Gheorghitoiu and Department of Family and Community Services - [2001] AATA 287

DECISION AND REASONS FOR DECISION [2001] AATA 287

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2001/2

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

DECISION

Tribunal Dr JD Campbell, Member

Date10 April 2001
PlaceSydney

Decision The decision under review is affirmed.

[sgd] Dr J D Campbell
Member
CATCHWORDS:
Social Security – compensation lump sum - preclusion period – whether special circumstances – failure of legal advisers to advise of preclusion period – financial hardship – medical conditions

Social Security Act (1991) ss 17, 1165, 1184

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225
Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985)
Director-General of Social Services v Hales (1983) 47 ALR 281
Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Green and Secretary, Department of Social Security (1990) 21 ALD 772
Re Department of Social Security and Galea (1993) 35 ALD 749
Secretary, Department of Social Security and Hill (1995) 2(1) SSR 9
Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Martin and SDSS (AAT 6482, 14 November 1990)
Re Department of Social Security and VXY (1993) 30 ALD 681

REASONS FOR DECISION

This is an application by Mr Ion Gheorghitoiu ("the Applicant") for review of a decision of a delegate of the Secretary, Department of Family and Community Services, dated 30 November 1999, to impose a preclusion period preventing payment of Social Security benefits from 4 November 1999 to 3 October 2007. This decision was affirmed by an authorised review officer ("ARO") on 9 June 2000, and then by the Social Security Appeals Tribunal ("the SSAT") on 5 December 2000. An application was lodged with the Administrative Appeals Tribunal ("the Tribunal") on 29 December 2000.
The hearing of the application for review was held in Sydney on 22 March 2001. The Applicant was self-represented and the Respondent was represented by Cheryl Collis of Centrelink.
The Applicant provided oral evidence. The following written material was also placed in evidence before the Tribunal:

Material prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 T1 – T19, pp 1-54
Raine & Horne real estate receipt for deposit of $500.00 paid by Applicant, dated 19 November 1999   Exhibit A1
Receipt from Mr Dowling, solicitor, for deposit, dated 2 December 1999     Exhibit A2
Letter from Mr Dowling, solicitor, to Applicant, dated 22 December 1999     Exhibit A3
Treating Doctor's Report of Dr Razvan, dated 12 September 2000   Exhibit A4
Report from Dr Mark Sheps, dated 2 January 2001     Exhibit A5
Two page report of use of lump sum by Applicant, dated 2 October 2000    Exhibit A6
Short medical history of A, undated        Exhibit A7
Authority to settle (copy), dated 3 November 1999       Exhibit R1
Respondent's amended statement of facts and contentions, dated 21 March 2001          Exhibit R2
Respondent's section 196 notice to Margiotta solicitor's, dated 22 February 2001 Exhibit R3
issues

The issues before the Tribunal are as follows:

a)whether the Applicant is precluded from receiving Social Security payments from 4 November 1999 to 3 October 1997; and if so
b)whether there are any special circumstances which would allow the receipt of the compensation to be disregarded in whole or in part.

legislation

The relevant legislation is the Social Security Act 1991 ("the Act") and in particular sections 17, 1165, and 1184.
"17(3) For the purposes of this Act, 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 judgement being entered in respect of the settlement or otherwise, on or after 9 February 1988; or
(ab) 50% of the payment if the following circumstances apply:
(i) the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii)the claim was settled, either by consent judgement being entered in respect of the settlement or otherwise, on or after 9 February 1988; or
(b)if those circumstances do not apply – so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.
…
1165(1A) If:
(a)a person receives or claims a compensation affected payment; and
(b)the person is not a member of a couple; and
(c)the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period.
…
1165(5) If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the new lump sum preclusion period is the period that:
(a) begins on the day after the last day of the periodic payment period; and
(b) ends after the number of weeks worked out under subsections (8) and (9).
…
1165(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:
Compensation part of lump sum
Income cut-out amount
1165(9) If the number worked out under subsection…(8) is not a whole number, the number is to be rounded down to the nearest whole number.
…
1184(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
(a)not having been made; or
(b)not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case."

