Fogg and Secretary, Department of Social Services (Social services second review)
[2019] AATA 1099
•23 May 2019
Fogg and Secretary, Department of Social Services (Social services second review) [2019] AATA 1099 (23 May 2019)
Division:GENERAL DIVISION
File Number(s): 2018/1704
Re:Arthur Fogg
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
Decision
Tribunal:Member D K Grigg
Date:23 May 2019
Place:Brisbane
The Tribunal varies the decision under review to the extent that the compensation preclusion period is correctly calculated from 16 August 2016 to 28 December 2021.
......................[SGD]..................................................
Member D K Grigg
Catchwords
SOCIAL SECURITY – compensation preclusion payment – calculation of preclusion period – whether the Tribunal has jurisdiction to revisit calculation of preclusion period - where no special circumstances – decision under review varied.
Legislation
Administrative Appeals Tribunal 1975 (Cth)
Social Security Act 1991 (Cth)
Cases
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Burston v. Melbourne and Metropolitan Tramways Board [1948] HCA 36; (1948) 78 CLR 143
Beadle and Director-General of Social Security (1984) 6 ALD 1
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Drake v Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541
Hajar and Secretary, Department of Social Security (1986) 16 ALD 716
Hneidi And Others v Minister For Immigration And Citizenship (2010) 265 ALR 292
Hussain Hazara and Minister for Immigration and Border Protection (Citizenship) [2018] AATA 159
Kuswardana v Minister for Immigration and Ethnic Affairs [1981] FCA 64, (1981) 54 FLR 334, 35 ALR 186
Metwally v University of Wollongong (1985) 60 ALR 68
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443Secretary, Department of Employment and Workplace Relations and Homewood [2006] FCA 779
Secretary, Department of Family & Community Services v Mourilyan [2002] FCAFC 207
Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67
Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267Secretary, Department of Social Security v Hales (1998) 51 ALD 695
Secretary, Department of Social Security v Thompson (1994) 36 ALD 563
Secondary Materials
Guides to Social Security Law: Social Security Guide (released 20 March 2019) (Cth)
REASONS FOR DECISION
Member D K Grigg
23 May 2019
BACKGROUND AND CLAIM HISTORY
On 13 October 2008 Mr Arthur Fogg (‘Mr Fogg’) suffered an injury at work which resulted in the development of deep vein thrombosis, severe complex regional pain syndrome, a Baker’s cyst and blood clotting. Mr Fogg commenced proceedings in the Supreme Court of New South Wales for damages resulting from his injury. After a protracted trial and appeal proceedings, Judgment was entered in favour of Mr Fogg in the amount of $1,002,734.18 plus costs.[1]
[1] Exhibit 11, Judgment of Fogg v Kane Constructions and Anor [2015] NSWSC 648dated29 May 2015.
On 20 July 2016 the Department of Human Services (“Centrelink”) was notified of the Judgment by the solicitors for Mr Fogg’s employer’s insurance company QBE Insurance Australia Ltd (“QBE”).[2]
[2] Exhibit 1, T Documents, T 17, pages 121 – 124, Letter from Moray and Agnew lawyers dated 20 July 2016.
Centrelink then wrote to QBE advising that it had been determined that Centrelink’s recovery from the matter was nil and that they may now pay Mr Fogg all compensation monies for which they were liable.[3]
[3] Exhibit 1, T Documents, T 18, page 125, Letter from Centrelink to QBE insurance dated 18 August 2016.
On 14 February 2017 Centrelink wrote to Allianz Australia Workers Compensation (“Allianz”) requesting further information regarding Mr Fogg’s compensation claim.[4]
[4] Exhibit 1, T Documents, T 19, page 126, Letter from Centrelink to Allianz dated 14 February 2017.
On 6 March 2017 Mr Fogg’s solicitors advised Mr Fogg that if he applied for any Centrelink payments in the future, a preclusion period may apply, because of the lump sum compensation payment.[5] A preclusion period may apply because during such a period, a potential recipient of Centrelink payments is expected to use the lump sum compensation amount to provide for their own income support. Centrelink also wrote to Mr Fogg directly on 13 December 2013 advising him that any compensation he may receive may stop him from receiving Centrelink payments in the future.[6]
[5] Exhibit 1, T Documents, T 20, pages 127 – 128, Letter from Lough & Wells to Mr Fogg dated 6 March 2017.
[6] Exhibit 1, T Documents, T 13, pages 97--99, Letter from Centrelink to Mr Fogg dated 13 December 2013.
On 21 March 2017 Allianz advised Centrelink that Mr Fogg’s claim had settled and that payments had ceased to be paid to him on 19 August 2016. Allianz confirmed that no lump sum payment was likely in the future.[7] The gross weekly benefits paid to Mr Fogg as a result of his compensation claim between 15 October 2008 and 15 August 2016 were $274,352.18.[8]
[7] Exhibit 1, T Documents, T 21, pages 131 – 132, Centrelink questionnaire answered by Allianz on 21 March 2017.
[8] Exhibit 1, T Documents, T 21, pages 134 – 145, Allianz list of payments for Mr Fogg supplied 21 March 2017.
On 27 March 2017 Centrelink wrote to Mr Fogg to inform him of the effect his lump sum compensation payment (“LSCP”) had impacted on his eligibility for future income support payments. Centrelink advised that as a result of his LSCP it had calculated that he had a preclusion period that started on 16 August 2016 and ended on 13 September 2021. During that period Mr Fogg would be ineligible to receive any income support from Centrelink.[9]
[9] Exhibit 1, T Documents, T 22, pages 146 – 148, Letter from Centrelink to Mr Fogg dated 27 March 2017.
On 29 August 2017 Mr Fogg applied for a review of Centrelink’s decision on the grounds that he:[10]
(a)only received $293,937.13 in compensation out of the total settlement sum;
(b)is significantly disabled and needs extensive care and support; and
(c)has limited mobility and needs crutches and a motorised scooter.
[10] Exhibit 1, T Documents, T 24, pages 151 – 152, Application for review by Mr Fogg dated 29 August 2017.
