SRKKKK; Secretary, Department of Family and Community Services

[2005] AATA 480

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 480

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2004/1430

GENERAL ADMINISTRATIVE DIVISION		)
Re

SECRETARY, DEPARTMENT OF   FAMILY AND   COMMUNITY SERVICES

And

SRKKKK

DECISION

Tribunal   Dr M E Thorpe, Member

Date  27 May 2005

Place  Sydney

Decision The decision of the Social Security Appeals Tribunal of 15 October 2004 is set aside and substituted with a new decision that the compensation preclusion period be from 10 October 1989 to 26 May 2043.

[SGD] Dr M E Thorpe, Member

CATCHWORDS

SOCIAL SECURITY – preclusion period - whether to reduce preclusion period – special circumstances - 50 per cent rule – lost earnings and earning capacity - decision set aside

LEGISLATION

Social Security Act 1991 ss 1184K, 1170, 17(1), 17(2), 17(3), 17(4), 17(8)

Administrative Appeals Tribunal Act 1975, subsection 35(2)(c)

CASE LAW

Secretary, Department of Social Security v Banks (1990) 23 FCR 416

Secretary, Department of Social Security v Hulls & Others (1991) 22 ALD 570

Kirkbright v Secretary Department of Family and Community Services (2000) 106 FCR 281

Beadle v Director-General of Social Security (1985) 60 ALR 225

Groth v Secretary, Department of Social Security (1995) 40 ALD 541

Loyden v Secretary of the Department of Family and Community Services [1999] AATA 663

Secretary, Department of Family & Community Services v Chamberlain (2002) 116 FCR 348

Fowles and Secretary, Department of Social security (1995) 38 ALD 152

REASONS FOR DECISION

27 May 2005 Dr M E Thorpe, Member

BACKGROUND

1.This is an application for review of a decision made by the Social Security Appeals Tribunal (“SSAT”) on 15 October 2004, which set aside a decision made by Centrelink (“the applicant”) on 23 January 2004 (T28), and later affirmed by an Authorised Review Officer on 20 July 2004 (T47), to apply a lump sum payment preclusion period from 10 October 1989 to 26 May 2048 and to recover a compensation charge in the amount of $92,614 (for 2 January 1992 to 13 January 2004) and not to shorten the preclusion period due to special circumstances.

2.The recovery of the compensation charge of $92,614.05 in respect of income support payments was not contested, so the only issue for the Tribunal was the length of the preclusion period. The SSAT set aside the decision to apply a lump sum preclusion period as from 10 October 1989 to 26 May 2048 and substituted a decision that a preclusion period of 20 years be applied (ending 9 October 2009) due to special circumstances, warranting departure from the ‘50 per cent rule.’

3.Subsequent to the hearing an application was made by the respondent that the respondent, the hospital, the doctor concerned and the respondent’s place of work be made confidential for the purposes of the decision. The reason advanced was that as a result of his condition; the respondent could be in a vulnerable position and in particular, there posed some risk if the value of the settlement was publicly disclosed. Mr Lozynsky for the applicant did not oppose the application. Subject to subsection 35(2)(c) of the Administrative Appeals Tribunal Act 1975 I give directions prohibiting or restricting the disclosure to some or all of the parties of evidence given before the Tribunal, or of the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to these proceedings.

4.Therefore the respondent will be referred to as ‘SRKKKK’, his place of work as ‘Company A’, his employer as ‘employer’, the hospital as ‘Y’, and the doctor as ‘Z’

BRIEF HISTORY

5.SRKKKK gave evidence in person in his wheel chair to the Tribunal and impressed as an honest and sincere person, making the best of his life’s situation. In his medical report, Professor John D Yeo reported an estimated 77 per cent reduction of SRKKKK’s life expectancy (T11 p80). Professor Yeo does not state the normal life expectancy of SRKKKK but Mr Kelly (for the respondent) calculated a life expectancy of 39 years, which would take him through until 2043. He has been a quadriplegic and in a wheel chair since October 1989. The quadriplegia followed an incident at a selective high school when he was pushed in the back. There had been an earlier incident in 1986 involving the neck, which caused temporary sensory loss. Proceedings were brought in the Supreme Court against Y and Z claiming damages for medical negligence on the basis that proper attention for a cervical stenosis in 1986 could have prevented the quadriplegia in 1989.