background

In 1992, the Applicant sustained a back injury at work. After a period of the continuance of his wage, he began to receive weekly compensation payments from GIO Insurance. On 3 November 1999 he received a lump sum amount of $349,556.64 in settlement of his worker's compensation claim, and his weekly compensation payments ceased. On 30 November 1999 Centrelink wrote to the Applicant and advised him that he would be precluded from receiving Social Security payments for the period 4 November 1999 to 3 October 2007.
On 19 November 1999, 16 days after receiving his compensation settlement, the Applicant placed a $500 initial deposit on the purchase of a house, the total cost of which was $135,000 (Exhibit A1).
Departmental records show that the Applicant contacted Centrelink by telephone on 17 April 2000 and expressed his disagreement with the preclusion period imposed. The record of conversation detailed the Applicant as having advised that he had just bought a house and new furniture, despite having knowledge of the preclusion period. On 19 April 2000 the Applicant attended an interview with regard to a review by the original decision maker, at which further receipts of expenditure were requested. On 24 May 2000 he phoned Centrelink and advised that he could not provide the receipts. Consequently, the Applicant was told that a decision would be made based on the information available, and on 24 May 2000 the original decision maker affirmed the decision to impose the preclusion period.
On 29 May 2000 the Applicant attended a Centrelink office with his son and requested a review by an ARO. The original decision was affirmed by the ARO in a letter to the Applicant dated 9 June 2000 (T14). The ARO's records included the following points:
"He told me that he received no advice from his solicitor about a possible preclusion period.
…he received the letter of 30/11/99, but did not know what it meant.
…he had to buy a house because he cannot live in the street. He said he previously lived in the street.
… he bought a cheap house in January 2000 for $140,000 and spent $15,000 renovating it. He bought furniture worth $2,000 as well as a fridge and a washing machine.
…
…repeated that he had no choice but to buy the house. He said the law is wrong. He admitted he did not make sure of his entitlement before he bought the house.
…
…said he would never sell his house as he wants something to leave his children when he dies. He wants to leave them the house.
…is not prepared to live with his children and rent out his house for income.
…" (T13)
On 5 December 2000 the SSAT also decided to affirm the decision, stating that in purchasing the house the Applicant had a substantial asset that appeared to be realisable, and further, that no special circumstances could be found to allow an exercise of the discretion of section 1184 of the Act. The SSAT noted that the Applicant said that his solicitor had not informed him of the preclusion period, but that "even if he had known, he would have done the same again" (T2).

