Secretary, Department of Family and Community Services v Edwards
[2000] FCA 1645
•16 NOVEMBER 2000
FEDERAL COURT OF AUSTRALIA
Secretary, Department of Family & Community Services v Edwards
[2000] FCA 1645ADMINISTRATIVE LAW - whether the Secretary is prevented by s 1163(9) the Social Security Act 1991 (Cth) from taking into account, in making a decision under s 1184(1) of the Act, the fact that there is no causal connection between the circumstances giving rise to a person’s entitlement to social security benefits and compensation for injury
Administrative Appeals Tribunal Act 1975 (Cth) s 44
Social Security Act 1991 (Cth) ss 17, 1163, 1165, 1166, 1179, 1184Secretary to the Department of Social Security v Siviero (1986) 13 FCR 431 referred to
Re Secretary, Department of Social Security and Lee (1993) 30 ALD 250 discussed
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570 cited
Secretary, Department of Social Security v a'Beckett (1990) 26 FCR 349 cited
Secretary, Department of Social Security v Smith (1991) 30 FCR 56 considered
Waterford v The Commonwealth of Australia (1987) 163 CLR 54 cited
Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 referred to
Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 referred toSECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES v DEAN EDWARDS
Q 71 OF 2000DRUMMOND J
BRISBANE
16 NOVEMBER 2000
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 71 OF 2000
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN:
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
APPLICANTAND:
DEAN EDWARDS
RESPONDENT
JUDGE:
DRUMMOND J
DATE OF ORDER:
16 NOVEMBER 2000
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The appeal be dismissed.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
Q 71 OF 2000
ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL
BETWEEN:
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
APPLICANTAND:
DEAN EDWARDS
RESPONDENT
JUDGE:
DRUMMOND J
DATE:
16 NOVEMBER 2000
PLACE:
BRISBANE
REASONS FOR JUDGMENT
This is an appeal by the Secretary, Department of Family and Community Services under s 44 the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of that Tribunal (the AAT) affirming a decision of the Social Security Appeals Tribunal (the SSAT) in favour of the respondent. The main question in the case is whether the Secretary is prevented by s 1163(9) the Social Security Act 1991 (Cth) from taking into account, in making a decision under s 1184(1), the fact that there is no causal connection between the circumstances giving rise to a person’s entitlement to certain social security benefits and the circumstances giving rise to that person’s right to compensation for injury. Cases involving challenges to the application of and the refusal to apply this particular provision or its precursors are many.
The respondent is now thirty-two years of age. He has been in receipt of a disability support pension since April 1989. He suffers from chronic schizophrenia. In September 1996 he was knocked from his bicycle by a motor car. He suffered physical injuries. The AAT found that he also suffered an exacerbation of his psychiatric condition (although the psychiatrist, Dr Mulholland, expressed a contrary view, which the SSAT appears to have accepted).
The respondent brought a damages claim against the driver of the vehicle. It was finally settled in July 1999 for a lump sum payment of $27,500. Out of this, he had to repay an amount to the Health Commission, no doubt in respect of his hospitalisation after the collision, and further amounts by way of solicitor and client costs, medical and orthopaedic expenses, all of which totalled approximately $6,500. The Secretary, in order to give effect to s 1165(1A) the Social Security Act 1991 (Cth), applied the “50%” formula in s 1165(8) to the respondent’s gross lump sum settlement figure of $27,500 and to his “income cut-out amount” defined in s 17(1) at the time of the settlement and calculated a “preclusion period” for the purposes of s 1165(5) of thirty-two weeks from the day after the accident, 5 September 1996 until 3 April 1997. In this way, it was determined that his receipt of compensation should disentitle him to receive the disability support pension for this period. Pursuant to ss 1166 and 1179 the Social Security Act, the Secretary then took action to recover from the insurer of the motor vehicle involved in the respondent’s accident the sum of $6,369.30 paid to the respondent during this period from the agreed settlement amount before it was paid by that insurer to the respondent’s solicitors. The Secretary declined to exercise his discretion under s 1184 to treat any part of the settlement amount as not having been made. So the respondent only received the settlement amount of $27,500 less the sum of $6,500 already referred to and less the further sum of $6,369.30 which was paid direct to the Secretary. The respondent successfully challenged the Secretary’s decision in both the SSAT and the AAT. Both held “special circumstances” within s 1184 existed to make it appropriate to treat the whole of the settlement amount as not having been made. The respondent was accordingly never precluded for any period from receiving his pension.
