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[2007] AATA 1712
General information, not legal advice.
Administrative Appeals Tribunal of Australia
2007-08-30
Original judgment source is linked above.
CATCHWORDS - PRACTICE AND PROCEDURE - application for reinstatement of application dismissed - reinstatement refused.
Administrative Appeals Tribunal Act 1975 ss 3, 32, 37, 41(2), 42A(1A), (2), (8), (9) and (10); 42A(1B) and 43
Brehoi v Minister for Immigration and Multicultural Affairs (1999) 52 ALD 385
Goldie v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 367; (2002) 72 ALD 652
Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305
Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516; 153 ALR 276
Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597
R v Secretary for the Home Department; Ex parte Mehta [1975] 1 WLR 1087
Re Emeco Australia (NSW) Pty Ltd and Commissioner for ACT Revenue (1993) 30 ALD 725
Re Manoli and Secretary, Department of Social Security [1994] AATA 130; (1994) 35 ALD 133
Re Naupoto, Viliami and Commissioner for Housing [1996] ACTAAT 145
Re Oates and Secretary, Department of Social Security [1994] AATA 252; (1994) 37 ALD 241
Secretary, Department of Social Security v Hulls (1991) 22 ALD 570; 13 AAR 414
DECISION AND REASONS FOR DECISION [2007] AATA 1712
And: SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Decision: The Tribunal has decided to refuse to reinstate the application lodged by the applicant on 16 June 2006 and withdrawn by her on 14 August 2006.
On 14 August 2006, Ms Denise White lodged a notice withdrawing an application she had lodged for review of a decision by a delegate of the Secretary of the Department of Families, Community Services and Indigenous Affairs (Secretary). The Secretary had refused to pay her an age pension due to the income she and her husband received and, more particularly, because of the effect on its payability due to her husband's periodic compensation affected payments. Mrs White applied reinstatement of her application. I have decided that s 42A(10) of the Administrative Appeals Tribunal Act 1975 (AAT Act) permits me to reinstate her application if it has been dismissed "in error". I have decided that there is no error of the kind referred to in s 42A(10). Even if there were such an error, I have decided that I would not exercise the discretion to do so. I reached that decision after deciding that, under the Social Security Act 1991 (SS Act), the Secretary had no option other than to decide that the age pension was not payable to Mrs White because of the effect of her husband's periodic compensation payments.
3. On 20 February 2006, a delegate of the Secretary concluded that Mr and Mrs White's combined income was above the allowable limit.[7] An Authorised Review Officer (ARO) affirmed the decision on 7 April 2006 and did so on the same basis as the delegate had made his decision.[8] Mrs White had challenged the decision on three bases. The first was that she and her husband had understood that they had been advised that she would receive a partial age pension. The second was that the weekly compensation payments should be treated as ordinary income and not as compensation direct deductions. The third was that it is discriminatory to treat the income of a person suffering a disability differently from other income.
4. Mrs White lodged an application with the Social Security Appeals Tribunal (SSAT) for review of the delegate's decision as affirmed by the ARO.[9]
5. The effect of the SSAT's affirmation of the delegate's decision was that it accepted the calculations made by the ARO. They were:
∙ Mr and Mrs White's combined ordinary income is $945.56, and when halved to $472.78 per annum this amount becomes Mrs White's ordinary income figure.
∙ Mrs White's annual compensation figure is $47,736 and his maximum entitlement to a Centrelink payment is $10,613.20. This results in an excess figure of $37,122.80. When added to $472.78 this results in a new ordinary income figure of $37,595.58 for Mrs White.
∙ Mrs White's ordinary income free area is $2,860 and when deducted from her ordinary income figure of $37,595.58, this results in an ordinary income excess of $34,735.58.
∙ The ordinary income excess figure of $34,735.58 is multiplied by 0.4 and the result of $13,894.23 is the reduction for ordinary income.
∙ The maximum payment rate of $10,688.60 is reduced by the reduction for ordinary income of $13,894.23. This results in a nil entitlement to age pension for Mrs White."
The ARO then concluded that the decision to reject Mrs White's age pension was correct because her combined income was too high.
6. A Conference Registrar had a conversation with Mrs White as part of the Tribunal's Outreach Programme for unrepresented applicants. Following that conversation, the Conference Registrar arranged for a standard form entitled "Notification of discontinuance/withdrawal" to be sent to her. Mrs White signed it and dated it 10 August 2006 and returned it to the Tribunal on 14 August 2006. The impact of s 42A(1A) of the AAT Act is that the Tribunal is taken to have dismissed the application without proceeding to review the decision. That happens immediately upon the lodgement of a withdrawal and without any intervention by the Tribunal. Although not formally required, the Tribunal formally recorded it on 15 August 2006 and sent the record to the parties.
