The Administrative Appeals Tribunal found the denigration of Martin Phillips while he was serving in East Timor had caused his bipolar disorder.

Mr Phillips had been promoted to the rank of major when he resigned from the British army and emigrated to become a captain in the Australian Army in January 1999.

He was posted to Toowoomba, where he found the senior ranks to be "cold and dismissive" towards him because, he felt, he was regarded as a foreign officer.

During an exercise in the Northern Territory, a major called Mr Phillips a "pommy bastard" and attempted to have him charged with misconduct.

Mr Phillips was deployed to East Timor from September to 18 December 1999, where he served as second-in-charge of the operations squadron.

During that time, a major who was not within his chain of command subjected him to a "daily onslaught" that included giving orders he was not entitled to give.

On one occasion, after Mr Phillips declined verbal orders, the major told him he would "make your life hell".

Mr Phillips reported the incidents to his superior officer several times, but the bullying continued.

Another time, Mr Phillips felt belittled and embarrassed when the Australian Army general undermined his authority in front of troops by challenging him about his boots.

He also suffered distress after seeing blood stains on a wall - they came from women who had been raped and murdered.

Mr Phillips returned to Australia in December 1999, feeling the army had let him down.

In the following months, he felt confused, lacked his previous confidence, found it difficult to speak to groups of soldiers and to brief other officers, and felt "generally upset".

Mr Phillips left his post in August 2000.

He was diagnosed with depression, suffered from problem gambling and was eventually discharged medically unfit for service in January 2002.

In 2007 he was diagnosed with bipolar disorder, with a clinical onset of December 1999.

Mr Phillips applied for a disability pension but the Veterans' Review Board rejected the bid, finding his bipolar and post-traumatic stress disorders had not been caused by his service.

He appealed the decision to the tribunal, which found in his favour.

Tribunal NSW deputy president James Constance, in a recent judgment, ordered that Mr Phillips receive a disability pension on the grounds his bipolar disorder had been war-caused.

"I am satisfied that Mr Phillips does suffer from bipolar disorder, which was caused by the manner in which he was treated in his work environment in East Timor," Mr Constance said.

"There is [evidence] pointing to the effects of Mr Phillips' treatment by his colleagues as being chronic and causing him to feel ongoing distress.

"The conduct of the major is consistent with Mr Phillips experiencing bullying in the workplace.

"Mr Phillips' unsuccessful attempts to have action taken in respect of his treatment by the major is consistent with Mr Phillips' perceived lack of support within his work environment."