The SSAT applied s 1184 in the respondent’s favour for two reasons. Firstly, it held that there was no causal relationship between the reason for receipt by the respondent of his disability support pension, viz, his schizophrenia, and the reason for receipt of compensation, viz, his orthopaedic injuries, and, secondly, only a minor portion of the damages could be related to economic loss and it was in any event, only a possibility that the respondent might suffer such loss, a possibility that would occur only many years in the future, if at all. These findings of fact are, of course, not challenged in the present proceedings.
The AAT disposed of the case in the respondent’s favour essentially on the same factual basis. In coming to its conclusion, the AAT referred to the fact that the respondent had engaged only in very limited casual gardening work since leaving school, found that this was “because of his affliction”, ie, his chronic schizophrenia, and also found that “the reality is that his chances of ever being employed are fairly minimal” (though he was, at the time of the AAT’s decision, currently undertaking university study). As to the damages settlement of $27,500, the AAT recorded the agreement of the Secretary and the respondent in the proceedings before it that the respondent had suffered no past economic loss. It went on to find:
“His claim was really for pain, suffering and loss of amenities. Nevertheless, a figure of $5,000 was included in the $27,500 as a ‘nominal amount’ to recover the remote possibility that at some time in the future Mr. Edwards may get some work and that if he should do so, his injuries may reduce some of his capacity to work.”
This finding appears to have been made on the basis of the letter sent by the respondent’s solicitors to the Secretary on 5 August 1999 in which those solicitors invited the Secretary to invoke s 1184 the Social Security Act in the respondent’s favour. In this letter they said, among other things:
“The only component of the settlement sum of $27,500.00 which related to economic loss was a nominal amount of $5,000.00 which was paid to the Plaintiff on the basis of potential loss of earning capacity in the future. Your charge is some $1,869.30 greater than this sum.”
The applicant contends that the AAT decision is flawed by two errors of law. Firstly, it is said that a decision-maker, when applying s 1184, is barred by s 1163(9) from taking into account, as an irrelevant consideration, the absence of any causal relationship between a person’s compensability and pensionability and, secondly, on the true construction of s 1184, the AAT took into account a second irrelevant consideration, viz, that it was only a remote possibility that the respondent might be able to earn income in the future.
The following provisions of the Social Security Act are relevant:
“1163(1)If a person is or may be entitled to or receives compensation, payments of a compensation affected payment to the person or the person’s partner might be affected under this Part.
Note: For compensation affected payment see subsection 17(1).
…
1163(9)This Part operates in certain specified circumstances to affect a person’s compensation affected payment because of compensation received by the person or the person’s partner. This Part is not intended to contain any implication that, in addition to those specified circumstances, there needs to be some connection between the circumstances that give rise to the person’s qualification for the payment and the circumstances that give rise to the person’s or the partner’s compensation.
Note:See the Note to subsection 1184(2) for more background information.
17(2)For the purposes of this Act, compensation means:
(a)a payment of damages; or
(b)a payment 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)a payment (with or without admission of liability) in settlement of a claim for damages or a claim under such an insurance scheme; or
(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.
Note:Under section 1163B, a person may be treated as having received compensation that the person would have received but for the effect of a State or Territory law.
