Mitchell; Secretary, Department of Employment and Workplace Relations [2006] AATA 804 | Case summary

Mitchell; Secretary, Department of Employment and Workplace Relations [2006] AATA 804 | Case summary | Zoe

[31]

The following background facts were not in dispute, and are derived largely from exhibit A1, being the documents provided pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the "AAT Act"), and electronic file notes relating to Mr Mitchell from 14 January 1994 to 28 October 2003 (exhibit A2).

Mr Mitchell is 52 years of age, and was granted a DSP in April 1987 in respect of the impairment and continuing inability to work caused by schizophrenia.

The last medical review provided to Centrelink in support of his entitlement to a DSP is a report dated 9 September 1997 by a Dr Williams (exhibit R2). Dr Williams concluded that Mr Mitchell remained unfit for any type of employment with, in general, a poor prognosis for improvement.

The applicant has delegated various of its functions under the Social Security Act 1991 (Cth) to Centrelink, a Commonwealth authority. Centrelink has published a Guide to Social Security Law which sets out policies it uses in determining eligibility for social security benefits. Paragraph 6.2.5.10 of the Guide in respect of DSPs provides in effect that all DSP "customers" should have a medical review at regular intervals on a five-year cycle, subject to certain exemptions. However, the Guide also provides that some customers are exempted from reviews, including customers who have a medical condition that is severe and/or degenerative. Under paragraph 6.2.5.20 of the Guide, customers (other than certain excepted categories of persons) who are receiving the DSP are subjected to automatic reviews, which entail sending them a review package incorporating review forms. The categories of excepted customers include those who suffer from a significant psychiatric or intellectual impairment. The Guide says that in those excepted cases, the customers are subject to "manual" reviews, which involve a Centrelink officer examining the details of each case to determine whether or not to go ahead with the review, and the nature of the review action, if any.

Late in 2002, being more than 5 years after Mr Mitchell's previous medical review, Centrelink followed the automatic review process and issued certain forms to him, which included a Treating Doctor's Report form ("TDR form"). It appears from exhibit A2 that the TDR form was re-issued on two subsequent occasions.

Mr Mitchell failed to complete and return these forms, and on 11 March 2003 his pension was suspended pursuant to subsections 64(4) and 80(1) of the Administration Act.

He wrote a letter on that same day to the Premier of South Australia in which he advised that he had recently been taken off the DSP, expressed concern about having to fill in Centrelink's forms and about the suspension of his pension, and requested that he "convince the RATS" that he could not continue. The Premier sent this letter on to the then Minister for Family and Community Services with a request to provide a response direct to Mr Mitchell on behalf of the Commonwealth Government. The Minister in turn sent Mr Mitchell's letter on to Centrelink. Centrelink later replied to the letter, and again requested that the forms be completed.

The information requested by Centrelink had not been provided by 27 May 2003, and a Centrelink officer decided on that date to cancel Mr Mitchell's DSP, with effect from 11 March 2003. Centrelink sent a letter to Mr Mitchell advising him of the cancellation decision. As appears from the reasons given by the ARO when he reviewed the decision, the cancellation of Mr Mitchell's DSP for failing to return the review form was inconsistent with the Guide, in that because of the nature and extent of his impairment, Centrelink should have undertaken a "manual" review. This was acknowledged by the applicant in the proceedings before me.

As mentioned above, Mr Mitchell subsequently applied for review of the cancellation decision and of the subsequent decision by the ARO, and the SSAT made a decision in his favour. The applicant seeks review by this Tribunal of the SSAT's decision.

[35]

Under s 129 of the Administration Act, a person affected by a decision of an officer under the social security law may apply to the Secretary for review of that decision. Section 135 contemplates that the review will be undertaken by the Secretary, the CEO or an authorised review officer, and that person is required by subsection 135(1) to review the decision, and either to affirm the decision, vary the decision or set the decision aside and substitute a new decision.