7. In a letter dated 15 March 2007, Mrs White wrote to the Tribunal asking that the:
"... appeal be reactivated and a hearing date set. ...
We have sought further advice and our views continue to be that we have been unfairly discriminated against, we also cannot understand why we were telephoned and encouraged not to proceed with this appeal by your department as that defeats the purpose of having an appeal process.
We continue to lobby Parliamentarians but are constantly running into dead ends as we have not exhausted the appeal processes.
8. The Secretary did not oppose Mrs White's application and Centrelink advised of his view in a letter dated 5 April 2007. The Tribunal did not make the order but decided to list the matter for a hearing to hear from both parties as to whether the Tribunal had the power to reinstate the application and, if so, whether it should be reinstated. The matter was listed for 11 May 2007 at Southbank. On 16 April 2007, Mrs White's husband telephoned the Registry to ask if his wife's reinstatement application could be heard by telephone. The hearing was changed on that day to a telephone hearing that would also be heard on 11 May 2007. The Tribunal sent the parties an amended listing notice on 17 April 2007.
THE TRIBUNAL'S POWER TO REINSTATE AN APPLICATION
9. Where the Tribunal has dismissed a application under s 42A(2), an applicant may apply for reinstatement within 28 days of receiving notification of the dismissal.[10] That is the effect of ss 42A(8) and (9). Section 42A(2), however, is not the section under which Mrs White's application was dismissed as it only comes into play if she had failed to appear at certain hearings. Mrs White did not fail to appear. The section under which her application was dismissed was s 42A(1B). That section does not confer any power upon the Tribunal to dismiss an application. Instead, it provides that, if an applicant notifies the Tribunal under s 42A(1A) that the application is withdrawn or discontinued, "... the Tribunal is taken to have dismissed the application without proceeding to review the decision." In the case of Mrs White's application, that means that her application was dismissed immediately when her withdrawal was received by the Tribunal.
10. The only power that the Tribunal has to reinstate an application in those circumstances comes from s 42A(10). That section provides that:
"(10) If it appears to the Tribunal that an application has been dismissed in error, the Tribunal may, on the application and give such directions as appear to it to be appropriate in the circumstances."
That section has two aspects. The first is what is meant by an "error". If there is an error, the second aspect is the discretionary aspect of s 42A(10). In its context, that discretion is inherent in the use of the word "may".
11. Taking the meaning of an "error" first, it is the subject of two streams of authority. They are epitomised by the judgments of the Full Court of the Federal Court in Brehoi v Minister for Immigration and Multicultural Affairs[11] and Goldie v Minister for Immigration and Multicultural and Indigenous Affairs.[12] A significant difference between the two is that the Full Court was required to consider the issue in Goldie but it was obiter dicta, or in the nature of an aside, and not essential to the resolution of the case, in Brehoi.
12. In Brehoi, the Full Court considered the history of the reinstatement provisions in ss 42A(8), (9) and (10) in the AAT Act. It noted that they were inserted in the AAT Act by the Administrative Appeals Tribunal Amendment Act 1993, which gave effect to recommendations made in the Report of the Review of the Administrative Appeals Tribunal dated November 1991 (Report). Proposal 28 of that Report noted that an application dismissed for failure to appear could not be reinstated even though the failure had been excusable. It was proposed that an applicant should be able to apply for reinstatement within 28 days of notification of the dismissal and that the Tribunal should be able to direct that the dismissal be vacated if it were satisfied that course were appropriate. That recommendation found its way into ss 42A(8) and (9).
13. As to the background to s 42A(10), the Full Court said:
"[28] As to what became s 42A(10), the report had identified as a problem ... the following:
The amendment proposed by proposal 28 would deal with the situation of vacation of a dismissal after failure to appear, and that failure is later found to have been excusable. There remains a need, both generally and if proposal 23 [which was that an applicant be permitted to "discontinue" an application in writing] be enacted, for there to be a power to vacate a dismissal where the application has been dismissed by administrative error on the part of the AAT.
In other words, the problem identified was the absence of a 'slip' rule. The report's proposed amendment to overcome that problem had been to provide that 'the tribunal may vacate the dismissal of any application for review where such dismissal has occurred through administrative error on the part of the tribunal.'.
[29] The Senate explanatory memorandum for the bill which became the 1993 Act, in explaining the clause which became, without debate or amendment, s 42A(10), adopted ... the language which had been used in the report, saying that the clause provided for the tribunal 'to reinstate an application which has been dismissed through administrative error on the part of the tribunal'."[13]
14. A different view was expressed by the Full Court of the Federal Court in the later case of Goldie. The majority, Wilcox and Downes JJ considered a submission to the effect that the word "administrative" had to be read into s 42A(10) before the word "error". They said of it:
"... The stated condition for the exercise of subs (10) power is that 'it appears to the Tribunal that an application has been dismissed in error'. The subsection does not impose any qualification or limitation on the word 'error'.
