Malak and Department of Family and Community Services - [2000] AATA 650

DECISION AND REASONS FOR DECISION [2000] AATA 650

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/1656

GENERAL ADMINISTRATIVE DIVISION       )
           Re      NABIL MALAK
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Dr J D Campbell, Member

Date1 August 2000
PlaceSydney

Decision      The decision under review is affirmed.
  ..............................................
  Dr J D Campbell
  Member
CATCHWORDS
Social Security – work injury – weekly payments – disability support pension payments – wife's payments – overpayment – disregarded of periodic payments in whole or in part – special circumstances – financial – health – solicitor's error.

Social Security Act 1991, sections 17, 1170, 1184

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Hajar v Secretary, Department of Social Security (1988)16 ALD 716
Secretary, Department of Social Security v Kulakov (1991) 63 SSR 879
Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681
Director-General of Social Services v Hales (1983) 47 ALR 281

REASONS FOR DECISION

Dr J D Campbell

Mr Nabil Malak ("the Applicant") in this matter seeks a review of the decision of the Social Security Appeals Tribunal dated 23 September 1999, which affirmed the decision of an authorised review officer dated 16 July 1999. This latter decision affirmed a decision dated 12 February 1997 made by a delegate of the Secretary, Department of Family and Community Services ("the Respondent"). In the delegate's decision, it was found that errors of periodic compensation payments could not be treated as a lump sum compensation payment and that as special circumstances were found not to exist, disregard in whole or in part of any compensation payments could not be made.
A hearing was held in Sydney on 20 March 2000, at which the self represented Applicant presented oral evidence. The Respondent was represented by Ms Alex, an advocate from the Centrelink Administrative Law section.
The following material was placed in evidence before the Tribunal:
Documents prepare pursuant to Section 37 of the Administrative Appeals Tribunal 1975 T1 – 45              pp1 - 86
Compensation Court judgement of 27 November 1996           Exhibit A1
Bundle of documents of Johnson and Sendall dated 11 October 1999        Exhibit A2
Bundle of medical reports re the Applicant        Exhibit A3
Medical report of Dr Hauser dated 11 January 2000     Exhibit A4
Rate notices re No.36 Hume st from Goulburn City Council   Exhibit A5
Rate notices re No.34 Hume st from Goulburn City Council   Exhibit A6
Medial report of Dr P King dated 13 March 2000          Exhibit A7
Two pages of advertisement re Restwell House           Exhibit A8
Respondent's statement of facts and contentions dated 15 February 2000 Exhibit R1
Bundle of Computer printouts re Applicant's payments Exhibit R2
Respondent's submissions dated 20 March 2000        Exhibit R3

issues

The following issueswere before the Tribunal:
(1) whether the payment of arrears of periodic compensation payments can be treated as a lump sum compensation payment; and
(2) whether special circumstances exist in order to disregard the whole or part of the payment of arrears of periodic compensation payment (for the purposes of payments received during the relevant period).

