Secretary, Department of Employment and Workplace Relations v Anastasiadis
[2007] AATA 1065
•16 February 2007
Administrative Appeals Tribunal
INTERLOCUTORY DECISION AND REASONS FOR INTERLOCUTORY DECISION [2007] AATA 1065
ADMINISTRATIVE APPEALS TRIBUNAL )
) N° V2006/1049
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY,
DEPARTMENT OF EMPLOYMENT
AND WORKPLACE RELATIONSApplicant
And
ARTHUR ANASTASIADIS
Respondent
INTERLOCUTORY DECISION
Tribunal Egon Fice, Member Date16 February 2007
PlaceMelbourne
Decision The Tribunal refuses to grant the application to stay the implementation of the decision of the Social Security Appeals Tribunal dated 21 September 2006.
(sgd) Egon Fice
Member
STAY APPLICATION – real prospects of success – review rendered nugatory – evidence to support application – debt not recoverable at law – financial hardship – delay in implementing SSAT decision
Administrative Appeals Tribunal Act 1975
Social Security Act 1947
Social Security Act 1991
Social Security (Administration) Act 1999
Auckland Harbour Board v R [1924] AC 318
Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220
Re Commonwealth of Australia and Quirke (1986) 9 ALD 92
Re Dart and Director-General of Social Services (1982) 4 ALD 553
Re Delkou and Repatriation Commission (1985) 8 ALD 454
Re Farmer and Secretary, Department of Social Security (1993) 31 ALD 262
Re Labrador Liquor Wholesale Pty Ltd and CEO of Customs [2006] AATA 485
Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344
Re Secretary, Department of Workplace Relations and Nicholas [2006] AATA 497
REASONS FOR INTERLOCUTORY DECISION
16 February 2007 Egon Fice, Member 1. Following an injury which Mr Arthur Anastasiadis suffered at his place of work in March 2003, he lodged a claim for a disability support pension (DSP) with Centrelink. Centrelink is the service delivery agency for the Secretary, Department of Employment and Workplace Relations (the Secretary). Centrelink rejected his claim. Mr Anastasiadis sought a review of the decision by a Centrelink authorised review officer (ARO). The ARO affirmed the primary decision. Mr Anastasiadis then sought a review of the decision by the Social Security Appeals Tribunal (SSAT).
2. On 21 September 2006 the SSAT set aside the decision of the ARO and granted Mr Anastasiadis the DSP. The Secretary filed an application with the Administrative Appeals Tribunal (AAT) for review of the SSAT decision. The Secretary also filed an application for a Stay of the operation or implementation of the SSAT’s decision pursuant to s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act).
3. At the hearing of the application for a Stay, which was conducted by telephone, I made an oral decision refusing to grant the Stay. These are my reasons for doing so.
GROUNDS FOR APPLICATION
4. The Secretary, in his request for an order under s 41(2) of the AAT Act, set out the following grounds for making the application that:
(a) the substantive application has real prospects of succeeding;
(b)the implementation of the decision may render review by this Tribunal nugatory;
(c)if the Stay Order is not granted the Department of Employment and Workplace Relations may have difficulty recovering, or may be unable to recover, any overpayment should the Tribunal find in favour of the applicant. Later recovery of an overpayment may also occasion greater hardship to the respondent; and
(d) the respondent is presently in receipt of newstart allowance.
POWER TO GRANT A STAY
5. Section 41(2) of the AAT Act empowers the Tribunal to grant a Stay after taking into account the interests of any persons who may be affected by the review, where it is considered appropriate for the purpose of securing the effectiveness of the hearing and the determination of the application for review. It should also be borne in mind that the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision (s 41(1) AAT Act).
