Telford v Department of Families Community Services & Indigenous Affairs [2009] FMCA 289 (15 April 2009)

Last Updated: 26 February 2010

FEDERAL MAGISTRATES COURT OF AUSTRALIA

TELFORD v DEPARTMENT OF FAMILIES COMMUNITY SERVICES & INDIGENOUS AFFAIRS

[2009] FMCA 289

ADMINISTRATIVE LAW – Appeal from AAT – appellant claims tribunal has denied them procedural fairness – appeal allowed and decision set aside.

Administrative Appeals Tribunal Act 1975 (Cth) A New Tax System (Family Assistance) Act 1999 (Cth)

Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576 Craig v State of South Australia [1995] HCA 58; (1985) 184 CLR 163 EB v CT (No 2) [2008] QSC 306 Humphrey v Wills [1989] VicRp 42; [1989] VR 439 Laycock v Forbes and Another (1979) 150 ALR 186 May v Deputy Commissioner of Taxation [1999] FCA 287; (1999) 92 FCR 152 New York Properties Pty Ltd v Federal Commissioner of Taxation [1985] FCA 306; (1985) 7 FCR 401 Percerep v Minister for Immigration and Multicultural Affairs [1998] FCA 1088; (1998) 86 FCR 483 R v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group [1969] HCA 10; (1969) 122 CLR 546 Russell v Duke of Norfolk [1949] 1 All ER 109 Servos v Repatriation Commission [1995] FCA 1137; (1995) 56 FCR 377 Sinnathamby and Os v Minister for Immigration & Ethnic Affairs (1986) 66 ALR 502 Sullivan v Department of Transport (1978) 20 ALR 323 Whim Creek Consolidated NL v Colgan [1991] FCA 467; (1991) 31 FCR 469

Applicant:

KATRINA HELEN TELFORD

Respondent:

DEPARTMENT OF FAMILIES, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

File Number:

BRG 1021 of 2007

Judgment of:

Burnett FM

Hearing date:

12 December 2008

Date of Last Submission:

4 February 2009

Delivered at:

Brisbane

Delivered on:

15 April 2009

REPRESENTATION

The Applicant appeared on her own behalf

Counsel for the Respondent:

Mr Rangiah SC

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

(1) That the appeal be allowed.
(2) That the application be remitted to the Tribunal for rehearing.
(3) Costs reserved.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BRG 1021 of 2007

KATRINA HELEN TELFORD

Applicant

And

DEPARTMENT OF FAMILIES COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Respondent

REASONS FOR JUDGMENT

Introduction

1. In 2000 the appellant entered into an agreement with the father of her child. The agreement provided for the transfer of a property at Cow Bay, Queensland then owned by the father to the appellant in lieu of child maintenance of her son. The consideration nominated for the transaction was $80,000, a figure suggested by valuation obtained from a local real estate agent. That sum was adopted as the valuation for the purposes of stamp duty assessment on the conveyance.
2. The child the subject of this arrangement was then about thirteen months old. His date of birth is 13 July 1999.
3. On 31 October 2000 the appellant informed Centerlink of this transaction. Centerlink determined to treat this transaction as a capitalised maintenance payment. It assessed its value over the remaining period until the child’s anticipated majority (12 July 2017) and in turn reduced the rate of the appellant’s family tax benefit under the maintenance income test.
4. The appellant initially questioned the decision with the Department of Social Security. On 16 November 2006 the initial determination was affirmed at first instance by an authorised review officer. She then made application to the Social Security Appeals Tribunal (the SSAT) for a review of that determination. On 24 January 2007 the SSAT affirmed the decision then under review. The appellant next made application to the Administrative Appeals Tribunal (the Tribunal) to review the decision of the SSAT. On 1 October 2007 the Tribunal constituted by a senior member affirmed the decision under review.
5. The appellant then appealed to the Federal Court against the decision of the Tribunal. Upon its return before the Federal Court the appeal was remitted for disposition by this Court.
6. At each instance below the appellant was unrepresented. Initially before this Court she was represented by pro bono counsel. However her pro bono counsel sought leave to withdraw and did withdraw. He indicated that he was having difficulty obtaining instructions from the appellant. Ultimately the appellant represented herself at the hearing.