legislation

The relevant legislation is the Social Security Act (1991) ("the Act") and in particular sections 17, 1170, 1184.
background
The Applicant was injured during the course of his work on 24 April 1992 (T3, p14) and again on 6 September 1993, for which he was awarded compensation for the period 29 September 1993 to 14 September 1995, in the amount of $20275.20 (T2, p4). The Applicant and his wife were in receipt of a disability support pension and a wife pension respectively, each commencing and continuing from 21 April 1994 and 16 June 1994 respectively. During the period 29 September 1993 to 7 September 1995 the Applicant and his wife were paid $27860.08 in social security payments (T19, p42). As a consequence, a delegate of the Secretary to the Department of Family and Community Services decided that a sum of $19970.20 was required to be paid back to the Respondent (T19, p42). This money was recovered directly from the insurer with a $305 over-recovery being paid to the Applicant (T37, p7). This decision was affirmed by an authorised review officer on 16 July 1999 (T36, p76) and by the Social Security Appeals Tribunal on 23 September 1999 (T2, p3).
applicants evidence
The Applicant told the Tribunal that he was aged 62, having been born in Egypt on 15 December 1938 and was married with two children, aged ten and eight. He stated that he was a qualified social worker, with both a bachelor and master degree in social work. After his arrival in Australia in 1969 he had worked with the Department of Immigration, Corrective Services and Health, and it was with Health that he suffered his work related injury which led to his cessation of work in 1993. Two major operations were undertaken in 1993 (cervical spine) and in 1994 (lumbarspine). At the time of his injury in 1992, the Applicant was earning in the order of $50,000 per annum.
The Applicant stated that in 1992 he had purchased two houses on a single title of land in order to establish support accommodation for the disabled and elderly. His application for a grant was refused because of an oversupply in the area, and despite community support, the project was not viable. A closure occurred in late 1992. As a consequence he moved to live in one of the houses and rented the other prior to moving to Sydney in September 1994 in order to receive appropriate medical care. The two properties were at various stages rented, renovated in part for sale and sold in 1998 and 1999 with proceeds being paid directly to the mortgage bank.
The Applicant told the Tribunal that he suffered injury at work on 24 April 1992 and that after rehabilitation he returned to work on restricted duties prior to cessation of work on 6 September 1993. The Applicant related to the Tribunal issues of concern that he had in relation to his workers compensation claim in that the judgement handed down on 27 November 1996 awarded weekly compensation payments for a defined period and that compensation was awarded for psychiatric and emotional as opposed to physical damage. The Applicant was of the opinion that an appeal should have occurred on the grounds that his psychiatric condition was a continuing one and that compensation should have been awarded for his physical damage. The Applicant was unable to convince his solicitors to follow a course of appeal.
The Applicant also raised a concern of why the weekly payments were not treated as weekly payments in relation to their effect on disability support pension payments. This issue was put in the alternate as to why the weekly compensation payments could not be treated as a lump sum, since they were received effectively as a lump sum, as all weekly payments for the closed period had been recovered as a quantum sum of weekly payments in arrears.
The Applicant in discussing the issues of special circumstances nominated the following areas for consideration:
(1) Ill Health:
(i)in 1993 the Applicant underwent a decompression operation of C5/6 and C6/7,    and in 1994 he underwent a laminectomy for disc prolapse at L3/4 and L4/5. He continues to experience pain from those degenerative processes involving his spine, for which he takes brufen, panadeine and valium. He stated that has no troubles with mobility and moving around;
(ii) the Applicant has had diabetes mellitus since 1981. He had oral therapy to 1991 and since then has become insulin dependent requiring twice daily injections. His vision has become affected for which he uses eye drops twice daily,
(iii) the Applicant suffers from hypertension for which he takes 4mgs of Gopten daily.
(iv)the right shoulder has adhesive capsulitis, treated with physiotherapy and hydrotherapy.
(v)the Applicant's headaches are currently under investigation.
(vi) the Applicant has a psychiatric adjustment disorder with associated clinical features of irritability, depression and sleep disorder. Treated with tryptanol, mogodon and fegratol.
(2) Financial Hardship:
The Applicant placed the issue of financial hardship in the following context:
     (i) as a result of his work injuries there had been a severe drop in his
annual earnings compared to what he now received in payments made as a result of his disability support pension (1994);
(ii) his wife, aged 40, an electronic technician, had ceased work to
         care for him and the two children;
     (iii) as a result of his involvement in the supported accommodation
         project in Goulburn, he had suffered financial loss, with debts
         outstanding to the mortgagee ($6000), to the local council for rates
         ($4500), and to the solicitor for fees ($2000).
(iv)as a result of his medical conditions, but particularly the cervical and lumbar spinal conditions, he has outstanding medical fees of $6000 to various doctors;
(v) as a result of his overall situation he has debts owing to his daughter ($10,000) and to friends and relatives ($6000) as well as a credit card charge of $5000;
(vi) outgoings for the family include rent ($190 a week in housing
commission accommodation); medication ($15 a week); payment of outstanding council rates ($35 a fortnight); payment to credit card ($35 per fortnight); food, school expenses, clothing etc.
(vii)fortnightly income for the family consists of disability support pension payment to the Applicant ($311.56), wife pension ($311.56) and family payment ($218.15);
(viii)the Applicant also indicated that he had received help from his church and friends and relatives, and that he was under no pressure to repay loans to his friends and relatives.
(3) Error by his solicitors:
The Applicant stated that his solicitors should have led evidence to indicate that his psychiatric impairment was ongoing, as was evidenced by the report from Dr Koller. Further there remained the issue that the workers compensation judgement should have been appealed on the issue of the physical impairments and the continuing psychiatric condition.
The Applicant, in summarising the effect of his ill health and the financial hardship being experienced by his family, made the following comments:
(a)the income fall had a direct impact on his and his family's life in that they had to rely on second hand clothing, lower quality food and no excursions for the children at school. The family cannot participate in events which require funds; no entertainment or holidays; the children had to change schools (uniform issue); the family uses yesterdays bread; the Applicant has to remove blue stickers to prevent the children identifying out of date food;
(b)the family has become socially isolated with loss of networks. The Applicant has learnt to find his way to the money lender; the family has bare essentials of furniture and the bank account is always zero. Reduced from driving Mercedes to a second hand old car, which was uninsured and has been stolen, the family now uses public transport;
(c)the Applicant is unable to see any 'light in the tunnel', and his health is deteriorating as he is not fullfilling his role towards his family. He can not see his way clear to paying out his debts, and he has concerns for the stability of his marriage;
(d)he is concerned for his children, particularly as the stressful situation does not appear to have an end point.

