Chen v Secretary, Department of Social Services

1. The application for a stay made by the notice of motion filed on 29 May 2019 is refused, with costs. THE COURT NOTES THAT:
2. The respondent informed the Court that it is the policy of the Department of Social Services not to enforce a debt to the Commonwealth while there are Court proceedings on foot challenging the debt. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ABRAHAM J: 1 The applicant applies for an order pursuant to section 44A(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) and rule 33.17 of the Federal Court Rules 2011 (Cth) staying the decision which is the subject of the applicant's substantive appeal to this Court. The respondent opposes the order. 2 The applicant is unrepresented in these proceedings. The description by the Administrative Appeals Tribunal (the Tribunal) of the applicant's evidence before it, largely reflects her conduct on this application: see Chen and Secretary, Department of Social Services [2019] AATA 560 (Chen 3) at [3], [4]. In this Court, the applicant was again advised of the desirability of her obtaining some legal assistance. 3 The applicant relied upon 8 affidavits filed prior to the hearing, in support of her interlocutory application: affidavit dated 29 May 2019; affidavit dated 19 June 2019; affidavit dated 25 June 2019; affidavit dated 26 June 2019; affidavit dated 3 July 2019; affidavit dated 4 July 2019; affidavit dated 9 July 2019; and an affidavit dated 12 July 2019. In addition, two further affidavits were filed: one on the day of the hearing after the completion of the argument, and another, filed on 22 July 2019, several days following the hearing of the application. The applicant also sent three emails containing various materials to chambers on the day following the hearing of the application (17 July 2019). 4 It is unclear on the face of some of the affidavits and materials filed prior to and after the hearing whether they relate to the stay application (as opposed to the final hearing). However, given the time at which they were filed, I have assumed that they do relate to this application and have acted accordingly. The respondent has confirmed that there is no objection to this additional information being taken into account in this instance. No written submission was filed by the applicant. I take the affidavits and materials emailed to chambers, to be the applicant's written submissions in relation to this matter. I note that a number of affidavits were filed in breach of my orders made on 26 June 2019 for the filing of material for the hearing of this application (both in terms of length and the date by which they were due to be filed). Nonetheless, I take them into account. I note also that one affidavit (the affidavit dated 12 July 2019) attaches the respondent's submission with handwritten comments on it, presumably made by the applicant. 5 The applicant has applied for a stay to enable her Disability Support Pension (DSP) to be reinstated so that it can continue to be paid pending the appeal. The applicant seeks that the payment of the DSP is backdated to 2 April 2019, the date on which (as the respondent informs the Court in its written submissions) the Department of Human Services (the Department) reconsidered and remade decisions in relation to the applicant's matter in accordance with the reasoning of the decision under appeal. 6 For the reasons below, the application for a stay is refused. Procedural history 7 These proceedings stem from the applicant's receipt of various Centrelink benefits, the decision by the respondent to cancel those benefits, and a subsequent order for the recovery of certain moneys previously paid. 8 From 11 October 1999 to 18 August 2006, the applicant received the Newstart Allowance (NSA) under the Social Security Act 1991 (Cth) (SS Act). The NSA is payable subject to a means test (an asset and income test) in accordance with sections 643 and 1068 of the SS Act. 9 On 19 August 2006, the applicant was granted a DSP under the SS Act on the basis that she was suffering from a mental health condition. The DSP is also subject to a means test in accordance with sections 117 and 1064 of the SS Act. Ms Chen was paid the DSP until 2 March 2018. 10 From 17 January 2017 to 1 December 2017, and from 2 December 2017 to 2 February 2018, the applicant was paid the Pensioner Education Supplement (PES) under the SS Act, which is also subject to a means test, with initial eligibility being dependent upon qualification for either the NSA or DSP at first instance, in accordance with section 1061PA of the SS Act. 11 This litigation arose in the context of five original decisions made by officers of the Department, as follows: (1) on 15 March 2018, a decision to cancel the applicant's DSP with effect from that day; (2) on 16 March 2018, a decision made to raise a debt against the applicant for overpayment of the PES for the period 17 January 2017 to 1 December 2017, amounting to $1,421.81; (3) on 16 March 2018, a decision made to raise a debt against the applicant for overpayment of the PES for the period 2 December 2017 to 2 February 2018, amounting to $280.80 (being a total PES debt of $1,702.61); (4) on 19 March 2018, a decision made to raise a debt against the applicant for overpayment of the NSA for the period 11 October 1999 to 18 August 2006, amounting to $66,494.77; and (5) on 19 March 2018, a decision made to raise another debt against the applicant for overpayment of the DSP for the period 19 August 2006 to 2 March 2018, amounting to $259,671.67. 