Hall; Department of Family and Community Services - [2001] AATA 664

DECISION AND ORAL REASONS FOR DECISION [2001] AATA 664

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S2000/263

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

DECISION

Tribunal Miss WJF Purcell (Senior Member)

Date3 July 2001
PlaceAdelaide

Decision      For the reasons given orally at the hearing of this matter, the Tribunal sets aside the decision under review and substitutes a decision that the respondent be precluded from payment of Disability Support Pension for a 39-week period from 25 June 1998.
  (Signed)
  WJF PURCELL
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions benefits and allowances – disability support pension – preclusion period for compensation-affected payments –settlement figure clearly inadequate – whether appropriate to exercise discretion to disregard some payments - whether legal expenses should be excluded for purposes of calculating preclusion period - whether there are special circumstances.

Social Security Act 1991 ss1184(1), 1184(2)
Re Beadle and Director–General of Social Security (1984) 6 ALD 1
Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64

ORAL REASONS FOR DECISION

3 July 2001 Miss WJF Purcell (Senior Member)

This is an application for review of a decision of the Social Security Appeals Tribunal (the SSAT) of 1 June 2000, which set aside a delegate's decision and substituted a decision that legal expenses in the sum of $16,661.32 should be excluded pursuant to section 1184 of the Social Security Act 1991 (the Act) for the purposes of calculating the preclusion period for compensation-affected payments, in respect of the respondent's Disability Support Pension.
The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the T Documents) together with exhibits tendered by the applicant (the Department). Mr Kilderry appeared for the Department. The respondent, who gave oral evidence, was represented by Mr Roberts.
The respondent was injured in an accident on the way to his work on 9 March 1994, and received Workers Compensation payments until 24 June 1998, when he received a lump sum payment from Workcover in the sum of $40,891.74. He was precluded from Social Security benefits until 16 September 1998, and granted then a Disability Support Pension, from 17 September 1998.
On 1 November 1999 the respondent settled his third party damages claim in the sum of $185,000.00, all inclusive. The amount of $159,742.84 was repaid then to Workcover. The Department considered that the settlement sum had a component for economic loss, and as the matter had settled by consent, 50 per cent of the total was taken into account as economic loss, which resulted in a preclusion period from 25 June 1998 to 24 January 2001. During the preclusion period the respondent received $10,387.71 and the Department decided that this amount was recoverable. The respondent applied for review of the decision.
On 7 February 2000, an Authorised Review Officer decided that there were special circumstances in which it was appropriate to disregard the medical and hospital payments reimbursed to Workcover, totalling $48,708.20. The preclusion period was recalculated to be from 25 June 1998 to 22 December 1999. The disability support payments received by the respondent during that period were $10,213.87. This amount was repaid by the respondent on 15 March 2000. The respondent was required to pay legal costs in relation to his third party claim, amounting to $16,661.32. On 1 June 2000, the SSAT decided in the special circumstances of the matter, to disregard the respondent's legal expenses. The Department has applied to this Tribunal for review of that decision.
The respondent was 17 years of age when he was involved in the motor accident, and it was nearly 6 years later that the third party claim was settled. After payment of all expenses the respondent received only $7,032.75, out of his settlement sum of $185,000.00.
The respondent gave oral evidence and I accept him as a witness of truth. He suffered extensive injuries which include:
Torn disc in the jaw
Dislocated shoulder
Severed muscle in the shoulder (which allowed a virus normally dormant in the body to eat into the muscles)
Left arm restriction
Injury to the upper middle back involving the discs
Some skeletal and muscle damage in the lower back (not included in the compensation settlement)
Bursitis in the right hip requiring cortisone injections
Torn tendons in the right foot
Loose cartilage in his left knee – the knee had been grinding since the accident and Mr Hall recently had to undergo surgery to remove the cartilage (no claim for this) – his right knee also needs surgery
Hip restriction and pain, with resultant "pins and needles" in the right foot
Neck C3/4 compressed disc – no ongoing treatment
Overall muscular damage
The respondent is now 25 years of age. He is married with two children, aged 3 years, and 8 months, and his wife is expecting another child in December. It is not possible in these brief reasons to outline in detail the symptoms he continues to suffer, and their effects on his lifestyle; but in brief, in relation to the injury described as "torn disc in the jaw", a maxillo-cranial surgeon, Mr Lock, performed surgery, which he reported (before the settlement) had been successful, and that the respondent would not have any ongoing problems. The condition did not, in fact, improve, and more than 2 years later Mr Lock is recommending further surgery to rectify the problem, but holds out now, a much lesser hope of a full recovery.
