Kevin Walker v Secretary, Department of Social Security [1997] FCA 589 (3 July 1997)

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW )

SOCIAL SECURITY ) - functions and powers of Social Security Appeals Tribunal - effect of the withholding in certain cases of the general conferral upon it of the powers and discretions of the Secretary - scope of appeal to the AAT - remedy where Tribunal declined jurisdiction - whether natural justice required prior notice to be given of an intention to take garnishee action - the scope of the duty to consider relevant considerations when making a decision to take garnishee action under s 1233.

WORDS AND PHRASES - "recommendations" - distinct from "directions".

Social Security Act 1991 (Cth) - ss 1233, 1237, 1243, 1247, 1253, 1283

Administrative Appeals Tribunal Act 1975 (Cth) - s 43

Walker v Secretary, Department of Social Security [1995] FCA 1136; (1995) 129 ALR 198, ref

The Shell Company of Australia Limited v The Federal Commissioner of Taxation [1930] UKPCHCA 1; (1930) 44 CLR 530, considered

Lee v Secretary, Department of Social Security (1996) 139 ALR 57, considered

Secretary, Department of Social Security v Hodgson [1992] FCA 338; (1992) 37 FCR 32, considered

Edelsten v Wilcox (1988) 83 ALR 99, considered

General Electronics International Pty Limited v DFC of T (1996) 96 ATC 5036, considered

Walker v Secretary, Department of Social Security [1993] FCA 643; (1994) 120 ALR 123, ref

Federal Commissioner of Taxation v Swift (1990) 18 ALD 679, ref

The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services [1992] FCA 599; (1992) 39 FCR 225, ref

Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 24 ALR 577, considered

Kioa v West [1985] HCA 81; (1985) 159 CLR 550, considered

Minister for Immigration and Ethnic Affairs v Pochi [1981] HCA 58; (1981) 149 CLR 139, considered

The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471, ref

Calvin v Carr [1979] UKPC 1; [1980] AC 574, ref

Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 114 ALR 340, considered

Minister for Immigration and Ethnic Affairs v Gungor [1982] FCA 99; (1982) 42 ALR 209, ref

KELVIN WALKER v SECRETARY, DEPARTMENT OF SOCIAL SECURITY

QG 26 OF 1997

Burchett, Drummond and Mansfield JJ

Brisbane

3 July 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

QUEENSLAND DISTRICT REGISTRY ) No. QG 26 of 1997

)

GENERAL DIVISION )

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: KELVIN WALKER

Appellant

AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY

Respondent

CORAM: Burchett, Drummond and Mansfield JJ

PLACE: Brisbane

DATE: 3 July 1997

MINUTE OF ORDER OF THE COURT

THE COURT ORDERS THAT the appeal be dismissed with costs.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

QUEENSLAND DISTRICT REGISTRY ) No. QG 26 of 1997

)

GENERAL DIVISION )

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: KELVIN WALKER

Appellant

AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY

Respondent

CORAM: Burchett, Drummond and Mansfield JJ

PLACE: Brisbane

DATE: 3 July 1997

REASONS FOR JUDGMENT

BURCHETT J:

This appeal raises several novel questions in respect of the procedure for review by the Social Security Appeals Tribunal of decisions of the Secretary of the Department of Social Security. There is no need to go into the facts in any detail. It is enough to say that the appellant was convicted in 1989 of offences arising out of false claims made to the Department of Social Security totalling over $20,000-00, for which he suffered imprisonment for some period. Although he had made false claims, and received this sum in respect of them, he had also made a genuine claim in relation to the period 20 October 1988 to 11 April 1989, being, as it was found, entitled to receive for that period the sum of $2,134-40, which had not been paid to him.