oral evidence of the applicant

In his oral evidence to the Tribunal, the Applicant stated that he was born in Romania on 24 October 1939. He was educated in Romania, leaving school at the age of 16 to attend professional school, after which he undertook work as an electrician. This was followed by five years of university study and resultant engineering qualifications. The Applicant came to Australia with his wife in May 1983. Prior to his accident, he was employed as an electrical fitter with Public Works for a period of eight years.
The Applicant had an accident at work on 27 March 1992. He was hit by a large load which became detached from a crane, and he was thrown across the room. He immediately experienced strong pain in his back and was taken by ambulance to Concord Hospital. After physiotherapy and little improvement in his condition, a discogram was recommended by his doctors and performed on 12 June 1992. Subsequently, the Applicant underwent surgery on his lower lumbar region on four occasions - 19 August 1992, 9 June 1963, 24 February 1995 and 5 July 1997.
The Applicant has not returned to work since the date of his accident. He was paid a full salary for the six months following the accident, then a reduced amount. He refused the termination of his employment and received weekly compensation payments up until the date of receipt of his lump sum amount. In addition, the Applicant received approximately $3000 from his superannuation scheme.
The Applicant told the Tribunal that he separated from his wife several months after his accident. He has three children who all live in Sydney; a twin son and daughter aged 29, who are both married, and a son aged 31 who lives with his ex-wife in rented accommodation in the Bankstown area.
Prior to receiving his compensation settlement the Applicant was living in many different places, including his car. This car has since been sold and replaced with a 1984 Ford Laser. The Applicant understood his compensation settlement to include an amount of approximately $300,000, of which he received approximately $200,000 after solicitors fees and party to party costs were paid.
The Applicant stated that during the settlement he was extremely sick and after three days in court he was unable to continue with the matter and was forced to accept a settlement due to his ill health. In addition, his ex-wife advised him to resolve the matter as quickly as possible because he was living in his car and in pain all the time. He hoped to be able to change his living conditions after the receipt of the lump sum amount.
With regard to the purchase of his house, the Applicant stated that his son organised this for him. He had never previously owned a house in Australia. The house is owned outright, the only expenses being land rates and other household bills. The Applicant described it as "modest"; it has two bedrooms and is located in Rosemeadow. He lives on his own, and stated that he does not have a border because he cannot live with anyone, and no-one wants to live with him there, even his own children.
The Applicant provided to the Tribunal a written statement of his other expenditure which included $31,000 in debts, $12,000 worth of house renovations, furniture at a cost of $3,000, a $4,000 car and $15,529 in general costs up to the date of the statement (2 October 2000). This left approximately $2,000 in his account, which has now also been used on living expenses (Exhibit A6).
In relation to the expenditure of the lump sum in it's entirety, the Tribunal referred the Applicant to the 'authority to settle' (Exhibit R1) - a statement signed on 3 November 1999 which included an acknowledgment that the Applicant would be prevented from claiming social security payments for "about 4-5 years". The Applicant informed the Tribunal that he signed this in his state of mind at that time and he was unaware of the contents of the statement. He said that he did not know anything about the authority to settle until he was shown a copy of it by the Respondent prior to the commencement of the hearing.
At the time of spending his lump sum, the Applicant believed that he would be entitled to a pension, due to his ill health. He did not realise that this was not the case until he spoke to Centrelink four months later. He stated that he did not get the letter from Centrelink, probably because he wasn't always living at his usual place of residence, as he sometimes stayed in Campbelltown with his son. When asked how, if he did not receive the letter, he was prompted to go to Centrelink to refute the preclusion period, the Applicant responded that his doctor sent him there to claim a pension. The Applicant denied that during the telephone conversation with Centrelink on 17 April 2000 he discussed how his money was spent (T6). He stated that on 17 April he made an appointment only, he then attended for the interview on 19 April 2000. Five weeks after this date he telephoned Centrelink for an answer to his request for review, and received a letter about one week after that.
With regard to his current financial position, the Applicant stated that he owes $1,500 on his mastercard and has no immediate funds, being overdrawn by $72.42 on his account at Westpac. With regard to his assets he has the furniture in his house, and a car which was valued at $4000 when he bought it in 1999/00. He pays $400 per year in life insurance costs, but has no other debts. He is currently provided with food by his family.
The Applicant described his various medical conditions. He stated that his back pain is "torture". He takes four to six panadeine forte tablets per day and uses voltaren cream and a tens machine. He sometimes changes the type of pain killers he takes, because they have an adverse effect on his stomach. The Applicant has had trouble with his stomach and bowel since the accident. He has diarrhoea "most of the time", even when taking panadeine forte. He stated that his doctor has said that he may have cancer, but no diagnosis has been confirmed. He has had a colonoscopy, and was told to return for further checks in six months time. The Applicant takes medication for high blood pressure, which commenced three to four years ago, and consequently has cardiac hypertrophy. He also has pain in his left knee as a result of the accident. He sometimes finds it hard to walk, and can go approximately 50 metres before additional back pain sets in.
With regard to his mental health, the Applicant told the Tribunal that he has trouble sleeping, but chooses not to take sleeping tablets as he finds they are of little or no assistance. He finds it difficult to concentrate, is forgetful, agitated and cannot control his anger. He experiences a strong sense of guilt over bringing his family to Australia, a decision which was necessary due to his involvement in politics and his fight against communism in Romania. He stated that his family had a good standard of living in Romania because of his engineering salary, but are struggling in Australia with high rent and difficulties in maintaining employment.
In cross examination the Respondent questioned the high cost of living of the Applicant in the amount of $15,529, as set out in his written statement of expenses. The Applicant stated that this was largely due to his medical expenses because he has no pensioner concession card available to him. He added that he has also purchased a home computer to the value of $2,500, because he spends a lot of time writing.
The Respondent questioned the Applicant with regard to his depression. The Applicant stated that in 1992 he was prescribed Prozac by Dr Chung but ceased taking this medication and went to another psychiatrist because he did not like Dr Chung. He is presently taking Zoloft anti-depressants at a dosage of half a tablet per day, which "helps sometimes".
The Applicant stated that his son is a motor mechanic, is involved in the sale of auto parts and attends university on a part-time basis. His daughter works part-time with the Defence Credit Union.