12 On 2 July 2018, an Authorised Review Officer (ARO) undertook an internal review of the five original decisions, under sections 126 and 235 of the Social Security (Administration) Act 1999 (Cth) (Administration Act). The ARO affirmed the decisions in (1), (2) and (3) above; varied the debt in decision (4) above to $66,020.98; and varied the debt in decision (5) above to $256,924.56. 13 On 29 August 2018, the Tribunal undertaking a first level review (AAT1), under section 142 of the Administration Act and section 25 of the AAT Act, affirmed the ARO's decisions. 14 On 20 December 2018, the Tribunal undertaking the second level review (AAT2) stayed the AAT1's decision under section 41(2) of the AAT Act. The decision of the AAT2 in relation to the issue of stay, Chen and Secretary, Department of Social Services [2018] AATA 4672 at [60], was as follows: The Tribunal grants the Applicant's request for a stay of the decision of the Social Services and Child Support Division of the Tribunal of 29 August 2018 in respect to the cancellation of the Applicant's DSP. It is ordered that any DSP arrears are to be paid to the Applicant from the original cancellation date of 15 March 2018 and ongoing payments of DSP are to be paid to the Applicant from the next day on which social security benefits are paid up until the decision of the Tribunal on the substantive application comes into operation. 15 As a result of that decision, the applicant's DSP payments were reinstated, together with a back payment of the DSP to 15 March 2018. 16 On 27 March 2019, the AAT2 set aside the AAT1's decision, and remitted the matter to the Secretary with the direction that the matter of raising any debts against the applicant prior to 18 May 2010 be reconsidered in line with the reasons of the AAT2 in Chen 3. The AAT2 did so under section 179 of the Administration Act and section 25 of the AAT Act. The AAT2's decision on 27 March 2019, which is the subject of Ms Chen's substantive appeal to this Court, and the present stay application, was as follows at [139]: Pursuant to section 43(1)(c)(ii) of the Administrative Appeals Tribunal Act 1975 the decision under review is set aside and remitted to the Secretary with the direction that the matter of the raising of any debts against the Applicant prior to 18 May 2010 be reconsidered in line with the reasons of the Tribunal. 17 It is this decision of the AAT2 which is the subject of the proceedings in this Court. The appeal against this decision was filed on 24 April 2019. 18 According to the respondent's written submissions made on this application, on 2 April 2019, a Departmental officer made the decision to cancel the applicant's DSP with effect from 15 March 2018, and made the following decisions to raise the debts against the applicant for: (1) overpayment of the PES for the period 17 January 2017 to 1 December 2017, amounting to $1,421.81; (2) the period 2 December 2017 to 2 February 2018, amounting to $280.80 (being a total PES debt of $1,702.61); (3) overpayment of the NSA for the period 11 October 1999 to 18 August 2006, amounting to $66,020.98; (4) overpayment of the DSP for the period 19 August 2006 to 2 March 2018, amounting to $256,924.56; and (5) overpayment of the DSP from 15 March 2018 to 29 March 2019, a further debt amounting to $28,209.51. 19 The respondent's written submissions also indicate that on 3 April 2019, the respondent informed the applicant of these decisions, and that on 9 July 2019, the total of the applicant's debts to the Commonwealth was $352,109.14. Argument 20 In summary, the applicant argued that the decision of the AAT2 was incorrect, there were errors in the reasons for the decision, and that certain assets referred to by the AAT2 are not hers. The applicant submitted that many of the bank accounts referred to in the AAT2's reasons are closed. The applicant submitted that she must pay all the bills for the properties and that the rent income does not cover it. The applicant submitted that she needs Centrelink benefits to pay the bills in relation to the properties and other matters. The applicant maintained, as she did in the Tribunal, that she has never received any money from the various trusts (which she says, own the properties), but that all she had done for 20 years is to pay the debts of the trusts from her personal accounts. The applicant submitted, as she did in the Tribunal, that the money in the trusts was from her family. The applicant also complained about the accuracy of aspects of the Tribunal's decision. This included the applicant's complaints in relation to some of the bank statements referred to in the Tribunal's decision, and a contention that some of the money was not hers. Much of what was submitted by the applicant related to matters which could not be relevant to any appeal. Despite repeated explanations to her about the nature of an appeal in this Court, the effect of the applicant's submissions was a plea that the Tribunal's decision was wrong and that an order should be made that she is entitled to be paid benefits. 