On 31 August 2017 Lough & Wells Lawyers, Mr Fogg’s solicitors, informed Centrelink that the total judgment (including interest) awarded in favour of Mr Fogg as a result of the Supreme Court proceedings, was $1,084,319.18 and that the amount received by Mr Fogg after workers compensation payback, Medicare payback and legal costs was $283,259.61. Lough & Wells submitted that:[11]
[11] Exhibit 1, T Documents, T 25, pages 153 – 156, Letter from Lough & Wells to Centrelink dated 31 August 2017.
(a)Mr Fogg suffered an extremely serious injury and has been unable to work since the accident;
(b)Mr Fogg would be relying on section 1184K of the Social Security Act 1991 (Cth) (“the Act”) which provides that the Secretary may treat a compensation payment as not having been made if the Secretary thinks it appropriate to do so in the special circumstances of the case;
(c)special circumstances exist in this case because:
(i)Mr Fogg is totally unfit to return to his preinjury occupation;
(ii)Mr Fogg has significant ongoing care needs;
(iii)Mr Fogg is reliant on the day-to-day support of his partner, Fiona De Souza, who was herself unwell and recently an applicant for the disability support pension (DSP);
(iv)Mr Fogg lives in a mobile home and does not have substantial fixed or appropriate accommodation;
(v)Mr Fogg is deteriorating and finding it difficult to get in and out of his mobile home;
(vi)Mr Fogg and Ms De Souza have no income or funds with which to afford to build an appropriate house for them to live;
(vii)Mr Fogg also has diabetes;
(viii)Mr Fogg’s estimated weekly costs of medication is $30;
(ix)Mr Fogg has associated costs with the maintenance of his Bruno lifter, his wheelchair and his car;
(x)Mr Fogg requires a therapy dog to help him cope with his depression which has associated costs.
On 29 September 2017 Centrelink advised Mr Fogg that it had referred his matter to be reviewed by an Authorised Review Officer (“ARO”).[12]
[12] Exhibit 1, T Documents, T26, page 157, Letter from Centrelink to Mr Fogg dated 29 September 2017.
Lough & Wells Lawyers wrote to Centrelink on 29 September 2017 and requested that the matter be reviewed urgently as Mr Fogg was in dire financial circumstances.[13]
[13] Exhibit 1, T Documents, T27, Letter from Lough & Wells to Centrelink dated 29 September 2017.
The review by the ARO was unsuccessful because the ARO found that there were no special circumstances to justify reducing or waiving the preclusion period.[14]
[14] Exhibit 1, T Documents, T28, pages 159 – 166, Decision of ARO and notes dated 17 October 2017.
On 21 December 2017 Mr Fogg lodged an application for review with the Social Services and Child Support Division (“SSCSD”) of this Tribunal.[15] Mr Fogg’s solicitors submitted that:[16]
[15] Exhibit 1, T Documents, T29, pages 167 – 176, Letter from Lough & Wells to the AAT enclosing an application for review and submissions dated 21 December 2017.
[16] Exhibit 1, T Documents, T29, pages 167 – 176, Letter from Lough & Wells to the AAT enclosing an application for review and submissions dated 21 December 2017.
(d)Mr Fogg’s awards of damages, other than for economic loss, was $455,424;
(e)in total the plaintiff received the sum of $283,259.61;
(f)Centrelink had noted the compensation part of his claim as being $253,292.91, which was correct in accordance with the Act, but that this does not take into account the hardship which would result from a preclusion period being applied given the small amount of compensation actually received by Mr Fogg to cover his ongoing medical needs, and the extent of his permanent disabilities;
(g)Mr Fogg is wheelchair-bound and extremely limited in terms of his mobility. Mr Fogg has been required to purchase a Bruno electric chair lifter to lift his wheelchair into and out of his caravan and additional equipment in order to be able to move within the caravan itself;
(h)Mr Fogg lives in a mobile home which he purchased from his settlement in the sum of $80,000;
(i)Mr Fogg was awarded future medical costs of $80 per week;
(j)Mr Fogg has limited education and is almost illiterate and the judge found that
Mr Fogg had no future capacity for work; and(k)the discretion available in section 1184K of the Act should be exercised.
In February 2018 Mr Fogg supplied Centrelink with a Statement of Financial Circumstances which indicated that:[17]
[17] Exhibit 1, T Documents, T31, pages 179 – 184, Statement of financial circumstances dated 10 February 2018.
(l)Ms De Souza currently receives $801.30 a fortnight in Centrelink payments;
(m)he has a 50% ownership of his mobile home valued $80,000 and 50% ownership in a demountable property valued $43,000;
(n)he owns a power chair and Bruno lifter which are valued at $17,000 ;
(o)he has a car which is valued at $45,000;
(p)he owns a caravan valued at $40,000;
(q)he could not afford to erect the two-bedroom kit home on their block of land;
(r)Ms De Souza requires oxygen tanks but she is not allowed to have any until she resides in a dwelling;
(s)after purchase of their land and dwelling there were no funds left out of the settlement monies he received;
(t)they are in a predicament where they cannot afford private rentals or housing due to Mr Fogg’s not having any income and they cannot remain living in the caravan either given that the difficulty Mr Fogg has in entering and exiting the mobile home and the bed and bathroom therein; and
(u)Ms De Souza is no longer in a relationship with him but remains as his full-time carer.
The SSCSD rejected Mr Fogg’s claim and affirmed the ARO’s decision on 21 October 2016.[18]
[18] Exhibit 1, T Documents, T2, pages 12-17, SSCSD’s Decision and Reasons for Decision dated 13 July 2017.
Mr Fogg has sought a review of the SSCSD’s decision by this Tribunal.[19]
[19] Exhibit 1, T Documents, T1, pages 1-2, Mr Fogg’s Application for Review dated 24 August 2017.
ISSUES FOR DETERMINATION
The issues for determination are whether:
(v)Mr Fogg received a LSCP; and, if yes,
(w)a preclusion period applied; and, if yes
(x)what is the correct preclusion period; and
(y)any special circumstances exist which would make it appropriate to treat the LSCP as not having been made.
LEGISLATIVE BACKGROUND
The legislation relevant to this matter is contained in the Act.
The amount, or duration, of a preclusion period is determined in accordance with Part 3.14 of the Act.
