Pledger v Secretary, Department of Family & Community Services [2002] FCA 1576 | Case summary

The AAT decision 30 In October 2000, the Department, having conducted a review of the applicant's capacity to service the debt determined that her circumstances no longer warranted the debt being written off. It began to withhold $49.81 per fortnight from her Newstart Allowance. 31 On 25 January 2001, the applicant sought review of the decision to withhold part of her Centrelink payments. She offered to repay the debt at $20.00 per fortnight. 32 On 16 July 2001, the applicant lodged an appeal to the AAT against the decision of the SSAT which affirmed the decision of the Department that she owed a debt to the Commonwealth. On 20 July 2001, the Department reduced the sum withheld from her Newstart payments to $20.00 per fortnight. 33 On 5 November 2001 the AAT affirmed the SSAT's decision that the debt incurred by the applicant not be waived. However, it set aside that part of the SSAT's decision that the recovery of the debt be written off. It substituted a decision that she repay the debt. 34 After setting out some uncontentious matters, the AAT observed at [4]: "There is some dispute as to when and how often the applicant informed the Department of their error in continuing to pay carer pension to her. Centrelink's records indicate that the applicant received various notices during those four years including three recipient notices, annual pensioner concession cards and annual statements for taxation purposes, all of which indicated that the applicant was in receipt of carer pension. It was not until 1 May 1997, following a proposed medical review of the applicant's mother, that the applicant's carer pension was cancelled." 35 The AAT then summarised some of the evidence which had been adduced before it. It said at [7]: "The written evidence from Centrelink included printouts from its computer system which provided the dates and text of several letters sent to the applicant. Centrelink's records indicate that the applicant notified the Department of her mother's death in April 1993. The applicant was given notices on 20 September 1993, 28 August 1996 and 6 February 1997 that indicated that the applicant was being paid carer pension. The respondent also sends out annual pension statements, for taxation purposes, to all its recipients, with a description of the particular social security payment paid. In February 1997, the applicant applied for, and was granted, an advance payment of carer pension and declared in the form that she was on carer pension at that time." 36 The AAT continued at [9]: "The applicant told the Tribunal that her mother passed away on 18 April 1993 and that she reported the death to the respondent the next day. She said that she had subsequently reported the death several more times by telephone, letter and in person at the respondent's office. The applicant said that her mother' age pension ceased but regular payments of carer pension continued. She said that when the payments continued notwithstanding her having told Departmental officers of the situation, she gave up trying to rectify what she thought was an administrative error in the title of the benefit she was receiving. The applicant said that she believed that she was entitled to a social security payment of some sort after her mother's death and thought that she would have been transferred automatically to the most appropriate payment. Having informed the respondent of the error on several occasions, the applicant said that she decided that if they could not get the description of the benefit right in their correspondence, it was not her problem but theirs." 37 The AAT noted that the applicant had conceded, in response to a question from the advocate from the Department, that she recalled getting pension concession cards with "Carer Pension" specified on them. However, she claimed that "she did not really pay much attention to the description of the type of payment on those cards or in other correspondence". She was adamant that she had informed a person named "Rosemary" at Centrelink's Fitzroy office, of her mother's death. She was also adamant that she had repeatedly told Rosemary, and other Centrelink staff, that she was still getting a carer pension despite the fact that her mother had died. 38 The AAT said at [15]: "The applicant said that she could not recall receiving all of the letters that Centrelink claimed to have sent her. She commented that mail regularly went missing in the high rise building in which she lived. On being questioned by Mr Perdon, she conceded that she knew that the carer pension provided marginally greater benefits than some other forms of social security payment. However, she maintained that she had told Centrelink staff both orally and in writing on many occasions about the death of her mother and nothing had been done about it." 39 The AAT accepted the applicant's evidence that following her mother's death, she had immediately notified the Department as required. This was evidenced by the fact that the Department stopped payment of her mother's pension shortly thereafter. The AAT further accepted that the applicant was told that she was still eligible to receive the carer pension during the bereavement period. However, she had continued to receive that pension after that period had expired. The AAT noted that the Department itself had accepted that the ongoing carer payments were the result of its own administrative error. 