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Heard and Repatriation Commission [2003] AATA 309 (4 April 2003)

Last Updated: 7 April 2003

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/711

Date 4 April 2003

Place Brisbane

Decision

(Sgd) Dr E K Christie

Member

CATCHWORDS

VETERANS' ENTITLEMENTS - disability pension - whether applicant entitled to special rate - whether applicant totally and permanently incapacitated - whether applicant prevented from continuing to undertake remunerative work by reason of war-caused incapacity alone - whether accepted service-related conditions `substantial cause' of inability to engage in remunerative work

Veterans' Entitlements Act 1986 ss 19, 24, 120

Forbes v Repatriation Commission (2000) 101 FCR 50

Flentjar v Repatriation Commission (1997) 48 ALD 1

Re Starcevich and Repatriation Commission (1986) 10 ALN 202

Re Doyle and Repatriation Commission (1986) 47 ALD 187

Jackman v Repatriation Commission [1997] FCA 564

Cavell v Repatriation Commission (1988) 9 AAR 534

Re Hornery and Repatriation Commission [1998] AATA 602

Rendell v Repatriation Commission [2001] FCA 1881

Re Bonner and Repatriation Commission (1989) 17 ALD 680

Byrne v Repatriation Commission [2001] FCA 1134

Fox v Repatriation Commission (1997) 45 ALD 317

1. This is an application by Kenneth Heard for a review of the following decisions:

(a) A decision by a Delegate of the Repatriation Commission dated 30 June 2000 which accepted the condition of post traumatic stress disorder as being service related and increased disability pension to 100% to the general rate;

(b) A further decision by a Delegate of the Repatriation Commission dated 26 October 2000 which determined that the conditions of localised osteoarthrosis of the left hip and localised osteoarthrosis of the left ankle were not service related; and

(c) On 19 July 2001 the Veteran's Review Board affirmed the decisions.

2. At the hearing, Mr A Harding of Counsel represented Mr Heard. The respondent was represented by Mr J Kelly, a Departmental Advocate.

3. The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the `T' documents) and the various documents tendered by the parties.

4. Oral evidence on behalf of the applicant was given by Mr Kenneth Heard himself and Dr P Kar, a psychiatrist. The respondent called no witnesses.

FACTS

5. Kenneth Heard was born in 1938 and served with the Australian Army from 26 April 1955 until discharge on 26 April 1980, having reached the prescribed retiring age.

6. During his service Mr Heard rendered operational service in the Malaysia region from 21 September 1965 until 14 September 1966 and in South Vietnam from 1 October 1969 until 25 January 1970.

7. Mr Heard also rendered eligible defence from 7 December 1972 until 26 April 1980.

8. Mr Heard had the following conditions accepted as "service related":

(a) Post Traumatic Stress Disorder (10 September 1999);[1]

(b) Osteoarthrosis of right knee (1994); [2]

(c) Sensorineural hearing loss; (1996) ²

(d) Tinnitus;

(e) Diabetes Mellitus; and

(f) Solar skin damage with malignant change.

9. Mr Heard had the following non-accepted conditions:

(a) Osteoarthrosis of the left hip;

(b) Localised osteoarthrosis of the left hip;

(c) Osteoarthrosis of the left ankle and foot;

(d) Localised osteoarthrosis of the left ankle; and

(e) Osteoarthrosis of the left hand

ISSUES TO BE DECIDED

10. The parties agreed at the commencement of the hearing that the only issue for the Tribunal to decide was whether Mr Heard was entitled to pension at the special rate. In turn, it was further agreed by the parties that sub-sections 24(1)(a) and (b) were not in dispute from the date of application. Consequently, the only issues to decide related to the application of sub-section 24(1)(c) and sub-section 24(2)(b) to Mr Heard's factual circumstances.

