Craig Colborne

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Veterans’ Review Board

2006 Veterans’ Law Conference
Veterans’ and Military Compensation
Surfers Paradise, 27-28 July 2006

20 years of the VEA

Craig Colborne
Barrister-at-law
2006 Veterans' Law Conference
20 years of the VEA
Craig Colborne

1. Rhonda Henderson and I were asked to present a paper on the Veterans’ Entitlements
Act 1986 (the “VEA”). Unfortunately, Rhonda couldn’t come because of work
commitments. Like Rhonda, Elenne is a barrister who appears for the Repatriation
Commission. She has gracefully agreed to run a critical eye over what I have to say
and provide another perspective.

2. Just over 20 years ago the VEA replaced the Repatriation Act 1920. To provide a
critique of how the VEA has operated over the last 2 decades would be a task that is
well beyond me. What I propose to discuss are some of the more problematic issues
relating to the VEA pension system for compensating disease, injury and death.

3. I propose to deal with 3 particular problems I see with what is happening now. First,
there is the common failure to apply properly the reasonable hypothesis test under s
120(3) of the VEA. Second, there are real problems with the system for reviewing
Statements of Principles (“SoPs”) and ensuring they are legally correct. Finally, I will
discuss the Federal Court cases that suggest that veterans, who are still working, may
not be able to qualify for the TPI and possibly the Intermediate rates of pension.

4. Before tackling these subjects, I will talk briefly about the revolution in Veterans’
law that occurred in the 6 or so years before the VEA came into operation. That
revolution led to fundamental changes in the law that had applied to veterans for half
a century or more and laid the foundation for some of the key provisions in the VEA.

The revolution

5. The compensation system for veterans from the World Wars, and their dependents,
was based largely on the Australian Soldiers Repatriation Act 1920, subsequently
renamed the Repatriation Act 1920. The reforms made to that Act in the 1970s and
1980s formed the basis for the compensation system continued by the VEA.

6. Some significant changes were made the Repatriation Act after 1920. For example, in
1929, War Pensions Entitlement Appeals Tribunals and Assessment Appeals
Tribunals were introduced. The onus of proof provision was changed on a number of
occasions. In 1965, the Intermediate rate was introduced. But the basic structure
introduced in 1920 remained, with modifications, until the 1970s.
20 Years of the VEA Page 2

7. For those of you who are interested, a detailed history of the compensation system, is
set at in the “Toose Report”1, which is available in electronic form on the Veterans
Review Board (the VRB”) web site2.

8. The “Toose Report” was handed down in 1975. It made many recommendations,
including –

(a) the functions of the various Repatriation Appeals Tribunals should be given to a
single tribunal, preferably the then proposed Administrative Appeals Tribunal;

(b) there should be an appeal from that tribunal to a court on a question of law;

(c) the present provisions of Section 47 [of the Repatriation Act] as to benefit of
doubt have proved most unsatisfactory and should be amended.

9. In 1977, a new standard of proof was inserted in the Repatriation Act3. In 1979, the
entitlement and assessment tribunals were abolished and replaced by the Repatriation
Review Tribunal. An appeal on a question of law from the decisions of the new
Tribunal lay to the Federal Court of Australia4.

10. The most far reaching reform arguably was the provision for appeals to the Federal
Court. Before this provision was inserted, judicial review was only available by
seeing prerogative relief from the High Court. In the one reported case, the Court
gave potential applicants no encouragement to do so5.

11. The Repatriation pension system was never the same again. Amongst other things, in
respect of the Commonwealth’s liability to pay pension, the courts held –

(a) war or defence service did not have to be the main, immediate or direct cause of
death or incapacity – it was sufficient if eligible service made a contribution6;

(b) the new standard of proof meant the Repatriation Commission bore the onus of
disproving a claim beyond reasonable doubt7;

12. The interpretation given to the standard of proof meant that the less that was known
about the causes of a death or incapacity, the more difficult it was for the
Commission to discharge its onus of proof. Mr Rose’s skeleton was found in the bush
1
Justice Toose, Report of the Independent Enquiry into the Repatriation System, 1975.
2
http://www.vrb.gov.au/publications.html
3
Section 12 of the Repatriation Acts Amendment Act 1977.
4
Sections 11, 15 and 26 of the Repatriation Acts Amendment Act 1979. In particular, s 26 inserted
s107VZZH, which provided that either an applicant or the Repatriation Commission could appeal, on a
question of law, to the Federal Court of Australia from a decision of the Tribunal.
5
The King v War Pensions Entitlement Appeal Tribunal; ex parte Bott (1933) 50 CLR 228.
6
Repatriation Commission v Law (1980) 31 ALR 140.
7
Repatriation Commission v Law (1981) 147 CLR 635 and Repatriation Commission v O’Brien (1985) 155
CLR 422.
20 Years of the VEA Page 3

4 years after he disappeared. There was no obvious cause of death. The possibilities
would have included a heart attack, stroke or suicide amongst others. The Tribunal
affirmed the decision to refuse his claim but its decision was set aside by the Federal
Court8. How could the Commission possibly prove, beyond reasonable doubt, that
Mr Rose’s service had not contributed to his death?

13. The various judgments in Law9 also meant it was very difficult for the Repatriation
Commission to prove that service had not made a contribution to a veteran’s tobacco
smoking habit. As a consequence, most claims in respect of smoking related diseases
succeeded. Despite subsequent reforms, that remains the position, particularly where
the veteran has had operational service. The Act was amended to limit future liability
in respect of smoking. A claim cannot succeed where it is based solely on the
commencement or an increase in smoking after 31 December 199710

14. The Federal Court’s interpretation of the provisions dealing with the assessment of
rates of pension was no less revolutionary. The Court held 11 -

(a) in order to qualify for the TPI and other earnings related pensions, the test was
whether the pensionable incapacity had the required effect on a veteran’s capacity
to earn remuneration by finding work;

(b) a veteran did not have to be 100% incapacitated under what is now called the
General Rate in order to qualify for a higher earnings related pension;

15. It is probably apocryphal, but the TPI Association was said to have complained about
repeatedly having to arrange for new batches of TPI badges to be manufactured.

16. The response to the interpretations give to the Repatriation Act by the courts came in
1985. The Repatriation Act was amended by12 -

(a) enacting a new modified criminal standard of proof that incorporated a
requirement for the evidence to raise a reasonable hypothesis;

(b) limiting the modified criminal standard to claims by veterans with operational
service and requiring other claims and all pension assessments to be established
on the balance of probabilities; and
8
Rose v Repatriation Commission ((1982) 44 ALR 504.
9
Law v Repatriation Commission (1980) 29 ALR 64, Repatriation Commission v Law (1980) 31 ALR 140
and Repatriation Commission v Law (1981) 147 CLR 635.
10
Sections 8(6), 9(7) and 70(9) of the Act, inserted by clause 28 of Schedule 1 of the Veterans’ Affairs
Legislation Amendment (Budget and Compensation Measures) Act 1997.
11
Collins v Repatriation Commission (1980) 32 ALR 581, Bowman v Repatriation Commission (1981) 51
FLR 374 and Repatriation Commission v Bowman (1981) 54 FLR 8.
12
Sections 16 and 32 to 34 of the Repatriation Legislation Amendment Act 1985, which came into operation
on 6 June 1985.
20 Years of the VEA Page 4

(c) introducing new tests for the TPI and other earnings related pensions that contain
the same sort of provisions that now apply to veterans under 65.

17. Provisions to reform the determining system had come into effect 6 months earlier.
The Repatriation Review Tribunal seems to have had no friends in the Department or
the RSL. It had been “repealed” and the final level of merits review had gone to the
Administrative Appeals Tribunal, in accordance with Justice Toose’s 1975
recommendation. The Veterans’ Review Board had been established to provide
intermediate merits review of Repatriation Commission decisions13.