6.There was divided medical opinion and depending on the view of the Court, SRKKKK may have won or lost the case. As is not unusual in these situations, the case was settled by the lawyers from both sides for a sum of $3,875,000, inclusive of costs, which represented a compromise of the order of 50 per cent of the full value of the plaintiff’s claimed damages. Under social security law, fifty per cent of the payment of $3,875,000 is the compensation part of the lump sum, and amounts to $1,925,000. At the hearing SRKKKK agreed that at the time of settlement he was advised and fully aware of the preclusion period and also on questioning by Mr Lozynsky, that he received advice and fully understood that the preclusion period would apply until 2048.

7.SRKKKK has been living in a share house run by a sponsor, for which he pays rental accommodation. Subsequent to his court award, he no longer qualifies under the “means test” and it is now necessary for him to move out into a private residence. He has repaid the monies owing to Centrelink for this accommodation, hence the non contestance of the repayment of the $92,614. He has recently purchased a house and anticipates moving into that house by April 2005. He will require homecare and he anticipates the need for a live in housekeeper, who will probably also act as a driver. SRKKKK has also worked for Company A since July 2001. On average he works about 12 hours a week for which he earns about $256 a week net. It is also possible that a companion may move into the house.

8.SRKKKK has invested about two million dollars into managed funds and has a substantial investment income. On the documentation available and on his own testimony, I was impressed with SRKKKK’s financial knowledge and diligence. At this time there is no question that SRKKKK is not managing his money as well as anyone could expect and there was no suggestion that he was extravagant or attempting to empty his funds. Although Mr Kelly submitted that the money will run out, Mr Lozynsky said SRKKKK had not exhausted his settlement monies and has no debts or personal loans, and that according to the SSAT, he has funds available to support him for at least 15 or 20 years if he chooses to live independently. Certainly at present there is no financial hardship, but there was insufficient information for me to even attempt any calculation of the adequacy of the funds, as I have no knowledge about the costs that he will incur when he moves into his own residence. If financial hardship does occur, SRKKKK will be at liberty to make a fresh application to the Department of Family and Community Services. The primary issue at hand is whether the length of the preclusion period should be reduced using the provisions of section 1184K of the Social Security Act 1991 (“the Act”). On the basis of Professor. Yeo's prediction of a 77 per cent reduction in life expectancy and taking into account the provisions of section 1184K, it is only fair and reasonable to reduce the preclusion period to 2043, taking the reduction in life expectancy as a special circumstance of SRKKKK's condition.

9.SRKKKK received compensation under subsection 17(2) the Act, which is compensation (whether the payment is in the form of a lump sum or in the form of a series of periodic payments and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity resulting from personal injury. Under the Act a person who is not a member of a couple and receives a lump sum payment under subsection 17(2) and seeks to be paid a compensated affected payment may be liable under section 1170 of the Act to a preclusion period. The provisions regarding the calculation of lump sum periods are set out in section 1170 of the Act. SRKKKK received an amount of $3,875,000, and the department assessed 50 per cent of the compensation lump sum figure (as per subsection 17(3) of the Act) to be $1937, 5000. Subsections 1170(4) and 1170(5) of the Act provides a formula for the calculation of a lump sum preclusion period which required that the amount of $1,937,500 be divided by $633,25, which is the ‘income cut-out amount’ specified under subsection 17(8) of the Act. This results in a 3,059 week preclusion period. None of these figures were contested. Using the 50 per cent rule of thumb, Centrelink produced a preclusion period running until May 2048, which by that time (if SRKKKK is still alive) he will be aged 72 years.

10.The applicant contended that the decision of the SSAT should be set aside by this Tribunal on the basis that the SSAT's findings with respect to the 50 percent rule were incorrect. The respondent respectfully adopted the decision of the SSAT, namely that the secretary should have exercised his powers under section 1184K of the Act to override the 50 per cent formula because of the special circumstances of this case and supported the decision of the SSAT to redetermine the preclusion period to run to 9 October 2009. Mr Kelly's argument was that the SSAT's decision was correct, namely that the appropriate course was to halve the economic loss component. The reasoning in paragraphs 67 to 73 of the SSAT decision appear to be based on the manipulation of the compensation part of the lump sum by the substitution of the economic loss component for the compensation sum, using the provisions of subsection 1184K(1) of the Act, which reads as follows;

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 appropriate to do so in the special circumstances of the case.

