Orlando; Department of Family and Community Services - [2000] AATA 632

DECISION AND REASONS FOR DECISION [2000] AATA 632

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N1999/39

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

DECISION

Tribunal MS S M Bullock, Member

Date1 August 2000
PlaceSydney

Decision      The decision under review is affirmed.
  [Sgd] SM Bullock
  Member
CATCHWORDS

Social Security – compensation payment – preclusion period – special circumstances – whether part or whole of compensation payment should be treated as not having been made.

Social Security Act 1991, section 1184

Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716
Re Secretary, Department of Social Security and Winterbotham (1990) (AAT 6499, 11 December 1990)
Re Lukic and Secretary, Department of Social Security (1991) (AAT 6944, 6 May 1991)
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Re Ivovic and Director-General of Social Security (1981) 3 ALN N95
Commonwealth v Daniels (1994) 33 ALD 111
Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745
Re Secretary, Department of Social Security and Hickman (1996) 43 ALD 75
Re Secretary, Department of Social Security and Anderson (1997) 49 ALD 189
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580

REASONS FOR DECISION

Ms SM Bullock, Member

This is an application for review to the Administrative Appeals Tribunal ('the Tribunal') by the Secretary, Department of Family and Community Services ('the Department') of a decision of the Social Security Appeals Tribunal ('the SSAT') made on 27 November 1998. That decision set aside a decision of an Authorised Review Officer ('ARO') of the Department and substituted a decision that the compensation representing the preclusion period from 27 November 1998 be disregarded due to the special circumstances of Mr Orlando's case (T2). Previously, the ARO had, on 16 June 1998, reduced the preclusion period to a period from 14 March 1995 to 25 March 2002 (T88). The original decision, made by a delegate of the Department, was that a preclusion period existed from 9 March 1995 to 5 February 2003 (T65, T67).
A hearing was held before the Tribunal in Sydney on 21 February 2000. The Applicant was represented by Mr J Kenny, Departmental Advocate. The Respondent, Mr Anthony Orlando, was represented by Ms S Koller, solicitor from the Welfare Rights Centre, Sydney. Oral evidence before the Tribunal was provided by Mr Anthony Orlando and Mr T Collins, a valuer with the Australian Valuation Office. Dr S Mosely, General Practitioner, provided oral evidence by conference telephone.
The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents", T1-T93) and the following exhibits:
Exhibit No.     Description    Date
A1      Letter and attached Valuation Report from the Australian Valuation Office.           21 September 1999
A2      Applicant's Statement of Facts and Contentions.         29 October 1999
R1      Handwritten letter, 'To whom it may concern' from Dr S Moseley, General Practitioner. 24 May 1999
R2      Letter, from Dr K Reinhardt, Consultant Psychiatrist, St John of God Hospital, Richmond            6 December 1999
R3      Letter, 'To Whom it May Concern' from Ms B Wall, Property Officer, Wilkinsons Real Estate Agencies      7 December 1998
R4      Respondent's Statement of Facts and Contentions     24 December 1999

the issues

The issue in this matter is whether or not there any special circumstances which would allow a part or a whole of the compensation paid to Mr Orlando to be disregarded under the provisions of section 1184 of the Social Security Act 1991 ('the Act').
legislation
Subsection 1184(1) of the Act deals with special circumstances under which a whole or a part of the compensation payment may be treated as not having been made. Subsection 1184(1) of the Act provides:
"1184(1) For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as:
not having been made; or
not liable to be made;
if the secretary thinks it is appropriate to do so in the special circumstances of the case."

background

The following information is provided by way of background and the facts contained within this section are not disputed.

