PWGC and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 81 (4 February 2010)

Last Updated: 5 February 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 81

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/5542

GENERAL ADMINISTRATIVE DIVISION		)
	Re		PWGC

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal

Senior Member K Bean

Date 4 February 2010

Place Adelaide

Decision

The Tribunal decides not to grant an extension of time for the making of an application for review of the decision of the Social Security Appeals Tribunal dated 3 April 2009.

..............................................
K BEAN
(Senior Member)

CATCHWORDS

PRACTICE AND PROCEDURE – Application for extension of time – Whether it is reasonable in all the circumstances to grant extension - Whether acceptable explanation for delay – Merits of substantive application – Not reasonable in all the circumstances – extension of time refused
Social Security Act 1991 ss 1164, 1184K

Administrative Appeals Tribunal Act 1975 ss 29, 44(2A)(a)
Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540
Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment [1984] FCA 176; (1984) 3 FCR 344; 7 ALD 315; 58 ALR 305

REASONS FOR DECISION

4 February 2010

Senior Member K Bean

1. The applicant, PWGC, suffered significant injuries in the course of his employment as a security guard on 11 November 2005. He subsequently received weekly payments of workers’ compensation until 28 August 2008. In September 2008, he agreed to settle his compensation claim on the basis of payment to him of a substantial lump sum in respect of his outstanding entitlements.
2. As a result of his receipt of that lump sum, Centrelink calculated a “preclusion period” during which he would not be entitled to certain payments under the Social Security Act 1991 (the SS Act). The period arrived at was from 29 August 2008 to 1 April 2010 so that, as at the date of this decision, there are some two months left to run before the period expires.
3. Unfortunately, by late 2008 PWGC had spent most of the lump sum he had received by way of workers’ compensation. On 5 November 2008, he lodged a claim for Parenting Payment (Single) which was subsequently rejected by reason of the preclusion period. PWGC then sought review of that decision by an Authorised Review Officer (ARO) of Centrelink, who affirmed the original decision. PWGC then appealed to the Social Security Appeals Tribunal (the SSAT) who made a decision on 3 April 2009 also affirming the decision under review.
4. On 20 November 2009, seven months after the decision of the SSAT, PWGC lodged an application with this Tribunal for review of the decision of the SSAT.
5. The application to this Tribunal was not lodged within 28 days of receipt by PWGC of the SSAT’s decision as required by s 29 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). PWGC has accordingly applied for an extension of time to apply to this Tribunal for review of the SSAT’s decision.

ISSUE BEFORE THE TRIBUNAL

6. The primary issue before me is whether I should exercise my discretion to grant an extension of time for the institution of proceedings in this Tribunal.

RELEVANT FACTS

7. PWGC is 33 years old and, as mentioned above, suffered various injuries at work in November 2005. On 1 September 2008 he settled his claim for $126,710 which included an amount of $83,845.33 by way of “redemption” of WorkCover’s future liability to him for payment of income maintenance. As also mentioned above, as a result of the settlement, Centrelink calculated a preclusion period of 83 weeks from 29 August 2008 to 1 April 2010 and there is no dispute that the preclusion period was correctly calculated. There is also no dispute that, as his legal costs were approximately $17,000, PWGC received about $109,000 ‘net’ from the settlement.
8. As to PWGC’s current circumstances, he has the care of his daughter who is currently five years old. He claims that his only income at present is Family Tax Benefit, in an amount of approximately $360 per fortnight. As his current rent is approximately $560 per fortnight, he is in a dire and deteriorating financial situation.
9. In relation to how he had spent the $109,000 he had received, consistently with what he had told the SSAT, PWGC confirmed before me that he had spent approximately the following amounts on the items indicated:

(a) home improvements like furniture and electronic goods - $20,000;

(b) work on a car - $4,000;

(c) repayment of loans from relatives - $10,500;

(d) $1,000 at “the show”; and

(e) $10,000 off his car loan.

10. In relation to the finding of the SSAT that “[PWGC] spent about half of the settlement sum on gambling”[1], PWGC refuted that finding and stated that the amount he had spent on gambling had been substantially less than that and in the vicinity of approximately $20,000. When questioned as to how he had spent the $30,000 which he claimed had not been spent on gambling and was not otherwise accounted for, PWGC referred to the amount he had paid by way of legal costs and also stated that he had loaned $18,000 to a girlfriend who had not paid him back.
11. By way of substantiating his claims, PWGC provided a bundle of receipts in relation to amounts spent following the settlement. Those receipts account for expenditure of approximately $16,342.69, which the respondent does not contend was unreasonable. PWGC also provided a list of other expenditures for which he has no receipts, totalling approximately $48,000.[2]
12. As to why he had not sought to challenge the decision of the SSAT earlier, PWGC stated in his application for an extension of time that this was “due to stress and looking after my daughter I have forgotten about it”. At the hearing, however, he relied primarily on his psychological state at the time he received the SSAT decision. He also provided two documents directed to that issue, being a letter from Ms Deborah Clark of Child Protection Services dated 14 December 2009 and a report of Mr Robert Tomlian, psychologist, dated 26 February 2008.
13. The letter from Ms Clarke confirms that, in her capacity as a Senior Social Worker, she met with PWGC on 11 December 2009 and that PWGC was seeking assistance for his daughter subsequent to alleged sexual abuse suffered by her in 2007, but not disclosed until November 2008. The letter also records that PWGC had reported being extremely distressed by the disclosure and claimed he had resorted to gambling and excessive spending as a way of “masking his distress”. Ms Clark also stated in her letter:

“While I have met [PWGC] only once so far, it is quite common for parents to find such disclosures very distressing for a long period of time. In my experience, this distress and consequent impaired functioning can continue for a long time.”

14. The report of Mr Tomlian also indicates that at the time Mr Tomlian saw PWGC, in January 2008, he was suffering adverse psychological symptoms, although no defined disorder, secondary to his work-related injuries and ongoing pain resulting from them.
15. At the hearing before me, PWGC also stated that he had not been in “the right head space” to challenge the SSAT decision and that he had been “in shock” and was still in shock and “was trying to block a lot of things out”. The Tribunal also received the impression that it was only as his financial circumstances became more serious that he decided to challenge the SSAT decision. He also indicated that he was not “in the right frame of mind” when he received his lump sum and that he would have acted more responsibly if he had been. He also confirmed, as he had indicated to the SSAT, that he did not consider himself to have a gambling problem, but rather had used gambling as a form of escape.

PRINCIPLES TO BE CONSIDERED IN AN EXTENSION OF TIME APPLICATION

16. Under s 29(7) of the AAT Act, the Tribunal has the power to extend the time for filing an application for review if “it is reasonable in all the circumstances to do so”.
17. Generally, to extend time the Tribunal must consider that there is an acceptable explanation for the delay and it is fair and equitable in the circumstances to extend time: per Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment [1984] FCA 176; (1984) 3 FCR 344; 7 ALD 315; 58 ALR 305. The applicable principles were summarised by Cowdroy J in Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1540, by reference to an earlier decision of Federal Magistrate McInnis, as follows:

“18. ... In Phillips v Australian Girls’ Choir Pty Ltd & Anor [2001] FMCA 109 Federal Magistrate McInnis considered the nature of the discretion contained in s 44(2A)(a) of the AAT Act, and said at [10]:
‘In the light of A’Hearn’s case, it is clear that at least one of the principles referred to by Wilcox J in the Hunter Valley decision needs to be modified namely that it should not be any longer regarded as law that the inexcusable delay on the part of a solicitor should be visited upon the client and nor should it be a principle that there is in fact a pre-condition to the exercise of discretion in favour of the applicant for extension to show an acceptable explanation for delay or that it’s fair and equitable in the circumstances to extend time. In the light of the decision in Ahearn’s [sic] case it is useful to set out in modified form the relevant principles in relation to the exercise of the Court’s discretion when considering an extension of time in a human rights application based upon those principles distilled by Wilcox J in Hunter Valley as follows: 1. There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The "prescribed period" of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission [1982] FCA 153; (1982) 43 ALR 535 at 550). 2. It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition (Comcare v A'Hearn [1993] FCA 498; (1993) 45 FCR 441 and Dix v Client Compensation Tribunal (1993) 1 VR 297 at 302). 3. Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. (See Doyle v Chief of Staff [1982] FCA 124; (1982) 42 ALR 283 at 287). 4. Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension. (See Doyle at p 287). 5. The mere absence of prejudice is not enough to justify the grant of an extension. (See Lucic at p 416). 6. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. (See Lucic at p 417). 7. Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court’s discretion (Wedesweiller v Cole [1983] FCA 94; (1983) 47 ALR 528).
Such principles were applied by Gray J in Pham v Commonwealth of Australia [2002] FCA 669, although in the context of s 46PO(2) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth).’
19 The Court respectfully approves of McInnis FM’s articulation of the principles in relation to the discretion contained in s 44(2A)(a) of the AAT Act.”

18. The applicable principles were discussed here in the context of s 44(2A)(a) of the AAT Act rather than s 29. It is clear from the relevant authorities however that whilst they ought not be followed in a “slavish” way, these principles are also relevant in the context of s 29.[3] Other matters which have also been found to be relevant in the context of s 29 include the fact that there was a significant issue to be determined, the potential financial loss to an applicant, the length of the delay and ignorance of appeal rights.[4]
19. I propose to address each of the most relevant criteria in turn below.

HAS THE APPLICANT PROVIDED AN ACCEPTABLE EXPLANATION FOR THE DELAY?

