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[1998] FCA 165
Federal Court of Australia
1998-03-05
Burchett J
Original judgment source is linked above.
This is an application for judicial review, under s 5 of the Administrative Decisions (Judicial Review) Act 1977 (the Judicial Review Act) and s 39B of the Judiciary Act 1903, of a decision of the first respondent, a senior member of the Administrative Appeals Tribunal, upon a preliminary point raised in relation to an application in the Tribunal. The decision could not be challenged in the Court in the normal way by appeal under s 44 of the Administrative Appeals Tribunal Act 1975 for the reason that the decision was on a preliminary point, which did not dispose of the application before the Tribunal so as to give rise to an appealable question under s 44: Director-General of Social Services v Chaney (1980) 31 ALR 571. But this restriction does not apply to proceedings for judicial review of a decision of the Tribunal, being a decision of the kind identified in s 3 of the Judicial Review Act or in respect of which s 39B of the Judiciary Act confers jurisdiction upon the Court. Though formerly a matter of some doubt (see Tuite v Administrative Appeals Tribunal (1993) 17 AAR 165), the right to seek judicial review may now be taken as firmly established: Federal Commissioner of Taxation v McMahon (1997) 149 ALR 159. That authority cannot be distinguished in point of principle from the present matter. Accordingly, the proceeding is competent, and an objection to its competency, which was filed by the second respondent, must be disallowed.
Notwithstanding that it is open to a litigant in the Administrative Appeals Tribunal to bring before the Court an application under the Judicial Review Act or s 39B of the Judiciary Act, the desirability of not permitting a proceeding before the Tribunal to be fragmented by interlocutory appeals, and the availability, at the end of the proceeding, of a right of appeal under s 44, provide strong reasons for refusing, as a matter of discretion, to grant relief by way of judicial review, except where significant benefit may be obtained by an early determination of some particular point: Lamb v Moss (1983) 49 ALR 533; Commissioner of Taxation v Beddoe (1996) 23 AAR 408; Australian Postal Commission v Hayes (1989) 23 FCR 320 at 323; Swan Portland Cement Ltd v Comptroller-General of Customs (1989) 25 FCR 523 at 530. Nevertheless, in Bogaards v McMahon (1988) 80 ALR 342 at 348-349, Pincus J took a flexible view of the Court's role in granting relief in such cases. The question sought to be raised by the application before me, as will appear, is both important and of significance for similar cases, and I would not, in the exercise of my discretion, decline to grant relief if the applicant's contentions prove to be well founded. I now turn to the circumstances out of which the application arises, of which a bare outline will be sufficient. Mr Kanak, the second respondent, is of aboriginal descent. There was in existence a Commonwealth scheme known as the Aboriginal Study Assistance Scheme or, by an abbreviation, ABSTUDY. Over a period of some three years in 1992, 1993 and 1994, Mr Kanak attended a number of tertiary institutions, receiving Commonwealth assistance by way of ABSTUDY payments. The institutions and the bases on which Mr Kanak was enrolled in them were various. At least some of the payments received by him were or included amounts to which he was not entitled. Some refunds have been made by him, amounts have been deducted from payments to which he was entitled, and substantial amounts have been recouped by the issue of statutory garnishee notices pursuant to s 42 of the Student and Youth Assistance Act 1973. The sum recovered is said to be $13,473-06 out of a total amount demanded of $14,255-03. Mr Kanak disputed the departmental decisions to recover moneys from him and to issue the garnishee notices, and he sought review of these decisions. Presumably, his dissatisfaction did not extend to so much of the amount recovered as consisted of voluntary payments made by himself. The decisions having been affirmed upon internal review, Mr Kanak sought a further review by the Social Security Appeals Tribunal, which decided on 29 February 1996 "to vary the decision. This means that the right to recover the sum of $3,980-30 is waived and that this amount should be refunded to Mr Kanak." The decision of the Social Security Appeals Tribunal to make a refund suggests the whole amount due by Mr Kanak had been paid. The figures stated in the subsequent decision of the Administrative Appeals Tribunal do not show that. They suggest an amount of $781-97 is still owing. There may, of course, be some simple explanation, and I simply draw attention to the matter. The Secretary of the Department was dissatisfied with the decision of the Social Security Appeals Tribunal. Accordingly, an application was made to the Administrative Appeals Tribunal, on the basis that recovery of the sum of $3,980-30 should not be waived. But Mr Kanak was also dissatisfied with the decision. It was his contention that a more basic question than waiver of one of the claimed debts should be examined. He had sought review of all the recovery decisions, and his argument was that the recoverability of the sums claimed by the