Strachan; Secretary, Department of Employment and Workplace Relations

[2006] AATA 541

Administrative

Appeals

Tribunal

 

INTERLOCUTORY DECISION AND REASONS FOR INTERLOCUTORY DECISION [2006] AATA 541

ADMINISTRATIVE APPEALS TRIBUNAL          № V2006/422

GENERAL ADMINISTRATIVE   DIVISION

Re:SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And:         DOROTHY-ANNE STRACHAN

Respondent

INTERLOCUTORY DECISION

Tribunal:       Mr Egon Fice, Member

Date:22 June 2006

Place:Melbourne

Decision:      The Tribunal refuses the request to stay the implementation of the decision of the Social Security Appeals Tribunal dated 28 April 2006, insofar as it deals with future payments from that date.  However, the payments in arrears of disability support pension between 11 July 2005 and 28 April 2006, are stayed by consent until the final determination of this matter before the Tribunal.

(sgd) Egon Fice

Member

PRACTICE AND PROCEDURE – disability support pension ‑ stay application – prospects of success – prospects of recovery of overpayment ‑ hardship

Administrative Appeals Tribunal Act 1975 (Cth) s 41(2)

Social Security Act 1991(Cth) s 94(1)(a), (b) and (c) s 1231

Social Security (Administration) Act 1999 (Cth) s 152(1)

In the Marriage of Whitford (1979) 24 ALR 424

Re Commonwealth of Australia and Quirke (1986) 9 ALD 92

Re Dart and Director-General of Social Services New South Wales (1982) 4 ALD 553

Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240

Re Department of Social Security and Collins (1991) 26 ALD 344

Re Repatriation Commission and Delkou (1985) 8 ALD 454

REASONS FOR INTERLOCUTORY DECISION

22 June 2006  Mr Egon Fice, Member

1.      Mrs Strachan lodged a claim for the Disability Support Pension (“DSP”) on the grounds that she suffered from a back condition, depression and diabetes.  Her claim for the DSP was rejected.  Upon review by the original decision‑maker, that decision was affirmed.  She then sought reconsideration by an Authorised Review Officer (“ARO”) who upheld the decision of the original decision‑maker.  She appealed that decision to the Social Security Appeals Tribunal (“SSAT”) which, on 10 May 2006, upheld her claim and directed that the matter be referred to the Chief Executive Officer (“CEO”) of Centrelink for reassessment.  On 18 May 2006, the Secretary, Department of Employment and Workplace Relations (“Secretary”) lodged an application for review with the Administrative Appeals Tribunal (“Tribunal”).  On the same day, the Secretary also lodged an application seeking a stay of the implementation of the SSAT decision.  It is that application which is before the Tribunal.

2.      The grounds upon which the Secretary seeks a stay of the implementation of the SSAT decision are that:

(a)the substantive application has real prospects of succeeding;

(b)implementation of the decision may render review by this Tribunal nugatory;

(c)if the Stay Order is not granted, the Secretary may have difficulty or may be unable to recover monies should the Tribunal find in favour of Mrs Strachan; and

(d)the recovery of any monies may cause greater hardship to Mrs Strachan.

3. The SSAT concluded that as at 11 July 2005, Mrs Strachan was medically qualified for the DSP. On 28 April 2006, the SSAT set aside the decision to reject Mrs Strachan’s claim for the DSP and it determined that her claim be reassessed on the basis that she satisfied s 94(1)(a), (b) and (c) of the Social Security Act 1991 (“the Act”).  Given that the SSAT did not specify a later date for its decision to come into operation, that decision must come into operation immediately upon the giving of the decision (s 152(1) Social Security (Administration) Act 1999 (“Administration Act”)). Therefore, Mrs Strachan is presently entitled to payment of the DSP commencing 11 July 2005. According to the parties, approximately $2500.00 is now payable as a result of the SSAT decision. However, Mrs Strachan has agreed that the decision of the SSAT, insofar as it requires payment by the Secretary of the DSP between 11 July 2005 and the date of this decision, should be stayed. Mrs Strachan’s objection to the Secretary’s Stay Application is in respect of any future payments to which she will become entitled.

