Kerr and Secretary, Department of Social Services (Social services second review)
[2022] AATA 147
•3 February 2022
Kerr and Secretary, Department of Social Services (Social services second review) [2022] AATA 147 (3 February 2022)
Division:GENERAL DIVISION
File Number: 2021/2783
Re:Rex Kerr
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Deputy President Boyle
Date:3 February 2022
Place:Perth
Pursuant to s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth), the time for the Applicant to make an application for AAT second review is extended to 27 April 2021.
...[SGD].....................................................................
Deputy President Boyle
CATCHWORDS
PRACTICE AND PROCEDURE – application to extend the time for the making of an application to the Tribunal for a review of a decision – AAT second review – AAT1 affirmed decision not to grant Applicant DSP – Hunter Valley considerations – Applicant a quadriplegic – delay of over two years in Applicant being informed of AAT1 decision – Tribunal accepts Applicant’s explanation for delay – reasonable in all the circumstances to extend time for the making of an application – application granted
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 29(2), 29(7)
Social Security Act 1991 (Cth) s 1169(1), 1184K
Social Security (Administration) Act 1999 (Cth) s 179
CASES
Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541
Brown v Federal Commissioner of Taxation [1999] FCA 563
Carter and Australian Securities and Investments Commission [2020] AATA 809
Comcare v A’Hearn [1993] FCA 498; (1993) 45 FCR 441
Commissioner of Taxation v Brown [1999] FCA 1198; (1999) 42 ATR 672
Comptroller-General of Customs v Akai Pty Ltd (1994) 50 FCR 511
DHLD and Executive Director, Social Security Appeals Tribunal [2010] AATA 377; (2010) 115 ALD 566
Dix v Crimes Compensation Tribunal [1993] 1 VR 297; (1992) 28 ALD 565
Doyle v Chief of General Staff [1982] FCA 124; (1982) 4 ALD 636
Frugtniet v Secretary, Department of Social Services [2017] FCA 1227
Frugtniet v Secretary, Department of Social Services (No 2) [2018] FCA 1767
FVMZ and Child Support Registrar [2018] AATA 4200
Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment [1984] FCA 186; (1984) 3 FCR 344
Kang and Secretary, Department of Social Services [2019] AATA 758
Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121
Lucic v Nolan [1982] FCA 217; (1982) 45 ALR 411
Wedesweiller v Cole [1983] FCA 94; (1983) 47 ALR 528
Zizza v Federal Commissioner of Taxation [1999] FCA 848; (1999) 55 ALD 451
SECONDARY MATERIALS
Dennis Pearce, Administrative Appeals Tribunal (LexisNexis, 5th ed, 2020) [6.19]
REASONS FOR DECISION
Deputy President Boyle
3 February 2022
THE APPLICATION
The Applicant’s substantive application seeks review of a decision to refuse the Applicant’s claim for Disability Support Pension (DSP) which was affirmed by the Social Services and Child Support Division of the Administrative Appeals Tribunal by a decision made on 22 June 2018 (AAT1).
The AAT1 affirmed the decision made by Centrelink (the Agency) on 27 September 2017 to reject the Applicant’s claim for DSP because he was subject to a compensation lump sum preclusion period until 2 November 2057.
The Applicant has applied for an order extending the time within which his application for review of the decision of AAT1 may be lodged.
THE ISSUE
The issue for determination is whether, pursuant to s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), the time for the making of the AAT second review application should be extended.
BACKGROUND
In October 2005 the Applicant was involved in an accident that resulted in him being a quadriplegic. As a result of the accident, the Applicant issued legal proceedings and was paid a lump-sum compensation amount of $4,100,000. The payment was made by consent on 18 April 2008.
The Applicant lodged a claim for DSP on 31 August 2017. An officer of the Department rejected the claim on 26 September 2017 (the original decision). The basis of the original decision was that the Applicant is precluded from receiving DSP due to a compensation lump sum preclusion period which was imposed for the period 8 October 2005 to 2 November 2057, that is, 2717 weeks from the date his loss of earnings commenced.
At the Applicant’s request, the original decision was reviewed by an Authorised Review Officer (ARO) who affirmed the decision on 16 November 2017. The Applicant then made application to the tribunal for review of the decision as affirmed.
The AAT1 decision made on 22 June 2018 affirmed the ARO’s decision of 16 November 2017 to affirm the original decision.
