Lagogiannis and Secretary, Department of Family and Community Services
[2005] AATA 129
•11 February 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 129
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2003/606
GENERAL ADMINISTRATIVE DIVISION ) Re CON LAGOGIANNIS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Senior Member WJF Purcell Date11 February 2005
PlaceAdelaide
Decision The Tribunal sets aside the decision under review, and substitutes a decision that the debt due to the Commonwealth by the applicant in the sum of $33,996.09 be reduced to $21,818.09 to the intent that the balance of the debt due by the applicant, as at 2 April 2004, is $15,000.
(Signed)
WJF PURCELL
(Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowances – Newstart Allowance – overpayment – debt due to the Commonwealth – grounds to waive the debt in part or in full – “knowingly” failed to comply with requirement of Act – special circumstances – good faith – decision set aside
Social Security Act 1991ss 1237AAD
REASONS FOR DECISION
11 February 2005 Senior Member WJF Purcell 1. This is an application for review of a decision of the Social Security Appeals Tribunal (the SSAT) of 28 October 2003, which affirmed the decision of an Authorised Review Officer of 6 March 2003, to raise and recover a debt of $33,996.09, being an overpayment of Newstart Allowance for the period 1 July 1995 to 6 November 2001.
2. The evidence before the Tribunal comprised the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act1975 (the T documents), together with the exhibits tendered by the parties. The applicant appeared on his own behalf, with the assistance of Ms Kyriazis of Disability Action. He gave oral evidence. Mr Goldsworthy represented the respondent (the Department).
3. On 24 September 1994 and 24 October 1994 the applicant applied for Newstart Allowance (NSA); which was paid from 24 October 1994, based on the information he provided in his application forms. He answered “no” to a question as to whether he had any assets, or received any income. He did not declare that he was the owner of four flats located at 7 Jervois Street, Torrensville, which had been purchased on 5 July 1991; nor did he advise that he received rental income for these properties, in the form of a cheque each month, from Lin Andrews Real Estate.
4. Between 15 July 1996 and 26 October 1998, the applicant held various periods of employment with the University of South Australia (UniSA). On 26 July 1996 he declared that he had earned $297.40 from “Underdale Uni”. He continued to lodge NSA continuation forms during his employment, but asserts that he did not declare any further income from this employment.
5. On 20 August 2001 information supplied by the Australian Taxation Office (ATO) led to enquiries, and on 15 February 2002 Centrelink determined that the applicant had not been entitled to any NSA payments because his assets had exceeded the allowable threshold. A debt of $43,280.06 was raised for recovery for the period 1 July 1995 to 6 November 2001. The applicant requested a review of this decision, and provided information about loans he had arranged with members of his family in order to purchase his property. On 14 January 2003 it was determined that although the applicant’s assets had not exceeded the threshold, he had been overpaid due to his failure to declare income. A debt of $33,996.09 was raised for recovery for the period 1 July 1995 to 6 November 2001. This decision was affirmed by an Authorised Review Officer on 6 March 2003, and by the SSAT on 28 October 2003. The applicant has applied to this Tribunal for review of the decision.
6. At the SSAT Hearing the applicant stated that he disputed the amount of the debt. He thought it should be considerably less, as he did not receive much rental income, and could not see how such a large overpayment could have accrued. He explained the circumstances leading to this debt in detail. He stated that in 1987, while working for “the railways” as a guard, he was seriously injured in a head on car accident. After 12 months, at the employer’s request, he resigned from work. He continued rehabilitation until 1992, when he obtained employment with Australia Post as a courier and mail sorter. He has been involved in a legal battle with Australia Post since 1994 because they gave him only 1-2 hours work per week. He has had further difficulties and legal proceedings arising from his later employment at UniSA, with large bills for legal fees associated with these matters.
