Horsnell; Secretary, Department of Families, Housing, Community Services and Indigenous Affairs and [2009] AATA 519 (9 July 2009)

Last Updated: 8 September 2009

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2008/4858
GENERAL ADMINISTRATIVE DIVISION )

Re: Secretary, Dept of Families, Housing, Community
Services and Indigenous Affairs
Applicant

And: Scott Horsnell
Respondent

CORRIGENDUM TO DECISION NO. [2009] AATA 519

TRIBUNAL: Deputy President D G Jarvis

DATE: 7 September 2009

PLACE: Adelaide

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth), to alter the text of the decision in this application by amending the cross reference in the third to last line of paragraph 54 from “(paragraph 43 above)” to “(paragraph 44 above)”, and including under the title CATCHWORDS the following cited case: Secretary, Department of Employment and Workplace Relations and Donald [2006] AATA 920; (2006) 92 ALD 791.

D G Jarvis
(Signed)
(Deputy President)

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 519

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/4858

GENERAL ADMINISTRATIVE DIVISION		)
	Re		SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Applicant

And

SCOTT HORSNELL

Respondent

DECISION

Tribunal

Deputy President D G Jarvis

Date 9 July 2009

Place Adelaide

Decision

The tribunal affirms the decision under review.

D G Jarvis

(Signed)
Deputy President

CATCHWORDS

SOCIAL SECURITY - compensation receipt - calculation of preclusion period - respondent suffered brain injury and seriously incapacitated - settlement required court approval - level of paid care required likely to increase significantly - multiple circumstances not “special” in themselves but in combination amount to special circumstances - preclusion period reduced to accord with counsel’s opinion as to economic loss - decision under review affirmed.

Social Security Act 1991 (Cth), s 1184K(1)

Beadle v Director-General of Social Security [1984] AATA 176; (1985) 7 ALD 670

Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541

Haidar v Secretary, Department of Social Security [1998] FCA 994; (1998) 52 ALD 255

Karvelas v Chikorow (1976) 26 FLR 381

Re Beadle and Director-General of Social Security (1984) 6 ALD 1

Re Fowles and Secretary, Department of Social Security (1995) 38 ALD 152

Re Welch and Secretary, Department of Family and Community Services [2003] AATA 905; (2003) 78 ALD 550

Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443

Secretary, Department of Family and Community Services v Allan [2001] FCA 1160; (2001) 66 ALD 147

Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67; (2002) 116 FCR 348

Secretary, Department of Employment and Workplace Relations and Donald [2006] AATA 920; (2006) 92 ALD 791

Secretary, Department of Social Security v Thompson [1994] FCA 1477; (1994) 53 FCR 580

REASONS FOR DECISION

9 July 2009

Deputy President D G Jarvis

1. The respondent, Scott Horsnell, was injured in a most unfortunate incident outside a tavern on 18 April 1999. He was struck by a security control officer and suffered severe brain damage.
2. He issued proceedings against the security officer, the two partners of the firm that employed the security officer, and the owners and licensee of the tavern. The proceedings were settled, and the parties signed heads of agreement whereby Mr Horsnell recovered the sum of $1,406,000, made up of interest and special damages of $1,235,000 and legal costs of $171,000 (exhibit A1, T9, page 74). An application was made for the compromise to be approved by the District Court of South Australia as required by the District Court Rules (exhibit A1, T8, page 68). An opinion was provided to the Court by counsel in support of this application. The opinion included a detailed explanation of the circumstances of the injury, Mr Horsnell’s past and future financial position, an assessment of the likelihood of his claim succeeding at trial and the quantum of damages that might be assessed by the Court. The Court approved the compromise on 3 August 2006.
3. An officer of Centrelink, the statutory authority to which the respondent has delegated certain of his powers, then decided to impose a lump sum compensation preclusion period of 1010 weeks, from 18 April 1999 to 25 August 2018 (exhibit A2, T12, pages 122-123).
4. Mr Horsnell’s solicitor requested a review of Centrelink’s decision, and the decision was later affirmed. The matter was then reviewed by an authorised review officer (ARO), who also affirmed the decision.
5. Mr Horsnell then applied to the Social Security Appeals Tribunal (SSAT) for a review of the decision of the ARO. On 8 September 2008 the SSAT set aside the decision of the ARO and remitted the matter for reconsideration in accordance with the direction that only the amount of $330,384 was to be used to calculate the compensation preclusion period. This decision was made by the presiding member. A second member of the SSAT wrote a dissenting opinion, expressing the view that this was not a matter where special circumstances existed, and that the discretion in section 1184K of the Act should not be exercised. The competing decisions of the SSAT members were thoughtful and carefully considered.
6. The presiding member’s decision prevailed, and the Secretary, Department of Families, Housing, Community Services and Indigenous Affairs has now applied to this tribunal for review of the decision of the SSAT.

