Hakim and Department of Family and Community Services
[2001] AATA 858
•15 October 2001
DECISION AND REASONS FOR DECISION [2001] AATA 858
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2001/16
GENERAL ADMINISTRATIVE DIVISION )
Re HASSAN HAKIM
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Dr J D Campbell, Member
Date15 October 2001
PlaceSydney
Decision The Tribunal determines that the decision under review is affirmed.
..............................................
Dr J D Campbell
Member
CATCHWORDS
Social Security - Lump Sum Compensation Payment - Compensation Affected Payment - Compensation Part of a Lump Sum Compensation Payment - Preclusion Period - Member of a Couple - Special Circumstances
Social Security Act 1991 - sections 17, 1163, 1165, 1184
Re Ivovic and Director General of Social Security (1981) 3 ALN N95
Beadle v Director General of Social Security (1985) 60 ALR 225
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
Dr J D Campbell, Member
In this matter Mr Hassan Hakim ("the Applicant") seeks a review of the decision of the Social Security Appeals Tribunal ("SSAT") dated 4 December 2000, which affirmed the decision of a Centrelink delegate of the Secretary of the Department of Family land Community Services ("the Respondent") dated 31 August 2000, to impose on the Applicant a lump sum preclusion period dating from 7 March 1989 to 8 August 2005. This latter decision had been affirmed by an authorised review officer ("ARO") in a decision dated 30 October 2000.
A hearing was held before the Tribunal on 6 July 2001 at which the self represented Applicant and his wife Mrs Hakim presented oral evidence. The Respondent was represented by Mr Lozynsky, an advocate from the Advocacy and Administrative Law Team at Centrelink.
The following written material was placed into evidence before the Tribunal:
Exhibit No Description Date
R1 Statement of Account from the Office of the Protective Commissioner 27 June 2001
R2 Respondent's Statement of Facts and Contentions 26 June 2001
R3 Statement of Centrelink Payment s to Mrs Hakim
R4 Compensation Summary Document and other documents relating to Compensation paid to Mrs Hakim
issues
The relevant issues in this matter are:
(a) whether, by reason of the receipt of a lump sum compensation payment, the Applicant is precluded from receiving income support payment from 7 March 1989 until 8 August 2005; and
(b) if so, whether there are any special circumstances found, which would permit the Tribunal to treat the whole or part of the compensation payment as not having been made.
legislation
The relevant legislation in this matter is the Social Security Act 1991 ("the Act") and in particular sections 17(1), 17(2), 17(3), 1163(1), 1165(2), 1165(3), 1165(4) and 1184(1).
backgroundThe Applicant was born in Lebanon on 10 February 1951, and went to school until he was 14 years old. From 1965 until 1974 he worked in Kuwait as an assistant mechanic for BMW. He returned to Lebanon and immigrated to Australia in 1976. He worked in Bexley on hot water systems for five years and then for the State Rail Authority as a mechanic assistant and later as a cleaner. In 1989 he was involved in a motor vehicle accident sustaining multiple fractures and remaining unconscious for some six weeks (the Applicant's evidence).
On 25 October 1987, the Applicant was injured whilst working as a cleaner for the State Rail Authority (T8, p26). Periodical weekly compensation payments were ceased on 16 December 1988 and settlement of the claim for $20,000 occurred on 12 September 1994 (T24, p48), with the Applicant having ceased work on 14 February 1989 (T3, p20). The Applicant lodged a claim for invalid pension on 17 February 1989 (T3, p20) and this was granted on 5 July 1990 (T50, p127). Notices were issued by the Respondent on 22 March 1989 to the Applicant (T4), the State Rail Authority (T6), and on 4 April 1989 to Keefe and Co (Solicitors) nominating notification requirements in the event of settlement and the consequent recovery of compensation affected payments. The State Rail Compensation Claim was settled on 12 September 1994 with the payment of a lump sum of $20,000 to the Applicant (T24, p48).
