Moran; Secretary, Department of Family and Community Services
[2005] AATA 794
•19 August 2005
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2005] AATA 794
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2004/722
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES Applicant
And
JANE MORAN
Respondent
DECISION
Tribunal REAR ADMIRAL A R HORTON AO Date19 August 2005
PlaceSydney
Decision The decision under review is affirmed.
[sgd] Rear Admiral A R Horton A O
Member
CATCHWORDS
SOCIAL SECURITY – preclusion period – lump sum compensation – ineligibility for compensation affected payments – SSAT reduced preclusion period - marriage breakdown - purchase of property – financial resources – health issues of respondent and family – special circumstances – decision affirmed
LEGISLATION
Social Security Act 1991 (Cth) – sections 17, 1169, 1170, 1184K
Guide to Social Security Law – Part 4.13.2.30
CASE LAW
Beadle v Director-General of Social Security (1985) 7 ALD 670
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Dranichnikov and Another v Centrelink and Another (2003) 75 ALD 134
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797
Re Nguyen and Secretary, Department of Family and Community Services (2004) 80 ALD 642
Re Davis and Secretary, Department of Family and Community Services [2005] AATA 546
REASONS FOR DECISION
19 August 2005 REAR ADMIRAL A R HORTON AO 1. This is an application to the Administrative Appeals Tribunal (“the Tribunal”) by the Secretary, Department of Family and Community Services (“the Applicant ”) to review a decision of the Social Security Appeals Tribunal (“the SSAT”) of 6 May 2004 which set aside a decision of an Authorised Review Officer (“ARO”) of 2 March 2004 and determined that so much of the compensation payment made to Mrs Jane Moran (“the Respondent”) be disregarded so as to reduce the compensation preclusion period to last from 24 January 2002 to 16 April 2007.
2. At a hearing before me on 20 July 2005, Mr Luke Carter, an advocate from the Centrelink Legal Services Branch, appeared for the Applicant. Mrs Cvetanka Jankulovska, solicitor from Legal Aid New South Wales, appeared for Mrs Moran. The documents provided by the Applicant pursuant to section 37 of Administrative Appeals Tribunal Act 1975 (“the T documents”) were taken into evidence, as were Exhibits A1 and R1 to R10 as listed in the attached Appendix. Mrs Moran gave oral evidence.
BACKGROUND
3. On 29 March 1999, Mrs Moran sustained a work place injury diagnosed as Reflex Sympathetic Dystrophy whilst employed at a school in the Catholic Diocese of Parramatta. On 3 January 2001 she lodged a claim for workers compensation with her employer’s insurance company, Catholic Churches Insurance Limited, a gross settlement of $625,000 being formalised on 4 November 2003. The Terms of Settlement state in part:
“1. Verdict and judgment for the Plaintiff in the sum of $475,000.
2.The Defendant pay the Plaintiff’s costs, agreed at $150,000 including GST”.
4. Prior to settlement, and in response to a request from Bussoletti Lawyers, representing Mrs Moran, Centrelink advised (9 April 2002) that a compensation payment could affect any current or future social security entitlements. On some ten subsequent occasions, Centrelink provided written advice as to the likely repayment amounts (to Centrelink) and preclusion periods relevant to a range of possible compensation payments. On 5 November 2003 (received 12 November 2003), Bussoletti Lawyers wrote to Centrelink to advise settlement, and to request advice on any amounts to be paid to Centrelink based on settlement of $475,000, and on the relevant preclusion period.
5. On 14 November 2003, Centrelink advised both Bussoletti Lawyers and Mrs Moran that the lump sum compensation that was relevant to the calculation of a preclusion period was $625,000, that $19,119.64 representing parenting payment would be recovered direct from the Defendant’s insurers, and that the preclusion period was from 24 January 2002 until 6 July 2011. An explanation as to how this preclusion period was calculated was included in each letter.
