Dranichnikov v Centrelink

Federal Court of Australia (Full Court)|2003-06-19|Before: Hely JJ, Hill J

REASONS FOR JUDGMENT HILL J: 1 Before the Court is an appeal brought by the appellants, Mr and Mrs Dranichnikov, against judgments delivered and orders made on 25 October 2002 and 5 November 2002 respectively. The judgments relate to an application for judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth)("ADJR Act") or alternatively s 39B of the Judiciary Act 1903 (Cth), of what was said in the amended application to be three separate decisions adverse to Mr and Mrs Dranichnikov. 2 Mr and Mrs Dranichnikov are nationals of what is now known as the Russian Federation. They applied for a protection visa claiming that they were persons to whom Australia owed protection obligations under the Migration Act 1958 (Cth) on the basis that Mr Dranichnikov was a "refugee" as defined in Article 1(A)(2) of the Convention relating to the Status of Refugees, done at Geneva on 28 July 1951, as affected by the Protocol relating to the Status of Refugees, done at New York on 31 January 1967 ("the Convention"). They were granted a Bridging Visa A, carrying with it right to for Mr Dranichnikov to work until the final determination of their claims. To date, their claim has not been finalised but as a result of a recent decision of the High Court of Australia (Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26), their application to the Refugee Review Tribunal has been remitted to that Tribunal for further consideration. 3 It seems that Mr Dranichnikov consulted a tax agent who lodged electronically Mr Dranichnikov's income tax return for the year ending 30 June 2001. He did so after he had been advised by Centrelink that he had no entitlement to a family tax benefit. A full copy of that return was not before the Court. However, it would seem that the return stated that Mr Dranichnikov was a resident of Australia for income tax purposes which was no doubt correct. According to a statutory declaration from the tax agent which was an exhibit in the proceedings, Mr Dranichnikov had, at the time he instructed the tax agent, indicated that he was under "extreme financial hardship". Mr Dranichnikov told the tax agent that he had been refused payment of the family tax benefit by Centrelink because he was not an Australian resident. The tax agent declared that he told Mr Dranichnikov that the agent could lodge a claim for family tax benefit, "and let the Family Assistance Office decide if he was eligible." The agent continued, "[t]he purpose of lodging the claim through the tax system was so that Family Assistance Office could again check Mr Dranishnikov's [sic] eligibility. The client was advised that we were unsure whether he would receive the FTB and we would contact him when the assessment came back." 4 In due course the agent received on behalf of Mr Dranichnikov payment of a family tax benefit in the sum of $5,180.99. It seems from an affidavit filed in the proceedings that by February 2002 Centrelink had formed the view that the family tax benefit had been wrongly paid. It demanded that Mr Dranichnikov repay the sum which it said had been paid by mistake. The question of repayment of the benefit thereafter became the subject of correspondence between Centrelink and Mr and Mrs Dranichnikov. Some of that correspondence is discussed in detail later in these reasons. 5 On 28 August 2002 Centrelink gave notice to Mr Dranichnikov's employer under s 89 of A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)("Administration Act") (in effect a garnishee order) to recover from Mr Dranichnikov's salary the amount of what was said to be an overpayment. Centrelink also put the matter of recovery of the overpayment into the hands of a firm of solicitors in East Brisbane. Threats of legal proceedings were made by Mrs Dranichnikov on behalf of her husband. 6 It was against this background that Mrs Dranichnikov sent a fax to Centrelink on 10 September 2002. The fax set out some migration information, some details about the attempts to recover the overpayment, details of her husband's income and Mrs Dranichnikov's bad health. The fax pointed out that the family was in "the extremely hard financial situation". The letter continued, "[t]herefore, may I ask your agency for any benefits for our family: Special Benefit or Sickness Allowance or Health Care Card or Parenting Payment or Rental Assistance or Family Tax Benefit (for my husband) or Rent Assistance or other payments or benefits applicable to the above circumstances." 7 On the same day, Mrs Dranichnikov went to the Brisbane office of Centrelink, referred to the fax and, to use the language of the learned Primary Judge, did so to "ask what the outcome was or perhaps for advice; it is not entirely clear which." Mrs Dranichnikov was told that because of her visa status she was not entitled to any relief. According to the judgment appealed from, Mrs Dranichnikov requested that she be given reasons in writing or a written decision. She wrote and handed to the staff at Centrelink another letter. 8 A Mr Salter, a customer service officer with the Family Assistance Officer, replied to Mrs Dranichnikov in a letter of the same day. That letter reads, "You have requested a letter about possible payments or concessions that you or your husband may be entitled to from Centrelink. You and your husband both have Bridging Visas sub class 010. Under Social Security Law, neither you or your husband qualify for any payments or concessions from Centrelink while you are the holders of these visas. Please advise us if you or your husband are granted a different visa sub class to test you or your husband's eligibility to any payments or concessions with that visa. This is an information notice given under the social security law. If you would like to talk about this letter please phone us on the number at the top of the letter." 9 That letter encompasses the second decision, the subject of the application for judicial review. The first decision was a decision of a Mrs Penman, a Centrelink authorised review officer, made on 16 August 2002 to recover the amount of $5,180.99. 10 The third decision, the subject of the application for review, is the decision made by a Mr McKenna, Centrelink delegated recovery officer on 28 August 2002, "in respect of recovery 'debt' and his conduct in which occurred breach of the rules of natural justice". Particulars with the amended application show that 28 August 2002 was the date of the letter to Mr Dranichnikov's employer by way of garnishee of his salary to recover the amount of $5,180.99 said to be overpaid.

