Re Stavrakis and Secretary, Department of Family and Community Services
[2003] AATA 212
•6 March 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 212
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2002/273
GENERAL ADMINISTRATIVE DIVISION ) Re RENOS STAVRAKIS Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Senior Member M D Allen
Mr S Webb, Member
Date 6 March 2003
PlaceSydney
Decision The decision under review is SET ASIDE and this matter remitted to the Respondent with the following direction namely:
That the Applicant Renos Stavrakis is subject to a preclusion period subject to sections 17 and 1165 of the Social Security Act 1991, as in force at 9 April 2001, for the period 12 February 2000 to 19 August 2007.
(Sgd) M D ALLEN ..............................................
Presiding Member
CATCHWORDS
SOCIAL SECURITY – Whether the preclusion period should be set aside or reduced – Finding that Applicant’s habituation to alcohol and gambling were not such that they were beyond his control – Special circumstances did not exist – Expenditure to fulfil obligations to relatives overseas did not amount to special circumstances.
The Social Security Act 1991- s17, s1165, s1184K
Secretary, Department of Social Security v Ellis 24 AAR 535
Re Hajar v Secretary, Department of Social Security 16 ALD 716
REASONS FOR DECISION
Senior Member M D Allen Mr S Webb, Member 1. By application made 21 February 2002 the Applicant sought review of a decision by a Social Security Appeals Tribunal that affirmed a prior determination that he was precluded from the payment of Social Security benefits for the period 12 February 2000 to 29 February 2008.
2. The Applicant was injured at his place of employment on 6 February 1996. He brought an action for negligence against his employer in the NSW District Court and on 10 December 1999 received a judgment in his favour in the total sum of $322,644.00. By a later judgment dated 3 April 2002 Herron DCJ amended his earlier judgment so that the amount awarded to the Applicant was reduced to $310,939.50.
3. Subsection 17(2) Social Security Act 1991 reads:
“17(2) For the purposes of this Act, compensation means:
(a) a payment of damages; or
(b) ...
(c) ...
(d) any other compensation or damages payment;
(whether the payment is in the form of a lump sum or in the form of a series of periodic payments) that is:
(e) made wholly or partly in respect of lost earnings or lost capacity to earn; and
(f) made either within or outside Australia.”
Whereas subsection 17(3) reads inter alia:
“17(3) For the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a) ....
(b) if those circumstances do not apply—so much of the payment as is, in the Secretary's opinion, in respect of lost earnings or lost capacity to earn.”
Subsection 17(4) states:
“17(4) Where a person:
(a) has received periodic compensation payments; and
(b) after receiving those payments, receives a lump sum compensation payment (in this subsection called the “LSP”); and
(c) because of receiving the LSP, becomes liable to repay an amount (in this subsection called the Repaid Periodic Compensation Payment – “RPCP”) equal to the periodic compensation payments received;
then, for the purposes of subsection (3), the amount of the lump sum compensation payment is:
LSP – RPCP”
4. Subsection 1165(8) Social Security Act reads:
“1165(8) If a compensation lump sum is received on or after 20 March 1997, the number of weeks in the preclusion period is the number worked out under the following formula:
Compensation part of lump sum
Income cut-out amount”
Whereas 1165(5) reads:
“1165(5) If periodic compensation payments are made in respect of the lost earnings or lost earning capacity, the new lump sum preclusion period is the period that:
(a) begins on the day after the last day of the periodic payment period; and
(b) ends after the number of weeks worked out under subsections (8) and (9).”
5. This matter came on for hearing on 16 December 2002. At that hearing the following documents were taken in and marked as exhibits namely:
Exhibit
Description
Date
T1-T41
Documents prepared for the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal 1975
A1
The Applicant's Statement of Facts and Contentions
R1
Respondent's Statement of Facts and Contentions
R2
Copy of departure cards held by the Department of Immigration regarding the Applicant
6. At the outset Counsel for the Applicant challenged the calculation of the preclusion period. The Applicant also advanced a case that he was entitled to relief pursuant to ss1184K(1) Social Security Act which reads:
"1184K(1) For the purposes for this Part, the Secretary may treat the whole or part of a compensation payment as:
(a) not having been made; or
(b) not liable to be made;
if the Secretary thinks it is appropriate to do so in the special circumstances of the case.”
