005] FCA 846; (2005) 216 FCR 435; 87 ALD 347

Hendy v Repatriation Commission [2002] FCA 602; (2002) 72 ALD 112

Leane v Repatriation Commission [2004] FCAFC 83; (2004) 81 ALD 625

Ogden Industries Pty Ltd v Lucas [1970] AC 113; 3 WLR 75

Repatriation Commission v Connell [2011] FCAFC 116; (2011) 197 FCR 228; 123 ALD 440

Repatriation Commission v Nation [1995] FCA 1277; (1995) 57 FCR 25; 21 AAR 351

Repatriation Commission v Richmond [2014] FCAFC 124

Repatriation Commission v Smith (1987) 15 FCR 327; 74 ALR 537; 7 AAR 17

Re Flentjar and Repatriation Commission [1995] AATA 273

Smith v Repatriation Commission [2012] FCA 1043; (2012) 131 ALD 63

Smith v Repatriation Commission [2014] FCAFC 53

Starcevich v Repatriation Commission [1987] FCA 342; (1987) 18 FCR 221; 76 ALR 449; 14 ALD 160; 7 AAR 296

OTHER MATERIALS

Chambers 21^st Century Dictionary, 1999, reprinted 2004, Chambers

REASONS FOR DECISION

1. A differently constituted Tribunal affirmed the decision of the Repatriation Commission (Commission) refusing to pay Mr Smith a disability pension under the Veterans’ Entitlements Act 1986 (VE Act) at either the special rate or the intermediate rate. It did so in a decision given on 16 February 2012. An appeal against its decision was dismissed by the Federal Court in a judgment delivered on 19 September 2012^[1] but an appeal against that judgment was allowed by the Full Court of the Federal Court on 1 May 2014 (Smith).^[2] In view of concessions made by the Commission, the only issue is whether Mr Smith meets the criteria specified in s 24(1)(c) for payment of pension at the special rate or, if he does not, whether he meets those specified in ss 23(1)(c) for payment at the intermediate rate. I have decided to set aside the Commission’s decision dated 28 May 2009 and to substitute a decision that Mr Smith is entitled to be paid disability pension at the special rate under s 24 of the VE Act with effect from 31 December 2008.

2. In the course of reaching that decision, I have considered the task I have been given by the Full Court in remitting the matter. That is a matter I raised with the parties during the hearing. The task requires me to identify the law that I am required to apply. Where the law is in legislative form that has been interpreted by the High Court or Federal Court, the Tribunal is bound to apply that law. It cannot turn to the words of the legislation concerned and come to its own interpretation. The practical considerations associated with applying the law in situations raising varying evidentiary patterns requires an understanding of the principles that underpin any interpretation that the High Court or Federal Court has adopted. Therefore, I have explored the principles underpinning the judgment of the Full Court of the Federal Court in this case.

THE TASK ON REMITTAL

3. The Full Court made the following order:

“1. The appeal be allowed.

2. The orders made by the primary judge on 19 September 2012 be set aside and in lieu thereof it be ordered that:

(1) the decision of the Administrative Appeals Tribunal made on 16 February 2012 be set aside and the matter be remitted to the Administrative Appeals Tribunal to hear and consider the matter according to law;

(2) the respondent pay the applicant’s costs.

3. By consent, the respondent pay the appellant’s costs.”^[3]

4. The Full Court’s power to make these orders is found in ss 44(4) and (5) of the Administrative Appeals Tribunal Act 1975 (AAT Act):

“(4) The Federal Court of Australia shall hear and determine the appeal and may make such order as it thinks appropriate by reason of its decision.

(5) Without limiting by implication the generality of subsection (4), the orders that may be made by the Federal Court of Australia on an appeal include an order affirming or setting aside the decision of the Tribunal and an order remitting the case to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the Court.”

5. In so far as the power of remittal is concerned, s 44(5) has chosen to express the power in terms of the Court’s being able to make “an order remitting the case to be heard and decided again” (emphasis added). The Full Court has chosen to remit the “matter” but it is open to conclude that:

“ Although the Court’s order referred to the ‘matter’ rather than the ‘case’, it appears that an order of the kind provided by s 44(5) was intended. As a matter of power, s 44(4) would, in any event, have authorised an order in the terms of the order made.”^[4]

6. That does not determine the scope of the “matter” which the Full Court remitted to the Tribunal. Has it remitted only those matters on which it found the Tribunal to have made an error of law or has it remitted all matters raised by the Commission’s decision on Mr Smith’s claim to be paid disability pension at an increased rate? In Repatriation Commission v Nation, Beaumont J stated the rule. Omitting citations, his Honour said:

“ The rule in England is that when a judgment is clear as to its terms, not even the pleadings nor the history of the action may be utilised to construe the judgment contrary to its clear meaning .... Where, however, the judgment or order is ambiguous, it may be permissible to resort to extrinsic material, including the reasons for judgment, to resolve the ambiguity ....

A similar approach has been taken in this country. If, as in the case of a ‘speaking’ order ... its true meaning is ‘immediately plain’, the terms of the order will speak for themselves. If this is not the case, its true meaning may be ascertained according to the ordinary rules of construction ... Under the ordinary rules of construction, evidence of surrounding circumstances is admissible to assist in the interpretation of an instrument if the language is ambiguous or susceptible of more than one meaning, but not admissible to contradict the language of the instrument when it has ‘a plain meaning’ ...”^[5]

7. In this case, the word “matter” could be considered to be ambiguous for the duty imposed on the Commission when considering a claim is “to satisfy itself with respect to, or to determine, as the case requires, all matters relevant to the determination of the claim ...”^[6] (emphasis added). When the Commission’s decision has been reviewed and:

“Where the Board, the Administrative Appeals Tribunal or a court makes a decision remitting to the Commission a matter, being:

(a) the assessment of the rate, or increased rate, at which a pension is payable under this Part; or
(b) the fixing of the date as from which a decision of the Board, the Administrative Appeals Tribunal or the court is to operate;

it is the duty of the Commission to determine that matter having regard to the provisions of this Act and the reasons of the Board, the Administrative Appeals Tribunal or the court, as the case may be, for that decision.”^[7]

8. Any doubt is quickly resolved when reference is had to the judgments of Buchanan J, with whom Rares J agreed, and Foster J. Buchanan J expressed the order that he would make in relation to matters other than costs in this way:

“ I would uphold the appeal, set aside the decision of the AAT and remit the matter for further consideration by the AAT of the whole of the appellant’s application. ...”^[8] (emphasis added)

Apart from costs, Foster J decided that the appeal should be allowed and:

“... The matter should be remitted to the Tribunal for further consideration by it according to law and in light of the Full Court’s judgment. That further consideration should relate to the whole of the appellant’s application for a pension increase. ...”^[9] (emphasis added)

Clearly, then, I must review all of the matters that are raised by Mr Smith’s application for an increase in the rate at which he is paid a disability pension.

BACKGROUND

9. There was no disagreement between the parties regarding a number of factual matters. In light of that and on the basis of the evidentiary material, I set out the findings of fact I have made on those matters.

10. Mr Smith was born on 9 January 1949 and was, when he lodged his claim for an increase in his disability pension, aged 60 years. The Commission has accepted that he was suffering from Bilateral Sensorineural Hearing Loss, Bilateral Tinnitus, Post Traumatic Stress Disorder, Solar Keratosis and Tinea. It has also accepted that each is war-caused for the purposes of the VE Act. He has been paid disability pension at 100% of the general rate since 8 March 2006. On 31 March 2009, Mr Smith applied for an increase in the rate of payment for his conditions but his application was refused by the Commission. Its decision has been affirmed by the Veterans’ Review Board on 13 July 2010 leading to the applications and appeals outlined in my opening paragraph.

11. Mr Smith left school when he had completed the equivalent of Year 11 and then undertook and completed an electrical mechanic’s apprenticeship with the Ford Motor Company. Mr Smith was called up for National Service in April 1970. After his discharge in January 1972, he returned to work with the Ford Motor Company for a fortnight or so before working with a variety of employers. I have set out further details of those employers when setting out Mr Smith’s evidence.

12. In April 1982, Mr Smith was working with Central Queensland Coal Associates when he was struck by a vehicle and suffered a crushing injury. As a result, his left leg was amputated above the knee and he also suffered injuries to his right tibia and left fibula. For the next five years or so, Mr Smith was incapacitated for work. He continues to suffer a permanent residual disability as a result of the amputation and as a result of injury to his right ankle.

13. In approximately 1987, Mr and Mrs Smith returned to Victoria where they purchased a farming property of some 500 acres on the Bellarine Peninsula. Mr Smith had some experience in farming as he had grown up on a dairy farm. He said that his grandfather had worked for the owner of the farm that he grew up on. His father share farmed that farm with the owner. Mr Smith would work with his father in his holidays.

14. Mr and Mrs Smith operated a farming business in partnership until 1998 when they sold approximately 330 acres. They continued to own the remaining 167 acres and to run a few cows. For a brief period, Mr Smith worked as an electrical installer but he and his wife then returned to Queensland where he was employed as an electrical fitter mechanic. Mr Smith’s father, who had been a farmer for some 21 years, looked after the cows and the remaining acres and Mr and Mrs Smith returned at Christmas time to help.

15. Mr Smith’s work in Queensland required him to be available at all hours of the day to help other employees with their problems and to cover for them when they were ill. He found it difficult to maintain the other work that was expected of him. Consequently, he returned to the farm on the Bellarine Peninsula in January 2000.

16. Mr Smith completed a Diploma in Office Administration at the Gordon TAFE before taking up employment with Avalon Airport Services. His duties required him to undertake repairs, maintain lighting, signalling and machinery. His contract ended after six months. As Mr Smith understood the position, the funding for his position came to an end.

17. In approximately June 2001, Mr Smith began work for a labour hire company known as “Forstaff” at Avalon Airport. He was seconded to work at Britax Aero Services (Britax). I will return to his work with Britax when I summarise Mr Smith’s evidence. Mr Smith remained with Britax until mid 2003.

18. Mr Smith returned to his work on the farm. He and his wife and son formed a partnership to develop a feedlot business on five acres of the property while continuing to run 60 breeding cattle on the remainder of the property. The partnership incurred establishment costs of the feedlot. It purchased cattle and planned to increase the numbers first to 500 and then to 1,000 over time. In 2006, Mr and Mrs Smith and their son decided to abandon the business and, apart from the house block, the farm was sold in May 2006. Mr Smith has not worked since that date.

LEGISLATIVE FRAMEWORK

19. In this case, what is in issue is the rate at which Mr Smith should be paid a disability pension under the VE Act and not whether he is eligible for a disability pension. Although eligibility is not in issue, I will begin with a brief outline of the legislative provisions that specify when a person is eligible to a disability pension in order to set the scene for those provisions that specify the rate at which it is to be paid.

Eligibility for a disability pension

20. Mr Smith had operational war service in Vietnam from 9 November 1970 to 4 November 1971^[10], and so eligible war service, for the purposes of the VE Act.^[11] He is also a veteran as that term is defined in s 5C(1). Following his claim for a pension under s 14, the Commission accepted that he has war-caused injuries or war-caused diseases as defined in ss 5D and 9. They are bilateral sensorineural hearing loss, bilateral tinnitus, post traumatic stress disorder (PTSD), solar keratosis and tinea. The Commission has accepted that Mr Smith is incapacitated from these conditions. Under the Guide to the Assessment of Rates of Veterans’ Pensions, it has determined that the degree of his incapacity is 100%.^[12] It follows that the Commonwealth is, subject to the VE Act, liable to pay a pension by way of compensation to Mr Smith.^[13] Pension is payable to him at 100% of the general rate of pension as the rate is determined by the degree of his incapacity.^[14]

Increase in disability pension

21. Under s 15, Mr Smith applied for an increase in the rate at which he is paid disability pension to a rate above 100%. He did so on 31 March 2009 when he was 60 years of age. His claim brought into consideration first s 24 and then, if that section is not applicable, s 23 of the VE Act. That follows from the fact that one of the six criteria that must be met before s 23 applies to a veteran is that neither ss 24 nor 25 applies. Section 24 provides for payment of a disability pension at the special rate, which is a rate higher than the intermediate rate provided for in s 23. Section 25 provides for payment of a disability pension at the special rate for a specified period when a veteran is temporarily incapacitated from a war-caused injury or war-caused disease or both and, if that incapacity were permanent, s 24 would apply to determine the rate of payment at the special rate. That is not the situation here as Mr Smith’s incapacity is accepted as permanent. Therefore, s 25 has no part to play in this case.

A. Section 24: special rate

22. Like s 23(1), s 24(1) sets out six criteria that must be met.^[15] Having made a claim, being under the age of 65 years when he did so, suffering a degree of incapacity from his war-caused injuries or war-caused diseases, or both, of at least 70%, and suffering a permanent (and not temporary incapacity as described in s 25), Mr Smith has met four of the six criteria.^[16] That leaves the criteria specified in ss 24(1)(b) and (c).

23. Beginning with s 24(1)(b), it provides that the section applies to a veteran if:

“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”.

24. Section 24(1)(c) must also be satisfied but it must be read with s 24(2). It provides that s 24 applies to a veteran if:

“the veteran is, by reason of incapacity from 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”.

25. Section 24(2) provides that:

“For the purposes 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 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; and

(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not 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 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.”

B. Section 23: intermediate rate

26. Had I decided that Mr Smith is not qualified under s 24(1), I would have turned to s 23(1). I will set those criteria out for completeness. As I have mentioned, s 23(1) sets out six criteria that must be met. Four of them mirror those in ss 24(1)(aa), (aab), (a)(i) and (c) and there is no question that Mr Smith meets them.^[17] That leaves ss 23(1)(b) and (c). Starting with s 23(1)(b), it provides that s 23 applies to a veteran if:

“the veteran’s incapacity from war-caused injury or war-caused disease, or both, is, of itself alone, of such a nature as to render the veteran incapable of undertaking remunerative work otherwise than on a part-time basis or intermittently”.

27. Section 23(1)(b) is qualified by s 23(2):

“Paragraph (1)(b) shall not be taken to be fulfilled in respect of a veteran who is undertaking, or is capable of undertaking, work of a particular kind:

(a) if the veteran undertakes, or is capable of undertaking, that work for 50 per centum or more of the time (excluding overtime) ordinarily worked by persons engaged in work of that kind on a full-time basis; or
(b) in a case where paragraph (a) is inapplicable to the work which the veteran is undertaking or capable of undertaking – if the veteran is undertaking, or is capable of undertaking, that work for 20 or more hours per week.”

28. The other criteria that is in issue in this case is set out in s 23(1)(c), which provides that s 23 applies to a veteran if:

“the veteran is, by reason of incapacity from 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 from that incapacity.”

29. Section 23(3) qualifies s 23(1)(c) when it provides that:

“For the purpose of paragraph (1)(c):

(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, to the extent set out in paragraph (1)(b) 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:

(i) if 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;

(ii) if the veteran is incapacitated, or prevented, from engaging in remunerative work for some other reason; or

(iii) if the veteran has been engaged in remunerative work on a part-time basis or intermittently for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; 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.”

100. Date of determination

30. A veteran’s entitlement to payment of disability pension at one rate or another is not determined at a fixed date such as the date of lodgement of an application for an increase in that rate. It is, instead, assessed by the Commission during a period known as the “assessment period”.^[18] The “assessment period” is the “... period starting on the application day and ending when the ... application is determined.”^[19] The “application day” is, in a case such as this, the day on which a veteran lodges an application for an increase in disability pension.^[20] An “application” is an application under s 15^[21] and such an application must comply with s 15(3).

31. The matters that the Commission must assess when a veteran such as Mr Smith has applied for an increase are set out in s 19(5C). They are:

“(a) the rate or rates at which the pension would have been payable from time to time during the assessment period; and

(b) subject to subsection (6), the rate at which the pension is payable.”

32. Section 19(6), to which paragraph (b) of s 19(5C) is subject, provides that:

“Where the Commission has, pursuant to subsection (5C), assessed that the pension was payable at some time during the assessment period at the rate provided by section 23 or 24 then, subject to section 24A, the rate at which the pension is payable shall not be lower than the rate provided by whichever of those sections applied, or applied most recently, during the assessment period.”

Section 24A provides for the Commonwealth’s continuing liability to pay a disability pension under ss 23 or 24 unless certain circumstances apply.

33. Section 19(6) applies where the Commission has, under s 19(5C), assessed that a pension was payable at some time during the assessment period at the rate provided by ss 23 or 24. It provides that:

“... subject to section 24A, the rate at which the pension is payable shall not be lower than the rate provided by whichever of those sections applied, or applied most recently, during the assessment period.”

34. The Commission may, subject to the VE Act, specify as a date of effect of a determination of an application made under s 15, the date on which an application was made in the form approved under s 15(3)(a). That is the effect of s 21(1) of the VE Act. If a veteran makes an application of a kind referred to in s 15 but not in the approved form, the date on which he or she makes that application may be specified as the date of effect of a subsequent determination provided an application in the approved form is made within three months of the first. That is the effect of s 21(2).

