National Office Instruction

amending General Orders (1993 edition)

Instruction No. 53
Date of Effect: On receipt
6443

ELIGIBILITY -- MEDICAL DISCHARGES

Purpose

The purpose of this instruction is to clarify the policy regarding medical discharges from the Forces and resultant determinations of eligibility under s4AAA of the Defence Service Homes Act 1918.

Background

A recent case decided by the Federal Court in favour of the applicant has highlighted the need to refine the policy regarding medical discharges and determinations of eligibility.

The case involved an applicant who had enlisted for six years and became an assault trooper. Bad fortune befell him in his fifth year of service: while parachuting, an activity approved by his Commanding Officer, he broke his ankle. It was a serious injury, putting him in hospital for some months and subsequently causing his superiors to rate his fitness as 'below medical standard'. That meant he could no longer be an assault trooper.

His superiors counselled him in hospital. He was told that he had a choice: he could transfer to another corps and be a storeman, or he could be discharged, at his own request, on medical grounds. He chose the latter. He did not want a corps transfer, partly because he wanted to be an assault trooper, not a storeman, and partly, it seems, because he was told that there would be little future for him in the Army, there being, apparently, a process in train to weed out members who were not 100 per cent fit. He requested, and was eventually granted, a discharge.

Some years later he applied for a notice of eligibility under the Defence Service Homes Act 1918. The application was declined at both the primary and review decision stages because of advice from the Department of Defence that his discharge was not by reason of 'invalidity or physical or mental incapacity to perform duties'.

A subsequent appeal to the AAT affirmed the earlier decisions, but in reaching its decision, the AAT raised a jurisdictional issue of major importance. That issue was whether the decision-maker (the Secretary of DVA) has the power, when determining eligibility under the Act, to 'go behind' the Army's stated reason for discharge (ie the reason contained in the member's discharge record). Until the Court hearing there had been conflicting authority on this point, but the AAT member clearly thought there was such power. In other words, the AAT held that it could take other matters into account in deciding an issue under Subsection 4AAA(1)(b) and not rely solely on the reasons for discharge as recorded by Defence.

Subsequent appeals by the applicant in regard to his eligibility and a cross appeal by the Department in regard to the jurisdictional issue were heard by the Federal Court recently. The Court decided in favour of the applicant on the eligibility matter and against the Department on the jurisdictional issue.

In deciding upon the jurisdictional issue, the Federal Court expressed the view that there are good reasons for a construction of s4AAA of the DSH Act that not only allows the decision-maker to determine the issue, but also requires him or her to do so. To rely on the military's stated reason could lead to injustice in some cases. The reason may have been erroneously or misleadingly stated. The potential for injustice stems from the inflexibility of an approach that treats words used in one context as having clearly-defined, 'objective' meanings apt for application in another.

In a sense, this confirms the long held view that the Secretary and appointed delegates determine eligibility under the DSH Act and not officers in the various Defence records offices.

In the case before it, the Federal Court considered the discharge term 'at own request'. It commented that on the face of it, this implies that the member asked to leave instead of being asked to leave. The term is simply one of the categories that is apparently meaningful to the Army for its purposes, but it does not necessarily bear upon the criteria for determining whether a member should get a subsidised home loan or not. It obscures a very real possibility: an incapacitated or invalid soldier might seek, at his/her own request, to be discharged.

The Federal Court expressed the view that the DSH Act is beneficial legislation and should be construed beneficially in favour of the applicant. The eligibility provisions of the Act in relation to peacetime service have the purpose of providing a benefit to people who have spent in excess of 6 years in the military service of their country or to people who have committed themselves to 6 years service and would have so served but for some legitimate reason such as, say, a medical one. To construe the Act in a way that would necessarily preclude further enquiry into the eligibility for a home loan of a person such as the applicant, whose formal record of service does not happen to include the words 'discharged on the grounds of invalidity or incapacity to perform duties' but whose claimed actual reason for discharge was his physical inability to perform military duties, would tend against the Act's beneficial purpose.

The substantive issue, the subject of the appeal before the Federal Court was whether, within the true meaning of s4AAA of the DSH Act, the applicant was discharged on the ground of invalidity or physical or mental incapacity to perform duties.

The Court found that the AAT took a narrow view, taking the section to refer to a discharge on account of inability to perform any military service. The Court expressed the view that there is nothing to suggest that the word 'duties' is to be understood to mean 'all military duties' or 'any military duty'. In the result there is some elasticity in the section: whether there has been a discharge on the ground of 'incapacity to perform duties' can only be judged in the circumstance of each case: it becomes a question of fact. It is entirely consistent with the beneficial nature of the legislation.

