Re Secretary, Department of Social Security v Julia Wetter [1993] FCA 17; (1993) 112 ALR 151 (1993) 17 Aar 8 (1993) 40 FCR 22 (1993) 29 ALD 310 (4 February 1993)

FEDERAL COURT OF AUSTRALIA

Re: SECRETARY, DEPARTMENT OF SOCIAL SECURITY
And: JULIA WETTER
No. W G114 of 1991
FED No. 13
Number of pages - 20
Social Security
[1993] FCA 17; (1993) 112 ALR 151
(1993) 17 AAR 8
(1993) 40 FCR 22
(1993) 29 ALD 310

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Hill J.(1)

CATCHWORDS

Social Security - family allowance - "dependent child" - "custody, care and control" of child - whether factual or legal test - relevance of agreement between separated parents varying custody order but not registered in Family Court - whether legal custody delegable.

Social Security - sole parent's pension - "substantially" - whether child substantially in care and control of applicant.

Social Security Act 1947 (Cth): ss.3(1) "dependent child"; 43(1) "qualifying child"; 3(2), 52, 86, 160(2), 169.

Family Law Act 1975 (Cth): s.63E.

Secretary, Department of Social Security v Field [1989] FCA 345; (1989) 25 FCR 425, discussed and followed.

Secretary to the Department of Social Security v Van Luc Ho (1987) 17 FCR 582 at 584, referred to.

Van Cong Hunyh v Secretary, Department of Social Security (1988) 18 FCR 402, distinguished.

Secretary, Department of Social Security v Leahy (1989) 19 ALD 319 at 324, referred to.

HEARING

PERTH
4:2:1993, SYDNEY

Counsel and Solicitors Mr P. Macliver instructed by
for Applicant: the Australian Government Solicitor

Counsel and Solicitors Mr A. Metaxas instructed by

for Respondent: Phillips Fox

ORDER

(1) The application be allowed.
(2) The decision of the Administrative Appeals Tribunal be set
aside and in lieu thereof it be ordered that:-
(i) The decision of the Social Security Appeals
Tribunal dated 7 December 1991, so far as it
relates to the family allowance, be set aside.
(ii) The decision of the delegate of the Secretary of
10 August 1990 refusing an application by the
applicant for family allowance be confirmed.
(3) The matter, so far as it relates to Mrs Wetter's claim for a
Sole Parent's Pension, be remitted to the Administrative
Appeals Tribunal for redetermination in accordance with law
with the taking of such further evidence as the Tribunal
shall allow.
(4) The appellant to pay the respondent's costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

DECISION

HILL J. The Secretary, Department of Social Security, appeals against a decision of the Administrative Appeals Tribunal (constituted by a Senior Member) in the following terms:

"The decision of the Social Security Appeals
Tribunal is set aside and the following decision
is substituted:
1. The respondent is entitled to a share of
the family allowance entitlement in
respect of the child Beau Wetter which
shall be shared between herself and Walter
Karl Wetter in the proportions of two
thirds for the respondent and one third
for Mr Wetter.
2. The respondent is entitled to sole
parent's pension for the said child during
the periods which she exercises actual
care and control over him."

2. The appeal to this Court is brought under s.43(2) of the Administrative Appeals Tribunal Act 1975 and is an appeal on, that is to say an appeal limited to, a question of law.

3. Mrs Wetter is the mother of a child, Beau, born on 22 June 1980. She separated from her husband, Walter, on 3 August 1988. In proceedings brought in the Family Court of Western Australia, pursuant to the provisions of the Family Law Act 1975, orders were made on 4 April 1990 in the following terms:

"5. The husband have the sole guardianship and
custody of the said child of the marriage,
BEAU WETTER, born the 22nd day of June
1980.
6. The wife have access to the said child
commencing on Friday the 13th day of April
1990 from 6.00pm Friday to 7.00pm Sunday
on alternate weekends and for one half of
all school holidays."