Basis of Appeal

7. The appeal is one governed by section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). It was one permissible for transfer to this Court; section 44AA(1) of the AAT Act. By order of Justice Collier made 26 November 2007 the appeal was transferred to this Court. In particular section 44(4) and (5) and (6) of the AAT Act apply in relation to the Court’s hearing and determination of the appeal. Those provisions require that the appeal be disposed of in a manner corresponding with the way in which they would apply to a hearing and determination of the appeal as if it was being heard by the Federal Court.
8. It follows the appeal is one limited to questions of law: section 44(1) AAT Act. Accordingly only questions of law posed in the appeal can be the subject of any order made by this court consequent upon the hearing of the appeal.

Grounds of Appeal

9. In her Amended Notice of Appeal filed 11 April 2008 the appellant alleged that the Tribunal breached the rules of natural justice in making its decision by prematurely deciding to affirm the decision under review. Five particulars of error were alleged, they being the Tribunal:
   1. failed to exercise all the powers and discretions conferred upon him by virtue of section 43(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ignoring the legitimate expectation of the appellant that he would do so;
   2. failed, contrary to section 39 of the Administrative Appeals Tribunal Act 1975 (Cth) to give the appellant an adequate or any opportunity to provide evidence of lower value for the property the subject of the proceeding;
   100. ignored the it’s own direction issued on 21 September 2007 listing the matter for October 2007 for directions on the issue of property valuation based on the respondent’s request that such issue be the subject of submissions.
   4. failed to consider whether as a matter of law the property could be regarded as an unrealisable asset under A New Tax System (Family Assistance) Act 1999 and it failed to give the applicant an opportunity to adduce evidence that the property was at the time of acquisition a unrealisable asset by ignoring the direction in paragraph c.
10. The appellant seeks orders that the decision of the Tribunal be set aside and the matter be remitted for rehearing according to law.
11. In summary the principal ground advanced by the appellant is that the Tribunal denied her procedural fairness in handing down its decision on 1 October 2007 affirming the decision under review in circumstances which unlawfully denied her the right to file further material. In particular she complained that the Tribunal had earlier issued directions in relation to the progress of the application by providing a timetable for the delivery of further submissions. The timetable concluded with a further mention on 4 October 2007. She says that she wanted to file valuation evidence before the set mention date but was informed she could not. In the meantime the Tribunal delivered its judgment.