On 7 March 1989 the Applicant was injured in a motor vehicle accident. On 11 August 1990 the Respondent issued notices to the Applicant, Owen Hodge and Son (Solicitors) and GIO, nominating notification requirements in the event of settlement and the consequent recovery of compensation affected payments (T12, T13, T14). The Applicant settled his third party claim for $1,050,000 on 7 September 1993. A Social Security repayment of $70,409.40 was made by the Applicant's solicitors to the Respondent on 12 October 1993, with the Respondent determining the correct amount to be $56,260.21 (T20, p43) and refunding the over recovered charge of $14,148.83 to the Applicant on 6 December 1993 (T23, p47).
On 19 October 1993, the Supreme Court of NSW handed down an order ordering the Office of the Protective Commissioner to manage the Applicant's Affairs (T26). On 10 November 1993 the Respondent calculated the Applicant's preclusion period at 857 weeks, commencing on 7 March 1989 and ending on 8 August 2005, and in so doing nominated the economic loss at $525,000 and the average weekly earnings at $612.50 (T20, p44). On 23 December 1993 the Respondent incorrectly advised the Applicant that his preclusion period ended on 31 December 1999 (T50, p128).
On 20 January 1994 the Applicant purchased a home for $320,000, with further monies spent on renovation ($80,000), furnishings ($20,000), car ($14,000), stamp duty ($10,000), holiday and expenses ($100,000), Protective Commissioner fee ($20,000), and Credit Union debt ($13,000). By 28 November 1995, the Applicant wrote that he had remaining with the Protective Commissioner a sum of $277,000 out of the net $850,000 recovered, after costs and recoveries (T34).
As a result of notification by the Office of the Protective Commissioner on 26 October 1995 that they were managing the affairs of the Applicant, and further a request to assess the preclusion period and the basis for such an assessment. The Applicant was notified by the Respondent on 9 November 1995 that the preclusion period commenced on 7 March 1989 and concluded on 8 August 2005 (T30). The Office of the Protective Commissioner further advised the Respondent on 8 November 1995 that that Office held two trust accounts for the Applicant which totalled funds of $277,000 (T28). On 22 November 1995 the Applicant requested a review of the preclusion period (T31), and in a letter dated 28 November 1995 declared the special circumstances which he believed existed (T34). The Respondent affirmed the earlier decision regarding the preclusion period on 12 December 1995 (T37), and following a further review request by the Applicant's wife on 15 December 1995, an ARO affirmed the earlier decision on 15 January 1996 (T39). Further, the ARO noted that she was unable to find any record, on the compensation papers, to indicate that either the Applicant or his solicitors were in fact notified of the preclusion period at the time of the settlement (T40, p95).
The Applicant lodged an appeal with the SSAT on 25 January 1996. On 29 March 1996 the SSAT issued the decision under review with the preclusion period to end on 8 August 2003. The SSAT on 29 March 1996 found that the misadvice given to the Applicant on 23 December 1993, that the preclusion period would end on 31 December 1999, was an unusual and uncommon circumstance. Further, the SSAT found that the other unusual and uncommon circumstance was that the Applicant faced further surgery, complicated by the misadventure of infection contracted during the treatment of his accident injuries. The SSAT concluded that these were both unusual and uncommon circumstances and as such constituted special circumstances (T43, p103).
On 11 October 1996 the Office of the Protective Commissioner wrote to the Respondent confirming its continued management of the Applicant's financial affairs and requesting confirmation of the Applicant's new preclusion period, as such information "is very important in making further financial decisions" for the Applicant (T45, p106). On 22 April 1997 the Office of the Protective Commissioner advised the Applicant and his wife that on the basis of current spending patterns the trust account balance held at the office would depreciate significantly by the financial year 2000/01. Further, the letter to the Applicant stated that the writer doubted that DSS benefits would be as high as $400 per week, not including other expenses and special allowances (T46, p107).