ISSUES BEFORE THE TRIBUNAL

7. The issues before the Tribunal are as follows:

(a) whether Mr Horsnell’s claim for damages was settled within the meaning of the relevant legislative provision; and if so
(b) whether special circumstances exist which make it appropriate to treat the whole or part of the payment as not having been made.

BACKGROUND

8. Mr Horsnell is now 37 years of age. He completed year 10 at school and then entered the workforce, undertaking manual labour. He worked intermittently, travelling around Australia in between periods of work. He did not marry and does not have any children.
9. The circumstances of Mr Horsnell’s injury are outlined in the opinion of counsel provided to the District Court (exhibit A1, T10, page 79). On the night of 17 April 1999 he went out with a group of friends to celebrate his sister’s birthday. During the course of the night he was struck on the head by a security control officer outside a tavern and was rendered unconscious.
10. Mr Horsnell was hospitalised as a result of his injury and underwent significant neurosurgery. He was transferred to the Julia Farr Centre and emerged from post traumatic amnesia about a month after he was injured. He was discharged from the Centre nearly two months later, and went to live with his father. He continued to receive rehabilitation treatment from the Centre until January 2000, when he was sent back to the Royal Adelaide Hospital for a cranioplasty procedure. He has lived by himself since then.
11. As a result of his injury Mr Horsnell has suffered executive dysfunction and short-term memory loss. His behaviour can be aggressive and he suffers from depression. Initially he suffered from epileptic seizures approximately twice a month, but these are now in remission. His driver’s licence has been revoked on medical grounds.
12. Mr Horsnell’s mother, Mrs Maureen Brown, gave evidence that his living relatives are herself, his father, a sister by adoption, a step-brother, and a step-father (to whom Mrs Brown is no longer married, and whose whereabouts she does not know).
13. She also said that Mr Horsnell’s father stays overnight with him approximately once a fortnight but does not provide him with health services or help to make meals for him. She also said that her other son, Damien, has occasionally helped her with Mr Horsnell’s care in the past, but is no longer able to do so because of his long working hours.
14. It is clear that Mrs Brown is Mr Horsnell’s principal carer. She said that she provides three to five hours of care a day to her son. She said that she changes his sheets and makes his bed when necessary, and also cooks meals for him three or four times a week. She feels that this is becoming a bit much for her and she is currently looking for a place that will provide these meals. When she does not cook for her son he relies on frozen meals; he used to be able to cook an egg or a piece of steak, but this has not happened for about two years, and his capacity seems to have deteriorated in this respect. She also spends time looking after her son’s paperwork, including forwarding documents to his administrator.
15. Mrs Brown said that, apart from the limited help provided by Mr Horsnell’s father and by a paid carer who comes to his house for three hours per week and takes him shopping, she is receiving no help with his care, and his family members are unable to contribute to his care, financially or otherwise.
16. She said further that Mr Horsnell’s care is becoming too much for her. Mr Horsnell’s behaviour is aggressive and can be violent: he has on occasion kicked and punched her. He shouts at her every time she goes to his house. She said that she is suffering from depression, has high blood pressure and also has back injuries from a fall she sustained last year after being assaulted by Mr Horsnell. She also has right knee problems and suffers from migraines and anxiety. She said she feels she will soon have to reduce the hours that she spends caring for Mr Horsnell, and that this will mean increasing the time spent at the house by a paid carer.
17. She said that Mr Horsnell works at a sheltered workshop three to four days a week. She said she believes that he leaves the house about 7:30 and that he works until about 1:00 or 2:00 in the afternoon. He travels to the workshop by bus by himself. She said that he is able to do this because she taught him the route.
18. Mr Horsnell has a sister and a step-brother. Mrs Brown said that his siblings rarely visit Mr Horsnell and that she has to prompt them to do so. She said that this upsets her but she understands that they find it hard to cope with Mr Horsnell’s “challenging behaviour”, namely that Mr Horsnell gets very aggressive, has pulled knives on her, his sister and his sister’s children, “talks dirty” in front of the children and often torments them, and is very angry and frustrated most of the time.
19. Evidence was also given by Mr Fabbro, Mr Horsnell’s solicitor, as to the frequency with which compromises of personal injury claims are approved by a Court. He said that he has been in practice for 20 years, is in charge of civil litigation at his firm and supervises 300 to 500 personal injury matters at any given time. He said that it is rare for a matter to require Court approval of any settlement reached by the parties, and this only occurs when the plaintiff is under 18 years of age or does not have the capacity to reach a compromise (usually due to some type of brain damage). He confirmed that when a settlement requires Court approval, any agreement reached by the parties has no legal effect until that approval is given, and that approval is only granted when a judicial officer is satisfied that it is appropriate to do so.
20. When asked what proportion of personal injury files at his firm is made up of matters requiring Court approval for a compromise, he said that out of the hundreds of personal injury matters finalised in a year, the firm settled only one or two matters requiring such approval, or at a maximum, three or four such matters in a year. He also said that he specialises in acquired brain injury cases, and that his practice is therefore atypical in that it would deal with more such cases than other practices. He also agreed that some such cases would go to hearing rather than being settled, but said that he believed 80% to 90% of personal injury claims are settled.

