Hamilton and Secretary, Department of Social Services (Social services second review)

[2019] AATA 703

Hamilton and Secretary, Department of Social Services (Social services second review) [2019] AATA 703 (16 April 2019)

Division:GENERAL DIVISION

File Number:           2019/0612

Re:Edward Hamilton

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Dr L Bygrave, Member

Date:16 April 2019

Place:Sydney

The application for an extension of time is granted.

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Dr L Bygrave, Member

CATCHWORDS

SOCIAL SECURITY – application for extension of time – age pension debt – where applicant rested on his rights – where prejudice to Secretary and general public – where substantive matter may have merit – extension of time granted

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) s 29
Social Security Act 1991 (Cth) ss 8, 1064, 1223, 1237A, 1237AAD

CASES

Chouman and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 222
Comcare v A’Hearn [1993] FCA 498; (1993) 45 FCR 441
Groth v Secretary Department of Social Security [1995] FCA 1708
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344

REASONS FOR DECISION

Dr L Bygrave, Member

16 April 2019

INTRODUCTION

1. On 5 February 2019, Mr Edward Hamilton lodged an application under subsection 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) seeking an extension of time to make an application to review a decision made by the Social Services and Child Support Division (SSCSD) of the Administrative Appeals Tribunal (the Tribunal) on 19 April 2017.

2. The SSCSD decision affirmed a decision made by the Department of Human Services (the Department) to raise and recover a debt in the amount of $76,929.40 due to the overpayment of age pension to Mr Hamilton for the period from 30 September 2011 to 5 January 2016.

3. The Secretary opposes the extension of time sought.

   BACKGROUND

4. Mr Hamilton is 82 years old. He has been in receipt of the age pension since 12 February 2002.

5. The Secretary submits that:

   ·Mr Hamilton was paid $5,000 per month from September 2011 to March 2015 pursuant to a company shareholder agreement; and

   ·the Department decided to treat these payments as income for the purpose of calculating Mr Hamilton’s entitlement to age pension.

6. On 5 May 2016, the Department decided to raise a debt in the amount of $76,929.40 for the period from 30 September 2011 to 5 January 2016 on the basis of undeclared income. An authorised review officer of the Department affirmed this decision on 27 October 2016.

7. The SSCSD affirmed the Department’s decision on 19 April 2017 and posted the decision notice to Mr Hamilton on 28 April 2017.

8. On 5 February 2019, Mr Hamilton lodged an “Application for Extension of Time for Making an Application for Review of Decision” with the General Division of the Tribunal.

9. The application was heard in Sydney on 21 March 2019. Mr Hamilton attended the hearing by conference telephone and was self-represented.

   PRINCIPLES TO BE APPLIED FOR AN EXTENSION OF TIME APPLICATION

10. Ordinarily, in accordance with paragraph 29(2)(a) of the AAT Act, an application for review of a decision must be lodged with the Tribunal within 28 days from the day on which the decision is given to the applicant.

11. Pursuant to subsection 29(7) of the AAT Act, the Tribunal may extend the time for lodging an application if it “is satisfied that it is reasonable in all the circumstances to do so” [emphasis added].

12. The principles to be applied in determining an application for an extension of time have been set out by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348 and 349 as follows:

    (a)an applicant must show an “acceptable explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time;

    (b)a distinction is to be made between an applicant who has “rested on his rights” and allowed the decision-maker to believe that the matter was finally concluded, and one who has continued to make the decision-maker aware that he or she contests the finality of the decision;

    (c)any prejudice to the respondent caused by the delay;

    (d)whether the respondent or the general public would suffer any prejudice as a result of the extension;

    (e)the merits of the substantial application;

    (f)“[c]onsiderations of fairness as between the applicant and other persons” in a similar position.

13. These principles are not to be applied mechanically. For example, an “acceptable explanation for the delay” is not an essential precondition to the exercise of the discretion, although it is to be expected that such an explanation will normally be given: Comcare v A’Hearn [1993] FCA 498; (1993) 45 FCR 441.

14. All of the circumstances of the case must be considered; the overriding consideration being whether it is “reasonable in all the circumstances” to grant the extension.

    REASONS FOR DELAY

15. The delay in Mr Hamilton seeking a review of the decision by the SSCSD is over 20 months outside the 28 day time limit.

16. In his application for an extension of time, Mr Hamilton provided the following explanation for the delay:

    I explained that I had severe medical surgical procedures I just could not handle any stress.

17. Mr Hamilton told the Tribunal that he has been unwell for an extended period. He provided the Tribunal with the following medical reports:

    ·Mr William Campbell (Vascular and Endovascular Surgeon) reported on 22 March 2019 that Mr Hamilton underwent surgery on 25 September 2013 and remains under supervision for his abdominal aortic aneurysm.

    ·On 24 May 2017, Associate Professor Nigel Jepson (Cardiologist) reported Mr Hamilton “had been well over the course of the year”.

    ·Associate Professor Jepson reported on 21 November 2017 and 28 November 2017 that Mr Hamilton underwent angiography procedures/coronary angiogram. A further procedure was undertaken on 22 December 2017.

18. A letter from Mr John McAulay (VMCH Age Care Facilities) dated 26 March 2019 advised that Mr Hamilton relocated to Sydney from mid-2016 due to ongoing ill health.

19. While Mr Hamilton has experienced substantial periods of ill health over the past 20 months, Associate Professor Jepson’s report dated 24 May 2017 indicates that he was well during the 28 days following the SSCSD decision. I therefore find that Mr Hamilton did “rest on his rights” in seeking a review of the decision.

