Pett and National Disability Insurance Agency

Pett and National Disability Insurance Agency [2024] AATA 2690 (30 July 2024)

Division:GENERAL DIVISION
File Number(s): 2021/6830
Re:Amanda Pett
APPLICANT

AndNational Disability Insurance Agency
RESPONDENT

DECISION

Tribunal:Senior Member B J Illingworth
Date:30 July 2024
Place:Adelaide

The decision under review is varied as follows:

1. The Applicant received two payments of compensation in accordance with Rules 3.1(b) of the National Disability Insurance Scheme (Support for Participant – Accounting for Compensation) Rules 2013 namely compensation in the amount of $115,000.00 pursuant to the Deed dated 19 December 2016 and compensation in the amount of $1,300.000.00 pursuant to the Deed of Release dated 2017.

2. The compensation reduction amount that arises from the compensation of $115,000 is nil on the basis that:

(a) Under Rule 3.13(b) the sum of $15,192.90 be subtracted

(b) Under Rule 3.13(d) the sum of $57,500.00 be subtracted

(d) Under Rules 3.10 the balance sum remaining of $24,571.05 be ignored for special circumstances.

3. The compensation reduction amount that arises from the compensation of $1,300,000.00 is $332,894.10 on the basis that:

(a) Under Rule 3.10 the sum of $873,415.65 and the sum of $93,690,25 be ignored for special circumstances.

4. The compensation reduction amount of $332,894.10 be applied as follows:

(i) $121,729.59 be applied to the current plan for the period 17 September 2021 to 15 September 2024.

(ii) The balance compensation reduction amount of $211,164,60 be applied to the Applicant’s future plans and amortised as determined by the CEO in accordance with Rule 3.7.

...........................[sgnd].........................................

Senior Member B J Illingworth

CATCHWORDS

NATIONAL DISABILITY INSURANCE SCHEME – review of statement of participant supports – whether compensation received for 2 personal injury claims was a compensation reduction amount within the meaning of section 11 of the National Disability Insurance Scheme Act 2013 – if a compensation reduction amount applied, the appropriate calculation of the compensation reduction amount to be applied.

LEGISLATION

National Disability Insurance Scheme Act 2013 (Cth)

CASES

SECONDARY MATERIALS

National Disability Insurance Scheme (Supports for Participants – Accounting for Compensation) Rules 2013 (Cth)

REASONS FOR DECISION

Senior Member B J Illingworth

30 July 2024

INTRODUCTION

The Applicant has applied to the Administrative Appeals Tribunal (Tribunal) to review a decision of the National Disability Insurance Agency (the Respondent or NDIA) to apply a Compensation Reduction Amount (CRA), being monies received by the Applicant in settlement of two civil actions filed in the District Court of South Australia (the District Court), to her National Disability Insurance Scheme (NDIS) statement of participant supports.
The Applicant’s NDIS Plan with start date of 4 May 2021 and review date 2 May 2024 (the Reviewable Decision)[1] was the subject of a request for internal review made under s 100(2) of the National Disability Insurance Scheme Act 2013 (the Act). The internal review made pursuant to s 100(6) of the Act which varied the Reviewable Decision is the subject of the Application for Review, and was the statement of participant support in an approved NDIS plan with start date 17 September 2021 and review date 15 September 2024 (the Varied Plan).[2]
[1] Exhibit A, T-Documents, T29: NDIS Plan (04.05.2021 – 04.05.2024), 321-33.
[2] Ibid T30: NDIS Plan (17.09.2021 – 15.09.2024), 334-44; T1C: NDIS Plan (17.09.2021 – 15.09.2024), 21-31.

ISSUES

The application for review enlivened 2 issues for consideration on review namely:
i.whether the settlement monies in respect of each civil action was a CRA within the meaning of s 11 of the Act, and
ii.the appropriate calculation of the CRA in regards each settlement sum and its application to the reduction of the participant’s supports.
The Applicant was represented by her husband. The Applicant applied to the Tribunal amongst other things, for a direction that the Respondent pay her legal costs including that of a barrister to conduct the application for review. That request was maintained throughout much of the proceeding. The Tribunal repeatedly advised the Applicant that the Tribunal did not have power to make the direction but on occasions the Applicant was given the opportunity to seek legal advice and legal representation. To assist the Applicant and her husband in prosecuting the application for review, the Tribunal hearing was listed on two separate days, first for the consideration of issue (i) and then for the consideration of issue (ii). There was some delay in considering issue (ii). In the period between the 2 hearing days the Respondent provided an internal NDIA document to the Applicant to help understand the method of calculation of the CRA[3] and the Applicant was given the opportunity to consider what was a very detailed spreadsheet and if necessary, seek further advice.
[3] Exhibit G - This internal document was the subject of a confidentiality order which is ongoing.
The Applicant and her husband were advised repeatedly that this arrangement to hear the application for review was to accommodate them in presenting the whole of the Applicant’s case, having regard to their respective health issues, minimise the stress and distress in prosecuting the application given neither were legally trained; and to give the Applicant the opportunity to fully present the whole of her case. They were advised repeatedly that the proceedings would not be split into 2 separate hearings and the Tribunal would not publish a decision with respect to issue (i) and then undertake a separate hearing, if necessary, in respect of issue (ii).
The Respondent was represented by solicitor Mr Matthew Daly in respect of issue (i) and he was led by Counsel Mr Matt Black in respect of issue (ii).
The Tribunal received into evidence the documents listed in the exhibit list, held on the Tribunal file. It included a substantial volume of material, particularly from the Applicant, and the Applicant’s evidence which was a signed statement dated 13 December 2023 that was unchallenged. No oral evidence was received by the Tribunal and the hearing proceeded on the papers. The Applicant and Respondent provided helpful closing submissions based on the documents received into evidence.

THE ACT

The section of the Act relevant to this application and the consideration of a CRA as provided in the National Disability Insurance Scheme (Support for Participant – Accounting for Compensation) Rules 2013 (the Rules) is the meaning of compensation defined in s 11 of the Act which reads as follows:
11 Definitions relating to compensation
(1)In this Act:
compensation means a payment (with or without admission of liability) in respect of:
(a)compensation or damages in respect of personal injury; or
(b)personal injury, under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(c)personal injury, in settlement of a claim for damages or a claim under such an insurance scheme;
that is wholly or partly in respect of the cost of supports that may be provided to a participant (whether or not specifically identified as such). It does not matter whether the payment is made directly to the person who sustained the personal injury or to another person in respect of that person.
(2)A payment referred to in subsection (1) may be:
(a)in the form of a lump sum or in the form of a series of periodic payments; and
(b)made within or outside Australia.
(3)In this Act, a reference to an insurer who is, under a contract of insurance, liable to indemnify a compensation payer or a potential compensation payer includes a reference to an authority of a State or Territory:
(a)that is liable to indemnify a compensation payer or a potential compensation payer against such a liability, whether under a contract, law or otherwise; or
(b)that determines to make a payment to indemnify a compensation payer or a potential compensation payer against such a liability, whether or not the authority is liable to do so.

