Repatriation Commission and David Moss - No. G130 of 1981 Administrative Law

1982 ALR 553

---

(Judgment by: Deane J, Fitzgerald J)

Repatriation Commission v David Moss

Court:

Judges: Fox J

Deane J
Fitzgerald J

Hearing date: 22 April 1982
Judgment date: 22 April 1982

SYDNEY

---

Judgment by:
Deane J
Fitzgerald J

The Repatriation Commission appeals, on a question of law, from a decision of the Administrative Appeals Tribunal ("the Tribunal") to the effect that the respondent, Mr. David Moss, had an existing partial incapacity caused by pulmonary tuberculosis which, if viewed in isolation, would entitle him to receive a pension under the provisions of the Repatriation Act, 1920 ("the Act") of 30 percent of the General Rate specified in Column 3 of the Table in Schedule I to the Act. The narrow, albeit important, point of law to be decided is whether, on the facts found by the Tribunal, Mr. Moss could properly be found to have had, at the date of the review, any such partial "incapacity" within the meaning of the legislation. If that question is answered affirmatively, the further question arises whether, on those findings of fact, it was open to the Tribunal to assess, as it did, the degree of such partial incapacity as 30% of "Total Incapacity" as referred to in the Schedules to the Act.

Mr. Moss is 59 years of age. He is a married man with three children aged 15, 13 and 12. He left school at the age of 15 after completing his Intermediate Certificate and joined the work force. He enlisted in June 1941 and served in the A.I.F. from that time until April, 1946 when he was discharged.

After his discharge, Mr. Moss worked in a number of different occupations in Queensland including, in late 1947, that of a driver of a machine in an underground mine in Proserpine. In early 1948, he obtained a position with the Metropolitan Water Sewerage & Drainage Board in Sydney as an underground machine operator in a project involving the construction of a large tunnel. He was required, for the purposes of that employment, to be X-rayed. The X-ray disclosed that he was suffering from pulmonary tuberculosis. He was hospitalized for some months. It is common ground that he was prevented by tuberculosis from pursuing his employment with the Metropolitan Water Sewerage & Drainage Board. Upon his discharge from hospital, he obtained employment as a stock clerk and commenced to study accountancy by way of a correspondence course. The strain of working by day and studying by night took its toll and he was again hospitalized with active tuberculosis. In all, he spent some ten months in hospital obtaining the rest and good food which then constituted the accepted treatment for tuberculosis.

On 21 January, 1948, Mr. Moss' tuberculosis was accepted as being due to war service. He was, on any approach to the meaning of the word "incapacity", suffering an "incapacity" caused by pulmonary tuberculosis. Section 37(1) of the Act provided, at that time, that the rate of pension payable to a member of the Forces in respect of incapacity caused by pulmonary tuberculosis should be not less than the general rate specified in Column 3 of the Table in Schedule 1 to the Act. In accordance with that provision, Mr. Moss' pension entitlement was assessed at one hundred percent of the general rate. At that time, s.37(2) of the Act provided that "any such pension" should not be terminated or reduced below the general rate "unless it is shown that the pension was obtained by fraud or impersonation". The apparent legislative guarantee contained in that sub-section was, however, susceptible to being destroyed by repeal or amendment.

The medical evidence which was accepted by the Tribunal established that Mr. Moss' pulmonary tuberculosis is now healed and inactive. There is no existing appreciable physical incapacity resulting from it. At most, he has a latent condition in respect of which there is only a very small risk of re-activation and in respect of which, if any of the circumstances which might lead to re-activation should become present (e.g., diabetes or alcoholism), adequate treatment could be given. His only existing appreciable physical incapacity attributable to his war service is partial deafness in each ear.

