Frugtniet v Secretary, Department of Social Services

1. The appeal be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

PAGONE J: 1 This is an appeal from the decision of the Administrative Appeals Tribunal refusing an application under s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") for an extension of time to lodge an application for review of a decision made on 15 February 2016 by the Social Services and Child Support Division of the Tribunal. Mr Frugtniet had been found by the Tribunal in its decision of 15 February 2016 to be a member of a couple for the purposes of the Social Security Act 1991 (Cth) and liable to repay to the Commonwealth excess payments which had been made to him. 2 Mr Frugtniet had previously been granted single parenting payments with effect from April 2008 on the basis that he was separated from his former partner, Ms Callychurn. On 24 August 2012 parenting payments to him were cancelled as Mr Frugtniet's dependent daughter turned 8 years of age, and he was transferred to Newstart Allowance at the single rate. On 12 December 2012 Mr Frugtniet advised Centrelink that his son, born on 8 May 2011, had entered Mr Frugtniet's care and in consequence Mr Frugtniet was re-granted parenting payments with effect from 7 December 2012. 3 Mr Frugtniet's entitlements were reviewed during 2013 and 2014, and in November 2014 a decision was made by Centrelink that Mr Frugtniet had wrongly received $52,159.20 in parenting payments in the period 9 April 2008 to 20 September 2011 due to undisclosed income. Mr Frugtniet successfully sought review of that decision but in February 2015 Centrelink made a determination that Mr Frugtniet was a member of a couple with Ms Callychurn for the purposes of the Social Security Act 1991 (Cth) and suspended further payments to him. He was subsequently notified by letter dated 19 May 2015 that he had incurred a recoverable debt of $65,557.46 in the period between 4 May 2011 and 17 February 2015. Mr Frugtniet unsuccessfully sought to review those decisions. The matter was referred to authorised review officers of Centrelink, and on 1 June 2015 an authorised review officer set aside the decision to suspend Mr Frugtniet's parenting payment but substituted a new decision that the payment be cancelled. On 30 September 2015 another authorised review officer varied the decision to raise and recover a debt by increasing the debt amount to $66,349.27 in respect of the period 8 May 2011 to 17 February 2015. 4 On 23 October 2015 and 28 October 2015 Mr Frugtniet applied to the Tribunal for an independent review of the decisions which had been made by the review officers on 1 June 2015 and 30 September 2015. On 12 February 2016 the Tribunal heard Mr Frugtniet's applications and on 15 February 2016 decided the applications by setting them aside but remitting them to the Chief Executive of Centrelink for reconsideration and recalculation of the debt on the basis that Mr Frugtniet was a member of a couple in the period 8 May 2011 to 17 February 2015. That decision was posted to Mr Frugtniet on 24 February 2016 although Mr Frugtniet said that he did not receive the letter until early March 2016 but nothing turns upon that in this appeal. What is important is that the 15 February 2016 decision required a recalculation of Mr Frugtniet's debt on the basis that he was a member of a couple. 5 Mr Frugtniet could have, but did not, seek to review the decision of the Tribunal that Mr Frugtniet was a member of a couple. Mr Frugtniet submitted, however, that he had extensive contact with the Department about the recalculation of the debt after the decision of 15 February 2016 which had found that he was a member of a couple with Ms Callychurn during the period under review. He did not, however, apply for review of that decision until 7 March 2017 when he applied to the Tribunal for review of the decision and applied for an extension of time within which to make the application for review. His application for an extension of time was heard by the Tribunal on 19 April 2017 but was rejected on that day. Mr Frugtniet then sought written reasons for the decision which had been given orally on 19 April 2017 and written reasons were given to him on 1 May 2017. It is from that decision, and on those reasons, that Mr Frugtniet has appealed to this Court. 6 The appeal was brought under s 44(1) of the AAT Act which requires there to be, and limits the appeal to, questions of law: see Brown v Repatriation Commission (1985) 7 FCR 302 at 304; TNT Skypack International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 82 ALR 175 at 178; Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315 at [90]. Whether an appeal raises a question of law is to be approached as a matter of substance rather than of form, and in cases of doubt, that may require the Court to consider the notice of appeal, the alleged question or questions of law, the grounds raised, the statutory context, and the Tribunal's reasons for its decision: see Haritos at [62(6)] and [94]. The notice of appeal in this proceeding was prepared by a litigant in person and not by a qualified legal practitioner, although Mr Frugtniet has had some personal experience in litigation. 