In response to further inquiry from the Respondent, the Office of the Protective Commissioner on 7 November 1997 declared that the Applicant had $230,331.33 in trust funds as at 30 June 1997. It was also declared that the Health Insurance Commissioner had determined an allowance of $99,000 to be applied for further medical expenses, with $1,128.04 having been spent on accident related medical expenses. Further, it was declared that the Applicant was receiving $400 per week and had received $12,534 on 24 May 1996 for general and educational expenses, airfares and spending money for a trip to Lebanon, and a further sum of $3950 on 23 July 1996. The Office also advised that the Applicant had exchanged contracts for a property on 6 November 1997 in the amount of $451,000, and that he had made an application for revocation of his Management Order, which was adjourned on 5 November 1997 (T49).
On 2 April 1998 the Administrative Appeals Tribunal ("AAT") set aside the decision of the SSAT dated 29 March 1996 and affirmed the earlier decision of the Respondent dated 9 November 1995, which stated that the Applicant's preclusion period commenced on 7 March 1989 and ended on 8 August 2005 (T50). On 11 July 2000 the Applicant lodged an application for extension of time to appeal the Tribunal's decision of 2 April 1998 to the Federal Court (T52A).
On 17 July 2000 the Applicant lodged a claim with the Respondent for disability support pension. His claim was rejected due to the existence of his preclusion period (T53). On 20 July 2000 the Applicant requested a review of his preclusion period and in response, on 27 July 2000, the Respondent requested he produce all necessary financial details as nominated (T56). In response the Applicant detailed the following (T57):
Mortgage $11,622 pa Groceries $5,200 pa
Council rate $1,391 pa Rental $300 pa
Water & sewage $763 pa Chemist $240 pa
House insurance $875 pa Clothing $800 pa
Life insurance $540 pa School fee $60 pa
Electricity $508 pa Entertainment $1,200 pa
Telephone $1,022 pa Car Registration $608 pa
University fee $506 pa Petrol $3,120 pa
Car repair $600 pa
Debts: Visa card $4,000 Assets: House $750,000 Motor vehicle $10,000
Investments $152,746 (Office of Protective Commissioner) (T58)
Interest for Investments $212.95 pw
FAO paid for 1 child $92.89 pw
YAL paid for 1 child to the Applicant (T63) $92.50 pwIn the letter of 27 July 2000 the Respondent refers to a preclusion period of 7 March 1989 to 8 August 2003 (T56). This error was corrected by the Respondent in a letter to the Applicant dated 17 August 2000 (T64A). On 31 August 2000, the Respondent, in light of the Applicant's assets which included a house and a cash sum of $152,000 held by the Office of the Protective Commissioner (T66), confirmed that the preclusion period from 7 March 1989 to 8 August 2005 would remain unchanged and that both the Applicant and his wife would not be able to receive compensation affected payments during this period (T66). The Applicant was notified of this decision on 1 September 2000 (T67). On 6 September 2000, following a whole person assessment of the Applicant by Health Services Australia, the Applicant was found to have a nil points impairment (T68).
Following a request for review by an ARO (T71), the latter reviewed the Applicant's circumstances and in a decision dated 30 October 2000 affirmed that the preclusion period should continue unchanged, that is from 7 March 1989 to 8 August 2005 (T77). The SSAT affirmed this finding in their decision of 4 December 2000 (T2).
further evidenceThe Applicant, in further evidence, indicated that since March 2000 he had been working part time as a driver, working some two to four days a week, for which he was paid some $13,000 in year 2000. He also stated that he was still currently working on a part time basis, and when working he was earning some $400 per week.
In response to a question on assets by the Respondent, the Applicant confirmed that he had land in Lebanon to the value of $30,000, but no further work had been performed on the building. The Applicant also stated that it cost him $20 per prescription for medication in relation to his knee.
Mrs Hakim, the Applicant's wife, stated that she had commenced part time work at the Hilton in July 2000 and after three months had a fall at work. She also had pneumonia resulting in two months off work and a hysterectomy and repair in February 2001. Mrs Hakim indicated that she had a claim for compensation against her employers, which was settled for $45,000 on 3 July 2001 as advised by the Respondent (Exhibit R4). A preclusion period was established for Mrs Hakim commencing on 3 July 2001 and ending 1 April 2002 (Exhibit R4).
