Staatz; Department of Family and Comminity Services [1999] AATA 90 (17 February 1999)

Last Updated: 11 March 1999

Catchwords - FARM HOUSEHOLD SUPPORT - restart re-establishment scheme - restart re-establishment grant - whether claim must be made before farm sold - decision set aside.

Farm Household Support Act 1992 - ss 3, 4, 8, 16, 52

Management and Financial Accounting Regulations - Reg. 9

Property Law Act 1974 (Qld) - s 12

Transfer of Land Act 1893 (WA) - s 137

Chettle v Brown [1993] 2 Qd R 604

Connell and Another v Bond Corporation (1992) 8 WAR 352

Costa & Duppe Properties Pty Ltd v Duppe [1986] VR 90

DECISION AND REASONS FOR DECISION [1999] AATA 90

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q1998/810

GENERAL ADMINISTRATIVE DIVISION )

Re SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Applicant

And SHANE STAATZ

Respondent

DECISION

Tribunal Miss S A Forgie (Deputy President)

Date 17 February, 1999

Place Brisbane

Decision The Tribunal:

1. sets aside the decision of the Social Security Appeals Tribunal dated 19 June, 1998; and

2. substitutes a decision that the respondent is not entitled to a re-establishment grant under the Restart Re-establishment Grant Scheme 1997 formulated pursuant to sub-section 52A(1) of the Farm Household Support Act 1992.

S A FORGIE

Deputy President

ADMINISTRATIVE APPEALS TRIBUNAL )

) Q1998/810

GENERAL ADMINISTRATIVE DIVISION )

Re: SECRETARY, DEPARTMENT OF FAMILY

AND COMMUNITY SERVICES

Applicant

And: SHANE STAATZ

Respondent

Tribunal: Miss S A Forgie (Deputy President)

Place: Brisbane

Date: 10 March, 1999.

CORRIGENDUM

The Tribunal amends its reasons for decision dated 17 February, 1999 by omitting the words "Management and Financial Accounting Regulations" from paragraphs 37 and 41 and inserting in their place the words "Financial Management and Accountability Regulations".

S A FORGIE

Deputy President

REASONS FOR DECISION

On 18 August, 1998, the applicant, the Secretary of the Department of Family and Community Services ("Secretary") applied for review of a decision of the Social Security Appeals Tribunal ("SSAT") dated 19 June, 1998. In its decision, the SSAT set aside a decision which had been made by a delegate of the Secretary on 9 March, 1998 and which had been affirmed by an Authorised Review Officer ("ARO") on 14 May, 1998. The decision had been to reject Mr Staatz's claim for a re-establishment grant.

2. At the hearing, Mr Staatz was represented by his solicitor, Mr Nunan, and the Secretary by his advocate, Mr Walsh. The documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 were admitted in evidence ("T documents"). Also admitted was a copy of the Restart Re-establishment Grant Scheme 1997 formulated by the Minister for Primary Industries and Energy ("Minister") under sub-section 52A(1) of the Farm Household Support Act 1992 ("the Act") and a copy of the Governor-General's Proclamation which was dated 26 November, 1997. Under sub-section 4A(1) of the Act, the Proclamation fixed 1 December, 1997 as the restart scheme payment commencement day for the Act. No oral evidence was given on behalf of either party.

THE ISSUE

3. The central issue in this case was whether Mr Staatz had to lodge a claim for a restart re-establishment grant before the farm was sold. If it were found that he did not have to do so, other issues would arise. Those other issues did not become relevant.

THE BACKGROUND

4. There was no dispute between the parties as to many of the facts in this case. The dispute centred upon the application of the Restart Re-establishment Grant Scheme to the facts. With this in mind, I have set out in the following paragraphs the findings of fact which I have made.