7 The questions of law identified by Mr Frugtniet were as follows: (a) Whether the Tribunal erred in applying the correct legal test and misapplied the legal principles which govern the proper statutory construction to section 29 (7) -(8) of the Administrative Appeals Tribunal Act 1975, without adequately disclosing its reasoning process in relation to the applicant's prospects relevant to the merits of an arguable case in relation to the substantive matter. (b) Whether the Tribunal erred by its failure to consider relevant material matters into consideration being jurisdictional facts and not having regard to all the circumstances that the Applicant had not rested on his rights. (c) Whether the Tribunal erred by its failure to consider the prejudice to the Applicant given that the decision made by the Tribunal dated 15 February 2016, involved a partnering decision that would give rise to a debt and you could not have one without the other which has not been resolved to date, is inextricably linked and would cause the Applicant to be bankrupted. The grounds relied upon by Mr Frugtniet in seeking relief on these questions of law were identified by Mr Frugtniet as follows: 1. The Tribunal erred in its application of the statutory scheme in not applying the correct legal test and misapplied the legal principles which govern the proper statutory construction to s. 29(7) -(8) as it was not reasonable in all the circumstances to do so, as it did not consider the merits of the Applicant's case before reaching the conclusion it did. 2. The Tribunal erred by its failure to apply the requisite legal principles that governed the exercise of the discretion by its failure to consider the relevant evidence which the Tribunal has not enumerated in its reasoning which would have evidenced that the Applicant had not rested on his rights. 3. The Tribunal erred in the exercise of the discretion pursuant to s. 29(7) - (8) of the AAT Act that it was not reasonable in all the circumstances by its failure to consider the prejudice to the Applicant. The Secretary submitted that there was no error of law made by the Tribunal in refusing to grant an extension of time. 8 Mr Frugtniet's first ground of appeal was that the Tribunal had not applied the correct legal test by not considering the merits of his case before reaching its conclusion. The Secretary's submissions identified two main elements of Mr Frugtniet's first ground of appeal, namely, (a) that the Tribunal had required an acceptable explanation for the delay as a precondition for the grant of an extension of time and therefore had applied the wrong legal test, and (b) that the Tribunal had failed to consider the merits of Mr Frugtniet's substantive application. In oral argument, however, a third basis emerged which Mr Frugtniet submitted was also to be seen from the first question in his amended notice of appeal, namely, that the Tribunal's reasons were insufficient. 9 Mr Frugtniet's application to the Tribunal for an extension of time was made on 7 March 2017. The Secretary had opposed that application and had filed written submissions dated 21 March 2017 in opposition. On 9 April 2017 Mr Frugtniet filed written submissions with an annexure in support of his application for an extension of time and an oral hearing was held by Member Burke on the following day. Mr Frugtniet claimed at the hearing before Member Burke, and in his written submissions, that the reason he had not sought to review the decision within the time prescribed was that he had been in extensive communication with Centrelink before the expiry of the period and had been told "to wait as the decision had not been implemented, and if not satisfied could then appeal the decision, rather than fragment the process". The evidence Mr Frugtniet relied upon was his own statement and some documents which the Tribunal did not consider sufficient to establish Mr Frugtniet's claim, but Member Burke expressed her concern during the hearing on 10 April about whether Mr Frugtniet's factual claims of not having appealed because of his having been told to wait had foundation and informed Mr Frugtniet during the course of the hearing on 10 April 2017 that she would adjourn the hearing to enable those representing the Secretary to explore what Centrelink had been saying to him over the preceding 12 month period "to be scrupulously fair" in determining how to proceed with the matter. The learned member went on specifically to inform Mr Frugtniet that she wanted to adjourn the proceeding because she wanted the Secretary's representative to explore what Mr Frugtniet had been told. 10 The Tribunal resumed hearing the application for an extension of time on 19 April 2017. Mr Frugtniet filed additional written submissions dated 18 April 2017 although they had not been seen by the Tribunal member until shortly before resumption of the hearing on the 19th. Both Mr Frugtniet and the representative for the Secretary were heard and the Secretary's case continued to be that the length of delay was inordinate and had not been explained but there was produced no further material to support Mr Frugtniet's claim of having been told not to wait for the recalculation of the debt before seeking to appeal the decision which had been made on the basis that Mr Frugtniet and Ms Callychurn were a couple for the purposes of the Social Security Act 1991 (Cth). 