Marian Rita Davis v Repatriation Commission [1997] FCA 389 (16 May 1997)

CATCHWORDS

VETERANS' AFFAIRS - Review of pensions by Repatriation Commission - Commission empowered to cancel pension where satisfied, having regard to any matter affecting payment of pension, that pension should be cancelled - Veterans' Review Board determines that veteran's death war-caused and that widow entitled to pension - After determination Commission obtains medical report that death not war-caused - In reliance on report Commission determines that death not war-caused and cancels pension - Validity - Whether report a "matter" - Whether "matter" must be in existence at date of Board's determination.

Veterans' Entitlements Act 1986 , s31(6), 32

Byrnes v Repatriation Commission [1993] HCA 51; (1993) 177 CLR 564

MARIAN RITA DAVIS v REPATRIATION COMMISSION VG 548 of 1996

COURT: Sundberg J

PLACE: Melbourne

DATE: 16 May 1997

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY ) No VG 548 of 1996

GENERAL DIVISION )

BETWEEN: MARIAN RITA DAVIS

Applicant

AND: REPATRIATION COMMISSION

Respondent

COURT: Sundberg J

DATE: 16 May 1997

PLACE: Melbourne

MINUTES OF ORDER

The Court orders that:

1. The application be dismissed.

2. The applicant pay the respondent's taxed costs of the application.

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

IN THE FEDERAL COURT OF AUSTRALIA )

VICTORIA DISTRICT REGISTRY ) No VG 548 of 1996

GENERAL DIVISION )

BETWEEN: MARIAN RITA DAVIS

Applicant

AND: REPATRIATION COMMISSION

Respondent

COURT: Sundberg J

DATE: 16 May 1997

PLACE: Melbourne

REASONS FOR JUDGMENT

SUNDBERG J:

Background

William Davis died on 24 January 1983. On 10 February his widow applied for a pension under the Repatriation Act 1920 . Her claim was refused by the Repatriation Board and, on 30 August 1984, an appeal was disallowed by the Repatriation Commission ("the Commission"). On 14 September 1984 Mrs Davis sought review of the decision to disallow her appeal, but in 1988 she advised the Veterans' Review Board ("the Board") established by the Veterans' Entitlements Act 1986 ("the Act") that she wished her application to "remain dormant indefinitely". The Board informed her that the application could be reactivated when she was ready to proceed to a hearing.

On 4 June 1993 Mrs Davis lodged a fresh application for a pension which was again refused by a delegate of the Commission. A purported application for review of that refusal was made to the Board which affirmed the Commission's decision. On 17 August 1995 Mrs Davis applied to the Administrative Appeals Tribunal ("AAT") for review of the Board's decision. In the course of preparing for an expected hearing before the AAT, the Department of Veterans' Affairs disclosed to Mrs Davis' solicitors that it was in the process of obtaining a report from Professor Cade, the Director of Intensive Care at the Royal Melbourne Hospital.

At some time in November 1995 Mrs Davis' application to review the Commission's 30 August 1984 decision was re-activated. The Board heard the application on 17 January 1996. In accordance with relevant transitional provisions, the application was treated as if it had been made under s135 of the Act. The Board found that Mr Davis' death was "war-caused" within the meaning of s8 of the Act and that Mrs Davis was entitled to a pension. It set aside the Commission's decision.

On 2 August 1996, following a review under s31(6) of the Act, the Commission's delegate cancelled Mrs Davis' pension with effect from 9 June 1984. Mrs Davis has applied for a review of that decision under s5 of the Administrative Decisions (Judicial Review) Act 1977 . She subsequently withdrew her application to the AAT.

The Commission's 1984 decision

The medical certificate concerning Mr Davis' death gave bronchopneumonia as the condition directly leading to death. It gave septicaemia as the antecedent cause. Other significant conditions contributing to the death but not related to the condition causing it were said to be a benign septic ulcer and chronic rheumatoid arthritis.

In deciding that Mr Davis' death was not war-caused the Commission concluded that the primary cause of death was chronic rheumatoid arthritis, which was not a war-caused disability. It found that treatment with corticosteroids which Mr Davis had been receiving for the arthritis increased his susceptibility to infections such as septicaemia.