Mrs Hakim told the Tribunal that her eldest daughter was married; her second daughter, aged 21, had two years remaining in her commerce degree and was receiving Austudy; her third daughter, aged 17, had just secured a job as a Retail Assistant and her son, aged 8, was in year 3 at school.
In a review of their asset situation the Applicant and his wife informed the Tribunal of the following:
Assets:
House valued $750,000 (mortgage $140,000)
Furniture valued $10 – $20,000
Cars (two) $7,000 and $700
Land in Lebanon $30,000
Weekly Expenses: $250 consumables
$60 – $70 petrol
$ 300 other expenses
Weekly Income: $92 Family Allowance
$280 Office of Protective Commissioner
Applicant's capacity to earnIn a letter dated 27 June 2001 the Office of the Protective Commissioner advised that (Exhibit R1):
the Applicant's Protective Office trust account as at 25 June 2001 stands at $110,871.88, with the current interest rate on the account being 5% pa;
the Applicant's weekly allowance is $280; and
the Office continues to pay all Mr and Mrs Hakim's bills, rates, private health insurance, etc out of funds held in this trust account.
submissions
the applicant
The Applicant contended that there has been a change in his circumstances and that by virtue of these changes, his remaining money held by the Office of the Protective Commissioner will only be sufficient to cover the expense of his basic living needs. In particular, the Applicant submitted that he is faced with debt repayments and rising expenses. The Applicant noted that his debt repayments of $450 per fortnight arose as a consequence of a mortgage from the ANZ bank for $140,000 associated with renovations needed for the family home. He further contended that expenses associated with private health insurance ($165 per month) are necessary in light of his need for further surgery and his daughter, who is an asthmatic. Similarly, the Applicant contended that expenses over the past seven years associated with his children's education, clothing, medical needs including prescribed footwear for himself, insurance, holidays and home maintenance expenses, amount to $160,000. As a consequence, the Applicant contended that, he and his family are in an uncomfortable financial position.
The Applicant also submitted that at the time of his settlement in 1993, he was advised that the preclusion period would end in December 1999, and that some three years later he was advised that his preclusion period would end in August 2005. In March 1996, the end date of his preclusion period was changed to August 2003 by the SSAT, only to be reverted to August 2005 by the AAT in April 1998. As a consequence of these various advices as to the end point of his preclusion period, the Applicant made particular capital purchases. The Applicant submitted that these purchases, together with the normal annual living expenses, were generating the circumstances whereby he could foresee the point of time at which he would have no income, no money with the Protective Commissioner and be unable to source social security benefits.
the respondent
The Respondent contended that there is nothing in the Applicant's circumstances, which make them unusual, uncommon or exceptional. In so stating, the Respondent pointed to the Applicant's net asset position in excess of $700,000; his available cash resources of $110,000; his ability and capacity to work as demonstrated by his driving employment since March 2000; his wife's compensation settlement and her capacity and ability to work; and the changing family environment with one daughter married and moved away from the family home, another daughter engaged and the third daughter now employed.
As a consequence, the Respondent submitted that, neither the Applicant's ill health, nor the family's financial circumstances, nor issues surrounding the incorrect advice rendered regarding the end of the preclusion period, are circumstances that when considered either singularly, or together, constitute special circumstances. Therefore, the Respondent contended that, a discretion under section 1184(1) of the Act should not be exercised by the Tribunal to alter the end date of the preclusion period.
consideration and findingsIn preliminary consideration, the Tribunal observes the difficulties associated with lump sum compensation and the management of such payments in the light of an injured worker's expectations. The Tribunal also notes the difficulties associated with the rules nominated, which create a preclusion period that prevents an injured worker and his family accessing affected compensation payments, when the length of the preclusion period is in excess of 16 years. Such a situation is not helped when the length and accurate dates of the preclusion period are not clearly established at the time of settlement. Nor would it seem to be assisted by a review process lasting from November 1995 until April 1998, particularly when diverse decisions have been made by the various tribunals during that process.