5. I find that Mr Staatz has been in partnership with his father and mother and with his brother, Graham, and Graham's wife, Sharee. The partnership was called "Staatz Enterprises". As Staatz Enterprises was engaged in the production of cattle, grains and vegetables, I am satisfied that it carried on an enterprise within the pastoral, agricultural and horticultural industries. Consequently, it carried on a farm enterprise. It did so on two thirds of a property known as "Marinya". The property was owned by Mr Staatz's parents, Mr Douglas Vincent Staatz and Mrs Beryl Mary Staatz (T documents, page 37).

6. Mr Staatz and his brother, Graham, worked on two-thirds of the property. A sum of $25,000.00 was contributed by Mr Staatz to acquire equipment with which to work the property. He also worked on the farm enterprise on a full-time basis. All of his income was derived from Staatz Enterprises' farm enterprise.

7. A separate farm enterprise was carried on by Mr Staatz's other brother, Trevor, on the remaining one third of Marinya. Trevor leased that one third from his parents.

8. On the basis of the entry for rent found in the profit and loss statement for Staatz Enterprises for the year ended 30 June, 1997, I find that Staatz Enterprises paid rent on that part of Marinya on which it carried out its farm enterprise (T documents, page 51).

9. Marinya was offered for sale early in 1998. Mr Staatz and his brothers, Graham and Trevor, approached Centrelink. They understood that they were told by Centrelink that they would not qualify for a re-establishment grant until the farm was sold. As Trevor wanted to undertake a course in computer science and Graham wanted to work in Western Australia, they both lodged a claim form prior to Marinya's being sold. Mr Staatz was able to stay on Marinya until it was sold and so waited until that had occurred before he lodged his claim at a Centrelink office.

10. I find on the basis of a letter written on 6 March, 1998 by the solicitors acting for Mr Staatz's parents that Marinya was sold on 2 March, 1998. The partnership, Staatz Enterprises, was dissolved on the same day. Since then, Mr Staatz has not engaged in any further farming activities. He lodged his claim for a re-establishment grant on 6 March, 1998.

11. There is no dispute that Trevor and Graham both received a re-establishment grant. Mr Staatz's claim was refused.

LEGISLATIVE FRAMEWORK

12. Although the issue in this case centres upon Mr Staatz's entitlement to a re-establishment grant, we should note at the outset that the Act makes provision both for re-establishment grants and for restart income support. As the two types of payment touch upon each other, I should briefly sketch the circumstances in which each is payable.

13. The Act itself sets out the circumstances in which a person is entitled to restart income support. Section 8B provides that:

"Subject to this Division, a person is qualified for a restart income support in respect of a period if:

(a) the period begins on or after the restart scheme payment commencement day; and

(b) throughout the period, the person:

(i) is a farmer; and

(ii) is at least 18; and

(iii) is an Australian resident; and

(iv) is in Australia; and

(c) the person has been a farmer for a continuous period of at least 2 years immediately before the period; and

(d) a certificate of inability to obtain finance issued in respect of the person had effect throughout the period."

14. Sections 8C, 8D, and 8E are concerned with situations in which a person in respect of a period is either not qualified or in which his or her qualification for restart income support ceases. Those sections are not relevant in this case.

15. A "farmer" is defined in sub-section 3(1) of the Act to mean:

"... a person who:

(a) has a right or interest in the land used for the purposes of a farm enterprise; and

(b) contributes a significant part of his or her labour and capital to a farm enterprise; and

(c) derives a significant part of his or her income from the farm enterprise."

16. The expression "farm enterprise" used in the definition of "farmer" is defined to mean:

"... an enterprise carried on within any of the agricultural, horticultural, pastoral, apiculture or aquaculture industries".

The expression "right or interest in the land" is not defined in the Act.

17. The manner in which a person makes a claim for restart income support is set out in section 16 of the Act. That section provides that a person must lodge a claim at an office of the Department of Family and Community Services or at a place, or with a person, approved by the Secretary in order to be a proper claim.

18. Sub-section 52A is concerned with the Restart Re-establishment Grant Scheme 1997 ("grant scheme"). It provides that the Minister may, by means of a written instrument:

"(a) formulate a scheme for the provision of payments, to be made after the restart scheme payment commencement day, by way of grant of financial assistance to people on the sale of farm enterprises, or rights or interests in farm enterprises; and

(b) provide for the implementation of and regulation of the scheme."