7. It was agreed between the parties that given that the challenge to the calculation of the length of the preclusion period involved further investigations particularly as related to the figures provided to the Respondent by the employer's insurer the Government Insurance Office the Tribunal would take evidence and submissions on 16 December 2002 regarding the question of whether or not special circumstances existed so as to invoke the provisions of ss1184K(1) and that written submissions would be lodged regarding the calculation of the preclusion period.
8. Following the District Court judgement in his favour the Applicant after repayment of workers' compensation weekly payments and costs received in round figures the amount of $186,000 (see Exhibit A1).
9. The Applicant no longer has any money available for his support and is dependant upon his eldest son for his day to day living.
10. Whereas the Applicant's wife is in receipt of a Social Security benefit it was the Applicant's evidence that he is living separately and apart from his wife although under the same roof. The wife however was not called in these proceedings.
11. No evidence was given as to the ownership of the Applicant's house however assuming the house is in joint ownership with his wife then he has an asset that could be realised.
12. The Applicant's current dwelling was purchased using part of the proceeds of his damages. His evidence was that he sold his house in Sydney and paid out the mortgage on that house and he then purchased his current dwelling near Gosford and by utilising part of his damages pay out was able to purchase this house unencumbered.
13. Some $50,000.00 has been spent on two trips to Greece. On each trip the Applicant was accompanied by his wife and remained in Greece for an extended period. Whereas there may have been family and cultural reasons for the visit the fact remains that by making these visits the Applicant was dissipating capital which he knew was required to provide for his support until the year 2008.
14. There is no evidence in this matter that the Applicant was not appraised by the Respondent or by his solicitors at the time of judgement as to the effects of the preclusion period.
15. The main ground upon which the Applicant bases his request for a reduction in the preclusion period is his alleged alcoholism and gambling habit.
16. It was the Applicant's evidence that because he had time on his hands plus the effect of pain from his injured back that he frequented hotels or the Belmore RSL Club and drank to excess. When drunk he was unable to control his gambling and the combination of alcohol and gambling has led to the extinction of his damages pay out.
17. Contained within the section 37 Documents are copies of the Applicant's bank accounts and these show regular withdrawals. Some of the amounts could not be explained by the Applicant, but it was argued that they show that at least $50,000.00 was spent on a combination of alcohol and gambling.
18. The term "special circumstances" was discussed by Carr J in Secretary, Department of Social Security v Ellis 24 AAR 535 at 539 namely:
"In Beedle v Director-General Social Security (1985) 7 ALD 670, a Full Court of this Court had to consider whether the Administrative Appeals Tribunal had erred in its interpretation of s 102(1)(a) of the Act which provided for an extension of time in which to claim a family allowance “...in special circumstances...” At 673-674 the Full Court said:
“Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate... It would depend on the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase 'special circumstances' although lacking precision, is sufficiently understood in our view not to require judicial gloss.”
In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545, Kiefel J, after referring to Beedle said:
"...for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of usual or ordinary case. That was, I consider, the only inquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended and unjust had occurred that there must be some feature out of the ordinary. The inquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied.”
Later (on the same page) Kiefel J expressly approved the Tribunal's reasoning in holding that Mr Groth's circumstances were not out of the ordinary when Pt 3.14 of the Act (in which ss 1168 and 1184 are to be found) had the same effect on him as it did on other persons qualified to receive the disability support pension. Her Honour added:
“It [The Tribunal] went on to find that his circumstances and those of his family although difficult did not constitute hardship and they could not be said different from other pension recipients.””
19. Whereas a person who has been diagnosed as being an alcoholic and/or a compulsive gambler may be able to demonstrate special circumstance, (see eg Re SRL and Secretary, Department of Social Security (unreported Tribunal decision 12288 of 14 October 1997) the addiction must be such that it can truly be said that the person is subject to a state where his mind is overborne by the addiction.
20. In this Applicant’s case whereas psychiatrist Dr Robertson opines that the Applicant suffers from alcohol abuse and dependency within the parameters of the Diagnostic Statistical Manual volume IV and also from pathological gambling we do not accept this opinion in its entirety.