The Proceedings Before the Learned Primary Judge 11 The application, as originally filed in the Court, noted that the first directions hearing would be held on 25 October 2002, however it appears that on 26 September 2002 Mr and Mrs Dranichnikov filed a motion in the Court seeking interlocutory relief returnable on 2 October 2002. That application for interlocutory relief was apparently settled. However, the learned Primary Judge required the parties to the proceedings to attend on 2 October 2002 and listed the matter for that day. His Honour did so, it would seem, so that he could give directions and avoid the need for a further directions hearing on 25 October 2002. He indicated to the parties that he could dispose of the proceedings by way of a final hearing on 25 October. Mr Dranichnikov did not appear on 2 October 2002, although his wife did. On that day his Honour listed the application for hearing on 25 October 2002 over the objection of Mrs Dranichnikov. 12 On 2 October 2002 Mrs Dranichnikov also asked His Honour to disqualify himself. She said that she had been involved on other occasions in proceedings before the learned Primary Judge. On one of those proceedings His Honour had found against Mrs Dranichnikov (not on credit) but the matter had been reversed on appeal. She complained also that the learned Primary Judge had refused permission for Mrs Dranichnikov to assist another litigant in unrelated proceedings for judicial review of a decision of the Refugee Review Tribunal. According to the judgment, what had happened was that his Honour had refused permission for Mrs Dranichnikov to make submissions through an interpreter while permitting her to remain at the Bar table to assist the litigant in question. Mrs Dranichnikov also complained that there had been delay in a corrected judgment in those other proceedings being available to the parties, there having been apparently an ex tempore judgment delivered at the time. 13 In support of an application for adjournment, Mrs Dranichnikov indicated that she had some medical problems which would necessitate the proceedings being adjourned. His Honour indicated that he would need an appropriate medical certificate before he would be prepared to give an adjournment. No such certificate was apparently provided. 14 The learned Primary Judge gave directions requiring material in support of the application to be filed on or before 16 October 2002 by Mr and Mrs Dranichnikov and listing the matter for final hearing on 25 October 2002. 15 The learned Primary Judge proceeded to hear submissions on 25 October 2002. On that day counsel for the respondents applied to strike out paragraph 2 of the amended application relating to the "decision of 10 September". The learned Primary Judge acceded to that application. He did so on the basis that there was no reviewable decision as that expression is used in the ADJR Act: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321at 337. 16 The parties were back in court on 5 November 2002. This was brought about because Mr and Mrs Dranichnikov filed a notice of motion seeking to amend their application in four respects. 17 The first amendment related to the paragraph which had been struck out on 2 October 2002. The amendment sought to be made was a review of a decision said to have been made by Centrelink on 25 October 2002 that Mrs Dranichnikov was not eligible for the family tax benefit, the low income health care card or the parenting payments. Since this appeared to be referring to the same subject matter as was referred to in the original paragraph 2 of the application which had been struck out, his Honour refused the amendments on the basis that it was too late to seek them in the proceedings. 18 The second proposed amendment involved the joinder of the applicants' daughter in the proceedings. The learned Primary Judge pointed out that, as the daughter was an infant, it would be necessary to make provision for a tutor. His Honour was of the view that the daughter was not a necessary party and hence that it was unnecessary to consider whether it would have been appropriate for either Mr and Mrs Dranichnikov to be the tutor to appear on behalf of their daughter. This application was also rejected. 19 The third amendment sought was stated to be, "to amend the third respondent/the Human Rights and Equal Opportunity Commission" (decision made on 23 October 2002 by the HREOC President). His Honour refused this amendment because the Commission was not a party and it did not seem that the proposed amendment had anything to do with the matters in the original application. 20 The final amendment sought was a claim for a stay of the garnishee notice and indeed the whole proceeding in the Court, pending further orders on the basis that Mr and Mrs Dranichnikov had filed a notice of motion with the High Court of Australia seeking to have the whole matter removed to that Court. Notice had been given to the Attorneys General of the Commonwealth and States shortly before the hearing. His Honour was of the view that sufficient opportunity had been given to the Attorneys to intervene had they wished to. In any event whether this was or was not the case, his Honour was of the view that it was impossible to identify a constitutional question, so that the proceedings should not be stayed. 21 His Honour then proceeded to consider on that day what may be referred to as the merits of the application as framed. His Honour determined first that Mr Dranichnikov was not eligible for the family tax benefit which had been paid to him through the Australian Taxation Office. This was because Mr Dranichnikov was not an Australian resident as that expression is defined in the Social Security Act 1991 (Cth), it being a necessary prerequisite to entitlement to the family fax benefit that the applicant be an Australian resident. 22 His Honour then turned to consider whether repayment of the benefit should be waived, pursuant either to s 97 or s 101 of the Administration Act. His Honour concluded that there was no error in the Secretary refusing to wave the benefit pursuant to s 97 of the Administration Act because the overpayment had not arisen solely as a result of administrative error. His Honour further held that the exercise of discretion to wave the repayment under s 101 involved no reviewable error. Particularly, no irrelevant considerations had been taken into account nor had there been a failure to take into account any relevant considerations. Likewise there had been no reviewable error in the decision made to garnishee Mr Dranichnikov's wages to recover the overpayment. An argument that there had been a failure to afford Mr Dranichnikov natural justice in that he had not been given a right to be heard before the garnishee process began was rejected. 23 Accordingly, His Honour, having disposed of each of the questions for review of the three decisions referred to in the amended application, dismissed that application and ordered that Mrs Dranichnikov pay the respondent's costs of the proceedings, up to and including the hearing of 25 October and Mr Dranichnikov be ordered to pay the respondent's costs of the proceedings generally. 24 For completeness it may be noted that His Honour refused to disqualify himself on the grounds of bias.