THE HEARING
The application for an extension of time was heard on 4 October 2021. The Applicant was represented by Ms A Livingston and the Respondent was represented by Mr D Carroll. All appearances were by telephone. The Applicant gave evidence at the hearing.
THE LAW
Section 29(2) AAT Act provides that an application for review must generally be lodged within 28 days of the person receiving notice of the decision.
Section 29(7) of the AAT Act provides:
The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.
Section 179 of the Social Security (Administration) Act 1999 (Cth) (Administration Act) provides:
(1) Application may be made to the AAT for review (AAT second review) of a decision of the AAT on AAT first review made under subsection 43(1) of the AAT Act.
(2) For the purposes of subsection (1), the decision of the AAT on AAT first review is taken to be:
(a) if an AAT first review affirms a decision—that decision as affirmed; or
(b) if an AAT first review varies a decision—that decision as varied; or
(c) if an AAT first review sets a decision aside and substitutes a new decision—the new decision; or
(d) if an AAT first review sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the AAT—the directions or recommendations of the AAT.
(Original emphasis.)
The case most often cited as setting out the relevant considerations for an extension of time to make an application for review is Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment.[1] As noted by Dennis Pearce in Administrative Appeals Tribunal (LexisNexis, 5th ed, 2020) at [6.19]:
The factors enunciated by Wilcox J in [Hunter Valley] form the basis for consideration of most applications and ... will almost certainly continue to be the starting point of most decisions.
[1] [1984] FCA 186; (1984) 3 FCR 344.
The Respondent’s outline of submissions identified Hunter Valley as setting out the relevant principles governing the granting of extensions of time in such applications.
I agree that the principles set out in Hunter Valley and the cases that have followed that approach are applicable to this matter.[2]
[2] See also Brown v Federal Commissioner of Taxation [1999] FCA 563; (1999) 42 ATR 118.
In Hunter Valley Wilcox J (at 348) pointed out that “[t]he prescribed period of twenty-eight days is not to be ignored ... Indeed, it is the prima facie rule that proceedings commenced outside the period will not be entertained...”. In Brown, Hill J stated, at [59], that in the taxation context, the Tribunal should be “... guided by what the justice of the case requires”. In determining the question of whether an extension of time should be granted, the Tribunal should weigh together all relevant factors.[3]
[3] Zizza v Federal Commissioner of Taxation [1999] FCA 848; (1999) 55 ALD 451 (per Katz J).
At paras [11] and [37]–[49] of DHLD and Executive Director, Social Security Appeals Tribunal,[4] Deputy President Forgie set out a thorough and helpful review of the relevant authorities.
[4] [2010] AATA 377; (2010) 115 ALD 566.
The authorities establish that a range of considerations are to be taken into account when exercising the discretion to extend time for an application to be made. No one consideration has precedence or is, in itself, determinative. The factors include:
(a)It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained.[5]
(b)It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is, however, to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition.[6]
(c)Action taken by an applicant other than by making an application to the court (or tribunal) is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised.[7]
(d)Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension.[8]
(e)The mere absence of prejudice is not enough to justify the grant of an extension.[9]
(f)The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.[10]
(g)Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court’s (or tribunal’s) discretion.[11]
[5] Lucic v Nolan [1982] FCA 217; (1982) 45 ALR 411 at 416.
[6] Comcare v A’Hearn [1993] FCA 498; (1993) 45 FCR 441; Dix v Crimes Compensation Tribunal [1993] 1 VR 297; (1992) 28 ALD 565 at 569.
[7] Doyle v Chief of General Staff [1982] FCA 124; (1982) 4 ALD 636 at 287.
[8] Doyle at 287; Brisbane South Regional Health Authority v Taylor [1996] HCA 25; (1996) 186 CLR 541.
[9] Lucic at 416.
[10] Lucic at 417.
[11] Wedesweiller v Cole [1983] FCA 94; (1983) 47 ALR 528.
In paras [40]–[44] of the decision in DHLD, Deputy President Forgie sets out a more detailed review of the cases dealing with the relevance of the apparent strength of the substantive claim. The Deputy President cites the comment made by the Full Court in Federal Commissioner of Taxation v Brown[12] at [28]:
We wish to make it clear, however, that the AAT is not precluded from taking into account the apparent strength or weakness of taxpayer’s case, when determining whether an extension of time should be granted, if the overall circumstances are such that the apparent strength or weakness of that case is properly to be regarded as a material consideration.
CONSIDERATION
[12] [1999] FCA 1198; (1999) 42 ATR 672.