7. The applicant told the SSAT that he had become addicted to painkillers for a time, but that at the time of the SSAT Hearing, he was managing to not use them. His mother is ill with cancer, and he has not told her that he is still struggling. He said that his mother does not believe in depression, and consequently does not understand what he is going through. He will visit her when he is feeling alright, and will leave if he starts to “feel bad”. He described trying his hardest to manage, but only being able to get through one day at a time. He has been taking Oxycontin, at a fairly high dosage, since around 1997. He has used this medicine in an attempted overdose. He has used Valium since around 1997 also, and was taking 3-4 a day, and more at times, but is now trying not to use it at all. He is feeling jumpy and nervy as a consequence.
8. The applicant told the SSAT that he had a nasty Workers’ Compensation case with UniSA, and is still being harassed. He has bottles thrown at his windows, and prank calls which he attributes to “UniSA people”. He lives in his own house at West Beach, and visits his parents a few nights a week. Often he will visit at night, after they are asleep, and stay there overnight. He described suffering from phobias; he is afraid to answer the door, and scared to go out with girls. He has lost friends, and lost almost all social contact. He has a sense that people look down on him, and while not exactly laughing at him, are thinking about him negatively. This makes it hard to use public transport; his heart races and he has a terrible feeling. Shopping is also difficult, for the same reason. These feelings are worsened by sleeplessness. He has frequent trouble sleeping. He has lost weight and his confidence and self-esteem have dropped. He has difficulty concentrating, and suffers memory lapses. He was only able to negotiate the purchase of his home in 1991 because his sister did all the paperwork for him.
9. The applicant said in evidence that he is distressed by his situation; he always wants things to be perfect, but they are not. He would like to be well, and he would like to not need Centrelink payments. He would like to feel normal. However, until he is well, he wants to be able to simply receive sickness allowance without any debt problems so he can get better.
10. The applicant attends a psychologist two to three times a month, and consults his doctor, Dr Arcondoulis, who he feels is losing patience with him. He had an appointment booked at the Royal Adelaide Hospital pain clinic for two weeks after the SSAT Hearing date. He described having lost interest in everything, and not caring about life any more. He does not use alcohol or other drugs, but smokes around 30 cigarettes a day.
11. The history of the applicant’s Australia Post dispute is that he was working casually as a mail sorter and courier in 1991 and 1992, but only getting a few hours work a day. He kept “hanging in there”, hoping for more hours, but did not get them, while other people did. Weak excuses were made to him about this. He had some help from his union, but the problem recurred. He took a week off, for stress, on medical advice, and when he returned, he was told that he had resigned. He had not resigned, and took legal action with the support of his doctor. He considers that his lawyer “stuffed up” his claim for stress reaction.
12. On 1 July 1996 he obtained some work at UniSA through his cousin. He got into a bit of a panic on the first day because he was asked to use some machinery, which strained his (previously injured) back. He was under pressure from other staff, including his cousin, not to complain about the machinery. Apart from that, the work was OK and he was glad to be working. He got a few months’ contract at a time, and UniSA seemed to be happy with him. He worked there until 26 October 1998, but not between September 1996 and April 1997. When his Australia Post court case came up, he was stressed and took three weeks off work at UniSA to get the Australia Post case behind him. When he returned to work, there was a misunderstanding involving his cousin’s payslip, which was placed in error in his pigeon hole. He opened the envelope, and his cousin was very angry with him. He felt that she taunted him. His contract was not renewed after that. He pursued this matter and it was finalised, unsuccessfully in November 2002. He is now trying to pursue it through his Member of Parliament and the Attorney-General. He said that all he wanted all along was WorkCover payments and rehabilitation. He hates having to see doctors all the time. Recently his parents paid for him to go to Malaysia for special (drug) rehabilitation treatment. Centrelink has treated this as if it was a holiday. It was not – it was very demanding.
13. In relation to the NSA claim he lodged in October 1994, the applicant acknowledges that he did not declare the income from the rental units. He said that he has not been getting “actual income” from them. He said that he had asked Centrelink about rental properties, and had been told that he could claim NSA if he had a rental property, but did not get any net rental income. He thought it would have been too difficult to come up with a rental income figure, and that in any case it would be very low and have no impact. He said also that he did not see the units as being “all his”, but as also belonging to family members who had lent him $100,000 towards the purchase price.
