Carey; Secretary, Department of Social Services and (Social services second review)

[2018] AATA 1637

Carey; Secretary, Department of Social Services and (Social services second review) [2018] AATA 1637 (12 June 2018)

Division:GENERAL DIVISION

File Number:           2018/2444

Re:Secretary, Department of Social Services

APPLICANT

AndChristopher Carey

RESPONDENT

DECISION

Tribunal:Member M East

Date:12 June 2018

Place:Perth

The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) is granted with respect to the payment of arrears.  The Tribunal refuses to grant a stay order with respect to ongoing payments, which are to be paid to the Respondent from the next pay date following the day that the Applicant receives this decision.

......[sgd]..................................................................

Member M East

CATCHWORDS

Practice and procedure – stay application with respect to AAT Tier 1 decision – Disability Support Pension – relevant factors – financial hardship – respondent difficulty in repaying debt – whether stay order would secure effectiveness of hearing – stay order granted for arrears but refused for ongoing payments

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) – s 25(1) – s 41(1) – s 41(2) – s 41(4)(a) – s 44A(2)

Social Security Act 1991 (Cth) – s 94(1)(a), (b) and (c)

Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 (Cth) – Table 5 – Table 7

CASES

Broadbent v Civil Aviation Safety Authority [1999] FCA 1871

Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418

Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 146

Opie v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 769

Re Commonwealth of Australia and Quirke (1986) 9 ALD 92

Re Dart and Director-General of Social Services (1982) 4 ALD 553

Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240

Re Repatriation Commissionand Bramston (1985) 8 ALD 468

Re Repatriation Commission and Delkou (1985) 8 ALD 454

Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344

Re Secretary, Department of Social Services and McNamara [2016] AATA 189

Rose and Comcare [2013] AATA 735

Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333

Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880

Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246

REASONS FOR DECISION

Member M East

12 June 2018

BACKGROUND

1. Mr Carey, the Respondent, made a claim for a disability support pension (DSP) which was signed and dated by him on 4 November 2016 (T36/241).

2. On 27 July 2017 Mr Carey’s claim was rejected on the basis that he was assessed as not having an impairment rating of 20 points or more (the Original Decision) under Table 7 of the Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 (Cth) (the Impairment Tables) (T39/270).

3. This decision was affirmed on review by the Authorised Review Officer on 6 November 2017 (T43/288) and Mr Carey sought review by the Social Services & Child Support Division of the Administrative Appeals Tribunal (the AAT1).

4. Following the hearing on 27 March 2018, the AAT1 review set aside the Original Decision and remitted the matter back to the Chief Executive Centrelink for reconsideration in accordance with the direction that Mr Carey satisfied sections 94(1)(a),(b) and (c) of the Social Security Act 1991(Cth) (the Social Security Act) when he made his claim for DSP in early November 2016 (T3/6). That is, the AAT1 accepted that Mr Carey’s mental health conditions were fully diagnosed, treated and stabilised, resulting in a severe impairment in mental health function. The AAT1 was satisfied that Mr Carey generated 20 points from Table 5 of the Impairment Tables and that he had a continuing inability to work. As such, Mr Carey would be eligible to be paid a DSP from his date of claim. It should be noted that some disagreement arose at the hearing as to whether Mr Carey’s claim was made on 4 or 8 November 2016. Whilst of little consequence to the outcome of this decision the date of eligibility will need to be clarified at the hearing of the substantive application.

5. The Secretary has applied for review of the AAT1 decision and is seeking an order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) to stay the operation of the AAT1 decision.  This would prevent Mr Carey from receiving any payments of his DSP from the date he was entitled unless he is successful in the current application.

6. Mr Carey has opposed the application for a stay order.

   ISSUE

7. The issue for determination by the Tribunal is whether it should make an order to stay the operation of the AAT1 decision and if so, the extent to which the stay order should operate.

   MATERIAL BEFORE THE TRIBUNAL

8. A hearing took place on 1 June 2018.  The Secretary was represented by Mr Burgess of Sparke Helmore Lawyers, who appeared by telephone.  Mr Carey represented himself and was supported by his mother, who also attended.

9. The Tribunal had before it the Secretary’s submissions on the stay application, dated 16 May 2018, together with Mr Carey’s response, received on 23 May 2018.  Mr Carey provided an annotated response to the Secretary’s submissions together with 7 invoices of various dates, dated from 20 August 2015 to 28 March 2018, for his psychology appointments.  Mr Carey also gave oral evidence at the hearing.  The Tribunal also had regard to the section 37 documents filed for the purposes of the substantive review (T-Documents) (T1 – T48).

