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Re: PETER BANOVICH And: THE REPATRIATION COMMISSION No. NSW G178 of 1986 Repatriation

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

Fisher J.

Beaumont J.

Wilcox J.

HRNG

SYDNEY

#DATE 17:11:1986

Counsel for the Applicant: Mr D M J Bennett QC with Mr G Miller

Solicitors for the Applicant: T Barrett, Australian Legal Aid Office

Counsel for the Respondent: Mrs P Fleming QC with Ms S Ward

Solicitors for the Respondent: Australian Government Solicitor

ORDER

The appeal be dismissed.

The appellant pay to the respondent its costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal

Court Rules.

JUDGE1

This is an appeal by the applicant, Peter Banovich, from a decision of the

Administrative Appeals Tribunal, constituted by a Deputy President sitting

alone, by which the Tribunal affirmed a decision of the Veterans' Review Board

that the applicant was not entitled to a pension at the Special Rate

prescribed by Schedule 2 to the Repatriation Act 1920 -- often referred to as

"the TPI pension" -- and that his pension would therefore continue at 100% of

the General Rate. The appeal is limited to matters of law: see s.44 of the

Administrative Appeals Tribunal Act 1975.

2. The applicant was born on 9 September 1909, so that he was 76 years of age

at the time of the hearing before the Administrative Appeals Tribunal. Mr

Banovich served overseas during the Second World War, being discharged on 3

November 1944 with a Class D medical classification. Prior to discharge he

was classified as unfit for any occupation involving heavy work.

Subsequently, Mr Banovich was granted a war disability pension, the amount of

which was, in 1960, increased to 100% of the General Rate. He has received

the pension at that rate since that time.

3. Since 10 October 1962 it has been accepted that the following disabilities

are attributable to Mr Banovich's war service:-

1. Fracture 4th, 5th and 6th cervical vertebrae,

2. Rupture long head left biceps,

3. Fracture right tibial tuberosity,

4. Dysentery,

5. Osteoarthritis of cervical spine,

6. Impotence,

7. Spondylitis,

8. Hysterical personality,

9. Osteoarthritis of hip joints.

4. For some years after his discharge from the Army Mr Banovich was

self-employed. During the 1950s he worked as a driver, first for CSIRO and

then for the Department of Works and Housing. From 1952 until at least 1960

he was employed by the Metropolitan Sewerage and Drainage Board as a "clerical

labourer". On 28 April 1964 he commenced employment with the Commissioner for

Railways (now the State Rail Authority). At that time the Railways had a

policy not to recruit persons aged more than 47 years and Mr Banovich was then

54 years old. However, he gave his date of birth as 1917 and was employed,

until September 1975 as a fitter's assistant and thereafter as a depot man.

5. Mr Banovich was retired from his employment with the State Rail Authority

on medical grounds on 7 May 1977. He was then in fact aged 67 years and 8

months but the Authority's records showed him to be only 59 years and 8

months. So far as the Authority was concerned, and but for his disabilities,

it seems that Mr Banovich's employment could have continued until 9 September

1982 when, according to the Authority's records, he would have turned 65

years.

6. The Tribunal made the following findings as to the circumstances of the

applicant's retirement:

"The event that precipitated Mr. Banovich's

retirement in 1977 was described by him as

follows. He had been standing on a table

cleaning a clock on the wall. His foot, which

was very close to the edge of the table,

slipped. He dropped one foot onto a swivel

chair which spun around causing him to injure

his right hip. Following examination by a

doctor employed by the Authority, Mr. Banovich

was told that he would be retired medically

unfit because his hip was 'finished' - 'it

will never be right'."

7. Later in the Tribunal's reasons, the Deputy President said that whilst it

was "Quite possible that this injury aggravated his war caused disability of

'osteoarthritis of hip joints', I have no evidence before me to that effect":

see para.27 of the Tribunal's reasons, cited below.

