Conti and Secretary, Department of Family and Community Services

[2005] AATA 1132

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 1132

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No S2004/318

GENERAL ADMINISTRATIVE DIVISION		)
Re		LEE PAUL CONTI

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member L Hastwell

Date16 November 2005

PlaceAdelaide

Decision The Tribunal affirms the decision under review.

..............................................

L HASTWELL
  (Senior Member)

CATCHWORDS

SOCIAL SECURITY – payments, benefits and allowances – Disability Support Pension – lump sum payment – preclusion period – mental health problems – death of child – business failure – circumstances unrelated in any way to preclusion period – whether special circumstances – decision affirmed

Workers Rehabilitation and Compensation Act 1986 (SA) ss 42, 43

Social Security Act 1991 s 1184K

Haidar v Secretary, Department of Social Security [1998] 994 FCA
Re Beadle and the Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary of Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

16 November 2005 Senior Member L Hastwell          

1.      Lee Paul Conti (the applicant) suffered a work related injury in November 1991.  He subsequently received two lump sum payments pursuant to the Workers Rehabilitation and Compensation Act 1986 (SA) (the WRC Act). In December 1993 he was awarded $24,836 pursuant to s 43 of the WRC Act for disability. On 30 May 1994 he received a commutation of weekly payments pursuant to s 42 of the WRC Act in the sum of $63,864. As the second award was for lost earnings or lost capacity to earn, a preclusion period from receiving Social Security benefits was calculated based on 50 percent of that sum, namely the sum of $31,932. He was then precluded from receiving payments under the Social Security Act 1991 (the Act) for 60 weeks commencing 1 May 1994 and continuing until 24 July 1995.  That decision was made by letter dated 19 July 1994.

2.      On 23 December 1996 the applicant sought a review of the decision, and on 4 February 1997 that decision was reconsidered and affirmed.  It was then reviewed by the Social Security Appeals Tribunal (the SSAT), and on 24 April 1997 the SSAT affirmed the decision under review. 

3.      On 17 August 2004, the applicant made contact with the Department with a view to having the matter reviewed once more.  He lodged an application for review with this Tribunal on 22 September 2004, and on 4 March 2005 he was granted an extension of time within which to bring an application for review of the SSAT decision.

4. The applicant does not challenge the original calculation of the lump sum preclusion period. The sole issue for determination of this Tribunal is whether, pursuant to s 1184K of the Social Security Act 1991 (the Act) part or all of the compensation payment made to the applicant can be treated as not having been made in the special circumstances of this particular case. 

legislation

5.Section 1184K of the Act provides as follows:

“(1)For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:

(a)      not having been made; or

(b)      not liable to be made;

if the Secretary thinks it is appropriate to do so in the special circumstances of the case.

(2)      If:

(a)a person or a person’s partner receives or claims a compensation affected payment; and

(b)      the person receives compensation; and

(c)the set of circumstances that gave rise to the claim for compensation is not related to the set of circumstances that gave rise to the person’s or the person’s partner’s receipt of, or claim for, the compensation affected payment;

the fact that those 2 sets of circumstances are unrelated does not alone constitute special circumstances for the purposes of subsection (1).”

issues

6.      The sole issue for the Tribunal to consider in this case is whether there are any special circumstances that would justify the Tribunal disregarding some or all of the payment made to the applicant in 1994 for the purposes of calculation of the preclusion period.

the hearing

7.      The applicant was represented by Ms Riley from the Welfare Rights Centre.  He gave evidence as did his wife, Maria Conti.  The Department relied on its statement of facts and contentions.  Various exhibits were received into evidence and at the conclusion of the hearing, the Tribunal sought production of the notes relating to an admission of the applicant to Glenside Hospital in 1997.  Those documents were produced and received by the Tribunal on 4 August 2005.  With the parties consent, those notes were received into evidence as Exhibit A6.

8.      It was evident throughout the applicant’s evidence that he had a poor memory for dates and time sequences.

9.      The applicant said that at the time that he agreed to his settlement he was not legally advised as to the possibility of a preclusion period.  He and his wife committed to purchasing a property shortly before he settled his case and were told of their preclusion from benefits just before they were due to settle on the purchase of the property.  They had to borrow on their mortgage to manage during the preclusion period as he did not become eligible again to receive benefits until July 1995. 

