Townsend and Secretary, Department of Family and Community Services

[2002] AATA 525

DECISION AND REASONS FOR DECISION [2002] AATA 525

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2001/1454

GENERAL ADMINISTRATIVE  DIVISION       )          
           Re      William Townsend           
  Applicant
           And    Secretary, Department of Family and Community Services        
  Respondent

DECISION

Tribunal       Ms SM Bullock, Senior Member  

Date28 June 2002

PlaceSydney

Decision      The Decision under review is set aside pursuant to section 43 of the Administrative Appeals Tribunal Act 1975. In substitution therefor, the Tribunal decides that: a) Pursuant to section 1184 of the Social Security Act 1991, in the special circumstances of Mr Townsend's case, that half of the compensation payment, being an amount of $100,000.00, be treated as not having been made; and,
 b) The matter is remitted to the Respondent to calculate the appropriate preclusion period.           

..............................................
  Ms SM Bullock
  Senior Member
CATCHWORDS
SOCIAL SECURITY - Compensation Affected Payment - Preclusion Period - Special Circumstances

LEGISLATION

Social Security Act 1991 (Cth) ss 17, 1163, 1165, 1184

AUTHORITIES

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670
Secretary, Department of Social Security v Hulls and Others (1991) 22 ALD 570
Re Ivovic and Director-General of Social Services (1981) 3 ALN N95
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Social Security v Thompson (1994) 53 FCR 580
Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464
Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690
Re Green and Secretary, Department of Social Security (1990) 21 ALD 772
Re Secretary, Department of Social Security and VYS (1995) 40 ALD 745
Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681
Re Secretary, Department of Social Security and Galea (1993) 35 ALD 749

REASONS FOR DECISION

28 June 2002   Ms SM Bullock, Senior Member   

1. This is an application for review to the Administrative Appeals Tribunal ("the Tribunal"), by the Applicant, Mr William Townsend, of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 29 August 2001 (T2) which affirmed a decision of an Authorised Review Officer ("ARO") dated 17 July 2001 (T19).  The ARO's decision in turn affirmed a decision of a delegate of the Secretary, Department of Family and Community Services ("the Department") made on 11 May 2001 (T14).

1. A hearing was held before the Tribunal on 20 March 2002. Mr Townsend was self-represented and gave oral evidence to the Tribunal. The Department was represented at the hearing by Ms S Mantaring, Departmental Advocate. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act  1975 ("T Documents", T1-T19) and the following exhibits:

EXHIBIT       DESCRIPTION       DATE
Exhibit A1     Applicant's Statement Recording Purchase of Shares-Stockbroker Andrew West  8 January 2001           
Exhibit  A2    NRMA Financial Statements        Various         
Exhibit A3     Documents provided to the Applicant by Centrelink, including: "Income from Investments Subject to Extended Deeming-Valid from 1 July 2000 to 19 September 2000" "Income Test-Pensioner Couple-Valid from 1 January to19 March 2001"                   
Exhibit A4     Letter from Dr Shane Connolly, Penrith Imaging, to Dr L Survela.     30 June 2000            
Exhibit A5     Letter from P Prendergast, Centrelink Manager to the Applicant re his Statement of Account.       15 October 1998     
Exhibit A6     Letter to the Applicant from Mr Sam Kay, Workers' Compensation Dust Diseases Board. 7 May 2001  
Exhibit A7     Letter to the Applicant from Mr John Cox, Astley Thompson Cox Solicitors & Attorneys.     3 April 2001  
Exhibit A8     District Court of NSW Consent Order in the matter of William Townsend v Shipcove Pty Ltd           19 February 2001   
Exhibit A9     Letter to the Applicant from Mr John Cox, Astley Thompson Cox Solicitors & Attorneys           23 February 2001   
Exhibit A10    Applicant's Statement        18 February 2002   
Exhibit R1     Respondent's Statement of Facts and Contentions.     7 January 2002       
Exhibit R2     Centrelink Financial Information Statement       12 March 2002        

Issues

1. The issues in this matter are:

• Whether or not a compensation preclusion period from 20 February 2001 to 2 August 2004 was correctly calculated; and if so,

• Whether or not there are "special circumstances" in the Applicant's case whereby all or part of the compensation payment should be treated as not having been made under the provisions of section 1184 of the Social Security Act 1991.

Legislation

1. A decision in this matter requires consideration of the Social Security Act 1991 ("the Act").

2. Section 17 of the Act deals with compensation recovery definitions and as relevant states:

3. Compensation recovery definitions

   17(1)   In this Act, unless the contrary intention appears:
             …

   compensation has the meaning given by subsection (2).

   Note: See also section 1163B.

   compensation affected payment means:
   (aa) an age pension; or
   (a) a disability support pension; or
   (b) a parenting payment; or
   (c) a social security benefit; or
   (e) a disability support wife pension; or
   (f) a carer payment; or
   (g) a special needs disability support pension; or
   (h) a special needs disability support wife pension; or
   (i) mature age allowance; or
   (j) mature age partner allowance; or
   (k) a former payment type.

   compensation part, in relation to a lump sum compensation payment, has the meaning given by subsections (3) and (4).

   …

income cut-out amount is the amount worked out using the formula in subsection (8).

…

lump sum preclusion period means either an old lump sum preclusion period within the meaning given by subsections 1165(3) to (4) (inclusive) or a new lump sum preclusion period within the meaning given by subsections 1165(5) to (8) (inclusive), as the case requires.

…

Compensation

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.

…
Compensation part of a lump sum

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; 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.
…"

1. Part 3.14 of the Act deals with compensation recovery. Specifically, subsection 1163 states, as relevant:
   "1163  General effect of Part

   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(3) If the compensation is a lump sum compensation payment, the              compensation affected payment might cease to be payable for a period (based on the amount of the lump sum) and some or all of the payments of the compensation affected payment might be repayable.

Note 1: Under section 1163A, certain lump sum payments may be treated as though they were received as periodic payments.

Note 2: 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.

…"

1. Section 1165 of the Act provides that a pension, benefit or allowance is not payable to a person during a lump sum preclusion period and sets out the method for calculating the preclusion period.