40 The AAT noted that the Department, while conceding administrative error, submitted that the applicant was aware that she was receiving carer pension despite being ineligible to do so. The Department tendered letters, taxation statements and concession cards that had been sent to the applicant, at her correct address, which referred to the fact that she was being paid "Carer Pension". The Department submitted that it could not be said, in these circumstances, that the applicant had received the payments in good faith. 41 The AAT then referred to the decision of Finn J in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 152 ALR 127. That case involved a matter where a student notified the Department that he was no longer entitled to "AUSTUDY". However, payments continued to be made for several months. The student became aware of the continuing payments, and contacted the Department repeatedly in an attempt to have the payments stopped. They were finally cancelled only after the student's Member of Parliament contacted the Department on his behalf. 42 Finn J held that the money had not been received in good faith at any time. The AAT noted that his Honour's reasoning had been followed, and applied in a number of subsequent cases. These included, in particular, Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424 where the applicant received a duplicate instalment of basic family payment of $2,065.60 which was erroneously paid into her bank account. When she later became aware of this additional payment, she queried it at her bank. However, she did not contact Centrelink, choosing instead to withdraw and spend that amount. Not surprisingly, Cooper J held that the payment had not been received in good faith. 43 There is then, in the AAT's reasons for decision, a paragraph which contains essentially all of its critical findings of fact. That paragraph is of central importance to this appeal. The AAT said at [27]: "The applicant admitted that she knew that after her mother's death, she was no longer entitled to a carer pension once the bereavement period had ended. She informed the respondent of the death and expected that carer pension would subsequently cease but it did not. The Tribunal accepts that the applicant did not act fraudulently and that she tried to have the administrative error rectified. However, the Tribunal does not accept that the applicant did not know that she was being paid carer pension during the following years. The Tribunal accepts that the applicant thought that she would be eligible for some other social security pension or benefit in lieu of the carer pension and did not realise that there would be adverse consequences for her if she utilised that money. Nonetheless, the Tribunal is satisfied that the applicant was aware that she was being paid carer pension when no longer eligible and that she utilised those funds." 44 Having made these findings of fact, the AAT then formulated what it considered to be the relevant legal test for "good faith". It said at [28]: "As is indicated in s1237A(1) of the Act and its attendant legislative note, the debt to the Commonwealth must be waived if the administrative error is the cause of the debt and if the recipient acted in good faith. The case law cited above indicates that a person in the applicant's circumstances, who has tried to rectify an administrative error unsuccessfully, but continues to utilise the payments, is not acting in good faith. The Tribunal finds that the applicant does not meet the mandatory waiver requirements in s1237A(1) of the Act." (emphasis added)

Consideration 53 As noted earlier, the AAT concluded that the applicant did not meet the waiver requirements in s 1237A(1) of the Act. That was because she was aware throughout the relevant period that she was being paid a carer pension to which she was not entitled, and had nonetheless utilised the funds. 54 The AAT derived the meaning which it accorded to the expression "in good faith" from the judgment of Finn J in Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (supra). That case concerned the proper construction of s 289(2) of the Student and Youth Assistance Act 1973 (Cth) which was, in all relevant respects, identical to s 1237A(1) of the Act. Finn J said at 130: "The section asks that a quite specific question be addressed: was the payment received in good faith? It is quite unconcerned, for example, with whether, after 22 December, Mr Prince acted in good faith towards DEETYA. Its sole concern is with whether a particular state of affairs exists at the time a payment (or payments) is received. The significance of the statutory context in which the formula is used is in the illumination it gives as to what is that required state of affairs. It has correctly been observed that the term "good faith" (or its now less fashionable Latin equivalent "bona fide") is a protean one having longstanding usage in a variety of statutory and, for that matter, common law contexts. I merely instance provisions protective of public officials in