Young v D.F.A.C.S. [2002] FMCA 369 (15 October 2002)

Last Updated: 14 October 2004

FEDERAL MAGISTRATES COURT OF AUSTRALIA

YOUNG v D.F.A.C.S

[2002] FMCA 369

ADMINISTRATIVE LAW

Administrative Appeals Tribunal Act 1975

Social Security Act 1991, ss.885(1) & (2); 891; 1223 subparagraph (3), 1237A(1); 1069H(2) & (3)

Federal Magistrates Court Rules 2001

Brown v Repatriation Commission [1985] FCA 194; (1985) 60 ALR 289 Waterford v Commonwealth [1987] HCA 25; (1987) 71 ALR 673 Blackwood Hodge Australia Pty Ltd v Collector of Customs No 2 (1983) Australian Law Digest 38 Polites v FCT (1988) 16 Australian Law Digest 707 Linel v Repatriation Commission (1982) 4ACN

Appellant:

MONIQUE YOUNG

Respondent:

SECRETARY OF DEPARTMENT OF FAMILY & COMMUNITY SERVICES

File No:

BZ 54 of 2001

Delivered on:

15 October 2002

Delivered at:

Brisbane

Hearing Date:

5 September 2001

Judgment of:

Rimmer FM

REPRESENTATION

Solicitors for the Appellant:

Appellant appeared in person

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

(1) That the notice of appeal filed by the APPLICANT on 22 November 2000 be dismissed.

(2) That the APPLICANT is to pay the costs of the RESPONDENT pursuant to Rule 21.10 of the Federal Magistrates Court Rules 2001 such costs to be fixed in the sum of $3,500.00 and are to be paid by the APPLICANT to the RESPONDENT within 6 months of today's date.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BZ 54 of 2001

MONIQUE YOUNG

Appellant

And

SECRETARY OF DEPARTMENT OF FAMILY & COMMUNITY SERVICES

Respondent

REASONS FOR JUDGMENT

Proceedings

1. This matter involves an appeal by Monique Young, the Appellant, against a decision given on 27 October 2000 by the Administrative Appeals Tribunal constituted by Senior Member K.L. Beddoe. The respondent to the appeal is the Secretary of the Department of Family and Community Services.

Appeal

2. The appeal was filed on 22 November 2000, and was remitted to this Court by order of Cooper J of the Federal Court of Australia on

5 February 2001. The power of the Federal Court to transfer to this Court, the Federal Magistrates Court, is contained in section 44AA(1) of the Administrative Appeals Tribunal Act 1975.

3. The Appellant appeared representing herself and made oral submissions. The respondent was represented by the Australian Government Solicitor and filed written submissions and presented oral argument in addition to those written submissions. I reserve my decision, which is delivered today.

History

4. This matter arises as a result of an overpayment made to Mrs Young of Family Allowance from Centrelink for the relevant period 17 June 1999 to 6 February 2000 in the sum of $1894.25. This overpayment arose because on 6 June 1999 the Appellant and her husband, just after their marriage, estimated in documentation to Centrelink that their combined total income for the 1998/1999 tax year would be in the sum of $33,000. On 6 June 1999 the Appellant and her husband requested that the Appellant's entitlement to Family Allowance be based upon that estimate. On 2 October 1999 the Appellant and her husband confirmed their estimate of their taxable income for the 1998/1999 year was $33,000.

5. It is clear from the facts that the Appellant and her husband's actual income for the purposes of the Family Allowance provisions for the 1998/1999 tax year was in fact $38,798 which included a net rental property loss of $3183. On the basis of the actual income for 1998/1999 year of $38,798 the rate of Family Allowance was re-assessed by Centrelink, and an overpayment of $1894.25 for the period 17 June 1999 to 6 February 2000 was identified and raised on 15 May 2000.