ISSUES BEFORE THE TRIBUNAL

11.The issue before the Tribunal is whether the original decision to impose a compensation preclusion period from 10 October 1989 to 26 May 2048 is correct or whether there are special circumstances in SRKKKK’s case which warrant the exercise of the discretion under section 1184K of the Act, such that any part of the compensation paid to SRKKKK might be disregarded for the purposes of determining the applicable preclusion period.

12.SRKKKK’s argument (based on the decision of the SSAT) was that the special circumstances of his case (his quadriplegia) allowed for past and future economic loss as described in the common law proceedings and therefore should constitute the compensation part of the lump sum rather than the application of the 50 per cent rule, which would result in a compensation loss of 50 per cent of the total compensation received. If this was the case, the preclusion period would have expired by now and the economic loss would have constituted approximately 15 per cent over that period. The respondent relied on the figures at pages 4 and 5 of their ‘Statement of Facts and Contentions’. The respondent referred to the ‘Schedule of Damages’, which amounted to $7,495.341.00. The damages were categorised, with general damages comprising 5 per cent of the claim. The largest damages item was for future outgoings (attendant care, nursing, household expenses and the like), which comprised 65.4 per cent of the total claim. Past economic loss and future earnings loss together compromised only 13.3 per cent of the claim and interest on past economic loss was 2.1 per cent. These figures must be halved as the settlement was for 50 per cent of $7,495.341.00, (namely $387, 5000) by agreement of the parties at the common law hearing. SRKKKK was fully aware, in the presence of his lawyers, at the time of the settlement that the settlement resulted in a preclusion period until 2048. This seems to be later contested by Mr Kelly in items 25, 28 and 33 of his Facts and Contentions. In evidence however, SRKKKK was very clear, in the presence of legal advice, that he fully understood the implications of the preclusion period.

13.Mr Lozynsky argued that because the compensation settlement received by SRKKKK was made either wholly or partly in respect of lost earnings or capacity to earn, then it came within the definition of compensation under subsection 17(2) of the Act. There is no dispute that the amount that SRKKKK received was partly in response to an economic loss figure or his loss of capacity to earn in the future or in the past. The applicant argued that there were no special circumstances to invoke section 1184K of the Act and to invoke an alteration to the preclusion period.

14.I have then the difficult task of determining whether there are other special circumstances to consider. In particular Mr Lozynsky for Centrelink said the 50 per cent rule should have been applied in the first place and that it was inappropriate to attempt to dissect the lump sum payment to assess the component parts or to treat the operation of the 50 percent rule as a special circumstance on its own. In support of his contention, Mr Lozynsky stated that the ‘compensation part’ of the lump sum should be held as being 50 per cent of the lump sum and referred to Secretary, Department of Social Security v Banks 23 FCR 416 and Secretary , Department of Social Security v Hulls & Others (1991) 22 ALD 570 (O’Loughlin J). In summary Hulls addressed the question of prevention of any dissection of ‘the lump sum’ and in Banks the 50 per cent rule was sought to eliminate double dipping. SRKKKK argues that his circumstances warranted the exercise of section 1184K of the Act which allowed for discretion to reduce the preclusion period.

15.Mr Kelly for the respondent contended that the application of the 50 per cent rule in SRKKKK’s special circumstances results in a manifest unfairness or injustice from which section 1184K was designed to provide a release valve (see Mansfield J in Kirkbright v Secretary Department of Family and Community Services (2000) 106 FCR 281). In particular SRKKKK had only been compensated in the amount of $499,314, being one half of $998,629, which is the total of items 6 and 8 on the Schedule of Damages, representing past and future economic loss.

