Mack; Secretary, Department of Social Services and (Social services second review)
[2020] AATA 3802
•20 July 2020
Mack; Secretary, Department of Social Services and (Social services second review) [2020] AATA 3802 (20 July 2020)
Division:GENERAL DIVISION
File Number:2020/2627
Re:Secretary, Department of Social Services
APPLICANT
Christopher MackAnd
RESPONDENT
DECISION
Tribunal:Senior Member Dr M Evans-Bonner
Date:20 July 2020
Date of written reasons: 3 August 2020
Place:Perth
On 20 July 2020, the Tribunal decided:
1.The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) is granted with respect to the payment of arrears of the Disability Support Pension (DSP) up until 6 April 2020 (being the date of the AAT1 Decision).
2.The Tribunal refuses to grant a stay order with respect to DSP payments from 6 April 2020, which are to be paid to the Respondent from the next pay date following the date of this decision. This means that the Respondent will receive a lump sum for the DSP payable from 6 April 2020, until the date of this order. He will then receive ongoing fortnightly payments of DSP until further order of the Tribunal.
Following a request from the Respondent’s legal representatives on 21 July 2020, the Tribunal is providing a written record of the reasons delivered orally on 20 July 2020.
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Senior Member Dr M Evans-Bonner
CATCHWORDS
Practice and procedure – stay application with respect to AAT Tier 1 decision – Disability Support Pension – relevant factors – prospects of success – prejudice or hardship – likelihood of recovery of monies if Respondent unsuccessful at substantive hearing – public interest – whether the review application will be rendered nugatory if stay order is not granted – whether stay order would secure effectiveness of hearing – partial stay order granted
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – ss 41(1), 41(2), 41(4)(a)
Social Security Act 1991 (Cth) – s 94(1)(e)(i)
Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011
Social Security (International Agreements) Act 1999 (Cth) – Sch 3
CASES
Broadbent v Civil Aviation Safety Authority [1999] FCA 1871
Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418
Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 482
Opie and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2012) 132 ALD 584
Re Commonwealth of Australia and Quirke (1986) 9 ALD 92
Re Repatriation Commissionand Bramston (1985) 8 ALD 468
Re Repatriation Commission and Delkou (1985) 8 ALD 454
Rose and Comcare (2013) 137 ALD 635
Re Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333
Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344
Re Secretary, Department of Social Services and McNamara (2016) 68 AAR 500
Secretary, Department of Employment and Workplace Relations and Anastasiadis (2007) 94 ALD 255
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880REASONS FOR DECISION
Senior Member Dr M Evans-Bonner
3 August 2020
BACKGROUND
This is a “reverse application” (with the Secretary being the Applicant) for the grant of a stay order which was heard by the Administrative Appeals Tribunal (the Tribunal) on 20 July 2020. The following is a written record of the oral reasons of the Tribunal which were delivered on 20 July 2020.
Mr Mack is a 20-year-old man who was born in Zimbabwe in 1999. In approximately 2002 migrated to New Zealand and is a New Zealand citizen (T22). In 2011 he relocated to Australia on a special category Visa, subclass 444, and as such is lawfully residing in Australia.
Mr Mack made a claim for a disability support pension (DSP) on 15 October 2019, based on his conditions of epilepsy and intellectual disability (T9).
On 13 January 2020, the then Department of Human Services (the Department) determined that Mr Mack met the “manifest eligibility requirements for a disability support pension as he has been assessed as having an IQ of lower than 70” (T16). The rationale for this assessment refers to Mr Mack having “multiple daily seizures and traumatic brain injuries occurring during the developmental period [which] may have contributed to a deterioration in functioning” and further “that improved treatment of his epilepsy will not lead to improvements in cognitive function” (T16).
However, on 17 January 2020, the Department wrote to Mr Mack to advise him that his claim had been rejected because he did not meet the Australian residence rules (T17/230). This decision was reviewed by an Authorised Review Officer (ARO) of the Department, however, on 12 February 2020, the ARO affirmed the decision (T18, T19/234–235).
On 24 February 2020, Mr Mack filed an application with the Social Services and Child Support Division of the Tribunal (AAT1), seeking review of the ARO’s decision of
12 February 2020 (T20).
On 6 April 2020, the AAT1 set aside the ARO’s decision of 12 February 2020 and substituted a new decision that Mr Mack was eligible for the payment of DSP from the date of claim (AAT1 Decision) (T2).