Mr Orlando was born on 1 November 1943 and is now 56 years old. In 1991/1992 Mr Orlando was made redundant from Mcloud Tyres, with whom he worked for nearly 20 years. He had been suffering from back pain for some time prior to this and was having difficulty in carrying out his duties. He had also been in receipt of workers compensation. On 8 March 1995, Mr Orlando received a lump sum worker's compensation settlement of $449,817.72 (T64) of which the Family Court had ordered that approximately $50,000 be given to his former wife, leaving a balance of $399,817.72.
A preclusion period was set by the Department from 9 March 1995 to 5 February 2003 (T67). This preclusion period was subsequently reduced by an ARO commencing on 14 March 1995 to 25 March 2002 (T88).
Mr Orlando has two sons, one of whom attends secondary school and the other of whom attends primary school.
From his lump sum compensation, Mr Orlando purchased a property of 2,203 hectares for approximately $380,000 (Exhibit A1). This property is a Permalum clad home and has some sheds situated at the bottom boundary of the land. Initially, Mr Orlando rented his home receiving approximately $315.00 gross per week (T63). During this period, Mr Orlando lived with his brother, Nuncio and his family. Mr Orlando's parents were also living with Nuncio at that time. The house purchased by Mr Orlando was previously occupied by a disabled gentleman. The home is all on the one level. Mr Orlando believed the interior of the house was suitable for wheelchair access should he need this in the future, and the grounds are very large and very private.
Mr Orlando has a number of health problems including his work-related back injury following which he had a laminectomy. He also has a complex neurological condition, left foot drop and dysarthria. In addition, Mr Orlando also suffers from a major depressive condition including suicidal ideation (T75).
On 22 June 1998, Mr Orlando appealed to the SSAT against the ARO's decision to continue the preclusion period, notwithstanding the fact that the ARO had reduced the period.
On 27 November 1998, the SSAT set aside the ARO's decision and substituted its own decision that in Mr Orlando's special circumstances his compensation should be disregarded from 27 November 1998, the date of the SSAT's decision.
On 8 January 1999, the Respondent made an application for review to the Tribunal against the SSAT's decision, writing:
"The decision under review is wrong. Notwithstanding considerations as to why the respondent may benefit from living in his own house, the 5 acres of land on which it is situated (and which contributed significantly to the expenditure of his lump sum) far exceeds his reasonable needs." (T1)