The Department attempted to set off against this relatively small sum, to the extent required, part of the very much larger sum the appellant owed in respect of his false claims. That, however, was held not to be a course legally open to it: Walker v Secretary, Department of Social Security [1995] FCA 1136; (1995) 129 ALR 198. But Spender J, who was one of the majority in that case, delivered (at 199) the following significant dictum:

"If the department wished to apply the $2134.40 payable to Mr Walker for sickness benefits in reduction of the debt of $20,287.03 owed by Mr Walker to the Commonwealth, in my opinion, it was, and still is, necessary to comply with the provisions of s 1233, dealing with recovery by way of a garnishee notice."

The Department took note of this dictum, and adopted the expedient to which Spender J had pointed. The sum of $2,134-40 was paid into Mr Walker's bank account, but at the same time a notice in the nature of a garnishee notice was given to the Bank under s 1233 of the Social Security Act 1991, requiring the Bank to pay the full amount of the money to the Commonwealth.

It was the notice under s 1233 that set in train the series of proceedings with which we are concerned. The appellant sought an internal review by the Department of the decision to issue the notice, which resulted in its confirmation; then, he applied to the Social Security Appeals Tribunal, without success; then, he applied to the Administrative Appeals Tribunal, again without success; then, he appealed on a point of law to a Judge of the Court, who dismissed his appeal; and from that decision he has brought the present appeal. He contends that he was denied natural justice by the Department's failure to notify him before it took the steps taken under s 1233, and that relevant matters were not taken into account in the making of the decision, insofar as his financial position, so he says, was not considered.

The Social Security Appeals Tribunal, when it heard the matter, noted that Mr Walker claimed to have been "denied natural justice by the Department"; that he alleged "the Department should have enquired into his financial position - to establish whether he had any liabilities or debts and whether he was able to exist financially - before taking [its] decision"; and that he "did not provide the Tribunal with any new information regarding this matter". Having referred to certain statutory provisions to which I will come shortly, the Tribunal concluded it had "no power to direct that garnishee action proceed in a manner different from that manner in which the Department proceeded to take garnishee action". On this basis, it recorded a decision in the following terms:

"The Tribunal therefore affirms the decision of the Department to recover the sum of $2,134.40 from Mr Walker."

The Administrative Appeals Tribunal disposed of the application made to it in two succinct paragraphs:

"6. I take the view that the SSAT had no power to review this decision of the delegate to recover a debt by way of garnishee notice and neither does the AAT.

7. The decision of the SSAT that it had no power nor any discretion to enable it to change the decision sought to be reviewed was correct. The decision will be affirmed."

The learned primary Judge held there was "jurisdictional error" in the expression of its decision in these terms by the Administrative Appeals Tribunal, but that the result, the dismissal of the appellant's appeal, was inevitable. Accordingly, he dismissed the further appeal to the Court.

To assist an understanding of these decisions, it is necessary to explain the nature of the system of review of administrative decisions made within the Social Security Department. Chapter 6 of the Social Security Act 1991 contains provisions, in respect of the review of decisions, which were drawn from the earlier Social Security (Review of Decisions) Act 1988. In his second reading speech on the Bill that became the 1988 Act, the Minister for Social Security explained (see House of Representatives Hansard for 29 September 1988 page 1228) that the Social Security Appeals Tribunal had been operating since 1975 without legislative foundation or any power to decide cases. It had simply been set up administratively to make recommendations to the Secretary in respect of decisions under review. The Bill was intended to confer powers and responsibilities on this shadowy Tribunal. Both the Minister's speech and the provisions of the Bill itself make clear the intention to provide a flexible, informal and speedy procedure "for the first tier of external review" (Hansard, ubi supra), with the possibility of further administrative review by the Administrative Appeals Tribunal. Each of these reviews, of course, may be said, in general, to be designed to secure the re-examination of the merits of a decision, including both the relevant facts, and also the evaluation of those facts on the basis of which the correct or preferable decision should be made. The fact that a dissatisfied party would have resort, not to the Federal Court of Australia, but to the Administrative Appeals Tribunal, for further review, shows in the clearest possible way that the scheme was designed to provide for administrative review of the merits of departmental decisions. The Administrative Appeals Tribunal was not set up as an appeal tribunal on questions of law.

