Muglia and Secretary, Department of Social Services (Compensation)

[2021] AATA 3423

Muglia and Secretary, Department of Social Services (Compensation) [2021] AATA 3423 (24 September 2021)

Division:General Division

File Number(s):      2021/5324

Re:Franco Muglia

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Chris Puplick AM, Senior Member

Date of written reasons:        24 September 2021

Place:Sydney

The application for an extension of time is refused.

...............................[sgd].............................

Chris Puplick AM, Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE – application for an extension of time – compensation preclusion period – 28-day period has elapsed – where extent of delay reasonably explained – where there is no reasonable prospect of success – application refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) s 29

Motor Accidents Compensation Act 1999 (NSW) s 84A and 94

CASES

Berkelaar and Comcare [1997] AATA 12015

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Brown v Federal Commissioner of Taxation [1999] FCA 563

Comcare v A’Hearn (1993) 45 FCR 441

Dolan and Comcare (1993) 29 ALD 887

Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 3 FCR 344

Jackamarra v Krakouer (1998) 195 CLR 516

Kim and Minister for Immigration and Border Protection [2018] AATA 155

Kuljic v Secretary, Department of Social Security [1994] FCA 886

O’Gorman and Comcare (Compensation) [2017] AATA 2192

Pohahau v Minister for Home Affairs [2019] FCA 1243

Secretary, Department of Family and Community Services and Roberts (2003) 73 ALD 412

SPWX and Secretary, Department of Social Services [2020] AATA 3883

REASONS FOR DECISION

Chris Puplick AM, Senior Member

24 September 2021

BACKGROUND

1. Mr Franco Muglia (the Applicant) is seeking an extension of time (EOT) in order to lodge an appeal against a decision made by the Social Services and Child Support Division of this Tribunal (AAT1) on 26 November 2020 to affirm a departmental decision that the Applicant had a debt to the Commonwealth.

2. On 13 May 2011 the Applicant commenced receipt of the Disability Support Pension (DSP).

3. On 2 February 2015 the Applicant was involved in a serious motor vehicle accident which resulted in the award to him of a lump sum payment by way of compensation on 6 May 2020.

4. On 12 June 2020 the Secretary, Department of Social Services (the Respondent) made two decisions. The first of these was to impose a “preclusion period” on the Applicant to commence on 2 February 2015 (the date of the compensable event) and conclude on 25 March 2018. The conclusion date of the preclusion period was calculated in accordance with the provisions of the Social Security Act 1991 (Cth) whereby recipients of certain social security payments are prevented from “double dipping”, that is, in this instance, receiving both the DSP and income from a compensation payment.

5. The second decision of the Respondent was to seek recovery from the Applicant of the sum of $81,922.26 being the amount of “overpaid” DSP during the preclusion period.

6. The Applicant sought a review of that decision which was affirmed by an Authorised Review Officer (ARO) of the Department on 16 April 2019. In turn that decision was appealed to the AAT1 where again it was confirmed on 26 November 2020.

7. The Administrative Appeals Tribunal Act 1975 (Cth) (the Act) provides that appeals against a reviewable decision (including the decisions of the AAT1) must be made within a period of 28 days.[1]

   [1] Administrative Appeals Tribunal Act 1975 (Cth) (Act) s 29(2).

8. However, a further provision is made in the Act[2] that the Tribunal may extend the time for seeking a review of a decision, “if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.”

   [2] Act s 29(7).

9. The decision by the AAT1 was made on 26 November 2020 and the evidence is that the decision was notified to the Applicant by email on 8 December 2020.[3] This is taken to be the date of the receipt of the decision, although the Applicant claimed not to have received it until 12 June 2020.

   [3] The email address used is the same as that appearing on the email sent by the Applicant to the Tribunal on 8 October 2020 so there is no basis upon which to doubt its receipt by the Applicant.

10. The 28-day period from 8 December 2020 expired on 5 January 2021 but the Applicant did not seek a review of the AAT1 decision until he gave notice of that on 4 August 2021[4] in association with which he applied for an EOT on 12 August 2021.

    [4] While the Applicant dated his application for review 6 August 2021, the Tribunal actually received his application by email on 4 August 2021.

11. His application is thus between 211 and 213 days out of time.

12. The application for the EOT was heard by the Tribunal on 14 September 2021 via telephone in accordance with the Tribunal’s COVID-19 protocols.

