Reardon and Secretary, Department of Family and Community Service S
[2004] AATA 90
•3 February 2004
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2004] AATA 90
ADMINISTRATIVE APPEALS TRIBUNAL )
) No S2003/443
GENERAL ADMINISTRATIVE DIVISION ) Re CRAIG REARDON Applicant
And
SECRETARY, DEPPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal Deputy President D G Jarvis Date3 February 2004
PlaceAdelaide
Decision The Tribunal decides that the decision under review be set aside and in substitution therefor so much of the compensation payment received by the applicant shall be treated as not having been made such that the preclusion period ends on 19 December 2003 instead of 10 December 2004.
D.G. Jarvis
(Signed)
Deputy President
CATCHWORDS
SOCIAL SECURITY - lump sum compensation - preclusion period - purchase of residence, investment properties and shares - subsequent separation and inability to realise assets pending Family Court proceedings - inability to find employment – dependency on assistance from charities - special circumstances found to exist - preclusion period varied – consideration of extent of variation of preclusion period
Social Security Act 1991 s 1169(1) and s 1184K
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Secretary, Department of Social Security v Smith (1991) 30 FCR 56
Re Ivovic and Director-General of Social Services (1981) 3 ALN 95
Re Unger and Secretary, Department of Family and Community Services [2003] AATA 390
Re Lukic and Secretary, Department of Social Security (AAT 6944 6 May 1991)
Re Secretary, Department of Social Security and Norman (AAT 13005 22 June 1998)
Re Bell and Secretary, Department of Family and Community Services [2003] AATA 732
Re Secretary, Department of Family and Community Services and McMahon (2003) 73 ALD 577
Re Murray and Secretary, Department of Family and Community Services [2003] AATA 641
Re Mundine and Secretary, Department of Family and Community Services [2002] AATA 205
REASONS FOR DECISION
3 February 2004 Deputy President D.G. Jarvis Introduction
1. The applicant settled a compensation claim against his employer for a lump sum payment, and Centrelink imposed a compensation preclusion period from 11 March 2000 to 10 December 2004. The applicant’s circumstances changed, and the applicant applied on 11 March 2003 for Centrelink to treat the whole or part of his compensation payment as not having been made due to special circumstances. A Centrelink officer rejected the application. This decision was affirmed by an authorised review officer on 28 April 2003 and by the Social Security Appeals Tribunal (“SSAT”) on 23 June 2003.
2. On 18 July 2003 the applicant applied to this Tribunal for review of the decision of the SSAT. He was unrepresented. The respondent was represented by Mr Christian Goldsworthy, departmental advocate.
3. The applicant gave oral evidence and tendered the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the “T” documents, exhibit A1). The applicant also tendered other documentary evidence which will be referred to below. After the hearing certain further documents were supplied to the Tribunal and were tendered by consent. Where relevant, those documents will be referred to below.
Issues
4. The issues before the Tribunal are whether there are special circumstances and if so, whether the Tribunal should exercise the discretion to treat the whole or part of the compensation payment as not having been made.
5. For the reasons referred to below, I have concluded that there are special circumstances in this matter and that a proportion of the applicant’s compensation payment should be treated as not having been made such that the preclusion period ends on 19 December 2003 instead of 10 December 2004.
Background
6. The following background facts are not in dispute. The applicant is aged 34, having been born on 21 May 1969. He was injured in an accident at work in October 1995 and as a result, the index finger and middle finger of his right hand were amputated. He settled a claim for compensation for a lump sum payment of $385,000 inclusive of costs and disbursements (see exhibit A10). After deducting the amount repaid for periodic compensation, $212,946.11 was used to calculate a compensation preclusion period. This resulted in a compensation preclusion period from 11 March 2000 to 10 December 2004. The applicant was notified of this preclusion period by a letter dated 23 May 2000 (T5), and acknowledged becoming aware of the preclusion period at about that time.
7. In an earlier application in 2002 the applicant had unsuccessfully sought a review of the preclusion period and a variation of it under the special circumstances provision of the Social Security Act 1991 (the “Act”). The decision rejecting that application was affirmed by an authorised review officer on 18 June 2002 and also affirmed by the SSAT on 22 August 2002. The present proceedings arise from the rejection by the SSAT of a subsequent application, namely the application made on 11 March 2003.
Legislation
8. Section 1169(1) of the Act provides:
“1169(1) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.”
Section 1184K(1) of the Act provides:
“For the purposes of 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.”
