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Brunner; Secretary, Department of Family and Community Services and [2003] AATA 749; (2003) 77 ALD 130 (5 August 2003)

Last Updated: 30 July 2009



Administrative

Appeals

Tribunal


DECISION AND REASONS FOR DECISION [2003] AATA 749

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/876

GENERAL ADMINISTRATIVE DIVISION

)

Re
SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY
SERVICES

Applicant


And
LYNDAL BRUNNER

Respondent

DECISION

Tribunal
Dr E K Christie, Member

Date 5 August 2003

Place Brisbane

Decision
The decision under review is set aside and in substitution thereto the Tribunal decides that Ms Brunner is not qualified for FTB in respect of her adopted daughter. The Tribunal raises the possibility of an Act of Grace payment in the factual circumstances.


(Sgd) EK Christie
Member

CATCHWORDS

SOCIAL SECURITY – Family Tax Benefit – whether person resides in Australia – maximum period of eligibility for family tax benefit while individual overseas – meaning of ‘residence’ – meaning and application of the phrase ‘have regard to’ – Act of Grace payment
Social Security Act 1991 ss 7(2), 7(3)

A New Tax System (Family Assistance) Act 1999 ss 24(4), 24(5)
R v Toohey; Ex Parte Meneling Station Pty Ltd [1982] HCA 69; (1982) 158 CLR 327
Qld Medical Laboratory v Blewett (1988) 84 ALR 615
Department of Defence v Fox (1997) 24 AAR 171
Hafza v Director-General of Social Security [1985] FCA 164; (1985) 6 FCR 444

Kioa v Minister Immigration and Ethnic Affairs (1995) 15 CLR 550


REASONS FOR DECISION


5 August 2003
Dr E K Christie, Member

  1. This is an application by the Secretary, Department of Family and Community Services for a review of a decision of the Social Security Appeals Tribunal (“the SSAT”), made on 2 September 2002, that “Miss Brunner is an Australian resident, and subject to other qualification and payability criteria, is entitled to family tax benefit” (“FTB”).
  2. The respondent has made this application for review because the SSAT set aside the decision of Centrelink that Ms Brunner was ineligible based on section 7(2) and section 7(3) of the Social Security Act 1991, and in doing so overlooked the application of section 24 of the A New Tax System (Family Assistance) Act 1999 (T1, Folio 1).
  3. The applicant was represented at the hearing by Mr T Ffrench, a Departmental advocate. The respondent, Ms Lyndal Brunner represented herself and gave evidence by telephone from Thailand.
  4. At the hearing, the Tribunal had in evidence before it, documents lodged pursuant to section 37 of the Administrative Appeals Act 1975 (the ‘T’ Documents – Exhibit 1) and various documents tendered as exhibits by the parties.

FACTS

  1. On the basis of the evidence before it, the SSAT made the following findings of fact:

(ix) Since November 1997, Ms Brunner has been physically present in Australia for three periods totalling ten months. (T2, Folios 6,7)

ISSUES TO BE DECIDED

  1. There were two issues for the Tribunal to decide:
  2. At the end of the hearing the Tribunal gave further time for the applicant to provide supplementary submissions on the retrospectivity of the FA Act. These submissions were received on 28 April 2003. Submissions in response were received from Ms Brunner on 11 July 2003.