10.     The applicant recounted the difficulties he had experienced over the years as a result of his back injury that has left him with chronic pain and ongoing disability at a relatively young age.  He said that he was taking painkillers throughout the time that he settled his claim, and in the period after his claim.   He thought that he may have contacted the Department straight after he received the letter advising of the preclusion period, but he acknowledged that his memory was not very good.  The Departmental records show that the first recorded contact with the Department was in December 1996 [T13/35]. 

11.     The applicant recounted suffering from significant depression on and off over the years since his accident.  The surgery to alleviate his symptoms had been unsuccessful and at various times he had been addicted to pain killing medication.  He still takes medication on a daily basis.

12.     During the preclusion period the applicant and his family had borrowed funds on the home mortgage to manage financially as all his compensation money had been used in the purchase of the home.  Some necessary home renovations were done during that time and as soon as he became eligible once more he was reinstated on benefits from 27 July 1995.

13.     In 1997 the applicant was admitted to Glenside Hospital for five days.  He blamed a lot of his emotional difficulties at that time on the preclusion period.  In his evidence he was emphatic that the main reason that he was admitted to Glenside in 1997 was because of the effect on him of the SSAT decision to affirm the original preclusion period.

14.     In 1998 the applicant and a business partner set up an antique and second hand shop.  It was an exciting enterprise for him, and things went well for a while.  However, the business suffered a down turn due to problems with the landlord and ultimately the business had to close.  It appeared from his evidence that it closed in late 1999 or early 2000.

15.     The applicant was extremely distressed by the accidental death of his oldest son, Benjamin, in March 1999.  Benjamin resided interstate, but there had been talk of him coming to work in the business with the applicant.  This was clearly a tragic incident that the applicant still has difficulty coming to terms with.

16.     The applicant’s wife gave evidence and confirmed their current financial position.  She was a straightforward witness and described a very difficult life with the applicant since he had his operation.  She explained that she could not work because her husband took so much Morphine based medication that she could not trust him with the children as he has difficulty staying awake.  She hopes to retrain herself and obtain some employment.  She recalled that he would ring the Department at least once a year about the issue of the preclusion period after it was imposed.

17.     It was clear from her evidence that she managed the household finances.  She was able to give the Tribunal a snap shot picture of their current financial position.  She sells Avon products to supplement the family income which otherwise comprises Centrelink benefits.  She presented as a strong and supportive wife who has stayed in a situation that has at times been very stressful for her.

18.     The Tribunal also received into evidence as Exhibit A2 a statement of Mrs Conti dated 20 July 2005.

19.     The Glenside Hospital medical notes provided some useful evidence for the Tribunal.  In that regard it was clear that it was not an issue with the Department that led to the applicant being hospitalised, but rather a combination of problems that had built up over many years, including his chronic pain, unemployment, drug addiction, domestic problems and unresolved issues about his own parents’ deaths.  It was only at the very end of that five day admission that there was any mention of him having any issue with the Department.

findings of fact

20.     The applicant sustained an injury at work in 1991 that resulted in him having surgery on his back in 1992.  The surgery was not successful and he has continued to have chronic back pain to the extent that his pain is managed with specialist assistance and he continues to take daily medication for pain and depression.

21.     The applicant settled his claim with WorkCover in May 1994.  He may not have been given legal advice about the possibility of a preclusion period.  However, at the time he was taking a lot of pain killing medication, and was anxious to finalise his claim.  It may be that he did not understand or take in the information given to him as to the impact of receipt of a lump sum on his Social Security entitlements. 

22.     In May 1994 the applicant and his wife contracted to purchase a property in Victor Harbor for the sum of approximately $88,000, inclusive of costs.  Their intention was to put his entire settlement sum into the purchase of that property which would leave them with a very modest mortgage.  They were due to settle on the purchase in July of that year. 

23.     The preclusion period from benefits dated from 1 May 1994 to 24 July 1995.   A letter from the Department advising of the preclusion period was sent to the applicant at his Victor Harbor address in July 1994, at around the time the settlement was due on the home. 

24.     The applicant and his wife then borrowed an extra $24,000 on their mortgage to support their lifestyle through the preclusion period.  This took their mortgage to a sum of close to $36,000.

25.     In 1995 the applicant and his wife carried out a bathroom renovation with respect to their Victor Harbor property.  It was an essential renovation because of the poor condition that the wet areas were in.  This may have been carried out during the preclusion period and was one of their outgoings.