EXAMINATION OF EVIDENCE

§ Kenneth Heard, Applicant

11. Mr Heard described how his medical conditions affected his ability to operate his "general convenience" store, as a commercial business, from the time of commencing the business in 1984 until the time of sale of this business on 1 August 1994. In particular, Mr Heard stated:

(a) That his knees/legs were in bad shape and became badly swollen ("like a balloon") and that he had difficulty walking and standing for long times;

(b) That he had become very agitated over time suffering mood swings with the result that he would frequently abuse customers, over trivial matters and he would apologise to them later. This problem had reached this stage because he did not understand what was happening to him. He stated that he did not know why he was "going over the top" and "flying off the handle" and why he felt he could not stand "being in his business". He said that there were times when he just broke down and cried.

12. He described the scope of operations of his commercial business [general convenience store, sub-newsagency, takeaway food, lotto agency, dry cleaning agency and an electronic banking agency]. It was the only such business offering this range of services in an isolated area. At its peak in 1992/93, the business turned over $1.8m per annum. In its last year of trading, the business turned over $1.4m per annum.

13. Mr Heard stated that the business was "high pressure". It employed sixteen people - four of whom were full-time, the rest part-time, and operated 7 days a week from 5.00am to 9.00pm. He said that he was there at the opening and locked up the business each night.

14. Mr Heard said that he first became aware of the condition of PTSD around 1995 when he became involved in veteran's advocacy work. He commenced this work in order to avoid becoming "brain dead" after selling his business. The work involved 1½ to 5 hours of his time each day, but the actual amount of time spent was "flexible".

15. Mr Heard stated that it had then "hit home like a brick" that he could have had PTSD like the people he was involved with. Whilst his GP initially advised him that he did not have PTSD, a psychiatrist, Dr Kar, subsequently confirmed his PTSD problem.

16. Mr Heard stated that he "loved his business" but because of his medical conditions "had to get rid of it". He eventually sold the business for $120,000 cash on 1 August 1994, at a much lower value than a value of $300,000 based on brokerage advice he had been given.

17. Under cross-examination, Mr Heard acknowledged that he was an Alderman with the Logan City Council from 1988 to 1991. He said that he regarded this position as a part-time job of one day per fortnight as it involved a two to three hour committee meeting, one day per fortnight, a two to three hour Council meeting, and further time dealing with constituents. He said that any remuneration he received was paid on a meeting basis. At this stage the "Council was a small part of his life". Mr Heard said that he stood for re-election in 1991 but was unsuccessful. Mr Heard said that he had decided to stand for re-election at the urging of constituents who wanted him to stand again.

18. Mr Heard said that during the period he was an Alderman, he had employed a business manager for a short time. Because this did not turn out to be a "good experience" he decided to not go down this pathway again.

19. Mr Heard acknowledged that his business was a "difficult business to sell" because of its size and the number of employees. He said and that only one offer had been made to purchase it.

20. In addition, he acknowledged that an employee had embezzled about $20,000 from his lotto agency over a period of three months, some fourteen months after the agency commenced.

21. Mr Heard was taken to two forms related to his Service Pension claim:

(a) In the "Preliminary Details Form" (5 September 1994), where at Q20 he had referred only to his knee and ankle problems causing him to sell the business. He said that he could not recall the telephone conversation and that it was not a detailed call.

(b) With respect to the Invalidity Details Form (3 October 1994), he said that he had not listed his mood swings under details of injury/illness at Q2, 3 as he was unaware that he had PTSD at this time.

22. Mr Heard stated that from around 1996 he had realised that he was "vegetating" and needed to do something with his life in order to become active. As a result be became involved with the RSL and was President of the Logan RSL for five years. He acknowledged that this role required him to deal with many people, with his PTSD, and that he had some "real ding dongs" with staff.

23. Finally Mr Heard stated that he had gone to CES in 1995 to register for work. Because he was on a Comsuper pension, he was not placed on the active list. He received no phone calls of offers from CES. He said that, in 1994, he had been approached by someone at a social club with a job opportunity to drive a water truck. However, he had to decline the offer because his leg problems made him unable to perform the "double de-clutching" task associated with driving the truck.