D. Standard of proof

35. I must determine whether Mr Smith is entitled to an increase in his rate of disability pension by reference to my “reasonable satisfaction”.^[22] What is meant by the expression “reasonable satisfaction” in this context has been explained by Beaumont J, with whom Northrop and Spender JJ agreed, in Repatriation Commission v Smith.^[23] His Honour said that the Tribunal:

“... should have asked itself whether on the facts of the case, it was persuaded on the civil standard. There is, in this connection, a distinction of substance to be drawn between the probabilities on the one hand and mere possibilities, even if they are real as distinct from fanciful, on the other (see Re Repatriation Commission and Delkou (No 2) (1986) 9 ALD 358; Re Easton and Repatriation Commission (1987) 12 ALD 777; Re Repatriation Commission and Falkner (1987) 12 ALD 87.”^[24]

WHAT IS THE LAW?

36. There is a considerable amount of earlier authority addressing the issues raised by ss 23 and 24 of the VE Act. The three members of the Full Court in Smith v Repatriation Commission have not referred to it to any great extent. For reasons I set out in Attachment A, their approach is orthodox and unimpeachable. I respectfully suggest, however, that it is not an approach that always assists administrative decision-makers in their task of working out whether authorities that have guided them in the past have continuing relevance and should be regarded as binding upon them. Why I say that will become clearer as I try to identify the principles that each member of the Full Court has relied upon and also have regard to the subsequent judgment of a differently constituted Full Court in Richmond v Repatriation Commission^[25] (Richmond).

General principles relating to the interpretation of ss 24(1)(b) and (c)

37. I have looked first to the general principles established by the Full Court in Smith in interpreting the provisions of ss 24(1)(b) and (c) without reference first to s 24(2). I will return to s 24(2) a little later. As I understand the three judgments, the following general principles can be drawn from them:

(1) “... [T]here are dangers in adapting a distillation of issues based upon particular facts in one case to another case or to cases generally ...”^[26]

(2) “ It is necessary to consider s 24(1) before turning to s 23(1). That is because s 23(1)(d) provides that s 23(1) applies to the veteran only if s 24 does not. ...”^[27]

(3) Sections “... 24(1)(b) and (c) address similar, but distinct, scenarios produced by the effect of the war-caused injury on the veteran’s ability to undertake remunerative work. ...”^[28]

(4) “ It is important that a beneficial provision like s 24(1)(c) be construed in a practical way. This is particularly so in today’s world, where forms of work and occupations are subject to constant change as technology eliminates or reduces some occupations and creates new ones. The expression ‘continuing to undertake remunerative work that the veteran was undertaking’ in s 24(1)(c) must be construed in a realistic and practical way so as to avoid underlying technical constraints on its application to a veteran whose income earning capacity has been completely or significantly impaired.”^[29]

The “Flentjar questions”

38. In deciding the matter, the Tribunal that heard Mr Smith’s application on the first occasion had reached its decision on the issues raised by s 24(1)(c) by reference to four questions formulated by a Full Court of the Federal Court in Flentjar v Repatriation Commission^[30] (Flentjar). I have set out the context in which the Full Court reached that formulation at Attachment B.

39. On appeal, Buchanan J expressed caution about approaching the matter in that way.^[31] The questions posed in Flentjar were:

“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 undertaking 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?”^[32]

40. His Honour said:

“... There is no reason to think that the distillation of the issues in Flentjar was not accurate and perfectly appropriate for that case. However, there are dangers in adapting a distillation of issues based upon particular facts in one case to another case or to cases generally (see also Byrne v Repatriation Commission [2001] FCA 1134 at [11]; Repatriation Commission v Connell [2011] FCAFC 116; (2011) 197 FCR 228 at [31]). I prefer, in the present case, to approach the construction of s 24(1)(c) and its interaction with s 24(2) by reference to the provisions of the Act itself.”^[33]

41. The Full Court in Repatriation Commission v Connell^[34] (Connell) to which Buchanan J referred, had pointed out that, in distilling the issues to be decided in Flentjar, Branson J had never intended them to be more than the issues that were raised by s 24(1)(c) and the evidence in the particular case before her. It described its duty as a duty:

“... to consider the question of law raised by the Repatriation Commission in the context of the issue which divided the parties in the Tribunal. ...”^[35]

42. Having rejected the general relevance of the questions posed in Flentjar, Buchanan J put forward four conditions that he said were comprised within the composite test found when ss 24(1)(b) and (c) are read together. Those conditions were:

“... First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.”^[36]

43. The first condition identified by Buchanan J was not identified by Branson J in Flentjar because, I respectfully suggest, her Honour directed her questions to s 24(1)(c) alone and not to s 24(1)(b). In place of Buchanan J’s first condition, Branson J required the identification of the remunerative work that the veteran was undertaking. That identification is necessary for the application of both s 24(1)(b), as identified by Buchanan J, and s 24(1)(c) as identified by Branson J. Although differently worded, the remaining three conditions identified by Buchanan J are consistent with the remaining three questions posed by Branson J.

44. Buchanan J went on to consider s 24(2) and its clarifying provision in s 24(2)(a) and its ameliorating provision in s 24(2)(b). Branson J had no need to consider s 24(2) as Mr Flentjar met s 24(1)(c) without the need to go to either.

45. In his judgment in Smith, Foster J approached the Flentjar questions differently. After summarising what was required by s 24(1)(c) he said that “These notions or ideas embodied in s 24(1)(c) have been encapsulated in the Flentjar questions.”^[37] He then recited those questions and ended by noting that “The focus must always be addressed when the Court is called upon to determine whether, in a particular case, the requirements of s 24(1)(c) have been satisfied.”^[38]

46. Foster J recognised that s 24(2) must always be addressed when deciding whether the requirements of s 24(1)(c) have been satisfied but made three broad points. First, the subject matter of s 24(2)(a) is separate from that in s 24(2)(b).^[39] Second:

“... A veteran who is caught by s 24(2)(a) would probably not have satisfied the requirements of s 24(1)(c), properly understood, in any event. Section 24(2)(a) should be regarded as an attempt to make crystal clear that s 24(1)(c) requires that the veteran be prevented from engaging in relevant remunerative work by reason of his or her war-caused incapacity. The cessation of work and the financial loss caused by that circumstance must be the consequence of the war-caused incapacity not the result of an independent decision to stop work or the consequence of incapacity brought about by some incident or other matter which is not war-caused.”^[40]

47. The third point made by Foster J about s 24(2) is that:

“ Section 24(2)(b) is an ameliorating provision designed to assist a veteran to comply with the particular requirement set out in s 24(1)(c) to the effect that he or she must establish that he or she has been prevented by reason of the relevant war-caused incapacity from continuing to undertake remunerative work that the veteran was undertaking, even though, absent subs (2)(b) of s 24, he or she would not be able to meet that requirement because he or she has not been engaged in any remunerative work since suffering the relevant incapacity or perhaps has not been prevented from undertaking remunerative work by that incapacity.”^[41]

And later:

“... [W]here the requirements of s 24(1)(c) are met by a veteran according to their terms, there will be no role for s 24(2)(b) to play and no need to resort to that subsection in order to ameliorate the strict application of s 24(1)(c) in an otherwise worthy case.”^[42]

48. It seems to me that Foster J saw the four Flentjar questions as addressing the questions raised by s 24(1)(c) itself and not as attempting to address the questions raised by both ss 24(1)(c) and 24(2). While he recognised that s 24(2)(b) is a provision ameliorating s 24(1)(c) in some circumstances, he also recognised that s 24(1)(c) could be satisfied in some circumstances without recourse to s 24(2). Indeed, he regarded s 24(2)(a) as simply a clarification of what was already stated to be so in s 24(1)(c).

49. In his judgment in Smith, Rares J made no mention of the Flentjar questions. I do not think that he can be taken as adopting Buchanan J’s views unquestioningly. Certainly, he said that he agreed with the orders proposed by Buchanan J and generally with his reasons but it cannot be said that he adopted those reasons. What Rares J said was that he “... prefer[red] to explain in my own words how I consider relevant provisions in the Veterans’ Entitlements Act 1986 (Cth) should be construed.”^[43] In view of his Honour’s approach and his not mentioning the Flentjar questions at all, I do not think that he can be read as disavowing the merit of those questions.

50. If I had only the judgment in Smith, it would seem to me that, despite the reservations expressed by Buchanan J, the approach taken by the Full Court in Flentjar remains equally valid provided it is remembered that it is addressing issues relating to s 24(1)(c) alone without reference to s 24(2) or to s 24(1)(b). The judgment of the Full Court of the Federal Court in Richmond has, however, brought that into question. It did not, however, analyse the conditions that Buchanan J had identified in the application of s 24(1)(c) and compare them with the Flentjar questions. Instead, the Full Court referred only to the passage from Buchanan J’s judgment in which he spoke of the dangers in adapting a distillation of the issues based on the facts in a particular case and his preference for approaching the construction of s 24(1)(c) and its interaction with s 24(2) by reference to the provisions of the VE Act itself.^[44] There can be no doubt about that but it does not acknowledge that administrative tribunals have to apply the law as interpreted by, in this case, the Federal Court. The fact that Buchanan J put forward three conditions that, apart from the first relating to the identification of the remunerative work, would seem, for all practical purposes, to mirror the Flentjar questions, leaves open the status of the conditions he has posed. I respectfully suggest that their status remains unclear in view of the judgment in Richmond.

Identifying the elements of ss 24(1)(b) and (c)

51. Sections 24(1)(b) and (c) are predicated on a veteran’s suffering incapacity from a war-caused injury or war-caused disease, or both, and on the degree of that incapacity’s having been assessed under s 21A to be at least 70%. The reference to incapacity is a reference to the effects of the war-caused injury or war-caused disease and not a reference to the injury or disease itself.^[45] Sections 24(1)(b) and (c):

“... address similar, but distinct, scenarios produced by the effect of the war-caused injury on the veteran’s ability to undertake remunerative work. ... So, if the effect of the war-caused injury has actually caused that loss (i.e. a loss) of income, the veteran will qualify for a special rate of pension.”^[46]

52. Section 24(1)(b) requires that:
    • (1) “... a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. ...”^[47]

(a) In its context, the reference to a veteran’s being “incapable of working” must be read as a reference to a veteran’s being rendered “incapable of undertaking remunerative work” for the requisite period.

(b) “... The effect of the veteran’s war-caused incapacity must have rendered the veteran – i.e. caused him or her to be or become (Macquarie Dictionary online) – incapable or unable of undertaking remunerative work for more than a total of 8 hours per week. Accordingly, the veteran need not be completely unable to perform such work. He or she may be able to perform such work but is limited to doing so for no more than 8 hours per week. ...”^[48]

(2) The expression “remunerative work includes any remunerative activity.”^[49]

53. With regard to s 24(1)(c), the Full Court said in Richmond:

“ Section 24(1)(c) has two main limbs, which may be informed by ss 24(2)(a) and (b). The first limb of the section is:

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 ...

The operation of the limb may be ameliorated to an extent by the operation of s 24(2)(b).

The second limb is:

the veteran ... 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;

The operation of this limb is amplified by s 24(2)(a).”^[50]

54. The Full Court in Richmond approved the statement made by Buchanan J in Smith that:

“Section 24(1)(b) and (c), when read together, state a composite test containing a series of conditions. First, s 24(1)(b) requires that a veteran be rendered, by the war-related incapacity alone, incapable of working more than eight hours per week. Secondly, s 24(1)(c) requires that the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work. Thirdly, s 24(1)(c) requires that prevention for that reason from continuing that work be the cause of a loss of earnings. Fourthly, s 24(1)(c) requires that the loss of earnings would not be suffered but for the incapacity.

The operation of s 24(1)(c) is capable of being informed by the provisions of s 24(2). The overall effect of s 24(1)(c) may be summarised as one which requires a demonstrated loss of earnings as the direct result of the war-related incapacity, and only for that reason ...”.^[51]

55. The first limb of s 24(1)(c) requires that:

(1) “... the remunerative work referred to in the subsection [s 24(1)(c)] must be remunerative work that the veteran was undertaking. ... [T]he remunerative work referred to in s 24(1)(c) is remunerative work undertaken by the veteran before he or she was prevented from continuing to undertake that work as is the type of work which the veteran previously undertook but which, because of war-caused incapacity alone, he or she can no longer undertake. It means any substantive work that the veteran has ever undertaken.”^[52]

(2) “... the veteran be prevented, by that incapacity alone (i.e. not for other reasons) from continuing earlier remunerative work....”^[53]

(a) “ The learned primary judge held that the expression ‘alone, prevented from ... work’ in the first limb of s 24(1)(c) excluded from consideration a factor acting as an incentive or influencing a decision by a veteran voluntarily to cease the relevant remunerative work. In her Honour’s view the prevented element of the alone prevented test could only be satisfied by factors which ‘prohibit, disable or restrain’ the veteran from continuing to engage in the remunerative work and not by factors which induce or provide the veteran an incentive to cease that work.

...

... Having regard to the text of s 24(1)(c) including the ordinary meaning of the words ‘prevented from’, as well as the overall structure of s 24, we respectfully agree with the learned primary judge’s construction of s 24(1)(c). However, we respectfully eschew her Honour’s gloss on the word ‘prevented’ which included statements that satisfaction of the test requires an ‘involuntary barrier’ or requires factors which ‘prohibit, disable or restrain’. In our view the ordinary meaning of ‘prevented’ in s 24(1)(c) is unambiguous and there is no requirement to use other words or expressions.

In understanding the section the focus must remain on the meaning of ‘prevented’, or more particularly ‘prevented from’, rather than on other words or expressions.

...

The Concise Oxford Dictionary relevantly defines ‘prevent’ to mean ‘hinder’, ‘stop’ or ‘preclude’. The Macquarie Dictionary includes the following definitions:

1. to keep from occurring; hinder
2. to hinder (a person, etc) as from doing something: there is nothing to prevent us from going.

...

6. to interpose a hindrance: he will come if nothing prevents it.

The enquiry under the first limb is therefore whether the veteran’s war-caused incapacity alone, prevented, the veteran from continuing to undertake the remunerative work he or she previously engaged in. It is factors that prevent the veteran from engaging in remunerative work that are relevant to the enquiry under the first limb of s 24(1)(c).

On a plain English approach to the provision we do not consider that a veteran is ‘prevented from’ engaging in remunerative work by the veteran’s voluntary or elective decision to cease work for a reason other than incapacity. The ordinary meaning of ‘prevented from’ does not include such voluntary or elective choices ...”^[54]

(i) Factors other than incapacity from a war-caused injury or war-caused disease, or both, that influence a veteran’s decision to cease to engage in remunerative work are to be considered under s 24(2)(a)(i) in considering the second limb of s 24(1)(c).^[55]

56. The operation of the first limb of s 24(1)(c) is moderated by s 24(2)(b):

(1) “... It follows from the scheme of the Act set out earlier that it must be possible to assess the merits of a claim at the date that an application is lodged, on which date the assessment period commences. That is because there is a requirement to assess whether any entitlement arises at any time during the assessment period. That means that it must be open to a veteran to rely upon genuine efforts to find work before the application is made. That would not be possible if the question is to be tested only after the date of the application.”^[56]

(2) “ Section 24(2)(b) provides some relief from the potentially harsh consequences of this arrangement. It applies where remunerative work is not being done. In my view, it accommodates a cessation of earlier remunerative work, as well as a circumstance where a veteran has not worked since injury, or since the development of the incapacity. In all those circumstances, in my view, a veteran may demonstrate genuine efforts to obtain work which are made fruitless by the incapacity. That is, the efforts would continue but for the incapacity and the incapacity is the substantial cause of inability to obtain work. Those circumstances are taken to satisfy the basic test in s 24(1)(c) of being actually prevented by the incapacity from continuing remunerative work. ...”^[57]

(3) “ The veteran must sincerely or honestly do something to attempt or try to engage in remunerative work: Leane v Repatriation Commission [2004] FCAFC 83; (2004) 81 ALD 625 at 632 [28] per Emmett, Conti and Selway JJ. Their Honours held that the word ‘genuinely’ in s 24(2)(b) referred to the subjective intention of the veteran. They said that the way in which a veteran might establish his or her case to satisfy the requirement in s 24(2)(b), that ‘he or she has been genuinely seeking to engage in remunerative work’, was a practical issue. Their Honours held that it was not essential that there be objective signs of active pursuit of remunerative work, although, in the ordinary course, it may be difficult for the veteran to establish the requirement in the absence of such objective material. They gave an example of a veteran who honestly wished to engage in remunerative work, had made a reasonable assessment of his or her disabilities, had reasonably concluded that he or she could only be employed in a particular type of work, was checking employment advertisements on the look-out for such work, but had not yet identified any such employment prospects (81 ALD at 632-633 [29]).”^[58]

(4) “ Section 24(2)(b) is facultative. It can apply both to a veteran who has never been engaged in remunerative work and to one who had, but for any reason, subsequently ceased work, and later sought to obtain remunerative work. ...”^[59]

(a) I discuss this further at Attachment C.

