Szmekura-Moor; Secretary, Department of Social Services and (Social services second review)

[2018] AATA 868

Szmekura-Moor; Secretary, Department of Social Services and (Social services second review) [2018] AATA 868 (11 April 2018)

Division:GENERAL DIVISION

File Number:           2018/0142

Re:Secretary, Department of Social Services

APPLICANT

Nicholas Szmekura-MoorAnd  

RESPONDENT

DECISION

Tribunal:Senior Member Dr M Evans

Date:11 April 2018

Place:Perth

The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 is granted with respect to the payment of arrears. The Tribunal refuses to grant a stay order with respect to ongoing payments, which are to be paid to the Respondent from the next pay date following the day that the Applicant receives this decision.

....[sgd]....................................................................

Senior Member Dr M Evans

CATCHWORDS

Practice and procedure – stay application with respect to AAT Tier 1 decision - Disability Support Pension – relevant factors – financial hardship - respondent difficulty in repaying debt – whether stay order would secure effectiveness of hearing – stay order granted for arrears but refused for ongoing payments

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) – s 25(1), s 41(1), s 41(2), s 41(4)(a)

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

Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 – Table 7

CASES

Broadbent v Civil Aviation Safety Authority [1999] FCA 1871

Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418

Department of Employment and Workplace Relations and Anastasiadis [2004] AATA 146

Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 146

Opie v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 769

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

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

Re Repatriation Commissionand Bramston (1985) 8 ALD 468

Re Repatriation Commission and Delkou (1985) 8 ALD 454

Rose and Comcare [2013] AATA 735

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

Re Secretary, Department of Social Services and McNamara [2016] AATA 189

Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065

Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880

Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333

Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246

REASONS FOR DECISION

Senior Member Dr M Evans

11 April 2018

BACKGROUND

1. The Respondent made a claim for a disability support pension (DSP) on 25 August 2016 (T12).

2. On 23 March 2017, the Respondent’s claim was rejected (the Original Decision) on the basis that he had not been assessed as having an Impairment Rating of 20 points or more under Table 7 of the Social Security (Tables for the Assessment of Work-related Impairment for Disability Support Pension) Determination 2011 (Impairment Tables) (T16).

3. The Respondent then sought an internal review of the Original Decision by the Department. The result was that the Original Decision was affirmed on 1 August 2017 (T21).

4. On 27 September 2017, the Respondent sought review by the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT Tier 1 Review). A hearing was conducted on 15 December 2017.

5. In a decision dated 15 December 2017, the AAT Tier 1 Review set aside the Original Decision and substituted a new decision. The new decision was that the Respondent satisfied the eligibility requirements in ss 94(1)(a),(b) and (c) of the Social Security Act 1991 (Cth) (Social Security Act). This included a finding that his medical conditions (autism spectrum disorder and attention deficit hyperactivity disorder) attracted a rating of 20 points under Table 7 of the Impairment Tables (the AAT Tier 1 Decision).

6. The effect of the AAT Tier 1 Decision was that the Respondent would be eligible to be paid a disability support pension from the date of claim, being 25 August 2016.

7. The Applicant has applied for a review of the AAT Tier 1 Decision by the General Division of the AAT (Tier 2 Review) and seeks an order under s 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) to stay the AAT Tier 1 Decision. This means that the Respondent would not receive a disability support pension from the date of claim unless the Applicant is successful at the AAT Tier 2 Review.

8. The Respondent opposes the Applicant’s application for a stay order.

   ISSUE

9. The issue for determination by the Tribunal is whether to make an order staying the operation of the AAT Tier 1 Decision, and if so, the extent to which the stay order should operate.

   MATERIAL BEFORE THE TRIBUNAL

10. A hearing in relation to the Applicant’s stay application was conducted on 9 March 2018.

11. The Applicant was represented by Mr Gary Khoo of the Department of Human Services who appeared by telephone. The Respondent was self-represented with the assistance of Ms Melinda Edgelow (a disability advocate from Sussex Street Community Legal Centre) who appeared by telephone.