20. I agree with the Secretary’s submission that Mr Hamilton would have been informed of his appeal rights following the SSCSD decision and the length of delay weighs against granting an extension of time.

21. While this principle weighs against the applicant, it is not the only factor I need to consider in determining whether to grant the extension of time.

    PREJUDICE TO THE RESPONDENT AND GENERAL PUBLIC

22. It is in the interests of both the Secretary and the general public that prescribed time limits are adhered to so as to ensure there is a predictable and orderly conclusion to appeal processes. I have regard to Chouman and Secretary, Department of Education, Employment and Workplace Relations, in which the Tribunal stated:

    ... to grant an extension of time in this matter would be unfair to other applicants in similar situations who have not submitted late applications.

    The grant of an extension of time in this matter would set an unwelcome example and cause inconvenience to Centrelink and the Tribunal in having to deal with large numbers of such applications. There is a general public interest in ensuring finality in decision-making.[1]

    [1] [2009] AATA 222, paras [30-31].

23. I accept that the Secretary and the general public would have expectations about the finality of the decision-making process in relation to Mr Hamilton’s application. As the delay is more than 20 months, I am satisfied that there would be prejudice to the Secretary and the general public if the extension of time is granted. This factor weighs against granting an extension of time to the applicant.

    MERITS OF SUBSTANTIVE MATTER

24. The Tribunal must consider the merits of the substantive application in deciding whether to grant the extension of time.

25. The substantive matter is whether, on the balance of the evidence before the Tribunal:

    (a)Mr Hamilton was overpaid age pension in the amount of $76,929.40 for the period from 30 September 2011 to 5 January 2016; and, if so

    (b)there are any grounds for waiving all or part of the debt. 

    Relevant legislation and consideration of the evidence

26. The rate of age pension is calculated in accordance with section 1064 of the Social Security Act 1991 (Cth) (the Act) and is affected by a person’s circumstances including their income. Income is defined in subsection 8(1) of the Act as an amount “earned, derived or received” by a person for their “own use or benefit”.

27. Where a person is overpaid a social security payment, subsection 1223(1) of the Act provides the amount of the payment is a debt to the Commonwealth.

28. Section 1237A of the Act provides that a debt can be waived if the overpayment arose only because of the Department’s error and the person received the money believing it to be their correct entitlement.

29. Section 1237AAD of the Act provides that all or part of a debt may be waived if there are “special circumstances”. This can only be applied where the debt did not result wholly or partly from a false or misleading statement and where the circumstances (other than financial hardship alone) are deemed “special” making it desirable to waive rather than write off the debt. Although the term “special circumstances” is not defined in the legislation, previous decisions by the Federal Court and the Tribunal consider “special circumstances” are circumstances that take a person’s situation “out of the usual or ordinary case”.[2]

    [2] For example, see Groth v Secretary Department of Social Security [1995] FCA 1708.

30. The Secretary submitted that a Newport Digital Technologies Australia Pty Ltd (NDT) Shareholders Agreement that was signed by Mr Hamilton on 9 August 2011 provided him with monthly payments of $5,000 between September 2011 and March 2015. It is the Secretary’s submission that these monthly payments were income as defined in subsection 8(1) of the Act and Mr Hamilton was overpaid age pension in the amount of $76,929.40 for the period 30 September 2011 to 5 January 2016 because these payments were not declared to the Department.

31. At the Tribunal hearing, Mr Hamilton strongly disputed the Secretary’s submission that he received income from NDT. Mr Hamilton contended that any payments he received from NDT were reimbursement of expenses he incurred or loans he had made to the company during its inception. Mr Hamilton provided a lengthy oral explanation about the company history and structure. He contended that the payments of $5,000 were actually made to his former partner, who had also loaned money to the company. Mr Hamilton was genuinely distressed about the situation both in terms of his reputation as well as his current financial and personal situation.

32. I provided Mr Hamilton the opportunity to provide further evidence to the Tribunal within seven days. He filed several emails as well as a letter from Mr Richard Damion (Chairman of the Board, NDT) dated November 2015 stating that Mr Hamilton and his former partner had invested in NDT Inc and had negotiated to form an Australia subsidiary of NDT Inc (which appears to have become NDT). Mr Hamilton advised he would be able to provide further evidence to the Tribunal for a substantial hearing.

33. Mr Hamilton’s submissions certainly raise questions about whether payments made to him from NDT were income or reimbursements. I note the NDT Shareholders Agreement signed by Mr Hamilton refers to the monthly amount of $5,000 as payments “in arrears”. It is my view that the current evidence before the Tribunal indicates a complex financial relationship between Mr Hamilton and NDT, and it may well be that Mr Hamilton is able to provide further evidence to support his application.

34. In making this decision, I also considered Mr Hamilton’s current circumstances. He told the Tribunal that he is in receipt of age pension but expressed concerns about his current financial situation and his ill health. I consider that, if Mr Hamilton was overpaid age pension and has a debt to the Commonwealth, his circumstances may allow for all or part of the debt to be waived in accordance with section 1237AAD of the Act.

35. In considering all of the relevant circumstances and weighing the available evidence, I am of the view that Mr Hamilton’s substantive matter may have merit. This weighs for the extension of time being granted.

    CONCLUSION

36. Weighing the relevant factors and taking into account all of the information before me, I am satisfied that it is reasonable in these circumstances to grant the extension of time.

    DECISION

37. The application for an extension of time is granted.

I certify that the preceding 37 (thirty -seven) paragraphs are a true copy of the reasons for the decision herein of Dr L Bygrave, Member

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Associate

Dated: 16 April 2019

Date(s) of hearing:	21 March 2019
Applicant:	In person
Solicitors for the Respondent:	E Ulrick, Department of Human Services