(5) “ The veteran must sincerely or honestly do something to attempt or try to engage in remunerative work: Leane v Repatriation Commission [2004] FCAFC 83; [2004] 81 ALD 625 at 632 [28] per Emmett, Conti and Selway JJ. Their Honours held that the word ‘genuinely’ in s 24(2)(b) referred to the subjective intention of the veteran. They said that the way in which a veteran might establish his or her case to satisfy the requirement of in s 24(2)(b), that ‘he or she has been genuinely seeking to engage in remunerative work’, was a practical issue. Their Honours held that it was not essential that there be objective signs of active pursuit of remunerative work, although in the ordinary course it might be difficult for a veteran to establish the requirement in the absence of such objective material. ...”^[60]

57. The second limb of s 24(1)(c) requires that:

(1) “... prevention for that reason from continuing that work be the cause of a loss of earnings.”^[61]

(2) “... the loss of earnings would not be suffered but for the incapacity.”^[62]

(a) “... Economic loss (i.e. loss of the opportunity for economic gain by way of income) follows naturally enough from this scenario [of being prevented by incapacity from continuing remunerative work]. The search is for remunerative work. The economic consequence of failure to obtain it is the result of the incapacity.”^[63]

(i) While it may usually follow that there will be an economic consequence of the sort described in the last three sentences of this paragraph, I respectfully suggest that it is not always the case. Each situation must be examined to ensure that there is in fact a loss of salary, wages or earnings for the specified reason. This was recognised by the Full Court of the Federal Court in Banovich v Repatriation Commission^[64] (Banvovich):

“... In the usual case a loss of salary, wages or earnings will follow any prevention from continuing to undertake the remunerative work which the member was undertaking, but there may be exceptional situations under which a person unable to continue that work continues to receive a salary, wages or earnings; in which exceptional case sub-para (iii) would not be satisfied.”^[65]

58. Section 24(2)(a) clarifies the operation of the second limb of s 24(1)(c):

(1) “... That is, s 24(2)(a) identifies the circumstances in which the claimed loss of income cannot be linked to the effect of the war-caused injury. For example, the veteran may simply have decided that he or she did not want to work for a reason unrelated to the effect of the war-caused injury. But, as the Commission submitted, correctly, the expression ‘has ceased to engage in remunerative work’, entails that the veteran has left the workforce, and not that he or she is merely unemployed.”^[66]

(2) “... In this assessment, of course, it continues to be accepted that the veteran is actually incapacitated in any event (a veteran who is incapacitated ...’). The purpose of the enquiry is to see whether, nevertheless, there are other explanations for economic loss so that the incapacity is not the only reason for it.”^[67]

(3) “... [W]e accept that the operation of the second limb of s 24(1)(c) and s 24(2)(a) means that a veteran who voluntarily chooses to cease remunerative work for reasons other than war-caused incapacity (for example, to access superannuation benefits or because of dissatisfaction with work unrelated to war-caused injuries) will usually not be eligible for the special rate, as he or she will usually be unable to establish financial loss by reason of his or her war-caused incapacity.”^[68]

THE EVIDENCE

Mr and Mrs Smith’s early years

59. Mrs Smith said that she had noticed changes in her husband when he returned from Vietnam in 1971. They had been married in 1970 shortly before he left for Vietnam and after they had known each other for three years. After his return, she said, he was angry, had difficulty in sleeping and was, at times, aggressive.

60. When they purchased the farm in 1987, Mrs Smith said, her husband did all of the farm work. Now and again, she would assist him on the roustabout work but he did all of the fencing and the general farm work. At that time, her husband worked quite well.

Mr Smith’s lower limb injuries and conditions

61. Mr Smith agreed with Ms Dowsett that he had suffered a significant injury in the mine accident in Queensland. The ongoing effects on him, though, were effects of inconvenience; nothing more. It would have been more than that in the first year after the accident but not since. The five years of intensive rehabilitation at Townsville enabled him to meet other people who had been injured and to talk through it and receive good advice. Mr Smith’s weight varied and he had to add or remove padding on his prosthetic leg or, if he gained too much weight, would be given a new leg. He did not have a lot of flexion in his right ankle, he said, and his hammer toes were fused. A proximal interphalangeal joint fusion was performed on the hammer toe in April or May 1989 by Mr Brink, Orthopaedic Surgeon.^[69] Mr Brink told Mr Smith “... to lie down as much as he can, which he just laughs at of course.”^[70]

62. Mr Smith’s general practitioner, Dr Birrell had written a report dated 9 August 1983 reporting on the injuries that his patient had suffered some 17 months earlier in an industrial accident.^[71] At that time, he felt that Mr Smith would never get back to a stage where he could resume his job as an electrician in the mines.^[72]

63. Dr Birrell, noted that he had complained on 24 September 2003 of cramp in his right groin. He had suffered it infrequently in the previous two to four weeks but the pain was severe and lasted some 45 minutes.^[73] Dr Birrell has recorded other complaints of groin cramps on other consultations including those on 28 June 2006^[74] and 2 February 2007.^[75] The cramps are recorded as occurring during the night and on waking. Mr Smith gave evidence to the same effect.

64. A Consultant Surgeon, Mr Roger White, could not identify the cause of Mr Smith’s cramping in August and September 2007^[76] but some relief was had from needling by Dr Michael Vagg, a Consultant in Rehabilitation and Pain Medicine.^[77] Mr Brink, an Orthopaedic Surgeon, was unable to identify the cause in January 2008.^[78] Mr White, a Consultant Surgeon, injected Botox later in the same month and Dr Vagg reported in April 2008 that this had led to a significant reduction in the episodes of cramping.^[79]

65. A note dated 5 April 2004 from Dr Matt Penn at the clinic Mr Smith attended recorded that he had “... problems with knee pain at end of the day trying to sleep. panamax not enough. On max celebrex. ...”.^[80] A note by Dr Catherine Condon at the same clinic and dated 17 August 2004 records that Mr Smith had complained that his right knee pain was increasing.^[81] Mr Smith said that he had also had an arthroscopy on his right knee in December 2008. He said that his knee suddenly collapsed. A report of his surgeon, Mr Brink, states that Mr Smith was suffering from:

“... 15 degrees fixed flexion, incompletely correctable varus pseudo laxity in a setting of post-traumatic predominantly medial compartment osteoarthritis of the right knee.”^[82]

66. During these years, Mr Smith was also consulting specialists about his prosthesis and lower limb issues he experienced. On 15 June 2004, for example, Dr Michael Bennett, Consultant in Rehabilitation Medicine, reported that Mr Smith had been provided with a new suction socket for his locked knee peg prosthesis and that he was happy with the result.^[83] On 18 August 2004, an X-ray of his hips showed the sacro-iliac joints to be normal but osteoarthritic changes in his right knee.^[84] Mr Rodney Brink, Orthopaedic Surgeon, examined Mr Smith and reported on 8 November 2004 that Mr Smith had complained of increasing medial right knee pain with lateral stress, twisting, bumping and weight bearing. Mr Brink carried out an arthroscopic assessment with debridement on 23 December 2004 and reported:

“He won’t be cured as he has quite a bit of cartilage degeneration on the medial femoral condyle. This knee will progress to significant arthritis in his lifetime, but hopefully that is five years away or more.

All he can do to prevent that is to keep slim and keep his muscles good, avoid very heavy lifting and high impact loading and maybe there is a role for chondroprotective substances like Glucosamine.”^[85]

67. A year or so later on 14 November 2005, Dr Rachel Nunan, Rehabilitation Medicine Physician, reported that Mr Smith required a new prosthesis. She noted how he had adjusted his existing prosthesis so that, for example, he “... uses extra suspension when performing more active pursuits such as riding his bike.”^[86] Dr Nunan also wrote that:

“... He has a locked knee and a peg foot. This has come about due to Ken’s occupation. Ken is a farmer and despite trialling different knees finds that the stability of a locked knee and peg foot is the best combination in his circumstances. I understand that he has an outside peg and an inside peg and he is able to interchange these when moving from the farm into the house. Today we discussed componentry with Ken. He is happy with the current componentry and there is no reason to change design.”^[87]

68. Mr Smith consulted Mr Brink again on 13 November 2008 about his right knee. Mr Brink observed that Mr Smith:

“... is retired, but very active physically and bothered with antero-medial right knee pain. He walks and cycles a lot.”^[88]

Mr Brink performed a total tibio-femoral replacement for Mr Smith on 13 February 2009. In his post surgical report dated 2 March 2009, Mr Brink reported that Mr Smith’s progress was good and he was hopeful that it would continue in that vein. His advice to Mr Smith had been:

“... to lose weight and to try and slow down and to try and cover as few miles as possible in a day indefinitely because he is very young and very active and puts so much work through this remaining right limb obviously.”^[89]

69. Mr Brink reported on the progress of the operation in a letter dated 2 March 2009. He was generally satisfied with Mr Smith’s progress and concluded:

“I have urged him to lose weight and to try and slow down and to try and cover as few miles as possible in a day indefinitely because he is very young and very active and puts so much work through this remaining right limb obviously.”^[90]

70. Mr Smith said that he has attended La Trobe University quite often since 2006 so that students who are studying prosthetic limbs and their construction are able to use him in the practical of their study. He does what he is asked to do. That may mean that they take his leg off, that he is standing or hopping from place to place using a handrail or that he is having fittings. Two students at a time work with him. He spends up to four hours with each pair. Dr van der Linden, Consultant Psychiatrist, noted on 1 June 2009 that Mr Smith enjoyed attending La Trobe University. He found the students to be courteous and nice, Dr van der Linden recorded.^[91] Mr Smith said that his wife drives him to and from the University. He feels that he is helping someone else when he is with the students. Mr Smith said that he does not have to interact with the students as such. Rather, he is just a model. They tell him what they want him to do and they talk with him nicely.

Mr Smith’s work in 2002 and 2003

71. Mr Smith said that his wife had driven him to work three or four days a week when he worked for Britax whether directly or indirectly through Forstaff. He said that he would get road rage really quickly and “arc up”. If someone tooted, he assumed that the toot was directed to him. If the traffic lights turned red, he assumed that they were against him. He felt that everyone was being confrontational towards him.

72. Mrs Smith confirmed that she would drive her husband to and from work because, on most days, he would be angry and angered by everything. He was an angry and aggressive driver and used a lot of foul language.

73. With regard to his employment with Forstaff, Mr Smith said that his contract ended and he agreed that would have been at about the end of 2002. Before it did so, he had experienced problems with the manager of Britax to whom he had been seconded. The problems concerned what the staff had been told about changed conditions and continuing work. Mr Smith thought that the staff were being misinformed and found it difficult to cope with that. Forstaff cancelled his contract but Mr Smith remained as an employee of Britax for a further six months until he resigned in the middle of 2003. During those months, Mr Smith said that he was engaged on a project. He denied that the duties had become more menial than those he had previously undertaken. In cross-examination, he could not recall that he had told Dr van der Linden that the work had become more difficult and more menial at this time.^[92] He replied that it was only more menial because he was no longer in charge of staff and more difficult because no-one had previously undertaken the task he had been asked to do. When he had previously been in charge of staff, he had not minded.

74. Mr Smith denied Ms Dowsett’s suggestion that he had left Britax because he was not enjoying the job. His reason for leaving, he said, was because he was not getting on with the manager. Had he got on with him, he would have stayed. His leg was not sore and he would not admit that he suffered mental problems. Mr Smith said that he organised men at Britax. He had not had to undertake manual work but he had done so. His legs did not affect his ability to do his job at all.

75. Mrs Smith said that she had observed that her husband found his work at Avalon Airport Services and Britax to be difficult at times. He would be quite stressed and feel angry with people. Her husband would come home and get angry and she could not reason with him. Mrs Smith never thought that her husband’s physical difficulties caused him to act in this way. He is no good under pressure, she said. He seems to get very aggressive and will not take anyone’s opinion or compromise. It is usually the case that he thinks that he is right and everyone else is wrong or that they are out to get him in some way. At the time that he left Britax, Mrs Smith said, her husband was having lots of arguments with his managers. He was upset about the way in which the employees were not being told the truth. He was fed up and annoyed and could not cope with what was happening.

76. In a Work Ability Report dated 25 November 2003, Mr Smith’s general practitioner, Dr Birrell wrote the following when asked why Mr Smith had left his last employment, which was at Britax:

“→ standing up a problem, legs painful.

→ 8 hour days to [sic] stressful on legs.”^[93]

77. When asked to comment on the work for which Mr Smith was suited, Dr Birrell had written:

“Would need to be of a sedentary nature.”^[94]

Earlier in his report, Dr Birrell had noted that “Mild PTSD” was a minor diagnosis. He was asked for his opinion on which of Mr Smith’s conditions affect his ability to work and how. Dr Birrell wrote:

“Legs are his major issue.

Ⓛ Leg phantom pains and stump pressure sores

Ⓡ Leg more of an issue because of arthritis in ankle/and weakness in lower leg.”^[95]

In Dr Birrell’s opinion, Mr Smith is able to perform clerical work of a sedentary nature for normal full-time hours. His final comment was that Mr Smith’s:

“... condition is stable but his Ⓡ leg will become more of a problem as he gets older.”^[96]

78. Mr Smith said that he had not written this statement and reasserted that he had experienced no problem with his legs. He agreed that he might have told Dr Birrell what appeared in the report but he could not tell him the real issue. Ms Dowsett drew his attention to the fact that Dr Birrell had referred him to a psychiatrist, Dr van der Linden, in October 2002. Dr van der Linden wrote to Dr Birrell on 29 October 2002 reporting on his consultation the previous day with Mr Smith and concluding that “... He did not appear excessively depressed or anxious.”^[97] Mr Smith said that he would have told Dr Birrell years before that about his mental health issue but could not recall telling him that his reason for leaving Britax was to do with his legs. When asked whether the reasons were to do both with his mental health and with his legs, Mr Smith said that it was to do with his mental health but not with his legs. He could not recall telling them it was his legs. He uses his legs as a crutch to lean on but they are not the true reason. Ms Dowsett drew his attention to the cramp he has suffered in his right thigh and the operation that he had undergone on his right knee and the advice that he had received from the surgeon to be careful with it. Mr Smith repeated that he had not had problems with his legs and that he had not taken much notice of the advice to take things carefully. It was his memory that his problems with his right knee leading up to the operation were not particularly serious.

79. Mrs Smith said that her husband had not appeared to have too much wrong with his knee before it was suddenly a problem. If he had taken pain killers, he had not told her. Mrs Smith said that her husband did not tell her too much about his health but, in lots of ways, she knew what was going on. She could tell how he was feeling from the way in which he dealt with things. If he was feeling a lot of stress, he would be angry and aggressive. He seemed happier after he had his knee replacement. He was also better after he admitted that he had a problem and started both to take medication and to look for answers. That was a big change in their lives. It began after one of his general practitioners decided that he should have greater familiarity with PTSD and began to read about it. That helped and it also helped when her husband attended a course. Mrs Smith herself found it helpful to have had the opportunity to talk to the women at the course and realised that they all had similar problems with their men. That course took place, Mrs Smith thought, at the beginning of 2006. Her memory accords with the note in the clinical notes kept by Mr Smith’s general practitioners. It records that Mr Smith was then engaged in a 15 week programme run by the Department of Veterans’ Affairs (DVA).^[98] Mrs Smith said that she had started to see the change in her husband when they began consulting Dr Newlands. On 24 April 2006, Dr Birrell recorded that Mr Smith was “Feeling pretty poorly with Counselling bringing it all out.”^[99]

80. In a Lifestyle Questionnaire lodged with DVA on 9 December 2003 and signed by Mr Smith, he had answered the question whether his disabilities stopped him from working in June 2003 any way as follows:

“I could not participate fully in management discussions and I also have a physical disability.”^[100]

Mr Smith said that what he had meant by saying “could not” was that he “could not be bothered doing it”. He would get angry, he said a little later. As for his physical disability, it was not really an issue. At the time that he completed the Lifestyle Questionnaire, Mr Smith said, he could not accept that he had a mental issue. He knew it but could not admit it.

81. Mr Smith agreed that he had written the following when asked at Question 35 to list the main ways in which his disabilities had affected the way he lives:

“I cannot join in community activities that require positive communication and I am not able to withstand mental stress. My physical disabilities prevent my mobility.”^[101]

Mr Smith acknowledged that he could not run or stand on a ladder but said that he can walk and stand for eight hours each day. He denied that physical disabilities were an issue.