Dr Collins' report

In coming to its 1996 decision the Board had before it a report from Dr Collins, a consultant forensic pathologist. Dr Collins agreed with the causes of death stated in the death certificate, save that he would have added blood loss from the ulcer. He said that although it was reasonable to suggest that the nidus of infection which led to the development of septicaemia was situated in the discharging left elbow joint, it was possible that it was derived from a subclinical chest infection. Examination of material from Mr Davis' lungs showed well developed generalised emphysema. Dr Collins was of the view that it was "pathologically sound to opine" that the severity of the emphysema significantly increased the likelihood of development of pneumonia, which was a major cause of death, and that the treatment of the pneumonia was more difficult than it would have been had it developed in the setting of "normal lung architecture". Dr Collins added that it was well established that cigarette smoking is an aetiological factor in the development of emphysema and peptic ulceration, both of which contributed significantly to the death. He concluded by saying that "If it is accepted that the deceased's smoking habit was a result of his war service, then there is robust evidence that his widow's appeal should be upheld".

The Board's 1996 decision

The Board set out the substance of Dr Collins' report, and said that as he appeared to be appropriately qualified in the field, the Board accepted his opinion in relation to the cause of death, and found that he had raised a reasonable hypothesis of connection between the death and Mr Davis' smoking habit. It then accepted evidence that that habit was war-caused. It concluded that it was not satisfied beyond reasonable doubt for the purposes of s120 that there was no sufficient ground for determining that the death was war-caused.

Professor Cade's report

Professor Cade expressed the opinion that the cause of death was septicaemia which arose from an infected bursa on the left elbow due to a staphylococcus. The septicaemia resulted in septic shock and multi-organ failure. Marked proneness to infection was due to Mr Davis' rheumatoid arthritis and its treatment with corticosteroids which caused him to be significantly immunocompromised. Professor Cade considered the above hypothesis concerning death to be "very convincing". Patients such as Mr Davis are known to be compromised hosts, and serious infections are a well recognised complication. The course of events in the days following his infection was characteristic of that seen in patients with septicaemia. The post-mortem findings were entirely in accord with Professor Cade's diagnosis. The hypothesis was "thus very strong both in general principle and in this particular case".

Professor Cade stated that the facts needed to support the hypothesis were objectively documented to have occurred: infection of the elbow, the culture of a staphylococcus, its spread to the blood, and subsequent critical illness with shock, renal failure and respiratory failure.

He said that the facts supporting the hypothesis could not be disproved, because they comprised both quantified laboratory results and objective contemporaneous clinical findings from a team within a first class hospital. There were no other facts inconsistent with the hypothesis or which could lead to an alternative hypothesis.

Professor Cade then commented on an earlier report by Dr Reddy, who was not a specialist. Dr Reddy had suggested the following causal sequence: "war service -> smoking -> chronic objective airways disease -> bronchopneumonia -> septicaemia -> death". According to Professor Cade, while this sequence could be plausible in general terms, it did not fit the facts of the present case. That was because the bronchopneumonia did not cause the septicaemia, since the septicaemia arose first: it followed the dissemination of organisms from the elbow infection. The bronchopneumonia was a terminal associated finding, and not a primary event. Professor Cade accepted the link between war service, smoking and chronic airways disease, but said that was as far as the sequence went. Dr Reddy's hypothesis was, Professor Cade said, "entirely at variance with the multiple medical ... reports originally contemporaneous and subsequently retrospective .... It is not in accord with the facts of the case".

The Commission's 1996 determination

In his determination the delegate noted that Professor Cade's report (28 March 1996) was not available to the Board at the hearing on 17 January 1996. He expressed the view that evidence which becomes available after a Board decision is a matter which may be taken into account under s31(6)(a). The delegate summarised the contents of Dr Collins' and Professor Cade's reports, and said he was satisfied beyond reasonable doubt that

(a) the cause of death was septicaemia with subsequent bronchopneumonia as the terminal event;

(b) the cause of the septicaemia was a staphylococcal infection in the left elbow, which infection was not causally related to war-service;

(c) the terminal bronchopneumonia was a direct and inevitable result of the terminal septicaemia;

(d) any condition of generalised emphysema would have made a minimal contribution to the terminal event and was not the cause of death;

(e) neither the peptic ulcer nor the chronic rheumatoid arthritis caused or materially contributed to the death.