There was contained in the text of the legislation, when it was enacted, a quite short list of matters where external review was not to be available. The list has grown somewhat, and is now to be found in s 1250 of the 1991 Act as a list of decisions which "[t]he Social Security Appeals Tribunal cannot review".

A key provision in the scheme is s 1253, subsecs 1 and 3 of which relevantly read as follows:

(1) If a person applies to the Social Security Appeals Tribunal (SSAT) for review of a decision ..., the Tribunal must:

(a) affirm the decision; or

(b) vary the decision; or

(c) set the decision aside and:

(i) substitute a new decision; or

(ii) send the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the Tribunal.

...

(3) Subject to subsection (4), the Social Security Appeals Tribunal may, for the purposes of reviewing a decision under this Act, exercise all the powers and discretions that are conferred by this Act on the Secretary."

Subsection (4) then provides:

(4) The reference in subsection (3) to powers and discretions conferred by this Act does not include a reference to powers and discretions conferred by ... ."

There follows a list lettered (d) to (o) (a, b and c having been repealed), including "(f) section 1233 (garnishee notice)".

It is now possible to see the difficulty which confronted the Social Security Appeals Tribunal. Its charter was merits review, but, in the case of a decision under s 1233, it was denied the powers and discretions without which meaningful merits review was impossible. Indeed, no powers were expressly conferred upon it to deal with such a case. Because s 1253(1) said that it "must" take one of the courses specified in that subsection, while subsec (4) prevented it from dealing with the merits, it simply affirmed the decision without coming to any conclusion upon the questions raised before it - the alleged denial of natural justice, and the alleged failure to take account of the appellant's financial position. The Administrative Appeals Tribunal, the decision of which is the decision that was called in question in this Court, agreed with that way of looking at the matter.

It seems to me there is a difficulty at the outset. Section 1283(1) provides:

"If a decision has been reviewed by the Social Security Appeals Tribunal (SSAT) and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for a review of the decision of the SSAT." (Emphasis added.)

Not surprisingly, this provision gives no right to apply to the Administrative Appeals Tribunal for a review of a decision simply declining jurisdiction. I say "not surprisingly", because such a decision involves a question which is quite plainly appropriate to be decided upon judicial review, by proceedings in the nature of mandamus. Therefore, if the Administrative Appeals Tribunal rightly interpreted the decision of the Social Security Appeals Tribunal as a refusal of jurisdiction, the Administrative Appeals Tribunal had itself no jurisdiction to deal with the matter. It would follow that the Federal Court had no jurisdiction to entertain an application by way of appeal from the Administrative Appeals Tribunal, so far as it related to any question of law involved in the review sought by the appellant of the decision to maintain the implementation in this instance of s 1233 procedures.

Although the Social Security Appeals Tribunal used the formal language of a confirmation of the decision put before it for review, the conclusion stated in its brief reasons was expressed in terms of power, which it considered it did not have. "[T]herefore" it affirmed the decision. An affirmation springing from a denial of any capacity to consider the matter is no affirmation at all. Adapting the words of Isaacs J in The Federal Commissioner of Taxation v Munro [1926] HCA 58; (1926) 38 CLR 153 at 183, the Tribunal's decision, when given, was formalized by confirming the original decision. But as Isaacs J dismissively added: "This is form only." Furthermore, it could not be said, in the words of s 1283(1), that the decision in question had "been reviewed by the Social Security Appeals Tribunal". Accordingly, the Administrative Appeals Tribunal was right in finding there had been a refusal of jurisdiction; but, for that very reason, it was wrong to find any jurisdiction in itself. In the special circumstances, s 1283 gave it none. The appellant's application to the Administrative Appeals Tribunal should have been dismissed as incompetent, and since the actual decision of the Tribunal (although not based on the correct view of the scope of s 1283) was indeed to this effect, the further application by way of appeal to this Court should have been dismissed, as it was. Consequently the present appeal should also be dismissed.

