Ian Staunton-Latimer and Comcare
[2013] AATA 389
•6 June 2013
[2013] AATA 389
Division GENERAL ADMINISTRATIVE DIVISION File Number
2013/2420
Re
Ian Staunton-Latimer
APPLICANT
And
Comcare
RESPONDENT
DECISION
Tribunal Mr S. Webb, Member
Date of decision 6 June 2013 Date of written reasons 11 June 2013
Place
Canberra
Operation of Comcare’s reviewable decision on 8 April 2013, deeming Mr Staunton-Latimer to have received superannuation benefits and reducing his weekly compensation for incapacity, is stayed, subject to further order, until 5 July 2013.
Liberty to apply.
..............................[sgd]..........................................
Mr S. Webb, Member
COMPENSATION – stay of operation of decision – discretion – relevant factors – change in policy based on interpretation of legislation governing weekly compensation for incapacity – deemed receipt of superannuation results in reduction of weekly compensation – adverse effect of Applicant's health – financial hardship – Applicant under pressure to draw down his superannuation entitlements – public interest in effective decision-making to be weighed against public interest in the lawful operation of the legislative compensation scheme for Commonwealth employees – application undermined if Applicant is compelled to draw down superannuation entitlements – capacity to recover over payments – stay necessary to secure effectiveness of determination on review – stay granted
Administrative Appeals Tribunal Act 1975 (Cth), s 41
Safety, Rehabilitation and Compensation Act 1988 (Cth), s 21A
REASONS FOR DECISION
Mr S. Webb, Member
11 June 2013
Ian Staunton-Latimer has applied for review of a decision by Comcare to reduce his weekly compensation payments for incapacity on the basis that he is deemed to have received deferred superannuation benefits. He also requested that operation of this decision be stayed for the duration of these proceedings. Comcare opposed this request.
At this juncture, it is this request, alone, that must be dealt with.
The matter came on for hearing before me. Having heard the parties, I gave the decision and brief reasons orally, at the conclusion of the hearing. For abundant clarity, it is desirable to set out those reasons more fully in written form.
The facts
The brief facts are that on 16 May 2001 Mr Staunton-Latimer was injured in Commonwealth employment. As a result, he is totally incapacitated for work. He successfully claimed compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (the SRC Act) and he was paid weekly compensation for incapacity under s 19 of that Act.
On 30 March 2007, Mr Staunton-Latimer’s employment ceased, he says involuntarily.
Mr Staunton-Latimer told me that, when his employment ceased, he elected to defer his superannuation entitlements under the Commonwealth Superannuation Scheme (the CSS). He maintains that this election was made under the terms of the Superannuation Act 1976 (Cth) (the 1976 Superannuation Act), although he could not recall the particular section.
On 11 May 2007, ComSuper provided information to Comcare in the form of a Notice under s 114B(2) of the SRC Act[1]. This form does not refer to deferred superannuation benefits. Nonetheless, it confirms that Mr Staunton-Latimer had not elected to receive all or part of his benefit as a pension or as a lump sum, and suggests that he elected to preserve his benefits. The form is annotated as follows –
Has productivity amt of $55,994.51 (employer funded) preserved – employer funded component is not determined until member claims benefit.
[1] T9 folio 53.
Mr Staunton-Latimer reached his minimum preservation age when he turned 55, on 7 June 2011.
On 15 November 2011, ComSuper provided information to Comcare under a s 114B(2) Notice[2]. Once again, the information provided is that Mr Staunton-Latimer’s Employer Financed Component (EFC) of his superannuation benefit had been preserved and not yet claimed. The estimated value of this benefit at his minimum preservation age is a lump sum of $159,304.30.
[2] T15 folio 60.
On 10 December 2012, Comcare wrote to Mr Staunton-Latimer in the following terms –
I am writing to you about Comcare’s new policy approach to determining incapacity entitlements when a retired employee is entitled to receive their superannuation benefits.
I am letting you know about this change to give you time to make appropriate financial arrangements before this new policy is applied.
…
… if you are currently receiving incapacity payments under section 19 of the SRC Act, your payments will be adjusted from your 55th birthday under section 20, 21 or 21A of the SRC Act based on employer funded superannuation benefits you are entitled to receive.
…[3]
(original emphasis)
[3] T17 folios 65-66.
On 13 January 2013, Mr Staunton-Latimer wrote to Comcare, contesting the new policy[4].
[4] T19.
On 21 January 2013, ComSuper provided Comcare with information about Mr Staunton-Latimer’s superannuation under a further s 114B(2) Notice[5]. This information is substantially the same as that given on 15 November 2011, although there is a three cent difference in the lump sum amount.
[5] T21 folios 76-77.
On 25 January 2013, Comcare determined that Mr Staunton-Latimer’s weekly compensation is to be calculated under s 21 of the SRC Act to take account of the EFC lump sum benefit nominated by ComSuper, reducing his weekly compensation from $1,877.92 to $1,619.94 per week[6]. Mr Staunton-Latimer requested reconsideration.
[6] T22.
On 23 February 2013, ComSuper again provided information to Comcare in a Notice under s 114B(2)[7]. On this Notice the estimated value of Mr Staunton-Latimer’s preserved EFC benefit when he turned 55 is said to be a gross fortnightly pension of $2,166.55 “and/or” a lump sum of $56,435.02.
[7] T25 folios 90-91.
On 26 March 2013, Comcare issued a reconsideration decision, revoking the primary determination on 25 January 2013, deciding instead that Mr Staunton-Latimer’s weekly compensation is to be calculated under s 21A of the SRC Act[8]. By this decision, his weekly compensation was reduced from $1,877.92 to $720.90 per week.
[8] T27.
On 8 April 2013, Comcare conducted a reconsideration on its own motion of the 25 January 2013 primary determination and purportedly revoked the determination and the 26 March 2013 reconsideration decision[9], deciding instead that Mr Staunton-Latimer’s weekly compensation should be reduced from $1,877.92 to $625.30 per week under s 21A.
[9] T28.
On 24 May 2013 Mr Staunton-Latimer applied for review of this decision and requested that operation of the decision be stayed for the duration of the proceedings. This was opposed by Comcare
The issues
Presently, the sole issue for decision is whether it is desirable to exercise the discretion conferred by s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) to order that implementation and operation of the decision under review be stayed for the duration of these proceedings. This may be done for the purpose of securing the effectiveness of the hearing and determination of the application for review if it is desirable to do so in all the circumstances.
Submissions
Mr Staunton-Latimer raised three key points in support of his request.
Firstly, he says that implementation of the decision has placed him in dire financial circumstances. He told me that he is unable to work and relies on weekly compensation payments from Comcare to live, as this is his sole source of income. He informed me that the reduction of his income from $1,877 to only $625 has caused him to put his car up for sale and to inform his landlord that he must move out of his rented accommodation in order to save the $225 weekly rent bill. He told me that he would not be homeless, however, as he was hoping to be able to move into a room in his daughter’s house.
Secondly, Mr Staunton-Latimer told me that his mental health has been adversely affected – the decision applying the change in Comcare’s policy has caused him to suffer mental stress and other psychological symptoms. On his account, three weeks ago, Dr Robinson, his treating general practitioner, prescribed Mirtazapine, an antidepressant medication, to treat these symptoms. He said that the treatment was helping.
Thirdly, Mr Staunton-Latimer says that he is in a bind over his superannuation if the decision is not stayed. On the one hand, he could address his financial difficulties by asking the trustee of the CSS to determine and pay his superannuation entitlements, although he is not sure what his entitlements might be in his present circumstances as an invalid. If he does so and his entitlements are paid, this cannot be undone later even if Comcare’s new policy is overturned. This would leave him worse off. On the other hand, if he does not ask the CSS trustee to determine his superannuation entitlements, he will suffer ongoing and potentially increasing hardship and poor health, but his superannuation entitlements will remain deferred under the 1976 Superannuation Act and his legal options will be preserved until Comcare’s policy has been properly tested in the Tribunal and, potentially, in the Courts.
Comcare says that there is a powerful public interest in preserving the effectiveness of public decision-making, whereby the decision made should be implemented promptly and the successful party is entitled to the fruits of the decision made. This, Comcare says, underpins the originating premise of s 41(1) of the AAT Act.
Comcare points to a line of authority suggesting that financial hardship, alone, is not a sufficient ground to grant a stay over the decision under review – many are the cases in which financial hardship features, and that is not a proper basis on which to exercise the discretion.
Mr Staunton-Latimer has adduced but little evidence to support his assertions of financial hardship and poor health and, in Comcare’s submission, he has not made out a sufficient case to justify staying operation of the decision under review.
In Comcare’s submission, it is highly desirable to avoid uncertainty about overpayment and subsequent recovery – there may be difficulty for both parties if a stay is granted and a substantial overpayment is ultimately to be recovered from Mr Staunton-Latimer.
Comcare noted that a ‘test case’ on the very points raised in Mr Staunton-Latimer’s case is presently awaiting decision in the Tribunal. If, once issued, the decision is taken on appeal to the Federal Court, substantial time may elapse before it is brought to finality. This, Comcare informed me, may be a relevant factor to consider. But, whatever the outcome of that case might be, including whether or not it is taken on appeal by either party, Mr Staunton-Latimer’s case can be expedited to hearing, thereby obviating the need to stay implementation and operation of the decision under review.
Consideration
The discretion conferred by s 41(2) of the AAT Act is broad. It is for the purposes of securing the effectiveness of the hearing and determination of the application for review. Thus, when deciding whether it is desirable to exercise the discretion, it is necessary to determine whether the application for review may be rendered futile if the stay is not granted. All of the circumstances must be considered and regard may be had to all relevant matters, including –
(a)the applicant’s prospects of success;
(b)consequences for the applicant if the stay is not granted;
(c)consequences for the respondent if the stay is granted;
(d)issues relating to over payment and recovery of monies if the stay is granted and the decision under review is upheld;
(e)any public interest; and
(f)any other relevant matter.
Mr Staunton-Latimer’s prospects of success, and the relative merit of his application, turn on a point of law – the proper constructions of s 21A of the SRC Act and the meaning of the word ‘receives’ in particular.
Comcare’s new policy, as applied in the decision under review and the primary determination, is that the word “‘Receives’ [in s 21A] also includes ‘is entitled to receive’”[10]. Mr Staunton-Latimer cavils with this interpretation and seeks to challenge it by his application for review. He says that there is no proper basis to deem him to have received superannuation benefits when he has not in fact done so – no superannuation entitlements were payable to him when he turned 55 and that has not subsequently changed. Whether he or Comcare is correct must be determined at hearing. All I can say, presently, is that his case is not devoid of any prospect of success.
[10] T22 folio 78.
As to the consequences for Mr Staunton-Latimer if a stay is not granted, I accept that he is struggling financially and that he is experiencing adverse effects on his psychological health. Even though his account of hardship is not supported by probative evidence, it was not challenged and it is not contra-indicated by other evidence. Generally, financial difficulty, alone, would not be a sufficient reason to grant a stay.
But in this case, if a stay is not granted, it appears that Mr Staunton-Latimer will face a difficult choice – suffering continuing financial hardship as a result of Comcare’s decision to significantly reduce his sole source of weekly income for the duration of these proceedings, in the hope that the reviewable decision will be set aside; or making an irrevocable decision to draw down his superannuation entitlements in order to ameliorate his reduced weekly compensation income, in the knowledge that if his application is successful, the victory will be somewhat pyrrhic, as he would not, then, be in a position to undo the decision to draw upon his superannuation and, if the information provided by ComSuper is correct, he would squarely be within the terms of s 21A, which he is presently trying to avoid.
Presently, it appears that Mr Staunton-Latimer is trying to sell his car and he is intending to relocate from rental accommodation into a room in his daughter’s house in order to alleviate his financial difficulties. He is reluctant to draw down his superannuation entitlements. Whether he will sustain this position over the period required to properly deal with his application, and with any appeal that may ultimately arise, is a matter of conjecture – it is simply not known. If he does not and draws down his superannuation entitlements, the utility of his application and the effectiveness of the Tribunal’s determination at hearing will be reduced. Thus, uncertainty about Mr Staunton-Latimer’s circumstances if a stay is not granted infects the Tribunal proceedings and the effectiveness of the hearing of this application.
It was noted in the hearing that Comcare has a ‘test case’ presently before the Tribunal on the very point Mr Staunton-Latimer is challenging in his application. I understand that applications on this point are unlikely to proceed to hearing before the ‘test case’ is finalised. It is conceivable, even likely, that the decision in the lead case may be taken on appeal to the Federal Court. These are matters of incidental note that simply indicate that the amount of time required to finalise Mr Staunton-Latimer’s application cannot accurately be predicted; nor can his application readily be expedited to hearing, as Comcare suggests, before the ‘test case’ is resolved.
These matters weigh heavily in favour of staying operation of the decision under review in order to secure the effectiveness of the Tribunal’s hearing and determination of Mr Staunton-Latimer’s application.
The consequences for Comcare if a stay is granted include the potential for over payment of weekly compensation to Mr Staunton-Latimer, and the consequent recovery of this from him if his application is not successful and the reviewable decision is upheld.
On this point, I note that Mr Staunton-Latimer is paid weekly compensation for total incapacity by Comcare. As I understand it, presently there is no prospect of him resuming paid employment. Thus, if a stay is granted and, ultimately, his application is not successful, Comcare will be in a position to recover any over payments from him, by way of garnishee on his incapacity payments for example, even though this may cause him to experience financial difficulties.
Mr Staunton-Latimer says the date on which the policy was implemented by primary determination in his case (14 February 2013) was somewhat arbitrary or coincidental, and it could just as easily have been implemented on another, later, date. He makes the simple point that, if no real significance attaches to the date on which the primary determination was implemented, other than perhaps Comcare’s convenience, implementation of the decision could be deferred or stayed to a later date. While the issue of recovery of over payments can readily be understood, this is simply a result of the date of effect specified in the decision.
Comcare says that there are competing public interests in this case. I agree. There is a clear public interest in maintaining the effectiveness of public decision making, supporting the operative effect of decisions made. In the usual course, a successful party should be entitled to enjoy the fruits of success and the decision should be promptly implemented.
There is also a public interest in ensuring that those adversely affected by a decision have an adequate opportunity to test the decision by exercising rights of review. This is especially so in a case such as this, where the decision gives effect to a policy change by an agency of the Commonwealth that adversely affects the financial interests of a citizen, an injured employee, and it affects the rights and entitlements he may have under the SRC Act and, potentially, the 1976 Superannuation Act, when there has been no change in the legislation and no authoritative judicial ruling has been given. In such circumstances, the importance of securing the affected employee’s rights to review should not be dismissed too readily.
There is also a public interest in the proper operation of the SRC Act and the 1976 Superannuation Act. In this regard the interests of injured employees who may be affected by the policy change and, vicariously, by the resolution of the ‘test case’, or absent that, resolution of Mr Staunton-Latimer’s application should also be considered.
On balance, these matters weigh for the grant of a stay in Mr Staunton-Latimer’s case.
Having carefully considered these matters and the submissions of the parties, it is most compelling that Mr Staunton-Latimer’s application for review of Comcare’s decision, giving effect to its new policy, may be rendered nugatory, at least in substantial part, if a stay is not granted and he is compelled by consequent financial hardship and poor health to draw down his deferred superannuation benefits. The exercise of his rights under the 1976 Superannuation Act would be irrevocable. If he does so, it is unavoidable that his weekly compensation for incapacity would be assessed under s 20, s 21 or s 21A of the SRC Act, effectively defeating the point of his present application. In those circumstances, if, ultimately, he succeeds in his application, he will not be in a position to enjoy the fruits of his success, as he could not undo or revoke his election to be paid superannuation benefits under the 1976 Superannuation Act. From this he will not be able to recover and his weekly compensation for incapacity will not be calculated in the same way, or at the same level as would otherwise have occurred, but for the decisions made under Comcare’s new policy.
Even though it is not presently established that Mr Staunton-Latimer will be compelled to draw down his superannuation entitlements, the prospect is sufficiently real to rise above mere conjecture or abstract possibility. The uncertainty it introduces undermines the security of Mr Staunton-Latimer’s application and, therefore, the effectiveness of the Tribunal’s determination of the application, once heard.
Despite being ably assisted by Comcare’s legal representative in this interlocutory hearing, Comcare’s opposition to the grant of a stay is difficult to comprehend in the circumstances. It is one thing to suggest that Mr Staunton-Latimer’s circumstances are not sufficient to justify the grant of a stay; one might expect that in the usual course. But it is entirely another to oppose a stay in prosecution of a policy that may necessitate Mr Staunton-Latimer to draw down his superannuation entitlements and, thereby, render his application somewhat futile. This is especially so, where the policy has not yet been tested at law.
Thus, in summary, whether or not Comcare’s construction of the meaning of ‘receives’ in s 20, s 21 and s 21A is correct, implementation of the decision applying the new policy introduces an undesirable level of uncertainty to the Tribunal proceedings in Mr Staunton-Latimer’s case. While financial hardship alone may not be determinative, the prospect that continuing financial hardship and poor health resulting from the decision may cause or compel Mr Staunton-Latimer to draw upon his superannuation entitlements if a stay is not granted, thereby, at least in substantial part, rendering his application nugatory, weighs heavily in favour of a stay being granted. Consideration of other relevant matters supports this conclusion.
In these circumstances, it is desirable to order that the implementation and operation of the decision under review is stayed, pending further order.
As the ‘test case’ is at an advanced stage in the Tribunal proceedings, and resolution of that case, subject to any appeal, may bear upon the resolution of Mr Staunton-Latimer’s application, it is appropriate to grant the stay until 5 July 2013. On that date a directions hearing is to be listed before me to determine the appropriate procedure to be followed in Mr Staunton-Latimer’s application, thereafter, including an extension of the stay if it is desirable to do so in the circumstances at that time.
In closing, it is appropriate to observe that Comcare’s new policy has yet to be tested and authoritatively determined at law. Implementation of the new policy may cause or, in effect, compel retired employees, such as Mr Staunton-Latimer, to irrevocably draw down their superannuation entitlements. Comcare may be able to recover over payments from incapacitated employees if decisions applying the new policy are stayed and the policy is upheld. Employees who draw down their superannuation when decisions applying the new policy are made and implemented cannot recover if the policy is set aside. In order to avoid such undesirable potentialities of untested policy, it may be desirable for Comcare to consider suspending further implementation of its new policy until it has been properly tested at law. But this, of course, is a matter for Comcare.
I certify that the preceding 49 (forty -nine) paragraphs are a true copy of the reasons for the decision herein of Mr S. Webb, Member ..................................[sgd]......................................
Associate
Dated 11 June 2013
Date of interlocutory hearing
by telephone6 June 2013
Applicant In person Advocate for the Respondent Mr L. Woolley Solicitors for the Respondent Sparke Helmore Lawyers
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