Re Secretary, Department of Social Security and Alexandrina Lea [1993] AATA 61; (1993) 31 ALD 789 (19 February 1993) - AATA 1993 case summary — Zoe

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Re Secretary, Department of Social Security and Alexandrina Lea [1993] AATA 61; (1993) 31 ALD 789 (19 February 1993)

[1993] AATA 61

Administrative Appeals Tribunal of Australia|1993-02-19|Before: Dr J

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Source facts

Court

Administrative Appeals Tribunal of Australia

Decision date

1993-02-19

Before

Dr J

Source

Original judgment source is linked above.

Judgment (80 paragraphs)

[1]

The applicant seeks review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 16 March 1992 which set aside a decision of a delegate of the applicant dated 27 November 1990 to raise and recover an overpayment of Sole Parent Pension ("SPP") under the Social Security Act 1991 ("the 1991 Act") for the periods 21 June 1990 to 19 July 1990, 2 August 1990 to 16 August 1990 and 11 October 1990 to 8 November 1990 respectively in the amount of $2120.80. The SSAT substituted a decision that recovery of $853.80 be waived as departmental error had contributed to a continuing overpayment after 25 September 1990, and that recovery of the balance be written off for a period of two years because of severe financial hardship.

[2]

2. Mr F Taylor, a departmental advocate, appeared for the applicant. Ms Lea, appeared in person assisted by a friend, Ms J. Hay, and gave evidence before the Tribunal. As will become evident below, the issues raised at the hearing involved considerable complexity and regrettably, a large part of these reasons is devoted to legalities. The Tribunal accepted into evidence the documents furnished pursuant to of the Administrative Appeals Tribunal 1975 (Exhibit 1) and a statement of the respondent: "Financial Situation as at May 1992" (Exhibit 2). Upon the Tribunal requesting some information about departmental practice relating to overpayments, Mr F Swerissen, Manager of the Compliance Project Section of the Department, who acts on occasions as an authorised review officer, and Ms I Walker, an in-office trainer for the Pensions Section at the Department's Innaloo office, gave evidence for the applicant.

[21]

"In considering the directions given by the Minister under Section

1237(3) the Tribunal applied itself to the question of special

circumstances, in particular in relation to Ms Lea's current financial

circumstances and the part played by the Department in protracting the

period of the overpayment.

When looking at the overpayment caused by the first two periods of

employment the Tribunal believes Ms Lea has breached the requirements

of the legislation in not advising of her employment within 14 days.

As such this portion of the overpayment should be recovered in full.

With regards to the overpayment attributable to her third period of

employment, the Tribunal accepts that Ms Lea telephoned the Department

within three weeks of commencing employment in September 1990 and when

her bank statement indicated the Department may not have actioned this

she recontacted them on 31 October 1990 and followed this up with

written advice. The Tribunal is satisfied from its discussions with Ms

Lea that she did contact the Department within three weeks and that

she also rang on 31 October 1991 even though there is no recorded note

of this contact either, but the Tribunal points to Ms Lea's letter

dated 31 October 1990 which is directed to a person called Wayne and

refers to a conversation on that day.

When dealing with the question of recovery, the Tribunal also had

regard to the financial circumstances of the client and in this

circumstance it is clear that Ms Lea is in desperate financial

troubles, and will be on a restricted budget for a long time. She

should however be able to stabilise her finances through employment,

given time.

The Tribunal therefore believes that the amount of overpayment

attributable to Ms Lea from October 1990 to November 1990 should be

waived on the grounds of administrative error in that the Department

of Social Security failed to act on information when provided. The

Tribunal is satisfied that Ms Lea acted in good faith and was not

aware that the monies had been credited to her account which was being

debited by the bank to an overdraft."

[56]

"20. ...In this respect observations made by the High Court in March

v. E and M Stramare Pty Ltd [1991] HCA 12; (1991) 99 ALR 423 about the "but for"

test in the context of a negligence action are instructive. Whilst

the Tribunal needs to be cautious about drawing analogies from a

different area of law, the caution demonstrated by their Honours in

regard to the use of the "but for" test in determining issues of

causation in negligence are of guidance to this Tribunal when dealing

with the statutory formula in question. As pointed out by Mason C.J.

(at p 425):

"It has often been said that the legal concept of causation differs

from the philosophic and scientific notions of causation."

21. After pointing out (at p 429) that in many situations the question

of whether "Y" is a consequence of "X" is a question of fact, he

concludes (at p 431) that the "but for" test does not provide a

satisfactory answer in those cases in which a superseding cause,

described as a novus actus interveniens, is said to break the chain of

causation which would otherwise have resulted from an earlier wrongful

act. Similarly, Deane J. (at p 435) observed that:

"The mere fact that something constitutes and essential condition

(in the "but for" sense) of an occurrence does not mean that, for the

purposes of describing responsibility..., it is properly to be seen as

a "cause" of that occurrence as a matter of ordinary language or

common sense." (emphasis added)

22. Toohey J., also (at p 436) indicated that he shared the Chief

Justice's view that the "but for" or "causa sine qua non" test should

not be a definitive theory of causation where negligence is alleged.

