Cvitan and Secretary, Department of Family and Community Services

[2002] AATA 1314

DECISION AND REASONS FOR DECISION [2002] AATA 1314

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No  W2002/35

GENERAL  ADMINISTRATIVE  DIVISION     )          
           Re       Jakov Cvitan        
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES        
  Respondent

DECISION

Tribunal        Mr Murray Allen (Member)           

Date 18 December 2002

Place Perth

Decision       The Tribunal: Affirms the decision of the Social Security Appeals Tribunal dated 3 January 2002.          

…...........(sgd M Allen).......................
  Member
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – aged pension – portability - whether the reasons for leaving Australia were reasonably foreseeable at the time of arriving in Australia – incorrect advice about portability of pension not an unforeseeable reason for the purposes of ss1220(3) – comment regarding appropriateness of compensation payment under scheme for Compensation for Detriment caused by Defective Administration or an ex gratia payment.
Social Security Act 1991 s 1220
Burnet and Director-General of Social Services (1982) AATA 0644

REASONS FOR DECISION

18 December 2002   Mr M Allen, Member

1. This is an application made by Mr Jakov Cvitan (through his representative, Mr Miroslav Srdarov) for review of a decision made on 3 January 2002 by the Social Security Appeals Tribunal (the SSAT).  On that day the SSAT affirmed the decision of a delegate of the Secretary of the Department of Family and Community Services ("the Secretary") made on 29 May 2001 to cancel payment of the aged pension ("the pension") with effect from 30 March 2000 that had prior to that time been paid to Mr Cvitan.

2. At the hearing of the application on 29 October 2002 Mr Srdarov represented Mr Cvitan and the Secretary was represented by Mr Jones from Centrelink's Advocacy and Administrative Law Team. The Tribunal received into evidence the documents ("the T documents") lodged by the Secretary in accordance with s37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) (T1 to T11). Oral evidence was given by Mr Srdarov. Mr Cvitan, who resides in Croatia, also gave oral evidence to the Tribunal by telephone which was interpreted by an accredited interpreter, Ms Sanja Peric. The Tribunal also received as evidence the following documents:

Exhibit         Description
A1                  Report from Dr Ukalovich (17 May 2000)
A2                  Report from Dr Atlagic (19 May 2000)
A3                  Letter from Mr Cvitan to Centrelink (undated)
A4                  Certificate from Travelworld Fremantle(undated)
A5                  Statutory declaration by Miroslav Srdarov (3 July 2000)
R1                  Computer printout extract of travel movements for Mr cvitan
R2                  Centrelink computer record extract (27 January 2000)
R3                  Statement made by Mrs Cvitan to Centrelink (4 February 2000)
R4                  Letter from Centrelink to Mr Cvitan (3 April 2000)
R5                  Centrelink computer extract (14 April 2000)
R6                  Letter from Centrelink to Mr Cvitan (28 April 2000
R7                  Centrelink computer extract (29 May 2000)
R8                  Letter from Centrelink to Mr Cvitan (7 June 2000)
R9                  Letter from Mr Cvitan to Centrelink (29 June 2000)
R10                Letter from Centrelink to Mr Cvitan 7 September 2000)
R11                Centrelink computer extract (27 September 2001)
R12                Letter from Centrelink to Mr cvitan (28 September 2001)
R13                Letter from Malaysia Airlines to Centrelink (3 September 2002)

I pause to observe that the documents R1-R13 should have been but were not included in the T documents originally filed by the Secretary.       
Background  and issues for the Tribunal

1. Mr Cvitan is an Australian citizen who was born in Croatia in 1935 and came to Australia in 1956. He lived and worked here until 1984 when he returned to Croatia, where he remained until he returned to Australia in 1989.  He lived in Australia until May 1992 when he returned to Croatia where he lived (apart from a period of two months in 1995 in Australia) until he and his wife returned to Australia on 2 December 1999.

2. In January 2000, when he turned 65, Mr Cvitan applied for and was granted an Australian aged pension. In mid February Mr Cvitan was informed (wrongly) by Centrelink that he could return to Croatia and continue to receive his pension. He acted on that advice and left Australia to return to Croatia on 30 March 2000. Following some correspondence between Centrelink and Mr Cvitan his pension was cancelled with effect from 30 March 2000 pursuant to s1220(1) of the Social Security Act 1991 ("the Act") on the basis that Mr Cvitan had left Australia within 12 months of his arrival and, hence, was not eligible to receive a pension during any time that he was outside Australia.

3. That decision was affirmed on internal review and by the SSAT.

4. It is not in dispute that Mr Cvitan resumed residence in Australia in December 1999 (see point 4 of the Secretary's Statement of Facts and Contentions and T8, page 22) and I did not understand the Secretary to argue that Mr Cvitan was not entitled to receive the aged pension when it was granted to him in January 2000. There was some comment at the hearing about the original entitlement in a context that I will return to at the end of these reasons (para XXX below). It is sufficient to say at this point that the only issue before the SSAT and this Tribunal has been whether the decision to cancel Mr Cvitan's pension was the correct or preferable one – specifically whether the Tribunal should exercise the discretion available to the Secretary under s1220(3) of the Act to determine that s1220(1) should not apply to Mr Cvitan because the reasons for leaving Australia before the end of the 12 month period arose from circumstances that could not be reasonably be foreseen when Mr Cvitan returned to Australia.

5. So far as is relevant, at the time of the making of the decision concerned s1220 of the Act provided as follows

   "No portability where claim based on short residence
   1220.(1)  If:
   (a)       a person is an Australian resident; and
   (b)       the person ceases to be an Australian resident; and
   (c)       the person again becomes an Australian resident; and
   (d)       within the period of 12 months after the person again becomes an Australian resident, the person is granted, or is transferred to:

   (i)        an age pension; or

   (ii)       a disability support pension; or

   (iii)      a bereavement allowance; and
   (e)       after the pension or allowance is granted, or the person is transferred to the pension or allowance, as the case may be, but before the end of that period of 12 months, the person leaves Australia; and
   (g) there is no determination in respect of the person under subsection (3);

   a pension or allowance based on that claim is not payable to the person during any period during which the person is outside Australia.

   1220.(3)  The Secretary may determine that subsection (1) …is not to apply to a person if the Secretary is satisfied that the person's reasons for leaving Australia before the end of the 12 month period arose from circumstances that could not be reasonably foreseen when the person returned to or arrived in Australia."

The evidence

1. Mr Srdarov gave evidence that he was approached by Mr Cvitan in mid-February 2000 for assistance.  Mr Cvitan was upset, telling Mr Srdarov that  Centrelink was asking him to sign some sort of a declaration that he would never return to Croatia if he was to be eligible for the pension.  This, so Mr Cvitan told Mr Srdarov, was quite unreasonable and was different treatment from that experienced by other people that Mr Cvitan knew.  Mr Cvitan asked Mr Srdarov whether he knew anything about such a requirement, which he did not, and whether he could help clarify the position with Centrelink about possible portability of the pension. 

2. Mr Srdarov telephoned a person he knew at Centrelink's Fremantle office and was referred to a more senior person. That person gave him the contact details of Centrelink's international section in Hobart. Mr Srdarov telephoned that office and spoke to a Mr Wakefield. He gave Mr Wakefield Mr Cvitan's pension number and asked for information about whether and when Mr Cvitan could receive a pension whilst living in Croatia. Mr Wakefield checked Mr Cvitan's position and informed Mr Srdarov that Mr Cvitan could leave Australia immediately for Croatia and would continue to receive his pension in that country. Mr Cvitan should call into the Centrelink office in Fremantle the day before he left Australia. Mr Srdarov asked for this advice to be put in writing and that resulted in a letter from Centrelink to Mr Cvitan dated 18 February 2000 (T5), which was signed by Mr Wakefield and confirms the position as set out above. It purports to be a departure certificate issued under s1219 the Act (reciting that Centrlink has been informed of the intended departure from Australia and confirms that the Secretary's delegate is satisfied that Mr Cvitan is qualified to receive a pension whilst outside Australia).

10.About three weeks after Mr Cvitan left Australia (on 30 March 2000) Mr Srdarov received a telephone call from him and was informed that Mr Cvitan had been informed by Centrelink that he could not receive his pension. Mr Cvitan told him that he was prepared to return to Australia if that was necessary. Mr Sdarov telephoned Centrelink and spoke to Mr Wakefield.  He was told that a mistake had been made in the earlier advice.  In response to the offer to return to Australia Mr Srdarov was told by Mr Wakefield that Mr Cvitan should not return to Australia because he may not get his pension restored. 

11.So far as Mr Srdarov knew, Mr Cvitan and his wife intended to remain permanently in Australia when they arrived.  When Mr Cvitan first spoke to him he (ie Mr Cvitan ) was aware of the need to stay in Australia for at least 12 months and he was happy to do so.  However, Mr Cvitan was agitated about what he thought was different treatment and the reason for returning was simply that Centrelink had advised that he was able to do so.  Mr Srdarov thought, but was not sure, that he had seen the declaration about not returning to Croatia that Mr Cvitan was upset about.  He could not now locate such a document.  Mr Srdarov was unaware of any medical reason for Mr Cvitan wanting to leave Australia.  The issue of whether there were any medical reasons only arose later when Centrelink sought information about the reasons for leaving.  Mr Wakefield had asked Mr Srdarov to ask Mr Cvitan whether there were any other reasons for returning (such as health ones) and Mr Srdarov had arranged to get a medical report from Mr Cvitan's Australian doctor (A1).

12.Mr Cvitan's evidence as interpreted was that he had not returned to Australia simply to get a pension.  As an Australian citizen he was entitled to visit this country and because he had worked here for many years and paid taxes he thought he was eligible to receive the pension.  He was aware of the requirement to stay here for at least 12 months and he was happy to stay more or less permanently – but did not think that would prevent making trips back to Croatia.  He was upset about what he saw as a demand never to return to Croatia and when he heard from Centrelink (via Mr Srdarov) that he was able to return to Croatia immediately and receive the pension there he decided to return. He had not been well in Australia, spending two of the four months here in bed, and although the climate in Croatia suited him better than the Australian climate that had not been the reason to return. 

13.Later in his evidence Mr Cvitan said that his doctor in Australia had told him that he needed an operation on his shoulder (which he had injured many years before whilst working in Australia) but that he would have to wait several months before he would be able to have it.  One reason for returning to Croatia was to have the operation and he had undergone that after his return.  

14.Various documentary evidence is also relevant and can be summarised as follows:

(a)On 4 February 2000 Mrs Cvitan provided a statement to Centrelink (R3) in support of the pension application.  It records that her husband was unable to attend the Centrelink office because he had a sore back and was at the doctor; that they returned to Australia "because the situation in Croatia is difficult and we have no money.  We intend to remain in Australia permanently"; that they were living in the house of a friend while she was away and that on her return they would rent a house or come to an arrangement with her as she is a widow and lives alone; that Mrs Cvitan understood that they could not leave Australia for 12 months or they may have to repay pensionmoney; and that they have a family home in Croatia that their father was living in.

(b)On 3 April 2000 Centrelink wrote to Mr Cvitan in Croatia seeking information about the reasons for returning to Croatia (R4).

(c) A response was received on or about 14 April 2000 and recorded in Centrelink's computer to the effect that "I did not planned to return overseas.  The reason was a my illness.  I have to have a operation."(sic) (R5)

(d)Centrelink decided it needed further information and wrote to Mr Cvitan again on 28 April 2000 with specific questions about the type of illness, when it was diagnosed, when the doctor advised an operation was needed, who is the doctor, when will the operation occur.(R6)

(e)That resulted in the production of two certificates from medical practitioners.  The first, dated 17 May 2000, from Dr Ukalovich of Kardinya, certified that he ad treated Mr Cvitan for hypertension, gout, non-nsulin dependent diabeties and a complete tear of the left shoulder tendon (A1).  The second, dated 19 May 2000, was from Dr Atlagic in Croatia and was in the Croatian language.  It was to the effect that Mr Cvitan required long term physiotherapy and psychological treatment, recommended surgery and recorded that he had heart problems and high blood pressure (A2).  Mr Cvitan also sent a facsimile to Centrelink (A3), a significant passage of which was as follows (after referring to the many years that he had worked and paid tax in Australia):

"I was sick and I have back problem many years ago.  I still have problem with the back.  At that time [ie when living and working in Australia in the past] I could go to the invalid pension but I didn't."

Mr Cvitan also advised in that facsimile that he had not worked in any country other than Australia and the only pension that he could receive would be from Australia.

(f)Document R7 records the decision of a Centrelink officer on 29 May 2000 to cancel the pension on the basis that any medical condition was present prior to arrival in Australia and there was nothing to substantiate an unforeseen circumstance.

(g)For the purposes of having the decision reviewed, on 3 July 2000 Mr Srdarov made a statutory declaration in which he described his contact with Centrelink on behalf of Mr Cvitan in a way that is consistent with his evidence outlined above (A5).

(h)In order to have the decision reviewed Mr Cvitan wrote to Centrelink on 27 October 2001 (T11).  As well as referring to the incorrect advice received from Centrelink, the letter contains the following  statements:

"I first arrived in Australia in 1956.  I worked for more than 30 years and eventually due to health problems I moved back to my country of birth Croatia in 1995.  In December I returned to Australia with the full intention of remaining in Australia for an extended period of time.  I applied for the age pension in January 2000, which was granted to me.  As I said before I had every intention of remaining in Australia, but as my health seemed to be deteriorating I enquired with Centrelink whether it was possible for me to return to Croatia and have my pension paid to me overseas.  I was informed by Centrelink that I may do so."

(i)Document A4 was produced by Mr Srdarov.  It is a certificate from a travel agent in Fremantle to the effect that Mr and Mrs Cvitan left Australia on one-way tickets from Perth to Split in Croatia.  A copy of the relevant ticket was attached.  This document was produced to counter an assertion in the Secretary's Statement of Facts and Contentions that "Mr Cvitan did not intend to prolong his residency in Australia in that he entered Australia with his return ticket."

Submissions

15.Mr Srdarov submitted that Mr Cvitan left Australia only because Centrelink had informed him that he was free to do so without affecting receipt of the pension.  The medical evidence had been generated later in response to the request from Centrelink for any other reasons to leave Australia.  Mr Cvitan would have stayed in Australia had he been advised correctly by Centrelink.

16.Mr Jones acknowledged that the advice given to Mr Cvitan was incorrect, but submitted that, because the departure from Australia had been within the 12 month period, the payment of the pension could not be continued after the departure unless a determination could be made under s1220(3). The evidence regarding the actual reasons for departure was inconsistent but, to the extent that there was evidence about medical reasons for departing, it was clear that Mr Cvitan's medical conditions were longstanding and any need to obtain medical attention should be regarded as reasonably foreseeable. However, the better view of the evidence was that the need to obtain medical treatment was not the reason for leaving Australia.

Consideration of the issues

17.I accept Mr Srdarov's evidence about his dealings with Mr Cvitan and that, so far as he could deduce, Mr Cvitan's only significant reasons for leaving Australia was his agitation about being asked to sign something that he thought prevented him ever returning to Croatia and the advice from Centrelink that he could do so and continue to receive his pension.  On the balance of probabilities I consider that no such demand was ever made by Centrelink.  Rather, I believe that Mr Cvitan must have misunderstood the requirement that he sign some form of acknowledgement of his understanding of the 12 month rule – along the lines of that which his wife had signed on 4 February 2000 (R3).  That misunderstanding started a chain of unfortunate events that has been to the great disadvantage of Mr Cvitan and his wife.

18.I also accept that Mr Cvitan's health was not good and that he needed medical attention while he was in Australia.  However, it is clear that his medical problems have been longstanding and any deterioration or wish to obtain medical treatment in Croatia can not be regarded as not reasonably foreseeable.  However, in any event the need to obtain medical treatment was not, in my opinion, a factor in the decision to return to Croatia.  In my opinion the question of whether there were any medical factors was only considered after Centrelink asked whether there were any other factors.

19.I find that the only material reason for leaving Australia was Mr Cvitan's entirely understandable - but incorrect because of wrong advice received from Centrelink -  belief that he was able to receive his pension in Croatia. The enquiry to Centrelink about the possibility of receiving the pension in Croatia arose because of Mr Cvitan's mistaken concern that he may be required to undertake that he would never return to Croatia.

20.As regards whether incorrect advice about pension entitlement or portability can constitute an unforeseen reason for leaving Australia for the purposes of s 1220(3) of the Act, this Tribunal said the following in relation to the corresponding provision of the Social Security Act 1947:

19. There seems little doubt from the evidence that the applicant was under the impression, however gained, that she had qualified for or had been granted a pension that would be payable to her overseas. As noted above, it is equally clear that she had not so qualified and could only become so qualified by the exercise of the discretion conferred by s.83AD(2). There is, in the Tribunal's view, a basic question whether, even assuming for the present that officers had informed her orally that she had so qualified or had been granted a pension that was portable, and that it was consequent on this information that she left Australia when she did, this could constitute a reason for leaving in the context of s.83AD(2).
20. In referring to a person's 'reason for leaving, or wishing to leave, Australia', the sub-section does not appear to us to contemplate advice as to eligibility for pension as such a reason. We think in the context the sub-section is referring to reasons unrelated to such advice, such as occurrences overseas (e.g. the serious illness of a close relative) which cause the person to cut short his stay in Australia or occurrences in Australia (e.g. the death of a relative with whom the person came back to Australia to live) which frustrated the intention of living in Australia. To apply the sub-section to the Departmental procedures of the grant of pensions and to the discussions that took place in connection with an application for pension is, we think, quite a different matter. Indeed, a close examination of the provision suggests that it is quite inapplicable to such a situation. The Director-General is empowered to determine that sub-section (1) does not apply where he is satisfied that the person's reason for leaving, or wishing to leave, Australia before the expiration of the prescribed period, arose from the unforeseeable circumstances. It is obvious that the Director-General could not exercise his powers in favour of an applicant 'wishing to leave Australia' for the reason that he had been erroneously informed by one of the Department's officers (or anyone else for that matter) that he was entitled to payment of a pension overseas. The proposition has only to be stated to be self-evident. But is it any different where the applicant leaves Australia and then seeks the exercise of the Director-General's discretion on this ground? We think not. We do not think that sub-section (2) is concerned with matters relating to the grant of the pension itself or advice, wherever obtained, in connection with eligibility for the grant of the pension. Burnet and Director-General of Social Services (1982) AATA 0644