    PRINCIPLES FOR CONSIDERING EXTENSIONS OF TIME

13. Extensions of time are not granted by the Tribunal as a matter of course and cogent reasons need to be advanced for them being granted.

14. McHugh J in the High Court case of Brisbane South Regional Health Authority v Taylor[5] gave four reasons why such limitations are an important part of the legal process. His Honour noted that:

    First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them.

    …

    The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.

    [5] (1996) 186 CLR 541 at 552-553. Footnotes and citations omitted.

15. It is generally accepted that the “check-list” outlined by Wilcox J in Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment[6] should be taken as the guide by this Tribunal in determining EOT matters.

    [6] (1984) 3 FCR 344.

16. That list provides as follows:

    ·an applicant must show an “acceptable explanation of the delay” and this it is “fair and equitable in the circumstances” to extend time;

    ·a distinction is to be made between an applicant who has “rested on his rights” and allowed the decision-maker to believe that the matter was finally concluded, and one who has continued to make the decision-maker aware that he or she contests the finality of the decision;

    ·any prejudice to the respondent caused by the delay;

    ·whether any others or the general public would suffer any prejudice as a result of the extension, or established practices be upset;

    ·the merits of the substantial application; and

    ·“considerations of fairness as between the applicant and other persons” in a similar position.

17. However, there are other principles which the Tribunal bears in mind in these considerations. They include:

    ·considering each case on its specific facts and merits, being guided by “what the justice of the case requires” and ensuring that all relevant factors are evaluated;[7]

    ·considering that “[i]f a consideration of the merits indicates that there is no question to be agitated on the appeal, and there is no prospect of success, it would be futile to grant an extension of time and most unjust to the respondent to subject the respondent to the costs of defending a pointless appeal”; and[8]

    ·considering “alternative avenues of relief for the Applicant should the original extension of time order not be made”.[9]

    [7] Brown v Federal Commissioner of Taxation [1999] FCA 563 at [59].

    [8] Kuljic v Secretary, Department of Social Security [1994] FCA 886 at [6].

    [9] Kim and Minister for Immigration and Border Protection [2018] AATA 155 at [20].

18. There is no hard-and-fast rule related to the length of time by which an application falls outside the prescribed time limits serving as a guide as to whether or not an extension of time may be granted.

19. In the matter of Roberts, the application was only one day beyond the statutory limit and the Tribunal stated:

    In many cases an extension of one day would not be opposed and an order to that effect would be made by the Tribunal quite readily. The brevity of the extension sought does not, however, lead automatically to an order extending the time just as the fact that a lengthy period of time has passed does not automatically lead to the refusal of such an order.[10]

    [10] Secretary, Department of Family and Community Services and Roberts (2003) 73 ALD 412 at [16]; Dolan and Comcare (1993) 29 ALD 887 at 888.

20. In Roberts  with just one day’s delay the extension of time was refused whereas in Berkelaar, where the time delay was 5 years, an extension of time was granted.[11] In 2020 the Tribunal saw fit to grant and extension of time to an applicant who had lodged her request well in excess of eight years after the appealable decision because although “[t]he delay in this matter is very substantial”, nevertheless “the issues sough to be considered in a review are also of importance.”[12]

    [11] Berkelaar and Comcare [1997] AATA 12015.

    [12] SPWX and Secretary, Department of Social Services [2020] AATA 3883 at [49].

    REASONS AND MERIT

21. In effect, the two most critical elements for the Tribunal to consider in an  EOT application are usually whether a reasonable explanation exists for the delay, (although “an acceptable explanation for the delay” is not “an essential precondition to the exercise of that discretion although it is to be expected that such an explanation will normally be given”)[13] and whether the application has a reasonable expectation of being successful if proceeding to a full merits-based review.

    [13] O’Gorman and Comcare (Compensation) [2017] AATA 2192 at [13], citing Comcare v A’Hearn (1993) 45 FCR 441.

22. None of the other factors in Wilcox J’s “check-list” has been raised by the Respondent as concerns, nor do they appear relevant in the circumstances of the present case.

23. The question of how to adjudge the latter point was set out by Wigney J in the following terms:

    It will seldom be in the interests of the administration of justice to grant an extension of time where the proposed application has little or no prospects of success. Such a finding should ordinarily only be made where the grounds of the application on their face appear to have little or no prospects of success and there is no need for any detailed argument in respect of the merits. It follows that an assessment of the prospects of success on an extension of time application should not ordinarily travel “beyond an examination of the grounds at what should be a reasonably impressionistic level … into a fuller consideration of the arguments for and against each ground of review.  [14]

    [14] Pohahau v Minister for Home Affairs [2019] FCA 1243 at [35]. Citations omitted.