Section 17(1)(c) of the Act provides that “compensation affected payment“ means (inter alia) “a social security benefit”, and s 23(1)(aac) defines this expression to mean (inter alia) Austudy payment or Newstart Allowance. The applicant previously applied for a sickness allowance which was denied, and on 14 January 2004 he lodged a claim for a Newstart Allowance (exhibit A6).
Evidence and Findings
9. I make the following findings on the evidence of the applicant, which I accept. After the applicant had resolved his compensation claim, the lawyer acting for him in that matter referred him to an accountant for advice as to the investment of the lump sum compensation paid to him. Acting on the accountant’s advice, the applicant purchased a home at Modbury North for himself and his family and two investment properties, at Klemzig and Elizabeth South respectively. The applicant and his family moved into the home at Modbury North and this was freehold. He raised money from the ANZ Bank to purchase the two investment properties, and these borrowings were secured by a mortgage over the investment properties. At the time of the proceedings in the Tribunal in 2002, the Modbury North property and the Klemzig property were each valued at about $130,000, and the Elizabeth South property was valued at about $50,000. The applicant expects that those properties have gone up in value since then, but he is uncertain by how much. The properties were purchased in the joint names of the applicant and his wife.
10. The applicant also used part of his compensation payment to purchase shares in several companies in the joint names of himself and his wife. He then traded in shares on the internet. At first his share portfolio increased in value, but following the events of 11 September 2001 (that is, the terrorist attacks on the World Trade Centre and the Pentagon) the value of the shares fell, and he then sold his shares with the exception of two particular holdings. Those two holdings fell substantially in value. The applicant hoped that they would recover, but they did not. He sold one of those holdings in about May 2002 for only $5,000, incurring a loss of about $25,000. He still owns the other holding (which are shares in a mining company) but has been advised that they are valueless.
11. The applicant said that in deciding on the investments he made, he thought that he and his wife could manage on the income which his wife was receiving, which came to about $500 per week and comprised social security benefits. He said that their house was fully paid for and income was supplemented a little by the income from the investment properties. The applicant also found work as a casual service station attendant and until 20 May 2002, when he lost his job unexpectedly, he earned around $380 gross per week (T13, page 25).
12. However, the applicant and his wife separated in May 2002, and he said that he expected to be divorced on the day following the hearing. He is involved in contested proceedings in the Family Court for a property settlement and access to his four children. He has changed solicitors in the course of that dispute and as a result of being unable to meet his previous solicitor’s bill, a caveat has been placed upon one of the properties and he now owes in excess of $3,000. The case is expected to be listed for hearing late this year or next year, but in the meantime, the applicant intends to seek interim orders for access. Since the separation, his wife has continued to live in the matrimonial home with the children.
13. After the parties separated the applicant lived with his parents until early in September 2002. His mother is aged 65 and his father is aged 70. They are pensioners and do not work. Unfortunately, living with his parents resulted in increasing tension between the applicant and his mother, which affected his mother’s health and his own health. The applicant’s mother frequently asked him what was happening as between him and his wife, and the resulting discussion would upset his mother, who suffers from high blood pressure. The applicant tendered a letter dated 12 January 2004 from Dr Stephen Klaric (exhibit A3), in which the doctor says that he has been treating the mother since 1996 and that in his opinion, if the applicant moved in with his parents, this could be stressful for the mother and have a detrimental effect on her health. The letter states ”She has high blood pressure which is at times difficult to control. The stress of having her son living with her could make her blood pressure go up even higher, possibly to very dangerous levels.” The applicant further said that due to the tension between him and his mother arising out of his matrimonial problems, his father “got on his back” because he was upsetting his mother.
14. At the request of the Tribunal and after the hearing, the applicant provided a letter dated 13 January 2004 from his present treating doctor, Dr Irene Faranda, and this was tendered as exhibit A5. In this letter, Dr Faranda expresses the opinion that moving back to his parents’ house would cause the applicant high levels of stress and an exacerbation of his underlying conditions. Dr Faranda also advises that the applicant has a history of back pain and depression. On 29 January 2004 the applicant provided a further letter to the Tribunal from his previous treating doctor, Dr David Jones, who treated the applicant while he resided with his parents. The letter was admitted as exhibit A9 and states that the applicant’s father had no concept of how depression affected his son, and this made the situation at home quite impossible for the applicant. Dr Jones writes that in his view, a return to the parents’ house would have a very negative effect upon the applicant’s medical problems, and his depression in particular.