16.Mr Kelly said that SRKKKK’s settlement at common law had been compromised by the order of the 50 per cent rule, with the attendant risk that his funds may run out. Mr Kelly estimated that the funds would only provide SRKKKK with the means of an independent living for approximately 20 years. This was contested by Mr Lozynsky who submitted that with careful budgeting for the future, SRKKKK’s lump sum should support him until 2048. This was not a view shared by the SSAT, who accepted SRKKKK’s claim about the inadequacy of the award to meet independent living costs over his lifetime (T2, p6). Mr Kelly relied on paragraphs 67-73 of the SSAT decision, where it was determined that the preclusion period should end in five years time, on 9 October 2009. The SSAT said that if it had accepted a ‘halving’ of the economic loss, the period would have expired by now and the economic loss would have constituted approximately 15 per cent of the total lump sum. Conversely, if the whole of the economic loss was to be assumed to have remained part of the settlement amount, it would have continued for several years beyond the cut off of the award, and the period would have continued for several years beyond the 2009 cut-off date selected. On that basis the SSAT reset the period for five more years, ending on 9 October 2009.

LEGISLATION:

Following are the relevant provisions of the Act.

Section 17(2)

Subject to subsection (2B) for the purposes of this Act, compensation means:

(a) a payment of damages; or

(b) a payment under 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 and whether it is made within or outside Australia) that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury).

Section 17(3)

Subject to subsection (4), 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; or

(ab)

50% of the payment if the following circumstances apply:

(i)

the payment represents that part of a person's entitlement to   periodic compensation payments that the person has chosen to                  receive in the form of a lump sum; and

(ii)

the entitlement to periodic compensation payments arose from                    the settlement (either with or without admission of liability) of a               claim that is, in whole or in part, related to a disease, injury or                  condition; and

(iii)

the claim was settled, either by consent judgment being entered                  in respect of the settlement or otherwise; or

(b)

if those circumstances do not apply—so much of the payment   as is, in the Secretary's opinion, in respect of lost earnings or                lost capacity to earn, or both.

Section 1170(4)

The number of weeks in the lump sum preclusion period in relation to a                 person is the number worked out using the formula:

Section 17(8)

For the purposes of the definition of income cut-out amount in subsection (1),      the formula is as follows:

where:

"maximum basic rate" means the sum of the amount specified in column 3 of       item 1 in Table B in point 1064-B1 and the amount of pension supplement     worked out under point 1064-BA2 for a person who is not a member of a       couple.

Note: Point 1064-BA2 refers to maximum basic rate . Maximum basic rate depends on a person's family situation. The rate used here is the rate for a person who is not a member of a     couple.

"ordinary free area limit" means the amount specified in column 3 of item 1 in       Table E-1 in point 1064-E4.

"pharmaceutical amount for a single person" means the amount specified in column 3      of item 1 in the Pharmaceutical Allowance Amount Table in point 1064-C8.

17.In SRKKKK’s case the sum of the maximum rate of pension, plus pharmaceutical allowance plus the ‘free of income test’ amount is $633.25 a week. This amount is not in dispute. Nor is there any dispute about the way the calculation was applied to achieve the end date of 26 May 2048.

CONSIDERATION

18.I am in agreement that the compensation settlement received by SRKKKK was within the definition of section 17(2) of the Act, as it was either wholly or partly in respect of lost earnings or capacity to earn. The applicant’s contention is that the decision to impose a compensation preclusion period from 10 October 1989 to 26 May 2048 is mathematically correct. The essence of this determination is how one views the compensation part of the lump sum and if the discretion under section 1184K (1) of the Act should be exercised to vary the compensation part of the lump sum to affect or alter the preclusion period.

19.As pointed out by Mr Lozynsky the Act does not define ‘special circumstances’. I am in agreement with the parties that Beadle v Director-General of Social Security (1985) 60 ALR 225 is a starting point for the interpretation of this term. I am also in agreement with Groth v Secretary, Department of Social security (1995) 40 ALD 541 at 545, where, after referring to the Federal Court decision in Beadle , Keifel J observed that special circumstances;

“…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….”

20.From the outset I intend to vary the preclusion period to 2043 taking into account the reports of Professor Yeo, who estimated a life survival for SRKKKK shortened by 77 per cent due to his medical condition. I consider this to constitute ‘special circumstances’ within the meaning of section 1184K of the Act.

21.My next task is to address the question concerning what portion of his award constitutes ‘economic loss’. The original claim as put forward by SRKKKK itemises heads of damages attributable to past or future economic loss and is less than one seventh of the original claim. The respondent argues that by counting half of SRKKKK’s award as though it were economic loss, the statutory purpose the rule is contradicted.