17(3)For the purposes of this Act, the compensation part of a lump sum compensation payment is:
(a)50% of the payment if the following circumstances apply:
(i)the payment is made (either with or without admission of liability) in settlement of a claim that is, in whole or in part, related to a disease, injury or condition; and
(ii)the claim was settled, either by consent judgment being entered in respect of the settlement or otherwise, on or after 9 February 1988; or
…
1165(1A)If:
(a)a person receives or claims a compensation affected payment; and
(b)the person is not a member of a couple; and
(c)the person receives a lump sum compensation payment (whether before or after the person receives or claims the compensation affected payment) on or after 20 March 1997;
no compensation affected payment is payable to the person for the new lump sum preclusion period.
Note 1:For new lump sum preclusion period see subsections (5) to (8).
Note 2:A series of lump sum payments can be taken to be one lump sum compensation payment under subsection 17(2B).
…
1165(7)… the new lump sum preclusion period is the period that:
(a)begins on the day on which the loss of earnings or loss of earning capacity began; and
(b)ends after the number of weeks worked out under subsections (8) and (9).
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
Note 1: For compensation part of lump sum, see section 17.
Note 2: For income cut-out amount, see section 17.
…
1184(1)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.
1184(2)If:
(a)a person receives or claims a compensation affected payment; and
(b)the person’s partner receives compensation; and
(c)the set of circumstances giving rise to the compensation are not related to the set of circumstances that give rise to the person’s receipt of or claim for the compensation affected payment;
the fact that those 2 sets of circumstances are unrelated does not in itself constitute special circumstances for the purposes of subsection (1).
Note:Subsection (2) is in response to comments made in the decision of the Administrative Appeals Tribunal in Re Secretary, Department of Social Security and Lee (S92/155) to the effect that the Social Security Act is aimed at reducing pensions in situations where a social security recipient’s entitlement is somehow connected with the fact that the recipient’s partner is in receipt of compensation payments and not wages.”
The general object of Part 3.14 - “Compensation Recovery” is clear. It is to prevent a person receiving certain kinds of social security benefit when they are also entitled to receive compensation. But that is to occur only if the compensation is partly or wholly in respect of lost earnings or lost earning capacity. Part 3.14 and its precursors have been changed many times over the past fifteen years. It has apparently not proved easy to devise a statutory regime thought to be fair to both a pension recipient who receives compensation for lost earning capacity and the taxpayer. Once, the existence of a causal relationship between pensionability and compensability was the essential criterion for the operation of the legislative provision restricting the pension entitlement of a person who had received compensation: once, pensionability and compensability had to arise from the same incapacity. See s 115B the Social Security Act 1947 (Cth) discussed in Secretary to the Department of Social Security v Siviero (1986) 13 FCR 431 at 438 - 439. In contrast, it is said that under the current form of the legislation, Part 3.14, such a connection is wholly irrelevant to the operation of any of the provisions of the Part: proof of such a connection is unnecessary now, so it is said, to the operation of the provisions of the Part which restrict pension entitlements because of the payment of compensation and to the operation of s 1184(1), which confers a discretion on the Secretary to relieve a pensioner from the impact of those restrictive provisions notwithstanding receipt of compensation.
The general trend of the legislative changes resulting in Part 3.14 has been to a regime requiring a reduction to be made in a person’s pension entitlement if the person receives compensation, for any reason and at any time. But such a simple regime is not yet reflected in the legislation. It is a policy question whether a person should be entitled to receive both a social security benefit and compensation for injury or other harm. The policy currently reflected in the legislation is that a person’s entitlement to any of the social security payments falling within the definition of “compensation affected payment” is only to be affected where the person acquires, at any time, a right to the payment of compensation that is “made wholly or partly in respect of lost earnings or lost capacity to earn”: see s 17(2)(e). That does not appear to accord with the Minister’s understanding of the effect of the 1993 amendments to Part 3.14 of the Act in so far as he said in the second reading speech on the relevant Bill:
“One of the more significant measures will be to bring within the provisions lump sum compensation payments whether or not they contain an economic loss component.”