10. The Tribunal found Mr Carey to be a credible and honest witness.

    RELEVANT LEGISLATION AND PRINCIPLES

11. The filing of an application to review a decision with the Tribunal will not automatically prevent it from taking effect. This is pursuant to s 41(1) of the AAT Act which states:

    (1)  Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.

12. If the Tribunal grants a stay order under s 41(2) of the AAT Act, it will stop a decision from taking effect until the final determination of the matter following the substantive hearing.

13. The Federal Court in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 (at 20) states:

    The discretion conferred by s 44A(2) of the AAT Act should be exercised only where special circumstances justify departure from the rule that a successful litigant is entitled to the fruits of judgment pending the appeal, because the appeal, although successful, may otherwise be rendered nugatory.

14. Section 41(2) of the AAT Act permits a party to apply to the Tribunal for a stay order with respect to an operative decision which affects a person’s rights (Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246). The Tribunal will only grant a stay order if there is something for the stay order to operate on. For example, in social security matters, if a lump sum has been paid, a stay order will be refused (Re Repatriation Commission and Delkou (1985) 8 ALD 454).

15. Section 41(2) of the AAT Act states:

    (2)  The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review. [Original emphasis]

16. In summary, s 41(2) of the AAT Act provides that the granting of a stay order is conditional upon:

    (a)a request being made to the Tribunal by a party; and

    (b)the Tribunal having the opinion that “it is desirable to do so after taking into account the interests of any persons who may be affected by the review”. The relevance of a person’s interests will be assessed with reference to the specific legislation under which the decision under review was made (Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333).

17. The fundamental purpose of a stay order is a narrow one – that is, the purpose of a stay order is to secure the effectiveness of the hearing and the determination of the application for review (Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 146 at [34]).

18. Section 41(4)(a) of the AAT Act also provides that the Tribunal will not grant a stay order unless the parties have been given a reasonable opportunity to make submissions to the Tribunal:

    (4)  …the Tribunal shall not:

    (a)make an order under subsection (2) unless the person who made the decision to which the relevant proceeding relates has been given a reasonable opportunity to make a submission to the Tribunal, as the case may be, in relation to the matter…

19. The discretion which s 41(2) of the AAT Act gives to the Tribunal is a broad one, and is similar to the power of a court to grant a stay order (Broadbent v Civil Aviation Safety Authority [1999] FCA 1871). The AAT has a broad jurisdiction, which is conferred by numerous acts of the Commonwealth Parliament (s 25(1) of the AAT Act). Applications made to the Tribunal to stay decisions, pursuant to s 41(2) of the AAT Act, are under a broad range of Commonwealth legislation in areas including civil aviation, social security and aged pensions, compensation and professional licences and registrations (such as tax agents’ registration). The relevant factors which may be considered by the Tribunal will consequently differ for each application (Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240).

20. In previous stay order applications before the Tribunal involving the payment of pensions and compensation, the Tribunal has had regard to the following factors: 

    (a)the prospects of success, or the merits of the Applicant’s case if the matter were to proceed to a substantive hearing;

    (b)the prejudice or hardship that the parties, or other persons whose interests may be affected by the review, may suffer;

    (c)the likelihood of recovery of monies by the Commonwealth if the person is unsuccessful at the substantive hearing of the matter;

    (d)whether it is in the public interest to grant a stay order; and

    (e)whether the review application, if successful, would be rendered nugatory if the stay order is not granted.

    (see for example, Re Repatriation Commission and Delkou (1985) 8 ALD 454, Opie and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 769, Rose and Comcare [2013] AATA 735, Re Secretary, Department of Social Services and McNamara [2016] AATA 189, Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065).

21. The Tribunal can consider the extent to which the stay order should operate and may exercise its discretion to stay part of the operative decision (see for example, Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344). In cases where the recipient of a payment would suffer hardship, the Tribunal may exercise its discretion to stay the payment of the lump sum arrears pending the final decision of the Tribunal under review, but not the ongoing weekly or fortnightly payments (see for example Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 (Quirke); Re Repatriation Commission and Bramston (1985) 8 ALD 468). This may assist to relieve hardship to the recipient, whilst, in part, protect public funds from being dissipated.

    CONSIDERATION

    Prospects of success

22. The Tribunal should consider the prospects of success or the merits of the Secretary’s case if the matter were to proceed to a substantive hearing in deciding whether to exercise its discretion to grant a stay order.  