respect of illegal acts done in good faith in the purported execution of a statute; for a discussion of which see eg Little v The Commonwealth (1947) 75 CLR 94 at 108-110; the duty of good faith of a mortgagee exercising a power of sale: eg Downsview Nominees Ltd v First City Corp Ltd [1993] 1 NZLR 513; and "good faith" as an essentially knowledge or notice idea in both statutory and common law contexts involving property dealings: see eg Bankruptcy Act 1966, s 120(6); Queensland Bacon Pty Ltd v Rees (1966) 115 CLR 266. The burden of the formula can vary significantly given the purpose it is intended to serve in a given setting. In one context it can focus inquiry upon a person's reason for action (eg as with the good faith duty of company directors); in another, to a person's state of knowledge when a particular event occurs. For my own part, I consider the burden of the formula in the s 289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received - ie is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith. Given the conventional liability of a mistaken payee of money from consolidated revenue to repay that money irrespective of his or her belief as to an entitlement to it (ie the "rule" in Auckland Harbour Board v R [1924] AC 318), the concession made to the mistaken payee by s 289 of the SYA Act does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the parliament intended otherwise." (emphasis added) 55 In Jazazievska (supra) Cooper J explained, and elaborated upon, the reasoning of Finn J in Prince at par [40]: "[40] Prima facie, s 1237A(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it." (emphasis added) 56 His Honour then dealt specifically with the concept of "wilful blindness" as an adjunct to the state of mind to which he referred above. He said at [41]: [41] A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists. …" 57 Although the AAT referred in some detail to both Prince and Jazazievska, it did not refer to a more recent decision of this Court in Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529 which was also directly in point. In that case, French J was plainly troubled by one aspect of the reasoning of Finn J in Prince, namely his Honour's use of the expression "reason to know" as being synonymous with the state of mind of the person concerned. French J sought to clarify the meaning of that expression in the following terms at [16]: "Consistently with what [Finn J] said in the Prince case, want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non entitlement in the mind of some imaginary recipient. That proposition is consistent with the view that the existence of such facts may support an inference that the recipient disbelieved or doubted or was suspicious about his or her entitlement. "Reason to know" as Finn J used that term in Prince does not necessarily import a criterion of imputed as distinct from a want of good faith as I have described it." (emphasis added) 58 French J went on to say at [17]: "None of these findings go to the state of mind and whether he had a belief, doubt or suspicion as to entitlement which would require a recipient acting in good faith to make an inquiry. Concern, puzzlement, upset and a perception of unusual circumstances, coupled with absence of further inquiry, are not enough themselves to constitute want of good faith." (emphasis added) 59 What seems to emerge from these authorities is that whether a payment has been received in good faith can only be determined after a careful consideration of the actual state of mind of the recipient of that payment. In that sense the test is entirely subjective, and not objective. However, plainly idiosyncratic views as to what might be regarded as acceptable behaviour, including the standards of a "Robin Hood", will not be regarded as amounting to "good faith". It should be noted, in this regard, that wilful blindness is itself a state of mind: Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 219-220. 60 The test propounded by the AAT when it determined that the applicant had not acted in good faith appears to have been modelled upon the passages in both Prince and Jazazievska set out above. Certainly, some of the language used by the AAT was similar to the language used in those cases. That does not mean that the AAT necessarily applied the correct test. Whether it did so depends upon the answer to another question. That is, were the passages from which it drew so extensively intended to formulate an exhaustive statement of the meaning relevantly to be accorded to "good faith"? 61 An immediate difficulty confronting this Court is the extreme brevity with which the AAT expressed its findings of fact. It is by no means easy to discern from its reasons precisely what findings it made regarding the applicant's "state of mind" when she received the payments. 62 There seems to be no doubt that the AAT accepted much of the applicant's evidence. It accepted, for example, as it was bound to do, that she informed the respondent almost immediately of her mother's death. It accepted that she tried repeatedly, although unsuccessfully, to have the Department's "administrative error" rectified. It accepted that she thought that she would be eligible for some other social security pension or benefit in lieu of the carer pension. It found that she did not appreciate that there would be "adverse consequences" for her if she utilised that money. Importantly, it accepted that the applicant did not act fraudulently. 