Bolton and Department of Family and Community Services [2000] AATA 749 (28 August 2000)

Last Updated: 7 September 2000

DECISION AND REASONS FOR DECISION [2000] AATA 749

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q1999/1156

GENERAL ADMINISTRATIVE DIVISION )

Re WILLIAM HENRY BOLTON

Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Dr E K Christie, Member

Date 28 August 2000

Place Brisbane

Decision The decision under review is affirmed.

(Sgd) EK CHRISTIE

MEMBER

CATCHWORDS

FARM HOUSEHOLD SUPPORT ACT - restart re-establishment Scheme - restart re-establishment grant - whether claim must be made before farm sold - whether applicant is a "farmer" within the meaning of the Act - meaning of words and phrases, "must"

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

In the Matter of an Application by Dalton (1995) 120 FLR 408

Keller v Bayside City Council (1995) 8 VAR 377

R v Perry (1993) 29 NSWLR 589

Secretary, Department of Family and Community Services and Staatz [1999] AATA 90

Worrall v Commercial Banking Company of Sydney Ltd (1917) 24 CLR 28

REASONS FOR DECISION

28 August 2000 DR E K CHRISTIE, MEMBER

1. This is an application by William Henry Bolton for a review of a decision of the Social Security Appeals Tribunal ("the SSAT") made on 23 September 1999 in which the SSAT decided that Mr. Bolton was not qualified for a restart re-establishment grant. The SSAT decision affirmed an earlier decision made by Centrelink on 24 February 1999 to reject Mr. Bolton's claim for restart re-establishment grant.

2. In arriving at its decision, the SSAT concluded that, "It is clear to the Tribunal that Mr. Bolton was no longer a farmer when he completed and lodged the claim on 1 February 1999" (T2 Folio 10).

3. The evidence before the Tribunal comprised the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the "T" documents), Exhibit 1, and the following exhibits:

* Exhibit S1 - Supplementary "T" Documents

* Exhibit 2- Statement of Robyn Elizabeth Bolton, 2 March 2000

* Exhibit 3 - Statement of William Henry Bolton, 2 March 2000

* Exhibit 4 - Statement of Anthony James Arnold, 16 March 2000

* Exhibit 5 - Centrelink Document (#98/01) "Restart Re-establishment Grant"

4. At the hearing, the applicant was represented by Mr. P. Smith of Counsel, instructed by Paul Everingham and Associates. The respondent Department of Family and Community Services ("the Department") was represented by Ms. T. Guthrie, a Departmental Advocate.

FACTS

5. The SSAT made the following findings of fact (T2 Folio 8):

"12. On the basis of the evidence before it, the Tribunal made the following findings:

(i) Mr Bolton was farming at 'The Pocket', Gogango, owning this property until a sale forced by QIDC was held in September 1994.

(ii) Following the sale Mr Bolton leased back 240 hectares of irrigation land for a period of 4 years, in an agreement which ceased on 22 September 1998.

(iii) A private arrangement allowed 120 hectares of wheat to be grown, with the final termination of the arrangement to be post-harvest of the crop, the crop harvest being completed on 11 November 1998.

(iv) A clearing sale was held on 12 December 1998, Mr and Mrs Bolton finally leaving the property on 21 December 1998.

(v) Mr Bolton lodged the claim for restart re-establishment grant on 1 February 1999.

(vi) At no time did Mr Bolton lodge a claim for restart income support."

6. At the commencement of the hearing, Counsel for Mr. Bolton acknowledged that "there appears to be no factual disputes, really, between the parties on issues relevant to the application".

ISSUES BEFORE THE TRIBUNAL

7. The only issues for the Tribunal to decide were:

* whether Mr. Bolton was a farmer when he completed and lodged his claim on 1 February 1999; and

* whether he was eligible for a grant under the Restart Re-Establishment Grant Scheme 1997 ("the Scheme").

STATUTORY FRAMEWORK

8. The relevant legislation is the Farm Household Support Act 1992 ("the Act"). The central issue in this application for review was whether Mr. Bolton was entitled to a re-establishment grant. The Act makes provision for re-establishment grants and for restart income support. There are linkages between these two types of payment in terms of the circumstances in which each is payable.

9. The term "farmer" is defined in ss.3(2) of the Act as:

"'farmer' means 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 the farm enterprise; and

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

10. Division 1B of the Act specifies provisions in relation to Qualification for Restart Income Support. Section 8B deals with the qualification for restart income support:

"8B Qualification for restart income support

Subject to this Division, a person is qualified for 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 has effect throughout the period."

