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Wednesday, 4 November 1992
Page: 2615

Mr HUMPHREYS (Minister for Veterans' Affairs8.54 p.m.) —I move:

  That the Bill be now read a second time.

This Bill introduces amendments to the Veterans' Entitlements Act 1986 which will detail more precisely, for the guidance of decision makers, the steps involved in and the manner of determining whether or not an injury, disease or death is war caused or defence caused under the Veterans' Entitlements Act 1986. The amendments will set out how the standard of proof and reasonable hypothesis provisions are to operate in making such a determination when a claim for pension relates to operational, peacekeeping or hazardous service. They will not change in any way the existing eligibility criteria for either disability or service pension.

  The purpose of the amendments will be to reverse the effect of the decision of the High Court of Australia in Bushell v. Repatriation Commission, handed down by the court on 7 October 1992. The amendments will return to the position that was intended to apply to the determination of claims following the introduction of the Veterans' Entitlements Act in 1986 and which the Repatriation Commission had understood had been endorsed by a number of leading decisions of the Federal Court, including the Full Bench of the Federal Court in East v. Repatriation Commission and the majority of the Full Bench of the Federal Court in Repatriation Commission v. Bushell itself.

  The standard of proof provisions in both the Veterans' Entitlements Act and its forerunner, the Repatriation Act 1920, have been the subject of considerable litigation and legislative change since the beyond reasonable doubt standard of proof was inserted into the Repatriation Act in 1977. Those changes were introduced by the then Government notwithstanding express comments in the 1975 Toose report against the applicability of the criminal standard to pension proceedings. The High Court, in Law's case in 1981, held that those words amounted to the criminal standard of proof.

  I must stress, of course, that the criminal standard of proof does not mean proof beyond all shadow of a doubt, but the O'Brien High Court decision in 1985 virtually amounted to this—hence the 1985 changes to the legislation to overcome that decision. The second reading speech made on that occasion set out in detail the reasons for those changes and much of the recent history of the legislation. The 1985 changes introduced the requirement that a reasonable hypothesis of the relevant war service connection must exist before a claim could be granted. The comments made in that 1985 speech are relevant to this Bill. I also refer honourable members to the detailed explanatory memorandum which accompanies this Bill.

  In 1986, the Repatriation Act 1920 was repealed and replaced by the Veterans' Entitlements Act 1986. A substantial measure of consensus as to the form of the standard of proof provision, section 120, was reached with the ex-service community. It made significant changes to the 1985 amendments and was intended to have the following effect:

.first, a reasonable hypothesis, and the facts founding it, were to be determined only after all the material had been considered and evaluated. That is, an end of the day test was involved;

.secondly, a single stage process was envisaged. Satisfaction of the reasonable hypothesis was intended to be taken as satisfaction of the beyond reasonable doubt standard. If a reasonable hypothesis was established, the relevant war service connection was held to exist and the claim was allowed. If not, the claim would be rejected. The 1985 dispelling provisions were removed; and

.thirdly, no onus of proof was cast either on the claimant or on the Repatriation Commission, and no presumption of entitlement was conferred on a claimant.

  These provisions were intended to ensure that the well-reasoned AAT decision in the O'Brien case, which was upheld by Brennan J. in his minority judgment in that case, would be valid if made under the new legislation. The Bushell case involved similar medical issues as O'Brien and was rejected at all three levels of the determining system; that is, by the Repatriation Commission, the Veterans' Review Board and the Administrative Appeals Tribunal as well as by the Full Bench of the Federal Court.

  Furthermore, the 1986 legislation was followed by a comprehensive AAT decision in the case of East, upheld by the Full Bench of the Federal Court. This is considered to have confirmed generally the intention behind the changes to the legislation. The High Court refused special leave to appeal from the Federal Court's decision.  It is now clear, however, from the Bushell decision that the 1986 provisions are not sufficiently comprehensive to achieve their intention. The result of the decision is that satisfaction of the reasonable hypothesis test does not exhaust the beyond reasonable doubt test. It was held to be a threshold test rather than, as intended, a test which is conclusive of the question whether the relevant war service connection exists. That is, a reasonable hypothesis can now be raised on only some of the material, without an evaluation or analysis of all the material.