6. The Appellant, Mrs Young, requested a review of that determination, and an authorised review officer was appointed to consider the matter. The authorised review officer advised the Appellant by letter on 2 June 2000 that the original decision could not be changed on the basis of the following:

a) That an estimate of income by Mrs Young was provided on 9 June 1999 of $33,000 for the year 1998/1999. This estimate consisted of $13,000 as income for herself and $20,000 as income of her husband, Mr Young;

b) that Centrelink confirmed by letter dated 9 June 1999 that Mrs Young's Family Allowance was being paid on the basis of an estimate of income supplied by her. The letter set out the requirement of Mrs Young to notify Centrelink if her actual income exceeded her estimated income by 110 per cent.

c) On 4 October 1999 Mrs Young submitted a review form, which again asserted she estimated the combined income of she and Mr Young for 1998 to 1999 to be $33,000;

d) That the tax assessment notices provided to Centrelink on

7 February 2000 indicated the actual combined income for herself and Mr Young for 1998/1999 was in fact $38,798, and that amount was in excess of 110 per cent of the amount estimated as her income for the period which had been $33,000.

7. On 9 June 2000, the Appellant appealed to the Social Security Appeals Tribunal, and the Presiding Member, Mr R. Harvey, affirmed the decision under appeal on 30 June 2000. The Appellant then sought to review that decision of the Social Security Tribunal by way of an appeal to the AAT. Senior Member, Mr K. Beddoe, affirmed the decision of the Social Security Tribunal on 27 October 2000. Mrs Young then filed this appeal.

The issues

8. As the Appellant was not legally represented, she had some difficulty in properly articulating the questions of law which formed the basis of her appeal in her notice of appeal, or in her oral argument to the Court.

9. The respondent identified and responded to two matters which appeared possible questions of law arising from the notice of appeal and the oral argument of the Appellant.

10. I have set out and identified the issues which appear to be raised for the Court's consideration in the notice of appeal and the matter as follows:

a) that the Senior Member made an error of law in his finding that it was not appropriate or a special circumstance to waive the recovery of all or part of the debt owing to the Commonwealth on the facts available to him at the time of the hearing;

b) that the finding of Senior Member Beddoe that the Appellant owed a debt to the Commonwealth arising from the receipt of Family Allowance in excess of her entitlement for the period

17 June to 6 February 2000 was an error of law as a calculation of the debt should have been made on the basis of some different year than that which was determined with respect to the Appellant and her husband's combined income.

Applicant's case

11. An argument was advanced by the Appellant in her oral argument which was not in her notice of appeal. She contended that she and Mr Young only married on 19 May 1999, just some six weeks prior to the end of the 1998/1999 financial year, and that inclusion of her husband's income for the 1998/1999 year for the purpose of calculating the rate of Family Allowance for the family was not therefore proper or correct.

12. The Appellant sought to rely on two further affidavits filed in the Court after the conclusion of the hearing before Senior Member Beddoe and in respect of this appeal. Those two affidavits were an affidavit by herself filed 2 July 2002 and an affidavit of her husband, Mr Young, filed 2 July 2002. The evidence in both went to providing fresh evidence on the findings of fact made by the Tribunal but these facts were not before the tribunal and were at all times capable of being put before the Tribunal at the time of the hearing resulting in the decision now appealed from. The tribunal made a precise finding of fact about this matter on the evidence that was presented by the appellant at that hearing.

13. These affidavits were not accepted by me as permissible fresh evidence in this appeal evidence. It is clear that the appeal must be based on the facts that were before the learned Senior Member Beddoe when he heard the matter on 27 October 2000. It is not appropriate to permit the Appellant to do what she sought, and that was in effect to re-agitate the facts by presenting fresh evidence to the appeal court in this manner. Clearly, the decision with respect to this appeal as determined by this Court must be on the facts which were constituted and before the Senior Member at the time that he made his decision.

The relevant legislation

14. The relevant legislation applicable in this matter is contained in the Social Security Act 1991, in particular in section 885(1) and (2), 891, 1223 subparagraph (3), 1237A(1) and 1069H(2) and (3) which state as follows,

i) section 885(1):

If:

(a) In working out the rate of Family Allowance payable to a person, regard is had to the person's income for a tax year and,

(b) The income to which regard was had constituted consistent of an amount estimated by the person and,

(c) The person's income for that tax year is more than 110 per cent of the amount of the income on which the determination of the rate of Family Allowance was based, the person's rate of Family Allowance is to be recalculated on the basis of that income.

ii) Net rental property loss, s885 sub (2):

For the purpose of this section, a person's income for a particular tax year is the sum of:

(a) The person's taxable income for that year, and

(b) The person's adjusted fringe benefit value for that year, and

(c) The person's target foreign income for that year, and

(d) The person's net rental property loss for that year.

iii) s891:

If:

(a) the Secretary makes a determination of a person's rate of Family Allowance, and

(b) In making the determination, the Secretary had regard to the person's income for a tax year,

(c) The income to which regard was had included an amount or amounts estimates by the person, and

(d) The person's income for the tax year is more than 110 per cent of the amount of income on which the determination referred to in paragraph (a) was based, and

(e) The Secretary makes a determination varying the person's rate of Family Allowance or cancelling the person's Family Allowance to give effect to the re-calculation required by section 885, the later determination takes effect on the day on which the earlier determination took effect.

15. Clearly, therefore in this matter, the applicable income was for the tax year 1998/1999.

i) Section 1223 of 3 states:

Subject to subsection (4),

if:

(a) An amount (the received amount) has been paid to a person by way of a Family Allowance, and

(b) The person's rate of Family Allowance is recalculated under

(1) section 884 or

(2) section 885, the under-estimate of income - (as applicable in this case) or

(3) section 886, or

(4) section 886A,

(c) The received amount is more than the amount (the correct amount) of the Family Allowance payable to the person, the difference between the amount and the correct amount is a debt due to the Commonwealth.

ii) Section 1237A(1):

Subject to subsection 1A, the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that portion of the debt.

iii) 1069-H(2):

For the purpose of this module a person's Family Allowance income for a particular tax year is the sum of the following amount (income components):

(a) The person's taxable income for that year,

(b) The person's adjusted fringe benefit value for that year,

(c) The person's target foreign income for that year, and

(d) the person's net rental property loss for that year.

iv) 1069-H3:

Income of members of a couple to be added. For the purpose of this module, if a person is a member of a couple, the person's income for a tax year includes the income for that year of the person's partner.

The AAT decision

16. The learned Senior Member, who had the advantage of hearing the applicant give evidence and hear the presentation of her case, gave the decision which she now appeals from. The learned Senior Member found relevantly as follows:

" That the claim for Family Allowance submitted by the applicant did not disclose the net rental property loss incurred by Mr Young when this was a factor that had to be taken into account for the purposes of determining income for the family payment. That because of that, her application made on 6 June 1999 was a false claim.

That because of that false claim and a failure to take into account estimates provided for Mrs and Mr Young were under-stated and when the actual income was known for the family payment purposes, an over-payment was correctly calculated by Centrelink, and that in view of the finding that the claim which was made for Family Allowance on 6 June 1999 contained a false statement (albeit unknown to the applicant), by Mr Young, that section 1237AAD of the Social Security Act 1981 can have no operation to allow a waiver of the debt on the grounds of special circumstance that otherwise have been found in the case."

17. As I have indicated earlier, the oral argument of Mrs Young, the applicant at the hearing of the appeal, seemed to raise further grounds not relied upon in her notice of appeal. I am satisfied that the authorities lead to the conclusion that the applicant is clearly bound by her grounds of appeal set out in the notice of appeal which at no time was formally or informally amended prior to the appeal hearing or at the hearing.

18. The only means by which the respondent was able to discern that there was perhaps a change to those grounds of appeal was upon hearing the oral submissions made by Mrs Young at the time of the appeal hearing.

Grounds of appeal to be considered

19. On that basis, I am satisfied that the grounds of appeal to be properly determined by this Court are those that are found in the notice of appeal and are as follows:

a) Whether a debt of Family Allowance in the sum of $1894.25 for the period of 1 June 1999 to 6 February 2000 exists under Social Security Act 1991

b) Whether the recovery should be waived under Social Security Act 1991

c) That it is sufficient that when the applicant married, that she answered all questions on the changes to circumstances in income and assets form for Family Allowance to the best of her knowledge and understanding and received in good faith the over-payment of Family Allowance.

The Law

20. Pursuant to section 44 of the AAT Act, the appeal lies to the Federal Court and on transfer now to the Federal Magistrates Court only in respect of errors of law. In respect of this requirement, the full Federal Court in Brown v Repatriation Commission [1985] FCA 194; (1985) 60 ALR 289 at 291 said:

The existence of a question of law is not merely a qualifying condition to ground an appeal from a decision of the Tribunal; rather, it and it alone is the subject matter of the appeal and the ambit of the appeal is confined to it.