LEGISLATIVE SCHEME

21. Part 3.14 of the Social Security Act 1991 (Cth) (“Act”) provides for the effect of compensation recovery on certain social security benefits. Section 1160(1) of the Act provides for the general effect of that Part of the Act. It provides as follows.

“1160(1) This Part operates in certain specified circumstances to do one or more of the following:
(a) reduce a person’s compensation affected payment;
(b) render a person’s compensation affected payment not payable;
(c) require the repayment of some or all of a person’s compensation affected payment;
because of the receipt of compensation by the person or the person’s partner.”

22. Section 1169(1) of the Act provides in effect that a compensation affected payment is not payable during a lump sum preclusion period. It provides as follows.

“1169(1) If:
(a) a person receives or claims a compensation affected payment; and
(b) the person receives a lump sum compensation payment;
the compensation affected payment is not payable to the person in relation to any day or days in the lump sum preclusion period.”

23. Section 17(2) of the Act defines “compensation”. This includes a payment of damages “that is made wholly or partly in respect of lost earnings or lost capacity to earn resulting from personal injury”.
24. Section 17(1) of the Act defines the expression “compensation affected payment”, and a disability support pension (DSP) is included in that definition.
25. Subsection 1170(3) provides relevantly that the lump sum preclusion period is the period that begins on the day on which the loss of earnings or loss of earning capacity began, and ends at the end of the number of weeks worked out pursuant to the statutory formula referred to in subsections 1170(4) and (5). That formula refers to the “compensation part of lump sum”.
26. Section 17(3) of the Act provides an artificial statutory formula for determining the “compensation part of a lump sum compensation payment”. It provides relevantly as follows.

“17(3) Subject to subsection (4), 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 ... .”

27. The above provisions must, however, be read subject to section 1184K of the Act. That section authorises the Secretary (and this tribunal, standing in the shoes of the Secretary) to disregard the whole or part of a compensation payment in certain circumstances. Subsection 1184K(1) provides as follows.

“1184K(1) For the purposes of this Part, the Secretary may treat the whole or part of the 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.”

CONTENTIONS OF THE PARTIES

28. The Secretary contended that Mr Horsnell’s preclusion period was correctly calculated because:

(a) the compromise was a settlement and thus under subsection 17(3)(a) of the Act the compensation part of the payment is 50% of the total payment; and
(b) there are no special circumstances in this matter to enliven the discretion contained in section 1184K of the Act.

29. As to the proper characterisation of the compromise, the Secretary relied on a decision of Member Allen in Re Welch and Secretary, Department of Family and Community Services [2003] AATA 905; (2003) 78 ALD 550, where he found that a Court approved compromised was a payment made “in settlement of a claim” within the meaning of s 17(3)(a)(i) of the Act. Member Allen also found in that case that special circumstances existed, so that the preclusion period could be reduced, but the Secretary contended that the present matter was distinguishable from Welch on its facts.
30. Counsel for Mr Horsnell, Mr Bryant, contended that the compensation payment received by Mr Horsnell was not truly a settlement under section 17(3)(a) of the Act because under the District Court Rules it could have no legal effect without the approval of the Court. He referred the tribunal to the second reading speech to the Social Security Amendment Act 1988 (Cth) which made amendments to the now repealed Social Security Act 1947 (Cth), and introduced the predecessor of the provisions in the current Act that contain the statutory formula for calculating the preclusion period. As counsel contended, it is clear that Parliament’s intention in enacting this section was to prevent parties to a settlement apportioning an artificially low figure to damages for economic loss in order to allow claimants to continue to obtain social security payments, effectively “double dipping”. Counsel contended that in Mr Horsnell’s case the District Court reviewed and approved his settlement and the figure attributed to economic loss must therefore be taken to have been correct. In the alternative, it was submitted on behalf of Mr Horsnell that special circumstances existed, and that the preclusion period should be reduced in accordance with the decision of the presiding member of the SSAT.