23. The relevant legal principles relating to this ground were summarised by Member Fice in Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065 at [10]-[11] as follows:

    10When considering the prospects of success of an applicant in the course of a Stay application, it is not the role of the Tribunal to conduct a preliminary hearing of the substantive matter based on the evidence given in the SSAT. As Davies J (President) said in Re Dart and Director-General of Social Services (1982) 4 ALD 553 at 555:

    It is not convenient or appropriate that on this application for a stay there should be any preliminary trial of the issues that will ultimately have to be considered by the Tribunal.

    11However, it is relevant for the Tribunal to consider whether there exist facts and circumstances which, if established at the substantive hearing, would provide a basis for the Secretary’s success in the review application; or whether there are points of law raised which, if sustained, will lead to that conclusion (see Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 at 95).

24. In summary, the Secretary’s submission is that Mr Carey’s conditions were diagnosed but were not fully treated and stabilised during the qualification period and that he has the capacity to work.  The Secretary relies on the Job Capacity Assessor’s (JCA) report dated 20 December 2016 (T37/261).  The JCA was a registered psychologist and was assisted by a contributing assessor who was also a registered psychologist.

25. The Secretary submits that the JCA report supports their contention that Mr Carey’s condition was not fully treated and stabilised and therefore could not be assigned an impairment rating.  The JCA report also states that Mr Carey did not have a continuing inability to work and could be expected to work 15-22 hours per week with intervention within two years.

26. Mr Carey submitted both in his written submissions and orally at the hearing that the Secretary did not have reasonable prospects of success.  He said he was successful at AAT1 review and relied on the opinions of Dr Castle and Mr Krupenia.

27. The Tribunal notes the conflicting evidence and the conclusion reached by the member at the AAT1 review.  Ultimately the question of whether the Secretary will be successful in her application for review will depend upon an assessment of the evidence at the substantive hearing.  Depending on whose evidence the Tribunal gives greater weight, the Secretary may have a reasonable prospect of success at the substantive hearing.  This weighs in favour of granting a stay order.

    Prejudice or hardship

28. Whether a person’s interests will be affected by the review will be assessed with reference to the specific statutes under which the decision being reviewed was made (Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333). With consideration to the statutory regime, in this instance the Social Security Act and the relevant Impairment Tables, the persons who may be affected by this application are the Secretary and Mr Carey.

29. The Secretary submits that she may be prejudiced if the stay is not granted.  The Secretary will be required to make DSP payments to Mr Carey from early November 2016 and if then successful in the substantive application, the Secretary will most likely have to recover nominal amounts over an extended period of time which will cause administrative costs to be incurred by the Commonwealth.  Mr Carey stated at the hearing that he already had an outstanding debt arising from an overpayment of his Newstart Allowance (NSA) which was already being repaid from his current Centrelink payments.

30. In his oral evidence at the hearing, Mr Carey said he lived with his mother and paid her a “token rent”.  He said he made some contribution to living expenses but his main concern was his inability to pay for and access regular psychological counselling.  He said his medication was funded by the government but he simply couldn’t afford private psychological counselling.  He said he was seeing a counsellor through a mental health service in Subiaco and also his General Practitioner.

31. The fortnightly payment from a DSP is approximately $280 higher than his NSA.  The Tribunal notes this would amount to a not insignificant sum with respect to the payment of arrears from early November 2016.  The Tribunal considers that the potential prejudice to the Secretary, should the stay not be granted with respect to the arrears, to be significant particularly in light of the reduced rate of repayment likely with Mr Carey.  However, the Tribunal is mindful of Mr Carey’s mental health condition which has been diagnosed and his need to access ongoing care and counselling and the associated cost of meeting those needs.  The Tribunal therefore considers this weighs heavily in favour of refusing the stay with respect to future payments.

    Likelihood of recovery of monies

32. Mr Carey indicated during the hearing that he acknowledged he would need to repay any monies received should the stay not be granted and the Secretary was ultimately successful in the substantive application.  He said however that he was in receipt of NSA and any repayments could be deducted from that payment. 

33. Mr Carey told the Tribunal that he was already having deductions made from his NSA for an earlier debt incurred.  Mr Burgess, when asked, was unable to provide any details as to this existing liability.  Accepting Mr Carey’s evidence that he is already making repayments for an existing debt, it is of concern to the Tribunal that, should the Secretary’s substantive application be successful and the stay is not granted, this would in turn lead to an even greater burden to Mr Carey in the future. This financial burden would further restrict his ability to access effective psychological counselling.

