JANN FORD and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2012] AATA 288

[2012] AATA 288

Division	GENERAL ADMINISTRATIVE DIVISION
File Number(s)	2011/5067
Re	JANN FORD
APPLICANT
And	SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT

DECISION

Tribunal	Senior Member Dr K S Levy, RFD
Date	14 May 2012
Place	Brisbane

The decision under review is affirmed.

..........[Sgd]..........................................

Senior Member Dr K S Levy, RFD

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits and allowances – Disability support pension – Preclusion period – Special Circumstances – Relevance of evidence – Admissibility of expert evidence – Decision under review affirmed  

LEGISLATION

Evidence Act 1995 (Cth) ss 55, 76, 79, 135

Social Security Act 1991 (Cth) s 1184K

Uniform Civil Procedure Rules 1999 (Qld)

CASES

Dasreef v Hawchar (2011) 243 CLR 588

Groth v Secretary, Department of Social Security (1995) 40 ALD 541
HG v The Queen (1999) 197 CLR 414
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic v Director General of Social Services (1981) 3 ALN 95

Re Timothy Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114

REASONS FOR DECISION

Senior Member Dr K S Levy, RFD

14 May 2012

INTRODUCTION

1. The applicant, Jann Ford, suffered a workplace injury which has resulted in her having an inability to work since 27 October 2006. She received an interim lump sum payment for that injury on 19 November 2009 and, subsequently, settled a claim for damages on 15 November 2010. She was advised of the compensation preclusion period prescribed by the Social Security Act 1991 (Cth) (the Act) prior to the settlement of that claim, and acknowledged she was advised that receipt of the damages payout would result in a compensation preclusion period from 18 November 2010 until 30 January 2019.

2. The applicant has since exhausted all of the money she received due to excessive spending (apart from the value of a townhouse which she has purchased with settlement money and money from the sale of her former property). On 6 June 2011, she claimed disability support pension (DSP) but this was rejected on the basis of the preclusion period.

3. She sought review of that decision and an Authorised Review Officer (ARO), on 27 September 2011, accepted certain submissions about her psychological condition at the time of her excessive spending. The ARO then exercised a discretion to reduce the preclusion period so that it ended on 30 March 2016, almost 3 years earlier than that statutorily prescribed. This represented a 35% (approximately) reduction in the preclusion period.

4. The applicant seeks further review of that decision in this Tribunal. At the outset, she sought a review of the legality of a preclusion period being imposed and, if so, whether the preclusion period was properly calculated. In addition, she sought a review on the grounds of “special circumstances” and whether it justified treating the compensation payment received as not having been made.

5. The applicant sought a confidentiality order on the basis that she did not want her problems to be more widely known. I indicated the policy is to have the matters heard by the Tribunal to be open and therefore should be reported, unless there is some adequate reason for not doing so. After hearing the evidence and on the basis that I did not regard the claims of potential self-harm as established, I declined to make the confidentiality order requested.

6. In the course of the hearing, Ms Ford conceded that she did not challenge the statutory basis that preclusion was prescribed by the Act or that the preclusion period calculated was correct. She stated that she now seeks review only on the basis of “special circumstances”.

   ISSUE

7. The issue for determination is: 

   Are there any “special circumstances” which make it desirable to treat the whole or part of the applicant’s lump sum compensation payment as not having been made?

   EVIDENCE

8. Ms Ford received an initial lump sum in compensation for her injuries of $57,000 on 19 November 2009. She subsequently settled a claim for damages of $620,000 on 15 November 2010. She therefore received a gross payment of $677,000. She stated in evidence that of the $620,000, after expenses of maintenance on her farm and legal costs, she cleared approximately $500,000 of that amount.

9. In evidence before the Tribunal, Ms Ford said that she had been a teacher for many years, teaching grade three at the Murwillumbah Primary School. She regarded herself as competent and having loved her job. She also had a property which she described as a farm and where she raised her three children as a single parent.