26.     The applicant has been in receipt of Disability Support Pension since the preclusion period ended in July 1995.

27.     In December 1996, the applicant made contact with the Department requesting a reconsideration of the decision to impose a preclusion period.  There was no evidence before the Tribunal to support the applicant’s claim that he had made any attempts prior to that date to deal with the Department with respect to the issue of the preclusion period.  His memory was generally unreliable, and the Tribunal is satisfied that his recollection of making regular contacts with the Department before that date is not correct.

28.     In mid 1997 the applicant was admitted to Glenside Hospital for five days.  He presented with suicidal ideation and significant depression, and his issues related to chronic back pain, drug addiction, post operative depression, and financial problems.  The SSAT decision did not feature as a trigger to this admission.  A reference to blaming “the Social Security and other legal matters relating to the work compensation case” appear in an entry on 15 July 1997.

29.     The applicant has been on pain killing and anti-depressant medication for many years to manage pain and his emotional state.  He has received psychiatric assistance.  He has a very supportive wife, who manages the family finances, and he continues to have significant problems with the side effects of the medication that he takes.

30.     The applicant has two dependant children residing with him still, one of whom was born in 1993 and the second of which was born in 1996.

31.     The applicant commenced a business venture with a partner in 1998.  It was unsuccessful for reasons related to problems with the landlord, and eventually that business shut down leaving some further debt for the applicant to deal with.  The debt has been absorbed in the mortgage.

32.     The applicant’s eldest son, Benjamin, died from accidental causes in March 1999, which has contributed to the ongoing depression and emotional difficulties from which the applicant suffers.

33.     The applicant and his wife own their home at Victor Harbor, and the estimated value of that property is $250,000.  There is a $53,000 mortgage secured against that property.  They have a $3,000 debt to GE Finance, and a $4,000 overdraft.  They have a credit card debt of $4,500 to the Adelaide Bank.  The applicant’s wife’s parents have assisted with finances over the years.

34.     The applicant’s wife sells Avon products to supplement their combined Social Security benefits.  Their family income is approximately $1,100 - $1,200 per fortnight.

consideration and application of the law

35. The sole issue for the Tribunal to determine is whether there are special circumstances such that pursuant to s 1184K(1) of the Act, some or all of the compensation payment made to the applicant can be disregarded. This would have the effect of reducing or removing altogether the preclusion period.

36.     The preclusion period ended many years ago and the applicant is currently in receipt of benefits.  The effect of exercising the discretion in his favour would be that the Department would be required to repay a sum of money to him.  The Tribunal notes that in Haidar v Secretary, Department of Social Security [1998] 994 FCA, it was held by Hill J  in the Federal Court that it is not a relevant consideration for the Tribunal in making its determination:

“… I find it impossible to see how the fact that the Government would be required to pay a sum of money to Mr Haidar would be a relevant matter, certainly once the preclusion period had terminated, in deciding to exercise a discretion in a way not overly favourable to Mr Haidar. …”

37.     In the case of Re Beadle and the Director-General of Social Security (1984) 6 ALD 1, the Tribunal said at page 3:

"…

An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of  these descriptions must depend on the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.  This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.

…”

38.     In Groth v Secretary of Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Re Beadle, observed that special circumstances:

"… would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case. … It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. …”

39.     Special circumstances must be considered on a case by case basis.  The Tribunal does not doubt that the applicant has suffered very difficult times over the years.  Nevertheless, the circumstances that he points to as being special arise well after the expiration of the preclusion period and do not have any real connection with the preclusion period.  The only complaint that the applicant raises about the preclusion period is that he was forced to borrow more than he had hoped to borrow to purchase his house.  That in itself did not drive him into any significant hardship.

40.     The Tribunal is mindful of the comments made in Haidar by Hill J where he commented:

“… events after the expiration of the ordained preclusion period could only have relevance as factors to be considered in the exercise of discretion if those facts in some way related to the events occurring during the preclusion period.

…”

41.     The applicant’s back injury and his chronic ongoing pain cannot in themselves amount to a special circumstance.  It was this injury that gave rise to his claim for compensation and to the preclusion period.  It would appear that the applicant’s legal advisers either did not make it clear to the applicant or he did not understand their  advice that he should be wise in the way he dealt with his compensation payment, and hence his commitment to purchasing a home without realising that he would not have all his resources available.  Nevertheless, his mortgage was able to be extended to what remained a relatively modest mortgage for him and his wife to manage during the time of the preclusion period.  That in itself does not make this an exceptional or uncommon case and the applicant remains in the fortunate position of owning his own home as a result of the decision to purchase, and the property remains a valuable asset for the applicant and his wife.

