Coffey v Secretary, Department of Social Security

The abuse of process claim 4 The primary judge described the appellant's second cause of action as the "abuse of process claim". The appellant alleges that on 4 February 1993 he attended an interview at the Department of Social Security to explain why the alleged overpayment had occurred. He was told that it was possible that matters concerning the overpayment might be referred to the Director of Public Prosecutions ("the DPP"). He alleges that the reason for the interview was to induce him to incriminate himself, although at the time he had the "impression that attendance will enhance" his position. He was not informed that the interview was to be taped and that the conversation could be used in evidence against him. He was aware that the interview was in a "sophisticated recording studio", but he was "disoriented and confused". He claims that he was not cautioned before the interview, though he says that was required by departmental guidelines. These matters are said to constitute an abuse of process. The appellant informed the primary judge that he may wish to amend his claim so as to assert that the above allegations constitute the tort of misfeasance in public office.

The malicious prosecution claim 5 The primary judge described the appellant's third claim as the "malicious prosecution" claim. The appellant pleads that on 17 February 1994 he was served with a summons issued out of the Adelaide Magistrates Court alleging 32 counts of "fraud". The DPP later withdrew the charges "as there is woefully insufficient evidence to justify the charges". He claims that the respondent had maliciously prosecuted him. The malice is said to arise from a combination of further facts. At the interview on 4 February 1993 the appellant had been assured that no further action would be taken without written notice to him, and he had "the impression" that he would have a right of review of any decision to take further action. If he had been notified of the proposal to charge him, he would have told the Department of the "inadequacies" of the case against him, so that it would not have been referred to the DPP and no charges would have been laid. The respondent's officer, to whom the appellant complained, at first disputed that any such assurance had been given, but after listening to the record of interview, asserted that the serving of the summons was the written notification. After service of the summons the applicant asked to see the fortnightly declaration forms he had provided to the Department, but was told they had been destroyed. It was the absence of the forms that led to the withdrawal of the charges. It is asserted that the respondent did not inform the DPP that the forms were not available, and that the charges would not have been laid if the DPP had been told they had been destroyed.

THE FACTS FOUND 6 The learned judge found the following facts. The appellant received benefits under the Social Security Act 1947 (Cth) and then under the Social Security Act 1991 (Cth) (the Act) between 1988 and May 1993. He was casually employed for some of that period, in particular for much of the period between 1 November 1990 and 26 March 1992. As a result of a review of his entitlements during that latter period, a delegate of the respondent formed the view that the appellant had been overpaid by $3,245.01 as he had not accurately and sufficiently declared his casual earnings. By letter of 21 January 1993 the appellant was informed of the possibility of prosecution for offences against the Act, and was invited to an interview. He was told that the interview was not compulsory, but would provide him with the opportunity to "advise of any factors which may affect the decision to take legal action". The interview took place on 4 February 1993. The internal report generated at the time included a pro forma checklist clearly designed, inter alia, to record whether the interviewee made admissions helpful to proof of the suspected offences. It also included a recommendation that prosecutions be instigated for 32 alleged offences against s 1347 of the Act. On review the recommendation was supported by two more senior officers. In early April 1993 the Area Manager (South) of the Department provided the DPP with a brief for perusal and opinion. 7 The DPP considered the brief, and on 4 February 1994 a complaint and summons alleging 32 offences of knowingly obtaining payment of an instalment of unemployment benefit, part of which was not payable, contrary to s 239(1)(b) of the 1947 Act and later s 1347 of the 1991 Act was served on the appellant. He sought copies of the declaration forms he had submitted to the Department for the benefits paid. Only two were still available. By letter of 5 May 1994 the DPP informed the Department that the charges were to be withdrawn. The DPP was of the opinion that since only two forms were available, in one of which the appellant had overstated his earnings, there was insufficient evidence to support the charges. However, the DPP indicated that the available evidence was sufficient to support charges of recklessly making false statements, contrary to s 1346. The complaint was withdrawn. The primary judge noted that there was evidence that the service of the complaint had caused distress and anxiety to the appellant, and that this was sufficient to show an arguable case of damage and loss.

