Michael Grida and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2012] AATA 468
•24 July 2012
[2012] AATA 468
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/1204
Re
Michael Grida
APPLICANT
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT
DECISION
Tribunal Mr Conrad Ermert, Member
Date 24 July 2012 Place Melbourne The Tribunal affirms the decision under review.
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Mr Conrad Ermert, Member
Catchwords
DISABILITY SUPPORT PENSION – Lump sum compensation payment – failed to understand agreement terms – health problems- financial circumstances – application of legislative provisions – whether special circumstances – decision affirmed
Legislation
Social Security Act 1991 section 1184K(1)
Cases
Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary Department of Social Security (1995) 40 ALD 541
Davy and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114Najdovska and Secretary, Department of Social Security (1998) 54 ALD 184
REASONS FOR DECISION
Mr Conrad Ermert, Member
24 July 2012
In 2008, Mr Grida, the applicant sustained injuries at his place of work. On 2 October 2009 he received a payment of $9,930 in relation to the injury. On 15 May 2011 he settled his claim for compensation for an amount of $175,000. On 27 October 2011 Mr Grida lodged with Centrelink, the provider of services for the respondent, a claim for disability support pension (DSP). A Centrelink officer rejected the claim on 8 November 2011 because Mr Grida was subject to a compensation preclusion period.
Mr Grida believed the decision to reject his claim was unfair. He sought review of the Centrelink officer’s decision by a Centrelink authorised review officer (ARO). On 10 January 2012 the ARO affirmed the Centrelink officer’s decision. Mr Grida sought review of the ARO’s decision by the Social Security Appeals Tribunal (SSAT). On 1 March 2012 the SSAT affirmed the decision under review. This matter is an application for review of the SSAT decision.
THE HEARING
Mr Grida participated in the hearing by telephone. Mr Tim Noonan, a Centrelink advocate, represented the Secretary, also by telephone.
I took into evidence the following:
·a letter to Mr Noonan from Slater & Gordon, solicitors, dated 18 April 2012 and a document titled Instructions to Solicitor dated 25 March 2011 (Exhibit R1);
·the documents provided by the respondent in accordance with section 37 of the Administrative Appeals Tribunal Act 1975 (the T-documents) (Exhibit R2); and
·the Supplementary T‑documents, comprising a Centrelink document titled A guide to Australian Government payments and a copy of section 4.13.4.20 of the Social Security Guide headed Factors to be Considered When Determining Special Circumstance Provisions (Exhibit R3).
THE ISSUES
There was no dispute between the parties regarding the key facts of the workplace injury, the details of the compensation payment, the amounts of money involved and the relevant dates. Mr Grida did not dispute the calculation of the preclusion period.
The issues to be determined are whether a compensation preclusion period should be applied to the claim for DSP; and, if so, whether Mr Grida’s circumstances should be considered special circumstances to treat the compensation payment as not having been made, in whole or in part.
THE EVIDENCE
In his opening statement, Mr Grida said that at the time of agreeing to the settlement with CGU (the insurer) he was under great pressure to settle the matter. After refusing an earlier offer, Mr Grida accepted an offer of $175,000. He said that he understood the offer to be $25,000 for legal costs and $150,000 to do as he liked. Mr Grida stated that at the moment of signing the settlement he was not of a clear mind and that he was being treated for depression. He said that had he known about a preclusion period at the time of the settlement he would not have signed the agreement.
Mr Noonan referred Mr Grida to the document titled Instructions to Solicitor dated 25 March 2011 (the agreement), signed by Mr Grida in the presence of A. Smith. The document includes:
5.My Centrelink benefits will be suspended for a period of 2 years and 2 months (estimated) upon settlement of my claim.
Mr Grida did not dispute that the signature was his. He said that the witness was Alice Smith, a friend. He did not agree that he knew about the preclusion period saying that it was not explained to him. He said that he did not even know what the word preclusion meant. When asked by Mr Noonan why he signed the agreement, Mr Grida said that he was under a great deal of pressure to settle.
Mr Noonan asked Mr Grida whether he had received the notifications from Centrelink regarding the preclusion period (T-documents, page 23 and 27). Mr Grida replied that he did not know whether he received that stuff. Mr Grida said that the letters were addressed to Alison Drive, Truganina and at the time the letters were sent he was living at Garden View Drive, Tarneit. Mr Noonan referred to the list of addresses known to Centrelink and shown in T-document 29, page 154, and noted that the Tarneit address was not included. He asked Mr Grida if he had notified Centrelink of this address. Mr Grida’s reply was that he would not deal with Centrelink and why tell them where I am? Mr Grida also said that he did not receive a copy of the letter dated 24 May 2011 sent by Centrelink to Slater and Gordon advising of the preclusion period (T-document 6).
