Bornecrantz v Secretary, Department of Social Services

Federal Court of Australia|2020-07-13|Before: Katzmann J

The application for an extension of time to seek leave to appeal be dismissed.
The applicant pay the first respondent's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 Section 43 of the Social Security Act 1991 (Cth) relevantly provides that a person is qualified for the age pension if the person has reached pension age and has 10 years "qualifying Australian residence". "Qualifying Australian residence" is a reference to s 7(3) which provides that, in deciding for the purposes of the Act whether a person is residing in Australia, regard must be had to a number of matters relevant to determining whether the person intends to remain permanently in Australia. The effect of s 29 of the Social Security (Administration Act) 1999 (Cth) is that a claim for an age pension may only be made in Australia and by a person who is an Australian resident. 2 On 26 October 2016, the applicant, Elizabeth Frances Bornecrantz, an Australian citizen then aged 65, lodged with the Department of Social Services a claim for an age pension, having arrived in Australia from the United Kingdom about a month earlier. Five days later she left to return to the UK. On the application form she indicated that Australia was her country of residence from December 1990 until 21 November 2011. She answered "no" to the question whether she was living permanently in Australia and she provided an address in the UK as her permanent address. Her claim was rejected by the first respondent, the Secretary of Department of Social Services, on the ground that she did not meet the residence requirements of the Administration Act. The claim was rejected by an authorised review officer (ARO) on the same grounds. Ms Bornecrantz then sought review of the ARO decision in the Administrative Appeals Tribunal. Her review application, lodged on 16 August 2018, was heard in the Social Services & Child Support Division of the Tribunal, which affirmed the Department's decision. Ms Bornecrantz then applied for a review of that decision. This second-tier review was heard in the General Division of the Tribunal by one of its Deputy Presidents, who dismissed the application at an early stage of the proceeding. 3 Ms Bornecrantz filed an appeal in this Court against the Deputy President's decision pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), which allows for appeals on a question of law. On the application of the Secretary, the primary judge summarily dismissed the appeal and ordered Ms Bornecrantz to pay the Secretary's costs. 4 Ms Bornecrantz now applies for an extension of time in which to seek leave to appeal from that judgment. The substance of her complaint is that, as an Australian citizen, she is entitled to receive the age pension, regardless of whether she satisfies the legislative requirements for Australian residence. Her central tenet, notwithstanding the terms of the legislation, as she put it in her submissions, is that "citizenship confers undeniable rights to an Old Age Pension and the access to Social Services". 5 For the reasons that follow, the application must be dismissed.

The Tribunal decision 6 As the primary judge noted, the second Tribunal dismissed the application on two independent bases: under s 42A(5)(b) of the AAT Act and also under s 42B(1)(b). 7 Section 42A(5)(b) provides that, if an applicant for a review of a decision fails within a reasonable time to comply with a direction by the Tribunal in relation to the application, the Tribunal may dismiss the application without proceeding to review the decision. 8 The Deputy President was satisfied that Ms Bornecrantz had failed within a reasonable time to comply with such a direction. 9 The direction in question was made on 22 November 2018 when Ms Bornecrantz was sent a listing notice requiring her to appear at a telephone conference on 31 January 2019. The day before the conference was scheduled to take place Leiv Bornecrantz, Ms Bornecrantz's husband and representative, emailed the Tribunal advising that they were "not interested in a Phone Conference" and that they did not think that anything could be achieved "by an inconvenient telephone conference". The Deputy President considered that Ms Bornecrantz had had sufficient time after the listing notice had been sent to contact the Tribunal to reschedule the conference if the date or time was inconvenient. He said that the approach she and her husband had taken "resulted in delay and uncertainty" and the submissions they provided the day before the scheduled teleconference did not assist as they failed to deal with the substantive issue before the Tribunal. In substance he adopted the Secretary's submissions, which also referred to the relevant legal principles drawn from Andelman v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2011) 213 FCR 345 at [32] (Jagot J) and Charara v Commissioner of Taxation [2016] FCA 451; 103 ATR 118 at [75]-[82] (Wigney J). 10 Section 42B(1) gives the Tribunal the power to dismiss an application for review of a decision at any stage of a proceeding if the Tribunal is satisfied that the application: (a) is frivolous, vexatious, misconceived or lacking in substance; or (b) has no reasonable prospect of success; or (c) is otherwise an abuse of the process of the Tribunal. 11 The Deputy President referred to the requirements in ss 43 and 7(3) of the Social Security Act and then addressed the apparently uncontroversial material on the Tribunal file. First, he noted that, while Ms Bornecrantz had "family relationships" in Australia, she has no employment, business or financial ties to Australia, has no substantial assets here, has been living outside the country for "a considerable period of time", and has only visited Australia twice since leaving in 2011. Second, the Deputy President noted that she and her husband live permanently in the United Kingdom. He referred to the fact that in her claim for the pension she had listed her permanent address as a UK address and to the statement made by her husband in his submission to the Tribunal at first instance that her intention was not to reside in Australia but the UK. He also referred to evidence that Mr Bornecrantz had given in earlier Tribunal proceedings that he and his wife reside permanently in the UK. 12 In these circumstances the Deputy President said he was unable to see how Ms Bornecrantz could satisfy the residency requirements in the Social Security Act. Consequently, he determined that she had no reasonable prospect of success and that it would be futile to proceed. He said he had considered the submissions made on Ms Bornecrantz's behalf about foreign law and citizenship but he was bound by the Australian legislation.