Sections 8C and 8D are concerned with situations in which a person in respect of a period is not qualified for restart income support:

"8C Persons not qualified if Secretary determines that they do not effectively control farm enterprises

A person is not qualified, or ceases to be qualified, for restart income support in respect of a period if the Secretary determines that:

(a) the person is not effectively in control of the farm enterprise for which the person claims restart income support; and

(b) restart income support should not be payable to the person in respect of the period.

Note: Some examples of cases in which the Secretary may consider that a person is not effectively in control of a farm enterprise are when a mortgagee has taken possession of a farm, when a person is a bankrupt or when an eviction notice has been served on a person in respect of a farm.

8D Persons not qualified if they have received restart income support for 1 year.

(1) A person is not qualified, or ceases to be qualified, for restart income support if the person has received restart income support in respect of a period of 1 year, or in respect of periods that add up to 1 year.

(2) If a person's partner (if any) during a period was paid restart income support in respect of the period, that period is taken, for the purposes of subsection (1), to be a period during which the person received restart income support."

11. Sections 15 and 16 of the Act specify the form a claim for restart income support should take as well as the manner of lodgement of such a claim in order for a proper claim to be lodged:

"15 Form of claim

To be a proper claim, a claim must:

(a) be made in writing; and

(b) be in accordance with a form approved in writing by:

(i) in the case of a claim for farm household support - the Secretary to the Department of Primary Industries and Energy; or

(ii) in the case of a claim for exceptional circumstances relief payment or restart income support - the Secretary.

16 Lodgement of claim

(1) To be a proper claim, a claim must be lodged:

(a) at an office of the Department; or

(b) at a place approved for the purpose by the Secretary; or

(c) with a person approved for the purpose by the Secretary.

(2) A place or person approved under subsection (1) must be a place or person in Australia."

12. Sub-section 52A (Part 9A) of the Act is concerned with the Restart Re-establishment Grant Scheme 1997 ("the 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."

13. Sub-section 52A(2) of the Act sets out the following matters with which the Minister may deal with in formulating the grant Scheme:

"52A.(2) Without limiting subsection (1), the Scheme may deal with:

(a) the circumstances in which people are qualified to apply for re-establishment grants; and

(b) the procedure for applying for a grant; and

(c) the circumstances in which a grant is payable; and

(d) the amount of grant payable; and

(e) the method for paying a grant."

14. Part 2 of the Scheme sets out the basis for making an application under the Scheme:

"Part 2 - Applying for a re-establishment grant

Division 1 - The application

2.1 Who can apply?

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

2.2 When must the application be made?

An application cannot be made after 30 November 1999.

2.3 How does a person apply for a re-establishment grant?

(1) A person who has claimed restart income support is also taken to have applied for a re-establishment grant.

(2) If a person wants to apply for a re-establishment grant only, the person must still complete a claim for restart income support."

Accordingly, 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 is 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.

15. 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."

In order to qualify for a re-establishment grant, Mr. Bolton would have to fulfil all of the eight criteria set out in clause 3.2 of the Scheme.

CONTENTIONS AND SUBMISSIONS OF THE PARTIES

16. Mr. Smith said that in March 1998, the Bolton's Bank Manager at Emerald told the Boltons to see Centrelink for financial assistance. Acting on the advice of the Centrelink officer they then saw the Boltons' completed forms for "Exceptional Circumstances Relief Payment" and received payments during 1998. However, they were not informed, at this time, that they could apply for a "Restart Re-Establishment Grant" - a Scheme introduced on 1 December 1997 and designed to operate for a two year period ending 1 December 1999.

17. Mr. Smith said that in October 1998, Mrs. Bolton heard about the Scheme on ABC radio. Her enquiries to Centrelink to follow up the radio information proved fruitless. However, subsequent assistance in November 1998, from the Queensland Rural Adjistment Unit and her Federal Member of Parliament overcame this problem. As a result, Mr. Bolton received a telephone call from Mr. Arnold of Centrelink to explain the Scheme to him. According to Mr. Bolton, this telephone conversation occurred on 4 December 1998 (Exhibit 3). Mr. Smith stated that Mr. Bolton first received a claim form on 7 December 1998 - a very busy time for the Boltons as they sold their farm on 12 December 1998 and then left the farm on 21 December 1998. The Boltons sent the claim form to Centrelink on 28 January 1999 and the form would have been received by Centrelink some time in early February 1999.