  The same applies to the facts that are required to support the hypothesis. They can be inferred on only some of the evidence and must be disproved beyond reasonable doubt if their existence, and that of the reasonable hypothesis, is to be rejected. The O'Brien decision established that this will be impossible in most cases. Additionally, the High Court held in Bushell that a reasonable hypothesis could be raised where it was supported merely by a responsible medical practitioner speaking within the ambit of that practitioner's expertise, even though it might be an opinion against the weight of informed medical opinion, or have little support in the medical profession or among scientists, or have been discarded by medical opinion for many years.

  The effect of such an interpretation would be that the only cases which will not succeed are those where there is no evidence, or the only evidence is to the contrary of the relevant service, injury or disease, or where no medical practitioner or other expert is willing to suggest an hypothesis linking the injury, disease or death with service. Such cases are rare. In a recent case the Administrative Appeals Tribunal, after quoting at length from Bushell, relied on the opinion of a paramedical person, who was not a qualified doctor, in preference to the opinions of three medical specialists. The AAT found that a heart condition and anxiety disorder were war-caused when the veteran had a total of less than four days of operational service, over a three-month period, in which he was not involved in any combat. This amounts to a return of the O'Brien situation.

  As highlighted in the 1985 second reading speech, the comprehensive three-tiered determining system was hardly a sign that there was to be virtual automatic acceptance of disability and war widows' claims. The anticipated impact of the decision is that there will be a large increase in the Department's expenditure on disability pensions, war widows' pensions and associated treatment costs. However, there is an issue of more fundamental concern. As the Acting Minister said in that speech:

It has always been accepted that the repatriation pension system should be generous. Nevertheless generosity seems to have gone beyond reasonable bounds.

The Australian repatriation system is already the most beneficial in the world. The recent decision goes far beyond what was intended in 1986 and provides benefits in circumstances where no reasonable person would believe them to be appropriate. The provision of benefits in such circumstances raises real questions of social justice.

  I remind honourable members of a statement made in 1988 by the Veterans' Entitlements Act Monitoring Committee, which was established to review the first 12 months operation of the Veterans' Entitlements Act. In commenting on a Federal Court decision which has now been revived by the Bushell case, the Committee stated that no legislative action should be taken to overrule that decision unless, in subsequent decisions to the same effect, it was found that the 1985 amendments were being frustrated and, in particular, that the effect of the High Court decision in O'Brien had not been negated. It is significant to note that the Committee was chaired by the Hon. Paul Toose, CBE, QC, and included representatives from the Returned Services League of Australia, the Australian Veterans and Defence Services Council, and a former chairman of the Legacy Coordinating Council.

  The situation contemplated by the Monitoring Committee has now arisen. Legislative action is necessary. The existing `beyond reasonable doubt' terminology of section 120 will be retained in its present form, but its effect will be clarified by amendments to accord with the intended effect I have referred to earlier. In addition, a new section, 119A, will be inserted setting out both the order and manner in which the relevant facts and causation issue will be decided.

  The main effects of the proposed amendments will be threefold:

first, they will ensure that all relevant facts must be found before proceeding to determine the causation issue under subsection 120(1), that is, whether the injury, disease or death is war-caused. If any essential facts are found not to exist, the causation issue will not arise and the claim cannot proceed. The findings in respect of both the facts and the causation issue are to take place in a structured manner and on the basis of a full examination, assessment and evaluation of all the evidence. It will not be a question of raising the existence of a necessary fact or hypothesis on the basis of only some of the evidence, with the Commission having to dispel the fact or hypothesis beyond reasonable doubt;

secondly, they will ensure that the establishment of a reasonable hypothesis connecting the incapacity or death with war service is a single, `end of the day' process which exhausts the requirements of the `beyond reasonable doubt' test, and is not itself required to be dispelled beyond reasonable doubt.