6. In response to a letter of 2 December 2003 from Bussoletti which questioned the basis of calculating the preclusion period against a gross settlement of $625,000 rather than the $475,000 actually received by Mrs Moran, Centrelink provided clarification on 8 January 2004, forwarding with the response a copy of Part 4.13.2.30 of the Guide to Social Security Law dealing with Compensation Part of Lump Sum – 50% rule. This decision was upheld by an ARO on 2 March 2004.
7. On 6 May 2004, the SSAT decided that special circumstances under the provisions of section 1184K of the Social Security Act 1991 (“the Act”) existed in this matter, and directed that so much of the compensation payment made to Mrs Moran was to be disregarded so as to reduce her compensation preclusion period to last from 24 January 2002 to 16 April 2007. The SSAT found that the preclusion period, on the facts before it, had been correctly calculated. The SSAT further considered that the domestic circumstances and obligations of Mrs Moran, her poor health and that of two of her children, the emotional and financial impact of separation from her husband in 2002, and the paying off of the mortgage on her home – and therefore losing about half of the cash resources resulting from the settlement – due to a lack of proper explanation by her solicitors of the implications of so doing, amounted to special circumstances and warranted reduction of the preclusion period (to 16 April 2007).
8. The Applicant sought, and was granted, an extension of time to lodge an application for review of this decision. In seeking review, the Applicant has submitted that the SSAT erred in its application of section 1184K of the Act to the facts, and that the Respondent is not entitled to obtain the benefit of that section as there are no special circumstances warranting the exercise of the Secretary’s powers under Part 3.14 of the Act.
LEGISLATION
9. Section 17 of the Act refers to compensation recovery definitions and subsection 17(1) defines compensation affected payments (including pensions, and allowances). It includes the disability support pension and parenting payment. Compensation is broadly defined in subsection 17(2) as a payment for damages or a payment under a scheme of insurance or compensation or a payment in settlement of a claim, subsection 17(2)(c) being relevant to the circumstances of Mrs Moran.
10. Subsection 17(3), as is relevant in this matter, states:
“Compensation part of a lump sum
17(3) Subject to subsection (4), for the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a) 50% of the payment if the following circumstances apply:
(i) the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(ab) 50% of the payment if the following circumstances apply:
(i) the payment represents that part of a person's entitlement to periodic compensation payments that the person has chosen to receive in the form of a lump sum; and
(ii) the entitlement to periodic compensation payments arose from the settlement (either with or without admission of liability) of a claim that is, in whole or in part, related to a disease, injury or condition; and
(iii) the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise; or
(b) if those circumstances do not apply—so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn, or both.”
11. Subsection 1169(1) states that if a person receives or claims a compensation affected payment and receives a lump sum compensation payment, then the compensation affected payment is not payable in relation to any day or days in the lump sum preclusion period. Section 1170, which refers to the lump sum preclusion period, relevantly states:
“ Lump sum preclusion period
1170(1) …
1170(2) If a person chooses to receive part of an entitlement to periodic compensation payments in the form of a lump sum, the lump sum preclusion period is the period that:
(a) begins on the first day on which the person's periodic compensation payment is a reduced payment because of that choice; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
´ 1170(3) If neither of subsections (1) and (2) applies, the lump sum preclusion period is the period that:
(a) begins on the day on which the loss of earnings or loss of capacity to earn began; and
(b) ends at the end of the number of weeks worked out under subsections (4) and (5).
1170(4) The number of weeks in the lump sum preclusion period in relation to a person is the number worked out using the formula:
1170(5) If the number worked out under subsection (4) is not a whole number, the number is to be rounded down to the nearest whole number”
12. The income cut-out amount as determined by the Applicant pursuant to the formula at subsection 17(8) of the Act is $633.25 in this instance. The Guide to Social Security provides further explanation in respect of the 50% rule, in that it is applied to the gross lump sum, in this case $625,000. It further states that where the terms of the settlement or agreement separately specifies legal costs – as is the situation in this matter – the 50% rule as relevant to economic loss – applies to the total lump sum, that is the two sums are aggregated. From these calculations a preclusion period is determined, this being initially determined as from 24 January 2002 to 6 July 2011.