EVIDENCE OF DR PHARBAL KAR, PSYCHIATRIST

24. It was Dr Kar's opinion that the onset of Mr Heard's condition of PTSD was "after he served in Vietnam". Dr Kar described the course of PTSD and emphasised that it would be unusual for anyone to have a "stable PTSD" as different reminders of the stressor, as well as stressors from ordinary life events, led to instability in the PTSD. This instability could actually affect the course of the condition. Later in his evidence, Dr Kar gave examples of stressors arising from ordinary life events such as unemployment, marital distress and financial difficulties.

25. Dr Kar was asked a number of questions relating to Mr Heard's undertaking voluntary work (veterans' pension advisory work; and as President of a RSL club) with particular reference to the contrast between voluntary and remunerative work in relation to the impacts on someone having PTSD. Dr Kar gave the following responses:

(a) that he would assume that the degree of flexibility and demands put on a person doing voluntary work would be less than for someone undertaking paid employment;

(b) that the "real stress" in undertaking voluntary work would be less "relative to working in paid employment because there would be pressure placed on a person in paid employment by the supervisor who was paying for the task" - especially if the person was unable to fully perform the task;

(c) in contrast where voluntary work was undertaken by a person, the organisation that engaged the person may still see the work as "sufficient" - even if the task was not fully performed; and

(d) that in Mr Heard's situation in having PTSD, that the voluntary work undertaken with the RSL would not be a "significant stressful factor".

26. Dr Kar acknowledged that his first report on Mr Heard was prepared in May 2000. Whilst he could not describe the clinical state of Mr Heard in 1994, relative to the first time that he saw him, it was his opinion that Mr Heard was probably physically better and functioning better occupationally as well, at the earlier time.

CONTENTIONS AND SUBMISSIONS OF THE PARTIES

27. Mr Harding submitted that the relevant remunerative work Mr Heard was undertaking was that of a shopkeeper and that he had undertaken this work for a considerable period of time before finally ceasing paid work.

28. Mr Harding submitted that, based on Dr Kar's evidence, Mr Heard's war caused injuries alone prevented him from doing any paid work. Furthermore, the medical report of Mr Heard's GP, Dr S Gilbert (3 October 2000, T6 Folio 94) had stated that "he could not work at all" and in terms of his capabilities "should be no work at all". In addition, Mr Heard's own evidence was that the only reason he ceased work was because of his accepted conditions.

29. Mr Harding referred to the Invalidity Details form (Exhibit R2, 30 September 1994) completed by Mr Heard that made no reference, by him, to his PTSD condition. At this time the PTSD condition had not been diagnosed. Furthermore the Medical Report of Dr G Smith (a GP) [Exhibit R2, 26 October 1994) failed to diagnose Mr Heard as having PTSD. However, it did identify stress associated with his business that caused social and domestic problems.

30. Mr Harding contended that if Mr Heard did not have his service accepted conditions ("bad knees, PTSD, hearing"), he would not have suffered a loss of wages. Furthermore, it was Mr Harding's contention that without these conditions, Mr Heard would still be working today and continuing with the successful business he had established. However, he contended that the business had to be sold at a loss. Mr Heard was no longer working at all and consequently he was suffering a loss.

31. Mr Harding contended that Mr Heard's age was irrelevant to the central issue, as he had not simply decided to "just retire" because of his age. Rather, he had ceased paid work because he could not cope any more. His mood swings had created problems with his customers and this problem that ultimately caused him to sell his business - a business independently valued at $300,000 but sold for $120,000. Mr Harding stated that the time of the sale of the business, Mr Heard was experiencing stressors in his marital life and his business (related to theft of moneys) that had adversely impacted upon his PTSD.