However, notwithstanding my own opinion, I accept that a different view could be taken of the decision of the Social Security Appeals Tribunal. If it were possible to ignore the context of its expressed reasons, the Tribunal's decision would appear to be one affirming the decision under review, with the result that a further review by the Administrative Appeals Tribunal would have been available under s 1283. On that basis, I now turn to consider whether the Social Security Appeals Tribunal did in reality have some power to review the decision made under s 1233.

The powers conferred on the Social Security Appeals Tribunal, as I have said, are powers of review on the merits. It is because the Secretary's decision is being reviewed on the merits that the task is to ascertain the correct or preferable decision to be made on the material presented to the Tribunal, not on the material that was before the Department: cf The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services [1992] FCA 599; (1992) 39 FCR 225 at 234; and see Lee v Secretary, Department of Social Security (1996) 139 ALR 57 at 63-64, per Davies J, citing Azevedo v Secretary, Department of Primary Industries and Energy [1992] FCA 84; (1992) 35 FCR 284 at 297. The drafting of subsecs (1) and (3) of s 1253 envisages decision-making on the merits. The expressions used are plainly taken from s 43(1) of the Administrative Appeals Tribunal Act 1975 , where, however, the logical link between actually making the appropriate decision and having the powers necessary to do so more explicitly appears. Section 43 itself reflects the provisions that governed the Boards of Review set up some seventy years ago to provide administrative review of taxation decisions, provisions that permitted the Boards of Review to survive, on the ground that their powers were not judicial, the constitutional challenge launched against them: The Shell Company of Australia Limited v The Federal Commissioner of Taxation [1930] UKPCHCA 1; (1930) 44 CLR 530. In the case cited, the advice of the Privy Council (quoting the judgment of Isaacs J in the High Court, to which I have already referred in these reasons) states the position (at 541):

"[T]he Board in the new sec. 44 is assimilated to the Commissioner. Instead of the Board being given the powers and functions of the Court, it is given `the powers and functions of the Commissioner in making assessments, determinations and decisions under this Act.' Those are the only powers and functions conferred upon the Board for the purposes of decision." (Emphasis added.)

Since the Tribunal is re-examining the merits in the light of the material put before it, a question whether the original decision-maker denied natural justice to a person affected, or failed to take into account some matter that was required to be taken into account, will not generally arise before the Tribunal. It simply makes the correct or preferable decision on the material before it. I drew attention to this feature of administrative review in my dissenting judgment in Tiong v Minister for Community Services and Health (1990) 93 ALR 308 at 321-322, saying:

"It was not a matter of asking whether Dr T.S. Tiong had been denied natural justice by the committee [this was a reference to the previous administrative decision-maker]. The Review Tribunal was not a court exercising a supervisory jurisdiction over the committee; its function was to review the actual decision on the merits ... ." (Emphasis original.)

So in Hawker de Havilland Ltd v Australian Securities Commission (1992) 10 ACLC 34, the members of the Administrative Appeals Tribunal (O'Connor J, B J McMahon and W.G. McLean) decided for themselves, on the material before them, a case in which it appeared that the original decision-maker had assumed there was no need to accord natural justice to a party, dealing with that issue by the addition at the end of the reasons of the Tribunal (virtually as a footnote) of a firm statement asserting the party's right to natural justice. Although it was not a natural justice case, the decision of Davies J in McIntosh v Minister for Health (1987) 17 FCR 463 at 467 also emphasizes the distinction between administrative review and "the function of review on a point of law".