The commencement of the VEA

18. The VEA came into operation on 22 May 198614. It repealed and consolidated in the
one Act various Repatriation statutes and incorporated the various reforms that had
been introduced in the previous 6 years.

19. The relevance of the VEA seems set to fade away slowly over the remainder of the
century because it does not apply to injuries, diseases and deaths that occur after 1
July 2004, if they are related to eligible service after that date. Where a pensionable
condition under the VEA is aggravated by eligible service after 1 July 2004 then the
veteran has to elect whether to receive compensation under the VEA or under the
Military Rehabilitation and Compensation Act 200415. This option should benefit
both lawyers and financial advisers.

20. The comments that follow are confined to the VEA but they are also relevant to the
Military Rehabilitation and Compensation Act 2004, to the extent that it incorporates
like provisions.

Raised Facts

21. The requirement in s 120(3) for the material to raise a reasonable hypothesis has
proved to be and remains problematic. In particular the importance of “raised facts”
to its proper application has been obscured and is sometimes overlooked by
determining authorities.

22. In East, the Full Federal Court followed the Veterans’ Review Board analysis in
Stacey and held that a reasonable hypothesis could not simply be left open as a
possibility but had to be pointed to by the facts16. The basis for determining whether

13
Section 19 of the Repatriation Legislation Amendment Act 1984 which came into operation on 1 January
1985.
14
See the Table of Acts in the Notes that follow the Act.
15
See ss 9A and 70A of the Act, s 12 of the Military Rehabilitation and Compensation (Consequential and
Transitional Provisions) Act 2004.
16
East v Repatriation Commission (1987) 16 FCR 517.
20 Years of the VEA Page 5

an hypothesis is pointed to by the facts was authoritatively settled by the High Court
in Bushell, where the majority held17 –

[Subsection 120(3)] is not concerned with conflicts in the material, whether they be of
opinion or fact. The purpose of sub-s. (3) … is to ensure that a claim to which s. 120 applies
is not met unless there is some material which raises the relevant causal hypothesis. …
…
The material will raise a reasonable hypothesis within the meaning of s. 120(3) if the
material points to some fact or facts ("the raised facts") which support the hypothesis and if
the hypothesis can be regarded as reasonable if the raised facts are true.

23. This was followed by the High Court in Byrnes, where the Court stated18 –

The statement in Bushell that the material must point to some fact or facts which support the
hypothesis mean no more than that the material before the Commission must raise some fact
or facts which give rise to the hypothesis. When that fact or those facts have been identified,
the question for determination is whether the hypothesis is reasonable.

24. For example, a veteran lodges a claim for cancer of the lung and states that he started
smoking on service, due to peer pressure, and had smoked a packet of cigarettes a
day for 40 years. On the other hand, medical reports over the years record that the
veteran had never smoked. On that scenario, that is material that points to the fact
that the veteran had smoked for 40 years. One has to assume that “raised fact” is true
and, on that basis, determine whether the hypothesis is reasonable. If the hypothesis
is found to be reasonable then the issue under s 120(1) is whether the “raised fact” as
to the smoking history is disproved, beyond reasonable doubt, by the evidence that
the veteran had never smoked.

25. This understanding of Bushell was reflected in judgments of the Federal Court like
that of the majority in Lowerson19. The waters were then mudded by the decision of
the High Court to refuse special leave in Owens case20.

26. The High Court refused the Repatriation Commission’s application for special leave
in Owens because the insertion of ss 120A and 120B in the VEA had substantially
diminished the grounds for seeking special leave and because the problem had been
elucidated by the Court in earlier cases (ie Bushell and Byrnes). Nevertheless it found
a prima facie case of error had been established. The Court held -

It is not whether an hypothesis of connection would be reasonable if some facts are ignored;
the question is answered by reference to the whole of the material before the Administrative
Appeals Tribunal

17
Bushell v Repatriation Commission (1992) 175 CLR 408 at 413.5 – 414.3.
18
Byrnes v Repatriation Commission (1993) 177 CLR 564 at 569.7
19
Lowerson v Repatriation Commission (1994) 50 FCR 252..
20
Repatriation Commission v Owens (1996) 70 ALJR 904.
20 Years of the VEA Page 6

27. The problem with Owens is that Bushell states that evidence, inconsistent with the
“raised facts”, is ignored for the purpose of deciding whether the material raises a
reasonably hypothesis.

28. It is clear that the comments in Owens were obita dicta because the Repatriation
Commission was refused Special Leave, in what appears to have been an extempore
judgment. It is also clear that the High Court in Owens was not seeking to depart
from what it had held in Bushell or Byrnes. In follows that, to the extent of any
inconsistency, Bushell and Byrnes prevail.

29. The judgment of Northrop, Sunberg, Marshall and Merkel JJ in Bey21 shows that
Owens did not change the law as to “raised facts”. Owens is cited in Bey for the
proposition that the question whether material raises a "reasonable hypothesis" is a
question of fact22. In respect of the law to be applied in determining whether material
raises a reasonable hypothesis, the judgment sets out the position established by
Bushell. It stated at 366 -

The method of applying s 120(1) and (3) is now well established:

1. One commences with subs (3). The first step is to identify the hypothesis said to establish
the causal link between the veteran's eligible war service and the death, injury or disease.
Identifying the hypothesis is a question of fact.

2. The second step under subs(3) is to determine whether the hypothesis is reasonable. The
material will raise a reasonable hypothesis if it points to some fact or facts which support the
hypothesis (the `raised facts') and if the hypothesis can be regarded as reasonable assuming
the raised facts to be true. In determining whether the hypothesis is reasonable the decision
maker must identify the facts said to point to it.

3. …

30. The waters were mudded again in Deledio, when the Full Federal Court set out, at the
end of its judgment, the oft quoted four step summary of how to apply ss 120(1) and
(3), following the introduction of Statements of Principles (“SoPs”). The first step in
Deledio is –

1. The Tribunal must consider all the material which is before it and determine whether that
material points to a hypothesis connecting the injury, disease or death with the circumstances
of the particular service rendered by the person. No question of fact finding arises at this
stage. If no such hypothesis arises, the application must fail.

31. There is no mention of “raised facts” or the requirement to assume they are true. It is
little wonder that determining authorities sometimes omit to identify the “raised
facts”.

21
Repatriation Commission v Bey (1997) 79 FCR 364 at 373.
22
Bey 79 FCR at 373,
20 Years of the VEA Page 7

32. That the requirements as to “raised facts” remained unchanged, under the SoP
regime, was made clear by Deledio, when the Full Court approved the following
statements at first instance by Justice Heerey 23 –

… "the 1994 amendments left intact the twin pillars of (i) the reverse onus of proof beyond
reasonable doubt and (ii) the reasonable hypothesis. Accordingly, the new regime of SoPs
has to be given an operation consistent with s 120(1) and 120(3) as expounded by the High
Court in Bushell and Byrnes".
…
Therefore when s 196B(2) says a factor `must... exist' and `must be related to service', it is
not interfering with the functions of ss 120(3) and 120(1). On the contrary, the RMA is to
identify the minimum factors which can connect the particular kind of injury etc with the
circumstances of the particular kind of service (operational etc.). If there is more than one
factor the RMA is to determine which of them (or whether all of them) must be related to the
circumstances of the service (see above). The particular claim then has to fit the template laid
down in the SoP. The Byrnes methodology is applied. Do the facts raised by the claimant
give rise to a reasonable hypothesis? Proof of facts is not in issue at this point.
…
At no stage is there an onus of proof on the claimant. If one of the disputed facts happens
also to be a component of an SoP then the Commission must disprove that fact beyond
reasonable doubt, just like any other relevant fact.