2. Section 1184 of the Act provides that in certain circumstances, the Secretary may disregard some payments of compensation in part or as a whole. Of specific relevance is subsection 1184(1) of the Act which states:

   "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."

background

1. The following information is provided by way of background and the information contained within is not disputed.

• On 16 March 1998, Mr Townsend had an accident whilst working as a shipwright for Shipcove Pty Ltd.  He slipped on fibreglass on the walkway outside the bathroom and injured his left leg and knee and broke his left arm.

• Mr Townsend was subsequently in receipt of weekly compensation payments from the date of the accident until 28 May 2000.  From 29 May 2000 until 19 September 2000, Mr Townsend was in receipt of Disability Support Pension.  On 20 September 2000, Mr Townsend was recommenced on weekly workers compensation payments, which were also backdated to 29 May 2000 (T3).

• On 19 February 2001, a common law settlement was reached in relation to the applicant's compensation claim for $200,000.00 plus an agreed sum for costs of $40,000. (T4)

• On 23 February 2001, John Cox, of Astley Thompson Cox, wrote to Mr Townsend informing him that his matter had settled for $240,000.00 and that his legal costs and disbursements were approximately $70,000.00. (Exhibit A9)

• On 1 March 2001, Centrelink wrote to Mr Townsend and his solicitors (T9, T10) advising that the period from which he would be precluded from receiving benefits had been calculated to be from 20 February 2001 until  2 August 2004.

• On 9 March 2001, Mr Townsend sought an internal review of Centrelink's decision in relation to the preclusion period (T11) and the decision was subsequently affirmed on 11 May 2001 (T14).

• On 21 June 2001, Mr Townsend sought a review by an ARO, and on 17 July 2001 the ARO affirmed the original decision of the Departmental delegate (T19).

• On 3 August 2001, Mr Townsend lodged an appeal to the SSAT and on 29 August 2001, the SSAT affirmed the decision under review (T2) determining that the preclusion period had been correctly calculated as running from 20 February 2001 to 2 August 2004 and that there were no special circumstances in Mr Townsend's case to allow the exercise of the discretion contained within section 1184 of the Act to disregard part or all of the compensation payment.

• On 21 September 2001, Mr Townsend completed an application for review to the Tribunal (T1). 

Evidence and Submissions of Mr Townsend

1. Mr Townsend told the Tribunal that at the time of the settlement of his common law compensation claim against Shipcove Pty Ltd on 19 February 2001, he was informed by his solicitor, John Cox of Astley Thompson Cox, that he would receive "$170, 000 in his hand".  Mr Townsend stated that at this time he was not aware that the agreed amount for settlement was a total of $240,000.00 and that of this amount, $40,000.00 was the agreed sum for costs.  Mr Townsend informed the Tribunal that he was subsequently notified by John Cox that the settlement was for a total of $240,000.00 and the actual amount he owed for legal costs and disbursements was approximately $70,000.00.  

2. Mr Townsend told the Tribunal that he was informed by Centrelink and his solicitors prior to the settlement on 19 February 2001, that there would be a preclusion period that would mean that he did not receive benefits for a certain period of time. During the year 2000, Mr Townsend recalled phoning Centrelink and having discussions with a female staff member, he believes her name was Caroline, of the Compensation Section at Parramatta.  Mr Townsend recalled discussing the preclusion period and that there was a formula for the calculation of this period.  Mr Townsend stated that he was informed at this time that his legal fees would be deducted, and that the remaining sum would be divided by half and then divided again by approximately $400.00.  He stated that he was informed that excessive legal and medical fees would be taken into account.  Mr Townsend submitted that he was not informed by Centrelink or his solicitors of the likely duration of the preclusion period as it would apply to him.

3. Mr Townsend told the Tribunal that following the settlement he received a letter from Centrelink on 1 March 2001 notifying him of his preclusion period from 20 February 2001 to 2 August 2004, and that the preclusion period was calculated on the basis of a settlement of $200,000.00.  At this time Mr Townsend thought that Centrelink had made a mistake because he believed his settlement was for $170,000.00 and not $200,000.00.  Mr Townsend submitted that the amount used to calculate the preclusion period did not take into account his actual legal costs, which were in fact $70,000.00 and the preclusion period should be calculated on the basis of the $170,000.00 he received in his hand following the settlement of his claim.

4. Mr Townsend informed the Tribunal that he was receiving Disability Support Pension prior to accepting the job as a shipwright where he was injured on 16 March 1998.  He also received Disability Support Pension during the period when he was not receiving workers compensation.  Mr Townsend stated that he has not worked as a shipwright or in full-time employment since the accident because of his health problems.  Mr Townsend told the Tribunal that he believed that in calculating the preclusion period, the period during which he was in receipt of Disability Support Pension (from 29 May 2000 until 19 September 2000, T3, p8) would be taken into account.

5. On receipt of the balance of the money from the settlement of his compensation claim, Mr Townsend used part of the money to assist his family and pay back family debts, to pay off other debts and to stock up on supplies of clothes, tools, books and natural remedies, he told the Tribunal.  Mr Townsend invested $100,000.00 of the settlement money in an NRMA Diversified Growth Trust on 20 April 2001 (Exhibit A2).  Mr Townsend chose this investment because he thought "if he was going through the preclusion period, he'd better have an income".  Mr Townsend sought advice in relation to his investment from a man named Don Strichter at NRMA investments, and from an "FIS Officer" at Centrelink.  Mr Townsend stated that he was told by Mr Strichter that he could get 10-15 per cent on the investment.  He was told that this investment was the second highest income earner and that it would also pay a quarterly dividend.  Mr Townsend conceded that the FIS officer did not advise him one way or the other in relation to whether or not to invest in this particular NRMA trust.  Based on the information that Mr Townsend had received, he was of the belief that the investment with NRMA was more risky than an investment with fixed interest rates, but was a higher income earner than other investments.  Mr Townsend told the Tribunal he believed this would be able to provide him with a regular income while he was precluded from receiving social security payments.

