MacDonald v Secretary, Department of Family and Health and Community Services and Indigenous Affairs
[2009] FCA 1142
•8 OCTOBER 2009
FEDERAL COURT OF AUSTRALIA
MacDonald v Secretary, Department of Family and Health and Community Services and Indigenous Affairs [2009] FCA 1142
DONALD CHARLES MACDONALD v SECRETARY, DEPARTMENT OF FAMILY AND HEALTH AND COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
VID 105 of 2008
RYAN J
8 OCTOBER 2009
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 105 of 2008
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN: DONALD CHARLES MACDONALD
ApplicantAND: SECRETARY, DEPARTMENT OF FAMILY AND HEALTH AND COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
JUDGE:
RYAN J
DATE OF ORDER:
8 OCTOBER 2009
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.IT BE DECLARED THAT in the events which have happened, the applicant’s Disability Support Pension granted from 7 March 2002 was cancelled with effect from, at the latest, 12 March 2005.
2.The applicant have leave, if so advised, further to amend his amended notice of appeal so as to raise questions of law properly so-called other than questions (a) and (b) in his present amended notice of appeal filed herein on 2 April 2009.
3.In the event of the leave granted by paragraph 2 of this Order being exercised, the applicant file and serve by 25 November 2009 a further amended notice of appeal and a written outline of submissions directed to each of the questions of law identified therein.
4.The costs of each party of and incidental to the hearing herein on 22 June 2009 be reserved.
5.Liberty be reserved to each party to apply on not less than 48 hours notice in writing to the other party.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
VID 105 of 2008
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN: DONALD CHARLES MACDONALD
ApplicantAND: SECRETARY, DEPARTMENT OF FAMILY AND HEALTH AND COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
JUDGE:
RYAN J
DATE:
8 OCTOBER 2009
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Before the Court is an application brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) in relation to several questions of law said to arise from a decision of the Administrative Appeals Tribunal (“the AAT”), Donald MacDonald and Secretary, Department of Employment and Workplace Relations [2007] AATA 2071. Underlying each of the matters set out in the amended notice of appeal is a straightforward question: did the AAT fall into any legal error in affirming a decision that the applicant, Mr MacDonald, was not entitled to Disability Support Pension (“DSP”)? To answer that question, it will be necessary to refer to the decisions made by the AAT, and to the facts which gave rise to them.
Background
Mr MacDonald, who is now aged 50, left school in year nine and subsequently worked as a bricklayer. He has also worked as a horse trainer. On 30 January 2001, he fell while at work and sustained an anterior wedge fracture to his second lumbar vertebrae. He has not worked since.
As a consequence of his injury, Mr MacDonald claimed, and was granted, DSP from 7 March 2002. On 28 February 2005, he received $360,000 by way of compensation for his injury; a preclusion period, operating from 10 February 2001 to 13 May 2006, was then imposed on 17 March 2005.
On 9 October 2006, Mr MacDonald contacted Centrelink, the Commonwealth agency responsible for administration of the DSP scheme, seeking reinstatement of his DSP. He then, on 11 October 2006, completed a claim form for that reinstatement. That led, on 19 October 2006, to a Job Capacity Assessment (“JCA”) by a psychologist, Ms Lewis. Ms Lewis concluded that:
Mr McDonald [sic] would benefit from a graduated work introduction in order to best accommodate his physical restrictions and pain. If he did not have a temporary incapacity, Mr McDonald’s [sic] work capacity would be 30+ hours.
Ms Lewis concluded, at that date, that Mr MacDonald’s work capacity was 15 to 22 hours per week.
On 25 October 2006, a Centrelink officer wrote to Mr MacDonald, so far as is relevant, in these terms:
I am writing to you about your claim for a Disability Support Pension.
One of the rules for getting a Disability Support Pension is that the rating of your permanent medical condition is 20 points or more as measured by the medical impairment tables in the Social Security Act 1991. Your medical condition for your spinal disorder has been assessed as a temporary condition and therefore you cannot be paid a pension.