22.Having in my opinion satisfied section 17(2) of the Act , I consider the cases referred to by Mr Lozynsky and in particular Banks where Von Doussa, J states;

“….. Thus, subpara (1) will apply to the total amount in settlement of a                  claim if the amount is in some part in respect of an incapacity for work                   and if the claim relates in some part to disease or injury. This will even            be so though the lump sum also clearly includes amounts for heads of                 loss which are unrelated to incapacity for work eg for pain and   suffering, for disfigurement, or for future medical expenses in relation to   disease or injury. This will also be the case where the lump sum   payment is in settlement of a claim which includes a head of loss that is                unrelated either to incapacity for work or to disease or injury eg a   component for property damage. “

23.I agree with Mr Lozynsky’s submission that the application of the 50 per cent rule as introduced by the Parliament eliminates the need to determine what component of that settlement should be attributed to lost earnings or lost capacity to earn. This was agreed in Hulls, where O’Loughlin J stated that it was an arbitrary rule but nevertheless in keeping with the intention of the Parliament. He stated

“Once the mischief at which the amending legislation was aimed has   been clearly identified, it becomes apparent that the legislation   prevents any dissection of the “lump sum”.…

24.SRKKKK has received a very substantial payment of damages and remains with very substantial assets. The exact time frame that these monies will be adequate for, taking into account his ability to earn, is not known, but it is not in the foreseeable future. The ceasing of the preclusion period would be of no benefit for this period as he would not be eligible for any pension. Mr. Kelly's argument that SRKKKK may one day run out of money is in large part countered by Mr Lozynsky's argument that under subsection 17(1) of the Act, (which refers to compensation affected payments, including an aged pension and disability support pension) that there is nothing stopping him from applying for that discretion under section 1184K in the future, as was the case in Loyden v Secretary of the Department of Family and Community Services [1999] AATA 663.

25.I would believe that as this case has been being thoroughly examined and detailed at this hearing before the AAT, all necessary facts and information would be available for any possible future hearing and SRKKKK would be at no disadvantage in any future request for a review.

26.I have no difficulty with the contention that the term ‘wholly or partly’ in respect of loss of earnings (even if only partly in respect of lost earnings) as outlined in section 17(2) of the Act, indicates that the 50 per cent rule applies.

27.In relation to a lump sum compensation payment, the compensation part has the meaning given by subsections 17 (3) and (4) of the Act.

28.In SRKKKK’s case payment was made in a settlement which was in whole or in part related to his condition.

29.Section 17(4) is not now relevant as SRKKKK has repaid any monies owing and this is not contested.

30.The fact that the common law settlement was for only for 50 per cent of what was originally claimed is of no concern to the Tribunal other than in the determination of the compensation part of the lump sum. To avoid confusion the compensation part of the lump sum was in fact 50 per cent of $3,875,000 inclusive of costs amounting to $1,937,500. On legal advice, SRKKKK was also fully aware that the preclusion period would run until 2048 at the time of the settlement. SRKKKK now claims that the application of the 50 per cent rule as stipulated in the legislation is, in the special circumstances of his settlement (only providing for 15 per cent economic loss), a manifest unfairness or injustice from which section 1184K was designed to provide a release valve (see Mansfield J in Kirkbright.) This case considered the policy behind section 1184K and that special circumstances, within the meaning of section 1184K(1) existed that made it appropriate to treat all or part of the compensation payment as not having been made. It was also a case where the compensation recipient exhausted all funds before claiming social security benefits. Firstly, any monies owing have been repaid by SRKKKK and any alteration in his current financial position is not going to assist him or provide additional social security benefits unless he spends the whole amount. I find it difficult to see any special circumstances resulting in a manifest unfairness or injustice when comparing SRKKKK’s case with Kirkbright.