Jurisdiction 8 Mansfield J upheld the respondent's submission that the Court had no jurisdiction to hear any of the appellant's claims. He dealt first with the debt claim. There was no direct legislative grant of jurisdiction pursuant to s 19(1) of the Federal Court of Australia Act 1976 (Cth). The associated, accrued or pendent jurisdiction granted by s 32 did not assist, because there was no other matter in which the Court's jurisdiction had been properly invoked with which it might be said that the debt claim was associated. Nor was there any jurisdiction derived from any implied incidental power of the Court. His Honour was of the opinion that the only possible source of jurisdiction was s 4(1) of the Jurisdiction of Courts (Cross‑Vesting) Act 1987 (SA) (the SA Act) which gives this Court original and appellate jurisdiction with respect to "State matters". The expression "State matter" means, so far as presently relevant, "a matter in which the Supreme Court has jurisdiction otherwise than by reason of a law of the Commonwealth or of another State". The Supreme Court had jurisdiction under s 39(2) of the Judiciary Act 1903 (Cth) to entertain the debt claim, but it was not jurisdiction which arose "otherwise than by reason of a law of the Commonwealth". Rather it arose under a law of the Commonwealth. Thus jurisdiction was not conferred on this Court by s 4(1) of the SA Act. 9 The primary judge also observed that the debt claim was improperly constituted as a cause of action against the Secretary of the Department. The proper respondent was the Commonwealth. His Honour could have allowed the appellant to add the Commonwealth as a party, but did not do so because that would not have given the Court jurisdiction over the matter. 10 The abuse of process claim and the malicious prosecution claim were not within the Court's jurisdiction for the same reason as the debt claim was not. His Honour did not need to consider whether, had jurisdiction existed, these claims were properly made against the respondent as presently described, or whether he should have been personally named.

Abuse of process/malicious prosecution 11 Despite his view that there was no jurisdiction to entertain any of the claims, the primary judge considered whether, on the assumption that the officers involved in the process leading to the referral of the brief to the DPP were added as respondents, the abuse of process and malicious prosecution claims had any prospect of success. He did this because he was reluctant to dismiss the claims on the jurisdictional basis without giving the appellant the opportunity to apply to add or substitute them. But he would give him the opportunity "only if it was meaningful to do so". Before his Honour the appellant did not seek to distinguish the abuse of process claim from the malicious prosecution claim "except to the extent that he invoked separately the tort of misfeasance in public office". Accordingly his Honour considered only the torts of malicious prosecution and misfeasance. He identified the elements of the tort of malicious prosecution as: · institution of criminal proceedings by the respondent; · termination of those proceedings in favour of the appellant; · absence of reasonable and probable cause for the institution of those proceedings; and · malicious intent, or a primary purpose for instituting the proceedings other than that of carrying the law into effect. 12 His Honour accepted, for the purpose of an application such as that before him, that the provision of information to an independent prosecuting authority can constitute the "initiation" of proceedings by the provider of the information. He referred to the decision of the House of Lords in Martin v Watson [1996] AC 74 and the observations of Dixon J in Commonwealth Life Assurance Society Ltd v Brain (1935) 53 CLR 343 at 379 to that effect. However, his Honour was of the view that it was necessary, at the least, that one or more of the officers provided the DPP with information knowing it to be false. See Martin v Watson at 84. His Honour went on to say that: "There is, in respect of each of those officers, no evidence upon which it could be found that any of them acted dishonestly in any sense. The applicant has made much of the statement that he would be informed before any action was commenced. I assume in his favour that such a statement was made. In my judgment, that could not indicate that that officer forwarded his recommendation believing that its contents were not true. The applicant has also stressed that the DPP did not pursue the prosecution. The identified reason is the lack of supporting documentation. The routine internal processes of the respondent did not cause that aspect to emerge in the investigation. Those processes focussed upon other means of proof. The information available was regarded as sufficient to warrant the recommendation. The DPP also apparently made the decision to prosecute without that documentary feature being considered. It is not for the Court to comment upon the adequacy of the evidence available for the prosecution, but it is clear that there is no material to indicate that those officers did not regard the material as adequate. Counsel for the respondent submitted, and was able to submit, that the available evidence was adequate to support the prosecution notwithstanding the decision of the DPP and the reason for it. The applicant has not identified any matter necessary to be proved for the prosecution to succeed which was not in fact the case. Nor has he identified any such matter about which there is any evidence to suggest that any of the three officers of the respondent knew, or believed, that the matter was not in fact the case. As noted above, the DPP's decision was made in relation to s 1347 of the Act but the DPP did also consider the evidence available adequate to sustain charges of breach of s 1346 of the Act." 13 His Honour went on to say that there was no evidence which could lead to the conclusion that any of the three officers procured the prosecution without reasonable and probable cause, or that malice or any improper purpose existed. He said: "There is no evidence which could lead to the conclusion that any of those three officers did not believe that there was material indicating guilt on the part of the applicant which should be brought to the attention of the DPP. There is also no evidence which could lead to the conclusion that any of those three officers could not reasonably have believed that the material available, including the applicant's admissions, warranted such action. I have not overlooked that apparently the primary declarations of the applicant were no longer retained, but there is nothing to indicate that the respondent's processes at that point did or should have drawn attention to that matter. It is not the law that those officers be exposed to malicious prosecution for not having made that enquiry at that time. Similar reasoning leads me to the conclusion that there is no evidence from which a conclusion of malice or improper purpose, that is the fourth of the elements of the cause of action, on the part of any of those three officers could be made out: Trobridge v Hardy (1955) 94 CLR 147 at 163‑165."