submissions

The Applicant submitted that he was unaware of the preclusion period at the time he spent his lump sum compensation amount. He stated that he did not receive the initial notification from Centrelink, and was unaware of the content of the authority to settle which he and his solicitor signed, due to his state of mind at that time. The Applicant claimed that he has no means to support himself without the pension, and does not have the option of producing income by way of obtaining a border in his house, as he is unable to live with other people.
By way of special circumstances, the Applicant noted his various medical conditions, which he listed as a damaged spinal cord and broken pedicles, a damaged left knee, heart hypertrophy and high blood pressure, irritable bowel syndrome caused by intense medication and suspected bowel cancer and persistent nervous disorder associated with depression (exhibit A7). This was mostly supported by Dr Razvan in his report dated 12 September 2000 and further discussed by Dr Mark Sheps in a short medical report dated 2 January 2001, where he reported that the Applicant had:
"…a number of medical problems including perennial rhinitis, Osgood Schattler's disease involving his left knee, and irritable bowel syndrome. In 1992 he sustained a serious back injury at work, which required corrective surgery…since then however he has suffered chronic lower back pain. The latter condition combined with current adverse social circumstances have been a major contributing factor to Mr Gheorghitoiu's problem of major depression. He had been assessed recently by a psychiatrist who confirmed this diagnosis. At times Mr Gheorghitoiu's depression has lead to suicidal thoughts and at one stage he attempted to starve himself to death.
…I remain concerned that he may deteriorate further with worsening anxiety and depression, and attempt to cause himself harm due to his perceived adverse social circumstances. In fact I believe there is a significant risk that he may possibly attempt suicide." (exhibit A5)
The Applicant provided a report of Dr R Chung, a consultant psychiatrist, dated 1 November 2000. Dr Chung stated that the Applicant suffered from:
"…two mental illnesses. The first is a Dysthymic Disorder, which is a low grade chronic depression of many years standing, and pre-dating his accident…
In addition…reaches the criteria for a major depression, certainly since March of this year and possibly for longer. Factors contributing to the aetiology of this include his earlier life experiences…chronic pain, and ill health, loss of job and marriage, financial hardship and his current dispute with Centrelink and the Social Security Appeals Tribunal." (T19)

Dr Chung did not believe that the Applicant's psychiatric problems had impaired his ability to make rational decisions with regard to his financial affairs or other aspects of his life. However, he found that the Applicant's financial situation is clearly a major aetiological factor in his current depression and that alleviation of his financial difficulties would be of benefit to his mental condition.