The delay
The Tribunal provided the Applicant and his former representative with the AAT1 decision by post on 2 July 2018.
The application for AAT second review was received by the Tribunal on 27 April 2021, two years, nine months and 25 days out of time.[13] The delay is obviously very considerable.
[13] Note: The Respondent calculates the application for AAT second review to be two years, eight months and 28 days out of time (Secretary’s Outline of Submissions dated 1 June 2021 para 29). The difference between my calculation of the delay and the Respondent’s calculation is not material for present purposes.
In the application for AAT second review lodged with the Tribunal on 27 April 2021, the Applicant’s explanation for the delay was:
Rex has been in Esperance hospital the decision was sent to his home address.
The Applicant’s evidence at the hearing was as follows:
I was reliant on someone else to collect my mail for me, different carers, I never received the letter saying about the 28-day period of appeal. I was only informed that only two-and-a-half months ago when I was speaking to the tribunal through their social worker in Perth that’s Fiona Stanley… that’s the first I heard of that 28-day period, otherwise I would have appealed within that first 28 days.[14]
[14] transcript at 17–18.
The Applicant’s evidence was that while he was in Fiona Stanley Hospital for treatment, a social worker at the hospital had called the Tribunal at the Applicant’s request to enquire about the AAT1 review and was told that the decision had been sent to the Applicant in July 2018. It was only then that the Applicant had become aware that an AAT1 decision had been made.
The Applicant’s evidence was that on the same day that he became aware of the AAT1 decision, Centerlink had made a determination to refuse a further application made by the Applicant for a DSP. The Applicant’s evidence was that he had sought review of that second Centrelink decision as well but was not aware of how that review was progressing.[15]
[15] transcript at 22.
While the delay in lodging the application for AAT second review is significant, I accept that the Applicant did not actually become aware of the AAT1 decision until the social worker at Fiona Stanley rang the Tribunal in April 2021. It appears that shortly after the Applicant became aware of the existence of AAT1 decision, certainly within 28 days thereof, he made the application to the Tribunal for AAT second review.
Prejudice
In relation to the prejudice that would be suffered if the Applicant were granted the extension of time, the Respondent cited Frugtniet v Secretary, Department of Social Services[16] at [18]:
18 The third ground relied upon by Mr Frugtniet was a failure to have considered prejudice to him and that the Secretary had failed to adduce evidence of prejudice to the Secretary by reason of granting an extension of time after a lengthy period of delay. In that regard Mr Frugtniet relied upon authorities indicating that a party opposing an extension on the grounds of prejudice should adduce evidence which shows the nature and extent of that prejudice: see Windschuttle v Deputy Commissioner of Taxation [1993] FCA 553; (1993) 46 FCR 235, 249250; see also Brown v Federal Commissioner of Taxation at [32], [51][54]. In this case, however, the relevant prejudice to the respondent and to the public was the inherent impact of the passage of time. That was not prejudice requiring evidence beyond the inferences flowing from the passage of time and the common knowledge that memory may fade with time and that making inquiries to test facts which are asserted may become increasingly difficult over time and to evaluate reliably. The prejudice to the Secretary may, on one view, not have been great but it was a factor able to be relied upon by the Tribunal as it did.
[16] [2017] FCA 1227.
The Respondent points to the fact that the Federal Court dismissed Mr Frugtniet’s appeal of the judgment referred to at [27] above.[17]
[17] Citing Frugtniet v Secretary, Department of Social Services (No 2) [2018] FCA 1767.
The Respondent then cited FVMZ and Child Support Registrar[18] in which the Tribunal stated:
15.… In this case there would significant prejudice to the Respondent: 32 months is a very long time and the prejudice is caused in several ways. First, there is the principle of finality in administrative decision-making process and the Respondent was entitled to believe the matter was finalised.
16.The delay also prejudiced the ability of parties to put evidence to the Tribunal. The Federal Court noted this particular factor in Furgtniet v Secretary, Department of Social Services [2017] FCA 1227 (Furgtniet) and said that, in that case, the relevant prejudice to the respondent and to the public was the inherent impact of the passage of time ([18]).
17.In Frugtniet, this was not a prejudice that required evidence beyond the inference flowing from the passage of time and the common knowledge that memory may fade, and making inquiries to test facts may become increasingly difficult. I also note that the effluxion of time makes it very difficult for even the Applicant to properly recall events. I find the Applicant to be a truthful witness, recounting events as she perceived them, but when a matter has been festering for nearly three years there is always a probability that memory will be affected by subjective perceptions.