Misfeasance in public office 14 The primary judge identified the elements of the tort of misfeasance in public office as: · an invalid or unauthorised act; · done maliciously; · by a public officer; · in the purported discharge of a public duty; and · which causes loss or harm to the plaintiff. See Northern Territory v Mengel (1995) 185 CLR 307 at 370, and now Sanders v Snell (1998) 157 ALR 491 at 502‑504. His Honour concluded that the appellant had no prospect of succeeding in this cause of action. He said: "No invalid or unauthorised act is alleged in the statement of claim. It is not asserted that it is not part of the duties of the respondent, through the three officers referred to above, to investigate suspected cases of overpayment of benefits and to consider the possibility of prosecution, and if appropriate to prepare a brief for submission to the DPP. There is also no evidence which is capable of leading to the finding that any one of those officers did not properly have that responsibility and was not endeavouring to fulfil it. The applicant must also fail to make out malice on the part of any of those three officers. It is arguable that the element of malice is satisfied by reckless indifference in the conduct of an office to the exercise of the power, as well as to conscious and deliberate intention to cause harm: see the reasons of Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ in Mengel at 347. Even assuming that lower threshold, in my view the applicant has no prospect of meeting it. I have discussed the evidence on that topic in detail when considering … the claim based on malicious prosecution. For the reasons which appear in that part of my reasons, I conclude that there is no evidence from which it could be concluded that any of the three officers took the steps, which each took leading to the referral of the brief to the DPP, with malice, as I have identified the arguable meaning of that expression."