The proceeding before the primary judge 13 The notice of appeal from the Tribunal was nine pages long. It is sufficient to refer to the grounds of the appeal. They read (without alteration): 16. That Leiv and Elizabeth Bornecrantz are Australian Citizens with more rights and obligations than other permanently Australian residents. 17. The exact rights and obligations of an Australian Citizen is not defined in the Constitution nor in the Social Security Act. 18. The Australian Government were obliged since 1946 to allocate 7% of tax paid to an Old Age Fund. 19. The Australian Government decided not to account for or keep record of such monies, instead gather it in Consolidated Revenue and spend it as it deemed necessary. 20. Australian Citizens therefore has a claim on the Government to return monies collected and "invested" for the purpose of paying the Old Age Pension. 21. Consequently, for Australian Citizens, the Old Age Pension is not a Social Benefit but a "Superannuation" payable on demand. 22. Australian Citizens do not lose their citizenship if they leave Australia, consequently, neither do they lose their rights and obligations, nor do they lose their right to an adequate Australian Old Age Pension. 14 At the first case management hearing, the primary judge drew attention to the fact that the notice of appeal did not address the first basis for the Tribunal's decision. Ms Bornecrantz then filed an amended notice of appeal. But both the questions of law and the grounds of appeal remained the same. As the primary judge observed, they were directed to what his Honour described as her "core proposition", namely, that as an Australian citizen she should be entitled to the age pension. His Honour acknowledged that the amended notice of appeal referred to the first basis for the Tribunal's decision but observed that it went no further than to state that the Deputy President was "truculent" to dismiss the appeal on that basis. 15 The Secretary filed an interlocutory application on 12 September 2019 seeking an order under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act) and/or r 26.01(1) of the Federal Court Rules 2011 (Cth) (Rules) that the appeal be summarily dismissed on the ground that it had no reasonable prospects of success.