THE HEARING

The Applicant was born in 1967[4] and has been a participant in the NDIS since in or about 2017.
[4] Exhibit A, T-Documents, T1: AAT Application for Review of Decision, 2.
Prior to becoming a participant in the NDIS and on 21 April 2011, the Applicant issued civil proceedings in the District Court of South Australia for damages and loss of earnings arising from injuries allegedly suffered on 21 April 2008 as a consequence of treatment by a physiotherapist (Claim 1). The Tribunal received into evidence the statement of claim filed in Claim 1.[5]
[5] Exhibit A, T-Documents, T3: Statement of Claim,40-4.
In 2015, the Applicant and her husband issued civil proceedings in the District Court of South Australia for damages arising from injuries allegedly suffered by the Applicant as a consequence of treatment received from 2 medical practitioners and a hospital (Claim 2). On 24 September 2015, the Applicant and her husband filed a second statement of claim in relation to Claim 2,[6] which amended the first statement of claim. The Tribunal received into evidence the amended statement of claim,
[6] Exhibit B, Supplementary T-Documents, ST2, 9-33.
On 19 December 2016, the Applicant entered into a Deed which evidenced the settlement of Claim 1.[7] In summary the terms of settlement included:
(a)the defendant pay the Applicant the sum of $115,000.00 in full and final settlement of all claims rights or entitlements including costs (the settlement sum);
(b)the Applicant authorised the sum of $15,192.90 be paid from the settlement sum in respect of a Notice of Charge dated 21 October 2016 payable to Medicare and the balance be paid to the trust account of her solicitor;
(c)the Applicant released and forever discharged the defendant from all future claims; and
(d)the parties will file a consent judgement in the District Court in the following terms namely (a) verdict for the defendant, and (b) no order as to costs.
[7] Exhibit A, T-Documents, T7: Deed made by Amanda Pett and Ms E.A, 118-21.
In early 2017, the Applicant and her husband entered into a Deed of Release which evidenced the settlement of Claim 2.[8] In summary the terms of settlement included:
(a)the defendants denied liability;
(b)the agreed settlement sum did not include economic loss, loss of earning capacity or loss of chance;
(c)the defendants pay to the Applicant and her husband $1,3000,000.00 inclusive of all damages and legal costs;
(d)in consideration for the payment of $1,300,000.00 the Applicant and her husband release the defendants from all claims, rights or entitlements.
[8] Ibid T9: Deed of Release, Hospital, 124-7.
Hence, Claims 1 and 2 were two separate and distinct civil claims for damages and the Applicant entered into 2 separate settlement agreements in the sum of $115,000.00 and $1,300,000.00 respectively in settlement of those civil claims. The Applicant maintains that the injuries the subject of both Claims 1 and 2 were unrelated to the medical conditions for which the Applicant was accepted into the NDIS as a participant.
The Applicant said that she did not receive any monies from the settlement of Claim 1. The whole of that settlement paid her legal costs in respect of her first solicitor. There was no evidence before the Tribunal as to that legal cost, but the Tribunal was referred to in the Applicant’s Case Summary lodged in the Tribunal on 6 May 2024[9] and the submissions of Mr Pett. The Tribunal notes that the District Court proceeding in Claim 1 was filed by a different legal practice to that filed in Claim 2, which subsequent legal practice was involved in the resolution of both Claims 1 and 2.
[9] Applicant’s submission (lodged 06.05.2024) namely Piper Alderman $11,000.00, Xenephon $88,807.00, Medicare $15,192.20.
By letter, dated 4 May 2017 from the Applicant’s solicitor to the Applicant and her husband, headed “Re: Amanda’s Personal Injuries Claim Date of Injury: 21 April 2008 & 29 October 2009”[10] the Applicant’s solicitor confirmed receipt of the total of both settlement sums less the Medicare charge, namely $1,399,807.10. The Applicant was responsible for negotiating an outstanding sum of $97,291.30 to Bupa from the balance sum she was to receive. It was noted the Applicant had already been paid $11,000.00 from the settlement monies and the Applicant received a trust account cheque for $490,820.40.
[10] Exhibit A, T-Documents, T12: Letter, Nick Xenophon & Lawyers, 133-8.
There was no evidence before the Tribunal about the negotiated settlement of the outstanding sum to Bupa by the Applicant.
Hence, the total settlement monies received by the Applicant was $501,820.40 ($490,820.40 plus $11,000.00). She was also provided with an authority for signing, which authorised payment of legal costs and disbursements from the settlement monies held in trust. I therefore infer that the total of the legal costs and disbursement the subject of that authority totalled $897,986.70, being the balance sum held in trust after payment of the settlement monies to the Applicant.
The Applicant informed the Respondent of the civil claims when she applied to become a participant of the NDIS.

Applicant’s Goals

The Applicant’s various NDIS plans listed the same goals she wished to work towards during her plan:[11]
Short-term goal
I would like to continue to live independently in my own home.
…
I would like to have support to sustain informal care arrangements such as assistance with cleaning and gardening and other daily tasks.
…
[11] Exhibit A, T-Documents, T1C, 21-31; T28: NDIS Plan (22.05.2020 – 22.05.2021), 308-20; T29: NDIS Plan (04.05.2021 – 04.05.2024), 321-33.
Medium or long-term goal
I would like to continue to develop my fine and gross motor skills and endurance, enabling me to participate in activities and tasks without fatiguing.
…
I would like to continue to develop my social skills in the community to enable me to build and maintain friendships.
…
I would like to improve my health and fitness by attending regular sessions with therapist led support to maximise movement, strength, balance and mobility.
…
I want to be able to sit on a horse once again.
The Varied Plan detailed how the Applicant will be supported, including but not limited to home supports when required, safety and training to ensure safe and effective use of equipment, supports to attend appointments, activities and travel. She was to have home assessments to measure capacity levels and develop a plan specific to her needs and locate activities in her community and assist in locating suitable providers. The Applicant’s core supports were to fund flexibility to help with daily activities, and her current disability. She was to receive daily living support to maximise independence including with self-care, household cleaning and yard maintenance; assistance with social and community activities with the assistance of a support person; improve the Applicant’s health and wellbeing and provide assistive technology.
By letter dated 12 February 2021,[12] the Respondent advised the Applicant that the Respondent would be undertaking a review of her NDIS plan and that a CRA may be applied to her plan in relation to compensation received ‘on or around 2017’.
[12] Exhibit A, T-Documents, T27: Email Correspondence from NDIA to Applicant's Representative, 250-7.
By letter dated 31 March 2021,[13] in respect of the settlement sum of $1,3000,000.00, the Respondent provided a CRA estimate calculated under rule 3.13 of the Rules. The Respondent detailed the CRA calculation and advised the Applicant that the estimated CRA was $1,020,362.00 to be divided over approximately 10 years and an amount of $103,851.07 may be deducted from her next plan; and the CRA amount was to be applied to future plans to be reassessed at each plan review. Hence, it was said the next plan may be reduced to $0.00. The Applicant was given the opportunity to respond to that estimate.
[13] Ibid 295-300.
By letter dated 4 May 2021,[14] the Respondent advised the Applicant that having taken into account the combined settlement sums with respect to Claims 1 and 2 and having tabled the calculation of the CRA, the total combined CRA was $1,167,789.97 and would be divided over a 10-year period. The sum of $118,262.80 per year would be applied to future NDIS plans and $145,064.94 would be applied to the current plan leaving $0.06 left in the current plan for administrative purposes.[15]
[14] Ibid 302-6.
[15] Ibid 302.
By separate letter dated 4 May 2021, the Applicant received notice of approval of her NDIS Plan starting 4 May 2021 to be reviewed 2 May 2024,[16] together with her 3-year plan for that period[17] in which the Total Core Supports was $0.04[18] and her Total Capacity Building Supports was $0.02.[19]
[16] Ibid T29: NDIS Plan (04.05.2021 – 04.05.2024), 321-4.
[17] Ibid 325-33.
[18] Ibid 330-1.
[19] Ibid 332.
The Applicant requested a reconsideration of that decision pursuant to s 100 of the Act. The Reviewable Decision is contained in 2 letters both dated 17 September 2021. The first letter headed ‘Outcome of your internal review request’[20] advised the Applicant that the CRA was to be recalculated as a consequence of information provided via email dated 12 August 2021 and provided a full explanation for the decision at the end of the letter. The second letter headed ‘Compensation Reduction Amount and your Plan Review’[21] informed the Applicant that the total CRA the subject of Claim 1 was $80,108.55, and the total CRA in respect to Claim 2 was $305,676.33. Hence, the total CRA for both claims was $385,784.88.
[20] Ibid T1A: Internal Review Decision, 7-14.
[21] Ibid T1B: Compensation Reduction Amount and Plan Review, 15-20.

The Applicant received the NDIS Plan[22] with a start date of 17 September 2021 and a review date of 15 September 2024 that took into account the CRA, which varied the Total Core Supports to $8,364.20[23] and the Total Capacity Building Supports to $17,651.04.[24]
[22] Ibid T1C: NDIS Plan (17.09.2021 – 15.09.2024), 21-31.
[23] Ibid 29.
[24] Ibid 30.

Is the settlement sum in respect of Claim 1 and Claim 2 a CRA?