FRESH EVIDENCE ON APPEAL 15 On the hearing of the appeal the appellant sought to adduce two documents which he had not placed before the primary judge, though both were in his possession before trial. The first is a handwritten memo dated 17 December 1992 signed by "James". Rendering various abbreviations in their complete form the memo reads: "Client already being prosecuted by Control Review and Recovery section of the Department. Client rang Control Review and Recovery says Client hung around these companies and gets part time job from the particular drivers not 'companies'. Control Review and Recovery are aware of client's activities and has warned him about declaring his income correctly. No further action." 16 The second document is the letter dated 26 January 1993 inviting the appellant to the interview that took place in early February. 17 The appellant said he had intended to cross‑examine the respondent and the three officers involved in the referral to the DPP with a view to eliciting that the 26 January 1993 letter was a trap designed to secure admissions by him to repair the gap in the evidence caused by the destruction of the forms he had submitted to obtain benefits. The letter implied that it had not yet been decided whether to prosecute him, yet the memo showed that that decision had been taken - "client already being prosecuted". The appellant contended that these documents established the malice required for the malicious prosecution and misfeasance causes of action. 18 When asked why he had not produced the documents on the hearing of his application, the appellant said he was under the impression that all that Mansfield J was going to decide was the question of jurisdiction, and that the balance of the case would then be heard and the documents would be used in the manner outlined. However, Mansfield J dismissed the case altogether, and the appellant lost his opportunity to use the documents. The appellant said his Honour was aware that he wanted an opportunity to deploy further material because the appellant had informed him that he "wanted to hold something back for the trial situation". However his Honour had denied him the opportunity to use it by dismissing the application, rather than by dealing only with the question of jurisdiction. The transcript discloses that the appellant did tell Mansfield J that he had not filed the whole of his evidence, and that he had other evidence that the decision to prosecute him had been taken before the interview of 4 February. But the transcript also makes clear that his Honour understood that the appellant wanted to use this evidence at the trial of the action, if there was to be a trial. In any event, we can understand that the appellant, who was not legally represented, may have been confused as to the course of proceedings, and in the exercise of our discretion we will permit him to rely upon the two documents. Whether they assist him as he thinks they do we will consider later.