At the time of the commencement of the Repatriation Acts Amendment Act, 1978 ("the Amendment Act"), Mr. Moss was still in receipt of a pension at the full general rate. Section 37 of the Act was repealed by the Amendment Act. Section 40 of the Amendment Act provides, for present purposes:

"40. (1) In this section, "review", in relation to a pension, means a review conducted under section 31 of the Repatriation Act 1920 for the purposes of --

(a)

assessing the nature, and probable duration, of the incapacity in respect of which the pension is payable; and

(b)

assessing the appropriate rate of that pension having regard to --

(i)

the assessment referred to in paragraph (a);

(ii)

any relevant provisions of the Repatriation Acts in force at the time of the review; and

(iii)

the provisions of this Part.

(2) The Repatriation Commission shall, as soon as practicable after the commencement of this Part, conduct a review with respect to every pension payable in respect of incapacity caused by pulmonary tuberculosis, being a pension that has been so payable since before the commencement of this Part.

(3) Where a pension is the subject of a review in accordance with sub-section (2), the incapacity (if any) in respect of which the pension is payable shall, for the purposes of that review and thereafter for all purposes of the Repatriation Acts, be treated as if it had resulted from an occurrence that happened during the war service or special service of the member of the Forces concerned.

(4) The Repatriation Commission shall not, on the completion of a review with respect to a pension in accordance with sub-section (2), and a determining Authority shall not, at any time after the completion of that review under sub-section (2), determine the rate of the pension to be a rate less than --

(a)

where the pension is payable to a member of the Forces - the rate of $74.40 per fortnight; or . . . . . . . . . . . . . . . . . . . . . . ".

Pursuant to the provisions of s.40, the Repatriation Commission, on 2 July, 1979, reviewed Mr. Moss' assessment for pension purposes and determined:

"Incapacity resulting from pulmonary tuberculosis is assessed as negligible with effect from 2.11.78. Incapacity from sensori-neural deafness left ear twenty percent, incapacity from conductive deafness left ear twenty percent, composite assessment for deafness is forty percent with effect from 27 April 1978.

Pension continued at one hundred per cent Class 'A' from 27.4.78 and at the 'frozen rate' with effect from 2.11.78 Review indefinite".

Subsequently, the matter came on for review by the Repatriation Review Tribunal and, at the request of the representative for Mr. Moss, the President of the Repatriation Review Tribunal referred the matter to the Tribunal pursuant to s.107VZZB of the Act.

As has been mentioned, the Tribunal accepted medical evidence to the effect that Mr. Moss' tuberculosis was healed and inactive. It was satisfied beyond reasonable doubt that there was no existing appreciable physical incapacity resulting from it. In the Tribunal's view however, that did not conclude the case. The Tribunal considered that Mr. Moss' present employability was impaired and diminshed as a consequence of the pulmonary tuberculosis which he had previously suffered. It held that that impairment and diminution constituted a partial incapacity for relevant purposes. The Tribunal's findings in those regards are conveniently summarized in the following four extracts from its Reasons for Decision which are quoted in a different order to that in which they appear in those Reasons:

"The evidence concerning tuberculosis does not disclose any present incapacity other than a limitation upon his ability to earn income".

"On the evidence, therefore, we are satisfied beyond reasonable doubt that Mr. Moss is not presently suffering from any physical or mental condition related to his tuberculosis which is limiting his activity or affecting his health".

"In the present case, we are satisfied that the tuberculosis materially reduced the applicant's ability to obtain employment in the field of work to which he was most suited. In our opinion, the tuberculosis had, in this respect, a permanent effect upon him which presently affects his earning capacity. This is not a simple case of a lost opportunity, that is to say, that he was unable to take a particular job at a particular time because he was in hospital. It is a case where, because of his tuberculosis, he was precluded from continuing in the type of work to which he was most suited, that is to say, some form of outdoor or semi-outdoor work in which he could ultimately develop to foreman or executive status. We think that that limitation upon him is an incapacity for which an assessment is justified".