Commonwealth should be reviewed, and then the question of waiver of any amount due should also be considered. He has not filed any application in the nature of a cross-application in the Administrative Appeals Tribunal, but if necessary, he could doubtless apply to do so. Up to the present, his contention seems to have been met by submissions, not at the formal level, but on the basis that the Tribunal has no jurisdiction to entertain it. That was the view of the Social Security Appeals Tribunal, the reasons of which included the following: "The tribunal has no specific power to look at whether the debt was correctly raised as such because ABSTUDY is separate from the AUSTUDY [as to this, see Part 2 of the Student and Youth Assistance Act] scheme. However, ABSTUDY is a special educational assistance scheme. Therefore, the tribunal has jurisdiction under s 309(c) [of the Student and Youth Assistance Act] to review a decision made under the Act relating to 'the recovery of amounts paid' under ABSTUDY. This means that the tribunal can look at whether there are grounds to waive recovery of all or part of the debt." It will be apparent from what I have already written that this succinct statement stirred objections from both sides. The Secretary objected to the proposition that waiver could be considered, while Mr Kanak objected to the proposition that whether the debt was correctly raised could not be considered. Since exploration of the issues of liability to make numerous refunds was likely to prove an onerous task, upon which the Secretary urged the Administrative Appeals Tribunal had no power to embark, it heard argument on this matter as a separate issue, and the decision now the subject of judicial review by this Court was announced. The Administrative Appeals Tribunal was succinct in its turn, stating in its reasons: "9. As I read s 42 [of the Student and Youth Assistance Act], before the Secretary can give a notice to a third party requiring payment of any amount to the Commonwealth he must first make a decision as to what amount is then due and owing to the Commonwealth. That in turn requires the Secretary to ascertain what was the recoverable amount, and whether any repayments have been made. 10. The decisions made by the Secretary in calculating the amount or sum to be specified in the notice issued under subsection 42(3) are decisions under the Act relating to the recovery of amounts as per the wording of paragraph 309(c) of the said Act. 11. It is therefore open to the Respondent upon this review to challenge the amounts alleged by the Applicant to have been overpaid." The argument put before me on behalf of the Secretary depends on the fact that ABSTUDY was a scheme of educational assistance inaugurated by the Commonwealth under special administrative arrangements. It was not a statutory scheme. In this respect, it could be compared with the Social Security Appeals Tribunal itself, which operated from 1975 until 1988 under purely administrative arrangements: see Walker v Secretary, Department of Social Security (1997) 147 ALR 263 at 265-266. The significance of the way that ABSTUDY was set up, for the Secretary's argument, is that provisions relating to the review of statutory decisions could not apply to ABSTUDY. The argument is that, for that reason, the Social Security Appeals Tribunal was right when it decided it could not review any determination that an amount of overpaid ABSTUDY payments was due from Mr Kanak, and the Administrative Appeals Tribunal was wrong in ruling to the contrary. To explain why I think the Secretary's argument must fail, it is necessary for me to trace and interpret a number of provisions of the Student and Youth Assistance Act. The section under which the garnishee decisions were made is s 42, relevantly in the following terms: "(1) In this section: 'recoverable amount' means an amount of any of the following kinds (whether the amount was paid, or became payable, before or after the commencement of this Part): ... (b) a special educational assistance scheme overpayment; ... (2) This section applies where: (a) the liability of a person (in this section called the 'debtor') to the Commonwealth in relation to a recoverable amount has not been fully satisfied; and (b) there is another person (in this section called the 'third party'): (i) by whom any money is due, or may become due, to the debtor; or ... (3) The Secretary may, by written notice given to the third party, require the third party to pay to the Commonwealth: (a) a specified amount, not being an amount more than: (i) the amount then due to the Commonwealth in relation to the recoverable amount; or (ii) the amount of the money referred to in whichever of the subparagraphs of paragraph (2)(b) is applicable; or (b) a specified amount out of each payment that the third party becomes liable from time to time to make to the debtor until the total of the amounts paid to the Commonwealth under the notice equals the amount then due to the Commonwealth in relation to the recoverable amount." By s 43, it is provided that (inter alia) s 289, which is concerned with the subject of waiver of a debt, also applies to a "recoverable amount" defined in the same way. These were the provisions that formed the foundation of the decision of the Social Security Appeals Tribunal in relation to waiver. It