8. We interpolate that counsel for Mr Banovich attack this finding and submit

that, in the conclusion it reached, the Tribunal asked itself the wrong

question. It is contended that the evidence before the Tribunal showed that

the injury at work was caused by the war related injury. We do not agree with

these criticisms. The evidence relied upon by counsel for Mr Banovich for

this purpose was as follows:

"Yes, did you have an accident?---Have an

accident in our office, yes.

What happened?---I was going up on a table

like that, and I was cleaning a clock on the

wall - clock ---

Yes?---And I put my foot very close to the

edge and as I could not move fast, because I

am too stiff - my right shoulder, my neck -

all is stiff - and hips. I could not - when I

slipped I could not spin round quick so I

dropped my foot on a chair to stop, but it

happened to be a spinning chair and when I put

the weight there she spins around and I hit my

hip, harder than I - - -

And how did it - - - ?---Well, nearly a minute

and a half I could not get up I was so pain in

the right hip."

9. We do not think that the Tribunal was bound to conclude from such sketchy

material that the injury which forced Mr Banovich's retirement was caused by

any war related disability. More important, it was not a matter which was

open for review by the Tribunal. Mr Banovich had not made a claim for a

pension in respect of any incapacity said to arise out of this incident. Thus

the Tribunal was not called upon to consider whether any such incapacity was

war related. What was before the Tribunal was the different question of

reassessment of the appropriate rate of pension payable to Mr Banovich by

reference to several disabilities which were accepted as attributable to war

service. In our reasons in Delkou v The Repatriation Commission, delivered

this day, we have mentioned the distinction between a determination that the

Commonwealth is liable to pay a pension to a member of the Forces on the

ground of his incapacity on the one hand and the rate of any such pension on

the other. In the present case, the Tribunal was concerned only with the

latter question.

10. Mr Banovich has not engaged in paid employment since his retirement from

the Railways.

11. On 20 June 1983 Mr Banovich applied for the Special Rate of pension. The

application was refused by a Repatriation Board and the Veterans' Review Board

affirmed that refusal on 15 January 1985.

12. Between the date of the decision of the Veterans' Review Board and the

hearing before the Tribunal, namely on 6 June 1985, the Repatriation

Legislation Amendment Act 1985 came into effect. That Act made important

amendments to the Repatriation Act, as previously framed. One of these

amendments was to Schedule 2 to the Act, that amendment effecting substituted

criteria for the grant of a pension at the Special Rate. Before the Tribunal

the parties accepted that, notwithstanding the fact that the application had

been made -- and determined by the Veterans' Review Board -- before the

enactment of the amendments, the Tribunal was bound to apply to the case the

terms of the amended Schedule. The Tribunal agreed with the parties'

understanding of the law. The contrary has not been argued before us, in this

case, but we are satisfied, for the reasons we give in Delkou, that this is

the correct position.

13. The relevant provisions of Schedule 2 are as follows:

"(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.

(2) 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 a substantial

cause of his or her inablity 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.

(3) In determining whether a member of the Forces

who is incapacitated from injury or disease 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 member;

(b) the kinds of remunerative work which a

person with skills, qualifications and

experience referred to in sub-paragraph

(a) might reasonably undertake; and

(c) the degree to which the incapacity of the

member from injury or disease that has

been accepted as related to the member's

relevant war service has reduced his or

her capacity to undertake the kinds of

remunerative work referred to in

sub-paragraph (b).

...

In this Schedule, a reference to remunerative work

shall be read as including a reference to any

remunerative activity."

(We have inserted, for convenience of reference, the numbers shown in square

brackets, the paragraphs being unnumbered in the Schedule itself).

14. Paragraph (1)(b) of the Schedule, upon which the present applicant

relies, specifies three qualifying criteria. They may be shortly described as

receipt of 100% general rate pension, total and permanent incapacity and

economic loss. There was never any question about the first element and,

before the Tribunal, the Repatriation Commission conceded total and permanent

incapacity.