[28] The only limitations that we can see in s 42A(10) are:
(i) that the tribunal has dismissed the application; and
(ii) that the act of dismissal was attended with error.
[29] We do not think it is necessary, in order to enliven the tribunal's power under s 42A(10), that the tribunal, or a member or employee of the tribunal, should have been at fault in relation to the dismissal. The fault may have lain elsewhere, provided it induced the error. For example, because of a mistake as to his or her instructions, a solicitor or other representative of a party might have wrongly consented to a dismissal order or filed a notice of discontinuance. No fault would attach to the tribunal; but if the solicitor's mistake induced the dismissal of the action, it could properly be said that the application had been 'dismissed in error'.
[30] A difficulty about importing the word 'administrative' into s 42A(10) is its imprecision. It is possible to make a clear distinction between actions performed by administrative officers of the tribunal, such as the registrar or registry personnel, and actions performed by the members of the tribunal in their quasi-judicial capacities. It might be possible to say that actions of the former class are 'administrative' actions. But this meaning of the word 'administrative' could not sensibly be read into s 42A(10); a dismissal of an action under subss (1) or (2) will necessarily be an action falling into the latter class. An order under either of those subsections would need to be made by a member of the tribunal exercising the tribunal's quasi-judicial powers."[14]
15. Wilcox and Downes JJ recognised that their conclusion did not agree with that reached by the Full Court in Brehoi. They had difficulty with the analysis adopted in Brehoi because Parliament had not chosen to adopt the words used in the Report. That is to say, Parliament had referred to an "error" and not to an "administrative error". Of the approach adopted in Brehoi, Wilcox and Downes JJ said:
"[34] Although it is appropriate to take account of the Senate explanatory memorandum (see s 15AB(1) and (2) of the Acts Interpretation Act 1901 ..., too much ought not to be made of it. It seems incorrect to say, as the memorandum did, that the 'clause provided for the Tribunal to "reinstate an application which has been dismissed through administrative error on the part of the Tribunal"' (our emphasis). Although rectification of administrative errors (whatever they might be in this context) was apparently the idea behind amendment, the word adopted by parliament was not so limited."
[35] After careful consideration of the matter, and with reluctance, we have come to the conclusion that the view expressed on this issue in Brehoi is not correct. It ought not be followed."[15]
16. Although in dissent on the orders, Carr J did not disagree with the majority that the "error", to which s 42A(10) refers, should be qualified by the word "administrative", to which it does not. That does not mean, though, that an "error" does not encompass an "administrative error". As his Honour said:
"[73] I would accept that a purpose of s 42A(10) is to provide a power to reinstate an application which has been dismissed through administrative error on the part of the tribunal. But I would not accept that s 42A(10) must be construed as applying only where there has been administrative error. I would construe the word 'error' as including administrative error but extending beyond mere administrative error.
[77] In my view, there is a significant desirability of persons being able to rely on the ordinary meaning conveyed by the word 'error'. More importantly, s 42A(10) provides a mechanism of avoiding prolonging legal or other proceedings without compensating advantage. The mechanism is a relatively informal method of bringing a matter back to the tribunal for reconsideration with a view to it being considered on the merits. It can be seen as a convenient, prompt and inexpensive means whereby errors which may have occurred in the exercise of the tribunal's default jurisdiction can be rectified. That is, any sort of error in dismissing an application summarily, whether the error be administrative error or any other error.
[78] As a matter of construction, I would confine s 42A(10) in its operation to dismissals under s 42A itself which have been made in error, not dismissals generally."[16]
17. Unlike the majority, Carr J did not give an example of an error that might be of a sort referred to in s 42A(10). The passages from his judgment to which I have referred speak in terms of an "error in dismissing an application" and of "dismissals ... which have been made in error". The way he has chosen to express himself is consistent with the words of s 42A(10) itself i.e. "that an application has been dismissed in error". This mode of expression might suggest that the error to which s 42A(10) refers must have been that of the Tribunal. That would follow from that fact that the Tribunal, and not the applicant, has the power of dismissing an application. Therefore, it may be arguable from Carr J's choice of language that, if there have been "dismissals ... made in error", those dismissals must have been made in error by the Tribunal.