CONSIDERATION

Was the compensation payment made to Mr Horsnell made “in settlement of a claim”?

31. By virtue of s 17(3)(a)(ii) of the Act the 50% statutory formula only applies if the compensation claim was “settled, either by consent judgment being entered in respect of the settlement, or otherwise.”
32. I accept the argument of counsel for Mr Horsnell that the compromise had no legal effect without approval of the Court. This follows from the provisions of Rule 35.11 of the District Court Rules, which reads as follows:

“35.11 Where in any proceedings a claim is made by or on behalf of a person under disability, no settlement, compromise, payment, or acceptance of money paid into Court, whenever entered into or made so far as it relates to that person’s claim, is binding without the approval of the Court. ...”

33. Nevertheless, whilst the compromise was ultimately reviewed and approved by a judicial officer of the District Court and it could not be suggested in this case that the economic loss component of the amount recovered had been artificially reduced, it was first reached through a process of negotiation between the parties. The proper analysis of what occurred in my view is that the parties reached an agreement that was subject to a condition subsequent, namely the approval of the compromise as required by the rules of Court. In my opinion the proper characterisation of the resolution of the claim is that it was “settled” within the meaning of s 17(3)(a)(ii) of the Act, and I agree with respect with Member Allen’s conclusion in Welch to that effect. The 50% formula in s 17(3)(a) therefore applies to the calculation of Mr Horsnell’s preclusion period.

Do special circumstances exist?

34. I must now consider whether special circumstances exist that would make it appropriate for me to treat the whole or part of the payment as not having been made.
35. The concept of what constitutes “special circumstances” has been discussed in many cases in the Federal Court and in this tribunal. In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 the tribunal was dealing with an application under a different section of the Act which also, however, involved a consideration of whether special circumstances existed. Toohey J said (at page 3):

“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

36. In the same case on appeal ((1985) [1984] AATA 176; 7 ALD 670), a Full Federal Court (Bowen CJ, Fisher and Lockhart JJ) said, at 675, that it was “in broad agreement with the approach of the Tribunal”, and reiterated the need to avoid limiting the scope of what might constitute special circumstances when it explained, at 674:

“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.”

37. In a later case, Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed at 545 that special circumstances:

“... would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

38. The flexibility of the concept of special circumstances was referred to in Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 42 FCR 443, where a Full Court of the Federal Court (Neaves, Burchett and O’Loughlin JJ) said, at page 450:

“Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other.”

39. In a similar vein Heerey J, in Secretary, Department of Family and Community Services v Allan [2001] FCA 1160; (2001) 66 ALD 147, said at [17]:

“It is not sensible to lay down precise limits or precise rules as to what may constitute special circumstances ... ill health, financial circumstances and the unfairness of a strict application of the Act are some matters which may in an individual case, constitute special circumstances.” (References omitted).

40. The purpose of the “special circumstances” provision was explained (in the context of a similar section, namely s 1237AAD of the Act, ) by French J (as he then was) in Secretary, Department of Social Security v Hales (1998) 82 FCR 154, when he said, at page 162:

“The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt.”
His Honour also said, at page 162:
“The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it.”

41. Finally, I refer to Haidar v Secretary, Department of Social Security [1998] FCA 994; (1998) 52 ALD 255 at 263, where Hill J discussed the predecessor of section 1184K of the Act, and agreed with an earlier observation by von Doussa J to the effect that in that section an attempt was made to balance on the one hand finite budgetary allocations against the interests of the recipient of the payment. His Honour continued:

“Without putting too fine a point upon it, the purpose of the basic thrust of the legislation was to avoid a claimant being entitled both to social security benefits and benefits in the nature of income through lump sum payments.
However, the legislature was conscious of the possible harshness of a rule structured in an arbitrary way. Section 1184, therefore, provided the means whereby the secretary or, in the event ultimately of an appeal to the Administrative Appeals Tribunal, that tribunal, could alleviate the harshness of the statutory provision in an appropriate case but only where there were special circumstances. 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 ...”.