6. Mr Townsend stated that the investment with NRMA did not provide him with the income that he thought he would receive and that he could live on.  The quarterly dividend turned out to be approximately $190.00 over 13 weeks (Exhibit A2).  He also received a distribution payment of approximately $4,300.00 for the period up to 30 June 2001 (Exhibit A2).  Mr Townsend stated that following the terrorist attacks in the United States on 11 September 2001, NRMA closed down for a week and he was not sure what had happened to his investment.  He explained that when the NRMA reopened he found out that his investment had dropped approximately $10,000.00 in value in one week.  After this, Mr Townsend contacted Centrelink because he no longer thought he would be able to live off this investment.  He suggested to Centrelink that if they paid him social security payments, they could take the money from his investment with NRMA that exceeded the amount of the Disability Support Pension.  Mr Townsend told the Tribunal that he subsequently received a letter from Centrelink that advised him that if he was unable to live off his investments he should sell them. 

7. In October 2001, Mr Townsend decided to take his money out of the NRMA Diversified Growth Trust.  In this month he took out approximately $20,000.00 and in November 2001 he took out the balance of approximately $70,000.00.  Mr Townsend told the Tribunal that this attracted an exit fee of approximately $3,000.00.  At this time, the investment had still not risen to its value prior to 11 September 2001.  Mr Townsend decided to reinvest this money himself in the stock market.  On 8 January 2001 he bought 10,000 shares in Santos Limited for $63,000.00 (Exhibit A1).  Mr Townsend stated that this has not been a good investment to begin with, and noted that the value of the shares has dropped, but he is hopeful that this will improve.  Mr Townsend has received one dividend from these shares of approximately $1,000.00, half of which he gave to his son Ian, for rent and living expenses.  Mr Townsend is of the view that he should not put the money into a bank, as that would not pay anything on his investment.  Ms Mantaring asked Mr Townsend whether he had considered a term deposit.  Mr Townsend responded that "Social Security" had told him not to do this.  He stated that he had invested the money as best he could, and "if I had a crystal ball I might be Bill Gates, not Bill Townsend".  

8. In relation to his health, Mr Townsend told the Tribunal he has a rare blood condition, which has been diagnosed as monoclonal gammopathy.  Mr Townsend was seeing Dr Survela, Haemotologist, for 18 months and is now seeing Professor Wiley at the Cancer Clinic for this condition.  Mr Townsend explained that this condition affects the immune system and causes him to suffer from intermittent ear, nose and throat infections, urinary tract infections and lung infections.  Mr Townsend told the Tribunal that he always has earaches, throat infections and often has to use a nebuliser.   Mr Townsend stated that as a result of this condition he suffers from lethargy.  He said that he feels worn-out, has aches and pains everywhere, and that this is "unbelievable sometimes".

9. Mr Townsend told the Tribunal that he also has colonic polyps, and is treated by Dr Gregan at Nepean Hospital. He has treatment for this condition, including regular colonoscopies.  Mr Townsend also suffers from a duodenal ulcer for which he takes "Zantac" (T18).  Mr Townsend informed the Tribunal that he injured his back in 1980, and had a spinal fusion operation in 1982 at Kogarah Hospital.  As a result of this, Mr Townsend stated that he suffers recurrent and severe back pain. 

1. The Tribunal referred Mr Townsend to the report by his General Practitioner, Dr Strangways-Dixon (T18, p39), who stated that Mr Townsend suffers anxiety, depression, obsessive compulsive disorder and ADHD.  Dr Strangways-Dixon stated that these conditions caused Mr Townsend "significant morbidity and emotional strain".  The monoclonal gammopathy causes ongoing lethargy and is being treated by Professor Wiley.  A psychiatrist treats his mental health problems, Dr Strangways-Dixon reported.  Mr Townsend explained that he sees Dr Quinn, Consultant Psychiatrist, at Emu Plains in relation to these problems.  In relation to his ADHD, Mr Townsend said that he drinks when he gets stressed.  He said that the last time he consumed alcohol was two or three years ago.    

2. Mr Townsend told the Tribunal that he suffers constant worry and great anguish about his financial situation due to his health conditions.  Mr Townsend submitted that his health problems have an impact on his financial circumstances with expenses including hiring nebulisers once every three weeks, paying the gap in specialist fees, and purchasing natural health products which Mr Townsend feels boost his weak immune system and provide him with "decreased pain mobility" (Exhibit A10).

3. The Tribunal understands that Mr Townsend is no longer married, but is in contact with his ex-wife, who drove with him to the Tribunal on the day of the hearing.  He has three children from that marriage, Renee, Rachel and Luke, as well as his two step-children, Ian and Jody.  Mr Townsend told the Tribunal that for the past few years he has been living with his 31-year-old stepson, Ian, and his stepson's partner.  Ian works on the railways and is paying off a mortgage on his house.  Mr Townsend stated that he pays Ian money for rent and living expenses "when he can".  He has not been able to pay Ian rent on a regular basis and he said that lately he has not been able to give him much at all because of his financial circumstances.   Mr Townsend said that he gave Ian some money from his original claim, and gave him half of the money he received from his NRMA investment, to pay him back money owed for rent and living expenses.

4. Mr Townsend told the Tribunal that he is not supported financially by other members of his family, apart from Ian.  Mr Townsend's daughter Rachel lives in Wollongong, has just had a baby and left work, and is trying to buy a house with her partner.  His daughter Renee has just finished her New South Wales Higher School Certificate. She is studying a TAFE course and supporting herself through part-time work.  She sometimes stays with him and sometimes lives with her mother.  Mr Townsend does not receive financial support from his stepdaughter, Jody.  Mr Townsend's parents are elderly, in receipt of the pension and living in a Department of Housing residence in Ballina.  Mr Townsend's ex-wife is also in receipt of a pension and is not able to provide him with any financial support.  Mr Townsend bought his ex-wife's car, valued at approximately $3,000.00, with money from the settlement.