15. The applicant previously owned a motor vehicle but sold this for $5,500 about four months ago. He paid over $2,000 off the mortgage to the bank, and repaid his mother about $1,300, which she had lent him. He used the balance of the money to pay other debts, including gas and electricity accounts.
16. The applicant has been assisted by the St Vincent de Paul Society and the Salvation Army, and more recently by two other charities because St Vincent de Paul were reluctant to help him any further. The charities now helping him give him food vouchers and have helped to meet his telephone account. The applicant supplied a letter from Ms Heather Churches of the Salvation Army which attests to his use of that charity (T17, page 47). He sometimes goes to his parents for meals, but only once every two to three weeks.
17. The applicant has tried to obtain employment and has obtained some labouring work on odd days. However, he has had trouble with his back since 1986 and after the labouring work he had been laid up with a bad back. He also tried telemarketing, but unsuccessfully.
18. He has investigated taking in a boarder. He placed advertisements in The Advertiser on two occasions, and these advertisements were repeated for four days on each occasion. As a result of each round of advertisements he received eight to ten responses. However, he finds it hard to trust people after the trouble he had in his relationship with his wife, whom he thought he knew. In cross-examination, he said that some of the applicants he interviewed were not of good character and he thought that having such a boarder would jeopardise his chance of getting access to his children. In his eyes none of the applicants were suitable. He also said that he intended to apply for interim orders for access to his children, and wanted to keep the other two bedrooms in his three-bedroom house available for his children. His distrust of people meant that he did not want to have a boarder in his house if he succeeded in obtaining access to his children, and he said that it would not always be possible for him to keep his children under close supervision if there was a boarder there. It was evident that establishing and maintaining contact with his children is important to the applicant.
19. In cross-examination it was suggested that the applicant’s efforts to find employment were less than satisfactory, but the applicant said that he had difficulties in obtaining employment due to his back injury, the stigma of his hand injury, and because he was depressed at his general situation. He also said he had cut down the hours of his previous employment at about the time of his separation, because he thought that his previous hours were part of the reason why his wife had left him. However, after that his employer put him off and said that the applicant was not suitable for the work he was doing.
20. The applicant has endeavoured to obtain an order from the Family Court for the sale of the investment properties, but his wife has opposed this and he has not been able to obtain any such order from the Family Court. The complexity and status of the proceedings in the Family Court is confirmed by exhibit A2, a letter from the applicant’s solicitors which relates to those proceedings. The matter is further complicated because his wife’s father claims that he paid a deposit on the investment properties and claims an interest in them. His wife’s father is living in the Elizabeth South property, and the applicant thinks that the father is paying $120 per week rent. He further thinks that his wife has paid about half of the rent received off the mortgage, but has kept the remaining half for herself. The ANZ Bank has served on the applicant notices dated 19 December 2003 demanding payment of arrears by 19 January 2004. A copy of the notices were tendered and admitted as exhibit A4. A further letter from the ANZ Bank was provided to the Tribunal on 29 January 2004 and was tendered as exhibit A7. This letter also makes it clear that the applicant is in arrears and therefore subject to the bank’s usual recovery action, which includes the right of foreclosure and sale.
21. The applicant said that he intends to apply for Austudy to enrol for a course to qualify for a job which will not involve physical work. He has thought of enrolling for accounting or bookkeeping. He left school at year 10 but studied some year 11 subjects part time. He has been told by Centrelink that he is ineligible for Austudy because of the preclusion period.
22. After the hearing, on 29 January 2004, an officer of Welfare Rights Centre (SA) Inc sent a facsimile to the Tribunal on behalf of the applicant enclosing a statement by the applicant giving reasons why he did not submit a new claim for Newstart Allowance when he lodged the application in March 2003 to truncate the preclusion period due to special circumstances (that being the application which ultimately gave rise to the present proceedings in the Tribunal). In this statement, which was tendered as exhibit A8, he says that when lodging that application, he asked the social worker (and I infer from this statement that the social worker was an employee of Centrelink) about putting in a new claim, but she said there was no point as his appeal was likely to be unsuccessful. The facsimile states that the applicant believes that in these circumstances there has been defective administration, and he hopes that a suggestion for further action may be made to Centrelink regarding this. The facsimile further records that following the hearing in this Tribunal, the applicant submitted a new claim for benefits pending the Tribunal’s decision, and a copy of a notice from Centrelink dated 14 January 2004 confirming his intention to make this claim was admitted as exhibit A6.
