Chen and Secretary, Department of Social Services (Social services second review) - [2018] AATA 4672

Chen and Secretary, Department of Social Services (Social services second review) [2018] AATA 4672 (20 December 2018)
Division:GENERAL DIVISION
File Number(s): 2018/5153
Re:Chia Huey Chen
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:20 December 2018
Place:Sydney

The Tribunal grants the Applicant’s request for a stay of the decision of the Social Services and Child Support Division of the Tribunal of 29 August 2018 in respect to the cancellation of the Applicant’s Disability Support Pension (DSP). It is ordered that any DSP arrears are to be paid to the Applicant from the original cancellation date of 15 March 2018 and ongoing payments of DSP are to be paid to the Applicant from the next day on which social security benefits are paid up until the decision of the Tribunal on the substantive application comes into operation.
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Chris Puplick AM, Senior Member
CATCHWORDS
PRACTICE AND PROCEDURE – cancellation of disability support pension – application for a stay of decision – principles governing a stay – prospects of success – prejudice to the respondent – recovery of overpayments – financial hardship – public interest – whether the appeal might be rendered nugatory – stay granted in respect of arrears – stay granted in respect of ongoing payments.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Social Security Act 1991 (Cth)
CASES
Mafafferi v Minister for Immigration and Multicultural Affairs [2001] 63 ALD 373
Panganiban and Australian Securities & Investments Commission [2016] AATA 703
Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] 24 ALR 307
Re Commonwealth Banking Corp and Iannello [1988] 15 ALD 418
Re Dart and Director-General of Social Services [1982] 4 ALD 553
Re Georges and Minister for Immigration and Ethnic Affairs [1978] AATA 63
Re Metro College of Technology Pty Ltd and Australian Skills Quality Authority (unreported) [2015] Application 2015/6137
Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298
Scott v Australian Securities and Investments Commission [2009] AATA 798
Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065
Shi and Migration Agents Registration Authority [2008] HCA 31
SECONDARY MATERIALS
Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2017
REASONS FOR DECISION
Chris Puplick AM, Senior Member
20 December 2018