By contrast, judicial review is not concerned with the making of the decision afresh upon material available at the hearing, but with the legal basis of the original decision, with legal questions which it raises, and with the legal sufficiency of the steps that led to its making. As Lord Brightman said pithily in Chief Constable of the North Wales Police v Evans [1982] UKHL 10; (1982) 1 WLR 1155 at 1173:

"Judicial review is concerned, not with the decision, but with the decision-making process."

It would be neatly logical to conclude, as the Social Security Appeals Tribunal and the Administrative Appeals Tribunal have done in the present case, that the withdrawal by s 1253(4) of the powers and discretions of the Secretary effectively negates any power of review by the Social Security Appeals Tribunal of decisions under s 1233. Certainly, it could only be in a very formal sense, and not at all in the sense intended, for instance, by s 43(1) of the Administrative Appeals Tribunal Act, that the Social Security Appeals Tribunal could affirm a decision of the Secretary under s 1233. One may compare administrative powers to affirm or vary decisions, or to make decisions in substitution for them, or to recommend decisions, following a merits review, with the powers of a court (as for example in s 16 of the Administrative Decisions (Judicial Review) Act 1977) which may set aside a decision, refer it back subject to directions, or declare the rights of parties with respect to any matter to which it relates, but would not, using language strictly, affirm or recommend an administrative decision.

Although, like the Board of Review under consideration in The Shell Company of Australia Limited, the Social Security Appeals Tribunal has conferred on it for the purposes of its decision making, by the terms of the legislation, only powers and functions of the original decision-maker, and these powers and functions have been withdrawn from the Social Security Appeals Tribunal in a case under s 1233, meaning must be given (if possible) to the contrast between s 1253(4) and the express provision in s 1250 taking certain decisions out of the field of review by the Tribunal. The inference is strong that other decisions, such as those under s 1233, were intended to have some form of review, although its nature and the power to engage in it were unstated, however restricted the review might be. When the Bill which became the Social Security (Review of Decisions) Act 1988 was before the Parliament, the Explanatory Memorandum circulated by the authority of the Minister for Social Security explained that s 182(5) (the original of s 1253(4)) "will circumscribe the Tribunal's powers concerning a range of administrative decisions" (emphasis added). The Minister did not suggest the provision would eliminate those powers in all such cases.

Not without some hesitation, I have come to the conclusion that Parliament's withholding from the Social Security Appeals Tribunal of the powers and discretions conferred by s 1233 does not leave the Tribunal without any work to do in a case such as the present. It cannot review the ultimate decision to utilize the procedure under s 1233, for a review on the merits of that decision would necessarily involve an exercise of the discretion conferred by the section. But before, in any case, this discretion can be exercised, there must be an amount due to the Commonwealth upon which the discretion can fasten. The ascertainment of that amount is an anterior, though necessary, step to be taken to enable the powers and discretions conferred by s 1233 to be considered. Furthermore, the powers and discretions conferred on the Tribunal include those involved in the waiver of a debt under s 1237, powers the exercise of which, in a particular case, may fall to be considered in relation to a decision under s 1233: Lee v Secretary, Department of Social Security (supra, at 67); Secretary, Department of Social Security v Hodgson [1992] FCA 338; (1992) 37 FCR 32.

Accordingly, the Social Security Appeals Tribunal did have a function to perform, though a limited one, in relation to the appellant's application. It should not have declined to consider the matter and, subject to discretionary considerations, could have been compelled to do so by proceedings in the nature of mandamus.

But it does not follow that the appellant should succeed in his appeal, even if he could overcome his jurisdictional difficulties. Neither of the points of law that he has agitated in this Court finds any foothold in the material that was before the Administrative Appeals Tribunal. Even if the natural justice point could be raised in the very limited proceeding which s 1253(4) permits, that point would be bound to fail.

