Lindsay and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 559

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 559

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No2008/1273   

ADMINISTRATIVE APPEALS DIVISION		)
Re		ANTHONY LINDSAY

Applicant

And SECRETARY DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal  Ms G Ettinger, Senior Member

Date17 June 2008            

Place Coffs Harbour

Ex Tempore 20 June 2008

Decision

The Tribunal affirms the decision under review.
The oral reasons for decision have been transcribed by Auscript and are furnished to the Applicant and to the Respondent as it is the reasons for the Tribunal’s decision.

  ...............................................

  Ms G Ettinger        Senior Member

CATCHWORDS

SOCIAL SECURITY – Whether there are special circumstances - shortening of the preclusion period - decision under review affirmed.

Social Security Act sections 1170, 1184K(1)

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

Beadle v Director-General of Social Security (1985) 60 ALR 225

Secretary, Department of Social Security v Hulls (1991) 22 ALD 570

Department of Social Security v Banks (1990) 20 ALD 19

Secretary Department of Social Security v Ellis (1997) 24 AAR 535

Director-General of Social Services v Hales (1983) 47 ALR 281

Re Colaiacolo and Secretary Department of Social Security (1985) (Decision No.2109, (24 April 1985)

Re Ivovich and Director-General of Social Services (1981)3 ALN N95

Re Krzywak and Secretary, Department of Social Security (1998) 15 ALD 690

INTRODUCTION

1.      Thanks for attending by phone Mr Lindsay.  Ms Mantaring has notified us that she is unable to attend, and that's perfectly fine because what I’m going to say will go onto the transcript. As you know, we had a transcript when we were at the hearing at Coffs Harbour as well, and what I’ll be doing is sending out a copy of what has been transcribed of what I say.  All we are doing this morning is handing down the decision.  There is no discussion because the evidence was completed at Coffs Harbour two days ago. You will be notified when the decision has been transcribed because it has to be typed, and there will be correspondence accompanying it telling you your rights of appeal in case you require them.  What I will do now is commence. 

2.      What I’ve done is take into account, all your evidence and the submissions made by the respondent and, of course, the law.  I’ve written some words because I wanted to be sure that we got everything in, so what I will do now is just hand down the decision.

BACKGROUND

3.      Mr Anthony Lindsay is a 49 year old man who was injured at work on 6 October 1998 in a fall on a building site.  He underwent surgery and was on workers compensation payments for some years until he obtained a lump sum settlement in 2002.  Mr Lindsay said that the settlement was $570,000, but that once the deductions had been made for medical expenses and the payback for workers compensation payments and legal costs, he finally received $333,000 in March 2003.

4.      Mr Lindsay’s pelvis was broken in the accident and he suffers serious pain, in part, he told me, because he has a floating fragment on bone in his hip, which presses on a nerve causing the pain.  When Mr Lindsay applied for disability support pension, to which I shall refer as DSP, in September 2007, he was assessed as eligible for DSP.  However, due to the lump sum settlement he received, he incurred a preclusion period from 28 November 2002 to 15 September 2010, during which he could not obtain any pension benefit.

5. The preclusion period is calculated pursuant to a formula in section 1170 of the Social security Act 1991. There was no disagreement about the accuracy of the calculation, and I accepted it as correct. Mr Lindsay applied to have the preclusion period shortened, in particular because he ended up paying $50,000 to his former partner as a settlement. Centrelink took that into account and then reduced the preclusion period, making it end on 25 November 2009. Mr Lindsay exercised his right to appeal to the Social Security Appeals Tribunal, which found special circumstances applied and reduced the preclusion period to 30 November 2008.

6.      Mr Lindsay says he is finding it very hard to manage as he and his partner survive on carer payments she receives for looking after him.  He says he cannot pay medical bills he will incur in connection with a back operation he needs to have, such as an MRI and other tests, and he has appealed to this tribunal.

7.      The Secretary, Department of Families, Housing, Community Services and Indigenous Affairs was the respondent in this matter and was represented by its advocate, Ms S. Mantaring.  The matter was heard at Coffs Harbour. 