33. The reference at the end of the second passage to "facts raised by the claimant" is a
paraphrase of the reference in Byrnes to "all or some of the facts raised by the
material before the Commission". The Court's reasoning in Deledio shows that it was
not seeking to depart from what had been held in Bushell and Byrnes.

34. The references in the first passage to the onus of proof and in the last passage to the
Commission having to disprove facts also require qualification. Subsection 120(6)
makes it clear that there is no onus on an applicant or the Commission. The issue is
whether the material before the determining authority disproves any relevant fact
beyond reasonable doubt.

35. I will provide an example of the problem I see with the application of 120(3). The
decision in question was made by the VRB on 23 March 2005. The veteran’s service
during WW II was operational service and he had claimed lumbar spondlyosis. The
Board noted that ss 120(1) and (3) applied. The VRB stated (my emphasis) –

[The Board] turned to the relevant Statement of Principles and the factors, one of which must
as a minimum exist before it can be said that, on the balance of probabilities, intervertebral
disc prolapse is connected with the circumstances of that service.
…
… the Board is reasonably satisfied that the amount of cigarettes smoked at the outset of the
back pain and the disc tear would not meet the 60 pack years as required by the Statement of
Principles factor.

23
Repatriation Commission v Deledio (1998) 83 FCR 82 at 95F-96F.
20 Years of the VEA Page 8

Turning again to the Statement of Principles regarding lumbar spondylosis, the Board is thus
reasonably satisfied that the factors regarding intervertebral disc prolapse is not achieved.

36. I picked a VRB decision to illustrate my point because, in my experience, this sort of
error is not uncommon in VRB decisions. The reasons are silent on the issue of raised
facts, let alone on whether there were any raised facts that supported the veteran’s
hypothesis. The VRB then makes the mistake identified by the Federal Court in
Deledio 7 years earlier. It looked to see whether the factor required by the SoP was
established on the balance of probabilities.

37. The application of the four step summary in Deledio, by itself, does not provide the
answer. In Meehan, Giles J stated24 -

13 I should add that the substance of subpar (29(ii) [where the tribunal referred to the
difficulty conceptually of assuming the raised facts to be true]) confirms the evident
difficulty which the Tribunal had in comprehending and applying the so-called Deledio steps.
In saying this, I have sympathy with the member of the Tribunal concerned. The sections
involved, and the concepts lying behind them, are difficult to comprehend and analyse.
Minds can certainly differ as to whether the manner in which the sections have been
construed is correct, but the High Court and the Full Court of this Court have settled the
principal questions of construction no matter what difficulties of application this may cause. I
also accept that there is some danger in applying the statement of the Full Court in Deledio as
if it were a statute in a case like this.

38. The requirements as to “raised facts” were fundamental to the High Court’s
interpretation in Bushell of s 120(3) and its explanation of how 120(1) and 120(3) are
to be applied. Bey makes it clear that Owens did not change the position. Deledio
makes it equally clear that the SoP regime did change the position.

39. The proper application of s 120(3) may not be easy but the High Court has held that
the requirement to identify and assume the truth of “raised facts” is an essential part
of that task.

Statements of Principles

40. The VEA was amended in 1994 to provide for Statements of Principles25. SoPs are
determined, amended and revoked by the Repatriation Medical Authority (“RMA”).
In making its determinations, the RMA can only have regard to "sound medical-
scientific evidence"26.

24
Meehan v Repatriation Commission (2002) 35 AAR 353. See also Hardman v Repatriation Commission
[2005] FCAFC 83 (13 May 2005), Dixon v Repatriation Commission (1999) 59 ALD 315; (1999) 29 AAR
235 and Arnott v Repatriation Commission (2001) 106 FCR 83.
25
Sections 6 and 9 to 10 of the Veterans’Affairs (1994-95 Budget Measures) Legislation Amendment Act
1994.
26
Section 196B of the VEA.
20 Years of the VEA Page 9

41. A SoP provides a template, which a claim must meet in order to satisfy the standards
of proof specified in s 120(3) or 120(4) of the Act27. Where a SoP is applicable, it is a
statute-backed declaration of what is proved or known scientific fact28 and prevails
over medical opinions that are inconsistent with it.

42. The Specialist Medical Review Council (“SMRC”) was established by amendments
demanded by the then Coalition Opposition in return for its support of the SoP
regime. The role of the SMRC is to provide a review mechanism for certain RMA
determinations29.

43. SoPs are a critical element in determining eligibility for pensions under the VEA.
While veterans and bodies representing them and their dependants have the right to
seek SoP reviews by the RMA and SMRC, preparing a review application can be a
time consuming and expensive tasks. They will often require a thorough review of
extensive medical and scientific literature by a medical specialist or scientist. This is
likely to be beyond the resources of almost all veterans and many organisations
representing them. There is a real danger that the mechanism for reviews will prove
of little benefit, unless provision is made to provide financial assistance to those
preparing meritorious RMA and SMRC applications.

44. The Repatriation Commission Annual Report 2004-2005 records that, as at 30 June
2005, 279 conditions were covered by a SoP. As there are unusually 2 SoPs for each
condition, one can assume there are well over 500 individual SoPs.

45. The Annual Reports of the RMA contain details of notifications it has received of
SMRC reviews30. Prior to 30 June 1996, the SMRC had not notified the RMA of any
reviews. The figures for subsequent financial years, ending in the years shown, are –

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

SMRC
reviews 2 1 0 6 1 0 0 1 4 12
sought
Reviews
Completed 0 0 0 0 0 0 4 2 2 1
Decision not
to proceed 0 0 0 0 0 0 5 0 0 0
with review

The numbers given in the table overstates the position because the majority of reviews relate
to both SoPs in respect of a disease and, in those cases, both have been included in these
figures.

27
Sections 120A and 120B of the VEA.
28
Deledio 83 FCR at 96A.
29
Section 196W of the VEA.
30
They are available at http://www.rma.gov.au/pubs/main.htm.
20 Years of the VEA Page 10

46. These figures don’t correlate precisely with information on the VRB web site but are
no doubt indicative. They suggest that few reviews are sought and, when they are,
they can take years to determine. This suggests the SMRC lacks the resources or
procedures necessary to conduct expeditiously, what are admittedly complex reviews.
The figures also emphasis the failure of most organisations representing veterans and
their dependants to engage in the SoP review process.

47. There are good reasons for having an effective mechanism for reviewing SoPs . The
NSW Court of Appeal judgment discussed below, shows that the view of the law
adopted by the SMRC on critical issues, and probably by the RMA as well, has been
erroneous.

48. There are also SoPs that raise real questions about whether or not they have been
determined correctly. For example, the SoPs concerning alcohol dependence or abuse
provide that alcohol abuse can only be related to service, if the claimant had a
psychiatric disorder, severe stressor or inability to obtain appropriate clinical
management that was related to service31. It defies common experience not to
acknowledge that, in the past at least, a service culture of regular and often excessive
alcohol consumption could contribute to an alcohol habit and alcohol abuse. It seems
from Roncevich that an alcohol related service culture is still to be found 32. Yet these
SoPs do not reflect that reality and they effect a large number of claims but have
remained unchallenged for years.

49. Another reason for concern is the response of the RMA to Kattenberg33. There the
Federal Court held that it was sufficient if eligible service made a contribution to a
factor in a SoP. The RMA’s commented34 –

In Kattenburg v Repatriation Commission (11 April 2002), Justice Emmett construed the
phrase 'related to service' as it appears in Statements of Principles by reading into it the
language of subsection 14 of s.196B (which is in the same terms). His Honour's decision
concluded that it was not necessary for the factor to be wholly attributable to service, but
merely to have been contributed to in a material degree by the service, or that it would not
have occurred but for the rendering of the service.

50. It seems that Kattenberg may have come as a surprise. But it merely gave effect to s
196B(14) of the VEA, where the required relationship between eligible service and a
SoP factor was spelt out in black and white. This does raise questions in my mind
about the quality of the advice provided to the RMA and the wisdom of the
prohibition on applicants making legal submissions to the RMA and SMRC35.

