White; Secretary, Department of Employment and Workplace Relations and

[2007] AATA 1054

Administrative Appeals Tribunal

INTERLOCUTORY DECISION AND REASONS FOR INTERLOCUTORY DECISION [2007] AATA 1054

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V2006/1127

GENERAL  ADMINISTRATIVE  DIVISION		)
Re		SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And GARY WHITE

Respondent

INTERLOCUTORY DECISION

Tribunal Dr R. McRae, Member

Date12 February 2007

PlaceMelbourne

Decision The application for stay is refused. 

(sgd) Dr R. McRae

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(1), (2)

Social Security Act 1991(Cth)s 94(1)(a), (b) and (c); s 1231; s 1223AB

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

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

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

Re Repatriation Commission and Delkou (1985) 8 ALD 454

Re World Audio Limited and AusCoast Broadcasting Pty Limited and Australian Communications and Media Authority [2006] AATA 177

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

Federal Commissioner of Taxation v Myer Emporium Ltd (1986) 64 ALR 325

In the Marriage of Whitford (1979) 24 ALR 424

Re Secretary, Department of Employment and Workplace Relations and Strachan [2006] AATA 541.

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

REASONS FOR INTERLOCUTORY DECISION

12 February 2007 Dr R. McRae, Member       

1. Mr G. White (the Respondent) is 49 years of age and receives Newstart Allowance of $426.70 per fortnight. He resides in his home in Wonthaggi, upon which he makes weekly mortgage repayments of $115.00. The Respondent lodged a claim for Disability Support Pension (DSP) with Centrelink. Centrelink is the service delivery agency for the Secretary to the Department of Employment and Workplace Relations (the Applicant). On 13 June 2006 a Centrelink officer rejected the Respondent’s claim. On 1 August 2006 an authorised review officer with Centrelink affirmed the decision to refuse the claim for DSP. On 17 October 2006 the Social Security Appeals Tribunal (SSAT) set aside Centrelink’s decision and decided that the Respondent satisfied s 94(1)(a), (b) and (c) of the Social Security Act 1991 (the Act) and was medically qualified for DSP.  The SSAT did not specify a later date for its decision to come into operation.  Therefore the decision must come into operation immediately upon the giving of the decision (s 152(1) Social Security (Administration) Act 1999 (Administration Act)). 

2.          The Applicant lodged an application for review of the SSAT decision with    the Administrative Appeals Tribunal (AAT) on 24 November 2006 with an application seeking a stay of the implementation of the SSAT decision.  It is the application seeking a stay which is before me.

3.          The Applicant seeks a stay of the implementation of the SSAT decision on the following grounds:

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

(b)implementation of the SSAT decision may render review by the AAT nugatory;

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

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

4.          The Respondent, who attended the hearing by telephone, opposed the Stay Order. 

POWER TO GRANT A STAY

5. Section 41(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act) states that the making of an application to the Tribunal for the review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.  However, s 41(2) of the AAT Act states that the Tribunal may, upon the request of a party to a proceeding, if it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make orders staying or otherwise affecting the operation or the implementation of the decision as the Tribunal considers appropriate to secure the effectiveness of the hearing and determination of the application for review.

6.          The general principles regarding the operation of s 41(2) of the AAT Act have been expressed in Re Dart and Director-General of Social Services (1982) 4 ALD 553; Re Dekanic and Tax Agents’ Board of New South Wales (1982) 6 ALD 240; Re Repatriation Commission and Delkou (1985) 8 ALD 454; and Re World Audio Limited and AusCoast Broadcasting Pty Limited and Australian Communications and Media Authority [2006] AATA 177. In Re Department of Social Security and Collins (1991) 26 ALD 344 Deputy President Forgie noted that in Delkou Deputy President Hall 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 the Tribunal’s decisions.  Deputy President Forgie said (at 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…

(emphasis added)

However, the overriding principle was stated by Davies J (President) in Dart (at 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…(emphasis added)

PROSPECTS OF SUCCESS

7.          Deputy President Hall in Delkou agreed with Davies J in Dart, that it was neither convenient nor appropriate that there should be a preliminary trial of the issues that will ultimately have to be considered by the Tribunal on the stay application.  However, it is relevant for the Tribunal to consider whether facts and circumstances exist which, if established at the hearing, would enable the Applicant to succeed 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.

8.          The Applicant did not submit that there was an error of law.  The Applicant submitted no affidavits.  However, the Applicant was dissatisfied at the weight the SSAT placed on evidence that it considered. 

9.          The substance of the application for review will be to consider submitted medical evidence.  That is the correct forum and function for such consideration.  The Applicant may or may not succeed in his application which would result in the SSAT decision being set aside. 