It is not necessary, at this stage, to refer in detail to the rest of the assessment and appeals process undertaken in relation to Mr MacDonald’s claim for DSP. On 27 November 2006, Ms Lewis performed a further “file assessment”, Mr MacDonald having provided some further medical evidence going to the permanence of his condition. That evidence did not change Ms Lewis’ perception of his ability to work, and so a Centrelink officer wrote to him again, explaining that the further information had been taken into account, but the decision itself was still thought correct. On 6 December 2006, Mr MacDonald sought, as that letter had said he might, review by an authorised Centrelink Review Officer of the decision declining to reinstate his DSP. That officer’s review of the decision did not result in any different outcome and Mr MacDonald, on 1 March 2007, appealed to the Social Security Appeals Tribunal which, by its decision dated 13 March 2007 (appeal number M224232), affirmed the decision from which the appeal had been brought. Following two further JCAs, undertaken on 6 March and 12 June 2007 respectively, Mr MacDonald appealed to the AAT, which conducted a hearing on 18 October 2007 and published its decision on 19 December 2007.
The Administrative Appeals Tribunal
The AAT, constituted by Dr Gordon Hughes, perceived that the “principal issue” confronting it on Mr MacDonald’s application was:
whether the Applicant had an impairment rating of 20 points or more under the Tables for the Assessment of Work-Related Impairment for Disability Support Pension (the Impairment Tables) in Schedule 1B of the Social Security Act 1991 (the Act); thereby satisfying the requirements of section 94(1)(b) of the Act for the purposes of qualifying for DSP. A related issue for consideration by the Tribunal was whether the Applicant had a continuing inability to work by virtue of such an impairment; thereby satisfying the requirements of section 94(1)(c)(i). In the event the Applicant failed to satisfy either of these criteria, he would not qualify for DSP.
After addressing itself to that question, the Tribunal affirmed the decision to reject Mr MacDonald’s claim for DSP. That decision rested principally on the evidence of Mr Atkinson, a psychologist employed by the respondent (or, more correctly, the respondent’s predecessor), who had conducted the further JCAs referred to at [6] above. Mr Atkinson’s report noted a lack of physical inhibition on Mr MacDonald’s part during an interview conducted by Mr Atkinson: he had been “highly animated with hand gesticulations during the interview”. Mr Atkinson also gave evidence, accepted by Dr Hughes, that Mr MacDonald was capable of performing domestic duties such as lawn mowing, though he had some help from his adult children with other domestic tasks and with his grocery shopping. As well, Mr Atkinson was of the view – as the other assessors before him had been – that, while Mr MacDonald was unlikely to be able to return to his previous occupation as a bricklayer, he could “with specific vocational rehabilitation support”, return to work and would likely be able to increase his work capacity over time. Finally, Mr Atkinson testified in evidence to the AAT that Mr MacDonald appeared to have a poor attitude to returning to work and said that:
A significant barrier to Mr MacDonald’s participation in employment appears to be his rigid, fixed belief that he is not capable of returning to work. He stated that ‘no employer would want to take him on’ and that “if I don’t receive the DSP, on principle I won’t do anything”.
The AAT also took into account a report of Mr MacDonald’s treating physician, Dr Jarman, who, while disclaiming any expertise in providing impairment assessments, expressed an opinion that Mr MacDonald could undergo retraining for work which was sedentary and did not involve any heavy lifting; Dr Jarman also opined that Mr MacDonald might benefit from exercises to build up muscular strength, “which would hopefully improve his pain and flexibility”. Mr MacDonald, so Dr Hughes’ reasons for decision record, disagreed with Dr Jarman’s assessment that he could undertake retraining.