42. As mentioned above, Mr Horsnell had net assets of $962,743 as at 30 June 2008. According to a footnote to the Statement of Facts, Issues and Contentions lodged on behalf of Mr Horsnell in April 2009, this figure would by then have been considerably less due to current economic circumstances. Financial statements for the year ended 30 June 2008 (exhibit R2) show that non current investments held on trust for Mr Horsnell were valued at $686,797 as at 30 June 2008, and that those investments included a significant proportion of listed securities. It is likely that the value of those securities has declined substantially since 30 June 2008, but no evidence was led as to whether the investments in question have been retained, or as to the value of Mr Horsnell’s current net assets.
43. Ms Welfare, the advocate for the Secretary, contended that Mr Horsnell has access to substantial assets, and has no need in the short term to be reliant on social security benefits. She contended that he could apply for such benefits at a later date, when his financial position was such that he needed to do so, and that it was likely that he would then be entitled to benefits. It is of course necessary for me to consider the issue of special circumstances at the present time. I accept that Mr Horsnell is not suffering from financial hardship when his situation is compared with that of many other recipients of social security benefits. However, the extent of financial hardship is only one of many considerations that may need to be taken into account when considering whether special circumstances exist.
44. Mr Byrant submitted that Mr Horsnell had only recovered $330,384 by way of compensation for loss of past and future earnings (being the total figure of $409,500 referred to in the opinion of counsel reduced by the same proportion as the reduction in the total claim, that is from $1,530,740 to $1,235,000, by reason of contributory negligence and the risk that his claim might fail). He pointed out that the amount recovered was therefore significantly less than the figure resulting from the statutory formula, which had been computed by Centrelink at $703,000 (being 50% of $1,406,000, which is the sum of the settlement sum of $1,235,000 and legal costs of $171,000).
45. Counsel further pointed out that Mr Horsnell’s assets are being managed by his trustee, who will need to manage and apply the assets so that there will be adequate funds to provide necessary care and medical treatment for Mr Horsnell for the rest of his life. Mr Horsnell himself does not have ready access to the funds, and the trustee will need to preserve the settlement funds as far as possible in order to provide for Mr Horsnell’s future needs. He further submitted that the cost of providing for such needs will increase as Mr Horsnell gets older.
46. As pointed out by Kiefel J in Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67; (2002) 116 FCR 348 at [33], it is often the case that the application of the statutory formula leads to a deemed recovery for economic loss of more, and sometimes substantially more, than the amount recovered, but that cannot, by itself, amount to special circumstances, or a matter out of the ordinary. Her Honour also said in effect, at [34], that the extent of the difference between the settlement component for economic loss and the figure produced by the statutory formula could not constitute a “special circumstance”, because the Act has selected a figure which may operate in an arbitrary way.
47. I also accept that it is common for plaintiffs to accept settlements entailing a reduction, and sometimes a substantial reduction, in the amount claimed, particularly in claims for personal injuries, because of difficulties of proof or other risks of litigation: see Re Fowles and Secretary, Department of Social Security (1995) 38 ALD 152 at [58]. Once again, that aspect would not, by itself constitute special circumstances.
48. Nevertheless, when considering whether special circumstances exist, it is necessary to have regard to the combination of all relevant circumstances, and not to disregard particular aspects simply because they cannot by themselves constitute special circumstances. In cases where:

(a) there is a significant disparity between an applicant’s economic loss because the arbitrary statutory formula takes into account other elements of the lump sum compensation amount (due, for example, to substantial compensation for future medical and carer expenses, or unusually high legal costs);

(b) the disparity is further increased by a reduction in the compensation recovered by reason of contributory negligence, or an allowance for the risks of litigation; and

(c) the applicant has been left with grave permanent disabilities and will require significant financial support to meet future medical and carer expenses

the combination of those matters might in all the circumstances of a particular case properly lead a decision-maker to conclude that the applicant’s position is sufficiently unusual to constitute special circumstances (see, for example, my decision in Secretary, Department of Employment and Workplace Relations and Donald [2006] AATA 920; (2006) 92 ALD 791).