31
Instruments No 76 and 77 of 1998.
32
Roncevich v Repatriation Commission (2005) 218 ALR 733; (2005) 79 ALJR 1366; (2005) 85 ALD 257.
33
Kattenberg v Repatriation Commission (2002) 73 ALD 365.
34
Chaper Legal Issues, RMA Annual Report 2001/2002.
35
Sections 196F and 196ZAof the VEA.
20 Years of the VEA Page 11

51. Despite the ban on legal submissions, the SMRC has benefited from the views of the
courts. The first judicial review application of a SMRC determination was made by
the Vietnam Veterans’ Association NSW Branch Inc and ended up before the NSW
Court of Appeal. Amongst other things, the majority of the Court held that the SMRC
had erred in its interpretation of the definition of sound medical-scientific evidence.
The SMRC had asked whether, according to these [epidemiological] criteria, either
[smoking or herbicides] had been established to be a cause of prostrate cancer36.
The Review Council had concluded there is no sound medical scientific evidence that
justified the inclusion of cigarette smoking as a factor in a Statement of Principles37.

52. Sound medical-scientific evidence is defined in s 5AB of the Act. In the case of
information about how a disease may be caused, s 5AB (2)(b) states that the
information has to meet the applicable criteria for assessing causation currently
applied in the field of epidemiology.

53. The majority of the Court of Appeal held that that criterion is met by information that
is regarded by epidemiologists as appropriate to be taken into account in deciding
issues of causation38. In other words, it would be enough if information
epidemiologists would take into account supported a reasonable hypothesis of a
causal connection. The SMRC had been wrong, in respect of the operational service
SoP, to require that smoking or herbicides had been established as a cause of prostate
cancer.

54. The significance of the majority judgment in the Court of Appeal was not lost on the
SMRC. It its first review, it had found there was no sound medical-scientific evidence
relevant to smoking and prostrate cancer. In the second review, it found that all the
information that had been before the RMA concerning smoking and prostrate cancer
was sound medical-scientific evidence. This meant it had to proceed to decide
whether that information meant smoking should be included as a factor in the SoP. It
found that the sound medical-scientific evidence did not justify an amendment to the
SoP to include smoking as a factor.

55. The SMRC’s new determination was again challenged by the Vietnam Veterans’
Association NSW Branch Inc but this time the proceedings were in the Federal
Court. The actual SoP reviewed by the SMRC had been revoked by the RMA and
replaced by a new SoP before the SMRC completed its review.

56. The Repatriation Commission argued that the SMRC had erred because it had no
power to continue a review, once the SoP had been revoked by the RMA. The 3
issues dealt with by the Court were -

36
Repatriation Commission v Vietnam Veterans' Association (2000) 48 NSWLR at 578 [117], [150]-[153],
[211] & [220]-[225].
37
48 NSWLR at 582 [151]-[152].
38
48 NSWLR at 578 [117] & [211].
20 Years of the VEA Page 12

(1) Did the RMA determination revoking the SoP prevent the SMRC from
continuing its review?

(2) Was the SMRC confined to reviewing the information that had been before the
RMA when it made the determination, the subject of the review?

(3) Had the SMRC misconstrued the test for determining whether a factor should be
included in a reasonable hypothesis SoP?

57. The Court was unanimous in holding that a RMA revocation of a SoP, subject to
review by the SMRC, terminates the SMRC review because there is nothing left to
review. All 3 judges declined to consider whether a SoP amendment by the RMA
would have the same effect as a revocation39. Nevertheless, the reasoning of the
Court seems to lead to the conclusion that an amendment of a SoP by the RMA also
terminates a SMRC review.

58. Those with an interest in a SMRC review will need to keep abreast of RMA
determinations. If the RMA either amends or revokes and replaces a SoP, that is
subject to a review by the SMRC, it will be necessary to see if the RMA’s action has
resolved the issue before the SMRC. If it hasn't, a new application would need to be
made to the SMRC, for a review of the new or amended SoP.

59. We now have a wasteful and frustrating system of SMRC reviews. There is a clear
case for Parliament amending the legislation to permit a SMRC review to continue
where the RMA revokes or amends a SOP, subject to review, but not in a way that
meets the concerns of those who had sought the review.

60. The Vietnam Veterans’ Association NSW Branch Inc argued before the Court that
the SMRC should review the most current SoP and was required to consider all the
material available to the RMA, when it last made or amended the SoP. Only Branson
J dealt with this issue and held that the SMRC was confined to the information that
was before the RMA, when it made the original determination that was the subject of
the SMRC review40. That view is consistent with the majority judgment in the Court
of Appeal41.

61. The most important aspect of the Full Court's judgment was its obiter comments
about the standard of proof. All 3 judges addressed this issue and the majority
concluded that the SMRC had erred. Justice Branson held -

48 The second step required to be taken by the RMA is, as is mentioned above, to determine
whether there is `sound medical-scientific evidence' that indicates that the particular kind of
injury, disease or death can be related to operational service rendered by veterans. …

39
Vietnam Veterans Association (NSW Branch) v Specialist Medical Review Council (2002) 125 FCR 127 at
[42], [91] & [109].
40
125 FCR 127 at [38].
41
48 NSWLR 548 at [59]-[60], [201] & [211].
20 Years of the VEA Page 13

49 … As the Chief Justice of the New South Wales Court of Appeal noted in the
Repatriation Commission case at [111]:

`... the use of the formulation "can be related to" is a test of possibility. In the case of subs (2)
it is sufficient that there is evidence that "indicates" the possibility.'

That is, in my view, the RMA must evaluate and characterise the relevant `sound medical-
scientific evidence' and form a view as to whether it points to, as opposed to merely leaves
open, the possibility of the particular injury, disease or death being related to operational
service rendered by veterans (see [50] below). The RMA is not called upon, as part of this
step, to assess the overall impact of the totality of the `sound medical-scientific evidence'
available to it.
…
53 In my view, the reasons for decision of the SMRC reveal that it did not then undertake
the step which I have identified above as the second step. That is, it did not ask the question
whether any of the `sound medical-scientific evidence' identified by it touching on the link
between smoking and prostate cancer indicates that prostate cancer can be related to
operational service rendered by veterans. If it had asked that question and answered it `yes', it
would necessarily have been of the view `that there is sound medical-scientific evidence on
which the Authority could have relied ... to amend the Statement of Principles in force in
respect of [prostate cancer]' within the meaning of s 196W(4) of the Act.

62. Justice Stone agreed and added -

111 It is important to note that under s 196B(2) of the Act the test of when the RMA must
determine a Statement of Principles in respect of injury, disease or death is if there is sound
medical-scientific evidence that `indicates' that the injury, disease or death `can be related to'
operational, peacekeeping or hazardous service by members of the Australian Forces. As can
be readily seen this test does not impose a stringent requirement in terms of the content of the
sound medical-scientific evidence. It is, as Spigelman CJ noted in the Repatriation
Commission case, a test of `possibility'.

112 The open nature of the provision is enhanced by the terms of s 5AB(2) of the Act and
the criteria it lays down as to when information is taken to be `sound medical-scientific
evidence'. In summary, the section provides that any information about particular kinds of
injury, disease or death is sound medical-scientific evidence if it is either consistent with
material published in a peer review publication or is in accordance with accepted medical
practice and, if it relates to causation, it is in accord with current epidemiological practice.
These criteria are not directed to scientific proof or to assessing the preponderance of
evidence in support of particular information. It would be irrelevant, for example, if there
were a number of articles in peer review publications that were inconsistent with the
information under consideration so long as there is one article in a peer review medical or
scientific publication that is consistent with the information.