The preclusion period is determined in accordance with section 1170 of the Act:
(1)Subject to subsection (2), if a person receives both periodic compensation payments and a lump sum compensation payment, the lump sum preclusion period is the period that:
(a) begins on the day following the last day of the periodic payments period or, where there is more than one periodic payments period, the day following the last day of the last periodic payments period; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number.
A compensation affected payment includes a social security benefit: section 17(1) of the Act.
Pursuant to section 1169(1) of the Act:
(1)If:
(a) a person receives or claims a compensation affected payment; and
(b) the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
“Compensation” is defined, relevantly, in section 17(2) of the Act to mean:
(a) a payment of damages; or
(b)a payment under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(d)any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury.
Section 17(3)(a) of the Act provides, relevantly here, that the compensation part of a lump sum compensation payment is:
(a) 50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise;
Section 17(4) of the Act provides:
(4) Where a person:
(a) has received periodic compensation payments in respect of lost earnings or lost capacity to earn; and
(b) after receiving those payments, receives a lump sum compensation payment in respect of the lost earnings or lost capacity to earn (in this subsection called the "LSP"); and
(c) because of receiving the LSP, becomes liable to repay an amount (in this subsection called the Repaid Periodic Compensation Payment - "RPCP") equal to the periodic compensation payments received; then, for the purposes of subsection (3), the amount of the lump sum compensation payment is: LSP - RPCP Receives compensation.
DOES A PRECLUSION PERIOD APPLY TO MR FOGG?
It is not in dispute that Mr Fogg received a LSCP as defined by section 17(2) of the Act.
As a result Mr Fogg is not entitled to receive a compensation affected payment (i.e. disability support pension) during a preclusion period unless special circumstances apply.
Does the Tribunal have jurisdiction to determine the correct preclusion period?
The Secretary submits that the ARO and SSCSD incorrectly calculated the preclusion period and that the preclusion period expires on 28 December 2021, not 13 September 2021.
Mr Fogg submits that the Tribunal has no jurisdiction to reconsider the calculation of the preclusion period.Mr Fogg’s Contentions
Mr Fogg contends that this issue is not within the jurisdiction of the Tribunal because it has already been determined by the ARO and confirmed by the SSCSD. Mr Fogg submits that the Secretary did not appeal those decisions and therefore the Tribunal has no jurisdiction to consider any issue other than whether special circumstances exist to treat the LSCP as if it had not been received.
Mr Gary Smith, Counsel for Mr Fogg, submitted that the Secretary:
(z)made no submission to the SSCSD that the calculation of the preclusion period was incorrect and as a result it was not challenged; and
(aa)should not be entitled to put in issue a matter that was not in issue in the proceedings below.
Mr Smith referred to the joint judgment of Gibbs CJ, Mason, Wilson, Brennan, Deane and Dawson JJ in Metwally v University of Wollongong (1985) 60 ALR 68 (“Metwally”) (at 71) where they said:
"It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so."
As an alternative argument Mr Smith contends that, pursuant to section 25(4A) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”) the Tribunal should limit the questions of facts and issues for consideration and order that the scope of the review of the decision to whether the applicant has been able to demonstrate special circumstances allowing for the preclusion period to be reduced.
Section 25(4A) of the AAT Act provides that:
(4A) The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.
Consideration of the Jurisdiction Argument
Mr Smith submitted that it was “of note that that the respondent in the proceedings below made no submission to the Tribunal that the calculation of the preclusion period was incorrect” and this is a “lack of consistency in the current proceedings as compared to the proceedings below”. As the Secretary pointed out, the Secretary is not able to be present at the AAT1 hearing without the AAT1’s permission.5 This was not one of the those matters where permission was sought. It is rare for a contradicter, such as the Secretary, to be present at these type of hearings in the SSCSD. It is, in the Tribunal’s view, unfair to hold the Secretary to something when they were not present and when the Secretary would not usually be expected to be present. This argument has little weight in relation to whether this Tribunal has jurisdiction to consider whether the preclusion period has been calculated correctly.
The Secretary submits that the High Court’s reasoning in Metwally in relation to a party being “bound by the conduct of his case” does not apply to the conduct of an administrative review on the merits. Unlike judicial review, the role of this Tribunal is to satisfy itself whether the decision under review “was objectively the right one to be made” not whether it was a decision “which an administrator acting reasonably might have made.”6 The Tribunal agrees with this Secretary’s submission. In Burston v. Melbourne and Metropolitan Tramways Board[1948] HCA 36; (1948) 78 CLR. 143 at 167 Dixon J, as he then was, noted in a dissenting judgment:
"But I perhaps should add that the question whether the failure of counsel to raise a contention at the trial precludes an application for a new trial is not in my opinion to be determined as an abstract proposition of law. The court's jurisdiction to order a new trial depends upon the demands of justice. Often it would be unjust to set aside a verdict for a reason which but for the default of the party moving, would never have existed. What is done and omitted at the trial is an important consideration to be weighed in determining a new trial application, but in the absence of a specific enactment or rule, it affects the exercise of discretion but does not amount always to a positive bar. There is not a rigid rule of law or practice.
[emphasis added]
The Tribunal stands in the shoes of the original decision maker and has all of the powers that were conferred upon the original decision maker. Pursuant to section 43(1) of the AAT Act, the AAT has the power to affirm, vary, set aside, make a decision in substitution of, or remit a decision under review. The AAT “stands in the shoes of the decision-maker and, on the material before it, makes the ‘correct or preferable’ decision”.[20]
[20] See Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 419 per Bowen CJ and Deane CJ.
The hearing before the Tribunal is a hearing de novo, that is, it is not a traditional Court appeal. The matter is heard afresh and the Tribunal is not bound by any decisions that have been made previously by the ARO or SSCSD in relation to the matter. To limit the scope of the Tribunal’s review is inconsistent with a de novo review. Once an application has been made to the Tribunal, all of the issues relevant to the matter are “alive” for determination.[21] It matters not that the Secretary had not lodged an application for review of the SSCSD’s decision. Once it is before this Tribunal all relevant matters can be considered and determined differently to the SSCSD.[22]
[21] Re Hospital Benefit Fund of Western Australia Inc v the Minister of Health, Housing and Community Services [1992] FCA 599 at [23]; and Freeman v Secretary, Department of Social Security [1988] FCA 294.