The "restart scheme payment commencement day" was fixed as 1 December, 1997 by the Governor-General in a Proclamation dated 26 November, 1997 (Exhibit 3).

19. Sub-section 52A(2) sets out some of the specific matters with which the Minister may deal in formulating the grant scheme. Those matters include qualifications for a re-establishment grant, the procedure for applying for that grant and the circumstances in which it is payable. The Minister formulated the grant scheme on 25 November, 1997 (Exhibit 2).

20. Clause 2.1 of the restart re-establishment grant scheme provides that:

"A person is eligible to apply for a re-establishment grant only if he or she is qualified for a restart income support under Division 1B of Part 2 of the Act."

21. A person who seeks a grant must apply before 1 December, 1999 (clause 2.2). He or she does so by completing a claim for restart income support whether or not he or she actually sought payment of it. This was the effect of clause 2.3. Sub-clause 2.3(1) provides that a person who claims restart income support is also taken to have applied for a re-establishment grant. If a person wants to apply for a grant but not for restart income support, the effect of sub-clause 2.3(2) is that he or she must still complete a claim for restart income support.

22. The qualifications which a person must possess in order to qualify for a re-establishment grant are set out in clause 3.2 of the re-establishment grant scheme. Sub-clause 3.2(1) provides that:

"A person is qualified to receive a re-establishment grant if:

(a) the person was eligible to apply for the re-establishment grant when the person applied; and

(b) the person's farm enterprise has been sold (and completion of the sale has taken place) within 1 year after:

(i) if the person has received restart income support - the person last received restart income support; or

(ii) in any other case - the person applied for the re- establishment grant; and

(c) the Secretary is satisfied that the sale was on commercial terms and at arm's length; and

(d) the Secretary is satisfied that the person has disposed of all of the person's farm assets; and

(e) the person has complied with any direction under Division 2 of Part 2 of this Scheme or section 13A of the Act to obtain advice; and

(f) the person's net assets, plus the total of any restart income support the person has received, is less than $157,500; and

(g) the person has not previously received a grant under this scheme or under an agreement subject to the Rural Adjustment Act 1992; and

(h) if the person has applied for a grant under an agreement subject to the Rural Adjustment Act 1992 - he or she has withdrawn that application."

23. A re-establishment grant is payable to a person when he or she becomes qualified to receive it (sub-clause 3.7).

CONSIDERATION

24. Mr Nunan contended that it is very clear from paragraph 3.2(1)(b) that the farm enterprise must have been sold before he can qualify for a re-establishment grant. It follows, he continued, that Mr Staatz cannot make an application until such time as he qualifies.

25. While I agree that Mr Staatz could not qualify for a re-establishment grant before Marinya was sold, I do not agree with Mr Nunan's conclusion. In order to qualify for a re-establishment grant, Mr Staatz must fulfil each of the eight criteria set out in clause 3.2. One of those criteria, which is set out in paragraph 3.2(1)(a), is that the person was eligible to apply for the re-establishment grant when the person applied. It is apparent from clause 2.1 that a person can only be eligible to apply if he or she was qualified for restart income support under Division 1B of Part 2 of the Act at the time when the person applied for the re-establishment grant. It is not enough that the person may have been qualified for restart income support at some earlier time.

26. In order to be qualified for restart income support at the time he lodged his application for a re-establishment grant, Mr Staatz must have met the criteria specified in section 8B. In particular in the context of this case, he must have been a farmer. At the time that he lodged his application on 6 March, 1998, however, he was not a farmer as Marinya had been sold on 2 March, 1998. If, in the past, he had a right or interest in Marinya, which was used for the purposes of the farm enterprise in which he was engaged, he no longer had that right or interest at the time of his application for a re-establishment grant. There is no evidence that Marinya was sold subject to any right or interest held by Mr Staatz. Consequently, Mr Staatz did not meet paragraph (a) of the definition of a "farmer" in sub-section 3(1). It was not questioned in the course of the proceedings that Mr Staatz met the criteria specified in paragraphs 8B(c) and (d).