evidence of mr timothy ellis collins

Mr Collins told the Tribunal that he is a fully qualified and registered valuer with the Australian Valuation Office ('AVO'). Mr Collins also noted that he was experienced in valuing for the Office of the Protective Commissioner, including valuing properties of disabled people. He has been employed by the AVO for nine and a half years.
Mr Collins inspected the property owned by Mr Orlando at 134 St Albans Road, Schofields on 8 September 1999. The property had been purchased on 15 June 1996 for $384,000.00. Referring to properties in the area in September 1999, Mr Collins noted that Mr Orlando's property was worth approximately $407,700.00 and by February 2000 it may well be worth between $450,000.00 and $475,000.00.
Mr Collins reported that Mr Orlando's home is in reasonable condition but is 'dated'. Mr Collins noted there were no internal or external modifications to suit a disabled person. There was a single step at the front of the house and approximately seven steps at the rear. For wheelchair access, Mr Collins explained, ramps would need to be installed at the front and the rear of the property. In its current configuration, Mr Collins stated that the bedroom would need to be enlarged as would door entrances, to allow wheelchair access. In the kitchen, if Mr Orlando was in a wheelchair, he would need to have the bench tops, sink and cooking facilities lowered to allow access from a wheelchair height. Mr Collins noted that he did not recall any rails or aids to mobility in the bathroom.
Mr Collins agreed that there was certainly substantial privacy on the property, afforded by fences and plants, and particularly recalled that the home was situated on acreage. Referring to the left-hand side of the property, Mr Collins noted that it was closer to the neighbours than on the other side but still very private. Mr Collins explained that if Mr Orlando was to live on a smaller, 'more usual suburban type block of land', he could also achieve privacy by the use of fences, plants and trees.
Mr Collins considered that there were other suitable houses in the area which were aged five to ten years old and referred specifically to a three bedroom brick home which in September 1999 was worth approximately $180,000.00. There were other properties smaller and more suitable to Mr Orlando's needs also in the suburbs of Schofields and Riverstone, which were valued at $200,000.00 and $250,000.00.
The Tribunal was informed that it would also be quite easy to find a comparable cottage to that already occupied by Mr Orlando in the St Albans area. Mr Collins stated it would be possible to renovate such a property to make it wheelchair accessible and the cost of these additional works would be approximately $40,000.
Mr Collins noted that at the time of the hearing in February 2000, the sale of properties had slowed in the area around Schofields. It may be quite difficult in such market circumstances, Mr Collins explained, for Mr Orlando to sell his property at that time, though circumstances could change.
evidence of mr orlando
Mr Orlando told the Tribunal that he attended school at Schofields and left secondary school when he was approximately 15 years old. He had difficulty reading at school. Mr Orlando had lived in the Schofields area and its environs for many years, including in South Maroota for 14 or 15 years with his wife, and later moved to his present address in mid-1996.
Mr Orlando described how he was unable to work any more in his long-term job at the tyre factory. That was a great blow to him. He also spoke to the Tribunal of the breakup of his marriage and described how he still loved his wife greatly and continued to be extremely "sad" at the failure of the marriage. Mr Orlando described his back condition and the need for him to have surgery in the form of a laminectomy. He still has back pain and has foot drop. No one has been able to precisely provide a diagnosis or reason for this latter condition and other neurological symptoms that he experiences, as was noted by Dr M R Fearnside, Neurological Surgeon. In a letter dated 28 October 1998, Dr Fearnside wrote that in 1994 Mr Orlando was complaining of generalised spinal pain including in the interscapular region and in his legs. Dr Fearnside also noted that Mr Orlando's legs were becoming weaker and there was muscle wasting. Dr Fearnside concluded in his 1998 report that he was unable to come to a clear reason for Mr Orlando's ongoing symptoms and had sought a second opinion (T91). The Tribunal was referred to a report prepared on 6 July 1993 by Dr R Reid, consulting in occupational medicine and rehabilitation, which opined that Mr Orlando was a 'very ill man' and that he had a serious neurological disorder, which may be amyotrophic lateral sclerosis. This condition is an idiopathic degenerative disease which comes on chiefly in late middle age and is characterised by motor weakness and spastic limbs associated with muscular atrophy. Dr Reid also noted that Mr Orlando has dysarthria and found it difficult to communicate (T45). Both Dr Fearnside and Dr P King, also a neurologist, noted that while Mr Orlando has a substantial congenital canal stenosis, this did not explain his general weakness and his progressive neuromuscular incapacity.
As a result of his loss of employment and compensation, and the cessation of his marriage, Mr Orlando sold his family home in South Maroota. After he was hospitalised for his back and later hospitalised for depression, Mr Orlando then moved to live with his brother, Nuncio, and Nuncio's wife and three children. Mr Orlando's parents were living with Nuncio at that time but have since died.