The Appeal 25 The notice of appeal contained numerous grounds. They may however be grouped under four headings:

Whether the learned Primary Judge erred in striking out paragraph 2 or the amended application for review?
Whether the learned Primary Judge erred in holding that neither Mr and Mrs Dranichnikov nor their child was eligible for the family tax benefit?
Whether the learned Primary Judge displayed actual bias, such that his Honour should have disqualified himself?
Whether there was any reviewable error in the failure to wave overpayment of the family tax benefit or the decision to garnishee Mr Dranichnikov's wages?

Whether there was a Relevant Decision Made on 10 September 2002 by Centrelink? 26 It was submitted that the letter of 10 September 2002 set out earlier in these reasons was "a response to an application made by Mrs Dranichnikov for special benefit, sickness allowances and low income health care card or special benefit". However, it is obvious from the letter itself that what Mrs Dranichnikov wanted was information which concerned whether she or her husband were entitled to any benefits, payments or concessions under social security legislation. It is clear enough from the letter itself that Mrs Dranichnikov had not made a claim for any particular benefit. That this is so, appears in the first paragraph of the Centrelink letter which says "[y]ou have requested a letter about possible payments or concessions that you or your husband may be entitled to from Centrelink." 27 It is clear also that the writer of the letter did not understand that he was giving a decision on a claim for any possible benefit that may arise under social security legislation. Of course, if a decision maker actually makes a decision the fact that subjectively the decision maker does not understand he or she has done so might not matter. But that is not the present case. 28 It is clear law that for there to be a reviewable decision the decision must be one which is made by or under a statute: Australian Broadcasting Tribunal v Bond per Mason CJ at 337. As the learned Chief Justice said in the passage cited, it is also an essential quality of a reviewable decision that it be a substantive determination. A mere expression of opinion having no substantive effect on the rights of a person could not be a reviewable decision: Commonwealth v Bradley (1999) 95 FCR 218at 223-224 and Bond at 338, referring to the tentative opinion expressed earlier by Ellicott J in Ross v Costigan (1982) 59 FLR 184. 29 The line may seem, to Mr and Mrs Dranichnikov, to be a fine one. But it is both clear and important. The social security legislation does not provide for binding information to be provided by officers. But more importantly here, the matter can be tested by looking at whether the letter has any substantive effect by considering whether it would be necessary in respect of every possible benefit that might be payable under social security legislation that Mrs Dranichnikov lodge an appeal from a decision. Clearly, insufficient information would have been provided by her to determine her entitlement to any possible benefit and any acceptance by her of the information she received would not negate any appeal right she might have to a refusal to be paid or provided with any particular benefit. 30 Accordingly, the learned Primary Judge did not err in striking out paragraph 2. It might be added here, although Mrs Dranichnikov did not substantially raise the matter as a separate appeal that there could be no error of principle in His Honour refusing to make any amendment to the application to review relating to what happened on 10 September 2002.