6. The decision whether to grant a Stay is entirely discretionary. It follows that an applicant does not have an automatic right to a Stay. Given the effect of s 41(1) of the AAT Act, it must necessarily be inferred that the reviewable decision, the decision of the SSAT in this case, is correct until proven otherwise. Further, the general principle applied by the courts that, prima facie, the successful party has the right to the fruits of a judgement should also apply in the case of Tribunal decisions. In the courts, an applicant for a Stay is required to show that there are special circumstances which would justify the stay of execution of the judgement.
7. The matters which are considered by the courts to constitute special circumstances are similar to those enunciated by the Tribunal when dealing with Stay applications. Deputy President G.D. Walker in Re Secretary, Department of Workplace Relations and Nicholas [2006] AATA 497 at [21] and Senior Member B.J. McCabe in Re Labrador Liquor Wholesale Pty Ltd and CEO of Customs [2006] AATA 485 at [5] set out the following factors which may need to be considered in determining whether a Stay should be granted.
(a)The prospects of success or the merits of the applicant’s case on review.
(b)Whether there will be prejudice to the parties or anyone else if a Stay were not granted.
(c) Whether it is in the public interest to grant a Stay.
(d)That the review application, if successful, would be rendered nugatory or pointless if the Stay was not granted.
8. Although the Tribunal is not bound by the rules of evidence (s 33(1)(c) AAT Act), and therefore there is no burden of proof on either party, quite clearly the applicant must provide to the Tribunal sufficient evidentiary material to enable it to exercise its discretion in accordance with law. In other words there must be sufficient evidence before the Tribunal to enable it to come to a conclusion, after considering the matters referred to above (or the factors relied on by the applicant), that the discretion ought to be exercised in favour of the applicant for the stay.
9. In this Stay application the applicant produced no such evidentiary material and he relied solely on oral submissions made by counsel. In my view, that approach will rarely be satisfactory. It may be sufficient where there is a patent error in the reviewable decision, but otherwise some evidence would need to be produced in order to have the Tribunal properly exercise its discretion after considering the factors relied on by the applicant; particularly if there is some dispute about those factors.
PROSPECTS OF SUCCESS
10. When considering the prospects of success of an applicant in the course of a Stay application, it is not the role of the Tribunal to conduct a preliminary hearing of the substantive matter based on the evidence given in the SSAT. As Davies J (President) said in Re Dart and Director-General of Social Services (1982) 4 ALD 553 at 555:
It is not convenient or appropriate that on this application for a stay there should be any preliminary trial of the issues that will ultimately have to be considered by the Tribunal.
11. However, it is relevant for the Tribunal to consider whether there exist facts and circumstances which, if established at the substantive hearing, would provide a basis for the Secretary’s success in the review application; or whether there are points of law raised which, if sustained, will lead to that conclusion (see Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 at 95). As there was no further evidentiary or factual material produced to support the applicant’s claim at the hearing of this application, the applicant must demonstrate that the decision of the SSAT was wrong in law. In other words, the applicant must demonstrate that the SSAT’s decision was obviously incorrect on its face (see Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344 at 346-347).
12. The Secretary directed me to three medical opinions which it was claimed supported his case. He also submitted that the wrong table was used when assessing Mr Anastasiadis’ degree of permanent impairment. However, there were a number of other medical opinions to the contrary. The SSAT in its reasons for the decision said that it had:
… carefully considered all the medical information in this case in order to draw its own conclusions as to whether Mr Anastasiadis has the requisite level impairment for a disability support pension.
13. There can be no suggestion that the SSAT did not consider the medical reports now referred to by the Secretary. Clearly, the SSAT preferred the contrary opinions of other medical practitioners. It does not assist the Secretary to simply point out that there are contradictory medical opinions that he prefers. That is usually the case in such matters. The fact that the SSAT preferred the opinions of other medical practitioners to those relied on by the Secretary does not constitute an error. It is not for me at this stage to determine which medical opinions should be preferred. Nor was the Secretary able to point to any obvious error in the SSAT decision. Therefore, it is not possible to say that the Secretary’s prospects of success in its application for review of the decision l are any different to what they were before the SSAT.