Following the settlement of his worker's compensation case, Mr Orlando purchased a property which he considered would be suitable for his future needs, particularly his physical needs, which he considered were going to be substantial as his physical health declined. It was Mr Orlando's view at that time that he would be in a wheelchair in a number of years because of the weakening of his lower limbs and associated pain. Mr Orlando explained to the Tribunal that he had decided to purchase a suitable property and had in fact found a property smaller than the one he eventually bought. The purchase of the initial property fell through. Mr Orlando then, by accident, became aware of a house being sold in which there lived a disabled man who had a calliper leg splint. When Mr Orlando saw the home, he believed it would be suitable for him if he were to become more disabled. He was confirmed in this view when he saw that the house had also been occupied by a disabled person. Mr Orlando stated that he did not live in the house initially but rented it out. He subsequently had some difficulty with the rental arrangements and the tenants.
While living at his brother's home, Mr Orlando had his own room but found it difficult living there, considering the number of occupants of the house and the amount of activity, including visitors. Mr Orlando was also prevented from having his children come to visit him at his brother's home because his parents did not approve of visits by the children of 'the failed marriage'. Accordingly, Mr Orlando had to see his children away from the home and this often presented practical and other logistical problems. Mr Orlando stated that he was not pressured to leave his brother's home but felt that his being there was a strain not only on him, but also on his brother and his family. Finally, Mr Orlando decided to move into his own home and this was made possible because of the difficulty with the continued rental of the house.
Mr Orlando told the Tribunal that he liked his home very much. He described it as not being luxurious but as a very 'generous home'. It provided him with the privacy he craved. He did not have to get up in the morning if he did not want to, nor did he have to entertain or speak to anyone, if he did not want to. The house is also big enough for him to get around and he believed that it would be suitable for a wheelchair, should this ever be required. Mr Orlando stated that the bathroom has towel rails, which he uses to assist him in bathing, although he does not bathe everyday. He is able to care for himself and, although acknowledging it was very difficult at times, he was still able to manage. Mr Orlando explained to the Tribunal how important it was to have this house as it was a place where his children could come and stay with him for either a day or overnight. The children loved coming to visit him and stay there. There were horses living in the next property and the children often liked to play with them.
Mr Orlando stated that he did not know what he would do if he were forced to either move out of the house or sell it. He told the Tribunal the he was 'not in a position to answer', noting that he felt very confused and upset having to face such a prospect. Mr Orlando stated that if this happened it would be 'the straw that broke the camel's back'. He explained that he had lost everything. He had lost his job, his wife, his health, and if he had to leave his home then he would be losing everything that had ever mattered to him.
Mr Kenny put to Mr Orlando the possibility that he could live with his brother, Nuncio, and rent out his home until the preclusion period had expired. Mr Orlando stated that it was not an option to return to live with his brother. He just could not stand having those people all around him, he needed his privacy. In relation to another option of selling the property and moving into a smaller property, which would be less difficult for Mr Orlando to manage in terms of housekeeping and upkeep, Mr Orlando stated that he just did not think that he could move. Even though a smaller property may be less to manage because of its scale, Mr Orlando stated that on his own property he did very little. He would mow the lawns using his special safety lawn mower, completing only as much as he could at a time. In terms of the sheds, he has nothing to do with those and he reiterated that he did not feel that he could live close to people and in a different environment. Mr Orlando impressed on Mr Kenny that he knows where everything is in his home, he is able to manage there and he felt that he just did not have the energy to try something different. Mr Orlando once again expressed his confusion and how upset he was and said he could just not think clearly anymore.
Financially, Mr Orlando has $1000 in a bank account. He has no other investments and could not afford fencing or sheds. He is able to manage his food preparation. He also has to find money for back braces, which cost approximately $180.00 and last for six months. He spends approximately $21.00 on medication per week, which included his medication of Zoloft, Panadeine Forte and his stomach medication. Mr Orlando told the Tribunal that he tries to save small amounts of money so that he can afford future health costs, such as a wheelchair or renovations to the house. When Mr Kenny again asked Mr Orlando whether it would not be wise to consider downsizing his property and obtaining a home with the possibility of wheelchair access or the ability to easily modify the home, Mr Orlando simply stated: 'I try not to think about it. It'll be decided for me'.
In relation to his medical conditions, Mr Orlando stated that Dr Fearnside wants to perform further surgery on his back, but Mr Orlando has said that he does not want this. Mr Orlando continues to see Dr Fearnside every six to seven months. He has also attended St John of God Hospital over the years seeking treatment from psychiatrists, Dr K Reinhardt and Dr J Westerink. Mr Orlando has required psychiatric care because of chronic depression. He stated that he takes medication for this condition although he does not like it. Mr Orlando explained that he is often very sad and will cry for no reason. He finds it difficult to deal with any problems and just tries to manage his life day to day. In terms of his physical condition, Mr Orlando described having pain in both legs, having his left foot drop, back pain, headaches and stomach pains. He finds it difficult to sleep and his speech is sometimes "not very good", he told the Tribunal. Mr Orlando's way of coping with many of these conditions is to take pain killers and to have nothing to do with people, apart from his children, who are a source of happiness for him.
evidence of dr susan moseley, general practitioner

