Goodale; Secretary, Department of Family and Community Services

[2004] AATA 571

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 571

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2003/741

GENERAL ADMINISTRATIVE DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And TROY GOODALE

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date4 June 2004  

PlaceBrisbane

Decision The Tribunal sets aside the decision under review and remits the matter to the applicant for reconsideration with a direction that the amount to be recovered be assessed on the basis of a single lump sum compensation payment.

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EK Christie
  Member

CATCHWORDS

SOCIAL SECURITY – compensation – lump sum settlement – preclusion period – words and phrases - “lump sum” – “compensation” – “payment … in settlement of a claim …” – calculation of preclusion period – two claims for workers’ compensation made – claims settled together – whether settlement to be treated as one or two lump sum payments

Social Security Act 1991 ss 17 and 1171

Acts Interpretation Act 1901 s 23(b)

Johns v Connors (1992) 107 ALR 465
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Jackson (1998) 158 ALR 307
Secretary, Department of Social Security v Banks (1991) 20 ALD 19
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Blue Metal Industries Ltd v Dilley [1970] AC 827

REASONS FOR DECISION

4 June 2004   Dr EK Christie, Member     

1.      This is an application by the Secretary, Department of Family and Community Services to review a decision made by the Social Security Appeals Tribunal (“the SSAT”) made on 12 August 2003.  The SSAT decided to set aside the decision under review and to send the matter back for reconsideration in accordance with directions that the amount to be recovered be assessed on the basis of two lump sum compensation payments (T2, Folio 7). That is, two lump sum preclusion periods would apply.

2.      In arriving at this decision the SSAT concluded:

“16.In the [SSAT’s] view, the design of the compensation provisions is to link the tangible result (eg a lump sum settlement or the making of periodic payments) from a particular event that relates to lost earnings or earning capacity to a person’s social security entitlements where there is an actual or deemed coincidence of payment periods.

17.…The settlement [in this application for review] compromised two separate claims for two separate workplace injuries. In substance, in the context of these provisions, two lump sum compensation payments arose. That they happened to be paid by way of one cheque at the convenience of the paying party cannot be determinative as to the consequences which flow under the Act.

18.On Centrelink’s approach, had there been two settlement documents and two cheques, a different outcome would result.  The Tribunal does not accept that these provisions were intended to operate so capriciously.”  (T2, Folio 6)

3.      The parties have consented for this application for review to be determined on the papers, that is, without a hearing.

4. The information and material before the Tribunal to determine this application for review were the “T” Documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 and the various documents filed by the parties with the Tribunal.

Facts

5.      On the basis of the evidence before it, the SSAT made the following findings of fact:

“(i)Mr Goodale suffered workplace injuries on 28 July 1998 and 26 March 1999.

(ii)Mr Goodale made separate compensation claims in respect of each event.

(iii)On 10 December 2002, both claims were settled in the one compromise agreement resulting in one payment to Mr Goodale.” (T2, Folio 4)

6.      It was not in dispute that Mr Goodale suffered two separate workplace injuries whilst lifting heavy items (26 July 1998 and 26 March 1999):  T17, Folio 78; T17, Folio 85.  On both occasions, Mr Goodale sustained an injury to his lower back.  Two separate claims for compensation or damages were made. There was common ground that, regardless whether the settlement was considered as one or two lump sums, the proceeds were “compensation” within the meaning prescribed in subsection 17(2) of the Social Security Act 1991.

Issues Before the Tribunal

7.      The issues for the Tribunal to determine were:

(a)whether the settlement Mr Goodale received in respect of injuries from two events should be treated as a single lump sum; and

(b)if this were the case, whether the discretion in section 1184K of the Act should be applied.

Statutory Framework and Legal Principles

8.      The legislation relevant to this application for review is found in the following provision of the Social Security Act 1991 (“the Act”).

“17(2) Subject to subsection (2B), for the purposes of this Act, compensation means:

(a)…; or

(b)…; 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)…;

(whether the payment is in the form of a lump sum or in the form or 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.”  (Tribunal emphasis)

9.      The term “lump sum” is not defined in the Act.

10. The approach taken by the SSAT in its determination for the amount recovered in the settlement to be assessed on the basis of two lump sum settlements raises the question of statutory interpretation as to rules relating to words in the singular and plural number. Accordingly, this question needs to be considered in the context of the operation of subsection 23(b) of the Acts Interpretation Act 1901 (“the Interpretation Act”), which provides:

“Rules as to gender and number

In any Act, unless the contrary intention appears:

(a)       …; and

(b)words in the singular number include the plural and words in the plural include the singular.” (Tribunal emphasis)

11.     In Johns v Connors (1992) 107 ALR 465, Lockhart J made the following observations on the operation of section 23 of the Interpretation Act (at 472-73):

“Section 23 of the Acts Interpretation Act applies so that, unless the contrary intention appears, the use of the singular ‘inspector’ includes more than one inspector. The question is whether a contrary intention appears from the ASC Act.