A letter dated 28 December 2000 was provided to the Tribunal from Ms Gizelle Hanna, a Centrelink Social Worker from the Campbelltown customer service centre (T1), who was assisting the Applicant in exercising his appeal rights. Ms Hanna stated that the Applicant had requested consideration of his contention that he was first officially informed of the policy relating to the preclusion period by writing on 25 May 2000. In addition, during review by the ARO, Centrelink failed to take into account the compensation settlement details in making a decision. This occurred because the ARO requested this information from the solicitor, who then did not provide it. Subsequently, the ARO refused to see the Applicant face to face to discuss this information, which the Applicant felt created a large disadvantage because of his non-English speaking background and difficulty with communicating via the telephone. Further, the SSAT did not take into account the report of Dr Schepps in making it's decision. Ms Hanna requested the Tribunal to take into account the Applicant's current psycho-social circumstances, including his suffering from major depression, the high cultural expectations for the Applicant to own a home to provide for his immediate family members, and his extreme financial hardship.
In written submissions, the Respondent contended that the preclusion period was correctly calculated pursuant to sections 17 and 1165 of the Act. Further, the Respondent conceded that the Act gives relief to the strict application of the compensation preclusion period by giving the Secretary a discretion to disregard the compensation payment in whole or part in 'special circumstances' in accordance with section 1184 of the Act. The Respondent relied on the authorities of Beadle v Director-General of Social Security (1985) 60 ALR 225, Beadle and Director-General of Social Security (1984) 6 ALD 1, Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 and Re Green and Secretary, Department of Social Security (1990) 21 ALD 772, to submit that the discretion should not be exercised because the Applicant's circumstances could not be considered special, in the sense that they are not "unusual, uncommon or exceptional".
The Respondent submitted that financial hardship must go beyond straitened circumstances and be truly exceptional, relying on cases such as Secretary, Department of Social Security and Hill (1995) 2(1) SSR 9, Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716, Re Beadle (1984) (supra), Re Colaiacolo and Secretary, Department of Social Security (AAT 2109, 24 April 1985). It was further submitted that hardship is a relevant consideration but regard must be had to the way in which the hardship arose. The Respondent contends that the Applicant has made a significant contribution to his own financial hardship by making "extravagant" purchases and having unjustifiably high living expenses.
With regard to the ill health of the Applicant, the Respondent submitted that ill health alone is not enough to constitute a special circumstance. The Respondent placed emphasis on the Applicant's depressive illnesses. Relying on the report of Dr Chung, the Respondent submitted that the Applicant's illnesses have in no way impaired his ability to make rational decisions in regard to his financial affairs.
With regard to the Applicant's existing assets, namely his house, the Respondent argued that the Applicant showed little regard for the preclusion period and how he was going to support himself for it's duration. Further, the Applicant declined to ameliorate his situation by renting a room in his house. The Respondent noted that the Applicant was renting accommodation prior to receiving his compensation settlement and the discretion in section 1184 was not enacted to maintain compensation recipients in private housing or to preserve other "nest eggs".
In relation to the issue of failure by a person's legal advisers to advise of the existence of a preclusion period following a lump sum settlement, the Respondent contended that this is not a persuasive factor in establishing special circumstances. Relying on the decision in Re Martin and SDSS (AAT 6482, 14 November 1990) the Respondent stated that this factor is not determinative and "the best view is that the matter is one, if at all, as between solicitor and client". In Re Department of Social Security and VXY (1993) 30 ALD 681 the Tribunal held that incorrect advice from a solicitor is not to be treated as special circumstances merely because the person has a claim in negligence against his or her solicitor.
The Respondent relied on decisions such as Re Department of Social Security and Galea (1993) 35 ALD 749 to indicate that the Tribunal is prepared to consider the lack of proper legal advice as relevant to the Applicant's state of mind in a decision to spend the settlement to purchase a home. However, the Respondent contends that the Applicant was informed of the preclusion period by his solicitor, indicated by his signature on the authority to settle dated 3 November 1999. The Respondent noted the Applicant's evidence to the SSAT where he stated that even if his solicitor had told him about the preclusion period, he would still have spent the money exactly as he did.
At the hearing, the Respondent submitted that the Applicant is an educated man, and reinforced that he received two separate notifications that he would be subject to a preclusion period in respect of social security payments. The first was the letter from Centrelink which was sent to the Applicant on 30 November 1999 (T4) and the second was the authority to settle which was signed by the Applicant on 3 November 1999 (exhibit R1). The Respondent further submitted that prior inconsistent statements made by the Applicant in relation to his knowledge of the existence of the preclusion period should be treated as an issue going to the credit of the Applicant.

consideration and findings

The parties agree that the Applicant was injured at work in 1992 and subsequently received a lump sum compensation amount of $349,556.64 on 3 November 1999. There is no dispute as to the Applicant receiving a net amount of $207,819.71 after the deduction of legal fees and party to party costs.

