Warwick v National Disability Insurance Agency

Relevant provisions 2 The main question in the appeal turns on ascertaining the correct meaning of a rule. I will turn to that rule shortly but in the meantime it is necessary to understand where it fits in the overall legislative scheme. 3 The legislation establishing the NDIS is the National Disability Insurance Scheme Act 2013 (Cth) ('the Act'). A person may apply to the Agency to access the NDIS: s 18. If it is decided that the 'access criteria' are met then the person becomes a 'participant': s 28(1). These criteria relate to age, residence and disability (or in some cases the need for early intervention): s 21. It is not disputed that Mr Warwick meets the access criteria. Once a person becomes a participant in the scheme, the Act requires the CEO of the Agency (or that person's delegate) to facilitate the preparation of a plan for the participant: s 32(1). Amongst other things, a plan must include a 'statement of participant supports': s 33(2). One of the kinds of support which may be included in a participant's plan is 'reasonable and necessary supports that will be funded': s 34(1). 4 Before reasonable and necessary supports can be included in a participant's plan, the delegate must be satisfied of all of the matters set out in s 34(1)(a)-(f). (For completeness, the effect of s 39 is that the Agency must comply with the statement of participant supports, which in practice means that funding is provided for any reasonable and necessary supports included in the plan.)

The Tribunal proceeding 5 Before the Tribunal the parties were in dispute about several matters. One of these concerned whether Mr Warwick had satisfied the Tribunal of the matter in s 34(1)(c). It requires the decision-maker to be satisfied that 'the support represents value for money in that the costs of the support are reasonable, relative to both the benefits achieved and the cost of alternative support'. 6 The Tribunal was ultimately satisfied that the relocation costs met this requirement. The debate which it resolved in reaching this conclusion concerned, in simple terms, whether it was more cost effective for Mr Warwick to have moved home or, instead, to have remained in his old home and to have had works done upon it to address his disability needs. The debate was complicated by the fact that Mr Warwick moved out of his old home before an assessment of that question could be conducted. Although that significantly complicated the Tribunal's task, it has no present relevance. The important matter is instead the Tribunal's conclusion that the relocation costs claimed represented value for money under s 34(1)(c). The correctness of this conclusion is not contested in the present appeal. 7 The conclusion that the relocation costs satisfied each of the requirements in s 34(1) did not immediately lead to a conclusion that they were to be included in Mr Warwick's plan. This is because s 33(5)(d) requires the decision-maker, in deciding whether to approve a statement of participant supports, to 'apply the National Disability Insurance Scheme rules (if any) made for the purposes of s 35'. I note that the question of whether there is a separate residual discretion under s 33(2)(b) to deny funding even where the s 34 criteria are satisfied is currently unclear: see National Disability Insurance Agency v WRMF [2020] FCAFC 79; 276 FCR 415 at 451-452 [158]-[167] per Flick, Mortimer and Banks-Smith JJ. That question did not arise in the present case given the way the Tribunal dealt with the matter. It is therefore not necessary to express any view about it. 8 Amongst other matters, the National Disability Insurance Scheme (Supports for Participants) Rules 2013 (Cth) ('the Rules') specify the circumstances in which a reasonable and necessary support will not be funded. Relevantly for Mr Warwick's case, paragraphs 5.1 and 5.2 of the Rules provide: 5.1 A support will not be provided or funded under the NDIS if: (a) it is likely to cause harm to the participant or pose a risk to others; or (b) it is not related to the participant's disability; or (c) it duplicates other supports delivered under alternative funding through the NDIS; or (d) it relates to day-to-day living costs (for example, rent, groceries and utility fees) that are not attributable to a participant's disability support needs. 5.2 The day-to-day living costs referred to in paragraph 5.1(d) do not include the following (which may be funded under the NDIS if they relate to reasonable and necessary supports): (a) additional living costs that are incurred by a participant solely and directly as a result of their disability support needs; (b) costs that are ancillary to another support that is funded or provided under the participant's plan, and which the participant would not otherwise incur. 