4. The Tribunal found that Mr and Mrs Wetter, by agreement reached between them, had varied the terms of access on the basis that each of them would take Beau for a week at a time on alternate weeks. This agreement was what the Tribunal referred to as "an informal variation in the formal Family Court access order which was agreed to by she (sic) and her husband". The Tribunal found that during access weeks Mrs Wetter exercised day to day care and control and met all the routine daily expenses incurred during her period of access for such things as food, entertainment, medical expenses and the cost of electricity, water etc, and that during the other weeks her husband met the same types of expenses. There was a sharing of other major items, like tennis lessons, school fees and clothing expenses, although the Tribunal said that the husband paid the greater proportion of these.

5. Mrs Wetter applied for, and was granted, a Sole Parent's Pension. She applied also for family allowance. On 25 July 1990, a delegate of the Secretary of the Department of Social Security decided to terminate Mrs Wetter's Sole Parent's Pension and on 10 August 1990 refused her application for family allowance. In the result, Mrs Wetter appealed to the Social Security Appeals Tribunal which allowed her appeal. That Tribunal set aside the two decisions of the delegate and substituted therefor decisions that Mrs Wetter's Sole Parent's Pension be restored from the date of its cancellation and further that there be a declaration that she and her husband were each qualified to receive family allowance in respect of the child, Beau. A direction was made under s.86(3) of the Social Security Act 1947 (Cth) that the husband receive a share of one half and that Mrs Wetter receive a share of one half of the family allowance from the date of the Tribunal's decision dated 7 December 1990. From this decision the Secretary appealed to the Administrative Appeals Tribunal which made the decision in favour of Mrs Wetter now appealed against.

The Statutory Background
6. The qualifications for payment of a Sole Parent's Pension are set out in sub-sec.44(1) of the Social Security Act 1947 ("the Act"). Relevant to the present case, the person requiring payment of the pension must have a "qualifying child", a term defined in s.43(1) of the Act:

"'qualifying child', in relation to a person, means a
dependent child of that person, or a child who, if he
or she were not in receipt of income from employment
exceeding $100 per week, would be a dependent child of
that person, being a child:
(a) who is under 16; or
(b) ...
where:
(c) the child is a natural or adopted child of the
person;".

7. The expression "dependent child" is, subject to a contrary intention, defined for the purposes of the Sole Parent's Pension in relation to a person as including:

"a child who is being wholly or substantially
maintained by the person;...".

8. There is also a definition of "dependent child" contained in sub-sec.3(1) of the Act. That definition, which applies subject to a contrary intention, is in the following terms:

"'Dependent Child' in relation to a person, means:
(a) in section 4A...
(i) a child under the age of 16 years who:
(A) is in the custody, care and control
of the person; or
(B) where no other person has the
custody, care and control of the
child - is wholly or substantially
in the care and control of the
person; or
(ii) ...
(b) elsewhere in this Act:
(i) a child referred to in subparagraph (a)(i)
who:
(A) is in full-time education; or
(B) is not in receipt of income from
employment exceeding $100 per week;
or
(ii) ..."

9. Subsection 3(2) provides:

"For the purposes of the definition of
'dependent child' in sub-section (1), a person
shall not be taken to have the custody of a
child unless the person, whether alone or
jointly with another person, has the right to
have, and to make decisions concerning, the
daily care and control of the child."

10. Section 52 provides, relevantly:

"(1) Where a child is a qualifying child of 2
or more persons, that child shall, for the
purposes of this Part, other than this
section, be taken to be a qualifying child
of one of those persons only.
(2) Where the Secretary is satisfied that the
child is a qualifying child of 2 or more
persons, the Secretary shall make a
determination in writing accordingly.
(3) In a determination under sub-section (2)
about a child, the Secretary shall specify
which of the 2 or more persons named in
the determination is, for the purposes of
this Part, to be taken as the person in
relation to whom the child is a qualifying
child.
(4) Where the Secretary makes a determination
under sub-section (2), the Secretary shall
cause the 2 or more persons named in the
determination to be informed of the terms
of that determination."

11. Section 160, which applies to the Sole Parent's Pension (that pension arising under Part V of the Act) provides, in sub-sec.(2):

"Where a person who is entitled to receive a
pension is in Australia, an instalment of the
pension is, subject to sub-section (3), payable
to the person on each pension pay-day on which
the person is so entitled."