13. Section 1184 of the Act provides the authority for the Secretary to recover from the insurer (Catholic Church Insurance Limited) recoverable Centrelink payments and this was done in respect of $19,119.64 as referred to in paragraph five in respect of parenting payment. Section 1184 K of the Act encompasses the important issue before me and it relevantly states:
“Secretary may disregard some payments
1184K(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.
1184K(2) If: …”
and it was under the provisions of this section of the Act that the SSAT reduced the preclusion period to be from 24 January 2002 until 16 April 2007, deciding to disregard, in round terns, one third of the compensation payment for the purpose of calculating the preclusion period.
EVIDENCE
14. Mrs Moran, aged 42, lives in her own home at Box Hill, NSW. She has four children, Joshua aged 21, Simone aged 17, Natasha aged 15 and Zachary aged 10 years, all of whom live at home. Mrs Moran’s mother Margaret, aged 70, lives with the family. In February 2002, Mr and Mrs Moran separated, the former moving to Queensland. They have since divorced. The home at Box Hill had been the family home, and following receipt of compensation and permanent separation, and on the advice of her lawyers at that time, Mrs Moran paid off the balance of the mortgage ($196,233 vide a Settlement Statement of 29 December 2003), and paid $20,000 to Mr Moran in order to obtain full rights to the property.
15. Mrs Moran gave evidence that following the separation, Mr Moran did not see his children until July 2004, and then his time with them was limited to about 30 minutes. Resulting from the court order, he pays $21.67 per month in child support, and half the school fees. She stated that he has refused to pay a proportion of medical expenses for the family. Apparently he was injured in 2001 in his employment as a draftsman at TAFE, and she understands he received compensation in 2004, but he has made no payment of any compensation to her for the family. Mr Moran’s father, who died in 2004, suffered with Parkinson’s disease and following DNA testing, Mr Moran has now been similarly diagnosed. Mrs Moran is extremely concerned at the genetic implications for her family.
16. The legal and other costs as shown in an undated Bussoletti Statement of Account (T32) amounted to $168,151.17 rather than the $150,000 for which provision for such cost and other plaintiff’s costs was made in the Settlement. The Statement of Account refers to a balance to Mrs Moran of $386,700.52, and costs are identified, including $47,500 to the Health Insurance Commission, to support this figure as being the money received by Mrs Moran. She subsequently paid out the balance of the mortgage, as noted above, paid off her car and bought a new vehicle suitable to meet her family commitments, and paid for some outstanding repairs to the home and some debts. Those latter costs have not been clarified, but taking known expenditures as defined by Bussoletti Lawyers and as given in evidence by Mrs Moran into account, the residual figure would be less than $170,000. In evidence, Mrs Moran stated that she believed that figure was in the order of $150,000, and in the ensuing 18 months since settlement she believes she has expended about $34,000 leaving a current balance in the order of $116,000.
17. Mrs Moran opined that at that rate of expenditure, it was possible that she could make the settlement monies last for a further five years, or until the end of the original preclusion period in 2011. Her only other income is by way of Family Tax Benefit, presently $392.84 per fortnight, and $92.40 per fortnight carer allowance for Zachary. Joshua attends university and receives a Youth Allowance of $104.85 per week; he provides financial support to his mother when asked. Simone attends TAFE and receives a Disability Support Pension (DSP) of $135.10 per week. Her mother, Margaret Taylor, who has serious medical conditions, but is able to assist with domestic duties, is in receipt of the age pension.
18. In evidence, Mrs Moran stated that she had understood from her lawyers that any settlement period would be calculated on a $475,000 settlement, which she thought would have limited the preclusion period to about 2007. She was of the view that her lawyers were clearly of this opinion, as reflected in their letters seeking review of the decision to consider the preclusion based on $625,000 (2 December 2003) and then referral to an ARO (28 January 2004). As to the decision to pay off the balance of the mortgage, she considered stability for her family, particularly given a number of serious health problems to be essential. Further, her home at Terry Road is adjacent to an intersection with Windsor Road, and a proposed major road widening project (to 4 lanes) or an overpass. She considers the value of her property must be depressed. She noted that the home is on tank water, costing her $85 every three weeks if no rain, and the septic tank service costs $61 four times a year.