ISSUE BEFORE THE TRIBUNAL

8.      The issue before me, although he did not put it that way, was Mr Lindsay’s claim that special circumstances should apply so that his preclusion period can end, and he can receive DSP immediately.  In considering that, I must be mindful that DSP is a compensation-affected payment pursuant to the Social Security Act 1991, (the Act) and that the lump sum compensation Mr Lindsay received is so defined in the Act. The preclusion period is calculated pursuant to section 1170 of the Social Security Act.

9.      Section 1184K(1) of the Act provides that the Secretary, and therefore the tribunal, may treat the whole or part of a compensation payment as not having been made if it is appropriate to do so in the special circumstances of the case.   

10.     Mr Lindsay’s main submissions regarding special circumstances were financial hardship, his solicitor’s inadequate or misleading advice and his deteriorating health.

THE EVIDENCE REGARDING SPECIAL CIRCUMSTANCES

11.     What happened with his settlement moneys was that Mr Lindsay thought he should buy his “own little place” so that he would not have to pay rent.  It seems that is also what his solicitor advised.  What he did, was spend $190,000 buying 100 acres in Bowraville with his settlement moneys.  He spent further money as follows: 

·     approximately $5000 on stamp duty; 

·     $5000 on fencing because he had cattle on his property and needed to keep them in; 

·     $50,000 he paid to his ex-partner;

·     $28,000 on a ute; 

·     $27,500  on a tractor; 

·     $6000 on furniture; and

·     other moneys on repayment of debt and removals. 

12.     He has now sold the cattle but is reluctant to sell the pressure-cleaning equipment he bought because he thought, and still thinks, he could carry on a business using it.  So far, however, he says he has spent more on advertising than he has obtained in return in regard to the pressure-cleaning business.

13.     Mr Lindsay said that ultimately, if he had to, he would consider selling the property, but understands that it would be hard, and take a long time to achieve. When asked what his partner could do to earn income, she said that she only has experience working in a factory, but that she has a computer and tries to find jobs cleaning or cooking in a takeaway shop via the internet sites.  She says that so far she has been unsuccessful and they both rely on her carer allowance.

14.     Mr Lindsay told me that he borrowed $50,000 on his property to assist with expenses, and that due to his inability to repay his loan, this was increased to $58,000, so that his originally unencumbered property now has a debt of $58,000.  He applied for a further loan, which was refused.  The letter documenting that was dated 8 May 2008 and was before me as exhibit A2.

15.     There was also some misunderstanding about the value of the property Mr Lindsay owns, so the respondent commissioned a drive-by valuation.  That was completed on 21 May 2008, and is exhibit R2 before the tribunal.  It indicates that the property is valued at $250,000.  Mr Lindsay acknowledged he had made a mistake in documentation prepared for Centrelink in which he indicated the value was $340,000.

16.     I noted that Mr Lindsay expressed a strong interest in getting back to work.  His skills are in driving earthmoving equipment, fencing and logging, which are all heavy work.  He told me that he probably could only do lighter work, such as forklift driving, once he has an operation for his back. 

17.     As to the preclusion period, Mr Lindsay claims not to have known anything about a preclusion period applying to him until his now partner applied for Newstart Allowance in 2003 or 2004.  By then, he had spent most of his settlement moneys, and did not have much left.  He claims his solicitor did not tell him anything about a preclusion period, although he remembers her telling him that once he had the settlement, he would have to take care of his own medical expenses.

18.     Ms Mantaring, who represented the Minister, pointed to copies of letters in the T documents dated 11 September 200, at T5 page 33, and 18 December 2002, at T9 page 40, which were, Mr Lindsay agreed, correctly addressed, one to his sister’s house and the other to an address in Sydney where he lived until approximately the end of 2002.  Mr Lindsay said that he was moving around at that time, and did not see any such letters.  He said that when he left the address in Sydney, he asked the tenants who took over from him to keep letters for him, but then when he went back to the house, they had left, and there were no letters.  He also said that both he and his sister took any correspondence which arrived to his solicitor, but that she was never there to receive it or explain the contents to him.

CONCLUSIONS

19.     I am satisfied that notice was given, in that the letters were correctly addressed to Mr Lindsay to addresses he provided, and that at least two letters were sent to him from Centrelink dealing with the preclusion period.  In addition, there was correspondence between Centrelink and the GIO, who were the insurers involved in the claim.  If the solicitor did not explain matters adequately to Mr Lindsay, then there are avenues of redress for that.  They are not at this tribunal, and errors in legal advice generally do not qualify as a special circumstance.