"In our opinion, when s.40(2) of the Repatriation Acts Amendment Act 1978 speaks of "incapacity caused by pulmonary tuberculosis" it speaks of an incapacity which at least includes, even if it be not limited to, an incapacity for work resulting from pulmonary tuberculosis. In our opinion, in assessing such incapacity one may compare the talents which the serviceman would have had but for the tuberculosis with the talents to which he was restricted by reason of the tuberculosis. In our view, a limitation imposed upon a person's employment capacity by tuberculosis is both a relevant matter to which weight should be given and, if established, an "incapacity caused by pulmonary tuberculosis".

The Tribunal went on to conclude that the appropriate assessment of Mr. Moss' incapacity caused by his pulmonary tuberculosis was 30% of the general rate. Combined with the assessment of 40% of the general rate in respect of deafness, the result was that Mr. Moss was entitled to a pension at a higher percentage of the general rate than either of those figures. The Tribunal assumed, without finally deciding, that the appropriate higher percentage was that determined by the addition of the two figures, namely 70% Since 70% of the general rate is less than the minimum $74.40 per fortnight fixed by s.40(4)(a) of the Amendment Act, the immediate consequence of the Tribunal's finding would be that Mr. Moss remained entitled to a pension at the "frozen rate" which the Repatriation Commission had allowed him in its assessment.

From Mr. Moss' point of view, the practical importance of the Tribunal's finding is that his pension will, if that finding stands, increase when 70% of the general rate exceed the frozen rate.

The function which the Repatriation Commission is required to perform by s.40 of the Amendment Act is a "review" under s.31 of the Act for the purposes of: (a) "assessing the nature, and probable duration, of the incapacity in respect of which the pension is payable" (s.40(1)(a)); and (b) "assessing the appropriate rate of that pension" (s.40(1)(b)). No express mention is made, in s.40, of that review involving an assessment of the "extent" of the incapacity: cf. s.27(1)(a) of the Act. While only pensions "payable in respect of incapacity caused by pulmonary tuberculosis" are required to be reviewed under s.40, the assessment of the nature of the incapacity in respect of which the pension is payable may reveal that the pension should properly be regarded as payable in respect of overall incapacity constituted by more than one type of particular incapacity: for example, as suggested in the present case, partial deafness and incapacity said to result from pulmonary tuberculosis. The assessment of "probable duration" of incapacity will be, at least primarily, concerned with whether the incapacity is past, temporary or permanent, those being matters which may affect the rate of pension, as will be seen when attention is directed to the provisions of the Act.

The assessment of the appropriate rate of pension as required by s.40(1)(b) is to be made "having regard to" the matters specified in sub-paragraphs (i), (ii) and (iii) of that paragraph. Sub-paragraph (i) requires that regard be had to the assessment made under paragraph (a) (see above). As to sub-paragraph (iii), the only "provisions of this Part" which seem significant for present purposes, i.e. other than sub-sections (1) and (2) of s.40, are the reference in sub-section (3) to "incapacity (if any)" which supports the conclusion that, on the review, a finding of no subsisting incapacity is open and the provisions of sub-section (4) which specify the minimum rate of pension immediately payable. It is therefore necessary, pursuant to sub-paragraph (ii), to found any determination of an appropriate rate in excess of the specified minimum rate, upon any "relevant provisions of the . . . Acts in force at the time of the review", i.e. provisions pursuant to which a pension may be payable "in respect of incapacity caused by pulmonary tuberculosis". As has been mentioned, the section of the Principal Act previously making special provision with respect to the subject (s.37) was repealed by the same Amendment Act as contains s.40. One must therefore turn to the general legislative provisions with respect to entitlement to, and the assessment of the appropriate rate of, a pension.

Basic to a claim for a pension under the general provisions of the Act is "the death or incapacity" of the claimant - see ss.24 (relating to World War I members) and 101 (relating to World War II members), both of which sections are contained in Part III of the Act, "PENSIONS". For present purposes, the relevant operative provisions are found in s.101(1) and are to the effect that, subject to certain immaterial exceptions, the Commonwealth is liable to pay pensions upon the incapacity or death of any member "whose incapacity or death has arisen out of or is attributable to his war service".