Background Facts

12. The appeal concerns an application heard by the Tribunal on 11 July 2007. At that time the appellant was self represented. At the conclusion of the hearing the Tribunal asked for additional submissions concerning the issue of a caveat being lodged by Centerlink and of the question of whether the asset could be treated as a unrealisable asset.
13. In response to that invitation Centerlink provided submissions but the appellant did not. She had been given until 8 August 2007 to provide her submissions but had not done so. On that day she contacted Centerlink and said that she had not received Centerlink’s submissions. Arrangements were then made to resend the submissions to her immediately and Centerlink wrote to the Tribunal agreeing to an extension of 10 days for the appellant’s submissions in response.
14. On 17 August 2007 the appellant contacted Centerlink asking for copies of legislative provisions. These were posted to the appellant by Centerlink that day. On 24 August the appellant provided submissions to the Tribunal in which she complained about the fairness of the legislation and asserted two different values for the property, namely a valuation of $50,000 and one for $1. The submissions were not supported by any evidence. The value of the property does not appear to have been in issue at the initial hearing.
15. On 30 August 2007 the respondent wrote to the Tribunal noting that the appellant had not previously raised any issue concerning the value of the property and requesting a directions hearing to set a timeframe for the respondent to submit evidence as to the value of the property. For that purpose the matter was listed for a directions hearing for 4 October 2007.
16. In the meantime the Tribunal delivered its decision on 1 October 2007.
17. In his decision the senior member materially decided that:
    1. Centerlink had been reasonable in valuing the property at $72,000;
    2. After the hearing the appellant sought to attribute a much lower value to the property, but did not put forward any evidence in support of that lower valuation;
    100. Centerlink had been correct to treat the full value of the property, without deduction of acquisition costs, as being “the value of the benefit that is received by the individual” under paragraph (a) of the definition of “maintenance income” in s.3 of the FAA;
    4. He was unable to accept that the property was a “unrealisable asset” on the evidence before him, but, even if there were such evidence it could not assist because “the value of the benefit that is received by the individual” requires that benefit to be valued at the time it is received not at any subsequent time;
    5. The appellant’s proposal that she receive the full FTB and the respondent lodge a caveat over the property was not a workable solution; and
    6. The length of the capitalisation period was appropriate.
18. The appellant contends that on the 30th of August she contacted a person who she believed was Gary Power, the agency’s solicitor, and advised him that she wanted to get a valuation of the property. She says he advised her that that would not be necessary and that if he wanted one he would get it[1]. She says that she again spoke with him on 2 October to raise the same issue only to discover the decision had been delivered.
19. The appellant contends that by proceeding to hand down its decision on 1 October 2007 after having directed on 21 September 2007 that the matter would be listed for further directions on 4 October 2007 demonstrated precipitous and premature decision making on the part of the Tribunal and denied her procedural fairness.
20. It is accepted that an allegation of denial of procedural fairness on the part of the Tribunal raises a question of law which can be the subject of an appeal under s 44 (1) of the AAT Act: New York Properties Pty Ltd v Commissioner of Taxation[2]. A denial of natural justice in turn would constitute an error of law vitiating the decision; Craig v State of South Australia[3].
21. For the respondent it was accepted that the Tribunal owed the appellant a duty to provide her with natural justice and procedural fairness. It denies that the Tribunal failed in fulfilling that duty. The respondent noted that the thrust of the appellant’s allegation was a breach of the hearing rule (audi alteram partem) which requires that “the person concerned should have a reasonable opportunity of presenting his case”; Russell v Duke of Norfolk [1949] 1 All ER 109 at 118 recited with approval in R v Commonwealth Conciliation and Arbitration Commission ex parte Angliss Group [1969] HCA 10; (1969) 122 CLR 546 at 552 – 553.
22. The respondent submitted that the appellant was given a reasonable opportunity of presenting her case. In particular it noted that the senior member specifically referred in his decision to the argument raised by the appellant after the hearing (that being the argument raised in her submissions of 24 August 2007 concerning the value of the property). In particular the senior member noted at [8]:
    • “After the hearing Ms Telford sought to attribute a much lower value to the property. She did not put forward any evidence in support of that lower valuation which was less than the unimproved value of the property. I was not prepared to consider such a contention which was unsupported by evidence.”
23. Significantly in the context of the directions issued by the Tribunal, the respondent submitted that it is important to recall the purpose of the directions hearing on 4 October 2007; that it was to allow the respondent time to obtain evidence to address the appellant’s allegations concerning the value of the property addressed in the appellant’s submissions of 24 August 2007.