18. That argument would also be open on the judgment of the majority if regard were had only to the two limitations they identified in [28] of their judgment in relation to s 42A(10) i.e. "that the Tribunal has dismissed the application" and that "the act of dismissal was attended with error".[17] Their example, however, not only throws the validity of that argument into grave doubt but also makes the boundary defined by the two limitations most uncertain. My reasons for that view are these. The example that Wilcox and Downes JJ choose focuses on a solicitor or a party's representative who, because of a mistake as to the client's instructions, consents to a dismissal order or a notice of discontinuance. If the Tribunal acts under s 42A(1) on the consent to the dismissal, it will have dismissed the application. If the notice of discontinuance is lodged, the Tribunal will be taken to have dismissed the application by virtue of s 42A(1B). In either case, the first limitation identified by Wilcox and Downes JJ would be satisfied.
19. But what of the second limitation? Would the "act of dismissal" (emphasis added) be attended with error? It is difficult to see how it would be. Given that the person making the error is the party's solicitor or representative and that the Tribunal is aware of the representation, the Tribunal is entitled to rely on the apparent or ostensible authority the solicitor or representative has.[18] The "act of dismissal" would not be attended with error. Were it the case that the Tribunal had not been advised that the solicitor or representative was the party's representative in the proceeding or that it had been advised that the person were no longer representing the person, the "act of dismissal" would be attended with error. That would follow from the fact that the Tribunal would have no basis on which it could rely on the consent to dismissal or notice of discontinuance.[19]
20. Wilcox and Downes JJ have not distinguished between the two situations. That must mean that they are prepared to go beyond the act of dismissal to look for an error that does not attend the act of dismissal but to one that precedes the act of dismissal. Once that position is reached, the question then becomes: by how much may the error precede the act of dismissal or what must the connection be between the error and the act of dismissal? Is the error limited to some aspect of the document of discontinuance or consent to dismiss that the Tribunal relies on to dismiss the application or upon which the AAT Act operates to deem the application dismissed? I do not need to explore that issue in this case.
21. If an error is established within the meaning of s 42A(10), reinstatement is not automatic. Reinstatement is a matter for the Tribunal's discretion but s 42A(10) does not give any guidance as to the way in which the Tribunal should exercise that discretion. I consider that the principles that guide the discretion given to the Tribunal to reinstate an application under s 42A(9) are relevant. That section provides that the Tribunal may reinstate an application dismissed "... if it considers it appropriate to do so ... and give such directions as appear to it to be appropriate in the circumstances."[20] No express guidance is given in the AAT Act as to the manner in which the Tribunal's discretion should be exercised but principles have been developed in related contexts in the Tribunal and the courts.
22. In Re Oates and Secretary, Department of Social Security,[21] for example, I attempted to identify some principles that might be taken into account in the context of s 42A(8). I did so after canvassing the various authorities relating to the consideration of applications for extension of time generally and, in the courts, applications to reinstate proceedings or to set aside a default judgment. I concluded that an application under s 42A(8) is more akin to the latter type of applications rather than to applications to extend the time within which to initiate proceedings at all. A different view was earlier expressed in Re Manoli and Secretary, Department of Social Security.[22] The difference lies, in the main, in respect of whether principles similar to those gathered in Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment[23] in relation to an extension of time should be applied or whether other criteria are relevant_._
23. Reinstatement applications begin from the premise that:
"... the person whose proceedings have been dismissed should not be prevented from presenting his or her case provided the person's misconduct has not prejudiced the other party."[24]
24. Notions of fairness between the parties are also relevant. In civil proceedings in the court, wider notions of fairness are not relevant as the action is viewed simply as a matter between the parties concerned. In the review of administrative decisions, it is arguable that wider notions of fairness are relevant. An administrative decision affecting an individual may be only one of many made under a legislative scheme and affecting a number of other individuals. This fact draws in the need to have regard to notions of what is fair not merely between the parties but also between the applicant and those in a like position. In Re Oates, I described those who are in a like position:
"(20) When compared with applications for an extension of time, the group of persons in a position like that of an applicant seeking reinstatement of his application, will be substantially smaller. The group does not comprise those in respect of whom a particular type of administrative decision has been made but those who have actually sought review but failed to appear at the appropriate time and whose applications have been dismissed. Arguably, the public interest shifts from ensuring certainty in administrative decision making and consistency of treatment of those affected by decisions to ensuring the efficient operation of a case management scheme and consistency of treatment of those affected by that scheme. Having had regard to the cases of Davies v Pagett[[25]] and Lenijamar Pty Ltd and Ors v AGC (Advances) Ltd_,_[[26]] I do not think that the public interest in this sense is directly relevant in its own right. What will be relevant is the regard which the parties have paid to that case management system. It will be relevant in assessing whether the respondent has been prejudiced and whether the respondent is likely to be prejudiced again in the future by the applicant's conduct."[27]
25. I would add to these two principles, a third. That is whether the application, if reinstated, would have merits. That does not require an exhaustive consideration of the merits but it does require a consideration of whether the application would have any chance of success if reinstated. To reinstate an application in circumstances in which there can be no chance at all of its being successful is to give false hope to an applicant as well as to waste the resources of both parties let alone of the Tribunal.