medical evidence:

In a medical report dated 11 January 2000, Dr Hauser, a consultant endocrinologist, confirmed that the Applicant had insulin dependent diabetes, with the need to alter the insulin type and dose of twice daily injection, because of poor sugar control. Further, Dr Hauser suggested a change in hypertension medication (Exhibit A4).
In a medical report dated 1 November 1999, Dr Goldberg, a consultant orthopaedic surgeon, stated that the Applicant had adhesive capsulitis of his right shoulder. Dr Goldberg considered the condition to be self limiting, with signs and symptoms settling over 18 to 24 months. Dr Goldberg suggested treatment with anti inflammatory medication and a regular exercise program (Exhibit A3). Dr Bell, a consultant neurosurgeon, in his report dated September 1999, formed a similar opinion, and also recommended physiotherapy.
In a psychiatric report dated 28 April 1997, Dr Koller, a consultant psychiatrist, concluded that throughout the period in question (1992 to 1997) the Applicant had suffered from an adjustment disorder. Dr Koller considered that the Applicant was unfit for any work in which he is qualified and in which he has experience (T39, p79).
In a radiological report of a CT scan of the cervical spine dated 19 August 1999, Dr Gray a consultant radiologist, concluded that there was a C5/6 congenital fusion but with no canal stenosis or nerve root compression (T44, p84).
It was also noted in the Social Security Appeals Tribunal decision that the younger child has asthma, which is controlled by medication (T2, p7).
submissions:
The Applicant, in initial submissions contended that the compensation of weekly incapacity payments should be treated as a lump sum, with a resultant defined preclusion period. In the alternate, if this was not accepted then the weekly incapacity payments should be offset against his payments from social security on a weekly basis.
The Applicant further submitted that the whole of the compensation payment should have been treated as not having been made, because of the special circumstances which exist in this matter. The Applicant nominated his continuing ill health and his inability to earn income, financial hardship and error by his solicitors as matters which he considered to fall within the ambit of special circumstances and which were having a direct social impact on him and his family's well being.
It was the Respondent's contention that :
(a)the Act specifically prevents a payment of arrears of periodic compensation payment being treated as a lump sum compensation payment; and
(b)the weekly periodic compensation payments were offset on a weekly basis against his social security payments as indicated in Exhibit R2; and
(c)the Applicant's circumstances are not exceptional or markedly different from others who are in generally similar circumstances (Exhibit R3).