McHugh J. (at p 441) emphasised that issues of causation (in the

context of negligence) cannot be decided on the basis of logic or by

the application of a scientific of philosophical theory of causation.

Conclusions of causation need to be based "upon a rule that enables

the Tribunal of fact to make a value judgment that in the

circumstances legal responsibility did not attach to the defendant

even though his or her act of omission was a necessary precondition of

the occurrence of the damage." (emphasis added)

[61]

36. Ms Irene Walker, an officer of the Department with knowledge of recovery procedures, having familiarised herself with the respondent's file, said that the form returned by Ms Lea on 19 August 1990 had gone from the Perth West Office of the Department, after receipt and had been received at the Mirrabooka Office on 20 August 1990. It was then "actioned" and an overpayment detected on 4 September 1990. At that stage all that had happened was that the office had established that there was an overpayment. It was not, however, the Department's practice to raise an overpayment without receiving further information. The practice at the time was to send out an employer's report form. This may take some time to be returned. In the meantime an overpayment would not be raised. Asked why, once it was evident and verified by 17 September 1990 there had been an overpayment, no steps were taken to do anything about it until after another two months, Ms Walker said that by that time another overpayment must have been detected and instead of just raising the one overpayment they would look at all the overpayments and raise them as one. She agreed that instead of putting the respondent in a situation of not knowing that she was in debt and would therefore have to make provision for recovery, the matter was allowed to go on until the full amount was known. In fact the witness confirmed that it was not departmental practice to notify people about possible overpayments. She also conceded that in such instances there would be no reduction in pension upon first detection. This would not occur until the overpayment was established and raised. If a recipient of pension did notify the Department within 14 days that they were receiving income the Department would not seek recovery in respect of the first 14 days but every payment thereafter would be treated as recoverable overpayment paradoxically the Tribunal finds it difficult to understand how, in these circumstances, there could be an overpayment except for administrative error.

[65]

38. The fact that notification of the relevant information with 14 days would have made no difference to the Department's continuing to pay pension at the full rate, is borne out by the fact that in each instance notification was made only a matter of a short time after the 14 day period had expired. Departmental procedures were the same no matter when notification was made. In relation to the June-July overpayment notification it was 10 days outside the period and only 3 days outside in the case of the August overpayment, whilst on the evidence of the respondent, which was vague on the point, notification in relation to the September-October overpayment could well have occurred within the 14 days, but more likely was three weeks after commencing work. It is therefore difficult to see how the failure to notify of any relevant circumstance within 14 days would have affected the outcome, given the departmental practice at the time. The juggernaut would still have rolled on irrespective of the breach of the notice under s.163 of the 1947 Act. Given those circumstances it is difficult to see how the debt to the Commonwealth arising from the overpayments in the second and third employment periods could be said to be "in consequence of" the failure to give the necessary particulars nor that the overpayment would not have occurred "but for" her omission to notify in time. Had the respondent informed the Department in time it would not, on the evidence, have prevented the overpayment of pension. Her failure was irrelevant to the outcome. The first period raises some slight difference in that she did commence work on 17 June 1990 prior to first receipt of pension on 21 June 1990 but there is nothing in evidence from the respondent's officers to suggest that any different outcome would have followed. The Tribunal sees no reason to differentiate between the three periods of employment. The Tribunal therefore finds that her failure to notify did not contribute to the incurring by the Commonwealth of the debt under s.246(1) and she is not therefore liable on that account.

[76]

48. A further relevant factor that the Tribunal must consider is the respondent's financial situation. The Department itself has recognised that to date her situation has been fairly precarious and to that end has reduced withholdings from her pension to a fairly minimal figure of $20 per fortnight. From the information set forth above and from her evidence, the Tribunal is satisfied that she is in fairly stringent circumstances. This is so even though some liabilities such as for construction of the fence can be deferred. She undoubtedly is a capable person who is able to find employment from time to time in short bursts but this barely allows her to accumulate much more than is necessary to pay her substantial financial commitments. She is attempting to bring up a teenage son alone. Though Mr Taylor in cross-examination sought to establish that orthodontic treatment required by her son was not a matter of necessity and could be deferred, the Tribunal is not so sanguine. Matters of health can be taken into account as a matter of special circumstances. The Tribunal is satisfied that the treatment is necessary and will involve a substantial financial commitment. The respondent is also likely to experience difficulties maintaining repayments for the house that she has purchased. She undertook commitments in that respect at a time when she was in stable employment and now in these harsh economic times naturally experiences difficulty keeping up her repayments. The Tribunal is satisfied that whilst by no means as desperate or stringent as many of the cases that come before it, the financial circumstances of the respondent tend towards the severe insofar as her expenditure is almost entirely directed towards necessities. Her home mortgage, rates and insurance costs amount to $190 per week which is not excessive. Any reduction in her financial capacity will result in some form or other of deprivation with a real potential for increased stress and impact on her health.

Re Secretary, Department of Social Security and Alexandrina Lea [1993] AATA 61; (1993) 31 ALD 789 (19 February 1993)

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Judgment (80 paragraphs)

Legislation Cited (4)

Cases Cited (14)

Re Secretary, Department of Social Security and Alexandrina Lea [1993] AATA 61; (1993) 31 ALD 789 (19 February 1993)