21. Brennan J in the High Court decision of Waterford v Commonwealth [1987] HCA 25; (1987) 71 ALR 673 at 689 expanded on this requirement, and I quote:

A finding by the AAT on a matter of fact cannot be reviewed on appeal unless the finding is vitiated by an error of law. Section 44 of the AAT Act confers on a party to a proceeding before the AAT a right of appeal to the Federal Court of Australia (and now to the Federal Magistrates Court) from any decision of the Tribunal in that proceeding but only on a question of law. The error of law which an appellant must rely on to succeed, must arise on the facts as the AAT found them to be or it must vitiate the findings made or it must have led the AAT to admit a finding it was legally required to make. There is no error of law simply in making a wrong finding of fact.

22. In Blackwood Hodge Australia Proprietary Limited v Collector of Customs Number 2 (1983) Australian Law Digest 38, the Full Court stated that:

To succeed, an appellant must show that there was no basis upon which the Tribunal could reach the conclusion that it came to.

23. In that decision Fisher J at 49 put it as follows:

" It is my firm view that this Court, when hearing appeals from a Tribunal constituted for the purpose of reviewing decisions of an administrative nature, should adopt a restrained approach. Parliament contemplated that only in exceptional circumstances should the decision of the Tribunal not be the final decision.

Lockhart J in Polites v FCT (1988) 16 Australian Law Digest 707 was critical of what he saw as a distinct and growing tendency for the Court to be asked to construe the Tribunal's reasons for its decisions minutely and finely, with an eye keenly attuned to the perception of error.

The Court, he said, should approach its task sensibly and in a balanced way, not reading passages from the reasons for decision in isolation from others to which they must be related or taking particular passages out of context of the reasons as a whole."

24. The Full Court in Brown v Repatriation Commission (supra) warned that the Court should be cautious before embarking on its own analysis of the evidence where the task of assessing facts has been placed by the legislature in the hands of a specialist body like the AAT. Northrop and Shepherd JJ in Linel v Repatriation Commission (1982) 4ACN in 29 said:

" A Court exercising supervisory jurisdiction over an administrative tribunal ought not lightly interfere with its decision even if the Court feels that the Tribunal's language may have a degree of looseness. Certainly, it ought not to indulge in an exercise of over-zealously picking the Tribunal up in the way that it has expressed itself. That is particularly so where it appears properly to have understood the legal principle which it is to apply."

25. In this particular matter, Senior Member Beddoe found that based upon the evidence which he heard before him in the hearing, and which he found to constitute the facts of this matter, that in applying the provisions of the Social Security Act 1991, in particular, Sections 885(1) and (2), 891, 1223(3), 1237A(1) and 1069H(2) and (3), that there had been an over-payment to the applicant of Family Allowance for the period 17 June 1999 to 6 February 2000 which constituted and constitutes a debt due to the Commonwealth by the applicant.

26. The relevant provisions of the Social Security Act 1991 have since been repealed with effect from 1 July 2000. However, clearly, the relevant law to be applied by the Senior Member was that which was in operation during the relevant period, and it is clear that that was the appropriate law which was properly applied by the Senior Member in his decision. I have set out the relevant sections of the Social Security Act earlier. It is clear that Section 838(1) of the Act provided that a person qualified for Family Allowance:

If that person had at least one Family Allowance child, was an inhabitant of Australia, the person's income for the relevant Family Allowance period did not exceed the person's income ceiling, and the value of the person's assets did not exceed a particular amount.

27. Section 861 provided that the rate of Family Allowance payable to a person for a Family Allowance child is worked out using the Family Allowance rate calculator at the end of Section 1069.

28. The effect of sub-module 3 titled "Family Allowance Income Test" is that a person's entitlement to Family Allowance who has four Family Allowance children will be proportionately reduced whether income is less than $70,173 but exceeds $23,532, which comes from a combination of Sections 1069H(2) and (3), H(23), H(27), H(28), H(31) and H(32).

29. A person's Family Allowance income for a particular tax year is as I have already indicated defined in Section 1069H(2), and includes a person's taxable income for that year and the person's net rental property loss for that year. Section 1069H(3) provides that:

For the purpose of the Family Allowance income test module, the person's income for a tax year includes the income for that year of the person's partner.