Finally, the AAT referred to two reports from a physiotherapist, Mr Hughes. The first, dated 19 June 2007, was written before the physiotherapist had seen any CT scans. In Mr Hughes’ opinion, Mr MacDonald could do “whatever he can without aggravating his symptoms”, i.e. that he could be placed in employment that did not involve prolonged sitting or standing or the lifting of heavy weights. In the second report, written after reviewing CT scans and dated 26 June 2007, the physiotherapist noted a “mild posterior disc bulge at L4/L5 level”, which caused him to add to his previous opinion a note that Mr MacDonald should avoid repetitive or prolonged bending or stooping, and that he should not “bend or twist his trunk while lifting any weight”.
That evidence led the AAT to conclude that Mr MacDonald had a genuine injury and an ongoing impairment, and, consequently, that he satisfied the requirements of s 94(1)(a) of the Social Security Act 1991 (Cth) (“the Act”). Moving to s 94(1)(b), after commenting, at [20] of his reasons for decision, on the arbitrary nature of the decision which he was required to make, the learned Member concluded that:
The Tribunal is of the opinion, however, that the Applicant's condition as described in the medical evidence before the Tribunal is more consistent with the criteria specified for a rating of 10 points, as opposed to a rating of 20. The Tribunal considers that the medical evidence before it does not indicate that the Applicant has lost half of the normal range of spinal movement with most physical activities or that he has lost three quarters of normal range of movement overall, thus meaning that he fails to satisfy the criteria for a rating of 20. The Tribunal prefers Mr Atkinson’s assessment. This conclusion is unfortunate for the Applicant in the sense that he would appear to comfortably exceed the threshold for a rating 10 points.
That being so, the AAT concluded, it was unnecessary to express a view about whether Mr MacDonald satisfies the requirement of a “continuing inability to work” imposed by s 94(1)(c)(i) of the Act.
Appeal to this Court
Mr MacDonald applied to this Court by way of appeal from the decision of the AAT. His application was initially out of time, but an extension of time in which to appeal was granted on 4 July 2008, and two further extension were granted subsequently.
Appeals to this Court are governed by s 44 of the AAT Act, which, so far as is relevant, provides:
44 Appeals to Federal Court of Australia from decisions of the Tribunal
Appeal on question of law
(1)A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.
The “appeal” contemplated by s 44(1), is thus limited to a question of law; see Hussain v Minister for Foreign Affairs (2008) 169 FCR 241 per Weinberg, Bennett and Edmonds JJ at 254 and the authorities there collected. That is so, as the High Court pointed out in Repatriation Commission v Owens (1996) 70 ALJR 904, at 904 because s 44(1) is concerned to ensure that the merits of the case are dealt with, not by this Court, but by the AAT, a “distribution of function [which] is critical to the correct operation of the administrative review process”. As I observed in Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 esp. at 524 and 527 (passages which have been endorsed by, for example, a Full Court of this Court in Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 per Branson and Stone JJ, at 324-5), to contend that the AAT has “erred in law” in making a particular finding is not to state a question of law. The identification of a discrete question of law has been erected by s 44(1) as a threshold requirement for the exercise of this Court’s jurisdiction to review a decision of the AAT. It is now well-established that the question of law said to arise from the decision of the AAT must be “stated with precision as a pure question of law”: Birdseye, at 325.