63 On the other hand, the AAT also found that the applicant was aware that she was being paid a carer pension when no longer eligible and that she utilised those funds. That finding might have been expressed with greater precision. It does not make clear whether her awareness that she was being paid a carer pension when no longer eligible meant that she knew that she was not entitled to a pension of that type, or whether it meant that she knew that she was not entitled to a pension of any type at all. The AAT apparently concluded that its finding was sufficient to negate the proposition that she had received the payments in good faith. 64 Regrettably, the paragraph in which the AAT set out its critical findings of fact seems to me to leave a number of questions unanswered. Although the AAT noted that on being questioned by the advocate for the Department, the applicant conceded that she knew that the carer pension provided "marginally greater benefits than some other forms of social security payment", it did not make any specific finding as to whether she believed that by continuing to receive a carer pension, she was receiving benefits over and above those to which she would have been entitled, in any event, had the Department corrected its administrative error. That seems to me to be a matter which must be relevant to whether she acted in good faith. 65 Another example of the difficulties which arise from the brief nature of the AAT's findings of fact is its finding that the applicant "tried to have the administrative error rectified". Did that finding entail a complete acceptance of the applicant's account of the many attempts which she claimed to have made to inform the Department of her mother's death, and that it may not be appropriate to continue paying her the carer pension? Or did it reflect a more qualified acceptance of that account? 66 A further example lies in the AAT's finding that the applicant did not act "fraudulently". It may be that the AAT intended by that statement to say no more than that she did not act deceptively. Alternatively, it may be that it expressed that finding because it was conscious of the observation made by Cooper J in Jazazievska at [40], as set out earlier, that: "A lack of good faith does not mean that the recipient must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive or retain the payment when he or she receives the payment and decides to exercise control over it by retaining it." 67 I have no difficulty in accepting, as Cooper J did, that there is a distinction between a want of good faith, and fraud. It is possible that a person may have acted without good faith, but not fraudulently. It is another question as to whether a person may have acted without good faith, but not dishonestly. The terms fraudulently and dishonestly are sometimes treated as though they were synonymous. Strictly speaking, that is incorrect. Fraud connotes an element of deception. Dishonesty may be established without any element of deception. 68 The passage in Jazazievska must be understood in context. As noted earlier, that case concerned the payment of a large sum into the applicant's bank account. That payment caused her immediately to make inquiries of the bank. However, she specifically refrained from making inquiries of Centrelink regarding the payment. Moreover, she withdrew the money, and spent it. It was hardly surprising that Cooper J concluded that it was open to the AAT to find that the applicant did not have an "honest belief" that she was entitled to receive and retain the payment. 69 The finding in the present case by the AAT that the applicant did not act fraudulently may have a particular significance. That depends upon whether by that finding it meant to convey merely that she did not act deceptively, or whether it meant to go further and conclude that she did not act dishonestly. If the AAT intended to say that she did not act dishonestly, there may be difficulties associated with its conclusion that she did not act in good faith. 70 The authorities suggest that the terms "dishonesty" and lack of "good faith" are closely related. 71 In Central Estates (Belgravia) Ltd v Woolgar [1972] 1 QB 48 the Court of Appeal had to determine the validity of a claim by a tenant to acquire the freehold or extended lease of a property, pursuant to s 4(1) of the Leasehold Reform Act 1967 (UK). 