The Secretary has applied for a review of the AAT1 Decision by the General Division of the Tribunal (AAT2) on 5 May 2020.
The Secretary also seeks an order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) to stay the effect of the AAT1 Decision.
Mr Mack, through his legal representative, opposes the Secretary’s application for a stay order.
ISSUE
The issue for determination by the Tribunal is whether to make an order staying the operation of the AAT1 Decision, and if so, the extent to which the stay order should operate. It is open to the Tribunal to grant a total, or a partial, stay of the AAT1 Decision.
MATERIAL BEFORE THE TRIBUNAL
A hearing in relation to the Secretary’s stay application was conducted on 20 July 2020.
The Secretary was represented by Mr Quanchi of Services Australia who appeared by telephone. Mr Mack was represented by Ms Thomas, a disability advocate from the Welfare Rights and Advocacy Service, who also appeared by telephone.
Mr Woodford, a solicitor from the Public Trustee’s Office was also present and gave some brief evidence to the Tribunal regarding Mr Mack’s living situation and the assistance being provided to him by the Public Trustee.The following material was before the Tribunal:
(a)section 37 documents (T-documents) filed by the Secretary, numbered T1–T28 and comprising 297 pages (Exhibit A1);
(b)the Secretary’s submissions seeking the grant of a stay dated 4 June 2020 (Exhibit A2);
(c)Mr Mack’s submissions in the stay application filed 2 July 2020 (Exhibit R1); and
(d)Mr Mack’s submissions opposing the stay application filed 10 July 2020 (Exhibit R2).
RELEVANT LEGISLATION AND PRINCIPLES
The filing of an application to review a decision with the Tribunal will not automatically prevent it from taking effect. This is provided for by s 41(1) of the AAT Act.
If the Tribunal grants a stay order under s 41(2) of the AAT Act, it will stop a decision from taking effect until the final determination of the matter following the substantive hearing.
With respect to an equivalent provision to s 41(2) regarding the Federal Court’s power to stay a decision of the Tribunal, in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880, [20] the Federal Court stated:
The discretion conferred by s 44A(2) of the AAT Act should be exercised only where special circumstances justify departure from the rule that a successful litigant is entitled to the fruits of judgment pending the appeal, because the appeal, although successful, may otherwise be rendered nugatory.
In this case, Mr Mack was successful at the AAT1 review, and so there must be special circumstances to justify depriving him of the benefits of his successful outcome.
Section 41(2) of the AAT Act states:
(2)The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
(Original emphasis.)
In summary, s 41(2) of the AAT Act provides that the granting a stay order is conditional upon:
(a)a request being made to the Tribunal by a party; and
(b)the Tribunal having the opinion that “it is desirable to do so after taking into account the interests of any persons who may be affected by the review”.
The fundamental purpose of a stay order is a narrow one – that is, the purpose of a stay order is to secure the effectiveness of the hearing and determination of the application for review (Re Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs (2004) 38 AAR 482, 494 [34]).
Section 41(4)(a) of the AAT Act also provides that the Tribunal will not grant a stay order unless the parties have been given a reasonable opportunity to make submissions to the Tribunal:
(4) …the Tribunal shall not:
(a) make an order under subsection (2) unless the person who made the decision to which the relevant proceeding relates has been given a reasonable opportunity to make a submission to the Tribunal, as the case may be, in relation to the matter…
The Tribunal is satisfied that the parties have had an adequate opportunity to make submissions, both in written form (see Exhibits A2, R1 and R2), and orally at the hearing.
The discretion which s 41(2) of the AAT Act gives to the Tribunal is a broad one and is similar to the power of a court to grant a stay order (Broadbent v Civil Aviation Safety Authority [1999] FCA 1871, [5]–[6]).
In previous stay order applications before the Tribunal involving the payment of pensions and compensation, the Tribunal has had regard to the following factors:
(a)the prospects of success, or the merits of the Applicant’s case if the matter were to proceed to a substantive hearing;
(b)the prejudice or hardship that the parties, or other persons whose interests may be affected by the review, may suffer;
(c)the likelihood of recovery of monies by the Commonwealth if the person is unsuccessful at the substantive hearing of the matter;
(d)whether it is in the public interest to grant a stay order; and
(e)whether the review application, if successful, would be rendered nugatory if the stay order is not granted.
