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[2000] FCA 1484
Federal Court of Australia
2000-10-20
Cooper J
Original judgment source is linked above.
background 1 This is an appeal heard in the original jurisdiction of the Court from the Administrative Appeals Tribunal ("the AAT"). The appeal is upon questions of law pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). 2 The appellant, Bogica Jazazievska, was referred for legal assistance by the Court in accordance with O 80 of the Federal Court Rules. On the hearing of the appeal, the appellant refused to allow counsel and his instructing solicitor to act further for her in the prosecution of the appeal. In those circumstances, the legal practitioners were given leave to cease to provide legal representation to the appellant and she conducted her appeal in person.
facts 3 On 13 October 1998, Centrelink raised three separate debts against the appellant in respect of the payments to her of benefits under the Act. The decision to raise and recover the debts related to : (a) an overpayment of $1,124.85 in additional family payments for the period 5 January 1995 to 17 August 1995; (b) an overpayment of $2,065.60 in basic family payment made on 27 March 1996 which duplicated basic family payments already paid during the period 3 April 1994 to 21 December 1995; (c) an overpayment of $2,039.90 in family payments for the period 17 July 1997 to 18 December 1997. 4 The Centrelink decision was affirmed by the Social Security Appeals Tribunal ("the SSAT") on 8 March 1999. The appellant sought a further review by the AAT. The AAT varied the decision of the SSAT by determining that the right to recover the overpayment of $2,039.90 in family payments for the period 17 July 1997 to 18 December 1997 be waived. Otherwise, the AAT affirmed the decision of the SSAT in respect of the other two overpayments. 5 The appellant appealed to this Court from the refusal of the AAT to determine to waive the right of the respondent to recover the other debts.
the proceedings before the aat 6 The AAT in respect of the additional family payment of $1,124.85 for the period 5 January 1995 to 17 August 1995, made the following findings. "12. On careful consideration of the evidence before the Tribunal today and all other material available to the Tribunal, the Tribunal affirms the following findings of fact made by the SSAT : · In late 1994 Mrs Jazazievska provided an estimate of her 1994/95 taxable income at $23,544. · Mrs Jazazievska was paid additional family payment in the debt period on the basis of this estimate. · Mrs Jazazievska's actual combined taxable income for 1994/95 was $35,784. · Mrs Jazazievska received notices dated 20 January 1995, 28 April 1995 and 2 June 1995 requiring her to notify the Department if her combined taxable income was likely to be more than $27,905. 13. The Tribunal finds that this overpayment cannot be waived for administrative error because the error has not been solely caused by Centrelink. Mrs Jazazievska has contributed to the error which has led to the overpayment. I accept that Mrs Jazazievska had an honestly-held belief that she was not obliged to notify the Department of these changes. However, the social security legislation makes this obligation quite clear for social security recipients. 14. The Tribunal finds that this overpayment cannot be waived for 'special circumstances' because there is no evidence to suggest that there are 'circumstances' associated with this overpayment which could be described as 'uncommon', 'unusual' or 'exceptional' and so come within the legal meaning of 'special circumstances': Re Beadle and Director-General of Social Security (1985) 6 ALD 1. 15. Redundancy payments are a common feature of employment in Australia today and can, and do, create significant problems for social security recipients. Mrs Jazazievska is not alone in this regard as there are a great number of cases decided by this Tribunal which consistently find that redundancy packages form part of taxable income. In her circumstances, the Tribunal agrees with the SSAT that it would not have been unreasonable for Mrs Jazazievska to raise a query with Centrelink as to the effects of her redundancy package on her social security entitlements. However, she did not do so. Her evidence before the Tribunal today was that she saw no reason to query it with Centrelink and so the question was never raised. As a consequence, Mrs Jazazievska has contributed to the administrative error which led to the overpayment." 7 The AAT, in respect of the basic family payment of $2,065.60 paid on 27 March 1996, made the following findings : "16. On careful consideration of all the oral evidence and information before the Tribunal, the Tribunal agrees with the following findings of fact made by the SSAT : · On 27 March 1996, Mrs Jazazievska's account was credited with a payment of $2,650.60 [sic] in error by Centrelink. · The payment represented the amount of basic family payments Mrs Jazazievska received between 3 April 1994 and 21 December 1995. · No letter of explanation regard the payment was issued. · Mrs Jazazievska queried the payment with her bank but not Centrelink. 17. The Tribunal concludes that the amount in question was a duplicate amount, not arrears, and that it was credited to her account due solely to an error on the part of Centrelink. 18. The Tribunal concludes that the duplicate payment cannot be waived for administrative error because it was not received in good faith in terms of what 'good faith' means according to law - not the perception that Mrs Jazazievska provided in her oral evidence. 19. The Tribunal emphasises that such a finding in no way adversely reflects Mrs Jazazievska's honesty - or that she acted in defiance of the law. The Tribunal finds her to be an honest, truthful witness in her account given to the Tribunal. 