72 Lord Denning MR said at 55: "… The words "in good faith" are often used in statutes but rarely defined. A good instance is the Larceny Act 1916, which speaks of "a claim of right made in good faith", but does not tell us what "good faith" means. Other instances come readily to mind. The Limitation Act 1939, section 26, speaks of cases when a right of action is concealed by "fraud", but does not define what is meant by "fraud" in this context. It is left to the courts to work it out from case to case: see Applegate v. Moss [1971] 1 Q.B. 406. In all such cases, when a word or phrase goes undefined, the judges have to work out for themselves the meaning of it, doing the best they can to interpret the will of the legislature in regard to it. That is the principle I stated in Seaford Court Estates v Asher [1949] 2 K.B. 481, 499. To my mind, under this statute a claim is made "in good faith" when it is made honestly and with no ulterior motive. It must be made by the tenant honestly in the belief that he has a lawful right to acquire the freehold or an extended lease, and it must be made without any ulterior motive, such as to avoid the just consequences of his own misdeeds or failures. If the landlord asserts that the tenant's claim is not made in good faith, the burden is on the landlord to satisfy the court that the tenant, in making the claim, is acting dishonestly or with an ulterior motive." (emphasis added) 73 Phillimore LJ said at 56: "Was the claim made otherwise than in good faith? Counsel could not help us very much. One said that a claim was not made in good faith when it was made in bad faith. Another said that a claim must be dishonest if it was to be described as made otherwise than in good faith. It was said that a claim would not be made in good faith if the facts stated in it were untrue to the knowledge of the tenant or if the claim was made for some ulterior motive. … I have come to the conclusion that the only course that the court can follow is to deal with the matter on the facts of this case. …" 74 Megaw LJ said at 57: "The words "in good faith", in my opinion, mean "honestly"." (emphasis added) 75 An earlier decision to similar effect was Mogridge v Clapp [1892] 3 Ch 382. There Kekewich J said at 391 that the words "good faith" were to be equated with the words "bona fides". His Lordship considered that the best way of defining the expression was to say that it was "the absence of bad faith - mala fides". 76 There are also statutory definitions regarding "good faith". In both the Bills of Exchange Act 1882 (UK) and the Sale of Goods Act 1979 (UK) a thing is deemed to be done in good faith when it is in fact done honestly whether it is done negligently or not. In the United States Uniform Commercial Code "good faith" is defined as meaning "honesty" in the conduct of the transaction concerned. 77 The view that "good faith" is broadly synonymous with "honesty" is supported, in a different context, by cases which have dealt with the introduction of the "privative clause" regime by the enactment of s 474 of the Migration Act 1958 (Cth) in October 2001. One of the few exceptions to the operation of that clause is a claim that the decision maker has acted in bad faith. "Bad faith", in that context, is said to imply "a lack of an honest or genuine attempt to undertake the task". More importantly, it is said to involve "a personal attack on the honesty of the decision-maker": NAAV v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 228 at [107]-[108] and SCAS v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 397. 78 Although a want of good faith under s 1237A(1) cannot be equated precisely with the common law concept of bad faith, as that concept has developed in other areas of public law,it is clear that both concepts are closely related. It is a serious matter to say of someone that he has not acted in good faith. An allegation of that type connotes an element of moral turpitude. It should not lightly be made. 79 The applicant's case before the AAT was, in substance, that she had not acted dishonestly. Indeed, her case was that she had done nothing wrong. The AAT accepted that she did not act fraudulently. Notwithstanding that conclusion, on one view it did not specifically address the broader question of whether the applicant had acted honestly. The AAT focused entirely upon the fact that she was "aware" that she was being paid carer pension "when no longer eligible", whatever may have been intended by that expression. 80 The AAT's approach to this issue is redolent of the problems which have beset the criminal law when dealing with the concept of "dishonesty". Broadly speaking there are two contrasting approaches to the meaning of this term. 81 Section 2 of the Theft Act 1968 (UK) provides a partial definition of dishonesty in the context of the offence of theft. A person's appropriation of property belonging to another is not to be regarded as dishonest if, inter alia, he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person. An accused does not act dishonestly if he believes, whether reasonably or not, that he has the legal right to do the act which is alleged to constitute an appropriation of the property of another. It is irrelevant that no such right exists in law. 82 Although s 2 of that Act refers specifically to a right in "law", it has been held that this does not necessarily exclude a belief in a merely "moral right". 83 In R v Feely [1973] 1 QB 530 it was held that whether a person who appropriated property belonging to another had acted "dishonestly" involved a question of fact for the jury to determine by reference to the defendant's state of mind. It was for the jury, applying the current standards of ordinary decent people, to determine whether the defendant had acted dishonestly. A taking to which no moral obloquy could reasonably attach was not within that concept. 