11 The Tribunal, as mentioned above, gave oral reasons when deciding against Mr Frugtniet's application for an extension of time. Mr Frugtniet then made a formal request for the Tribunal to give written reasons. The Tribunal member informed Mr Frugtniet that she would give written reasons but explained that they would be no longer than the oral reasons she had given to the effect that it was not reasonable to grant the extension of time he had sought. Section 43(2B) of the AAT Act required the Tribunal when giving written reasons to include "its findings on material questions of fact and a reference to the evidence or other material on which those findings are based". The Tribunal's written reasons were provided on 1 May 2017 in respect of the decision which had made on 19 April 2017 rejecting Mr Frugtniet's application for an extension of time. 12 The decision of the Tribunal not to extend the time within which Mr Frugtniet could make an application for review was made under s 29(7) and (8) of the AAT Act which conferred upon the Tribunal a discretion about whether to extend the time in the following terms: (7) The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so. (8) The time for making an application to the Tribunal for a review of a decision may be extended under subsection (7) although that time has expired. The Tribunal member concluded that she was not satisfied that it would be reasonable in all the circumstances to grant the extension which had been sought. The Tribunal was not obliged to extend the time within which Mr Frugtniet could make his application for review of a decision which had been made on 15 February 2016. The Tribunal had a discretion to extend the time for Mr Frugtniet to make the application and Mr Frugtniet must show in his appeal to this Court that the Tribunal erred in exercising its discretion. In House v R (1936) 55 CLR 499 the High Court said at 504-505: The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges opposing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matter to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law proposes in the court of first instance. The decision of the Tribunal was not, of course, that of a primary judge but the observations in House v R apply to an appeal from a decision by the Tribunal exercising a discretion. 13 Mr Frugtniet's claim to the Tribunal had been that he had not exercised his right to seek review of the Tribunal's decision because of what he had been told by the defendant. The Tribunal was not obliged to accept the claim made by Mr Frugtniet that the reason he had not sought review of the decision of 15 February 2016 was that he had been "told to wait" and that he could subsequently appeal if not satisfied once the decision which had been made came to be implemented. Mr Frugtniet's claim was plausible of having been told to await the recalculation of the debt before deciding whether to appeal the foundation of the decision but the Tribunal member did not accept, and was not bound to accept, the claims which Mr Frugtniet had made. The explanation he had given for his delay in making the application for review was that he had been told to wait until the decision was implemented and the Tribunal member plainly engaged with, and rejected, the evidentiary foundation upon which that submission was made. At [6]-[8] the Tribunal said: 6. The Applicant contended that he was waiting for Centrelink to action the direction of the Social Security and Child Support Division of the Tribunal (AAT1) of 15 February 2015. The substance of the decision did not change when it was actioned. The Applicant was aware of what that decision was. It was an assessment of whether he was a member of a couple. In the absence of an explanation, it is reasonable to conclude that by waiting for Centrelink to recalculate the debt he tacitly accepted the decision. 7. The Applicant further argued that if he was to lodge an application in respect of the 15 February 2015 decision, it may leave him in a situation where he had two applications before the Tribunal. He argued that he had contacted the Respondent about an appeal and been told to wait until the decision was implemented, and that he was only relying on such advice when he made his decision to wait. 8. I was not persuaded by the Applicant's claims that he had contacted the Department of Human Services and made the enquiries he purports to have made. The only evidence the Applicant produced to support these claims was correspondence between the Applicant and the Commonwealth Ombudsman, and a letter from the Department of Human Services dated 24 February 2017 which related an assessment of an unspecified benefit. These were provided to the Tribunal and the Respondent after close of business the day before the interlocutory hearing, after it had already been adjourned to accommodate late submissions by the Applicant on the first occasion. These documents only establish that the Applicant complained to the Ombudsman and that at a point in time, the Department was making an assessment of a benefit he was receiving. They do not prove any history of contact with the department about possible appeals. In these passages the Tribunal complied with its obligation under s 43(2B) of the AAT Act of stating its findings on material questions of fact with a reference to the evidence and other material upon which the Tribunal's findings were based. 