20. However, 'good faith', according to the law in Secretary, Department of Education, Employment, Training and Youth Affairs and Prince (NG 338 of 1997, delivered 21 November 1997) means (per Finn J): 'It's concern is with the state of mind concerning the receipt: if that person knows or has reason to know they are not entitled to the money.' 21. In Mrs Jazazievska's case, the Tribunal concludes that the receipt of a large sum of $2,650.60 [sic], without any explanation, would justify some query, on her part, to Centrelink. However, this was not the case. A query was raised by Mrs Jazazievska, but with the Bank only. Any uncertainty Mrs Jazazievska had on this payment for social security purposes could only have been answered by Centrelink. As a social security recipient, such a query, in the Tribunal's view, would not have been unreasonable for her to make. 22. The Tribunal further finds that there are no circumstances relating to this debt which could be described as 'special circumstances' to justify waiver of the duplicate overpayments".
the issues on appeal 8 The appellant by her amended notice of appeal pleaded the following questions of law as arising on the appeal: "2. THE QUESTIONS OF LAW raised on the appeal are : (A) incorrect application in law in Section 1237A(1) of the Social Security Act, 1991 as there was a failure in law to take account of all relevant information indicating the alleged overpayments were solely the result of admin [sic] error and the applicant had acted in good faith within the meaning of the DEETYA -v- PRINCE. (B) an error of law in failing to apply Section 1237A(2) of the Social Security Act 1991 and by considering the receipt of a redundancy package as income rather than property, and further the value of which was underestimated in good faith in circumstances where the value of the value of the [sic] property was not easily estimated." 9 The grounds pleaded were : "GROUNDS: (a) failure of decision to take to [sic] into account relevant facts; and (b) failure to look at all the facts mis-application of Section 1237A(1) of the Social Security Act, 1991 to the facts; and (c) failure to apply Section 1237A(2) of the Social Security Act, 1991."
the relevant legislation 10 The following sections of the Social Security Act 1991 (Cth) ("the Act") are relevant to the issues raised on this appeal; ss 860, 885, 891, 1223(3) and 1237A(1), (2) and (3). 11 Sections 860, 885 and 891 as at 1 January 1996 provided : "860. If the rate of the family payment payable to a person in a calendar year has been worked out in accordance with the Family Payment Rate Calculator in section 1069, the rate of family payment payable to the person only has to be worked out again during that calendar year if : (a) the person notifies the Department or an officer that a notifiable event has occurred in relation to the person; or (b) a notifiable event has occurred in relation to the person and the person fails to notify the Department that it has occurred; or (c) additional family payment becomes payable to the person during that calendar year; or (ca) family payment advance is or is not payable for a particular period; or (d) the person revises an estimate of his or her taxable income; or (e) the person has underestimated his or her taxable income; or (f) the Commissioner of Taxation changes an assessment of the person's taxable income. ..... 885. If: (a) in working out the rate of family payment payable to a person, regard is had to the person's taxable income for a tax year; and (b) that taxable income is an amount estimated by the person; and (c) the Commissioner of Taxation subsequently makes an assessment of that taxable income; and (d) the estimated amount is less than 75% of the amount assessed by the Commissioner; the person's rate of family payment is to be recalculated on the basis of that taxable income as assessed by the Commissioner. ..... 891. If: (a) the Secretary makes a determination of a person's rate of family payment; and (b) in making the determination , the Secretary had regard to: (i) the person's taxable income for a tax year; or (ii) the person's partner's taxable income for a tax year; and (c) that taxable income is an amount estimated by the person; and (d) the Commissioner of Taxation subsequently makes an assessment of that taxable income; and (e) the estimated amount is less than 75% of the amount assessed by the Commissioner; and (f) the Secretary makes a determination varying the person's rate of family payment, or cancelling family payment, to give effect to the recalculation required by section 885; the later determination takes effect on the day on which the earlier determination took effect." 12 Sections 1223 and 1237A relevantly provided : "1223(3) Subject to subsection (4), If: (a) an amount (the 'received amount') has been paid to a person by way of family payment; and (b) the person's rate of family payment is recalculated under : (i) section 884 (amendment of assessable income); or (ii) section 885 (underestimate of income); or (iii) section 886 (failure to notify notifiable event); and (c) the received amount is more than the amount (the 'correct amount') of the family payment payable to the person; the difference between the received amount and the correct amount is a debt due to the Commonwealth. ..... 1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt. ..... 1237A(2) If: (a) a debt arose because the debtor or the debtor's partner underestimated the value of particular property of the debtor or partner; and (b) the estimate was made in good faith; and (c) the value of the property was not able to be easily determined when the estimate was made; the Secretary must waive the right to recover the proportion of the debt attributable to the underestimate. 1237A(3) For the purposes of this section, a proportion of a debt may be 100% of the debt."