5. Mr Townsend gave his parents some money on the original settlement of his compensation claim to assist them financially.  He told the Tribunal that he is not generally able to help out his daughter Renee financially, but he did assist her to buy a car with approximately $2,000.00 from the settlement money.  Mr Townsend also put aside approximately $2,000.00-3,000.00 for his son Luke, which his sister is holding as savings for him.             

6. Mr Townsend told the Tribunal that his son, Luke, who is 25 years of age, is currently in custody in the psychiatric section of Long Bay Gaol.  Mr Townsend stated that his son has schizophrenia and is serving a 12 month sentence for breach of bail.  His son was convicted of armed robbery.  Mr Townsend told the Tribunal that Luke was also under suspicion for some time in relation to  several other high-profile murders in the Wollongong area, for which he was not charged and for which other persons have since been charged.  Mr Townsend visits his son every second weekend and rings him about half a dozen times a week.  Mr Townsend informed the Tribunal that the problems his son Luke has experienced has caused him a terrific amount of stress over the last two or three years.

7. Mr Townsend has a Commonwealth Bank Account, which he told the Tribunal usually has a balance of between $100.00 and $200.00.  He has an account with his stockbroker, which is used only for the purpose of managing his "Santos" shares, which has a $50.00 balance, the amount required to keep the account open. 

8. Mr Townsend stated that he has been doing a little bit of work for the Salvation Army, "a couple of hours here and there".  He is paid approximately $49.00 for the cleaning work that he does at the Citadel.  Mr Townsend also does some voluntary work for this organisation, including collecting donations.  Mr Townsend does about seven hours per week voluntary and paid work for the Salvation Army.  Mr Townsend works with Captain Jonathon Browning, who provided a letter to the Tribunal.  Captain Browning noted that he has known Mr Townsend since 1998.  He has provided spiritual counsel and personal support as his Minister.  Captain Browning opined that Mr Townsend was experiencing financial hardship because of the nature of his health problems and the effects on his employment prospects.  There were also difficulties because Mr Townsend had invested his settlement in a capital growth fund which does not provide him with enough money to live on, Captain Browning concluded (T18, p40).   

9. Ms Mantaring asked Mr Townsend why the amount he is paid by the Salvation Army has dropped from $80.00, the amount Mr Townsend told the SSAT he was earning (T2, p5), to $49.00, the amount he has recorded in the Financial Information Statement of 12 March 2002 (Exhibit R2).  Mr Townsend explained that there were two reasons, firstly, that he was not able to do the work anymore, and secondly, because the Salvation Army were no longer able to give him the same hours.  In response to a question from Ms Mantaring as to how many hours of cleaning he does per week, Mr Townsend told the Tribunal that it was a few hours per week, but that the Salvation Army do not really worry about the hours.  He stated that the money for his cleaning was probably more like charity than anything else, because they know that he needs the money.  He pointed out that he has done a large amount of voluntary work for the organisation over the years.

10. Mr Mantaring asked Mr Townsend about the Mobility Allowance paid to him by Centrelink.  Mr Townsend responded that this was approximately $60.00 per fortnight and went straight into his Commonwealth Bank Account.  He stated that he uses this money for petrol to drive to visit his son in Long Bay.  Mr Townsend explained that this allowance was being paid for his voluntary work with Alcoholic Anonymous.  This work includes phone work, assisting members, as well as driving to see people at their houses and at different meeting places.  Mr Townsend said that he does about 10 hours voluntary work for Alcoholics Anonymous per week, not including telephone work.  Mr Townsend reiterated that he has done a large amount of voluntary work during his lifetime, including work for the Salvation Army, work for courts and prisons, assistance with bushfires, the Olympic and Para-Olympic Games.

11. Ms Mantaring asked Mr Townsend to clarify some of the answers he had provided on the Centrelink Financial Information Statement, completed by Mr Townsend on 12 March 2002 (Exhibit R2).  In relation to household expenditure, Ms Mantaring asked whether the $100.00 Mr Townsend had recorded included expenses such as groceries.  Mr Townsend replied that this was approximately the amount he would pay per week, but he was not always able to give his stepson Ian this amount.  He stated that if he was not living with Ian, he would probably have to live in Salvation Army premises. 

12. In relation to the amount Mr Townsend had recorded for medical expenses of $10, 000.00 per year, Ms Mantaring asked whether this amount was specifically for the period February 2001-2002.  Mr Townsend explained that the amount he had recorded was for that period, and was paid for with the money from the settlement of his compensation claim.  Mr Townsend believes the figure could be even more than that, because he bought a large stock of natural remedies, which he uses for his medical conditions.  Mr Townsend stated that, in terms of medical expenses, he has to pay the "top up" for the specialists he sees.  He pays about $32.00 for Dr Gregan, $60.00 for Dr Survela, $26.00 to Dr Griggs and he was not sure the top-up for Professor Wiley.  Mr Townsend stated that he hires Nebulisers about every fortnight, at $30.00 per fortnight.  Mr Townsend stated that he did have a Health-Care Card and that he does get subsidised for prescription medication.  However he has to pay about $3.50 every time for certain medication, such as pain-killers that he needs including "Mersyndol", "Aspirins", "Panadeine forte" and "Zantac".  Mr Townsend stated that he has to buy certain things prior to his colonoscopy, including epsom salts.  Mr Townsend said that his total medical expenses would usually be about $2000.00 per year, but he had bought supplies during the past year with his settlement money.  He stated that he spends a lot of money on "new-age products" for his health problems, including "Oracle", $29.00 a bottle, "VMM-echinacea", $50.00 a bottle, "Transfactor", at $50.00 a bottle and "Feroxin", at $29.00 a bottle.  Mr Townsend stated that he takes these products to boost his immune system.  Mr Townsend said that he would have spent about $8000.00 on these products with his settlement money.  He now spends about $150.00 per month on these products.

13. Ms Mantaring asked Mr Townsend to clarify the amounts he had recorded for tools/books, $8000.00 and clothing, $5200.00, on the Financial Information Statement of 12 March 2002.  Mr Townsend stated that he does not spend this much on tools and books all the time, and this was what he spent when he received the settlement money.  Mr Townsend said that he also "stocked-up" on good quality clothing that would last him three to four years.  Mr Townsend thought that if things were going to be uncertain financially for a while he wanted to make sure he was stocked up on clothing that would last him through this period.  Mr Townsend stated that his ongoing costs with clothing are now for items such as underwear, socks and singlets.           