18.In Frugtniet the delay was approximately 12 months whereas here the delay is considerably longer. There is also the community expectation that the rules regarding delays in the making of an application are rigidly enforced. To make an exception without the benefit of convincing reasons would overall prejudice the systems requiring administrative actions to be appealed within the appropriate time.
[18] [2018] AATA 4200.
Based on the above, the Respondent contends that given the passage of time there is an increased chance that there is a diminished capacity for the Secretary “to test facts which are asserted by memory and oral evidence.”[19] The Respondent does concede that this factor is not great but contends that it is still a relevant factor.
[19] Secretary’s Outline of Submissions dated 1 June 2021 para 35.
I agree with the Respondent’s concession that this should not be a significant factor in the present case. The issue to be determined in the substantive application is not one that will rely, at least to any significant degree, on witnesses’ recollection of events. That application will be determined largely on legal considerations as to the existence of a preclusion period under s 1169(1) of the Social Security Act 1991 (Cth) (SSA) and whether there are any special circumstances which result in it being appropriate to treat the whole or part of the compensation payment as having not been made pursuant to s 1184K of the SSA. The “special circumstances” upon which the Applicant relies are uncontroversial historical facts relating to the $4,100,000 compensation payment and the Applicant’s present circumstances. Accordingly, it is difficult to see how considerations of fading memories of events would apply in the present case.
Wider prejudice to the general public in terms of disruption to established practices
The Respondent contends that it is in the public interest that there is an end to the appeal process. Time limits are imposed to ensure that there is a predictable and orderly conclusion to the process and the public interest and the interests of those applicants who comply with the prescribed time limits would be unsettled by perceptions of unfairness and uncertainty if an extension of time is granted where the justice of the case does not permit that this should occur.[20]
[20] Citing FVMZ [18]; see [29] above.
I do not accept that third parties would feel aggrieved by an extension of time being granted in the present case given the personal circumstances of the Applicant and the reason for the delay in making the application.
Prospects of success
According to the application lodged with the Tribunal, the Applicant’s substantive application is based on the following proposition:
Mr. Rex Kerr is a quadriplegic from an accident in October 2005. He received a compensation payment of $4100,000. on the 18/4/2008 to cover his needs with the preclusion period being until 2/11/2057.
Mr. Kerr has exhausted his compensation paying for his care and supports that have been required over the the 13year period since the lump sum payout. He has no source of income and has now been a social admission since the 20th of January 2021 at the Esperance Hospital. Mr. Kerr has an NDIS plan and an agency that can implement his care in his home. However without Centrelink payments he cannot live, pay for food, utilities, or medications. He is currently having to stay in hospital for purely this reason.
As the Respondent notes, the Applicant’s case is that there are special circumstances. The Respondent contends, as the AAT1 found, that there are no, or no sufficient, special circumstances under s 1184K of the Act. The Respondent contends that “[t]he Applicant’s reasons for the application are not sufficient to set aside the AAT1 decision”.[21] That statement by the Respondent, while it may be expressed somewhat in the vernacular, does not reflect the role of the AAT second review. Like all reviews by the Tribunal, the AAT second review under s 179 of the Administration Act is a hearing de novo based on the evidence before the Tribunal at the time of the AAT second review. I summarised the role of the Tribunal in reviewing a decision in Kang and Secretary, Department of Social Services[22] at [18] as follows:
The role of the Tribunal in such a review is to determine for itself what is the correct and preferable decision: see Shi v Migration Agents Registration Authority [2008] HCA 31; (2008) 235 CLR 286 (Shi). The Tribunal is not limited to reviewing the decision for legal or other error, but rather conducts its own de novo assessment and determination of the matter. Its role is ‘to “do over again” what the original decision maker did’: see Yao v Minister for Immigration and Border Protection (2014) 140 ALD 21at [41] per Perry J (White and Wigney JJ agreeing), referring to Shi at [100] (per Hayne and Heydon JJ) and at [37] (per Kirby J). See also Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at [589] and reference to that case in CMHV and Director-General of Security and Minister for Foreign Affairs [2017] AATA 1547 at [37].
[21] Respondent’s Outline of Submissions dated 1 June 2021 para 46(a).
[22] [2019] AATA 758.