When the respondent did settle his claim eventually at the age of 24, he accepted the medical advice he received and did not anticipate that his jaw, his left knee and his back symptoms would not subside. He has undertaken now, 6 months treatment at the Memorial Hospital Pain Clinic, and has been told in effect "this is as good as it gets". He says that he is determined that if this is the situation, thenhe is not prepared to live the rest of his life on painkillers, and restricts himself to taking Panadol.
I found the respondent an impressive witness of understated manner, who did not exaggerate his symptoms; rather that he did not wish to recall the pain, trauma, lassitude and depression that he continues to suffer, preferring to "get on with life". His motive in settling his claim was to get it over and done with, after 6 years of consulting various doctors and lawyers.
The respondent and his wife moved to Queensland in late 1998, to establish a business with a partner on an equal basis. They invested $6,000.00. The business partnership disintegrated and the remaining partner purchased their interest for $5,000.00, with no additional payment for their work contribution. They returned to Adelaide, and rented a home in the Adelaide Hills.
Section 1184 of the Act, as far as is relevant for the purpose of these proceedings, provides:-
Secretary may disregard some payments
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.
History
S.1184(1) (former S.1184) renumbered by Act No. 121, 1993, by s.79;
The expression "special circumstances" has been considered by the Tribunal on many occasions; and in Re Beadle and Director–General of Social Security (1984) 6 ALD 1, 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."
In Trimboli v Secretary, Department of Social Security (1989) 86 ALR 64, the Full Court of the Federal Court considered the interpretation of s115E of the 1947 Act, which was a predecessor of s1184 of the Act. It did so in the context of the refund of Social Security benefits, pensions or allowances, for a lump sum compensation payment. In his Judgment, Hill J said at p.73:-
"It is neither appropriate nor proper here to attempt a definition of what circumstances will be 'special'. The occasions when circumstances are special will vary with the facts of each particular case. Further, the decision as to when it will be 'appropriate' to exercise the power under s115E involves the exercise of a discretion which is extremely broad and which is not to be confined, save in accordance with usual principles, namely, that it is to be exercised bona fide and for the purposes for which the discretion is conferred, such purposes being determined by reference to the policy and purpose of the Social Security Act: cf Giris Pty Ltd v FCT (1969) 119 CLR 365 at 384."
I have examined the whole of the evidence carefully and in detail and I have taken into account the parties' submissions. In this matter the misfortune that the respondent suffered as a result of his 1994 injuries has been compounded by a chain of events. The injuries that the medical practitioners regarded as stabilised at the date of settlement have deteriorated; and in the case of the jaw injury Mr Lock's surgery failed to achieve the resolution he confidently reported to the solicitors. The respondent is now in the situation of waiting in the elective surgery list for an opportunity for Mr Lock to operate again, with an uncertain prognosis. The damage to his left shoulder (severed muscles) enabled a virus to penetrate the joint, causing muscle wastage. This was not regarded as an element of the damages claim. There is a continuing threat of further deterioration of his knee and back conditions, and none of these events were foreseen when he settled some 18 months ago, and netted $7,000.00.
The respondent is the father of a young family, living in rented accommodation, with his wife balancing the family budget, and the respondent facing the prospect of further surgery, pain and discomfort. The settlement figure was clearly inadequate, and the balance received of $7,000.00 some 6 years after the accident, does not impress one as a fair result.
I consider that the respondent's circumstances are so unusual, uncommon and exceptional, that it would be unjust and inappropriate for him and his family to be precluded from payment of Disability Support Pension for the 78 week period from 25 June 1998 to 22 December 1999, being the period decided upon by the Authorised Review Officer. I am satisfied that it is appropriate that the discretion available pursuant to s1184(1) of the Act, should be exercised in his favour.
For these reasons the Tribunal sets aside the decision under review and substitutes a decision that the respondent be precluded from payment of Disability Support Pension for a 39-week period, from 25 June 1998.
I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Miss WJF Purcell (Senior Member)
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  3 June 2001
Date of Decision  3 July 2001
Counsel for the Applicant        Mr Kilderry
Solicitor for the Applicant         Centrelink
Counsel for the Respondent    Mr Roberts
Solicitor for the Respondent    Welfare Rights Centre Inc