is not, of course, apparent, simply on the face of ss 42 and 43, that they have application in the present case. In order to show that they do, it is necessary to turn, first, to the definition in s 3 of "special educational assistance scheme overpayment", the expression used in s 42(1)(b). That expression "means an amount paid under a current special educational assistance scheme ... that should not have been paid". Next, one goes to the definition in the same section of "current special educational assistance scheme", which includes "the ABSTUDY Scheme (also known as the Aboriginal Study Assistance Scheme)". Having regard to these definitions, and the positive provisions of ss 42 and 43, although ABSTUDY was not, as the Secretary points out, itself a statutory scheme, it is clear that those provisions of the statute which are contained in ss 42 and 43 do apply to ABSTUDY overpayments. The question is, when s 42 provides the statutory tool of a garnishee power for the recovery of a non-statutory overpayment, what statutory incidents are involved? It seems to me that the terms of s 42 afford a reasonably clear answer. The section only applies to an "overpayment", the liability to repay which, in the terms of subsection (2), "has not been fully satisfied". When it applies, the Secretary is empowered to give the notice, but only, as subsection (3) is careful to state, in respect of an amount "not being an amount more than ... the amount then due to the Commonwealth" in respect of the overpayment. Those provisions cannot be satisfied unless the Secretary determines what the overpayment was, and how much of it remains due. Accordingly, although the original decisions to make the payments, and to seek to recover them as overpayments, were apparently outside the scope of the statute, once the garnishee provision was availed of, statutory decisions had to be made in respect of the same sums. Furthermore, once the statutory scheme comes to apply to the particular means of recovery chosen, the exercise of the discretion involved in s 42(3) may also require, in a particular case, consideration of the power of waiver attracted by s 43. So to hold, would not only be in accordance with the terms of ss 42 and 43, but would also accord with the construction which has been given to the very similar provisions of ss 1233 and 1237 of the Social Security Act 1991: Walker v Secretary, Department of Social Security at 269, 274; Lee v Secretary, Department of Social Security (1996) 139 ALR 57 at 67; Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32. Not the least important of the statutory incidents of a decision to issue a garnishee notice under s 42 is the right of review which that decision attracts. Section 302(c) of the Student and Youth Assistance Act includes among the decisions, internal review of which may be sought under s 304, "all decisions of an officer under this Act relating to the recovery of amounts paid under a current ... special educational assistance scheme". Section 309 then uses precisely the same language to bring such decisions within the purview of the Social Security Appeals Tribunal. The expression "all decisions of an officer under this Act relating to the recovery" is certainly wide enough to go well beyond the decision to exercise the discretion conferred by s 42(3). That the expression "relating to" is "extremely wide" was accepted by Taylor J in Tooheys Limited v Commissioner of Stamp Duties (NSW) (1961) 105 CLR 602 at 620. As Gaudron J pointed out in Re Dingjan; Ex parte Wagner (1995) 183 CLR 323 at 363, "[t]he words 'relating to' do not ordinarily require a direct or immediate connection, although they will do so if that is indicated by their context." In PMT Partners Pty Ltd v Australian National Parks and Wildlife Service (1995) 131 ALR 377 at 398-399, Toohey and Gummow JJ described the words "in or in relation to" as "particularly wide". Their Honours said that "the cases do show that the words are prima facie broad and designed to catch things which have sufficient nexus to the subject." They quoted the observation of McHugh J in an earlier case that "[t]he prepositional phrase 'in relation to' is indefinite. But, subject to any contrary indication derived from its context or drafting history, it requires no more than a relationship, whether direct or indirect, between two subject matters." The joint judgment of Brennan CJ, Gaudron and McHugh JJ contains a passage (at 385) which is apposite to the present problem: "Inevitably, the closeness of the relationship required by the expression 'in or in relation to' ... must be ascertained by reference to the nature and purpose of the provision in question and the context in which it appears." Their Honours went on to refer to the "remedial nature" of a provision and "the consideration that a provision conferring a power to be exercised judicially should be construed as liberally as its terms and context permit" as tending in favour of giving the expression a wide meaning. It seems to me that similar considerations favour a wide meaning in s 309, where the words "relating to" define the extent of a power of review by a body, which is certainly bound to act judicially, of decisions that may not otherwise be reviewable. Such a provision is plainly of a remedial character. Accordingly, the statutory power of