The Applicant argues that the settlement sums referred to in both the Deed (Claim 1) and Deed of Release (Claim 2) were not compensation within the meaning of the Act.
The Tribunal received a copy of the letter from the Applicant to the Respondent requesting the internal review of the decision dated 4 May 2021,[25] in which the Applicant submitted that the settlement sums were not compensation. I will briefly detail that submission which was repeated by the Applicant at the hearing before me:
i)In relation to Claim 1, it is submitted that the Applicant did not receive any payment of the settlement sum referred to in the Deed and consequently it cannot be considered compensation.[26] This was repeated in the Applicant’s statement dated 13 December 2023 under the heading ‘Summary of Reasons for Accepting the First Settlement’. She there listed several reasons for the payment not being compensation (a) – (o), which included her belief that the physiotherapist did not cause her current disability, unrelated events in November 2009 left her profoundly disabled, the denial of liability in the Deed was correct, the legal fees exceeded the settlement sum, that the motivation for the physiotherapist in settling the claim was to safeguard her reputation and the Applicant was surprised a settlement offer was made.[27]
ii)In relation to Claim 2, the Applicant submits the Deed of Release was evidence that the settlement was not for an injury.[28] It is submitted that ‘settlement’ is broader than compensation and may or may not include compensation and can be for any reason whatsoever. It is submitted that the Deed of Release in respect of Claim 2 is ‘settlement without payment for injury’.[29] It is also submitted that given there are two ‘Releasors’ (the Applicant and Mr Pett) named in the Deed of Release and no percentage of the settlement sum is attributed to either, the settlement sum is to be divided equally between them. In her Statement dated 13 September 2023, the Applicant detailed her reasons for agreeing to the second settlement, detailed at length the post-surgery events, her fall in hospital, and treatment events and medical cover-up that followed leading to her admission to Hampstead Rehabilitation Centre and her symptoms.[30] The Applicant stated that the breach of duty was for the period 28 October 2009 – 30 October 2009 and also explained why she agreed to a denial of liability in the Deed of Release. She attributes allegations of negligence and cover up to one of her treating doctors only.
[25] Ibid T19: Application to Review a Reviewable Decision, 157-173.
[26] Ibid 168.
[27] Exhibit E, Applicant’s Witness Statement, 8-10.
[28] Exhibit A, T19: Application to Review a Reviewable Decision, 167.
[29] Ibid 169.
[30] Exhibit E, Applicant’s Witness Statement, 11-5.

Further, the Applicant submits that if any settlement amount was intended for NDIS type supports, it would have been identified and paid by the Releasees. There is no merit in this submission. The settlement of the civil action addresses the claim in negligence and damages pleaded by the Applicant. If within the terms of the settlement an applicant has been paid compensation which may be for NDIS type supports, then it is the Act and Rules to be applied to determine if there is a CRA and how that CRA is to be calculated. In any event both settlements predated the applicant’s first plan, and the grant of participant supports.
The Applicant placed importance on the ‘denial of liability’ referred to in the Deed of Release and submitted ‘It is crucial to note that settlement which are based on agreed denial of liability indicate that there was no payment for injury or supports.’[31]
[31] Transcript (8 May 2024) p 86, lines 22-24.
Further in her statement, the Applicant under the heading ‘Details of Complications as a Result of Lack of Diagnosis, Correct Treatment and Supports’ at (a) – (k) detailed conditions which included the consequence of the hospital withholding necessary surgery, concussion suffered at home, mental health issues particularly following her dealings with NDIS, criticism of the NDIA Planner, her ankle fracture and other injuries which I understand do not form part of Claim 1 or Claim 2.[32]
[32] Exhibit E, Applicant’s Witness Statement, 16-8.
In the hearing, the Applicant’s representative was given permission to read an artificial intelligence language model which he relied on in support of the argument about the terms of settlement[33] he submitted supported the argument that denial of liability means explicit denial of any responsibility or fault for the alleged injury. Therefore, such a payment with denial of liability, it is argued, does not constitute compensation for injury as defined by s 11 of the Act.
[33] Transcript (8 May 2024) p 91, lines 15-39.
There is no merit in the submission that the denial of liability operates in the manner urged upon the Tribunal by the Applicant. It is common practice in resolution of litigation between parties, including litigation for damages arising out of medical negligence, for parties to reach agreement, often confidential agreement, to resolve the litigation in full and final settlement of all claims rights or entitlements including costs and interest with a denial of liability.
The denial of liability in resolution of litigation does not operate to change the basis of that litigation informed by the pleadings and in particular the statement of claim filed by the Applicant. Further the wording of section 11 of the Act contemplates a payment made ‘with or without admission of liability’. The legislative scheme involving the consideration of a CRA is to ensure that a participant does not receive more than one payment for a NDIS type support and that the NDIS does not pay to a participant a sum of money for which that participant has already been paid compensation.
Further the Applicant argued that the injury, in particular, the neuropathy the subject of Claims 1 and 2, was not the neuropathy that gave rise to the Applicant becoming a participant in the NDIS, and there was no causation between the alleged injury the subject of Claims 1 and 2 and the Applicant’s acceptance as a participant in the NDIS. In support of those submissions, the Applicant relied on a 6-line support report of Dr Brazenor dated 4 February 2023[34] who reported that he interviewed the Applicant on 7 July 2016. He provided several ‘medicolegal reports’ in relation to alleged neuropathy and mismanagement of hypoxia/hypotension whilst in hospital. He then said “I write to make it perfectly clear that when I examined her there seemed to be signs of gross truncal ataxia, such that I recommended referral to a neurologist, with magnetic resonance scan and brain. The results of such were never transmitted to me, but irrespective of what they may have been, the cause of Ms Pett’s gross truncal ataxia was not in any way related to her indemnity claim”. I will deal with that submission later.
[34] Exhibit I, A-Documents, Dr Brazenor’s Report, 163.
It is necessary to consider the operation of the legislative scheme and its application to the Applicant.

The operation of the legislative scheme relevant to the Applicant

It is accepted that the Applicant meets the disability requirements in s 24 of the Act. She suffers from a number of permanent impairments which substantially reduced her functional capacity. It is also accepted that the Applicant meets the criteria for the provision of reasonable and necessary supports in accordance with s 34 of the Act. Those are identified in her various plans including the Varied Plan the subject of the application for review.[35]
[35] Exhibit A, T-Documents, T30: NDIS Plan (17.09.2021 – 15.09.20240, 334-44.
The Applicant complains about the conduct of NDIA and its employees and invites the Tribunal to make findings adverse to those employees involved in the decision-making process with respect to the Applicant, including referring them for prosecution. The Respondent correctly submits that is not the function of the Tribunal and is not within the Tribunal’s jurisdiction to consider as part of this Application for Review, those complaints. Those who are the subject of the complaints are not witness in the Application for Review and have had no opportunity to respond to the Applicant’s allegations. The jurisdiction of the Tribunal is to consider afresh the decision under review namely the Varied Plan.
The issue is whether each settlement sum is properly regarded as a CRA within the meaning of s 11 of the Act and applied to the identified supports contained in the reviewable decision in accordance with the Rules. I agree with the Respondent’s submission.
Prior to the substantive hearing the Tribunal listed an interlocutory hearing to address the question of the Tribunal’s jurisdiction. The Applicant challenged the Tribunal’s jurisdiction to deal with the Application for Review, requested the application be referred to a superior court, sought a decision in regards loss, damages and interest as a consequence of the criticism made of the Respondent and its staff and their conduct in dealing with the Applicant; and referral of the Respondent’s staff for disciplinary and other action. In my oral decision dated 23 June 2023, I there detailed for the Applicant’s benefit the jurisdiction of the Tribunal which I will not repeat. The Tribunal does not have jurisdiction to deal with the Applicant’s grievances about the Respondent’s staff, refer staff for prosecution or other disciplinary action, nor award damages as requested. There was no basis to refer the application to the Federal Court. It is unfortunate that the Applicant still raises the same complaints including about the Respondent and staff during the substantive hearing.
The Respondent accepts that the CRA amount referred to in the Varied Plan will need to be again adjusted in favour of the Applicant, and the Respondent provided a ‘Draft Decision’ (the Draft Decision) to assist the Tribunal in understanding the Respondent’s submission about the application of the CRA to the Applicant’s plan supports. The Tribunal received that ‘Draft Decision’ but explained to the Applicant it was not evidence before the Tribunal, it was not an exhibit and was received only as an aid to understanding the Respondent’s submission.
The Respondent referred to the Applicant’s submission that there was no causative link between the injuries the subject of Claims 1 and 2 and the Applicant’s impairments within the meaning of s 24 of the Act that gave rise to her being a participant in the NDIS, and accordingly, the settlement sums could not be regarded as a CRA.
The Respondent submits it is not a question for the Tribunal whether there was any causative link between the injuries the subject of the civil claims and the disability requirements s 24 of the Act. As the Respondent correctly submits, causation of a person’s injury is a complex issue, requiring the decider of fact, in this matter a civil court, to hear evidence from appropriately qualified experts including medical practitioners and to reach a required level of satisfaction, having regard to that evidence about negligence and causation of injury. That question of causation is not the function of the Tribunal.
The NDIS is a no-fault insurance scheme, enlivening a person’s entitlement to become a participant in the NDIS and an entitlement to reasonable and necessary supports, unrelated to the consideration of causation of the injury or disability.
Hence, the injuries pleaded in the statement of claims in Claims 1 and 2 and who caused the injuries and whether those injuries found in whole or in part the Applicant’s entitlement to be a participant in the NDIS, is not a question that arises for the Tribunal.
The issue for the Tribunal is whether the Applicant’s impairment was caused to any extent by a personal injury the subject of each civil action and one of the criteria referred to in Rule 3.1 (a) – (d) applies. I will return to that later under heading The Rules.