24. The level of examination which should be undertaken by the Tribunal, of the grounds upon which the appeal itself is based, were summarised by the High Court in Jackamarra:[15]

    The understanding of counsel for the appellant as to how the Court would examine "the merits" was consistent with the practice of the courts in a number of common law jurisdictions dealing with applications to extend the time for appealing. In R v Secretary of State for the Home Department; Ex parte Mehta, for example, Lord Denning MR said:

    "We often like to know the outline of the case. If it appears to be a case which is strong on the merits and which ought to be heard, in fairness to the parties, we may think it is proper that the case should be allowed to proceed, and we extend the time accordingly. If it appears to be a flimsy case and weak on the merits, we may not extend the time. We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time."

    [15] Jackamarra v Krakouer (1998) 195 CLR 516 at [3]. Citations omitted.

    THE APPLICANT’S REASONS

25. The Applicant stated is reasons for the delay as follows:

    “I’m slow as anything at doing anything I’m not good at doing anything anymore especially paperwork trying to do it before the time I was on 24 tablets a day before and it mentally stuffed me more I struggled to do the paperwork as I’m chronically depressed and forget things so easily and can’t or really struggle to read things properly especially struggled to read the time that I had to do an appeal by I read one sentence if that and I can’t read anymore or mentally think it’s really bad! I have an Occupational Therapist Report that clearly stated I couldn’t do a lot of things and needed help but my lawyer and insurance did nothing to help so  w[ith]out that money I paid from my own pocket when they should have paid.”[16]

    [16] Applicant’s application for review dated 12 August 2021.

26. The Applicant was invited to expand on this statement at the Tribunal hearing. He indicated that, after his accident, he was largely dependent upon other people to assist him with any “paperwork” or anything requiring detailed attention. He complained of difficulties in concentrating or reading long documents, exacerbated by a low level of motivation resulting from the regime of 24 tablets which he had to take daily and his deep feelings of depression and occasional suicidal ideation.

27. The Tribunal also has before it a number of medical and psychiatric reports dating back to 2015, several prepared in relation to the Applicant’s claim for compensation payment.

28. The report of Dr Peter Giblin dated 31 August 2015 notes a diagnosis of depression but without other co-morbidities. Dr Ben Teoh (Consultant Psychiatrist) (15 July 2017) reports diagnoses of chronic adjustment disorder with mixed depression and anxious mood with a prognosis that the depression has become chronic and the outlook is not encouraging. Ms Marie Lucas (Occupational Therapist) (6 July 2018) notes the ongoing support needs of the Applicant following his accident and reports his dependence on family and friends to manage relatively simple administrative tasks such as paying bills.

29. Dr Alan Home (Occupational Physician) (10 February 2020) notes that while the Applicant can manage most domestic chores on his own and has some limited capacity to work, he suffers significantly from depression and needs to take care regarding potential addiction to his medications.

30. Dr Selwyn Smith (Consultant Psychiatrist) (May March 2020) provides a lengthy report in which he reviews some 38 reports and documents and the opinion of numerous treating practitioners. He confirms the Applicant’s regime of 24 tablets per day and his diagnoses of Somatic Symptoms Disorder, Chronic Pain Disorder, Major Depressive Disorder and Post Traumatic Stress Disorder (in partial remission). He notes that the Applicant suffers a “moderate impairment” in concentration and is highly de-motivated.

31. After consideration of both the medical evidence and its advice regarding the ability of the Applicant to understand complex matters and to be motivated enough to act without assistance, together with the Applicant’s oral testimony, the Tribunal accepts that a reasonable explanation for the delay in lodging the application for an EOT has been established.

    PROSPECTS OF SUCCESS

32. There can be no dispute that the Applicant, as a result of his compensation payments was subject to a preclusion period under the Social Security Act.

33. The core of the Applicant’s appeal turns upon the fact that he believes that the Department was in error in making the precise calculations of his debt for over payment of DSP. He does not deny that a preclusion period applies in his case, only that the length of that period is wrong because it is based on an initial faulty calculation.

34. In making its calculations, the Department has determined that the “lump sum compensation payment” which is the basis for calculation of the preclusion period was $169,283.61.

35. In assessing the Applicant’s compensation payments following the accident, the NSW State Insurance Regulatory Authority (Claims Assessment and Resolution Service – CARS) made the following determinations under subsection 94(4) of the Motor Accidents Compensation Act 1999 (NSW) (NSW Act):[17]

    [17] Annexure E, Respondent’s Outline of Submissions at 27.

    Non-Economic loss  $160,000.00

    Economic losses

    Past loss of earnings (incl. superannuation)             $91.944.77

    Future loss of earnings (incl. superannuation)          $77,338.84

    Past treatment  $55,984.23

    Future treatment  $40,000.00

    …

    Future commercial care  $19,908.00

    Total of economic losses and non-economic losses            $445,175.84

    …

    Total damages assessed  $445,175.84

36. The Assessment then provided that “[t]he Claimant’s economic losses are to be reduced by and the Insurer is to have credit for the following payments”:

    Section 83 payments  $49,523.33

    Section 84A hardship payments  $39,500.00.[18]

    [18] Ibid.

37. There is a further relevant section in the Assessment as follows:[19]

    “The starting point in my view is the allowance of the sum of $210 per week, and thereafter to approach the matter on the basis of an allowance of a buffer for the lost opportunity to undertake additional work should he have decided to do so. If I allow the $210 per week for the whole of the period from four weeks after the date of accident to date, that is a period of 270 weeks and the total would accordingly be $56,700.00 plus superannuation at 9.25% (based on the gross) in the sum of $5,244.77. There is then the question what allowance should I make for the loss of opportunity to undertake additional work over and above the seven hours per week that he was undertaking at the time of the accident. In my view having regard to the matters I have referred to regarding my concerns as to the history and the Claimant’s reliance upon disability payments for a number of years until the date of accident, in my view I propose to allow an additional sum of $30,000 inclusive of superannuation for that loss of opportunity. The calculation of these sums gives a total of $91,944.77.”

    [19] Ibid at 27, at [106].

38. In a letter to the Applicant, his solicitors advised:

    “In terms of the Award from the CARS Assessor at SIRA, the Assessor made an award for past economic loss of $91,944.77 which inherently had a component for past loss of income and superannuation which has been calculated by reference to specific weeks and sums, however a curious amount of $30,000 for ‘loss of opportunity’ was also noted in the award of $91,944.77. We respectfully believe this ‘loss of opportunity’ should have been a separate head of damages and not included it as part of past economic loss as it does not truly represent any past loss of income. The Assessor’s award for past economic loss should be calculated by reference to specific weeks of payments.

    We hope this assists with understanding your award and what should be recoverable from Centrelink. Certainly, we are aware of the current dispute you have with Centrelink’s recovery, however we also question the merits of including the $30,000 for loss of opportunity as part of the economic loss calculations considered by Centrelink.  

    Indeed, the Assessor has made it a difficult job for you and Centrelink to work out precisely your award for past and future economic loss.”[20]

    [20] Annexure G, Respondent’s Outline of Submissions at 34.

39. The Tribunal agrees with the Applicant that this all seems exceptionally confusing, and sympathises with his submission in which he states:

    “I Franco Muglia hereby state that before receiving my ctp payout I called Gio and asked them to do the paperwork properly that the $39,500 I got in advance that it was used for medical and not to put it as economical they did not care I also called my lawyer Wendy Hunt and asked her to make sure the Gio insurance do their job properly and not to put the $39,500 as economic both the insurance and my lawyer didn’t care as my case was finalised and before I received any money I already paid back the $39,500 to Gio insurance and Centrelink still took another $39,500 again which has caused me so much stress as that is not right but it is money that is surposed[sic] to help me in my future I asked for it to be reviewed I was then told by Stuart who reviewed it that the government legislation states they can double dip on my money my bad luck I can’t work again from being a victim of a car accident left traumatised thinking I ran over 2 kids even though it wasn’t my fault that’s the most worst feeling in the world you have no idea and left with injuries I was also told by another Centrelink client officer what I can’t spend my money on which disgusted me you people work you can make $39,500 I can’t and if it was taken twice from you I’m sure you won’t like it and know that it’s wrong to be taken from you twice especially when the insurance and your lawyer don’t care about the paperwork being worded properly so I employee you I need that $39,500 to help me with my medical again as I got stuffed over with ctp compensation case and am left stressed about my future when I don’t have much of a life from being not only injured from the car accident but being left traumatised from it and being traumatised that Centrelink is just taking more of my money that I need because no one cared about doing paperwork properly...”[21]

    [21] Annexure H, Respondent’s Outline of Submissions at 35.