POWER TO GRANT A STAY

4. Unless an Order is made by the Tribunal under s 41(2) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”), 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)). The power to stay the operation or the implementation of a decision is set out in s 41(2)) of the AAT Act which provides:

(2)       The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

5. A number of decisions have dealt with the operation of s 41(2) of the AAT Act and the general principles regarding its application have been expressed in Re Dart and Director-General of Social Services New South Wales (1982) 4 ALD 553; Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240; and Re Repatriation Commission and Delkou (1985) 8 ALD 454 In addition, Deputy President Forgie, in Re Department of Social Security and Collins (1991) 26 ALD 344, examined in some detail the principles and application of s 41(2) of the AAT Act. Deputy President Forgie noted that Deputy President Hall, in Delkou, said that the Tribunal recognised that the power conferred by s 41(2) needed to be construed broadly and that it must be capable of adaptation to the wide variety of situations that arise in its diverse administrative review decisions. She then said at page 346:

…Therefore, cases such as Delkou and Dart will provide guidance but each case must be considered on its own merits.  Matters which were considered in those cases and which were also found by the Honourable J.B.K. Williams in Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 to be proper for the Tribunal to take into account included:

“(a)the likely prospect of recovery by the Commonwealth of compensation paid to the respondent pursuant to the determination in favour of the respondent in the event that the determination was not upheld on review;

(b)the prospect of success that the Commonwealth’s application for review of the determination;

(c)the hardship to the respondent that might result if a stay order were made.” …

Although the matters set out in Quirke are proper matters to take into consideration, the overriding principle is that which was stated by Davies J (President) in Dart where he said, at page 556:

… However, a stay order is made only if it is appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review. …

PROSPECTS OF SUCCESS

6.      In considering the prospects of success of the Secretary’s substantive application to the Tribunal, I should bear in mind what was said by Deputy President Hall in Delkou.  He referred to the decision of Davies J in Dart, with which he agreed, where the President said that it was neither convenient nor appropriate that on a stay application there should be a “preliminary trial of the issues that will ultimately have to be considered by the Tribunal”.  It is nevertheless relevant for the Tribunal to consider whether there exist facts and circumstances which, if established at the hearing, provide a basis for the Secretary’s success in the application, or whether there are points of law raised which, if sustained, will lead to that conclusion.  This statement was adopted with approval by the Honourable J.B.K. Williams in Quirke.

7. The Secretary in this case argued that the decision made by the SSAT was wrong in law. In particular, he argued that the pre-conditions set out in s 94(1)(b) and (c) of the Act were not met. The Secretary submitted that the assignment of a rating of 20 points under Schedule 1B of the Act can only take place after a comprehensive history and examination. Before a rating can be assigned, an applicant’s condition must be fully documented, diagnosed, treated and stabilised. In order to assess whether a condition is fully diagnosed, treated and stabilised, according to Schedule 1B, one must consider, amongst other things, whether treatment is continuing or is planned in the near future, and whether any further reasonable medical treatment is likely to lead to significant function improvement within the next two years. The Secretary argued that the evidence before the SSAT was that at the date of Mrs Strachan’s claim, her condition could not be regarded as fully treated and stabilised as she had only just commenced treatment and was about to commence more intensive psychological counselling. The Secretary also submitted that the evidence was not consistent with an inability to work as a medical report indicated she may be able to work in excess of 30 hours per week within 6 to 24 months.

8.      Against the Secretary’s argument, Mrs Strachan relied on the fact that her treating doctor reported that her depression was likely to be a long term problem and would not be substantially improved in the following two years.  The SSAT preferred the view of her treating doctor to assessments of her condition obtained by the Secretary.

9.      Quite clearly, without a thorough examination of the contradictory medical evidence, and the testing of opinions by cross-examination, it is not possible to offer any view about the prospects of success.  In the final analysis, the question is: whose medical experts should be believed?  I am not able to say that the SSAT decision is patently incorrect on its face.  The Secretary’s claim can be put no higher than: there are questions which need to be resolved and it is possible that the Secretary may succeed in his application which would result in the SSAT decision being set aside.

IMPLEMENTATION OF THE DECISION MAY RENDER REVIEW BY THE TRIBUNAL NUGATORY

10.     I did not understand the Secretary to be making any submissions under this heading even though it is set out as a ground for seeking the stay.  There was nothing put to me which might cause me form the opinion that if the SSAT decision were implemented, review by the Tribunal would be rendered nugatory. 

PROSPECTS OF RECOVERY OF PAYMENTS MADE TO MRS STRACHAN

11.     Unlike the argument put on behalf of the applicant in Collins, the Secretary did not argue that should he be successful before the AAT, payments made to Mrs Strachan may not be recoverable as a matter of law.  The Secretary only expressed concern about recoverability of any overpayment in the context of the pecuniary position of Mrs Strachan.  Also, given that Mrs Strachan consents to a Stay Order being granted in respect of all arrears of payments due to her, we are only concerned here with future payments.  As far as those payments are concerned, I was told by Mr Freedman, who appeared on behalf of Mrs Strachan, that she was already receiving approximately $400.00 per fortnight in Widow Allowance.  If she were granted the DSP, that would add approximately $89.00 per fortnight to her social security payments.