[22] Re McLaren and Repatriation Commission (1987) ALD 479 at 488; Fitzmaurice and Repatriation Commission (1987) 13 ALD 723.
Bowen CJ and Deane J said in Drake v Minister for Immigration and Ethnic Affairs (Drake):[23]
― The question for the determination of the Tribunal is not whether the decision which the decision-maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether the decision was the correct or preferable one on the material before the Tribunal
[23] (1979) 24 ALR 577; 2 ALD 60; 46 FLR 409 at 589; 68, 419 per Bowen CJ and Deane J.
In relation to the power under section 25(4A) of the AAT Act, it must be exercised in such a way that the Tribunal is able to reach the correct or preferable decision, within the confines of procedural fairness. Deputy President S A Forgie outlined her view in of the application of section 25(4A) of the AAT Act in Hussain Hazara and Minister for Immigration and Border Protection (Citizenship) [2018] AATA 159 as follows:
40. I remain of the same view that I expressed in Re Lavery and Registrar, Supreme Court of Queensland and Ors (No. 2)[18] after considering the authorities and the AAT Act:
“It follows from the purpose of administrative review, as well as from the specific provisions of the AAT Act to which I have referred, that a decision maker may seek to support the decision on a basis completely different from that upon which it was originally made. Equally, a person applying for review of that decision may seek to have it set aside on a basis completely different from that which he, she or it originally put to the decision maker. As the purpose of the proceedings in the Tribunal is to reach the correct and [sic[19]] preferable decision and not to decide any application by stealth or entrapment, all parties are, subject only to exceptions not relevant in this case, required to put their whole case on the table before the proceedings commence.”[20]
41. I am not persuaded otherwise by s 25(4A) of the AAT Act when it provides:
The Tribunal may determine the scope of the review of a decision by limiting the questions of fact, the evidence and the issues that it considers.
There are circumstances in which it is appropriate to exercise the power given by s 25(4A). They will be circumstances that will be identified, in part, by bearing in mind the exhortation found in s 2A that the Tribunal pursue, among others, the objectives of fairness, justice, economy, informality and speed. Perhaps more importantly, they will be identified also by bearing in mind the obligation imposed by s 39(1) of the AAT Act that:
“Subject to sections 35, 36 and 36B, the Tribunal shall ensure that every party to a proceeding before the Tribunal is given a reasonable opportunity to present his or her case and, in particular, to inspect any documents to which the Tribunal proposes to have regard in reaching a decision in the proceeding and to make submissions in relation to those documents.”
42. While s 39(3) expressly states that s 39 does not limit s 25(4A), the obligation imposed on the Tribunal by s 39(1) of the AAT Act remains one of the factors that must be kept in mind in considering whether, and if so how, it will exercise its power to determine the scope of the review. Another is the duty imposed on it by s 43 and explained in Drake to review the decision and yet another to have regard to the exhortatory provisions of s 2A directed to the mechanism of review that the Tribunal must pursue. The application for review of the decision that brought all of these factors into play cannot be ignored either for Parliament has given the person the right to ask for the decision to be reviewed. As Senior Member Taylor said in Re Sleiman and Companies and Auditors and Liquidators Disciplinary Board:[21]
“12. The Tribunal’s mandatory objective under section 2A of the AAT Act, and its power under subsection 25(4A), permit the Tribunal to confine the issues and evidence it considers. Those powers could not be used to justify orders precluding effective review of decisions falling within the Tribunal’s proper review jurisdiction. But the amplitude of the language is certainly apt to permit the Tribunal to limit the scope of its review function to a consideration of matters that are truly material to the determination of the review proceedings. ...
13.-15. ...
16. Properly understood, subsection 25(4A) of the AAT Act does permit the Tribunal to determine the scope of its review function. The language of the subsection permits limits relating to facts, evidence and issues. The appropriate scope of any restriction will depend on the circumstances of the particular case.”[22]
Mr Fogg was well aware from the Secretary’s submission that the calculation of the preclusion period was in issue. Further time to provide supplementary submissions was also afforded to both parties after the hearing.
In Kuswardana v Minister for Immigration and Ethnic Affairs [1981] FCA 64;, (1981) 54 FLR 334; 35 ALR 186 a particular issue was simply conceded by the parties and hence the Tribunal. However, on appeal, the Court noted that the Tribunal erred at law by failing to consider the issue which was fundamental to the issue before it and remitted the matter.
While this matter does not involve a concession by the Secretary, to ignore the matter, as will be seen below, would be to allow an incorrect decision to prevail. The error should be corrected. This is the Tribunal’s primary function.
The Tribunal finds that it has jurisdiction to consider whether the calculation of the preclusion period by the ARO and SSCSD was correct.
What is the preclusion period? How is the preclusion calculated?
The agreed calculation of the judgment sum $1,002,734.18, less 15% for contributory negligence, included the following:[24]
[24] Exhibit 1, T Documents, T28, pages 159-166, Decision of ARO and notes dated 27 October 2017.
(bb)Non-economic loss - $229,000.00;
(cc)Past economic loss - $199,752.00;
(dd)Superannuation on past economic loss - $21,972.72;
(ee)Future economic loss - $351,262.50;
(ff)Superannuation on future economic loss - $47,771.70;
(gg)Past domestic assistance - $66,224.00;
(hh)Equipment - $7,797.00;
(ii)Past out of pocket expenses - $144,704.65;
(jj)Future out of pocket expenses - $116,067.30;
(kk)Fox v Wood - $23,135.40.
Interest was also awarded in the sum of $81,585.[25]
[25] Exhibit 1, T Documents, T25, pages 153-156, Letter from Lough & Wells to Centrelink dated 31 August 2017.
The error made by the ARO and SSCSD was not including the interest that was awarded to the applicant in calculation of the preclusion period. The Secretary referred the Tribunal to the Full Federal Court decision of Secretary, Department of Family & Community Services v Mourilyan [2002] FCAFC 207 which held that interest awarded in respect of economic loss should be included as part of the lump sum compensation.[26] Therefore the interest on the economic loss component of Mr Fogg’s compensation, of $81,585 should have been included as part of the total LSCP.