Mr Grida said that he first learned of his preclusion period when he went to the Centrelink office in Bendigo to apply for a health care card and a Centrelink officer told him about the preclusion period.
Mr Grida agreed with the content of paragraph 25 of the SSAT decision (T-document 2). He added that he used his superannuation funds together with a mortgage of $100,000 to buy his Heathcote property. He said after the property purchase he had $100,000 remaining to live on. He deposited this money into a Suncorp account. Mr Grida said that he bought the property because renting a property would mean he would have nothing left in the end. Mr Grida said he spent about $25,000 fixing the place up and now had about $60,000 left in the bank. His current mortgage is between $80,000 and $90,000.
Mr Noonan referred to paragraph 54 of the Secretary’s Statement of Facts and Contentions, which listed actions which might improve Mr Grida’s financial situation. Mr Grida’s responses were:
·Sale of residence and rent accommodation –stupid nonsense;
·Redeem the bank term deposit which was $75,000 at February 2012 – there was only $60,000 left and he needed that to live on;
·Obtain another bank loan secured by his equity in the property – another loan ... and put myself in more debt;
·Sell the vehicle and, if necessary, purchase a less expensive car – he needs the car to get around. Mr Grida had earlier testified that he had traded his previous vehicle down to one of lesser value.
When asked about his health, Mr Grida said that his back condition is worse. He was recently in hospital for a week with a sciatica condition and was still seeing doctors. He said he had pain all the time. Mr Grida added that the litigation was making things worse, not doing my head any good.
CONSIDERATION
Should a Compensation Preclusion Period be Applied?
The relevant legislation is contained in the Social Security Act 1991 (the Act). Paragraphs 23 to 36 of the Secretary’s Statement of Facts and Contentions detail the relevant sections of the Act and their application to this case. The paragraphs contain the calculations that determine a preclusion period of 115 weeks. The Secretary concludes that the start date of the lump sum preclusion period is 25 March 2011 and the end date is 6 June 2013. Mr Grida does not dispute that the preclusion period has been correctly applied and calculated.
I agree with the Secretary’s reasoning and calculation of the start and end dates. I find that a lump sum compensation preclusion period was correctly applied from 25 March 2011 to 6 June 2013.
Are Mr Grida’s Circumstances special circumstances?
Mr Grida’s application is that because of his special circumstances the preclusion period should not be applied. The relevant legislation is contained in s 1184K(1) of the Act, which states:
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 term special circumstances has been extensively considered in case law. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1, the Tribunal stated:
... An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. ... This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special. ...
In Re Groth v Secretary Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J in the Federal Court stated:
...it is sufficient to observe that it would require something to distinguish Mr Groth’s from others, to take it out of the usual or ordinary case. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. ...
I note also the decision in Re Davy and Secretary, Department of Employment and Workplace Relations (2007) AATA 1114 (at paragraph 80), in which the Tribunal said that consideration of special circumstances ... requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system ...
Mr Grida submitted that his circumstances were special because of the condition of his health when he signed the agreement. He said that his health was getting worse and that his depression was brought on by all of this stuff. Mr Grida also submitted that the preclusion provisions in the agreement should have been explained to him before he signed the document. He said the paperwork was confusing and the statement about the preclusion period should have been in the first paragraph of the agreement, not in paragraph 5. Mr Grida submitted that he had no income and that he was trying to survive. Finally, Mr Grida submitted that the decision should not be made on this legislation as it did not give him a 50 per cent chance of succeeding in his application.
In regard to Mr Grida’s health issues, Mr Noonan referred to the submission in the Secretary’s Statement of Facts and Contentions, namely:
...most of the applicant’s health problems are a direct consequence of the employment injuries in respect of which he received the lump sum compensation payment.
He referred to the decision in Re Najdovska and Secretary, Department of Social Security (1998) 54 ALD 184 and submitted that:
This decision substantiates the position that ill health suffered by disability pension claimants or recipients must be “special or unusual” when compared with other people receiving a disability support pension ... The applicant’s ill health conditions are not of themselves sufficiently “unusual or uncommon” to warrant exercising the discretion in subsection 1184K(1) of the Act.