15. But the Commission successfully disputed that the third element was made

out. In its reasons for decision the Tribunal said this in relation to

economic loss:

"22. There are, essentially, two questions

posed by paragraph (1)(b)(iii). The first

question is whether, by reason of the

incapacity from the accepted disabilities

alone, Mr. Banovich is prevented from

continuing to undertake remunerative work that

he was undertaking. 'Prevented' in this

context, I understand to mean 'precluded'.

The relevant question, in my view, is whether

the incapacity from the accepted disabilities

alone is what stands between the veteran and

his continuing to undertake remunerative work

that he was undertaking. If there are other

reasons which prevent the member from

continuing to so work, the first requirement

of paragraph (1)(b)(iii) cannot be satisfied.

In the present case, it was said that whatever

incapacitating effect may flow from the

applicant's accepted war disabilities, the

applicant was now, by reason of his age,

precluded from undertaking remunerative work.

In support of this contention evidence was

called from Mr. Ian Sneddon, the manager of

the Cabramatta Job Centre of the Commonwealth

Employment Service, who said that, quite apart

from the highly competitive labour market for

unskilled work, Mr. Banovich's age and

disabilities would preclude him from obtaining

full time employment, sedentary or otherwise.

The part-time labour market, he said, was even

tighter. That factor aside, however 'Mr.

Banovich's stated disabilities would

undoubtedly remain an unsurmountable barrier'.

He concluded that, in his opinion, any of the

three factors of age, labour market conditions

or accepted disabilities, would make it

extremely unlikely that Mr. Banovich would be

able to obtain employment. The combination of

all three factors 'would make it infinitely

more unlikely'."

16. The Tribunal referred to the submission of counsel for Mr. Banovich

pointing out that no age limit was imposed by the Schedule and went on:-

"24. In the present case, it is, I think,

relevant that Mr. Banovich has throughout the

bulk of his working life been employed in

various Government authorities, all of which

have a maximum statutory retiring age not in

excess of 65 years. By the date of his latest

application for the Special Rate pension in

June 1983 (that being the application that is

presently before me), he was 73 years of age,

considerably beyond the statutory retiring age

for the types of employment in which he had

engaged during most of his working life. His

only prospect of employment at that stage

would have been in private enterprise - a

prospect which, on the evidence of Mr.

Sneddon, even if Mr. Banovich was assumed to

be perfectly fit, was minimal having regard to

(a) the state of the labour market and (b) Mr.

Banovich's age.

25. In my view, therefore, it follows that in

June 1983, Mr. Banovich was not prevented from

continuing to undertake remunerative work that

he was undertaking by reason of incapacity

from his accepted disabilities alone. He was,

in my view, also prevented from continuing to

undertake such work by reason of his advanced

years. His age alone had become a barrier

precluding any further prospects of employment

in the workforce. In my view, therefore, he

fails to satisfy the first requirement of

paragraph (1)(b)(iii) of Schedule 2."

17. Although it was strictly unnecessary to consider the matter, the Tribunal

also dealt with the second requirement of sub-para.(iii), in relation to which

para.(2)(a) is relevant.

"27. In the present case, the evidence leaves

no doubt that Mr. Banovich has ceased to

engage in remunerative work. Looking back

over his work history, I find that the reason

Mr. Banovich has ceased to engage in such

work, was the decision of the SRA to retire

him on medical grounds by reason of the injury

that he sustained to his right hip. Whilst it

is quite possible that this injury may have

aggravated his war caused disability of

'osteoarthritis of hip joints', I have no

evidence before me to that effect. On the

evidence as it stands, therefore, I am unable

to find that Mr. Banovich ceased to engage in

remunerative work by reason of incapacity from

his accepted disabilities alone. Whether that

conclusion be correct or not, it is my view,

for the reasons earlier given, that Mr.

Banovich was prevented from engaging in

remunerative work not only by reason of the

incapacity from his accepted disabilities but

also by reason of his age. Accordingly, Mr.

Banovich cannot be taken to be suffering a

loss of salary or wages by reason of

incapacity from his accepted disabilities

alone."