The amended notice of appeal to which the hearing before this Court was directed was filed on 2 April 2009 and identified the following questions of law:
Start Date
(a)Whether the AAT misconstrued clauses 3(1) of Schedule 2 and s 123(1) of the Social Security Administration Act (SSA Act) by treating the Applicant’s request for payment of DSP, made in October 2006, as a new claim rather than a recommencement of DSP following the end of a period of suspension imposed by operation of s. 1169 of the Act (preclusion period);
(b)Whether the AAT erred in law by failing to apply ss. 1169 and 1170 of the Act and s.43 of the SSA Act and therefore, failing to find that the Applicant became entitled to DSP by virtue of the expiry of a preclusion period;
Impairment Tables
(c)Whether the AAT erred in law in applying the Impairment Tables referred to in s.94(1)(b) of the Act as they stood prior to amendments which took effect from 1 January 2008 (the pre-2008 Tables), by relying on assessments of the applicant’s spinal mobility that were not “medical assessment” performed by a “Medical Officer” as required by the pre-2008 Impairment Tables, but were prepared by psychologists who were not “Medical Officers” within the meaning of the Act and who did not perform “medical assessment” as required by the pre-2008 Tables;
Alternatively to (c)
(d)If the Impairment Tables as amended by Act No. 173 of 2007, which commenced to operate on 1 January 2008 (post-2008 Tables), had application to the decision of the AAT; whether the AAT misconstrued the post-2008 Tables or failed to satisfy itself as to the requirement of the post-2008 Tables for evidence of examination of spinal mobility or the taking of a comprehensive history;
pre- or post-2008 Impairment Tables
Alternatively to (a) and (b)
(e)Whether the AAT erred in law by failing to taking into account or have regard to the following relevant matters it was obliged to have regard to:
(i)the medical evidence in the s.37 Documents;
(ii)the Applicant’s impairment rating in the period prior to the imposition of the preclusion period on 17 March 2005;
(f)Whether the AAT misconstrued the Impairment Tables by deciding that the Applicant had an impairment rating of 10 points when it found that the actual rating was “comfortably in excess of 10 points”;
(g)Whether the AAT erred in law as it was unable to determine whether the impairment rating was 10 or 20 points, but found in favour of the Respondent as if the Applicant had an onus of proof;
(h)Whether the AAT erred in law by failing to call for further evidence when the evidence of the impairment rating of the Applicant’s spine before it was insufficient to reach its decision;
Continuing Inability to Work
(i)Whether the AAT erred in law by applying s.94 of the Act as amended with effect from 10 May 2005 and failing to apply the transitional rules applicable to the Applicant;
(j)Whether the AAT erred in law in failing to consider matters particular to the Applicant in determining whether he had a “continuing inability to work”;
Generally,
(k)Whether the AAT denied procedural fairness and took account of irrelevant considerations by;
(i)accepting hearsay evidence of facts relevant to prove the ultimate issue; and
(ii)accepting opinion evidence from laypersons to prove the ultimate issue; and
(iii)continuing the proceeding when the Applicant was not able to fully hear and participate due to technical difficulties with the telephone connection.
(l)Whether the AAT erred in law by failing to identify the decision of which review was sought;
(m)Whether the AAT erred in law by failing to give reasons for its decisions as required by s 43 of the Administrative Appeals Tribunal Act 1975.
The Statutory Provisions
To the extent that the amended notice of appeal properly raises questions of law, their resolution turns largely on the application of several statutory provisions. Section 94 of the Act provides, so far as is relevant, as follows:
94Qualification for disability support pension
(1)A person is qualified for disability support pension if:
(a)the person has a physical, intellectual or psychiatric impairment; and
(b)the person’s impairment is of 20 points or more under the Impairment Tables; and
(c)one of the following applies:
(i)the person has a continuing inability to work;
(ii)the Health Secretary has informed the Secretary that the person is participating in the supported wage system administered by the Health Department, stating the period for which the person is to participate in the system; and
(d)the person has turned 16; and
(e)the person either:
(i)is an Australian resident at the time when the person first satisfies paragraph (c); or
(ii)has 10 years qualifying Australian residence, or has a qualifying residence exemption for a disability support pension; or
(iii)is born outside Australia and, at the time when the person first satisfies paragraph (c) the person:
(A)is not an Australian resident; and
(B)is a dependent child of an Australian resident;
and the person becomes an Australian resident while a dependent child of an Australian resident; and
(f)the person is not qualified for disability support pension under section 94A.
(2)A person has a continuing inability to work because of an impairment if the Secretary is satisfied that:
(a)the impairment is of itself sufficient to prevent the person from doing any work independently of a program of support within the next 2 years; and
(b)either:
(i)the impairment is of itself sufficient to prevent the person from undertaking a training activity during the next 2 years; or
(ii)if the impairment does not prevent the person from undertaking a training activity—such activity is unlikely (because of the impairment) to enable the person to do any work independently of a program of support within the next 2 years.