Applying the Act and Rules

Division 2 of the Act

Division 2 of the Act deals with ‘Preparing Participants’ Plans’. Relevantly, within that Division, ss 33(1)–(8) of the Act detail matters that ‘must’ be included in a participant’s plan. Section 33(1) of the Act says the plan ‘must’ include the participant’s statement of goals and aspiration and what they ‘must’ contain. Section 33(2) provides that the participant’s plan ‘must’ include the ‘statement of participant support’ approved by the Chief Executive Officer (CEO) of the NDIA and what those supports ‘must’ specify.
A decision made under s 33(2) of the Act is, by operation of s 99 of the Act, a reviewable decision. Pursuant to s 100(2) of the Act a person affected by the reviewable decision, in this matter the Applicant, may request a review of that reviewable decision and the internal reviewer will make a decision under s 100(6) (the internal review decision). It is that internal review decision which is before the Tribunal on the application for review and enlivens the Tribunals jurisdiction.
Section 33(5) of the Act provides for matters the CEO ‘must’ have regard in deciding whether or not to approve a statement of participant supports and s 33(5)(d) mandates that the CEO ‘must’ have regard to the Rules made under s 35 of the Act in approving a statement of participant supports.

The Rules

The ‘Interpretation’ provision of the Rules is contained in Rule 4.4 and adopts the meaning of ‘compensation’ as defined by s 11 of the Act.

Part 3 Compensation

Part 3 of the Rules is headed ‘Compensation’ and applies to a participant, or a person who later becomes a participant of the NDIS, if the person’s impairment was caused to any extent by a personal injury and one of rules 3.1(a)-(d) applies which Rule reads as follows:
3.1 This Part applies in relation to a person who is a participant, or who later becomes a participant, if the impairment of the person was caused to any extent by a personal injury, and one of the following cases applies:
(a) the person received compensation under a judgement or settlement in respect of the injury in which:
(i) it is possible to identify the NDIS component of the amount of compensation (NDIS component is defined in paragraph 4.4); and
(ii) the component is either fixed by a non-consent judgement or is objectively identifiable (eg commutation of benefits under a statutory scheme); or
(b) the person received compensation under a judgement or settlement in respect of the injury that:
(i) does not satisfy paragraph (a) and
(ii) fixes an amount of compensation in respect of the injury; or
(c) the person is receiving compensation under a scheme of insurance or compensation under a Commonwealth, State or Territory law, including a payment under a contract entered into under such a scheme; or
(d) the person:
(i) entered into an agreement to give up a right to compensation in respect of the injury; and
(ii) because of that agreement, there are amounts that the person did not receive by way of a compensation payment (even if the person received other amounts by way of compensation payment in respect of the injury); and
(iii) the CEO is not satisfied that it was reasonable, in the circumstances, for the person to have entered into the agreement.
Personal injury is not defined but as the Respondent submits it is well understood at law. Fairly described, personal injury includes a hurt or impairment to a person’s physical or mental condition. It is submitted by the Respondent that the relevant question is whether the Applicant’s impairment was caused, to any extent, by personal injury. This is different to the question of fault of any physiotherapist, medical practitioner or hospital in causing the injury.

The Respondent referred the Tribunal to the Applicant’s ‘current known medical conditions’ which were before the Respondent to determine whether the Applicant should become a participant of the NDIS.[36] The list of medical conditions is long. Under heading ‘Major Medical events’, it includes:
2008 April – L4/L5 prolapse with instant back and lower leg pain as well as saddle area numbness, symptoms indicative of cauda equina syndrome but unconfirmed.
…
2009 November – Brain injury right basal ganglia
2009 November - Permanent peripheral neuropathy which, is axonal (and not demyelinating). Investigations did not identify a progressive condition.
[36] Exhibit A, T-Documents, T17: Medical Conditions, 151-3 and T18: Medical Conditions 2, 154-6.
Under heading ‘Current known medical conditions’ is included:[37]
3. L4/L5 prolapse with unconfirmed Cauda Equina Syndrome symptoms and anterior and posterior fusion.
…
10. Brain injury - ischaemic lacunas right basal gangalia [sic].
11. Permanent peripheral neuropathy of ideopathic [sic] aetology [sic] complicated by nutritional deficiency and prescription drug interactions.
i. Not just hands and feet - all over proximal and distal.
ii. Very high levels of continuous pain (4 times worse than experience of childbirth, very bad even when controlled by medication).
iii. Periodic bolts of extreme pain.
[37] Ibid 152.
The Respondent submits that those conditions are within the meaning of personal injury and to some extent, are contributors to the relevant impairment for which the Applicant was made a participant of the NDIS.
If for the purpose of Rule 3.1 the Tribunal is satisfied that, in this matter, the Applicant suffered an impairment caused to any extent by a personal injury, it is necessary to consider whether Rules 3.1(a)–(d) apply.
The Respondent correctly observed that Rules 3.1(a), (c) and (d) do not apply. Rule 3.1(a) refers to a compensation received under a judgement or settlement where it is possible to identify a NDIS component. Rule 3.1(c) is compensation received under a scheme of insurance including a contract entered into under such a scheme. Rule 3.1(d) applies where a person gave up a right to compensation in respect of an injury.
However, it is submitted Rule 3.1(b) does apply to the Applicant in respect of both settlement sums because she received compensation under a judgement or settlement which fixes an amount of compensation in respect of the injury.
Subject to satisfying the Tribunal that each settlement sum was compensation I agree with those submissions.
Hence, the question is whether the Applicant received ‘compensation’ as defined by the Act and adopted by the Rules. Therefore, in the circumstances of this matter, the question is whether the Applicant received a payment (with or without admission of liability) in respect of a personal injury, in settlement of a claim for damages that is wholly or partly in respect of the cost of supports that may be provided to the Applicant, whether or not it is specifically identified as such. It does not matter whether the payment is made directly to the Applicant or to another in respect of the Applicant.
The Respondent conceded that there must be a link between the injury and the NDIS, which link is found in the opening words of Rule 3.1, namely, that the personal injury caused to any extent the impairment. The impairment must mean the impairment in respect to which the NDIS is operating. Hence, there must be a causal link between the injury in respect of which compensation was paid, and the impairment. Therefore, in the Applicant’s case the question is whether the impairment was caused, to any extent, by an injury the subject of the settlement of Claim 1 and or Claim 2.
Hence, for the purpose of the legislative scheme, the relevant consideration in the provision of reasonable and necessary supports is whether the Applicant suffered an impairment, not whether the Applicant suffered an injury. The Applicant’s impairments which were referred to in being approved as a participant in the NDIS, are identified above[38] and including impairments arising from L4/L5 prolapse, brain injury and permanent peripheral neuropathy complicated by nutritional deficiency and prescription drug interactions.
[38] See paragraph [53] above.
The Respondent referred to the Deed and Deed of Release and their application to the legislative scheme which I will now detail.

The first Deed in relation to Claim 1

The Deed dated 19 December 2016[39] is in relation to Claim 1, in which a physiotherapist was the defendant, and related to treatment received on 21 April 2008 and following. Under the heading ‘Clause 1 – Settlement’, paragraph 1.1 provides that the physiotherapist pay the Applicant $115,000.00 inclusive of damages, statutory charges, interest, filing and service fees, legal and other costs. Reference is also made to the separate civil action Claim 2.
[39] Exhibit A, T-Documents, T7: Deed made by Amanda Pett and Ms E.A, 118-21.
Paragraph 2.1 provides that in consideration of the agreed sum, the Applicant released and forever discharged the physiotherapist from all demands, claims, proceedings, actions and suits arising out of the consultations, the proceedings, the Claim 2 proceedings and the matters under the heading ‘Background’.
To understand from what the Applicant released the physiotherapist, it is necessary to consider what was contained in the pleadings of Claim 1.

