Joss; Secretary, Department of Employment and Workplace Relations and

[2007] AATA 1754

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1754

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/950

GENERAL ADMINISTRATIVE  DIVISION		)
Re		SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And GRANT FLETCHER JOSS

Respondent

DECISION

Tribunal Ms Robin Hunt, Senior Member

Date13 September 2007

PlaceSydney

Decision

The decision of the Social Security Appeals Tribunal dated 4 March 2003 is set aside and a new decision is substituted that:

·     Mr Joss was not unemployed during 1 October 1997 to 22 January 1998;

·     He ceased to qualify for Newstart allowance during that time;

·     He incurred a debt of $2,636.30 to the Commonwealth in respect of Newstart allowance paid to him for the period 1 October 1997 to 22 January 1998;

·     There are no special circumstances which make it desirable the debt be waived; and

·     The debt be recovered by withholdings or instalments at rates commensurate with Mr Joss’s circumstances from time to time.

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

Ms Robin Hunt
  Senior Member

CATCHWORDS

SOCIAL SECURITY – debt to the Commonwealth – overpayment of Newstart allowance – consideration of special circumstances – no special circumstances making it desirable to waive debt

Social Security Act 1991, s 1237AAD

Re Beadle v Director-General of Social Security (1984) 6 ALD 1

Beadle v Director General of Social Security (1985) 7 ALD 670

Dranichnikov v Centrelink (2003) 53 ATR 270

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Riddell v Secretary, Department of Social Security (1993) 30 ALD 31

Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25

Ryde v Secretary, Department of Family and Community Services [2005] FCA 866

Secretary, Department of Social Security v Hales (1998) 82 FCR 154

REASONS FOR DECISION

13 September 2007 Ms Robin Hunt, Senior Member   

introduction

1.      These are the reasons for decision following a further hearing pursuant to an order made by the Federal Court in which the Court upheld the Secretary’s appeal, set aside a previous decision of this Tribunal, and ordered that the matter be heard and decided again without hearing further evidence.

2. The proceedings concern a debt to the Commonwealth. The respondent, Mr Grant Joss, was receiving Newstart allowance when he incurred the debt. The parties agreed at the further Tribunal hearing conducted on 10 September 2007, that the only remaining issue for this Tribunal was whether the debt should be waived under section 1237AAD of the Social Security Act 1991 (the Act) on the basis that there were special circumstances.

background

3.      Mr Joss was receiving Newstart allowance for a period during which the Secretary of the Department of Employment and Workplace Relations (the Secretary) subsequently decided he was not unemployed. The Secretary sought review by this Tribunal of a decision of the Social Security Appeals Tribunal (SSAT) that Mr Joss was unemployed and that he owed no debt for overpayment of Newstart allowance from 24 July 1997 to 22 January 1998. This Tribunal upheld the SSAT’s decision. On the Secretary’s appeal, Graham J of the Federal Court held that it was not open to the Tribunal to find that Mr Joss was unemployed during the relevant period.

issue

4.      Are there special circumstances making it desirable to waive the debt?

consideration of special circumstances

5. Section 1237AAD permits waiver of a debt to the Secretary in special circumstances. The section reads:

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)        making a false statement or a false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)it is more appropriate to waive than to write off the debt or part of the debt.

6.      The parties agree that Mr Joss owes a debt of $2,636.30, being overpayment of Newstart allowance from 24 July 1997 to 22 January 1998. During the time he received the allowance, Mr Joss was not required to meet the activity test due to his medical problems but he engaged in activities which he argued did not amount to employment. He commenced receiving wages in early 1998 and notified the Secretary of this change in his circumstances. In 1999, Mr Joss instituted a claim in the Industrial Relations Commission in NSW and received a large sum of money by way of settlement in November 2004. This payment triggered an investigation by Centrelink into Mr Joss’s employment status.

7.      At the Tribunal hearing on 26 September 2005, Mr Joss gave evidence that he was penniless. He told this Tribunal that his settlement money had been paid in accordance with his agreement with the other party but that it was all expended. He was again receiving the Newstart allowance. Mr Joss said that he owed Westpac $14,000 and owed his brothers and a sister money. He explained that he was not dressed as he would like for the Tribunal attendance as he had no suitable clothes.