14. In Mr Townsend's concluding statement to the Tribunal he reiterated that he did have knowledge about the preclusion period at the time of settlement of his compensation claim, and that armed with that knowledge he went to court and settled his claim.  He submitted that the real information about the calculation of the preclusion period came after he had settled his claim, in relation to the fact that only the legal costs agreed in the settlement were taken into account.  Furthermore, Mr Townsend reiterated his contention that he was told prior to settlement that the period for which he was not paid workers compensation would count towards the preclusion period, and it was not for the purposes of his preclusion period.  Mr Townsend was of the belief the three months would come off his preclusion period, he told the Tribunal. 

15. Mr Townsend concluded that, although it was difficult to understand what were considered special circumstances, he believed that his circumstances must fit under the "special" banner.  Ms Mantaring, for the Respondent, had outlined three categories in relation to "special circumstances"-legal, medical and health-and Mr Townsend told the Tribunal that he had presented something in each of these categories. Mr Townsend submitted that his circumstances were "special" in that they were out of the ordinary. In particular, Mr Townsend stated that he did not think the things that happened to his investments in the last 12 months usually happened to people. Mr Townsend also stated that he believed that he should not be held accountable for a lawyer who did not tell the truth about costs. In addition, Mr Townsend emphasised his poor health condition. Mr Townsend stated that he believed there had to be a category for special circumstances in the Act and that he did not believe that the Act was written to be applied unfairly as it had been in his case.
    Respondent's Submissions

16. Ms Mantaring submitted that there was no dispute that Mr Townsend's settlement was for an amount of $200,000.00, plus $40,000.00 for costs. Ms Mantaring contended that the preclusion period had been correctly calculated under the Act based on the settlement of $200,000.00, a figure which excluded the sum agreed in the terms of settlement for legal costs of $40,000.00. Ms Mantaring submitted that the correct application of the "50 per cent rule" under subsection 17(3) of the Act, provided that the part of the compensation used to calculate the preclusion period, the 'compensation part' as defined under this section, is 50 per cent of the gross amount of the award.

17. Ms Mantaring opined that there had in fact been a beneficial application of the legislation in Mr Townsend's case.  At the time of the calculation of the preclusion period in Mr Townsend's case, the policy contained a concession in relation to legal costs, which provided that if they were specified in the settlement that this amount could be taken out when calculating the preclusion period.  Ms Mantaring submitted that the policy of the Department has been subsequently amended such that legal costs specified in settlements are no longer to be disregarded in the compensation part of the lump sum.  Ms Mantaring pointed out that there is nothing in the legislation that provides for legal costs to be taken into account, and a strict application of the legislation would mean that these were not left out when calculating the preclusion period.  Therefore, Ms Mantaring contended, the Applicant had gained an advantage from the existing policy at the time, and would have had a longer preclusion period had there been a strict application of the legislation.  Ms Mantaring referred the Tribunal to the case of Secretary, Department of Family and Community Service v Hulls and Others (1991) 22 ALD 570, where the "50 per cent rule" was applied to the gross lump sum amount, without deducting legal costs.

18. In relation to the period in which Mr Townsend was in receipt of Disability Support Pension, Ms Mantaring submitted this was correctly left out of the calculation of the preclusion period, as subsection 1165(5) of the Act states that the preclusion period is to begin after the last day weekly compensation ceases to be paid. In Mr Townsend's case the preclusion period was therefore correctly calculated to be from 20 February 2001, which was after the last day Mr Townsend received weekly compensation.

19. In regards to Mr Townsend's circumstances, Ms Mantaring submitted that, when taken as a whole, his circumstances were not "special" within the meaning of section 1184 of the Act. Ms Mantaring conceded that Mr Townsend suffered multiple medical conditions, but emphasised that these conditions were not deteriorating. Ms Mantaring further submitted that there had been no evidence in relation to Mr Townsend's health that he was any different or worse off than any other recipient of Disability Support Pension. Ms Mantaring referred the Tribunal to Re Secretary, Department of Social Security and Bolton (1989) 18 ALD 464, in which the Tribunal held that ill-health alone was not enough to constitute "special circumstances" under section 1184 of the Act.

20. Ms Mantaring contended that the fact that Mr Townsend had to pay $70,000.00 in legal expenses, as opposed to the $40,000.00 agreed in the terms of settlement claim by Mr Townsend or that he was possibly given incorrect legal advice could not be taken to be "special circumstances".  Ms Mantaring conceded that Mr Townsend's solicitor may not have explained to him the full repercussions of accepting the $170,000.00 which Mr Townsend was informed he would receive in the settlement.  However, Ms Mantaring contended that this did not amount to incorrect legal advice.

21. Ms Mantaring submitted that Mr Townsend's financial losses were also not extreme.  Mr Townsend's preclusion period had two years and 14 weeks remaining at the date of the hearing and Mr Townsend owns approximately $60,000.00 in shares.   As against this, a person on Disability Support Pension, who would be entitled to $427.60 per fortnight, would have access to $26,298.00 over the same period.  This put Mr Townsend in a better position than a person on Disability Support Pension.  Ms Mantaring contended that the compensation was meant for Mr Townsend to live on and was not meant to be an asset.  It was Mr Townsend's responsibility to tailor his investments so that he had money to live on, Ms Mantaring opined.  Further, it was submitted by Ms Mantaring that Mr Townsend's current circumstances could not be said to be severe financial hardship, because he had the opportunity of continuing to live with his step-son and giving him money from his investments where possible.

22. Ms Mantaring stated that it would not be possible to base the calculation of the preclusion period on the $170,000.00 because "two wrongs don't make a right".  Ms Mantaring reiterated the concession that had already been made in the application of the legislation in Mr Townsend's case.  This was that the amount specified in the consent order for costs which was taken out of the calculation of the preclusion period.