The Tribunal first turns to consider whether the calculation of the preclusion period was correct. The Applicant's payment falls within the definition of compensation in accordance with subsection 17(2) of the Act, which defines compensation as a payment of damages or a payment under a scheme of insurance or a payment in settlement of a claim for damages. As the compensation payment was received by way of a settlement, subsection 17(3) applies. For the purposes of the Act, the compensation part of a lump sum compensation payment is 50 per cent of the payment where the payment is made in settlement of a claim that is, in whole or in part, related to a disease, injury or condition. It follows that the compensation part of the payment in this case is $174,778.32.

The preclusion period in relation to this amount is calculated in accordance with section 1165 of the Act. Subsection 1165(5) states that the preclusion period commences on the day after the cessation of the periodic compensation payments which the Applicant was receiving, that is 4 November 2000. The number of weeks in the preclusion period is calculated by the formula of subsection 1165(8); that is, by dividing the $174,778.32 by the income cut-out amount, which in accordance with subsection 17(1) of the Act is $422.90. Thus the number of weeks of the preclusion period is 413.28, which is then rounded down to 413 as per subsection 1165(9). The result is that a compensation affected payment is not payable to the Applicant for the duration of the 413 week period, pursuant to subsection 1165(1A) of the Act, unless special circumstances exist which would allow the Tribunal to exercise the discretion of section 1184 of the Act and treat the whole of part of the compensation payment as not having been made.

The Tribunal now turns to consider whether there are in fact any special circumstances which exist in the Applicant's case. The case law on this issue is clear. In the leading case of Beadle (supra, 1985) the Full Federal Court held that it was not possible to lay down precise rules but rather, an consideration of special circumstances would depend upon the facts of the case. Further, even though the phrase 'special circumstances' lacks precision, it "is sufficiently understood in our view not to require judicial gloss". In Re Beadle (supra, 1984), the Tribunal held that the phrase 'special circumstances' is "incapable of precise or exhaustive definition" but said that the circumstances:

"…must have a particular quality of unusualness that permits them to be described as special…the qualifying adjective looks to circumstances that are unusual, uncommon or exceptional".

In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J stated that special circumstances would require something "to take it out of the usual or ordinary case". Further the court held that:
"Whilst we agree that hardship is a relevant consideration in the discretion conferred…we reject the submission…that we should ignore the circumstances out of which the alleged hardship is said to have arisen."
In the Federal Court decision in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, French J said of the "concept" of special circumstances that the evident purpose "…is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness".

In considering whether the Applicant's circumstances are unusual or uncommon, the Tribunal turns to consider the facts in evidence. The Tribunal considers that the Applicant's claim of special circumstances can be divided into the issues of a lack of knowledge of the existence of the preclusion period, medical conditions including major depression, current financial hardship, and cultural factors leading to the Applicant's decision to purchase a house.

The Applicant's evidence as to whether or not he received notification by Centrelink of the preclusion period by way of the letter dated 30 November 1999 is conflicting. It appears that the letter was sent to the Applicant's address, but the Applicant in his oral evidence stated that he was residing with his family for much of that time. In any event, the Tribunal finds that the Applicant was made aware of the preclusion period on 3 November 2000, when he signed the authority to settle with his solicitor. The Tribunal is mindful of the Applicant's illness and resultant state of mind at that time, but relies on the report of Dr Chung who states that the Applicant's ability to make decision was unaffected by his illness. Further, the Tribunal notes the Respondent's reference to the case of VXY (supra), where it was held that issues with regard to incorrect advice from a solicitor are not to be treated as special circumstances merely because the person has a potential claim in negligence.

The Tribunal acknowledges that the Applicant suffers from various medical conditions, including a damaged spinal cord and broken pedicles, Osgood Schattler's disease involving his left knee, heart hypertrophy and high blood pressure, irritable bowel syndrome and a persistent nervous disorder associated with depression. However, the Tribunal does not find that the Applicant's difficulties are of the unusual quality required to justify a finding of special circumstances. The Applicant's current situation is undoubtedly difficult, but must be considered against the circumstances of others in a similar situation. The Applicant's current situation is undoubtedly difficult, but must be considered against the circumstances of others in a similar situation and be found to have an element which makes them exceptional, which sets them apart from the rest. Regard must be had to the fact that many claimants of social security benefits are in a similar situation to the Applicant, some without the benefit of a large unencumbered asset.