Nor does the Minister’s understanding appear to be reflected in the Explanatory Memorandum accompanying the relevant Bill. It is not reconcilable with the definition of “compensation” in s 17(2) of the Act. The SSAT, the AAT and counsel in the proceedings in this Court were correct in reading Part 3.14 as only permitting a person’s entitlement to a social security benefit to be affected by a right in that person (or the spouse) to damages made wholly or partly in respect of either lost earnings or lost capacity to earn.
Often, eg, when a person has become entitled to a pension because of the injury for which compensation is later recovered, there will be a link between pensionability and compensability. Part 3.14 will apply, in such a case, to reduce or destroy the person’s pension entitlement either temporarily or permanently, provided the compensation includes a component for past or future economic loss. But often, however, there will be no link between a person’s pensionability and his or her compensability, eg, when, as here, a person is receiving a pension in respect of a longstanding disability and is then the victim of an accident in which unrelated injuries are suffered. In such a case, the person’s pension entitlements are to be affected by the compensation recovered, but once again only if that compensation includes something, no matter how small a part it may be of the whole compensation amount, in respect of past or future loss of earnings.
As the Minister seems to have assumed in his second reading speech on the 1993 Bill, the policy consideration he mentioned does not logically require that the recovery of compensation should affect a range of pension entitlements only if the compensation includes some allowance for lost earnings or lost earning capacity. This is particularly so, given that some of the “compensation affected payments”, ie, some of the pension entitlements affected by receipt of compensation, are awarded without reference to the person’s current or potential earning capacity. Section 17(1) identifies each of the social security payments that is a “compensation affected payment” for the purposes of Part 3.14. To be qualified to receive certain of these payments, a person must be unemployable (eg, in the case of a disability support pension, by force of s 94(1)(c)) or must be unemployed (eg, in the case of the mature age allowance, by force of s 660XBA(1)(b)). The qualifications for other kinds of “compensation affected payment” do not, however, include such factors (eg, the age pension, by force of s 43 and the carer payment, by force of s 198). But in this respect the legislation is clear. Though a person may be in receipt of a disability support pension, a qualification for which is a continuing inability to work, if he obtains an award of compensation in respect of injuries subsequently suffered which includes nothing for lost earnings or lost earning capacity because, eg, the disability that was sufficient to attract the disability support pension is also sufficient to prevent a finding that the accident-caused injuries have caused the person any economic loss past or future, Part 3.14 will have no application to the person’s pension entitlements. If, however, the person, due to a pre-existing ailment, obtains a disability support pension and then subsequently suffers injuries wholly unrelated to that ailment for which compensation, including a component for economic loss, no matter how small, is recovered, the pension entitlement will be affected by Part 3.14.
The first sentence of s 1163(9) describes in general terms the operation of Part 3.14. One of the “specified circumstances” which will affect a person with an entitlement like the respondent to a disability support pension occurs where s 1165(1A) operates, viz, where the pensioner receives “a lump sum compensation payment” on or after 20 March 1997. In that event, no such pension is payable for the relevant preclusion period determined in accordance with s 1165(7) and (8). Section 17(2) defines, in effect, what will constitute a compensation payment. Various kinds of damages and insurance payments will come within this expression, but only if they are “made wholly or partly in respect of lost earnings or lost capacity to earn”: s 17(2)(e). Section 1179(1) permits the Secretary to recover the preclusion period amount of the pension direct from an insurer only if the insurer is liable to indemnify the person liable to satisfy the pension recipient’s damages claim and then only if that claim is “wholly or partly in respect of the [pension recipient’s] lost earnings or lost capacity to earn”. It is because the respondent’s settlement amount included what the Tribunal described as $5,000 as a “nominal amount” to cover the remote possibility that, at some time in the future, he might get some work and his accident injuries may reduce some of his capacity to do that work, that the Tribunal accepted that Part 3.14 applied to the respondent’s disadvantage.