Note:For work see subsection (5).
(3)In deciding whether or not a person has a continuing inability to work because of an impairment, the Secretary is not to have regard to:
(a)the availability to the person of a training activity; or
(b)the availability to the person of work in the person’s locally accessible labour market.
(4)A person is treated as doing work independently of a program of support if the Secretary is satisfied that to do the work the person:
(a)is unlikely to need a program of support that:
(i)is designed to assist the person to prepare for, find or maintain work; and
(ii)is funded (wholly or partly) by the Commonwealth or is of a type that the Secretary considers is similar to a program of support that is funded (wholly or partly) by the Commonwealth; or
(b)is likely to need such a program of support provided occasionally; or
(c)is likely to need such a program of support that is not ongoing.
(4A)The Secretary must comply with the guidelines (if any) determined and in force under subsection (4B) in deciding the following:
(a)whether paragraph (1)(b) applies to a person;
(b)whether the Secretary is satisfied as mentioned in subsection (2) or (4).
(4B)The Minister may, by legislative instrument, determine guidelines to be complied with by the Secretary in making a decision referred to in subsection (4A).
(5)In this section:
training activity means one or more of the following activities, whether or not the activity is designed specifically for people with physical, intellectual or psychiatric impairments:
(a)education;
(b)pre‑vocational training;
(c)vocational training;
(d)vocational rehabilitation;
(e)work‑related training (including on‑the‑job training).
work means work:
(a)that is for at least 15 hours per week on wages that are at or above the relevant minimum wage; and
(b)that exists in Australia, even if not within the person’s locally accessible labour market.
Person not qualified in certain circumstances
(6)A person is not qualified for a disability support pension on the basis of a continuing inability to work if the person brought about the inability with a view to obtaining a disability support pension or a sickness allowance or with a view to obtaining an exemption, because of the person’s incapacity, from the requirement to satisfy the activity test for the purposes of job search allowance, newstart allowance, youth training allowance, youth allowance or austudy payment.
(1)A person is qualified for disability support pension if:
(a)the person has a physical, intellectual or psychiatric impairment; and
(b)the person's impairment is 20 points or more under the Impairment Tables; and
(c)one of the following applies:
(i)the person has a continuing inability to work;
…
Section 123(1) of the Social Security Administration Act 1999 (Cth) (“the Administration Act”) provides:
123 Continuing effect of determinations
(1) A determination that:
(a) a person’s claim for a social security payment is granted; or
(b) a social security payment is payable to a person;
continues in effect until:
(c)a further determination in relation to the payment under section 80, 81, 82, 124H or 124M takes effect; or
(d)the payment ceases to be payable under section 90, 91, 93, 94 or 95; or
(e)the end of the day immediately before the day on which the person dies.
Section 80 of the Administration Act provides:
80 Cancellation or suspension determination
(1)If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a)who is not, or was not, qualified for the payment; or
(b)to whom the payment is not, or was not, payable;
the Secretary is to determine that the payment is to be cancelled or suspended.
(2)Subsection (1) does not authorise the Secretary to make a determination if:
(a)the payment of a social security payment to a person has been cancelled or suspended by the operation of another provision of the social security law; and
(b)the determination would take effect at or after the time at which the cancellation or suspension referred to in paragraph (a) would take effect.
(3)However, subsection (1) authorises the Secretary to make a determination that:
(a)cancels a social security payment that has been suspended under subsection 81(3); and
(b)takes effect at or after the time the suspension took effect.
(3A)Subsection (1) does not authorise the Secretary to make a determination that cancels the payment of a parenting payment, youth allowance, austudy payment, newstart allowance or special benefit to a person if:
(a)paragraph (1)(a) does not apply to the person; and
(b)paragraph (1)(b) applies only because of the application of a compliance penalty period.
(4)A reference in this section to a social security payment being, or having been, paid includes a reference to:
(a)if the social security payment is a youth allowance—the youth allowance being payable but for the operation of section 547AA; or
(b)if the social security payment is a newstart allowance—the newstart allowance being payable but for the operation of section 615.