(See for example, Re Repatriation Commission and Delkou (1985) 8 ALD 454 (Delkou); Opie and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2012) 132 ALD 584, 586; Re Rose and Comcare (2013) 137 ALD 635; Re Secretary, Department of Social Services and McNamara (2016) 68 AAR 500, 503; and Re Secretary, Department of Employment and Workplace Relations and Anastasiadis (2007) 94 ALD 255, 257 (Anastsiadis).)
The Tribunal can consider the extent to which the stay order should operate and may exercise its discretion to stay part of the operative decision (see for example Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344).
In cases where the recipient of a payment would suffer hardship, the Tribunal may exercise its discretion to stay the payment of the lump sum arrears pending the final decision of the Tribunal under review, but not the ongoing weekly or fortnightly payments (see for example Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 (Quirke); Re Repatriation Commission and Bramston (1985) 8 ALD 468). This may assist to relieve hardship to the recipient, whilst, in part, protecting public funds from being dissipated.
CONSIDERATION
Prospects of success
The Tribunal should consider the prospects of success or the merits of the Applicant’s case if the matter were to proceed to a substantive hearing in deciding whether to exercise its discretion to grant a stay order.
In doing so, it is not the role of the Tribunal to conduct a preliminary hearing of the substantive matter, or a preliminary trial of the issues. Rather, the Tribunal is required to consider whether there exist facts and circumstances which, if established at the substantive hearing, would provide a basis for the Secretary’s success in the review application (see Anastasiadis, 257–8 [10]–[11]).
The main contention between the parties concerns whether Mr Mack meets the residency requirements in s 94(1)(e)(i) of the Social Security Act 1991 (Cth) (Social Security Act) and/or under the relevant provisions of the Agreement on Social Security between the Government of Australia and the Government of New Zealand (the Agreement) set out in Sch 3 of the Social Security (International Agreements) Act 1999 (Cth). The parties have opposing views on the interpretation of the relevant law, with Mr Mack’s representative submitting that he does meet the residency requirements. The Secretary’s representative submitted, among other things, that the Agreement imposes an additional requirement for Mr Mack to have a working age residence in New Zealand for the purposes of qualifying residency for the DSP under the Agreement (Exhibit A2 [23]–[31]). Depending on the interpretation of these provisions by the relevant member at the AAT2 hearing, the Secretary may have a reasonable prospect of success at the substantive hearing.
The Secretary raised a further ground that, under the Agreement, Mr Mack must be severely disabled, meaning that he must be totally unable to work for any hours per week at all (Exhibit A2 [32]–[36]). After reviewing the evidence, the AAT1 found that, “the tribunal is left with the clear impression that [Mr Mack] could not endure the patterns, routines and requirements of work, whether the work was sedentary, light, less skill, manual, clerical, administrative or otherwise” (T2/15 [32]). Thus, after reviewing the relevant evidence, the Tribunal clearly concluded that the respondent was totally unable to work. The Secretary argued that the AAT1 found that Mr Mack was unable to work for at least 15 hours a week, which fell short of the requirement to be totally unable to work (Exhibit A2 [34]). The Tribunal does not agree. In fact, it was very clear from the AAT1 decision that the member was of the view, after reviewing the relevant evidence, that Mr Mack was not capable of any work at all. Thus, the Tribunal is not of the opinion that the Secretary would have a reasonable prospect of success based on this ground.
Overall, this factor weighs slightly in favour of granting a stay order.
Prejudice or hardship
Whether a person’s interests will be affected by the review will be assessed with reference to the specific statutes under which the decision being reviewed was made (Re Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333, [4]). Considering the statutory regime in this instance is the Social Security Act and the relevant Impairment Table within the Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011, the persons who may be affected by this application are the Secretary and Mr Mack. The Tribunal also notes that this legislation is of a beneficial nature.
The Applicant submits that the Secretary may be prejudiced if the stay is not granted (Exhibit A2, [37]–[40]). This is because the Applicant will be obliged to make DSP payments to the Respondent from 15 October 2019, the date when his claim was lodged. The Secretary submits that if Mr Mack is unsuccessful at the AAT2 hearing, he will have accrued a substantial debt to the Commonwealth and cause administrative costs to be incurred by the Commonwealth to recover the debt. The Secretary also submits that as Mr Mack is currently not receiving any social security payments, it will be difficult to recover the debt at all, for example through deducting small weekly amounts from any existing social security payments.