Throughout Part III, there is a consistent association between "incapacity" and "death": see, e.g., ss.24, 27, 42, 44 and 101 and the Schedules. The phrase "incapacity or death" appeared in the now repealed s.37 which, as elsewhere stated, made special provision as to the rate of a pension payable in respect of incapacity or death from pulmonary tuberculosis; it again appears in Part VII of the Amendment Act which contains the provisions dealing with the review of pensions payable in respect of incapacity or death caused by pulmonary tuberculosis: see, e.g., ss.38 and 39. This link between an "incapacity" and "death" is continued and emphasised by other provisions in Part III of the Principal Act, e.g. ss.24(2)(a), 27(1) and 48(1) which deal with deaths caused by incapacity. Other provisions, such as s.38(b), refer to incapacity as something which is suffered. The word "incapacity" is not completely defined but, unless the contrary intention appears, "includes incapacity . . . that arose from disease, not due to the serious default of, the member, contacted by him while employed on war service" (s.23, underlining added).

Section 27 of the Act charges Repatriation Boards appointed under the Act with various duties including the determination of the circumstances giving rise to "the incapacity from which a (claimant for a pension) is suffering or from which he has died" and also "in the case of incapacity the nature and extent thereof": see s.27(1)(a). The Boards must also determine whether a claimant is "permanently unemployable" (s.27(1)(j)), a term defined in s.23 to mean, unless the contrary intention appears, "permanently incapable, by reason of physical or mental disablement, of being employed. . . ". Section 48(1) requires a medical practitioner in reporting on any claim to set out in his report his opinion -

"(a) in the case of a claim in respect of . . . dealth . . . - as to the cause of the death;

and

(b) in the case of a claim in respect of . . . incapacity . . . - as to the nature, cause and extent of incapacity,"

and also to set out his opinion in respect of whether the incapacity "from which the member is suffering or from which he has died" arose in circumstances entitling the claimant to a pension. Another duty committed by the statute to Repatriation Boards is that of "assessing, from time to time, the rates of pensions . . . ": s.27(1)(d). Speaking generally, the rates of pension are those specified in the Schedules to the Act: see s.35.

The Schedules proceed on the premises that there are degrees of an undefined condition referred to as "Total Incapacity" and that the condition may and perhaps often will exist although the person entitled to the pension is able to engage in a remunerative occupation and earn a living wage. The basic rate of pension for total incapacity is that specified in Schedule 1 Column 3. Clause 6 of Schedule 1 provides for a rate substantially higher than the basic rate "Where the incapacity . . . is such that he is unable to earn a living wage by reason that he is unable to engage in a remunerative occupation except on a part-time basis or intermittently". The basic rate of pension which is payable under Schedule 1 Column 3 to a person entitled to a pension "upon his Total Incapacity", or "on Total Incapacity", may also be increased under Schedule 1 Clause 3 if the person entitled to the pension is "temporarily totally incapacitated to such an extent as to be precluded from earning other than a negligible percentage of a living wage while he is so incapacitated . . . ". Schedule 2 provides a "Special Pension" rate (the Special Rate) for, inter alios , those in such a condition permanently, i.e. those "who are totally and permanently incapacitated (i.e. incapacitated for life to such an extent as to be precluded from earning other than a negligible percentage of a living wage)" (underlining added in each case).

Schedule 3 Table C is expressed to relate to pensions payable "IN CASES OF PARTIAL OR SPECIFIC INCAPACITY". It provides, in effect, that the rate of pension payable in such cases is such rate, being less than the General Rate and Special Rate, "as is assessed, having regard to the nature and probable duration of the incapacity, or in accordance with Schedules 4 and 5 in the cases to which those schedules apply". The terms General Rate and Special Rate are related back respectively to Schedule 1 Column 3 and to Schedule 2.