It would be extraordinary if a power to attach moneys in a bank account could only be exercised after the giving of a notice that might quite easily facilitate evasion. See Edelsten v Wilcox (1988) 83 ALR 99 at 114; General Electronics International Pty Limited v DFC of T (1996) 96 ATC 5036 at 5045. And s 1233(4) expressly contemplates that notice will be given only after the power has been exercised. In any case, the appellant availed himself of the opportunity of a full internal review, at which all the requirements of natural justice were satisfied. The case is to be contrasted with Colpitts v Australian Telecommunications Commission (1986) 9 FCR 52 at 65-67. So far as concerns the alleged failure to take account of relevant circumstances, there were no circumstances put forward on which it would have been other than perverse of the Tribunal to have made a decision in favour of the appellant upon the very limited issues open to it.

For these reasons, the appeal should be dismissed with costs.

I certify that this and the preceding twelve (12) pages are a true copy of the Reasons for Judgment of the Honourable Justice Burchett.

Associate:

Date:

IN THE FEDERAL COURT OF AUSTRALIA )

)

QUEENSLAND DISTRICT REGISTRY ) No. QG 26 of 1997

)

GENERAL DIVISION )

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN: KELVIN WALKER

Appellant

AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY

Respondent

CORAM: Burchett, Drummond and Mansfield JJ

PLACE: Brisbane

DATE: 3 July 1997

REASONS FOR JUDGMENT

DRUMMOND AND MANSFIELD JJ:

This is an appeal from the judgment of a judge of the Court dismissing an appeal under s 44 the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal (AAT) with respect to certain garnishee action taken under s 1233 the Social Security Act 1991 (Cth). It is the latest round in Mr Walker's long struggle to insist upon payment by the Department of Social Security (DSS) of $2,134.40 in sickness benefits in the face of the DSS's attempts to deny him access to those moneys because, before acquiring that entitlement, he had fraudulently obtained $20,287.03 in sickness benefits from the Commonwealth. In addition to a number of internal reviews in the DSS, there have been, at least so far, two hearings before the Social Security Appeals Tribunal (SSAT), four hearings before the AAT, three hearings before single judges of this Court and two hearings before the Full Court of this Court.

The history of the litigation

The saga of Mr Walker's struggle commences with his fraudulently obtaining the $20,287.03 in sickness benefits during a period of three and a half years to August 1987. Before his conviction and imprisonment in respect of this fraud, he applied for sickness benefits for a period between October 1988 and April 1989. The DSS denied his entitlement to this; the SSAT overturned this decision, but the AAT agreed with the DSS. However, a single judge of this Court allowed Mr Walker's appeal from the AAT's decision and sent the matter back to the AAT for re-hearing. It was on this re-hearing in June 1991 that an order was made in his favour in respect of the sum of $2,134.40.

In July 1991, the DSS set off this sum against the fraudulently obtained overpayment. The SSAT, on Mr Walker's application, overturned this decision, but the AAT restored it. An appeal by Mr Walker to a single judge of this Court failed: see Walker v Secretary, Department of Social Security [1993] FCA 643; (1994) 120 ALR 123. However, Mr Walker's appeal to the Full Court of this Court was successful, by majority decision: see Walker v Secretary, Department of Social Security [1995] FCA 1136; (1995) 129 ALR 198. In upholding Mr Walker's appeal, the majority indicated that, if the DSS wished to apply the $2,134.40 payable to Mr Walker in reduction of the debt of $20,287.03 owed by him, it could only do that by complying with the garnishee provisions of s 1233 the Social Security Act.

That the DSS has tried to do. On 5 April 1995, it issued to Mr Walker's bank a garnishee notice under s 1233(1) in respect of the $2,134.40. As required by s 1233(4), a copy of the notice was also sent to Mr Walker the same day. At one stage, officers of the DSS considered paying this sum into Mr Walker's bank account and issuing a garnishee notice to the bank in respect of only $1,134.40; apparently DSS guidelines suggested that, when a garnishee notice was issued to recover overpayments of benefit, the benefit recipient should be left with a minimum of $1,000. But the decision ultimately taken was to recover the whole of the $2,134.40 paid that same day by DSS into Mr Walker's account.