8.      Mr Joss gave further evidence about his poor health. He recounted a history of medical problems. He said he broke his neck when he was 16 and his posture after this injury led to damage to his legs. When he was 47 he had hip replacement surgery and seven years later he had similar surgery to his other hip. He had a continuing platelet problem after contracting a virus in 1993 and had to avoid quinine. He took low dosage aspirin treatment for this condition. He also had to take magnesium to avoid stomach cramps. In addition, Mr Joss gave evidence that he took blood pressure medication as well as treatment for arthritis. He had moved to Queensland to avoid arthritis related problems he experienced in the Sydney winter. He and his family had spent thousands of dollars on treatment for his back problems. He described various treatments he had undergone. At the foot of his bed he had an inversion machine to help him straighten his back. Mr Joss said he had numerous skin cancers cut out also and wore a special hat to protect the scar on the back of his neck from one of these operations.

9.      When asked about his major current disability, Mr Joss responded that he supposed it was his blood pressure. He went on to tell about complications and bad reactions he suffered to anti-inflammatory medication for his arthritis. Concerning possible future employment prospects, Mr Joss gave evidence that he was no longer interested in working on boats although he had a permit for charters on the Great Barrier Reef. There were 5 years left to run under the permit at the time of the hearing in late 2005. Mr Joss explained that there were various compliance matters involving insurance and other costs which were causing him concern about maintaining compliance with the permit and its renewal. He gave further evidence that he was trying to prepare another vessel for survey but there were difficulties associated with his being in a position to do this. I was unable to hear any evidence about Mr Joss’s present circumstances in 2007 but there is nothing to suggest that Mr Joss’s situation has improved since the first hearing in 2005.

10. Mr Cassim, the solicitor for Mr Joss, put to me that Mr Joss’s poor health and the length of time over which Mr Joss was involved in litigation to resolve his compensation claim and related entitlement to social security assistance were special circumstances. He argued these circumstances were in addition to Mr Joss’s financial hardship and health problems and together provided sufficient reason to permit waiver under section 1237AAD(b).

findings

11.     I accept that Mr Joss continues in poor health. From the Secretary’s records furnished for the review, I see that Mr Joss was born on 5 December 1944 and is therefore aged 62. I note from the Secretary’s records that Mr Joss was not required to perform the usual activity test at the time of the overpayment because he was awaiting further surgery. This shows a Centrelink officer had concluded Mr Joss had such disabling health problems at that time that he was not expected to be able to work.

12.     In view of his age and health, I accept that Mr Joss’s future career prospects may not be good. I also accept the evidence put to me of Mr Joss’s financial hardship. I further note that Mr Joss has endured a long and trying time sorting out his entitlements to remuneration for his contractual arrangements about the vessel he was preparing for survey. Mr Joss’s litigation has indeed taken place over a number of years and this has no doubt put a strain on him mentally as well as financially. His proceedings in the Industrial Relations Commission were finally resolved in 2004, after the SSAT made its decision in his favour. The SSAT decision has since been contested and I am dealing with the issues again in this decision.  Full payment to Mr Joss of his entitlement after action in the Industrial Relations Commission took a further number of years and Mr Joss has no funds at his disposal despite the settlement reached.

13. Mr Joss gave evidence in September 2005 that all the money had been paid under the settlement by that time and that he was nevertheless in debt. In addition, Mr Joss’s disagreement with the other parties to that dispute and his employment status brought about the present dispute with the Secretary. All these matters have contributed to Mr Joss’s circumstances for evaluation under section 1237AAD(b).

14.     The meaning of “special circumstances” is a broad concept and has been held to cover many situations which were particular to their own set of facts. Some guidance or principles have been provided by the courts and the Tribunal has applied these principles in cases before it. One of the cases most commonly referred to by the Tribunal is Re Beadle and the Director-General of Social Security (1984) 6 ALD 1, where Justice Toohey J, presiding on the Tribunal said, at page 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 on 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….

15.     The Full Court in Beadle v Director-General ofSocial Security (1985) 7 ALD 670, approved the Tribunal’s interpretation and made some other observations. Justice Kiefel, then sitting on the Federal Court, in Groth v Secretary of Department of Social Security (1995) 40 ALD 541, referred to the Federal Court’s decision in Re Beadle and observed that special circumstances:

… would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary 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. …

16.     In another case, Riddell v Secretary, Department of Social Security (1993) 30 ALD 31, at 38, the Full Court said:

Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.