Application of S1184K
23. The concept of special circumstances, which must be found to exist before the discretion conferred by s 1184K of the Act is enlivened, was considered in Re Beadle and Director-General of Social Security (1984) 6 ALD 1. In this case the Tribunal was dealing with an application under a different section of the Act which also, however, involved a consideration of whether special circumstances existed. Toohey J said (at page 3):
“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases.. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”
In the same case on appeal ((1985) 7 ALD 670 at 674), the Full Federal Court reiterated the need to avoid limiting the scope of what might constitute special circumstances when it explained:
“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 a later case, Groth v Secretary, Department of Social Security (1995) 40 ALD 541, at page 545, Keifel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstance “would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case …. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
In Riddell v Secretary, Department of Social Security (1993) 42 FCR 443, the Full Court of the Federal Court said at page 450:
“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”
24. It is also necessary to take into account the interests of the community whose needs must be met from a finite budget allocation for social security measures, as mentioned by Von Doussa J in Secretary, Department of Social Security v Smith (1991) 30 FCR 56 at paragraph 61, and that in the exercise of a special circumstances discretion such as that conferred by s 1184K, the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends of objects which are conformable with the scope and purpose of the Act (Re Ivovic and Director-General of Social Services (1981) 3 ALN 95 at 97.4). In the context of s 1184K, reference should also be made to the approach of the Tribunal in Re Unger and Secretary, Department of Family and Community Services [2003] AATA 390, where at paragraph 37 the Tribunal cited the following extract from Re Lukic and Secretary, Department of Social Security (AAT 6944, 6 May 1991):
“…it is not the intention of the legislature that a recipient of compensation for incapacity to work should use that compensation to acquire assets and then also continue to receive a pension at public expense in respect of that incapacity for work.”
The Tribunal in Unger then referred to the decision in Re Secretary, Department of Social Security and Norman (AAT 13005, 22 June 1998) where the Tribunal determined that:
“This prevention of double dipping reflects the idea that the money is there to provide a person with income, not capital for investment.”
Consideration
25. Mr Goldsworthy on behalf of the respondent submitted that the applicant’s decision to speculate upon the share market was imprudent and extravagant. He also contended that the applicant should have set aside some of his compensation monies as income and further, he should fully explore any opportunities to rent out his Klemzig house or take in a boarder before seeking to rely upon the public purse. In submitting that the Tribunal should not exercise its discretion to reduce the preclusion period, Mr Goldsworthy relied on Re Unger and the extracts from other decisions cited in Unger (see paragraph 24 above). He also relied upon several decisions of the Tribunal where an applicant had expended the majority of their compensation monies on the acquisition of property. He referred to Re Bell and Secretary, Department of Family and Community Services [2003] AATA 732 which, however, can be distinguished from the present case as, at the time of that hearing, Mr Bell had placed his unencumbered house on the market and had access to the income of his de facto partner.
26. Mr Goldsworthy also referred to Re Secretary, Department of Family and Community Services and McMahon (2003) 73 ALD 577. That was a decision of the Tribunal in which Mr McMahon used his compensation monies to pay the mortgage on the house that he jointly owned with his wife. Mr McMahon then separated from his wife and his son remained with him in the marital home. The Tribunal heard evidence from Mr McMahon that he used the remnants of his compensation payment to come to a property settlement with his wife and that the sale of the marital home was a possibility. Mr McMahon also had the support and financial assistance of his children and had not had to resort to charities in order to meet day-to-day expenses. Mr Goldsworthy also pointed to the decision of the Tribunal in Re Murray and Secretary, Department of Family and Community Services [2003] AATA 641 in which matter Mrs Murray had expended her compensation monies on a house, new furniture and an expensive second hand car. At the time of the hearing she was able to sell her assets and was also in receipt of a carer’s allowance and practical and financial assistance from her children. The Tribunal considered that her situation was difficult but not unusual, uncommon or exceptional. As explained below, the applicant in the present matter is in a situation in which he cannot realise his assets and is unable to come to a property settlement other than by court order. He is also unable to rely upon his family for assistance. Mr McMahon and Mrs Murray would appear to have had options not presently available to the applicant in the matter before me.