By virtue of subsection 109(2) of the Administration Act, if notice is given to a person informing him or her of a decision made in relation to his or her social security payment, and that person applies under s 129 of the Administration Act for review of the decision more than 13 weeks after notice has been given, any favourable determination resulting from the application for review takes effect on the day on which the application for review was made.

Under s 142 of the Administration Act a person whose interests are affected by the decision of the Secretary, the CEO or the authorised review officer may apply to the SSAT for review of that decision.

Subsection 151(1) provides in effect that subject to certain exceptions which are not relevant in the present matter, the SSAT may for the purpose of reviewing a relevant decision, "exercise all the powers and discretions that are conferred by the social security law on the Secretary".

Subsection 149(1) of the Administration Act provides for the responsibilities of the SSAT following an application to it for review of a decision. It provides that the SSAT must affirm or vary the decision, or set the decision aside and substitute a new decision, or send the matter back to the Secretary or the CEO, as the case requires, for reconsideration in accordance with any directions or recommendations of the SSAT.

Section 152 of the Administration Act provides for the date of effect of decisions of the SSAT. Section 152(4) applies where the application for review was made more than 13 weeks after notice was given of the decision by the Secretary, CEO or ARO. It provides as follows:

[43]

On my analysis of the history of this matter there were two decisions made by Centrelink, first the decision on 11 March 2003 to suspend the DSP, and second the decision on 27 May 2003 to cancel the DSP, with effect from the date of suspension.

As mentioned above, there is no evidence before me to indicate that Mr Mitchell's condition had improved prior to either the suspension or the cancellation of his pension, or that he was no longer incapacitated for work. It appears also that there was no such evidence before Centrelink when the suspension and cancellation decisions were made. In the absence of evidence of changed circumstances, a pre-existing determination to grant a pension should not be varied so as to remove the existing entitlement: Commonwealth of Australia v Muratore [1978] HCA 47; (1978) 141 CLR 296; McDonald v Director-General of Social Security [1984] FCA 57; (1984) 1 FCR 354; Telstra Corp Ltd v Arden (1994) 20 AAR 285; and Comcare v Nichols [1999] FCA 209.

No doubt in some circumstances it might well be appropriate to suspend a DSP, if a pensioner has persistently failed to co-operate with proper requests for relevant information, and reasonable steps have been taken to warn of an intention to take that action. However, having regard to Mr Mitchell's circumstances, I consider that this was not such a case. As mentioned above, under the Social Security Guide, Centrelink should not have issued the relevant forms to Mr Mitchell pursuant to an automatic review process. The assistance to decision-makers afforded by policy statements was referred to by Brennan J as he then was in Re Drake and Minister for Immigration and Ethnic Affairs (No. 2) [1979] AATA 179; (1979) 2 ALD 634 at 644 - 5. In the present matter, the Guide does not have the status of a Ministerial policy, but it is used by Centrelink as a basis for determining very large numbers of claims for social security benefits. The Guide no doubt assists to achieve consistency of decision-making, and this leads to greater public confidence in the administration of social security legislation. This Tribunal should, in the exercise of its function, review a policy adopted by an administrator (Drake and Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 80 per Smithers J), but I see no basis on which to question the appropriateness of the portions of the Guide to which I have referred above. Further, it was not suggested that the Guide was unlawful or inconsistent with the Administration Act, or that it would work an injustice in Mr Mitchell's case, and I see no reason why the Guide should not be applied in this case. The fact that Centrelink's actions in suspending and cancelling the DSP were inconsistent with the Guide provides further reason why I am not satisfied that it was reasonable for subsection 64(4) to apply to Mr Mitchell so as to remove his entitlement to a continuation of his DSP.

I conclude for the above reasons that Mr Mitchell's DSP should not have been suspended on 11 March 2003, or cancelled on 27 May 2003.

[45]

In my view, Mr Mitchell's letter to the Premier requesting the Premier's assistance, and the Premier's subsequent conduct in forwarding the letter on to the Minister with a request for a response to be given direct to Mr Mitchell on behalf of the Commonwealth Government, meant that the letter should be treated as a request made by Mr Mitchell to Centrelink.