82. In 2003, Mr and Mrs Smith brought their son, Toby, into their partnership in order to develop a feedlot business. Once the feedlot was set up, they would first purchase cattle weighing approximately 250 to 300 kg and in a forward store condition i.e. they were putting on condition and not losing it. They would then feed them with particular rations twice a day to ensure that they grew quickly and ensure that they only had to move to eat and drink so that their fat became white in colour and their meat pink. At first, the partnership had 100 of their own cattle on the feedlot as well as other cattle sent by other people for fattening. They were paid $3.00 per head per day for the cattle sent to them and sold their own once fattened. The partnership received money from the sales but spent the majority of it on feed and on the acquisition of more cattle.

83. Mr Smith said that, initially, they would try to source their cattle from local farmers so that they did not have to pay yard dues to agents for their purchase. Later, they had to turn to agents to buy and sell cattle for them but sometimes those agents would purchase cattle in a backward store condition. Cattle in that condition were losing, and not gaining, condition and required too long to be brought to a forward store condition so that they could put on the necessary weight. Mr Smith said that the agents knew that they were buying the wrong cattle for them and knew it. He added that he told them what they were doing and that they did not like being told. Mr Smith said that he sees things in black and white and people have to be truthful; there are no grey areas for him. His son could see that he and the agents were “head butting” each other and having face to face arguments.

84. Mrs Smith said that her husband would go to the market and tell the agents what he wanted them to buy. She said that, a lot of the time, the agents would purchase cattle and sell to butchers. The cattle that the agents purchased for them were not suitable and would take too long to fatten. That annoyed her husband. If the cattle were not delivered on time or the agents had not paid the right price for them, he would tell them so. Her husband stopped being involved in the purchase of cattle because he said that he had had enough of it. Mrs Smith and her son agreed that he was having difficulties and they took over responsibility for that side of the business.

85. Mr Tobias (Toby) Smith, Mr and Mrs Smith’s son said that the relationship between his father and the agents became “... progressively more confrontational”.^[102] His father was not happy with some of the cattle the agents bought and the prices they were getting for those they sold but it was important to form a good relationship with them and to trust them. Mr Toby Smith referred to an occasion on which the agents had purchased cattle on their behalf. The agents had told them that they were pretty good stock but, when they arrived at the feedlot, they were hollow or below normal condition. It was their job to fatten them from normal and not to get them to normal and then fatten them. Mr Toby Smith said that his father had not been happy with that but added that it had to be remembered that they had paid a lot less than the then prevailing market price. Therefore, it was debateable whether the purchase was a good or bad thing but his father had a strong opinion that it was the latter. In Mr Toby Smith’s opinion, there has to be a degree of trust placed in the agents and, basically, his father did not do that. His father told the agents that he was not happy and this type of discussion happened a number of times. As a result, his father could not be involved with that side of the business because his way of dealing with the agents was counter-productive to there being a good relationship between them. The agents were a major part of the business when they were operating the feedlot. Forming the relationship necessary for the successful operation of the feedlot was not his father’s strong suit, Mr Toby Smith said.

86. Mr Smith became the person who mixed the feed for the cattle as well as the person who checked them for sickness, lameness and pink eye. For the feed, Mr Smith was required to follow a recipe but he forgot what he was doing and added too much caustic soda. That made the cattle sick. He also understood that he was missing feeds. His son took over the feeding and Mr Smith became responsible for the tasks of cleaning the troughs and fixing the fences. He said that he could cope with that. He had all the tools and a small tractor and could repair what he had to. When he needed to mend fences, Mr Smith said, he would load the post driver on the rear of the tractor and the materials on the front. He would pull the post out of position, put the post in position and drive the post in. Fixing water troughs was no problem at all. Feeding had not been a problem either from a physical point of view as it was all done by machinery. He was not required to stand on the back of a truck and push off bales of hay.

87. Mrs Smith confirmed that her husband had taken over the feeding but said that he did not last a week at the task. He would think that he had followed the recipe but then miss an ingredient but, when challenged, would become annoyed. Mrs Smith said that she and her son had to watch him all of the time. Mr Toby Smith said that he had seen his father mix the feed incorrectly. He had a discussion with him about it but the discussion had not gone down well with his father. From his observation, his father had no problem when he moved to the general maintenance on the farm. He could do everything that he physically needed to do. He had a four-wheel motorbike that Mr Toby Smith described as his father’s second leg. With it, he was able to get around the farm without any worries.

88. Mr Smith said that he and his son abandoned the feedlot in October or November 2003. They did so, Mr Smith said, because the stock and station agents they had been dealing with wanted to take over the feedlot. He did not want to allow them to do that because he did not want people coming onto their property and trespassing on his space.

89. Mr Toby Smith said that the reason was that they needed to increase the size of the feedlot in order to get anywhere. To do that, they needed his father to take up the duties of mixing and distributing the feed, weighing the cattle and handling them generally. The business could not afford to employ someone to do that work. What it needed was for his father to take up more of the workload.

Mr Smith’s applications for employment

90. Mr Smith signed a second Lifestyle Questionnaire dated 18 January 2005 but he did not complete it. He could not recall whether he had read it before he signed it. When asked whether it was his habit to sign documents without reading them, he replied that, unfortunately, it is. Mr Smith noted that he had changed jobs often. In answer to a question as to whether he had changed jobs in the previous five years, Mr Smith had written:

“Could not accept authority. Relationship difficulties with management.”^[103]

In answer to further questions, he had said that he “Can’t cope with criticism or ineptitude at management” because he is “... particularly sensitive to criticism and dishonesty in governance at all levels. Stressed out.”^[104] He changed jobs in an attempt “... to find employment in a stress free honest environment.”^[105] Later, he said that he had stopped working because he “Could not cope with stress, could not build working relationship with those in authority.”^[106]

91. Mr Smith agreed with the proposition that he had made much more mention of his mental health issues in this Lifestyle Questionnaire than he had done in that which he completed in 2003. He said that this was due to his having seen Dr Carol Newlands and he was starting to accept those issues. Mr Smith did not accept the suggestion that he was downplaying the effect of his physical injuries saying that they were not a problem.

92. At question 17, Mr Smith noted that he “... can’t do ...” house cleaning, minor house repairs, light gardening such as weeding and watering and heavy gardening such as digging and pruning trees.^[107] In cross-examination, Mr Smith said that it was not so much that he could not do those jobs as his not wanting to do them. He saw no point in them and he was not getting paid to do them. His legs were not any part of his reason for not wanting to do those jobs. Washing his car, which he noted he could do with difficulty, was different because he likes to do that so that it looks good.

93. In response to a question by Ms Ryan, Mrs Smith said that her husband did a lot of gardening work at home. He plants trees – lots of them - uses the tractor and a chain saw to remove old trees and mends fences. As for household repairs, he would sometimes start a job but either not finish it or, in the case of the chook house, she had to wait nine years for him to complete it. Whether a job was done depended upon how he felt and how he was coping on the day. If everything was going well with him, he would be in great form but, if he was depressed or stressed he would not complete the work. Mrs Smith agreed with Ms Dowsett that her husband is not the kind of man who could be said not to complain but said that he did not talk about either his physical injury or mental health to any great degree.

94. Since abandoning the feedlot, Mr Smith said that he had not worked. In late 2005 and during 2006, he applied for a lot of jobs. At the time, he thought that he would work until he was 65 years of age or longer if he had the right job. He applied for a position as a Rollformer Operator and Welder Garage manufacturer after seeing it advertised. It is his understanding that employers want an employee who can identify when a machine is not working properly and stop unnecessary wastage. Physically, he thought that he could do the job but in his application, he disclosed that he had PTSD and wore hearing aids. The proprietor, whom he knew, was already aware of his artificial knee. He thought that he could do the job and was hopeful of getting it. Mr Smith’s application was unsuccessful. The proprietor wrote him a letter after Mr Smith requested it. As he put it, he virtually had to get on his hands and knees to get them to explain why he had not obtained the job; he knows these people, Mr Smith said. The letter advised him that:

“During the interview you mentioned that you suffered Post Traumatic Stress Disorder and the positions that we needed filled required your being interactive with fellow employees and the positions at times can become stressful.”^[108]

95. Ms Dowsett explored Mr Smith’s application further in cross-examination. She suggested that there had been separate positions of Rollformer Operator and of Welder Garage manufacturer advertised. Mr Smith said that the Rollformer Operator was required only to stand at a machine forming gutters. He acknowledged that he had not worked with sheet metal previously but thought that the sheet metal came in 3 foot 6 inch diameter rolls that would be lifted by a crane. He would feed that into a machine and stand by to make sure that nothing went wrong. His shift would have last eight hours.

96. Mr Smith applied for a full-time maintenance position at a local hotel. He had done electrical maintenance work all of his life and he not only thought that he could do the job but that he would surely get it. Mr Smith acknowledged that he is slow when he uses steps or stairs without a handrail as he has to walk up each step separately. If he has a handrail, he can walk up normally. The hotel had three storeys and he would have been required to use the stairs but he said that he would have carried his tools up in a bag. The position only required him to carry light items. If there were major repairs to be undertaken, the hotel proprietor would have called in a contractor, he said. When it was suggested to him that he was making an assumption on this point, Mr Smith replied that the maintenance position was that of a handyman. Big jobs were contracted out. That is what the previous occupant of the position had told him and so had the proprietor. The letter advising him that his application was unsuccessful noted:

“As stated in your application, you suffer from Post Traumatic Stress Disorder. The maintenance position at times is quite demanding and due to schedules and deadlines this position may be stressful.”^[109]

97. Mr Smith wrote to his brother in law who managed a property some six hours’ drive from them. The position attracted Mr Smith who said that he had hoped to live on a house that was available for an employee on the property. He asked to be considered for a position as a farm hand but the owner of the property had seen his temper tantrums, Mr Smith said. As a consequence, he was not successful in obtaining the position. His brother in law wrote to him saying that:

“... due to the medical condition that you mentioned of post traumatic stress disorder and stress levels which we encounter whilst handling cattle I have to inform you that your application was unsuccessful.”^[110]

98. When Mr Smith understood that a real estate agent was looking for someone to erect “For Sale” signs, he applied for the position. In response to his application for a position with a real estate agent, he received a letter advising him that he had been unsuccessful. The letter read in part:

“As you are aware this position was a clerical position with a great deal of interaction between the public and our office staff, there is also a certain amount of pressure to meet deadlines and performance criteria.

We feel that you would be unsuitable for the job because as you mentioned during our discussions you suffer from post traumatic stress disorder.”^[111]

Mr Smith said that he had not understood the position to be clerical but he had understood that he would be required to interact with the office staff and with people in the buildings on which the signs would be placed.

99. Mr Smith said that he had applied for a number of other jobs but had not been successful. Among them was a job as a driver for the Army. He was interviewed but was not successful. Whereas he had been able to get jobs in the past, he found that suddenly he could not. Mr Smith felt sure that he would have obtained the positions had it not been for his psychiatric condition.

Further documentary evidence relating to Mr Smith’s leaving work

100. Mr Smith could not recall when he first raised his psychiatric condition with his then general practitioner but he could recall the incident that led to his doing so. It was in the late 1970s or in the early 1980s. He begged his doctor of help, Mr Smith said, but was told to go home and get on with his life because he had not had it tough in Vietnam. The blokes in World War II had it tough, not him, he said he was told by his general practitioner.

101. In his application for a disability pension completed on 23 November 2003, Mr Smith wrote the following when asked why he had ceased employment on 30 June 2003:

“Because I found standing very difficult and found that the pain I was suffering was unbearable.”^[112]

When asked why he had given that reason, Mr Smith said that he had found it really hard to admit that he had a mental defect. It has been one of the hardest things that he has had to admit to. He felt that referring to pain was the easiest thing to say. Even now he tells his grandchildren that it is the pain in his leg that keeps him in his bed rather than his depression.

102. At the time he submitted his application, Mr Smith said that had not applied for another position since 30 June 2003. When asked what he believed was then preventing him from being employed, Mr Smith wrote:

“My physical and mental state.”^[113]

Mr Smith also noted on his application form that he had a small farm and traded in partnership with his son and wife.

103. Mr Smith said that he did not obtain any assistance until approximately 2004 when he was referred to a psychiatric clinic. At the time, he said, he did not feel that he should be there. He did not have a problem; other people had problems. There were problems with his wife and he could not concentrate. He was unable to read or watch television where he would see news about bombings. He worried about the future that his grandchildren would have.

104. Mr Smith takes prescribed medicine for his psychiatric condition and, Mr Smith, his wife makes sure that he does. When asked how he is now able to deal with the public, Mr Smith said that he lives the life of a hermit. He does not like being with other people. He cannot do it. It is not that he does not want to be with other people; he just cannot do it.

Medical evidence

105. The notes from the clinic Mr Smith currently attends record regular prescriptions of Celebrex, which is an anti-inflammatory drug, from late 2001 through 2003 and 2006. Those prescriptions were interspersed with others for other inflammatory medications such as Mobic and medication giving pain relief such as Panadeine Forte. The first prescription for an anti-depressant medication, Efexor, was given on 16 May 2006 according to the clinical records.^[114]

106. Mr Smith saw Dr Martin van der Linden on 26 November 2003 and reported in a letter dated 1 December 2003 and addressed to DVA that:

“Mr Smith did not believe he had significant psychiatric symptoms which needed treatment. However, he described being a very restless sleeper, perspiring excessively as well as suffering from nightmares the content of which he often could not recall. At times however he would dream of his time after Vietnam as well as about his legs. It appears the nightmares disturbed his wife more than they did him and he still averaged nine hours sleep per night. He described fleeting short bouts of depression with occasional suicidal ideation but never any intent. He thought of Vietnam occasionally especially with certain cues which resulted in a degree of anger and distress. He did not associate with other veterans from Vietnam and tended to avoid dawn services and marching. He described thinking of his leg accident and feeling panicky and frightened when he did so. This was also precipitated by certain cues especially of being around heavy machinery. He described hypervigilance around heavy machinery and ‘being on edge’ near plant and equipment.

Since the Iraqi war, he felt some distress and ruminated that “it will be another Vietnam”. Mr Smith throughout my assessment never believed he would die or that his life was under direct threat whilst in Vietnam.

On mental state examination he presented as a pleasant and co-operative man who was not obviously anxious or depressed. There was no evidence of psychosis, cognitive deficits or suicidal ideation.

...

I believe that Mr Smith suffers from numerous symptoms of PTSD. However, I believe it is sub-syndromal despite still causing a degree of impairment. I also believe that at least 50% of this sub-syndromal PTSD is secondary to his mine accident as opposed to his time in Vietnam.”^[115]

107. Mr Smith agreed with Ms Dowsett that he had spoken with Dr van der Linden about his experiences in Vietnam. He had probably spoken about what they had been doing and what he had seen but did not think that he had spoken too much about it. He tried to “rein in” what he told him because it is difficult for him to accept help.

108. Dr Carol Newlands, Consultant Forensic Psychiatrist wrote a report dated 2 December 2004. Mr Smith had told her that others had suggest that he should get help for his symptoms and consider claiming a pension for them. As to those symptoms, Dr Newlands reported:

“Certainly, he does seem to have a lot of anxiety based problems, such as sleep problems, waking up at night yelling, and always being extremely hot and perspiring, even in winter. He has some claustrophobia, does not relate well to people, has had some marital difficulties, and dislikes being in crowds. If there is any form of confrontation, he tends to react rather aggressively, at least verbally aggressively, and is a man not prone to discuss things with his wife and family.”^[116]

109. The next report from Dr Newlands is dated 12 July 2007. By this time, the farm had been sold and the remaining 7½ acres were not occupying Mr Smith sufficiently. He had been undertaking some voluntary work with the local cricket club and had been seeking some form of work, preferably paid but voluntary if necessary, as he did not wish to retire. Since taking Efexor, he had found himself to be less agitated. He was waking frequently during sleep and his memory was good but his concentration poor. As a consequence, he could not go to the cinema or watch television. His mood was up and down and he was easily annoyed. Socially, he did not really interact with his family members. Mr Smith told her that he was surprised that he and his wife were still together. They were living separate lives but there were no arguments or hostility between them.^[117]

110. Dr van der Linden’s report dated 3 September 2008 and is addressed to Dr Bateman, who practised at the same practice as Dr Birrell. He began by referring to Mr Smith’s long history of PTSD with depressed and anxious mood. Six years before, he noted, he had seen Mr Smith but had felt that his PTSD was then sub syndromal. Dr van der Linden continued:

“Over the past several years, his symptoms appeared to have worsened to the degree that he was unable to work in any capacity and experienced severe symptoms almost constantly. This was despite having remained on venlafaxine 225mg for the past three years.

I believe that he is going for a TPI pension in the near future and I will support him in this.

On review on the 3^rd September 2008, I suggested he try risperidone 0.5mg twice a day to see if this will help with his agitation. I also advised him to continue on his current dose of venlafaxine.”^[118]

Financial evidence

111. Mr Smith said that he had continued to run his farm when he worked as an electrical installer in 1998. He had the opportunity to work and was able to make money during a slack period on the farm. He ceased working as an electrical installer at that time because his contract ended and because he and Mrs Smith moved back to Queensland where he resumed work in the mining industry. Mr Smith said that he made that move in order to make more money.

