Kelty; Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and

[2009] AATA 255

Administrative Appeals Tribunal

WRITTEN REASONS FOR ORAL INTERLOCUTORY DECISION [2009] AATA 255

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2009/1201

GENERAL ADMINISTRATIVE  DIVISION		)
Re		SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Applicant

And JOHN KELTY

Respondent

DECISION

Tribunal Ms A F Cunningham (Senior Member)

Date8 April 2009

PlaceHobart

Decision The application for stay is granted.

[Sgd Ms A F Cunningham]

Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE - application for a stay of decision

Administrative Appeals Tribunal Act 1975, section 41(2)

Commonwealth Banking Corporation v Iannello (1988)  

WRITTEN REASONS FOR ORAL INTERLOCUTORY  DECISION

20 April 2009   Ms A F Cunningham (Senior Member)   

1.        On the 12 February 2009 the Social Security Appeals Tribunal (SSAT) set aside a decision of Centrelink to reject Mr Kelty's claim for Disability Support Pension (DSP) and substituted a decision that Mr Kelty is medically qualified for DSP from the date of his claim.  Mr Kelty's claim for DSP was made on 29 October 2008. 

2.        The Secretary now seeks an order staying the operation of the decision of the SSAT.  The application for a stay is opposed by Mr Kelty who contends that he meets the qualification requirements for a DSP on medical grounds and is confident that with additional medical evidence he will persuade the Tribunal that this is the case. 

3.        Mr Kelty underwent major surgery in July 2008 following a diagnosis of bowel cancer earlier in the year which was treated with chemotherapy and radiotherapy.  As a result of the surgery Mr Kelty now suffers a number of functional impairments and has a permanent colostomy which causes discomfort and restrictions due to its position. 

4.        Centrelink's decision to reject Mr Kelty's claim was made on the basis that the medical conditions were considered temporary in that there was an expectation of improvement within 24 months.  This assessment was made on the basis of the Job Capacity Assessment which referred to the medical report that accompanied the claim.

5.        In that report completed by Dr Daniels on 29 October 2008 he stated that the current impact was expected to persist for between 3 and 24 months and that the effect of the condition on Mr Kelty's ability to function within the next two years was uncertain.  Dr Daniels noted that a clinical review is expected in April 2009.

6.        However in a subsequent report completed on 24 November 2008, Dr Daniels stated that he expected that the current impact would persist for more than 24 months and that the effect on function within the next two years remained unchanged.  There is no accompanying explanation for the changes made in the report which was prepared just one month after the earlier report.  The SSAT relied on the information in this subsequent report to arrive at the conclusion that the condition was not temporary, that is it was likely to persist for more than two years. 

7. Section 41(2) of the Administrative Appeals Tribunal Act 1975 sets out the procedure for considering an application for the stay of a decision.

8.        The Tribunal has traditionally adopted the approach set out in the decision Commonwealth Banking Corporation v Iannello (1988) 15 ALD 418 which considered the relevant factors as:

·Any hardship likely to be suffered;

·Ensuring the effectiveness of the review by allowing sufficient preparation by the parties to the appeal;

·Ensuring a successful application is not rendered nugatory and;

·The prospects of success of the application for review.

Hardship

9.        It was contended by the Secretary that Mr Kelty would suffer unnecessary hardship if the decision of the SSAT is not stayed, essentially because if the appeal is successful Mr Kelty will have been significantly overpaid.

10.      Mr Kelty currently receives the maximum rate of New Start Allowance of $453.30.  He would likely receive the maximum rate of DSP of $569.50 pursuant to the decision of the SSAT.  Further arrears of $1,339.75 would be payable for eleven and a half fortnights. 

11.      Mr Aaberg calculated that if the hearing takes place in approximately 16 weeks he would have been overpaid $4,500.00 irrespective of the arrears.

12.      Ms Rattray contended that the additional income between NSA and DSP of approximately $100.00 per fortnight is needed towards the purchase of medical supplies and expenses. 

13.      I was informed by Mr Aaberg that if the appeal is successful and a stay is not granted, Mr Kelty would be required to repay the full amount of the DSP and would have no entitlement to NSA as it cannot be paid retrospectively.  On the other hand if a stay is granted Mr Kelty would continue to receive NSA.  Mr Kelty will receive all arrears due, that is the difference between NSA and DSP if the appeal is not successful.