Whether Mr Dranichnikov was Entitled to be Paid the Family Tax Benefit? 31 Entitlement to the family tax benefit arises under A New Tax System (Family Assistance) Act 1999 (Cth)("Family Assistance Act"). Section 21 of that Act is headed, "When an individual is eligible for family tax benefit in normal circumstances". It provides: "(1) An individual is eligible for family tax benefit if: (a) the individual has at least one FTB child (see section 22 and later provisions; and (b) the individual is an Australian resident (c) the individual's rate of family tax benefit, worked out under Division 1 of Part 4, is greater than nil. (2)However, the individual is not eligible for family tax benefit if another provision of this Subdivision so provides." 32 Mr and Mrs Dranichnikov placed considerable emphasis upon the words "in normal circumstances" as they appear in the heading. No doubt, those words suggests that there are qualifications which apply to the tests in s 21 and indeed that is clear from the sections which follow it. However, none of the matters contained in Part 3 of the Family Assistance Act, being the part that deals with family assistance, has any application to Mr and Mrs Dranichnikov or the circumstances of their child. 33 The expression "Australian resident" is defined in s 3(1) of the Family Assistance Act by reference to the meaning it has in the Social Security Act 1991 (Cth) ("Social Security Act"). Section 7 of the Social Security Act is headed, "Australian residence definitions". The first of the definitions which is said to apply unless a contrary intention appears is a definition of "Australian resident". It is said to have the meaning given by subsection 2. That subsection provides as follows: "An Australian resident is a person who: (a) resides in Australia (b) is one of the following; (i) an Australian citizen (ii) the holder of a permanent visa; (iii) the holder of a special category visa who is likely to remain permanently in Australia (iv) the holder of special purpose visa who is likely to remain permanently in Australia." 34 It is common ground that neither Mr and Mrs Dranichnikov or, for that matter, their child, satisfied the definition of "Australian resident" in s 7(2). 35 It is submitted, however, by Mr and Mrs Dranichnikov that Mr Dranichnikov become an Australian resident by virtue of other definitions contained in s 7, for example subs 5, 6, 6AA, 6A which are definitions which refer to "qualifying Australian residence". In subs 6 of s 7 it is provided as follows: "A person has a qualifying residence exemption for a social security pension, a social security benefit (other than a special benefit), a non-benefit BP (partnered), family payment, a maternity allowance, a mobility allowance, a pensioner education supplement or a seniors health card if, and only if, the person: (a) resides in Australia; and (b) is either (i) a refugee or (ii) a former refugee." 36 While it is clear that the family tax benefit is within the meaning of "family assistance" in the Family Assistance Act, these definitions do not, as such, purport to alter the tests for residence of Australia but relate to qualifications for payment of various benefits which turn upon whether the applicant for the benefit has a stated number of years qualifying Australian residence. Reference may be made, for example, to s 43 of the Social Security Act relevant to the aged pension and s 94 in respect of the disability support pension. What, however, is significant for present purposes it that the definition has no relevance to the family tax payment with which the present application is concerned. 37 Mr and Mrs Dranichnikov refer in their submissions to the decision of the Full Court of this Court in Minister for Immigration and Multicultural and Indigenous Affairs v Al Masri (2003) 197 ALR 241and the judgment of Gleeson CJ in Plaintiff S157/2002 v Commonwealth of Australia (2003) 195 ALR 24at [30]. These cases decided relevantly that courts will not impute an intention on the part of a legislature to abrogate common law rights in the absence of clear words requiring this effect. It is submitted that the right to a family tax benefit is in essence a basic human right which has not been taken away. It is submitted that the language of entitlement is ambiguous and therefore Mr Dranichnikov is entitled to the benefit. With respect to the submission, entitlement to the benefit itself is not a basic human right. Nor is the qualification for benefit ambiguous as suggested. Unfortunately for Mr and Mrs Dranichnikov entitlement to the benefit depends, for them, upon their falling within the definition of "Australian resident" and they do not. 38 It was submitted further that the legislation and presumably Mr and Mrs Dranichnikov's entitlement to the benefit should be construed in accordance with Australia's international obligations. Reference was made to a number of international treaties to which Australia is a party, for example, the various human rights treaties or for that matter the international conventions relating to refugees, as requiring a favourable treatment of Mr and Mrs Dranichnikov and entitling them to receive the benefit. It is submitted also, that the respondents failed to act in accordance with decisions such as Al Masri and Plaintiff S157/2002 and not giving weight to the international treaties to which reference is made in the submissions. Apart from the problem that many of these treaties have not been adopted by Australia as part of its municipal law, the more basic problem is that entitlement to the family tax payment is a statutory entitlement expressed without ambiguity. The underlying policy is that the benefit is payable only to persons who are Australian citizens residing in Australia or to certain persons holding certain categories of visas which Mr and Mrs Dranichnikov do not hold. It follows that Mr Dranichnikov had no entitlement to be paid the family tax benefit that was in fact paid to him.