112. Mrs Smith said that the money they earned from fattening cattle for the agents was used to pay their bills and for living expenses. Any other money that they required was drawn from an overdraft account. The partnership did not make a profit but it made enough to meet their bills.

CONSIDERATION

113. It has been accepted by the Commission that Mr Smith meets the requirements of s 24(1)(b). That is to say, it has been accepted that his incapacity from his war-caused injuries or war-caused diseases, or both, is of such a nature as, of itself alone, to render him incapable of undertaking remunerative work for periods aggregating more than eight hours per week. The remunerative work that he has undertaken in the past has required him to use, to a greater or lesser extent, his skills and qualifications as an electrician or as a farmer. It has been remunerative work that has called upon a range of skills beyond his technical qualifications to include manual work and supervisory skills.

Section 24(1)(c)

114. Incapacity is a reference to the effects of an injury or disease. Although the Commission has already accepted Mr Smith’s PTSD as a war-caused injury or disease, the effects of that condition and of other injuries or diseases from which Mr Smith suffers were not the subject of any concession by the Commission or agreement between the parties. On the basis of the evidence of Mr Smith supported in various material aspects by the evidence of Mrs Smith and Dr Newlands, I find that he is affected by PTSD to the extent that he is anxious, does not relate well to people and dislikes crowds, has poor concentration, suffers from sleeplessness and some claustrophobia and tends to respond aggressively if he perceives any form of confrontation from others towards him. He is also affected by the injuries to his lower limbs.

115. Mr Smith has also lost his left leg and suffered injuries to his right leg. He suffered that injury after his return from service in Vietnam and is not a war-caused injury or disease. Over the years, including those in the assessment period, he has suffered pain in the stump of his left leg, pain in his right knee and cramping in his groin. These findings are supported by the medical evidence to which I have referred. I refer in particular to the clinical notes of his general medical practitioners who report Mr Smith’s complaints of pain in his right knee on 5 April 2004 and increasing pain later on 17 August 2004. The findings are also supported by the report of his Orthopaedic Surgeon, Mr Brink, on 8 November 2004. Mr Smith has been prescribed anti-inflammatory medication regularly throughout the whole period covered by the clinical notes beginning in August 2000.

116. Medical opinions have also been given to the effect that Mr Smith’s physical injuries reduce his ability to work. An early example appears in the Work Ability Report Dr Birrell completed on 25 November 2003. That was consistent with Dr Birrell’s much earlier note written in 1983 that Mr Smith would never resume his work as an electrician in the mines. It was also consistent with what Dr van der Linden understood Mr Smith had said to him i.e. that he intended to apply for a disability pension and “... was hoping to tie in his artificial leg with his Vietnam war service.”^[119]

117. Suffering physical injuries that others might think would prevent certain activities and enduring pain as a result of those physical injuries is one thing and being incapacitated by them and/or by pain from them is another. Mr Smith’s evidence is that he was not limited by either the injuries or the pain. I have looked to other evidence to see whether his memory is consistent with that because, understandably, the passage of time can cause us to see past events with different eyes. That can happen simply because our focus is on the present or on the good, and not the bad, that we are left with from the past. There would seem to be a little bit of that in relation to Mr Smith’s memory about his right knee. His memory of events is that his knee suddenly collapsed in 2008 or so. An examination of the clinical records, however, shows that he was complaining of pain in that knee in 2004 and of increasing pain later in the same year.

118. Where his memory of events is consistent with past events comes about in the way he dealt with pain and the difficulties of having to cope with a prosthetic left leg. His memory is that they did not cause him any difficulty once he had undertaken five years of rehabilitation and learned to walk again. That accords with the reports of Mr Brink who referred in his reports to Mr Smith’s being very physically active in the context of the total tibio-femoral replacement of his right knee in 2009 and to his having laughed in 1989 at the suggestion that he should lie down after the proximal interphalangeal joint fusion of his hammer toe. Mr Brink’s observations are supported by the evidence of Mrs Smith and Mr Toby Smith. Mr Toby Smith said that his father was quite capable of managing the physical tasks on the feed lot in 2006 and with general tasks around the farm including fence mending and trough cleaning. His father used his motorbike as his second leg and could get about the farm without any worries.

119. Mrs Smith also confirmed that her husband had not appeared to have too much problem with his knee although he was happier after the knee replacement. She had never thought that the anger her husband showed, whether when he came home from work or otherwise, was as a result of any physical difficulties. It was, rather, as a result of his mental problems that he did not acknowledge until much later. She spoke of his arguments with his employers and of his anger at home where she could not reason with him. She had always thought that his anger and aggression was not related to his physical activities.

120. Mr Smith has said that he denied his mental issues for a long time. His view is supported by Dr Newlands and also by Dr van der Linden. Dr van der Linden’s reports support Mr Smith’s evidence that he could not acknowledge that he had mental problems for many years. It is true that Dr Birrell had referred him to Dr van der Linden as early as October 2002 but I did not have any evidence from Dr Birrell as to why he did that. It may be that he saw something in Mr Smith’s behaviour but I cannot find any indication of his reasons in the clinical notes. Mr Smith himself seems to have focused on his legs in that early consultation but a reading of the subsequent reports shows that Dr van der Linden moved from a position of finding that he did not appear excessively depressed or anxious to a conclusion that he was suffering from PTSD and that he was no longer sub-syndromal. Dr Newlands’ reports also show a similar journey.

121. Having regard to this evidence, I am satisfied on the balance of probabilities that Mr Smith was not prevented from undertaking remunerative work that he was undertaking by reason of any incapacity arising from his physical injuries. He had learned to live with them and with the pain and discomfort that they brought. That continued to be the case when he lodged his claim for a disability pension on 31 March 2009. Earlier that month, Mr Brink had described Mr Smith as still being “very young and very active” and putting so much work through his right limb. That is consistent with my finding that, at the time that he lodged his claim, Mr Smiths’ physical injuries were not playing a role in preventing him from continuing to undertake remunerative work at that time.

122. I am satisfied that he was incapacitated as a result of his PTSD. His anger, aggression, lack of concentration and inability to get on with work or business associates meant that he could not undertake remunerative work that required those skills. Modern day work as a farmer in whatever guise (e.g. managing a feedlot) or using skills as an electrician require both concentration and interpersonal skills (including anger management and appropriate behaviour) as well as physical ability. I find that he did not have the necessary concentration or interpersonal skills in 2003 when he ceased his last remunerative employment or at the time that he lodged his claim for a disability pension on 31 March 2009.

123. There was no disagreement between the parties that, if I came to that conclusion, he suffered a loss of salary or wages that he would not have suffered had he been free of the PTSD. That means that Mr Smith satisfies s 24(1)(c). As he has also satisfied ss 24(1)(a) and (b), he is entitled to be paid disability pension at the special rate under s 24. Therefore, I set aside the decision of the Commission dated 28 May 2009 and substitute a decision that Mr Smith is entitled to be paid disability pension at the special rate under s 24 of the VE Act with effect from 31 December 2008.

Section 24(2)(b)

124. In view of my decision, I do not need to consider the ameliorating provisions of s 24(2)(b) but I will do so for the sake of completeness. The practical effect of s 24(2)(b) is that Mr Smith will effectively be deemed to have met the criteria in s 24(1)(c) if he can satisfy me of four matters. The first is that he has not attained the age of 65 years. The second is that he has been genuinely seeking to engage in remunerative work. The third is that he would, but for “that incapacity”, be continuing so to seek to engage in remunerative work. The fourth is that his incapacity is the substantial cause of his inability to obtain remunerative work in which to engage. The reference to “that incapacity” in the second matter I have identified must be a reference to the incapacity from war-caused injury or war-caused disease, or both, to which reference is made in s 24(1)(c). That follows from the opening words of s 24(2) stating that the two paragraphs that follow are “For the purpose of paragraph (1)(c)”. There is no reference to any other incapacity in s 24(1)(c).

125. Section 24(2)(b) were considered by the Full Court of the Federal Court in Leane v Repatriation Commission.^[120] In relation to the second matter that must be established, the Court explained that:

“ The primary judge interpreted the word ‘seeking’ to mean ‘attempting to’ or ‘trying to’. This may be accepted. Such a meaning involves something more than a mere wish or hope. It requires that a claimant ‘do’ something. On the other hand the word ‘genuinely’ is used in the sense of ‘sincerely’ or ‘honestly’. It involves an assessment of the subjective intention or purpose of a claimant. What is required is that the claimant honestly be trying to engage in remunerative work.”^[121]

126. The Full Court then turned its mind to how a veteran could meet this criterion in practical terms:

“ It may be accepted that, in the ordinary course, a person in the position of the Veteran would have difficulty in establishing that he or she was honestly trying to engage in remunerative work unless there were some ‘objective signs of active pursuit of remunerative work’. However, it would be wrong to turn the practical issue of how a person might establish his or her case into some legal pre-condition. Assume, for example, that a claimant satisfied the Tribunal that:

• he or she honestly wished to engage in remunerative work;
• he or she had made a reasonable assessment of his or her disabilities;
• he or she had reasonably concluded that he or she could only be employed in a particular type of work;
• he or she was checking employment advertisements on the look out for such employment; but
• he or she had not yet identified any such employment prospects.

Counsel for the Commission properly conceded that, on these facts, the Tribunal might be satisfied that the claimant was ‘genuinely seeking to engage in remunerative work’. ...”^[122]

127. It is quite clear that the Full Court in Leane did not consider its example to be a template for a consideration of the matter. In this case, the evidence I have shows that Mr Smith has applied to three potential employers for employment in particular positions. His applications were made in 2006 and so before he lodged his claim for an increase in his disability pension on 31 March 2009 and the commencement of the assessment period. Despite that, they are relevant in indicating the efforts that Mr Smith made to find remunerative work and to identify the work that he could not reasonably do.

128. The letters he was given by the three employers all have the same theme. Each reveals that Mr Smith has told the employer of his suffering from PTSD but there is no indication that he has told each of the way in which his condition affects him or how it would, or would not, have an impact upon his being able to undertake the particular duties of the position. The letter regarding the farm hand position, for example, refers to the stress levels encountered in handling cattle. On the evidence given by Mr Smith, it is not stress that affects his ability to undertake the work but his lack of concentration and difficulties in his interactions with people that reveal themselves in anger and aggressive behaviour. The letter regarding the hotel maintenance position speaks of the position being quite demanding due to having to meet deadlines and schedules. There is nothing in Mr Smith’s evidence to indicate that his PTSD led to his having difficulties with meeting deadlines. He undertook the maintenance jobs at the feedlot. Whether or not his issues with poor concentration might have an impact is not addressed in the letter.

129. The letter from the Rollformer and Sheet Metal manufacturer leaves open the question whether Mr Smith was qualified for the position in any event. I understand that he thought that all that was required was his standing at a machine but the description of the positions poses a question as to whether particular skills or training, beyond those of Mr Smith, were required to operate the machine or equipment. If they did, his lack of skills and training might be the substantial cause of Mr Smith’s inability to obtain that remunerative work.

130. There is material that points to Mr Smith’s not wishing to retire. I refer particularly to the report of Dr Newlands dated 12 July 2007. There is no reference to Mr Smith’s looking for remunerative work at that stage. By 13 November 2008, however, Mr Brink described Mr Smith as “retired” even though very active. That would suggest that Mr Smith was no longer looking for remunerative work. In later years, and certainly by 2010, that suggestion finds further support in the report of Dr Clayton Thomas, a Consultant in Rehabilitation and Pain Medicine. He came to the view that Mr Smith’s physical disability would not disable him from performing work greater than 50% of the time but he added that he thought that:

“... it would be prudent from a mobility point of view to avoid standing or walking for the duration of a working day, but in any case, I think he could work in the vicinity of 30 hours per week in a position that did [not] require a reasonable amount of time up on his legs.”^[123]

It would seem that by 2010, Mr Smith’s ability to engage in remunerative work of the sort he had undertaken in the past was compromised by his physical disabilities. That would be consistent with there being no evidence of his having looked for work in those later years of the assessment period.

131. Having regard to all of these matters, I would not have been satisfied that Mr Smith had been genuinely seeking to engage in remunerative work at any point in the assessment period. As I have said, however, I do not need to decide this issue for I have found that Mr Smith has met those criteria set out in s 24(1)(c). He has no need to rely on the deeming provisions in s 24(2)(b).

INTERPRETING THE LAW

132. Both the Full Courts in Connell and in Smith v Repatriation Commission have recognised that it is the words of Parliament that govern what the law is when the law is to be found in an Act of Parliament or in delegated legislation. It is not to be found in an interpretation of those words by another court in another context. Speaking of s 92 of the Commonwealth Constitution, but his words are equally applicable to any other enactment, Windeyer J said in Damjanovic & Sons Pty Ltd v The Commonwealth^[124] (Damjanovic):

“... [I]t is the words of the Constitution in their relation to the facts alleged in the pleading the subject of the demurrer that we have to consider. In doing so we are not governed by words, formulae and sentences culled here and there from judgments in other cases on different facts. That does not mean that we are to ignore authoritative expositions in earlier cases, or disregard the facts of earlier cases, as illustrations of the operation of the section in the Constitution. These cases establish doctrine, expound principle and, by denotation, give a concrete content to the abstract and general words of the enactment. This restrains the predilections and idiosyncrasies of an individual judge from dominating his interpretation of the Constitution. It thus makes for a stable law and a stable economy. Speaking in a general sense, I therefore hold myself guided, if not strictly governed, by the earlier decisions of this Court on this topic. Nevertheless, when new facts arise for consideration, it is, I think, wise to have always first in mind the words of s. 92 itself. ...”^[125]

133. The proper approach was set out more directly by the Privy Council in Ogden Industries Pty Ltd v Lucas^[126] (Ogden) in considering Victorian workers’ compensation legislation. That is a case that has been cited with approval in cases such as Brennan v Comcare.^[127] Their Lordships said:

“It is quite clear that judicial statements as to the construction and intention of an Act must never be allowed to supplant or supersede its proper construction and courts must beware of falling into the error of treating the law to be that laid down by the judge in construing the Act rather than that found in the words of the Act itself.”^[128]

134. In this regard, the interpretation of statutory law differs from ascertaining the common law. In Brennan v Comcare, Gummow J explained that in the case of the common law:

“... the task is to interpret the legal concepts which find expression in the various language used in the relevant judgments. The frequently repeated caution is against construing the terms of those judgments as if they were the words of a statute. The concern is not with the ascertainment of the meaning and the application of particular words used by previous judges, so much as with gaining an understanding of the concepts to which the expression was sought to be given.”^[129]

135. The process of reasoning differs as Windeyer J explained in Damjanovic:

“... Analogy – not in the strict mathematical sense, but in the sense of a resemblance of facts – has long had a great place in our system of law. It is at the base of the method of precedent in the common law. ... [R]easoning by analogy is a rather different process in the development of the common law from its use in the interpretation and application of a statute or of the Constitution. Sir Own Dixon, in an extra-judicial address he delivered in 1933 (reprinted in Jesting Pilate (1965), p. 13), said of the common law that

‘it has undergone a continuous growth and expansion accomplished by continual deduction and induction. By deduction, a new application is given to an existing principle; many single instances having been thus produced, in course of time a new or developed principle is discerned in them and expounded. By this process of imperfect induction, the secondary principle is established as part of the doctrine of the common law, and plays its part in turn in the production of still more doctrine’.

This, I would respectfully say, is a wholly apt description of the processes of the common law. It points I think the contrast with expositions of the effect of statutes and codes. The process is then one of deduction and subsumption, rather than of imperfect induction. The words of the enactment provide the major premise. The result is not, or ought not to be, the establishment of any secondary principle embodied in new words, but at most the provision of an illustration of the effect in a new setting of the original principle expressed in the original words.”^[130]

136. That is unquestionably the approach taken by the judicial arm of government in the Commonwealth but the Tribunal is a member of the executive arm. That difference does not of itself lead to any difference in the way in which the Tribunal undertakes the task of ascertaining the law, whether common or statutory, when there is no relevant judicial authority directly on point. As soon as there is judicial authority of that sort, the Tribunal is bound to apply the law as interpreted by that authority. The reason for that is found in the judgment of Allsop J, as he then was, in Federal Commissioner of Taxation v Indooroopilly Children Services (Qld) Pty Ltd:^[131]

“ It is the function of the courts exercising federal jurisdiction to declare the meaning of statutes of the Commonwealth Parliament in the resolution or quelling of controversies. To quote Marshall CJ in Marbury v Madison 5 US [1803] USSC 16; (1 Cranch) 137 (1803) at 177:

It is, emphatically, the province and duty of the judicial department to say what the law is.