14.      In the event of a successful appeal, Mr Kelty would likely be subject to the standard withholding rate of 14% and subject to a repayment therefore of around $63.00 per fortnight from his NSA for  three and a half years. 

15.      It was submitted on behalf of Mr Kelty that the Tribunal could merely stay the operation of the order in so far as it affects the payment of arrears. 

16.      I consider that the real potential for hardship in this case is if the appeal is successful and a stay is not granted, Mr Kelty will liable for the full repayment of DSP as he would not be retrospectively entitled to NSA. 

17.      Mr Kelty is currently in receipt of NSA and has been given an exemption from the activity test until 19 June 2009.  As submitted by Mr Aaberg, only one more medical certificate for a thirteen week period would be required pending the hearing of the appeal.  In my view this would not cause Mr Kelty any undue or unreasonable hardship. 

Prospects of success

18.      Both parties submitted that their case has merit.  I understand the decision of the SSAT which was chaired by a medical practitioner and based on the evidence before it.  It may be that further medical evidence will produce a different result but this is uncertain at this stage.  I have no basis upon which I can assess the prospects of success.  The outcome in the absence of further medical reports is essentially unknown at this stage. 

Prospect of recovery such that a successful review is not rendered nugatory

19.      This factor has been dealt with above and is not a persuasive issue in the circumstances of this case.

Ensuring the effectiveness of the review

20.      Mr Aaberg contended that approximately 16 weeks will be required before the medical evidence can be obtained for a hearing.  Ms Rattray suggested 8 weeks.  I  believe that the period may be somewhere in between.  In any event the decision to grant or not grant a stay will not impact on the hearing date.

21.      I accept that further medical evidence would be of assistance in determination of the application for review.  Sufficient time should be allowed to enable these further assessments and reports to be prepared. 

Decision

22.      There is a fundamental principle that a litigant is entitled to the benefit of a decision pending appeal unless there are circumstances that justify a stay of the decision.

23. What justifies the stay in the circumstances of this case? The only factor of any weight in this case is the question of hardship. Section 41(2) requires that I take account of the interests of any persons who may be affected by the review and makes such order that is appropriate for the purposes of securing the effectiveness of the application for review.

24.      If the application for stay is refused and the appeal is successful, Mr Kelty will be left with a fairly sizeable debt of $4,558.40 plus $1,339.75 in arrears to repay and would not be entitled to any income for the period from when he is paid DSP. 

25. Although Mr Kelty is aware of this prospect, in my view this potential outcome objectively assessed is not in his interests and does not support the object of securing the effectiveness of the application for review referred to in section 41(2).

26.      As stated above the information in support of the merits of the appeal is neutral and in my view non-persuasive for either party.  Essentially the prospects of success are unknown at this stage.  If a stay is granted Mr Kelty would still be in receipt of NSA and the difference between the two payments is approximately $100.00 per fortnight. 

27.      There is the potential for a successful appeal, the Secretary obviously thinks that it has a case.  The consequences of a successful appeal if a stay is not granted would result in a sizeable debt being raised against Mr Kelty who says he is not able to work and would therefore have to repay the debt from his pension entitlements over a long period of time.

28.      On balance I consider that a stay of the decision of the SSAT is in the interests of both of the parties to the application for review and would mean that Mr Kelty who has been successful in his review to date, would not be unreasonably disadvantaged as a result of the Secretary's application for review.  He will maintain his entitlement to NSA pending the review and in the event of an unsuccessful appeal will be entitled to the benefit of the SSAT decision and paid all arrears owing.  Whilst in the meantime Mr Kelty will be paid approximately $100.00 less per fortnight than he would have received under DSP, it is not anticipated that the appeal hearing will be unreasonably delayed.

29.      For these reasons the application for stay is granted.

I certify that the 29 preceding paragraphs are a true copy of the reasons for the decision herein of Ms A F Cunningham (Senior Member)

Signed:  ............................
               R Hunt (Administrative Assistant)

Date of Hearing  8 April 2009
Date of Decision  20 April 2009
Solicitor for the Applicant          Flemming Aaberg, Centrelink Legal Services
Solicitor for the Respondent     Noelle Rattray, Hobart Community Legal Service