Privacy Law and Policy Reporter
The applicant, Mr Allen, was injured at work, and settled a claim for workers compensation. Under the settlement Mr Allen was to receive ,a lump sum payment, rather than periodic payments for a term. He applied for Newstart allowance (unemployment benefits) in the interim period before receiving the lump sum settlement. The Centrelink officer he dealt with was his former wife’s mother. The Centrelink officer told her daughter (Mr Allen’s former wife) that Mr Allen was expecting to receive a lump sum payment. Mr Allen’s former wife considered that she was entitled to receive a portion of the lump sum under family law and successfully obtained a court order requiring Mr Allen to pay an amount to her. Mr Allen had earmarked that money as capital for a small business (a tea tree plantation), and was not able to set up the business after paying his former wife, and therefore was not able to earn income through the business to support himself and his second family.
The Centrelink employee (Mr Allen’s former mother in law) no longer worked for Centrelink by the date of the AAT’s decision.
Because workers compensation awards include a component in respect of lost wages, social security law prohibits ,for a period the payment of benefits or allowances that would normally be paid to a person who is unemployed or disabled so as to be unable to work. This general position may be varied in special circumstances. This AAT decision concerned the ‘preclusion period’ that Mr Allen should serve during which ,he is ineligible to receive relevant social security payments.
In setting aside the decision of the Social Security Appeals Tribunal, the AAT held the following.
1. The applicant’s current financial hardship, caused by his lack of income, debts, inability to attract an employer and need to maintain a child at secondary school while living in the country, combined with the ongoing financial loss suffered by ,the unauthorised disclosure of confidential information by the former Centrelink employee which ,in turn led to the loss of his capital needed to establish a source of income, amount to ‘special circumstances’ for the purposes of s 1184 of the Social Security Act 1991 (Cth): Department of Social Security v Ellis (1997) 46 ALD 1, applied.
2. The whole of the compensation payment made to the applicant be treated as not having been made.
Senior Member M D Allen, in explaining the AAT’s reasons for this decision, referred to s 93(1) of the Privacy Act 1998 (Cth) which states that:
A confider may recover damages from a confidant in respect of a breach of an obligation of confidence with respect ,to personal information.
Senior Member Allen then found that:
... the result of the disclosure of his damages settlement led to direct pecuniary loss by the applicant and the subsequent and direct failure, by reason of that loss, to engage in a viable business and be self-supporting. ... In my opinion, the applicant would have a case in damages against the respondent, the respondent being vicariously liable for the disclosure of confidential information by its servant, the Centrelink employee who is the applicant’s ex-mother-in-law.
Without knowing more about the family law proceedings in which Mr Allen’s ex-wife obtained an order that part of the settlement sum be paid to her, it is not possible to test the assertion that the ‘the disclosure of his damages settlement led to direct pecuniary loss’. It is entirely conceivable that Mr Allen’s damages award would have come to the attention of his former wife in the ordinary course of events (for example, if the Child Support Registrar becomes aware of an event or change in circumstances which affects a person’s liability to pay child support or the rate at which support is payable, the Registrar must immediately take appropriate action — s 74 Child Support (Assessment) Act 1989. If that is so, the damage suffered by Mr Allen as a result of the breach of confidence would either have been nominal or limited to an amount for distress caused by the unlawful manner of disclosure.
Patrick Gunning, Mallesons Stephen Jaques.