Theo v Department of Family and Community Services

Federal Court of Australia (Full Court)|2005-11-23|Before: Greenwood JJ

REASONS FOR JUDGMENT THE COURT: 1 This appeal principally concerns the cancellation of the appellant's age pension and the rejection of his following applications for the pension. Also at issue is the question of the method of calculating the appellant's pension entitlements for the period following the overturning of an earlier decision to cancel his pension. 2 In June 2002 a decision was made to cancel the appellant's age pension which he had been receiving. That decision was set aside on the basis that the notices required for it were invalid. Mr Theo was subsequently paid 'arrears' of $11 374, being the total of payments which had not been paid in the period in which the cancellation was effective. 3 On 3 July 2003 Centrelink forwarded a letter to the appellant requesting information about documentation it required to establish that control of the Solon Theo Family Trust ('the Trust') had been relinquished by him and his partner. There had been a history of correspondence concerning the Trust. The appellant was given fourteen days to comply. The letter contained the notification that: 'This is a notice given under section 196 of the Social Security (Administration) Act 1999.' 4 On 8 August 2003 another letter was sent by Centrelink requiring specific documents, including a copy of the amendments of the Trust Deed for the Trust and a form (a Module PT form) which required information to be provided about private trusts. The notice was expressed to be given under s 196 of the Social Security (Administration) Act 1999 (Cth) ('the Administration Act') and concluded with the advice that the appellant needed to contact Centrelink or supply the documents within fourteen days 'to avoid possible cancellation of your Age Pension'. 5 The appellant responded to the letters and demanded further arrears of pension. He did not however provide the documentation sought. The Module PT form was returned by him marked 'N/A'. By letter dated 10 September 2003 he was notified that his age pension was cancelled from that date as he had failed to comply with the request for documentation made on 5 August 2003 (an incorrect reference to the second request of 8 August). Payment was said to have been cancelled in accordance with s 81 of the Administration Act. 6 On 6 October 2003 the appellant applied for the age pension. On 10 October 2003 the appellant was asked by Centrelink for information in connexion with his claim to the pension. It included the Module PT form and proof of identity to a certain level. The authority for the request was said to be 'under social security law'. The appellant was informed that he should comply to avoid possible rejection of his claim and he was given fourteen days to supply the information and documents. The appellant responded by letter dated 15 October 2003 which continued his argumentative approach. He provided a copy of his passport as proof of identity but not the other information required. On 14 October 2003 Centrelink also sent a letter, said to be a notice under s 196 of the Administration Act, referring to the recent request and advising that he had fourteen days to lodge the documents. On 31 October 2003 Centrelink notified of the rejection of his claim for an age pension for the reason 'we cannot pay you your Age Pension because we have not received a reply to the letter/s sent you'. 7 The appellant claimed the pension a second time, by an application dated 8 April 2004. Centrelink wrote to him on 14 April 2004, noting that he had marked as 'N/A' details relating to his bank account. He was also asked to provide proof of identity to a higher level than previously, and information including the Module PT form. The authority was again stated to be generally under Social Security Law and he was told that he needed to supply the documents or contact Centrelink within fourteen days to avoid rejection. On 16 April 2004 a notice under s 196 issued, referring to the previous request and requiring the documents within fourteen days. The appellant had responded to the earlier request by letter dated 16 April 2004. He said that he did not have a bank account and he complained, at a number of points, that Centrelink had the other information requested on his file. On 4 May 2004 he was advised that he would not be paid the age pension because he had not provided acceptable proof of his identity. 8 The appellant sought review by the Social Security Appeals Tribunal and the Administrative Appeals Tribunal of each of the cancellation and rejection decisions, together with the decision which determined the amount of arrears of pension. He was unsuccessful on each occasion. French J dismissed the appeal from the decision of the Administrative Appeals Tribunal.

STATUTORY PROVISIONS 9 Section 36(1) of the Administration Act obliges the Secretary to determine a claim for a social security payment by either granting or rejecting it. Section 37(1) requires the Secretary to grant the claim if the claimant is qualified (par (a)); and the social security payment is payable (par (b)). There is no dispute that the claimant was qualified for the purposes of paragraph (a), by reason of s 43 of the Administration Act. 10 Section 63 of the Administration Act refers to a person who is either receiving a social security payment or has made a claim for one. Section 63(2)(d) permits the Secretary to require a claimant for a social security payment to provide information to the Secretary by written notice specifying the time for the provision of the information. In the event that the claimant fails to comply with the requirement in the notice given under subs (2), the payment that the person is receiving or has claimed is not payable (subs (4)(d) and (f)). The requirement of the notice must be reasonable: subs (4)(c). 11 Section 196 of the Administration Act appears in Part 5 'Information management', Division 1 'Information gathering'. Section 192 in that Part provides a general power in the Secretary to obtain information or have documents produced and applies, inter alia, where there is a question as to whether a person is qualified to make a claim for the payment or whether they are entitled to receive payment. Section 196 requires the notice to be in writing and given in a certain manner, specifying the information to be given and the period within which it is to be given, which must not be later than 14 days after the giving of the notice: (subss (1)(2) and (3)). The notice must specify that it is given under the section: subs (2)(b)(iv). 12 One of the consequences of a failure to comply with s 196 is the commission of an offence, for which s 197 of the Administration Act provides a penalty of a term of imprisonment. Section 81(1) also provides that if a person is given a notice 'embodying a requirement under Division 1 of Part 5' and they do not comply, the Secretary may determine that the payment is to be cancelled or suspended.

The decision of the administrative appeals Tribunal 13 The Administrative Appeals Tribunal ('the Tribunal') found that the appellant had responded to the request preceding the cancellation of his pension by saying that it did not concern him and that he had marked the Module PT form as inapplicable to him. The Tribunal was satisfied that the documents requested were in his possession and under his control. It was not satisfied that he no longer had any involvement with the Trust, after hearing his evidence. It held that the s 196 notice was validly given and the Secretary's discretion to cancel the aged pension under s 81 of the Administration Act was enlivened. It affirmed the decision to cancel. 14 With respect to the first decision rejecting his claim to a pension, the Tribunal referred to each of the requests for information of 10 October 2003 and 14 October 2003. It accepted that he had provided proof of identity, but found that he had not provided the other information required of him. It determined that the second request was a valid notice under s 196 of the Administration Act, and then went on to refer to the provisions in s 37 and s 63 of the Administration Act, holding the latter and in particular subs (4), to apply to the appellant. It affirmed the decision of 31 October 2003 although, it may be observed, for a different reason. 15 The second decision to reject the appellant's claim to the pension was also affirmed. The information requested was much the same as had previously been sought and was not provided. The Tribunal was satisfied that the appellant had failed to comply with a requirement to which s 63(4) of the Administration Act refers and further that a notice complying with s 196 had been given. 16 The Tribunal also affirmed the decision concerning the calculation of the arrears of pension which the appellant contended resulted in an underpayment of about $6 000. The appellant had argued that arrears should have been assessed at the rate applying when the calculation was undertaken. The rate had changed in the period in question. The Tribunal found that the calculation, which had been undertaken by reference to rates applying from time to time in the period, was correct.

the decision of the primary judge 17 His Honour referred in some detail to the provisions relating to the calculation process (at [44]) and concluded that they conferred no power to determine arrears by reference to the rate applicable at the time they were calculated. The provisions relating to the Tribunals, which heard the appellant's applications, could not enlarge the power of the Secretary, on remitter, to calculate the back-pay in the way contended for. 18 The appellant also raised, for the first time before his Honour, a contention that the married rate of pension which had formerly applied to him no longer applied. He contended that the single rate should have been used because he was separated from his wife. It is apparent that his Honour did not consider that a matter not raised squarely before the Tribunal could be raised on appeal. In any event his Honour considered that there was insufficient evidence to support a finding of separation. There was only an oblique reference to this status by the appellant on one of the claims lodged by him and a reference to Centrelink's failure to remove his wife's name. 19 His Honour found that no error of law had been shown by the appellant in connexion with the decisions to cancel his pension and to reject his claims to one. His Honour reasoned as follows: '51. I have set out earlier the AAT's reasoning in relation to the decision to cancel Mr Theo's pension on 10 September 2003 and the rejection of his fresh claims in October 2003 and April 2004. All of these decisions related to Mr Theo's refusal to supply information required by law to be supplied in relation to his entitlement and his claims. Although I have had some reservations about the AAT's reliance upon the s 196 notices as a basis for attracting the application of s 63(4) of the Administration Act, I am satisfied that in the circumstances of this case any error of construction in that regard would not have affected the outcome. In any event the point was not taken. 52. None of the other arguments advanced by Mr Theo disclosed any error of law on the part of the AAT. There was no estoppel which would overcome the statutory powers which supported the cancellation of his pension and the limitation on eligibility under s 63(4) which prevented such a payment being made. There was no constitutional issue arising in this case. Mr Theo argued for some form of contractual entitlement of a constitutional character deriving from his contributions as a taxpayer. The provisions of the Income Tax Assessment Act do not affect the construction or operation of the provisions of the Act or the Administration Act. 53. Mr Theo made the point that no trust deed was necessary to affect his relinquishment of control under the Solon Theo Family Trust. Even allowing for that argument as a response to the requests for information with which he did not comply, he did not comply with other aspects of the requests and, in particular, with the requirement for completion of a PT Module form. In my opinion Mr Theo has not been able to point to any error of law on the part of the AAT which would entitle him to the relief sought.

the appeal 20 The matters raised before French J in connexion with the cancellation and rejection decisions were reiterated on the appeal. The appellant argued that the Commonwealth was obliged to pay him the age pension because there was a promise to pay social benefits made to the public, in consideration of their paying tax. This would seem to suggest that part of the social security legislation regulating rights to a pension is invalid, a matter which is not necessary to be further considered. The appellant's argument is misconceived. The appellant submitted that the Secretary was estopped from denying his entitlement to claim because there was no appeal from the earlier decision overruling the cancellation decision. The estoppel argument also had other aspects to it, none of which identified an operative estoppel nor one which was effective against the exercise of a discretion under a statute: see Minister for Immigration & Ethnic Affairs v Kurtovic (1990) 21 FCR 193 at 207-211. 21 The balance of the nineteen grounds of appeal are largely argumentative and do not identify a question of law, let alone an error of law. There was one point raised by the appellant which might have qualified as one, concerning the application of the Administration Act. The appellant argued, correctly, that the requirements of a notice under s 63(4) of the Administration Act must be reasonable. He contended that they were not, because he was either unable to provide the information sought or he was not liable to provide it because of the provisions of certain guidelines to the Social Security Laws. The appellant relies upon Guide to the Social Security Law 4.12.9.10 ('the Guide') because it refers to resignations from a controlled private trust effective at a certain date, a date later than he says he resigned. The provisions of the Guide to which the appellant refers have as their subject matter particular kinds of trusts which are defined in and for the purposes of the Social Security Act 1991 (Cth). They are not however relevant to questions concerning the failure to provide information pursuant to the Administration Act. Insofar as the appellant relies upon the Guide as conveying something about the date of his resignation from his family trust, it seeks to involve this Court, impermissibly, in findings of fact. Appeals to this Court can involve only questions of law. For the same reason the Court cannot consider for itself the correctness of the Tribunal's finding that the appellant had the information requested but did not provide it. 22 There was one matter to which the Court's attention was drawn. It arose from French J's reservation about the Tribunal's reliance upon the notices under s 196 as a basis for attracting the application of s 63(4) of the Administration Act. His Honour did not consider that any error in construction would have affected the outcomes [at 51]. The appellant did not point to any error on the part of the Tribunal in this regard. He complained that his Honour determined the matter in the face of a reservation. On the hearing of the appeal the Court nevertheless sought and obtained submissions from the respondent on the matter. 23 It seems to us that there is no difficulty with the procedure which was followed concerning the cancellation of the appellant's pension. Section 196 of the Administration Act permits information to be required in connexion with the question whether a cancellation should take place. Section 81 of the Administration Act has the effect that it may be cancelled if not complied with. 24 The steps taken with respect to the determination of the applications for pension are a little more curious. We do not understand why notices under s 196 were given. The relevant notices for the purposes of ss 36 and 37 are those provided for in s 63(2) of the Administration Act. The Tribunal correctly connected ss 36 and 63 and spoke of them as the operative provisions. Its references to the notices under s 196 were not connected with the decision to refuse. One may infer that the Tribunal took the first notices, those stated to be 'under social security law' as notices for which s 63 provides. We agree. In our view it is not necessary that the notice state that it is one given under s 63(2) for it to be a notice for the purposes of s 63(4). There is no such requirement in the section. This may be contrasted with the provisions of s 196, which contains an express requirement to that effect with respect to a notice issued pursuant to it. An important difference between the provisions is that a person failing to comply with s 196 may be sentenced to a term of imprisonment. In those circumstances they need to be informed of the section being applied to them. 25 That leaves the question whether the provision of the s 196 notice has any effect upon the operation of s 63 when a notice is given under the latter section and not complied with. We cannot see that it has. It appears to us irrelevant to that question and an unnecessary step which had no purpose, given that there is no suggestion that the penalty referred to in s 197 was to be sought. Indeed it seems to us that the Tribunal was at something of a loss to know how to deal with them. We do not however take the view that s 196 was used by it to connect to s 63(4) of the Administration Act. In this respect we respectfully differ from his Honour, but agree with the conclusion his Honour reached. 26 The ground of appeal relating to the method of calculating arrears of pension may be dealt with shortly. It is not necessary for us to set out the provisions relating to the method of calculation provided for in the Administration Act. His Honour was clearly correct in holding that they provide no support for the appellant's contention. We also agree that the claim to single status and a pension at that rate cannot be raised when evidence has not been advanced and the matter not argued before the Tribunal so as to permit necessary findings to be made. 27 The appeal will be dismissed with costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Kiefel, Jacobson and Greenwood.

Associate: Dated: 23 November 2005 For the Appellant: Appeared in Person

Solicitor for the Respondent: Australian Government Solicitor

Statutes Social Security (Administration) Act 1999(Cth)ss 196, 81, 36(1), 37(1), 93, 63, 192, 197

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