31.I agree with Mr Lozynsky that, as long as the lump sum compensation payment is in respect of lost earnings or earning capacity, the whole payment is caught within the meaning of compensation and the 50 per cent rule will apply. Hence it is not appropriate to attempt to dissect the lump sum to assess its component parts or to treat the 50 per cent rule as a special circumstance on its own. In Secretary, Department of Family & Community Services v Chamberlain (2002) 116 FCR 348 the Federal Court stated that the purpose of the 50 per cent rule was to avoid the manipulation of settlements where people went behind the total settlement sum to look at the economic loss component. As stated in Chamberlain, it is not appropriate to go behind the settlement lump sum and work out what proportion of that settlement was in respect of economic loss, because this would defeat the purpose of the 50 per cent rule which has been enacted by Parliament. The respondent also referred to Fowles and Secretary, Department of Social security (1995) 38 ALD 152, where the Tribunal was not satisfied that a low component for economic loss amounted to special circumstances because this would lend support to the approach that the amending legislation sought to prevent, for example, the dissection of the lump sum into components.

32.SRKKKK currently has ample funds to purchase his house and invest substantial funds for investment, as well as the capacity to earn some income from his work with Company A. I have no way of forecasting his financial future. Mr Lozynsky said that there were sufficient funds to guarantee SRKKKK’s future. Mr Kelly considered that on the present vista that awaits him in the future when the money is gone, he will end up in an institution. This is the result of his special circumstances in that he requires such large ongoing funds to maintain a condition of independent living. Mr Kelly also made the valid point that whatever the preclusion period, SRKKKK would not be entitled to draw a pension from the public purse unless and until he qualifies under the pension income and assets test. I share Mr Lozynsky’s optimism as SRKKKK impressed me as an intelligent, sincere man doing the very best under his disability, investing and planning for the future with diligence and care. This does not ignore Mansfield J in Kirkbright but the circumstances are a little different in that SRKKKK was fully aware of the preclusion period at the time of settlement. Mr Kelly advanced that SRKKKK will be at a grave disadvantage in addressing the issues down the track when records had gone, memories faded or witnesses no longer available. This hearing will ensure that records are available. There may not be this need in the future and substituting a preclusion period of 2009 is of no benefit to SRKKKK under his current financial position. It is purely conjectural as to when and if he will again qualify under the pension and income test as acknowledged by the SSAT at paragraph 73 of its decision.

33.There are ‘special circumstances’ in this case, namely that SRKKK is quadriplegic with limited ability to earn income and has the need for ongoing care as well as a reduced life expectancy. I have already reduced the preclusion period based on Professor Yeo's prediction as I do not consider it appropriate or prudent for a preclusion period to exceed the life expectancy of the injured person. He did receive a substantial common law settlement, in excess of the means test requiring him to seek independent living accommodation. It is now 16 years since he became quadriplegic, during which time he has coped very well, living communally in a sponsored environment, attending TAFE and procuring part time work. I would invoke special circumstances to reduce the preclusion period if I considered it would benefit SRKKKK. It is very possible, as Mr Lozynsky said that SRKKKK will be able to manage financially. I note the SSAT's prediction that the preclusion period should end in five years (i.e. 2009), amounts to a total period of 20 years. I understand that the figure was calculated by halving the economic loss component to make up the compensation part of the lump sum. This figure of 2009 is totally unrealistic in terms of SRKKKK’s present financial position and attitude. There is certainly no indication of financial hardship at this time or probably for at least the next 20 years. If this is not the case and there is financial hardship at an earlier dare, he can seek to have section 1184K applied in the future. To have the preclusion period shortened on the basis that there may be financial hardship sooner than later is not the purpose of the legislation (Beadle).  

34.In response to the applicant’s contentions numbers 21, 25, 28, 32 and 33. Firstly any matters concerning the original claim for $7.5 million and the end figure of $3,875,000 is a matter between the parties (contentions 25, 28, 33). There was always the risk of all or nothing and as often happens, the parties settled for 50/50. This has no bearing at this time on any special circumstances. Concerning contention 25, this is covered by the 50 per cent rule. Concerning contention 32, I agree that careful budgeting will be required but that we do not know what the situation will be in 2043 when the preclusion period is finished.

35.For these reasons the decision of the Social Security Appeals Tribunal of 15 October 2004 is set aside and substituted with a new decision that the compensation preclusion period be from 10 October 1989 to 26 May 2043.

I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Dr M E Thorpe, Member

Signed:         N. Kinchin            .....................................................................................

Associate

Date/s of Hearing  4 April 2005
Date of Decision  27 May 2005
For the Applicant  Mr Lozynsky                   
Solicitor for the Respondent     Mr Kelly