27. Nor did Mr Staatz meet paragraph (b) of the definition of "farmer" in sub-section 3(1). At the time he lodged his application on 6 March, 1998, he no longer contributed a significant part of his labour and capital to a farm enterprise. He had in the past and, indeed, had done so until on or about 2 March, 1998 when Marinya was sold. Finally, Mr Staatz did not meet paragraph (c) of the definition. Although he had, until 2 March, 1998, derived all of his income from the farm enterprise, there is no evidence that he continued to do so when he lodged his application for re-establishment grant on 6 March, 1998. It follows that Mr Staatz was not a farmer at the date of his application and so was not qualified for restart income support at that date. Consequently, he did not meet the criterion specified in paragraph 3.2(1)(a).

28. Mr Nunan also submitted that if I were to conclude, as I have, that Mr Staatz was not a farmer when he lodged his application on 6 March, 1998, then I should find that sub-clause 3.2(1) is ambiguous. That ambiguity lies, he said, in the requirement, in effect, in paragraph 3.2(1)(a) that the person be a farmer at the time he or she lodged the claim and the requirement in paragraph 3.2(1)(b) that the farm enterprise has been sold. It is not justifiable, he continued, that a person must apply for a re-establishment grant before becoming eligible for the grant.

29. While the two requirements may initially appear at odds with each other, I do not think that they are either at odds or that they are ambiguous when regard is had to the whole of the restart income support and restart re-establishment schemes.

30. In requiring that all persons seeking assistance must qualify for restart income support, the Act is ensuring that only those farm families who need support are entitled to seek to take advantage of the grant payable under the Restart Re-establishment Scheme when they sell their farm. The Act does this by ensuring (among other matters) that farmers who are in the industry and who have been for the prescribed length of time, are those farmers who receive assistance. Second, in ensuring that a certificate of inability to obtain finance has been issued in respect of the person throughout the relevant period, it is ensuring that support is only given to those farmers who are facing financial difficulties. In requiring them all to apply for restart income support, the scheme also enables them to choose whether to take payments of income support and a lump sum when the farm is sold or whether to wait until it is sold and take it all as a lump sum in the form of a grant.

31. That the ordinary meaning of the words is the meaning intended by the Scheme is apparent from the Second Reading Speech of the Minister when he said:

"The proposed amendments offer an innovative approach to assisting farm families. This legislation provides farmers with the opportunity to give serious consideration to the future of the farm and family without having to rush decisions. It recognises that it takes time to come to grips with the possibility of a future that does not entail farm ownership. It allows them to keep working the farm while they review their situation. It relieves the tremendous pressure than (sic) can arise from literally not being able to put food on the table." (House of Representatives, Thursday, 23 October, 1997 Hansard, page 7916)

32. Support in the form of a re-establishment grant is only given if a person fulfils further criteria in addition to that in paragraph 3.2(1)(a). The effect of paragraph 3.2(1)(b) is that the criteria specified in that paragraph can only be fulfilled (if they are fulfilled at all) at some date after the person has applied for a re-establishment grant. The provision achieves this by setting the time limits within which the person must sell his or her farm enterprise if he or she is to be paid a grant and setting those time limit by reference to a date beginning after the application has been made. A further effect of paragraph 3.2(1)(b) (when read with clause 2.3) is that the person will need to have lodged a claim for restart income support before selling the farm regardless of whether he or she actually wants restart income support. Where the person has successfully claimed restart income support, the time within which the person must sell the farm is 12 months from the time the person was last paid restart income support. Where he or she is not paid that amount or simply applies for a re-establishment grant, the person has 12 months from the date of that application within which to sell the farm enterprise.