113 Having identified the relevant sound medical-scientific evidence the RMA is then
required to apply the test of possibility (see [111] above) in order to determine if that
evidence indicates the possibility of a relation between the relevant injury, death or disease
and the relevant service. I agree with Branson J that at this point the obligation on the RMA
is to determine a Statement of Principles if there is any sound medical-scientific evidence
that could indicate the relevant relationship. I would understand the reference in s 196B(6)(b)
to sound medical-scientific evidence being insufficient for this purpose as referring not to the
20 Years of the VEA Page 14

weight of the evidence but to the absence of the link between the information that has been
determined to be sound medical-scientific evidence and the relevant service.

63. Both judges in the majority help that if there was any sound medical-scientific
evidence that points to the possibility, for example, of a relevant connection between
prostrate cancer and smoking then smoking would have to be included as a factor in
the SoP. This is a dubious proposition. It confines the question to whether evidence
points to a possible casual connection and ignores the issue as to whether that
possibility is too tenuous or too remote for the hypothesis to be reasonable.

64. It seems unlikely that the interpretation given to the provisions dealing with the
contents of SoPs by the majority of the Court of Appeal is the interpretation that the
RMA had applied in earlier SoPs. If that is the case then the RMA should
systematically review all SoP made before it had the benefit of the views of the
Court.

65. The problems identified by the Court of Appeal and Full Federal Court with SMRC
reviews, shows there is an obvious need for a more efficient, effective and user
friendly system for reviewing RMA determinations. The fact that nothing has been
done to address those problems suggests the Repatriation Commission and the
present Coalition Government are not interested in such reform.

Still working and TPI

66. Single judges of the Federal Court have held that a veteran cannot receive the TPI
rate of pension, if the veteran has not ceased the remunerative work the veteran was
last undertaking. In Haskard, the Court held that this was the case under the
provisions that apply to a veteran who had turned 65, when the claim or application
was made42. In Wright, the Federal Court held that the same was true for veterans
under 65 when they applied43. The reasoning that led to these conclusions seems to
mean the same is true for veterans seeking the Intermediate rate.

67. There are good reasons for questioning the reasoning followed in Haskard and
Wright which would represent, at least in respect of the Intermediate rate, a major
change in how the relevant legislation has been understood and applied in the past.

68. A number of the eligibility criteria for the Intermediate and TPI rates of pension are
expressed in exactly the same language and this has been the case since the
provisions were first inserted into the Repatriation Act in 198544. The use of some
identical criteria for both rates of pension was continued with the 1994 amendments,
which introduced new criteria for veterans who had turned 65, before they had made
their claim or application45. Unless there is good reason for holding otherwise, one

42
Haskard v Repatriation Commission (2002) 126 FCR 1.
43
Wright v Repatriation Commission (2005) 144 FCR 302.
44
Sections 33 to 34 of the Repatriation Legislation Amendment Act 1985.
45
Sections 16 and 17 of the Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994.
20 Years of the VEA Page 15

would assume that the identical criteria in the two sections were meant to have the
same meaning.

69. Haskard dealt with the real difficulties in interpreting the criteria for the grant of the
TPI rate of pension for veterans who have turned 65. The difficulty arises because
identical criteria for both the TPI and Intermediate rates seem to require that a
veteran has ceased work completely46. On the other hand, other provisions, dealing
with the Intermediate rate, assume that a veteran working part-time may still
qualify47. So how are these apparently conflicting provisions to be interpreted to
make sense?

70. The Court in Haskard decided that the requirement, in s 24(1)(c) of the VEA, that a
veteran is … prevented from continuing to undertake remunerative work that the
veteran was undertaking meant a veteran must have ceased to undertake that work
but could still be doing other work. For the reasons that follow, I don’t think that
interpretation of the criteria can be correct.

71. In addressing this issue, I will start with a little history, which may help to understand
what the present provisions are meant to achieve. The Repatriation Act made
provision for pensions on partial or “Total Incapacity” and for loss of earning
capacity. The provisions dealing with loss of earning capacity were first considered
in Collins, which set out the relevant provisions48. They relevantly provided that –

(a) the Intermediate rate was payable where the veteran was unable to earn a living
wage by reason that he was unable to engage in a remunerative occupation except
on a part-time basis or intermittently;

(b) the Temporary Totally Incapacitated rate was payable where a veteran was
temporarily totally incapacitated to such an extent as to be precluded from
earning other than a negligible percentage of a living wage; and

(c) the Totally and Permanently Incapacitated rate (“TPI”) was payable to veterans
who had been blinded or who were incapacitated for life to such an extent as to
be precluded from earning other than a negligible percentage of a living wage.

72. Under these provisions, it seems clear that a veteran, who had not ceased work
completely, could still be eligible for a loss of earning capacity rate of pension.

73. In response to how the courts interpreted the criteria for these rates of pensions, new
tests for the TPI, Intermediate and Temporarily and Totally Incapacitated rates were
inserted in the Repatriation Act 49. The Second Reading Speech stated 50–
46
Sections 23(3A)(d) and (g) and 24(2A)(d) and (g) of the VEA.
47
Section 23(2) and 3(a)(iii) of the VEA.
48
Collins v Repatriation Commission (1980) 48 FLR 198 at 201.
49
Sections 33 and 34 of the Repatriation Legislation Amendment Act 1985
50
Hansard, House of Representatives, 17 May 1985 at pp.2646-7.
20 Years of the VEA Page 16

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. An intermediate rate pension may be payable where a veteran
is prevented by accepted disabilities from engaging in other than part time or intermittent
work. The Bill clarifies the test for this rate of pensions in a similar way. Part time work is to
be less than 20 hours a week.

74. The Second Reading speech suggests that Parliament intended that -

(a) the TPI pension would only be payable when a veteran was precluded from
continuing to engage in remunerative work;

(b) the Intermediate rate would be payable where a veteran was prevented from
engaging in other than part time or intermittent work; and

75. The provisions of the Repatriation Act, dealing with loss of earning capacity were re-
enacted as ss 23, 24, 25 and 28 of the VEA and the definition of “remunerative work”
was included in s 5 of that Act. With some amendments, they are now the provisions
that apply to veterans, who are under the age of 65 when they lodge their claim or
application.

76. Section 24A was inserted in the VEA in 1987 to prevent a veteran from loosing a TPI
or Intermediate rate of pension, at the time when the veteran would have retired in
any event. It read51 –

51
Section 65 of the Social Security and Veterans’ Entitlements and Amendments Act (No 2) 1987. Section
24A was amended by Items 123 and 124 of Schedule 1 of the Veterans Affairs Legislation Amendment
20 Years of the VEA Page 17

Continuation of rates of certain pensions

24A. Where the Commonwealth is or becomes liable to pay a pension to a veteran at the
rate applicable under section 23 or 24, that rate continues, while a pension continues to be
payable to the veteran, to apply to the veteran unless:

(a) the decision to apply that rate of pension to the veteran would not
have been made but for a false statement or misrepresentation made by a
person;

(b) in the case of a veteran to whom section 23 applies:

(i) the veteran is undertaking or is capable of undertaking remunerative
work of a particular kind for 50% or more of the time (excluding overtime)
ordinarily worked by persons engaged in work of that kind on a full time basis; or

(ii) in a case where subparagraph (i) is inapplicable to the work which
the veteran is undertaking or is capable of undertaking-the veteran is
undertaking or is capable of undertaking that work for 20 or more hours per week;
or

(c) in the case of a veteran to whom section 24 applies-the veteran is undertaking or is
capable of undertaking remunerative work for periods aggregating more than 8 hours
per week.".