30. Section 1069H(8)(1) provides that a person's taxable income for a tax year is:

a) the person's assessed taxable income for that year, or

b) if a person does not have an assessed taxable income for that year, the person's accepted estimate of taxable income.

31. The relevant tax year for a Family Allowance pay day is the base tax year for that pay day. The base tax year is the year ended on 30 June in the calendar year before the calendar year in which the pay day occurs. The relevant tax year is changed to be the tax year ending in the calendar year in which the payment is made where the person requests the Secretary to pay Family Allowance on the basis of an estimate. That is found in Section 1069H(21).

32. As I have already indicated, if a person relies upon an estimate of income and the actual income for that tax year is more than 110 per cent of the amount on which the determination of Family Allowance was based, the person's rate of Family Allowance is to be recalculated on the basis of the actual income, and the difference between the received amount and the correct amount clearly under Section 885 and Section 1223(3) is a debt due to the Commonwealth.

33. This is the law which was applied by Senior Member Beddoe in the decision that he reached on 27 October in determining that the amount of over-payment to the applicant raised by the Department was the amount stipulated in the Notice of Reassessment and did constitute a debt due to the Commonwealth. The applicant has clearly not demonstrated that there has been any error of law which was applied by the Senior Member and that ground of her appeal for those reasons must fail.

34. The next ground of appeal is whether the debt should have been waived by Senior Member Beddoe, and Section 1237 provides that the Secretary and, thus, the AAT, may only waive the Commonwealth right to recover a debt in the circumstances described in certain provisions, one of which is Section 1237AAD. That section allows the Secretary to waive the debt:

... if the Secretary is satisfied that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation, or failing or omitting to comply with the provision of the Act.

35. The Senior Member in his decision of 27 October 2000 clearly made a specific factual finding that the applicant's husband, Mr Young, did make a false statement or representation when he found that the claim which had been submitted had contained a false claim. Whilst the Senior Member indicated that he doubted that that was known to Mrs Young, he clearly made the finding that it was a false claim on the part of Mr Young.

36. I am satisfied given the evidence which was before the Senior Member that such finding was open to the AAT upon the evidence before it. Such finding was one inference that could be logically drawn from the forms and the manner in which they had been completed by the applicant and her husband. On that basis, there can be no finding by this Court that there is a legal basis for undermining the factual finding of Senior Member Beddoe with respect to this matter.

37. I am satisfied, therefore, that the Senior Member reached a proper and considered decision when he found that the Department had not erred in the decision that it had made not to waive the debt which is recoverable as a debt due and owing to the Commonwealth.

38. For the reasons which I have set out above, it is clear that I have found that the grounds of appeal as set out in the notice of appeal by Mrs Young do not rely upon or indicate an error of law which can be found by this Court to have been made by the Tribunal constituted by Senior Member Beddoe.

39. It is clear that the applicant feels deeply aggrieved by the facts and circumstances which surround the raising of the over-payment, in particular, the fact that she remarried in late May and at a point of time which was only approximately six weeks in the total period of the tax year of 1998/1999 from which the income was the basis at law upon which her family assessment was calculated. However, those are the laws she was subject to in governing her entitlements to social security benefits provided under the then relevant and applicable sections of the Social Security Act.

40. Whilst to the applicant they may demonstrate in her view a certain unfairness, the law must be applied in accordance with those sections and has been applied in accordance with those sections by the Senior Member in the decision he made in the Tribunal on 27 October.

41. In all the circumstances, I order that the appeal be dismissed.

42. The Australian Government Solicitor has made as part of the application an application for costs on behalf of the respondent. The appellant did not raise in the Notice of Appeal any appealable error. Costs, in my view, on an appeal clearly should follow the cause.

43. The applicant has been wholly unsuccessful in the appeal and there is no basis upon which the Court could otherwise then order that costs follow the cause.

44. In those circumstances, I order that the applicant is to pay the costs of the respondent and those costs, in accordance with the applicable Schedules of the Federal Magistrates Court Rules, will be fixed in the sum of $3500 and are to be paid by the applicant to the respondent within six months of today's date.

I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Rimmer FM

Associate:

Date: