Martinez v Secretary, Department of Family & Community Services

Ground of Appeal 5 The applicant appeared unrepresented. His notice of appeal, which appears to have been prepared by him, specifies only one ground. The ground is that "unusual, uncommon and exceptional circumstances did exist as defined under the Social Security Act". In the same notice he identified as the question of law raised on the appeal "that the AAT did not interpret 'special circumstances' under the Social Security Act correctly". On behalf of the respondent it was accepted that the error of law identified by this formulation was that the AAT wrongly held the facts as found by it fell within the concept of "special circumstances".

Applicant's Circumstances 6 The applicant's circumstances as found by the AAT are as follows. 7 The applicant suffered a back injury in the course of his employment as an engineer on a fishing vessel on 15 May1985. From 10 August 1987 he commenced receiving social security payments by way of special benefit, unemployment benefit, sickness benefit and disability support pension. His wife commenced to receive social security payments by way of disability support wife pension from 6 September 1988. 8 In February 1990 the applicant's solicitors lodged with the Workers Compensation Board of Western Australia a claim against the applicant's employer for weekly payments of compensation. By letter dated 30 May 1996 they advised him he was entitled to compensation in the total sum of $86,992.00 by way of weekly payments culminating on 16 October 1992. On 26 June 1996 a consent order was made by a Review Officer in the Conciliation and Review Directorate, Workcover, Western Australia that such sum be paid to the applicant. 9 On 26 June 1996 an officer of the DSS issued a preliminary notice under s 1177 of the Act to the State Government Insurance Commission ("SGIC") regarding possible recovery by the DSS of an amount from the total amount the SGIC may become liable to pay by way of indemnifying the insured employer. On 5 July 1996 a Recovery Notice was issued under s 1179 of the Act to the SGIC by a delegate of the respondent. It was to the effect that it was proposed to recover from the SGIC the amount of $47,394.15 being the sum of social security payments made to the applicant and his partner during the "periodic payments period" from 15 May 1985 to 16 October 1992. 10 The applicant sought reconsideration. Upon that being unsuccessful, there followed review by the Authorised Review Officer and then by the SSAT. 11 It was not in contest before the AAT nor on this appeal that the applicant is a person: (a) who, for a periodic period (15 May 1985 to 16 October 1992); (b) received both: (i) a series of periodic compensation payments ($86,992.00), deemed by s 17(A); (ii) compensation affected payments (sequentially: special benefit, unemployment benefit, sickness benefit and disability support pension. (c) whose wife also received compensation affected payments (disability support wife pension) in consequence of which: (d) the Applicant's compensation payment for SGIC was reduced by $47,394.15. 12 The matters relied upon by the applicant before the AAT to establish "special circumstances" was summarised by the AAT as follows: "At the hearing the applicant submitted that he was presently suffering severe financial hardship and that that in itself constituted a special circumstance which warranted a favourable exercise of the discretionary power conferred by s 1184(1) of the Act. Documents lodged with the Tribunal on behalf of the applicant prior to the hearing raised the following additional circumstances of the applicant's case for the Tribunal's consideration in relation to the "special circumstances" discretion: · the failure of the applicant's solicitors to give him correct advice and to act in his best interests - in particular, their failure to advise him of the substantial amounts recoverable by the DSS and the ATO prior to his agreeing, on their evidence, to accept the sum of $86,992.00 by way of arrears of weekly compensation payments · his employer's failure to insure him for the purpose of working on the fishing vessel and his being denied the right to make a claim for negligence in respect of his work-related injury · that fact that his employer was not covered by workers compensation insurance at the time of his work-related injury · the confusion surrounding his employment status at the time of his work-related injury · the premature end to his working life by reason of the abovementioned injury and the prognosis that his back condition will gradually degenerate over the next 10-20 years · the likelihood of his suffering long term financial hardship · the stress suffered by him in recent years which has adversely affected his general health and his family relationships." 13 The AAT's reasons also record that the applicant told it that his workers' compensation claim had been handled by different firms of solicitors before it was eventually settled in 1996. He said that the solicitor who settled his claim told him that he was likely to be awarded $80,000.00-$100,000.00 by way of compensation. His evidence was he was not told about any requirement to repay money to the DSS. On that basis he gave "verbal consent" to his solicitor in 1995 to settle the case. He also said his solicitor told him that he would fix the question of repayment to DSS but had failed to do so. He considered the solicitor had lied to him and the advice he had received from him to settle the compensation case had been wrong and not in his best interests. 14 In 1997 he obtained a refund of tax of $13,000.00. He used this to take his family to Spain to visit his dying mother. 15 The applicant's financial circumstances were dealt with by the AAT in the following paragraph of its reasons: "The applicant also told the Tribunal about his present financial circumstances. He said that his, and his wife's, total social security payments are approximately $708.00 per fortnight and that, in addition, his wife earns approximately $200.00 per fortnight as a cleaner. As regards his expenses, he tendered in evidence a document (Exhibit A9) which itemised his family's fortnightly living expenses which total $1,170.00. The Tribunal notes that the applicant and his wife each own a car (although approximately $9,000.00 is still owing on his wife's car) and they own the matrimonial home (which is worth at lease $120,000.00 and is unencumbered). The applicant added that he had borrowed $10,000.00 from his brother in Spain when he bought the house and that he presently has no means of repaying that debt." It appears from the evidence given by the applicant to the AAT that the borrowing from his brother was in an amount of US$10,000.00. 16 The AAT's reasons also record the effect of two medical reports in evidence. These were that by reason of his back condition the applicant is unable to work in his usual occupation and to undertake any manual labour. It is likely his back condition will slowly degenerate over the next ten to twenty years. He is also shown to have suffered stress-related complaints and symptoms.