10. Ms Ford was hurt at work and her active life turned to inactivity. Following the injury she was not physically able to undertake many of the things she customarily had done around her property, for example mowing and gardening.

11. Five months after ceasing work, Ms Ford had surgery for a hernia. She told the Tribunal that she regarded this surgery as having been poorly performed, having contracted infections. Her condition deteriorated with no sign of progress for a long time. Over this period, she and her daughters agreed that they wanted to keep the family property despite the fact Ms Ford did not have her former income but only social security benefits of $350 per week. As a result, her mortgage on that property blew out although she anticipated getting a lump sum compensation which would settle that debt satisfactorily.

12. Ms Ford told the Tribunal that, in hindsight, she should have sold the farm much earlier. She thought she might get compensation for loss of wages in the order of $1.5 million. Ultimately, the amount received was closer to $550,000. She sold the farm and bought a townhouse at the beach which was listed at $385,000. The townhouse cost her $400,000 in purchase price and legal costs together, with other money spent to make improvements or modifications to accommodate her needs.

13. The applicant told the Tribunal that she had $300,000 remaining and thought that she had a plan to survive during the preclusion period to January 2019. However, she then found her spending was uncontrollable. She spent on herself and her children for what she thought they had ‘missed out on’. She acknowledged that she bought many things which were unnecessary, some of which were insignificant but others which were quite significant. For example, she told the Tribunal that she had enquired about a Mercedes Benz car. The salesman bought it around to her townhouse and she immediately bought it for $60,000. She didn’t drive it but contacted the salesman a few weeks later and said that she had made a mistake. She then sold it back to the salesman for $43,000, a loss of $17,000 in a matter of weeks. She also bought a Saab motor car which has since been sold. She purchased courses in music for herself, a keyboard and guitar for her daughter, along with jewellery and clothes. She described to the Tribunal about offering to buy a pair of boots worth $300 for each of her daughters, at which time the daughters insisted that she should also have a pair of these boots. The purchase for three pairs of boots became $900. I note there is a suggestion in a report by the ARO that she, at one stage, also used substances, but this was not elaborated on any further either in that report or in the hearing. The applicant did, however, acknowledge there was much money spent on food and particularly when her daughters had teenage friends around socially. Ms Ford stated that she always catered well for her daughters and their friends.

14. Ms Ford told the Tribunal that her condition has improved in the last 12 months and she now walks on the beach and can use stairs. In addition, she drives on Friday for her elder daughter who has a newspaper run. This daughter is also Ms Ford’s carer.

15. Her medical practitioner, who she had seen some years earlier, had suggested that if she wished to return to teaching, she should first have a functionality test. Ms Ford says she cannot afford the cost of this test. She also indicated one of her doctors told her that as she had run out of money, she should approach Centrelink to get a reduction in the preclusion period.

16. In cross-examination, Mr Hamilton drew attention to the fact that at the time of settling the damages claim, Ms Ford’s solicitor was advised that accepting the payment would result in a preclusion period until January 2019. Ms Ford accepted that she was aware of the preclusion period.

17. The applicant received lump sum payments and, despite knowledge of the preclusion period, she now says all her money has been exhausted. The respondent suggested in cross-examination that she had an asset (her townhouse), which could be sold and invested to form an income base for her for the remainder of this period. Ms Ford said this was “not fair”. The thread of cross-examination pointed to the proposition that it was also not fair that taxpayers should pick up the bill for her previous over spending. In the course of cross-examination, it was apparent that Ms Ford is very articulate and would like the opportunity to return to work. Her health is improving and she makes $60 per week assisting her daughter with the paper run. It was also noted by the respondent that a youth allowance is paid for her youngest daughter. This daughter also has three part-time jobs while being at school. Ms Ford told the Tribunal that this helps pay electricity and other expenses.

18. It was also put to Ms Ford that her elder daughter, who is her carer, gets paid substantial amounts of money for being her carer. Ms Ford conceded that the daughter who is her carer is the same daughter who has the newspaper run. She does not live with Ms Ford but does not live far away and spends time each day assisting her as required. It was suggested that the elder daughter who is the carer also provides some financial support to Ms Ford from time to time. Ms Ford did not deny this but she stated that her daughter also has some personal issues of her own.