33. It is apparent from the provisions of the Act and of the Restart Re-establishment Scheme that it is not possible for a person first to sell his or her farm enterprise and then to decide to apply for a re-establishment grant. Again, it is apparent from the Second Reading Speech of the Minister when he said:

"A re-establishment grant of up to $45,000 will be available to eligible farmers. This grant will provide positive incentives for farmers to leave farming before their assets are severely depleted. I emphasise that eligible farmers will be able to apply for the re-establishment grant only during the first two years of the operation of the Farm Family Restart Scheme. To receive the grant, those who apply and meet the eligibility criteria will need to sell their farm within twelve months of ceasing income support, or from the date of their application if income support is not sought." (House of Representatives, No 16, 1997, 23 October 1997 Hansard, page 7916)

34. In this case, Mr Staatz had not applied for either restart income support or a re-establishment grant before Marinya was sold. It follows that he cannot fulfil the criteria specified in paragraph 3.2(1)(b) of the Restart Re-establishment Scheme as he did not sell his farm after he applied for the re-establishment grant.

35. Mr Nunan submitted that, should I reach this conclusion, I should decide that Mr Staatz was entitled to a grant as he received incorrect advice from Centrelink. He also submitted that the advice given on the forms is misleading. Mr Nunan referred, for example, to the form headed "Claim for the Family Restart Scheme" (T documents, pages 27-36). The boxed statement on page 11 of that form follows a section requiring the claimant to elect whether he or she is applying for restart income support only, a restart re-establishment grant only or restart income support and a restart re-establishment grant. Arrows from the last two options direct the reader's attention to the boxed section which states:

"To be eligible for a Restart Re-establishment Grant it will be necessary to sell your farm within 12 months and complete a Restart Re-establishment Grant claim form.

If you decide within 12 months you want to receive Restart Income Support you must advise Centrelink who will review your income and non-farm assets." (T documents, page 36)

36. This section also needs to be read with the front page of the information notes given in relation to the scheme. Those notes set out that the scheme consists of two components: restart income support and restart re-establishment scheme. It explains what a farmer is and what a farm is before going on to explain how a person can qualify for the scheme. It states:

". you must be a farmer now and have been for a continuous period of at least 2 years.

. you must be unable to borrow against your assets,

. you must not be involved in bankruptcy proceedings or have been issued with an eviction order or in any other way have lost control of the management of your farm enterprise, and

. you must only have joined the Farm Family Restart Scheme a maximum of once previously and received less than 6 months Restart Income Support during that period."

(T documents, page 24)

37. Although I accept that Mr Staatz understands that he was given incorrect advice, I am not in a position to determine that he was. That is so because I have not heard any evidence from Centrelink offices regarding the oral advice he was given but, more relevantly, because it is not a matter with regard to which I have any jurisdiction. The provisions of the Act and of the Restart Re-establishment scheme are quite clear in their terms. There is no provision which permits me to make a decision which I may think is justified by notions of justice but not permitted on any construction of the law as passed by Parliament. It is open to Mr Staatz, however, to make an application under Regulation 9 of the Management and Financial Accounting Regulations.

38. For similar reasons, I cannot take into account the successful applications of Trevor and Graham in reviewing Mr Staatz's entitlement to a re-establishment grant. Although fairness would dictate that Mr Staatz should receive it if his brothers, who did receive the grant, were in precisely his position, I am bound by the terms of the legislation and not by what happened in relation to other people, however closely aligned their position is to that Of Mr Staatz.

39. Lest it should be of any assistance to the parties, I will make observations on one matter. That matter relates to Trevor's position. His position was different from Mr Staatz's in that Trevor had leased one third of Marinya from their parents. It is to be expected that the decision-maker considered that he had a right or interest in Marinya in the form of a lease.

40. Whether Mr Staatz has a right or interest in Marinya has been questioned by Mr Walsh. Whether or not he had that interest will be relevant in determining whether he was a farmer and whether he would have qualified had he been given the correct advice to lodge an application for a re-establishment grant before Marinya was sold. Again, this is not a matter which is within my jurisdiction to consider and I express no concluded view upon it.