17.     Mr Cassim for Mr Joss submitted that Mr Joss’s situation was out of the ordinary in that he had to pursue litigation over several years before his entitlements, both under industrial relations laws and concerning the Newstart allowance, were made clear. He suggested this was an unusual circumstance. In my view, lengthy and exhausting litigation is not particularly unusual and does not take Mr Joss’s case out of the ordinary.

18.     As well, Mr Cassim put that Mr Joss did not intentionally take benefits to which he was not entitled. I am prepared to find that Mr Joss made an honest mistake in accepting Newstart allowance. He was not required to look for work and declared his change in circumstances when he started to work for a wage. Through the process of review and appeal, it was not until the Federal Court handed down judgment on 10 July 2006 that it was finally determined that Mr Joss was employed for the purposes of the Act and was therefore not entitled to payments he received from 24 July 1997 to 22 January 1998. This is an unusual length of time for such a question to be resolved. However, the end result is that Mr Joss was not entitled to the money. Further, it was not paid to him due to any administrative error or mistake by Centrelink. While I have some sympathy for Mr Joss, who the Secretary concedes did not make any false misleading statements to Centrelink, this situation does not take his matter out of the ordinary. There are many instances where social security recipients are overpaid and incur a debt through an innocent mistake.

19.     Counsel for the Secretary drew my attention to the recent Federal Court case of Angelakos vSecretary, Department of Employment & Workplace Relations [2007] FCA 25. Besanko J in Angelakos, at paragraph 27 and following, referred with approval to the Beadle cases and a number of other cases including Dranichnikov, Hales, Ryde, Groth and Riddell, cited above. These cases have mentioned the need to be flexible in considering a wide range of possible special circumstances. In particular, Justice Besanko noted that the Tribunal member in Angelakos was not required to make a more precise test or formulation of reasonable circumstances than was done in that case. His Honour said:

36                 … this is not a case where the facts suggested that a precise formulation of the test was necessary or likely to be decisive. It seems to me to be implicit at the very least that the Tribunal member did not consider that there were any features which meant that the case was unusual or out of the ordinary.

20.     I further note that French J pointed out in Hales (supra) that it was not necessary to find financial hardship before applying section 1237AAD. This is just one of the circumstances that might enliven the section. With these observations in mind, I have viewed Mr Joss’s circumstances from an overall perspective.

21.     It is clear Mr Joss was in financial difficulty at the time he gave evidence about his circumstances in 2005. The debt to the Commonwealth places an additional burden on him. He also was in poor health. He had some prospects of future employment although his evidence suggested these prospects were reduced by various difficulties he was experiencing. I also note that Mr Joss has reached an age when many people retire and it is difficult to find work.  It is plain that Mr Joss is in difficult circumstances. However, the difficulties he is experiencing are common to many social security recipients. Bearing all these matters in mind, I am not satisfied, on balance, that Mr Joss’s case is out of the ordinary. I do not consider he is placed in special circumstances that make it desirable to waive his debt.

22.     I have not forgotten the Mr Joss will suffer additional financial hardship in being required to repay the debt especially when he had no expectation that he would have to do so until some years after he had spent the money in good faith. However, the degree of hardship to him may be reduced by making repayment in instalments. The Secretary asked in its “additional submissions” made on 13 October 2005 that the Tribunal order the debt be recovered by withholdings or instalments at rates commensurate with Mr Joss’s circumstances from time to time. I agree with this course of action if Mr Joss cannot repay the debt in full when this decision is handed down.

decision

23.     The decision of the Social Security Appeals Tribunal dated 4 March 2003 is set aside and a new decision is substituted that:

·Mr Joss was not unemployed during 1 October 1997 to 22 January 1998;

·He ceased to qualify for Newstart allowance during that time;

·He incurred a debt of $2,636.30 to the Commonwealth in respect of Newstart allowance paid to him for the period 1 October 1997 to 22 January 1998;

·There are no special circumstances which make it desirable the debt be waived; and

·The debt be recovered by withholdings or instalments at rates commensurate with Mr Joss’s circumstances from time to time.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Robin Hunt  

Signed:         Talaishia Collis
  Associate

Date/s of Hearing  10 September 2007      
Date of Decision  13 September 2007
Counsel for the Applicant         Mr T Reilly 
Solicitor for the Applicant          Ms B Griffin – Australian Government Solicitor
Solicitor for the Respondent     Mr G Cassim – Garry Cassim & Associates