In considering Mr Grida’s physical health and applying the same reasoning as in Najdovska, I find that Mr Grida’s health is not sufficiently unusual or uncommon to be considered special circumstances under the Act. In considering Mr Grida’s submissions regarding his mental health, I note that Mr Grida has provided no medical evidence or opinion to support the existence of depression or any other condition. Accordingly, I find that there are no special circumstances relating to the condition of Mr Grida’s mental or physical health.
The next circumstance put forward by Mr Grida was essentially that he was not aware of the preclusion period provision in paragraph 5 at the time he signed the agreement. Mr Noonan submitted that the provision in the agreement was clear and did not require further explanation. Mr Noonan said that despite the lack of explanation, Mr Grida proceeded to sign the agreement. He added that if Mr Grida had had doubts he should have sought further explanations at the time.
It is not in dispute that Mr Grida signed the agreement. I note that at the time he was accompanied by a friend, Alice Smith, who also signed the agreement as a witness. In my opinion, the wording of paragraph 5 of the agreement is clear; that a preclusion period will apply as part of the agreement. The handwritten numeral 2 before the words years and months stand out from the typed words of most of the agreement. I find it difficult to accept that Mr Grida would not have noticed paragraph 5 when reading through the agreement, regardless of the fact that it was not the first paragraph of the agreement as proposed by Mr Grida.
Mr Grida testified that, at the time of signing, he did not understand the term preclusion. I note however that the wording of the paragraph is:
My Centrelink benefits will be suspended for a period of 2 years and 2 months ... [emphasis added].
Mr Grida gave no evidence that he did not understand the word suspended. In addition, at the time of signing, Mr Grida had access to further advice from his friend and the solicitors witnessing the agreement. I do not consider the circumstances to be unfair or unjust to Mr Grida such that they should be determined to be special circumstances, as required for the exercise of the discretion under the Act.
With regard to Mr Grida’s financial circumstances, Mr Noonan submitted that Mr Grida had proceeded to purchase the Heathcote property with no consideration of how to survive until the end of his preclusion period. Mr Noonan submitted that Mr Grida had the option, unpalatable though it may be, to sell the Heathcote property and rent other accommodation. Mr Noonan submitted that Mr Grida had $60,000 in a bank account which could be invested. Mr Noonan submitted further that Mr Grida might be able to obtain another bank loan, but on his own evidence Mr Grida had not made any inquiries into such a possibility.
I note from Mr Grida’s evidence that he bought his Heathcote house in July 2011 for $290,000 and his current mortgage is between $80,000 and $90,000. Even assuming a fall in the value of the house over the ensuing 12 months, it is clear that Mr Grida has considerable equity in the property. In addition, Mr Grida has about $60,000 in a bank account. Mr Grida estimated his after-tax earnings while he was still working as about $50,000 per year, on which he was able to live. Mr Grida said that his expenses now were greater than while he was working.
Mr Grida has $60,000 readily accessible on which to live for the remaining 12 months of the preclusion period. This equates approximately to his financial position while fully employed. In addition, he has acquired considerable equity in his Heathcote property. If required this could be used to underwrite a further loan from the bank, or could be utilised by selling the property and renting accommodation. On this evidence I consider that Mr Grida’s financial circumstances are by no means straightened. I find that his financial circumstances are not special circumstances.
The final circumstance put forward by Mr Grida is that the legislation does not give him a 50 per cent chance of succeeding in his claim. The provisions of the legislation are not a circumstance applicable to Mr Grida alone. Indeed the provisions apply, and are intended to apply, to all applicants and are therefore not unusual nor uncommon to any applicant in Mr Grida’s position. Nor can the provisions in themselves be considered as unfair or unjust. In any case, the application must be decided in accordance with the relevant provisions of the Act. The fact that Mr Grida’s circumstances are being determined in accordance with the provisions of the Act does not make them special circumstances, and I find accordingly.
After considering all the circumstances, I find that none of Mr Grida’s circumstances are special and do not justify the exercise of the discretion available under s 1184K(1) of the Act.
CONCLUSION
After considering all the evidence, I have found that Mr Grida’s lump sum preclusion period has been correctly calculated and applied. I have also found that there are no circumstances in Mr Grida’s case that justify the exercise of the discretion available under section 1184K(1) of the Act to treat the compensation payment as not having been made, in whole or in part. Accordingly Mr Grida’s application does not succeed.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 32 (thirty-two) paragraphs are a true copy of the reasons for the decision herein of Mr Conrad Ermert, Member
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Associate
Dated 24 July 2012
Date(s) of hearing 18 June 2012 Applicant In person Advocate for the Respondent Mr Tim Noonan, Centrelink Advocacy Branch
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