20. Ms Giaretto for the respondent contended that whilst PWGC’s explanation went some way toward explaining the delay, it did not fully explain it. She pointed out that it would not have been difficult for him to pursue an application to this Tribunal earlier. She also pointed out that PWGC’s daughter was not with him constantly, and PWGC conceded before me that she attended school. It could be added that the need to care for his daughter would not by itself in any event amount to an acceptable explanation for his failure to make an application earlier.
21. In relation to PWGC’s statement that he had “forgotten” about the SSAT decision, Ms Giaretto submitted that it was highly unlikely that PWGC had in fact “forgotten” about this decision if his financial circumstances were “truly dire”, and I consider there to be considerable force in that submission. I would also add that the evidence before me does not establish that PWGC was suffering from any disabling medical condition during the relevant period such as could reasonably be said to have made it difficult for him to lodge an application with this Tribunal. I accept that his distress as referred to in Ms Clark’s letter explains some of the delay, however I am not satisfied that this, or any of the other matters put forward by PWGC (whether considered in isolation or together) constitute an acceptable explanation for the delay of six months.
22. For these reasons, I am not satisfied that PWGC has provided an acceptable explanation for the delay in making application to this Tribunal.

PREJUDICE

23. Ms Giaretto appropriately did not contend that there was any prejudice likely to be suffered by the respondent if an extension of time was granted.

OTHER ACTIONS TAKEN BY THE APPLICANT

24. There is nothing to suggest that PWGC took any action to contest the correctness of the SSAT decision prior to lodging his application with this Tribunal. In her written submissions, Ms Giaretto pointed out that he had had at least 11 “contacts” with Centrelink since the SSAT decision and it was only during the last contact, on 18 November 2009, that he mentioned his discontent with the decision.

FAIRNESS

25. Considerations of fairness as against other applicants would also militate against the granting of PWGC’s application, particularly in the absence of an acceptable explanation for the delay.

THE MERITS OF THE SUBSTANTIVE APPLICATION

26. In order to succeed in his substantive application, PWGC would have to satisfy the Tribunal that there were “special circumstances” within the meaning of s 1184K of the SS Act such that the preclusion period imposed upon him should be reduced.
27. Relevant to that question would be the question of how he spent the settlement sum, and, if that expenditure could not be considered reasonable or responsible, the extent to which any unreasonable expenditure could be attributed to unusual and extenuating circumstances.
28. Unfortunately for PWGC, I am not satisfied that he enjoys good prospects of persuading the Tribunal that the expenditure of the settlement monies was reasonable, or that it was sufficiently influenced by any extenuating factor so as to render his circumstances “special” in the relevant sense.
29. The material provided by PWGC accounts for only about $65,000 of the $109,000 received by him. The respondent disputed the reasonableness of some of the expenditures for which PWGC has provided details and/or receipts. However, even assuming the reasonableness of these, that still leaves approximately $45,000 unaccounted for.
30. Before me, PWGC referred to a loan to his girlfriend of $18,000 which had not been repaid, however he provided no corroboration of this, and had not referred to it previously, before the ARO or the SSAT. He also relied upon the amount he had spent in legal costs, however it is clear on the material before me that his legal costs had already been deducted from the monies received by him.
31. Of course I have not conducted a full inquiry into the merits of the case and it is not appropriate that I do so. However, on the material before me, it appears that PWGC did spend a large proportion of his lump sum, in the vicinity of $40,000, on gambling and/or other things which could not be considered a reasonable or responsible use of those monies. I note that PWGC does not claim to have a gambling addiction, so there is no medical explanation for his decision to spend so much of his lump sum on gambling.
32. PWGC claimed that distress caused by the disclosure in relation to his daughter referred to above was a factor in his decision to spend such large amounts on gambling. However, analysis of the contemporaneous material available to me does not bear out that claim.
33. PWGC claims that the relevant disclosure occurred in November 2008. The respondent has provided notes made by the ARO compiled from PWGC’s bank statements, including for the period September 2008 to January 2009 . These notes reveal significant ATM withdrawals the ARO has labelled “Hotel ? Unexplained Expenditure” at regular intervals from 4 September 2008 until 22 January 2009. There is no discernible change in the pattern of expenditure from November 2008 onwards, and in fact the bulk of this expenditure, in terms of overall value, appears to have occurred prior to November 2008. In the event this matter proceeded to a substantive hearing, of course the source documents would need to be examined and explored with PWGC. On its face however, this material is at odds with PWGC’s claim that he gambled because of distress caused by his daughter’s disclosure.
34. There is also significant doubt on the material before me as to the nature of the “disclosure” made by PWGC’s daughter or whether a “disclosure” was in fact made by her. I note from the ARO’s notes supplied by the respondent that the “disclosure” appears to have been a telephone call from PWGC’s ex partner reporting that another child had been molested and asking if the same had occurred to PWGC’s daughter. However, there was no evidence that this had occurred and the matter had not been taken any further.
35. I accept that PWGC is facing significant financial hardship and that he has the primary care of his five year old daughter. However, I do not consider on the material before me that his circumstances meet the relevant test of being “unusual, uncommon or exceptional”,[5] or that there is any element of injustice[6] in his being required to serve the full preclusion period. As Deputy President Barnett stated in Re Secretary, Department of Family and Community Services and Norman[7]:

“It is not an unusual circumstance that a person to whom a preclusion period applies spends their funds in a way which is unwise.”