This is an application by Ms Chen (the Applicant) for a stay order in respect to a decision by the Social Services and Child Support Division of this Tribunal on 29 August 2018. The decision affirmed a determination by an authorised review officer (ARO) of the Department of Social Services (the Respondent) (of 2 July 2018) to affirm an earlier decision made on 15 March 2018 to cancel Ms Chen’s disability support pension (DSP).
MS CHEN
Ms Chen is a person known under several different names in a variety of contexts and documents. Her names include Chia Chen; Chia-Huey Chen; Chia Huey Chen; Jasmine Chen; Jasmine Peyronneau and Huey Peyronneau. There are no suggestions of any dishonesty or fraud in her use of multiple names and draws no adverse inference.
Ms Chen is also a person who suffers from a significant degree of mental unwellness and although no specific diagnoses is before the Tribunal it is quite clear that she is not a person who is always fully in control of her thought processes nor at times able to focus coherently on matters immediately before her.
At the hearing she was unable to answer some simple questions and had considerable difficulty following Tribunal procedures, even with the assistance, from time to time, of a Mandarin interpreter. Her inability to give coherent evidence on her own behalf is a cause of major concern to the Tribunal and the Tribunal believes that in the absence of competent legal representation, any full hearings on the merits (now scheduled for March 2019) would be rendered potentially meaningless.
For example Ms Chen was unable to be precise about where she actually resided (she answered “in a higher world”) or where she slept last night (her answer, “what is the relevance of that?”). She stated, when asked about her current income that it was “minus” but that was because she gave all that she had to “homeless people who sleep in my homes”.
The Tribunal’s concerns in this matter were, very properly, supported by comments from the Respondent’s representative at the hearing.
Concerns about the impact of proceedings, especially in terms of potential debt recovery were acknowledged by the Tribunal at first instance when this matter was before it in August 2018.[1]
[1] Section 37- Tribunal Documents at [17].
It is unfortunate that, in the absence of legal representation and hence in the absence of a well presented statement of Ms Chen’s case that the Tribunal is forced to proceed simply on the material which has been formally presented to it by way of evidence.
FACTUAL BACKGROUND
Although the specific details of Ms Chen’s appeal relate to the cancellation of her DSP, this payment and related issues of over-payments are part of a larger suite of social service payments some of which were initially granted as far back as 1999 and 2006.
Relevantly, the Tribunal was informed by the Respondent that Ms Chen had first been granted the DSP on 19 August 2006 on the basis that she was suffering from some form (unspecified) of mental illness and her DSP payments continued, without interruption, until the cancellation decision of 15 March 2018.
·On 15 March 2018 a decision was made to cancel Ms Chen’s DSP as from 15 March 2018.
·On 16 March 2018 a decision was made to raise a debt against Ms Chen for overpayment of the Pensioner Education Supplement (PES) for the period 17 January 2017 to 1 December 2017.
·A further decision was made on the same day to raise a debt for overpayment of the same allowance from 2 December 2017 to 2 February 2018.
·On 19 March 2018 a decision was made to raise a debt against Ms Chen for overpayment of Newstart Allowance (NSA) for the period 11 October 1999 to 18 August 2006.
·A further decision was made on the same day to raise a debt against Ms Chen for overpayment of the DSP from 19 August 2006 to 2 March 2018.
These decisions were reviewed by an Authorised Review Officer (ARO) of the Department on 2 July 2018. In that decision the ARO confirmed the various cancellations and the raising of debts, but in relation to the latter, some of the figures were varied.
The final decision of the ARO in terms of the debts was as follows:
1.PES debt (17.01.17 to 01.12.17) = $ 1,421,81
2.PES debt (02.12.17 to 02.02.18) = $ 280.80
3.NSA debt (11.01.99 to 18.08.06) = $ 66,020.98
4.DSP debt (19.08.06 to 02.03.18) = $ 256,924.56.
In total this amounted to a debt owed by Ms Chen in the sum of $ 324,648.15.
On 29 August 2018, the Social Services and Child Support Division of this Tribunal (AAT1) affirmed the ARO’s decision.
On 22 November 2018 Ms Chen appealed to this Tribunal against the decision of the AAT1 in respect to the cancellation of her DSP.
THE ISSUE
The only issue before the Tribunal is whether a stay of the decision under review should be granted. In effect the Tribunal must determine whether or not Ms Chen is eligible for arrears since cancellation of the DSP from 15 March 2018 (the date of cancellation) and ongoing payments until the decision of the Tribunal on the substantive application comes into operation.
REASONS FOR THE CANCELLATION OF THE DSP: MS CHEN’S ASSETS
Payment of the DSP is calculated at a rate prescribed in section 1064 of the Social Security Act 1991 (the Act). It contains both an income and an assets test such that once a prescribed threshold is met, an applicant is no longer eleigible for the pension.
Where a person is involved in the control of, or as a beneficiary of a Trust, calculations of their pension entitlement are covered by Part 3.18 of the Act (including section 1207V which relates to control of a Trust). Specific calculations are made with reference to the provisions of the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2017.