The purpose of s 23 and the principles that govern its application have been referred to in many cases, but the following oft cited passage from the judgment of the Judicial Committee of the Privy Council in Blue Metal Industries Ltd v Dilley [1970] AC 827 at 846-7 is apt:

‘By s 21 of the Interpretation Act, 1899 (NSW), it is enacted that in all Acts, unless the contrary intention appears, words in the singular shall include the plural and words in the plural shall include the singular. Such a provision is of manifest advantage. It assists the legislature to avoid cumbersome and over-elaborate wording. Prima facie it can be assumed that in the processes which lead to an enactment both draughtsman and legislators have such a provision in mind. It follows that the mere fact that the reading of words in a section suggests an emphasis on singularity as opposed to plurality is not enough to exclude plurality.  Words in the singular will include the plural unless the contrary intention appears.  But in considering whether a contrary intention appears there need be no confinement of attention to any one particular section of an Act.  It must be appropriate to consider the section in its setting in the legislation and furthermore to consider the substance and tenor of the legislation as a whole.  (See Sin Poh Amalgamated (HK) Ltd v Attorney-General of Hong Kong [1965] 1 WLR 62). In that case a test was indicated which often may be helpful. In the judgment of the board delivered by Lord Pearce it was said, at 67:

The Interpretation Ordinance was intended to avoid multiplicity of verbiage and to make the plural cover the singular except in such cases as one finds in the context of the legislation reason to suppose that the legislature, if offered such amendment to the bill, would have rejected it’.” (Tribunal emphasis)

12. In the event that only one – not two – lump sum preclusion periods apply, Centrelink may raise and recover an amount of $280 as a debt due to the Commonwealth. Accordingly, in these circumstances, section 1184 of the Act is relevant as it provides the applicant with discretion to decrease the length of the preclusion period:

“1184(1)[Special circumstances]     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.”  (Tribunal emphasis)

13.     The Tribunal has had to consider the meaning and application of the expression “special circumstances” on many occasions.  The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has become an oft-quoted benchmark as to the interpretation of “special circumstances”.  In that case the Tribunal said (at p.3):

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

14.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J after referring to the Federal Court’s decision in Beadle, observed that “special circumstances”:

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

Consideration of the Issues

15.     Following the course directed in Blue Metal Industries v Dilley [1970] AC 827 and in the context of the Act, the central issue becomes whether the legislature intended to exclude its operation where there was more than one lump sum compensation payment made. That is, whether it was intended that the term “lump sum” should be understood to be limited to a single lump sum and to exclude a plurality of lump sums.

16.     In the Tribunal’s view, the legislature had such an intention.  That “lump sum” should be read by excluding the plurality of lump sums is consistent with the operation of section 23(b) of the Interpretation Act. The Tribunal makes this conclusion for the following reasons:

(a)The point at which the preclusion period commences depends on whether the recipient has received periodic compensation payments, a lump sum in partial satisfaction of an entitlement to periodic compensation payments, lump sum compensation only or has received none of these payments.  For present purposes, the contentious situation relates to whether the lump sum settlement received by the respondent, in two claims for injuries sustained in two events, should be treated as a single lump sum compensation payment:  Secretary, Department of Social Security v Jackson (1998) 158 ALR 307 at 316; and

(b)The payment of compensation in the form of a lump sum payment is dealt with in the Act under section 1165 as a separate, distinct and different regime from that applicable to compensation in the form of a series of periodic payments: Secretary, Department of Social Security v Jackson (1998) 158 ALR 307 per Cooper J at 316; and

(c)Although the term “lump sum” is not defined in the Act, its meaning has been considered by von Doussa J in Secretary, Department of Social Security v Banks (1991) 20 ALD 19, where (at 24) his Honour concluded:

“The words ‘lump sum’ are not defined. They are not words of art. In the Macquarie Dictionary a ‘lump sum’ is defined as a sum ‘including a number of items taken together or in the lump’. In my opinion the words bear that meaning in the section. The words are used in Pt XVII of the Act to distinguish ‘lump sum payments by way of compensation’ from ‘periodical payments by way of compensation’ (see, eg, ss 152(2)(d), (3)(b) and 153(1)(a)). A ‘lump sum’ payment is simply one which includes a number of items.  Where a payment by way of compensation consists of the aggregate of several amounts which could have been paid separately or at different times the payment is one of a lump sum.  A payment the total of which is arrived at by adding amounts for different heads of loss would also be a lump sum payment.”(Tribunal emphasis)

(d)The reasoning by von Doussa J in Bank’s case is consistent with the intention of the legislation to treat as the singular, lump sum compensation payments received simultaneously or at different times, in relation to one or more injuries arising from the same event [see section 17(2B)]; and

(e)The meaning of “lump sum” by von Doussa J further extends to apply to treat as the singular, a lump sum payment where the total is arrived at by adding amounts for different heads of loss. Moreover, this meaning of “lump sum” extends to treat as the singular, payments received that consist of the aggregate of several amounts which could have been paid separately or at different times. 

17.     Given the Tribunal’s findings as to the intention of the legislature with respect to limiting lump sum payments - which could have been paid separately or at different times as a single lump sum, the Tribunal concludes that the settlement Mr Goodale received in respect of injuries for two events should be treated as a single lump sum.

18.     Given this finding, the Tribunal next considers whether “special circumstances” exist that warrant the exercise of discretion under section 1184(1) to disregard any amount of the compensation payment as not having been made.

19.     Given the Tribunal’s earlier findings as to the intention of the legislature that the term “lump sum” should be limited to exclude a single lump sum and so exclude a plurality of lump sums, the Tribunal finds that there is no basis to conclude, in the factual circumstances of Mr Goodale’s application for review, “that something unfair [or] unintended” has occurred: Groth’s case.  In turn, there is nothing “unusual, uncommon or exceptional” in these factual circumstances of this application:  Beadle’s case.  Accordingly, the Tribunal finds that there is no basis to exercise its discretion under the “special circumstances” provision [section 1184] of the Act and so treat whole or part of the compensation payment as not having been made.

20.     For all of the above reasons, the Tribunal sets aside the decision under review and remits the matter to the applicant for reconsideration with a direction that the amount to be recovered be assessed on the basis of a single lump sum compensation payment.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Sarah Oliver
  Associate

Matter Heard on the Papers      
Date of Decision  4 June 2004

For the Applicant  Mr R McQuinlan, Departmental Advocate     
Solicitor for the Respondent     Mr C Worsley, Taylors Solicitors