84 In R v Ghosh [1982] QB 1053 it was held that "dishonestly" in the Theft Act described the state of mind, and not the conduct, of the person accused. The test of dishonesty was subjective. However, the standard of honesty to be applied was the standard of reasonable and honest people, and not that of the accused. Accordingly, the jury, in determining whether the accused had acted dishonestly should have first considered whether he had acted dishonestly by the standards of ordinary and honest people and if they found that he had, then they had to consider whether he himself must have realised that what he was doing was by those standards dishonest. It follows that there is no scope under this formulation for a person to be able to claim that he did not act dishonestly in circumstances where his subjective views are significantly at variance from the standards of ordinary members of the community. 85 The position in Victoria is somewhat different from that in England. The word "dishonestly" is said to be used in a "special sense" in that part of the Crimes Act 1958 (Vic) which incorporates the provisions of the English Theft Act. 86 In R v Bonollo [1981] VR 633 it was held, following two earlier decisions of the Full Court of the Supreme Court (R v Salvo [1980] VR 401 and R v Brow [1981] VR 783), that in order to establish dishonesty the prosecution must prove that the accused obtained the property without any belief that he had a legal right to do so. A belief on his part that he was morally entitled to do what he did was not sufficient to exculpate him. 87 However, the authority of Bonollo, and the two cases which preceded it, is no longer regarded as certain in consequence of the decision of the High Court in Peters v The Queen (1998) 192 CLR 493. That case concerned the statutory offence of conspiracy to defraud the Commonwealth. Gaudron and Toohey JJ, with whom Kirby J agreed on this point, held that the requirement of fraud in the offence of conspiracy to defraud incorporates dishonesty. Moreover, in determining dishonesty, the matter should simply be left to the jury with the instruction that the question whether particular conduct was dishonest was to be "determined by application of the standards of ordinary, decent people". In other words, the Court chose to follow the approach taken in England in Feely, and in Ghosh, rather than the approach taken in Victoria. 88 It should be noted that the New South Wales Court of Criminal Appeal long ago adopted the approach taken in England to dishonesty: see R v Glenister (1980) 2 NSWLR 597. 89 To complicate matters still further, the Victorian Court of Appeal in R v Lawrence [1997] 1 VR 49 held that Ghosh should be adopted in preference to Bonollo in relation to the crime of stealing, misappropriation or conversion of property belonging to the Commonwealth. 90 A taking without moral obloquy negates dishonesty. It seems to follow that the applicant's belief that she had done nothing "morally" wrong, not just by her own standards, but by the standards of ordinary decent people, must at least be relevant to whether she acted in "good faith". 91 The applicant's case, as presented to the AAT, was that although she was aware that she was no longer entitled to a carer pension after her mother's death, she at all times believed that she was entitled to a social security pension or benefit, albeit under a different name. It seems to me that it is not sufficient in those circumstances simply to ask whether she was aware that she was not entitled, in law, to a carer pension. 92 It is far from clear whether the AAT found that the applicant believed that by receiving the carer pension she obtained an amount greater than that to which she would be entitled if she received a different pension or benefit. When one considers as well her repeated, though unsuccessful, attempts to have the Department rectify its error, the question of her good faith is seen to be significantly more complex than the AAT appears to have recognised. 93 Assuming that one accepts as true the applicant's account of her state of mind, I consider that there is a serious question as to whether ordinary, decent members of the community would regard what she did as "dishonest". I am not dissuaded from that view by the AAT's finding that she was "aware" that she was being paid carer pension when "no longer eligible". 94 I am fortified in my conclusion that the AAT erred in its approach to the question of good faith by a consideration of the legislative background to the Act, and its nature and purpose. 95 In Blunn v Cleaver (1993) 47 FCR 111 a Full Court of this Court (Sheppard, Neaves and Burchett JJ) commented, at 120-1, in the following terms upon the drafting of the Act: "The Minister, in his Second Reading Speech on the Social Security Bill 1990 (which became the Social Security Act 1991), delivered in the House of Representatives on 6 December 1990, said: "… The object of this Bill is to overcome the problem of readability by using a 'clear English' drafting style and format. That style and format should make it a more accessible piece of legislation that ordinary Australians can reasonably be expected to understand."" 