12. The entitlement to the family allowance arises under s.82 of the Act. For present purposes it is relevant to note that the allowance in respect of a child is payable only if the child is a "dependent child" of the person. The only definition relevant to the words "dependent person" is that already set out and contained in s.3(1).

13. Finally, the terms of s.86 require consideration. That section provides as follows:

"(1) In spite of any other provision of this
Part, family allowance is not payable to
two persons in respect of the same child
on the same family allowance pay-day
except in accordance with this section.
(2) Where the Secretary is satisfied that 2
persons are each qualified to receive a
family allowance in respect of the same
child, the Secretary shall make a
declaration accordingly.
(3) Where a declaration is in force under
sub-section (2), the family allowance in
respect of a child to whom the declaration
relates shall be shared between the 2
persons to whom the declaration relates in
accordance with a direction given by the
Secretary specifying the share that each
person is to receive.
(4) Where the Secretary gives a direction
under sub-section (3), he shall inform the
persons who are to share a family
allowance in accordance with the direction
accordingly."

The decision appealed against
14. The Tribunal, after referring to the statutory framework, referred to the decision of Secretary to the Department of Social Security v Van Luc Ho (1987) 17 FCR 582 where Davies J said at 584:

"the words 'custody, care and control', which
were the operative words both before and after 5
September 1985, and the words 'has the right to
have, and to make decisions concerning, the
daily care and control of the child', which now
appear in s.6(1A) of the Act, must be
interpreted having regard to the context in
which they appear. In that context, the words
should not be given a narrow, strict or
inflexible interpretation. The Act is welfare
legislation and family allowance is provided to
assist in the raising and care of children."

15. Having averted to this passage the Tribunal expressed itself to be of the view that Mrs Wetter had "effective custody, care and control of Beau in the practical sense every second week and during half of every school holidays". It said:

"While she is in daily control of Beau during
the access periods ordered by the Family Court
(as varied by consent) she does have, not only
the right, but also the duty, to make decisions
concerning the daily care and control of the child."

16. The Tribunal's determination that the family allowance be shared so that Mrs Wetter received two-thirds of that Allowance and Mr Wetter one-third, was said by the Tribunal to have been made following principles referred to in the decision of Re Mrs B and Director-General of Social Security (1984) 6 ALD 609.

17. The Tribunal then turned to the matter of the Sole Parent's Pension. It considered the definition of "dependent child" in s.43 and said:

"The word 'substantial' is not defined in the
Act but the second revision of the Macquarie
Oxford Dictionary (sic) gives the normally
accepted usage of the word as 'of ample or
considerable amount, quantity or size, etc' and
in this regard the respondent's contribution to
the maintenance of Beau in terms of both
financial contributions and other forms of
support easily satisfies the criteria (sic) of
being 'substantial'. The Tribunal finds that
the respondent is entitled to receive the sole
parents pension (sic) in respect of Beau but
only for the periods during which he is actually
under her daily care and control."

18. I shall deal, as the Tribunal did, with the question of the family allowance first.

19. For the Secretary it was submitted that the Tribunal had erred by applying an incorrect test of dependency, having regard to the provisions of s.3(1) of the Act. The Tribunal adopted what it expressed to be a practical test of control and custody. However, the Secretary submitted, that was not the correct test having regard to the decision of the full court of this Court in Secretary, Department of Social Security v Field [1989] FCA 345; (1989) 25 FCR 425, a case decided after the decision of Davies J in Secretary, Department of Social Security v Van Luc Ho to which the Tribunal referred.