review extends to decisions determining the amounts of overpayments to be recovered under s 42 and decisions not to waive recovery under s 43, which fall within the wide words in s 309(c) "all decisions of an officer under this Act relating to the recovery of amounts paid under a current ... special educational assistance scheme". But there is a problem created by the terms of s 316, which mirrors the language of s 1253 of the Social Security Act 1991. The difficulty is that the Social Security Appeals Tribunal is not a court, but an administrative tribunal set up to review decisions on their merits. It is required to make the correct or preferable decision, not on the material that was before the original decision maker, but on the material before the Tribunal. To enable it to do this, it has had conferred on it, by s 316(4), but subject to s 316(5), powers expressed as follows: "for the purpose of reviewing a decision under this Act, [it may] exercise all the powers and discretions that are conferred by this Act on the Secretary." This is the same mechanism by which similar powers were conferred on the same Tribunal under s 1253 of the Social Security Act 1991, and on the Administrative Appeals Tribunal by s 43 of the Administrative Appeals Tribunal Act 1975. I explained the mechanism in my judgment in Walker v Secretary, Department of Social Security at 267-269. But, although s 316(4) confers these powers on the Social Security Appeals Tribunal, s 316(5) excepts the garnishee power with which we are here concerned: "(5) The reference in subsection (4) to powers and discretions conferred by this Act does not include a reference to powers and discretions conferred by: ... (c) subsection 42(3) (notice requiring payment to the Commonwealth) ... ." It was a precisely similar exclusion from s 1253 of the Social Security Act 1991 which gave rise to the problem in Walker v Secretary, Department of Social Security. The question is whether the Social Security Appeals Tribunal had any power to carry out the review it purported to carry out in this case; and if not, whether the Administrative Appeals Tribunal was, as a consequence, left without power to do so either. In my judgment in Walker v Secretary, Department of Social Security at 269, I expressed myself as follows: "Not without some hesitation, I have come to the conclusion that parliament's withholding from the Social Security Appeals Tribunal of the powers and discretions conferred by s 1233 [the garnishee provision in the Social Security Act 1991] does not leave the tribunal without any work to do in a case such as the present. It cannot review the ultimate decision to utilise the procedure under s 1233, for a review on the merits of that decision would necessarily involve an exercise of the discretion conferred by the section. But before, in any case, this discretion can be exercised, there must be an amount due to the Commonwealth upon which the discretion can fasten. The ascertainment of that amount is an anterior, though necessary, step to be taken to enable the powers and discretions conferred by s 1233 to be considered. Furthermore, the powers and discretions conferred on the tribunal include those involved in the waiver of a debt under s 1237, powers the exercise of which, in a particular case, may fall to be considered in relation to a decision under s 1233: Lee v Secretary, Department of Social Security (at 67); Secretary, Department of Social Security v Hodgson [supra]." So far as I concluded that the denial to the Tribunal of the powers and discretions of the Secretary in respect of the issue of a garnishee notice deprived it of its function of review on the merits of that very matter, this conclusion has since received support from the decision of a full court in Otter Gold Mines Ltd v Australian Securities Commission (1997) 25 ACSR 382, where Merkel J (with whom Beaumont and Sundberg JJ agreed) described (at 389-390) the function of the Administrative Appeals Tribunal as follows: "When reviewing an administrative decision under s 43(1) [of the Administrative Appeals Tribunal Act 1975, the provision conferring on the Tribunal "all the powers and discretions that are conferred by any relevant enactment on the person who made the decision"] the AAT stands in the place, and is empowered to exercise all of the relevant powers and discretions, of the decision maker in respect of the decision under review. The AAT hears the matter de novo in the light of the evidence placed before it. ... In the present case the duty of the AAT was to determine the application ... on the basis of the relevant facts and submissions placed before it and then to give effect to that determination by exercising the power conferred under s 43(1)(a) (b) or (c) of the AAT Act. The determination of the application is to be on its merits as at the date of hearing before the AAT and not as at the date of the decision of [the original decision maker]." Later in his reasons, his Honour added (at 392): "In setting aside the decision of [the original decision maker, in this case the Australian Securities Commission] and remitting the matter back to it with a direction ... the AAT was finally determining Otter's application for a modification on the merits under s 43(1)(c)(ii) of the AAT Act. In these circumstances it did not form any part of the