PREJUDICE TO PARTIES IF STAY NOT GRANTED
14. The Secretary submitted that if a Stay were granted and Mr Anastasiadis were to receive DSP payments in compliance with the SSAT decision, rather than the newstart allowance which he is currently receiving, and if the Tribunal were to then set aside the SSAT decision, the DSP payments Mr Anastasiadis had received would not be recoverable at law. The Secretary referred to the Tribunal decisions in Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344 and Re Farmer and Secretary, Department of Social Security (1993) 31 ALD 262.
15. In Collins, Deputy President S. Forgie said at [24]:
There is, he said, a legal argument that moneys paid pursuant to the SSAT's decision may not be recoverable as a matter of law. This point was not argued in any depth at the hearing and it was not an appropriate occasion on which to do so.
Nevertheless, the Deputy President looked at a number of cases in which the Tribunal had dealt with the recoverability at law of overpayments made under valid determinations, indicating that it was clear from those cases that there may be a real question whether such overpayments could be recovered. The Deputy President referred to the decision of Deputy President A. Hall in Re Delkou and Repatriation Commission (1985) 8 ALD 454 where the Tribunal concluded that … there is a very real question as to whether the moneys maybe recovered as a question of law. Deputy President Hall also considered that it was inappropriate, in the context of a Stay application, that he should endeavour to resolve that question. He simply held that he was not prepared to treat the doubts expressed by the Repatriation Commission regarding the recoverability at law of an overpayment as completely unfounded. Although Deputy President Forgie also concluded that it was not appropriate for her, in the context of a hearing of an application for a Stay Order to fully explore the question, she noted that there was a very real question as to whether the moneys may be recovered as a question of law.
16. In Farmer, Deputy President P.W. Johnston was required to determine whether there was a recoverable debt in the following circumstances:
(a)on 6 December 1991 a delegate of the Secretary decided that because the applicant received a substantial compensation payment for injury, he was precluded from receiving the DSP until 3 April 1992;
(b)on 7 February 1992, the SSAT set aside the delegate’s decision and decided that part of the compensation payment should be treated as not having been made and therefore the preclusion period terminated on 12 November 1991, resulting in arrears of DSP being payable to the applicant;
(c)on 20 March 1992, prior to the Tribunal hearing the Secretary’s application, the Tribunal ordered a Stay of the operation of the SSAT decision subject to the condition that the Secretary pay to the applicant one half of the amount of the DSP which was then owing to the applicant under the decision of the SSAT;
(d)on hearing the Secretary’s application before the Tribunal on 15 June 1992, the SSAT decision was set aside and the decision of the delegate affirmed;
(e)following the Tribunal’s decision, a delegate of the Secretary decided to recover the moneys which the Tribunal ordered to be paid to the applicant in the course of the Stay application hearing by withholding a sum from the applicant’s fortnightly current DSP payments;
(f)the applicant appealed the decision of the delegate and the SSAT decided that it had jurisdiction to review the method of recovery and affirmed the delegate’s decision to recover the debt by withholding moneys from the applicant’s fortnightly DSP payments; and
(g)the applicant sought review of the SSAT decision regarding debt recovery whereupon the Tribunal decided that the applicant did not owe a debt to the Commonwealth.
17. At the time Farmer was decided, the relevant section of the Social Security Act 1991 (the Act) was s 1223(1) which provided that if:
(a)an amount had been paid to a person by way of pension, benefit or allowance under the Act; and
(b)the recipient was not qualified for the pension, benefit or allowance, and the amount was not payable to the recipient;
the amount so paid was a debt due to the Commonwealth and was recoverable by the Commonwealth by means of deductions against that person’s current pension, benefits or allowances under the Act, by legal proceedings or by a Garnishee Order.