23. In conclusion, Ms Mantaring contended that the preclusion period was correctly calculated and that section 1184 of the Act did not apply in Mr Townsend's case. Therefore, the decision of the SSAT to affirm the imposition of a preclusion period from 20 February 2001 to 2 August 2004 is the correct decision and a decision which should also be affirmed by the Tribunal.
    findings

24. The Tribunal has come to a determination in this matter taking into account the documentary evidence, the submissions, the legislation and case law.

25. The Tribunal finds that Mr Townsend was truthful in his evidence and a witness of credit.

26. The first issue the Tribunal must decide is whether the preclusion period for Mr Townsend from 20 February 2001 to 2 August 2004 was correctly calculated. 

27. It is not disputed that Mr Townsend's compensation claim settled on 19 February 2001 for $200,000.00, with an additional amount specified in the settlement of $40,000.00 for costs (Exhibit A8).  The Tribunal finds that this was a compensation payment made in settlement of a claim, made partly in respect of lost earnings or lost capacity to earn, and satisfies the definition of compensation under subsection 17(2) of the Act. The Tribunal also finds, and this was not a matter of contention at the hearing, that Mr Townsend is liable for a preclusion period under section 1165 of the Act.

28. Turning to the calculation of the preclusion period, the number of weeks in Mr Townsend's preclusion period is calculated under subsection 1165(8) of the Act. This is worked out by dividing the compensation part of a lump sum by the income cut-out amount. Under subsection 17(3)(a) of the Act, the compensation part of the lump sum is 50 per cent of the lump sum payment. Mr Townsend's preclusion period was calculated based on a lump sum amount of $200,000.00, excluding the amount specified for costs in the settlement of $40,000.00. Using this figure, applying the 50 per cent rule, the compensation part of the lump sum is $100,000.00, which is divided by the income cut-out amount. Using this formula, Mr Townsend's preclusion period was calculated to be a period of 180 weeks.

29. Mr Townsend argued that the amount taken to be the lump sum compensation payment was incorrect, in that it should have taken into account the true legal costs of the settlement. This would mean that the compensation part of the lump sum would have been 50 per cent of $170,000.00. The Tribunal notes that the Act does not provide for expenses such as legal expenses to be deducted from the lump sum payment to calculate the compensation part of the lump sum under subsection 17(3) of the Act. In relation to what constitutes the lump sum payment, the approach that has generally been taken in the case law is that the lump sum is the global amount specified in the settlement. The Tribunal notes that this approach would appear to fit with the legislative intention behind the 50 per cent rule as discussed by O'Loughlin J in Secretary, Department of Social Security v Hulls and Others (supra) at 578:
    " The history of this legislation and, in particular, the reasons for using an arbitrary formula of 50% were traced in detail by von Doussa J in Secretary, Department of Social Security v Banks (1990) 20 ALD 19; 23 FCR 416. His Honour referred to the minister's second reading speech when the "50% rule" was introduced into the legislation. The relevant passage from that speech is (at 422): "Settlements of lump sum compensation particularly in the workers compensation jurisdiction are being manipulated to obscure the economic loss component and to avoid recovery of social security payments. To prevent this abuse the minister announced on 8 February 1988 that, for future personal injury settlements made by agreement or by consent order, 50% of lump sum compensation will be deemed to be in respect of economic loss. This Bill gives effect to that proposal: Hansard, 13 April 1988, p 1497." Once the mischief at which the amending legislation was aimed has been so clearly identified, it becomes apparent that the legislation prevents any dissection of the "lump sum". Although those words are not defined, I respectfully agree with what von Doussa J said of them in Banks' case: "They are not words of art. In the Macquarie Dictionary a 'lump sum' is defined as a sum 'including a number of items taken together or in the lump'. In my opinion the words bear that meaning in the section." …"            

1. In that decision, the question was raised whether legal costs would be deducted from the lump sum payment if they were specified in the settlement.  O'Loughlin J concluded that "I cannot agree with the tribunal that this figure would have been reduced if the parties to the settlement of the common law claim for damages had agreed upon an amount for costs."

2. There is no dispute that in Mr Townsend's case legal costs of $40,000.00 were specified in the settlement, and that Mr Townsend's legal expenses for the compensation claim were in fact more than the specified amount, and were approximately $70,000.00 (Exhibit A9).  The Tribunal finds, however, that there was no error by the Department, in failing to exclude Mr Townsend's full legal costs of $70,000.00 in calculation of the preclusion period.  In any event, Mr Townsend already has the benefit of $40,000.00 being excluded from the calculation of the preclusion period-a concession by the Respondent which the Tribunal will not disturb.

3. As to when the preclusion period begins, this is specified in subsection 1165(5) of the Act, being the day after the last day of the periodic payment period. Mr Townsend was receiving periodic compensation payments up until the settlement of his compensation claim on 19 February 2001. The Tribunal finds therefore that the preclusion period was correctly applied as commencing the day after these periodic payments ceased, which was 20 February 2001.

4. In relation to Mr Townsend's claims that the preclusion period should have included the period he received Disability Support Pension and workers compensation payments ceased, the Tribunal accepts the evidence, which Mr Townsend did not dispute at the hearing, that workers compensation payments were backdated for that period, being 29 May 2000 until 19 September 2000.  The Tribunal finds that the decision not to include this period in the calculation of the preclusion period to be correct.      

5. The Tribunal accordingly finds on all the evidence that Mr Townsend's preclusion period was correctly calculated in accordance with the legislation to be 180 weeks, commencing on 20 February 2001 and ending on 2 August 2004.

6. The Tribunal must now determine whether, by virtue of section 1184 of the Act, part or whole of Mr Townsend's compensation payment may be treated as not having been made in the special circumstances of his case.

7. As to the meaning of special circumstances, there is no definition provided in the legislation and although numerous cases have given the phrase consideration, the case law has not arrived at a precise or exhaustive definition.  One of the leading cases in relation to the meaning of special circumstances, Beadle v Director-Generalof Social Security (1985) 7 ALD 670, provides guidance into the approach that has been taken to the meaning of the phrase, where the Full Court stated:

   "Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate…It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given.  The phrase "special circumstances", although lacking precision, is sufficiently understood in our view not to require judicial gloss."