14. The applicant had provided Centrelink with a document recording an agreement between his sister, his father and himself, setting out that they each have an interest in the property, because of the loans. He has been repaying them at a rate of $400 per fortnight (alternating fortnights between his parents and sister) since first purchasing the units. His parents and sister also lent him money for legal and medical fees, and the loan arrangements have been renegotiated as the situation changed. Some of his repayments have now been attributed to funds lent for legal and medical fees. There is no formal loan document, repayment schedule, or agreed interest component in relation to these advances.
15. The applicant said that he tried to sell one of the units, but could not because they are run down, and would not sell for much. He wants to be able to put some energy into them, but is not well enough to do maintenance work around the place. Consequently he has to spend more on them than he anticipated, because he has to pay other people to do work that he expected to do himself.
16. The applicant said in evidence that he thought he had told Centrelink about his work with UniSA. However, he was taking so many pills that he cannot clearly recall what happened. It was all he could do to manage going to work each day; he would then just go home and sleep. He thought working would help him get back on track in his life, so kept on with it despite it being exhausting. He thought that his NSA had stopped while he had wages from UniSA. He explained that he had not felt like himself for a long time – he has been like a zombie.
17. The applicant said in evidence that Centrelink had requested his income details when calculating this debt, so he had taken all his papers and receipts to an accountant who had prepared 10 years’ worth of tax returns for him, and charged $1,800. He maintains that the Department’s debt calculations are wrong; that the $400 a fortnight he repays to his family should be deducted from his rental income. He also thought that Centrelink should use the rental income figures from his tax returns, rather than its own calculation of rental income, which was higher. He said he had spent more on maintaining the properties than the agent had billed him for. He met some of the expenses directly from his own pocket, rather than through the agent. He said he feels guilty that his parents have had to support him financially. He is not where he would like to be, and thinks he should he, in his life, at his age.
18. The Department contends that the applicant declared that he had earned $297.40 on 26 July 1996, he did not indicate that his employment was ongoing, and no other earnings were declared subsequently. The applicant had the ability to work full-time for approximately two years at UniSA. It is reasonable to assume that he at some point turned his mind to declaring this income to Centrelink. For this reason, the Department contends that all or part of this debt cannot be waived pursuant to s 1237AAD of the Social Security Act 1991 (the Act), as the applicant has “knowingly” failed to comply with a requirement of the Act.
19. The Department contends also that the applicant was the owner of four flats for which he received rental income. It is reasonable to assume that he at some time turned his mind to declaring this income to Centrelink. For this reason the Department contends that all or part of this debt cannot be waived pursuant to s 1237AAD of the Act as he has “knowingly” failed to comply with a requirement of the Act. In addition, he has not supplied sufficient detail to warrant a finding that any medical condition he suffers from is a “special circumstance” so that the debt may be waived under s 1237AAD of the Act. His health was sufficiently stable that he was able to work full-time for most of a two year period at UniSA.
20. The Department contends also that waiver of the applicant’s debt pursuant to s 1237AAD of the Act is not possible as he has not received the overpayment in good faith, and his circumstances are not sufficiently “special” to warrant waiver of the debt. He has significant assets that can and should be realised to repay this debt to the Commonwealth.
21. Section 1237AAD of the Act provides:
“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.
Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.”
22. The applicant is clearly a much troubled and forlorn 37-year-old man, who feels that life has dealt him severe blows, both financially and from a health perspective. He has been involved in disputes with two former employers over a period of some 10 years, and suffers serious medical problems as a result of his injuries in May 1987, exacerbated by his ongoing work-related disputes, and the persistent pain he suffers. He has low literacy skills. He has extreme difficulties articulating his problems and his point of view; and was assisted greatly at the Hearing by Ms Kyriazis’ caring and heartfelt advocacy on his behalf.
23. I was assisted also by the several medical reports tendered at the Hearing. There is a helpful report from the Royal Adelaide Hospital Pain Unit, and the applicant’s treating General Practitioner, Dr Arcondoulis reported on 1 April 2004, in the following terms:
“I first saw Con on 30 May 1987 after a severe head-on car accident which occurred on 18 May 1987.