The primary judge's reasons 16 The primary judge referred first to the terms of s 31A and r 26.01 and then discussed the relevant principles, referring first to a summary of those principles in Riva NSW Pty Limited v Official Trustee in Bankruptcy [2017] FCA 188 at [45]-[50] (Perry J). 17 His Honour remarked that, in addition to these principles, once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary, citing Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at [127], [130] and [132]. 18 The primary judge then applied these principles to the two bases of the Tribunal's decision. His Honour noted that, despite having been given the opportunity to file an amended notice of appeal, Ms Bornecrantz did not challenge the first basis, being her failure to comply with the Tribunal's direction to participate in a telephone conference within a reasonable time. His Honour acknowledged that the Court may look beyond the precise questions of law articulated in the notice of appeal to determine whether, in substance and not merely form, the applicant has reasonable prospects of successfully prosecuting the appeal. Even looking beyond the questions of law and grounds of appeal as set out in the amended notice, however, to other material before the Court, his Honour held that there was no reasonable prospect that the appeal could succeed "having regard to the lack of any substantial challenge to the first basis of the [Tribunal's] decision". In the absence of any challenge to it, his Honour said that the first basis of the Tribunal's decision must stand and that there was no utility in determining other questions about the second basis of the decision. 19 Nonetheless, his Honour did go on to find that there was no reasonable prospect that Ms Bornecrantz would succeed in challenging the second basis of the Tribunal's decision. His reasons follow. 20 First, on the proper construction of the relevant legislative provisions, Ms Bornecrantz was precluded from being granted the age pension because she was not resident in Australia at the time of her claim. 21 Second, Ms Bornecrantz had not alleged that there was any legal error in the Tribunal's finding that she was not resident in Australia at the time of her claim. 22 Third, given the terms of the legislation, his Honour found that any contention that Ms Bornecrantz would be entitled to the age pension by reason of being an Australian citizen would have no reasonable prospects of success. 23 Fourth, his Honour accepted the Secretary's submission that the legislative choice to exclude non-resident citizens from applying for an age pension is plainly within the power of the Parliament to make laws with respect to old-age pensions in s 51(xxiii) of the Constitution. His Honour said that there was nothing in the Constitution to suggest that Parliament is required to provide age pensions to anyone at all or that it cannot make Australian residence a condition of making a claim, regardless of citizenship. 24 Fifth, his Honour rejected the argument that Ms Bornecrantz is entitled to the age pension because of some Constitutional right to "repayment of salary/wages sacrifice". In particular, his Honour observed that ss 81 and 83 of the Constitution provide for all moneys raised or received by the Executive Government of the Commonwealth to form one Consolidated Revenue Fund to be appropriated by law. He said there was no basis for the suggestion that Ms Bornecrantz has some Constitutional entitlement to taxes she may have paid in the past. 25 Sixth, the international law materials to which Ms Bornecrantz referred in question 5 of her amended notice, consisting of arts 25, 29 and 30 of the Universal Declaration of Human Rights, did not limit Parliament's power to enact legislation. 26 Seventh, his Honour accepted the Secretary's submission that s 78B of the Judiciary Act 1903 (Cth), which requires notice to be provided to the Attorneys-General of the Commonwealth and States of constitutional matters in causes pending in federal courts, did not prevent the Court from granting summary judgment. His Honour found that s 78B is only engaged where the "pending cause truly 'involves' a matter arising under the Constitution or involving its interpretation, and a mere assertion to that effect is insufficient", drawing attention to Re Culleton [2017] HCA 3; 340 ALR 550 at [29] (Gageler J). He added the Constitutional issue did not arise in any event because of the absence of any reasonable prospects of success in challenging the first basis of the Tribunal's decision, which provided a sufficient basis for summary judgment.

The application for an extension of time for leave to appeal 27 Leave to appeal is required because the judgment is interlocutory: FCA Act, s 24(1A) and (1D)(b).

The rule 28 Rule 35.13 of the Rules requires that an application for leave to appeal be filed within 14 days of the judgment or the making of the order or on or before a date fixed for that purpose by the court from which leave to appeal is sought. 29 Ms Bornecrantz applied for an order dispensing with compliance with r 35.13.

General principles 30 I do not consider that it would be in the interests of justice to dispense with compliance with r 35.13 since the Court has the power to extend time (see r 1.39) and Ms Bornecrantz has applied for an extension of time. 31 Subject to s 37M of the FCA Act, the Court's discretion both to extend time and to grant leave to appeal is unfettered. Section 37M relevantly imposes an obligation on the Court to interpret and apply the civil practice and procedure provisions in the Act and the Rules and to exercise any power conferred by them in the way that best promotes their overarching purpose, which is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible. 32 In considering whether to extend time the Court will have regard to the length of the delay, whether there is an acceptable explanation for it, whether the respondent would be prejudiced if the time were extended, and whether there is sufficient merit in the proposed appeal to justify doing so. See, for example, SZTRY v Minister for Immigration and Border Protection [2015] FCAFC 86 at [6]. 33 In general, leave to appeal will only be granted if the judgment in question is attended by sufficient doubt to warrant its reconsideration and if substantial injustice would result were leave to be refused, assuming the decision to be wrong: Décor Corporation Pty Limited v Dart Industries Inc (1991) 33 FCR 397 at 398-399. An appeal to the Full Court from a single judge is in the nature of a rehearing in which error must be shown: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [25]. 34 Unless there is doubt about the correctness of the decision, there is no useful purpose to be served in extending time or granting leave to appeal. It would put the parties to unnecessary expense and defeat the overarching purpose.

The length of the delay 35 The application is dated 15 November 2019 and was filed on 21 November 2019. Since the judgment was published on 22 October 2019, this means that the time to file an application for leave to appeal expired on 5 November 2019 and the application was filed just over two weeks after the time expired.