AAT's Reasoning on Legal Concept of "special circumstances" 17 In relation to the legal concept of "special circumstances" in s 1184(1) of the Act the AAT said: "The "special circumstances" discretionary power conferred by s 1184(1) of the Act and its statutory predecessors has been considered in numerous decisions of the Federal Court and of the Tribunal. The tenor of those decisions is that, before it may become appropriate to exercise that discretionary power, the circumstances of the particular case must be special, in the sense of unusual, uncommon or exceptional, such that the application of the relevant "compensation recovery" provisions in Pt 3.14 of the Act will produce a result that is, in relation to the person concerned, unjust, unfair, unreasonable or otherwise inappropriate, having regard to the purpose or object of Part 3.14 of the Act, namely, to ensure that a person is not entitled to receive both compensation payments and social security payments in relation to the same incapacity for work and in respect of the same period of time: see, for example, Re Ivovic (above) at pp N96-97; Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3; Secretary, Department of Social Security v Smith (1991) 30 FCR 56 at 58-63; Haidar (above) at pp 296-297)."

Whether the AAT in error of law concerning legal concept 18 While the grounds as drafted by the unrepresented applicant do not strictly challenge the AAT's understanding of the legal concept of "special circumstances", that aspect was addressed in the course of argument on behalf of the respondent. I accept from the respondent's submissions that there is not any error of law in the understanding by the AAT. 19 True it is that the words "unusual, uncommon or exceptional" derive from the first instance decision in Re Beadle v Director-General of Social Security (1984) 6 ALD 1. There the AAT, presided over by Toohey J, considered the meaning of "special circumstances" as applied to a discretion s 102(1) of the Social Security Act 1947 (Cth). The AAT said that the expression was "by its very nature incapable of precise or exhaustive definition". Nevertheless the AAT also said "the qualifying adjective looks to circumstances that are unusual, uncommon or exceptional". On appeal the Full Court (Bowen CJ, Fisher and Lockhart JJ) in Beadle v Director-General of Social Security (1985) 60 ALR 225 at 230 found no error of law on the part of the AAT but added "while we would place less emphasis on one dictionary definition of "special", we are in broad agreement with the approach of the Tribunal…". This was in the context where the Full Court has said at 228 that it did not think it was possible to lay down precise limits or precise rules on what would constitute special circumstances. It said " the phrase "special circumstances", although lacking precision, is sufficiently understood in our view not to require judicial gloss". I accept that in this approach the Full Court did not fully endorse the AAT's paraphrase of "unusual, uncommon or exceptional" yet did not make the use of those words in themselves an error of law. 20 In Beadle before the Full Court at 228 the Court considered what would constitute special circumstances for allowance by the Director-General of a longer period than the legislatively prescribed period of six months between eligibility for a family allowance arising and a claim being made. The Full Court said that " presumably in this context special circumstances must include events which would render the six months unfair or inappropriate." Hill J accepted this approach in Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at 367 where he said: "The question of what constitutes special circumstances has been the subject of a number of decisions of this court. It suffices here to say no more than that something is required which would take the matter out of the usual ordinary case: Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545 per Kiefel J; Secretary, Department of Social Security v Ellis (1997) 46 ALD 1 at 5 per Carr J. As the Full Court of this court said in Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228, albeit in a slightly different context, special circumstances will be those matters which render circumstances unfair or inappropriate." 21 These authorities were referred to and considered by Merkel J in Kertland at 417-419 together the decision in Secretary, Department of Social Security v Smith (1991) 30 FCR 556, the circumstances of which were analogous to the ratio in accordance with which Kertland was decided. 22 Having considered these authorities and the approach which the AAT took to the legal concept I cannot detect any error of law in its approach to the concept of special circumstances.