In further introductory comment, the Tribunal does not consider itself bound by any of the earlier decisions in this matter. In so doing, it has detailed as best it can, from the material before it, the circumstances that have occurred over time. The Tribunal also notes the role of the Office of the Protective Commissioner in this matter and does observe that, despite being granted management of the Applicant's financial lump sum compensation by the Supreme Court of NSW on 19 October 1993, it was not until 26 October 1995 that the Office notified the Respondent of its responsibility, when requesting an assessment of the preclusion period.
statutory frameworkThe following statutory framework details the sections of the Act with which this matter is concerned:
(a) section 17(1) of the Act defines compensation affected payments;
(b) section 17(2) of the Act defines compensation as to include a payment in settlement of damages or a claim under an insurance scheme;
(c) section 17(3) of the Act defines the compensation part of a lump sum compensation payment as 50 percent of the payment when payment is made in settlement of a claim, with the claim being settled by consent judgement after 9 February 1988;
(d) section 1163(1) of the Act indicates that payments of compensation affected payments to the Applicant or his partner might be affected where an individual receives compensation;
(e) section 1163(2) of the Act defines that no compensation affected payments are payable to the Applicant and his partner for the old lump sum preclusion period;
(f) section 1163(3) of the Act defines the commencing date for the old lump sum preclusion period, with section 1163(4) defining the length of the old lump sum preclusion period, which is derived by dividing the compensation part of the lump sum by the average week by earnings; and
(g) section 1165 (2) provides:
"Subject to subsection (2B), if:
(a) a person receives or claims a compensation affected payment; and
(b) the person is a member of a couple; and
(c) the person, or the person's partner, receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) before 20 March 1997;
the following provisions have effect:
(d) no compensation affected payment is payable to the person for the old lump sum preclusion period;
(e) no compensation affected payment is payable to the person's partner for the old lump sum preclusion period."
(e) section 1184(1) provides:
"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."
findings of fact
The Tribunal, having considered all the evidence placed before it, makes the following finding of facts:
(a) the Applicant was injured in a motor vehicle accident on 7 March 1989. The Respondent issued notification requirements to the Applicant, the Applicant's solicitors, and GIO, the insurer, on 11 August 1990 in the event of a settlement and the consequent recovery of compensation affected payments from the Applicant and his partner. Settlement was effected on 7 September 1993 for $1,050,000. Social Security repayments were finalised by 6 December 1993;
(b) on 19 October 1993 the Supreme Court of NSW ordered the Office of the Protective Commissioner to handle the financial affairs of the Applicant arising from the settlement of 7 September 1993;
(c) on 10 November 1993 the Respondent calculated the Applicant's preclusion period to be 857 weeks commencing on 7 March 1989 and ending on 8 August 2005, with economic loss nominated at $525,000 and average weekly earnings at $612,50;
(d) on 23 December 1993 the Respondent notified the Applicant that his preclusion period commenced on 7 March 1989 and concluded on 31 December 1999;
(e) on 20 January 1994 the Applicant purchased a home for $310,000. Further monies were spent by 28 November 1995 on renovations ($80,000), furnishings ($20,000), the Office of the Protective Commissioner's fee ($20,000), car ($14,000), stamp duty ($10,000), holidays and expenses ($100,000) and Credit union debt ($13,000). Thus, by 28 November 1995 only $277,000 of the net $850,000 received by the Protective Commissioner remained;
(f) on 26 October 1995 the Office of the Protective Commissioner notified the Respondent that the Office was managing the financial affairs of the Applicant, and requested an assessment of the preclusion period and the basis of that assessment. On 9 November 1995 the Respondent notified the Applicant that his preclusion period commenced on 7 March 1989 and concluded on 8 August 2005. The Applicant requested a review of this decision, which was affirmed by an ARO on 15 January 1996. In this latter decision, the ARO noted that she was unable to find any record on the compensation papers to indicate that neither the Applicant nor his solicitors had been notified of a preclusion period at the time of the settlement of 7 September 1993 (T40, p95). The SSAT on 29 March 1996 varied the decision under review and found that the preclusion period should end on 8 August 2003;