The District Court Pleadings in respect of Claim 1

The statement of claim,[40] under heading ‘Particulars of Claim’, commencing at paragraph 3 and following, the Applicant states that on 21 April 2008 the Applicant suffered an injury as a consequence of treatment by the physiotherapist. She consulted the physiotherapist on referral from a medical practitioner and disclosed the full extent of her back condition, sought advice in respect of it, and the physiotherapist administered treatment following which the Applicant suffered chronic and constant pain and numbness. Her condition deteriorated and had not improved since.
[40] Exhibit A, T-Documents, T3: Statement of Claim, 40-4.
Under the heading ‘Particulars of Injury and Loss’ at paragraphs 15.1–15.10, the Applicant stated amongst other things that she suffered numbness in lower limbs, constant pain and spasms of the lumbar and thoracic spine, takes significant medication, psychological injury including stress anxiety and depression, loss of income, received voluntary services from her husband, will continue to need voluntary and home assistance in the future, and will require future medical treatment, medical services from orthopaedic surgeons, rheumatologists, rehabilitation medicine providers, psychologists and or psychiatrists and related treatment.
It should be noted that in this civil action the Applicant claimed financial loss namely loss of income which was specifically excluded from the settlement in the civil proceedings relating to Claim 2 to which I will refer in a moment.

Hence, the Applicant released the physiotherapist from all claims, rights and entitlements arising from the identified treatment and injury and loss suffered, which included voluntary services of her husband and the need for voluntary and home assistance in the future and which in part forms the basis of the funded reasonable and necessary supports that may be funded by the Respondent and identified in her plan.
The Respondent submits this payment of monies therefore falls within the meaning of compensation referred to in Rule 3.

The Deed of Release in respect of to Claim 2

Claim 2 named the Applicant and her husband as the plaintiffs and a hospital and two medical practitioners as the defendants. The Deed of Release in settlement of Claim 2[41] referred to the Applicant and her husband as the ‘Releasors’ and the 3 defendants were the ‘Releasees’. The defendants denied liability but agreed to pay to the Applicant and her husband the sum of $1,300,000.00 inclusive of legal costs, and which sum made no allowance for economic loss, loss of earning capacity or loss of chance.
[41] Exhibit A, T-Documents, T9: Deed of Release, Hospital, 124-7.
The Applicant and her husband accepted the settlement sum in full and final settlement of all claims, rights, and entitlements the subject of the civil proceedings.

The District Court Pleadings in respect of Claim 2

The District Court ‘Second Statement of Claim’[42] is a significant pleading. In brief, ‘PART 2 – BASIS OF CAUSES OF ACTION AND OTHER MATERIAL FACTS’,[43] referred to the Applicant’s admission to hospital on 19 October 2009 for a L4/L5 posterolateral fusion with a pedicle screw fixation, and the significant impact the treatment had on the Applicant including permanent hypoxic ischaemic neurological damage to her peripheral nervous system causing her to suffer a permanent loss of proprioception to her upper and lower limbs. She pleaded further deterioration in her medical condition until her transfer to Hampstead Rehabilitation Centre. She was then unable to walk.
[42] Exhibit B, Supplementary T-Documents, ST2, 9-33.
[43] Ibid 15-9 at [20]-[32].
Under the heading ‘PARTICULARS OF INJURY AND LOSS’,[44] the Applicant pleaded that as a result of the peripheral nerve damage to the distal fingers she required assistance from her husband; and ‘the general nature of the resulting disabilities include impairment and restriction of bodily and mental functioning’. It is submitted by the Respondent that peripheral neuropathy was part of the basis of the Applicant’s NDIS application and the settlement payment of $1,300,000.00.
[44] Ibid 28-30 at [48]-[49].
At paragraph 48.4 in reference to her economic and non-economic loss, the Applicant pleaded:
… the need for treatment, equipment and medical services and associated costs in the past and in the future; the need for voluntary and paid services in the past; the need for future care; a need for gardening, washing, household and domestic and maintenance services; past and future mileage and travel costs.
It is submitted that those losses for which the Applicant received the settlement sum were supports that the NDIS may provide.
At paragraph 49, there is a brief pleading in respect of the claim by the Applicant’s husband which pleaded that for the reasons pleaded in respect of the Applicant’s claim, Mr Pett claimed damages for (i) the loss and impairment of consortium of the Applicant, and (ii) ‘by way of per quod servitium amisit’ (service of a servant). No evidence was received from the Applicant identifying how the settlement sum in the Deed of Release was quantified and the apportionment of the settlement sum between the Applicant and her husband, despite the Tribunal inviting the Applicant to provide such evidence and suggesting the Applicant speak with her solicitor who was involved in the settlement of Claim 2.
The Respondent submits that having regard to the terms of the Deed of Release and the release from all claims rights and entitlements as pleaded by the Applicant and her husband, this payment of monies in respect of Claim 2 falls within the meaning of compensation referred to in Rule 3.

Determining the CRA and the Rules

If the settlement payments are compensation, a question then arises how to apply the settlement sum to determine the CRA. This is particularly relevant when a settlement, such as those in this matter, do not differentiate between the various heads of damage that may form the components of the final settlement, for example past and future loss and the NDIS component.
Rule 3.1(a) deals with those matters where the ‘NDIS component’ is identified. The meaning of ‘NDIS component’ is found in rule 4.4 which reads:
NDIS component, of an amount of compensation under a judgement or settlement, means the component that relates to the provision of supports of a kind that may be funded or provided under the NDIS after the date of the judgement or settlement, and may include a component that consists of periodic payments.
Hence it is argued that Rule 3.1(b) applies because the NDIS component cannot be identified as contemplated in rule 3.1(a) but the Applicant received a compensation amount that was fixed by the terms of the Deed and Deed of Release.
Therefore, when rule 3.1(b) is applied it is then necessary to consider how to calculate the CRA. Rule 3.13 under the heading ‘Compensation reduction amount – other circumstances’ deals with a judgement or settlement within the meaning of rule 3.1(b) and provides the CEO and in this matter the Tribunal, with a step-by-step process of calculating the CRA.
In applying rule 3.13, the definition of compensation in s 11 of the Act requires that the payment in respect of personal injury in settlement of a claim for damages must wholly or in part be in respect to the costs of supports that ‘may’ be provided. The Respondent submits that for the reasons explained about the relationship between the settlement sums and the District Court pleadings in Claim 1 and 2, the settlement sums encompass payment for supports that the NDIS ‘may’ provide and therefore it is appropriate to apply Rule 3.13 in determining the CRA.
It is irrelevant in the determination of the CRA, to consider what portion of the settlement sum may fall within the cost of supports that may be provided.
I will turn to the step-by-step process of calculating the CRA in a moment but before I do, it is helpful to first detail the general application of the CRA.

Compensation to be taken into account and Special Circumstances

Rules 3.4 – 3.9 deal with compensation to be taken into account.
Rule 3.5 provides that in considering whether or not to approve the statement of participant supports the CEO is to take account of the compensation by reducing funding for reasonable and necessary supports that would otherwise be approved by the appropriate CRA under Rules 3.11 to 3.21.
Rule 3.6 recognises that different CRA’s may arise to which different paragraphs of Rule 3.1(a)-(d) may apply, and Rules 3.15 and 3.20 set out special rules that apply when there are multiple CRA’s.
It is therefore not appropriate to simply accumulate multiple CRA’s and apply that total to the reduction of funding for reasonable and necessary supports in the participant’s plan support. In this matter there are 2 separate settlement sums to be considered and a decision made whether each settlement sum was compensation and whether different CRA’s arise and are to be applied.
Rule 3.7 provides that the reduction may be amortised over a period of time and hence the CEO has a discretion to spread the CRA over a period of time, which occurred in the matter.
Under the heading ‘Special Circumstances’ Rule 3.10 provides that ‘For the purposes of paragraph 3.5, the CEO may ignore the whole or part of the CRA … if the CEO thinks it appropriate to do so in the special circumstances of the case (which may include financial hardship suffered by the participant)’.
When considering the CRA and its application to any reduction in a participant’s plan supports, there remains the discretion in the CEO, or in this matter the Tribunal, to ignore in whole or in part the CRA, in the special circumstance of the case. However, other than by referring to financial hardship being included in the special circumstance consideration, there is no further guidance given to the decision maker as to the meaning of special circumstance of the case. But the term is not a general proposition overarching all considerations and is case specific. Hence, each matter will need to be considered on its own facts in deciding whether, in the special circumstance of that matter, the decision maker may ignore in whole or in part the CRA.
I will now turn to the step-by-step process of calculating the CRA that applies only if the Tribunal is satisfied that the payments are compensation.