EXAMINATION OF THE EVIDENCE

  1. Ms Brunner stated that she has had the care of her daughter since late 1995. Her daughter was born 25 September 1995. She adopted her daughter on 24 December 2001. Australian citizenship was granted to her adopted child on 1 February 2002. Her claim for FTB was made on 5 February 2002 (T4, Folio 19).
  2. In response to a Tribunal question, Ms Brunner acknowledged that the SSAT findings of fact (i) to (viii) (see para 5) as being correct, but was uncertain about fact (ix); the latter fact related to the frequency and length of visits to Australia.
  3. Ms Brunner said that she had worked as a missionary worker in Thailand for the eleven years since 1992. She had relocated to different parts of Thailand over this time. At no stage did she enter into a tenancy agreement but paid rent on a monthly basis.
  4. Ms Brunner stated that she was initially employed by Gateway Baptist Mission. That was her home church. About three years ago, employees of that Mission were “handed over” to the Australian Baptist Missionary Society (ABMS), which provided them with superannuation and health insurance. Recently, ABMS changed its name to Global Interaction. She worked as a foreign facilitator of the project and trained Thai people. She was now involved in her third project in Thailand.
  5. She said that she had purchased a house in Australia, but the amount of her salary in Thailand meant that her home had to be sold. When in Australia she usually resided with her family. Her household furniture was retained after her house was sold and had been stored with family and friends.
  6. Ms Brunner stated that the time she remained in Thailand would depend on the continuation of funds for the projects in which she was involved. Sources of funds were Aus-Aid and the Thai government. Her existing project was a five year project ending in October 2004.
  7. Because of the uncertainty of attracting funding sources and how long the project(s) might proceed beyond this date, as well as factors such as health and her child’s education needs, Ms Brunner said that she may return to Australia in the near future. Furthermore, she acknowledged, even if funding were to continue, that she did not intend to stay in Thailand indefinitely as the future education needs of her child were paramount. She said that by the time her daughter was 10, she would need to educate her child in Australia so that she was not disadvantaged.
  8. Ms Brunner said that the Tribunal should recognise that she was an Australian citizen assigned as an Australian to undertake work in Thailand. Her employer was Australian. She saw her future in Australia not Thailand. Nor would visa requirements permit her to ever live in Thailand indefinitely. She acknowledged her closest friends and family lived in Australia.
  9. Ms Brunner gave the following responses in cross-examination:

RELEVANT LEGISLATION

  1. Family tax benefit is paid under the A New Tax System (Family Assistance) Act 1999 (“the FA Act”). Section 21 requires that for a person to be eligible for a family tax benefit, they must (among other things) be an “Australian resident”.
  2. The phrase “Australian resident” is defined as having the same meaning as in the Social Security Act 1991 (“the Act”). In the Act, section 7 defines “Australian resident”, as follows:
“7(2) An Australian resident is a person who:
(a) resides in Australia; and
(b) is one of the following:
(i) an Australian citizen;
(ii) the holder of a permanent visa;
(iii) a special category visa holder who is a protected SCV holder.”

  1. It is not in dispute that Ms Brunner satisfies the section 7(2) requirement.
  2. Sub-section 7(3) of the Act sets out the factors which must be considered in deciding whether a person “resides in Australia”.
7(3) In deciding for the purposes of this Act whether or not a person is residing in Australia, regard must be had to:
(a) the nature of the accommodation used by the person in Australia; and
(b) the nature and extent of the family relationships the person has in Australia; and
(c) the nature and extent of the person’s employment, business or financial ties with Australia; and
(d) the nature and extent of the person’s assets located in Australia; and
(e) the frequency and duration of the person’s assets located in Australia; and
(f) any other matter relevant to determining whether the person intends to remain permanently in Australia.”

  1. Sub-sections 24(4) and (5) of the FA Act state:
24(4) If an individual leaves Australia, the maximum period for which the individual can be eligible for family tax benefit during that absence from Australia is the period of 3 years beginning on the first day of that absence.
24(5) If:
(a) an individual who has been absent from Australia for more than 26 weeks, but less than 3 years, returns to Australia; and
(b) the individual leaves Australia again less than 26 weeks later;
the individual is taken not to have returned to Australia for the purposes of subsection (4).”

  1. The three years “overseas absence” rule of FTB is equivalent to the repealed (1 July 2000) Social Security Act 1991 provisions for “overseas absence” and family allowance (section 840) – save for an increase from 13 weeks for the time spent in Australia in the Act to 26 weeks in the FA Act. Section 840 provided:
840(1) If a person who is qualified for family allowance:
(a) leaves Australia; and
(b) continues to be absent from Australia for more than 3 years;
the person is not qualified for family allowance at any time after the first 3 years of the absence while the person remains absent from Australia.
840(2) If:
(a) a person who has been absent from Australia for less than 3 years returns to Australia; and
(b) the person leaves Australia again within 13 weeks after returning to Australia;
for the purposes of subsection (1), the person is taken not to have returned to Australia.”

