Secretary, Department of Employment and Workplace Relations v Kelly [2006] FCA 659 (29 May 2006)

Secretary, Department of Employment and Workplace Relations v Kelly [2006] FCA 659

SOCIAL SECURITY – eligibility for newstart allowance – respondent a full-time student – respondent enrolled for honours year – newstart allowance not payable to persons enrolled in full-time course of study unless certain statutory conditions met – conditions not met – whether Administrative Appeals Tribunal finding that applicant ought to have formed a particular opinion, or taken certain actions, sufficient to satisfy conditions

Held: finding that particular opinion ought to have been formed, or certain actions ought to have been taken, by Secretary not sufficient to satisfy statutory criteria which require the existence of such opinion, or taking of such actions

Social Security Act 1991 (Cth) ss 593, 601, 604, 606, 613,
Administrative Appeals Tribunal Act 1975 (Cth) s 44

Attorney General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 referred to
Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 referred to

SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS v LUKE KELLY

VID 2 of 2006

WEINBERG J
29 MAY 2006
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 2 OF 2006

BETWEEN:	SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS APPLICANT
AND:	LUKE KELLY RESPONDENT
JUDGE:	WEINBERG J
DATE OF ORDER:	29 MAY 2006
WHERE MADE:	MELBOURNE

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

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 2 OF 2006

BETWEEN:	SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS APPLICANT
AND:	LUKE KELLY RESPONDENT

JUDGE:	WEINBERG J
DATE:	29 MAY 2006
PLACE:	MELBOURNE

1 This is an appeal, pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth), from a decision of the Administrative Appeals Tribunal ("the AAT") given on 5 December 2005. By that decision, the AAT affirmed a decision of the Social Security Appeals Tribunal ("the SSAT") given on 18 April 2005, in which the SSAT set aside a decision by the applicant cancelling the respondent’s newstart allowance. The "appeal" to this Court is in fact an exercise of the Court’s original jurisdiction.

2 The respondent indicated at a directions hearing that he did not wish to participate in this proceeding, and no longer had any interest in the matter. Accordingly, I have heard argument only from the applicant.

3 The background facts can be briefly summarised. The respondent completed a Bachelor of Environmental Science degree at Deakin University in July 2004, and thereafter unsuccessfully sought employment. He was in receipt of newstart allowance from that time. He was advised by his university lecturers that his prospects of finding a job would be significantly enhanced if he were to undertake an honours year. He enrolled for that extra qualification in February 2005.

4 On 11 February 2005, a decision was taken by a Centrelink officer, acting as a delegate of the Secretary to the Department of Family and Community Services (which, at that time, had responsibility for newstart), to cancel the respondent’s newstart allowance on the basis that he was no longer eligible for that benefit as he was undertaking full-time study. On 22 February 2005, that decision was affirmed by an authorised review officer. On 24 March 2005, the respondent lodged an appeal with the SSAT. As already indicated, he was successful in that appeal. He was also successful before the AAT. It was that decision that prompted the appeal to this Court.

5 It should be noted that no newstart payments were made to the respondent after 11 February 2005, when the benefit was cancelled. Accordingly, there is no issue as to recovery of any alleged overpayment in this proceeding.

6 Section 593 of the Social Security Act 1991 (Cth) ("the SSA") sets out the basic qualifications for the payment of a newstart allowance. Section 593(1)(b) provides that one such qualification is satisfaction of what is described as "the activity test".

7 Section 601(1) provides that a person satisfies "the activity test" in respect of a particular period if that person satisfies the Secretary that, throughout the period, the person is actively seeking and willing to undertake paid work in Australia, other than paid work that is unsuitable to be undertaken by the person.

8 Section 601(2) provides that a person also satisfies the activity test in respect of a period if the Secretary is of the opinion that, throughout the period, the person should, inter alia, undertake a course of vocational training or participate in another course approved by the Employment Secretary which is likely to improve the person’s prospects of obtaining suitable paid work, or assist the person in seeking suitable paid work.

9 Section 606 provides that a Newstart Activity Agreement (which is relevantly defined in s 604(1C)) shall contain certain terms. The person with whom such an agreement is entered is required to undertake one or more of a series of activities approved by the Secretary.

10 Section 613 deals with the conditions of eligibility of full-time students for a newstart allowance. The section is pivotal to this proceeding, and provides as follows:

11 In substance, therefore, s 613(1) provides that a newstart allowance is not payable to anyone who is enrolled in a full-time course of study unless one or more of the exceptions contained within s 613(2) is made out. Relevantly, these are s 613(2)(a) (that the person is enrolled in a course that the Secretary has required the person to undertake under s 601(2)), or s 613(2)(b) (that the person is engaged in a course undertaken under a "Newstart Activity Agreement").

12 The notice of appeal identifies three questions of law as being raised. However, only the first two were ultimately pressed. In substance, they are as follows:

13 Put simply, the applicant submits that both the SSAT and the AAT erred in law in finding that newstart allowance was payable to the respondent, as a full-time student, in circumstances where the conditions specified under s 613(2) were not met.

14 The applicant submits that, with regard to s 613(2)(a), the respondent was not enrolled in a course that the Secretary had required him to undertake under s 601(2). As for s 613(2)(b), the applicant submits that the respondent was not engaged in a course undertaken under a Newstart Activity Agreement. As neither condition was met, and s 613(2)(c) had no application, s 613(1) rendered the respondent ineligible for newstart allowance.

15 The applicant further submitted that the fact that both the SSAT and the AAT apparently considered the honours year to be a useful exercise, and one which was likely to improve the respondent’s prospects of gainful employment, was simply irrelevant as a matter of law, so far as his eligibility for newstart allowance was concerned.