This weighs in favour of granting a stay order, particularly with respect to the arrears.
However, this must be balanced against the situation of Mr Mack, who is experiencing substantial hardship. Mr Woodford from the Public Trustee, who has been assisting Mr Mack, stated that Mr Mack was recently living in an abandoned house until he was moved on by police, and is essentially homeless, having no fixed address (Exhibit R2, [9]).
Occasionally Mr Mack stays with his father, however this is limited to weekends and Mr Mack only stays with his father once every two months. Mr Mack has no income, and his father pays for his medication (Exhibit R2, [9]). However, the instability with Mr Mack’s accommodation also raises concerns and challenges regarding his ability to regularly take his medication and attend medical appointments.
Mr Mack sometimes seeks assistance from Indigo Junction, a not-for-profit organisation that provides homeless services to youths and their families. He attends daily and can have a milo drink there and access a social worker, but they do not provide food. The Tribunal notes the submission from Mr Mack’s representative that Indigo Junction have been trying to assist him to find accommodation, however, it is difficult because of his lack of funds. The submission continues to state that if Mr Mack receives a DSP, Indigo Junction might be able to find him disability housing or temporary accommodation, such as in a caravan park (Exhibit R2, [9]). This factor weighs strongly against the grant of the stay order, because with some funds Mr Mack may be able to find secure accommodation, even if it is on a temporary basis.
Mr Mack also has debts, including for previous accommodation costs, which the Public Trustee is assisting him with (T26). The evidence of Mr Woodford was that the payment of arrears, as well as ongoing DSP, would be a “huge amount of assistance” to Mr Mack, which would give him more stability. The Tribunal also notes that the public trustee will assist Mr Mack with the management of any lump sum by directly paying his debts and giving him an ongoing allowance. This will ensure that any monies received by Mr Mack are appropriately applied and managed.
This hardship to Mr Mack weighs in favour of refusing a stay order in its totality.
Likelihood of recovery of monies
If Mr Mack is unsuccessful at the AAT2 hearing, any money paid to him as a result of the AAT1 decision will be a debt to the Commonwealth, and he will be liable to repay it. It may be difficult for the Secretary to recover the debt because Mr Mack is not currently receiving any other social security payment that the debt could be deducted from. At the interlocutory hearing, Mr Quanchi noted that Mr Mack had previously applied for the youth allowance, but Mr Mack’s claim was rejected because he did not meet the residency requirements.
However, as has been outlined above, Mr Mack is experiencing hardship. He has epilepsy and an intellectual impairment and is currently homeless. He requires stable accommodation which will assist him with regularly taking his medication and in attending regular medical appointments. Mr Mack has no income at all. The Tribunal is concerned that he has no money for food, and that his itinerant lifestyle is not conducive to managing his health conditions.
These factors weigh in favour of granting the stay order with respect to the arrears, but not the ongoing payments. This would give Mr Mack a stable fortnightly income up until the time that the AAT2 can hand down a decision on the substantive application. Although the payment of arrears would help give Mr Mack some stability, if he is unsuccessful at the AAT2 hearing, the Tribunal is concerned that he would owe a substantial debt that may cause him further hardship, which at the same time may be difficult for the Secretary to recover. Thus, a partial stay may balance these considerations.
Public interest
The Secretary submitted that there is a public interest in avoiding overpayments of public money in circumstances where there are serious questions regarding the respondent’s qualification for payment (Exhibit A4, [42]). The Tribunal agrees that this submission has merit, and that it tends to weigh in favour of the grant of a stay order.
However, the Tribunal also agrees with the submission of Mr Mack’s representative that there is a general public interest in decisions of administrators, such as the AAT, including the AAT1, being implemented at the time they are made. To date, Mr Mack has not received any payment of arrears, or any ongoing payments of DSP, despite having been successful in the AAT1 on 6 April 2020. This is of concern to the Tribunal because three and a half months have now passed since the AAT1 found in favour of Mr Mack, and yet nothing has been paid to him. In effect, the Secretary has decided to stay the decision itself for some three and a half months, when this is a matter for the Tribunal.
The Tribunal is of the opinion that granting a partial stay would fairly balance these considerations. The public interest would be served in that the potential amount of the debt would be reduced if arrears prior to the AAT1’s decision were excluded. On the other hand, the hardship that Mr Mack is suffering, and the importance of a successful party not being deprived of the benefit of a lawful decision of this Tribunal, would be assisted by Mr Mack receiving DSP from the date of the AAT1 decision.