The delegate considered Dr Collins' hypothesis to be speculative, not based on a consideration of all the extensive clinical evidence available but merely consistent with some of the facts considered in isolation, and inconsistent with and expressly contradicted by all the available evidence, in particular the clinical evidence and post mortem examination. He concluded:

Even if the material before me was sufficient to raise a reasonable hypothesis, as required by the terms of subsection 120(3) of the Act, of the requisite causal connection between Mr Davis' death and his eligible war service, I am satisfied beyond reasonable doubt that the necessary factual foundations of the hypothesis put forward by Dr Collins have been disproved beyond reasonable doubt as a result of the evidence set out in Professor Cade's report. The cause of Mr Davis' death, established by Professor Cade after extensive laboratory investigations and post mortem examination, was not as speculated by Dr Collins.

Therefore, under the tests laid down by the High Court in Bushell and Byrne's cases, I am satisfied, beyond reasonable doubt, that there is no sufficient ground for determining that the late Mr Davis' death was war caused.

The delegate cancelled Mrs Davis' pension with effect from 9 June 1984, the date from which it was declared to be payable by the Board.

The Bushell and Byrnes tests

In Byrnes v Repatriation Commission [1993] HCA 51; (1993) 177 CLR 564 at 571 Mason CJ, Gaudron and McHugh JJ expressed the "tests" to which the delegate referred as follows:

The position may be summarised as follows:

(1) First, sub-s.(3) of s.120 is applied: do all or some of the facts raised by the material before the Commission give rise to a reasonable hypothesis connecting the veteran's injury with war service? The hypothesis will not be reasonable if it is contrary to known scientific facts or is obviously fanciful or untenable. If the hypothesis is not reasonable, the claim fails. Proof of facts is not in issue at this point.

(2) If a reasonable hypothesis is established, sub-s.(1) of s.120 is applied. The claim will succeed unless:

(a) one or more of the facts necessary to support the hypothesis are disproved beyond reasonable doubt; or

(b) the truth of another fact in the material, which is inconsistent with the hypothesis, is proved beyond reasonable doubt, thus disproving, beyond reasonable doubt, the hypothesis.

Section 31(6)

Division 6 of Pt II of the Act - "Review of pensions by Commission" - consists of s31. The section specifies seven situations or sets of circumstances in which the Commission may review or vary a decision. The first, dealt with by sub-s(1)(a), is where the time has not expired for making an application to the Board under s135 for a review of a decision of the Commission with respect to a claim for a pension under s14, an application for an increased pension under s15, or an application for an attendant allowance under s98. In any such case the Commission may review that decision. The second situation, dealt with by sub-s(1)(b), is where an application has been made under s135 but the review has not been determined. In that case too the Commission may review the decision.

The third, dealt with by sub-s(2), is where application has been made to the AAT under s175 for a review of a decision of the Commission that has been affirmed by the Board, or a decision of the Board in substitution for a decision of the Commission, and the review has not been determined. In that case the Commission may review the decision and, with the consent of the applicant, vary it. The fourth, dealt with by sub-s(3), is where a manifest error requires correction. In that case the Commission may, for the purpose of correcting the error, vary the date approved by the Board as the date as from which a decision of the Board made in substitution for a decision of the Commission is to operate.