Commencement: 22 May 1986

77. The Second Reading Speech stated52 –

The Bill also gives legislative effect to the Government’s major decision not to allow the
adverse interpretation given in three recent Federal Court decisions to the provisions of the
Veterans’ Entitlements Act relating to eligibility to the totally and permanently incapacitated
rate (TPI) and intermediate rate of pension to stand.
…
The second amendment is to insert a new section 24A in the Veterans’ Entitlements Act.
This will ensure that persons who are eligible to receive and are receiving a TPI or
intermediate rate pension will not ordinarily lose payment of the pensions at such a rate in
their lifetime. The only exceptions are where the grant of pension would not have been made
but for a false statement or misrepresentation or, where the veteran’s war caused incapacity
improves to the extent that he or she is undertaking, or becomes capable of undertaking
remunerative work for periods greater than that specified in the existing law.

78. Whatever may have been the position set out in the Second Reading Speech in 1985,
the insertion of s 24A in 1987 shows that Parliament had decided that, regardless of
age, a veteran could continue to receive a TPI or Intermediate rate pension, while still

(Budget and Compensation Measures) Act 1997 to provided that paragraphs (b) and (c) did not apply to a
veteran undertaking certain rehabilitation. It was amended again by Items 132 and 133 of Schedule 1 of the
Military Rehabilitation and Compensation (Consequential and transitional provisions) Act 2004 to permit a
reduction in the rate of pension when a veteran had received a payment for permanent impairment under the
Safety, Rehabilitation and Compensation Act 1988.
52
Hansard, House of Representatives, 4 November 1987, p 2015.
20 Years of the VEA Page 18

undertaking limited remunerative work. The reference in the Second Reading Speech
to a veteran undertaking … remunerative work for periods greater than that specified
in the existing law seems to adopt the view that the then provisions of s 23 and 24
permitted a grant of pension to a veteran who was still undertaking some
remunerative work.

79. In Haskard, the following observations were made in respect of the under 65
provisions (my emphasis) -

24 … It is clear in the context of the intermediate rate of pension that the veteran may be
prevented from continuing to undertake remunerative work that the veteran was undertaking
by reason of the incapacity brought about by the war-caused injury or disease but still have
the capacity to work on a part-time or intermittent basis and that that capacity, which might
be translated into actual work, may encompass the ability to work less than twenty hours
per week or 50% of ordinary working time.
…
26 When one comes to look at the provisions dealing with the Special Rate of pension, ie s
24, it is again clear that the veteran may be prevented from continuing to undertake
remunerative work that he or she was undertaking, notwithstanding that the veteran may be
capable of undertaking remunerative work for periods aggregating at least up to eight hours
per week.
…
30 Finally, in the case of the Special Rate pension where the incapacity must at least be
70%, the veteran under 65 may have the capacity to, and in fact undertake, remunerative
work for some number of hours per week but nevertheless, be prevented from undertaking
the remunerative work that he in fact was undertaking. However the veteran must have
ceased to be undertaking the particular remunerative work he had previously
undertaken before the Special Rate pension is payable.

80. What seems clear is that the analysis in Haskard is based on reading prevented from
continuing to undertake remunerative work that the veteran was undertaking as
requiring a complete cessation of that work. Having adopted that view, Haskard then
has to accommodate the Intermediate rate provisions, and possibly s 24A, to which it
did not refer, that show that continued remunerative work is permitted by the
legislation. This it did by finding a distinction between previously undertaken work
and other remunerative work.

81. Although not stated in Haskard, the same interpretation would apply to the under 65
provisions for the Intermediate rate because ss 24(1)(c) and section 23(1)(c) are
identical.

Veterans under 65

82. The difficulty with the construction adopted in Haskard appears from the relevant
provisions for Intermediate rate eligibility for veterans under 65. The criteria include

23 Intermediate rate of pension
(1) This section applies to a veteran if:
20 Years of the VEA Page 19

…
(b) 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; and
(c) 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; and
…
(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.
(3) 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
…

83. The differences between the s 23 provisions for the Intermediate rate and the
comparable provisions of 24 for the TPI rate are –

(a) Section 23(1)(b) provides that war-caused incapacity must render the veteran
incapable of undertaking remunerative work other then part-time or
intermittently, as defined in ss 23(2), while 24(1)(b) provides that it must render
the veteran incapable of undertaking remunerative work for periods aggregating
more than 8 hours a week.

(b) the comparable provisions of ss 23(1)(c) and 23 (3)(a) and ss 24(1)(c) and
24(2)(a) are identical except that s 23(3)(a) has the phrase to the extent set out in
paragraph 1(b) and s 24(2)(a) does not have an equivalent praise or an equivalent
provision to s 23(3)(a)(iii).
20 Years of the VEA Page 20

(c) Section 23(2) has no equivalent in s 24. Although it only qualifies s 23(1)(b), to
the extent that it addresses the circumstance where a veteran is undertaking …
work, it would be otiose if ss 23(1)(c) and 21(3)(a)(i) required a complete
cessation of remunerative work.

84. As I have noted, ss 23(3)(a)(i) and (ii) and ss 24(2)(a)(i) and (ii) are the same. In
respect of the latter the Full Court in Sheehy held53 –

The notion of "ceas(ing) to engage in remunerative work" in sub-para 24(2)(a)(i) and the
notion of being prevented "from engaging in remunerative work" in sub-para 24(2)(a)(ii) are
intended to refer respectively to the "remunerative work that the Veteran was undertaking"
and the remunerative work that the Veteran is "prevented from continuing to undertake"
referred to in sub-para 24(1)(c), and since the notion of "engaging" in remunerative work
means performing such work, the notion of "undertaking" it has the same meaning.

85. It follows from Sheehy that the reference in s 23(3)(a)(iii) to remunerative work that
the veteran has been engaged in is also a reference to remunerative work that the
veteran was undertaking. It is a small step from there to infer that the references in s
23(2) to the work a veteran undertakes or is undertaking are also references to work
the veteran was undertaking referred to in s 23(1)(c). If that is the case then the
legislation does not support the dichotomy made by Haskard between work the
veteran was undertaking and any other work

86. That is another reason for finding there is no scope for the dichotomy. In Sheehy, the
Full Court also held that remunerative work that the veteran was undertaking was any
work that the veteran had successfully or effectively undertaken54. There thus seems
no scope for a dichotomy between remunerative work that the veteran was
undertaking and other remunerative work. Both forms of work, if done successfully
and effectively, will be work that the veteran was undertaking for the purposes of ss
23(1)(c) and 24(1)(c). Any work not done effectively and successfully will not be
relevant.

87. It also is hard to conceive of any policy reason why Parliament would deny eligibility
to a veteran, who was forced to reduce previously undertaken work to say 15 hours a
week, but grant eligibility to a veteran, whose war-caused incapacity confined the
veteran to some new form of work for 15 hours a week. If the compensation is for loss
of earnings and earning capacity then basing eligibility on such a distinction would
make little sense and would discriminate against veterans who were only capable of
performing unskilled manual work.

88. If the comparable provisions in ss 23 and 24 have the same meaning then the view
adopted in Haskard is inconsistent with ss 23(2) and 23(3)(a)(iii).

53
Sheehy v Repatriation Commission (1996) 66 FCR 569 at 574A.
54
66 FCR at 574G.
20 Years of the VEA Page 21

89. A requirement in ss 23(1)(c) and 24(1)(c) is that a veteran is prevented from
continuing to undertake remunerative work. Reference is also made in ss 23(3)(a)(i)
and 24(2)(a)(i) to a veteran who has ceased to engage in remunerative work for
reasons other than the war-caused incapacity. Remunerative work is not qualified in
either case by any, some, all or the remunerative work. The view that these
requirements can only be satisfied by a complete cessation of remunerative work is
not persuasive. If a veteran’s war-caused incapacity means the veteran, who used to
work 40 hours a week, is now prevented from doing so, and can and only does work
5 hours a week, then there is nothing strained about saying that the veteran has been
prevented from continuing to undertake remunerative work or has ceased to engage
in remunerative work.