36. Because of its potential relevance in calculating the preclusion period, I sought submissions from the respondent in relation to s 1164 of the SS Act, which applies when an entitlement to periodic payments is converted into a lump sum. The respondent submitted that the provision did not apply to PWGC’s circumstances as his redemption was not calculated by reference to “a period”, as stipulated by the provision.
37. I accept that, superficially, that is the case as there is no reference in the material before me to the period to which regard was had in calculating the “redemption”. Having said that however, reference is made in the documentation to a weekly amount of $659.86, which the applicant is “taken to be receiving” following payment of the redemption pursuant to certain provisions of the Workers’ Rehabilitation and Compensation Act 1986 (SA). It may be possible for PWGC to mount an argument that his lump sum redemption was calculated on the basis of that entitlement continuing for the number of weeks arrived at by dividing the lump sum amount by the presumed weekly payment amount.
38. Be that as it may however, examination of the calculations involved in determining PWGC’s preclusion period reveals that, as required by the SS Act, PWGC’s two lump sums were first added together, 50 percent of that amount was then taken to represent loss of earnings, and a “divisor” of $759.75 was then applied to arrive at the preclusion period of 83 weeks. As it happens, in PWGC’s case, if his lump sum redemption amount was divided by his presumed weekly payment amount as would be required if s 1164 applied, this would yield a longer preclusion period, of approximately 95 weeks. I am therefore satisfied that the potential application of s 1164 is not likely to assist PWGC’s chances of succeeding in his substantive application.
39. I also note that, as the bulk of the lump sum received by PWGC related to compensation in respect of lost earnings, he has benefited from the application of what is described as the “50/50 rule”, since a significant proportion of the compensation he received in respect of lost earnings has not been taken into account in calculating the preclusion period.
40. For all of these reasons, I consider PWGC’s overall prospects of succeeding in his substantive application to be relatively poor.
41. As pointed out by Ms Giaretto in her written submissions, it is also relevant that, even if an extension of time was granted, it is unlikely that a final hearing could be held and a substantive decision made much before April 2010, when the preclusion period ends.
42. PWGC has sought a stay of the SSAT’s decision, however as that decision simply affirmed the decisions below to impose the preclusion period, it cannot avail PWGC to have that decision stayed.

CONCLUSION

43. Having regard to the applicable criteria outlined above, including what I consider to be his relatively poor prospects of succeeding in his application if an extension of time were granted, I have decided not to grant the extension of time sought by PWGC.

CONFIDENTIALITY ORDER

44. Subsequent to the hearing of this matter, I convened a Telephone Directions Hearing to discuss with the parties the sensitive nature of some of the issues addressed at the hearing and the possible need for a confidentiality order. PWGC confirmed that he considered the matters discussed at the hearing relating to his daughter to be extremely sensitive and requested that they remain confidential. The respondent had no objection to orders being made to that end.
45. Being satisfied that the issues discussed at the hearing relating to PWGC’s daughter should remain confidential, I accordingly made orders pursuant to s 35 of the AAT Act requiring that PWGC’s name be replaced by a pseudonym on all documentation, and prohibiting publication of his evidence at the hearing and relevant exhibits.

DECISION

46. The Tribunal decides not to grant an extension of time for the making of an application for review of the decision of the SSAT dated 3 April 2009.

I certify that the 46 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member K Bean

Signed: ............J Coulthard...........................................

Associate

Date of Hearing 21 December 2009

Date of Decision 4 February 2010

Advocate for the Applicant Self-represented

Advocate for the Respondent Ms L Giaretto

Centrelink Legal Services and Procurement Branch

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[1] At [16].
[2] The material supplied by PWGC also confirms that his legal fees were deducted from his lump sum before he received it, so that the net amount received by him was approximately $109,000.00.
[3] Brown v Federal Commissioner of Taxation (1999) 42 ATR 118.
[4] Pearce, D., Administrative Appeals Tribunal, Butterworths (2nd Edition, 2007), pp 56-62, [5.6]-[5.20].
[5] Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3
[6] Groth v Secretary, Department of Social Security (1995) 40 ALD 542 at 545
[7] AAT 13005, 22 June 1998 at [18]