QFKN and Secretary, Department of Social Services (Social services second review)

[2022] AATA 1352

QFKN and Secretary, Department of Social Services (Social services second review) [2022] AATA 1352 (31 March 2022)

Division:GENERAL DIVISION

File Number:               2019/7028

Re:QFKN

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Senior Member M J McGrowdie

Date:31 March 2022

Date of written reasons:        26 MAY 2022

Place:Sydney

The reviewable decision dated 13 March 2019 is set aside and the matter remitted to the Respondent to calculate the sum which should now be repaid.  

.................................[SGD].......................................

Senior Member M J McGrowdie

CATCHWORDS

SOCIAL SECURITY – Disability Support Pension; reduce repayment of non-entitled payments; whether a compensation preclusion period applies, whether special circumstances allow a reduction of compensation preclusion period; medical negligence; compensation recovery; whether “special circumstances” exists  – decision under review set aside and remitted;

LEGISLATION

Social Security Act 1991 ss 17(2B), 1170(4), 1160, 1184K

CASES

Rosemarie Beadle and Director-General of Social Security [1984] AATA 176

Department of Employment and Workplace Relations v Homewood [2006] FCA 779

REASONS FOR DECISION

Senior Member M J McGrowdie

26 MAY 2022

1. These proceedings have been anonymised and the Applicant’s name has been substituted with the letters QFKN.  I will simply refer in my decision to the Applicant without reference to her actual name.  The Applicant has appeared in person and Ms Hammerton appeared on behalf of the Secretary, Department of Social Services.

2. The matter relates to a claim by the Applicant to reduce her repayment to the Department as a result of a common law settlement on 30 October 2017.  She received a settlement in respect of a medical negligence case brought in the Supreme Court on her behalf in the sum of $635,000 by way of a settlement where the amount of costs payable to her solicitors was $288,556.38.  It related to an injury she suffered on 14 June 2011.  She had been admitted to Bathurst Hospital on 12 June 2011 and given an infusion of a drug which the Applicant says was contraindicated and which she did not consent to and which was administered without any proper diagnosis having been made.

3. As a result of that infusion, she was readmitted to hospital, this time at Westmead Hospital, on 14 June for surgery in the nature of a left suboccipital decompressive craniectomy. 

4. I also note that QFKN says, she was not properly informed about the procedure and the risk that it might present and did not give an informed consent.

5. She was admitted to Bathurst Hospital on 12 June 2011 as she was in her son’s car and her son was driving.  It was a four-wheel drive vehicle going up a slight incline when one of the wheels lost traction and the Applicant feared that the car was going to roll down the hill and injure or kill her son.  She suffered shock by reason of this and it brought back to her mind that, only six months prior to that, there was an incident involving her son, when he nearly died, happened in front of her when her son had a fall and was critically injured and was not expected to live.  These events combined, caused her to fall to the ground where she remained for quite some hours before taken to Bathurst Hospital and then the events occurred which I have outlined.

6. The case essentially involves two arguments. One is that the legal costs, which QFKN had to pay, were excessive. The Applicant also argues that pursuant to section 17(2B) of the Social Security Act(Cth)1996 (‘the Act’), there was an illegality involved with regard to her treatment; namely, that the medical treatment she received was so inappropriate as to be illegal.

7. She made a complaint to the Healthcare Complaints Committee who have referred her to the New South Wales Police. NSW Police are conducting an investigation into the matter.  She is satisfied as to the progress of that investigation, but it is certainly not complete. Whether or not any criminal charges will be laid against anyone as a result, is only speculative at this time.  What needs to be said though is QFKN is doing what she can to assist the police with regard to that investigation.

8. As a result of the treatment she received, and the subsequent operative treatment she underwent, she says that she suffered a cognitive impairment due to brain damage.  I am happy to note, however, that the Applicant has regained her intellectual capacity and has articulated her case in a most thorough and precise way.  She has conducted herself admirably during the course of these proceedings, as has the Secretary of the Department.