By s 1240, Mr Walker was entitled to apply to have the decision to issue the garnishee notice reviewed within the DSS under s 1243. He promptly contacted the DSS about the issue of the garnishee notice. He requested a review of the decision and explained why he objected to it. The review he sought took place on 5 July 1995. The review officer advised Mr Walker that the decision was adverse to him by letter dated 5 July 1995 in these terms:

"I am writing to you about your Sickness Allowance (SA) debt.

I am an Authorised Review Officer and I have taken a fresh look at your case. I looked at the things you have already told the Department about your case.

I have decided that the decision to recover a debt by garnishee action was correct.

All the Department's decisions have to be based on the law set out in the Social Security Act 1991 (the Act). In your case I used section 1233 of the Act.

Section 1233 of the Act explains the conditions for the Department to garnishee monies from a third party who holds money on behalf of a debtor.

I used the following facts/findings to make up my mind:

* a debt for $20,032.23 was calculated on 3/5/88;

* the Department owed you $2,134.40 of Sickness Allowance for the period 20/10/88 to 12/4/89;

* the Department deposited $2,134.40 into your Advance Bank account on 5 April 1995; and

* you were sent a copy of the Garnishee Notice on 5/4/95;

* the Department garnished your Advance Bank account on 5/4/95 and recovered $2,134.40 to repay part of your debt of $20,032.23.

These facts/findings were based on:

* Departmental records relating to the debt and garnishee notice.

The Garnishee Notice was implemented on 5/495 under the provisions set out in section 1233 of the Act (see attached). This section of the Act gives the Department the authority to recover debts by written Notice. The Department also wrote to you on 5 April 1995 advising you that it was taking this action and gave you a copy of the Notice.

Therefore, I agree with the decision to recover your debt by garnishee of your Advance Bank account."

Mr Walker was not satisfied with this decision. On 11 July 1995, he applied to the SSAT for its review. The ground he relied on was that he had been denied natural justice. At the hearing before the SSAT, he identified this denial as having been constituted by the DSS's failure, before it issued the garnishee notice, to notify him of its intention to take that action, thereby depriving him of the opportunity to address the DSS on a matter relevant to its decision to take garnishee action, via, his financial situation. As the SSAT noted in its reasons for decision, Mr Walker did not provide it with any new information, although he made detailed submissions to the SSAT.

Section 1247 provides:

"(1) Subject to section 1250, if:

(a) a decision has been reviewed by the Secretary or an authorised review officer under section 1243; and

(b) the decision has been affirmed, varied or set aside;

a person whose interests are affected by the decision of the Secretary or the authorised review officer may apply to the Social Security Appeals Tribunal for review of that decision.

(1AA) ...

(1A) For the purposes of sub-section (1), the decision made by the Secretary or the authorised review officer is taken to be:

(a) if the Secretary or the authorised review officer affirms a decision - the decision as affirmed; and

(b) if the Secretary or the authorised review officer varies a decision - the decision as varied; and

(c) if the Secretary or the authorised review officer sets a decision aside and substitutes a new decision - the new decision."

It follows from s 1247(1A)(a) that the authorised review officer having, on 5 July 1995, affirmed the original decision of 5 April 1995 to take garnishee action, it is not the latter decision, but that decision as affirmed by the review officer which alone was open to review by the SSAT. As will appear, the correct identification of the decision which the SSAT had authority to review at Mr Walker's request is of importance to this appeal.

The decisions below

The SSAT rejected Mr Walker's application for review, holding that, because of s 1253(4) of the Act, it had: "no power to direct that garnishee action proceed in a manner different from that manner in which the Department proceeded to take" that action. We do not read this as a statement by the SSAT that s 1253(4) deprived it of all power to review the decision in question; but it is clear enough from the SSAT's failure to reach any conclusion on the validity of Mr Walker's complaint about being denied natural justice that it did not regard itself as entitled, in the face of s 1253(4), to examine the relevant DSS decision for possible error.