Rule 3.13 applied to Claim 1[45]

[45] See para [57]-[58] above.

Rule 3.13 explains the calculation of the CRA in regards a settlement of the type referred to in rule 3.1(b) and prescribes the method of calculation and reads as follows:
In the case of a judgement or settlement mentioned in paragraph 3.1(b), the CEO is to identify the compensation reduction amount as follows:
(a) calculate the amount of compensation fixed under the judgement or settlement;
(b) subtract the sum of the amounts (if any) payable in respect of the amount of compensation under the following:
(i) the Health and Other Services (Compensation) Act 1995;
(ii) the Health and Other Services (Compensation) Care Charges Act 1995;
(iii) Part 3.14 of the Social Security Act 1991;
(iv) a law of the Commonwealth, a State or a Territory, prescribed by the National Disability Insurance Scheme rules;
(c) subtract an amount that the CEO considers reflects the value of any period of preclusion:
(i) that arises from a Commonwealth, State or Territory statutory scheme of entitlements (for example, the Social Security Act 1991); and
(ii) is in respect of the injury;
(d) if no preclusion period has arisen for the purposes of paragraph (c) and the CEO is satisfied that:
(i) the participant claimed damages in relation to lost earnings or lost capacity to earn; and
(ii) the amount of compensation fixed under the judgement or settlement included an amount in respect of those damages;
subtract 50% of the amount of compensation;
(e) if the amount after applying paragraphs (a) to (d) is greater than the value of the reasonable and necessary supports that the CEO considers would have been provided to the participant and funded under the Act over the participant’s expected lifetime, had the participant been a participant from the time of the compensable event—replace the amount by that value;
(f) subtract an amount that the CEO considers equivalent to the total of the amounts that were paid by the participant for supports, being supports of a kind funded under the Act, after the compensable event and before becoming a participant;
(g) subtract any recoverable amount payable by the participant in respect of the compensation amount pursuant to section 106 or section 107 of the Act;
(h) subtract any amounts deducted by the Agency under section 105B of the Act;
(i) subtract the amount of any reduction in funding under paragraph 3.5 that occurred in relation to a previous plan of the participant.
The Respondent referred the Tribunal to the Draft Decision which explained the calculation urged upon the Tribunal in respect of each settlement sum. I will first deal with those submissions in regards the calculation in respect of Claim 1 and the settlement sum of $115,000.00 as it related to Rule 3.13(a) - (b)(i), (ii).
The Respondent submitted that the CRA in relation to the compensation of $115,000.00 is nil, for the following reasons:
i)Rule 3.13(a) required the CEO to calculate the amount of compensation under the settlement. That amount is $115,000.00.
ii)Rule 3.13(b) required the CEO subtract other amounts payable under certain statutory provisions or as prescribed by the NDIS Rules. In this matter that sum is $15,192.90 being the Medicare refund and Notice of Charge referred to in the first Deed which is to be deducted. The balance is $99,807.10. In the case of the second settlement no statutory refund is referred to and the amount is ‘$nil’.
iii)Rule 3.13(c) relates to the subtraction the amount CEO considers reflects the value of any preclusion period. This does not apply and the amount to be subtracted is ‘$nil’.
iv)Rule 3.13(d) applies if there is no preclusion period for the purpose of Rule 3.13(c) and the CEO is satisfied that there is a loss of earning, or loss of capacity to earn which was included in the amount of compensation (the settlement sum), in which case 50% of the amount of compensation is to be subtracted. This applies in respect of the first settlement and the sum of $57,500.00 (50% of $115,000) should be subtracted. The balance is $42,307.10 ($99,807.10 minus $57,500.00).
v)Rule 3.13(e) it is submitted attracts a $nil reduction. This rule provides that if, after applying rules 3.13(a)–(d) the amount of the CRA is greater than the reasonable and necessary supports funded over the participants expected lifetime, had the participant been a participant from the time of the compensation event (21 April 2008), replace the amount by that value.
vi)Rule 3.13(f) it is submitted attracts a $nil reduction. This rule permits the subtraction of an amount the CEO considered equivalent to the total amounts paid by the participant, for supports of a kind funded under the Act, after the compensable event and before becoming a participant. This enables amounts expended by the participant on supports from the time of the injury up to the time of becoming a participant, being deducted from the CRA. In this matter there was no acceptable evidence of an amount to which this rule applied. This Rule and the question of the Applicant’s out of pocket expenses incurred between the compensation event date and becoming a participant is important in the Applicant’s case which I will explain.
·   The Respondent referred to requests made to the Applicant for evidence of this type of expenditure contemplated under rule 3.13(f). In an email dated 16 February 2021 from the Respondent to the Applicant and her husband[46] under heading ‘Evidence of expenditure’ the Respondent advised that once the CRA is calculated, the Respondent would reduce from the CRA any money previously spent on NDIS type supports from the date of the compensable event to the day before accessing the NDIS.
[46] Exhibit A, T-Documents, T27: Email Correspondence from NDIA to Applicant’s Representative, 258-260.
·   The Respondent acknowledged the likelihood of the Applicant having used some of the compensation money on NDIS supports, and evidence of those expenditures would likely reduce the CRA applied to the Applicant’s NDIS plan. The Respondent went on to say that in ‘NO WAY’ would past expenditure increase the CRA or result in a debt, and the effect was to reduce the CRA to be applied to future NDIS plans.
·   The Applicant described in submissions, that this email was a bribe by the Respondent which was illegal and inappropriate. This view is indicative of the level of distrust that has infected much of the relationship between the Applicant and the Respondent but also reflected the Applicant’s interpretation of the NDIS.
·   Plainly the email was not a bribe. The email was a description, by the Respondent, of evidence of expenditure by the Applicant that may be used to the Applicant’s benefit in reducing the CRA. Given those potential out-of-pocket expenses incurred by the Applicant from the date of injury until the day before she became a participant on 24 October 2017, being expense of NDIS type supports paid over many years, may have been significant, the impact on the reduction of the CRA may also potentially be significant.
·   No evidence was provided by the Applicant to the Respondent and hence $nil was to be subtracted.
·   In a 5-page document before the Tribunal, which I infer was prepared by the Applicant and headed ‘G1 – OT Report, Indicative Cost of Support before NDIS, Draft 1’,[47] was a list of itemised expenditure said to be incurred prior to the Applicant becoming a participant in the NDIS. It describes by reference to a start and end date under headings ‘Description’, ‘No. Hours / Item Cost’, ‘Cost per Hour / Item Qty’ and ‘Total’ the various out of pocket expenses of the Applicant. For example, for the start and end dates of ‘27 October 13’ and ‘25 October 17’ respectively it details amongst other things:
[47] Exhibit A, T-Documents, T26: Indicative Costs of Support Before NDIS, 242-6.