12. The following material was before the Tribunal:

    (a)the Applicant’s Submissions on Stay Application dated 31 January 2018 (Exhibit A1);

    (b)an email from the Respondent dated 17 January 2018 in response to the Applicant’s request for a stay order (Exhibit R1);

    (c)the oral evidence of the Respondent; and

    (d)the section 37 documentation filed by the Applicant relating to the substantive review of the AAT Tier 1 Decision (T-documents).

13. The Tribunal found the Respondent to be a credible and honest witness.

    RELEVANT LEGISLATION AND PRINCIPLES

14. The filing of an application to review a decision with the Tribunal will not automatically prevent it from taking effect. This is provided for by s 41(1) of the AAT Act which states:

    (1)  Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.

15. If the Tribunal grants a stay order under s 41(2) of the AAT Act, it will stop a decision from taking effect until the final determination of the matter following the substantive hearing.

16. The Federal Court in Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 (at 20) stated:

    The discretion conferred by s 44A(2) of the AAT Act should be exercised only where special circumstances justify departure from the rule that a successful litigant is entitled to the fruits of judgment pending the appeal, because the appeal, although successful, may otherwise be rendered nugatory.

17. Section 41(2) of the AAT Act permits a party to apply to the Tribunal for a stay order with respect to an operative decision which affects a person’s rights (Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246). The Tribunal will only grant a stay order if there is something for the stay order to operate on. For example, in social security matters, if a lump sum has been paid, a stay order will be refused (Re Repatriation Commission and Delkou (1985) 8 ALD 454).

18. Section 41(2) of the AAT Act states:

    (2)  The Tribunal may, on request being made 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 (Original emphasis).

19. In summary, s 41(2) of the AAT Act provides that the granting a stay order is conditional upon:

    (a)a request being made to the Tribunal by a party; and

    (b)the Tribunal having 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”. The relevance of a person’s interests will be assessed with reference to the specific legislation under which the decision under review was made (Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333).

20. The fundamental purpose of a stay order is a narrow one - that is, the purpose of a stay order is to secure the effectiveness of the hearing and determination of the application for review (Kurukkal and Minister for Immigration and Multicultural and Indigenous Affairs [2004] AATA 146 at [34]).

21. Section 41(4)(a) of the AAT Act also provides that the Tribunal will not grant a stay order unless the parties have been given a reasonable opportunity to make submissions to the Tribunal:

    (4)  …the Tribunal shall not:

    a)make an order under subsection (2) unless the person who made the decision to which the relevant proceeding relates has been given a reasonable opportunity to make a submission to the Tribunal, as the case may be, in relation to the matter…

22. The discretion which s 41(2) of the AAT Act gives to the Tribunal is a broad one, and is similar to the power of a court to grant a stay order: Broadbent v Civil Aviation Safety Authority [1999] FCA 1871. The AAT has a broad jurisdiction, which is conferred by numerous acts of the Commonwealth Parliament (s 25(1) of the AAT Act). Section 41(2) of the AAT Act applications are made to the Tribunal to stay decisions under a broad range of Commonwealth legislation in areas including civil aviation, social security and aged pensions, compensation and professional licences and registrations, such as tax agents’ registration. The relevant factors which may be considered by the Tribunal will consequently differ for each application (Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240).

23. In previous stay order applications before the Tribunal involving the payment of pensions and compensation, the Tribunal has had regard to the following factors:  

    (a)the prospects of success, or the merits of the Applicant’s case if the matter were to proceed to a substantive hearing;

    (b)the prejudice or hardship that the parties, or other persons whose interests may be affected by the review, may suffer;

    (c)the likelihood of recovery of monies by the Commonwealth if the person is unsuccessful at the substantive hearing of the matter;

    (d)whether it is in the public interest to grant a stay order; and

    (e)whether the review application, if successful, would be rendered nugatory if the stay order is not granted.

    (see for example, Re Repatriation Commission and Delkou (1985) 8 ALD 454, Opie and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 769, Rose and Comcare [2013] AATA 735, Re Secretary, Department of Social Services and McNamara [2016] AATA 189, Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065).