[26] See also Baker and Secretary, Department of Family and Community Services [2003] AATA 700.
Mr Smith accepted that the interest relating to the economic loss component of the compensation payment should be included in the calculation of the preclusion period.
The Secretary also relies on the Guides to Social Policy Law: Social Security Guide (“the Guide”).
Brennan J explained the relevance of an adopted policy to decision-making in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 640:[27]
Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process.
[27] Singh v Minister for Immigration and Citizenship (2012) 199 FCR 404.
The Full Federal Court in Hneidi And Others v Minister For Immigration And Citizenship (2010) 265 ALR 292 set out the four propositions which emerge from Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 (“Drake”) when considering the entitlement of an administrative decision-maker to take into account a statement of governmental policy:
[41]…The first is that the decision-maker is entitled, in the absence of specifically defined criteria for the exercise of the discretion, to take into account “government policy”. Thus, where the tribunal is not under a statutory duty to regard itself as bound by the policy, it is entitled to treat the policy as a relevant consideration.
[42] Second, in the absence of a specific statutory provision (which would no doubt be unusual) the tribunal is not entitled to abdicate its function of determining whether the decision under review was, on the material before the tribunal, the correct or preferable one, to a more passive function of determining whether the decision conformed to the relevant policy.
[43] Third, it is not desirable to frame a general statement of the part which government policy should ordinarily play in the determinations of the tribunal. That is a matter for the tribunal to determine in the context of the particular case, informed by considerations of the desirability of consistency of administrative decisions but balanced against the ideal of justice in the individual case.
[44] Fourth, the borderline between cases in which the tribunal has abdicated its functions to those of an unthinking application of “government or ministerial policy” to the facts may sometimes be blurred. But where the tribunal considers that the correct or preferable decision results from the application of such a policy, it should make it clear that:
… it has considered the propriety of the particular policy and expressly indicates the considerations which have led it to that conclusion.
In Drake, Brennan J (as President of the AAT) noted that:
·“An argument against the policy itself or against its application in the particular case will be considered, but cogent reasons will have to be shown against its application”.[28]
·“The Tribunal’s duty is to make the correct or preferable decision in each case on the material before it, and the Tribunal is at liberty to adopt whatever policy it chooses, or no policy at all, in fulfilling its statutory function”.[29]
·Further, consistency with comparable cases and decisions is “[o]ne of the factors to be considered in arriving at the preferable decision… and one of the most useful aids in achieving consistency is a guiding policy”.[30]
[28] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
[29] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 642.
[30] Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 643.
The Tribunal is not bound to apply the Guide but it may, and it should, apply it in exercising its discretion unless it is unlawful or “tends to produce an unjust decision”.[31]
[31] ReDrake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 645.
The Guide sets out at 4.13.2.30 that:
The 50% rule is applied to the gross lump sum for the same compensable event. The only allowable deduction is periodic compensation that must be repaid because of the lump sum payment. The gross lump sum depends on the terms of the award or settlement. The following table shows how the 50% rule is applied in various situations.
If the terms specify that the lump sum…
Then the 50% rule…
includes past periodic payments that are liable to be repaid,
Example: Settled for $300,000 with any past periodic payments to be repaid.
applies to the lump sum payment (LSP) less the repaid periodic compensation payments (RPCP), i.e. the amount of the lump sum compensation payment is:
LSP - RPCP.
Section 17(4)(c) of the Act requires that the recipient of the lump sum compensation payment has become liable to repay periodic compensation payments before they are deduced from the lump sum payment amount.
The Tribunal agrees with the Secretary that the reviewable decision should be varied and finds that the ARO and SSCSD calculated the preclusion period incorrectly in deducting the amount of weekly compensation payments.
Applying section 17(3) of the Act, the compensation part of the lump sum payment is 50% of the compensation payment. The lump sum payment totalled $1,084,319.18, 50% of which equals $542,159.59. The repaid periodic compensation amount is $274,352.18.
In accordance with section 1170(4) of the Act, the number of weeks in the preclusion period equals 280 weeks calculated as follows:
$542,159.59[32]-$274,352.18/$955.90[33] = 280 weeks[34]
[32] 50% of the compensation part of the lump sum payment: section 17(3) of the Act.
[33] This is the income cut-out amount calculated in accordance with section 17(8) of the Act; the income cut
outamount as at the date of settlement on 20 July 2016 was $955.90 (the income cut out amount) (T 32, page190).
[34] The number is then rounded down in accordance with section 1170(5) of the Act.
The 280 week preclusion period commences on the day following the last day of the periodic payments, in this instance 15 August 2016, and ends 280 weeks later on 28 December 2021 and not on 13 September 2012 as found by the ARO and SSCSD.[35]
[35] See section 1170(1) of the Act.
ARE THERE ANY SPECIAL CIRCUMSTANCES?
The Secretary may, at its discretion, treat whole or part of the lump sum compensation payment as having not been made or not liable to be made if the Secretary thinks it’s appropriate to do so in the special circumstances of the case: section 1184K of the Act.
If the Tribunal finds that special reasons exist for the purpose of section 1184K of the Act, French J (as he then was) said, in Secretary, Department of Employment and Workplace Relations and Homewood [2006] FCA 779, at [34], that the Tribunal is expected to:
1.Identify the circumstances of the case which it found to be ‘special’ and the reasons for which it arrived at that finding.
2.Explain why, in the special circumstances so found, it thought it appropriate to treat the whole or part of the compensation payment as not having been made.
3.Explain why it selected the particular quantum (ie the whole or part) of the compensation payment as not having been made.
What does “special circumstances” mean?
The Act does not define what constitutes “special circumstances”.
There has been considerable judicial consideration of the phrase in the context of other social security legislation, for example:
·“Special” denotes something different from the usual or ordinary: Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, at 545 per Kiefel J (as she then was).
·French J (as he then was) said in Secretary, Department of Social Security v Hales (1998) 82 FCR 154 (“Hales”), at 162:
The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. … It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words... It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
·The Full Federal Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 held, at 450:
Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.