Jurisdiction 19 Section 1224(1) of the Act provides that if an amount has been paid to a recipient by way of social security payment and the amount was paid because the recipient had made a false statement or false representation, the amount "is a debt due by the recipient to the Commonwealth". Sub‑section (2) provides that the debt may be recovered by the Commonwealth by means of legal proceedings, garnishee notice or, if the recipient is receiving social security payment under the Act, by deductions from that payment. The claim to recover the overpayment from the appellant is, by statute, a claim in debt. However, the appellant's claim to recover the amount deducted on the ground that he had not made any false statement or false representation entitling the making of a deduction from his benefits, is either a claim to a statutory entitlement or a claim in restitution. The precise nature of the cause of action is unimportant for present purposes. As we see the matter, the question turns on s 39B(1A)(c) of the Judiciary Act, which confers jurisdiction on the Court in matters "arising under a law made by the Parliament". The question is whether what has been called the debt claim arises under the Act within the meaning of that provision. The primary judge did not refer to s 39B(1A)(c). His Honour was of the opinion, correctly in our view, that jurisdiction was not conferred on the Court by s 19(1) or s 32 of the Federal Court of Australia Act or by s 4(1) of the SA Act. 20 In Re McJannett; Ex parte Australian Workers' Union of Employees (Q) [No 2] (1997) 189 CLR 654 the Court was concerned with the phrase "a matter arising under this Act" in s 347(1) of the Industrial Relations Act 1988 (Cth). At 656‑657 the Court said: "The test for determining whether a proceeding is in a matter arising under the Act for the purposes of s 347(1) is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act. That test follows from what was said with respect to s 76(ii) of the Constitution in R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141 at 154, where Latham CJ said: 'One is compelled to the conclusion that a matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law. In either of these cases, the matter arises under the Federal law. If a right claimed is conferred by or under a Federal statute, the claim arises under the statute'." 21 It is common ground that during the relevant period the appellant was entitled to unemployment benefit and later job search allowance. See ss 513, 553, 556 and 561 of the Act in relation to the period after 1 July 1991. The dispute concerns the quantum of benefit payable. Although the matter was not explored before us, the dispute centres on s 559, which provides that a person's benefit is to be worked out using the Benefit Rate Calculator at the end of s 1068. The Calculator requires one to take a number of steps: · to work out the amount of the appellant's ordinary income on a fortnightly basis; · to work out his ordinary free area limit (prima facie $60); · to determine whether his ordinary income exceeds his ordinary income free area limit; · if his ordinary income does not exceed his ordinary income free area, his ordinary income excess is nil; · if his ordinary income exceeds his ordinary income free area, the excess is his ordinary income excess; and · a proportion of the ordinary income excess is the amount by which the amount of the benefit is reduced for ordinary income. 22 The ordinary income free area is the maximum amount of ordinary income a person can have without affecting the rate of benefit. The Department's claim is that the appellant understated the amount of his ordinary income, which resulted in a smaller reduction for ordinary income than would have been the case had he correctly stated it. The appellant claims that he was entitled under ss 559 and 1068 to a benefit in the amount that was actually paid to him. The right that he seeks to enforce is conferred by those sections. The fact that in order to vindicate the right he has to deflect the operation of s 1224, by showing that his claim forms did not contain false information, does not signify. The claim remains one made under ss 559 and 1068. In our view, therefore, the debt claim arises under the Act for the purposes of s 39B(1A)(c). 23 That the Court has jurisdiction over the debt claim is supported by observations of the Full Court in Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582. In that case the Corporation had made a determination under s 56 of the Federal Airports Corporation Act 1986 (Cth) increasing the landing charges payable for certain aircraft at principal Australian airports. After they had paid the increased charges for some time, the airlines affected brought an action in the Supreme Court of New South Wales for a declaration that the determination was invalid and an order that the Corporation repay the amounts overpaid. The matter was transferred to the Federal Court as a "special federal matter" under the cross‑vesting legislation. In the course of considering whether the airlines could attack the determination collaterally rather than first proceeding under the Administrative Decisions (Judicial Review) Act 1977 (Cth) to determine whether the determination was valid, Lehane J, with whom Beaumont and Whitlam JJ agreed, said at 593‑594: "No doubt there may be matters, properly described as arising under the ADJR Act, in proceedings other than those commenced by an application under that Act; and it might have been the case that the Court would have had, in respect of such a matter, no jurisdiction other than that given to it by the Cross‑Vesting legislation. However, s 39B(1A) of the Judiciary Act 1903 (Cth) now provides that the original jurisdiction of the Court includes jurisdiction in any matter "arising under any laws made by the Parliament" so that, if the disharmony was significant, it is so no longer. It may also be mentioned, in passing, that another result of s 39B(1A) may well be that, because this proceeding may be said to arise under the FAC Act (itself a law made by the Parliament), the court has in any case jurisdiction independently of the cross‑vesting legislation. … The proceeding was transferred to the court because Ireland J saw it as a special federal matter; but the proceeding is now, as it was before his Honour, a common law claim for money paid under what is said to be an invalid determination."

Abuse of process? 24 Part 6.1 of the Act deals with the internal review of decisions under the Act. Parts 6.2 and 6.3 deal with the review of decisions by the Social Security Appeals Tribunal. Part 6.4 deals with review of decisions, including those of the Social Security Appeals Tribunal, by the Administrative Appeals Tribunal. Sections 1287 to 1294 contain a number of modifications to the operation of the Administrative Appeals Tribunal Act 1975 (Cth), but otherwise its provisions apply of their own force to review of decisions made under the Act. The appellant followed the review process in Part 6. In early 1994 he sought internal review of the decision that the amount overpaid was recoverable. The decision was affirmed by an Authorised Review Officer. The decision was later affirmed by the Social Security Appeals Tribunal, though the recoverable amount was adjusted to $3,206. The appellant's application to the Administrative Appeals Tribunal ("AAT") to review the decision was dismissed in November 1994. He did not appeal from that decision. On 27 June 1997 the appellant applied to the AAT to review the respondent's decision "not to allow a review of validity of overpayment due to lack of worth". The AAT decided it did not have jurisdiction to hear the application, and dismissed it. The appellant did not appeal from that decision. 25 An attempt to litigate in the Court a dispute or issue which has been resolved in earlier litigation in another court or tribunal may constitute an abuse of process even though the earlier proceeding did not give rise to a res judicata or issue estoppel. See Sea Culture International v Scoles (1991) 32 FCR 275 at 279 and Walton v Gardiner (1993) 177 CLR 378 at 393‑4. Whether it does depends on the facts of the particular case. In the present case the circumstances are these. First, the Parliament has made available a comprehensive and multi‑level process for the review of decisions under the Act. Secondly, the appellant has had three reviews under the procedures thus made available. Thirdly, the respondent and his officers have been vexed already by these reviews, especially those before the two Tribunals. In our view, for the Court to allow the appellant to relitigate his claim that the respondent was not entitled to withhold from his benefits the amount of the alleged overpayment, would be to permit its process to be employed in a manner unfair to the respondent. The maintenance of the debt claim is an abuse of process, and should be dismissed.