41. Despite that, I will draw the parties' attention to one matter should Mr Staatz lodge a claim under Regulation 9 of the Management and Financial Accounting Regulations and should the matter of his right or interest in land become relevant. Staatz Enterprises, rather than Mr Staatz himself, paid rental for the property and paid it to Mr Staatz's parents. Mr Staatz was a partner of Staatz Enterprises. A leasehold interest in land is created whenever one person, the lessor, confers upon another, the lessees, the right to the exclusive possession of land for a period which is either certain or capable of being ascertained and with the intention of conferring an interest in land rather than a mere privilege (see Land Law, Peter Butt, 2nd edition, 1988, Law Book Company, page 218).

42. In this case, there is said to be an oral lease to Staatz Enterprises. No more is known about the lease and I do no more than note the provisions of section 12 of the Property Law Act 1974 (Qld) which provides:

"(1) All interests in land created by parol and not put in writing and signed by the person so creating the same, or by the person's agent lawfully authorised in writing, shall have, despite any consideration having been given for the same, the force and effect of interests at will only.

(2) Nothing in this Act shall affect the creation by parol of a lease taking effect in possession for a term not exceeding 3 years, with or without a right for the lessee to extend the term for any period which with the term would not exceed 3 years."

43. On the assumption that it can be said that Staatz Enterprises has a leasehold interest in Marinya, the next question would be to consider whether Mr Staatz could be said to have an interest in Marinya as well. In determining that question, regard would need to be had to principles such as those considered by Malcolm CJ in Connell and Another v Bond Corporation (1992) 8 WAR 352.

44. In that case, the plaintiffs claimed that they had an "estate or interest in land" by virtue of their being partners with the defendant and the land being one of the assets of the partnership. The land had been acquired by Bond Corporation Pty Ltd as trustee for all the partners. Section 137 of the Transfer of Land Act 1893 (WA) provides, in part, that:

"Any beneficiary or other person claiming any estate or interest in land under the operations of this Act or in any lease mortgage or charge by deposit without writing or by devolution in law or otherwise may lodge a caveat with the Registrar in the form of the Eighteenth Schedule hereto or as near thereto as circumstances will permit forbidding the registration of any person as transferee or proprietor of and any instrument affecting such estate or interest either absolutely or until after notice of the intended registration or dealing be given to the caveator or unless such instrument be expressed to be subject to the claim of the caveator as may be required in such caveat ..."

45. In summary, Malcolm CJ found that a partner's interest in a partnership is in the nature of an equitable chose in action. A partner has a beneficial interest in every asset of the partnership which takes effect in possession only on the partnership's dissolution. In the case of land, that interest is more than a mere equity and is capable of supporting a caveat.

46. If this line of reasoning were adopted, it would be open to Mr Staatz to argue that he had an interest, albeit equitable, in Marinya when he sought advice from Centrelink. In considering the merits of that argument, consideration would also need to be given to the contrary view reached by White J in Chettle v Brown [1993] 2 Qd R 604. Similar authorities were considered in both Chettle and Connell although Malcolm CJ referred to the judgement of Brooking J in Costa & Duppe Properties Pty Ltd v Duppe [1986] V.R. 90 more extensively and it may be therein that that the difference between the two cases lies. An analysis of the two cases appears in an article entitled, "Does the interest of a partner in partnership land give the partner a caveatable interest?" (Paul Latimer, (1995) 69 ALJ 240)

47. For the reasons I have given, I:

1. set aside the decision of the Social Security Appeals Tribunal dated 19 June, 1998; and

2. substitute a decision that the respondent is not entitled to a re-establishment grant under the Restart Re-establishment Grant Scheme 1997 formulated pursuant to sub-section 52A(1) of the Farm Household Support Act 1992.

I certify that this and the sixteen preceding pages are a true copy of the decision and reasons for decision herein of Miss S A Forgie (Deputy President)

Signed: ......................................................

Merissa Martinez Associate

Date/s of Hearing 20 January, 1999

Date of Decision 17 February, 1999

Solicitor for Applicant Mr B Nunan, Clearly & Lee

Advocate for Respondent Mr J Walsh