A review of Ms Chen’s eligibility established that she was in control (for all legal purposes) of a trust known as the Peyronneau Family Trust (PFT), established on 4 August 2010, which in turn may or may not have, replaced a previous trust known as the Chia-Huey Chen Family Trust (CFT) which was established on 5 February 1999.
The PFT owns assets in terms of six properties in New South Wales and Queensland all of which appear to be unencumbered. The total purchase price of these properties, acquired between February 1999 and October 2017 was $872,000.
In addition Ms Chen holds at least 13 separate current bank accounts with seven different banks. They were opened between July 2002 and August 2017.[2] At various times she may have held or operated up to 51 such accounts.
[2] Details are provided in the Respondent’s Stay of Decision Submission at [4.5] and [4.11]. Details are not disputed by Ms Chen.
On 28 March 2018 Ms Chen established a self-managed superannuation fund (YPS Superfund Pty Ltd) of which she is the sole director, secretary and shareholder of the trustee company.[3]
[3] Section 37 Tribunal Documents at [745].
As best as she could, Ms Chen argued before the Tribunal that she was not the beneficiary of any of these Trusts; that she was not the actual “owner” of any of the properties and that the numerous bank accounts were either deposits made on behalf of third parties or accounts with zero balances.
These are not matters for the Tribunal’s determination at this point – they are matters reserved for determination at the substantive hearing of this matter.
Ms Chen makes several further claims in relation to her assets, each of which is contested. In the first instance she claims that she has a debt of 9,600,000 French francs (in the order of $A 2.6 million) to her husband (Nicholas Peyronneaau) contracted in Paris on the day of their marriage, 24 March 1995. Both the Respondent[4] and the AAT1 expressed a degree of scepticism about the validity of this claim. Ms Chen also claims a substantial debt owed to her mother.
[4] Respondent’s Stay of Decision Submission at [4.13].
It is also a matter of dispute as to the extent to which the Trusts referred to above are valid trusts in terms of treatment of their assets for the purposes of Social Security legislation. Were they to be so, then the deeming provisions of part 3.18 of the Act would be enlivened.
STAY APPLICATIONS
Stay applications may be brought under section 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) which provides:
(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.
It is important to distinguish matters which are relevant for the Tribunal’s consideration in stay applications from those which are not.
In particular, the Tribunal, in stay applications, is not concerned with a merits review of the original decision under appeal, nor with a detailed examination of matters which will ultimately have to be considered by the Tribunal in any full hearing.[5]
[5] Secretary, department of Employment and Workplace relations and Anastasiadis [2007] AATA 1065; Re Dart and Director-General of Social Services (1982) 4 ALD 553.
What is central to a stay application is the extent to which a stay is necessary, in the express words of s. 41(2) of the AAT Act “for the purpose of securing the effectiveness of the hearing and determination of the application for review.”
It is also important that the Tribunal consider the interests of “any persons who may be affected by the review”.
The focus on this central issue was affirmed by the Federal Court in Madafferi where, in relation to an analogous provision in migration legislation the court described as “the primary question” in a stay application, how such a decision “will impact in any way on the effectiveness of the hearing and determination of the appeal.”[6]
[6] Mafafferi v Minister for Immigration and Multicultural Affairs [2001] 63 ALD 373 at [24].
Something akin to a “check list” of items for consideration in stay applications was provided by then AAT President Downes in Scott[7] as follows:
Application having been made for a stay of proceedings under s 41 of the Administrative Appeals Tribunal Act 1975, it is nevertheless incumbent upon me now to consider whether a stay is appropriate. In considering the application, it is appropriate for me to consider a range of matters, including:
1. The prospects of success.
2. The consequence for the applicant of the refusal of a stay.
3. The public interest.
4 The consequences for the respondent in carrying out its functions depending upon whether a stay is granted or not.
5. Whether the application for review would be rendered nugatory if a stay were not granted.
6. Other matters that are relevant, amongst which I would include the length of time that the ban has already been in place and the gap between today and the hearing of the application.
[7] Scott v Australian Securities And Investments Commission [2009] AATA 798 at [4].
The issues for the Tribunal’s consideration in stay applications has also been elucidated by Senior member Taylor SC in Panganiban[8] to include:
[8] Panganiban and Australian Securities & Investments Commission [2016] AATA 703 at [7].
oan applicant’s prospects of success, in obtaining a materially different outcome as a result of the review proceeding;
othe functions and responsibilities of the statutory decision maker, the nature and purpose of the reviewable decision, and the public interest in relation to it;