In stating the general effect of Part 3.14 on s 1163(9), the first sentence says that, “in certain specified circumstances”, ie, specified in that Part, a person’s entitlement to disability support pension (among other social security benefits) will be affected because of a compensation payment received by the person or the person’s partner. The reference in s 1163(9) to “this Part” can be explained by the fact that there are a number of sections, including sub-sections (1), (1A), (2), (2AA) and (2B) of ss 1165 and 1168, which, between them, define “the specified circumstances” which will affect a social security recipient’s entitlements, where that person or that person’s partner has received a compensation payment. The second sentence of the sub-section, in my opinion, is designed to make clear that under the current legislation, a determination whether a particular case comes within any of those “specified circumstances”, so that the pensioner’s social security entitlements will be affected by a compensation payment, is to be made without regard to whether there is some connection or causal relationship between the person’s pensionability and his or her compensability. That is, the second sentence is confined to ensuring that, in determining whether circumstances have arisen which invoke the operation of Part 3.14 in relation to a compensation payment received by a pensioner, whether such a relationship exists is an irrelevant consideration. So much is, in my opinion, made clear not only by the unambiguous wording of the sub-section, but also by the note to s 1163(9). This sub-section was inserted to overcome the decision of the AAT in Re Secretary, Department of Social Security and Lee (1993) 30 ALD 250 in which it seems to have been thought that the Tribunal adopted a construction of the Part which required, in addition to proof that the express criteria for the operation of the Part were satisfied in the particular case, proof was also required of satisfaction of an implied criterion, viz, the existence of a causal relationship between the pensioner’s pensionability and his or her compensability (or between the person’s compensability and his partner’s pensionability where only the partner was in receipt of a pension). It seems to have been thought that the Tribunal in Lee tried to restore the old law in force pre-1991. The Tribunal in Lee was, however, only concerned with whether s 1184 should be applied to relieve the pension recipient of the unchallenged impact that receipt by her spouse of periodic workers’ compensation had on her disability support pension. The Tribunal held that s 1184 applied to require relief from a reduction to the particular pension, whenever there was no connection between the pension recipient’s pensionability and the spouse’s compensability. Section 1184(2) was inserted at the same time as s 1163(9) was inserted (by Act No 121 of 1993) to overturn this interpretation of s 1184 which sought to narrow its area of operation by providing that the absence of such a connection was not by itself sufficient to require the Secretary to apply s 1184(1) to such a case.
The respondent, however, wants to push s 1163(9) further than it is capable of going. The respondent contends, correctly, that s 1163(9) operates to ensure that a person’s pension will be affected by his having obtained compensation though there is no connection between his pensionability and his compensability. But the respondent also contends that the sub-section operates to make the absence of such a connection a circumstance which the Secretary is prohibited from taking into account when deciding under s 1184 whether to relieve a compensated pensioner, in whole or in part, from the burden that falls on his pension entitlement once the “specified circumstances” exist.
Section 1184 confers power on the Secretary by reason of the circumstances of the particular case to ameliorate what has been called the arbitrary operation of the social security benefit reduction provisions of the Part “if the Secretary thinks it is appropriate to do so in the special circumstances of the case”. In Secretary, Department of Social Security v Hulls (1991) 22 ALD 570 at 580 - 581, O’Loughlin J adopted the following statement by the Full Court as to what is meant by “special circumstances” in an earlier version of s 1184(1):
“… Whilst it would be unwise, if not impossible, to attempt to lay down any precise delineation of what may amount to ‘special circumstances’ for the purpose of s 115(4A) … the use of the word ‘special’ is, we think, intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case …. Whilst we agree that hardship is a relevant consideration in the discretion conferred by s 115(4A), we reject the submission by Mr Watkins (for the applicant) that we should ignore the circumstances out of which the alleged hardship is said to have arisen. The reference to special circumstances ‘by reason of which’ a person liable ‘should be released’ requires, in our view, that there must exist in the circumstances of the case, a factor or factors which justify the making of an exception in whole or in part to the principle of liability which the Act otherwise establishes. In the exercise of the discretion which s 115(4A) confers, the decision-maker must have regard to whether, by exercising the discretion in a particular case, he will be achieving or frustrating ends or objects which are conformable with the scope and purpose of the Social Services Act 1947 …. Thus whilst keeping the dominant principle of s 115 in mind, he must nevertheless be prepared to respond to the special circumstances of any particular case by reason of which strict enforcement of the liability created by the section would be unjust, unreasonable or otherwise inappropriate.”