20. In Field, the respondent had had sole custody of his son until February 1987 when, as a result of orders of the Family Court, custody was given to his former wife and an access order was made sharing the care of the son equally between both parents during the period when he was not at school. The Secretary cancelled the supporting parent's benefit and the matter went ultimately on appeal to the full court of this Court. The question in issue was whether the expression "custody, care and control" in the statutory definition of "dependent child" referred to factual responsibility or whether it referred to legal entitlement to the child's custody. It was noted that decisions prior to the amendments made to the Act in 1985 had construed the expression "custody, care and control" as involving a factual matter unaffected by the legal right to custody. However, the Court in Field (Morling, Beaumont and Burchett JJ) rejected that approach to the Act as amended in 1985. It said (at 429):

"We agree that for the purposes of the
definition of 'dependent child' in s.3(1) a
person cannot be taken to have the custody of
the child unless that person has a legal right
to have, and to make decisions concerning, the
daily care and control of the child. That this
is so, is, we think, made reasonably plain by
s.3(2) which speaks of a person's 'right' to
have, and to make decisions concerning, the
daily care and control of the child. Absent the
order of a competent court depriving a parent of
his common law right to custody of his child,
the parent will have the right referred to in
s.3(2). But when a court makes an order
limiting a parent's common law right, whether
the parent thereafter retains the right of the
kind referred to in the subsection will depend
upon the terms of the court's order. We do not
think that a person can be said to have 'the
right to have... the daily care and control of
the child' merely because he has for some brief
period or periods the de facto custody of the
child, albeit with the consent and approval of
the person to whom the court has committed the
child's custody."

21. Thereafter, the Court considered whether, in certain circumstances, a right of access might confer rights of the kind described in s.3(2). The Court gave an illustration of an order granting access to the child for continuous periods of two months a year in another capital city from that in which the wife dwelt. It expressed the view that a finding could be open in such a case that during every two month period the father had the right to make decisions concerning the daily care and control of the child pursuant to the order of the Court granting access. However, as that matter is discussed in the case, it seemed to depend rather upon the access being extended so that, of necessity, the order for access would include the duty to care for the child. That is not the case, so far as the present court order is concerned. Without wishing to lay down precise rules, the Court said (at 430):

"But having regard to the circumstance that
(supporting parent's benefit) is payable on a
fortnightly basis, we think that a practicable
and sensible rule is that a person who, pursuant
of an order of the Family Court, has the right
of access to his child in his own home for a
period of not less than 14 consecutive days,
should be regarded, ordinarily, as having the
right to have, and to make decisions concerning,
the daily care and control of the child during
that period. A lesser period may, in particular
circumstances, suffice to render a finding open
in favour of the parent enjoying access, but the
ordinary periods here are so brief that the only
conclusion possible is in the negative."

22. It will be recalled that Field was concerned with intermittent access during the school year and a period of approximately four consecutive weeks in the summer school holidays. In the present case, Mrs Wetter had access, under the court order, only on alternative weekends and a maximum of three or four weeks of the school holidays. Just as the time in Field, other than the four consecutive weeks, was insufficient, so too was it here.

23. The question which then arises is whether the fact that the court order was varied by agreement between the parties, that agreement being apparently informal, suffices to distinguish the present fact situation from that in Field. I do not think that it does.

24. At general law, both parents can be said to have the right to the daily care and control of the child. The Family Court of Australia or, as in a case emanating in Western Australia, the Family Court of Western Australia, may affect the general law rights of the parents by granting an order conferring custody upon one or other of the marital parties. Section 63E(2) of the Family Law Act 1975 (Cth) then provides that:

"A person who has or is granted custody of a
child under this Act has:
(a) the right to have the daily care and
control of the child; and
(b) the right and responsibility to make
decisions concerning the daily care and
control of the child."

25. Sections 63E(3), 64(1) and (2) of the Family Law Act empower the Family Court to vary the operation of a custody order by an order granting rights of access, if satisfied that it is desirable to do so. The parties to the marriage may, by consent, vary an order of the Family Court, but to do so their agreement must be registered in a court: Division 10 of Part VII of that Act. An informal and thus unregistered agreement between the parties to the marriage does not operate to vary the court order, although it may operate by way of estoppel inter partes. Also, the Family Court must not enforce an agreement if to do so would, in its opinion, be contrary to the best interests of a child: s.66ZD(4). An agreement between the parties to the marriage varying a court custody order could be considered under s.66ZD(4) in an appropriate case. Nevertheless, where a court order is in existence, that order will determine in accordance with its terms the legal right to the daily care and control of the child unless varied by a subsequent order or a registered agreement.