HEALTH ISSUES
19. Mrs Moran suffers Reflex Sympathetic Dystrophy of the left arm, resulting from her accident at work in 1999. She is generally unable to handle items with the left hand, which unless pressed to her body shakes continually, and she demonstrated that in order to use that limb, she has to place any object or item under the left arm by using her right hand. Her vehicle has been modified with steering wheel knob and blinker extension so that she can drive with one limb only. Her home is large and she relies on the children, and her mother to assist with cleaning and cooking. She has to cope on a daily basis with considerable physical demands resulting from the medical condition of Zachary.
20. Dr T G Curlewis of Dural Medical Centre has been the family doctor for over ten years. He has provided a number of reports over recent years, initially to Bussoletti Lawyers in regard to the compensation claim, and more recently to Legal Aid New South Wales in respect of the matter before me. His initial report before me of 3 July 2001 notes that the first consultation in respect of Mrs Moran’s present illness occurred in April 1999. He notes that a venous Doppler and arterial duplex scan showed normal results as did a nerve conduction study. Dr Curlewis referred to a variety of medications “to try to modify symptoms”, which had varying success, but side effects. He notes he saw Mrs Moran monthly, and that symptoms had spread to her left shoulder – with pain on limited movement – and varying ache in the right shoulder.
21. Dr Curlewis saw the prognosis as poor, with wasting of muscles and stiffness. He reported that attempts at rehabilitation had failed. In a report of 1 March 2002 (Exhibit R1) he notes no improvement, but development of a “claw hand in permanent flexion”. He notes no known cure for the condition, and an inability to return to work. His next report of 26 March 2002 (Exhibit R2) refers to temporary problems with the right hand due to overuse. He anticipates Mrs Moran being on medication for the rest of her life.
22. A radiological report by Dr T Lo of 22 October 2003 indicates no obvious feature to account for the symptoms. The most recent report before me by Dr Curlewis of 30 March 2005,(Exhibit R8), in respect of Mrs Moran, confirms his opinions as given in previous reports and states that no improvement can be expected, but the condition is stable. He advises that medication comprises morphine each morning, panadeine forte four times daily, maxalon to prevent nausea and baclofen nightly to prevent muscle spasms. He notes the condition is “irreversible”. In evidence, Mrs Moran confirmed she was taking the prescribed medication.
23. Referral to Dr D M Salmon, Consultant in Pain Medicine, confirmed the diagnosis of reflex sympathetic dystrophy. In a report of 12 April 2002, he refers to regular consultations. At that time he saw the need for comprehensive physical therapy, regular pain management counselling and psychological intervention. He assessed Mrs Moran as having reduced physical tolerance and intractable pain and reactive depression, and he foresaw the need for domestic assistance.
24. Professor P Disler, Consultant Physician and Specialist in rehabilitation Medicine, saw Mrs Moran for the second time in October 2002, his report being at Exhibit R4. His diagnosis was complex regional pain syndrome (CRPS). He noted that Mrs Moran was devastated at the breakdown of her marriage. He refers to other medical reports in 2002 wherein diagnosis ranged from chronic adjustment disorder to CPRS to major depression, and he concluded that Mrs Moran remained “severely disabled”.
25. In considering the health of Mrs Moran, and the effects it may have on her ability to cope with her role as a sole parent, and in the wider context of reviewing this matter, it is appropriate to look at the health of those who live with her. Joshua Moran has been diagnosed with a depressive condition. Dr Curlewis, the family doctor, ascribes this to a “smouldering resentment towards his father since his exit”. He sees him (in March 2005) as moody and depressed, and having trouble coping with university, reluctantly taking anti-depressant medication from time to time. This description accords with the picture presented by Mrs Moran in evidence.