CONTENTIONS AND SUBMISSIONS OF THE PARTIES

  1. Mr Ffrench submitted that Ms Brunner was not an Australian resident for the purposes of the legislation [section 7(3)] because:
  2. Mr Ffrench conceded that the nature of Ms Brunner’s family relationships in Australia were “very strong” and supportive of the residency requirements.
  3. Mr Ffrench considered the following list of dates where Ms Brunner, was absent from Australia and on assignment in Thailand (Exhibit 2) against the section 24(4) and (5) provisions of the FA Act:
“1. Arrived in Thailand June ? 1992
Departed June 6th 1994
2. Arrived in Australia June 7th 1994
Departed February 27th 1995
3. Arrived in Thailand February 27th 1995
Departed November 23rd 1997
4. Arrived in Australia November 24th 1997
Departed April 17th 1998
5. Arrived in Thailand April 17th 1998
Departed June 7th 1999
6. Arrived in Australia June 8th 1999
Departed July 16th 1999
7. Arrived in Thailand July 16th 1999
Departed July 7th 2000
8. Arrived in Australia July 8th 2000
Departed October 21st 2000

9. Arrived in Thailand October 21st 2000
Departed January 22nd 2002
10. Arrived in Australia January 22nd 2002
Departed February 15th 2002
11. Arrived in Thailand February 15th 2002
Until possibly February 2004???”

  1. Mr Ffrench submitted that Ms Brunner had left Australia on 27 February 1995. As each return to the country since that time has been less than 26 weeks in duration, subsection (5) deems that “the individual is not taken to have returned for the purposes of subsection (4)”..
  2. As a consequence, Mr Ffrench submitted that the relevant date for the purposes of that subsection was 27 February 1995. As this was more than three years prior to the date Ms Brunner claimed FTB, on 5 February 2002, her eligibility was precluded by virtue of this provision.
  3. Mr Ffrench further submitted that the clear words of the Act must be given effect and that issues of retrospectivity were not raised by the reference in subsection 24(4) to a time prior to the commencement of the Act. The intent of section 24(4) was clear: the provision relates to a defined period of absence commencing on, or after, a particular date.
  4. Furthermore, on the question of retrospectivity, Mr Ffrench contended that common law principles indicate that it is appropriate to talk in terms of retrospectivity only where an amending Act affects rights by changing them, with effect prior to its commencement. Such a situation existed with the introduction of the FA Act. However, this Act was not operating retrospectively but was concerned with the present assessment of a potential right – an entitlement to FTB, by reference to past events.
  5. It was also Mr Ffrench’s contention that the three year “overseas absence” rule of FTB was substantially the same as the “overseas absence” rule for family allowance, the payment which preceded FTB.
  6. With respect to the issues of Australian residency, Ms Brunner submitted that in addition to her oral evidence, that the Tribunal should consider the following factors:
  7. It was Ms Brunner’s contention that the three year time period should run from the date of her claim (5 February 2002). Moreover, she submitted that the time frames upon which the FTB eligibility were based were unclear and that she first became aware of FTB statutory requirements when her FTB claim had been rejected. She had not been given any Centrelink advice in this regard.
  8. With respect to the section 24(4) and (5) issues arising under the FA Act, Ms Brunner submitted:

CONSIDERATION OF THE ISSUES

  1. The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times.
  2. The first issue for the Tribunal to decide is whether Ms Brunner satisfies the Australian residency requirements prescribed by section 7(3) of the Social Security Act 1991 (“the Act”).
  3. Under section 7(3) of the Act, in deciding the question of law, whether or not a person is residing in Australia, “regard must be had to” a number of factors. The Act then particularises specific factors for which “regard must be had to”.
  4. The phrase “have regard to” has been considered judicially on many occasions:
  5. In addition to the legal meaning of this phrase and central to applying this meaning to the consideration of the six statutory factors, is an understanding of the legal meaning of “residence”. The concept of what amounts to residence was discussed by Wilcox J in Hafza v Director-General of Social Security [1985] FCA 164; (1985) 6 FCR 444. Although decided with reference to the Social Security Act 1947, the general concepts discussed by His Honour have not been altered by the 1991 Act. His Honour said (at 449-450):
“There is a plethora of decisions, arising in various contexts but predominantly matrimonial causes and revenue cases, relating to the legal concept of residence. As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. The concept was explained in a taxation case, Koitaki Para Rubber Estates Ltd v Commissioner of Taxation (Cth) (1941) 64 CLR 249, by Williams J:
‘The place of residence of an individual is determined, not by the situation of some business or property which he is carrying on or owns, but by reference to where he eats and sleeps and has his settled or usual abode. If he maintains a home or homes he resides in the locality or localities where it or they are situate, but he may also reside where he habitually lives even if this is in hotels or on a yacht or some other abode.'
Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place – even involuntarily: see Commissioners of Inland Revenue v Lysaght [1928] AC 234 at 248 and Keil v Keil [1947] VR 383 – a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place – Levene v Inland Revenue Commissioners [1928] UKHL 1; [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149 – together with an intention to return to that place and an attitude that that place remains ‘home’: see Norman v Norman (No 3) (1969) 16 FLR 231 at 236. It is important to observe firstly, that a person may simultaneously be a resident in more than one place – see the facts of Lysaght (supra) and the reference by Williams J to ‘a home or homes’ – and, secondly that the application for the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as ‘home’, a change of intention may be decisive of the question whether residence in a particular place has been maintained.” (Tribunal’s emphasis)