14 The Tribunal was guided in the exercise of the discretion by the often cited passage in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 and the words of s 29(7). The latter required that the Tribunal be satisfied that "it is reasonable in all the circumstances" to extend the time within which a person may make an application. There is a wide discretion granted by s 29(7) of the AAT Act but guidance in the exercise of that discretion may be gained from the observations made by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen at 348-9 where his Honour said: 1. Although the section does not, in terms, place any onus of proof upon an applicant for extension an application has to be made. Special circumstances need not be shown but the court will not grant the application unless positively satisfied that it is proper so to do. The "prescribed period" of twenty-eight days is not to be ignored (Ralkon Agricultural Co. Pty Ltd v. Aboriginal Development Commission (1982) 43 A.L.R. 535 at 550). Indeed, it is the prima facie rule that proceedings commenced outside that period will not be entertained (Lucie v. Nolan (1982) 45 A.L.R. 411 at 416). It is a pre-condition to the exercise of discretion in his favour that the applicant for extension show an "acceptable explanation of the delay" and that it is "fair and equitable in the circumstances" to extend time (Duff at 485; Chapman v. Reilly unreported (Federal Court of Australia, Neaves J., 9 December 1983) at 7). 2. Action taken by the applicant, other than by making an application for review under the Act, is relevant to the consideration of the question whether an acceptable explanation for the delay has been furnished. A distinction is to be made between the case of a person who, by non-curial means, has continued to make the decision-maker aware that he contests the finality of the decision (who has not "rested on his rights": per Fisher J in Doyle v Chief of Staff (1982) 42 A.L.R. 283 at 287) and a case where the decision-maker was allowed to believe that the matter was finally concluded. Compare Doyle, Chapman, Ralkon and Douglas v. Allen (1984) I F.C.R. 287 with Lucic at 414-415 and Hickey v. Australian Telecommunications Commission (1983) 48 A.L.R. 517 at 519. The reasons for this distinction are not only the "need for finality in disputes" (see Lucic at 410) but also the "fading from memory" problem referred to in Wedesweiller v. Cole (1983) 47 A.L.R. 528. 3. Any prejudice to the respondent including any prejudice in defending the proceedings occasioned by the delay is a material factor militating against the grant of an extension: see Doyle at 287, Duffat 484-485, Hickey at 525-527 and Wedesweiller at 533-534. 4. However, the mere absence of prejudice is not enough to justify the grant of an extension: Douglas, Lucic at 416, Hickey at 523. In this context, public considerations often intrude (Lucic, Hickey). A delay which may result, if the application is successful, in the unsettling of other people (Ralkon at 550, Becerra at 12-13) or of established practices (Douglas) is likely to prove fatal to the application. 5. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted: Lucic at 417, Chapman at 6. 6. Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the court's discretion: Wedesweiller at 534-535. In considering the authorities it is, I believe, important to bear in mind the point made by Sheppard J. in Wedesweiller at 531, relating to the diversity of decisions to which review may be sought under the Act: " ... there will be some cases which may be decided upon considerations which affect only the immediate parties. It will be appropriate to consider whether the delay which has taken place has been satisfactorily explained, the prejudice which may be caused to an applicant by the refusal of an application, the prejudice which may be suffered by the Government or a particular department if the application is granted and, generally, what the justice of the case requires. In other cases wider considerations will be involved." These principles, as his Honour observed at 348, were "to guide, not in any exhaustive manner, the exercise" of the discretion and were not to be applied as if imposing strict rules or preconditions. Indeed, in Comcare v A'hern (1993) 119 ALR 85 the Full Court observed that an acceptable explanation for delay was not a precondition or prerequisite to the grant of an extension of time, although it was a factor that may be relevant and may warrant a favourable exercise of the discretion in an appropriate case. 15 The reasons given by the Tribunal were in part expressed in a way that might suggest the elevation of a requirement to provide an explanation