24. The respondent clearly wished to respond to the appellant’s assertion that the value of the property could be as low as $1 and sought time to obtain that evidence in order to assist it in defending the appellant’s application. Significantly the directions hearing was not sought by the appellant to assist her in prosecuting her case or to allow her time to obtain further evidence.
25. The respondent contends that in the circumstances there was no breach of the hearing rule insofar as it related to the appellant. Indeed, it submitted, if any party were to complain it ought to have been the respondent. Clearly in the event the respondent had no basis for complaint.
26. The respondent submitted that the appellant was given both the opportunity to present further evidence in relation to the property and that she acted upon that invitation.
27. In her grounds of appeal the appellant alleged that on 11 July 2007 when the matter was heard before the Tribunal the decision was reserved pending the submission of further submissions by both parties in relation to “whether the property could be treated as a unrealisable asset”. She alleged that on 24 August 2007 she “sent submissions to the respondent in relation to the value of the property and the issue of the unrealisable asset”. It was in response to those submissions that she alleged that on 30 august 2007 the respondent wrote to the Tribunal “acknowledging that the issue of the value of the property had not been previously raised” and (was) seeking a new direction hearing to allow the appellant time to submit such evidence.”[4]That was also the same day she maintains she spoke with a person she identified as ‘Gary Power’ but who in any event was a Commonwealth employee.
28. In the course of his decision the senior member observed at [15]:
    • “Ms Telford was given additional time to make submissions as she stated that she did not have all the relevant material before her”.
29. It is apparent that based upon the material before him, despite the opportunity afforded to her, the Tribunal was not satisfied with the appellant’s material. Accordingly he determined there was no point in having a directions hearing to allow the respondent time to impose upon it the obligation to obtain valuation evidence to counter what at that time appeared to be mere assertions of the appellant.
30. In its submissions the respondent asserted that the situation was analogous to one where the first party seeks an adjournment, the adjournment is refused and the Court or Tribunal finds in favour of the first party. In that instance there would be a denial of procedural fairness to the second party by refusing the first party an adjournment. For instance in Sullivan v Department of Transport (1978) 20 ALR 323 an unrepresented applicant challenged a decision of the AAT refusing a commercial pilots licence on medical grounds. Dean and Fisher JJ (at 343) held that the failure of the Tribunal to grant an adjournment so that the applicant could present evidence regarding his medical status would have been a denial of procedural fairness if the applicant requested an adjournment. However, the applicant did not request an adjournment and the relevant duty of the Tribunal was only “to ensure that a party is given a reasonable opportunity to present his case”. Neither the legislation nor the common law imposed the Tribunal “the impossible task of ensuring that a party takes the best advantage of the opportunity to which he is entitled.” It followed there was no denial of procedural fairness in those circumstances. See also Humprey v Wills [1989] VicRp 42; [1989] VR 439 at 445-446.
31. If the facts were as the respondent and Tribunal apprehended them to be then I accept the analogy was apposite. However it appears that unbeknown to both the respondent and the Tribunal the facts were not as they thought.
32. In submissions the appellant gave a somewhat muddled but comprehendible explanation of speaking with a Commonwealth officer who she identified as Gary Power. The effect of her submission was that on 30 August she explained that she wanted to put evidence before the Tribunal about the value of the subject property. She says that person told her not to. In her submission she stated, “... on 30 August we had a discussion about this valuation that he told me not to get and not to submit and then we discussed it up to 2 October when I went in and found that they’d already made their decision and I’m saying that with all the things that he told me not to give which I realise this is not the right advice at all[5].”
33. The only Gary Power known to the Court in the context of this proceeding is the solicitor for the respondent. Mr Power filed an affidavit on 23 January 2009 which has not been challenged. In it he deposed that he first became aware of this matter on 20 November 2007 during a telephone conversation with a representative of Centerlink at the time of AGS’s engagement and that prior to that time he had no knowledge of the appellant.
34. Clearly the appellant is mistaken in her belief that she spoke with Mr Power. However other evidence filed by the appellant supports the contention that she intended to file further evidence and so may have been mislead in the manner she alleges. In particular she has attached a copy of an invoice from a real estate agent in respect of the costs of procuring the valuation report. It is dated 30 August 2007. In addition she has produced a valuation report although I note it does post date the Tribunal’s decision. Significantly however the report was prepared by Vince Wight the agent who invoiced the appellant. I am unable to readily reconcile that fact with her statement that she had procured the valuation on 30 August. However accepting that she would only have been invoiced once the service was provided it seems a report of the kind produced was available to be filed at the time she says she was told not to.