20.     As To his health; Mr Lindsay appears to have consulted medical specialists and surgeons privately in relation to the operation he has been told he should have to assist with his pain. He acknowledged he could approach a public hospital, but said that he would have to wait for too long to get the attention he needs. He also seemed unsure whether the doctors he now consulted would see him in other than a private setting.

21.     I now move to consider special circumstances pursuant to section 1184K(1) of the Act.  Special circumstances in the context of the Social Security Act 1991 have been considered many times before this tribunal and have been referred to in the case law, but they are not defined as such.  In Beadle v Director-General of Social Security the Federal Court in examining special circumstances within the terms of section 102(1) of the previous Act,  the 1947 Act said:

It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.

22.     In the leading case of Beadle v Director-General of Social Security, a 1985 case, special circumstances are defined as being those which are unusual, uncommon or exceptional. This has been reinforced in many cases decided since including Secretary, Department of Social Security v Hulls, a 1991 case, Secretary, Department of Social Security v Banks, a 1990 case and Secretary, Department of Social Security v Ellis, a 1997 case.  I noted that in Director-General of Social Services v Hales, a 1983 case, Sheppard J said:

The legislation provides for the payment of a variety of benefits to different classes of people who will usually have one thing in common.  They will be impecunious and in straitened circumstances.

23.     I am mindful that relying on authority in Beadle v Director-General of Social Security and in Re Krzywak v Department of Social Security, also Re Ivovich and Colaicolo v Secretary, Department of Social Security, that unless the circumstances of Mr Lindsay’s case are so unusual, uncommon or exceptional, then I am precluded from exercising the discretion to waive all or part of the debt. 

24.     Ms Mantaring argued that Mr Lindsay’s circumstances did not meet the test for special circumstances, noting that the preclusion period originally set had already been reduced.

25.     Ms Mantaring submitted, and I agree that poor advice from a solicitor cannot generally be considered a special circumstance and that being in straitened financial circumstances alone is not sufficient to meet the test. 

26.     I find that Mr Lindsay’s case does not meet the test for being so unusual, uncommon or exceptional that I should further reduce his preclusion period.  His partner is receiving a carer pension and having spent all the compensation money Mr Lindsay cannot expect to double dip and also receive a pension before his preclusion period expires.

27.     I have already referred above to the fact that Mr Lindsay spent 190,000 on the property, and instead of conserving funds which are intended to sustain the recipient for a period, he continued to spend approximately $5000 for fencing, $27,500 for a tractor which is now broken and inoperable, $28,000 for a ute, money on pressure-cleaning equipment, and $6000 on furniture. I find that the circumstances leading to the financial pressures Mr Lindsay is experiencing are as a result of him choosing to spend all his compensation money which is paid out in order to provide for an injured person’s future.

28.     I accept that Mr Lindsay suffers pain and needs medical attention, but I am satisfied he has not sufficiently explored his rights to access the public system which is what most people do. 

29.     I am not satisfied that Mr Lindsay’s circumstances are so special as to attract special circumstances in order that I should exercise the discretion to find that all or part of the compensation payment was not made, so that his preclusion period can be shortened. His circumstances are simply not so unusual, uncommon or exceptional as to qualify as special circumstances or that it would be unjust, unreasonable or otherwise inappropriate not to grant him a reduction or totally disregard the compensation payment in order to affect the preclusion period.

30.     There has been nothing so unusual, uncommon or exceptional in viewing the totality of circumstances in this case so as to warrant applying the discretion regarding special circumstances in favour of Mr Lindsay. 

DECISION

31.     Therefore, the preclusion period must remain until 30 November 2008.  The decision under review is affirmed. 

I certify that the 31 preceding paragraphs are a true copy of the reasons for the decision herein of

Signed:         .....................................................................................
  Associate

Date/s of Hearing  17 June 2008
Date of Decision  20 June 2008
Counsel for the Applicant         Self Represented
Solicitor for the Applicant          Ms Susan Mantaring