18. Mr. Smith's basic contentions were:

* that there was an implied oral application on 4 December 1998 when Mr. Bolton spoke to Mr. Arnold on the telephone; and

* that the legislation did not prevent retrospective applications.

These two contentions represent (a) procedural and (b) eligibility issues with respect to a grant under the Scheme.

19. Mr. Smith stated, at the outset, that "from our point of view we would concede that after 21 December, or 12 December [1998], Mr. Bolton was not a farmer so there's no dispute about that."

20. In terms of the procedural issue, Mr. Smith submitted, based on enquiries Mr. Bolton had made about the Scheme commencing late October 1998 (see paragraphs 16 and 17), that it could be construed that Mr. Bolton had made an application for a Re-establishment Grant around 4 December 1998.

21. Mr. Smith contended that the Scheme did not provide a formal mechanism for making an application for assistance apart from specifying:

* that an application could not be made after 30 November 1999 (Clause 2.2); and

* that a person must complete a claim for Restart Income Support (Clause 2.3). That is, it did not provide for a 'claim form' to be completed for Restart Income Support.

22. Furthermore, Mr. Smith submitted that the operation of the Act and Scheme involved a two stage process comprising an oral, implied application and a written claim. Moreover, it was his contention that the enquiries and activities of Mr. and Mrs. Bolton in their dealings with Centrelink indicated that an oral application could be implied on 4 December 1998 (see Exhibit 3).

23. In terms of the eligibility issue, Mr. Smith contended that the provisions of the Act contemplated qualification for Restart Income Support in relation to a "period". It was his contention that if a person could establish that they had been a farmer, continuously, for two years immediately before the period applied for, and during such period, they were effectively in control of the farm enterprise, then they were eligible to receive Restart Income Support for a period up to 12 months. Furthermore, there was nothing in the Act which prevented a person making a retrospective application provided they fulfilled the other qualifying criteria.

24. To support this construction of eligibility under the Act, Mr. Smith submitted that past tense was used in the provisions of the Scheme as to the eligibility of a person under the Scheme. For example, Clause 3.2.1(a) used the words "was eligible" and "when the person applied" rather than the words "is eligible at the time of application".

25. In addition, it was Mr. Smith's contention that Clause 3.2(b)(ii) of the Scheme did not exclude the situation where a person had disposed of the farm enterprise prior to application. Notwithstanding the disqualifying period that the farm enterprise must be sold within 12 months of application, he submitted that this would not necessarily exclude a situation where the farm enterprise was sold before an application for a grant was made.

26. Mr. Smith submitted that s.8D of the Act was important because of its relevance to whether a person must be a farmer at the time of application. It was his contention that s.8D provided for different periods of time when a person was a "farmer" to be added up to enable the person to become entitled to income support for the 12 month period so derived.

27. The Departmental Advocate, Ms. Guthrie, referred to the Second Reading Speech of the Farm Household Support Bill and stated that the clear intention of the Scheme was to assist farmers to make decisions about their future so that restart income support could be provided during the time that they were deciding whether to leave the farm and to provide an incentive to leave in due course. She referred to the following passage in the Second Reading Speech.

"Just as importantly the measures contained in this Bill offer carefully targeted assistance to those who wish to adjust out of farming. The New Farm Family Restart Scheme is the government's key program for delivering income support to the farm sector. It also provides Adjustment Assistance to farmers who wish to leave the industry. 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 the situation. It relieves the tremendous pressure that can arise from literally not being able to put food on the table.

The Farm Family Restart Scheme will provide a decision support system for farms considering exiting the industry as well as those who need the breathing space to refocus their farm enterprise. This Scheme provides access to professional advice for farmers to help them assess the future viability of their business."

28. Ms. Guthrie submitted that Mr. Bolton lost control of his farming enterprise on 11 November 1998 when the last crop was harvested. Once the crop had been harvested, Mr. Bolton was no longer a farmer because he failed to meet any element for the definition of "farmer" provided for in ss.3 (a), (b), (c) of the Act. From this time, Mr. Bolton was "simply waiting for the money to come in, the harvest had been completed". Furthermore, she submitted that the Boltons' sole purpose for remaining on the property was the clearance sale. However, it was her contention that the clearing sale could not be construed to the elements of the statutory definition for a "farmer" as the purpose of the clearance sale was "converting the assets capital".