Bias 39 The notice of appeal refers to actual bias and not apparent or ostensible bias. 40 It is now well established that actual bias involves prejudgment of the case; approaching the case with a closed mind so as to be unable or unwilling to decide the case impartially: Sun Zhan Qui v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71at 127 per Burchett J. As French J said in Minister for Immigration and Multicultural Affairs v Jia (1998) 84 FCR 87at 104 in a passage approved in the joint judgment of Gleeson CJ and Gummow J on appeal (2001) 178 ALR 421 at 438 [72]: actual bias "must be a pre-existing state of mind which disables the decision-maker from undertaking or renders him unwilling to undertake any or any proper evaluation of the materials before him or her which are relevant to the decision to be made." There is a heavy onus to show a state of mind being pre-judgment that the person guilty of bias is "so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented." 41 The notice of appeal refers to some eleven matters by way of particulars said to demonstrate bias on the part of the learned Primary Judge. These range from an allegation that the Primary Judge had proceeded at the Directions Hearing on 2 October 2002 without proper notification of the appellants and in the absence of Mr Dranichnikov, a comment said to have been made by his Honour that he proposed "to get rid of it" (i.e. the case on 25 October 2002) in the context of refusing a further period of time between directions and hearing; to his Honour's involvement in earlier cases, not in any way concerned with credit; to his Honour refusing to stay proceedings when Mr and Mrs Dranichnikov had commenced proceedings in the original jurisdiction of the High Court seeking relief by way of constitutional writs and other matters, some of which, supposedly, were to be discovered in the transcript of the proceedings before his Honour. 42 The Court ordered the appellants to give particulars of any matters of bias to which they wished to refer in the transcript. This produced a submission which seemed to be based on apprehended bias, which referred to the "unreasonable proceedings", the failure of his Honour to give an adjournment on medical grounds without up-to-date evidence and a general ground, "by not affording to the appellants a fair proceedings permitted by the Judiciary Act; the Federal Court Act and Federal Court Rules". Under this latter heading, reference is made to a number of procedural matters, for example, the refusal to give leave for the issue of certain subpoenas, excusing the respondents for non compliance with a notice of discovery and refusing to permit copies of transcripts to be made. 43 It may be noted that the appellants do not rely upon matters such as the failure to give greater time between directions and hearing as a ground of appeal separate from bias. These procedural matters involving what went on during interlocutory proceedings are said to demonstrate in themselves "bias and oppressive conduct". 44 As already noted, the additional submissions move the ground of appeal from actual bias to ostensible bias. Clearly it will be difficult for a complainant to show from the conduct of the proceedings that there has been the necessary closed mind such as to constitute actual bias. Apprehended bias requires, on the other hand a lesser test, that being "whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question to be decided": Re Refugee Review Tribunal; Ex parte H (2001) 179 ALR 425at 434 and see generally Ebner v Official Trustee in Bankruptcy (2000) 176 ALR 644at 647 and the cases there discussed. 45 Opinions may differ whether more time should have been allowed to Mr and Mrs Dranichnikov between the directions hearing and the hearing of the merits. Opinions may differ as to whether more time might perhaps might have been allowed for responses from the Attorneys General to notices given by Mr and Mrs Dranichnikov under the Judiciary Act 1903 (Cth), although it must be said that no constitutional issue seems to be raised at all in the proceedings. 46 We have read through the transcript of the proceedings before the learned Primary Judge and note, as his Honour himself observed, that Mr and Mrs Dranichnikov repeatedly accused him of corruption, unfairness, rudeness and other matters in the conduct of the proceedings. The transcript, in fact, shows remarkable restraint on the part of the learned Primary Judge in all the circumstances and such comments as may have concerned Mr and Mrs Dranichnikov probably were made as expression of impatience at their behaviour, impatience which in the circumstances was quite understandable. What is, however, important is that nothing in what has been put by Mr and Mrs Dranichnikov as showing either actual bias or ostensible bias, comes close to demonstrating either. Some of the claims suggesting bias were indeed ludicrous, for example, the allegation that his Honour had, at each hearing delivered extemporary judgments, and "with many errors" which is suggested caused the appellants to seek a number of corrigenda. It is difficult to see how this demonstrates a closed mind, as is suggested. The allegation of either actual or apparent bias is simply not made out.

Waiver 47 Two sections in the Administration Act deal specifically with waiver of overpaid benefits: ss 97 and 1001. Section 97 is expressed in mandatory terms. It provides: "(1) The Secretary must waive the right to recover the proportion (theadministrative error proportion) of a debt that is attributable solely to an administrative error made by the Commonwealth if subsection (2) or (3) applies to that proportion of the debt. (2) The Secretary must waive the administrative error proportion of a debt if: (a) the debtor received in good faith the payment or payments that give rise to the administrative error proportion of the debt; and (b) the person would suffer severe financial hardship it were not waived. (3) …" 48 By contrast there is a discretion in the Secretary to waive recovery s 101: "…if the Secretary is satisfied that: (a) the debt did not result wholly or partly from the debtor or another person knowingly: (i) making a false statement or a false representation; or (j) failing or omitting to comply with a provision of the family assistance law; and (b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and (c) it is more appropriate to waive than to write off the debt or part of the debt." 49 It must be borne in mind that the proceedings before the learned Primary Judge were proceedings for judicial review. Thus the question whether the Secretary should have exercised the discretion under s 101 of the Administration Act did not involve the learned Primary Judge in deciding for himself whether that discretion should be exercised. It was necessary that there be some ground of review as set out in ss 5 or 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) or so far as the application was grounded in s 39B of the Judiciary Act 1903 (Cth) that there be some ground for the Court to intervene by way of prohibition or other writ referred to in that section. 