It is then necessary to determine whether the letter from Mr Mitchell of 11 March 2003 should reasonably be interpreted as a request (through an intermediary, namely the Premier) to have Centrelink reconsider its decision to suspend his pension. I consider that it should be so interpreted, and Mr Harvey very properly acknowledged that the letter of 11 March 2003 should be so interpreted.

Section 129 of the Administration Act, which entitles persons affected by decisions under the social security law to apply for review of the decision, does not provide for how applications should be made. Earlier decisions of this Tribunal indicate that the "most informal query" made verbally may be treated as a request for review, and give a very broad meaning to what will constitute an application for review: see, for example, Re Frost and Secretary, Department of Social Security (AAT 10360, 17 August 1995) at [10]. A similar approach was adopted in Re Secretary, Department of Social Security and Marsh (1996) 42 ALD 639, and Katsiambirtas and Secretary, Department of Family and Community Services [2002] AATA 342; (2002) 68 ALD 713, which matters also involved verbal communications with departmental officers. The present case involves a written communication. In my opinion, it is necessary to consider the terms of the communication, and to determine whether the communication, construed objectively, identified the relevant decision and informed the recipient that the person wished to apply for review of the decision. I think that this approach is consistent with various decisions of the Federal Court dealing with whether notices of decisions have been provided to benefit recipients (see Re Peura and Secretary, Department of Family and Community Services (2003) AATA 1123 where I summarised the effect of the principles laid down in those decisions).

Mr Mitchell's letter in the present matter expressly refers to the fact that he had recently been taken off the pension (thus referring by implication to a decision producing that consequence), refers to his anger at having to fill out the forms, and expresses the hope that the Premier can "convince" Centrelink that he cannot continue. According to the Macquarie Dictionary (Fourth Edition) the meaning of the word "convince" includes "to persuade by argument or proof", and that process would entail requesting Centrelink to reconsider its action in suspending Mr Mitchell's DSP. The letter was sent to the Premier, but there is a general principle of common law that what a person may do himself or herself, he or she may do by an agent, and is deemed to have acted personally (that is, the Latin maxim qui facit per alium facit per se) : Christie v Permewan, Wright Co Ltd [1904] HCA 35; (1904) 1 CLR 693 at 700. The letter contained a request that the Premier should take the matter up on Mr Mitchell's behalf, and that is what happened.

I accordingly conclude that the letter constituted an application for review of the decision to suspend the pension. The application was therefore not made more than 13 weeks after notice was given of the suspension decision, and subsection 109(2) has no application.

[47]

There is, however, no evidence before me to suggest that Mr Mitchell applied for review of the cancellation decision prior to 8 October 2003, being the date when Centrelink received his letter requesting a review of that decision. This date was more than 13 weeks after that decision had been made. By virtue of subsection 109(2) of the Administration Act, the setting aside of the cancellation decision could not therefore have taken effect prior to 8 October 2003. The ARO reinstated Mr Mitchell's DSP as from that date.

The cancellation decision made on 27 May 2003 had purported to cancel the DSP with retrospective effect to the date when it had been suspended. However, on my analysis, there were two decisions, first to suspend the DSP, and a later decision to cancel it. In my view, a decision to suspend the DSP entailed different considerations than a decision to cancel a DSP. It is inherent in a suspension decision that the decision is an interim decision, which might be reversed in the future, without going through the formal review process provided for in the Administration Act. The question of whether it was reasonable for subsection 64(4) to apply to Mr Mitchell should have been decided as at the date when that question of the possible cancellation of the DSP was being considered. If the decision-maker was satisfied that it was so reasonable, then by virtue of par 64(4)(e) the DSP thereupon ceased to be payable. The practical effect of the decision was that the DSP ceased to be payable as from the date of suspension, and the decision to cancel also entailed by implication a decision not to re-instate the pension, and in effect superseded the suspension decision. However, the question of whether to cancel the DSP, including the application of par 64(4)(b) (that is, that the Secretary was satisfied that it was reasonable for the section to apply to Mr Mitchell with the consequence that DSP was no longer payable) and par 64(4)(c) (that is, that he had not taken reasonable steps to comply with the relevant notice) had to be made as at the date when those issues were being considered; and the cancellation should not have been made retrospective to the date of the earlier suspension of the DSP.