8. The discretion inherent in the phrase "special circumstances" was also taken up by the Tribunal in Re Ivovic and Director-General of Social Security (1981) 3 ALN N95, where it was noted that the use of the word "special" was "intended to allow the decision-maker the fullest opportunity to consider the particular circumstances of each case."

9. In determining what constitutes special circumstances, the Federal Court in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 observed that it would require something that distinguished the case, and took it out of the "usual or ordinary case".  The Court noted that if something "unfair, unintended or unjust had occurred", this would be something that would ordinarily distinguish it as such a case.  

10. There have been cases that have attempted to identify the types of factors that would be considered to be relevant in an inquiry into whether there are special circumstances within the meaning of section 1184 of the Act. The Tribunal notes the decisions of Re Krzywak and Secretary, Department of Social Security (1988) 15 ALD 690 and Re Green and Secretary, Department of Social Security (1990) 21 ALD 772; referred to the Tribunal by the Respondent in this regard. In examining particular circumstances, however, it is important not to lose sight of the need to look at the whole of a person's circumstances, as was noted in the decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1, which stated:

    "But it is not helpful to focus too closely on each particular circumstance of the applicant and ask whether it is special…..The question is whether, when the relevant circumstances of the applicant are looked at in their entirety, they may be fairly described as unusual, uncommon or exceptional so as to warrant payment of the allowance earlier than the date from which it would ordinarily be paid."

11. Turning to examine Mr Townsend's circumstances, the Tribunal notes in particular the evidence of Mr Townsend and his General Practitioner, Dr Strangways-Dixon, in relation to his serious health difficulties and the impact that these have on his life.  Mr Townsend suffers from a serious condition known as monoclonal gammopathy, which Dr Strangways-Dixon noted in his report of 8 July 2001 (T18) is "of greatest concern" in relation to his heath and is "causing ongoing lethargy".  In addition to the symptom of lethargy, Mr Townsend told the Tribunal this condition also causes him recurrent infections and a significant amount of pain and discomfort.

12. Mr Townsend has "multiple medical ailments causing significant morbidity and emotional strain", as was also noted by Dr Strange-ways Dixon in his report. These include, in addition to monoclonal gammopathy, colonic polyps, duodenal ulcer and recurrent sciatica with back pain.  Mr Townsend is also being treated by a psychiatrist for depression, anxiety, obsessive compulsive disorder and ADHD. (T18)

13. Mr Townsend is limited significantly in the work that he can do now and in relation to his future prospects, as a result of his health concerns.  Mr Townsend has not worked since his accident in 1998, although the Tribunal notes that this injury in itself in which he broke his left arm and injured his left knee, on the evidence before the Tribunal is not a substantial continuing factor limiting his ability to work.

14. The Tribunal notes the evidence from Mr Townsend of the emotional strain and anxiety caused by his ill health.   Although the Tribunal notes that Mr Townsend has a Health-Care Card and receives Medicare rebates for part of his specialist fees, the Tribunal also accepts the evidence from Mr Townsend that his ill health does have an impact on his financial circumstances, with additional expenses including hiring nebulisers, paying the gap in specialist medical fees, travel to see medical specialists and for his various treatment requirements. Mr Townsend sees specialists regularly for his psychiatric problems, monitoring of his monoclonal gammopathy condition and for treatment of his colonic polyps.

15. The Tribunal notes that Mr Townsend, despite his own ill health, has continued to provide support, emotionally and financially where possible for his son, who has been diagnosed with schizophrenia and is currently serving time in jail.  The problems that his son has experienced, have clearly been a cause of significant concern to Mr Townsend, adding to the emotional strain that he is under as a result of his own physical and psychiatric health problems.

16. The Tribunal finds that, in relation to his general financial circumstances, Mr Townsend is under considerable hardship.  Mr Townsend is currently reliant on his stepson for support in terms of accommodation and living expenses, including rent.  The Tribunal notes that Mr Townsend does reimburse his stepson for rent and living expenses when he can, but cannot do this on a regular basis and this is not a full reimbursement.  Mr Townsend does not receive any further financial assistance from his family.  His income consists of approximately $49.00 per week from his casual work from the Salvation Army, Mobility Allowance of approximately $60.00 fortnightly and the dividends from his "Santos" shares.  The Tribunal accepts Mr Townsend's evidence that his income at this time is insufficient to cover his living expenses, including additional expenses for his health care.  The Tribunal notes that Mr Townsend's expenses include running a car, which he purchased from his ex-wife with part of his settlement money.  The costs of running the car includes petrol for him to travel to and from Long Bay gaol fortnightly to visit his son, Luke.

17. Mr Townsend does not have any assets, apart from his car and the investment in Santos shares of $63,000.00, which he purchased with the remainder of his settlement money.  Mr Townsend has a balance of approximately $100.00 or $200.00 in his Commonwealth Bank savings account and the limit of $50.00 in his "stock-broker's" account.  The Tribunal notes that there have been cases that have found that special circumstances have existed, where the person has used part or all of their lump sum payment to purchase a home, an asset worth considerably more than Mr Townsend's investment of $63,000.00.  In Secretary, Department of Social Security and VYS (1995) 40 ALD 745, the Tribunal found special circumstances although the recipient of the lump sum compensation payment owned a house outright, had approximately $45,000 in investments, and had purchased a new house with the lump sum payment.

18. The Tribunal notes that there has been no suggestion that Mr Townsend has been careless or frivolous with his compensation payment.  The Tribunal finds that Mr Townsend has used his compensation payment in a reasonable and responsible manner, to pay off debts, provide some limited assistance to his immediate family, including putting some aside for his son who is serving time in gaol, to purchase essential items for his own well-being including stocking up on clothes, books and health products. 