50 The amended application for review sought relief on the basis that the decision to recover the overpaid debt or not to waive it was made in breach of natural justice, although the general grounds stated in the application referred to the decision makers, presumably in respect of each decision, having failed to take into account a relevant consideration or that the decision involved an error of law. 51 The question whether the rules of natural justice applied to the waiving of a debt arising from an overpaid amount and, if so, the content of those rules, is a matter to be determined by reference to the statutory scheme and all relevant circumstances of the case: Kioa v West (1985) 159 CLR 550 per Mason J at 584-585. Relevant to that question will be Part 5 of the Administration Act which provides not only for an internal review of a decision under the Family Assistance Law but as well for application to be made to the Social Securities Appeals Tribunal which, under s 110 of the Administration Act is required to pursue the objective of providing a mechanism of review that is "fair, just, economical, informal and quick". There is also an additional right for a review by the Administrative Appeals Tribunal after the Social Securities Appeals Tribunal has made a decision and on the application of a person affected by the decision. 52 The provisions of Part 5 not only provide a matter to be taken into account by this Court on an application for judicial review in the exercise of the Court's discretion to grant relief but also tend against the conclusion that before proceedings for recovery of overpaid amounts are taken or decisions are made relating to waiving the requirement or refusing to waive the requirement of overpayment, there is a necessity that a person affected be given a right to be heard. In the circumstances of this case we do not think that there was a requirement on the part of the Secretary to give to Mr Dranichnikov the opportunity to be heard before determining to seek to recover the overpaid amount. This is particularly so in the circumstances that the question whether there was an entitlement to the benefit and the circumstances in which the benefit had come to be paid had been the subject of considerable correspondence passing between Mr Dranichnikov or Mrs Dranichnikov on his behalf and Centrelink or offices of Centrelink. 53 In the written outline of submissions filed with the Court on the appeal, Mr and Mrs Dranichnikov submitted that the circumstances were such that Centrelink or the Secretary of Centrelink was required to waive the right to recover the overpayment under s 97. It was submitted that his Honour, or perhaps Centrelink, had failed to take into account the evidence of Mr and Mrs Dranichnikov that the payment had been received from the Australian Tax Office in good faith and on the advice of the tax agent who had submitted the taxation return and that Mr and Mrs Dranichnikov and their child would suffer severe financial hardship if there were not waiver. In submissions in reply it was said that even if the amount had not been properly paid to Mr Dranichnikov, Centrelink or perhaps the Australian Taxation Office had an obligation to check requirements for eligibility and that the Australian Tax Office had been notified that Mr Dranichnikov, while having applied for a protection visa class 866 had not yet received it because proceedings in respect of a protection visa had not finally been determined. 54 The correspondence which led to Centrelink seeking to recover the overpayment commenced, for present purposes, with a letter from Mr Salter dated 25 February 2002 which noted that Mr Dranichnikov had been paid more than he was entitled to by way of the family tax benefit. That letter is a form letter much of which can hardly be said to be relevant to the circumstances. It seems to go to matters of calculation rather than entitlement. It prompted a response from Mr Dranichnikov that he was entitled to the benefit because his income had been correctly calculated. This claim arose because the form letter seemed rather to deal with miscalculations of income. There is then a letter from Mr Salter dated 27 March 2002 which suggests that in the meantime Mr Dranichnikov had asked him to review his decision about the benefit being wrongly paid. Mr Salter states that the decision was correct and accordingly that his decision to raise a debt of $5,180.99 "must stand". The letter advises Mr Dranichnikov of his right to appeal or seek an internal review. 55 On 18 June 2002, Mr Dranichnikov wrote to Mr Salter. In response Mr Salter referred the file to another officer, presumably for an internal review. 56 In a letter dated 2 August 2002, Mr Dranichnikov asked for the debt to be waiver referring both to s 97 and to s 101. As to the latter matter, the application was based upon the fact that proceedings in respect of the protection visa were still not completed, although it was contended by Mr Dranichnikov that he was a refugee and was entitled therefore to a protection visa. Reference was also made to the various international treaties which it was said should be taken into account in determining to waive repayment of the debt. On 16 August 2002 Mrs Penman wrote to Mr Dranichnikov advising that the decision to recover the debt was correct and that the request to have that decision changed was unsuccessful. A decision statement accompanying that letter, stated that what was considered by the decision maker were the following matters: " · Your claim for Family Tax Benefit lodged on 7.3.01: · Copy of the letter sent to you on 8.3.01 stating that you could not be paid Family Tax Benefit because you were not a permanent resident of Australia; · Copy of the letter sent to you on 19.3.01 following reconsideration of this decision, and affirming that because you had a temporary visa, subclass 010, you could not be paid the Family Tax Benefit; · Copy of the letter sent to you by the Authorised Review Officer on 3.4.01, affirming the decision that you were not residentially qualified for the Family Tax Benefit; · Copy of the letter sent to you on 8.8.01 stating that the decision of the Authorised Review Officer could not be reviewed again, and informing you again of your rights to appeal to the SSAT; · Record that you were paid Family Tax Benefit for the amount of $5,180.99 on 23.10.01; · All the correspondence you have had with Centrelink about this matter; · The things you told me on the phone; · The thinks your tax agent told me on the phone, and the copies she faxed me of your Family Tax Benefit claim she lodged with the ATO on your behalf, and · Computer records maintained by Centrelink of your Family Tax Benefit claim." 