1. In short, the Applicant believes that the following amounts should not be taken as part of his compensation lump sum payment:

   ·$39,500.00 as this was supposed to cover his medical expenses and the necessary supports which had been recommended in the report of Ms Lucas, the Occupational Therapist; and

   ·$30,000.00 which he says was “awarded” to him for “loss of opportunity” and not loss of income.

2. Unfortunately for the Applicant, neither claim is sustainable.

3. The sum of $39,500.00 was paid under section 84A of the NSW Act which provides, relevantly:

   (1) Once liability has been admitted (wholly or in part) or determined (wholly or in part) against the person against whom the claim is made, it is the duty of an insurer to make payments to or on behalf of the claimant in respect of economic loss but only to the extent that such a payment is necessary to avoid the claimant suffering financial hardship.

4. The sum in question was paid to the Applicant after the accident, once liability was admitted, and before payment of his final settlement in order to cover medical expenses and ensure that he did not suffer financial stress until settlement was made.[22] When settlement was made, this amount was deducted from final payment by way of recouping an advance. The Applicant is wrong to characterise it as he having to “repay” an amount.

   [22] Annexure F (ARO notes), Respondent’s Outline of Submissions at 31-32.

5. This was explained to him in a letter from his solicitors on 27 July 2020 when they advised that they had sought these “hardship” payments on his behalf; that two lump sum payments were made to him (in 2016 and 2017) and that:

   “[t]he insurer was thus entitled to a credit of this amount, or a reimbursement of this amount, either way, you did not received, again, the amount of $39,500.00 and this was deducted from your past economic loss.”[23]

   [23] Annexure G, Respondent’s Outline of Submissions at 34.

6. The Tribunal understands the Applicant’s frustration that his amount was taken as related to economic loss when he understood it as being for medical expenses as recommended by his Occupational Therapist. However, this is a matter involving the Applicant and his advisors, not the Tribunal.

7. For the Tribunal to now characterise the payment not as “hardship” advance payments but rather as non-economic loss would be to (improperly) retrospectively alter the basis of the payment.

8. As to the sum of $30,000.00, the problem here arises from the use of different terms in different places. It is quite clear from the Assessors report that the money is being included in the award “as a buffer for the lost opportunity to undertake work” and for “what allowance should I make for the loss of opportunity to undertake additional work”.

9. There is no mistaking the intent of the Assessor or the basis of the award. The problem arises rather from the solicitor’s comments that the assessment involved “a curious amount of $30,000 for ‘loss of opportunity’” and “should have been a separate head of damages and not included it as part of past economic loss as it does not truly represent any past loss of income.”

10. It was intended to compensate for loss of income in the form of income forgone due to an inability to work over and above the hours which were possible as a result of the accident.

11. There is thus no basis for the Applicant being able to deduct either the $39,500.00 (the advance on payment) or the $30,000.00 (payment for loss of income) from the amount of his compensation payment. This means that the Respondent’s figure of $169,283.61 (being the sum of the past and future loss of earnings - $91,944.77 + $77,338.84) is the correct figure to establish the compensation payment lump sum.

12. The Tribunal itself is not in a position (absent relevant data) to calculate the preclusion period using the formula set out in section 1170 of the Social Security Act but it has no reason to believe that the calculation was not properly and accurately made and that the preclusion period ended on 25 March 2018.

13. The Tribunal thus finds that the Applicant would have no prospect of success in challenging the decision under review were the matter to proceed to a full merits-based review.

14. As this is an application for an EOT the Tribunal has no jurisdiction to review the decision of the AAT1 regarding the existence or otherwise of any “special circumstances” which might otherwise have arisen to vary the details of the preclusion period.

15. The Tribunal understands that the Applicant is currently in receipt of the DSP and it appreciates that he finds himself under great stress both emotionally and financially.

16. Although it sympathises with his position it is also perhaps best for him that this matter be brought to some finality allowing him and the Respondent to come to what will obviously be some accommodation of their respective positions.

17. Because the application has no prospect of success in a merits-based review the application should be refused.

    DECISION

18. The application for an extension of time is refused.

I certify that the preceding 57 (fifty -seven) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

.....................................[sgd]...................................

Associate

Dated: 24 September 2021

Date(s) of hearing:	14 September 2021
Applicant:	In person
Solicitors for the Respondent:	Ms C Hammerton, Services Australia