othe reasons proffered to support, or oppose, the stay application, and the potential practical consequences of any stay;
othe practical consequences of the decision under review (to the parties and to any interested persons), unless its operation is the subject of a relevant stay, after taking into account:
i.conditions that might be imposed as a term of any stay;
ii.the timing of the reviewable decision, the application, and any likely review hearing;
iii.the ability of the applicant to pursue the review proceedings effectively; and
iv.the likely practical utility of any favourable review outcome.
These two lists encompass essentially the same material and the Tribunal proposes to consider this application against the tests outlined in Scott.
Before doing so the Tribunal notes that the Respondent urged that the question of “hardship” (in this instance meaning essentially financial hardship) should also be taken into account. The Tribunal, with respect, even after close reading of the authorities advanced on this point by the Respondent, must take this as a relevant matter only to the extent that it may impact upon the ability of the Applicant to secure a full and adequate hearing of their claims at the substantive hearing on the merits.[9]
[9] Re Commonwealth Banking Corp and Iannello (1988) 15 ALD 418 at [420].
However this is at least in accord with comments of that Deputy President Forgie, in reference to the “check list” in Scott observing that it “should not be regarded as a comprehensive list of all matters that may be relevant in a particular case.”[10]
[10] Trades College Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 1703 at [38].
The Tribunal also notes however that while the Respondent outlined a position to the effect that the Applicant would not suffer any financial hardship were the stay not granted,[11] it withdrew from this position during the course of the hearing.
[11] Respondent’s Stay of Decision Submission at [4.3]-[4.4].
THE PROSPECTS OF SUCCESS
Although there is some recent authority suggesting that “Prospects of success have no place”[12] in the considerations of the Tribunal, nevertheless it has been the Tribunal’s past practice to give them at least some consideration, albeit within the strictures of section 41(2) of the AAT Act.
[12] Rust-Oleum Australia Pty Ltd and Australian Pesticides & Veterinary Medicines Authority [2017] AATA 298 at [36] per DP Forgie.
As already stated the Tribunal, at this stage, is not concerned to sort out the dispute between the parties, especially in the complex area of determining the validity or otherwise of the various Trusts. What it must do is examine whether, prima facie, the evidence before it in support of the cancellation decision is of sufficient strength to be convinced that it would sustain the original decision in a full hearing. In the alternate, does the evidence, prime facie, suggest that Ms Chen would be able to demonstrate that she does not possess (or beneficially control) the assets which are assigned to her by the Department and which render her ineligible for DSP payments.
The Respondent argues that the evidence of Ms Chen’s property holdings and bank accounts which it has set out in its Submission should be taken at face value. Were this to be the case then the Tribunal agrees that her prospects of success would be very limited. On the other hand, were it to be established that Ms Chen is not a beneficiary or in control of any Trust, or that the various bank accounts are as she describes, then her prospects would be far greater.
In her own evidence Ms Chen made the point that her own mental health issues precluded her from serving as a Trustee of any properly managed Trust, let alone be in a positon of control. Again, were this found to be the case, then her prospects of ultimate success would improve materially.
CONSEQUENCES FOR THE APPLICANT IF STAY REFUSED
Although the immediate matter before the Tribunal is the stay of the DSP cancellation, it must be recognised that this is inextricably bound up with the question of whether, if sustained, a significant debt is raised against Ms Chen. In turn, there is nothing before the Tribunal to suggest whether or not the Department would pursue or waive that debt (in whole or in part).
What is clear however, is that were the cancellation to be stayed, and were Ms Chen to be unsuccessful at the merits hearing, then both a further debt would have accrued to her, as well as there being further unjustified expenditure of public monies.
In the absence of any reliable evidence about Ms Chen’s current financial status, all such matters being in dispute, the Tribunal is hardly in any position to give proper assessment to what the impact of denial of the stay would be on her economic position. It does however believe that it would add substantially to the psychological and emotional burdens under which she is clearly labouring at this stage.
THE PUBLIC INTEREST
Clearly there is a public interest in any welfare payment being made only in accordance with the authorising legislation. As the Tribunal said in Metro College
“The regulatory regime assumes there is a public interest in ensuring these programs are properly run according to recognized standards.”[13]
[13] Re Metro College of Technology Pty Ltd and Australian Skills Quality Authority (unreported) [2015] Application 2015/6137 at [10].
This is part of the Tribunal’s wider remit to support the principles and processes of “good government” throughout all areas of public administration.[14]
[14] Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 at [334] per Smithers J.