The explanation for the delay 36 In the affidavit in support of her application, Ms Bornecrantz stated that an application for leave to appeal was lodged electronically with the Court on 4 November 2019 (the day before the time to do so expired) but that it was rejected at 00:48 UK time the following day because it was filed in the proceeding before the primary judge (which by then was closed). She said that attempts to "lodge a new file" electronically "failed miserably" as "the subject matter had not been provided for in the design of the eLodgment portal," "it also refused the file as 'corrupted' (outdated .pdf engine)", and "an attempt to email the documents to the NSW Registry at 09:07 UK time failed as the file was too big". She indicated that, after several exchanges with the Registry on 6 November 2019 and some frustration, the application reached the Registry at 21.15 AEST by which time it was too late and she was advised that she needed to lodge a form 118 (for an extension of time for leave to appeal). 37 No documents were annexed to the affidavit to support this account but it was not challenged and it has the ring of truth about it. What remains entirely unexplained in the affidavit is why it took a further 11 days for the application for an extension of time to be filed.

The merits of the application 38 The Secretary does not claim to be prejudiced. Moreover, despite the fact that the explanation for the delay is incomplete, the Secretary accepted that, if leave to appeal would be granted, there would be "no reason not to grant the extension of time". The Secretary argued, however, that the extension of time should be refused because it would be futile to grant it since there is no merit in the application or the prospective appeal. 39 The grounds in support of the application are as follows (without alteration): 1. The Defendants application for a Summary Dismissal was unconscionable as its intent was to prevent the Applicant to present her case to the Federal Court. Only the Federal Court has jurisdiction to adjudicate on the arguments presented by the Applicant, the AAT can only adjudicate with reference to and the application of the Social Security Act. 2. The Applicant could not be expected to understand that a failure to provide submissions and documents that had already been submitted with the Application, in response to the Direction of Brian Leaver, would prevent the Applicant to appeal to the Federal Court. An early Dismissal for any reason, the Applicant saw as a time saver. The Applicant at all times were aware that the applications to the various levels of the Dept Social Security and AAT was just posturing, neither the DSS or the AAT has the jurisdiction to consider whether the Social Security Act is contrary to the Australian Constitution or if the Australian Parliament has acted contrary to Australian Financial Laws. 3. The Applicant expected and wanted an early dismissal by the AAT as its Jurisdiction was limited. 4. Justice Griffiths should have understood that to allow the Defendants application for Summary Dismissal would be Perverting the Course of Justice, first in the Federal Court would the Applicant "have her day in Court" 5. To apply for costs and for Justice Griffiths to award costs against a destitute Old Age Pensioner not in receipt of her rightful Old Age Pension as an Australian Citizen and contributor to her own Pension by 7% of her tax payments and her contributions to the Australian society by working for a Charity, "Life Line", is both unconscionable and emoral. 6. Justice Griffiths' Decision is "legalesically" clinical, without empathy, without any understanding of the issues and without social responsibility. (Emphasis added.) 40 The draft notice of appeal pleaded one ground in the following terms (without alteration): A summary Dismissal is a perversion of the course of Justice. The AAT and the Dept Social Security does not have the jurisdiction to decide if the Social Security Act is faulty, contrary to Domestic and International Law, contrary to the Australian Constitution, an infringement on the rights of Australian Citizens and if the Australian Parliament and Government have acted contrary to Australian Laws applicable to Financial Institutions and the laws of accountability. 41 On or about 24 February 2020, Ms Bornecrantz sent an amended draft notice of appeal to the Registry. That document does not conform to the Rules which, amongst other things, require that the notice of appeal must state "briefly but specifically, the grounds relied on in support of the appeal": r 36.01(2)(c). Instead, it begins with a summary of "questions of law", which is in precisely the same terms as the single ground of appeal in the original draft notice of appeal, and then proceeds to advance her case that she should receive an age pension because she is an Australian citizen. The document is 12 pages long. Much of it makes little sense. It barely engages with the primary judge's reasons. Importantly, nowhere does it identify a ground of appeal or any particular error on his Honour's part. In her written submissions, however, Ms Bornecrantz identified the "grounds relied on" in the following way: Grounds relied on: 17. That Leiv and Elizabeth Bornecrantz are Australian Citizens with more rights and obligations than other permanently Australian residents. 18 The exact rights and obligations of an Australian Citizen is not defined in the Constitution nor in the Social Security Act. 19. The Australian Government were obliged since 1946 to allocate 7+% of tax paid to an Old Age Fund. 20. The Australian Government decided not to account for or keep record of such monies, instead gather it in Consolidated Revenue and spend it as it deemed necessary. 