24. The Tribunal can consider the extent to which the stay order should operate and may exercise its discretion to stay part of the operative decision (see for example, Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344). In cases where the recipient of a payment would suffer hardship, the Tribunal may exercise its discretion to stay the payment of the lump sum arrears pending the final decision of the Tribunal under review, but not the ongoing weekly or fortnightly payments (see for example Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 (Quirke); Re Repatriation Commission and Bramston (1985) 8 ALD 468). This may assist to relieve hardship to the recipient, whilst, in part, protecting public funds from being dissipated.

    CONSIDERATION

    Prospects of success

25. The Tribunal should consider the prospects of success or the merits of the Applicant’s case if the matter were to proceed to a substantive hearing in deciding whether to exercise its discretion to grant a stay order.  

26. The relevant legal principles relating to this ground were summarised by Member Fice in Secretary, Department of Employment and Workplace Relations and Anastasiadis [2007] AATA 1065 at [10]-[11] as follows:

    10. When considering the prospects of success of an applicant in the course of a Stay application, it is not the role of the Tribunal to conduct a preliminary hearing of the substantive matter based on the evidence given in the SSAT.  As Davies J (President) said in Re Dart and Director-General of Social Services (1982) 4 ALD 553 at 555:

    It is not convenient or appropriate that on this application for a stay there should be any preliminary trial of the issues that will ultimately have to be considered by the Tribunal.

    11. However, it is relevant for the Tribunal to consider whether there exist facts and circumstances which, if established at the substantive hearing, would provide a basis for the Secretary’s success in the review application; or whether there are points of law raised which, if sustained, will lead to that conclusion (see Re Commonwealth of Australia and Quirke (1986) 9 ALD 92 at 95).

27. In summary, the Secretary’s argument is that the Respondent’s conditions were diagnosed, but were not fully treated and stabilised during the qualification period, and that he has the capacity to work. The Secretary summarised its submissions on this ground in its Submissions on Stay Application dated 31 January 2018 (Exhibit A1) at paragraph 20 as follows:

    The Secretary submits that the available evidence does not support an assessment that Mr Szmekura-Moor had a severe impairment for the conditions that arise under Table 7 of the Impairment Tables. The Secretary submits that she has reasonable prospects of success on review and this justifies a stay being granted.

    In support of these submissions, the Applicant referred to a medical report by Dr Ernst De Jong (Consultant Psychiatrist) dated 26 June 2016, a further medical report by Dr De Jong dated 8 July 2017, and a referral by the Respondent’s general practitioner for him to see Dr Raj Sekhon (Psychiatrist) for opinion and management of his conditions. In summary, the Applicant argued that the evidence does not support the conclusion that the Respondent met the eligibility requirements in ss 94(1)(a),(b) and (c) of the Social Security Act (regarding the Respondent’s conditions being fully stabilised and treated, and his capacity to work).

28. The Respondent argued in his written submissions, and at the hearing, that the Applicant does not have a reasonable prospect of success at the substantive hearing of the matter for two reasons. These can be summarised as follows: firstly, because the Respondent was successful at the Tier 1 Review, and secondly because there is no new evidence to support the Applicant’s case. In Exhibit R1, the Respondent stated, “I am confident that the follow-up review will conclude with the same result as the initial review, in light of the lack of new evidence and the factual inaccuracy of Centrelink’s claims”.

29. Whether the Respondent’s conditions were fully stabilised and treated, and his capacity to work (and therefore whether the Respondent met the eligibility requirements in ss 94(1)(a),(b) and (c) of the Social Security Act), will depend on the interpretation of the relevant evidence at the substantive hearing. Depending on the interpretation of this evidence, the Secretary may have a reasonable prospect of success at the substantive hearing. This weighs in favour of granting a stay order.