19. The applicant conceded to Mr Hamilton that with these resources she does in fact get by at the moment with the assistance of social security payments paid to her daughters. She also acknowledged that she has no major debts.

    Medical Evidence

20. On the day of the hearing, Ms Ford tendered a letter from Dr David Furrows, whose title is Clinical Director, Tweed-Byron Mental Health Service, which, Ms Ford informed the Tribunal, is part of the New South Wales Health Department. His letter is dated 17 October 2011 but had not previously been provided to the Tribunal or the respondent. The letter states that Ms Ford had attended the Mental Health Service on two occasions in recent years and that on the previous occasion she had seen a psychiatrist who had provided anti-depressant medication. Dr Furrows notes Ms Ford has had financial difficulties and a mood disorder. He notes her embarrassment of her present situation and her previous over spending, which, he says, has a direct link to her mental illness. Dr Furrows also suggests that if she lost her remaining asset, she may be at high risk of major depression and perhaps self-harm. Ms Ford also tendered a letter from a psychologist, Alison Tuck. That letter mirrors the evidence which Ms Ford herself gave to the Tribunal. Ms Tuck’s report reveals the results of two psychological tests administered and concludes her depression and anxiety as being in the moderate range and her stress in the normal range. Notwithstanding these findings, Ms Tuck concludes that she agrees with Dr Furrows report about Ms Ford perhaps being at some risk in the future if she had to sell the townhouse.

21. I asked at the commencement of the hearing whether either of these professional people were going to be available to give evidence. Ms Ford says she did not understand that she was entitled to bring witnesses. On pressing the matter further she explained it was very difficult to get hold of anyone from the Mental Health Service and that you could only leave a telephone message and then they would call you back. I indicated that an adjournment would be appropriate to see if either of these professionals was available. Ms Ford returned after the adjournment saying she had left a message for Dr Furrows. Her phone later rang during the course of her giving evidence and she could not answer the call in time but suspected it may have been a return call from the Mental Health Service.

22. Mr Hamilton has submitted that the brevity of the reports and the conclusions are not supported by any evidence, particularly in the report of Dr Furrows.

    CONSIDERATION

23. The matter for determination is whether there are any “special circumstances” which would justify regarding the lump sum compensation as not having been made to the extent that the original preclusion period should be reduced. It is relevant to note that the reduction given by the ARO is also subject to review and therefore could be accepted in full, denied in full, or varied partially.

24. The statutory provision governing this issue is contained in s 1184K of the Act and empowers a discretion to treat some or all of a lump sum compensation payment as not having been made if there are “special circumstances” which make it appropriate to do so.

25. The applicant says there are “special circumstances” in that she ‘lost the plot’ or that her circumstances are unusual or unintended. She submits that her excessive spending was as a result of mental illness.

26. The respondent referred to the legal bounds of the term “special circumstances” and submitted:

    (a)“Special circumstances” would have to reveal something “unusual, uncommon or exceptional”. Whether circumstances answer any of these descriptions must depend upon the context in which they occur (Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3);

    (b)“Special circumstances” would require a conclusion “… that something unfair, unintended or unjust had occurred…” (Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545);

    (c)For a person to be released from liability,

    … 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 [recovery of debt] in mind, [the decision maker] must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which a strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise…

    (Re Ivovic v Director General of Social Services (1981) 3 ALN N95); and

    (d)“Special circumstances” must take account of the fact that any waiver of a debt results in a person having the benefit “… in circumstances in which he was not entitled to it… He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement” (Re Timothy Davy and Secretary Department of Employment and Workplace Relations [2007] AATA 1114 at [80]).