26. Consideration of the merits of an application is common place in considering applications to extend time.[28] In Jackamarra v Krakouer[29], Brennan CJ and McHugh J adopted a statement by Lord Denning MR in R v Secretary for the Home Department; Ex parte Mehta[30] to the effect that, on an application to extend time, the court would "...never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time."[31] Brennan CJ and McHugh J explained the reason for this approach:
"[9] One reason that an appellate court does not go into 'much detail on the merits' in considering whether the time for an appeal should be extended is because ordinarily it only has 'limited materials and argument'. Unless motions to extend time for appeals are to turn into full rehearsals for those appeals, appellate courts can only assess 'the merits' in a fairly rough and ready way. In most cases, that assessment will be made from the statement of the applicant's case rather than from the opposing arguments or any detailed examination of the proofs of the argument. The merits are merely one of the factors that must be considered in determining whether the discretion to extend time should be exercised... The court needs to remind itself also that the parties do not expect to argue the merits issue as elaborately as if they were arguing the appeal itself.
[10] It is one thing to conclude that counsel's statement of the appeal argument contains the ground for its rejection. It is another matter altogether to hold that, although the logic of the argument is impeccable, the appeal has no merits because the applicant has not taken the Court to the detail of the evidence, the statutes or the case law. Given the practice in hearing applications for extension of time, the rules of procedural fairness require that an appellate court should not determine the application on the details of the evidence (if they have been provided) or the lack thereof unless counsel has been given fair notice that the court intends to take that course."[32]
27. Professor Curtis, President of the Administrative Appeals Tribunal of the Australian Capital Territory adopted a similar approach in Re Emeco Australia (NSW) Pty Ltd and Commissioner for ACT Revenue:[33]
"... I think that the proper test is to be put no higher than that the applicant has or can have an arguable case."[34]
In Re Naupoto, Viliami and Commissioner for Housing,[35] he noted that it is not essential that there be some material before the Tribunal with regard to prospects of success. There may, though, be practical reasons for there being so:
"21. Because the Tribunal must weigh up all of the relevant factors, it will generally be in an applicant's interest, if his or her case for an extension of time is otherwise weak, to put material to the Tribunal to show that the substantive application has a good prospect of success. Where there are otherwise good grounds for granting an extension of time, and there is nothing in the material before the Tribunal to show that the substantive matter has little or no prospect of success, it is not necessary for an applicant to show that the substantive application has reasonable prospects of success in order to obtain an extension of time. ..."
28. The principles regarding the prospects of success or merits of the applicant's case were stated in the context of applications for an extension of time but are equally applicable to an application for reinstatement. In both instances it is futile to reinstate an application when the Tribunal has no power to review the decision concerned.
The calculation of the rate of the Age Pension payable
29. The rate at which Age Pension is payable to a person who is not permanently blind is worked out using Pension Rate Calculator A (the Rate Calculator) at the end of s 1064.[36] It is part of Chapter 3, which sets out general provisions relating to payability and the rates at which pensions and allowances are paid. The Rate Calculator sets out eight steps that must be followed in calculating the rate of, among others, an age pension. They are:
(b) add any additional amounts that are subject to income or assets testing;
(c) apply the income and assets tests;
(d) add any additional amounts that are not subject to income or assets testing."
30. The steps are expanded in Module A, which is found in point 1064-A of the Rate Calculator. It is clear from that section that the addition of the amounts worked out under the first two steps leads to a figure described as the maximum payment rate. The third step leads to two amounts which are both deducted from the maximum payment rate. The first amount deducted is known as the income reduction and the amount remaining after its deduction is known as the income reduced rate. The second amount deducted is known as the reduction for assets and the amount remaining after its deduction from the maximum payment rate is known as the assets reduced rate. The income reduced rate and the assets reduced rate are compared and the lower of the two rates becomes the provisional annual payment rate. The rate of pension is obtained by subtracting certain advances that might have been made and adding any amount payable by way of remote area allowance.
31. The effect of step 5 of point 1064-A1 is that the income reduction is worked out by applying "the ordinary income test" set out in Module E at the end of s 1064. Point 1064-E1 sets out six steps to be followed in Module E. Under the first, the person's ordinary income needs to be worked out on a yearly basis followed by the person's ordinary income free area. If the person's ordinary income does not exceed the person's ordinary income free area, the person's ordinary income excess is nil. If it does exceed the person's ordinary income free area, that amount is described as the person's ordinary income excess. It is used to work out the person's reduction for ordinary income using points 1064-E10 to 1064-E12. Point 1064-10 requires that the figure calculated as the ordinary income excess must be multiplied by 0.4. The resulting figure is the reduction for ordinary income.