  This will be achieved by significant changes to the words of existing subsection 120(3) and by the insertion of a note to subsection 120(1). The changes to subsection (3) will eliminate any interpretation of the existing words that the `raising' of a reasonable hypothesis `after consideration of the whole of the material' merely means the `raising' of an hypothesis on some of the evidence after completion of the gathering of all the evidence. The changes will confirm that the hypothesis has to be `established', not merely `raised', and that this is to be `on the basis of all the material' after a comprehensive evaluation of that material in accordance with the amendments.

Thirdly, they will define the circumstances in which an hypothesis of a connection with war service will not be regarded as reasonable. These will include, for example, circumstances where the hypothesis is fanciful, speculative, unreal, tenuous or remote, or is not grounded in the particular circumstances of the case.

  In addition, the amendments will overturn the effect of the Bushell decision that a medical opinion may raise a reasonable hypothesis even though it is not generally accepted as being reasonable by expert medical or scientific opinion. An hypothesis will not be reasonable in these circumstances, nor if it is outweighed by a more persuasive and compelling expert opinion, or by a greater substantial body of expert opinion. A decision-maker, therefore, will be required to conduct a thorough evaluation of, and to form a view upon, the medical and scientific opinion, rather than merely identify whether a purported reasonable hypothesis is supported by a responsible medical practitioner.

  I also draw attention to the fact that a report by the Auditor-General on compensation for veterans and war widows should be finalised and tabled in the next few weeks. The audit report is expected to raise fundamental issues which will require long and careful examination, hopefully on a bipartisan basis. Changes to the legislation to reverse the Bushell decision cannot, however, await that examination.

  While there would be no additional or reduced expenditure flowing from this Bill, if the effects of the High Court's decision were not legislatively overturned by the measures contained in it, the estimated additional program costs would be $10m to $15m in 1992-93, $60m to $105m in 1993-94, $80m to $135m in 1994-95 and $100m to $180m in 1995-96. The increased costs by the financial year 2001-02 would be $235m to $440m. By that time, the accumulated cost for the first 10 years would be $1.2 billion to $2.2 billion. The financial implications of not proceeding with legislative action are, therefore, very significant; so too, as I have said, are the equitable considerations. I assure honourable members that these amendments will not affect, but are designed to protect, the legitimate claims and rights of the veteran community which will continue to be guaranteed by the Act.

  The Act will continue to provide that, in determining any claim, a determining authority is required to act according to substantial justice and the merits and all the circumstances of the case. The Act will continue to take account of the difficulties that lie in the way of ascertaining facts, including for any reason attributable to the effects of the passage of time, the availability of witnesses, or any deficiency in official records. Furthermore, once any hypothesis is found to be reasonable, the claim must succeed, even if medical opinion is that the hypothesised connection is not the most likely cause.

  I must also stress that the Government is being even-handed in its treatment of court decisions which it believes at the time to be inconsistent with equity and the intention of the legislation. I remind honourable members that when the Federal Court held that T&PI pensioners could, contrary to established practice, have their pensions automatically revoked at age 65, the Government acted very quickly to legislate to preserve the previous position.

  Finally, I reiterate the Government's commitment generally to the continuation of generous and effective benefits and treatment for those who suffer because of their war service for Australia. Australia has by far the most comprehensive and generous repatriation benefits in the world. After the Bill I have introduced becomes law, this will still be the position, and this Bill's effect of preventing an escalation in costs will help to ensure that expenditure is directed to the legitimate needs and priorities of our veterans and war widows. I commend the Bill to the House and present the explanatory memorandum to the Bill.

  Debate (on motion by Mr Tim Fischer) adjourned.