(g) on 11 October 1996 the Office of the Protective Commissioner wrote to the Respondent confirming that the Office continued to manage the Applicant's financial affairs and requesting confirmation of the Applicant's new preclusion period;
(h) on 22 April 1997 the Office of the Protective Commissioner wrote to the Applicant and his wife, advising that at the current rate of spending the trust account balance would depreciate significantly by the financial year 2000/01;
(i) on 7 November 1997, the Office of the Protective Commissioner advised the Respondent that the Applicant had $230,331.33 remaining in his trust account and that he had purchased another property on 6 November 1997 for $451,000;
(j) on 2 April 1998 the AAT set aside the earlier decision of the SSAT and confirmed that the Applicant's preclusion period would extend from 7 March 1989 to 8 August 2005;
(k) on 17 July 2000 the Applicant requested a review of his preclusion period, citing financial difficulties as changed circumstances. Following an extensive review of the Applicant's financial circumstances, the Respondent affirmed the then existing preclusion period. Further, at this time (6 September 2000), the Respondent noted that the Applicant had been found to have a nil point's impairment rating when assessed by Health Services Australia. A decision to affirm the preclusion period was made by an ARO on 30 October 2000, which was in turn affirmed by the SSAT on 4 December 2000;
(l) the current financial situation of the Applicant and his wife includes capital assets of a home ($750,000), two cars ($7,700), furniture ($10,000 - $20,000), property in Lebanon ($30,000), cash at the Protective Commissioner ($110,871.88), wife's compensation settlement ($45,000) and a capital liability of a mortgage ($140,000);
(m) the Applicant's and his wife's weekly expenses are of the order of $620 and weekly income to meet these expenses is sourced from the Office of the Protective Commissioner ($280), Family Allowance ($92) and the Applicant's and his wife's capacity to earn;
(n) the Applicant had recommenced work in March 2000 and was continuing to undertake part time work as a driver, earning a variable sum per week up to $400;
(o) the Applicant's wife had recommenced work in July 2000, suffered an injury at work, followed by pneumonia for two months, and underwent a hysterectomy in February 2001. A compensation settlement of $45,000 was effected on 3 July 2001; and
(p) circumstances within the Applicant's family had changed with one daughter married and no longer living at home, a second daughter engaged and completing a university degree, a third daughter now working as a retail assistant and a son still at school. The medical circumstances of the children remain unchanged.The Tribunal, in noting the various events that have happened over time to the preclusion period, finds that the preclusion period does extend from 7 March 1989 to 8 August 2005. In so finding, the Tribunal notes that the compensation part of the lump sum was $525,000 and the average weekly earnings was $612.50, with a resultant preclusion period of 857 weeks. The Tribunal also notes that the Applicant does not disagree with this calculation, his disagreement being with the incorrect advice given in December 1993 and the delay in providing him with the correct advice on 9 November 1995.
The Tribunal, in considering the financial circumstances of the Applicant and his wife, notes their net capital assets as being in excess of $800,000 (ie allowing for the mortgage) and including cash assets in excess of $150,000, if the wife's compensation is taken into account and if not in excess of $110,000. The Tribunal notes the Applicant and his wife's weekly expenditure in the order of $620 and a weekly income of $370 (Protective Office $280, family allowance $90), plus whatever the Applicant and his wife can earn. The Tribunal further notes the levels of earnings as estimated by the Applicant, which would appear to equate to some $300 - $400 a week when he is working.
In considering the Applicant's spending pattern throughout the period commencing with settlement in September 1993, the Tribunal notes that at this point in time the net value of the capital assets (excluding the wife's compensation settlement sum), that is, their house less mortgage, land in Lebanon, cars, furniture and cash of $110,000, is in excess of $750,000 when compared with the net settlement after expenses of $850,000. Thus the Tribunal concludes that after seven years a significant proportion of the initial capital amount remains intact. The issue that remains in the Tribunal's view is that the current spending pattern at $32,000 per year will exhaust cash available from the trust account held at the Office of the Protective Commissioner within four years, with interest rate of 5 percent. Such a scenario involves the current weekly expenditure being derived from the trust account, with no consideration being given to work earnings from either the Applicant or his wife.