26. Simone Moran was diagnosed with an epileptic condition at the age of five or six. Since 1995 she has been under the care of Professor N Buchanan. His reports of 10 December 2004 (Exhibit R6) and 25 January 2005 (Exhibit R7) confirm this condition in the form of complex partial seizures which secondarily generalise. Lamictal and ospolot have controlled her seizures and Professor Buchanan sees the need to remain on this medication “well into the future”. He reported her last seizure as being in November 2003. Mrs Moran stated that prior to being controlled by medication, Simone at times had frequent seizures in a day, but they are now much less frequent and the last episode was some six months ago whilst travelling by train to TAFE. Simone is in receipt of the DSP, her mother having been her carer until the age of 16.
27. Natasha Moran, the second daughter, is generally in good health, although she has recently undergone a bone graft to replace a bone tumour in a broken toe. As with Simone and Zachary, she is driven to the train or school as relevant in the absence of public transport.
28. Zachary Moran has an extreme medical condition, that on the evidence before me, results in the requirement for Mrs Moran to provide significant physical and emotional support. Professor Buchanan reported on 25 January 2005 (Exhibit R7) that Zachary “appears to have primary generalised epilepsy with recurrent episodes of collapsing. I initially saw him in October 2004 and it has taken a bit of time to make a diagnosis. So far he has not responded to medication but it is still early days. It is not possible to give any sort of prognosis at this stage…” There are no later reports and, from Exhibit R6, it appears that Professor Buchanan has recently retired.
29. Dr Curlewis reported on Zachary’s condition as being epileptic on 30 March 2005, but in his most recent report dated 13 April 2005 (Exhibit R9), he states that the diagnosis has been changed to juvenile Huntington’s disease “invariably fatal and Zachary is not expected to last more than two or three years”. There are no other medical reports before me to confirm this latest diagnosis or the prognosis.
30. In evidence, Mrs Moran confirmed that the original diagnosis had been made after Zachary had a number of falls and resulting injuries. He has not been informed of the latest diagnosis nor the significance of the disease. Mrs Moran described a rapid deterioration in his condition, with frequent falls leading to the use of a wheelchair since March 2005. That wheelchair is manual, requiring much help from her, but she is hopeful that the Spastic Centre will make a mechanised chair available. Safety rails have been fitted in the home. Mrs Moran stated that Zachary’s short term memory has “gone”, he has difficulty swallowing and will require gastronomy feeding. Zachary is on various medications to control epilepsy, to assist him to swallow, to help him sleep and to counter depression.
31. Having had difficulty at his previous school, Zachary now attends Rouse Hill Public School for two to three hours on most days, and Mrs Moran is happy with that arrangement. He attends Westmead Children’s Hospital two or three times a week. Mrs Moran drives him to school, the hospital and to medical appointments, having to fold and lift the wheelchair into her vehicle, which she stated she had to do, and could do, albeit with some difficulty. Mrs Moran has to dress Zachary, has provided him with orthotic shoes, and has to control his diet because of a coeliac condition and his difficulty in swallowing.
SUBMISSIONS
32. The Applicant referred to the concept of the preclusion period, in that Mrs Moran was compensated for her injury and for future economic loss which provided her with sufficient financial resources. To receive compensation and a social security benefit would be contrary to the intent of the legislation. Her present circumstances and the health problems of her children were acknowledged but they were not “unusual, uncommon or exceptional” to use the descriptive phrase considered appropriate by the Tribunal, with Toohey J presiding, in Re Beadle and Director-General of Social Security (1984) 6ALD1. The Applicant submitted that the finding of the SSAT that special circumstances existed could not be justified on the evidence, and an end date to the preclusion period of 6 July 2011 remained the appropriate date. Finally, Mrs Moran herself had stated that at her rate of financial expenditure over the last 18 months, she could financially survive for a further five years or until 2011.
33. The Applicant drew on the reasoning of the Tribunal in Re Groth and Secretary, Department of Social Security (1995) 37 ALD 797, this decision subsequently being upheld on appeal by the Federal Court, where it was stated in part:
“…His circumstances are not out of the ordinary when regard is had to those subject to the provisions of Part 3.14. 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 when considered in the light of others in a similar situation and in light of the object of the Act.”