Dr Moseley stated that she had been treating Mr Orlando for approximately 16 years and also his ex-wife and two children. Dr Moseley noted that Mr Orlando's main health problems are those problems emanating from his back injury some years ago. He had an intervertebral prolapse in 1983, degeneration of the spine, which was treated by laminectomy in 1992, and generalised neuropathic weakness. Mr Orlando also has a speech difficulty although Dr Moseley stated that Mr Orlando has always had slowness of speech.
In addition to his physical problems, Dr Moseley notes that Mr Orlando has mental health problems. Dr Moseley told the Tribunal he is chronically depressed and finds it emotionally very hard to cope. Mr Orlando has been hospitalised for depression in St John of God hospital previously and continues to have outpatient treatment from time to time.
Dr Moseley told the Tribunal that she sees Mr Orlando weekly for medication, counselling and general discussion. Dr Moseley believes that Mr Orlando does not discuss his problems with anyone else. She described Mr Orlando as having intractable pain for which he constantly takes painkillers and medication for his depression. Dr Mosely noted that Mr Orlando was previously a very hard working, proud man, who has suffered major losses in his life including his job, his wife, his health and his parents. Dr Mosely stated in relation to Mr Orlando's current situation that 'his world is falling apart'. Mr Orlando's depression is on 'the brink', Dr Moseley noted. If he had to leave his home, 'he would be in serious trouble', Dr Moseley explained. Although it is difficult for him living alone and it was an extremely big step for him to take, Dr Moseley opined that Mr Orlando gained something because he felt at least he could look after himself and have somewhere of his own and for his children to stay. He is usually in bed by mid-afternoon, Dr Moseley stated, not because he is a lazy person, but because his energy is completely drained by that time. Dr Moseley told the Tribunal that she personally was very pleased when Mr Orlando moved into his current home because it was a boost to his self-esteem. Asked how Mr Orlando would be if he had to sell the property or rent it out and move somewhere else, Dr Moseley stated, 'it would be a huge blow'. Dr Moseley noted that Mr Orlando has not recovered from the loss of his wife and all that that entails and the split of his family. 'If he lost this house, I would be very doubtful he would cope', Dr Moseley opined. She believed it would be a backward step and then stated, 'He is that close to doing something to harm himself…he would not have enough stamina to get himself out of the hole'. Such a move would create for him a huge crisis, and Dr Moseley stated that he may well not survive such an event which he would perceive as yet another loss. It has been so difficult for Mr Orlando to cope, but he has managed day to day, and to take his home away from him could cause him to decide to end his life, Dr Moseley indicated.
Dr Moseley described for the Tribunal the level of stress Mr Orlando experiences in his world. Dr Moseley noted the Mr Orlando constantly scratches and tears at his skin. Commonly when he visits her surgery, there is blood on his shirt. Initially, Dr Moseley had thought that Mr Orlando may have been having a reaction to his medication, but when she withdrew medication, the problem did not go away and it became apparent over time that when he is stressed and anxious, which is most of the time, he scratches. Mr Orlando also does not like being dependent on medication and from time to time will cease his medication. Dr Mosely stated that when Mr Orlando takes such action, he 'gets into strife' and becomes ill. Dr Moseley said it is not certain whether or not Mr Orlando will need a wheelchair. Dr Moseley stated, somewhat pessimistically, he may not even get to that.
Dr Moseley indicated that she speaks regularly with psychiatrists, either Dr Reinhardt or Dr Westerink, about Mr Orlando and his treatment. They both find it difficult to know how to best help him, Dr Moseley stated, but believe his current situation is at the moment the best it will be. He does not have a lot to look forward to, Dr Moseley informed the Tribunal.
Dr Moseley told the Tribunal that Mr Orlando's children like going to visit him very much, and they look forward to their time with him. These visits provide him with some joy and are something that he also always looks forward to.
other medical evidence
dr j westerink, consultant psychiatrist, st john of god hospital
On 24 November 1998, Dr Westerink reported he had first seen Mr Orlando on 6 March 1994 (T92). He was depressed at the time. Dr Westerink last saw Mr Orlando on 6 July 1998 and at that time Mr Orlando wanted to move back into his home after it had been rented. Dr Westerink noted that Mr Orlando's mother had died two years ago and his father six months ago and he had lost his support system. Dr Westerink opined that it would help Mr Orlando if he were able to move back into his own house.
dr k reinhardt, consultant psychiatrist, st john of god hospital
On 6 December 1999, Dr Reinhardt reported that she had reviewed Mr Orlando in July 1997, having been involved in his care for two to three years at that stage. He was at that time in constant pain and chronically depressed. Historically, Dr Reinhardt noted that Mr Orlando had experienced multiple losses including his work, his health and his family, which have led to his intractable depression. Dr Reinhardt opined:
"I believe that the possibility of losing his only security – his house, would destabilise him significantly and exacerbate the suicidality with which he constantly struggles." (Exhibit R2)