21 The respondent opposes the application. 22 In summary, the respondent contended that the grounds in the Notice of Appeal filed on 24 April 2019 indicate that the applicant has poor prospects of success; there is a paucity of evidence to support any contention of financial hardship (rather, on the findings of the AAT2 the applicant has considerable real estate assets, the income she derives from those assets, and her bank account assets); if unsuccessful in her appeal to this Court, she will have a further debt being the amount of DSP paid to her in accordance with the stay order until the date of the Court's decision, which would add to her current predicament and would exacerbate her financial difficulties, as the AAT2's stay order on 20 December 2018 was ultimately to her considerable disadvantage. The respondent also submitted that if a stay is refused, the appeal proceedings would not be rendered nugatory if the applicant is ultimately successful, and given the potential loss to the public purse and the interests of the parties, there is no proper basis for granting a stay. Relevant legal principles 23 The relevant statutory provision is section 44A(2) of the AAT Act, extracted below: 44A Operation and implementation of a decision that is subject to appeal … Stay orders (2) Where an appeal is instituted in the Federal Court of Australia from a decision of the Tribunal, that Court or a Judge of that Court may make such order or orders staying or otherwise affecting the operation or implementation of either or both of the following: (a) the decision of the Tribunal or a part of that decision; and (b) the decision to which the proceeding before the Tribunal related or a part of that decision; as that Court or Judge considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal. 24 The principles relevant to the exercise of the discretion in section 44A(2) are well settled. 25 The discretion should only be exercised where special circumstances justify departure from the rule that a successful litigant is entitled to the fruits of judgment pending the appeal; for example, because the appeal, although successful, may otherwise be rendered nugatory: Comcare v Nicolas [2014] FCA 638 at [6]; Broadbent v Civil Aviation Safety Authority [1999] FCA 1871 at [5], [6]; Hartnett v Migration Agents Registration Authority [2003] FCA 998 at [4]; Theo v The Secretary, Department of Family Services [2004] FCA 1748 at [5]. 26 Such special circumstances have been held to exist typically, but not exclusively, where the respondent's financial state is such that there is no reasonable prospect of recovering the moneys paid pursuant to the judgment under appeal: Secretary, Department of Families, Housing, Community Services and Indigenous Affairs v Mouratidis [2010] FCA 880 at [21]. 27 The discretion conferred by the section is broad and there is no reason to graft qualifications onto its clear words: Aspen Pharma Pty Ltd v H Lundbeck A/S [2013] FCA 324 at [31]-[32]. 28 In Minister for Home Affairs v Zadeh [2018] FCA 1452, Thawley J at [23] observed: Whether or not a stay should be ordered depends upon whether the Court considers it appropriate for the purpose of securing the effectiveness of the hearing and determination of the appeal. Considerations relevant to the exercise of the Court's discretion, which are not confined, include: (1) As a general rule the successful party is entitled to the benefit of the judgment which is presumed to be correct. (2) The applicant bears an onus to demonstrate a proper basis for a stay. (3) Although speculation as to the prospects of success is generally unnecessary, a stay will not be granted in the absence of arguable grounds of appeal or where the appeal is not bona fide. (4) On the other hand, if it appears that the prospect of success is strong, this may in the circumstances of the particular case be a relevant factor to consider in exercise of the discretion and may interact with considerations of balance of convenience; if the prospect of the appeal succeeding is particularly strong then the appellant may have to show less in terms of balance of convenience. (5) All other things being equal, a stay will generally be granted if, but for a stay, the appeal would be rendered nugatory if the appeal is successful. (6) Considerations such as the balance of convenience and the competing rights of the parties and the effect of granting or not granting the stay on non-parties are to be weighed in the balance. Consideration 29 As noted above, the applicant seeks a stay of the decision of the AAT2 to enable her to continue to be paid benefits by the respondent pending the hearing and determination of the appeal in this Court. 