That Mrs Moran’s solicitors did not adequately advise her of the implications of the preclusion period was not, of itself, a special circumstance, although the Applicant conceded it would not now be fair or realistic to expect Mrs Moran to sell her home (Exhibit A1). She is in receipt of the Family Tax Benefit and that, with her residual compensation amount, is sufficient to enable her to cope financially until the expiration of the preclusion period. Finally, neither the separation from her husband nor her unfavourable prospects of gaining employment are outside the normal run of social security cases and cannot be seen as justifying special circumstances.
34. For the Respondent, Mrs Jankulovska submitted that discretion in this matter was permissible under the legislation and following case law. Section 1184K of the Act gives such latitude if appropriate. She pointed out that Mrs Moran was a truthful witness; the evidence as to her difficult circumstances was strong before the SSAT, but given the responsibility of this Tribunal to look afresh at the circumstances, the evidence, particularly in respect of the health of Zachary, was that much more persuasive.
35. Mrs Jankulovska emphasised the adverse health of Mrs Moran, who has to take strong medication to cope with her afflictions, and who as a sole parent has had to take responsibility for four children who to varying degrees have medical problems. Her ex-husband provides minimal financial support, and shows no interest in his family. Mrs Moran, in spite of her own difficulties, must drive the children some 50 kilometres each day in the absence of public transport. Mrs Jankulovska submitted that the Applicant had concentrated on the financial issues rather than all the circumstances. To suggest that Mrs Moran could cope financially until the preclusion period ended in 2011 was to see her on the poverty line.
36. In support of her submission that the SSAT decision should be upheld, Mrs Jankulovska referred to four relevant authorities. Firstly, to the decision in Re Davis and Secretary, Department of Family and Community Services [2005] AATA 546, wherein the Tribunal took account of Re Beadle (supra) and Re Groth (supra) as previously referred to, but saw some latitude in the fact that Hill J, in Dranichnikov v Centrelink (2003) 75 ALD 134 at 148, noted that the expression “unusual, uncommon or exceptional’ was not actually affirmed by the Full Court. Whilst supporting the argument against double dipping, in the circumstances that tribunal found in favour of Mr Davis.
37. I was referred to Secretary, Department of Social Security v Thompson (1994) 53 FCR 580 where at paragraph 4, Enfield J opined that “the width of the discretion under the section (1184) clearly extends to all the circumstances of the case”, and to Nguyen and Secretary, Department of Family and Community Services [2004] AATA 249 at paragraphs 51 and 59, where the tribunal respectively referred to the need for full consideration of the “…circumstances which if ignored would produce an unfair or unjust result” and followed Re Thompson (supra).
CONSIDERATION AND DECISION
38. “Special circumstances” as referred to in section 1184K is not defined in legislation, but the interpretation put forward by the Tribunal with Toohey J presiding in Re Beadle (supra) has been widely followed, and states:
"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. Whether circumstances answer any of these descriptions must depend upon 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 run of cases. 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."
39. That Tribunal went on to say (at 3) that "the existence of special circumstances is to be determined from all the circumstances ..." which in the context of the matter before that tribunal related to an application for handicapped child’s allowance. That "all the circumstances" should be considered in this matter is supported by the words of the Full Federal Court in dismissing an appeal against the above decision (Beadle v Director-General of Social Security (and others) (1985) 7 ALD 670), wherein it was stated at 674 in respect of whether special circumstances were evident in the delay in making a claim "More difficult would be questions of ignorance, illiteracy, isolation, illness and the like. It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it possible to lay down precise limits or precise rules". Such a view has been subsequently endorsed by the Full Federal Court in Dranichnikov (supra) at 66 – 67.40. The decisions in Re Thompson and Re Nguyen referred to above emphasise the need to consider all the facts and circumstances of the matter before me, and section 1184K provides the discretion to do so (Enfield J in Re Thompson). I see that as particularly important in this matter given the facts before me, the issues for consideration and the interrelationship between those involved.