consideration and findings

In considering the issue of a lump sum payment of arrears of weekly incapacity payments, the Tribunal notes section 17(4A) of the Act which provides:
"17(4A). For the purposes of this Act, a payment of arrears of periodic compensation payments is not a lump sum compensation payment."
Accordingly the Tribunal finds that the payment of arrears of weekly incapacity payments (periodic compensation payments) by the Applicant cannot be treated as a lump sum compensation payment.
In considering whether it was correct to recover the sum of $19970.20, the Tribunal notes that the Applicant was awarded weekly incapacity compensation payments for the period 29 September 1993 to 14 September 1995 amounting to $20,275.20, such payments being paid by way of a lump sum in arrears. Further the Tribunal notes that the Applicant and his wife received social security payments in the amount of $27,860.08 for the period 29 September 1993 to 7 September 1995. The Tribunal finds that in accordance with section 1170 of the Act, the decision to recover the amount of $19970.20 was and is correct.
In turning to the issue of special circumstances, the Tribunal notes section 1184(1) which provides:
"1184(1). For the purposes of this part, the Secretary may treat the whole or part of a compensation payment as
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case."
The Tribunal is aware that the issue of special circumstances has been much canvassed. In Re Beadle and Director General of Social Security (1984) 6 ALD 1 Toohey J stated:
"An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to the circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend on the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual set of cases. That is not to say that the circumstances must be unique, but they must have a particular quality of circumstances that permits them to be described as special."

In Re Ivovic and the Director-General of Social Services (1981) 3 ALN 95 the following three pertinent observations were made, namely:
(a)that for a person to be released from obligations there must exist in the circumstances of the case a fact or factors, which justifies the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes; and
(b)in the exercise of such a discretion in a particular case, it is necessary for the decision maker to have regard to whether such an exercise will be achieving or frustrating ends or objects which are in conformity with the scope and purpose of the Act; and
(c)in particular circumstances where strict enforcement of liability created by a section of the Act would lead to unjust, unreasonable or inappropriate outcomes, the decision maker must be prepared to respond and consider such circumstances special.
In Re Groth v Secretary, Department of Social Security (1995) 37 ALD 797, the issue of compensation recovery provisions were considered in the context of subsection 1184(1) of the Act. The Court stated, in the context of the Applicant's ill health and his receipt of a disability support pension:
"Unfortunately, his circumstances are not out of the ordinary. He must be very careful financially and the choices he and his family have are severely curtailed both by their limited finances and their poor health. Difficult as their circumstances are, however, they are not special considered in light of others in a similar situation and in light of the object of the Act."

Further the court commented:

"…it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case…if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary."

The Tribunal also notes the following cases, nominating in turn the feature for which the case establishes:

Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464 – need to take a global view of all the circumstances.
Re Krzywak and Secretary, Department of Social Security (1998) 15 ALD 690 – financial hardship alone is not sufficient to qualify as special circumstances. It must be more than straitened circumstances.
Hajar v. Secretary, Department of Social Security (1998) 16 ALD 716 – financial circumstances must be more than straitened. Must be exceptional.
Secretary, Department of Social Security v. Kulakov (1991) 63 SSR 879 – ill health alone cannot be held to be a special circumstance.
Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681 – failure of proper representation by legal representative not to be treated as a special circumstance.

Further the Tribunal also notes the comments of Sheppard J in Director General of Social Services v Hales 47 ALR 281 at 321 where he states in relation to the issue of financial circumstances:
"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 in precarious and in straitened circumstances."