Schedule 4 provides that the rate of pension payable to a person entitled to a pension "who is incapacitated by reason of a disability specified in the first column of this Schedule is a rate equal to such percentage of the General Rate of pension to which (he) would be entitled under Schedule 3 if he were totally incapacitated as is set out in the second column of this Schedule opposite to the description of the disability". There follows a table containing two columns - one column is headed "Description of Disability" and contains items such as "Loss of two or more limbs", and the other column is headed "Percentage of General Rate" and contains percentages ranging from 100 to 50 depending upon the disability described. Schedule 5 takes matters a step further. It provides that where a person entitled to a pension "is suffering from a disability described in Column 1 of the following table, the amount and the rate of allowance (if any) specified in relation to that disability, in Columns 2 and 3 respectively, of the Table shall, subject to this Act, be payable in addition to the pension payable under Schedule 4". Then follows a table containing under the same heading, "Description of Disability", many of the items dealt with in Schedule 4 and, in further columns, the additional amounts and allowances to be paid under Schedule 5. None of the disabilities specified in Columns 1 of Schedules 4 and 5 is present in the instant case.

It emerges from the above that, if Mr. Moss is entitled, under the general provisions of the Act, to receive pension payments in respect of the consequences of his past pulmonary tuberculosis, it is pursuant to s.101(1) and Schedule 3 Table C. Any such entitlement depends upon whether he can be said, by reason of those consequences, to have an "incapacity" for the purposes of the operative general provisions of the Act being a "partial or specific incapacity" for the purposes of Table C.

Consideration of the relevant provisions of the Act leads, in our view, to the conclusion that, in a general sense, the word "incapacity", as used in the Act generally and s.101 and Schedule 3 Table C in particular, refers to a physical or mental disability or impairment rather than inability to work or earn. The consistent references to a person "suffering" an incapacity, the references to an incapacity "from which" a person "has died", the consistent link, as alternatives, between "incapacity" and "death", the terms of the partial definition of incapacity in s.23 as including "incapacity that arose from disease" and the policy underlying the Schedules of paying an increased pension over that payable in respect of "total incapacity" in the event that the incapacitated person is unable to earn other than a negligible percentage of a living wage all point to that conclusion. That conclusion conforms with what was said by the Full Court of this Court (Bowen C.J., Deane and Lockhart JJ.) in Repatriation Commission v. Bowman (judgment delivered 25 November, 1981, as yet unreported). It also accords with the reasoning of Ellicott J. at first instance in Bowman's Case ((1981) 34 A.L.R. 556 ) and of Fisher J. in Collins v. Repatriation Commission ((1980) 32 A.L.R. 581 at p.583). On the other hand, our conclusion in that regard does not accord with the approach adopted in the present case by the Tribunal: it should be mentioned that the Tribunal's Reasons for Decision were published before the Full Court's judgment in Bowman's Case.

In Bowman's Case (supra), the Full Court was concerned, inter alia, with whether Ellicott J. had been correct in treating cases on workers' compensation legislation as relevant to determining whether an applicant for pension was, for the purposes of Schedule 1 Clause 3, temporally totally incapacitated "to such an extent as to be precluded from earning other than a negligible percentage of a living wage" or had, for the purposes of Schedule 1 Clause 6, such an incapacity that he 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". The Court concluded that Ellicott J. was correct in his use of those cases. In so holding however, the Court expressly recognized a basic distinction between a pension for incapacity under the general provisions of the Act and compensation under workers' compensation legislation. Their Honours said:

"It is true, as Counsel for the Commission submitted, that the disability pensions dealt with in Schedules 1 and 2 are concerned with compensating for war related injury whereas the workers' compensation legislation is concerned to compensate for loss of earning capacity. The point is that the Schedules adopt loss of earning capacity (one way or another) as the measure of the extent of the war related disability. It is in relation to this aspect, that is to say, using loss of earning capacity to measure the extent of disability, that the workers' compensation cases may be regarded as furnishing some guidance".