32. Returning to the first step of the ordinary income test, it requires the person's ordinary income to be worked out on a yearly basis. The general meaning of "ordinary income" is set out in s 1072. That section is found in Part 3.10, which contains provisions relating to the ordinary income test and is applicable to all Rate Calculators appearing in Chapter 3. It provides that a person's ordinary income:
"... for a period is a reference to the person's gross ordinary income from all sources for the period calculated without any reduction, other than a reduction under Division 2 or 3."[37]
33. The references to Divisions 2 and 3 are references to Divisions in Part 3.10. Division 2 is concerned with the conversion of foreign currency amounts and Division 3 with the disposal of ordinary income. Neither is relevant in this case. The word "income" is defined in s 8(1) of the Act in relation to a person to mean and again this is a provision generally applicable to the interpretation of other provisions of the SS Act. It provides that:
"(a) an income amount earned, derived or received by the person for the person's own use or benefit; or
(b) a periodical payment by way of gift or allowance; or
(c) a periodical benefit by way of gift or allowance;
but does not include an amount that is excluded under subsection (4), (5) or (8);"
34. Sections 8(4) and (5) are concerned with home equity conversion and are not relevant. Section 8(8) is concerned with a person's payments under the SS Act and a variety of payments that might be made to the person under a superannuation fund, an approved deposit fund, a deferred annuity or an Australian Taxation Office small superannuation account or a wide variety of other payments. None of these payments includes a payment of compensation or damages for a work-related injury or for a personal injury and so they are included for the purposes of "income" in s 8(1).
35. Part 3.14 of the SS Act is headed "Compensation recovery". Section 1160(1) sets out that the:
"... Part operates in certain specified circumstances to do one or more of the following:
(a) reduce a person's compensation affected payment;
(b) render a person's compensation affected payment not payable;
(c) require the repayment of some or all of a person's compensation affected payment;
because of the receipt of compensation by the person or the person's partner."
36. Only ss 1160(1)(a) and (b) can have any relevance in the context of this case. A "compensation affected payment" includes an age pension[38] and Part 314 is applicable to any age pension that would be payable to Mrs White as the provisional commencement day or start day for it is on or after 20 March 1997.[39]
37. A person may receive a lump sum of compensation or periodic payments of compensation. The term "periodic payments of compensation" is read in light of the term "lump sum compensation"[40] and there is no question that Mr White is in receipt of periodic payments of compensation.
38. The effect of periodic payments of compensation varies according to whether they are received by the person claiming a compensation affected payment or by that person's partner in the periodic payments period. The "periodic payments period" is a reference to the period to which the periodic compensation payments relate.[41] Section 1173 is concerned with the situation in which the person claiming the compensation affected payment and the recipient of the periodic payments of compensation are the same. It provides:
(a) a person receives periodic payments; and
(b) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the rate of the person's compensation affected payment in relation to that day or those days is reduced in accordance with subsection (2).
(2) The person's daily rate of compensation affected payment is reduced by the amount of the person's daily rate of periodic compensation.
(3) The reference in subsection (2) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
(a) a person receives periodic compensation payments; and
(b) at the time of the event that gave rise to the entitlement of the person to compensation, the person was qualified for, and was receiving, a compensation affected payment; and
(c) the person receives or claims a compensation affected payment in relation to day or days in the periodic payments period;
the periodic compensation payments are to be treated as ordinary income of the person for the purposes of this Act."
39. Section 1174 is concerned with the effect of periodic compensation payments on the rate of a partner's compensation affected payment. It provides that:
(a) a person receives periodic compensation payments; and
(b) the person is a member of a couple; and
(c) the person was not, at the time of the event that gave rise to the entitlement of the person to the compensation, qualified for, and receiving, a compensation affected payment; and
(d) the person is qualified for a compensation affected payment in relation to a day or days in the periodic payments period but, solely because of the operation of this Part, does not, or would not, receive the payment; and
(e) the person's partner receives or claims a compensation affected payment in relation to a day or days in the periodic payments period;
the amount (if any) by which the daily rate of periodic compensation payable to the person exceeds the daily rate of compensation affected payment for which the person is qualified in relation to a day of days in the periodic payments period (the excess amount) is to be treated as ordinary income of the person's partner for the purpose of the calculation of the amount of the compensation affected payment referred to in paragraph (e).
(2) The reference in subsection (1) to a daily rate of periodic compensation is a reference to the amount worked out by dividing the total amount of the periodic compensation payments referred to in paragraph (1)(a) by the number of days in the periodic payments period.