16 To be fair to the applicant, the argument was put with considerably greater sophistication than this at the hearing. Dealing firstly with the SSAT, which focussed predominantly upon s 613(2)(a), it was submitted that there had been a failure on its part to address the question specifically before it, namely whether the cancellation decision should be set aside. Rather, the SSAT had reasoned simply that the honours year would improve the respondent’s prospects of obtaining suitable paid work, and that this justified treating the conditions under s 601(2) as though they were satisfied.

17 However, s 601(2) is actually more complex than this. The section relevantly provides:

18 It was submitted on behalf of the applicant that it was not sufficient for the SSAT to have concluded that the Secretary ought to have formed the opinion in s 601(2)(a). That was to ignore the requirement of s 601(2)(b) concerning notification, and s 601(2)(c) concerning compliance, neither of which had been met in this case. That being so, it was clear that the respondent had not enrolled in a course that the Secretary had required him to undertake under s 601(2), within the meaning of s 613(2)(a). Accordingly, that exception to s 613(1) could not apply.

19 It was submitted that, when it came to the AAT’s decision, the reasoning was, in a sense, even simpler. The AAT noted that s 606(5) provided for an activity agreement to be varied. Such an agreement did exist between the respondent and Centrelink prior to the cancellation of the respondent’s newstart allowance in February 2005. In the AAT’s view, the agreement should have been varied, and the honours course accepted as one that would satisfy the requirements set out in s 601(2). Alternatively, the course should have been regarded as one in which he was engaged, and which he would have undertaken under a Newstart Activity Agreement (had one been entered into), pursuant to s 613(2)(b).

20 As a further alternative, the AAT said that the honours course could have been regarded as "another activity that the Secretary regards as suitable for the person and that is agreed to between the person and the Secretary". Plainly, the AAT had in mind s 606(1)(g) in invoking this formula.

21 Paraphrasing the AAT’s reasons for decision, the honours year of study in which the respondent had enrolled was regarded as a valuable activity, and one which should have been included in a Newstart Activity Agreement. In the AAT’s words:

22 This passage suggests that the AAT was influenced by some notion of estoppel on the part of the applicant, based upon its disapproval of Centrelink’s failure to form the requisite opinion, and act upon it. If so, there is no justification for that approach: Minister for Immigration, Local Government and Ethnic Affairs v Kurtovic (1990) 92 ALR 93 per Gummow J, and Attorney General (NSW) v Quin [1990] HCA 21; (1990) 170 CLR 1 at 18 per Mason CJ. See generally M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action (3^rd ed, 2004) at 359-64. It may be noted that there is no suggestion in the present case of any abuse of power, or breach of promise, on the part of the applicant.

23 In the AAT’s view, therefore, a Newstart Activity Agreement should have been created, or the previous agreement varied, to incorporate the honours year by way of a requirement on the part of the Secretary, and an undertaking on the part of the respondent. Additionally, or in the alternative, the Secretary should have regarded the honours year as "suitable" as an "activity" and which should have been included in a Newstart Activity Agreement pursuant to s 606(1)(g).

24 Plainly, it would have been open to the Secretary to have formed the opinion that the respondent should undertake the course contemplated on the basis that it would improve his prospects of obtaining suitable paid work. The difficulty, so far as the respondent is concerned, is that the Secretary did not do so.

25 Even if the Secretary had formed the requisite opinion, there was no notification of that opinion to the respondent. Nor was there any compliance with any such notification.

26 In addition, the Secretary did not enter into a Newstart Activity Agreement with the respondent regarding the honours course, and did not vary an existing agreement to include a term whereby the respondent agreed to undertake such a course.

27 None of the conditions required in order to avoid the operation of s 613(1) were met. It is simply that, in their different ways, the SSAT and the AAT both considered that the Secretary ought to have formed the opinion referred to in s 601(2), or ought to have entered into a Newstart Activity Agreement with the respondent, allowing for the honours course.

28 In my view, neither the SSAT, nor the AAT, was entitled to conclude that the conditions under s 613(2) had been met in circumstances where manifestly they had not. The fact that these bodies considered the honours course to be worthwhile, and one that ought to have been the subject of approval under s 601(2), or the subject of a Newstart Activity Agreement under s 606, cannot overcome this fundamental hurdle.

29 I would add that it is also difficult to see how something that manifestly did not occur can be deemed by a tribunal, with retrospective effect, to have occurred, at least in the context of statutory criteria that are strict, and clearly stated. The fact that there were several options available to the Secretary when dealing with the respondent’s continuing right to claim a newstart allowance, does not mean that either the SSAT, or the AAT, was itself entitled to choose one or more of those options, and proceed upon the basis that it had been exercised. A statute that sets out strict conditions for eligibility for a particular benefit is not amenable to a construction that treats that which ought to have been done as though it had been done.

30 The second question of law raised in this proceeding does no more than restate the first question, albeit in a slightly different form. Both questions should be answered in favour of the applicant.

31 Accordingly, the "appeal" should be allowed. The decision of the AAT must be set aside. In lieu thereof, it is ordered that the decision of the SSAT be set aside, and the applicant’s decision to cancel the respondent’s newstart allowance affirmed. The applicant, very properly, did not seek any order for costs.

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Weinberg.

Counsel for the Applicant:	Mr J. Lenczner

Solicitor for the Applicant:	Australian Government Solicitor

	No appearance for the respondent

Date of Hearing:	29 May 2006

Date of Judgment:	29 May 2006

Federal Court of Australia

Secretary, Department of Employment and Workplace Relations v Kelly [2006] FCA 659 (29 May 2006)