The fifth, dealt with by sub-s(4), is where the Commission is satisfied that evidence before the Commission when it made a decision was false in a material particular. In that case it may review the decision. The sixth, dealt with by sub-s(6), is

Where the Commission is satisfied that:

(a) having regard to any matter that affects the payment of a pension or attendant allowance, being a matter that was not before the Commission, the Board or the Administrative Appeals Tribunal, as the case requires, when the decision to grant the pension or attendant allowance, or a decision to vary the rate of the pension or attendant allowance, was made;

(b) by reason of a refusal or failure of any person to comply with a provision of this Act;

(c) by reason of a refusal or failure of a veteran to comply with a notice served on the veteran under subsection (5A) or with a request made under paragraph 32(1)(c); or

(d) by reason of the circumstances referred to in a paragraph of section 24A being applicable to the veteran;

in a case to which paragraph (a), (b) or (c) applies, a pension or attendant allowance should be cancelled or suspended or is being paid at a higher rate than it should be or, in a case to which paragraph (d) applies, a pension is being paid at a higher rate than it should be, the Commission may, by determination in writing, cancel or suspend or decrease the rate of the pension or attendant allowance, or decrease the rate of the pension, as the case may be, with effect, subject to subsection (7), from the day on which the determination was made or such later day as is specified in the determination.

The final situation, dealt with by sub-s(8), is where the Commission is satisfied that, having regard to any matter that affects the payment of a pension or attendant allowance, the rate of the pension or allowance is less than it should be. In that case the Commission may increase the rate.

Other parts of s31 which impinge upon the operation of sub-s(6) are sub-ss(5A), (6A) and (7). Sub-section (5A) provides:

The Commission may, for the purpose of reviewing a decision under this section, of exercising its powers under subsection (6) for a reason specified in paragraph (6)(a) or (b) or of exercising its powers under subsection (8), by notice in writing served on a veteran who is in receipt of a pension under this Part, request the veteran:

(a) to undergo, as provided in the notice, a medical examination for the purpose of the review, or the exercise of those powers, as the case may be; or

(b) to consent to the release to the Commission of information concerning the veteran of a kind described in the notice, being information that, in the opinion of the Commission, may be relevant to the review, or the exercise of those powers, as the case may be.

Sub-section (6A) provides that where the Commission is, under sub-s(6), satisfied that the rate of pension payable to a veteran is higher than it should be by reason that the degree of incapacity from war-caused injury or disease, or both, is less than ten per cent, it must cancel the pension. Sub-section (7) empowers the Commission, when a determination is made under sub-s(6), to specify as the date as from which the cancellation, suspension or decrease is to take effect, a date earlier than the date of the determination.

A refusal or failure by the Commission to review a decision under s31 is not subject to review by the Board or by the AAT: sub-s(10). A decision by the Commission upon a review under s31 in relation to a pension or attendant allowance is not subject to review by the Board or the AAT unless the Commission cancels or suspends the pension or attendant allowance, or varies the decision, reviewed by the Commission: sub-s(11). Section 135(3) enables a veteran or a dependant of a veteran to apply to the Board for a review of a determination by the Commission under s31(6) cancelling or suspending, or decreasing the rate of, a pension or attendant allowance, or under sub-s(8) increasing the rate of a pension or allowance. When a decision made by the Commission has been reviewed by the Board under s135 and affirmed, varied or set aside, application may be made to the AAT for a review of the decision under s175.

Division 7 of Pt II, which consists of ss32 to 34, deals with procedural matters relating to, inter alia, reviews under s31. Section 32(1) empowers the Commission to summon a person to appear before it to give evidence and produce documents, take evidence on oath or affirmation, request the Secretary or a person likely to be affected by the review to furnish material relevant to the review, and request the person likely to be affected by the review to attend before it to discuss the review. The Commission does not have power to summon a person likely to be affected by the review: sub-s(2). Where the Commission decides to vary a decision upon a review under s31, to cancel or suspend a pension or allowance under s31(6), to decrease the rate of a pension or allowance under s31(6), or to increase the rate of a pension or allowance under sub-s(8), it is required to make a record of its decision together with a statement in writing setting out its findings on material questions of fact, referring to the evidence or other material on which those findings are based and giving its reasons for the decision: s34(1). A copy of the decision and statement must be given to the person affected by the decision: sub-s(2). Where the statement contains or refers to any information, opinion or other matter that in the Commission's opinion is of a confidential nature or might be prejudicial to the physical or material health or well-being of the person on whom the statement is required to be served, the statement must not contain or refer to that information, opinion or matter: sub-s(3).