9 The Tribunal approached the matter on the basis that the relocation costs were 'day-to-day living costs' within the meaning of paragraph 5.1(d). However, paragraph 5.1(d) is subject to the carve-out in paragraph 5.2(a) which Mr Warwick submitted he fell within. The question for the Tribunal therefore became whether the relocation costs could be described as having been incurred 'solely and directly' as a result of Mr Warwick's disability support needs. The Tribunal interpreted these words to require the application of a sole cause test so that it had to be shown that the only reason that Mr Warwick moved to his new home was his disability needs. 10 If any of the matters in paragraph 5.1(a)-(d) are satisfied in relation to a support then the effect is that the support cannot be funded under the NDIS. The parties agreed that Mr Warwick's choice of his new home was motivated by a desire to be near his daughter. At this point, it is useful to know that Mr Warwick's new home is part of a gated community and that his daughter lives in the same community a very short distance away. The parties disagreed, however, as to whether this desire for proximity was based solely on the support of Mr Warwick's daughter as a carer or also on her informal support as a family member. The Tribunal ultimately accepted that the convenience of Mr Warwick's daughter living nearby was not solely related to his disability support needs and that, as such, the sole purpose test in paragraph 5.2(d) could not be satisfied. Since the carve-out in paragraph 5.2(a) was not enlivened it followed, on the Tribunal's reasoning, that the exclusion in paragraph 5.1(d) applied and the support, whilst satisfying each of the requirements in s 34(1)(a)-(f), was not one which was to be funded. It therefore declined to include in Mr Warwick's statement of supports his relocation costs. Since this was the decision made by the delegate, the Tribunal affirmed that decision. Although it is not relevant to this appeal, it should be noted for completeness that the Tribunal's reasons for the decision were quite different to those of the delegate.

Were the relocation costs 'day-to-day living costs'? 11 The main issue on appeal is Mr Warwick's contention in this Court that 'day-to-day living costs' cannot include the costs of relocating from one home to another. Mr Warwick did not advance this argument before the Tribunal and it is apparent that Mr Warwick, the Agency and the Tribunal all simply assumed that relocation costs were 'day-to-day living costs'. The Agency objected to Mr Warwick raising this issue for the first time on appeal in this Court. However, it was not submitted that, had the point been raised before the Tribunal, the Agency would have led additional evidence, or that the Agency would suffer injustice if the point were now entertained. 12 Generally, a party is bound by the way a Tribunal proceeding has been conducted. Nevertheless, a discretion to permit the raising of a fresh ground of appeal may in an appropriate case be exercised in favour of an appellant if no injustice to the respondent is entailed: Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; 233 FCR 215 at 347-348 [79]-[83] per Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ. 13 I propose to allow Mr Warwick to raise this argument on appeal notwithstanding that it was not raised in the Tribunal. The reasons I do so are that (a) it is obvious that relocation costs are not 'day-to-day living costs' and there is a public interest in having it made clear for the purposes of the NDIS that this is so; and (b) allowing the submissions to be raised works no injustice to the Agency. 14 Paragraph 5.1(d) is contained in a legislative instrument. The expression 'day-to-day living costs' is not defined in that instrument, nor does it bear a technical meaning. Thus, it bears its ordinary meaning. According to the Macquarie Dictionary, the ordinary meaning of 'day-to-day' is 'ordinary; happening every day'. Perhaps the word 'everyday' captures these two concepts. The ordinary meaning of 'living costs' is those expenses which are incurred in the course of living for the purpose of living. Thus 'day-to-day living costs' are those everyday expenses which are incurred in the course of living for the purpose of living. This meaning is confirmed by the examples which appear in brackets in paragraph 5.2(d) - 'rent, groceries and utility fees' - which are canonical examples of day-to-day living costs. 15 The costs of engaging an agent to sell one's home, the costs of moving from one home to another, conveyancing fees and the payment of stamp duty on the conveyance of a new home are not everyday costs which are incurred in the course of living for the purpose of living. To the contrary, they are extraordinary expenses to which not everyone has the good fortune to become liable and which, even amongst those who are that fortunate, can scarcely be described as 'day-to-day' costs. 16 It follows that the relocation costs claimed by Mr Warwick do not fall within paragraph 5.1(d). The Tribunal's determination that paragraph 5.1(d) applied therefore involved an error of law. The determination should be set aside and the matter remitted to the Tribunal to determine according to law and in light of these reasons.