41. The medical evidence in respect of the condition of Mrs Moran has not been disputed. Whilst the reports from Dr Salmon and Professor Disler are relatively dated, they nonetheless project diagnoses and opinion based on numerous examinations and observations. They reflect the opinion of the treating general practitioner Dr Curlewis, that Mrs Moran has a serious medical condition, the prognosis being that no alleviation or improvement can be expected. The disabilities associated with that fundamental condition, as amplified by the breakup in the marriage and Mrs Moran having to resort to a sole parent role, have been addressed. Those difficulties were described in oral evidence, and limitations in use of the upper left limb were evident. I found Mrs Moran to be an honest witness.
42. The medical conditions of her children have been well supported by medical evidence and have not been disputed. The circumstances of Zachary have seemingly been unfolding in recent months, but on the evidence of Dr Curlewis, and the evidence of Mrs Moran, I have no reason to doubt that he has a serious illness and his condition is deteriorating. This situation was not before the SSAT, but it is now a clear issue in the circumstances of Mrs Moran and accordingly must be considered. The evidence before me is that Mrs Moran carries a high physical and emotional workload in caring for Zachary.
43. The Applicant has quite rightly, in my view, accepted that Mrs Moran is now not in a realistic position to sell the family home should that become a consideration in terms of financial resources in the event that the preclusion period extends to 2011. That she was inadequately advised of the implications of the preclusion period upon her eligibility for compensation affected social security payments is a moot point. Certainly, the application by Bussoletti Lawyers for reconsideration of the decision to calculate the preclusion period based on $625,000 (rather than $475,000) and the subsequent request for ARO review might well indicate that Mrs Moran could form the opinion that a lesser preclusion period was likely if not probable. Against that, Mrs Moran was advised directly by Centrelink by letter dated 14 November 2003 – and therefore prior to paying out of the balance of the mortgage – that the preclusion period would be from 24 January 2002 to 6 July 2011. Were it not for other considerations in this matter, the decision to pay off the mortgage in the face of that advice could well result, on its own, in a decision to retain the preclusion period termination date at 6 July 2011.
44. Medical reports before me indicate that Mrs Moran was significantly affected by the breakdown of the marriage, and subsequent divorce, and I find it not unreasonable to accept, as Mrs Moran implied in her evidence, that she saw the need to make provision for the home, and that she could survive financially until the expiration of the preclusion period. It may be that she can, but on her evidence, I am inclined to agree with her advocate that she could be on the poverty line by 2011.
45. Taking account of all the issues put to me in this matter, I am satisfied that the discretion in section 1184K as to special circumstances should be exercised. I have no wish to put aside the decision of the SSAT, which I believe rightly considered the whole circumstances as they then existed, nor do I have it in mind that an alternate methodology to disregarding one third of the compensation payment should be considered. Accordingly, I affirm the decision of the SSAT that the lump sum preclusion period last from 24 January 2002 to 16 April 2007.
I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of REAR ADMIRAL A R HORTON AO
Signed: L Feely
AssociateDate of Hearing 20 August 2005
Date of Decision 19 August 2005
Advocate for the Applicant Luke Carter
Solicitor for the Respondent Cvetanka Jankulovska
APPENDIX – LIST OF EXHIBITS
A1 - Applicant’s Statement of Facts and Contentions dated 5 November 2004
R1 - Report from Dr T G Curlewis dated 1 March 2002
R2 - Report from Dr T G Curlewis dated 26 March 2002
R3 - Report from Dr D M Salmon dated 12 April 2002
R4 - Report from Professor P Disler dated 21 November 2002
R5 - Financial Statement dated 20 January 2005
R6 - Report from Professor N Buchanan dated 10 December 2004
R7 - Report from Professor N Buchanan dated 25 January 2005
R8 - Report from Dr T G Curlewis with attachment dated 30 March 2005
R9 - Letter from Dr T G Curlewis dated 13 April 2005
R10 - Respondent’s Statement of Facts and Contentions dated 1 July 2005
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