30 I am mindful that the applicant is unrepresented in these proceedings, as she was before the Tribunal. The Tribunal observed that the DSP had been granted on the basis of mental health issues, and it expressed its concerns about those issues and the impact it had on her ability to conduct the proceedings. 31 It appears that this application has been made, at least in part, because a stay was granted by the AAT2 on 20 December 2018, pending its final consideration of the decision under review. That initial decision by the AAT2 to grant a stay, has created a false expectation in the applicant. 32 The circumstances in this Court are very different from that faced by the Tribunal at the time that decision was made. 33 First, at the time the AAT2 granted the stay it did not have the applicant's financial position and was not in any position to assess the dispute (the applicant challenging the respondent's assertions as to her financial position), or the financial impact of a denial of any stay. That was a matter for the hearing of the review. The applicant was unsuccessful. The AAT2 made a number of adverse factual findings in relation to the applicant and her claims as to the real estate and bank accounts held in her name. 34 Second, the appeal to this Court is limited; a party may only appeal to this Court "on a question of law, from any decision of the Tribunal": section 44(1) of the AAT Act. It is not a merits review: Kara v Comcare [2011] FCA 951 at [31]; Evans v Secretary, Department of Social Services [2014] FCA 491 at [21]. 35 Whether a notice of appeal contains a question of law is to be approached as a matter of substance and not form: Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315 (Haritos) at [62]. In cases of doubt, the Court will consider the notice of appeal in question, the alleged question or questions of law, the grounds raised, the statutory context, and the Tribunal's reasons for its decision, and having considered all those matters, satisfy itself that there is in fact a question of law: Haritos at [94]. That the applicant is unrepresented is a relevant matter to be taken into account: Lim v Secretary, Department of Education, Employment and Workplace Relations [2008] FCA 1058. In the present circumstances, the applicant's mental health issues are also a relevant matter to take into account. 36 In light of the affidavits relied on by the applicant, I also note that in relation to the substantive appeal, generally section 44 of the AAT Act (by vesting original jurisdiction in this Court to hear an appeal from the Tribunal only on a question of law) does not permit further evidence to be relied on in this Court which was not before the Tribunal. While the prohibition against the reception of further evidence on the hearing of a section 44 appeal is not a complete one, there is only limited scope where such evidence will be admitted: Rana v Repatriation Commission [2011] FCAFC 124; (2011) 126 ALD 1 at [19]-[21]. 37 Against that background I turn to relevant factors in this case. 38 Bearing those matters in mind, and being conscious that only an overview of the merits of the substantive appeal can be considered at this stage, there is nothing in the grounds of appeal as currently drafted which would weigh particularly in favour of a stay. 39 The grounds are as follows (recited with any errors as they appeared in the original Notice of Appeal): Grounds relied on 1.Miss Chen had been told from Centerlink in 1999 that she can still have Newstart after she bring her family trust 6 million Taiwan dollars to Australia to purchase properties for her family under Trust name. 2. So, she went back to her country twice just to cancel life insurance policies from her entire family for using this premium from everyone. by bring her families money here just to purchase two properties they lose their insurance cover. … Questions of law: 1. According to social Security Law Section 1237 AAD waive the debt under special circumstances of war threats and financial hardship. 2. According to Social Security Act Section 1236, waive the debt due to administration error. In the T documents that Centrelink provided has shown that over 60% of the bank statement are in error and 100% of the bank statements in decision letter are in error just like current Centrelink statement are still in error after the applicant called and tried to tell them but they did not want to change it (Annie Walsh). 