96 Their Honours continued at 125-126: "A consideration of the historical development of the legislative provisions leaves no doubt that the intention of the legislature has been to eliminate, so far as possible, what has been referred to as "double dipping" in those cases where there is a prescribed correlation between an entitlement to a social security pension, benefit or allowance of the prescribed kind and an entitlement to compensation. To achieve that end the legislation has sought to deal with a variety of situations and it would not be surprising, given that context, to find that the language used is not entirely apposite in some of the situations with which the legislation intends to deal." 97 Their Honours then stated at 127: "Before concluding this judgment, we feel constrained to make a general reference to the Act in which the legislation in question is contained, the Social Security Act 1991. The Act in its current form contains more than 1,364 sections. We have not counted the precise number. To do so would involve taking account of a number of sections which are identified by letters as well as numbers. These have been added to the Act in the short period of two years in which it has been in force. The Act, including the notes to it, occupies 1,471 pages of the Commonwealth Statutes. The professed aim of the drafting of the Act is to make it more accessible to persons without legal training. It is necessary to say "more accessible" - perhaps it is really necessary to say "less inaccessible" - because no-one seriously believes the layman can master the Act unaided. This case shows its own authors did not - for if they had, they would not have left it so ambiguous. But their aim was to assist the inexpert." 98 After referring to the fact that in February 1993 the Senate Standing Committee on Legal and Constitutional Affairs made its first report on "The Cost of Justice" and recommended that the law which people must obey should be readily understood by them, and should be as comprehensible to members of the public as possible, their Honours concluded at 128: "The comments we have made are not intended to undervalue simplicity. But the pursuit of simplicity without due regard to the subject matter may be foolishness. And an Act that is two or three times as long is not necessarily easy to read because some technical expressions (which once understood were succinct) have been replaced by wordier ones … A substantial portion of these reasons contains our attempt to explain the provisions of the legislation relevant to the problem here at issue. We do not apologise for the fact that, to many, what we have written will appear complex and difficult to follow. Indeed, without a copy of the Act within one's hand and a reference to a succession of provisions, one can make no sense of it. It is difficult to know what can be done about this problem. As the Senate Committee remarked, the increasingly complex society in which we all live very often demands that legislation be expressed in a complex form. That is the factor which will so often operate to prevent simplicity in legislative drafting. The area of social services legislation is a complex one as the terms of the previous legislation and judicial decisions upon it have demonstrated. That is what the draftsman of this legislation may have sought to overcome. Regrettably, the replacement consists of a maze of provisions made the more complex by prolix definitions, provisos and exceptions. Both those who claim entitlements under it and those responsible for its administration will not always find it easy to discover whether or not a benefit is payable. …" 99 See also Anstis v Secretary, Department of Social Security (1999) 96 FCR 421. 100 When one notes that one of the principal aims of the Act was to prevent "double dipping", and when one bears in mind that there is no suggestion, in the present case, of that having occurred, it is obvious why the suggestion that the applicant did not receive the payments in good faith requires careful consideration. It must be remembered that the Act makes provision for many different types of social security payments and benefits, a number of them expressed in complex and highly technical terms. A significant proportion of those who receive such benefits are likely to be disadvantaged. Some of them will have great difficulty in dealing with bureaucracy, and will find the entire process of complying with the requirements of the Act almost beyond them. 101 I readily accept that a person in the applicant's circumstances might genuinely have taken the view that she had done all that she could to persuade the Department to correct its administrative error. It is understandable that she should believe, in those circumstances, that if the Department wished to designate her pension as a carer pension, and not give it its correct name, that was a matter entirely for the Department. 102 I conclude by noting that the expression "received in good faith" in s 1237A(1) encompasses such a wide variety of circumstances that it is not helpful to seek to define them exhaustively. Instead, in each case there are considerations of degree, involving an assessment of the importance of a particular aspect of the state of mind of the recipient of the payment. Paradoxically, in an Act which is replete with highly technical language, and which defines some terms in a manner which is almost unintelligible, the expression "good faith" is left undefined. Regrettably, on this occasion commendable legislative restraint has not produced clarity. 103 Normal canons of statutory construction would suggest that the words "good faith", which are inherently open textured, are not used in any special sense in the Act. They are therefore to be accorded their ordinary and natural meaning. The words themselves are normative, and not descriptive. In other words, they are value laden, and the values which they reflect must be the values of ordinary, decent members of the community. 104 I accept that Finn J in Prince correctly held that there is a distinction between receiving a payment in good faith, and acting in good faith. However, the two concepts are not wholly removed from one another. 105 When, as in the present case, a recipient of a particular pension has tried repeatedly, but without success, to have the Department cease paying that particular pension, and the person knows or believes that she is entitled in any event to a different pension or benefit, it is impossible to treat these matters as irrelevant to whether the payments were received in "good faith". 106 I do not accept the submission advanced on behalf of the respondent that the applicant's attempts to have the Department rectify its error were irrelevant. Nor do I accept the submission that the applicant was obliged, as a matter of law, to leave the funds credited to her in her bank account until she somehow persuaded the Department to change the basis upon which the payments were made. That submission struck me as being unrealistic. The applicant plainly had no other sources of income, and no other means to live apart from drawing upon the pension paid to her. She could hardly be expected to do nothing with the funds credited to her account until the Department finally overcame whatever difficulties it had with recognising that the carer pension should no longer be paid. I note that the error made by the Department persisted for approximately four years. 107 The question then arises as to what orders are appropriate on the appeal? Normally an error of law on the part of the AAT leads to the matter being remitted to be heard and determined according to law. However, in some cases, there will be no point in remitting the matter. For example, it may be clear that there is only one possible outcome of any such rehearing. This is not such a case. 108 It is for the AAT, standing in the shoes of the respondent, to determine whether some, or all, of the payments made to the applicant were received in good faith. In arriving at that determination, the AAT will need to make findings of fact which are significantly more specific that those previously made. It will need to determine, for example, whether the applicant genuinely believed, during the relevant period, that she was entitled to some form of social security pension or benefit which was broadly equated to the amount that she was receiving by way of carer pension. The question is, of course, what she believed, and not what some reasonable person might have believed. However, an unreasonable belief is less likely to be accepted as having been genuinely held. 109 I should add that, strictly speaking, the AAT must consider the applicant's state of mind, as it may have varied, throughout the entire period in question. It is possible, for example, (and I make no comment whatsoever as to whether or not this should be done) that the AAT might conclude that she received some of the earlier payments in good faith, but not the later ones. The AAT was, of course, obliged by the terms of s 1237A(1) to determine what proportion, if any, of the debt should be waived. It is tolerably clear from its reasons for decision that it did give specific consideration to that issue. 110 I trust that my reasons for judgment will not be misunderstood. This is a most unusual case. A finding that a person was aware that he or she was being paid a carer pension when no longer eligible, will normally lead to the conclusion that the payments were not received in good faith. However, knowledge of lack of entitlement to a particular type of pension will not inevitably lead to that conclusion. 111 There is nothing mechanistic about the task which the AAT must perform. It must take into account all relevant matters. These include those which tell in favour of the applicant as well as those that do not. The AAT is also obliged to include in its reasons for decision any finding on material questions of fact and a reference to the evidence or other material on which those findings were based: s 43(2B) of the AAT Act. 112 In my opinion the application for an extension of time should be granted. The appeal should be allowed and the matter remitted to the AAT for hearing and determination according to law. Having regard to the circumstances of this case I consider that the AAT should be differently constituted when it rehears this matter. The respondent must pay the applicant's costs. I certify that the preceding one hundred and twelve (112) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.

Pledger v Secretary, Department of Family & Community Services

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