1. The comments quoted above are equally applicable in the present case, even though in the present case there is no doubt that Mr Cvitan was mislead by Centrelink. That being so, the pre-conditions for the exercise of the discretion under s 1220(3) of the Act do not exist. However, I would record that if I had been satisfied that the pre-conditions did exist I would have been prepared to exercise the residual discretion in favour of Mr Cvitan because of the following considerations:

   ·    the length of time that he had lived, worked and paid taxes in this country;

   ·    his apparent ineligibility for any pension in any other country;

   ·    the wrong advice given to him by Centrelink;

   ·    my view that he and his wife returned to Australia intending to resume their residence in Australia and that there is no evidence  that  there was any attempt to somehow defraud or manipulate the system.

2. However, in view of the conclusions that I have reached in relation to the provisions of s1220 of the Act the decision under review must be affirmed.
   Further comment

3. In my opinion this case is a most unfortunate one. In my opinion Mr Cvitan has been greatly disadvantaged by acting on what is conceded to have been wrong advice (both orally and in writing) from Centrelink in response to a specific inquiry on an issue that was fundamental to the continued ability to receive the pension. I believe that some comments by me are appropriate. I note that s1220 of the Act has been amended since 2000 in a way that alters materially the relevant requirements.

4. Although the position was not clear, I understood that Mr Cvitan had applied in mid-2000 for compensation for the incorrect advice.  Document T10 at folio 24 (dated 8 September 2000) records that this claim was rejected "as it was determined that customer had never intended to remain in Oz and should not have been granted an Australian pension and therefore had not suffered an economic loss due to the incorrect advice.  There is no right of review for this decision.

5. Thereafter Mr Srdarov apparently took the matter up with his Federal Member of Parliament and in a letter dated 11 July 2001 (T5) the Minister for Family and Community Services wrote to that Member explaining that the compensation decision was rejected for the reason mentioned above, but  advising that she had asked Centrelink to review the claim for compensation on its own merits and not only by consideration of eligibility for the pension.  That lead to a letter from Centrelink to Mr Cvitan dated 28 September 2001 (R12) which advised that a further review of the cancellation decision would be undertaken and that the request for compensation was under consideration.  A subsequent letter dated 10 October 2001 (T9) advised that the original decision was regarded as correct because the reasons for leaving Australia were foreseeable and that the compensation question was still being considered in Canberra.
   26.  In its decision the SSAT added a comment that it believed the case was suitable for a payment of compensation under the scheme for Compensation for Detriment caused by Defective Administration (CDDA).  I understood from Mr Srdarov that an approach had been made to the Commonwealth Ombudsman.  It is unclear to me whether the Ombudsman has made a recommendation to Centrelink, but Mr Srdarov claimed that Centrelink had not finalised the review requested by the Minister.  Whether or not this is so, I wish to express also the opinion that this is an appropriate case for compensation.  As I have noted, the issue of Mr Cvitan's original entitlement to the pension was not in issue in the present proceedings.  Nevertheless, I formed the opinion that Mr Cvitan and his wife did intend to resume residence in this country.  Indeed as late as the letter of 10 October 2001 (T9 ) Centrelink informed Mr Cvitan that it "accepted that you became resident in Australia again when you returned in December 1999."  In my opinion compensation under the CDDA scheme or an ex gratia payment should be made.

   I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of 

   Signed:         ......(sgd V Wong)..........................................
     Associate

   Date/s of Hearing  29 October 2002
   Date of Decision  18 December 2002
   Counsel for the Applicant        Mr M Srdarov
   Counsel for the Respondent    Mr A Jones
   Solicitor for the Respondent    Advocacy & Administrative Law Team,
     Centrelink