42.     The applicant did not make any attempt to challenge the preclusion period until well after it had finished, and it would appear that he may have fallen into further financial difficulties and he saw a challenge to the preclusion as being a way of obtaining some further funds.  There is no doubt that the applicant himself is not a good financial manager, and has been heavily reliant on his wife to assist him with finances over the years.

43.     The applicant would have the Tribunal believe that the time he spent in Glenside Hospital in mid 1997 was largely the direct result of the SSAT decision.  The Tribunal is satisfied that he has exaggerated this link between his hospitalisation and the SSAT decision.  He was hospitalised for four nights and five days.  There is one mention only of “Social Security”, this being on the very last day before discharge.  The notes show reports of a history of depressive illness, marital problems, pain and drug dependency as being his major problems.  There were also issues relating to unresolved grief about the death of his parents.  At the very end of his admission when he was making plans about how to deal with the future, there is mention of him blaming Social Security and other legal matters relating to his compensation as being part of his problems.  At that stage he was indicating an intention to sell his house and to move to Adelaide, however that did not happen.

44.     The applicant then started a business in 1998.  He has a long standing personal interest in bric-a-brac and collectibles.  He and a friend ran that business, but it ultimately failed because of difficulties that related in no way to his injuries, but to difficulties with the landlord.  The relatively small losses sustained in that business failure were absorbed into some further debt.  At T19/50 there is a statement by the applicant about that venture which suggests that it was an exciting project that worked for a while and then went wrong.

45.     The applicant’s son died accidentally in 1999 in tragic circumstances which added to the significant depression from which the applicant has suffered.  That is in no way connected to the applicant’s compensation claim or the preclusion period, and is a sad and unfortunate event.  That event occurred many years after the end of the preclusion period and has no link with the preclusion period.

46.     The applicant asked the Tribunal to look at a series of unrelated events that occurred after the preclusion period ended as combining to give rise to a special set of circumstances that he says should result in the preclusion period being varied.

47.     The Tribunal had regard to the various authorities on special circumstances.  Each case is based on its own facts and in many of the quoted cases the applicants faced long preclusion periods that extended beyond the date of the hearing, and they were effectively in dire financial circumstances because of unfortunate events that had occurred during the preclusion period.  That is not the case here.  The applicant and his wife own their own home, have a relatively modest mortgage and manage from week to week, although they do have a level of debt that they find uncomfortable.

48.     Things appear to be improving for the applicant and his wife.  She plans to return to work, although the ongoing problem remains that the applicant still uses pain killing medication, and his inability to be able to be left with young children for a long period of time because of the drowsiness that medication causes affects her ability to leave the house for prolonged periods.  His wife remains optimistic about their future, particularly as the children become more self reliant.

49.     The Tribunal has sympathy for the applicant’s position.  It is regrettable that he suffered this injury as clearly he was an intelligent and able person with good health and the injury has changed the course of his life.  Nevertheless he and his wife have a modest, but reasonable lifestyle with an income from the Department which is supplemented by the small earnings of his wife.  All the events pointed to by the applicant are events that post-dated the preclusion period, save for his health condition, which is a product of both the back injury and of many issues, some of which relate back to his early childhood.  The fact that he is depressed and in pain cannot in itself amount to a special circumstance.  The Tribunal does not believe that the unrelated events that have individually occurred since the end of the preclusion period can be considered in this instance to give rise to special circumstances.  The Tribunal does not accept that the SSAT decision contributed in any material way to the applicant’s admission to Glenside Hospital in 1997.

50.     In the circumstances the Tribunal finds that there is nothing unusual, uncommon or exceptional about the applicant’s case that would justify the Tribunal finding that some or all of the applicant’s compensation payment was not made.

51.     The Tribunal affirms the decision under review.

I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member L Hastwell

Signed:         ............J Coulthard.........................................
  Associate

Dates of Hearing  28 July 2005, 18 August 2005
Date of Decision  16 November 2005
Counsel for the Applicant         Ms M Riley
Solicitor for the Applicant          Welfare Rights Centre
Counsel for the Respondent     Mr R Kilderry
Solicitor for the Respondent     Centrelink Legal Services Branch