In Carter and Australian Securities and Investments Commission[23] at [51], having referred to a number of the authorities set out in the above paragraphs, I observed:
The above authorities make it clear that the role of the Tribunal is to do over again that which the original decision maker did and, on the evidence before the Tribunal at the time that it makes its decision, exercising the same discretions that the original decision maker had, make what it considers to be the correct or preferable decision. That is not, as asserted by the Applicant, an exercise in considering what errors the delegate made. It will be an exercise in considering the evidence that was presented to the delegate, and any further evidence put to the Tribunal by the parties, and forming its own view as to what the correct or preferable decision is.
[23] [2020] AATA 809.
The role of the Tribunal on an AAT second review is not to determine whether there is evidence or material “sufficient to set aside the AAT1 decision”, the role is for the Tribunal to “[form] its own view as to what the correct or preferable decision is”[24] or, as Hill J put it in Comptroller-General of Customs v Akai Pty Ltd[25] at 521:
… [to work] out, as a further step in administration, what it considers the decision ought to be: cf Mobil Oil Australia Pty Limited v Commissioner of Taxation (Cth) [1963] HCA 41; (1963) 113 CLR 475 at 502 per Kitto J; Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 at 413-415 per Bowen CJ and Deane J, and more recently see Liedig v Commissioner of Taxation (1994) 50 FCR 461.
[24] Carter at [51].
[25] (1994) 50 FCR 511.
In Kuljic v Secretary, Department of Social Security[26] von Doussa J relevantly stated, at 122, that:
One of the principal considerations to be addressed in deciding whether it is fair and equitable in all the circumstances to extend time is whether the merits of the proposed appeal are such that if an extension of time is granted there is some prospect of success in the appeal. If a consideration of the merits indicates that there is no question to be agitated on the appeal, and there is no prospect of success, it would be futile to grant an extension of time and most unjust to the respondent to subject the respondent to the costs of defending a pointless appeal.
[26] (1994) 33 ALD 121.
The Tribunal is not required to undertake a substantive review of the merits of the application but rather should assess whether the Applicant has an arguable case. In Brown Hill J at [56] stated:
... For present purposes I am prepared to accept the view of von Doussa J in Windshuttle that an applicant should show that he or she has an arguable case. No doubt if the objection on the face of it is one which is frivolous or bound to fail as a matter of law it would be a futility to permit an extension of time to enable it to be considered. But this points to quite a low threshold. What is involved is whether the objection on its face discloses a case which is arguable, not whether having regard to other matters, including evidence which may not even be known to the taxpayer at the time of making the application, the case is one that the taxpayer will or will probably lose.
In my view it could not be said that the Applicant’s claim in the substantive application is one that is, on its face, frivolous or has no prospects of success, or that it would be a futility to permit an extension of time. As Hill J noted, the threshold is a low one and in the present matter I accepts that the Applicant’s case, as a minimum, is arguable and meets that threshold.
Alternative avenues of relief
As noted above, the Applicant has made a further application for DSP which the Agency rejected on 17 February 2021. The Respondent notes that it is open to the Applicant to seek review by an ARO of that decision. If the Applicant considers that he now has special circumstances that would make it appropriate to treat the whole or part of a compensation payment as not having been made (thereby shortening or eliminating the preclusion period), the Applicant can provide that information to the ARO.
While that may be the case, on the evidence before me, I am unable to make any judgement of the basis, merit or stage of that other claim for DSP. My role is to consider the substantive application and the application for an extension of time which is before me.
CONCLUSION
While the delay in bringing the substantive application is considerable, I accept the Applicant’s explanation for that delay. Given the nature of the issues to be agitated and determined in the substantive application, I cannot see that the Respondent is likely to be prejudiced to any significant degree by an extension of time being granted. The determination of the substantive application will be made on the basis of the Applicant’s present circumstances. Potentially fading memories of witnesses will not be an issue.
Based on the above, I am satisfied that it is reasonable in all the circumstances to extend the time for making the substantive application.
DECISION
Pursuant to s 29(7) of the AAT Act, the time for the Applicant to make an application for AAT second review is extended to 27 April 2021.
I certify that the preceding 45 (forty-five) paragraphs are a true copy of the reasons for the decision herein of Deputy President Boyle
...[SGD].....................................................................
Associate
Dated: 3 February 2022
Date of hearing: 4 October 2021 Advocate for the Applicant: Ms A Livingston Counsel for the Respondent: Mr D Carroll Solicitors for the Respondent: King & Wood Mallesons
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