9. It is a startling medical history and it is a tragedy which the Applicant has had to endure. In accordance with section 17(2B) of the Act, provision is made whereby a payment of a benefit, as a result of criminal injury, does not constitute compensation under the Social Security legislation. I am not able speculate whether or not a criminal injury occurred or not. Although, it is certainly open for such a conclusion to be possibly reached by the New South Wales Police once they have completed their investigation.

10. Her legal costs were $288,000 which was about 45 per cent of the total compensation she received in the Supreme Court settlement. There is a discretion in terms of the formula contained in section 1170(4) of the Social Security Act 1991 (Cth) as to the repayment that a social security recipient has to make to Centrelink when an action is settled at common law where the recipient had been receipt of social security payments.

11. Part 3.14 of the Act deals with compensation recovery. Section 1160 in general operates such that if there are special circumstances, it is possible for the Secretary or the Tribunal to reduce a person’s compensation (indistinct) payment. The Secretary and the Tribunal does, according to section 1184K of the Act, may disregard some of the payments as not having been made if it is appropriate to do so in the special circumstances of the case. The question here then is whether or not there are special circumstances.

12. Guidance is provided in a case of Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779 where French J set out the manner in which it was expected that a Tribunal would set out reasons for a decision under section 1184K of the Act by first identifying the circumstances of the case which is found to be special and the reasons for which it arrived at the finding. Secondly, to explain why, in the circumstances so found, it is thought appropriate to treat the whole or part of the compensation payment as not having been made. And third, explain why it selected the particular quantum (the whole or part) of the compensation payment as not having been made.

13. The term ‘special circumstances’ was described by the Tribunal in Rosemarie Beadle v Director-General of Social Security [1984] AATA 176 as circumstances that are uncommon, unusual, exceptional and have a particular quality, What are special circumstances are what might appear to emerge from the facts made before the Tribunal and the submissions made by the parties. The Tribunal can take into account general known concepts in relation to litigation due to its experiences and the experience and qualifications.

14. I would consider that cases for medical negligence are notoriously difficult and costly proceedings.  It is a good thing that the matter was settled, and it is not surprising that the costs were so high.  I do not have the jurisdiction to determine whether the costs were proper or improper. I do conclude that they are at a level which significantly exceeds what costs would be in ordinary litigation. I consider that there are special circumstances regarding part of the costs as being compensation and which should not be included in the application of the formula. The formula is geared to take into consideration what are the normal costs of litigation and I consider medical negligence cases generally to be harder and tougher than the usual run of cases and that there would be some allowance and relief afforded to the Applicant regarding the costs that were paid by her in relation to her settlement.

15. The Applicant does say that she may wish to challenge the validity of the costs that were to be charged.  That is not something that I can go into but would be something that the Applicant may consider after obtaining legal advice as to her rights in that regard.  To the extent to which costs should notionally be reduced, for the purposes of the formula, is a very much an objective matter.  One might argue that there should be a 10 per cent reduction or one could argue that the reduction should be as high as 25 per cent.  Doing the best I can, and doing what I think is appropriate in the circumstances, is that 20 per cent of the costs should not be included as having been received by the Applicant in compensation.

16. In conclusion, I set aside the reviewable decision dated 13 March 2019 and the matter is remitted to the Respondent to calculate the sum which should now be repaid.

17. Nothing that I have found or considered should anyway affect the course of the criminal investigation that is taking place nor any potential action that the Applicant may have as a result of what she has indicated as being to her criminal conduct on behalf of those that treated her.  I am limited in what I can consider and that is I am confined to apply to legislation and arrive at a decision which I think is just and is the proper decision in the circumstances in terms of the social security legislation.

I certify that the preceding 17 (seventeen) paragraphs are a true copy of the reasons for the decision herein of Senior Member M J McGrowdie  

..................................[SGD]......................................

Associate

Dated: 26 May 2022

Dates of hearing:	30 November 2020; 16 February 2022; 31 March 2022
Applicant:	In person
Solicitors for the Respondent:	Ms Hammerton, Services Australia