    Prejudice or hardship

30. Whether a person’s interests will be affected by the review will be assessed with reference to the specific statutes under which the decision being reviewed was made (Samir Pty Ltd and Aged Care Standards and Accreditation Agency [2012] AATA 333). Considering the statutory regime in this instance is the Social Security Act and the relevant Impairment Table, the persons who may be affected by this application are the Applicant and the Respondent.

31. The Applicant submits that the Secretary may be prejudiced if the stay is not granted. This is because the Applicant will be obliged to make DSP payments to the Applicant from 25 August 2016, and if the Applicant is successful in the substantive application, it will likely have to recover nominal amounts over an extended period of time which will cause administrative costs to be incurred by the Commonwealth. This weighs in favour of granting a stay order, particularly with respect to the arrears.

32. In his oral submissions at the interlocutory hearing, and in his written submissions, the Respondent gave evidence that he was currently receiving the Newstart allowance, which is $260 less a fortnight than the disability pension. The Respondent gave evidence that he was struggling to afford rent and to pay for necessary items such as food and clothing, and that the additional financial pressure, together with the time it is taking to resolve his DSP claim, was impacting on his mental health. In his written submissions (Exhibit R1), the Respondent stated that, “My current financial status is incredibly dire, and I have been struggling to make ends meet for the past 2 years as a result of Centrelink’s constant rejections.” This hardship to the Respondent weighs in favour of refusing a stay order, particularly with respect to the ongoing payments. 

    Likelihood of recovery of monies

33. In his oral submissions at the interlocutory hearing, and in his written submissions, the Respondent stated that he was aware that he may have to repay the money if he was unsuccessful at the substantive hearing, and that he was willing to do so.  The Respondent stated in his written submissions (Exhibit R1):

    I am in opposition of the stay order and do not wish to have it implemented. I make this claim with the knowledge that should the secondary review of my appeal be rejected, I will need to repay any income I was granted from the Disability Support Pension during the intervening time. I understand this fact and accept it.

34. With respect to the potential back payment of arrears from 25 August 2016, which he would receive as a lump sum if the stay order were not granted, the Respondent gave evidence at the hearing that he would try to save this money. He gave evidence at the hearing that receiving this money was a matter of financial security for him because he would not be overdrawn on his bank account each fortnight.

35. Regarding the likelihood of recovering the debt, the Secretary submitted that (Exhibit A1 at [27]):

    If the Secretary is successful in the substantive application and a stay is not granted, the resulting overpayment will ultimately be a debt to the Commonwealth that is payable by Mr Szmekura-Moor. Recovery of that amount may impose financial hardship on Mr Szmekura-Moor.

36. As discussed above, the Respondent gave evidence to the Tribunal that he is currently experiencing financial hardship and that he is having difficulty meeting the daily costs of living. He gave evidence that this financial hardship, as well as the length of time that it is taking to resolve his DSP claim, is also having an impact on his mental health. This evidence of financial hardship suggests that despite his intentions to save the arrears, it may be difficult for him to do so and there may be a risk that the arrears may dissipate, and further, that it may cause the Respondent hardship if he is unsuccessful at the substantive hearing and has to repay them. This weighs in favour of granting a stay order for the arrears. On the other hand, the hardship which is being experienced by the Respondent in meeting his daily living expenses, and the impact that this is having on his mental health, weighs in favour of refusing to grant the stay order for the ongoing weekly payments.

1. The Tribunal notes that the Applicant will be able to recover the amount of any monies overpaid at law (as noted by the Applicant in Exhibit A1), if the Applicant is successful at the substantive hearing. However, the Tribunal accepts, as the Applicant has submitted, that this may be via nominal deductions over a period of time.  If the Respondent receives ongoing payments until the hearing of the substantive matter, he will only receive a sum which is $260 more per fortnight than the Newstart allowance he is currently receiving. The Tribunal is of the view that this smaller sum is more likely to be recoverable by the Applicant, without being so high as to cause undue hardship to the Respondent if he is unsuccessful at the substantive hearing and has to repay it. These factors weigh in favour of granting the stay order with respect to the arrears, but not the ongoing payments.  