With regard to the Applicant's financial hardship, the decision in Re Hajar (supra) is relevant:

"Here the applicant could not be said to be suffering from any real financial hardship that could in any way be regarded as special. He is making no contribution to the maintenance or support of his wife or children…His day-to-day living needs are modest and are financed by small borrowings from friends and family. This is a continuation of the way of life he had in financial matters from the time of his resignation until the time of his settlement. His borrowings, however, are much smaller as he no longer has a liability to meet his house payments, nor does he support his family. With the possible exception of his Adelaide brother, who bowed to his wife's insistence, none of his creditors appear to have been pressing. On the question of hardship, I find it impossible to ignore the existence of the house, which is valued at approximately $175,000 and which is free of encumbrances…It is inequitable for the applicant to claim financial hardship when he owns such a valuable asset and does nothing to realise on it…"

The Tribunal accepts the Applicant's statement of expenditure at T18, noting the additional purchase of a personal computer as detailed in the Applicant's oral evidence. However, as the Applicant was aware of the preclusion period on 3 November 2000, he began to dissipate his funds, including the purchase of his house, in full knowledge that he would not be entitled to receive a social security benefit for at least four to five years. Furthermore, in addition to refuting that he was aware of the preclusion period, the Applicant has stated that had he been made aware of it, he would have continued with the same course of expenditure, with no regard for his ability to support himself from week to week.

The Tribunal does not dispute the financial hardship with which the Applicant is now faced with regard to his liquid assets. However, although his circumstances are straitened, they are not exceptional and again lack the quality of unusualness which might justify the double advantage of receiving social security payments to supplement a compensation lump sum, the majority of which has been exhausted through the Applicant's own choices, namely, the purchase of an encumbered house. By purchasing his house, the Applicant has used his compensation money to secure a lasting asset for himself and, he states, his family. Whilst this may have been done with the best of intentions, it must be considered against the underlying principle of compensation which is to place the innocent party in the position that they would have occupied had the damage/ injury not occurred. The hardship resulting from the Applicant's inability to fund his day to day living expenses as a result of his purchase does not equate to special circumstances, but rather, might be viewed as an inability to maintain the advantage he has obtained from his compensation payment. Consequently, the Tribunal places some responsibility on the Applicant to minimise his current hardship through the use of his house as a source of income, whether by way of income from borders or otherwise.

Further, whilst acknowledging the pressure of cultural factors which have lead to the Applicant's desire to own an asset which may ultimately benefit his family, this fact in itself is not of an unusual character, nor does it constitute a special circumstance. The Tribunal notes the Applicant's current lack of financial dependents – it is not necessary for him to make any contribution to the support of his wife or children.
In summary the Tribunal finds that the Applicant's circumstances as detailed, considered either singly or together do not constitute special circumstances for much, if not most of the Applicant's tightened financial circumstances. And consequential nervous disorder arises from the Applicant's own decisions as to how he wished to spend the compensation payment, with all such decisions being made with advice having been given that there would be a preclusion period in which he would not qualify for any income support payments. In the light of this particular expenditure decision, the Tribunal considers that the Applicant should move to remedy his self created difficult financial situation by make more effective use of the funds and/or assets purchased with those funds.

As a consequence of the Tribunal concluding that the Applicant's circumstances do not constitute special circumstances, the Tribunal pursuant to subsection 1184(1) of the Act is not in a position to further consider that the whole or part of the Applicant's compensation payment may be treated as not having been made.

determination

The Tribunal determines that the decision under review is affirmed.
I certify that the 51 preceding paragraphs are a true copy of the reasons for the decision herein of Dr JD Campbell.
Signed:         .....................................................................................
  Associate
Date of Hearing  22 March 2001
Date of Decision  10 April 2001
Representative for the Applicant              Self-represented
Representative for the Respondent Cheryl Collis