29. Ms. Guthrie submitted that Mr. Bolton had never made a claim for Restart Income Support nor had he lodged a claim for that particular payment - notwithstanding that the provisions of the Scheme made it "very clear" that Mr. Bolton was required to make a claim for restart income support in writing and to lodge the claim. Ms. Guthrie stated that in order to apply for a grant under the Scheme, a person must have claimed "restart income support". It was reading more into the legislative framework, she submitted, that the legislation did not refer to a "claim form" - but only a "claim". However, the legislation referred to a proper claim as one that must be in writing.

30. Ms. Guthrie submitted that at the time Mr. Bolton lodged his application for a grant on 1 February 1999 (T8):

* he had left the farm;

* was not a "farmer" according to the statutory meaning;

* he had never made a claim for restart income support;

* he had never lodged a claim for restart income support; and

* there was no evidence of any oral application for a claim.

31. Furthermore, Ms. Guthrie contended that, in terms of Mr. Bolton's eligibility to receive the grant, the provisions of the Scheme made it clear that:

* the grant would not be received until after the property was sold (Clause 2.1); and

* the person was only eligible to apply if he or she was qualified for restart income support (Clause 3.2).

32. Ms. Guthrie referred to the notes on the Centrelink document 'Restart Re-Establishment Grant' (Exhibit 5) and contended that the information provided to applicants for a grant made it clear that:

* to qualify for a grant, a person must lodge an application and be qualified for the Farm Family Restart Scheme; and

* the prospective grantee must not in any way, have lost control of their farm enterprise.

33. Ms. Guthrie referred to the s.8(c), (d), (e) provisions of the Act - provisions which were concerned with circumstances where a person was "not qualified" for restart income support; these provisions addressed different "periods" of time. It was Ms. Guthrie's contention that these provisions did not alter the plain wording of the Act and Scheme so that whenever a claim was made, qualification for restart income support would have to be considered "at that time in terms of the legislation". Ms. Guthrie further submitted:

"And given that once one lodges a claim for Restart Income Support it's implied that you've applied for the grant as well, then if the person was to get a grant as a result of one of those periods, then that would obviously depend on whether or not all of the other qualification provisions for the grant are met in due course."

34. Supplementary submissions were received by both parties in relation to a Tribunal question concerning the issue of procedural fairness and the time of Mr. Bolton's application for a grant. Ms. Guthrie contended that the factors set out by Wilcox J in Hunter River Developments and Ors v Cohen (1984) 7 ALD 315 had no application to the exercise of a discretion to grant an extension of time in which to apply for a restart re-establishment grant under the legislative framework. Mr. Smith contended:

"that the determination whether or not a person is entitled to apply for a Restart Re-establishment Grant after they have ceased to be a farmer, is purely a question of law to be determined after interpreting the provisions of the Farm Household Support Act 1992 and the Restart Re-establishment Grant Scheme 1997."

CONSIDERATION OF THE ISSUES

35. The objective of the Tribunal is to review administrative decisions; not only on their merits, but in accordance with the law at all times.

36. The first issue for the Tribunal to consider are the procedural issues with respect to a grant under the legislative framework. Section 15 of the Act provides:

"15. To be a proper claim, a claim must:

(a) be made in writing; and

(b) be in accordance with a form approved in writing by:

(i) in the case of a claim for farm household support - the Secretary to the Department of Primary Industries and Energy; or

(ii) in the case of a claim for exceptional circumstances relief payment or restart income support - the Secretary." [Tribunal emphasis]

Section 16 of the Act provides:

"16 (1) To be a proper claim, a claim must be lodged:

(a) at an office of the Department; or

(b) at a place approved for the purpose by the Secretary; or

(c) with a person approved for the purposes by the Secretary." [Tribunal emphasis]

In Keller v Bayside City Council (1995) 8 VAR 377 Batt J stated:

"The word 'must' is, in my view, the word of most insistent obligation in the English language. The relevant meaning of it is that given in sense II 3, in the Oxford English Dictionary (2^nd ed), where it is described as 'expressing necessity' in the senses of 'is obliged or required to; it is necessary that'. In the Macquarie Dictionary (revised edition) the relevant meaning is that in sense 1, namely, 'to be bound by some imperative requirement'. In CT Onions, Modern English Syntax, par 131 it is stated that must' expresses 'necessity and obligation'. Quirk & Ors, A Comprehensive Grammar of English Language, pars 4-51 and 4-54 describes it as a mode verb denoting obligation or compulsion. Relevantly, according to the authors' schema, it is a verb of intrinsic and committed modality denoting obligation or compulsion. It was described by Williams J in Posner v Collector for Interstate Destitute Persons (Vic) (1946) 74 CLR 461 at 490, as 'a word of absolute obligation'".