27. Mr Goldsworthy relied upon Re Mundine and Secretary, Department of Family and Community Services [2002] AATA 205. In that case Mr Mundine had purchased a house with the majority of his compensation monies at a time when he and his wife intended that their family would survive upon the social security income of his wife until the end of the preclusion period. However, after they purchased the house, Mr Mundine and his wife separated. Notwithstanding their separation, Mr Mundine and his estranged wife went on to sell the house, purchase another one in joint names and ultimately sell again in order to jointly purchase land on which they decided to build a house. Mr Mundine made a series of decisions throughout the preclusion period to purchase assets when he could have utilised his portion of the sale proceeds for his maintenance until he became eligible for social security payments. In that case, unlike the present one, the applicant was able to realise his assets and also reside rent free with his mother. Mr Mundine was found to be in merely straitened financial circumstances and was the victim of his own poor decision making, whereas the present applicant is unable to realise his assets and is at serious risk of being homeless in the very near future.
28. In the present matter, I find that whilst the applicant has assets in the form of the Modbury, Klemzig and Elizabeth South properties, those assets are jointly owned and he is not able to realise them until the Family Court case is determined. The applicant is in the unusual position of being unable to sell or even mortgage his assets, and I note that the applicant’s Family Law solicitor advised that the property dispute is unlikely to be resolved until late 2004 (see exhibit A2). In an attempt to derive rental income from the property presently inhabited by his father-in-law, the applicant has attempted to initiate eviction proceedings in the Residential Tenancies Tribunal. However, the applicant said that that Tribunal will not deal with the issue as the two landlords, being the applicant and his estranged wife, are in dispute. The applicant has sought re-employment with his previous employer and has made some attempts to gain work elsewhere, but has been unsuccessful due to the combined effects of his depression, back condition and the stigma attached to his hand injury. The respondent suggested that the applicant could derive some income from having a boarder reside with him or by moving in with his parents and renting out his present residence at Klemzig. However, the applicant has not taken in a boarder for the reasons outlined in paragraph 18 above. His only realisable asset, his car, has already been sold and the proceeds have been used. The applicant’s impecuniosity has made him dependent upon the help of various charitable organisations in order to purchase food and pay his telephone bills, and he cannot rely upon the assistance of his parents or move in with them again due to their own limited resources, poor health and the stress that the situation causes his mother (see paragraph 13 above). It is clear that the applicant finds himself in severe financial hardship and not merely straitened circumstances: see Director-General of Social Services v Hales (1983) 47 ALR 281.
29. The applicant has received a letter of demand and a default notice from the ANZ Bank as he has not met his mortgage repayments (see exhibit A4). He submitted that he will experience further hardship if the bank forecloses on his properties. The respondent correctly pointed out that the default notice and notice of demand do not identify which property or whether both properties are at risk of sale in the event of foreclosure. However, the applicant submitted, and in my opinion it follows as a matter of logic, that the Klemzig house would be sold before the Elizabeth house because the Klemzig house is worth more. Indeed, on the applicant’s estimate of the value of the houses, the Elizabeth house would not meet the outstanding mortgage of $99,752.14 and it seems reasonable to assume that the bank would sell the applicant’s residential home at Klemzig in order to meet the mortgage in its entirety. The letter from the ANZ Bank comprising exhibit A7 makes it explicit that, after identifying the Elizabeth South and Klemzig properties, “ANZ has the right to sell the above properties to cover arrears and collections are to follow its due course unless full clearance is made”(sic). The threat of foreclosure also renders the respondent’s suggestion that the applicant should rent out his present residential property or take in a boarder impracticable, and his concern to keep the property available for his four children to assist in his claim for access is, I think, reasonable. It is also unclear as to whether the applicant would be entitled to keep any rent he may receive from a tenant, or whether the situation with the mortgage or his Family Law dispute would require the monies to be paid elsewhere. If the bank does sell the Klemzig property, and the applicant is deprived of accommodation, then his financial situation is likely to become even more dire.
30. The applicant gave evidence about his back condition and depression. He explained that he can no longer engage in manual labour without incurring disabling back pain. In cross-examination he explained that he suffers from a loss of motivation as a result of his depression. Dr Faranda’s letter confirmed that the applicant has attended her practice since August 2003 and that he has a medical history of back pain and depression (see exhibit A5). I note the respondent’s submission that Dr Faranda does not have first-hand knowledge of the applicant’s mental and physical condition while he was residing with his parents because she commenced treating him after he had ceased living with his parents. However, this contention has, I think, been answered by the letter of Dr Jones referred to in paragraph 14 above. It is clear from that letter that the applicant consulted Dr Jones with depression and stress during the time that he resided with his parents. On the evidence before me I find that returning to his parents’ home would be likely to be most detrimental to the applicant, as well as to his mother.