57 The findings of fact and reasons set out dealt largely with the correct assertion that Mr Dranichnikov was not qualified to receive payment of the benefit. After dealing with those matters the writer referred to the following matters. " The debt arose due to your tax agent completing and lodging an application for Family Tax Benefit although you had been told several times you were not residentially qualified; Therefore the debt did not arise due to administrative error; Therefore it cannot be waived under section 97 of the FA Administration Act; The circumstances are not exceptional or unusual to make waiver under section 101 of the FA Administration Act appropriate." 58 Following that letter Centrelink proceeded to take steps to recover the overpayment by garnishing Mr Dranichnikov's wages. 59 Since no person was called to give evidence on behalf of the respondents, it must be taken that the matters taken into account by the Secretary or authorised person making the decision and the reasoning process involved are those set out in the decision statement and only those so set out. The conclusion made by the decision maker that the debt did not arise due to administrative error was clearly based essentially on two matters. The first was that Mr Dranichnikov was not entitled to the benefit. The second was that the debt had arisen due to the taxation agent completing and lodging and application for Family Tax Benefit, although Mr Dranichnikov had been told several times before that he was not qualified to receive the benefit because he was not a resident. 60 It is clear that the provision dealing with compulsory waiver requires that the overpayment arise solely by virtue of administrative error. What constitutes administrative error in the context of s 97 may be the subject of some debate. But with respect to the decision maker, it is hard to see how a decision could be made in the present case whether there had been administrative error merely because the application had been lodged by the tax agent and no entitlement to the benefit existed. 61 In written submissions filed at the request of the Court after the appeal had been heard, it was submitted on behalf of the respondents that payment of a benefit to which there was not entitlement could not involve administrative error. That indeed seems to have been the view of the decision maker. With respect it cannot be correct. Section 97 is predicated on there being money payable to the Commonwealth by way of a debt and presumably because there had been payment of a benefit or overpayment of a benefit to which a person was not entitled. The submission would bring about the result that s 97 was meaningless. 62 It is neither possible nor appropriate to attempt a meaning of the words "administrative error" which would accurately cover every case for much will turn upon the circumstances. Essentially, however, the concept is one where the error or mistake arises as a result of the procedure that has been adopted. An obvious example would be payment of a benefit where the decimal point was wrongly located. An error made by Centrelink or the Australian Taxation Office acting on its behalf in its administration of the law will generally be an administrative error. On the other hand, a decision made, for example, on a question of legal entitlement to a benefit while no doubt made in the course of administration of the law would not be an administrative error. To the extent that it is submitted on behalf of Centrelink that an error in the present circumstances could not be an administrative error, I am of view that that submission is wrong. 63 While the question whether there was administrative error is one for the Secretary, it is obvious from the Decision Statement that the decision maker made no attempt at all to determine what happened in the Australian Taxation Office which brought about the result that the benefit came to be paid. No doubt this was because of the view that appears to be taken by the decision maker that a benefit for which a person was not qualified for payment could not be a benefit paid by way of administrative error. It is submitted on behalf of Centrelink that what led to the payment was the fact that the information provided through the tax agent did not disclose that Mr Dranichnikov was not an Australian resident within the meaning of the Family Assistance Act. That, however, is not what the decision maker herself determined. It is an attempt on the part of counsel to suggest what might have been a ground for the decision. In fact, any person looking at the application for family benefit would know immediately that there was information missing from it. It was not as if there was a false statement made in the return that Mr Dranichnikov was for relevant purposes an Australian resident. If anything, the way in which the claim was presented to the Australian Taxation Office is consistent with the conclusion that the source of the error in overpaying Mr Dranichnikov was administrative rather than determinative. 64 Counsel for Centrelink submitted that it was arguable that as the claim for benefit was to be taken as being not effective by virtue of s 10(1)(a) of the Administration Act and therefore not made, this would support the view that there was no administrative error. With respect to the submission it cannot be accepted. A claim was made. It may be that for some purposes it should be taken as not having been made. But it was made in fact. It was dealt with and payment was made in respect of it. The issue is rather as to the nature of the error made in the decision taken to pay the benefit rather than the question of entitlement to the benefit. Without investigating how that error came about (and it is clear from the documents that such an investigation was not undertaken) the decision miscarried. 65 The decision maker clearly also determined that the circumstances were such that they were not exceptional or unusual so that waiver could not be made as a matter of discretion under s 101. That equates "special circumstances", as that expression is used in the Administration Act with either exceptional circumstances or unusual circumstances. The origin of the test apparently adopted by the Secretary appears to be the decision of the first instance Judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225. That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154. The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words "unusual, uncommon or exceptional" come was not actually affirmed by the Full Court. 