"a matter that was not before the Commission"

The applicant's principal submission was that the "matter" referred to in s31(6)(a) must be something that was in existence when the decision in question was made. It was said that this is implicit in the words "a matter that was not before the ... Board ... when the decision ... was made". Assuming that the words do, standing alone, contain such an implication, it is dispelled by the provisions in s31(5A) and s32(1) governing the conduct of a review. A medical report obtained by the Commission under s31(5A)(a) "for the purpose of the review" will necessarily be material that was not in existence when the Board's decision was made. And information obtained under par (b) that "may be relevant to the review" may well be material that has come into existence since the decision under review was made.

In the exercise of its powers under s32(1) the Commission is likely to obtain evidence and documents (pars (a) and (b)) and material relevant to the review (par (c)) which was not before the Board when it made its decision, because it was not then in existence. There may of course be other reasons for the material not being before the Board, such as intentional non-disclosure. But given that the parties to proceedings before the Board will prima facie have placed before it all material then in existence which may have assisted their cases, it is likely that some of the material obtained by the Commission under s32 would not have been before the Board when it conducted its hearing, for the reason that it did not then exist. Accordingly I reject the submission that the matter referred to in s31(6)(a) is limited to matter in existence when the decision in question was made.

The applicant's alternative argument took as its starting point the hierarchy of decision-making established by the Act. The hierarchy consists of the Commission as primary decision-maker, the Board as the second tier decision-maker, and the AAT as the third tier decision-maker and ultimate forum of merits review. It was said that the review mechanisms provided by ss135 and 175 were intended to result in the final disposition of claims. It was submitted that while the word "matter" standing alone would receive a wide construction, in the context of the review provisions as a whole it must be limited to a degree which is necessary to achieve finality in the disposition of claims. If s31(6) is not limited in this manner, the Commission could review decisions of the Board or the Tribunal again and again on any pretext in defiance of the review hierarchy. The limitation contended for was not more precisely formulated than this, but was said to lead to the conclusion that a medical report which merely repeats and endorses the conclusions in other reports based on documented observations, and which contains no new observation, fact, cause, circumstance, information, opinion or contention, is not capable of being a matter which was not before the Board when the decision to grant the pension was made. It was accepted that a medical report which was brought into existence to take into account some change in the facts and circumstances, or facts or circumstances not previously disclosed, might be in a different position.

I see no reason to limit the ordinary meaning of the words "any matter that affects the payment of a pension ..., being a matter that was not before the ... Board ... when the decision to grant the pension ... was made" in the manner contended for. The "hierarchy" argument, which purports to be based on the structure of the review provisions of the Act, ignores the fact that s31 itself contains no less than seven exceptions to the simple three tier structure on which the submission is based. Far from supporting the contention that s31(6) would, unless narrowed, permit the Commission to review decisions of the Board or Tribunal in defiance of the review hierarchy, a reading of the relevant parts of the Act as a whole shows that the three tier review structure contended for is simplistic. Not only does s31 provide a number of additional grounds of review, but decisions made pursuant to the section are themselves subject to review under s135(3).

The "finality" submission was based on s14(7). Section 14 deals with the making of claims for a pension. Sub-section (5) provides that where a veteran has made a claim in respect of incapacity from a particular injury or disease "and the claim has not been finally determined", the veteran may not make another claim in respect of incapacity from that injury or disease. Sub-section (6) is a comparable provision in relation to pensions in respect of the death of a veteran. Sub-section (7) provides that a claim is "finally determined" for the purposes of the section when either a decision that has been made in respect of the claim is not subject to any form of appeal or review, or the decision was subject to some form of appeal or review but the period within which such an appeal or review could be instituted has ended without an appeal or review having been instituted. Sub-section (7) does not sustain the "finality" submission. It is no more than a definition of the term "finally determined".

The fact that s31(6) may be open to abuse (repeated reviews on any pretext), does not in my view require it to be read down. A capricious or unreasonable exercise of the power will be susceptible to review under s5 of the Administrative Decisions (Judicial Review) Act.