Later, in In the Matter of an Application by Dalton (1995) 120 FLR 408 Batt J concluded:

"For the reasons which I gave in Keller v Bayside City Council (1995) 8 VAR 377 the word 'must' is, in my view, the word of most insistent obligation in the English language...."

Furthermore, in R v Perry (1993) 29 NSWLR 589 at 593, Abadjee J stated, "The word 'must' would suggest that the provision is a mandatory provision".

36. Accordingly, the Tribunal concludes that the use of the word "must" in sections 15 and 16 of the Act placed a mandatory obligation on Mr. Bolton to make a proper claim for restart income support by making the claim in writing and to lodge this claim. However, neither of these statutory requirements were adhered to by Mr. Bolton. Moreover, the effect of sub clause 2.3.2 of the Scheme required someone in Mr. Bolton's circumstances who wished to apply for a grant, but not restart income support, nevertheless "must still complete a claim for restart income support (Tribunal emphasis)". Accordingly, the Tribunal's conclusions on the interpretation of the statutory provisions for making and lodging a claim, provide no support for Mr Smith's submissions that any oral application that could be implied on 4 December 1998 on the part of Mr. Bolton, would have such effect as to offset the mandatory requirements imposed under the legislative framework.

37. Moreover, Mr. Bolton lodged a claim for re-establishment grant on 1 February 1999, he had not lodged a claim for restart income support either at this date or at the earlier date. Of further significance, is that Mr. Bolton would not have been a "farmer" at 1 February 1999 - a point conceded by the applicant's advocate (see paragraph 19).

38. In addition, Mr. Bolton had not applied for either restart income support or a re-establishment grant before his property was sold. Accordingly, the Tribunal concludes that Mr. Bolton cannot fulfil the criteria specified in paragraph 3.2 (1) (b) of the Scheme as he did not sell his farm after he applied for the re-establishment grant. In this regard, the Tribunal concurs with the decision of Deputy President Forgie in Secretary, Department of Family and Community Services and Staatz AATA 90 of 1999 (Q98/810, 17 February 1999).

39. The Tribunal has carefully considered Mr. Smith's submissions that the legislation does not prevent retrospective applications. However, the Tribunal concludes that such a contention is not consistent with scope, purpose and subject matter of the legislative framework as can be derived from the Second Reading Speech of the Farm Household Support Bill (see paragraph 27). Moreover, the language used in the legislative framework does not plainly manifest, in express terms, or by clear implication, an intention that matters of procedure are to operate retrospectively: see Worrell v Commercial Banking Company of Sydney Ltd (1917) 24 CLR 28.

40. The Tribunal is fully aware of the factors which have led to the application by Mr. Bolton failing to comply with the provisions of the legislative framework for eligibility for a grant. Many of these factors were out of Mr. Bolton's control eg incorrect information given by Centrelink over time; the timing of receipt of the correct claim forms (7 December 1998); the demands of the clearing sale; the issue of "procedural fairness" and the reasons for the lodging of the application by Mr. and Mrs. Bolton on 1 February 1999; localised flooding and access problems. The Tribunal considers that some of these issues could be pursued as the possible basis for obtaining compensation by Mr. Bolton by (a) means that fall outside statutory entitlements and (b) circumstances where Mr. Bolton feels he may have been "unfairly disadvantaged" by the Commonwealth but has no legal claim against it. In this regard, the Tribunal draws the parties attention to Regulation 9 of Financial Management and Accountability Regulations ("Act of Grace Payments") - as well as the Compensation for Detriment Caused by Defective Administration Scheme policy, respectively. These avenues could be pursued by Mr Bolton.

41. For all of the above reasons, the Tribunal concludes that Mr. Bolton was not qualified for a restart re-establishment grant.

42. Accordingly, the Tribunal decides to affirm the decision under review.

I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of DR E K Christie, Member.

Signed: Emma Oettinger

Associate

Date/s of Hearing 17.4.00

Date of Decision 28.8.00

Counsel for the Applicant Mr. P.E. Smith

Solicitor for the Applicant Paul Everingham & Associates

Respondent Ms. T. Guthrie, Departmental Advocate