3. Over 5 times from different respondents reports they all have different mistakes about almost three quarters of the property details are in error. This includes photos of wrong buildings wrong purchase dates, wrong purchase price and purchase year that applicant has not even entered Australia yet: in T documents and review office's letter. 4. According to Social Security Act 3.7 RA Section 1070, waive the debt due to Chia Huey Chen had several injuries to her eyes which have become very sensitive to light and causing tears so that her eyes get very painful which affects vision which is worse than blindness because of the swelling and pain. 5. According to Equality Act 2010, justifying discrimination. Her family trust asset is like superannuation for her family. There are over 35 beneficiaries in the two family trusts and Jasmine is the only one paid the bills not the beneficiaries still got blamed. 40 That some of the grounds are referred to in the Notice of Appeal as "questions of law", does not mean that this is necessarily an accurate characterisation of the grounds. 41 I observe that the issue of the correctness of the decision to cancel the applicant's benefits on 15 March 2018 is made by reference to the applicant's financial position as at that date. Meanwhile, on the issue of waiver, the Tribunal took into account evidence in relation to the applicant's financial position up until it handed down its decision. That distinction is not reflected in the grounds of appeal or the applicant's submissions on this application. 42 Some grounds as drafted appear irrelevant to the findings of the Tribunal, because they rely on matters not before it and are therefore, not relevant to its determination. For example, the applicant's reliance on her eyesight issue and the suggestion of blindness, was not before the Tribunal and was not the basis on which the DSP was granted. Similarly, her complaints in relation to her superannuation (and that it is exempt from the relevant means tests), were irrelevant to the Tribunal's findings as to the correctness of the decision to cancel her benefits, as none of the property was part of any superannuation fund at the time the decisions were made to cancel the applicant's benefits. 43 It appears, as drafted, that some grounds only go to the merits of the decision by the AAT2. I note also that most of what was said by the applicant during the hearing of this application related to a merits assessment. 44 Some of the grounds of appeal relate to the Tribunal's findings which rejected the applicant's submission that her debt should be waived. The Tribunal made some findings that were favourable to the applicant in relation to this issue, including that there was an administrative error by the respondent in the calculation of her pension entitlements in 2010 which persisted until 2018, and that any false statements or misrepresentations by her were as a result of her "state of mind" and not attempted or calculated deception: Chen 3 at [80], [92], [122]. However, on the face of it, those grounds as drafted seem to relate to a review of the factual conclusion not to waive the debt (and in relation to some grounds, based on matters that were not before the Tribunal). Whether there is a question of law will be determined after argument on the appeal. However, even if a ground on waiver was on a question of law, and was successful, the decision to cancel her benefits would not be affected. Indeed, logically those grounds are premised on the basis that the decision to cancel the applicant's benefits is correct. Given that any enforcement of the debt to the Commonwealth which is related to Chen 3 will not be enforced until the applicant's appeal is resolved, there would be no basis to grant a stay, the result of which would be that her benefits were reinstated pending the appeal, on those grounds alone. 45 On the other hand, the respondent accepts that if, as ground 3 suggests, there has been an error on the basis that the Tribunal mistakenly identified assets, that may arguably be a question of law. Whether that is so, and what outcome may result, will require resolution after argument at the hearing. I note that orders have been made which would permit the applicant to amend the grounds, which she has not done. 46 However, based on the current grounds of appeal, there is nothing about the potential merit of the appeal which would weigh in favour of granting a stay. 47 As noted above, the applicant submits that she must pay all the bills for the properties and that these bills are unable to be covered by the rental income the properties receive. The applicant submits that she needs the benefits to pay these bills in relation to the properties and other matters. The evidence from the applicant in relation to her claim of current financial hardship is unclear. 48 As the respondent notes, on the findings of the Tribunal the applicant has substantial assets, both in real estate and financial assets, including in numerous bank accounts. According to the Tribunal's decision, the real estate is unencumbered. 