Question 1: denial of procedural fairness
16 A denial of procedural fairness raises a question of law: Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28 at [8] per Gray ACJ and North J; Haritos at [202].
17 The respondent accepted, as contended by the applicant, that although the Tribunal referred to the cancellation of the allowance being under s 95 of the Administration Act (automatic cancellation), that basis for the cancellation had not been raised with the parties either before or during that hearing, and is inconsistent with the basis on which the respondent presented its case. This falls within the question and grounds relating to a denial of procedural fairness. In the applicant's amended notice of appeal, this question/ground was framed as follows:
1. Whether the Tribunal fell in error from a breach of procedural fairness while concluding that the cancellation was pursuant to subsection 95 (1) of the Social Security (Administration) Act (Cth) 1999 (assuming from paragraphs 7, 8 & 22 of its decision and reasons that they are the relevant provisions of law applied by the Tribunal in justification for its affirmation of the decision under review), without such an argument being advanced on behalf of the Secretary, nor discussed at the hearing or before, in light of the evidence including (but not limited to):
a) The submissions and statements on behalf of the Secretary;
b) The oral statements of the representative for the Department at the hearing; and
c) The submissions and statements of the Applicant.
18 At the hearing of the appeal, having provided the Court with a copy of the transcript from the Tribunal, the applicant proceeded to outline what he described as "the total package" of errors made in relation to s 95. Suffice to say, the cumulative effect of these oral submissions was that the applicant had "submit[ed] evidence [to the Tribunal]…without knowing that the Tribunal propos[ed] to invoke section 95(1) in place of 80(1)", and that this was "a matter of substance".
19 Section 95 is in the following terms:
95 Automatic cancellation - failure to provide statement under subsection 68(2)
(1) If:
(a) a person who is receiving a social security payment is given a notice under subsection 68(2) requiring the person to give the Department a statement or a number of statements; and
(b) the notice relates to the payment of the social security payment in respect of a period or a number of periods specified in the notice; and
(c) the person does not comply with the notice so far as it relates to a particular period;
then, subject to subsection (2), the social security payment is cancelled, by force of this section, on the first day in that period.
(2) If the Secretary is satisfied that, in the special circumstances of the case, it is appropriate to do so, the Secretary may determine in writing that subsection (1) does not apply to the person on and from a day specified in the determination.
(3) The day specified under subsection (2) may be before or after the making of the determination.
20 As is apparent from the Tribunal's reasons, this provision was plainly considered by it to be relevant, and there is no dispute between the parties that the Tribunal concluded that the applicant's allowance was automatically cancelled pursuant to s 95.
21 The applicant is correct that s 95 was not raised during the hearing, nor was it raised in any submission by the respondent prior to the hearing. Indeed, the respondent had submitted to the Tribunal (and to the AAT1) that the applicant's allowance was cancelled pursuant to s 80(1) of the Administration Act. The written and oral submissions of the respondent before the Tribunal were directed towards s 80(1). That provision was in the materials provided to the Tribunal, s 95 was not.
22 It is to be presumed that the respondent's reliance on s 80(1) is based on its understanding that that was the power utilised in cancelling the applicant's allowance. If that is so, for the Tribunal to find that the cancellation was pursuant to s 95, is not correct. However, the respondent's submission in this Court simply proceeded on the basis that the allowance was cancelled pursuant to s 95, as the Tribunal concluded, despite that inconsistency.
23 Section 80(1) is as follows:
80 Cancellation or suspension determination
(1) If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a) who is not, or was not, qualified for the payment; or
(b) to whom the payment is not, or was not, payable (other than because of the operation of Division 3AA);
the Secretary is to determine that the payment is to be cancelled or suspended.
24 The difference between the s 80(1) and s 95, is that the former cancellation involves some decision by the Secretary, the latter is automatic.
25 It follows that no submission was advanced to the Tribunal about the application of s 95. Importantly, the applicant was not given an opportunity to address that provision. This is in the context where the applicant had submitted before the Tribunal that s 80(1) had not been satisfied. The Tribunal did not refer to or address those arguments. Indeed, the Tribunal did not refer at all to s 80(1) and why it did not accept the respondent's submission that the cancellation was made under that section.
26 The failure to raise with the applicant that it was considering concluding, contrary to what was relied on by the respondent, that the cancellation was pursuant to s 95 is, in the particular circumstances of this case, a denial of procedural fairness. Section 95 has a number of preconditions to its operation which require satisfaction of certain factual matters.
27 The respondent accepted that procedural fairness in the Tribunal generally required prior notice that a decision that may affect a party's interests will be made; disclosure of the "critical issues" to be addressed, and of information that is credible, relevant and significant to the issues; and a substantive hearing, with a reasonable opportunity to present a case. The respondent submitted that the critical issue to be addressed was whether the cancellation of the applicant's allowance on 7 November 2016 with effect from 8 October 2016, was the correct and preferable decision, and that that was disclosed to him. That submission does not assist the respondent because while that proposition may be correct, its interpretation must necessarily extend to the power to cancel the allowance in circumstances where there must be satisfaction of certain preconditions.
28 The respondent also submitted that the decision-maker does not have to reveal their thought process in order to comply with the requirement to provide an applicant with procedural fairness, relying on Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576 (Alphaone) at 591-2 per Northrop, Miles and French JJ. While that proposition is correct, again, it does not assist the respondent in this case. The reliance on s 95 is not "a thought process" in the manner discussed in Alphaone. Here, the Tribunal, without notice to the applicant and without ruling on his submission in relation to s 80 (the provision the respondent submitted to it was the correct one), relied on s 95. The Tribunal did so without any explanation in its reasons as to why, and without addressing whether the preconditions were factually established.
29 The applicant submitted that if he had been provided with the opportunity to address s 95 he would have made submissions as to why the conditions imposed by that section had not been established. The applicant outlined those submissions during the course of this appeal. He was denied the opportunity of addressing the application of s 95 before the Tribunal.
30 This ground interrelates with the third ground addressed below, as the applicant's submissions in relation to the failure to establish the preconditions of s 95 would include the matters referred to in that ground, but not considered by the Tribunal.
31 Therefore, the issue becomes whether the breach has given rise to a "practical injustice": the breach must result in a denial of an opportunity to make submissions and that denial must be material to the Tribunal's decision: Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421 at [38], [45]-[46] per Bell, Gageler, Keane, Nettle and Gordon JJ. By denying the applicant an opportunity to provide submissions or evidence on s 95, the breach has the requisite materiality.
32 This ground is established. The applicant has established that the breach was material and has given rise to a practical injustice.