The first sentence of s 1163(9) cannot, for the reasons given, be taken as applying the second sentence to s 1184, though that last-mentioned provision is contained in Part 3.14. Further support for this view is, I think, contained in s 1184(2). Though s 1184(1) gives the Secretary what is, in express terms, an unfettered discretion to ignore the receipt by a pensioner of a compensation payment in determining the pensioner’s social security entitlement save only that there must be “special circumstances” to justify doing that, s 1184(2) identifies one particular circumstance where a person receives a pension and the person’s partner receives a compensation payment and directs the Secretary how he is to deal with that circumstance when deciding whether or not to apply s 1184(1) in favour of a pensioner. The circumstance referred to in s 1184(2) is that there is no causal relationship between the facts giving rise to the partner’s receipt of compensation and the facts giving rise to the pensioner’s receipt of the social security payment. If such a circumstance exists in the particular case, then s 1184(2) directs the Secretary that it “does not in itself constitute special circumstances for the purposes of sub-section (1)” (emphasis added). The words in emphasis give the lie to the Secretary’s submission that the existence of such a circumstance is always, and in all cases, an irrelevant consideration for the Secretary when considering whether to apply s 1184(1) in favour of the person. This provision, in the clearest of terms, acknowledges that such a circumstance is relevant for the Secretary to take into account. But, if, in the circumstances covered by s 1184(2), that is the only factor relied on by the pensioner to claim exemption from the pension reduction provisions of Part 3.14 that is not, by itself, sufficient to warrant the application of s 1184(1) in the pensioner’s favour. There must be some other circumstance in the case, as well. This is not, of course, to say that the absence of a causal relationship is always necessary, only that if it does exist it is, by itself, not sufficient to justify the application of s 1184(1). That it may be a relevant consideration is supported by the fact that the legislation requires compensation to affect a pension entitlement only if the compensation includes some component for past or future lost earnings. Given this, it might be thought that, in a case where the particular pension entitlement is based on an incapacity wholly unrelated to that attracting compensation, there may be no “double dipping” of the kind which precursors to Part 3.14 sought to prevent. It has been said of precursors to Part 3.14:
“The object of the legislation [is] to avoid double payments for an inability to exercise an earning capacity. It would be contrary to this object to deprive a person otherwise entitled to a pension during a period when there was no coincidence (or presumed coincidence) between payments from the two sources. In such cases there would be no overlapping of benefit.”
See Secretary, Department of Social Security v a'Beckett (1990) 26 FCR 349 at 359.
Far from saying that the absence of a causal relationship between pensionability and compensability is irrelevant to the task of considering whether to apply s 1184(1), sub-section (2) acknowledges that it is a relevant consideration but by itself, is not sufficient to require the benefit of s 1184(1) to be given to the pensioner, at least when the question arises as to whether a pensioner should be left with pension unaffected despite the spouse’s receipt of compensation. In Secretary, Department of Social Security v Smith (1991) 30 FCR 56, von Doussa J held that it was a consideration of relevance to the exercise of the discretion under a precursor of s 1184(1) that the supervening incapacity for work that attracted pension payments was unrelated to the earlier injury that attracted compensation.
The AAT was not in error in having regard to this consideration in determining to apply s 1184(1) in the respondent’s favour.
As to the second error of law, the taking into account by the Tribunal of an irrelevant consideration, the Tribunal, after referring to the component in the damages payment of $5,000 being by way of compensation for the “remote possibility” that he might at some time in the future become able to earn income but at a lesser rate because of his orthopaedic injuries, and to the object of Part 3.14 being to prevent “double dipping”, ie, “to prevent a situation arising whereby a person could receive a social security pension and, at the same time, be compensated for the same period by way of compensation”, said:
“If he does work in the future, and is slightly impeded, the $5,000 will cover that possibility. He will not, of course, get any social security benefits if he happens to get employment. Not only has there been no double-dipping in the past, there may never be any double-dipping in the future. In our view the justice of the case demands that none of the amount of $27,500 be included in the calculation for preclusion period purposes.”