·Jacobson J in Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs v Jones (2012) 89 ATR 267; [2012] FCA 639 explained the effect of the authorities as follows [emphasis added]:
[51] ...the phrase “special circumstances”, although lacking in precision, is sufficiently understood as including events or things that render the operation of the statue in a particular case as unfair, unintended or unjust. What is required is something that takes the case out of the ordinary, and unfairness or unintended consequences may show that this exists. Moreover, the circumstances of the case are not confined to matters that are external to the operation of the statutory scheme: see Smith per von Doussa J at 60, 61–62; Groth per Kiefel J at 545, Kertland v Secretary, Dept of Family and Community Services (1999) 95 FCR 64 per Merkel J at 71, 73; Kirkbright v Secretary, Dept of Family and Community Services (2000) 106 FCR 281 per Mansfield J at [22], [26]–[27] and [31]–[32]; see also Secretary to the Department of Family and Community Services v Allan (2001) 116 FCR 1 per Heerey J at [17].
The AAT has also considered the phrase and held that the interpretation in Beadle and Director-General of Social Security (1984) 6 ALD 1, at [12] (i.e. that the circumstances must be unusual, uncommon or exceptional), applies to the Act.[36]
[36] See Hunnibell and Secretary, Department and Community Services [2004] AATA 992, at [19]; Papps and Secretary, Department of Family and Community Services [2005] AATA 660, at [37].
In summary, the circumstances relied upon to be “special” must be unusual, different, uncommon or exceptional.[37]
[37] The core requirement for “special reasons” is that there be something “unusual or different”: French J in Boscolo v Secretary, Dept of Social Security [1999] FCA 106; (1999) 90 FCR 531, at [18]; Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084, at [37].
Mr Smith referred the Tribunal to:
(ll)Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25 where Besanko J reiterated “the importance of maintaining flexibility” in determining what constitutes special circumstances and that circumstances do not have to be exceptional, just unusual, uncommon;
(mm)Hales where French J, as he then was, explained that the concept of special circumstances is broad and that a constellation of factors including financial circumstances may fall within it; and
(nn)Secretary, Department of Social Security v Thompson (1994) 36 ALD 563 which provides that a broad number of issues need to be looked at and considered.
Do special circumstances exist?
Mr Fogg contends that the compensation payment should be treated as not having been made because as a result of his workplace injury he is unable to work, he has no money and he and Ms De Souza support themselves solely from her carer payments.
Mr Fogg also contends that special circumstances exist because of the limited amount of the awarded damages he actually received given his injuries, his financial hardship and his medical issues.
Mr Smith outlined at the hearing that after the accident Mr Fogg:
…developed - or following the accident, regional pain syndrome, deep vein thrombosis, continues to suffer severe pain in the left leg and foot, severely restricted in terms of his mobility, he gets around on his electric scooter. Continues to suffer severe depression, needs help on a daily basis. Just doing things around the house, looking after himself, he needs someone. Now, not only that, he has unrelated issues. He’s got his diabetes, his kidney stones, a stent was inserted. Now, these are - certainly the kidney stones were completely unknown at the time any Centrelink decision was made. Another factor to go into the mix is [he’s] had a stent inserted.
Mr Fogg was unwell on the day of the hearing and did not give evidence. Ms De Souza was present at the hearing and gave the following evidence:
· Regarding Mr Fogg’s health:
o “the majority of the time [he] is lying in bed. He’s not able to actually stand up for more than five minutes at a time. I have to walk him to the bathroom to either go to the toilet or to shower. But most of the time, he’s laying down flat on his back with his legs elevated.
o He does not go out during the day
o His GP will come out and see him at the house, at the property.
o I administer all his tablets and his insulin for him as he requires.
o He had a stent inserted in his kidney in June 2018 which was supposed to remain there for 3 months – to date it has not been removed and he is on two hospital waiting lists to have it removed
· Regarding Ms De Souza’s health:
o “I have a variety of medical conditions. I have chronic cluster headaches, migraines. I’ve now got functional neurological symptoms disorder, which are unclassified seizures. I also get functional dysarthria, which actually affects my ability to speak. I also have multiple spinal prolapses in my lumbar spine, a damaged right sacroiliac and a few other things I have.
o I’m not classified as disabled enough to get - to get the Disability Support Pension, … I’m only on the carer’s pension.
· Regarding their medical expenses:
o “We currently survive off my carer’s pension. I juggle each fortnight as to whether his medication or my medications get paid.”
o Mr Fogg has no other sources or any source of income
o Mr Fogg’s medication expenses are approximately $200/week
o Her medication expenses are approximately $30/week
o If Mr Fogg was able to receive a pension most of his medications would be free
o Mr Fogg’s medication include:
§ NavoRapid insulin, the Lantus Solostar insulin, Lyrica 300 milligrams, Avanza (anti-depressant) - 90 milligrams, which is two tablets, a tablet for his tachycardia.
o The medications are bought monthly unless he goes through some of the medication faster
o Lyrica is the most expensive medication
· Regarding their assets/financial circumstances:
o They purchased a vacant block of land in late 2016 together for approximately $73,000.
o They have made some improvements to the land such as excavation, installing water tanks, electricity and fencing.
o Their original intention was to build a two-bedroom kit demountable home on the property.
o They purchased the kit home for approximately $43,000 - it is sitting on the front of the block waiting to be erected. They have been unable to erect the kit home because they ran out of money.
o They currently reside in a caravan on the property which was purchased in 2011 for $80,000.
o In 2011 they bought a Land Cruiser for approximately $110,000. “We had to actually upgrade the car in order to tow the caravan.”
o She made inquiries of local real estate agents and the original property developer about selling the property and was told it would take anywhere between six to 12 months before we can sell it. “A friend who is actually doing real estate, she came and - came up and actually sat with us and went through everything as to what sort of figures we could actually look for” and told them they would receive no more than they paid for the original block of land.
o “Some fortnights we do okay and some fortnights we don’t, depending on what bills have to come out”.