Whether the review application will be rendered nugatory
The Tribunal is also required to consider whether the review application, if successful, would be rendered nugatory if the stay order is not granted.
The concern is that is that if the stay order is not granted and the Secretary’s substantive application succeeds, Mr Mack would have received monies that he was not entitled to. This money must be recovered in circumstances where Mr Mack may experience hardship in repaying it, and indeed, the Secretary may not be able to recover the monies at all. The difficulty in recovering monies has been found by the Tribunal to weigh in favour of granting a stay order (Delkou, 460–2).
Consequently, a stay order would assist in securing the effectiveness of the hearing in this matter.
However, the Tribunal notes the submission from Mr Mack’s legal representative that the Secretary has legal options to recover a potential debt should this become necessary to do so in the future (Exhibit R2, [14]). However, if the stay is granted and the Secretary is unsuccessful in the substantive application, Mr Mack will have been without income to which he was entitled for many months and will not be able to be compensated for the hardship he will have experienced. The Tribunal agrees with this submission made on behalf of Mr Mack and gives some weight to it.
The Tribunal is of the opinion that, given that arrears have been accruing since the date of claim being 15 October 2019, the arrears are substantial and may be difficult to recover. This weighs in favour of granting the stay order with respect to the arrears.
However, the ongoing fortnightly payments are not as substantial, and if the hearing is expedited, they would not result in a substantial debt if the Secretary is successful at the AAT2 hearing. Further, an ongoing regular payment of DSP would give Mr Mack an income (which he does not currently have), may help facilitate more secure accommodation, and provide him with an ongoing income to buy medication and food. If the Tribunal orders that only the arrears up until 6 April 2020, being the date of the AAT1 decision, are to be paid, Mr Mack will nevertheless be entitled to receive a lump sum payment for the three and a half months that have passed since the AAT1 decision. This may also provide him with some assistance with the debts described by Mr Woodford that the Public Trustee is assisting him to manage.
CONCLUSION
Having reviewed the evidence before it, including the oral and written submissions of both parties, and for the reasons outlined above, the Tribunal concludes that it should exercise the discretion conferred upon it by s 41(2) of the AAT Act. That is, the Tribunal has decided to grant a stay order to secure the effectiveness of the hearing of the substantive application currently before the Tribunal with respect to the arrears up until the time of the AAT1 decision, being 6 April 2020.
There are circumstances which justify the departure from the rule that a successful litigant is entitled to the fruits of the judgment pending appeal with respect to the arrears. However, for the reasons outlined above, this is not the case with respect to the ongoing payments. In Quirke, when granting a stay order with respect to the arrears, but not ongoing weekly compensation payments, Senior Member Williams (at 96) ordered that the payment of weekly payments should commence from the next “pay-day” following his decision.
The Tribunal notes the hardship that Mr Mack is suffering, surrounding his serious health issues and homelessness. Therefore, the Tribunal agrees that the substantive application should be resolved quickly. The Tribunal notes the decision in Re Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418, 423, where the Tribunal granted a stay order, but to reduce hardship to the recipient of the payment, directed that the hearing of the substantive matter be expedited. The Tribunal has therefore programmed the matter and will request that, to the extent that Tribunal resources permit, that this matter be expedited to be heard as soon as possible in the week commencing 7 September 2020 or as soon as practicable thereafter. The Tribunal has already made directions on 20 July 2020 to facilitate the programming of the matter up to the AAT2 hearing.
DECISION
The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) is granted with respect to the payment of arrears of the Disability Support Pension (DSP) up until 6 April 2020 (being the date of the AAT1 Decision).
The Tribunal refuses to grant a stay order with respect to the ongoing DSP payments from 6 April 2020, which are to be paid to the Respondent from the next pay date following the date of this decision. This means that the Respondent will receive a lump sum for the DSP payable from 6 April 2020, until the date of this order. He will then receive ongoing fortnightly payments of DSP until further order of the Tribunal.
I certify that the preceding 57 (fifty–seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans-Bonner
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Associate
Dated: 3 August 2020
Date of hearing: 20 July 2020 Representative for the Applicant: Mr A Quanchi
Solicitor for the Applicant: Services Australia Representative for the Respondent: Ms R Thomas Solicitor for the Respondent: Welfare Rights & Advocacy Service
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