26. It was submitted that there was a conflict between the decisions of the full court in Field and that of a differently constituted full court in Van Cong Huynh v Secretary, Department of Social Security (1988) 18 FCR 402. In the latter case Morling J, with whose reasons Sheppard J generally agreed, accepted that the test to be adopted was a test of "factual custody, care and control", following the view of Davies J in Van Luc Ho. However, in Van Cong Hunyh the question for decision was not whether the test was legal control as against factual control. Section 3(2) was not referred to. Van Cong Hunyh was not referred to in Field.

27. Should there be a conflict between Field and Van Cong Hunyh, I would prefer the reasons in Field which have regard to s.3(2) and which are, with respect, correct, notwithstanding that to do so could, as the respondent submits, render ineligible for a sole parent's pension an illiterate, impoverished or geographically isolated parent who has quite properly come to have custody of a child but who in practical terms cannot gain access to the Family Court to vary an outdated order.

28. Counsel for Mrs Wetter submitted that even if the Tribunal had erred by applying the wrong test (and it would seem that it did), nevertheless on the facts of the case Mr Wetter should be taken to have delegated to his wife, during the period in which she in fact had access to Beau, namely, each alternate week, his legal power to make decisions on a daily basis with respect to the child. This was an argument which had appealed to the Social Security Tribunal when it had decided the matter. Reference was made to the decision of Lee J in Secretary, Department of Social Security v Leahy (1989) 19 ALD 319. That case, however, does not support the submission. It is true that Lee J referred to delegation, but his Honour did so in the context that a person with legal custody may necessarily have to delegate the power of daily care and control to others but still retain the legal right to legal control. His Honour did not suggest that the person to whom the control was delegated could be said to have that legal control.

29. Leahy was a case where the child in fact was living in the care of a family in Perth. Nevertheless Lee J held that the child's mother continued to have the legal custody and guardianship of the child by virtue of ss.34 and 35 of the Family Court Act 1975 (WA). Consistently with Field, his Honour said (at 324):

"If a person has legal custody there is no room
for a discretionary conclusion of fact as to a
right of control. That right is part of legal
custody and, therefore, would be an established
fact. Section 3(2) of the Act defines custody
by the right to have daily care and control and
not by the exercise of daily care and control.
The latter elements are separately referred to
in the definition of dependent child."

30. It is not for me sitting at first instance to wonder at the legislative policy behind the section. It results, in practical terms, in the need, where parties vary orders of custody, for the variation to be registered with the Family Court so that it is clear that the legal rights, required by s.3(2) to be satisfied, reside in the person making the application for family allowance.

31. I am bound by the decision of the full court in Field and applying the principles contained in that case I must conclude that the Tribunal erred in law in holding Mrs Wetter to be entitled to the family allowance payment.

32. I turn now to deal with the question of the Sole Parent's Pension.

33. The appellant Secretary submits that the Tribunal erred in law in applying the wrong test as to the meaning of the word "substantially". The submission was that the context in which the word "substantially" appears in the definition of "dependent child" in s.43(1) requires the conclusion that it means "as to the greater part" or "in the main". Reference was made to the decision of Mr R.A. Balmford, Senior Member, in the case of Re Mrs B and Director-General of Social Security.

34. As Mr Balmford points out in that case, the meaning of the words "substantial" and "substantially" depends greatly upon the context in which they appear. Reference was made by Mr Balmford to a passage in the judgment of Mayo J in A E Terry's Motors Ltd v Pinder (1948) SASR 167 at 180 where his Honour said:

"What is meant by 'a substantial part' and 'the
remaining part' of the premises? 'Substantial' is not
a word with a fixed meaning in all contexts. In
certain associations it can be taken to stress the
quality of solidarity or strength. It may be related
to the appearance of some physical object. With other
concepts it may refer to weight, volume or area.
Again it may be used to indicate worth, or stability.
Used in a comparative setting, 'a substantial part' as
against 'the remaining part', it suggests a dichotomy
into the substantial part, and the not-substantial, a
contrast, according to cubic contents, or area,
between the greater and the less, or between the
essential and the subordinate or incidental."