Section 93 of the Administration Act provides for the automatic cancellation of a social security payment by stipulating;
93Automatic cancellation—recipient complying with subsection 68(2) notice
(1)Subject to subsection (2), if:
(a)a person who is receiving a social security payment is given a notice under subsection 68(2); and
(b)the notice requires the person to inform the Department of the occurrence of an event or change of circumstances within a specified period (the notification period); and
(c)the event or change of circumstances occurs; and
(d)the person informs the Department of the occurrence of the event or change of circumstances within the notification period in accordance with the notice; and
(e)because of the occurrence of the event or change of circumstances:
(i)the person ceases to be qualified for the social security payment; or
(ii)the payment would, but for this section, cease to be payable to the person; and
(f)the social security payment is not cancelled before the end of the instalment period for the person that is current when the event or change of circumstances occurs;
the following paragraphs have effect:
(g)if the social security payment is cancelled during the instalment period (the first period) following the instalment period in which the event or change of circumstances occurs, the payment is payable to the person until the end of the instalment period in which the event or change occurs, and is then cancelled by force of this subsection;
(h)if the payment is not cancelled during the first period, the payment is payable to the person until the end of the notification period, and is then cancelled by force of this subsection.
Sub-section 68(2) of the Administration Act in turn permits the giving of a notice requiring a recipient to inform the Department of an event or change of circumstances. It provides;
The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
(a) inform the Department if:
(i) a specified event or change of circumstances occurs; or
(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;
(b) give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
(c) give the Department one or more statements about a matter that might affect the operation, or prospective operation, of Part 3B in relation to the person.
An indication of the nature of the events or changes of circumstances which may be specified in a notice under s 68(2) is to be found in s 68(5) which provides:-
An event or change of circumstances is not to be specified in a notice under this section unless the occurrence of the event or change of circumstances might:
(a)affect the payment of the social security payment or the person’s qualification for the concession card, as the case requires; or
(b)affect the operation, or prospective operation, of Part 3B in relation to the person.
Was the request of 6 October 2006 a request for a new DSP or for recommencement of a DSP following a preclusion period?
Mr Clough of Counsel, who appeared for Mr MacDonald in this Court, submitted that, by operation of s 123 of the Administration Act, the pension initially granted to Mr MacDonald continued in existence until, in the terms of s 123, a further determination was made under one or other of ss 80, 81 or 82 of the Administration Act, or the pension ceased to be payable by force of one or other of ss 90, 91, 93, 94 or 95 of that Act. Mr Clough submitted that, of those provisions, s 80 alone was capable of applying in Mr MacDonald’s circumstances. Section 80, it will be recalled, empowers the Secretary to cancel or suspend a social security payment that is being, or has been paid, to a person. That power is to be exercised if the Secretary is satisfied that the person is not, or was not, qualified for the payment or was a person to whom the payment is not, or was not, payable. In reliance on s 80, Mr Clough contended that, as the Secretary had never purported to cancel or suspend the pension which had been granted to Mr MacDonald on 7 March 2002, that pension remained payable and payments of instalments to Mr MacDonald should have resumed after the expiration of the lump sum preclusion period calculated in accordance with ss 1169 and 1170 of the Act.
Mr Clough then submitted that any decision purportedly made on the basis that the initial pension had been cancelled and that Mr MacDonald needed to apply for a new pension was infected by an error of law. As I understand his oral submissions, Mr Clough contended that, if the submission just outlined were correct, Mr MacDonald would be entitled to a declaration to that effect and it would be unnecessary to answer the rest of the “questions” posed in the amended notice of appeal.
In response to those submissions on behalf of the applicant, Ms MacDonnell of Counsel, for the respondent Secretary, argued that the matter before the Court had arisen from the decision of the AAT which, in turn, was a reviewable decision made in relation to Mr MacDonald’s application dated 11 October 2006. All that was before the Court, so the argument went, was that decision which had been made on Mr MacDonald’s application for reinstatement of his DSP, and “not a decision, years earlier, to cancel the applicant’s disability support pension”.