for the delay as an impermissible precondition or prerequisite to the grant of an extension of time, but what the Tribunal said in that regard must be read in context. The Tribunal did not make a finding of inadequacy of an explanation (or even a finding of no explanation) as the basis for determining the application for an extension of time against Mr Frugtniet. Mr Frugtniet had provided an explanation and had made his explanation the basis for his application for an extension of time but the Tribunal was not persuaded by what he had said. The adjournment had not resulted in confirmation of what he had claimed and no further material was produced to support what he had said. The Secretary's submissions to the Tribunal, both written and oral, continued to rely upon the absence of merits in Mr Frugtniet's case and that the Secretary would suffer prejudice if the application were granted. The Tribunal took into account both submissions and in relation to the merits of Mr Frugtniet's case concluded that nothing in the application before the Tribunal indicated sufficient prospects of success which outweighed the significant, unacceptably explained, delay and the consequential prejudice suffered by the respondent and the public if the extension were to be granted. 16 The decision was made by the Tribunal on 19 April 2017 following a hearing at which the Secretary's submissions about lack of merit and prejudice were made. The Tribunal was not obliged to embark on a trial of the merits when evaluating that as a factor in deciding whether to grant an extension of time: see Brown v Federal Commissioner of Taxation (1999) 42 ATR 118 at [24] and [25]. The subsequent reasons were brief but brevity is not an error (see NAXT v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 279 at [15]) and the Tribunal had taken into account the submissions which had been made. The Tribunal did not treat the need for an acceptable explanation for the delay as a precondition for the granting of an extension of time but took into account the absence of an acceptable explanation in the context of other factors which included the Tribunal's finding that Mr Frugtniet was aware, as he conceded at the hearing of the appeal, of a time limit of 28 days within which to make an application, that he had elected to wait for a recalculation of amounts following the decision of 15 February 2015, the absence of sufficient prospects of success outweighing an unexplained delay, and the consequential prejudice in the grant of an extension. Accordingly, there is no error in the test applied by the Tribunal. The Tribunal's reasons were not insufficient and it had not required an explanation for the delay as a precondition for the grant of an extension. 17 The second ground of appeal was that the Tribunal failed to consider the evidence which would have shown that he had not rested on his rights. However at [6]-[8] of the Tribunal's reasons (quoted above), the Tribunal considered, but rejected, Mr Frugtniet's claims of having contacted Centrelink and of having been told by Centrelink that there was no need to appeal until after the implementation of the decision which had been made on 15 February 2016. The decision made on 15 February 2016 required a recalculation upon a finding that Mr Frugtniet was a member of couple. The Tribunal noted at [8] that the evidence Mr Frugtniet had produced to support his claims of having been told that he could wait was correspondence he had had with Commonwealth Ombudsman, and a letter from the Department of Human Services dated 24 February 2017, relating to an assessment of an unspecified benefit. Those documents were found by the Tribunal to establish only that Mr Frugtniet had complained to the Ombudsman and that at a point in time the Department had been making an assessment of a benefit he was receiving, but that they did not prove a history of contact with the Department about possible appeals. 18 The third ground relied upon by Mr Frugtniet was a failure to have considered prejudice to him and that the Secretary had failed to adduce evidence of prejudice to the Secretary by reason of granting an extension of time after a lengthy period of delay. In that regard Mr Frugtniet relied upon authorities indicating that a party opposing an extension on the grounds of prejudice should adduce evidence which shows the nature and extent of that prejudice: see Windschuttle v Deputy Commissioner of Taxation (1993) 46 FCR 235, 249-250; see also Brown v Federal Commissioner of Taxation at [32], [51]-[54]. In this case, however, the relevant prejudice to the respondent and to the public was the inherent impact of the passage of time. That was not prejudice requiring evidence beyond the inferences flowing from the passage of time and the common knowledge that memory may fade with time and that making inquiries to test facts which are asserted may become increasingly difficult over time and to evaluate reliably. The prejudice to the Secretary may, on one view, not have been great but it was a factor able to be relied upon by the Tribunal as it did. 19 Accordingly, the appeal will be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Pagone.