Start End Description No. Hours / Item Cost Cost per Hour / Item Qty Total

27 October 13 25 October 27 Care and Support 728 $44.67 $32,519.76

Domestic Services 9131.20 $43.90 $400,859.68

· The list includes details of occupational therapy expenses, home repairs and alterations to accommodate the Applicant, garden maintenance, wheelchair expenses, car hand controls, personal alarm system, physiotherapy, hydrotherapy, and a total expenditure of over $4.4 million. It is arguable that some of the suggested itemised costs may fall within the meaning of rule 3.13(f) and substantially reduce the CRA and possibly to zero.
· The Applicant said she had no records of those expenses having moved house on numerous occasions. There was no evidence before the Tribunal in support of any itemised cost, no receipts, no bank statements, no evidence from the relevant support provider and no basis upon which the Tribunal could be satisfied that any item should be considered within Rule 3.13(f).

vii)Rules 3.13(g) and (h) it is submitted each attract a $nil reduction. The former provides that the CEO subtracts any recoverable amount (i) pursuant to s 106 and 107 of the Act , and (ii) subtracts any amount deducted by the Respondent under s 105B of the Act, respectively. Neither apply in this matter.
viii)Rule 3.13(i) provides for the subtraction of the amount of any reduction in funding due to a compensation reduction amount that occurred in relation to a previous plan. The Respondent submits that amount is $17,736.05 and should be subtracted leaving a balance of $24,571.05 ($42,307.10 minus $17,736.05). The Respondent submits that the current plan under review (the Varied Plan) remains in force and relates to the period September 2021 - September 2024 and no deduction amount applies. However, the Applicant had an earlier plan that commenced on 4 May 2021 which operated until the Varied Plan came into effect on 17 September 2021. The amount of $17,736.05 was applied in respect of the earlier plan and was referred to in the letter to the Applicant dated 17 September 2021 headed ‘Compensation Reduction Amount and Your Plan Review’.[48]
· In response to the Tribunal, Counsel explained that the sum of $17,736.05 was the total of the Rule 3.13(i) amount of $3,090.42 in regards the Claim 1 CRA, and $14,645.63 in regards the Claim 2 CRA and the total was applied for ease of calculation to the CRA calculation for Claim 1. Mathematically it made no difference to the final CRA applying it that way, rather than between the claims separately. The Rules did not prescribe how the calculation involving separate CRA’s was to be applied and this was consistent with the step-by-step process in Rule 3.13. I agree that approach is appropriate.
·This meant that in respect of Claim 2 to which I will refer in a moment, there was no reduction under Rule 3.13(i) for the same amount because it was already taken into account.

[48] Exhibit A, T-Documents, T1B: Compensation Reduction Amount and Plan Review, 15-20.

Rule 3.10

The Respondent referred to Rule 3.10 and the discretion granted to the CEO, and in this matter the Tribunal, to ignore the whole or part of a CRA, if appropriate to do so in the special circumstances of the matter, which may include financial hardship suffered by the participant. The Respondent submits that the balance sum of $24,571.05 should be ignored for special circumstances on the basis of the confirmed legal cost and because the compensation was inclusive of legal costs.

When $24,571.05 is deducted from the total legal costs of $897,986.70, the balance is $873,415.65 to which I will now refer in respect of Claim 2.

Rule 3.13 applied to Claim 2[49]

[49] See para [57]—[58] above.

The Respondent submitted that the CRA in relation to the compensation of $1,300,000.00 is $332,894.10, for the following reasons:
i)Rule 3.13(a) the amount of compensation was $1,300,000.00.
ii)Rule 3.13(b) the amount to be subtracted is ‘$nil’ given the relevant amount had already been taken into account in assessing the Claim 1 CRA.
iii)Rule 3.13(c) the amount to be subtracted is $nil for the same reasons referred to in dealing with the CRA calculation in Claim 1.
iv)Rule 3.13(d) the amount to be subtracted is $nil. The settlement of Claim 2 did not involve loss of earnings or loss of capacity to earn and hence the 50% reduction did not apply to this CRA calculation.
v)Rules 3.13(e)-(h) the amount to be subtracted in respect of each is $nil for the same reasons referred to in dealing with CRA calculation in Claim 1.
vi)Rule 3.13(i) the amount to be subtracted is $nil noting the amount of $121,729.50 was currently applied as a CRA for the current plan for 17 September 2021 to 15 September 2024.

Rule 3.10

For Rule 3.10, the sum of $873,415.65 being the balance of the legal cost after applying the special circumstances consideration to Claim 2, should be ignored in calculating the CRA for the same reason as referred to in Claim 1.
Further, the Respondent submitted that a further special circumstance arose which entitled the Tribunal to ignore the sum of $93,690.25 from the CRA. The Respondent conceded that there had been a delay in applying the CRA Rules, that was not the fault of the Applicant. The Respondent estimated that if it had applied the CRA Rules in a timely manner in respect of the pre-May 2021 plans, the amount of $93.690.25 would have applied. In regards, Claim 1, the amount was $8,920.96 and Claim 2 was $84,769.29 which totalled $93,690.25 and that total has been applied to the calculation of the CRA in Claim 2.
After ignoring the further amounts due to special circumstances, the CRA is therefore $332,894.10. The Respondent submits that insofar as the Varied Plan for the period 17 September 2021 to 15 September 2024 applied a CRA of $121,729.50, that should remain in place and the balance of CRA of $211,164, should ‘be applied to future plans and amortised if and as may be appropriate under Rule 3.7’.
It begs repeating that if the Applicant had provided evidence that satisfied the Respondent she incurred out of pocket expenses for supports of the kind funded under the Act after the compensable event the subject of Claim 2 and before becoming a participant in the NDIS, the CRA would, on the Respondents submission, arguably be further ignored.

