Davis and Secretary, Department of Family and Community Services

[2005] AATA 546

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 546

ADMINISTRATIVE APPEALS TRIBUNAL      )

)     No  N2005/294

GENERAL ADMINISTRATIVE DIVISION )

Re THOMAS DAVIS

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Senior Member M D Allen

Date31 May 2005

PlaceSydney

ADMINISTRATIVE APPEALS TRIBUNAL         )       No.      N2005/294
  )
GENERAL ADMINISTRATIVE DIVISION            )

Re          THOMAS DAVIS

Applicant

And       SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal        :      Senior Member M D Allen

Date               :      31 May 2005

Place             :       Sydney

DecisionFor the reasons given orally at the conclusion of the hearing in this matter, the decision under review is set aside and the matter is remitted to the respondent with a direction that the preclusion period be recalculated so that it ceases on the twenty third day of January 2005. 

(Sgd)M.D. ALLEN
  .............................
   Senior Member

CATCHWORDS

SOCIAL SECURITY – preclusion period imposed as Applicant received settlement monies from workers’ compensation claim – whether Applicant was entitled to relief due to “special circumstances” – decision under review set aside and remitted to Respondent with direction that the preclusion period be recalculated so it ceases on twenty third day of January 2005..

Social Security Act 1991 – ss17(3) and 1184K.

Department of Social Security v Ellis (1997) 24 AAR 535

Beadle v Director-General, Social Security (1985) 7 ALD 670.

Groth v Department of Social Security (1995) 40 ALD 541

Dranichnikovic v Centrelink (2003) FCAFC 133

REASONS FOR DECISION

Senior Member M D Allen

1. At the conclusion of the hearing of the above matter the terms of the decision intended to be made and the reasons therefor were stated orally. After service upon the Applicant and Respondent of a copy of the decision that was in fact made, the Respondent pursuant to Sub‑section 43(2A) of the Administrative Appeals Tribunal Act 1975 requested the Tribunal to furnish to the Respondent a statement in writing of the reasons of the Tribunal for its decision.

2.      The oral reasons for decision have been transcribed by Auscript, the Commonwealth Reporting Service.  Whereas those oral reasons may reflect the inelegance of an extempore decision, they are in fact the reasons for the said decision.

3.        The said transcript is annexed hereunto and furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal's decision.

I certify that this and the preceding page are a true copy of the decision and reasons for decision herein of:

Senior Member M D Allen

Signed:          (E.Pope)
          ..................................................................................…………

Associate

Date of Hearing  31 May 2005

Date of Decision  31 May 2005

Solicitor for Applicant  Applicant self-represented

Advocate for Respondent              Ms Susan Mantaring, Department of Family and Community Services

DRAFT DECISION
ADMINISTRATIVE APPEALS TRIBUNAL
By SENIOR MEMBER M.D. ALLEN
No N2005/294
THOMAS DAVIS and SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
SYDNEY, TUESDAY, 31 MAY 2005

MR ALLEN:   By application made the tenth day of March 2005 the applicant seeks review of a decision by a Social Security Appeals Tribunal made the third day of February 2005 affirming a prior determination by the respondent that imposed a lump sum preclusion period upon the applicant from 23 January 2003 to 20 July 2005.  The facts leading up to the imposition of that preclusion period are well set out in the respondent's statement of facts and contentions, basically those facts are that on 30 July 1998 the applicant sustained a serious work injury as a result of which he achieved an award of civil damages in the sum of $303,207.54.

Out of that there was a repayment to the Government Insurance Office of the pre-paid workers compensation payments.  There was also refunded to the respondent part of an aged pension which had been paid between 29 January 2003 and 19 July 2003.  There was then imposed a preclusion period calculated on the economic loss component of the awarded damages.

In these proceedings there has been no challenge to the actual preclusion amount or the sum upon which the preclusion period was calculated but the applicant seeks to have all or part of the preclusion period set aside on the basis that special circumstances exist. The grounds upon which he can seek this is section 1184K of the Social Security Act 1991 which reads inter alia:

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. 

The term special circumstances has been considered both by this Tribunal and the Federal Court in numerous cases.  An overview was given by Carr J in Secretary, Department of Social Security v Ellis (1997) 24 AAR 535 at 539. His Honour stated “

“In Beadle v Director-General of Social Security the Full Court of this Court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of section 102(1A) of the Act which provided for an extension of time in which to claim a family allowance in special circumstances. The Full Court said:

‘Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate.  It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.  The phrase, special circumstances, although lacking precision is sufficiently understood in our view not to require judicial gloss.’