The Federal Court expressed the view that the question for the decision maker, when determining eligibility would be this:

'Is the applicant to be regarded, as a matter of ordinary language, as having been discharged on the ground of his or her incapacity to perform duties?'

It is no more than a restatement of that test to put it in the following way, which may perhaps, be more helpful to a decision maker:

'Is it fair to say that physical or mental incapacity for some or all military duties was the factor actuating the military discharge of the person in question?'

The test, as so framed, does not involve distractions of enquiring whether:

(a) the person's discharge was voluntary or involuntary;

(b) the applicant for a DSH loan had a remnant capacity to perform some military duties or none; or

(c) there were or were not other factors also operating to bring about the discharge.

It is enough if incapacity to perform some military duties was a sufficiently substantial and operative factor that it is reasonable to say that that was the ground of the discharge.

On reflection, the basic questions in this case were whether the applicant was committed to serving for the basic service period, and if so, whether that service ended by reason of medical incapacity to perform duties. The answer was 'yes' on both counts, notwithstanding that service records indicated that he was discharged 'at own request'. There was nothing known about the applicant that would suggest that he had any intention of not serving for the basic service period service had he not sustained the injury which made him unfit for further service as an 'assault trooper' during the fifth year of his service. Officially the Department of Defence gave him a medical classification as being 'below medical standard'. It is also worth noting that the weekend activity (parachuting) which caused the injury was directly related to his Army occupation. Here was a young soldier so dedicated to what he was doing in the Army that he spent his leisure time perfecting the skills so necessary to doing his job well. This reinforces the evidence of the commitment he had at the time.

Policy

It is important for individuals like the successful appellant in this case, that we learn from cases like this. It is also important that this is not seen as a criticism of those who dealt with the case at primary and review decision stage. Their decisions after all, were affirmed on appeal to the AAT. This is the very reason that appeal mechanisms exist. Often legal opinions vary in interpretations of the law and often full bench hearings are decided in the majority and not unanimously.

The Federal Court's decision in this case confirms the view that there is nothing to prevent the Secretary and appointed delegates from taking other matters into consideration, other than the enlistment and discharge details as recorded by Defence, when determining eligibility. There is nothing new in this approach. An example in recent years is detailed in Central Office Instruction No 35 of 28 October 1994 where a benevolent approach to establishing eligibility of WWII female veterans was promulgated, notwithstanding the effect that documents they may have signed when enlisting had on their eligibility.

Obviously we will continue to rely heavily on information provided on official Defence records, whether it is provided by the applicant under 'best evidence' or direct by the Department of Defence through a 'Request for Service Details'. However, in any case where the applicant disputes the accuracy of information provided, further information should be sought from any relevant source to enable an informed decision to be made. Where it is established that a medical condition was a factor in an applicant's premature discharge, notwithstanding that officially, the discharge was not on the ground of invalidity or physical or mental incapacity to perform duties' a benevolent approach to determining eligibility is to be followed after considering the following basic question.

'Is it fair to say that physical or mental incapacity for some or all military duties was the factor actuating the military discharge of the person in question?'

General Orders

Eligibility General Order 9.2.4.2 has been amended to incorporate this change of policy. This opportunity is also taken to include a reference to 'open ended enlistments' in the same GO following another case recently received. Although 'open ended enlistments' were introduced for non commissioned officers from 1 July 1988, certain applicants had some first service before 15 May 1985 and are seeking assistance under the DSH Act. Under 'open ended enlistments' soldiers enlist until their normal retirement age (55 years). Discharge will not be granted without 6 months' notice and until the appropriate Return of Service Obligation has been fulfilled (for most soldiers - 4 years). As such enlistments are open ended, all soldiers with this form of enlistment satisfy the minimum requirement of enlistment for 'not less than 6 years' as specified in s4AAA(1)(b).

Also included is a complete schedule to the War Gratuity Act 1945 which was affected by a pagination problem when NOI 47 was issued earlier in the year. Amended pages 3 and 4 of the Eligibility GO's Index are also attached. This opportunity is also taken to update the NOI Index.

Attached are amended pages for the Eligibility General Orders. Please replace the existing pages 3-4 and 39-48 with the amended version. This Instruction has no effect on any previously issued NOI.

KERRY BLACKBURN
Branch Head
Housing & Community Services

29 November 1996