He was unconscious and was removed from the vehicle with the mechanical aid of the “jaws of life”. He was transported by ambulance to Flinders Medical Centre and was diagnosed as suffering from severe cervical, thoracic and lumbar spinal injury, internal bleeding, punctured kidney, and a musculo-ligamentous injury to the neck, right shoulder and right wrist. Glass was removed from his head, chest, and arms with severe lacerations and bruising.
Con had a secure job at the time with Australian National Railways as a Guard and after time off work was retrenched on medical grounds.
Con embarked on a program of rehabilitation with physiotherapy and chiropractic treatment to get him fit to return to work.
He was finally ready in 1992 obtaining employment with Australia Post as a Courier and Mail Sorter. He was so excited to work again but was quickly let down by working only an hour or two per day. He persisted with management and hoped that after some time his hours might improve. After one year he was still experiencing unfairness, e.g. new employees would get a full week’s work while he was still doing an hour or two. Finally he involved the Union and management was ordered to give him 25 hours a week minimum. After some weeks he came to see me and his hours had diminished to an hour or two. He would be given such excuses as: they lost his number and forgot to put him on the roster. The Union was involved numerous times and management continued to fail to comply with the Union’s demands.
In June 1994 Con came to see me and told me that he had a confrontation with his boss and was told that his long hair and soccer-player appearance was to blame for not getting more hours.
I gave him two weeks off work for stress leave as he was severely underweight and mentally abused. While on stress leave Australia Post retrenched him. He took legal action and his case was investigated. The outcome was that he was mistreated, not by discrimination, but rather bad management.
The Equal Opportunity Commission attempted to come to a compromise with Australia Post but they would not agree. Con wanted an apology and full time employment. He also wanted his legal and medical bills payed by Australia Post.
Con has suffered numerous nervous breakdowns and was not able to cope with much at all. To make matters worse he was forced to pay thousands of dollars in legal bills. His family has helped and supported him a great deal and this is probably the reason why he has not committed suicide. He has attempted suicide on five occasions, but has not been successful.
In September 1996 he was offered a job at The University of South Australia. He came to see me to ask my opinion and I advised him to take the offer (from his cousin) as it might help in his recovery. He was reluctant to accept the job offer due to his poor mental state and literacy problems. However, he was contracted for two months to begin with, and I was hoping for various mental problems to be resolved due to co-workers willing to support him. He came to see me after two weeks and told me the job was easy, but he could not do the paperwork effectively because he couldn’t understand it. He felt that his insomnia and poor concentration was to blame but was confident that time would resolve this problem.
I was happy with his progress as he had started to smile again and put on weight.
He then received ‘rolling contracts’ and was physically coping well and getting better slowly mentally.
I then saw Con in February 1997. He was worried about a co-worker injuring himself on a steel conveyor belt, and he was to take over that task. He told me that the machinery was badly rusted, heavy, and would jam consequently making it difficult to get in and out of the holes. Occupational Health and Safety had identified the conveyor as a risk due to bad design and excess weight.
My advice to him was not to make an issue of it as the machinery would be repaired. He agreed and would rather put up with some discomfort than complete an Incident Report. The reason he felt like this was that he was scared and had been confronted by his cousin. His cousin had told him that everyone had helped him greatly and if he filled in an Incident Report everyone would turn against him and Con would lose his job. He continued to lift the conveyor and almost a year later the conveyor was not repaired. Con was lifting 40kg on his own and was experiencing back pain which was getting worse every week.
I then instructed Con to complete an Incident Report, which he did not want to do as it would jeopardise the effort put in and would cause confrontation with his cousin. I finally ordered him to stop lifting the conveyor and gave him a week off in May 1998. In June 1998 he had returned to work and the conveyor system was permanently bolted and not to be lifted again.
On his first day back at work he collected his mail from his pigeon hole and amongst his mail was his cousin’s payslip which he mistakenly opened. He was then confronted by his cousin and was accused of stealing the payslip. She told him that he was no longer wanted and would lose his job.