This passage has been recognised as central to the administration of justice and to the relationship between the judiciary and executive in this country ...”^[132]

137. That function finds expression in two ways in so far as actions and decisions of the executive are concerned. The first relates to the court’s role in defining the limits of the executive’s power in taking particular action or making a particular decision. It was described by Brennan J in Attorney-General (NSW) v Quin:^[133]

“... The duty and jurisdiction of the court to review administrative action do not go beyond the declaration and enforcing of the law which determines the limits and governs the exercise of the repository’s power. If, in so doing, the court avoids administrative injustice or error, so be it; but the court has no jurisdiction simply to cure administrative injustice or error. The merits of administrative action, to the extent that they can be distinguished from legality, are for the repository of the relevant power and, subject to political control, for the repository alone.

The consequence is that the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise. ...”^[134]

138. The second relates to the executive’s duty to “... exercise them only in accordance with the laws which govern their exercise. The rule of law requires no less.”^[135] This means that:

“ Considered decisions of a court declaring the meaning of a statute are not to be ignored by the executive as inter partes rulings binding only in the earlier lis. As Mahoney J (as his Honour then was) said in P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 383:

The duty of the executive branch of government is to ascertain the law and obey it. If there is any difficulty in ascertaining what the law is, as applicable to the particular case, it is open to the executive to approach the court, or afford the citizen the opportunity of approaching the court, to clarify the matter. Where the matter is before the court it is the duty of the executive to assist the court to arrive at the proper and just result.

There was some inferential suggestion in argument that the appellant was somehow bound by legislation (not specifically identified) to conduct his administration of the relevant statute by reference to his own view of the law and the meaning of statutory provisions, rather than by following what the courts have declared. It only need be said that any such provision would require close scrutiny, in particular by reference to issues raised by s 15A of the Acts Interpretation Act 1901 (Cth).”^[136]

FLENTJAR QUESTIONS RELATING TO APPLICATION OF s 24(1)(c)

Background to Full Court’s formulation of four questions

139. Mr Flentjar was born on 4 September 1916. He had, until about 1970, earned an income by driving a taxi and had done so since sometime between 1950 and 1959 when he had purchased a licence to operate a taxi. In approximately 1970, he had been unable to continue to work as a taxi driver by reason of war-caused bowel problems. As a result of those bowel problems, the Tribunal had found, Mr Flentjar had then sold his taxi with its licence.

140. Almost 20 years after he had sold his taxi licence, Mr Flentjar applied for an increase in the rate of his disability pension to the special rate. He did so on 7 August 1991 when he was 74 years and 11 months old. Putting aside his inability to work as a taxi driver because of his war-caused bowel condition, Mr Flentjar could not have worked as a taxi driver at that time as he was prevented from doing so by the Victorian Taxi Directorate once he had turned 70 years of age.

141. The Commission refused Mr Flentjar’s application on 28 April 1992 and its decision was affirmed by the Veterans' Review Board on 27 September 1993.^[137] By the time that the Tribunal came to hear his application for review, the Victorian Taxi Directorate had changed its policy. Accordingly, provided he was medically fit, Mr Flentjar was no longer prevented from holding a taxi licence by reason of his being aged over 70 years. The policy had changed in February 1994 when Mr Flentjar was aged 77 years and 5 months.

142. It was agreed between Mr Flentjar and the Commission both in the Tribunal and before the Federal Court that he had satisfied the criteria in ss 24(1)(a) and (b). Only that in s 24(1)(c) remained in contention between them. In deciding that Mr Flentjar was entitled to payment of a disability pension at the special rate from 15 September 1992, the Tribunal had decided that:

“34. Applying Starcevich [Starcevich v Repatriation Commission^[138]], it is our view that Mr. Flentjar’s taxi business may properly be treated as the relevant remunerative work for the purposes of section 24(1)(c). We are of the further view that the reason he sold his taxi licence in about 1970 was because he was incapacitated within the terms of section 24(1)(b) of the Act. We acknowledge that in February 1994, Mr. Flentjar was almost 77 years of age. However, while over the assessment period he has suffered from several disabilities that are not war-caused, the evidence of Dr. Stone was clearly that, notwithstanding Mr. Flentjar’s age, none of these would act as a bar to the issuing of a taxi driving licence to him. After giving careful consideration to Mr. Flentjar’s evidence and other material relevant to his non war-caused disabilities, we accept the evidence of Dr. Stone.”

143. On appeal to Spender J, the Full Court recorded in its judgment:

“... His Honour noted that the evidence before the Tribunal indicated that Mr Flentjar had the medical capacity to hold a taxi driver’s licence after 1994, but that the Tribunal did not in its reasons for decision express and address the issue of whether it is likely that, war-caused incapacity aside, Mr Flentjar would have engaged in remunerative employment as a taxi driver after February 1994. In February 1994 Mr Flentjar was more than 77 years old.”^[139]

144. In her judgment, with which Beaumont and Jenkinson JJ agreed, Branson J took the same view as Spender J saying:

“...Although the Tribunal accepted medical evidence to the effect that, but for his war-caused incapacities, Mr Flentjar would have been fit to drive a taxi in excess of up to eight hours, consideration nonetheless was required to be given to whether his war-caused incapacities aside, it was likely that he would have sought and obtained a taxi driver’s certificate during the assessment period, and thereafter worked as a taxi driver or taxi owner-driver.

Assuming a finding ... that his war-caused incapacities were the only factors preventing Mr Flentjar from continuing to undertake the work of a taxi driver or taxi owner-driver, ... [s 24(1)(c) would also] involve consideration of whether, having been legally disqualified from driving a taxi for more than seven years, Mr Flentjar would have sought to re-enter the workforce as a taxi driver or taxi owner-driver at the age of 77 years when such disqualification was lifted. I thus agree with Spender J that the Tribunal erred in law in reaching its conclusion that Mr Flentjar was entitled to payment of the pension at the special rate with effect from 15 September 1992.”^[140]

145. Branson J also explored the precise nature of Mr Flentjar’s remunerative work. On the evidence, her Honour thought:

“... It would thus appear that the relevant ‘remunerative work that the veteran was undertaking’ within the meaning of s 24(1)(c) of the Act was the work of taxi driving, or possibly the work of being a taxi owner-driver. If it were shown that the leasing of a taxi licence for reward involved appreciable administrative and management tasks, it would presumably be open to a decision maker to find that such leasing amounted to remunerative work for the purpose of s 24(1)(c) of the Act. However, Mr Flentjar has never earned remuneration in this way. If he had, it would, in my view, be a different category of remunerative work from the work of taxi driving or working as a taxi owner-driver. ...”^[141]

146. This passage of her Honour’s judgment is written against a background of earlier Full Court judgments in Banovich and Starcevich v Repatriation Commission^[142] (Starcevich) as well as in Repatriation Commission v Smith.^[143] In Banovich, the Full Court had been concerned with the interpretation of para [1](b)(iii) of Schedule 2 to the Repatriation Act 1920 (1920 Act). It is expressed in terms very similar to those used in s 24(1)(c) when expressing the criteria that a member of the Forces was required to meet in order to be granted the special rate of pension.^[144] Paragraph [2] is drafted in terms similar to those of s 24(2). The Full Court said of “remunerative work”:

“ We accept that the loss referred to in par [1](b)(iii) may be caused either by a loss of existing employment or by an inability to obtain new employment. There is no difficulty in regarding either circumstance as preventing the member ‘continuing to undertake’ remunerative work. But it is, in our opinion, erroneous to read the phrase ‘remunerative work that the member was undertaking’ as referring to a particular job with a particular employer. The term ‘remunerative work’ is used in the Schedule in a context which indicates an intention to refer to work generally: see, for example, par [1](b)(ii), par [2](b), par [3]. Consistently with that user the phrase ‘remunerative work which the respondent was undertaking’ should be read as a reference to the type of work which the member previously undertook and not to any particular job. It follows that a member’s loss of particular employment for a reason unrelated to a war disability would never destroy a member’s subsequent entitlement to claim a special rate pension; the question would remain, at the relevant date for determination of a claim, whether the member was prevented by his or her war-related incapacity – and by that incapacity alone – from continuing in that field of remunerative activity.”^[145]

147. A differently constituted Full Court took the matter a step further in Starcevich when it explored whether the “remunerative work that the veteran was undertaking” and is now prevented from undertaking had to be the last remunerative work he or she had undertaken. In two separate judgments, the majority of the Full Court concluded that it did not. Fox J put it this way:

“ It seems to me that the intention of para. 24(1)(c) is that the applicant must have suffered substantial loss of remuneration consequent alone upon the incapacity referred to in paras. 24(1)(a) and (b). The loss must be real, in the sense that the applicant cannot rely upon any remunerative work that he has undertaken in the past, but it would be unnecessarily restrictive to assess the loss by reference only to the last remunerative work undertaken before the applicant's inability to work became complete. In my opinion, a veteran’s entitlement to a pension under s.24 may be based on his being prevented from continuing to undertake substantial remunerative work that he has undertaken in the past, even if that work was followed by work of a different type before the veteran ceased work altogether. In such circumstances, the passage of time from the cessation of the work upon which reliance is placed to the veteran’s complete retirement may mean that the other requirement of para. 24(1)(c), namely that the veteran’s war-caused injury or disease alone prevents him from undertaking the remunerative work upon which his claim is based, is not satisfied, but this is a different matter, and one which does not arise here.”^[146]

148. In Repatriation Commission v Smith, Beaumont J, with whom Northrop and Spender JJ agreed, said of the task created by s 24(1)(c):

“... [T]he question posed by s 24(1)(c) is one of hypothetical fact. The Tribunal must attempt an assessment of what the respondent probably would have done if he had none of his service difficulties. ...”^[147]

Formulation of four questions

149. It is in this context that Branson J summarised the issues that were before the Tribunal in Flentjar. They were:

“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 undertaking 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?”^[148]

150. Her Honour did not mention s 24(2) in her judgment but it is apparent that the four questions or issues that she has posed assist in resolving whether s 24(1)(c) has been satisfied in the particular case before her. She had no reason to go on to consider the clarifying provision of s 24(2)(a) or the ameliorating provision in s 24(2)(b).

SECTION 24(2)(b): applicable whether or not veteran previously engaged in remunerative work

151. Each of the Judges addressed this question in Smith. Rares J in Smith said that s 24(2)(b):

“... can apply both to a veteran who has never been engaged in remunerative work and to one who had, but for any reason, subsequently ceased work, and later sought to obtain remunerative work. ...”^[149]

Buchanan J was of the same opinion^[150] as was Foster J.^[151]

152. There is no question that I am bound to apply their Honours’ interpretation of the provision but a proper understanding of the reasoning for an interpretation always assists in its practical application. With that in mind, I have taken some time to explore it in a quest to seek clarification of the reasons for their interpretation.

The reasons

153. As I understand Rares J’s reasons, they are:

“... Section 24(2)(b) does not connect the loss of income to the veteran’s inability to continue remunerative work under s 24(1)(c). Yet, one way that a veteran could demonstrate that he or she was unable to engage in remunerative work, after a period in which the veteran had not been engaged in such work, would be to show that he or she had been seeking to do so and could not obtain such work (see s 28). A sympathetic or loyal employer who ceased, for any reason, to employ a veteran suffering a war-caused injury, may have been the only person willing to employ someone with such an injury to perform that kind of remunerative work. For example, the employer may no longer be able to afford the cost of employing the veteran or may have ceased business. Once that source of employment has ceased to be available, the veteran may be able to satisfy s 24(1)(c) merely because no other person would engage him or her in remunerative work by reason only of the incapacity from the war-caused injury. It may not be necessary to show that the veteran has sought to obtain such work because the particular circumstances of the now former employer make it clear that that person had treated the veteran in an exceptional or unique way. But, the veteran could also seek to bring himself or herself within s 24(2)(b) by demonstrating attempts to seek remunerative work.”^[152]

154. Buchanan J set out his reasons at [49]-[52]:

“ Section 24(2)(b) provides some relief from the potentially harsh consequences of this arrangement. It applies where remunerative work is not being done. In my view, it accommodates a cessation of earlier remunerative work, as well as a circumstance where a veteran has not worked since injury, or since the development of the incapacity. In all those circumstances, in my view, a veteran may demonstrate genuine efforts to obtain work which are made fruitless by the incapacity. That is, the efforts would continue but for the incapacity and the incapacity is the substantial cause of inability to obtain work. Those circumstances are taken to satisfy the basic test in s 24(1)(c) of being actually prevented by the incapacity from continuing remunerative work. Economic loss (i.e. loss of the opportunity for economic gain by way of income) follows naturally enough from this scenario. The search is for remunerative work. The economic consequence of failure to obtain it is the result of the incapacity.

...

On the view which I take, the test in s 24(2)(b) is one to be applied at the time when the assessment is required to be made under s 19(5C). A veteran who has not been engaged in remunerative work at a particular point in time (i.e. before or during the assessment period) may nevertheless satisfy s 24(1)(c) by demonstrating that there has been a genuine effort to engage in remunerative work, which effort would continue but for the incapacity, and that the incapacity is the substantial cause of an inability to obtain remunerative work. In that circumstance, the veteran is treated as having been prevented from continuing to undertake remunerative work earlier undertaken. Where the requirements of s 24(1)(c) are capable of being addressed directly, because a veteran is able to show a non-continuation of earlier remunerative work, it will not be necessary to have regard to s 24(2)(b). However, there may be circumstances, and the present case was one in my view, where a veteran will be entitled, notwithstanding earlier cessation of remunerative work (whatever the reason), to point to genuine efforts to re-engage in remunerative work. Such an approach does not subvert the operation of s 24(1)(c). It merely provides an alternative, and intended, method of satisfying s 24(1)(c).”

155. Foster J gave his reasons at [182]-[184] of his judgment:

“ The starting point for considering whether s 24 is engaged at all in any given case is a finding that the veteran is totally and permanently incapacitated (within the meaning of s 24(1)(b)) from a war-caused condition. Such incapacity may be complete at the point in time when the veteran ceased military service or it may only become complete at some later time. It is the veteran’s incapacity which triggers the potential engagement of s 24, not the cessation of his or her military service.

The clause ‘... who has not been engaged in remunerative work ...’ in s 24(2)(b) is tantamount to a statement as to a state of present affairs viz ‘... who is not engaged in remunerative work ...’. The gateway erected by s 24(2)(b) is the circumstance that remunerative work is not being undertaken by the veteran at the time when the relevant assessment is being carried out. That circumstance may exist because the veteran has not engaged in any remunerative work since becoming totally and permanently disabled or because he or she has ceased being engaged in remunerative work previously undertaken after becoming incapacitated. In either case, the veteran may secure the benefit of s 24(2)(b) if he or she can satisfy the criteria laid down in the subsection (as to which, see [173] and [174] above).

A veteran who has not worked at all since becoming incapacitated or who has ceased engaging in remunerative work for reasons which include incapacity brought about by war-caused injury or disease, or both, will be (and should be) entitled to a pension at a higher rate if he or she has been genuinely seeking to engage in remunerative work and would, but for the war-caused incapacity, be continuing to seek to engage in remunerative work, provided that the war-caused incapacity is the substantial cause of the veteran’s inability to obtain remunerative work. The second class of veteran to which I have just referred would include veterans who suffer from slow-onset diseases such as PTSD.”

My difficulties

156. I have difficulty in understanding how their Honours have reached their conclusions. I will develop the reasons for my difficulty. Beginning with the judgment of Rares J and in the barest outline, it seems to me that his Honour has supported his opening statement that s 24(2)(b) applies to both those who have never undertaken remunerative work and those have done so but subsequently ceased by reference to matters arising under s 24(1)(b) and evidentiary matters relating to the first limb of s 24(1)(c). He has not done so by reference to the matters arising under the second limb of s 24(1)(c). He seems not to have explained how they support his conclusion nor taken account of the differences in language used by Parliament in each of the provisions i.e. “incapable of undertaking remunerative work” in s 24(1)(b), “prevented from continuing to undertake remunerative work” in s 24(1)(c), “ceased to engage in remunerative work” in s 24(2)(a) and “has not been engaged in remunerative work” in s 24(2)(b).

157. The opening statement made by Rares J to the effect that s 24(2)(b) does not connect the loss of income to the veteran’s inability to continue to engage in remunerative work under s 24(1)(c) is unexceptional. It recognises that s 24(2)(b) is not about the second limb of s 24(1)(c) but with the first.