18. Because Mr Farmer remained qualified for the pension during the preclusion period, s 1223(1) did not apply to him. It was probably also open to the Tribunal to come to the conclusion that the moneys sought to be recovered as a debt due to the Commonwealth were not in fact paid to Mr Farmer under the Act. Rather, they were paid pursuant to the order made by the Tribunal under s 41(2) of the AAT Act.
19. In my view, neither Collins nor Farmer supports the Secretary’s argument that should DSP payments be made to Mr Anastasiadis as a result of the SSAT decision, if the Tribunal subsequently sets aside that decision and reinstates the decision made by the Secretary, the amounts so paid are not recoverable as a debt due to the Commonwealth.
20. There seems to be some uncertainty about whether payments made under a valid determination of the SSAT, where the Tribunal refuses a Stay application under s 41(2) of the AAT Act, and where subsequently the Tribunal sets aside the decision of the SSAT and the Secretary then seeks to recover the payments made pursuant to the SSAT determination, are recoverable at law. It is common for the Secretary’s representatives in these cases to rely in particular on the decision of Deputy President Hall in Delkou. There are considerable problems in following this approach.
21. Delkou was a Repatriation Commission matter which was decided in 1985, before the introduction of the Act.As he did in Re Buhagiar and Director-General, Social Services (1981) 4 ALD 113, Deputy President Hall discussed common law principles regarding the recovery of moneys paid under a valid and subsisting determination. At that time, there was no statutory power in the Repatriation Act (or in the 1947 Social Security Act for that matter) under which moneys paid under a valid and subsisting determination could be recovered.
22. However, the introduction of the Act, and in particular Parts 5.1 and 5.2, which deal respectively with overpayments, debt recovery and amounts recoverable under the Act, resulted in the creation of debt recovery provisions which excluded the common law methods of recovery. The later introduction of s 1222A made it clear that where an amount had been paid by way of social security payment, the amount is a debt due to the Commonwealth only if a provision of the Act expressly provided that it was a debt due to the Commonwealth. The Explanatory Memorandum to the Social Security Amendment (Budget and Other Measures) Bill 1996 provided some background:
The debt creation provisions in Part 5.2 of the Social Security Act provide that there is a debt under the Social Security Act only where a provision under Part 5.2 provides that there is a debt (section 1212A [sic]) this means that the debt creation provisions of the Social Security Act are expressed as a code, and exclude common law methods of recovery.
If, for some reason, a person is paid more than their correct entitlement and the circumstances in which the payment was made are not covered by a provision in Part 5.2, the amount is not recoverable.
23. Deputy President Johnston in Farmer at [39] pointed out that this provision had no parallel in the Social Security Act 1947. The Deputy President also correctly stated that it prevented a debt arising on any other basis than the application of the Act. He said that it excluded the possibility envisaged in Auckland Harbour Board v R [1924] AC 318 that payment of any moneys out of the consolidated revenue fund without parliamentary authority is unlawful and that an amount so paid is recoverable by the Government. He concluded:
Consequently, the possibility put forward by Mr Harris that there might be a debt recoverable by the Commonwealth at common law in the present circumstances is not tenable.
24. The language used in the current Part 5.2 section 1223(1) was introduced by an amendment set out in the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Bill 2000 (the Amendment Bill). It provides:
Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
25. Section 1223(1AB) of the Act, which was also introduced by the Amendment Bill and became effective in 2001, sets out some examples of when a payment should not have been made resulting in a person obtaining the benefit of the payment to which that person was not entitled. One of those examples is where, according to the provisions of the social security law, the person for whose benefit the payment was made was not qualified to receive the payment.
26. The Explanatory Memorandum to the Amendment Bill states that the social security law provides for the continuing effect of determinations – that is, a determination, once made, continues in effect until a further determination is made which changes the effect of the first determination. The Explanatory Memorandum also explains that when a determination is made in respect of a person’s social security payment, the provisions of the social security law provide for when that determination takes effect.