I have therefore concluded that (subject to the effect of subsection 152(4), which I will consider below) the effective date of the setting aside of the suspension decision should be 11 March 2003 (being the date when Centrelink, in my view erroneously, suspended the DSP), and that Mr Mitchell should be entitled to arrears of pension from that date until 27 May 2003, when the cancellation decision effectively took the place of the suspension decision. I have further concluded that the cancellation decision should take effect from 8 October 2003, being the date of receipt of Mr Mitchell's application for review by an ARO of that decision, and so he should not be entitled to arrears of pension between 28 May and 7 October 2003.

[53]

It can be implied from this letter that Mr Mitchell did not agree with the ARO's decision, but in my view the letter cannot reasonably be interpreted as a request for review of the ARO's decision. It contains no request for any such review, and does not even refer to the SSAT.

As mentioned above, Mr Mitchell eventually applied for review of the ARO's decision on 15 February 2006, which was more than two years after he had received notification of the ARO's decision. This was, of course, substantially more than the period of 13 weeks referred to in par 152(4)(b) of the Administration Act.

The applicant's Statement of Facts and Contentions refers to the fact that the decision of the SSAT was expressed as a decision to set aside the ARO's decision and send the matter back to the Secretary for reconsideration, as the SSAT was empowered to do under subparagraph 149(1)(c)(ii) of the Administration Act. It is then contended that the direction accompanying the SSAT's decision could, however, result in only one decision, so that in substance the SSAT had set aside the decision and constituted a new decision within the meaning of par 152(4)(c) of the Administration Act, and accordingly, that paragraph was satisfied.

Of course, the function of this Tribunal is not to determine the rights and obligations of the parties arising out of the determination made by the SSAT. It is not necessary or appropriate to characterise the decision made by the SSAT to determine its legal consequences. Rather, this Tribunal must determine the matter afresh, in order to arrive at the correct or preferable decision, but in doing so, stands in the shoes of the decision-maker whose decision it is reviewing.

Under subsection 43(6) of the AAT Act, a decision of a person as varied by the Tribunal, or a decision made by the Tribunal in substitution for the decision of a person, is deemed to be a decision of that person and, "unless the Tribunal otherwise orders, has effect, or shall be deemed to have had effect, on and from the day on which the decision under review has or had effect" (emphasis added).

Mr Harvey did not refer at the hearing to the Tribunal's power under subsection 43(6) of the AAT Act to order that the decision being reviewed should have effect, or be deemed to have effect, on some date other than the date resulting from subsection 152(4) of the Administration Act, or to the possible relevance of this subsection to the applicant's further contention that the delay in the application to the SSAT meant effectively that Mr Mitchell could not recover the arrears of pension (see paragraph 29 above). Following the hearing, I gave the applicant an opportunity to comment on the relevance of subsection 43(6) of the AAT Act, and Mr Harvey provided helpful supplementary submissions on that issue. I also gave the respondent an opportunity to respond, but he did not do so. I do not criticise this omission, because the applicant's supplementary submissions addressed complex legal questions arising from the issue I had raised.

In the present matter, the decision under review is the decision of the SSAT (subsection 179(2) of the Administration Act). Having regard to my above conclusions in relation to the suspension decision, the appropriate decision of this Tribunal, subject to subsection 152(4) of the Administration Act, would be to make a decision in substitution for the decision of the SSAT, and under subsection 43(6) of the AAT Act, that decision would be deemed to be a decision of the SSAT. On the face of it, in those circumstances I would have a discretion under subsection 43(6) to order in effect that the deemed decision of the SSAT should have effect, or be deemed to have effect, on and from some date other than the date of effect of the decision under review.