19. In relation to Mr Townsend's investments, the Tribunal is of the view that Mr Townsend has entered into these investments with good faith, although on Mr Townsend's own evidence, which the Tribunal accepts, these have not proved to be good investments so far, with respect to providing Mr Townsend with an income, or increasing the value on his investment.  The Tribunal notes Mr Townsend's evidence in relation to the impact of the New York terrorist attacks of 11 September 2001 on his investments, and that this eventually caused him to sell his investment with NRMA and reinvest in shares with Santos Ltd.  The Tribunal considers, however, that the reasoning behind making these particular investments was not unreasonable, reckless or unjustified.  Mr Townsend told the Tribunal, and the Tribunal accepts, that he chose these investments on the balance of considerations of earning a profit on the investment and providing him with as high an income as possible to last him through the preclusion period.  

20. The Tribunal notes the Respondent's submissions that if Mr Townsend were to sell his investment, place the money in a term deposit, and live-off this money for the remainder of the preclusion period, he would still be in a better position financially than most recipients of the Disability Support Pension.  The Tribunal notes, however, that it must look at the whole of Mr Townsend's circumstances including the impact that the completion of the preclusion period would have on him.  Given the evidence which the Tribunal accepts and Mr Townsend's demeanour at the hearing, the Tribunal is firmly of the view that to allow the completion of the preclusion period would have serious consequences for Mr Townsend and would produce a result which would clearly be unjust, unfair and unreasonable. 

21. The Tribunal finds that a situation where Mr Townsend is forced to either continue with his current financial position or where he is forced to sell his Santos shares, his only asset, apart from a second hand car, places him in a position of considerable and, in the view of the Tribunal, unreasonable hardship, both financially and emotionally.  Given the anxiety caused by Mr Townsend's undisputed medical and psychiatric health problems, as well as the anguish that Mr Townsend has suffered as a result of the problem experienced by his son, Luke, the Tribunal considers that this level of further financial pressure and insecurity would propel Mr Townsend into a crisis. 

22. The Tribunal considers that Mr Townsend's investment provides him with a form of both financial and emotional security for a future that is otherwise uncertain as a result of serious health and other problems. It is the view of the Tribunal that it is not a fair or appropriate result of the application of the legislation if Mr Townsend is to be left in a position of considerable financial hardship and suffer severe consequences in terms of the emotional strain that this will place on him.  The Tribunal notes the decision of Senior Member Dwyer in Re Secretary, Department of Social Security and VYS (supra) in which she states at 759:

    "I agree that it is inappropriate for a system of social security to require people to take a "one way ticket to poverty" to qualify for social security payments.  That is why the legislation allows for social security payments to people who own their own home and have some limited assets and income.  If they can supplement their social security payment with other income, they will obviously have a better standard of living.  Why should the system necessarily be less generous to those who suffer from a disability for which compensation was payable?
    The Act allows the secretary and this tribunal to seek to achieve a "broad measure of justice for the individual case
    .…" 

23. In relation to the relevance of both Mr Townsend's existing mental health difficulties and anxiety, and the Tribunal's view in relation to the emotional strain likely to result if the preclusion period is not shortened, the Tribunal refers to the Federal Court decision of Einfeld J in Secretary, Department of Social Security v Thompson (1994) 53 FCR 580 in which it was noted in relation to section 1184:

    "The width of the discretion under the section clearly extends to all the circumstances of the case, including circumstances not specifically related to a particular portion of the compensation payment.  It is not therefore outside the section for the Tribunal to consider general factors such as the mental health and social conditioning of the individual in concluding that the preclusion period should be shortened".

24. With regards to the possibility of "incorrect legal advice" being considered special circumstances, the Tribunal is aware that there is authority in the case law that provides that this can be relevant to whether there are special circumstances within the meaning of section 1184 of the Act (Re Secretary, Department of Social Security and Galea (1993) 35 ALD 749; Re Secretary, Department of Social Security and VXY (1993) 30 ALD 681). The Tribunal is unable however to make any findings on the evidence before it in Mr Townsend's case. The Tribunal notes there are other avenues in relation to alternative means of redress available to Mr Townsend if he believes he has received incorrect or incomplete legal advice.

25. The Tribunal finds that Mr Townsend's circumstances, when looked at in combination, are "special" within the meaning of section 1184 of the Act. The Tribunal finds that Mr Townsend's special circumstances include his serious physical and psychiatric health conditions, his financial and social circumstances, including the problems experienced by his son Luke, and the significant emotional strain that he has been under as a result of the combination of these factors. The Tribunal is of the view that the imposition of a preclusion period on Mr Townsend until August 2004 is inappropriate and unreasonable taking into account these circumstances.

26. Having decided that Mr Townsend has special circumstances within the meaning of section 1184 of the Act, the Tribunal turns to consider how the discretion is to be exercised in Mr Townsend's case. The Tribunal is guided by Einfeld J in Secretary, Department of Social Security v Thompson (supra), who noted that "in a socially beneficial legislative framework where intuitive justice will often be as fair a criterion and as faithful to the legislative intention as any other approach".  In that decision, Einfeld J noted that in some cases the special circumstances identified by the Tribunal will direct attention to a specific part of the compensation, whereas where the special circumstances relate to the general circumstances of the recipient of compensation, the decision-maker would be more likely to have regard to the effect on the recipient of a reduction in the preclusion period.  Considering the nature of the special circumstances in Mr Townsend's case, the Tribunal considers that it is appropriate and just in his case to consider half the compensation payment as not having been made, and for the preclusion period to be recalculated on this basis.

27. In all the circumstances and for the reasons expressed above, pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the decision under review is set aside and in substitution therefor, the Tribunal decides that:

    a) Pursuant to section 1184 of the Act, in the special circumstances of Mr Townsend's case, for the purpose of calculating the preclusion period, an amount of $100,000.00 be treated as compensation not having been made.

    b) The matter is remitted to the Respondent to recalculate the preclusion period arising as a consequence of this decision.

I certify that the 74 preceding paragraphs are a true copy of the reasons for the decision herein of Ms S M Bullock, Senior Member

Signed:         .....................................................................................
  Ms J Purches, Associate

Date of Hearing  20 March 2002
Date of Decision  28 June 2002

Representative for the Applicant             Self Represented

Representative for the Respondent        Ms Susan Mantaring, Departmental Advocate