The distinction made by Mrs Davis' counsel between a report merely repeating material that was before the decision-maker and one containing fresh material, though perhaps important in some cases, does not assist her. The power in s31(6)(a) is available to the Commission only if it is satisfied of the existence of a matter that affects the payment of a pension and which was not before the decision-maker. If the "new material" is no more than a repetition of material that was before the decision-maker, it would not be reasonably open to the Commission to be relevantly satisfied that the material "affects the payment of a pension". Professor Cade's report and the opinions contained in it are not of this character. The report itself was new evidence, and was capable of satisfying the Commission that it was matter that had not been before the Board. The report contained an expression of opinion from a highly qualified medical specialist, based on contemporary clinical and laboratory evidence, that persuasively identified the cause of death to the exclusion of other possible causes. Although the contemporary clinical and laboratory evidence had been before the Board, an expert analysis, interpretation and explanation of the evidence of the type presented by Professor Cade, without which a body such as the Board could not be expected to interpret the evidence, had not.

It was also submitted for Mrs Davis that because Professor Cade's report had been received in time for it to be used by the Commission in support of an application for review of the Board's decision by the AAT, it could not found an exercise of the Commission's power to review the Board's decision under s31(6)(a). A variation of this argument was that the Commission, having had a reasonable opportunity to put Professor Cade's report before the AAT, had not done so, and so was not able to use the report to found an exercise of power under s31(6). These assertions were not developed in argument, and in my view they have no substance. If material becomes available after the relevant decision is made, and it affects the payment of a pension, the power in s31(6)(a) is available to the Commission. It is simply irrelevant that it becomes available at a time when the Commission might seek a review by the AAT. The Commission may engage in conduct which disables it from taking a particular course, but in the absence of any such conduct, it can pursue whichever avenue it chooses. The second argument advanced has overtones of estoppel without any factual basis to support the estoppel.

The grounds of review

Four grounds are advanced in the application. The first is that the Commission had no jurisdiction to make the decision because Professor Cade's report was not a matter affecting the payment of a pension that was not before the Board when it decided to grant the pension. The second ground is that the decision was not authorised by s31(6). The third ground is that the decision involved an error of law in that a report obtained by the Commission after the Board's determination was not a matter falling within s31(6)(a). I have given my reasons for rejecting the arguments that were deployed in respect of these three grounds.

The fourth ground is that the decision was an improper exercise of the power conferred by s31(6) because it was made for a purpose other than that for which it was conferred. The contention was that the decision was made for the purpose of conducting a general review of the merits of Mrs Davis' entitlement to a pension, or for the purpose of avoiding the need for the Commission to seek review by the AAT, rather than for the purpose of reviewing the Board's decision in the limited circumstances prescribed by s31(6). This is really the "hierarchy" argument in a different form. Indeed it was submitted that the reason for the purported exercise of power was to circumvent the review hierarchy. This ground fails for lack of evidence to support the claimed impermissible purpose.

I granted Mrs Davis leave to add a further ground, that there was no evidence or other material to justify the decision that the delegate was satisfied, having regard to Professor Cade's report, that the pension should be cancelled. The contention here was that since the report contained no new contention in relation to the claim for a pension that was not available to the Commission prior to the Board's decision, the delegate had no evidence for the decision that he was satisfied that the pension should be cancelled having regard to a matter affecting the pension that was not before the Board. There are two obstacles to the success of this ground. The first is that, for the reasons I have given, Professor Cade's report does contain new material. The second is that the complaint that there was nothing in the report not available to the Commission prior to the Board's decision is irrelevant to the exercise of the power in s31(6)(a).

The application is dismissed with costs.

I certify that this and the preceding sixteen pages are a true copy of the reasons for judgment of the Honourable Justice Sundberg

..........................................................

Associate

16 May 1997

Counsel for the Applicant: K Bell

Solicitors for the Applicant: John W Ball & Sons

Counsel for the Respondent: P Hanks

Solicitor for the Respondent: Australian Government Solicitor

Date of Hearing: 8 May 1997

Place of Hearing: Melbourne

Date of Judgment: 16 May 1997