At an earlier stage in the joint judgment in Bowman's Case (supra), the Full Court had referred to the "definition" of "incapacity" as including incapacity "that arose from disease" and said:

"Although not itself conclusive of the question, the definition supports the view, which is reinforced by the Act as a whole and the Schedules, that the word "incapacity" means a physical or mental disability rather than an inability to work or earn wages. This is the view expressed by Fisher J. in Collins v. Repatriation Commission (1980) 32 A.L.R. 581 at p.583 and by Ellicott J. in the present case. We agree with it".

The judgment in Bowman's Case (supra) did not, however, purport to establish, for the purposes of the Act, a clear dichotomy between physical or mental impairment on the one hand and inability to work or earn on the other. To the contrary, it was recognized in that case that inability to work or to earn will commonly be a manifestation and a measure of incapacity. While there are parts of the Schedules (Schedules 4 and 5) in which ability to work or to earn is necessarily irrelevant, there are other parts (Clauses 3 and 6 of Schedule 1 and Schedule 2) where a particular degree of inability to work and earn is given special significance. The latter type of provision was involved in Bowman's Case (supra) and, as has been seen, the basis of the Full Court's acceptance of the relevance of decisions on workers' compensation legislation was that they furnished some guidance on the aspect of using loss of ability to earn to measure the extent of disability.

It would be wrong to attempt to impose a logic and symmetry upon a legislative scheme the real explanations for which are historical and political. It would be a mistake either to assume that it will always be possible to draw a clear distinction between physical and mental disabilities on the one hand and inability to work and earn on the other or to seek to establish any formularized definitive test for drawing that distinction by reference to concepts such as immediate, inherent, consequential and symptomatic. Equally, any temptation towards attempting to frame a comprehensive judicial definition of what the statute has left largely undefined is to be resisted. The judicial gloss of such a general test or comprehensive definition would afford no true substitute for the statutory test and where, as here, the problem is largely semantic, the formulation of such a test or definition would, in our view, be likely to add to the burden as the words of the formulation fall for interpretation. The question whether there is a relevant incapacity, in the sense of physical or mental impairment or disability, must in each case be decided by reference to the particular specific features and considerations which the case presents. In answering that question, diminution of earning ability will frequently, perhaps commonly, be a manifestation and a measure of such incapacity: it is however neither a prerequisite nor a hallmark of its existence.

The effect of the Tribunal's findings of fact in the present case may be shortly restated. Mr. Moss did not at the date of the review have pulmonary tuberculosis or any physical or mental disability related to the pulmonary tuberculosis which he had earlier suffered; his health was no longer affected and no longer imposed any restriction upon his activities. However, in consequence of his earlier pulmonary tuberculosis, he was disadvantaged with respect to his employment and employability: he lacked skills, experience, a work position, job opportunities, and a higher level of income both in the present and for the future, which, but for his war service and the consequential pulminary tuberculosis, he would have possessed. He was missing such capabilities and opportunities not because he had lost them during or by reason of his previous illness but because that illness had deprived him of the opportunity to acquire or pursue them. It is not, for example, a case where an underlying and persisting loss of confidence or mental facility is resulting in diminished earning ability. It is a case where earning ability was not enhanced by reason of the fact that a disability or condition, which is now cured and inoperative, prevented, while it existed and was operative, the acquisition of skills, experience and seniority and the pursuit of a particular class of work.

The conclusion which we have reached, on the facts as found by the Tribunal, is that the disadvantages and lack of skills and abilities to which Mr. Moss is presently subject cannot properly be seen as an incapacity for the purposes of the Act. They represent the consequences of a past incapacity which no longer exists. They do not constitute a present incapacity in the relevant sense. It was not disputed, on Mr. Moss' behalf, that the consequence of that conclusion is that the decision of the Repatriation Commission should be restored.

We would allow the appeal, set aside the decision of the Tribunal and, in lieu thereof, order that the decision of the Repatriation Commission be restored. The applicant suggested that, in that event, each party should pay its or his own costs. We consider that such an order should be made. We also consider, if application be made in that regard, that the respondent should have a certificate pursuant to s.6 of the Federal Proceedings (Costs) Act, 1981 in respect of his costs of the appeal.