Nevertheless, Ms MacDonnell contended, the decision to cancel Mr MacDonald’s DSP was independently supportable. Those contentions centred on two letters: the first, a letter advising of the grant of a DSP and the second notifying its cancellation. Each letter was provided to the Court in the form of a computer print-out from the respondent’s electronic records, and it is not necessary to set out the data relating to the exact amounts of payment which were reproduced in each letter. The relevant part of the letter of 16 May 2002 advising of the grant of a DSP was in these terms:
WHAT YOU MUST TELL US
You must tell us within 14 days (28 days if residing outside Australia) if any of these things happen, or may happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices. This is an information notice given under the social security law.
Income
(income means your gross income before the payment of any tax, or if self employed, your net profits after allowable deductions).
if you start work for 30 hours per week or more
if your income, not including financial investment or maintenance, increases;
if you start work or recommence work;
if you start any form of profession, trade, business or self employment;
if you buy or sell any shares or managed investments;
if you receive any bonus shares;
if you receive a lump sum amount of money or one-off payment from any source.
Compensation
you must tell us within 7 days if you become aware that you will receive or have received compensation.
The letter of cancellation of 23 March 2005, so far as is presently relevant, recited:
As we have been advised that you are entitled to a lump sum compensation payment of $360,000.00 we have calculated that the amount of Centrelink payments to be repaid is $44,407.72. The preclusion period start date is 10 February 2001 and the end date is 12 May 2006…
We have asked CHU UNDERWRITING AGENCIES P/L to repay $44,407.72 to Centrelink before they pay you the rest of your compensation payment. The authority to do this is under section 1184 of the Social Security Act 1991.
As your preclusion period has not yet ended, your current payment has been cancelled from the date you were last paid. If, after 12 May 2006 you again need to receive Centrelink payments, you will need to lodge another claim at that time…
Ms MacDonnell submitted, correctly in my view, that the letter extracted at [24] above advising of the grant of a DSP constituted a notice under s 68(2)(a) of the Administration Act, which provides, in effect, that the Secretary may give a notice to a person to whom a social security payment of the type at issue in this case is being paid requiring the person to inform the Department if a specified event or change of circumstances (within the boundaries marked out by s 68(5)) has occurred or is likely to occur.
Submissions on behalf of the Secretary were then directed to s 93 of the Administration Act which is set out at [19] above, and which, relevantly, provides for the automatic cancellation of a social security payment being received by a person who gives notice under s 68(2) advising of a change of circumstances by reason of which the person ceases to be qualified for the payment or the payment would cease to be payable. That premise entailed, according to Counsel for the Secretary, that Mr MacDonald, having been receiving a social security payment, having been given a notice under s 68(2) of the Administration Act in accordance with s 93(1)(a) of that Act which required him to inform the Department of an event or change of circumstances of the kind described in s 93(1)(b), the change having occurred as contemplated by s 93(1)(c); and his having informed the Department of the change (s 93(1)(d)), s 93(1)(e) and (g) or (h) of the Administration Act became applicable. Those paragraphs provide that if:
(e) because of the occurrence of the event or change of circumstances:
(i) the person ceases to be qualified for the social security payment; or
(ii)the payment would, but for this section, cease to be payable to the person; …
that person’s social security payment is cancelled with effect from either the end of the instalment period in which the event or change of circumstances occurs or the end of the period during which the person was required to inform the Department of the event or change of circumstances. In Mr MacDonald’s case that was on the expiration of 14 days after his receipt on 25 February 2005 of a lump sum from any source or the expiration of seven days after his becoming aware that he had received “compensation”.
I have found the contentions advanced on behalf of the Secretary compelling. Section 1169 of the Act says nothing about the suspension or revival of payment of instalments of a pension affected by a lump sum payment. It provides;
1169Compensation affected payment not payable during lump sum preclusion period
(1) If:
(a)a person receives or claims a compensation affected payment; and
(b)the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.