32. Mr Harding contended that Mr Heard could not go back to paid work as pressure placed upon him would cause problems for his PTSD condition.

33. It was Mr Harding's contention that if Mr Heard failed to satisfy the "alone test", he satisfied the requirement for genuinely seeking work. Mr Heard had approached CES but to no avail. He had also "showed an interest" when an employment opportunity to drive a water truck arose - but his oral evidence to the Tribunal indicated that he was not capable of driving the actual truck. Mr Harding submitted that, in all of the circumstances, Mr Heard was willing to undertake work that he was capable of performing.

34. Mr Harding further submitted (in reply) that Mr Heard's hip "was not a substantial factor as to why he's quit his business. It may well have been a factor but its not a factor in preventing him from doing shopkeeping work now". Moreover, he submitted if Mr Heard did not have PTSD and his knee conditions, he would still be working as a shopkeeper.

35. Mr Kelly commenced by referring to the period in 1994 when Mr Heard applied for a service pension when he had sold his business. Mr Kelly submitted that at this time, Mr Heard was having problems working his business because of a range of problems - knee problems; mood swings leading to customer abuse; stresses of running a business having a turnover of $1.7m and employing 16 people; problems with his business partner leaving him with the job of running the business; staff theft problems; aggravated hip problems; marital difficulties.

36. Mr Kelly contended that at this time, Mr Heard had just completed a three year term as a local authority Alderman and had decided to recontest his position and continue to run his business, if successful at the polls. It was Mr Kelly's contention that a review of the facts indicated that Mr Heard was running a business 7 days per week, working long hours, and that he had combined this work with work as an Alderman. However, he then ceased all paid work completely in 1994.

37. Mr Kelly referred to the Medical Report of Dr G Smith (Exhibit R2) and submitted that the reason Mr Heard had sold his business was because of a range of factors - not simply his accepted service conditions.

38. Mr Kelly next contended there was no evidence that Mr Heard genuinely liked to engage in paid work as he did not actively seek remunerative work. Mr Kelly acknowledged that Mr Heard had commenced voluntary work in the Veteran's Pension Office and "had enjoyed the work so much" that from there he had run successfully as President of his local RSL Club in 1996. This latter position required him to interact a great deal with people. Mr Kelly submitted that, on the one hand, Mr Heard "could handle customers in his business in 1990". However, as RSL President he contended that Mr Heard "could handle people" and could do so "probably from 1999 onwards".

39. Finally, Mr Kelly submitted that Mr Heard's age was an additional factor that prevented him from undertaking remunerative work. Mr Heard was 62 at the time of his application for a service pension and 64 at the date of the Tribunal hearing.

CONSIDERATION OF THE ISSUES

40. The object of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times. The relevant legislation is the Veteran's Entitlement Act 1986

41. The Tribunal has considered and applied the following case law authorities to the central issues to be decided: sub-section 24(1)(c) and sub-section 24(2)(b) of the Veterans' Entitlements Act 1986.

(a) Legal Principles

42. The following approach was used in Forbes v Repatriation Commission (2000) 101 FCR 50 at 52 and 53 by RD Nicholson J, to interpret and to apply the provisions of subsection 24(1)(c):

"That approach [ss 24(1)(c)] is best understood by dividing it into its two limbs and relating those limbs to the relevant portions of what follows in s 24(2).

The first limb of s 24(1)(c) reads:

`(c) the veteran is, by reason of incapacity from that war-caused injury or war-caused disease, or both, alone, prevented from continuing to undertake remunerative work that the veteran was undertaking...'

That limb must be read subject to the application of s 24(2)(b) which reads:

`(b) where a veteran, not being a veteran who has attained the age of 65 years, who has not been engaged in remunerative work satisfies the Commission that he or she has been genuinely seeking to engage in remunerative work, that he or she would, but for that incapacity, be continuing so to seek to engage in remunerative work and that that incapacity is the substantial cause of his or her inability to obtain remunerative work in which to engage, the veteran shall be treated as having been prevented by reason of that incapacity from continuing to undertake remunerative work that the veteran was undertaking.'