31. The applicant explained to the Tribunal that he wishes to study in order to qualify for a non-labour intensive position. He did not complete his secondary education, having failed to complete year 11 at school, and wishes to pursue an education in book keeping or similar. While the applicant is not presently enrolled in any such course and would therefore not presently qualify for Austudy, it is appropriate for the applicant to re-train in order to find more suitable employment and this demonstrates the applicant’s desire to be independent of the social security system. I note that the applicant only has 11 months of his preclusion period remaining and it has been some 20 months since he separated from his wife. In my opinion, the applicant has utilised all available resources and investigated any options reasonably open to him. In particular, the applicant has been persistent in his attempts to gain access to his assets through the Family Court, but the complexity of that dispute has delayed its resolution either by consent or by trial.
32. The Tribunal is mindful of the need to approach the exercise of its discretion in a way that accords with the legislative intention of Parliament as outlined in the cases referred to in paragraphs 23 and 24 above. In considering whether the applicant’s situation amounts to special circumstances, it is relevant for the Tribunal to have regard to the manner in which the compensation monies were expended. The Tribunal notes that the applicant acted upon financial advice from an accountant in investing his compensation, and as a result, he purchased property and shares. He also acted in anticipation of ongoing income from his wife, and managed his shares profitably until his investments were adversely and unexpectedly affected by the events of 11 September 2001. He was, for a time, employed and in receipt of income, but unexpectedly put off in May 2002 after he reduced his hours. In any event, even if the investment in the shares had retained or even increased in value, the applicant had purchased the shares jointly with his estranged wife, and it appears that he would be unable to realise the shares until the finalisation of his Family Law dispute. This is not a situation in which the applicant acted in an irresponsible or reckless manner, and the present matter is in my view distinguishable from the other decisions relied on by the respondent.
33. In summary, I have concluded that the combination of the applicant’s circumstances, namely his severe financial hardship, the prospect of imminent foreclosure by the bank, the inability of the applicant to realise his investment properties, the complexity of the Family Law case in which he is involved, the absence of any family support and his poor physical and psychological health amount to circumstances that can be properly described as unusual, uncommon or exceptional.
34. In applying s 1184K(1) of the Act, it is also necessary to consider the extent of the compensation payment which should be treated as not having been made in the special circumstances of this matter. On the evidence before me, I think that the applicant’s circumstances were less severe at a stage earlier than at the time of the hearing before me when, for example, he still owned his motor vehicle and therefore had the potential to realise that asset. However, it appears from exhibit A7 that the principal loan from the ANZ Bank was 63 days in arrears as at 20 January 2004, and two other smaller loans from the bank were in arrears by 97 days and 96 days respectively. As mentioned above, the bank served demand notices dated 19 December 2003 on the applicant, and on the evidence before me there was no prospect that the applicant would have been able to find the arrears demanded in those notices. I consider that from that date onwards there would be no basis on which he could reasonably have made a commitment to any possible boarder or tenant. Further, by that date all of the other circumstances to which I have referred above existed. I accordingly decide that so much of the compensation payments should be disregarded so as to end the preclusion period on 19 December 2003.
35. As mentioned in paragraph 22 above, the applicant has indicated that he wishes to make a claim arising from defective administration arising from his assertion that he was dissuaded from lodging a claim for social security payments in March 2003. If the applicant wishes to pursue such a claim, he could do so pursuant to the Compensation for Detriment caused by Defective Administration Scheme. There is insufficient evidence before me to express any view on any such claim, and any such claim cannot, of course, be dealt with in the present proceedings.
36. For the above reasons I decide that the decision under review be set aside and in substitution therefor so much of the compensation payment received by the applicant shall be treated as not having been made such that the preclusion period ends on 19 December 2003 instead of 10 December 2004.
I certify that the 36 preceding paragraphs are
a true copy of the reasons for the decision herein of
Deputy President D G JarvisSigned: .......................................................................................
N. Quirke Associate
Date/s of Hearing 12 January 2004
Date of Decision 3 February 2004
Counsel for the Applicant In Person
Solicitor for the Applicant -
Advocate for the Respondent Mr C Goldsworthy
1
6
0