27. Section 152(1) of the Social Security (Administration) Act 1999 (the Administration Act) provides that, subject to s 152(2) and s 153(3), a decision of the SSAT comes into operation immediately on the giving of the decision. Section 152(2) provides that the SSAT may specify in its decision that the decision is not to come into operation until a later day specified in the decision and, if it does so, the decision comes into operation on the later day. Section 153(3) provides that subject to subsections (4) and (5), if the SSAT varies a decision under review or sets aside a decision under review and substitutes a new decision, the decision as varied or the new decision (as the case may be) has effect or is to be taken to have had effect on and from the day on which the decision under review has or had effect. Section 152(4) only applies where a person applies to the SSAT more than 13 weeks after notice was given for review of the decision and s 152(5) provides that the SSAT may declare that s 152(3) does not apply and s 152(1) and s 152(2) apply instead.
28. The result is that the SSAT decision will, unless an application has been made more than 13 weeks after notice was given of the original decision or where the SSAT has otherwise declared, become effective from the day on which the original decision had effect.
29. The Tribunal can only review a decision that has already been reviewed by the SSAT (s 181 of the Administration Act). A decision made by the Tribunal comes into operation immediately upon the giving of the decision (s 43(5A) of the AAT Act) unless the Tribunal specifies otherwise. Where the Tribunal varies a decision of the SSAT or substitutes its decision for the SSAT decision, that decision is deemed to be a decision of the SSAT and upon the coming into operation of the Tribunal decision, unless the Tribunal otherwise orders, it has effect or is deemed to have had effect on and from the day on which the decision of the SSAT has or had effect (s 43(6) of the AAT Act).
30. Therefore, if the Tribunal on review of an SSAT decision decides that the SSAT decision should be set aside, its decision takes effect on and from the day on which the SSAT made its decision. It follows that if the Tribunal finds that a person is not qualified to receive a social security payment, that finding will have retrospective effect. Therefore, any social security payments made pursuant to the SSAT decision must be payments made to a person who was not entitled to obtain those payments for the reason that they were not qualified to receive them. The result is that those payments are recoverable as a debt due to the Commonwealth under the Part 5.1 provisions of the Act.
31. The Secretary also submitted that he would have difficulty in recovering moneys paid to Mr Anastasiadis pursuant to the SSAT decision, if the SSAT decision was overturned by the Tribunal. The Secretary submitted that if he were successful before this Tribunal, Mr Anastasiadis may have to repay approximately $1,895.00. At the time of hearing Mr Anastasiadis was receiving newstart allowance of $420.90 per fortnight. For Mr Anastasiadis the difference between the newstart allowance and the DSP would be approximately $80.00 per fortnight. Mr Anastasiadis resides with his parents and there is no evidence that he has any assets other than a bank balance of $2.00.
32. In my opinion, although Mr Anastasiadis has no apparent assets which might give the Secretary some comfort in the event that recovery of DSP payments may be required, it is likely that he will continue to receive newstart allowance if his review before this Tribunal is unsuccessful. In that case, the Commonwealth may recover the debt pursuant to s 1231 of the Act by making deductions from his newstart allowance or any other social security payments which are paid to him. Those deductions can take into account any financial hardship that may be caused.
33. It follows that I am of the view that if the Stay Order is refused, the Secretary would not have difficulty in recovering either the arrears of payment or any ongoing payments of DSP.
REVIEW BY TRIBUNAL RENDERED NUGATORY
34. The High Court in Federal Commissioner of Taxation v Myer Emporium Ltd [No 1] (1986) 160 CLR 220 said, at 223, that a decision may be rendered nugatory:
… where for whatever reason, there is a real risk that it will not be possible for a successful appellant to be restored substantially to his former position if the judgment against him is executed: …
35. The Secretary submitted that if a Stay were refused, there is a real risk that the Secretary will not be able to recover any DSP paid in arrears should it succeed in its application for review before the Tribunal. However, as I have set out above, it seems to me that the amount of payments which may need to be recovered is relatively small and can be deducted by instalments from ongoing newstart allowance payments if required. There was no evidence put before me to indicate that there was a real risk that recovery would not be achieved.