conclusion on the appeal 13 The error which led to the overpayment of the sum of $1,124.85 in additional family payments for the period 5 January 1995 to 17 August 1995 was the failure in February 1995 to recalculate the appellant's entitlement consequent upon the changed circumstances of the appellant brought about by receipt of the redundancy package. The AAT found that the appellant contributed to that error by failing to disclose to Centrelink the fact that she had received the payment. 14 The AAT found that the appellant did not advise Centrelink of her changed circumstances because : (a) she had an honestly held belief that she was not obliged to notify Centrelink of the changes; and (b) she saw no reason to query the effect of the redundancy package on her social security entitlements and thus did not raise the issue with Centrelink. 15 The AAT made these findings on the basis of the evidence given by the appellant to the AAT. The findings were crucial to the finding of the AAT that s 1237A(1) of the Act could have no relevant operation because the debt was not attributable "solely to an administrative error made by the Commonwealth ..." It was the contribution of the appellant's conduct to the error which rendered the section inapplicable. 16 The appellant has challenged these findings on the basis that there was no evidence which would allow the making of the findings or allow them to be drawn as inferences from other facts which could be supported on the evidence. Consequently, the appellant contends that to make the findings in the absence of evidence was a reviewable error of law: Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473 at 480, 483; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355 - 356; Minister for Immigration & Ethnic Affairs v Teo (1995) 57 FCR 194 (FC) at 199. 17 Further, the appellant contends that the AAT failed to take into account material which was relevant to the issue of whether she contributed to the error which led to the overpayment, which it was obliged to take into account, and, failed to give the whole of that material proper consideration: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39 - 42; Bruce v Cole (1998) 45 NSWLR 163 at 186; Aronson & Dyer "Judicial Review of Administrative Action" (2nd Ed LBC (2000)) at 207 - 208. 18 The material which she contends the AAT failed to take into account, as it was obliged to do, was her oral evidence that she in fact made disclosure of the redundancy payment to Centrelink at or about the time she received it in February 1995, and the contents of certain documents. The documents she swore she disclosed to Centrelink at the time she made the disclosure. She also gave evidence that copies of the documents were taken and retained by Centrelink. Those documents were part of the bundle Exhibit 2 tendered by her on the AAT hearing. They were a letter dated 10 January 1995 from QBuild Property Management offering the appellant Voluntary Early Retirement on the terms contained in the letter; a letter dated 23 January 1995 advising her that her employment would be terminated on 3 February 1995 and that she would be contacted in the following week with payment details; and a Queensland Government Pay Advice showing details of her employment for the period ending 3 February 1995. The Queensland Government Pay Advice showed that she had total earnings of $22,923.21 from which tax deductions of $2,429.20 had been taken. The remaining balance of $20,494.01 was paid by the accompanying cheque number 449233. Importantly, the notice records that the appellant's taxable earnings for the year 1994/1995 were $14,210.31 from which had been deducted $3,559.30 in tax instalments. This documentation constituted a full disclosure of the redundancy payment the appellant received and her actual income for the relevant year after taking into effect the redundancy payment. 19 The appellant did in fact give evidence that she took the documents relating to her redundancy package to Centrelink where they were copied and a copy retained by Centrelink. She gave the following evidence to the AAT when questioned by the Member : "That's the income. That's the $6076?---Yes. And if you take that out - there are some more copies on the back - there's some copies on the back. When I received them there was something going on in Government, they'd been losing contracts with buildings so I was on maternity leave and somehow I find out from the ladies talking around it will be redundancy. And I still have a big problem with myself walking. I left home, I called the office - is George Street Mineral House. Have a glass of water?