   Public interest

2. The Applicant submitted that (Exhibit A1 at [30]) “DSP payments are made from public funds and she [the Secretary] has an obligation to protect those funds by ensuring that payments are only made to individuals who are lawfully entitled to receive them”.

3. The Tribunal agrees that this tends to weigh in favour of the grant of a stay order.

   Whether the review application will be rendered nugatory

4. The Tribunal is also required to consider whether the review application, if successful, would be rendered nugatory if the stay order is not granted. The Applicant argues that it would be.

5. In her written submissions, the Applicant stated (Exhibit A1 at [22]): “If the stay is not granted, DSP arrears will be paid to Mr Szmekura-Moor from 25 August 2016 and there is a real risk that the Secretary would not be restored to her original position if the substantive application succeeds.”

6. In summary, the Applicant’s argument is that if the stay order is not granted and the Secretary’s substantive application succeeds, the Respondent would have received monies that he was not entitled to. This money must be recovered in circumstances where the Respondent may experience hardship in repaying it. Consequently, a stay order would assist in securing the effectiveness of the hearing. 

7. Further (in Exhibit A1 at [23]) the Respondent submitted that, “…while the amounts may be recoverable at law, successful recovery action cannot be guaranteed.” The difficulty in recovering monies has been found by the Tribunal to weigh in favour of granting a stay order (Re Repatriation Commission and Delkou (1985) 8 ALD 454). The Tribunal is of the opinion that, given that arrears have been accruing since the date of claim, being 25 August 2016, the arrears are substantial and may be difficult to recover if they have been dissipated before the hearing of the substantial application. This weighs in favour of granting the stay order with respect to the arrears. However, the ongoing fortnightly payments are not substantial (being $260 more per fortnight than the Newstart allowance which the Respondent is currently receiving), and are likely to be recovered (for example, through a reduction in fortnightly repayments over a number of months) if the Respondent is unsuccessful at the substantive hearing.

   CONCLUSION

8. Having reviewed the evidence before it including the oral and written submissions of both parties, and for the reasons outlined above, the Tribunal concludes that it should exercise the discretion conferred upon it by s 41(2) of the AAT Act to grant a stay order to secure the effectiveness of the hearing of the substantive application currently before the Tribunal with respect to the arrears. There are circumstances which justify the departure from the rule that a successful litigant is entitled to the fruits of the judgment pending appeal with respect to the arrears, but for the reasons outlined above, not with respect to the ongoing payments. In Quirke, when granting a stay order with respect to the arrears, but not ongoing weekly compensation payments, Senior Member The Hon JBK Williams (at 96) ordered that the payment of weekly payments should commence from the next “pay-day” following his decision. The Tribunal proposes to proceed in a similar manner in this application.

9. The Tribunal notes the financial hardship that the Respondent is suffering, namely his inability to meet his daily living expenses, as well as the Respondent’s evidence that his mental health has been under strain due to the length of time his claim has taken to date. As a consequence, the Respondent requires the substantive application to be resolved quickly. The Tribunal notes the decision in Re Commonwealth Banking Corporation and Iannello (1988) 15 ALD 418, where the Tribunal granted a stay order, but to reduce hardship to the recipient of the payment, directed that the hearing of the substantive matter be expedited. The Tribunal has therefore requested that, to the extent that Tribunal resources permit, that this matter be expedited to be heard as soon as possible.

   DECISION

10. The application for a stay order under s 41(2) of the Administrative Appeals Tribunal Act 1975 is granted with respect to the payment of arrears. The Tribunal refuses to grant a stay order with respect to ongoing payments, which are to be paid to the Respondent from the next pay date following the day that the Applicant receives this decision.

I certify that the preceding 46 (forty-six) paragraphs are a true copy of the reasons for the decision herein of Senior Member Dr M Evans

.....[sgd]...................................................................

Associate

Dated: 11 April 2018

Date of hearing:	9 March 2018
Representative for the Applicant:	Mr Gary Khoo
Respondent:	In person
Advocate for the Respondent:	Ms Melinda Edgelow