  1. On careful consideration of all of the evidence and information before the Tribunal, and, in particular paras 13-16, 24, 31, the Tribunal concludes that Ms Brunner satisfies the section 7(3) requirements for residing in Australia. Moreover, the Tribunal agrees with the following reasons of the SSAT in the “Application of the law”.
“25. Some of these indicators [s 7(3)(a) to (f)] may suggest that she is a resident, and some may suggest otherwise. For example, the nature of her accommodation in Australia is more akin to that of a visitor than a resident. She had no significant assets in Australia. She spends far more time overseas than here. Pulling in the other direction are the strength of her family ties to Australia, the temporary and uncertain nature of her continued presence overseas, and the stated practices and views of her employer.
26. The Tribunal places considerable weight on some of the other factors it deemed to be relevant. Miss Brunner has maintained a number of connections with Australia which are not consistent with a person residing or intending to reside in another country, most notably her teacher’s registration. Her intention is to return to Australia to reside and for her daughter to receive an Australian education. She pays Australian income tax.
27. All in all, the [SSAT’s] view was that Miss Brunner’s association with Australia is much stronger than with Thailand. Coupling this with her intention to return to Australia for the long-term, the Tribunal accepts that she is ‘residing in Australia’.” (T2, Folio 7).

  1. Furthermore, the Tribunal places special weight on the test in Hafza’s case and finds that Ms Brunner has not only retained a continuity of association with Australia, but also has proven, on the civil standard of proof, an intention to return to Australia - as well as displaying an attitude that Australia remains home.
  2. In making this finding the Tribunal has applied the legal principles as to the meaning of the phrase “have regard to” and has given weight to the intention requirement [factor (f)], family relationships in Australia [factor (b)], the nature and extent of, and the practices of her employment [factor (c)] relative to the other prescribed factors.
  3. The next issue for the Tribunal to decide is whether Ms Brunner satisfies the requirements of section 24(4) and section 24(5) of the FA Act as to the maximum period of eligibility for FTB whilst in Thailand.
  4. These legislative provisions apply, strictly, and, compared with the application of section 7(3) of the Social Security Act 1991, provide the Tribunal with no discretion other than to apply them directly to Ms Brunner’s factual situation.
  5. Moreover, the Tribunal concludes it is a relevant consideration that the three year “overseas absence” provision for FTB in the FA Act is substantially the same as the repealed section 840 “overseas absence”. The latter provision provided for family allowance payments prior to FTB being introduced. As a consequence, there would be a legitimate or reasonable expectation [Kioa v Minister Immigration and Ethnic Affairs (1995) 15 CLR 550] on the part of the administrative decision-maker (that is Centrelink) that administrative decision-making involving FTB or family allowance would involve a consideration of the three year absence rule in relation to frequency of travel to and from Australia and the duration of stay in Australia.
  6. Given the above reasons (paras 43, 44) and consideration of frequency and duration of travel to and from Australia and Thailand (Exhibit 2), the Tribunal can make no finding other than to conclude that the relevant date for the purposes of sections 24(4) and (5) of the FA Act is 27 February 1995. Accordingly, as this date is more than three years prior to the date FTB was claimed, on 5 February 2002, Ms Brunner is not eligible for payments of FTB benefits.
  7. Whilst this outcome may seem harsh, it would be more appropriate to describe the outcome as unfortunate. The legislation gives the Tribunal no other option than to make such a finding as there is no discretion in the legislation under sections 24(4) and 24(5) of the FA Act for the Tribunal to make any other decision based on the factual evidence Ms Brunner has provided to the Tribunal.
  8. However, the Tribunal does raise for the consideration by Ms Brunner and the applicant, the Departmental Policy Guideline “Act of Grace Payments” (Part 3 Chapter 9).
  9. The Departmental Policy Guideline states as follows:
Section 3 Act of Grace Payments
What is an Act of Grace payment
An Act of Grace payment may be made where a person has suffered a loss. Although there is no legal liability on the Commonwealth to meet the loss, it is considered that the Commonwealth bears some responsibility for the loss....