But, if as the AAT found to be likely, the respondent never works in the future, he will have received, in the form of the $5,000 damages component, a windfall, ie, compensation for a loss he will never in fact suffer. Far from being a strong reason in favour of ignoring that windfall in calculating the preclusion period (the view of the Tribunal), the probability that the respondent may never suffer loss from impaired capacity to earn provides strong reason for including the $5,000 in that calculation, ie, for allowing the charging provisions of Part 3.14 to operate, without modification under s 1184(1). If s 1184(1) is applied and the respondent never suffers the loss for which the $5,000 was paid, he is likely, in view of his schizophrenia, to receive the full pension and, in addition, will retain the whole of the $5,000. It seems clear, therefore, that the Tribunal fell into error in holding that because the $5,000 was paid by way of compensation for a loss unlikely ever to occur, that was good reason for applying s 1184(1) in the respondent’s favour.
However, this does not necessarily mean that its error is a reviewable error of law. The applicant characterised it as such only on the basis that, in arriving at its decision to give the respondent the benefit of s 1184(1), the AAT impermissibly found support in the fact that the respondent was never likely to suffer any of the economic loss for which he had received the $5,000 and was thus said to have taken into account an irrelevant consideration in reaching its decision.
It is trite law that the task of fact-finding is committed to the AAT, not this Court, and that this Court can intervene only if the AAT’s decision is infected with error of law. As Brennan J said in Waterford v The Commonwealth of Australia (1987) 163 CLR 54 at 77:
“The error of law which an appellant must rely on to succeed must arise on the facts as the A.A.T. has found them to be or it must vitiate the findings made or it must have led the A.A.T. to omit to make a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact.”
But there are a number of grounds upon which a Court can judicially review the decision on fact of a Tribunal for error of law constituted by errors made by the Tribunal in its fact-finding process. Thus, if a Tribunal charged with arriving at a decision vulnerable to review only for error of law, in the course of finding the facts, takes into account considerations which, in accordance with the test in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40, can be said to be irrelevant to the proper performance of its function, that error in how the Tribunal has gone about finding the facts will be an error of law. See, eg, Sharp Corporation of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6 at 12.
For the reasons given, a consideration relevant to whether “special circumstances” exist for the purposes of s 1184(1) is the fact that a pensioner has received compensation for economic loss that it is unlikely he will ever suffer: that is likely to produce a situation tantamount to the “double dipping” which Part 3.14 is intended to prevent. The existence of such a circumstance therefore mitigates against the application of s 1184(1) in the pensioner’s favour. It is plain that the Tribunal identified this consideration as relevant to whether s 1184(1) should be applied in favour of the respondent. But it made a wrong use of it in arriving at its decision. The Tribunal did this because while it correctly identified the consideration in question as relevant to the ultimate conclusion of fact it had to arrive at in relation to whether or not special circumstances existed, it misunderstood the true evidentiary significance of the consideration and so misused it in reasoning to its conclusion. That is no more than an unreviewable error of fact. It cannot, I think, be said that by misusing, in its fact-finding exercise, what it correctly identified as a relevant consideration for it to take into account, the Tribunal took into account an irrelevant consideration. The Secretary has no remedy for the Tribunal’s error here in question within the rubric of error of law constituted by taking into account an irrelevant consideration. It was not argued that this error of fact could be characterised as a reviewable error of law on any other basis.
The appeal is dismissed.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond. Associate:
Dated: 16 November 2000
Counsel for the Applicant: A Horneman-Wren Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: D O’Gorman Solicitor for the Respondent: Streeting Haney Date of Hearing: 30 October 2000 Date of Judgment: 16 November 2000
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