35. Mr Balmford adopted what had been said by the Tribunal in Re Grech and Director-General or Social Services (1981) 3 ALN N60 which, after setting out the preceding passage, said:

In the present context we think the proper meaning to
be given to 'substantially' is the following meaning
given to the word in the Oxford English Dictionary
(Vol.X): '4. In all essential characters or features;
in regard to everything material, in essentials, to
all intents and purposes; in the main'."

36. In the present context the word "substantially" appears in contrast to the word "wholly" but forms a phrase with it. If "substantially" bore the meaning suggested by the Tribunal, namely, something more than merely incidental, there would have been no need at all for the word "wholly" to have appeared. It is the word "wholly" that gives context here to the word "substantially". In the context, in my view, the word means something less than "wholly" but more than merely "insubstantial" or "insignificant" and is appropriately paraphrased by the words "in the main" or "as to the greater part". I am reinforced in my view by the adoption of the same view by the full court of this Court in Commissioner for Superannuation v Scott (1987) 71 ALR 408 at 411-3 in a similar context.

37. Counsel for the Secretary conceded that if I were to take the view that the Tribunal had erred in applying the test of "substantially" the matter should be returned to the Tribunal for it to make a finding as to whether Beau was, at the relevant time, "wholly or substantially" maintained by Mrs Wetter. As Mrs Wetter gave no evidence to the Tribunal, and it is stated that she was overseas at the time, it would be appropriate for the Tribunal to determine that matter, having regard to such evidence as it may then take.

38. One further comment should be made. It is clear enough, under s.52 of the Act, that ultimately only one person may receive payment of the Sole Parent's Pension. The Tribunal appears to have taken no account of that section. If the Tribunal forms the view that Beau is a qualifying child in the relevant sense of each of Mrs Wetter and her husband, the Tribunal, exercising the powers of the Secretary, must proceed in accordance with s.52 to make a determination specifying who is to be taken as the person in relation to whom the child is a qualifying child.

39. In a narrow sense, s.160(2) might suggest that the question of entitlement to a pension has to be determined on each date on which the pension is, in fact, paid. To look at the matter of dependency of a child on a particular day would seem somewhat ludicrous. In my view a common sense approach should be taken. It is appropriate to consider a period, being perhaps the whole of the period of two weeks prior to the pension payment date, to see whether in the whole of that period it is appropriate to categorise the child as relevantly being dependent. This is no more than saying that the question of dependency on one day requires looking at the facts immediately before that day and perhaps even immediately after. Ultimately, the scheme of the Act is for a continuous entitlement to pension, but subject to the fact that the pension is to cease where some event or circumstances change so that the person receiving the pension ceases to be qualified or eligible to receive it: s.169. Indeed, the provisions of s.169 tell against treating, in a case where there are alternating weekly or fortnightly periods of access, each of the parents as wholly or substantially maintaining the child in that fortnightly period. Once that fortnightly period came to an end it would be necessary for the person giving up custody for the next fortnight to notify a change of circumstances so that the pension would cease and then be resumed a fortnight later. The Act cannot be assumed to have such a capricious application.

40. Accordingly, in a case such as the present it seems to me that a decision must be made on all the facts as to whether it is appropriate to categorise Mrs Wetter as wholly or substantially maintaining her son. If it is, then she is entitled to the whole pension. If it is not, then, in my view, she is not entitled to the pension at all.

41. Although Mrs Wetter has been unsuccessful, the Secretary has agreed that in the circumstances the Secretary should pay the costs of the appeal and accordingly I would make the following orders:

(1) The application be allowed.
(2) The decision of the Administrative Appeals Tribunal be set
aside and in lieu thereof it be ordered that:-
(i) The decision of the Social Security Appeals
Tribunal dated 7 December 1991, so far as it
relates to the family allowance, be set aside.
(ii) The decision of the delegate of the Secretary of
10 August 1990 refusing an application by the
applicant for family allowance be confirmed.
(3) The matter, so far as it relates to Mrs Wetter's claim for a
Sole Parent's Pension, be remitted to the Administrative
Appeals Tribunal for redetermination in accordance with law
with the taking of such further evidence as the Tribunal
shall allow.
(4) The appellant to pay the respondent's costs of the appeal.