Con came to see me in a frenzy with threats that he would kill himself. His mental state quickly deteriorated and the efforts of myself and his psychologist were challenged. Con’s fiancée of ten years left him. I told him he had no choice but to take legal action. I lodged a WorkCover claim for back pain and unfair dismissal which was refused and he was ordered to go to Court. He didn’t stand a chance in Court as evidence was fabricated with workers intimidated to commit perjury to make Con look like a liar. This process finally finished in 2003.
Con continues to receive hate mail, bottles and eggs thrown at his house. Con was ordered to pay thousands of dollars in legal, medical and University of South Australia legal fees.
During the Court case in November 2001 he received a letter from Centrelink that he owed $43,000 and that his sickness benefit payments were suspended. Centrelink reviews the amount and changes those amounts to $28,000, then $33,000 and issued a warrant for the sale of his property. He is also ordered to pay Centrelink’s legal fees.
I am of the opinion that this man has suffered enough injustice and has been suicidal for a number of years. He tells me the guilt of how it would affect his family and nephews is the only reason he has not succeeded.
Con’s condition to date is chronic back pain, chronic depression, panic attacks, anxiety, insomnia, loss of memory and a range of phobias. He is scared of people and has not been out of the house in four years. He only gets out to see his immediate family with no contact with anyone else. He is in no condition to work as he is petrified of going into a workplace only to suffer gain.
He is mentally unstable and if these issues don’t resolve in the immediate future, there is no telling what the result will be. I ask that you consider his case carefully and compassionately, taking into account that ten years of injustice is enough punishment for anyone to endure.
Con is not medically fit to be in Court as his condition does not give him a fair chance to respond. I am fearful for this man’s life! I have advised Con for some time to apply for the disability pension, but he is fearful of the forms and doctors he will be required to see. This man should be put on the disability pension and given the chance to be rehabilitated.” [Exhibit A1]
24. Dr Arcondoulis referred the applicant to Mr Maroulis, Psychologist, who reported on 1 April 2004, in part, as follows:
“Mr Lagogiannis initially consulted myself for psychological assessment and treatment around 1994, initially referred by Dr D Arcondoulis, treating general practitioner.
…
Currently, is suffering from a Chronic Pain Syndrome with a psychological sequelae, Anxiety and Depression of a moderate-severe level, which inhibits his ability to re-enter the workforce and his overall quality of life has been severely compromised.
At present continues to consult myself on a regular basis.
Part of his condition has included such symptoms as suicidal ideation, short-term memory and concentration difficulties including decision-making difficulties. Thus, it has been extremely difficult for him to make rational decisions or abide by his responsibilities. This in turn has made it quite difficult for him to undertake Centrelink responsibilities.
Please look favourably on this unfortunate individual whose physical and emotional health has been severely compromised by his past employers, including numerous Court proceedings as a consequence.” [Exhibit A1]
25. I accept the applicant’s submission that his mental health had an impact on his ability to cope with the intricacies of the Centrelink requirements; and his evidence that he did not attempt to mislead, and was on so much morphine that he was “up one day, and down the next”. He said that he should not be in the mess he is in, and fears that he will not reach his 40th birthday.
26. I consider that on all the evidence in this matter, the applicant did not knowingly fail to comply with a provision of the Act, and that his circumstances are so unusual and special that it would be appropriate for me to exercise the discretion provided by s 1237AAD of the Act.
27. In the course of the Hearing, I was informed by Mr Goldsworthy that the outstanding debt was $27,178.00, as at the date of the Hearing. I consider it appropriate that the balance of the debt should be reduced to $15,000. The debt due to the Commonwealth is $33,996.09. At the date of the Hearing, 2 April 2004, the Department had recovered $6,818.09, leaving a balance of $27,178.00. If the balance of the debt is reduced to $15,000, the total debt due by the applicant is $15,000 plus $6,818.09 (recovered already), a total of $21,818.09.