submissions

Mr Kenny submitted that central to this case was the issue of Mr Orlando's physical and mental illness which make it difficult for him to evaluate the situation he finds himself in. Mr Kenny contended that Mr Orlando finds it very hard to face and plan for his future. He is, despite his disabilities and their difficulties, able to function normally and is well maintained and treated by his general practitioner, Dr Moseley.
The Applicant believes that it is appropriate for Mr Orlando to use the capital he has invested in his house to support himself. Mr Kenny further submitted that Mr Orlando has put too much capital into his house, which is too large for him 'and his reasonable needs'. Mr Kenny contended that Mr Orlando could manage financially by renting this property as he had previously done. In such circumstances, Mr Orlando could then move into his brother's home or elsewhere and this would still maintain his wish for independence. Renting is an option which would mean that the house could still stay under Mr Orlando's ownership. Further, Mr Kenny submitted that another option available to Mr Orlando is that he could sell his property and then purchase another more suitable, less expensive property, which he would then be able to renovate if his physical health deteriorated and he required special mobility and access features within the new house. Mr Orlando does not need wheelchair access immediately, but he may need it, and his current home does not provide it. Mr Kenny noted that the Applicant's concerns are mainly financial as it is not considered appropriate that tax payers subside Mr Orlando living in a home which is not entirely suitable for him, especially when he has other viable options available to him, which would allow him to live within his means.
Mr Kenny referred the Tribunal to Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690, in which that Tribunal undertook a comprehensive review of previous cases and identified factors relevant to the special circumstances discretion which included financial hardship, ill health, legislative change and incorrect legal advice. Mr Kenny submitted it would be incorrect to exercise the discretion in this case because it would frustrate the objectives or ends of the Act, especially when Mr Orlando had the possibility of other options in terms of his accommodation. While Mr Kenny, on the Applicant's behalf, recognised the difficulties Mr Orlando has, it was not unrealistic that his particular physical and emotional needs could be met by alternative accommodation, either by selling his house or by renting it and living elsewhere.
Mr Kenny further noted that it was not possible to argue hardship in Mr Orlando's case because one must look at how the situation arose. Mr Orlando was substantially compensated for his injuries and he purchased a home which was excessive to his needs. The property is too large for him and it is over capitalised, Mr Kenny submitted. This situation has occurred, it was submitted, because Mr Orlando chose to purchase such a property.
Further, Mr Kenny noted that the medical conditions to which the SSAT had regard were conditions for which Mr Orlando was compensated. Mr Kenny contended that the purchase of the house on a five-acre block of land is inconsistent with Mr Orlando's health needs and the maintenance of such a block is further incompatible with his physical limitations. In relation to Mr Orlando exercising his access right to his children in a place of his own, this could equally be achieved easily at another property. There is no need to have a five-acre property for this purpose and a unit or town house would suffice, Mr Kenny submitted. Mr Orlando's further concerns about privacy could also be achieved in areas of closer settlement by means of fences, plants and trees, as Mr Collins had described.
It was further submitted that in the event that Mr Orlando was required to modify his home to suit his physical limitations, there is no advantage given to Mr Orlando by modifying his current home. This home is not established for wheelchair access or with other mobility aids and hence Mr Orlando is in the same position as he would be in any other property, where renovation would have to occur to make the home accessible. Mr Kenny argued that if Mr Orlando moved to a less expensive, smaller property, he would still have adequate finances for his medication, the performance of his parental duties and his future needs. He has a low-income health card and with the house being rented at the rate of $315 per week, which he previously received, he would achieve an income which is greater than the maximum rate of Disability Support Pension. There is simply no reason, Mr Kenny submitted, why Mr Orlando's disabilities could not be accommodated in a more 'normal' and suitable housing environment.
Mr Kenny concluded that in exercising the discretion to disregard the compensation, the SSAT had failed to have regard to the circumstances in which the hardship arose, namely the extravagance in the purchase of an asset which was in no way suitable for Mr Orlando's needs and which is nevertheless still realisable. In this regard, Mr Kenny referred the Tribunal to the following cases: Re Hajar and Secretary, Department of Social Security (1988) 16 ALD 716; Re Secretary, Department of Social Security and Winterbotham (1990) (AAT 6499, 11 December 1990); Re Lukic and Secretary, Department of Social Security (1991) (AAT 6944, 6 May 1991); and Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464.
To follow the SSAT's decision would, Mr Kenny submitted, endorse inappropriately high expenditure on realisable assets so as to artificially induce financial hardship. In such circumstances, Mr Kenny submitted that the decision under review be set aside. Not to do so would cost the public purse at least $30,000, Mr Kenny concluded.
Ms Koller, on Mr Orlando's behalf, submitted that there is substantial documentary and medical evidence concerning Mr Orlando's physical and psychiatric problems. His depression, neurological condition and speech difficulties are not part of the disabilities for which he was compensated for his back injury.
There is nothing extravagant, Ms Koller submitted, about Mr Orlando's purchase of his home. He requires privacy and the house can be modified to suit his disabilities if and when required. He already uses a shower seat in the bathroom and towelling rails are used as mobility aids for him while bathing. His long term psychiatrists, Dr Westerink and Dr Reinhardt state that for him to move from his house would propel him into a more precarious psychiatric health situation where suicide was a realistic possibility for Mr Orlando. Ms Koller urged the Tribunal to consider Mr Orlando's profound and long standing psychiatric problems which cannot be denied. Mr Orlando has strong emotional connections with his home not just because of its physical attributes but because it is very strongly tied to his sense of self worth and self esteem. It was an extremely difficult decision for him to decide to live in his home alone, but he has been able to do this and this has provided him with a sense of achievement in an otherwise difficult life which is characterised by great pain, depression and sense of loss. For Mr Orlando, the home was immediately attractive to him when he purchased it because someone who was disabled had lived there. He identified with this and saw that the house could provide for his future needs and disabilities. Further, Ms Koller submitted that Mr Orlando's circumstances have changed somewhat since he has purchased the home. He has lost both his mother and father, his physical health has declined and his depression has become chronic. These are circumstances which Mr Orlando most probably did not envisage at the time of purchase.