IMPLEMENTATION OF THE DECISION MAY RENDER REVIEW BY THE AAT NUGATORY

10.        The Applicant did not submit that if the SSAT decision were implemented, review by the Tribunal would be rendered nugatory.  The Applicant did submit that the real issue was an undue windfall to the Respondent, which the Respondent may spend, leading to difficulty in the recovery of the money.

PROSPECTS OF RECOVERY OF PAYMENTS MADE TO THE RESPONDENT

11.        The Applicant expressed concern about the recoverability of any overpayment to the Respondent.  The potential overpayment is $2,400.00.  The Applicant referred to a grave problem for the Department if the money could not be recovered.  The Applicant was unable to justify this statement. 

12.        Submissions related to the Respondent’s financial position included that his Newstart Allowance is $426.70 per fortnight from 29 December 2006 (a reduction from prior payments of $455.30 per fortnight as stated in the application for Stay Order).  The Respondent’s potential DSP payment is approximately $518.00 per fortnight.  The Applicant is aware that the Respondent is a house owner, and has a Commonwealth Bank of Australia bank account with a current balance of $56.00.  There is a mortgage over the property.  There were no submissions related to the value and equity positions of the property.  It is reasonable to assume there is at least some equity in the property, as well as the prospect of some in the future. 

13.        If the Applicant succeeds in his substantive application, the Applicant may indeed have problems in recovering the monies paid to the Respondent.  This is a relevant consideration, as was pointed out in Quirke at 94. It is not in the public interest to provide payments that are clearly not due. This could indeed prejudice the Applicant. The sum involved suggests it should not gravely prejudice the Applicant. However, the Applicant could recover any excess payments by way of deductions from Newstart Allowance in accordance with s 1231 of the Act. Such deductions may be subject to severe financial hardship constraints. Such a course is likely to result in recovery of any overpayment, albeit over an uncertain and possibly extended duration.

14.        The Applicant referred to Dawson J in Federal Commissioner of Taxation v Myer Emporium Ltd (1986) 64 ALR 325, who said that where a debt was irrecoverable it justified departure from the ordinary rule.  There were no submissions that the potential debt that may arise if the Applicant is successful at the AAT application would be irrecoverable. 

15. The Applicant submitted that s 1223AB of the Act was relevant. Subsection (a) refers to a person who applies to the AAT (the Applicant in this hearing).  Subsection (c) refers to the amount [of money] that has in fact been paid to the person.  The reference to person is not qualified within the section, and within the section refers to the same person at law.  No amount has been paid to the Applicant nor would it be should the Stay Order be granted.  Indeed the Applicant is seeking through the Stay Order to not make a payment the SSAT has decided should be paid.  

HARDSHIP TO THE RESPONDENT IF A STAY ORDER IS MADE

16.        Deputy President Forgie considered the concept and meaning of “hardship” in Collins.  The Deputy President took into account the views expressed by the Full Court of the Federal Court in In the Marriage of Whitford (1979) 24 ALR 424 at 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 (Re Secretary, Department of Employment and Workplace Relations and Strachan [2006] AATA 541).

17.        The granting of the Stay Order sought by the Applicant would result in hardship to the Respondent in the setting of the SSAT decision and the benefits which would be expected to flow from it.  An additional $91.30 per fortnight would most likely improve the Respondent’s financial circumstances. 

18.        The Applicant’s submission was that the Respondent may enjoy the new financial circumstances, only to possibly have them withdrawn should the Applicant be successful in his appeal.  The Stay Order would prevent this from occurring. 

CONCLUSION

19.        The Applicant’s chances of success in its substantive application are no better than the Respondent’s.  It is not possible to say that the SSAT decision is patently incorrect on its face.  Success or otherwise at the substantive hearing of this matter will depend on the expert medical evidence given at that hearing. 

20.        Recovery of any monies paid to the Respondent pursuant to the SSAT decision may be problematic in the event that the Applicant is successful before the AAT.  However, the Respondent would still be receiving Newstart Allowance and the Applicant could ensure that deductions, allowing for any hardship considerations, were made in order to recover the debt. 

21.        If a Stay Order was made regarding payments following the SSAT decision additional hardship would be inflicted upon the Respondent. 

22.        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 the application for an order staying the implementation of the SSAT decision made on 17 October 2006 should be refused. 

I certify that the twenty-two [22] preceding paragraphs are a true copy of the reasons for the decision of:

Dr R McRae, Member

(sgd)       Ursula Noyé

Clerk

Date of hearing:  30 January 2007

Date of decision:  12 February 2007
Solicitor for the Applicant:            Mr T. Noonan, Centrelink Legal Services Branch
Solicitor for the Respondent:       Mr M. Alexander, Victoria Legal Aid