---No, I'm just - is time passing and I'm not involved with those things so I'm losing myself. Mineral House, that's where the main office is of cleaning staff so I called there, the lady's name is Donna. She is Croatian. So she was there at the time and I tell her what information she can give me about redundancy. I like to have redundancy. She said, 'I don't think they will give you that'. And I said, 'please give me the letter what everyone receives so I will try to get it' because I couldn't work. It was very critical. If I sit I can't stand, if I stand I need time to move my legs. So I thought I would be disabled so why being left with nothing when I can have something what is mine. So she told me she will bring the letter downstairs and I will arrive on the time she will come out and give me the letters because if I park I need time to walk so I would lose hours to get there. She give me them, I apply and I receive first letter back on 10 January. Yes?---That's not final letter so I can give the Centrelink how much money I would receive in that cessation year. So is another letter, the first one they send me was they refuse, they won't give me and I apply again. So it's the second letter on 23 January still goes behind them, their dates and their letters and then comes the payment. They told me they would give me payment on that date and I have to contact the office. I call pay office and I ask them is it true I'm going to receive that. They send me a letter like this one, it was wrong. They took it back and they send me another one. One was 24 and this one is 20. So when it was finalised they will send me - I knew they will send me that. I went and I make arrangement to buy land for my oldest girl. So that was your redundancy pay-out? That cheque there?---Yes, yes. So when I get that I spend the money before I get the money. You know what I'm saying? I understand, yes. You knew it was coming and you committed yourself?---Because - yes, my ex-husband was using me so much so I got remarried and I didn't want to be on the street again because I'd been left on the streets. So when the money comes they been spend already and I took this back to Centrelink and I will [sic] out all the forms they ask me for. They've got that - all those copies, all those letters from them and they ignore them. They just say here - it was very difficult to work out what portion of the final amount received was taxable income. They should - - - Yes, Mrs Jazazievska, just before you go on on that point? What you're reading is actually how they summarised your evidence. It's not the Department's findings?---There are some - - - They are summarising what you have said?--- - - - amount has already been taxed. Yes, okay, if you go in my way they told me some of the money there had been taxed. You don't understand? That's what they told me. You don't understand how much tax was and you can see for yourself there more than two and a half thousand dollars tax on that money but when the - it is mine I will go on with my story. The Centrelink ask me which one is which, they shouldn't ask me because I don't know. I was told what is inside and they can see - if it's not enough evidence for them they can contact Taxation Office because now they contact everyone. They dig - they touch my son's private properties and they shouldn't touch - go in them - my son's files. Yes, just keep to the problem that you've got now?---Yes, but everything is in here, even my son's - what I wanted to say. I told them some of that is taxable, some of it isn't taxable. That's what I was told. So they took a copy, nothing happened. Okay, they've been sending me letters, I can't give them proper income. They should take whatever it says on the paper and work out - if it's not good enough then on the end of the year when I get the - the tax return they can take that. ..." (Emphasis added) 20 Under cross-examination she said : "Yes, I appreciate that?---So when my redundancy start you have few letters asking for that and I'm showing you because I didn't know nothing before 20 January. So I didn't have the money or I wasn't sure until I received the cheque. Right, okay?---And I took it there. They're supposed to have copies from the cheque. Right. So at the time you provided the estimate you didn't know about - - -?---No.
Associate: Dated: 20 October 2000 Appellant in person: Mrs Bogica Jazazievska
Counsel for the Respondent: A Horneman-Wren Solicitor for the Respondent: Australian Government Solicitor
Date of Hearing: 17 March 2000 Date of Judgment: 20 October 2000
Jazazievska
Secretary Department of Family & Community Services
(1975) 132 CLR 473
(1990) 170 CLR 321
(1995) 57 FCR 194
(1986) 162 CLR 24
(1998) 45 NSWLR 163
(1977) 16 SASR 41