34. As noted earlier, if this stay application is not successful, Mr Carey would have access to a payment of arrears dating back to his date of application together with an ongoing payment of DSP at a slightly higher rate than what he is receiving on his NSA. The Tribunal is of the view that the smaller sum (i.e. the difference between the rate of pay of his NSA and DSP) is more likely to be recoverable by the Secretary without being so high as to cause undue hardship to Mr Carey if he is unsuccessful at the substantive hearing and has to repay it.  These factors weigh heavily in favour of granting the stay order with respect to the arrears, but not the ongoing payments.

    Public interest

35. The Secretary submitted that “DSP payments are made from public funds and she [the Secretary] has an obligation to protect those funds by ensuring that payments are only made to individuals who are lawfully entitled to receive them” (Secretary’s submissions dated 16 May 2018, at para 26).

36. The Tribunal agrees that this tends to weigh in favour of the granting of a stay order.

    Whether the review application will be rendered nugatory

37. The Tribunal is also required to consider whether the review application, if successful, would be rendered nugatory if the stay order is not granted. The Secretary argues that it would be.

38. In her written submissions, the Secretary stated “If the stay is not granted, DSP arrears will be paid to Mr Carey from 8 November 2016 and there is a real risk that the Secretary would not be restored to her original position if the substantive application succeeds”.

39. In summary, the Secretary’s argument is that if the stay order is not granted and the substantive application succeeds, Mr Carey would have received monies that he was not entitled to. This money must be recovered in circumstances where Mr Carey may experience hardship in repaying it. Consequently, a stay order would assist in securing the effectiveness of the hearing. 

1. Further the Secretary submitted that, “…while the amounts may be recoverable at law, successful recovery action cannot be guaranteed.” The difficulty in recovering monies has been found by the Tribunal to weigh in favour of granting a stay order (Re Repatriation Commission and Delkou (1985) 8 ALD 454). The Tribunal is of the opinion that, given that arrears have been accruing since the date of claim, being early November 2016, the arrears are substantial and may be difficult to recover if they have been dissipated before the hearing of the substantive application. This weighs in favour of granting the stay order with respect to the arrears. However, the ongoing fortnightly payments are not substantial (being $260 more per fortnight than the NSA which Mr Carey is currently receiving), and are likely to be recovered (for example, through a reduction in fortnightly repayments over a number of months) if the Secretary is unsuccessful at the substantive hearing. This weighs in favour of not granting the stay order with respect to the ongoing payments.

   CONCLUSION

2. Having reviewed the evidence before it, including the oral and written submissions of both parties, and for the reasons outlined above, the Tribunal concludes that it should exercise the discretion conferred upon it by s 41(2) of the AAT Act to grant a stay order to secure the effectiveness of the hearing of the substantive application currently before the Tribunal with respect to the arrears. There are circumstances which justify the departure from the rule that a successful litigant is entitled to the fruits of the judgment pending appeal with respect to the arrears, but for the reasons outlined above, the stay is refused with respect to the ongoing payments. In Quirke, when granting a stay order with respect to the arrears, but not ongoing weekly compensation payments, Senior Member The Hon JBK Williams (at 96) ordered that the payment of weekly payments should commence from the next “pay-day” following his decision. The Tribunal proposes to proceed in a similar manner in this application.

3. The Tribunal notes the financial hardship that Mr Carey is suffering, namely his inability to access adequate, ongoing psychological counselling.  As a consequence, Mr Carey requires the substantive application to be resolved quickly. The Tribunal notes the decision in Re Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418, where the Tribunal granted a stay order, but to reduce hardship to the recipient of the payment, directed that the hearing of the substantive matter be expedited. The Tribunal has therefore requested that, to the extent that Tribunal resources permit, that this matter be expedited to be heard as soon as possible.

   DECISION

4. The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) is granted with respect to the payment of arrears. The Tribunal refuses to grant a stay order with respect to ongoing payments, which are to be paid to the Respondent from the next pay date following the day that the Applicant receives this decision.

I certify that the preceding 43 (forty-three) paragraphs are a true copy of the reasons for the decision herein of Perth

.......[sgd].................................................................

Associate

Dated: 12 June 2018

Date of hearing:	1 June 2018
Representative for the Applicant:	Ashley Burgess
Solicitors for the Applicant:	Sparke Helmore Lawyers
Respondent:	In person: self-represented