18. Several grounds of appeal are argued on behalf of the applicant but they

reduce to two major matters for determination: the proper interpretation of

para.(1)(b)(iii) and the date at which the criteria specified by para.(b) must

be satisfied.

The interpretation of para.(1)(b)(iii)

19. Sub-paragraph (iii) refers to "incapacity from that injury or disease

alone". This is a reference back to sub-para.(ii) and to the concept of

incapacity which it embodies; that is to say an incapacity:

(a) which is caused by an injury or disease that has

been accepted as related to the member's war

service; and

(b) which is such, of itself alone, to render the

member incapable of undertaking remunerative

work for more than eight hours per week.

It will be noted that sub-para.(ii) deals only with the nature of the

incapacity. It includes no requirement of economic loss.

20. Sub-paragraph (iii) takes the incapacity described in sub-para(ii) and

imposes two additional requirements: that the member be prevented by such

incapacity from continuing to undertake remunerative work which he or she was

undertaking and that, by reason thereof, the member suffer a loss of salary or

wages or of earnings on his or her own account. 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.

21. Counsel for the applicant submit that a member may be "prevented from

continuing to undertake" remunerative work in two disparate ways: the member

may lose his or her employment or he or she may be unable to obtain

employment. They submit that, in either case -- but in the second case only

where that the member has previously had employment -- it is accurate to speak

of the incapacity preventing the member "from continuing to undertake

remunerative work that the member was undertaking". The "loss of salary or

wages" referred to in sub-para.(iii), they say, is the financial loss suffered

because of the loss of existing employment or the loss caused by the inability

of the member to obtain employment.

22. In the argument of counsel for the applicant, the distinction made in

para.(1)(b)(iii) is reflected in the alternatives postulated by para.2(a);

sub-para(i) referring to a case of loss of employment and sub-para(ii) to a

case of inability to obtain employment. Unless para.2(a) is so construed,

they say, a member who loses his or her employment for a non-war related

reason -- for example, retrenchment -- or who is at some stage unable to

obtain employment for a non-war related reason -- for example, imprisonment --

will never subsequently be entitled to receive a Special Rate pension,

regardless of the subsequent employment effects of a war-related disability.

In the present case it is enough, say counsel, that Mr Banovich ceased to work

for the State Railway Authority because of a war related incapacity or was at

some stage -- for example immediately after retirement by the Authority --

unable to work because of the war-related incapacity alone.

23. We accept that the loss referred to in para.(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,

para.(1)(b)(ii), para.(2)(b), para.(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.

The relevant date

24. Counsel for the applicant submit that an applicant is entitled to a

Special Rate pension if he or she was at any time able to satisfy the criteria

specified in para.(1)(b). They say that if, at some stage, the incapacity

caused by the member's accepted war disability was, of itself alone, enough to

prevent the member undertaking remunerative work and to occasion a loss of

salary or wages, the entitlement to a Special Rate pension arises and that it

is not lost because, before final determination of the claim for that pension,

there arises some additional impediment to remunerative work.

25. The date at which the relevant facts must be considered has been

discussed in a number of recent decisions of the Administrative Appeals

Tribunal. In Re McCartney and Repatriation Commission (1986) 4 AAR 518 it was

concluded that the applicant's qualification for grant of a Special Rate

pension should be considered on the basis of the facts as they stood at the

earliest date from which the Tribunal could approve payment at that rate;

that is the date upon which the applicant made a claim which complied with

s.25 of the Act. However, the issue in that case was whether the relevant date

was the date of the application or the date of the hearing before the

Tribunal. There is no reference in the Tribunal's decision to the possible

relevance of an earlier date.

26. In Pringle v Repatriation Commission (not reported, 11 June 1986) a

differently constituted Tribunal reached a different conclusion. By the date

of this decision the Repatriation Act 1920 had been replaced by the Veterans'

Entitlements Act 1986, but nothing was seen as turning upon that circumstance.