Eligibility for an Act of Grace payment
Eligibility for an Act of Grace payment depends on the claimant’s circumstances and a wide range of matters may be taken into account to determine eligibility although there is no set eligibility criteria for an Act of Grace payment, claims may be considered where:
Request for an Act of Grace payment
Requests for ‘Act of Grace payments’ can arise from almost any sphere of Commonwealth administration.
The act of grace power is a unique discretion given to the Minister for Finance and Administration to make payments to persons who may have been unintentionally disadvantaged by the effects of Commonwealth Government legislation, actions or omissions and who have no other viable means of redress.
Claims for Act of Grace payments
A claim for an Act or Grace payment should first be considered under the criteria for ‘compensation for detriment caused by administrative error’.. If a claim satisfies that criteria it will be determined under the compensation for detriment provisions. Claims that do not satisfy the compensation criteria may be determined under the Act of Grace provisions.”

  1. In relation to the “Act of Grace Policy” the Tribunal considers that there is no issue for a claim under the Policy, “Compensation for Detriment caused by Administrative Error”, as there appears to be no departmental administrative procedures available to Ms Brunner that could have applied in her factual circumstances.
  2. However, the Tribunal accepts the evidence of Ms Brunner as evidence of the truth and makes the following conclusions. Whilst the following conclusions have no application to the relevant provisions of the Social Security Act 1991 and the A New Tax System (Family Assistance) Act 1999 in this application for review, they may be relevant considerations for the possible application of an Act of Grace payment in Ms Brunner’s factual circumstances:

(i) Ms Brunner’s work as a missionary meant she had limited finances. The need to sell her home in Brisbane as well as the amount of her salary are but two examples raised before the Tribunal (see para 12);

(ii) Because of limited finances, Ms Brunner’s travel to Australia from Thailand was completely dependent on the release of funds by her employer as she herself could not afford the costs of travel [para 31(e)];

(iii) That because her travel was totally dependent on funds being made available to her by her employer, her travel schedule was inflexible and uncertain; that is, Ms Brunner had little control of the actual times she could travel to Australia and her return to Thailand;

(iv) Furthermore, notwithstanding that her overseas travel schedule was inflexible, she was completely unaware of the statutory requirement for the three year absence rule and social security entitlements. She had never received any Departmental advice or information in this regard;

(v) Ms Brunner has never been a social security recipient and so could not be made aware of social security changes, obligations or eligibility criteria; and

(vi) The factual circumstances of her adoption of a child from another country, some 9 years after working in this country, with sporadic return travel home during this period (with or without the child) was undertaken against a background of a lack of awareness of eligibility requirements for FTB as prescribed by statute.

  1. In the context of these conclusions, the Tribunal makes the observation that the legislative outcome under the Social Security Act 1991 is an “unintended, anomalous, inequitable, unjust or otherwise unacceptable result” in Ms Brunner’s particular circumstances. On consideration of the overall circumstances, it may even lead to a conclusion that it is “desirable to apply the benefits of the proposed legislation” or even “that there is a moral obligation on the Commonwealth to make a payment”.
  2. The Tribunal emphasises that it has no power whatsoever to order that an Act of Grace Payment be made to Ms Brunner. The process for such a payment is for Ms Brunner to make a claim to the Department for an Act of Grace payment and to request that her claim be assessed under the specified eligibility criteria. The final authority to grant payments under Act of Grace does not rest with the Tribunal, but the Minister for Finance or their appointee.

DECISION

  1. For all of the above reasons, the Tribunal sets aside the decision under review and in substitution thereto decides that Ms Brunner is not qualified for FTB in respect of her adopted daughter.

I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member


Signed: Sarah Oliver

Associate


Date of Hearing 1 April 2003

Date of Decision 5 August 2003

For the Applicant Mr T Ffrench, Departmental Advocate

The Respondent appeared in person



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