21. Australian Citizens therefore has a claim on the Government to return monies collected and "invested" for the purpose of paying the Old Age Pension. 22. Consequently, for Australian Citizens, the Old Age Pension is not a Social Benefit but a "Superannuation" payable on demand. 23. Australian Citizens do not lose their citizenship if they leave Australia, consequently, neither do they lose their rights and obligations, nor do they lose their right to an adequate Australian Old Age Pension. 42 Submissions were filed by both parties. Ms Bornecrantz requested an oral hearing. Yet, at the commencement of the hearing, Mr Bornecrantz, who appeared for her by leave, as he had below, was content to rely on the written submissions. 43 In substance the draft amended notice of appeal, like the submissions filed in support of the application, rails against the summary dismissal power given to the Court and repeats the arguments advanced below about why Ms Bornecrantz contends she should receive a pension notwithstanding the residence requirement and the injustice she perceives in the present law, once again claiming it is invalid. Ms Bornecrantz complains that it would be "a travesty" (presumably a travesty of justice) not to uphold the application "as it really is the Application for an analysis that could not take place in the lower Appeals Jurisdictions", arguing that this was "the first instance and opportunity" for a "conventional" Court to hear her arguments. 44 Ms Borncrantz claims that residency was not an issue when she and her husband left Australia for health reasons in 2011 (the same year Mr Bornecrantz was granted an age pension, apparently at a reduced rate) and contended that "the Residence issue is clearly a problem with Retrospective Legislation", which she described as "an evil construct". Yet there is nothing new in the residence requirements. This is not a case of retrospective legislation. The relevant provisions upon which the Secretary's decision was based were in force at the time Ms Bornecrantz lodged her claim for the age pension. Presumably Mr Bornecrantz received an age pension because he was resident in Australia when he made his claim. In her claim for the pension Ms Bornecrantz said that she left Australia on 21 November 2011. In the amended notice of appeal before the primary judge she said that she and her husband left together and at that time Mr Bornecrantz had retired and was receiving the age pension. 45 In the proposed appeal, as in the appeal below, Ms Bornecrantz does not allege that the Tribunal erred in law in dismissing her application for failing to comply with a direction. Indeed, as is apparent from those parts of the grounds of the application emphasised at [39] above, she wanted the Tribunal to dismiss her application. Ms Bornecrantz also accepts that at the time she claimed the age pension she was not resident in Australia for the purposes of the Social Security Act. As Dr Lim put it in his submissions on behalf of the Secretary, to a large extent her submissions appear to take issue with the policy of a residence requirement for an age pension. Her arguments are essentially political, not legal, and beyond the power of the Court to resolve. They are in the nature of a polemic. Ms Bornecrantz's case is based, not on what the law is, but what she and her husband insist it should be. 46 In part, Ms Bornecrantz's case is also a plea for an increase in the pension paid to Mr Bornecrantz from the date his wife retired. In her submissions, for example, Ms Bornecrantz states that she "claims that she is not applying for her own Pension but for her Husband to receive the full pension for a married couple". If Mr Bornecrantz ever made a claim that his pension be increased which was rejected by the Secretary, that decision was not the subject of the application before the Tribunal and it was irrelevant to the issues the primary judge was called upon to resolve, and since Mr Bornecrantz is not a party to the application in any event, it, too, is beyond the scope of the present application. 47 Above all, none of the points raised by Ms Bornecrantz or the arguments in support of them suggests any error on the part of the primary judge. The appeal is not reasonably arguable.

Conclusion 48 I accept the explanation given by Ms Bornecrantz for the failure to lodge the leave application within time. There is no prejudice to the Secretary if an extension of time were to be granted. Moreover, there is no doubt that substantial injustice would result if leave were refused and the decision of the primary judge were wrong. But nothing put on this application casts the slightest doubt on the correctness of the primary judge's decision. Certainly, the proposed appeal would be doomed to fail. It follows that it would be futile to extend the time to file an application for leave to appeal. In any event, even if I had been persuaded to extend the time, I would have dismissed the leave application because the judgment is not attended by sufficient doubt so as to warrant its reconsideration on appeal. The application should therefore be dismissed with costs. There will be orders accordingly. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.

Social Security Act 1991(Cth)ss 7(3), 43

Federal Court Rules 2011(Cth)rr 26.01(1), 35.13, 36.01(2)(c)

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