CONCLUSION

The failure of the Respondent to consider the CRA until approximately 4 years after the Applicant became a participant in the NSDIS when the Respondent had been advised of the settlement of the civil claims was unfortunate to say the least.
The Varied Plan and internal review decision were both incorrect and although there may have been an absence of evidence and particularly evidence provided by the Applicant to assist the Respondent in the internal review, the statement of claim in respect of Claim 1 included a claim for payment for loss of earnings which appeared not to be taken into account in applying the Rules, in particular Rule 3.13(d) and the 50% reduction to the compensation amount. Further the Applicant incurred significant legal costs and disbursements which also does not seem to be considered.
Given the nature and extent of the Applicants medical conditions and impairments, her ongoing anxiety and depression, the initial advice by the Respondent in 2021 that her participant supports may be reduced to zero, would have been very distressing to the Applicant and her husband and contributed to the ongoing tension between the Applicant, her husband and the Respondent which was evident in the hearing.
Between the hearing dates the Applicant was provided with Exhibit G, the confidential spreadsheet, to assist her in understanding the calculation process. The Applicant prepared her own spreadsheet Exhibit F which she said was best practice in the proper calculation method. The outcome of each method of calculation was dependent upon the input of correct information into each spreadsheet which was subject to different interpretations of what was the relevant evidence to be used, by each party. Both Exhibits did not assist me in this matter.
The Applicant’s submission that the Claim 1 settlement sum was not compensation because she received none of those monies because they were subsumed by the legal costs of her first legal practitioner has no merit. There is no acceptable evidence before the Tribunal in support of that submission. If there was such evidence, it may be relevant in considering whether the whole or part of the settlement sum should be ignored in the CRA calculation by having regard to Rule 3.10 ‘special circumstances’ in the same way the Respondent has urged upon the Tribunal as referred to above.
Further, the Applicant’s submission that Claim 2 settlement sum was not compensation because the Deed of Release was entered into with a denial of liability also has no merit. It is common practice in resolution of litigation between parties, including litigation for damages arising out of medical negligence, for parties to reach agreement, often confidential agreement, to resolve the litigation in full and final settlement of all claims rights or entitlements including costs and interest with a denial of liability.
The denial of liability in resolution of litigation does not operate to change the basis of that litigation informed by the pleadings and in particular the amended statement of claim filed by the Applicant.
In consideration for the payment of the settlement sum referred to in the Deed of Release, the civil action in negligence and damages claimed for personal injury was wholly resolved. This negotiated settlement is clearly contemplated by the definition of compensation found in s 11 of the Act which means payment (with or without admission of liability).
The settlement of the civil claim that the Deed (relating to Claim 1) and Deed of Release (relating to Claim 2) are each intended to address, is informed by the pleadings and in particular the statement of claim filed in the District Court for each Claim. Hence an allegation of negligence and claim for damages for personal injury caused by such negligence, that falls outside the pleaded case is not covered by the settlement deed which might otherwise be pleaded in bar to the further litigation.
It is therefore necessary to consider the pleadings in Claim 1 and Claim 2 and the settlement deed in relation to each to determine if a compensation payment occurred within the meaning of s 11 of the Act.
Each Claim was an action in damages in respect of personal injury said to have been cause by the negligence of the named defendants. Each deed of settlement evidences the settlement of each Claim and the payment to the Applicant in settlement of each, and in particular for the personal injury pleaded by the Applicant.
Accordingly, each settlement sum is a payment with or without admission of liability in respect of compensation or damages in respect of personal injury and in settlement of a claim for damages, and each is compensation within the meaning of s 11 of the Act. It is then necessary to consider whether the Applicant’s impairment for which she is a participant in the NDIS was caused to any extent by a personal injury and whether one of the Rules in 3.1(a) – (d) applies.
I am satisfied that the Applicant has, in relation to each claim, pursued an action for personal injury and that to some extent a personal injury the subject of each Claim contributed to the impairment for which the Applicant was made a participant of the NDIS which impairments I have referred to above.
It is then necessary to consider whether each settlement payment is wholly or partly in respect of the costs of supports that ‘may’ be provided to the Applicant as a participant. It is not a positive requirement that cost of supports ‘will’ be provided. The definition contemplates that the payment is of a type that ‘may’ be payable under the participant supports irrespective of whether such payment occurs.
The pleadings again inform this question. The payments in settlement of Claim 1 and Claim 2 include payments in respect of the costs of supports that may be provided to the Applicant, and the settlement sum in each Claim is properly regarded as separate payment of compensation and a separate CRA applies in determining the cost of the plan supports.
In respect of Claim 1 the Applicant pleaded injury to her back, chronic constant pain and numbness including numbness to her lower limbs, constant pain and spasm of the lumbar and thoracic spine, psychological injury including stress, anxiety and depression for which she received voluntary services from her husband, continues need of voluntary and home assistance in the future which I am satisfied may form part of the reasonable and necessary support in the Applicant’s plan.
In respect of Claim 2 the Applicant pleaded a significant number of personal injuries including but not limited to her admission to hospital on 19 October 2009 for a L4/L5 posterolateral fusion with a pedicle screw fixation, and the significant impact the treatment had on the Applicant including permanent hypoxic ischaemic neurological damage to her peripheral nervous system causing her to suffer a permanent loss of proprioception to her upper and lower limbs. The Applicant pleaded that she had a need for voluntary and paid services in the past, the need for future care, gardening, washing, household and domestic and maintenance services, which I am satisfied may form part of the reasonable and necessary supports in the Applicant’s plan.
The Applicant submitted that the neuropathy suffered by the Applicant which gave rise to the actions in damages, particularly in relation to Claim 2, was a different neuropathy that was the subject of the acceptance of the Applicant as a participant in the NDIS. That submission was based in part on the Applicant’s own interpretation of the neuropathy suffered which it was submitted was supported by Dr Brazenor.
Neuropathy occurs when nerve damage gives rise to pain, weakness, numbness in one or multiple parts of the body. Peripheral neuropathy related to nerves outside the brain and spinal cord are damaged which may cause weakness, numbness and pain for example to the hands and feet.
However, Dr Brazenor was referring to the Applicant’s gross truncal ataxia. I note the pleading in Claim 2 pleads the Applicant was first seen to have and ataxia type of gait and her foot was seen to turn inwards when walking and standing and she had difficulty controlling her hands and arm and felt destabilized.[50]
[50] Exhibit B, Supplementary T-Documents, ST2, 20 at [35D].
Truncal ataxia is indicated by an instability in a person’s trunk which is most evident when sitting or in the persons gait which Dr Brazenor opined was not related to the Applicant’s indemnity claim. This report provides no support for the Applicant’s submissions about differing neuropathy.
I agree with the Respondent’s submissions that Claim 2 did include a claim for damage to the Applicant’s peripheral nervous system with loss of proprioception to her upper and lower limbs and as such she suffered and impairment caused to some extent by a personal injury. She pleaded under heading ‘Basis of Causes of Action and Other Material Facts’ that as a result of “a lack of oxygenated blood her peripheral nervous system in particular her upper and lower limbs resulting in permanent hypoxic ischemic neurological damage to her peripheral nervous system causing her to suffer a permanent loss of proprioception to her upper and lower limbs”. Under heading ‘Particulars of Injury and Loss’ the Applicant pleaded that as a consequence of negligent treatment and the numerous medical conditions that followed, those conditions “caused the development of the [Applicant’s] peripheral neuropathy and loss of proprioception”.[51]
[51] Ibid 18, 24 at [43D], 28 at [48.1].
I agree with the Respondent’s submissions that the basis that the Applicant was accepted into the NDIS included permanent peripheral neuropathy. In the NDIS Medical Conditions,[52] it records the condition was complicated by nutritional deficiency and prescription drug interactions. It was not just her hands and feet that were affected but “all over proximal and distal”. Reference to the hospital notes regarding aetiology said, severe and very painful all over nerve and joint pain developed during treatment for critical illness with high dose of intravenous Norfloxacin.
[52] Exhibit A, T-Documents, T17: Medical Conditions – T18: Medical Conditions 2, 152-6.
Nonetheless, Claim 2 pleaded numerous factors in support of her cause of action in negligence, a broad range of medical conditions giving rise to a broad range of personal injuries for which the Applicant received a payment of compensation, evidenced in the Deed of Release, and I am satisfied that the personal injuries caused to some extent the Applicant’s impairment which resulted in her being accepted as a participant in the NDIS.
Having regard to the above matters I am also satisfied that the Applicant received compensation in relation to both Claims 1 and 2 under a settlement identified in the Deed and Deed of Release in which the NDIS component is not possible to identify but which fixed an amount of compensation in respect of her injury in accordance with Rule 3.1(b).
Having made those findings, I have considered how the CRA should be determined. I agree with the Respondent’s submission that for the purpose of doing so Rule 3.13 applies and I am satisfied the approach urged upon the Tribunal in relation to Claim 1 and Claim 2 as referred to in paragraphs 94 – 102 is the right approach resulting in the correct and preferable decision in determining the CRA in relation to the CRA in respect of Claim 1 and Claim 2. The decision under review should therefore be varied such that the statement of participant supports reflect the CRAs that applies the Rules in accordance with the Respondent’s submission.
However, I note that the Applicant’s plan has a review date of 15 September 2024 and the deficiencies in the evidence before the Tribunal for the purpose of Rule 3.13(f) relating to the reduction in the CRA due to out of pocket expenses incurred from the date of the compensable event up to the date before the Applicant became a participant in the NDIS, for supports of a kind funded under the Act, may be relevant when applied to her future plan, including when the balance CRA is amortised under Rule 3.7. The Applicant may also wish to consider whether proof of expenses which it is submitted exceeded $4 mil, albeit not for supports of a kind funded under the Act, might enliven the special circumstances consideration in Rule 3.10, and including financial hardship suffered by the Applicant.

DECISION

The decision under review is varied as follows:
1. The Applicant received two payments of compensation in accordance with Rules 3.1(b) of the National Disability Insurance Scheme (Support for Participant – Accounting for Compensation) Rules 2013 namely compensation in the amount of $115,000.00 pursuant to the Deed dated 19 December 2016 and compensation in the amount of $1,300.000.00 pursuant to the Deed of Release dated 2017.
2. The compensation reduction amount that arises from the compensation of $115,000 is nil on the basis that:
(a) Under Rule 3.13(b) the sum of $15,192.90 be subtracted
(b) Under Rule 3.13(d) the sum of $57,500.00 be subtracted
(c) Under Rule 3.13(i) the sum of $17,736.05 be subtracted
(d) Under Rules 3.10 the balance sum remaining of $24,571.05 be ignored for special circumstances.
3. The compensation reduction amount that arises from the compensation of
$1,300,000.00 is $332,894.10 on the basis that:
(a) Under Rule 3.10 the sum of $873,415.65 and the sum of $93,690,25 be ignored for special circumstances.
4. The compensation reduction amount of $332,894.10 be applied as follows:
(i) $121,729.59 be applied to the current plan for the period 17 September 2021 to 15 September 2024.
(ii) The balance compensation reduction amount of $211,164,60 be applied to the Applicant’s future plans and amortised as determined by the CEO in accordance with Rule 3.7.

I certify that the preceding one-hundred and thirty-two (132) paragraphs are a true copy of the reasons for the decision herein of Senior Member B J Illingworth

...............[sgnd].................................

Legal Associate

Dated: 30 July 2024

Date of hearing:	10 October 2023, 7 and 8 May 2024
Representative for the Applicant:	Adrian Pett
Representative for the Respondent	Matt Black, Quay 11 Chambers

[2024] AATA 2690

30 July 2024

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Statutory Construction

Costs

Procedural Fairness

Appeal

Start	End	Description	No. Hours / Item Cost	Cost per Hour / Item Qty	Total
27 October 13	25 October 27	Care and Support	728	$44.67	$32,519.76
27 October 13	25 October 27	Domestic Services	9131.20	$43.90	$400,859.68