There is of course, also a public interest in ensuring the people who have to deal with/live with potentially debilitating mental health issues are not subjected to further disadvantge through the operations of the legal and justice systems, including those focused upon administrative matters.
CONSEQUENCES FOR THE RESPONDENT IF STAY REFUSED
These arise in relation to the possible continuation of unauthorised payments and the possible addition to debts which may need to be recovered dependent upon the outcome of the substantive hearing.
This issue was clearly articulated by Senior Member Taylor in Panganiban[15] as follows (citations omitted)
The precondition requiring the Tribunal to take into account “the interests of any persons who may be affected by the review” ordinarily requires the Tribunal to have regard to the decision maker’s position in relation to the stay application: AAT Act s 41(4). Together with the basic criteria for the exercise of the stay power, it also requires the Tribunal to have regard to the statutory scheme relevant to the reviewable decision. This is because the statutory scheme is likely to be critical to a proper understanding of both the practical consequences of the reviewable decision, and the relevance of the public interest to that decision, and to the exercise of the stay discretion.
The nature of the procedures involved in the reviewable decision, the specificity of the findings the decision involves, and the interests the exercise of the statutory power are intended to serve, may provide a proper basis for refusing a stay application. They are particularly likely to do so where the available material does not conduce to an appropriate degree of satisfaction that the review process has a substantial prospect of a more favourable outcome.
[15] Panganiban and Australian Securities & Investments Commission [2016] AATA 703.
As already indicated in reference to public interest considerations, the integrity of regulatory schemes and the central role of the systems regulator are proper matters for the Tribunal’s consideration.
Nevertheless, in the overall scheme of things the Tribunal does not believe that any prejudice to the Respondent would be of significant magnitude.
PROSPECTS OF RENDERING THE REVIEW NUGATORY
This is the matter which is of primary concern to the Tribunal, given the express provisions of section 41(2) of the AAT Act. The Tribunal has already expressed its concern about the validity of any such merits review having legitimacy given the capacity of the Applicant and the absence of any legal representation on her behalf.
The Respondent, in order to assist the Tribunal, raised the question of whether or not the Applicant needed access to her current level of DSP payments in order to be able to consider engagement of some form of legal representation at the substantive hearing. Ms Chen advised that she had been in contact with Legal Aid but this had been without success. It was suggested that she seek internal review of that legal aid decision, but the Tribunal cannot be satisfied that such a suggestion will necessarily be followed-up. Similarly there can be no guarantee that were Ms Chen’s DSP to be continued, that any such income would be directed to the matter of legal representation at some date in the future rather that used for other purposes, nor is the Tribunal aware of the various sums of money that would be involved in any such arrangement.
It must be recognised that it is not the issue of this stay application per se which raises all these difficult issues for Ms Chen – they will be apparent were the stay to be granted or not.
OTHER MATTERS – THE INTERESTS OF OTHER PARTIES
There do not appear to be any matters under this heading which require that attention of the Tribunal.
DISCUSSION
In this extraordinarily difficult case the Tribunal is faced with the dilemma that the Respondent puts to it certain information in relation to both the assets and the income of Ms Chen. She denies that she either owns or controls the properties or the relevant bank accounts, but she is in no position, at this stage, to put coherent evidence to the Tribunal to substantiate her claims.
It is the Tribunal’s assessment that, as of the date upon which it is required to make a decision, and with the material which is before it[16], especially Ms Chen’s appearance as a witness[17], she would suffer considerable disadvantage were the stay not granted and this disadvantage would be very likely to render the substantial merits hearing nugatory.
[16] Shi and Migration Agents Registration Authority [2008] HCA 31.
[17] Noting the importance which might be attached to the Tribunal’s access to an applicant as a witness where this was not the case for the original decision-maker, Re Georges and Minister for Immigration and Ethnic Affairs [1978] AATA 63 per Fisher J.
On the other hand, while appreciating the Respondent’s proper concern for the protection of the revenue, the integrity of the DSP system and the possibility of Ms Chen incurring further debt to the Commonwealth, any disadvantage which it might suffer were the stay to be granted would, in the greater scheme of things, be relatively insubstantial.
DECISION
The Tribunal grants the Applicant’s request for a stay of the decision of the Social Services and Child Support Division of the Tribunal of 29 August 2018 in respect to the cancellation of the Applicant’s DSP. It is ordered that any DSP arrears are to be paid to the Applicant from the original cancellation date of 15 March 2018 and ongoing payments of DSP are to be paid to the Applicant from the next day on which social security benefits are paid up until the decision of the Tribunal on the substantive application comes into operation.

I certify that the preceding 60 (sixty) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

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Associate
Dated: 20 December 2018

Date(s) of hearing: 18 December 2018

Solicitors for the Respondent: Dr S Thompson, Department of Human Services

Date(s) of hearing:	18 December 2018
Solicitors for the Respondent:	Dr S Thompson, Department of Human Services