· The use of the LSCP:
o Ms De Souza assists Mr Fogg to manage his money
o Mr Fogg received approximately $250,000
o Out of that money they:
§ Purchased the land for $73,000
§ Purchased the kit home for $43,000
§ Paid back his parents for their financial assistance since his injuries were sustained – this was done by paying his father’s credit card bill, buying his mother a car, purchased a car and furniture for his daughter – this totalled just under $50,000
§ Water tanks which cost $6,500
§ Conveyancing fees
§ Fees to install/connect electricity to the property – approximately $13,000
o The lump sum money ran out in March 2018
· In August 2018 they moved in with Mr Fogg’s parents for a couple of months after the stent procedure, but had to move out because Mr Fogg ha[d] no income and he would not have any income for a few more years. Mr Fogg’s parents could not afford to keep looking after him. At that time Ms De Souza says she was in a rehabilitation hospital learning to walk and talk again. She says she discharged herself from hospital in order to take care of him.
· Ms DeSouza receives approximately $1,000/fortnight in Carer’s Pension to care for Mr Fogg. Ms De Souza has received the Carer’s Benefit since 2009.
· Regarding selling the property:
o On one hand they want to sell the property so they could move into an established dwelling - this would make it easier for Ms De Souza to care for Mr Fogg. On the other hand, Ms De Souza said renting is dead money and she would rather they owned their own home.
o Without a pension they have little prospect of obtaining a rental property.
Consideration
Mr Smith submitted that although the award of damages was over $1,000,000, Mr Fogg only received $283,000, or 26%. This he says is unusual.
That Mr Fogg only received 26% of the judgment is in part due to the legal fees incurred.
Mr Fogg’s total legal costs were approximately $1,000,000, of which $700,000 were recovered from the unsuccessful parties leaving him with approximately $300,000 in legal bills.Ms Jacky Vetter, on behalf of the Secretary, submitted that it’s not unusual or uncommon for a person to receive from compensation less than what was anticipated and awarded.
The Secretary referred to the decision of Keifel J, as she then was, in Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67. This decision concerned an aged pensioner who received only $3,000 for loss of earnings after settling a claim for $39,000. The 50% rule was applied and the preclusion period assumed that she received significantly more than what she was awarded for loss of earnings.
Justice Keifel considered section 1184K of the Act and found that it does not intend for a decision maker to be required to consider contentions without part of the compensation that reflects the economic loss component, whether one has regard to the application of the formula or the discretion under section 1184K.
Keifel J held that:
25 Here the factual assumptions upon which the calculations are based, including that which treats fifty per cent of the total compensation payment as representing the economic loss component, could not have been intended to be subject to rebuttal in the process of applying the formulae. The statutory purpose is to overcome the need in each case to determine what part of a lump sum compensation payment in truth represents economic loss. Although the assumptions to be made and the result reached are necessarily arbitrary, it is a course which has been taken for administrative simplicity: Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, 579; Secretary, Department of Social Security v Smith (1991) 30 FCR 56, 61.
And later
33 In the present case the Tribunal considered that the application of the formulae was unfair to the applicant because she would have to pay more than she had received by way of compensation for economic loss, indeed twice as much. That factor will however be present in most cases and is an aspect of the application of the formulae. In my view it cannot, by itself, amount to a special circumstance, one out of the ordinary.
34 The basis for the Tribunal's view was its acceptance of what the parties to the settlement said had been offered and accepted for the economic loss component. It was far less than the statute assumed to be the case in applying the formulae. Again, however, this will be so in many, if not most, cases to which the Act applies. Further, the extent of the difference from the basis upon which the parties acted could not provide the necessary "special circumstance". The statute has selected a figure which may operate in an arbitrary way.
35 The statutory objectives in utilising the formulae, referred to above, must also be borne in mind. It is not intended that a decision-maker be required to consider contentions about what part of the compensation reflected the economic loss component. That is so whether one has regard to the application of the formulae or the discretion under s 1184. The latter does not alter the objective and must be read in light of it.
Unfortunately it is not uncommon that successful litigants do not end up with the lion’s share of the judgment or award made in their favour, particularly given the legal fees that are payable.[38] It is also common for matters to be protracted and for appeals to further delay and add to the expense of the proceeding.
[38] See Dimitrov v Secretary, Department of Social Services [2017] AATA 1384.
Even if it appears “unfair” for a successful litigant to end up with only 26% of the total award, this fact in and of itself does not mean that special circumstances exist such that a preclusion period should apply. One must consider all of the circumstances.
Mr Fogg and Ms De Souza provided the following information regarding Mr Fogg’s income and assets:-
(oo)Land value is approximately $73,000, with no mortgage;
(pp)Kit home value is approximately $43,000;
(qq)car which was purchased in 2011 for $110,000;
(rr)caravan purchased for $80,000;
(ss)quad bike purchased for $2,300.
These are realisable assets.
The land and kit home could be sold, or a loan could be obtained to provide any necessary funds with the land as security, at least until such time as the preclusion period has expired. There is no corroborating evidence that Mr Fogg has listed the assets for sale or made any attempts to realise his assets. There is no corroborating evidence that the state of the property market is such that he could not realise his asset. There is also no corroborating or independent evidence of the property’s current value. No formal valuation of the property or copy of a rates notice setting out the rated value of the land was provided to the Tribunal.
Mr Fogg received $283,000. Out of the money Mr Fogg and Ms De Souza have accounted for outgoings totalling approximately $185,500, leaving approximately $97,500 unaccounted for.
The Tribunal does not know how Mr Fogg spent or otherwise dealt with the balance of the LSCP. No corroborating evidence was provided. This significantly weighs against the exercise of the discretion in section 1184K of the Act. Mr Fogg has not provided the Tribunal with any documents to substantiate his economic position. These facts, together with the fact that Mr Fogg has potentially realisable unencumbered assets, means that the Tribunal cannot find that Mr Fogg is suffering from significant financial hardship.
The Federal Court has made it clear that with respect to financial hardship, being impecunious is not unusual or uncommon. In Hales French J referred to the fact that the one thing social welfare recipients have in common is being impecunious, and having straightened financial circumstances.[39] Mr Fogg has land and other assets available to him to alter his impecunious state.
[39] (1998) 82 FCR 154 at 157.