49 While the applicant makes the assertion of financial hardship, it seems to be based on the proposition that all the assets found by the Tribunal to be attributable to her for the purposes of the assessment of the various social security benefits, are in fact, not hers. In other words, it proceeds on the basis that the Tribunal is incorrect. That is, the applicant claims that the real estate is not hers to control, rather, she only pays the bills in relation to the real estate from her personal accounts. The problem is that, in at least some respects, it appears likely to be a challenge to the factual findings, as opposed to a question of law. The Tribunal found that there were trusts, as the applicant contended, but pursuant to the provisions of the SS Act, the applicant was the effective owner of the properties and that she was, in effect, the sole controller of the trusts: Chen 3 at [77]. That involved, at least in part, a factual finding as to her role in relation to the properties. This included accepting the evidence at the AAT1 given by persons said to be trustees who said that the applicant was the person who made all the decisions in relation to the trusts, and therefore the properties: see for example, Chen 3 at [64]-[66]. An annexure to the decision of the AAT2 contains valuations in relation to five of the properties amounting to $1,540,000.00 as at 1 July 2017. There appears to be no valuation for the last property which was purchased in late 2017 for $192,000 (which a handwritten note in the affidavit dated 9 July 2019 suggests was paid for in cash). One property was sold on 14 December 2018 for $165,000: Chen 3 at [42]. 50 In respect to her financial assets, the applicant's affidavits on this application contain some bank statements which reflect that some bank accounts have been closed. However, these documents do not address all accounts, nor is there any evidence of what became of the money held in those accounts in the instances where an account had been closed. It appears that there was a withdrawal of substantial funds from some accounts shortly after the respondent cancelled the applicant's benefits. It became obvious during the applicant's oral submissions that she still has six or seven bank accounts, and there is money in the accounts (although the contents of these accounts are unknown). The applicant's submission appears to be that the money is not hers, or that she cannot use it. 51 On the other hand, if the stay is granted (and benefits were paid), and the applicant was unsuccessful in the substantive appeal, the money would need to be repaid. That would increase the debt the applicant owed to the respondent. I note that in the Notice of Appeal the applicant complains that her debt has gone up after the decision of the AAT2. That increase is the debt generated as a result of the earlier grant of a stay. It is the recovery of the benefits paid to the applicant pending the determination of the second review. In oral submissions when this was raised with the applicant, she complained that the debt has risen since the decision of the AAT2, and that she was challenging this in the Tribunal. 52 I note that if a stay was not granted it would not render the appeal nugatory if the applicant was ultimately successful. 53 As noted above, during the course of the submissions the applicant spoke of many matters which could not be relevant to an appeal to this Court on a question of law. Nor were many of the matters relevant to this application. The effect of these submissions was a plea that the Tribunal was wrong and to order that she is entitled to be paid the requested benefits. 54 Weighing all the relevant matters, the applicant has not discharged the onus on her to demonstrate that the application for a stay should be granted. A stay of the decision of the AAT2 is not necessary for the purpose of securing the effectiveness of the hearing and determination of the appeal. 55 I note that when the applicant first raised the issue of a stay at the first case management hearing it was based on only two concerns: first, that the applicant was prevented from leaving Australia to visit a family member in China who is ill; and second, that the respondent would enforce the judgment against her. In any event, neither of those propositions have substance. 56 As to the first, the respondent has informed the Court that the Department has never issued a "Departure Prohibition Order" with respect to the applicant (which would, in effect, prevent the applicant from leaving Australia), and the Department has no intention of doing so. 57 As to the second, the respondent informed the Court that it is Departmental policy not to enforce a debt to the Commonwealth while there are Court proceedings on foot challenging that debt. That is a proper course in this case. Conclusion 58 Accordingly, I refuse the application to grant a stay of the judgment the subject of the appeal. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Abraham.