Secretary to the Department of Family and Community Services v William and Denise McDonald - [2001] AATA 770

ADMINISTRATIVE APPEALS TRIBUNAL)

N° V01/787

GENERAL ADMINISTRATIVE DIVISION)
Re: SECRETARY TO THE

DEPARTMENT OF FAMILY AND
COMMUNITY SERVICES

Applicant

And: WILLIAM AND DENISE McDONALD

Respondents

ORDER [2001] AATA 770

Tribunal:       M.J. Carstairs, Member
Date:             3 August 2001
Place:            Melbourne

Order:UPON HEARING Ms P. D'Cunha, for the applicant, on an application for a stay of the operation or implementation of the decision of the Social Security Appeals Tribunal ("SSAT") made on 31 May 2001 and Mr W. McDonald, for the respondents, THE TRIBUNAL ORDERS, pursuant to subsection 41(2) of the Administrative Appeals Tribunal Act 1975, that until such time as the application for review in this proceeding has been heard and determined by the Tribunal, or until further order, the implementation and operation of the decision of the SSAT will be stayed in respect of the period from 1 March 2001 to 8 May 2001, but is not otherwise stayed.

(sgd) M.J. Carstairs
Member
PRACTICE AND PROCEDURE – stay of operation of decision.
Administrative Appeals Tribunal Act 1975 ss37, 41(2)
Re Commonwealth of Australia and Quirke (1986) 9 ALD 92
Re Trewin and Secretary, Department of Social Security (1993) 31 ALD 629

REASONS FOR ORDER

3 August 2001 M.J. Carstairs, Member

This is an application by the Secretary to the Department of Family and Community Services (the applicant) for the stay of a decision of the Social Security Appeals Tribunal (the SSAT) dated 18 May 2001, which set aside a decision of the applicant and substituted a new decision that the respondents' assets should not include the value of certain loans.
The Tribunal heard the application for a stay of the SSAT decision on 3 August 2001. Ms P. D'Cunha represented the applicant and the respondents represented themselves. At the conclusion of the hearing, oral reasons were given to stay the decision in part. On 14 August 2000 the Tribunal received from the respondents a request for written reasons.
BACKGROUND
On 1 March 2001 a decision was made by a Centrelink delegate of the applicant to include in the combined assets of the respondents the value of loans made by them to a unit trust. This decision affected the rate of age pension payable to each of the respondents. The respondents requested that the decision to include the loans be reviewed. On 22 March 2001 an authorised review officer decided that the original decision correctly included the value of the loan in the calculation of the respondents' assets. The respondents then sought review by the SSAT.
On review, the SSAT decided that the loan to the unit trust should not be included in the combined assets of the respondents. The SSAT took the view, having examined the financial records of the trust and associated company, that the loan was irrecoverable. The effect of disregarding the loan was to reduce the respondents' combined assets for age pension from $385,182 to $43,553.
On 28 June 2001 the applicant lodged an application for review of the SSAT's decision. The applicant also sought a stay of the decision under review on that date. As the reason for seeking review, the applicant stated only that the SSAT had "applied an incorrect interpretation of the law". By letter dated 8 July 2001 the respondents opposed the granting of the stay.
EVIDENCE
The material before the Tribunal consisted of the Tribunal file and the documentation prepared by the applicant pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the Act). At the hearing the applicant amended the application for a stay by limiting it to that part of the SSAT decision that had effect in the period 1 March 2001 to 8 May 2001.
The applicant told the Tribunal that the respondents had taken action on 8 May 2001 to deregister the trustee company for the unit trust. The respondents were the company directors. As a result of the action taken to deregister the company the applicant accepted that any loan was irrecoverable and age pension could be restored without the loan appearing as the respondents' asset and thereby affecting the rate of age pension. At the date of the stay hearing the arrears of age pension calculated from 8 May 2001 had not been paid to the respondents, but the applicant stated the sum was to be credited to the respondents' bank accounts within days. For this reason a stay of decision was sought only in respect of the period from 1 March 2001 until the application to deregister the company was lodged (8 May 2001). Age pension was restored to each of the respondents on an ongoing basis at $278.59 per fortnight.
The respondents told the Tribunal that in the period during which the issue had been in dispute and their rate of pension reduced, they had accumulated debts, had been forced to convert assets in order to live, and their life-style had been diminished. They stated that they were aggrieved it had taken the applicant from May until August to reinstate their correct pension amount, despite the outcome of the SSAT review in their favour on 18 May 2001.
CONSIDERATION OF THE ISSUES
The power of the Tribunal to grant a stay is to be found at s41(2) of the Act. That section provides that the Tribunal may grant a stay of a decision if, after taking account of the interests of persons affected by the review, the Tribunal considers it is appropriate to do so in order to secure the effectiveness of the hearing and determination of the application for review.
Each case must be considered on its own merits, however amongst the matters usually taken into account by the Tribunal are those set out in Re Commonwealth of Australia and Quirke (1986) 9 ALD 92, namely
(a)The likely prospect of recovery by the Commonwealth of moneys paid to the respondent, in the event that the determination is not upheld on review.
(b)The prospect of success of the Commonwealth's application for review of the determination.
(c)The hardship to the respondent that might result if a stay order were made.
The applicant submitted that as the rate of age pension was restored to its previous level any question of hardship was lessened. It was submitted that the SSAT had erred in its application of the law, as there was no provision that allowed the loan to be disregarded while-ever the company was operating. It was further submitted that if the application were successful, a debt would need to be raised against the respondents. That itself would cause hardship.
The respondents handed up written submissions to support a refusal of the request for a stay. They submitted that they should have the benefit of their favourable decision at the SSAT. They submitted that the application for review did not particularise the grounds on which the SSAT is said to have erred and that no light had been thrown upon the alleged error of law by the SSAT in any matters raised by the applicant in seeking the stay. Additionally they submitted that the suggestion that, should the applicant be successful at the hearing and a debt raised against them, there would be any problem with paying back the money "was an inferential attack on our personal integrity".
In the present case the Tribunal is satisfied that the question of hardship has been satisfactorily dealt with by the concession of the applicant in limiting the order sought to the period 1 March 2001 to 8 May 2001. The Tribunal accepts the submission from the respondents that the applicant has poorly articulated the grounds for seeking review. However this is a lesser issue in the Tribunal's view where the concession has been made to limit the period for which a stay is sought. This enables the respondents to have some of the fruits of their favourable decision, while allowing both parties time to prepare their case. As has been pointed out in Tribunal decisions on other occasions, the section looks to securing "the effectiveness of the hearing and determination of the application for review". It does not look to alleviating hardship per se. (Re Trewin and Secretary, Department of Social Security (1993) 31 ALD 629). The Tribunal is also satisfied that the proper balance of interests between the parties in this matter is secured by issuing the order sought by the applicant.
For these reasons, the Tribunal decides that the discretion in s41(2) of the Act to stay a decision pending review should be exercised in respect of part of the period that is affected by the decision.

ORDER

The Tribunal orders that the decision under review, namely the decision of the SSAT dated 18 May 2001, is stayed insofar as it affects the period 1 March 2001 to 8 May 2001, but is not otherwise stayed, pending the hearing and determination of the matter or further order.