Other issues on appeal 17 The conclusion above makes Mr Warwick's remaining contentions irrelevant. Had it been necessary to decide them, however, I would have rejected Mr Warwick's submission that it was determinative that he did not fall within paragraph 5.1(b). The matters set out in paragraph 5.1 are alternatives. The fact that he did not fall within paragraph 5.1(b) says nothing about the question posed by paragraph 5.1(d). Nor does it matter that the Tribunal had accepted that the relocation costs satisfied the tests specified in s 34(1)(a)-(f). It still needed to be decided whether the support was to be funded. Paragraph 5.1 specifies those circumstances where a support otherwise satisfying s 34(1)(a)-(f) will not be funded. It takes satisfaction of s 34(1)(a)-(f) as a given. 18 I would also have rejected his contention that the Tribunal (or the Agency) had breached the rule in Browne v Dunn (1893) 6 R 67, or rules of procedural fairness, by failing to call Mr Warwick and put to him questions about his motivations for moving to the new home. Neither the Agency nor the Tribunal was bound to call Mr Warwick who was, after all, the Applicant and represented by legal practitioners. As it happens, Mr Warwick was in hospital at the time of the hearing. If it had been thought necessary by Mr Warwick's advisers to obtain his evidence about his motivations for moving home, the obvious person to call him would have been Mr Warwick. If he was not called because he was in hospital an adjournment should have been sought. 19 I would not have accepted that the Tribunal made any error in its approach to the meaning of the words 'solely and directly' which was, with respect, plainly correct. The fact that everyday living costs are usually only incurred for one purpose - living - may be contrasted with the multiple motivations people often have for moving home. The point of paragraph 5.2(a) is to permit recovery of everyday costs where those costs relate solely to disability support needs. Thus the telephone bill is out, but transport costs for a person unable to drive or to utilise public transport because of a disability are in. Expenses which are disability-related but which would be incurred anyway even if the person did not have a disability are not recoverable. Thus the fact that a telephone is used for purposes which relate to disability does not make it recoverable if it is used for other non-disability-related purposes too. 20 The fact that day-to-day living costs are incurred for relatively straightforward purposes can be contrasted with the multiple motivations people may have for acquiring a new home. Mr Warwick's circumstances are indicative of this phenomenon. He obviously wished to live near his daughter but he also needed to move into a home which suited his needs. It is likely that he had other reasons too: he liked the house; the price was right; his wife was content with it. The nature of a relocation decision and the multiple motivations which may attend it well show that relocation costs have no business in paragraph 5.1(d). 21 On the other hand, it is clear that the Tribunal's decision to reject his claim for all of the relocation costs would have involved error. It had found that the reason he had moved out of his former home was solely related to his disability. It should have followed that relocation costs associated with that move were recoverable. These were the agent's fees and commission, the conveyancing costs on the sale and the cost of moving to his daughter's home. On the Tribunal's findings, the decision to relocate from his daughter's home to the new home and the expenses involved did not satisfy the sole cause test and hence were not recoverable. The Tribunal bundled both sets of costs together and rejected all of them. It therefore failed to apply paragraph 5.1(d) to the facts that were before it. Had I accepted that paragraph 5.1(d) had anything to do with this case, I would have accepted that this treatment was erroneous. I would have remitted the matter to the Tribunal to determine which costs were recoverable. 22 Upon Mr Warwick filing an amended notice of appeal seeking to set aside the Tribunal's decision on the basis that relocation costs do not fall within paragraph 5.1(d), orders should be made setting aside the Tribunal's decision and directing it to redetermine Mr Warwick's application according to law. There should be no order as to costs. Whilst he has succeeded, the point should have been raised before the Tribunal. Had that occurred, the present hearing would have been unnecessary. The parties should bring in a short minute of order to give effect to these reasons within 7 days. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Perram.