The second limb of s 24(1)(c) reads:

`(c) .....is, by reason thereof, suffering a loss of salary or wages, or of earnings on his or her own account, that the veteran would not be suffering if the veteran were free of that incapacity; and'

This is to be read in conjunction with s 24(2)(a) which provides:

`(a) a veteran who is incapacitated from war-caused injury or war-caused disease, or both, shall not be taken to be suffering a loss of salary or wages, or of earnings on his or her own account, by reasons of that incapacity if:

(i) the veteran has ceased to engage in remunerative work for reasons other than his or her incapacity from that war-caused injury or war-caused disease, or both; or

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

43. With respect to the requirements of subsection 24(1)(c), Nicholson J referred to the decision of the Full Court of the Federal Court in Flentjar v Repatriation Commission (1997) 48 ALD 1 at pages 4-5 where the Court said that the issues before the Tribunal were:

"1. What was the relevant `remunerative work that the veteran was undertaking' within the meaning of s 24(1)(c) of the Act?

2. Is the veteran, by reason of war-caused injury or war-caused disease, or both, prevented from continuing to undertake that work?

3. If the answer to question 2 is yes, is the war-caused injury or war-caused disease, or both, the only factor or factors preventing the veteran from continuing to undertake that work?

4. If the answers to questions 2 and 3 are, in each case, yes, is the veteran by reason of being prevented from continuing to undertake that work, suffering a loss of salary, wages or earnings on his own account that he would not be suffering if he were free of that incapacity?"

44. The above matters must be satisfied to the reasonable satisfaction of the Tribunal in accordance with the standard in subsection 120(4): Re Starcevich and Repatriation Commission (1986) 10 ALN 202; Re Doyle and Repatriation Commission (1986) 47 ALD 187. That meant, as Tamberlin J noted in Jackman v Repatriation Commission [1997] FCA 564:

"The AAT had to determine, to its reasonable satisfaction, whether the applicant's war-caused disabilities were the only reason for him not being in remunerative employment. Burchett J in Cavell stated that this determination is not to be made upon `nice philosophical distinctions', equally it is not to be made upon complex calculations of the probability that an intervening event may have occurred. The approach is to be guided by commonsense with an `eye to reality'.."

45. The question of a combination of war service conditions and non-war caused conditions and undertaking remunerative work, was also considered by Nicholson J in Forbes v Repatriation Commission (supra) at page 57:

"The applicant's case requires the Tribunal to not have regard to the non war-caused condition where there is a finding that it alone did not stop the applicant from undertaking work. In my view, that course is not open to the Tribunal in the light of the words used in the first limb of s 24(1)(c). The question whether the veteran by reason of the war-caused condition `alone' has been prevented from continuing to undertake remunerative work can only be answered by reference to all the circumstances in which the war-caused condition exists. The fact that a non war-caused condition is not alone causative of such preventative effect does not prevent it having that effect in combination with the war-caused condition. The possibility of combination is recognised in the third conceptional environment identified in the applicant's case. Furthermore, it is consistent with the application by a Tribunal of a common sense approach `with an eye to reality'.

As in the case of the present applicant, it is possible that the war-caused condition will be far and away the more dominant of the causes of the preventative effect where there is also present a non war-caused condition having such effect in combination. The result is that the presence of the latter will deny to a veteran qualification for the special rate of pension. Parliament has sought to ameliorate this position by the provisions in s 24(2)(b), to which reference has been made.. To date, the applicant has been unable to qualify pursuant to that provision. Whether he can qualify pursuant to that provision in the future remains a question for consideration" [Tribunal emphasis].