158. The remainder of the paragraph causes me more concern. Rares J speaks of how, in evidentiary terms, a veteran might “... demonstrate that he or she was unable to engage in remunerative work, after a period in which the veteran had not been engaged in such work ...” (emphasis added). Clearly, his Honour’s reference to a veteran’s being “unable” to engage in remunerative work is a reference to his or her incapacity and so a reference to the issue that is raised by s 24(1)(b). It cannot be read as a reference to the issue that must be decided under the first limb of s 24(1)(c), which presupposes that the veteran is incapacitated within the meaning of s 24(1)(b). If there is any doubt about whether Rares J intended to refer to a veteran’s being unable to undertake remunerative work or being prevented from doing so, it is put aside by his reference to s 28 to support his proposition. That section clearly relates only to the determination of the incapacity issue arising under s 24(1)(b) and not the prevention issue arising under s 24(1)(c). Omitting references to s 24A, which provides for reassessment of pensions payable under ss 23 and 24, s 28 provides:

“In determining, for the purposes of paragraph 23(1)(b) or 24(1)(b), whether a veteran who is incapacitated from war-caused injury or war-caused disease, or both, is incapable of undertaking remunerative work ... the Commission shall have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the veteran;

(b) the kinds of remunerative work which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake; and

(c) the degree to which the physical or mental impairment of the veteran as a result of the injury or disease, or both, has reduced his or her capacity to undertake the kinds of remunerative work referred to in paragraph (b).”

159. The distinction between the issue of incapacity arising under s 24(1)(b) and that arising under s 24(1)(c) was addressed by Madgwick J in Hendy v Repatriation Commission^[153] when he observed:

“ It is a preliminary and elementary observation that, by using the phrase ‘prevented from continuing to undertake remunerative work that the veteran was undertaking’ in s 24(1)(c), the framers of the Act meant something quite different from the phrase ‘incapable of undertaking remunerative work’ s 24(1)(b) and the statutory exegesis of that latter phrase in s 28. This point, though elementary, seems worth making both because it is not easy to bear in mind that the decision-maker needs to consider two quite distinct concepts in relation to remunerative work, and because the distinction between the two concepts sharpens an appreciation of the features of each.”^[154]

160. The examples that Rares J gives of the evidentiary material that might support a veteran’s claim are not directed to the s 24(1)(b) issue of incapacity but to the s 24(1)(c) issue of his or her being prevented from continuing to undertake remunerative work. It is apparent from his judgment that he intends the examples to be read as referable to the first limb of s 24(1)(c). His approach is again unexceptional and, with one qualification, so is his concluding statement that “... the veteran could also seek to bring himself or herself within s 24(2)(b) by demonstrating attempts to seek remunerative work”.

161. That one qualification is that, before attempting to address evidentiary matters of that sort, the veteran must meet the criteria for the application of s 24(2)(b). The criteria that must be met at the outset are that the veteran is a veteran “not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work” (emphasis added). If the veteran is able to establish two factors, he or she “shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.” (emphasis added) In its context, the reference to “incapacity” must be read as the incapacity from a war-caused injury or war-caused disease, or both, that meets s 24(1)(b). That would mean that the veteran would then be treated as having met the first limb of s 24(1)(c). It would mean that a veteran “who has not been engaged in remunerative work” by reason of incapacity is treated the same as a veteran who has been “prevented from continuing to undertake remunerative work”. Section 24(1)(c) provides for the situation in which a veteran has not undertaken remunerative work for either a short or a lengthy period of time.

162. There is nothing either on the face of s 24(2)(b) or in the structure of s 24(1)(c) that suggests that it should be read as applying to a veteran “who has not been engaged in remunerative work” for some time. When I go to s 24(2)(a), I see that a veteran who “has ceased to engage in remunerative work” for reasons other than his or her incapacity from a war-caused injury or war-caused disease, or both, will not be taken to meet the second limb of s 24(1)(c). Rares J had earlier said at [10] of his judgment^[155] “the expression ‘has ceased to engage in remunerative work’, entails that the veteran has left the workforce, and not that he or she is merely unemployed.” If that is the proper meaning of that expression, it would seem to follow that Parliament intended that the expression “has not been engaged in remunerative work” should not be read in the same way. Following his Honour’s interpretation, it would entail that the veteran has not been in the workforce at all. If Parliament had intended s 24(2)(b) to be read as extending to a veteran who has been engaged in remunerative work but has left it as well as to one who has never engaged in it, it would be expected that it would use words consistent with the remainder of the section. That is to say, it would be expected to use words consistent both with those used in s 24(1)(c) to describe a veteran who has been prevented from “continuing to undertake remunerative work” and with those used in s 24(2)(a)(i) to describe a veteran who has “ceased to engage in remunerative work” as well as those that were used to describe a veteran “who has not been engaged in remunerative work”. Instead, it has chosen to use only the last of these three expressions.

163. The factors that a veteran must establish before having the benefit of s 24(2)(b) are also relevant to explore to see whether they support the view that its ameliorating provisions were meant to apply only to a veteran who is prevented from continuing to engage in remunerative work as well as to a veteran who has not been engaged in remunerative work. The first of those factors is that the veteran must satisfy 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” (emphasis added). The reference is to the remunerative work that the veteran has been seeking, and would, if it were not for the incapacity, be continuing to seek to engage in. It is not a reference to remunerative work in which he or she has engaged or would be continuing to engage in if it were not for the incapacity. The second factor has the same emphasis. It is that it is the veteran’s incapacity that is “the substantial cause of his or her inability to obtain remunerative work in which to engage” (emphasis added). Both factors have an emphasis on not having been engaged in remunerative work but seeking to be so engaged. They do not add any weight either way to whether a veteran can take advantage of s 24(2)(b) after a break in remunerative work or whether he or she must not have been engaged in remunerative work at all.

164. My difficulty with the reasons given by Buchanan J is that I do not understand how a provision requiring, among other matters, that a veteran be a person “who has not been engaged in remunerative work” can be said to apply “where remunerative work is not being done” and so accommodate “a cessation of earlier remunerative work, as well as a circumstance where a veteran has not worked since injury, or the development of the incapacity.” The error must be mine but it seems to me that Buchanan J has reached his conclusion by changing the first criterion of s 24(2)(b) - “who has not been engaged in remunerative work” – to a different criterion – “where remunerative work is not being done” – and then drawn his conclusion from that different criterion. It is a conclusion that follows from the criterion he has formulated but it is not readily apparent to me that it follows from the criterion as stated in s 24(2)(b).

165. I respectfully suggest that Foster J has taken the same approach as Buchanan J in stating that the “... clause ‘who has not been engaged in remunerative work’ is tantamount to a statement as to a state of present affairs viz ‘... who is not engaged in remunerative work ...’.” Neither Foster J nor Buchanan J considered the clause used in s 24(2)(b) or examined the differences between it and other clauses used in other provisions such as “ceased to engage in remunerative work” used in s 24(2)(a)(i) and “prevented from continuing to undertake remunerative work that the veteran was undertaking” used in s 24(1)(c) and which s 24(2)(b) is intended to ameliorate. Foster J referred to the judgments of Madgwick J in Hendy v Repatriation Commission^[156] and of Gray J in Giesen v Repatriation Commission^[157] where a contrary conclusion was reached. To my mind, he has not engaged with those judgments, and particularly that of Gray J, to refute the bases on which that contrary conclusion was reached.

Extrinsic material relating to the enactment of s 24 of the VE Act

A. Veterans’ Entitlements Bill 1985

166. I have also looked at the Second Reading Speech given when the Veterans’ Entitlements Bill 1985 (1985 VE Bill) was introduced. I am permitted by ss 15AB(1)(a) and 15AB(2)(f) of the Acts Interpretation Act 1901 (AI Act) to do so in order:

“to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; ...”^[158]

My doing so is also supported by the following passage from the judgment of Brennan CJ, Dawson, Toohey and Gummow JJ in CIC Insurance Ltd v Bankstown Football Club Ltd^[159] (CIC Insurance):

“ It is well settled that at common law, apart from any reliance upon s 15AB of the Acts Interpretation Act 1901 (Cth), the court may have regard to reports of law reform bodies to ascertain the mischief which a statute is intended to cure .... Moreover, the modern approach to statutory interpretation (a) insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and (b) uses ‘context’ in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means such as those just mentioned, one may discern the statute was intended to remedy .... Instances of general words in a statute being so constrained by their context are numerous. In particular, as McHugh JA pointed out in Isherwood v Butler Pollnow Pty Ltd (1986) 6 NSWLR 363 at 388, if the apparently plain meanings of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance. Further, inconvenience or improbability of result may assist the court in preferring to the literal meaning an alternative construction which, by the steps identified above, is reasonably open and more closely conforms to the legislative intent ...”^[160]

167. Turning then to the Second Reading Speech given in relation to the 1985 VE Bill, the Minister for Aboriginal Affairs, the Hon Clyde Holding said that:

“ Part II of the VEB sets out the eligibility conditions for the grant of a disability [sic] to a veteran ... Eligibility will arise in respect of a veteran's incapacity from injury or disease, or his or her death, where that injury, disease or death is determined to be war-caused. In effect, the VEB maintains the eligibility criteria applying under existing legislation. ... Disability pensions are payable on three scales-the general rate, the intermediate rate and the special TPI rate. This pension structure is maintained by the VEB. ...

Part II of the VEB will also continue the effect of the recent legislative amendments to clarify eligiblity for payment of pension at the intermediate or special-TPI-rate. The TPI rate pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their old age. It was never intended that the TPI rate would become payable to a veteran who, having enjoyed a full working life after war service, then retired from work, possibly with whatever superannuation and other retirement benefits are available to the Australian work force.

Under the TPI criteria in the VEB, a pension is not payable at that rate unless at the time of determination that veteran is receiving a 100 per cent general rate pension, is totally and permanently incapacitated, and would be continuing in remunerative work but for a war-caused disability and thereby suffers an economic loss. I would not expect many veterans over the normal retirement age to qualify for payment of pension at this rate as there would usually be reasons other than the effect of a war-caused incapacity which precluded continuing in employment. If a person has had the usual span of working life or has retired voluntarily or has left employment for reasons other than accepted disabilities, a TPI pension is not payable. Nonetheless, there is no strict age limit on entitlement to the special rate pension, although it must be clear that not many veterans over the age of 65 years will qualify. Special provision is made by the Bill to cover veterans who are under 65 years of age, are unemployed, and are genuinely seeking to engage in remunerative work.”^[161] (emphasis added)

168. The Explanatory Memorandum to the Bill does not take the matter any further for it simply says that:

“A special provision will be made in paragraph 24(2)(b) to cover veterans who are under 65 years of age, are unemployed and are genuinely seeking to engage in remunerative work.”

169. The word “unemployed” is not a word that is used in the VE Act. It is a word that was used by Rares J at [10] of his judgment to distinguish between a veteran who has left the workforce, and so one who “ceased to engage in remunerative work” and one who “is merely unemployed.” Whether or not the Minister intended to draw the same distinction is not apparent on the face of this sentence from the Explanatory Memorandum. When read in light of the passage I have reproduced from the Second Reading Speech, he would seem to have intended it to have its ordinary meaning without qualification of the period for which a person might have been unemployed or whether the person had previously been employed. In its ordinary meaning, the word “unemployed” refers to a person’s being “... without paid employment; jobless ...”.^[162]

2. Amendment of s 24 by addition of s 24(2A)

170. Clause 17 of the Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994 (1994 Amendment Act) added s 24(2A) to the VE Act. It is not relevant in the context of Mr Smith’s case as he was not over 65 years of age when he made his claim but it is relevant in understanding what Parliament intended. In summary, the changes effected by cl 17 to s 24 of the 1994 Amendment Act and similar changes by cl 16 to s 23, were:

“ The proposed amendments provide that the special or intermediate rates of disability pension will not apply to veterans who are over 65 years of age unless they had been engaged in remunerative work after the age of 65 years unless they had been engaged in remunerative work after the age of 65 years and, when they stopped their last remunerative work, they had been engaged in that remunerative work for at least ten years. The proposed amendments will not affect payment of existing pensions at the special and intermediate rates and will apply to claims or applications lodged on or after 1 June 1994. The new rules will apply only to veterans who make claims or applications after the age of 65 years.”^[163]

171. The Second Reading Speech made by the Hon Kim Beazley, the then Minister for Finance, in relation to the Bill leading to the 1994 Amendment Act explained the reason for introducing the restrictions in the eligibility criteria relating to veterans over the age of 65 years. In doing so, he emphasised the intention underlying the eligibility criteria relating to special and intermediate rate pensions. He said:

“ The second initiative relates to changes to the eligibility criteria for special and intermediate rate pensions. The former being known in the past as the TPI, or totally and permanently incapacitated, pension. The criteria for these higher rates of disability pension were changed in 1985 when it became clear that the outmoded terminology of the old Repatriation Act was enabling these pensions to be paid to veterans who had completed a full working life, after retiring on superannuation and other retirement benefits. This was never intended. The original intention of these higher levels of pension was to compensate those severely disabled veterans who could not work to support their families on their return from service. It was to be in only very rare cases that any veteran beyond the normal retirement age would be eligible for such rates of pension.

Subject to certain exceptions and to protection of existing special and intermediate rate pensions, the changes being made by this bill reinforce that intention. They will mean that these pensions will not normally be granted to veterans who are over 65. An exception to this rule will apply if the veteran was engaged in remunerative work after the age of 65 and that work was in the same business or employment in which the veteran had been working for 10 continuous years. This would include, for example, many in the farming community.”^[164] (emphasis added)

Predecessor of s 24: Schedule 2 of the 1920 Act

172. I have also looked at the immediate predecessor of s 24. It is found in Schedule 2 to the 1920 Act. Schedule 2 is relevant for, as the Minister said in the Second Reading Speech relating to the 1985 VE Bill, what was later enacted as Part II of the VE Act simply continued the effect of amendments made to the 1920 Act. Those amendments had been made by the Repatriation Legislation Amendment Act 1985 (1985 Amendment Act) in repealing and re-enacting Schedule 2.

173. I have already set out [1](a) and (b) of that Schedule at FN 144 above for it was considered by the Full Court in Banovich, to which I have referred at [57] and [146] above. Apart from changes of style, paragraphs [1](b)(ii) and (iii) mirror the provisions now found in ss 24(1)(b) and (c). The first change in style is a change in description from “a member of the Forces” to “veteran”. The second a change in the description of condition from an “injury or disease that has been accepted as related to the member’s relevant war service” to “war-caused injury or war-caused disease, or both”.

174. Paragraph [2] of Schedule 2 qualified the operation of [1]. It read:

“For the purpose of the last preceding paragraph –

(a) a member of the Forces who is incapacitated from injury or disease that has been accepted as related to the member’s relevant war service 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 member has ceased to engage in remunerative work for reasons other than his or her incapacity from that injury or disease; or

(ii) the member is incapacitated, or prevented, from engaging in remunerative work for some other reason; and

(b) where a member of the Forces, not being a member 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 member shall be treated as having been prevented by reason of that incapacity, from continuing to undertake remunerative work that the member was undertaking.”

175. Paragraph [3] of Schedule 2 went on to require the Commission to have regard to certain matters in deciding whether a member of the Forces who is incapacitated from injury or disease is incapable of undertaking remunerative work. Again, apart from the changes in description, para [3] is consistent with s 28 of the VE Act as it is presently drafted. The provision that a reference to “remunerative work” is to be read as including a reference to any remunerative activity at the end of [3] is now found in s 5Q(1) of the VE Act.

176. In his Second Reading Speech relating to the Bill leading to the enactment of the 1985 Amendment Act, the Minister for Community Services, Senator Grimes, reflected what was later to be said in introducing the 1985 VE Bill. He said in his Second Reading Speech:

“ Since 1920, there has been a special rate of disability pension payable in circumstances where, because of total and permanent incapacity resulting from war service, a veteran has been unable to resume or to continue in civil employment. The Special or T&PI pension was designed for severely disabled veterans of a relatively young age who could never go back to work and could never hope to support themselves or their families or put away money for their old age. It was never intended that the T&PI rate would become payable to a veteran who, having enjoyed a full working life after war service, then retired from work, possibly with whatever superannuation and other retirement benefits are available to the Australian workforce.

Determining authorities have found the application of the present legislative provisions difficult because the provisions, unchanged since 1920, contain outmoded and imprecise terms. The amendments clarify the eligibility criteria and make it clear that, to qualify for T&PI pension, a veteran must be eligible for the 100% general rate pension. In addition, the T&PI pension can become payable only when a veteran is totally and permanently disabled by accepted disabilities and is thereby precluded from continuing to engage in remunerative work. If a person has had the usual span of a working life or has retired voluntarily or has left employment for reasons other than accepted disabilities, a T&PI pension is not payable. It would be in only very rare cases that any veteran beyond the normal retirement age could be eligible for this pension. Special provision is made by the Bill to cover veterans who are under 65 years of age, are unemployed, and are genuinely seeking to engage in remunerative work.”^[165] (emphasis added)

177. The amendments effected by the 1985 Amendment Act and, in particular, the repeal and re-enactment of Schedule 2, came into force on 6 June 1985. They followed closely upon the tabling of the Veterans’ Entitlements Bill 1985 on 30 May 1985 which, as I have said, contained provisions reflecting those in Schedule 2. In his Second Reading Speech delivered nearly five months later on 16 October 1985 after an exposure period for the Bill, the Minister said that:

“ The introduction of the Veterans’ Entitlements Bill in the Parliament marks the culmination of one of the most extensive periods of consultation that this or any other government has ever undertaken. The Bill has been drafted around the recommendations made by the Advisory Committee on Repatriation Legislation Review which was constituted by representatives of the Returned Services League, Legacy, the War Widows’ Guild and the Australian Veterans’ and Defence Services Council. Ninety-five per cent of the Committee’s 292 recommendations have been incorporated in the Bill. ...”^[166]

178. The Minister noted that there had been criticisms of the standard of proof in the amendments to the 1920 Act introduced on 6 June 1985 but later noted that the other provisions of Schedule 2 were incorporated in the Bill.^[167] The Report of the Advisory Committee on Repatriation Legislation Review (Advisory Committee) does not specifically address the issue raised by s 24(2)(b) and makes no particular recommendation.