In its supplementary submissions, the applicant contended that notwithstanding subsection 43(6), this Tribunal, standing in the shoes of the SSAT, was constrained by subsection 152(4) of the Administration Act, and could not back date the effective date of its decision. The applicant relied on dicta of Smithers J in Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 85; (1980) 44 FLR 41 at 45 as to the effect of subsections 43(1) and (6) of the AAT Act. His Honour pointed out that, by virtue of those subsections this Tribunal, when reviewing an administrative decision, may exercise all the same powers and discretions that are conferred on the person who made the reviewable decision, and a decision of the person as varied by this Tribunal, or a decision of this Tribunal in substitution for the person's decision, is deemed to be a decision of the person. He went on to say that those provisions "confirm what is no doubt otherwise implied, that in reviewing a decision the Tribunal is considered as being in the shoes of the person whose decision is in question". He continued:

[55]

The applicant also referred to the decision of this Tribunal in Re Bugg and Secretary, Department of Social Security (1996) (AAT 10842, 27 March 1996). In that case, SM Webster decided that this Tribunal had no greater power to backdate the grant of a DSP than the SSAT, in circumstances where the applicant for a DSP had applied to the SSAT outside the period limited by the then relevant legislation.

However, in Pochi, whilst Smithers J discussed the position of this Tribunal in conducting its function and its relationship with the person who made the decision being reviewed, his Honour did not refer to the discretion conferred on this Tribunal by subsection 43(6) to give that person's decision an earlier operative date than it would otherwise have. Similarly, in Bugg SM Webster did not advert to the above discretionary power. I therefore do not regard those authorities as determinative of the possible application of the discretion conferred by subsection 43(6) of the AAT Act in matters where this Tribunal is reviewing decisions of the SSAT.

In cases where an application is lodged with the SSAT more than 13 weeks after the applicant has been given written notice of the ARO's decision, subsection 152(4) of the Administration Act provides that the social security law has effect as if the decision under review (being in this case the ARO's decision) had taken effect on the day of lodgement of the application. In the present case, that date is 15 February 2006, being the date of Mr Mitchell's (belated) application to the SSAT. By then Mr Mitchell was already receiving the DSP, and so the setting aside of any decision made nearly 3 years earlier to suspend his DSP would not have any practical utility, and would not produce any entitlement to arrears or DSP.

The apparent purpose of the restriction on retrospectivity by virtue of subsection 152(4) of the Administration Act, and of a corresponding restriction in subsection 109(2) in relation to decisions of an ARO, is to limit the total liability of the Secretary if a person delays pursuing his or her claim for longer than the periods of 13 weeks referred to in those subsections. Further, the subsections have the effect of requiring persons who are making claims to pursue their rights of review promptly. In the case of applications for arrears of pension, where the pension is later reinstated as occurred in the present case, the subsections operate in the same way as a statute of limitations, and effectively bar the claimant from entitlement.

The constraint in subsection 152(4) of the Administration Act on the operative date of a decision of the SSAT is in conflict with the discretion in subsection 43(6) to give the deemed decision of the person whose decision is being reviewed a retrospective effect. However, it is a well-established principle of statutory interpretation that a specific section will override an inconsistent general section, especially where the general section is contained in a separate earlier Act which is of general application: D.C. Pearce and R.S. Geddes, Statutory Interpretation in Australia, (6th Edition, 2006) at [4.32], [7.18], [7.21] and [7.26] - [7.31]. In applying that principle, I am mindful that in the case of the Administration Act, Parliament has made provision for appeals to this Tribunal, and has made certain specific amendments to the AAT Act. However, the Administration Act did not amend subsections 43(1) or (6) of the AAT Act.

Where (as in the present situation, by virtue of the AAT Act) this Tribunal stands in the shoes of the SSAT, and has the same powers and discretions as the SSAT, and its decision is deemed to be that of the SSAT, the specific constraint in subsection 152(4) on the effective date of the deemed SSAT decision should, in my view, prevail over the discretion to order retrospectivity contained in subsection 43(6), which is a provision of general application. In resolving the apparent conflict between the two provisions, it is also significant that the specific provision, subsection 152(4), does not literally refer to the effective date of the SSAT decision, but refers in terms to how the social security law is to have effect.