46. With respect to the third question identified in Flentjar, Burchett J in Cavell v Repatriation Commission (1988) 9 AAR 534 agreed with the following statement by the Tribunal, in terms of it clearly revealing an application of the statutory test, in an unexceptional manner, to the material in evidence before the Tribunal:

"that it followed from the use of the word "alone" in s.24, that any factor having employment consequences which played a part in the applicant's inability to work or to obtain and hold remunerative employment, is sufficient to displace the applicant's case for pension at the special rate."

47. Section 24(2)(b) has long been interpreted as an ameliorative provision, as compliance with this subsection would excuse a veteran from having to meet the "alone" test as provided in subsection 24(1)(c).

48. In Re Hornery and Repatriation Commission [1998] AATA 602 (11 August 1998), the Tribunal stated [at para 41]:

`If a veteran falls within s. 24(2)(b), the veteran is relieved from the "alone" requirement in s. 24(1)(c). In order to fall within s. 24(2)(b) the veteran must satisfy the Commission (and now the Tribunal standing in the shoes of the Commission) that he or she "has been genuinely seeking to engage in remunerative work ..." and the Tribunal must also be satisfied that the veteran would, but for the incapacity, be continuing so to seek to engage and that war caused incapacity "is the substantial cause of his or her inability to obtain remunerative work'..

49. In Rendell v Repatriation Commission [2001] FCA 1881 (21 December 2001), at para 37, French J referred to the decision in Hornery, stating that the above reasoning by the Tribunal represented "a relevant point of construction" and was "conveniently set out". Furthermore, French J made the following observations on the operation of section 24(2)(b):

" ...it cannot have been intended that veterans under the age of 65 who have ceased work by reason of incapacity from war-caused injury or war-caused disease, or both, alone, are required to actively pursue remunerative work before they cane be entitled to payment of the Special Rate. Section 24(2)(b) is ameliorative of s 24(1)(c) and is to be applied where the Tribunal is satisfied that the veteran has been genuinely and actively pursuing remunerative work in the sense of looking to obtain work and that war-caused incapacity is the substantial cause of his inability to obtain it".

50. In terms of the meaning of the phrase "has been genuinely seeking to engage in remunerative work", the Tribunal in Re Hornery and Repatriation Commission [1998] AATA 602 (11 August 1998), stated that it agreed with the reasoning of Deputy President McMahon in Re Bonner and Repatriation Commission (1989) 17 ALD 680 [at 681], that "the use of the word `genuinely' in the paragraph indicated the necessity for some objective signs of active pursuit of remunerative work".

51. In Byrne v Repatriation Commission [2001] FCA 1134 (17 August 2001) Gyles J made the following observations as to the proper application of section 24(2)(b) [at para 10]:

"The issue is not limited to the question why the incapacitated is in fact unable to obtain employment in the particular place [Kempsey], although that may be relevant. In order to judge the effect of the relevant incapacity, it is necessary to compare the position of the applicant as he is with the position he would be without the relevant incapacity. In the present case, that requires the formation of an assessment of the work prospects of the applicant as a fifty-one year old man with his characteristics and abilities, who had never suffered from PTSD, bilateral sensorineural hearing loss, osteoarthritis of right and left knees or sleep apnoea and who is probably not living in Kempsey. That process enables the true effect of war-caused incapacity upon the ability of the applicant to obtain work to be assessed".

52. The meaning of the term "substantial cause" was considered in Fox v Repatriation Commission (1997) 45 ALD 317. Kiefel J noted that this term "requires that, if the incapacity is not of itself productive of an inability to obtain work, it is nevertheless the operative factor which, more than any other explains it. That, something might be a `substantial cause' has regard to the situation where there may be a number of factors operating which are of sufficient causal significance to qualify as `substantial'...".