49. I consider that there are a number of features of Mr Horsnell’s situation that make it unusual when compared with other cases involving preclusion periods. I have referred above to the significant permanent disabilities from which Mr Horsnell is suffering. He engages in violent and inappropriate behaviour which is frightening to his mother and other family members. He currently requires the assistance of a carer for three to five hours per day to assist him with the activities of daily living. He is incapacitated for work and is unlikely to be able to work again, other than to continue to work part time through a sheltered workshop.
50. The carer assistance which Mr Horsnell is receiving is provided very predominantly by his mother. However, she has difficult health problems herself, and these problems and her increasing age make it likely that she will need to reduce the extent of her care of Mr Horsnell progressively over the next few years. It will then be necessary for Mr Horsnell’s needs to be met by a paid carer coming to his house. Further, I find from the evidence of Mrs Brown that other persons in Mr Horsnell’s immediate family have not in the past provided practical assistance to him, and it appears most unlikely that he will receive much assistance from them in the future. In addition, he has no prospect of receiving financial assistance from his immediate family, either in the short term, or through inheritance.
51. Quite apart from these matters, Mr Horsnell’s case is unusual in that, as mentioned above, he issued the proceedings that resulted in his recovering compensation by his next friend, and the compromise of the proceedings was approved by the District Court of South Australia. In the experience of his solicitor, only a very small percentage of settlements of claims for personal injuries are approved by a Court. This occurred in Mr Horsnell’s case.
52. Further, experienced counsel provided an opinion as to the quantification of Mr Horsnell’s claim for economic loss, as well as the other elements of his claim. The procedure that was followed in Mr Horsnell’s case accorded with the practice of the court in granting approval to the compromise of an action by a party with a disability (as explained in Karvelas v Chikorow (1976) 26 FLR 381, a case in the Supreme Court of the Australian Capital Territory). Whilst the judgment and Court order approving the compromise of Mr Horsnell’s action did not specifically approve the quantification of the various elements constituting the amount of the settlement, the Court’s approval is an indication that the formulation and quantification of the claim was appropriate, and that it accorded with the Court’s opinion as to the likely amount of any judgment that might have been recovered if the matter had not been settled. As mentioned above, this is clearly not a case where the extent of economic loss might have been reduced artificially, so as to enable the claimant to engage in “double dipping”, that is to receive both compensation for economic loss and social security benefits from the Commonwealth. In the present matter, having regard to the court’s approval of the compromise, a finding that special circumstances exist would not be inconsistent with the purpose sought to be achieved by the enactment of the statutory formula provided for in s 17 of the SS Act.
53. In Welch (supra) the tribunal found that special circumstances existed, taking into account a number of factors, many of which are similar to the circumstances of this matter. In seeking to distinguish the present matter from the decision in Welch on its facts, Ms Welfare referred to such matters as the extent of disability, the level of care required, and the extent of financial self-sufficiency and unpaid carer assistance which Mr Horsnell is receiving compared with the situation of the applicant in Welch. Whilst there are differences of degree in relation to such matters, it is necessary for decision-makers to examine the particular circumstances of each case in order to determine whether special circumstances exist, by reference to the principles to which I have referred above. No two cases will be identical. For the reasons I have explained, I am satisfied that special circumstances exist in Mr Horsnell’s case.
54. It remains necessary to determine how much of the compensation payment should be treated as not having been made. Sometimes this is a difficult issue, and might entail an intuitive judgment, but in this case, there is good evidence that the sum of $330,384 represents a reasonable assessment of the amount of compensation for economic loss included in the compromise settlement of Mr Horsnell’s claim (see paragraph 44 above). The presiding member of the SSAT applied that figure. I consider that this was a proper basis for exercising the discretion conferred by s 1184K(1).
55. Of the total amount of the settlement of $1,406,000, the presiding member of the SSAT correctly calculated that $745,232 should be treated as not having been paid. The balance of $660,768 would then become the lump sum compensation payment, and by virtue of the formula in s 17(3) of the Act, the compensation part of this payment is 50% of this balance, namely the above figure of $330,384. I agree therefore that $745,232 should be treated as not having been paid.

DECISION

56. The tribunal affirms the decision under review.
    

I certify that the 56 preceding paragraphs are a

true copy of the reasons for the decision

herein of Deputy President D G Jarvis

Signed: .(Signed).............................................................. L. Staker Associate

Date of Hearing 10 June 2009

Date of Decision 9 July 2009

Date of receipt of final

submissions 19 June 2009

Advocate for the Applicant Ms M Welfare

Solicitor for the Applicant Centrelink Legal Services Branch

Counsel for the Respondent Mr T Bryant
Solicitor for the Respondent Andersons Solicitor