The only bank record provided is a one page bank statement from October 2018. As
Ms Vetter pointed out, this document does not show, whether the LSCP was received into that account, and where the money was spent.The letter of 27 March 2017 from Centrelink set out the preclusion period. While this letter was sent after the land was purchased, it was received prior to receipt of $90,000 from Medicare and prior to the purchase of the $2,300 quad bike, the $43,000 on the kit home in October 2017, and $9,000 of expenses related to excavating the land.[40] This weighs against the discretion, to treat some or all or part of the compensation monies as having not been made. It also weighs against the argument that the actual amount of damages Mr Fogg received was insufficient.
[40] Exhibit 2, Statement of Arthur Fogg dated 21 December 2018 and attachments, Annexure C, Tax Invoice dated 26 October 2017.
In August 2016 a Centrelink officer telephoned Ms De Souza, as Mr Fogg’s nominee, and advised her that Mr Fogg’s DSP would be cancelled and a preclusion period would apply once his Allianz payments ceased.[41]
[41] Exhibit 1, T Documents, T33, pages 194-215, Relevant customer contact notes for the period 18.07.2008 – 17.10.2017.
Ms De Souza confirmed that they believed when they received the balance of LSCP they would be in debt due to legal fees. If that was their belief why did they continue to spend the money? This expenditure included items that would be regarded by many as being in the expensive range (car for $110,000).
The letter of 27 March 2017 from Centrelink advised them to phone the compensation team and informed them that Centrelink has financial information services officers that could advise them, but they never took advantage of this offer.[42]
[42] Exhibit 1, T Documents, T22, pages 146-148, Letter from Centrelink to Mr Fogg dated 27 March 2017.
There is no documentary evidence before the Tribunal which substantiates Mr Fogg’s statement that $260 is being spent on Mr Fogg’s medical expenses per week.
Ms De Souza’s evidence was somewhat inconsistent, in that she said his medical expenses were $200 per week.There is no corroborating medical evidence before the Tribunal that allows it to ascertain whether or not Mr Fogg has medical circumstances which are “special”. It is not unusual or out of the ordinary for someone who has received compensation as a result of a compensable injury to require ongoing treatment and care.
It is also not unusual that a former recipient of DSP and someone that has been awarded a LSCP would have ongoing medical expenses.[43]
[43] Hammelswang and Secretary, Department of Social Services [2015] AATA 905, at [7].
As is customary, Mr Fogg’s concession card expired on 16 August 2017, one year after his compensation preclusion began.[44] His medical expenses no doubt would have increased after that time. Ms De Souza’s evidence was that things started to go bad financially in July 2018 when the concession card ceased. However, the concession card ceased nearly 12 months prior to that.
[44] Exhibit 1, T Documents, T23, pages 149-150, Letter from Centrelink to Mr Fogg dated 16 August 2017.
The Court assessed Mr Fogg’s ongoing medical expenses as $80 per week for the balance of his life. This amount does not include Mr Fogg’s diabetes expenses, but it is still a significant departure from the $260 per week contended by Mr Fogg.
At the hearing Mr Smith said:
once we take away the economic loss figure, used in the calculation of $253,000, the plaintiff or applicant, sorry, has less than $30,000 balance from what he received net for all other heads of damage, including future treatment costs. So that’s his pain and suffering. That’s his future treatment costs. And, well, he had past domestic assistance which was almost $70,000.
To be left with $30,000 to cover all of those, we say is unjust and there’s something that does need to be also taken into consideration in determining whether or not there are special circumstances.
The Act prescribed how the preclusion period is to be calculated. It would not be uncommon for others in Mr Fogg’s situation to be affected similarly.
Mr Fogg’s share of the land if realised at the purchase price would be $36,000. Mr Smith said this is a factor to take into account as this amount is all that would be available for the remainder of the preclusion period because Mr Fogg has no source of income, no wage, no pension and would need to apply for rental accommodation. Ms De Souza’s evidence was that she thought that there would be difficulties getting rental accommodation in circumstances where she is the sole provider on a carer’s pension. No corroborating evidence of this assertion was provided. There are many recipients of social security benefits who are in rental accommodation. Again, this is not an unusual circumstance.
The Tribunal also notes that Mr Fogg and Ms De Souza pool their resources.
CONCLUSION
Mr Fogg has had the benefit of having realisable assets that other social security recipients would not necessarily have. Mr Fogg used some of his LSCP to buy property, after being advised of the compensation preclusion period and continued to spend the money on improvements to the land. Mr Fogg and Ms De Souza continued to spend money after being advised in August 2016 and March 2017 that a preclusion period applied and after receiving the ARO’s decision.
In Hajar and Secretary, Department of Social Security (1986) 16 ALD 716 the Tribunal found it impossible to ignore the fact that the applicant had an asset, namely a house, when considering the issue of hardship and found that it would be “inequitable for the applicant to claim financial hardship when he owns such a valuable asset and does nothing to realise on it”.[45]
[45] (1986) 16 ALD 716, at [45].
Further, Mr Fogg states he spent all of the LSCP[46] but he has not verified all of his expenditure with receipts and no relevant bank statements have been provided to the Tribunal to corroborate and explain how the balance of the LSCP has been utilised.[47] The Tribunal cannot be satisfied that the money has been used responsibly or that despite being aware of the preclusion period, used the money for a necessary purpose.
[46] Exhibit 2, Statement of Arthur Fogg dated 21 December 2018 and attachments, para 47.
[47] Ristevski and Secretary, Department of Social Services [2017] AATA 127.
The exact amount of Mr Fogg’s actual expenses has also not been verified.
These factors weigh against the exercise of the discretion under section 1184(K) of the Act
As a result the Tribunal finds that no special circumstances exist.
DECISION
The decision under review is varied to the extent that the compensation preclusion period is correctly calculated from 16 August 2016 to 28 December 2021.
I certify that the preceding 104 (one hundred and four) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg
.................[SGD]....................................................
Associate
Dated: 23 May 2019
Date of Hearing: 11 March 2019 Date reserved: 8 April 2019 Advocate for the Applicant: Mr Gary Smith Solicitors for the Applicant: Lough & Wells Lawyers Advocate for the Respondent: Ms Jacky Vetter Solicitors for the Secretary Sparke Helmore
1
29
0