It is the Tribunal's finding that in light of all the evidence before it, the Applicant's financial circumstances require prudent management, particularly in the areas of discretionary expenditure. In considering the Applicant's capacity and ability to work albeit as a part time driver up to four days a week, the management of his trust account by the office of the Protective Commissioner and the existence of capital in excess of $650,000, excluding cash reserves held in Trust, the Tribunal concludes that the Applicant is not in difficult financial circumstances at this point in time. However, the Tribunal notes that he may need to tighten discretionary expenditure to avert difficult financial circumstances in the future. In arriving at such a finding, the Tribunal considers the Applicant's need for operative interventions in the future, but notes that the cost may well be borne by health insurance funds if the appropriate waiting period has been served. Alternatively, the cost may be contained within existing capital acquisitions, such as home or land in Lebanon, particularly when it would appear that there will be a decreasing number of occupants over time at the current four bedroom residence of the Applicant and his wife.
In concluding comments concerning the financial circumstances of the Applicant, the Tribunal observes, on the evidence before it, the communication difficulties existing between the three parties, namely the Applicant, the Respondent and the Office of the Protective Commissioner. The Respondent often dealt with the Applicant as a consequence of a request from the Office of the Protective Commissioner (for example regarding the issue of the preclusion period in October/November 1995) and the latter relied on information of such a request from the Applicant. The Tribunal recognises that it will be important for all parties to communicate effectively if effective financial management is to occur over the next four years.
In considering the Applicant's health and work capacity, the Tribunal notes that the Applicant has been assessed at nil points impairment by Health Services Australia, with the consequence that even if the preclusion period was not in operation, he would not qualify for disability support pension. Moreover, the Tribunal notes the discrepancy between what the Applicant told the SSAT on 4 December 2000 as to his work capacity and ability (that he was unable to work) and what he told this Tribunal when describing his work capacity and ability since March 2000. In so noting, the Tribunal concludes that the Applicant does have a capacity and ability to work and earn to support income requirements for himself and his family. Such work activity in the Tribunal's view has been undertaken and can continue in the presence of whatever disability remains from his accident in 1989.
In relation to medical aspects of the remainder of the family, the Tribunal has no assessment on whether Mrs Hakim has a continuing inability to work, nor an assessment of any impairment which may interfere with her capacity to work. The Tribunal further notes that two of the children suffer from asthma.
In considering the circumstances surrounding the definition of the preclusion period, it is clear to the Tribunal that the Applicant was given wrong advice by the Respondent, on 23 December 1993, when he was informed that his preclusion period would cease on 31 December 1999. Further, the Tribunal notes that an ARO, on 15 January 1996, was unable to find any documentary evidence that the Applicant or his solicitors had been informed of the correct definition of his preclusion period at the time of settlement. It would appear that both the Office of the Protective Commissioner (the Applicant's financial manager appointed by the Supreme Court of NSW) and the Applicant, were not informed of the correct dates for the preclusion period until after the Office had sought such advice on 26 October 1995, with the Respondent notifying the Applicant of such dates on 9 November 1995.
As foreshadowed earlier in this decision, the Tribunal concludes that this has been unsatisfactory administrative practice by both the Respondent and the Office of the Protective Commissioner, for indeed particular expenditure decisions were made by the Applicant in the two year interregnum before either the Applicant or the Office became aware of the correct preclusion period.
The Tribunal, while acknowledging that the Applicant was given both incorrect advice and delayed correct advice by the Respondent, turns to an examination of whether such actions caused damage to the Applicant. The Tribunal notes that no evidence has been placed before it to indicate that decisions made by the Applicant during this five year interregnum period would have been different in the light of the correct definition of the preclusion period. Further, the Tribunal notes that there appears to have been little alteration in the Applicant's spending pattern once the correct preclusion period was made known to him. Thus, the Tribunal concludes that there is no conclusive evidence that the circumstances as outlined have determined the spending pattern of the Applicant. Further, there is much evidence to suggest that the Applicant's major capital purchases have been instrumental in preserving the Applicant's overall financial security, albeit with increasing tightened cash reserves over the remaining four years of his preclusive period.