In considering the circumstances of the Applicant in this matter, the Tribunal does find that the Applicant is in ill health with a range of disabilities which prevent him from working, and for which he is receiving a disability support pension. Nevertheless, despite his ailments of cervical and lumbar spinal difficulties, painful right shoulder, hypertension, diabetes, headache and adjustment disorder, he is mobile and able to engage in many of the activities of every day living, with restrictions of a physical nature causing limitations of endurance and some activities. In terms of his ill health, the Tribunal finds that the Applicant's disabilities and the range thereof are not uncommon, usual or exceptional when placed in the context of individuals receiving disability support pensions.
In relation to the issue of financial circumstances, the Tribunal observes that the Applicant has particular debts, most of which have arisen as a consequence of his corporate venture into support accommodation in 1992 and which have been nominated earlier in this decision. A second line of debts relate to his medical treatments in 1993 and 1994 and a third line relates to debts owing to friends and relatives, with a fourth line being a bankcard debt. The Tribunal notes that the council rates debt and the bankcard debt are subject to fortnightly repayments and that there is no pressure to repay the debts to friends and relatives. The Tribunal further notes that the Applicant and his wife receive $840 a fortnight in social security payments and against which the Applicant nominates fortnightly expenditure of rent ($380); medication ($30); credit card payment ($35); council rates outstanding ($35) plus normal living and schooling expenses for his family.
In considering the Applicant's overall financial situation, the Tribunal concludes that the debt situation is essentially unmanaged and that most debts owing are essentially non-recoverable, for in essence there are no assets upon which a claimant can make a claim. Further the Tribunal is of a view that debt management by the Applicant has been a secondary issue in terms of coming to grips with his diminished social, financial and environmental circumstances. The Tribunal, while sympathetic to the Applicant's and his family's diminished social and domestic circumstances, is of the view that the Applicant's outstanding debt issues should be dealt with in the normal course of commercial enterprise (albeit from whence most of them arose) and that assistance and direction should be offered for this to be done. It is the Tribunal's view that in relation to the issue of the debt owed the by Applicant, the debt and its consequences are of no difference to debts owed by so many others and for which there is no recourse to assets by the individual to whom the money is owed. In essence the Tribunal finds that the issue of debt in this case does not constitute a special circumstance for it is not an unusual, uncommon or exceptional circumstance. Further the Tribunal is of the opinion that if whole or part of the compensation payments were to be treated as not having been paid, such a decision would be contrary to the objectives and purposes of the Act. In making such an observation, the Tribunal is mindful that there are other legal mechanisms for dealing with the issue of non-recoverable debts, and that the recourse to social security legislation as a provider of funds to pay out accrued debt is not the purpose for which the legislation was intended.
In turning to the issue of the Applicant's operating expenditures and revenues, the Tribunal concludes that the Applicant and his family are living in tightened financial circumstances. However again the Tribunal finds that such circumstances are not unusual, uncommon or exceptional, when considered with the classes of people for which particular social security benefits (as paid to the Applicant and his wife) are paid.
The Tribunal also finds that the circumstances relating to legal issues surrounding the compensation claim are matters which the Applicant should have addressed with his legal representatives many years ago. The issue of whether any merit exists in the Applicant's complaints about his solicitors is not a matter for this Tribunal, and particularly when faced with a particular view of the circumstances as nominated by one party.
In considering all the issues in this matter in a global context, the Tribunal finds that the Applicant's circumstances are not special. That they are difficult is not in issue, but when considered by the Tribunal in the light of others in similar situations and in light of the purpose and objectives of the Act, they are not special. Further the Tribunal concludes that in making such a finding, the Applicant is not being treated unfairly or unjustly, in that the circumstances described are not uncommon, unusual or exceptional when considered within the classes of people for which the particular social security benefits are paid.
determination
The Tribunal determines that the decision under review is affirmed.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Dr J D Campbell
Signed:         .....................................................................................
  Associate
Date/s of Hearing       20 March 2000
Date of Decision       1 August 2000
Counsel for the Applicant             Self represented
Counsel for the Respondent        Adele Alex, Departmental Advocate

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Citations

Malak and Department of Family and Community Services [2000] AATA 650

Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Director-General of Social Services v Hales [1983] FCA 81