AAT's statutory function to determine whether the ASC's decision ought, or ought not, have been made by the ASC on the basis of the submissions and material before the ASC. Rather, the AAT's statutory function was to determine whether the decision the subject of review was the correct or preferable one on the material and submissions before the AAT and to then exercise the power conferred on it under s 43(1) accordingly." If this reasoning concerning the nature of the functions of the Administrative Appeals Tribunal is correct, a body exercising a similar statutory function must be deprived of that function in a case where it is deprived of the powers and discretions conferred on the original decision maker. However, in Walker v Secretary, Department of Social Security in the passage cited above, I took the view that the Social Security Appeals Tribunal, though deprived of the powers and discretions conferred on the Secretary by the section authorizing the issue of the garnishee notice, was not deprived of the powers and discretions of the decision maker to ascertain what amount was due to the Commonwealth and to consider whether there should be a waiver of any debt so due. The exercise of these powers and discretions involved a step which was required to be taken before the issue of a garnishee notice could be decided upon. The present case is even clearer. For whereas in Walker v Secretary, Department of Social Security, I held that consideration of the issue of a garnishee notice necessarily involved the making of decisions on the anterior matters, in the present case the application brought before the Social Security Appeals Tribunal was not merely an application to review the issue of a garnishee notice (cf Secretary to the Department of Social Security v Riley (1987) 17 FCR 99 at 104-105) but was expressly an application to review all of the anterior decisions relating to the recovery of the alleged debt. They included a decision under s 42(1) and s 42(2), not s 42(3), that Mr Kanak had received ABSTUDY overpayments his liability in respect of which had not been fully satisfied, and a decision authorized by the Act by necessary implication, but not falling within s 316(5)(c), fixing "the amount then due to the Commonwealth", so that an amount not being more than that amount could be determined for the purpose of s 42(3)(a). In my opinion, s 316(5)(c) should be construed as limited to the power and discretion to issue the garnishee notice, in order to leave an appropriate area of operation for s 309(c); in recognition of its nature as a restriction upon a remedial provision; and to preserve consistency with s 1253(4) of the Social Security Act 1991, a restricted interpretation of which is required by its context and confirmed by the relevant explanatory memorandum, as was made clear in Walker v Secretary, Department of Social Security at 269. In Walker v Secretary, Department of Social Security, the joint judgment of Drummond and Mansfield JJ holds (at 275) that it would be open to the Social Security Appeals Tribunal "to set aside a decision under s 1233 and send it back to the Secretary for reconsideration in accordance with non-binding recommendations." If this view were to be accepted in relation to s 42(3) of the Student and Youth Assistance Act, it would be even clearer that the questions now at issue were properly before the Social Security Appeals Tribunal. Division 3 of Part 9 of the Student and Youth Assistance Act gives a right of review of decisions of the Social Security Appeals Tribunal by the Administrative Appeals Tribunal. Section 323 applies the Division to the same decisions to which the provisions for internal review and review by the Social Security Appeals Tribunal are applied by ss 302 and 309. Section 324(1) then provides: "If a decision has been reviewed by the Social Security Appeals Tribunal (the 'SSAT') and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for a review of the decision of the SSAT." In the present case, the decisions under review were varied by the Social Security Appeals Tribunal, and otherwise affirmed, implicitly if not expressly. Accordingly, the Administrative Appeals Tribunal has power to review those decisions. The difficulty discussed in Walker v Secretary, Department of Social Security at 266-267 does not arise, notwithstanding that the Social Security Appeals Tribunal wrongly excluded an aspect of the matter from its review. That was an error in the exercise of its powers, not a refusal to exercise those powers. It follows that the Secretary's application must be dismissed, and that Mr Kanak should have an order for his costs, other than any costs of the objection to competency. I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Burchett
Associate: Dated: 5 March 1998 Counsel for the Applicant: Ms R M Henderson
Solicitor for the Applicant: Australian Government Solicitor
The 1st Respondent submitted to the order of the Court. Counsel for the 2nd Respondent: Ms J A Keys Date of Hearing: 24 June 1997 Written Submissions lodged 2 July 1997.
Date of Judgment: 5 March 1998
Lamb
Moss
(1983) 49 ALR 533
(1989) 25 FCR 523
(1988) 80 ALR 342
(1997) 149 ALR 159
(1997) 147 ALR 263
(1996) 139 ALR 57
(1992) 37 FCR 32
(1961) 105 CLR 602
(1995) 183 CLR 323
(1995) 131 ALR 377
(1989) 23 FCR 320
(1980) 31 ALR 571
(1987) 17 FCR 99