27. I note also that the original decision has been reviewed by an ARO and that officer was persuaded that Ms Ford’s behaviour in recklessly spending over $200,000 was due to mental illness and therefore was special or unusual. The ARO determined that the compensation preclusion period should be reduced by two years and 10 months, which, if I agree with that decision, would result in the preclusion period ceasing in 2016 rather than 2019.

28. In relation to the medical evidence and the suggestion of mental illness, Mr Hamilton submitted that Dr Furrows report has no evidence to support it. He says indeed, Ms Ford has been shown to be nothing but a survivor. In addition, he points to the following:

    (a)She has a job which causes her some difficulty but earns $60 per week;

    (b)She receives family assistance from Centrelink;

    (c)She has a full time carer on a carer’s payment. The carer is her elder daughter who also gets a generous allowance for looking after her mother; and

    (d)The townhouse is an asset which could be converted to being an income producing asset if necessary. He says there is nothing uncommon in any of these circumstances.

29. I note also, in addition to Mr Hamilton’s submissions, that Ms Ford has improved over the last year and would like the opportunity to return to her teaching profession.

30. Some of the applicant’s submissions are not entirely consistent with the medical evidence on which she relies. Her demeanour at the hearing initially displayed some anger or antagonism. As the hearing proceeded, it was apparent that the applicant is an intelligent person who has good training and skills and would like to return to teaching. She has admitted some progress in the last year.

31. In relation to the medical evidence specifically, I note the opinion of Dr Furrows is brief and indicates that this was the only occasion on which he had seen Ms Ford, although she had also been to the Mental Health Service on one previous occasion. The letter gives the impression that it is essentially a reflection of what Ms Ford told Dr Furrows on that occasion. There is no other indication of detailed clinical analysis being available other than what Ms Ford provided. Dr Furrows was not available for cross-examination. In addition, the statement does not provide a certificate ordinarily provided by medical specialists acknowledging that, under the Uniform Civil Procedure Rules 1999 (Qld), there is the duty of an expert to a court or tribunal which overrides the duty to the party who has called the professional person to give evidence. Therefore, I am not certain that the report by Dr Furrows was made while observing the duty of an expert.

32. Notwithstanding the caution noted in the previous paragraph, the Tribunal has not had the benefit of hearing or seeing Dr Furrows or having him cross-examined upon his report. Section 55 of the Evidence Act 1995 (Cth) (the Evidence Act) provides evidence is admissible if it is relevant, and, “if it were accepted”, it “could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding” (s 55(1)). But s 76 of the Evidence Act provides that evidence of an opinion is generally speaking, not admissible unless it falls within one of the statutory exceptions. One such exception is s 79(1) of the Evidence Act which provides for the admission of “expert” evidence, where a person “has specialised knowledge based on the person’s training, study or experience”, and the opinion of such a person is “wholly or substantially based on that knowledge”. Also of relevance to the facts in this case, s 135 of the Evidence Act which provides evidence might be excluded “if its probative weight is substantially outweighed by the danger that the evidence might:

    (a)be unfairly prejudicial to a party, or

    (b)be misleading or confusing, or

    (c)cause or result in undue waste of time.”

33. These provisions have been the subject to considerable elaboration and fine tuning by the High Court of Australia in HG v The Queen (1999) 197 CLR 414, followed by detailed particularisation of the application of the provisions relating to admissibility and weight to be given to expert evidence in Makita(Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 743-744 (per Heydon JA in the New South Wales Court of Appeal); and more recently in Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, where the High Court of Australia discussed “the basis rule”, which is concerned with being able to connect the opinion of an expert (in that case a medical specialist) with particular facts upon which it is based, and whether that opinion is based on the expert’s “training, study or experience” (at [36] per French CJ, Gummow, Hayne, Crennan, Keifel and Bell JJ).

1. Therefore, regardless of the formal qualifications or experience of a witness, the law requires that any expert must, firstly, convince the court or Tribunal that his qualifications and experience are such as to regard the person as an expert. I do not doubt that Dr Furrows would have been able to establish that point had he been called. However, what is particularly important is that the law requires that an expert must be able to satisfy a Tribunal “… how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’”, relates to his opinion and whether that opinion as to the facts assumed or observed is “wholly or substantially based’” on that specialised training and experience. “If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially upon the expert’s specialised knowledge” (Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 744 per Heydon JA). On that basis and having considered Mr Hamilton’s submissions, I do not think the requirements of s 79 of the Evidence Act have been satisfied and therefore, it would not be appropriate to put great weight on such a brief report when the Tribunal has not had the benefit of hearing from Dr Furrows (see Gleeson CJ in HG v The Queen (1999) 197 CLR 414 at 427 [39]; and Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 at [36]). Neither am I satisfied that the psychologist’s report by Ms Tuck (who seems to have adopted Dr Furrow’s conclusions) advances the matter any further. Also, Ms Tuck was not called to give evidence. To do otherwise would be to rely on evidence which is speculative at best and has not been proved.

2. The question then is: to what extent was the spending behaviour driven by mental illness? I accept that Ms Ford undoubtedly has suffered from depression. The illness and the length of time over which it has existed would be likely to cause some degree of mood disorder in any person, no matter how well adjusted they may have previously been. But having a mood disorder and then drawing a conclusion that it is responsible for the reckless spending behaviour shown is not supported by any of the evidence which has been presented. Ms Ford was undoubtedly angry at her circumstances. She still clearly regards her circumstances as being “unfair”. However, no substantive evidence of any real weight is therefore available to attribute such extreme spending behaviour to a mood disorder such as depression. That would be speculative. It may be equally speculated that her reckless spending was due to anger or anxiety about the future and this caused her depression. But again, no evidence is available to assist the Tribunal to answer this question. There is certainly no evidence available to make any finding of fact about any vulnerability to self-harm which has been briefly stated in the professional opinions tendered on the morning of the hearing.

3. In relation to the ARO’s decision, I am unable to accept that decision as being based on any substantive evidence which meet the requirements of the Evidence Act 1995 (Cth). There is no expert evidence which appears to justify my reducing the preclusion period further (or at all) and there is no reason for doing so based on the available evidence. However, I note Mr Hamilton, in response to a question by the Tribunal, merely did not oppose that finding. I note also that the ARO’s decision was made on 27 September 2011 and the applicant has been subject to that decision for approximately 7 months.

4. In all the circumstances as to the question before the Tribunal, I cannot find “special circumstances” which are any more unusual, uncommon or exceptional than most other people who are the recipients of lump sum payments and have preclusion periods applied to them. I do, however, acknowledge that Ms Ford has had a debilitating period but that she is, by her own admission, improving. Her attitude also indicates that she is motivated to overcome her circumstances over the last five or six years and to try to integrate back to the workforce. That shows an encouraging development in her position up to the present time.  I certainly did not detect a risk of self-harm to herself.

5. Ms Ford submitted, from her viewpoint, it was “unfair” that she should have to bear the consequences of her spending behaviour. However, none of the evidence points legally, to “special circumstances”, in the sense that there is an unjustness or unfairness which would justify reducing (or further reducing) the preclusion period. This is because there is no evidence which could excuse her reckless behaviour and spending pattern, of which expenditure of over $200,000 cannot now be properly identified. This is not a case where the taxpayer should have to bear this burden.

6. I therefore find as follows:

   (a)There are no “special circumstances” in this case as defined by law.

   (b)While I do not accept there is any substantial legal reason for the reduction of the preclusion period as determined by the ARO, in light of the fact that the Secretary has not opposed that determination, I will, reluctantly, leave that decision undisturbed.

   (c)That no further reduction in the preclusion period is justified. The preclusion period should therefore cease on 30 March 2016.

   DECISION

7. The decision under review, as amended by the ARO, is affirmed.

I certify that the preceding 40 (forty) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr K S Levy, RFD.

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Associate

Dated  14 May 2012

Date(s) of hearing	11 April 2012
Applicant	In person
Advocate for the Respondent	Bob Hamilton, Departmental Advocate