In considering whether any of the circumstances constitute "special circumstances", the Tribunal notes the definition of this term in matters previously decided by either the Federal Court or the AAT:
(a) In Re Ivovic and Director-General of Social Services (1981) 3 ALN N95, the Tribunal, in discussing the term "special circumstances" as it was then found under section 115 of the Social Security Act 1947 stated at N97:
"…The reference to special circumstances 'by reason of which' a person liable 'should be released' requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes… Thus whilst keeping the dominant principle of s115 in mind, he must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate."(b) In Beadle v Director-General of Social Security (1985) 60 ALR 225 at 230 the Federal Court approved, in general terms, the statement of Toohey J in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, where Toohey J states:
"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 a special."(c) In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 Keifel J stated:
"…for present purposes it is sufficient to observe that it would require something to distinguish [this case] from others, to take it out of the usual or ordinary case. That was, I consider, the only inquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary."In considering the circumstances outlined in earlier paragraphs of this decision, the Tribunal notes that at this point in time the Applicant is in an overall sound financial situation as regards his capital assets, including cash in a trust account. The Tribunal has already observed that careful financial management and prudent decision making will be necessary for the Applicant's current cash availability to service necessary and prudent expenditures over the next four years. The Tribunal finds that the Applicant's financial situation is not uncommon, unusual or exceptional at this point in time and, with careful and prudent financial management of capital and cash, the Applicant could continue to carefully, but adequately, meet his financial commitments over the next four years and thereafter. In making such comments, the Tribunal is mindful that the Applicant has the capacity and ability to work, but, in the Tribunal's view, the real issue is ensuring that discretionary expenditure by the Applicant is congruent with what he can afford. In summary, the Tribunal concludes that the Applicant's financial circumstances are not unusual, uncommon or extraordinary, in that his current circumstances, although tightening in terms of discretionary expenditure, are certainly not straightened. Further, if the Applicant continues his discretionary expenditure at the current rate, without making any adjustments to his distribution of financial capital, the Applicant may well have to consider moving to a smaller accommodation.
In considering the Applicant's and his family's health, noting the nil improvement rating and the Applicant's capacity and ability to return to part time work of up to four days per week, and the general health of his wife and three children remaining at home, the Tribunal finds that there is nothing unusual, uncommon or exceptional in these circumstances. As such, the Tribunal concludes that such circumstances do not constitute special circumstances.
In relation to the issue of the misadvise and the failure to correctly advise the Applicant of the correct definition of his preclusion period, the Tribunal finds that such circumstances do not constitute special circumstances. In so finding, the Tribunal has considered all the material before it and has concluded that there is no evidence to suggest that the Applicant would have altered his strategic investments and day to day discretionary financial decision making during the two-year period in question. Indeed, the Tribunal concludes that there is little material before it to indicate a change in pattern of either the Applicant's strategic investments or his discretionary spending pattern once he was advised of the longer and concrete preclusion period. In essence, the Tribunal finds that while there was both misadvise and delayed advice, there was no unfairness to the Applicant, as he has not suffered detriment as a result of such advice. The Tribunal concludes that such circumstances do not constitute special circumstances. (Groth v Secretary, Department of Social Security [supra] considered and applied).
Finally, the Tribunal, in considering all the circumstances in this matter, finds that there is nothing unusual, uncommon or exceptional and as such finds that special circumstances are not established in this matter.
In the absence of a finding of special circumstances in this matter, the Tribunal is not in a position to consider an exercise of discretion under section 1184(1) of the Act in this matter.
determinationThe Tribunal determines that the decision under review is affirmed.
I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell, Member
Signed: R Quinn .....................................................................................
AssociateDate/s of Hearing 6 July 2001
Date of Decision 15 October 2001
Representative for the Applicant Self
Representative for the Respondent Mr G Lozynsky
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