My above conclusion is, I think, also consistent with the role of this Tribunal in conducting merits review. If the SSAT had decided to set aside the suspension decision for the reasons I have referred to above, that decision would have been correct, but by virtue of subsection 152(4) of the Administration Act could not have had an effective date earlier than the (belated) date when Mr Mitchell had applied to the SSAT for review of the ARO's decision. It would not be appropriate for this Tribunal to interfere with what in those circumstances would have been a correct decision, by giving that decision a retrospective operation.

As mentioned above, I have also concluded that Mr Mitchell's DSP should not have been cancelled on 27 May 2003. That decision was set aside by the ARO, but because of the operation of subsection 109(2) of the Administration Act, the pension could only be reinstated as from the date when Mr Mitchell's application for review was received by the ARO, namely 8 October 2003. Neither the SSAT nor this Tribunal has power to give the decision of the ARO an earlier operation, or otherwise overcome the effect of subsection 109(2).

It follows from my above conclusions that I am not empowered to make any order that would result in Mr Mitchell being entitled to recover the arrears of the DSP for the periods from 11 March to 27 May 2003, or from 27 May to 7 October 2003, notwithstanding my view that Centrelink should not have made either the suspension decision or the cancellation decision.

[56]

It is unfortunate that the respondent has been prejudiced by decisions to suspend and then cancel the DSP as a result of Centrelink proceeding with its automatic review process instead of undertaking a "manual" review as contemplated by the Guide, and reviewing whether Mr Mitchell's circumstances had changed. It follows from what I have said above that Mr Mitchell, by means of his letter to the Premier, had made a valid application for review by an ARO of the decision to suspend the DSP within the relevant 13 week period, and a correct review of that decision would have resulted in arrears of the DSP being payable for the period from 11 March to 27 May 2003. In all of the circumstances, I think that consideration should be given to making some payment to the respondent pursuant to the Compensation for Detriment caused by Defective Administration Scheme, or pursuant to s 33 of the Financial Management and Accountability Act 1997 (Cth), which authorises the Minister for Finance and Administration to make an act of grace payment. These are, however, matters outside the jurisdiction of this Tribunal.

As to the cancellation decision, it has not been necessary for me in these proceedings to examine in detail the communications that took place between Centrelink and Mr Mitchell between the date of the suspension decision and the date of the cancellation decision, or in the period following the cancellation decision and before he lodged his application for a review by an ARO. Further, it was not clear whether Mr Mitchell's medical condition affected his ability to apply earlier for review by an ARO, or whether there was some other reason for his delay in making that application.

However, Mr Mitchell did give an explanation for the delay in his applying for review to the SSAT. He said that he did not understand that it was necessary for him to make the application within the 13 week period referred to in subsection 152(4) of the Administration Act. He pointed out in his evidence that the green pamphlet (which I have found accompanied the letter from the ARO advising of his decision on review) states simply that "It is best to appeal within 3 months of the review officer's decision" (emphasis added) (exhibit R1, page 8). The pamphlet does not advise persons adversely affected by a decision of an ARO that they may be prejudiced if they fail to apply to the SSAT within 13 weeks, and does not refer to the effect of subsection 152(4) of the Administration Act.

I also referred above to the wording of the paragraph in the ARO's letter advising of the right of "appeal" to the SSAT. The relevant sentence suggests that the SSAT may effectively waive the 3 months' period referred to so as to permit the payment of arrears, but as I have said, the SSAT has no such power. I do not know whether the same wording is still used on the pamphlet or in letters advising the outcome of the appeals to an ARO. I suggest that the applicant should, in addition to considering the relevance of these matters to an act of grace or defective administration payment, review the relevant wording and its application to circumstances such as those that arose in this case.

Mitchell; Secretary, Department of Employment and Workplace Relations [2006] AATA 804 (20 September 2006)

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Judgment (60 paragraphs)

Mitchell; Secretary, Department of Employment and Workplace Relations [2006] AATA 804 (20 September 2006)

Legislation Cited (4)

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