(a) the amount that would, apart from this section, be the amount of the partner's ordinary income in relation to the day or days referred in paragraph (1)(e) is to be increased by the excess amount; and
(b) the increased amount is to be taken to be the amount of the partner's ordinary income in relation to that day or those days, as the case may be."
40. The tests in ss 1173 and 1174 show that the effect of a periodic compensation payment on a compensation affected payment varies according to whether that periodic compensation payment is received by the claimant for the compensation affected payment or by the claimant's partner. If received by a claimant for a compensation affected payment, the amount of any compensation affected payment payable to the claimant is reduced on a dollar for dollar basis. Should the claimant be a partner of a person who has received a periodic compensation payment, the dollar for dollar reduction does not arise. Instead, the amount, if any, by which the periodic compensation payment exceeds the compensation affected payment payable to the claimant's partner is regarded as the claimant's income.
Was Mrs White's application dismissed in error?
41. I do not consider that Mrs White's application was dismissed in error. As I have said, her application for review was dismissed immediately the Tribunal received her notice of withdrawal. There was no doubt that her notice of withdrawal was such a notice and the Tribunal has not made an error in identifying it as such.
42. Mrs White did not make an error in sending the notice of withdrawal to the Tribunal. She knew what she was sending and that is so even though she later thought that she should not have sent it at all but should have continued with the review process. Whichever stream of authority is followed regarding the meaning of an "error" in s 42A(10), the error must bear some relation to the dismissal. There is no error of that kind in this case. That is so even though Mrs White thought that she had received advice from the Conference Registrar and that the Conference Registrar's advice was incorrect. As is apparent below, I do not consider that any view expressed during the Outreach by the Conference Registrar as to the merits of Mrs White's application was incorrect. The extent to which a Conference Registrar should express a view in conducting an Outreach as opposed to, for example, a conciliation conference, was not raised or discussed in this case; only the fact that the Conference Registrar had expressed a view was raised. I can understand that she felt that the outcome of her sending the notice of withdrawal was to deny her the opportunity to have the Secretary's decision reviewed when that is the purpose of the review process. That denial is, though, an outcome of the decision by Parliament to permit an applicant to end proceedings without a review and, in some instances, the Tribunal to do so. It is not an outcome of any error within the meaning of s 42A(10).
If there is an error, should the Tribunal exercise the discretion?
43. My conclusion that there is no error within the meaning of s 42A(10) is an end of the matter. The Tribunal has no power to reinstate an application and so no discretion to do so unless there is such an error. Despite that, I have considered whether I would have exercised the discretion had I found an error. I have done that lest I have been mistaken as to the aspect of error.
44. Mr White said that he and his wife had been trying to have the policy behind the AAT Act changed by Parliament. They felt that the operation of the SS Act was to discriminate against them. Had he been working, his wife would have been entitled to a part pension. As it is, she is not entitled to a pension at all. When the rate of payment of a compensation affected payment is calculated, Mr and Mrs White argue, the amount of a periodic compensation payment should be deducted from the amount of the compensation affected payment that would otherwise be payable to the person. It should not be treated as income and used to reduce the maximum rate payable for the relevant compensation affected payment.
45. Mrs White has been quite quick in seeking reinstatement. She has not rested on the matter so that the Secretary has been led to think that the matter is long finished. There are no witnesses in a matter such as this so there are no concerns about time having passed and witnesses lost or having become unavailable. The only real issue in this case relates to the merits of the application.
46. I have already set out the relevant provisions of the SS Act. On their face, they clearly support the way in which the ARO and the SSAT have applied Pension Rate Calculator A to determine Mrs White's entitlement to be paid an Age Pension. As neither she nor her husband were in receipt of a compensation affected payment at the time of the event that gave rise to his entitlement for compensation, Mr White's periodic compensation affected payments must be taken into account in accordance with s 1174 in order to determine if there is an ordinary income excess. Point 1064-E10 then requires that figure to be multiplied by 0.4. Once that figure is determined, it is compared with the maximum rate of payment of the compensation affected payment to which Mrs White would be entitled. Given that the figure exceeded that maximum rate, there could be no compensation affected payment payable to Mrs White.
47. This is clear from s 1174. There is no discretion given by the SS Act to choose to deal with the compensation affected payment in any other way. Not only is this clear from ss 1173 and 1174 themselves, it is also clear from the Explanatory Memorandum that accompanied the introduction of the Family and Community Services Legislation (Simplification and Other Measures) Bill 2001 in the House of Representatives. That Bill introduced the current regimen regulating the manner in which compensation affected payments are affected by periodic compensation payments. In his Second Reading Speech, the Minister for Community Services explained what were seen to be the merits of this result when compared with the previous treatment of periodic compensation payments on a partner's compensation affected payment:
" Currently, if a person gets a compensation affected payment, which is defined in the act, then they lose one dollar for every dollar of period compensation received. If this amount is reduced to zero, then any excess compensation counts against their partner's compensation affected payment dollar for dollar.