(2) In this section:
lump sum compensation payment does not include a lump sum payment:
(a) to which section 1164 applies; or
(b)that relates only to arrears of periodic compensation payments.
Section 123(1) of the Administration Act, on the other hand, expressly stipulates that a determination granting a claim for a social security payment continues in effect until, amongst other circumstances, the payment ceases to be payable under s 93 of the Administration Act. In this case, Mr MacDonald’s DSP ceased to be payable upon its automatic cancellation pursuant to s 93 of the Administration Act by force of his having given notice of a specified event or change of circumstances. There was no scope for the Secretary to have determined, pursuant to s 80(1) of the Administration Act, that Mr MacDonald’s DSP was to be suspended because s 80(2) expressly provides that:
(2)Subsection (1) does not authorise the Secretary to make a determination if:
(a)the payment of a social security payment to a person has been cancelled or suspended by the operation of another provision of the social security law; and
(b)the determination would take effect at or after the time at which the cancellation or suspension referred to in paragraph (a) would take effect.
Section 123(1) of the Administration Act is clearly “another provision of the social security law” within the meaning of s 80(2)(a); see the definition in s 3(3) of the Administration Act which provides;
(3)A reference in this Act to the social security law (other than the reference in section 4) is a reference to this Act, the 1991 Act and any other Act that is expressed to form part of the social security law.
For these reasons, I have reached the clear conclusion that the determination to grant Mr MacDonald DSP from 7 March 2002 only continued in effect until the DSP ceased to be payable under s 93 of the Administration Act. On the evidence, that occurred, at the latest, on 12 March 2005, being the specified period of 14 days (the notification period) within which Mr MacDonald was required by the notice dated 16 May 2002 under s 68(2) of the Administration Act to inform the Department of his receipt of the lump sum compensation.
Conclusion
It follows that Mr MacDonald’s initial DSP was effectively cancelled and that, upon the cessation of the preclusion period on 12 May 2006, it was necessary for him to apply under s 11 of the Administration Act for a new grant of DSP. That is what he did on 11 October 2006 and, after the process described at [4]-[11] of these reasons, his claim was rejected.
As I have found that it was necessary for him to apply afresh for a DSP after 12 May 2006, the primary contention advanced on behalf of Mr MacDonald fails. As a result, it may become necessary to consider the other “questions” raised by his amended notice of appeal. However, at the hearing of this matter on 22 June 2009, I indicated, with the acquiescence of Counsel for both parties, that I would deliver reasons on what I then called the “construction point”, and invite further submissions, either orally or in writing, if the remaining issues raised by the amended notice of appeal were sought to be agitated. There will, therefore, be a declaration conforming with the reasons explained above and furnishing an answer to questions (a) and (b) raised by the amended notice of appeal.
I am not persuaded that each of the remaining questions articulated in the Amended Notice of Appeal and reproduced at [15] of these reasons is properly a question of law as identified in the authorities noted at [14] above. However, the applicant should have an opportunity to consider, in the light of these reasons, whether he wishes to press arguments directed to questions of law properly so-called other than questions (a) and (b) in the present amended notice of appeal. Accordingly, I shall grant leave to the applicant, if so advised, to further amend his amended notice of appeal. To facilitate consideration of any remaining or revised questions of law after that has been done, I shall direct that the applicant file and serve a written outline of submissions directed to those remaining or revised questions. If necessary, the application will then be listed for further hearing after consultation with the parties. The costs of each party of the hearing on 22 June 2009 will be reserved. There will be liberty to each party to apply.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate:
Dated: 8 October 2009
Counsel for the Applicant: Mr Daniel Clough Solicitor for the Applicant: Connley & Co Counsel for the Respondent: Ms Jane MacDonnell Solicitor for the Respondent: Herbert Geer
Date of Hearing: 22 June 2009 Date of Judgment: 8 October 2009
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