Dr Moseley, who has been Mr Orlando's treating doctor for some 15 years, is very clear in her opinion of the impact upon Mr Orlando if he were forced to either move from his home or sell it. This is not the opinion of a doctor who has done an assessment for the purpose of a Tribunal hearing but from a doctor who knows Mr Orlando well and understands his needs. As Dr Moseley stated, Mr Orlando lives each day and would simply be unable to face the proposition of having to lose his home.
Mr Koller referred the Tribunal to ReSecretary, Department of Social Security v Smith (1991) 30 FCR 56, in which special circumstances were defined. That case also cited with approval the statement in Re Ivovic and Director-General of Social Services (1981) 3 ALN N95 which indicated that 'special circumstances' were contained in the legislation 'to allow the decision-maker the fullest opportunity to consider particular circumstances in each case'. The Court in Smith (supra) indicated: 'special circumstances are indeed "wide words"'.
In Commonwealth v Daniels (1994) 33 ALD 111 at 119, the Court noted that special circumstances allow decision-makers:
" …the fullest opportunity to consider the particular circumstances of each case. The discretion may be exercised in favour of an applicant for a pension where the special circumstances of the particular case demonstrate that the strict enforcement of other provisions Pt XVII of the Act would be unjust, unreasonable or otherwise inappropriate…"
In Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745, the Respondent had had assets in the form of property but the Tribunal took the view that the discretion contained within the Act allowed decision-makers to consider factors such as mental health and the social conditioning of the individual in deciding whether a preclusion period should be reduced. The Tribunal in VYS (Supra) considered that the Tribunal should endeavour not to add to Mr VYS's feelings of anxiety and should aim to leave Mr and Mrs VYS with some hope for the future. The Tribunal in that matter noted that the Act allows the Secretary to achieve a 'broad measure of justice for the individual case'. The Tribunal further decided in that case to reduce the preclusion period to achieve the correct balance between the compensation recovery policy of the Act and Mr VYS's psychiatric and emotional needs. Such findings in VYS are not inconsistent with what the SSAT achieved by its decision in relation to Mr Orlando, Ms Koller submitted.
In Re Secretary, Department of Social Security and Hickman (1996) 43 ALD 75, that Tribunal referred to the need for the Respondent to retain emotional stability and this is what is required for Mr Orlando, Ms Koller submitted. In Re Hickman (supra), that Tribunal noted that there was a range of factors which, taken together, satisfied the Tribunal that special circumstances existed. The Tribunal found that Mr Hickman's circumstances varied markedly from that of the usual run of cases and included the severe nature of Mr Hickman's injury and the impact of such injuries on his life, including his relationships. Further, that Tribunal understood that Mr Hickman needed to have isolation, as it provided him with emotional stability and this made the application unusual.
In Re Secretary, Department of Social Security and Anderson (1997) 49 ALD 189 there was a real possibility of the Applicant in that case causing serious harm and indeed attempting suicide. In Mr Orlando's evidence, Ms Koller submitted it was clear that Mr Orlando could attempt suicide. This is not a fanciful submission but realistic and supported by objective medical evidence.
Ms Koller submitted that the Department cannot argue that Mr Orlando is the author of his own difficulties. He could not foreshadow his physical and psychiatric health problems at the time he purchased the house, nor his inability to deal with the major losses that have confronted him.
Ms Koller further submitted that the Department's concern appears to be the single factor related to the value of Mr Orlando's property. Ms Koller submitted that the property was a sensible and appropriate purchase at the relevant time. It has only been since the demise of Mr Orlando's parents, that his housing situation in combination with his physical and mental health conditions have lead him to need to live in his own home at a point earlier than he may have anticipated at the date of purchase.
In conclusion, Ms Koller submitted that Mr Orlando has a number of special circumstances, in particular his severe depression, his underlying complex neurological conditions and his speech difficulties which are not related to the back injury for which Mr Orlando was compensated. Mr Orlando is very withdrawn and has mobility difficulties. If Mr Orlando was to sell or move away from his home, this would defeat his need for space and quiet and he would simply not cope.
Given Mr Orlando's complex health problems, the fact that he has already completed over half the preclusion period, considering his deteriorating incapacities and noting the decisions of various Courts and Tribunals in which matters other than purely financial circumstances have been taken into account as special circumstances, Mr Orlando is entitled to the reduction in his preclusion period, Ms Koller submitted. In such circumstances, the decision of the SSAT should be affirmed, Ms Koller contended.
findings
The Tribunal has reached a decision in this matter taking into account the oral and documentary evidence, the submissions and by applying the legislation and case law.
Mr Orlando was co-operative in the provision of his evidence and the Tribunal considered him to be a truthful witness. The Tribunal witnessed for itself the distress experienced by Mr Orlando and his confusion over the issues being discussed. The Tribunal considered that this demeanour was not in any way contrived but reflected a man deeply troubled by physical and psychiatric problems, as the objective medical evidence available to the Tribunal had indicated.
The Tribunal finds that Mr Orlando suffers from a complex combination of physical and psychiatric health problems. In this regard the Tribunal notes Mr Orlando's chronic back problems, his left foot drop, his neurological deficits, intractable pain, stomach condition and chronic depression. These conditions are well documented and have been with Mr Orlando for some years. The Tribunal finds that the neurological problems and dysarthria are not related to the back injury for which Mr Orlando was compensated. While there may be some component of depression related to his back condition, the Tribunal considers that the other issues of loss of his family, his marriage, his parents and the neurological conditions all impact most significantly upon this depressive state.