Collateral attack 26 The debt claim may be looked at in another way. The review provisions in Part 6 are elaborate and specific. They have led us to conclude that Parliament did not intend that reviewable decisions under the Act should be amenable to collateral attack. By collateral attack we mean a challenge the primary object of which is not to set a decision aside, but to determine other issues in the course of which the validity of the decision arises. Thus in the present case the appellant's debt claim is primarily to recover the amount of the deduction, but in order to do that he must show that the decision to make the deduction is defective. 27 The case is unlike the Aerolineas case. Collateral challenge was available in that case because s 10(1) of the Administrative Decisions (Judicial Review) Act provides that a right to seek review under that Act is in addition to, and not in derogation of, any other right to seek a "review", which is defined to include "a review by way of reconsideration, rehearing, appeal, the grant of an injunction or of a prerogative or statutory writ or the making of a declaration or other order". As Lehane J said at 596, s 10 made it impossible to say that the ADJR Act by implication precluded the making of a common law claim, a necessary element of which was establishing the invalidity of the decision. There is no comparable provision in the Act or in the Administrative Appeals Tribunal Act.

MALICIOUS PROSECUTION/MISFEASANCE 28 The appellant has not persuaded us that on the evidence before him the primary judge fell into error in holding that the appellant had no prospect of proving essential elements of these torts. His Honour was conscious of the constraints on the summary dismissal of proceedings under O 20 r 2(1) and referred to the authorities establishing that the Court should only dismiss an action in a very clear case, where there is in reality no question to be tried. We agree with his Honour's treatment of these issues set out in the passages we have quoted.

THE NEW EVIDENCE 29 We have outlined the way in which the appellant sought to use the two documents he has been permitted to adduce on appeal. We do not regard them as even arguably enabling him to establish malice on the part of any of the three officers who participated in the preparation of the brief to the DPP. In order to succeed in his malicious prosecution claim the appellant must establish, amongst other things, malicious intent on the part of one or more of the officers in the preparation of the brief. The production of a document prepared by someone called James, whom the appellant thought was "probably in the Department's office at Currie Street", incorrectly stating that as at 17 December 1992 the appellant had already been prosecuted by the Department, does not show or suggest that the Department's letter of 26 January 1993 was false in its claim that a decision on whether he would be prosecuted had not yet been made. (It may be mentioned in passing that the first sentence of James' memo is probably meant to refer to civil recovery proceedings). In any event the decision whether to prosecute was the DPP's, not the Department's. Even if, as claimed by the appellant, the letter was a ruse to secure his attendance at an interview in the hope of securing admissions, that does not assist in establishing a malicious intent on the part of the writer in the preparation of the brief. The position is the same in relation to the misfeasance claim. The two documents do not assist the appellant to establish that the officers or any of them did an invalid or unauthorised act with malice.

CONCLUSION 30 The appeal should be dismissed with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Solicitor for the Respondent: Australian Government Solicitor