The Tribunal found that, at a point of time earlier than the date of the

application, all of the requirements of para.(1)(b) -- as it stood at the date

of the Tribunal's decision -- were met by the applicant. It was held that he

thereby became entitled to a grant of a Special Rate pension, an entitlement

which was not lost because of subsequent events. "Any other view" the

Tribunal said, "would discourage the well motivated person who would otherwise

try to continue in useful work despite his disabilities and encourage those

less well motivated for fear that if they did not apply for the TPI pension at

the earliest possible opportunity they would later be debarred by the mere

fact of increasing age".

27. In Finkelstein v Repatriation Commission (not reported, 30 June 1986) and

Dell v Repatriation Commission (not reported, 29 August 1986) it was held by

the Tribunal that the facts should be examined as at the date of the

application for a Special Rate pension. A similar view was taken in two

subsequent cases, each heard by a differently constituted Tribunal, Mattson v

Repatriation Commission (not reported, 2 July 1986) and Ridyard v Repatriation

Commission (not reported, 18 July 1986).

28. We have some sympathy for the comment made in Pringle, quoted by us, as

to the effect of confining examination of the facts to the period commencing

from the date of the application for a Special Rate pension. But it appears

to us that the terms of the legislation permit no other conclusion than that

contended for by the Commission. The purpose of Schedule 2 is to identify the

persons to whom, to quote the opening words of the Schedule, a Special Rate

pension "may be granted". In considering whether to grant a Special Rate

pension, the decision-maker must be satisfied that the applicant is a person

to whom the Schedule relates. Some such persons are identified by reference to

past events. Under para.1(a) a person who "has been blinded" will qualify for

a grant. Others (para.1(b)) are identified by reference to their possession

of specified present characteristics. In this sub-paragraph all the criteria

are couched in the present tense.

29. The task of the Administrative Appeals Tribunal, in reviewing a decision

relating to an application for a pension, is to make the decision which the

primary decision-maker ought to have made, upon the basis of the evidence

before the Tribunal. Subject to any change in the relevant law, the Tribunal

should put the applicant in the position in which he or she was entitled to be

put at the time of the primary decision. It follows, we think, that the

question whether a particular applicant complies with the criteria in

para.(1)(b) of the Schedule should be considered as at the time of his or her

application to the primary decision-maker for the grant of a Special Rate

pension.

30. Having regard to the findings of the Tribunal, the present applicant

faces two hurdles -- each of which we regard as insurmountable -- in his quest

for a Special Rate pension. The Tribunal found that the cause of his

retirement from the employ of the State Rail Authority was the the injury to

his hip occasioned by the fall at work. This injury, which has not been

accepted as a war related incapacity, thereafter would, in any event, have

prevented Mr Banovich from continuing to undertake the remunerative work which

he had previously undertaken. Consequently, even immediately after his

retirement, Mr Banovich did not comply with sub-para.(iii). But, secondly, by

the date of his application for a Special Rate pension -- June 1983 -- he

would, in any event, have been retired by the Railways. His age, even

according to their records, exceeded 65 years. And, although the Tribunal

rightly accepted that a person was not automatically disentitled to a pension

on attaining 65 years, the Tribunal found, on the facts of this case and

having regard to Mr Banovich's employment history, that Mr Banovich would in

any event have been unlikely to continue in remunerative work after the date

upon which he would have retired from the Railways.

31. We see no error of law in the decision of the Tribunal.

32. Although we did not find it necessary to refer to it as an aid to the

construction of the legislation, we note that our conclusion would appear to

accord with the policy underlying its enactment. In his second reading speech

introducing the Repatriation Legislation Amendment Bill 1985, the Acting

Minister for Veterans' Affairs said:

"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

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 retires from work possibly with whatever

superannuation or other retirement benefits

are available to the Australian work force.

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 a TPI pension a veteran must be

eligible for the 100 per cent general rate

pension. In addition, the TPI rate 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 TPI 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."

(See Parliamentary Debates, House of Representatives, 17 May 1985 at

pp.2645-6.)

33. The appeal must be dismissed with costs.

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