90. This construction of prevented from continuing to undertake remunerative work is
consistent with the 1985 Second Reading Speech. It stated that the Intermediate rate
may be payable where a veteran is prevented by accepted disabilities from engaging
in other than part time or intermittent work.

91. In Lucus, the Full Court considered the Intermediate rate provisions in the
Repatriation Act, following the 1985 amendments. The Repatriation Review Tribunal
considered various types of work Mr Lucas had undertaken and proceeded on the
basis that his handicraft and art work, that he was still undertaking, constituted
remunerative work but found there had been no loss in respect of that work. The
Court held55 (my emphasis) –

The whole purpose of para.6(c) is to limit the payment of benefits under the Schedule to
those who have not only suffered such an incapacity as would prevent full-time work but
who have, in consequence, been prevented from continuing to undertake work which
they would otherwise have undertaken and, by reason thereof, have suffered a loss of
salary, wages or earnings: cf the extract from the second reading speech of the Acting
Minister quoted by us in Banovich. The relevant question under para.6(c) -- it first having
been determined under para.6(b) that the applicant has suffered the requisite incapacity -- is
whether that incapacity has caused a loss of remunerative work, and so income, which
would not otherwise have occurred.

92. These comments support the view that the phrase prevented from continuing to
undertake remunerative work does not require a complete cessation of that work. The
Court did not consider that Mr Lucas could not qualify for the Intermediate rate
pension because he was still undertaking remunerative work. And a loss of
remunerative work, resulting from an inability to work full-time, does not equate
with a cessation of remunerative work.

93. The Full Court in Starcevich considered an applicant who had been forced to give up
farming in about 1970. He then worked for the Postmaster-General’s Department. He
effectively ceased work in 1974, when the branch of the Department where he
worked moved its location and he was unable, due to his injury, to work at its new

55
Lucas v Repatriation Commission (1986) 69 ALR 415 at 422.5.
20 Years of the VEA Page 22

site. By the time he made his application, in 1984, he would have been retired from
the Department because of his age. The Court held that Mr Starcevich qualified for a
TPI pension because he had been prevented from continuing to undertake
remunerative work that he had been undertaking, in that he had been prevented from
continuing to work as a farmer.

94. The relevant provision is s 24(1)(c), which reads -

(c) 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; and

95. Mr Starcevich had ceased all work that he had undertaken in the past. Nevertheless,
when he made his application, his pensionable incapacity was not causing him any
loss of salary related to his work with the Department. It follows that Starcevich
stands for the proposition that prevented from continuing to undertake remunerative
work in s 24(1)(c) does not require that a veteran’s pensionable incapacity has forced
the veteran to cease all remunerative work he had previously undertaken. It is
sufficient if the veteran had been forced to cease to engage in some remunerative
work. If that is true in respect of different types of work then there is no reason why it
is not also true of a diminution in a particular type of work.

96. The legislation is to be given a reasonably liberal interpretation but not one that
means the true significance of the provisions should be strained or exceeded56.

97. The better view seems to be that veterans, under the age of 65 when they lodge their
claim, are not ineligible for the Intermediate or TPI rates of pension merely because
they continue to undertake some remunerative work.

98. In Wright, the Court dealt with an appeal by a 55 year old veteran and sought to
apply the reasoning in Haskard to a veteran under the age of 65. The Court stated57 -

25 On the case that Mr Wright presented to the AAT, Mr Wright was said to have been
engaged in remunerative artistic work, and it is clear that this artistic work had continued
during the assessment period, although to a lesser extent than previously, largely because of
his alcohol problems. In those circumstances, in addition to the fact that the "alone" test was
not satisfied, the requirement that Mr Wright had been prevented from continuing
remunerative work has not been satisfied. As Hill J pointed out in Repatriation Commission v
Haskard (2002) 126 FCR 1 at [31]:
Either the veteran is or the veteran is not prevented from continuing to undertake the last
paid work he undertook. If that last paid work was as here, acting as a property valuer on his
own account, the question to be asked is whether that last paid work has ceased or whether

56
Repatriation Commission v Hayes (1982) 64 FLR 423 at 426.2; Starcevich v Repatriation Commission
(1987) 18 FCR 221 at 225.6 & Repatriation Commission v Hawkins (1993) 45 FCR 205 at 211.3.
57
Wright v Repatriation Commission (2005) 144 FCR 302.
20 Years of the VEA Page 23

it has continued. On the facts here it has not ceased but continued. All that has happened is
that the quantity of work has declined but that does not mean that the work itself has ceased.
26 These remarks are apposite to the present circumstances because the evidence here
indicates that Mr Wright continued to engage in his artistic work during the assessment
period, and had not ceased, although the amount of artistic work was substantially
diminished. On Mr Wright’s case his last paid work was as an artist.

99. These comments were made after the Court had already based its decision on the
Tribunal’s finding of fact that Mr Wright did not satisfy the alone test58. Furthermore,
the passage quoted from Haskard in Wright dealt with veterans over the age of 65,
when they made their claim, and thus was not applicable. The views expressed in
Wright were obiter comments, which did not reflect a considered view by the Court,
and are not binding on determining authorities.

Veterans who have turned 65

100. In 1994, new criteria for veterans who had turned 65 were inserted in ss 23 and 24 of
the VEA59. The provisions that apply to the Intermediate are set out below. The
comparable provisions for the TPI rate of pension are the same, except that the
underlined provisions are omitted. The highlighted provisions are those that create
problems when one tries to reconcile them with the provisions that are predicated on
the possibility of diminished but continuing remunerative work. Last paid work is
highlighted and italicised in the legislation.

23 Intermediate rate of pension
…
(3A) This section applies to a veteran if:
…
(c) paragraphs (1)(a) and (1)(b) (as affected by subsection (2)) apply to the veteran;
and
(d) the veteran is, because of incapacity from war-caused injury or war-caused
disease or both, alone, prevented from continuing to undertake the remunerative
work (last paid work) that the veteran was last undertaking before he or she
made the claim or application; and
(e) because the veteran is so prevented from undertaking his or her last paid work,
the veteran is suffering a loss of salary or wages, or of earnings on his or her
own account, that he or she would not be suffering if he or she were free from
that incapacity; and
(f) the veteran was undertaking his or her last paid work after the veteran had
turned 65; and
(g) when the veteran stopped undertaking his or her last paid work, the veteran:
(i) if he or she was then working as an employee of another person—had been
working for that person, or for that person and any predecessor or
predecessors of that person; or

58
144 FCR 302 at [19]-[20].
59
Sections 16 and 17 of the Veterans’ Affairs (1994-95 Budget Measures) Legislation Amendment Act 1994.
20 Years of the VEA Page 24

(ii) if he or she was then working on his or her own account in any profession,
trade, employment, vocation or calling—had been so working in that
profession, trade, employment, vocation or calling;
for a continuous period of at least 10 years that began before the veteran turned
65; and
…
(3B) For the purposes of paragraph (3A)(e), a veteran who is incapacitated from
war-caused injury or war-caused disease or both, to the extent set out in
paragraph (1)(b) is not taken to be suffering a loss of salary or wages, or of earnings
on his or her own account, because of that incapacity if:
(a) 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
(b) the veteran is incapacitated, or prevented from engaging in remunerative work
for some other reason; or
(c) 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.
…

101. Section 23(3A)(c) makes satisfaction of paragraph 1(b) (as affected by
subsection (2)) a requirement. Subsection 23(2) provides that a veteran cannot
satisfy 23(1)(b) if the veteran undertakes or is capable of undertaking work for more
than a half a normal week. The application of s 23(2), without modification, is
consistent with the Intermediate rate being payable when a veteran is still working
part time or intermittently.

102. As with the under 65 provisions, s 23(3B)(c), makes ineligible a veteran working
part-time for reasons other than a war-caused incapacity. This would also be otiose if
eligibility depended on a complete cessation of work.