35. In summary there does appear to be evidence supporting her assertion that she intended to file further relevant material. The appellant contends that she was advised she could not. She acted upon that advice and clearly did so to her detriment.
36. Generally there is little scope for the adducing of fresh evidence on appeal: Servos v Repatriation Commission[6]; the “very limited circumstances in which such evidence will be received must , however, include those cases where it is contended that the applicant has been denied procedural fairness before the tribunal, and evidence is required to make good that claim.”: Percerep v v Minister for Immigration and Multicultural Affairs [7]. As with Percerep v Minister for Immigration and Multicultural Affairs (supra) this is such a case where the reception of evidence of matters that transpired between hearing and the appeal ought to be permitted.
37. The appellant’s submissions were not sworn to. However she appeared in person and addressed the court directly on these matters. If she were required to be put to proof I accept she would have given sworn evidence consistent with her submissions. I am prepared to accept and act upon her unsworn evidence.
38. The matters she gave evidence of were clearly incorrect insofar as she said she spoke with Gary Power. However I accept she did speak with an officer of the Commonwealth whom she hoped would assist her. Without any criticism of that officer I accept that in reliance upon statements made to her by an officer of the Commonwealth she did not file the valuation material[8].
39. Had she acted as she intended she would have placed valuation evidence before the Tribunal. Although the appellant’s case before the Tribunal had closed she did have reasonable prospects of successfully applying to re-open her case and adducing that further evidence EB V CT (No 2) (supra)[9]. This is particularly so as she was self represented and the Tribunal was not bound by the rules of evidence. Indeed the directions hearing foreshadowed was to permit the Department an opportunity to place evidence before it concerning valuation.
40. Consequently I consider the appellant was denied procedural fairness in that she was deprived of a right to be heard on a matter she was entitled to agitate before the Tribunal. The appeal should be allowed and the decision should be set aside on that basis.
41. For completeness the respondent also addressed the prospect of the appellant’s complaint concerning notice of the Tribunal’s views relating to the value of the property. It was submitted on its behalf that procedural fairness does not normally require that a decision maker give to a person who has been afforded an opportunity to present material a further opportunity in the form of advanced notice of a decision maker’s view that the material is insufficiently persuasive for a decision in that person’s favour; Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074; (1994) 49 FCR 576 at 590-591, Whim Creek Consolidated ML v Colgan [1991] FCA 467; (1991) 31 FCR 469, Laycock v Forbes and Another (1979) 150 ALR 186, May v Deputy Commissioner of Taxation [1999] FCA 287; (1999) 92 FCR 152 and Sinna Thamby v Minister for Immigration & Ethnic Affairs (1986) 66 ALR 502.
42. In this case I accept that the applicant had no prima facie entitlement to advance notice of the Tribunal’s views concerning her assertions as to the value of the property. However this is not to the point in this case. In this case the Tribunal as decision maker had no knowledge of the advice the appellant says she received and her conduct in reliance upon it. It properly proceeded but was unaware of the prospective denial of procedural fairness arising from the advice which prejudiced its decision.
43. It follows that in the circumstances the appellant was denied procedural fairness. The appeal is allowed. However given that the senior member played no roll in these affairs there is in my view no reason why the matter should not be remitted to him for his further consideration.

Orders

44. Appeal allowed.
45. Application remitted to the Tribunal for rehearing.
46. Costs reserved.

I certify that the preceding 46Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !forty-sixforty-six (46) paragraphs are a true copy of the reasons for judgment of Burnett FM

Associate: Beverley Schmidt

Date: 14 April 2009

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[1] T2 Ln 12
[2] (1985) 7 FCR 401
[3] (1995) 184 CLR 163
[4] The reference to the “applicant” in ground 4(e) was clearly in error. The appellant having already filed material in relation to the value of the property with her submissions of 24 August 2007 was not seeking time to submit such evidence. Rather it was the respondent.
[5] T2 Ln 9-20
[6] (1995) 56 FCR 377
[7] [1998] FCA 1088; (1998) 86 FCR 483 at 495
[8] I think it is entirely possible that she was correctly advised by the officer with whom she conversed but that the appellant simply did not comprehend the advice she received and that she misconstrued it. However it is not necessary for me to make any finding on that matter.
[9] [2008] QSC 306 and in particular the authorities noted therein dealing with the manner in which the discretion ought be exercised.