In future, if a person partner's periodic compensation has to be taken into account in working out the person's income for social security purposes, it will be treated as ordinary income of the person.
It is expected that this measure will result in an increase in the amount of social security pensions and benefits paid to couples with low levels of income derived largely, or solely, from compensation payments."[42]
48. In this case, I do not consider that Mrs White's application, if reinstated, would have any merits. That is so even if I accept everything that has been stated by Mr and Mrs White without question and I have no reason to question what they have stated. The absence of merits means that I would decide to refuse to reinstate Mrs White's application even if I had power to do so.
I certify that the forty-eight preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: ...................................................................
[1] Documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents) at 17-20
[10] AAT Act, s 42A(8) An exception occurs where the AAT has made an order under s. 41(2) giving the applicant temporary relief from the implementation of the decision while the application for review is on foot.
[11] (1999) 52 ALD 385; constituted by Whitlam, Moore and Katz JJ
[12] [2002] FCAFC 367; (2002) 72 ALD 652; constituted by Wilcox and Downes JJ, Carr J dissenting
[13] (1999) 52 ALD 385 at 389-390
[14] [2002] FCAFC 367; (2002) 72 ALD 652 at 657
[15] [2002] FCAFC 367; (2002) 72 ALD 652 at 658-659
[16] [2002] FCAFC 367; (2002) 72 ALD 652 at 666
[17] [2002] FCAFC 367; (2002) 72 ALD 652 at 657
[18] Some of these issues arise from time to time in this context and in the context of consent decisions under s 43 of the AAT Act because, unlike the courts, the AAT does not require a party to enter an appearance. This follows from the fact that s 32 of the AAT Act provides that "... a party to the proceeding may appear in person or may be represented by some other person." Unlike Order 9 Rule 1 of the Federal Court Rules, s 32 does not require an "appearance", and so a written notice, to be lodged or given. Consequently, it does not require the party concerned to choose whether to act personally in the matter or through a representative. Furthermore, unlike Order 9 Rule 1, s 32 does not necessarily relate to the proceedings as a whole. That follows from the breadth of the definition of the word "proceeding" in s 3 of the AAT Act.
[19] A notice of discontinuance lodged by a person who, to the Tribunal's knowledge, is no longer representing a party might also raise questions whether the notice could be said to be a nullity for the purposes of s 42A(1A) and so have no effect for the purposes of s 42A(1B). In the case of a consent to dismiss lodged under s 42A(1) by such a person, the application of the principles of Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 might lead to the conclusion that there was no legal foundation on which the Tribunal could dismiss the application under s 42A(1) and so no decision to dismiss at all.
[23] [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305. The essential features of those principles are set out in the head note to the case which reads:
"(a) the fact that the applicant bears the onus of rebutting the prima facie rule that no ... proceedings commenced outside the prescribed period will be entertained by the court by showing an 'acceptable explanation of the delay' and that it would be 'fair and equitable in the circumstances' to extend the time;
(b) any action taken by the applicant, apart from the actual making of an application for review under the ADJR Act, which continues to make the decision-maker aware that the finality of his decision is being contested;
(c) any prejudice to the respondent which may have resulted from the delay;
(d) any unsettling of people, other than the respondent, or of established practices;
(e) the merits of the substantial ... application;
(f) considerations of fairness as between applicants and other persons in like positions: it is not only prejudice vis-a-vis the parties but against the wider public interest which must also be taken into consideration."
[24] Re Oates and Secretary, Department of Social Security [1994] AATA 252; (1994) 37 ALD 241 at 246
[27] [1994] AATA 252; (1994) 37 ALD 241 at 246-247
[28] It is one of the factors to which Wilcox J draws attention in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment [1984] FCA 176; (1984) 3 FCR 344; 58 ALR 305
[31] [1975] 1 WLR 1087 at 1091. Cited with approval by Brennan CJ and McHugh J in Jackamarra v Krakouer [1998] HCA 27; (1998) 195 CLR 516; 153 ALR 276 at 519; 295
[32] [1998] HCA 27; (1998) 195 CLR 516; 153 ALR 276 at 521-522; 279-280 (omitting footnotes)
[34] (1993) 30 ALD 725 at 732
[40] Secretary, Department of Social Security v Hulls (1991) 22 ALD 570; 13 AAR 414 at 575
[42] Hansard, House of Representatives, 24 May 2001 at 26971
(1984) 3 FCR 344
(1998) 195 CLR 516
(1986) 10 FCR 226
(1990) 27 FCR 388
(2002) 209 CLR 597