53. In Hendy v Repatriation Commission [2002] FCA 602, Madgwick J considered the question of a veteran engaging in remunerative work in relation to factors such as the veteran's age, time out of the workforce and war service conditions. At para 40, Madgwick J made the following statement:

"It seems clear however that it is not in the intendment of the legislation that decision-makers might resort, under the rubric of labour market factors, to the mere consequences of a veteran's service-related disability for the purpose of defeating the veteran's claim. Among other things, if a service-related condition incapacitates a veteran for particular work, it will be more or less true in every case that, as time goes by, the veteran's ability to re-enter the workforce will tend to be impaired on account of lack of recent experience of that work, absence from the workforce generally and, for older veterans, their increasing age. There would have been little point in providing for a work incapacity pension if the direct consequences of the incapacity could defeat the right to the pension"..

(b) Application of Facts to the Law

54. The central question for the Tribunal to decide, pursuant to section 24 of the Act, is whether the accepted service-related conditions suffered by Mr Heard are of such a nature in themselves, to have caused him to cease work and to continue to prevent him from undertaking "remunerative work". The parties have agreed at the outset that the only issues for the Tribunal to decide are the application of sub-section 24(1)(c) and sub-section 24(2)(b) to Mr Heard's factual circumstances.

55. In deciding the four issues identified in Flentjar, the Tribunal has applied the "recoverable satisfaction test' in accordance with the standard in sub-section 120(4) and has followed the meaning in Jackman.

56. The first issue for the Tribunal to consider is whether the requirements of sub-section 24(1)(c) are satisfied - whether Mr Heard's service-related disabilities, alone, prevented him from continuing or resuming remunerative work. With respect to the third question, identified in Flentjar, the principles in Cavell and Forbes, make it quite clear that any factor having employment consequences which play a part in Mr Heard's inability to work, or to obtain and to hold paid employment, would be sufficient to displace the case for pension at the Special Rate.

57. Some of the service-related conditions (see para 8) clearly have an impact on Mr Heard in this regard with respect to work as a shopkeeper. He has significant injuries to both knees causing him to suffer osteoarthritis of the knees (Dr P Sharwood (T6, Folio 10)). Mr Heard's oral evidence was that his knees became badly swollen ("like a balloon") from prolonged standing. Dr Kar in his first medical report (14 May 2000: T6, Folio 26-29) stated that "Mr Heard's PTSD condition was unlikely to remit completely due to its chronicity and that he had moderate impairment in occupational functioning as he is unable to interact appropriately with work colleagues due to emotional burden of illness". Dr Kar identified "affective symptoms" influencing Mr Heard's capacity to work (for example inability to deal with customers) related to factors such as "irritability", "avoidance" and "destruction". Mr Heard has frequent recollections and distress in relation to his PTSD experiences (GARP Table 4.1 Rating 10; T6 Folio 41). In a subsequent report (6 October 2000: T6 Folio 93) Dr Kar qualified what he meant by "light non-stressful work":

"In my earlier report to you I have stated that Mr Heard is capable of working about eight hours a week. The eight hours related to his ability to do the kind of voluntary work he was doing at the time and not remunerative employment. This was based on his then functioning as head of the local RSL branch which was voluntary work. I am told this is already proving difficult to perform and he can manage only six hours of voluntary work now."

Dr Kar believed Mr Heard could do "light non-stressful work".

58. Mr Heard has also a range of non-accepted conditions (see para 9). Dr Sharwood (T6, Folio 11) referred to evidence of degenerative changes within the hip joint and the presence of osteoarthrosis. Mr Harding has conceded this to be a possible factor in the past. Evidence before the Tribunal, from both parties, indicates that non-service related conditions and other factors were also involved; for example, business management problems, marital difficulties (T6, Folio 31).

59. Accordingly, by applying the principles in Cavell and Forbes, the Tribunal is "reasonably satisfied" from the evidence that it was not Mr Heard's accepted service-related conditions which, alone, prevented him from continuing or resuming work. A combination of factors were also involved and one of these (related to his left hip condition) was not a service accepted condition. The Tribunal concludes that on all of the evidence before it, that a combination of factors - rather than accepted service-related conditions alone, prevents Mr Heard from satisfying the requirements of sub-section 24(1)(c).