The evidence provided by Dr Moseley was of great assistance to the Tribunal and the Tribunal commends Dr Moseley for the care and concern that she provides to Mr Orlando. Dr Moseley is in a unique position to be able to provide a very clear and objective assessment of Mr Orlando's health conditions. It is her considered view that it has been a great achievement for Mr Orlando to not only move to the home he presently occupies, but to continue to live there under great difficulty where life for Mr Orlando is a day by day proposition. Mr Orlando clearly derives some benefit and self-esteem from his achievement in maintaining his independence, but the Tribunal considers that there is more to it than that. The home where he lives also provides him with a place where his children can come. It may well be true, as Mr Kenny submitted, that the children could visit their father in a less expensive, smaller property. For Mr Orlando however, with his complex combination of psychiatric and physical difficulties, the large property provides for him the means to isolate himself from his neighbours but also a large haven for his children to come and be free with him, including their being able to visit the horses next door. It is not merely for Mr Orlando a luxury to live on acreage as the Respondent submitted, but in the Tribunal's view and in the medical opinions of Dr Moseley and the psychiatrists Dr Westerink and Dr Reinhardt, it is a matter of survival that he continues to live in that house.
It may well be true that in normal circumstances it would be reasonable to expect that a person who had received compensation should live on that compensation without recourse to Social Security benefits; in short, that a preclusion period should be established. In normal circumstances, it is also reasonable to expect that someone who had extravagantly purchased an asset such as a home or land which was beyond their needs, to sell that property to allow them to live within their means without recourse to the public purse. Mr Orlando's circumstances are, however, by no means ordinary. He suffers from a complexity of psychiatric and physical problems. Mr Orlando's self worth is linked to his home and he lives a very meagre existence there. The Tribunal does not consider that his purchase of his home was extravagant and, even if it were in the past considered to be so, the fact that Mr Orlando's circumstances including his health have changed dramatically, warrants the Tribunal considering whether or not his circumstances are special. If Mr Orlando were forced to leave his home by either renting another property or selling it and moving somewhere else, the Tribunal fears that this would propel him into a precarious situation where suicide would be a realistic threat to his survival. If these were not special circumstances enough, the Tribunal considers that the chronic depression and other physical health problems are also special circumstances, which in combination make Mr Orlando's situation unique and out of the run of the usual cases which come before decision-makers. The Tribunal considers that it would be unjust and unfair in all the circumstances which face Mr Orlando for the preclusion period not to be lifted in some part.
The Tribunal is of the view that it is not a realistic option for Mr Orlando to either rent his property or sell it and move to another property. The isolation provided by his home is important and essential to his emotional stability. It also provides him with independence and a place for his children to come and visit and stay with him. Accordingly, it is the Tribunal's view that Mr Orlando's home, as it stands now, meets the complexity of Mr Orlando's needs and is essential to his well being.
For all the reasons expressed above, the Tribunal considers that Mr Orlando's circumstances are special and accordingly section 1184 of the Act should be invoked to allow a part of the compensation paid to Mr Orlando for his back injury to be treated as not having been made. It is difficult to calculate an exact amount of compensation which should be disregarded and, in this regard, the Tribunal notes Secretary, Department of Social Security v Thompson (1994) 53 FCR 580, in which the Federal Court discussed the amount of reduction referring to the need 'not to take legalism and beaurocratic pedantry too far' and require the artificial exercise of the calculation process. That Court referred to it being appropriate in some cases to use 'intuitive justice' as to the amount of the reduction. The Tribunal considered appropriate the SSAT's decision to treat compensation as not having been paid beyond 27 November 1998, the date of its decision. The Tribunal can find no reason to disturb this date as the date from which the compensation should be disregarded and accordingly under section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal affirms the SSAT'S decision of 27 November 1998 that in Mr Orlando's special circumstances, compensation should be disregarded as having been paid from 27 November 1998.
I certify that the 58 preceding paragraphs are a true copy of the reasons for the decision herein of MS S M BULLOCK, Member.
Signed:         .....................................................................................
  Associate
Date/s of Hearing  21 February 2000
Date of Decision  1 August 2000
Representative for the Applicant      Mr J Kenny, Departmental Advocate
Solicitor for the Respondent              Ms Koller, Solicitor, Welfare Rights Centre, Sydney