FINANCIAL HARDSHIP
36. If a Stay were refused, Mr Anastasiadis would be paid approximately $500.00 per fortnight as apposed to the $420.00 per fortnight which he is receiving as newstart allowance. According to Mr Anastasiadis, he will suffer financial hardship if he is denied the additional $80.00 per fortnight; although he put no evidence before me regarding the extent of that financial hardship. Nevertheless, I accept that the prejudice occasioned to Mr Anastasiadis if a Stay is granted would be greater than that occasioned to the Secretary. This is due to his somewhat precarious financial position and the need to continue to meet living expenses.
CONCLUSION
37. After taking into account the factors advanced by the Secretary which the Tribunal should consider when deciding whether to exercise its discretion to grant a Stay of the operation or implementation of the SSAT decision made on 21 September 2006, I have reached the view that, on balance, a Stay should not be granted.
38. In the course of the hearing I also expressed concern about the fact that the Secretary had not implemented the SSAT decision, despite the fact that s 152(3) of the Administration Act provides that, where the SSAT has set aside a decision under review and has substituted a new decision, the new decision has effect or is taken to have had effect on and from the day in which the decision under review has or had effect.
39. While I understand that the Secretary will not implement a SSAT decision against which he intends to appeal and seek a Stay order because, to do so, would render the Stay application incompetent, my concern is that the delay between the SSAT decision and the hearing of the Stay application by this Tribunal may cause serious financial hardship to an applicant. For example, the SSAT decision in this matter was made on 21 September 2006 and the reasons for that decision were delivered on 4 October 2006. Centrelink’s Legal Services Branch received the SSAT decision on 4 October 2006. However, an application for a Stay Order under s 41(2) of the AAT Act was not lodged with the Tribunal until 2 November 2006, almost one month later. The matter was listed for a Stay hearing on 15 December 2006 but was vacated at the request of Mr Anastasiadis’ legal representatives. Because of the intervening Christmas holiday period, the Stay application was not heard until 19 January 2007. That has resulted in almost a four month delay between the date on which the original decision was made and the date on which I gave an oral decision regarding the Stay Application. In the meantime, although Mr Anastasiadis was entitled to the benefit of the decision of the SSAT from at least 4 October 2006, he has remained on newstart allowance and, most likely, has suffered some financial hardship as a consequence of the delay.
40. It seems to me that the delay between an SSAT decision favourable to a claimant and the hearing of a Stay application can be significantly reduced were the Secretary to file an application for review of the SSAT decision, and an application for a Stay Order, immediately following the SSAT decision. The Tribunal should then provide the earliest possible hearing date for the application for the Stay Order.
41. The burden on an applicant could also be reduced if the Secretary were to consider whether it is appropriate to seek a Stay of ongoing social security payments from the date of the SSAT decision as well as any arrears of payments which might become owing to the applicant as a result of the SSAT decision. Although there may be good reason to seek a Stay of payment of arrears owed to the applicant, particularly where the sum involved is substantial and there are serious questions about its recoverability, the same problem may not arise in respect of ongoing payments. Often, particularly where DSP payments are involved, the applicant will be receiving another form of social security payment and the difference between the payments may be relatively small, although significant to an applicant who relies solely on social security payments to survive. If the Tribunal subsequently sets aside the SSAT decision, there should be no difficulty in recovering any overpayment.
I certify that the forty-one [41] preceding paragraphs are a true copy of the reasons for the decision herein of:
Egon Fice, Member
Signed: Ursula Noyé
Clerk
Dates of Hearing: 19 January 2007
Date of Decision: 16 February 2007
Advocate for the Applicant: Mr T. Noonan, Centrelink Legal Services
Advocate for the Respondent: Ms R. Mills, Victoria Legal Aid
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