103. In Haskard, the Court came to the following conclusions –

(a) the Intermediate rate may be payable where a veteran is still doing some work (at
[24]);

(b) there is at least an implication from s 23(3)(b) (sic – s 23(3B) ?) that a veteran
over 65 may receive the Intermediate rate while still being capable of working (at
[25]);

(d) there is nothing in s 24(2A) which raises an implication that a veteran has a
capacity to work (at [27]);

(e) where the language in s 24(2A)(d) is used what is required is that the veteran can
no longer work in the particular job or occupation in which the veteran last
20 Years of the VEA Page 25

worked and there is no implication that he would be incapacitated for other work
(at [28] & [31]);

(f) in the case of the Intermediate rate for a veteran over 65, the veteran may still be
working part-time but that has nothing to do with the question as to whether he is
prevented from continuing to undertake the work last undertaken (at [29)];

(g) for the TPI, a veteran under 65 may undertake work for some hour a week but
must have ceased the remunerative work he had previously undertaken (at [30]).

(h) where a veteran has originally worked full-time in his last paid work but had to
reduce his work to part-time the veteran might be said to have been prevented
from undertaking his initial full-time work (at [32]) and there is doubt about
whether work on a full-time basis and work on a part-time basis should be
characterized as the same type of work (at[38]).

(i) Carter was correct in holding that last paid remunerative work for the purposes of
ss 24(2A)(d) and s 24(2A)(g) includes remunerative work, regardless of whether
it is done for less that 8 hours a week (at [33]).

104. His Honour’s judgment turned on proposition (e) which is based on a dichotomy
between being prevented from continuing to undertake the remunerative work that
the veteran was last undertaking, which must have ceased, and other work that a
veteran can do. I have explained why I do not think that dichotomy is possible.

105. The problem then is how to resolve the requirement that a veteran has stopped
undertaking his or her last paid work and the Intermediate rate provisions that seem
to permit part-time work

106. Unlike the provisions for those under 65, s 23(3A) refers to being prevented from
undertaking the remunerative work that the veteran was last undertaking. This might
mean that one could only have regard to the type and amount of work a veteran was
last doing before the claim was lodged. But the provision is probably directed at
Starcevich and prevents a veteran from relying on a different type of work done in
the past. On this view, the only relevant work is that last performed before the claim
was lodged but it is to be considered in its entirety. This is consistent with the
Explanatory Memorandum, which states60 -

New paragraph 3A(d) provides a similar test to that in the first part of the current paragraph
1(c), but relates it to the veteran’s “last paid work”. The paragraph defines “last paid work”
to mean the remunerative work that the veteran was last undertaking before he or she made
the claim or application. Thus, the veteran must because of incapacity from war-caused
injury or war-caused disease, alone be prevented from continuing his or her last paid work.

60
Explanatory Memorandum, House of Representatives, Veterans’ Affairs (1994-95 Budget Measures)
Legislation Amendment Bill 1994 p 22.3.
20 Years of the VEA Page 26

107. What then is the position of a veteran forced over the years to reduce remunerative
work by stages, from say 40 hours a week to 5 hours a week, due to war-caused
incapacity? The veteran can be described as being prevented from undertaking the
remunerative work he was last undertaking, albeit that he still does that work for less
hours. Haskard seems to express a not dissimilar view at [32], where it states that
there may be an argument for characterising the last paid work as full-time work and
a finding could be made that it had ceased, despite on going part-time work. But the
reference to the remunerative work makes this a more strained construction than is
the case with ss 23(1)(c) and 24(1)(c).

108. In Carter, Branson J pointed out a particular problem with s 24(2A)(d), when she
stated61 –

22 Paragraph 24(2A)(d) of the Act might prove to have a harsh impact on veterans seeking
to receive the special rate of pension if the work which Mr Carter undertook as a partner in
his accounting practice and the limited audit work that he subsequently undertook for NZI
were both properly to be understood as examples of "the remunerative work ... that [he] was
last undertaking before he ... made the ... application" within the meaning of par 24(2A)(d).
A consequence of this construction of the phrase "the remunerative work ... that the veteran
was last undertaking ..." would seem to be that a veteran who was, because of incapacity
from war-caused injury or war-caused disease or both, alone, prevented from undertaking
work as a full-time partner in an accounting practice, but not prevented from undertaking on
a contract basis limited and irregular audit work (even though such work was not in fact
undertaken), might not be able to establish that he or she was because of that incapacity
alone prevented from undertaking his or her last paid work.

109. Carter supports the interpretation given to ss 23(3A)(d) and 24(2A)(d) in Haskard. It
also shows the consequences of that interpretation. The last paid work must not only
have ceased but war-caused incapacity must deprive a veteran of the capacity to
undertake any amount of the last paid work. This is another reason for construing
these provisions as being satisfied when a veteran is preventing from undertaking
some of the last paid work.

110. The more difficult issue is found in paragraph (g), which refers to the veteran having
stopped undertaking his or her last paid work. That points to complete cessation. This
is consistent with the Explanatory Memorandum, which states62 -

New paragraph (3A)(g) provides that when the veteran ceased to continue to undertake his
or her last paid work, …

111. On the other hand, s 23(3B)(c) only makes sense if the loss of earning required by
paragraph (e) (consequent on being prevented from continuing to undertaking the last
paid work, referred to in paragraph (d)) can be satisfied, although a veteran has been

61
Carter v Repatriation Commission (2001) 113 FCR 314 & [2001] FCA 992 (30 July 2001).
62
1994 Explanatory Memorandum at p 22.8 and see p 20.2 to the same effect.
20 Years of the VEA Page 27

engaged in remunerative work part time. This contrary intention also receives support
in the Explanatory Memorandum63 –

The operation of the new paragraph (3A)(e) is further affected by subsection (3B), which
provides criteria in almost identical terms to those in the current paragraph (3)(a). It is
intended that subsection (3B) will have the same effect on paragraph (3A)(e) as paragraph
(3)(a) has on paragraph (1)(c).

112. There is a conflict between paragraphs (3A)(c) and (3B)(iii) on the one hand, which
are premised on some on going work, and 3A(g) on the other. This conflict is
repeated in the Explanatory Memorandum. One answer is to put a gloss on (g) by
construing stopped undertaking his or her last paid work as meaning having stopped
undertaking the last paid work, as it was performed before the war-caused incapacity
came into play or stopped performing some of the last paid work.

113. It also the case that s 24A was not amended in 1994. If paragraph (g) is to be read
literally, that means a veteran, who had ceased work before making the claim, and
otherwise qualified, could resume some work at any time after lodging the claim and,
unless the veteran infringed s 24A, would still qualify for the Intermediate or TPI
rates of pension. This seems to be a strange result.

114. The over 65 provisions and the judgment in Haskard are both difficult to construe.
Haskard does not offer a persuasive interpretation of the legislation. The analysis in
that case was distracted by the arguably erroneous assumption that prevented from
continuing to undertake remunerative work that the veteran was undertaking
necessitated a complete cessation of that work. That led to the suggestion that there
could be other work the veteran was doing that was not remunerative work that the
veteran was undertaking.

115. The problem remains the inconsistency between the provisions in the Intermediate
rate provisions, that are premised on a veteran continuing to undertake part-time
work, and s 23(3A)(g). Arguably, s 23(3A)(d) adds some support to the requirement
for a complete cessation of work but it does contain a degree of ambiguity. The
resolution of this conflict in s 23 is likely to determine how the comparable
provisions of s 24 are ultimately construed by the courts.

116. As this problem is the result of the poor and confusing drafting of the over 65
provisions in s 23 and 24 it may be more appropriate for it to be remedied by
appropriate legislative amendments, rather then leaving it to the courts to make sense
of the provisions.

***

63
1994 Explanatory Memorandum at p 22.5.