In Groth v Secretary, Department of Social Security Kiefel J after referring to Beadle said:

‘For present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others to take it out of the usual ordinary case, that was I consider the only inquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred there must be some feature out of the ordinary.  The inquiry I have referred to would involve considering what would be the effect if the provision in the question or the principle of liability it creates is applied.’

Later Kiefel J expressly approved the Tribunal's reasoning in holding that Mr Groth's circumstances were not out of the ordinary when Part 3, point 14 of the Act had the same effect on him as it did on other persons qualified to receive a disability support pension. Her Honour added:

‘The Tribunal went on to find that his circumstances and those of his family although difficult did not constitute hardship and they could not be said to be different from other pension recipients.’

The only comment I would make about that passage is that that perhaps it might over-emphasise hardship.  In Dranichnikovic v Centrelink (2003) FCAFC 133 Hill J at paragraph 65 of his judgment stated inter alia:

“Their Honours point out that the question whether there were special circumstances was one for the decision-maker, in that case the Director-General, bearing in mind the purpose for which the power was given.  The reference to the first instance decision from which the words unusual, uncommon and exceptional come was not actually affirmed by the Full Court.”

Interestingly enough in that particular case Kiefel J who was of course the judge in the matter of Groth (supra) agreed with Hill J as did Hely J.  In Groth also, Kiefel J pointed out the rationale behind the preclusion period under the Act.  Her Honour said:

“When an employee suffers from a work injury that results in his inability to work the law requires his employer to compensate him for his lost earnings.  The compensation cost is meant to be borne by the employer and not by the taxpayer.  The compensation payment recipient cannot then double dip and receive benefits from the public purse in respect to the same period of time.”

Now in this matter, the applicant points to special circumstances and they were well set out in the original decision of the Social Security Appeals Tribunal and also in the document which became exhibit A1 in these proceedings.  It was reaffirmed by the applicant in today's proceedings.  Basically his daughter suffers from paranoid schizophrenia, she is a single mother and has two children, one of whom a boy aged 14 is still residing at home.  Because of his daughter's illness and the fact that at times she requires admission to hospital, the applicant has taken upon himself a large part of the care of his youngest grandson.  He has also at times had to give assistance to his daughter because she, due to her illness has not always managed her money well.  For example, at one stage although she is in public housing he found that she had not been paying her rent and he had to make some arrangements with the Housing Commission.

He has been very supportive of his grandson, he is paying small school fees at a Catholic systemic school which of course ensures that he is getting the best education he can provide for him.  He has supported him in many ways and he has also ongoing health problems of his own including prospective dental surgery of the sum of $6000.  On the other hand, it can be said that the daughter herself receives social security benefits and also benefits for the youngest child.

The applicant states he was not advised by his solicitor as to the effective preclusion periods although Centrelink did write to him.  He said at that stage he was then so affected by his injuries he didn't fully appreciate the matter and his solicitor gave him no real advice. 

As this Tribunal has pointed out on several other occasions, the fact that an applicant's solicitor does not advise of the preclusion period is a matter of negligence on the solicitor's behalf and he can take action against his solicitor for professional negligence.  It is not a special circumstance.  Likewise, there are certain health issues referred to by the applicant but again that is not a special circumstance, indeed he received an award of civil damages for his injuries.

In the document that became exhibit A2, is an outline of the applicant's expenditure over the period.  I note also that he has some $40,000 odd still in the bank but of course he now has coming from July when it is reinstated, only his aged pension to support him and also support his grandson with such support as he can give.

It strikes me that there is a degree of special circumstances in this case where the applicant has been supporting his grandson in a circumstance where the child's mother suffers from an illness which results at times of course in her being unable to support or even look after herself both physically and financially.  I think the applicant is to be commended in the support that he gives to his grandson, particularly with regard to education. 

In the figures that have been shown to me over the period of the preclusion period it would seem as opposed to what the applicant has spent, vis a vis the award of damages there has been a shortfall of some $268,000.  As was referred to in Groth, the idea of the preclusion period is so that people don't double dip and therefore the taxpayer is also supporting them at a time when they've received an award of damages to cover the same period.  Likewise, when one has to refer to special circumstances one cannot enter into moral obligations and expect the taxpayer also to make provision for them.

That having been said however I believe that the applicant should not be in a situation where there has been a shortfall.  If on one hand he shouldn't double dip on the other hand there shouldn't be a shortfall.  The best as I can see in fairness is that I will set aside the decision under review and remit the matter to the respondent with a direction that the preclusion period be recalculated so that it ceases on the twenty third day of January 2005.