AAT's reasoning on application of legal concept of "special circumstances" 23 The AAT's reasoning on the application of the concept to the applicant's circumstances was as follows: "In the Tribunal's opinion, there are no unusual, uncommon or exceptional features of the applicant's case by reason of which the application of the relevant "compensation recovery" provisions of the Act - apart from s 1184 - would, having regard to the purpose or object of those provisions, be unjust, unfair, unreasonable or otherwise inappropriate. Those provisions operate in relation to the applicant in the same way that they operate in relation to others who receive, or are entitled to receive, periodic compensation payments or a payment by way of arrears thereof, and who also receive social security payments for the relevant periodic payments period. Circumstances such as the alleged failure of the applicant's solicitors properly to advise him regarding the recovery of social security payments from his compensation payment, the alleged failure of his employer to arrange the necessary kinds of insurance, and the uncertainty of his employment status at the time of his work-related injury in respect of which he became entitled to compensation, may well have been disadvantageous to the applicant but they, nevertheless, do not constitute "special circumstances" for the purposes of s 1184(1) of the Act. As regards the applicant's present, and probable future, health and financial circumstances, the Tribunal acknowledges that they are clearly unfavourable but, in the Tribunal's opinion, they are not so grave or dire as to warrant a compassionate exercise of the discretionary power conferred by s 1184(1) of the Act. As regards health matters, the applicant has a degenerative back condition (in respect of which he receives a disability support pension) and has suffered stress-related problems in recent years but those conditions cannot reasonably be described as so grave as to constitute special circumstances for the purposes of s 1184(1) of the Act. Similarly, as regards the applicant's financial circumstances, given that he and his wife own their own home (which is unencumbered) and have a combined income of at least $908.00 pr fortnight and no uncommon kinds of debts or expenses, it cannot reasonably be said that his financial circumstances are so dire as to constitute special circumstances for the purposes of s 1184(1) of the Act. Although the applicant's and his wife's fortnightly living expenses presently exceed their fortnightly income, there is, in the Tribunal's opinion, some scope for them to reduce their present expenses and also, if necessary, to increase their present income by means of the applicant's wife seeking additional work."

Whether AAT in error of law in application of legal concept 24 It was made apparent to the applicant by the Court that the function of this Court is not to re-exercise the discretion exercised by the AAT. Rather the function of the Court is to find whether there was any error of law in the performance of its function by the AAT. Provided the discretion is exercised with regard to all the evidence relevant to the issue and the correct legal concept has been applied, there may be little scope for the Court to find such error in the presence of relevant evidence. 25 In my opinion on the evidence before it the AAT could not have done otherwise than to reach the conclusion which it did. That conclusion was that the circumstances of the applicant's case were not such as to result in recovery being unfair or inappropriate. 26 For the respondent it was contended that the issues relating to the advice to the applicant from his solicitors, the alleged failure of his employer to arrange necessary kinds of insurance and the uncertainty of his employment status at the time of his work related injury were properly regarded as matters of history leading to the applicant's circumstances at the time of the exercise of the discretion. It is submitted it is on the circumstances as presently obtaining that the discretion must be exercised. The relevance of the past events, it is said, may be to show how the applicant has placed himself in those presently obtaining circumstances. Nevertheless, past events may be relevant in a particular context, such as that of delay in Beadle. 27 It is not necessary to attempt any definitive exposition on those submissions nor would it be appropriate to do so in the absence of an argument in contradiction. It is sufficient that the AAT addressed all of the circumstances pertaining to the applicant and that there was evidence upon which it could properly conclude that the exercise of those provisions would not be unfair or inappropriate in the case of the applicant. Even considering the past events in relation to the applicant, the other evidence including the evidence of his financial circumstances, was such as to entitle the AAT to conclude the applicant's case was not taken out of the ordinary. 28 That view is reinforced by reference to the nature of the circumstances at issue in Ellis and in Haidar. They stand in sharp contrast to those at issue before the AAT. 29 Therefore, I do not consider any error of law is disclosed in the application by the AAT of the legal concept of special circumstances to the evidence relating to the applicant.

Conclusion 30 For these reasons I consider that the application by way of appeal should be dismissed. I certify that the preceding thirty-(30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice R D Nicholson.

Associate: Dated: 11 August 2000 The applicant appeared for himself

Solicitor for the Respondent: Australian Government Solicitor