66 To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as "special reasons" has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss. 67 It is possible to read the decision statement as suggesting that the present case was one incapable of falling within the words "special circumstances". If that is what was held, it would involve legal error. However, the real problem with the exercise of discretion under s 101 as with the mandatory provisions of s 97, is that the decision maker appears not to have considered at all what the circumstances were which gave rise to the overpayment. Whether those circumstances were or were not special will obviously be a matter for the decision maker when the factual circumstances have been ascertained. 68 In my view the appeal should on this point be allowed and the matter remitted to the Secretary of Centrelink to determine whether the overpaid amount, otherwise a debt, was required to be waived, having regard to s 97 or whether the discretion under s 101 should be exercised. 69 The appellants were not represented. They have been only partly successful. In the circumstances there should be no order as to the costs of the appeal or at first instance. The orders of the Primary Judge made on 2 November 2002 should be set aside and in lieu therefore it should be ordered: 1. Application allowed in part. 2. Matter remitted to the Secretary of the Department of Family and Community Services to consider again in accordance with law whether the overpayment of the family tax benefit in the sum of $5,180.99 was required to be or should be waived under s 97 or s 101 of the Administration Act respectively. 3. There be no order as to the costs of the application. 4. Application otherwise dismissed. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hill.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT KIEFEL J: 70 I have had the advantage of reading the judgment of Hill J in draft form. I agree with the orders proposed by his Honour for the reasons his Honour gives. I also agree with the observations made by Hely J. I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT HELY J: 71 I have read the judgment of Hill J in draft form. I agree with the decision of Hill J. However, I wish to add the following observations. 72 It is clear that an amount has been paid to Mr Dranichnikov by way of Family Tax Benefit to which he was not entitled. By force of s 71 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)("the Act") the amount so paid became a debt due to the Commonwealth. However, subject to s 97(2) of the Act, the Secretary was obliged to waive the right to recover the debt if it was "attributable solely to an administrative error made by the Commonwealth": s 97(1). 73 Section 97(1) invites and requires a factual enquiry as to how it came to pass that a sum of money which was not payable to Mr Dranichnikov came to be paid to him. The mere fact that an entitlement to a Family Tax Benefit was claimed by Mr Dranichnikov in, or in association with, the lodgement of his tax return does not necessarily lead to the conclusion that the debt did not arise due to an administrative error. Whether the debt was due to an administrative error depends upon the circumstances, including the information supplied in association with the claim, and whether any administrative procedures which were in place in relation to the processing of such claims were followed. 74 The four pages taken from the 2001 tax return for Mr Dranichnikov which were in evidence before the primary judge do not contain any information as to whether or not Mr Dranichnikov was an Australian resident for the purposes of the A New Tax System (Family Assistance) Act 1999 (Cth) or as to whether he was entitled to the Family Tax Benefit. These pages of the form do not contain any provision for the inclusion of information in relation to those matters. 75 The primary judge held that the overpayment was as a result of a representation made by the tax agent on behalf of Mr Dranichnikov that he was entitled to the benefit, and in the context of "self-assessment" it cannot be said that there was any error by the Commonwealth which led to the overpayment. 76 The problem with this analysis is that the pages of the form do not include any express representation by the tax agent that Mr Dranichnikov was entitled to the Family Tax Benefit, nor do the reasons of the decision-maker refer to any such representations having been made. In the view of the decision-maker, the fact that a claim for the benefit was made is of itself sufficient to negative administrative error. That cannot be right, if only because acceptance of that claim might be the result of an administrative error. 77 It might be otherwise if the Commonwealth accepted at face value some assertion made on behalf of Mr Dranichnikov as to his status as an Australian resident or as to his entitlement to the Family Tax Benefit. At Vol 1 p 171 of the appeal papers, a letter from Centrelink to Mr Dranichnikov of 8 January 2002 asserts: "If you had answered NO to the question on page 3 of the claim form, a lump sum would not have been paid to you by the Australian Tax Office." The problem is that the decision-maker's reasons of 16 August 2002 do not refer to this matter, nor can one tell from the appeal papers what "the question on page 3 of the claim form" was. 78 Had the matter been properly investigated by the decision-maker, it is possible that the decision-maker could have concluded that the debt did not arise solely as a result of an administrative error. But it is apparent from the reasons for decision that the decision-maker made no enquiry into whether this was so or not. Rather the decision-maker proceeded on the impermissible basis that if a claim for a benefit was made to which the claimant was not entitled payment of the claim cannot have been an "administrative error". 79 The exercise of the discretion under s 101 of the Act also miscarried, as the existence or otherwise of "special circumstances" which might make waiver desirable necessarily requires an understanding of the circumstances which gave rise to the overpayment. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely.

Associate: Dated: 19 June 2003 The appellants appeared in person

Solicitor for the Respondents: Australian Government Solicitor

Statutes A New Tax System (Family Assistance) Act 1999(Cth)s 21

Social Security Act 1947(Cth)

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