12.     Mr Freedman explained that Mrs Strachan was in a precarious financial position because, from her Widow Allowance, she only had approximately $36.00 per week available to her to spend on food, clothing, travel costs and like expenses.  There were certain “one off” bills, which she could not meet.  She had obtained an advance from Centrelink in the sum of $500.00 which was being repaid and she had also borrowed a further $400.00 from her daughter.  I accept Mrs Strachan’s financial position as described by Mr Freedman and recognise that her financial position is quite parlous.  I also accept that if the Secretary is successful in his application to the AAT, the recovery of monies paid to Mrs Strachan may well pose a problem.  I have no doubt that this is a relevant consideration as was pointed out in Quirke at page 94. However, Mr Freedman also submitted that, given that Mrs Strachan would in any event be entitled to a Widow Allowance, the Secretary could recover any excess payments by way of deductions from that Allowance in accordance with s 1231 of the Act. Such deductions would of course be subject to severe financial hardship constraints. Nevertheless, it would seem to me that this course is likely to result in recovery of any overpayment, albeit over an extended period of time. I have no doubt that if recovery of overpayment were required, it would put Mrs Strachan under greater financial pressure but the extent of that pressure can be varied to account for any additional hardship.

HARDSHIP TO MRS STRACHAN IF A STAY ORDER IS MADE

13.     The concept and meaning of “hardship” were fully discussed by Deputy President Forgie in Collins.  Although the Deputy President did not come to a final view on the meaning of hardship, she took into account the views expressed by the Full Court of the Federal Court in In the Marriage Of Whitford (1979) 24 ALR 424 where it said, at page 430:

In our view the meaning of “hardship” in sub-s 44(4) is akin to such concepts as hardness, severity, privation, that which is hard to bear or a substantial detriment.

The Full Court also said that it was appropriate to equate hardship to any appreciable detriment, financial personal or otherwise.

14.     Given the state of Mrs Strachan’s current financial position as explained by Mr Freedman, which I accept, the granting of the Stay Order sought by the Secretary would result in hardship to Mrs Strachan.  An additional $89.00 per fortnight, given her financial position, would undoubtedly go some way towards alleviating the financial difficulties which she already faces.

15.     I am satisfied that if future payments of the DSP were withheld from Mrs Strachan, there would be an appreciable detriment to her already difficult financial circumstances.

CONCLUSION

16.     The Tribunal can only make Orders staying or otherwise affecting the operation or implementation of a decision under review if it is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review where the Tribunal considers it is appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.  Having considered the prospects of the Secretary’s success on review, it is not possible to say that they are any better than Mrs Strachan’s.  Success or otherwise at the substantive hearing of this matter will depend on the expert medical evidence given at that hearing.  It is not possible to say that the decision made by the SSAT is patently incorrect on its face. 

17.     As far as recovery of any monies paid to Mrs Strachan by way of DSP are concerned, I accept that there are likely to be some problems in making full recovery in the event that she is unsuccessful before this Tribunal.  However, it is not possible to say that recovery will be impossible.  In fact that was not argued by the Secretary.  Rather, he submitted that there might be difficulty in making recovery.  However, offset against that is the fact that Mrs Strachan would in any event be qualified to receive the Widow Allowance and the Secretary could ensure that deductions, commensurate with any hardship considerations, were made in order to recover the debt. 

18.     Finally, if a Stay Order were made regarding payments following the SSAT decision, it does appear that additional hardship would be inflicted upon Mrs Strachan. 

19. Therefore, balancing these factors, and mindful of the basis upon which a Stay Order should be granted under s 41(2) of the AAT Act, I am of the view that an order staying the implementation of the SSAT decision made on 28 April 2006, insofar as it deals with future payments from that date, should be refused. However, the payments in arrears, that is payments of the DSP between 11 July 2005 and the date of the SSAT decision, are stayed by consent until the final determination of this matter before the Tribunal.

I certify that the nineteen [19] preceding paragraphs are a true copy of the reasons for the decision of:

Mr Egon Fice, Member

(sgd)       Olympia Sarrinikolaou

Clerk

Date of hearing:  9 May 2006

Date of decision:  22 June 2006
Solicitor for the applicant:            Mr M. Freedman, Victoria Legal Aid
Solicitor for the respondent:        Mr M. Hester, Legal Services Branch, Centrelink