28. For these reasons the Tribunal sets aside the decision under review, and substitutes a decision that the debt due to the Commonwealth by the applicant in the sum of $33,996.09 be reduced to $21,818.09 to the intent that the balance of the debt due by the applicant, as at 2 April 2004, is $15,000.
29. After I had prepared these Reasons for Decision, but before they could be handed down, the applicant requested that the matter be relisted, so that he could present further material to the Tribunal. Ms Kyriazis of Disability Action was not present at the Resumed Hearing on 22 July 2004, in the course of which it became clear that the only new material the applicant was providing was advice, he says that he has received from a Centrelink officer, that if the Department took into account the $380 per fortnight he was paying to his family, then there would be no debt. The applicant reiterated his challenges to the Department’s calculation of the quantum of the debt, on the basis that the Department had not accepted the figures that he had provided to the Australian Taxation Office in relation to outgoings incurred in earning income from his flats, but had substituted its own calculations. His other assertion was that the Department, and the SSAT, had not taken into account the alternating fortnightly repayments he was making to his parents, and to his sister.
30. These alleged payments were not supported by any documentary evidence, and I adjourned the matter to enable Mr Goldsworthy to outline in writing to the applicant the financial details the applicant needed to supply in support of his assertions regarding the repayments. The adjournment would enable also, the calling as witnesses, the Departmental officer who undertook the disputed calculations, and the applicant’s sister, who works part-time, and, he alleges, lent him $70,000 of the $100,000 loan on the flats. The adjourned date was to coincide with a day the applicant’s sister was not working.
31. The matter was relisted on several occasions, but generally on the afternoon of the day before the Hearing, the applicant would advise Registry that he was unable to attend because of ill health, or a death in the family. The last listing notice forwarded to the applicant on 13 January 2005, and delivered by registered mail, informed him that if he did not attend the Resumed Hearing on 3 February 2005, the Tribunal might hand down a decision in his absence.
32. At the Resumed Hearing on 3 February 200, Mr Goldie appeared for the Department. The applicant appeared, and advised that his sister (Mrs Alexandrides) had been expected to attend, but had been called to work. He produced what he described as a Repayment Book [Exhibit A3], which he said showed the fortnightly repayments of capital and interest to his father and sister. The mortgage document over the property at 7 Jervois Street however, makes no mention of interest payments.
33. I adjourned the matter for a short time, to enable the applicant to arrange for his sister to attend the Hearing. Mrs Alexandrides attended, and gave evidence of the oral agreement for the applicant to pay her interest on the $70,000 loan. She recalled that the interest rate was about 5 percent. She said that $30,000 of the amount that she lent the applicant was borrowed from another person, who she would not identify. That loan is still outstanding, she said. Her evidence was unconvincing, and of little assistance.
34. Ms Fulton, an officer with the Department’s Investigations and Recovery Team, gave evidence that, as there were doubts about the inflated figures provided by the applicant to the Australian Tax Office, she spoke to the land agent, Lin Andrews, who advised that his company paid all repairs and expenses, and accounted to the applicant every 12 months. Ms Fulton invited the applicant to provide proof of the additional expenses, but they were not provided to the Department, nor were they provided at the Resumed Hearing, more than six months after the adjourned Resumed Hearing of 22 July 2004. The applicant provided no substantiation of his additional expenses. The Department’s calculations were based on the only available information, and that was from the land agent, Mr Andrews. I accept Ms Fulton’s evidence, and am satisfied on the evidence, that the calculations of the debt are accurate.
35. The evidence and matters that arose in the course of the Resumed Hearings made no material difference to the decision I had reached previously, and outlined in my Reasons for Decision.
I certify that the 35 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member WJF Purcell
Signed: .....................................................................................
AssociateDates of Hearing 2 April 2004, 22 July 2004 & 3 February 2005
Date of Decision 11 February 2005
Counsel for the Applicant In person
Solicitor for the Applicant -
Counsel for the Respondent Mr C Goldsworthy/Mr A Goldie
Solicitor for the Respondent Centrelink Service Recovery Team
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