60. The Tribunal has already noted that the legislation contains provisions to ameliorate sub-section 24(1)(c) by sub-section 24(2)(b) of the Act. In Mr Heard's circumstances, given that he is under 65, "substantial cause" may be substituted for the "alone" test - provided that the other pre-conditions of section 24(2)(b) are met.

61. The Tribunal has applied the meaning of "substantial" in Fox and the accepted service-related conditions relative to the other combined factors that resulted in Mr Heard failing to satisfy the "alone" test in sub-section 24(1)(c).

62. The Tribunal is reasonably satisfied that the accepted service-related conditions are not of equal significance to the other of the combined factors that caused Mr Heard to cease remunerative work and that these accepted service-related conditions continue to prevent him for undertaking paid work. Furthermore, the Tribunal concludes that the accepted service-related conditions, in themselves and particularly PTSD and its symptoms, are the "operative factors", more than any of the "combination of factors", that are the substantial cause of Mr Heard's inability to obtain remunerative work in which to engage.

63. Next, the Tribunal has adopted the approach in Byrne and considered the work prospects of a 62 year old man with his characteristics and abilities, who has never suffered from PTSD, osteoarthrosis of both knees, sensorineural losses, tinnitus, diabetes mellitis and solar skin damage with malignant change.

64. The Tribunal is also reasonably satisfied, based on all of the evidence before the Tribunal, specifically:

(a) The above finding that Mr Heard's accepted service-related conditions were the "substantial cause" of his inability to engage in paid work;

(b) hat Mr Heard's condition of PTSD was unstable and affected by past and ordinary life event stressors (Dr Kar's evidence); and

(c) The need for Mr Heard to engage in light non-stressful work such as voluntary work, as this work would not be a significant stressor affecting the stability of his PTSD (Dr Kar's evidence);

that, in the context of the true effects of these findings, Mr Heard took steps to pursue remunerative work consistent with the limitations imposed by his service-related disabilities.

65. Furthermore, in the context of Mr Heard having PTSD that was undiagnosed and untreated from 1994 to 1999, together with its effects on his social, psychological and emotional functioning and in turn his capacity to undertake paid work, the Tribunal is reasonably satisfied that Mr Heard did not simply retire from the work force. The Tribunal is also reasonably satisfied that Mr Heard's efforts extended beyond enquiries as he sought employment opportunities that arose for remunerative work through CES - as well as though episodic opportunities (for example driving a water truck). The latter opportunity was not feasible because of his knee problems. Moreover, he did not accept an offer of an appointment with a politician in Canberra, because of the limitations imposed by his accepted service-related conditions (Exhibit A1).

66. It was not in dispute between the parties that Mr Heard suffered a loss of salary or wages or of earnings. The Tribunal further concludes, given the above findings in relation to the first limb of sub-section 24(1)(c) and sub-section 24(2)(b), that sub-section 24(2)(a) of the Act is also satisfied.

67. The Tribunal had not considered Mr Heard's age as a factor in relation to the question of his engaging in remunerative work as the Tribunal has relied on the reasoning of Madgwick J in Hendy's case in this regard.

68. For all of the above reasons, the Tribunal sets aside the decision under review and in substitution thereto decides that Mr Heard is entitled to a pension at the Special Rate. The earliest date of effect is 10 November 1999 ("assessment issue") and 5 July 2000 ("entitlement issue").

I certify that the 68 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member

Signed: .......................................................................................

Associate

Date of Hearing 15 November 2002

Date of Decision 4 April 2003

Counsel for the Applicant Mr A Harding, of Counsel

Solicitor for the Applicant Gilshehan and Luton, Solicitors

Solicitor for the Respondent Mr J Kelly, Departmental Advocate

[1] , ² , ³

[Dates provided by the Respondent at the hearing