21. A reference to volume IV of the DSM at page 196 makes it clear that Alcohol Abuse is a different disease classification from Alcohol Dependence. The authors state "when these problems are accompanied by evidence of tolerance withdrawal or compulsive behaviour related to alcohol use a diagnosis of Alcohol Dependence rather than Alcohol Abuse should be considered".
22. Given the history the Applicant gave to us together with his evidence that he was able to stop drinking entirely by his own self will, we are not convinced that the Applicant was suffering from Alcohol Dependence as opposed to Alcohol Abuse.
23. In his report Dr Robertson states "given his level of alcohol consumption he would almost certainly need a period of admission to hospital in order to detoxify safely and to undergo thorough medical examination". As stated the Applicant's evidence is that this did not happen. It may well be that he exaggerated the level of his alcohol consumption to Dr Robertson, but as stated above that he was able to stop drinking without recourse to any detoxification programs suggests his illness was better described as Alcohol Abuse DSM code 305.00.
24. In accepting this diagnosis we also accept that a person who abuses alcohol may be inhabited in his behaviour. In the Applicant's case it is entirely feasible that while under the influence of alcohol he gambled but there is no evidence that his drinking alcohol was in any way compulsive behaviour, or a dependence upon alcohol as opposed to abusing alcohol when he drank.
25. Similarly whilst Dr Robertson refers to the Applicant suffering from Pathological Gambling there is nothing in Dr Robertson's report or in the evidence before us that would indicate that the Diagnostic Criteria for Pathological Gambling in DSM IV have been met.
26. More particularly there is no evidence that the Applicant's gambling was in any way compulsive in the sense that his will was overborne but rather it was a case of disinhibited behaviour while under the influence of alcohol.
27. At the time of his action for his damages in the District Court the Applicant was examined by two psychiatrists. Nothing is said in the judgement of Herron DCJ as to any sequelae from the work accident resulting in alcohol dependence or abuse, or pathological gambling. As the psychiatric reports before the District Court were not tendered in these proceedings we draw the inference that they are silent as to alcoholism or gambling.
28. Having regard to all the material before us we are not satisfied that there is sufficient evidence to say that the Applicant's alcoholism and gambling were matters beyond his control so as to constitute special circumstances. There is no suggestion as in Re SRL supra of brain injury leading to incapacity to adequately manage his affairs.
29. The Applicant has also expended money in two trips to Greece. Whereas cultural factors no doubt played a part in these trips the expenditure namely some $50,000.00 seems excessive. We accept that there may have been pressure upon the Applicant to contribute towards a mausoleum for his father but he must have been aware that any such contribution could only be made having regard to his own financial circumstance. It is not the place of the Australian taxpayer to rescue the Applicant from the consequences of ill thought out largess to his family and relatives in Greece.
30. As stated earlier the Applicant has at least a half interest in his house near Gosford and as pointed out in Re Hajar and Secretary, Department of Social Security 16 ALD 716 the Tribunal is reluctant to find special circumstances when there exists an unencumbered asset such as a house. The Applicant is not destitute, as it would appear that his eldest son, at present, is content to contribute towards his support.
31. We find that special circumstances do not exist in the case of the Applicant so as to enable the Tribunal to treat the whole or any part of the compensation payment as not having been made.
32. Subsequent submissions by the Respondent were to the effect that the preclusion period is of 392 weeks starting 12 February 2000 and ending 19 August 2007. The Applicant's solicitors did not lodge any submissions in reply to the Respondent submissions. We are therefore satisfied that the period nominated in the Respondent's Statement of Facts and Contentions (Exhibit R1) and re-explained in the subsequent submission is correct.
33. The decision under review is SET ASIDE and this matter remitted to the Respondent with the direction that the Applicant Renos Stavrakis is subject to a preclusion period pursuant to sections 17 and 1165 of the Social Security Act 1991, as in force at 9 April 2001, for the period 12 February 2000 to 19 August 2007.
I certify that the 33 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen and Mr S Webb, Member.
Signed: .......................................................................................
AssociateDate of Hearing 16 December 2002
Date of Decision 6 March 2003
Counsel for the Applicant Mr J Ingram
Solicitor for the Applicant Brydens Law OfficeAdvocate for the Respondent Ms A Garcia, Advocacy and Administrative Law Team
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