Summary

179. On my reading of the extrinsic material, I do not think that it can be read as supporting the conclusion reached by the Full Court in Smith that s 24(2)(b) is available to a veteran who has previously engaged in remunerative work. Indeed, it would tend to support the contrary conclusion reached by Madgwick J in Hendy v Repatriation Commission and by Gray J in Giesen v Repatriation Commission. In saying that, I recognise that it is not the extrinsic material that decides the interpretation of the words of an enactment but the words of the enactment itself. It would seem that the words that Parliament has chosen lead to the same interpretation. That is particularly so in light of the various ways in which s 24 expresses the relationship between the veteran and remunerative work. Parliament’s expression of that relationship in s 24(2)(b) as one in which the veteran (who is aged less than 65 years) “has not been engaged in remunerative work” but has been “genuinely seeking to engage in remunerative work” must, I respectfully suggest, be compared and contrasted with a veteran who has been “prevented from continuing to undertake remunerative work”.

180. I would go further and respectfully suggest that task should be undertaken in the context of a consideration of s 24 and the criteria it establishes for payment of disability pension at the special rate as a whole and not simply with a focus upon s 24(1)(c) and s 24(2). The interpretation of sub-sections in a section is no different from the interpretation of the words in a phrase. Interpretation of the latter was considered by the High Court in Collector of Customs v Agfa-Gevaert Ltd:^[168]

“... The meaning attributed to individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole and the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question. In R v Brown ... [[1996] AC 543 at 561], a recent House of Lords decision, Lord Hoffmann said:

‘The fallacy in the Crown's argument is, I think, one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence. ... This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.’

... [T]he notions of meaning and construction are interdependent. ...”^[169]

I certify that the one hundred and eighty preceding paragraphs are a true copy of the reasons for the decision herein of

Deputy President S A Forgie,

Signed: ......[sgd]...............................................

Associate

Date of Hearing 10 November 2014

Date of Decision 21 January 2015

Counsel for the Applicant Ms Fiona Ryan

Solicitor for the Applicant Mr Michael E Jorgensen

Williams Winter

Counsel for the Respondent Ms Cathy Dowsett

Solicitor for the Respondent Mr Kasper Maat

Australian Government Solicitor

---

^[1] Smith v Repatriation Commission [2012] FCA 1043; (2012) 131 ALD 63; Gordon J

^[2] Smith v Repatriation Commission [2014] FCAFC 53; Rares, Buchanan and Foster JJ

^[3] The orders made by Gordon J had been to dismiss the appeal and that Mr Smith pay the Commission’s costs of the proceeding with those costs to be taxed if the parties did not agree.

^[4] Repatriation Commission v Nation [1995] FCA 1277; (1995) 57 FCR 25; 21 AAR 351 at [39]; 33; 359

per Beaumont J with whom Black CJ and Jenkinson J agreed

^[5] [1995] FCA 1277; (1995) 57 FCR 25; 21 AAR 351 at [41]- [42]; 34; 359-360

^[6] VE Act; s 18(1)

^[7] VE Act; s 18(2)

^[8] [2014] FCAFC 53 at [78]

^[9] [2014] FCAFC 53 at [195]

^[10] Exhibit A1; statement of Mr Smith of 5 August 2010

^[11] VE Act; s 7(1)

^[12] VE Act; ss 21A(1) and (2)

^[13] VE Act; s 13(1)(d)

^[14] VE Act; s 22(2)

^[15] Section 24(2A) applies to a veteran who had turned 65 years of age before submitting a claim under either ss 14 or 15. It, and its qualifying provision, s 24(2B), do not apply in this case.

^[16] VE Act; ss 24(1)(aa), (aab), (a)(i) and (d)

^[17] VE Act; ss 23(1)(aa), (aab), (a)(i) and (d)

^[18] VE Act; s 19(9)

^[19] VE Act; s 19(9)

^[20] VE Act; s 19(9) and see s 21

^[21] VE Act; s 19(9)

^[22] VE Act; s 120(4)

^[23] Repatriation Commission v Smith (1987) 15 FCR 327; 74 ALR 537; 7 AAR 17

^[24] (1987) 15 FCR 327; 74 ALR 537; 7 AAR 17 at 335; 547; 26

^[25] [2014] FCAFC 124; Middleton, Murphy and Rangiah JJ

^[26] [2014] FCAFC 53 at [45] per Buchanan J

^[27] [2014] FCAFC 53 at [8] per Rares J

^[28] [2014] FCAFC 53 at [9] per Rares J

^[29] [2014] FCAFC 53 at [17] per Rares J

^[30] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93; Beaumont, Branson and Merkel JJ

^[31] In his judgment, Rares J made no mention of Flentjar at all while Foster J mentioned it in the context of summarising the Tribunal’s reasoning.

^[32] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93 at 4-5; 96

^[33] [2014] FCAFC 53 at [45]

^[34] [2011] FCAFC 116; (2011) 197 FCR 228; 123 ALD 440 at [31]; 234; Marshall, Downes and Bromberg JJ

^[35] [2011] FCAFC 116; (2011) 197 FCR 228; 123 ALD 440 at [32]; 234; 446

^[36] [2014] FCAFC 53 at [47]

^[37] [2014] FCAFC 53 at [168]

^[38] [2014] FCAFC 53 at [169]

^[39] [2014] FCAFC 53 at [171]

^[40] [2014] FCAFC 53 at [172]

^[41] [2014] FCAFC 53 at [173]

^[42] [2014] FCAFC 53 at [176]

^[43] [2014] FCAFC 53 at [1]

^[44] [2014] FCAFC 124 at [51]

^[45] VE Act; s 5D(2)

^[46] [2014] FCAFC 53 at [9] per Rares J

^[47] [2014] FCAFC 53 at [47] per Buchanan J

^[48] [2014] FCAFC 53 at [8] per Rares J

^[49] VE Act; s 5Q(1)

^[50] [2014] FCAFC 124 at [21]- [22]

^[51] [2014] FCAFC 124 at [24] citing [2014] FCAFC 53 at [47]- [48]

^[52] [2014] FCAFC 53 at [166] per Foster J

^[53] [2014] FCAFC 53 at [47] per Buchanan J

^[54] [2014] FCAFC 124 at [70]- [78]

^[55] Richmond [2014] FCAFC 124 at [83]

^[56] [2014] FCAFC 53 at [69] per Buchanan J

^[57] [2014] FCAFC 53 at [49] per Buchanan J

^[58] [2014] FCAFC 53 at [23] per Rares J

^[59] [2014] FCAFC 53 at [21] per Rares J and see [151]-[165] below

^[60] [2014] FCAFC 53 at [23] per Rares J

^[61] [2014] FCAFC 53 at [47] per Buchanan J

^[62] [2014] FCAFC 53 at [47] per Buchanan J and see also [8] where Rares J describes s 24(1)(c) as having three elements, which are consistent with those identified by Buchanan J and reproduced in (2), (3) and (4) above.

^[63] [2014] FCAFC 53 at [49] per Buchanan J

^[64] [1986] FCA 397; (1986) 69 ALR 395; 6 AAR 113; at 402; 119 per Fisher, Beaumont and Wilcox J

^[65] [1986] FCA 397; (1986) 69 ALR 395; 6 AAR 113 at 402; 119 The reference to subparagraph (iii) is a reference to para [1](b)(iii) of Schedule 2 to the Repatriation Act 1920. It is expressed in terms very similar to those used in s 24(1)(c) and I return to it at [146] in Attachment B below.

^[66] [2014] FCAFC 53 at [10] per Rares J

^[67] [2014] FCAFC 53 at [48] per Buchanan J

^[68] [2014] FCAFC 124 at [86]

^[69] Exhibit R9 at 45

^[70] Exhibit R9 at 45

^[71] The accident occurred on 19 April 1982.

^[72] Exhibit R9 at 47

^[73] Exhibit R9 at 64

^[74] Exhibit R9 at 70

^[75] Exhibit R9 at 70

^[76] Exhibit R9 at 143 and144

^[77] Exhibit R9 at 145 and 146

^[78] Exhibit R9 at 147

^[79] Exhibit R9 at 148 and 149

^[80] Exhibit R9 at 65

^[81] Exhibit R9 at 66

^[82] Exhibit R9 at 159

^[83] Exhibit R9 at 130

^[84] Exhibit R9 at 131

^[85] Exhibit R9 at 135

^[86] Exhibit R9 at 136

^[87] Exhibit R9 at 136

^[88] Exhibit R 9 at 153

^[89] Exhibit R9 at 163

^[90] Exhibit R9 at 163

^[91] Exhibit R7 at 17

^[92] In his clinical notes dated 20 November 2002, Dr van der Linden recorded Mr Smith as having said: “Generally work is good, capable, considered a good worker. Never had the sack, only once made redundant. Last year more difficult getting work → because of his disability & age.”: Exhibit R7 at 5

^[93] T documents, T1 at 4

^[94] T documents, T3 at 4

^[95] T documents; T3 at 5

^[96] T documents; T3 at 6

^[97] Exhibit R9 at 36

^[98] Exhibit R9 at 68

^[99] Exhibit R9 at 69

^[100] Exhibit R5 at 5

^[101] Exhibit R5 at 5

^[102] Transcript of 6 September 2011 at 53

^[103] Exhibit R6 at 6

^[104] Exhibit R6 at 6

^[105] Exhibit R6 at 6

^[106] Exhibit R6 at 7

^[107] Exhibit R6 at 5 The question gave him the following answers to choose from: “Easily”, “With difficulty”, “With help”, “If I take my time”, “I can’t do it”, “I don’t need to” and “Not Applicable”.

^[108] T documents; T12 at 145

^[109] T documents; T12 at 146

^[110] T documents; T12 at 147

^[111] T documents; T12 at 148

^[112] T documents; T20 at 212

^[113] T documents; T20 at 212

^[114] Exhibit R9 at 58

^[115] T documents; T4 at 10 The letter is written in similar terms to that written to Dr Birrell on 5 November 2003: Exhibit R9 at 33-35

^[116] Exhibit R9 at 134

^[117] Exhibit R9 at 140-141

^[118] Exhibit R 7 at 22

^[119] Exhibit R9 at 36

^[120] [2004] FCAFC 83; (2004) 81 ALD 625; Emmett, Conti and Selway JJ

^[121] [2004] FCAFC 83; (2004) 81 ALD 625 at [28]; 632

^[122] [2004] FCAFC 83; (2004) 81 ALD 625 at [29]; 632-633

^[123] Exhibit A2 at 4

^[124] [1968] HCA 42; (1968) 117 CLR 390; Barwick CJ, McTiernan, Kitto, Taylor, Menzies and Windeyer JJ

^[125] [1968] HCA 42; (1968) 117 CLR 390 at 407-408 per Windeyer J

^[126] [1970] AC 113; 3 WLR 75

^[127] [1994] FCA 1147; (1994) 50 FCR 555

^[128] [1970] AC 113; 3 WLR 75 at 127; 85

^[129] [1994] FCA 1147; (1994) 50 FCR 555 at 572

^[130] [1968] HCA 42; (1968) 117 CLR 390 at 408-409

^[131] [2007] FCAFC 16; (2007) 158 FCR 325; Stone, Allsop and Edmonds JJ

^[132] [2007] FCAFC 16; (2007) 158 FCR 325 at [4]- [5], 327 (citations omitted) Stone and Edmonds JJ agreed on this issue at [1]; 326 and [48]; 348 respectively.

^[133] [1990] HCA 21; (1990) 170 CLR 1; 93 ALR 1; 64 ALJR 327; Mason CJ, Brennan and Dawson JJ; Deane and Toohey JJ dissenting

^[134] [1990] HCA 21; (1990) 170 CLR 1; 93 ALR 1; 64 ALJR 327 at 35-36; 25; 341

^[135] Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135; 169 ALR 400; 74 ALJR 490; 60 ALD 342; 106 LGERA 419; Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ at [56]; 157; 416; 501; 359; 437 per Gaudron J

^[136] [2007] FCAFC 16; (2007) 158 FCR 325 at [6]- [7]; 327

^[137] Facts drawn from Tribunal’s decision Re Flentjar and Repatriation Commission [1995] AATA 273; Senior Member Gibbs and Members Ermert and Shanahan

^[138] [1987] FCA 342; (1987) 18 FCR 221; 76 ALR 449; (1987) 14 ALD 160; 7 AAR 296; Fox, Jenkinson and Neaves JJ

^[139] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93 at 5; 95 per Branson J with whom Beaumont and Merkel JJ agreed

^[140] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93 at 5; 97

^[141] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93 at 4; 95

^[142] [1987] FCA 342; (1987) 18 FCR 221; 76 ALR 449; 14 ALD 160; 7 AAR 296; Fox and Jenkinson JJ; Neaves J dissenting

^[143] (1987) 15 FCR 327; 15 FLR 327; 74 ALR 537; 7 AAR 17; Northrop, Beaumont and Spender JJ

^[144] “[1] The special rate of pension may be granted to –

(a) a member of the Forces who has been blinded as a result of war service; and

(b) any other member of the Forces if –

(i) the other member is in receipt of, or is eligible to receive, a general rate pension at the rate specified in column 3 of the table in Schedule 1;

(ii) the other member is totally and permanently incapacitated, that is to say, the member’s incapacity from injury or disease that has been accepted as related to the member’s relevant war service is of such a nature as, of itself alone, to render the member incapable of undertaking remunerative work for periods aggregating more than 8 hours per week; and

(iii) the other member is, by reason of incapacity from that injury or disease alone, prevented from continuing to undertake remunerative work that the member 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 member would not be suffering if the member were free of that incapacity.”

^[145] [1986] FCA 397; (1986) 69 ALR 395; 6 AAR 113 at [23]; 402; 119-120

^[146] [1987] FCA 342; (1987) 18 FCR 221; 76 ALR 449; 7 AAR 296 at [19]; 225-226; 454-455; 301 per Fox J and see also [2]; 226-227; 455-456; 301-302 per Jenkinson J

^[147] (1987) 15 FCR 327; 74 ALR 537; 7 AAR 17 at 337; 548; 27-28

^[148] [1997] FCA 1200; (1997) 48 ALD 1; 26 AAR 93 at 4-5; 96

^[149] [2014] FCAFC 53 at [21]

^[150] [2014] FCAFC 53 at [49]

^[151] [2005] FCAFC 53 at [181]

^[152] [2014] FCAFC 53 at [21]

^[153] [2002] FCA 602; (2002) 72 ALD 112

^[154] [2002] FCA 602; (2002) 72 ALD 112 at [34]; 120 appeal against judgment allowed by Full Court of Federal Court in Repatriation Commission v Hendy [2002] FCAFC 424; (2002) 76 ALD 47; Whitlam, Emmett and Stone JJ but this statement of principle was not questioned.

^[155] See [169] above

^[156] [2002] FCA 602; (2002) 72 ALD 112

^[157] [2005] FCA 846; (2005) 216 FCR 435; 87 ALD 347 at [19]- [27]; 441-443; 352-354

^[158] AI Act; s 15AB(1)(a)

^[159] (1997) 187 CLR 384; 141 ALR 618

^[160] (1997) 187 CLR 384; 141 ALR 618 at 408; 634-5

^[161] Hansard, Parliament 34, House of Representatives, 16 October 1985 at 2178

^[162] Chambers 21^st Century Dictionary, 1999, reprinted 2004, Chambers

^[163] Explanatory Memorandum to 1994 Amendment Bill at 20

^[164] Hansard, House of Representatives, 9 June 1994 at 1809

^[165] Hansard, Senate, 22 May 1985 at 2378

^[166] Hansard , Parliament 34, House of Representatives, 16 October 1985 at 2178

^[167] See [177] above

^[168] [1996] HCA 36; (1996) 186 CLR 389; 141 ALR 59; 43 ALD 193; 35 ATR 249; 24 AAR 282; Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ

^[169] [1996] HCA 36; (1996) 186 CLR 389; 141 ALR 59; 43 ALD 193; 35 ATR 249; 24 AAR 282 at 397; 64; 198; 254; 287-288