The decision of 5 April 1995 as affirmed on 5 July 1995 having been reviewed and affirmed by the SSAT, Mr Walker was entitled, by s 1283, to seek review by the AAT of the SSAT's decision. He did that. But the AAT rejected his application, the Senior Member constituting it saying: "I take the view that the SSAT had no power to review this decision of the delegate to recover a debt by way of garnishee notice and neither does the AAT".

Mr Walker then appealed to a single judge of this Court, who held that the AAT fell into error by failing to recognise that the SSAT had power, albeit limited by s 1253(4), to review the decision of the DSS to implement garnishee action. His Honour concluded:

"However, in my opinion, the AAT's affirmation of the decision of the SSAT that it had no power or any discretion to enable it to change the decision sought to be reviewed (being the decision to garnishee the applicant's bank account) is not vitiated by the presence of this error.

If the matter was sent back to the AAT in light of the error identified above, then the same conclusion would inevitably be reached. In my view, it would be an exercise in futility."

He therefore dismissed Mr Walker's appeal.

Submissions on appeal

On the hearing of the appeal to this Court, it was submitted on Mr Walker's behalf that the critical issue for determination was whether the SSAT and, in turn, the AAT, had power to review a decision made by the DSS to recover a debt owing by him by garnishee action under s 1233. Counsel submitted that, notwithstanding s 1253(4), the SSAT had power to overturn that decision because the DSS failed to comply with the rules of natural justice and, in particular, with the obligation to give Mr Walker opportunity to address issues relevant to the decision to issue the garnishee notice before making it.

What is the true construction of s 1253(4)?

The task of identifying the proper construction of s 1253(4) is not made easier by the draftsman's confusion in considering that a provision such as s 1253(4)(m) (which in terms only denies the SSAT the right to exercise the powers and discretions of the Secretary on a review by it of his decisions under ss 1241 and 1251) could serve any purpose in the face of a provision of s 1250, such as s 1250(1)(h) (which in terms excludes entirely those same decisions from any review by the SSAT).

Section 1253 provides:

"(1) If a person applies to the Social Security Appeals Tribunal (SSAT) for review of a decision (other than a decision referred to in subsection (7)), the Tribunal must:

(a) affirm the decision; or

(b) vary the decision; or

(c) set the decision aside and:

(i) substitute a new decision; or

(ii) send the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the Tribunal.

(2) ...

(3) Subject to subsection (4), the Social Security Appeals Tribunal may, for the purposes of reviewing a decision under this Act, exercise all the powers and discretions that are conferred by this Act on the Secretary.

(4) The reference in subsection (3) to powers and discretions conferred by this Act does not include a reference to powers and discretions conferred by:

...

(f) section 1233 (garnishee notice); or

..."

The learned primary judge accepted that the SSAT had power under s 1253(1) to review certain decisions of the SSAT and held that the AAT fell into jurisdictional error by mistakenly denying the existence of any jurisdiction to review the decision in question. But his Honour thought that s 1253(4)(f) so constrained the SSAT in reviewing the DSS decision under s 1233 that the AAT was correct in holding that the SSAT "had no power or any discretion to enable it to change" that decision. He held that the AAT's error in failing to recognise that the SSAT had limited jurisdiction to review the decision could not lead to any different conclusion if he were to remit the case to the AAT because the limitations placed by s 1253(4) on the SSAT's power to interfere with the relevant DSS decision in his view prevented the SSAT, and thus the AAT, correcting any error of the kind that Mr Walker complained of that may have existed in that decision. The learned primary judge did not, however, attempt to further identify the scope of the review which s 1253 permits the SSAT to make of those decisions listed in s 1253(4), which include decisions under s 1233.

The draftsman of s 1253(1) and (3) obviously relied upon s 43(1) the Administrative Appeals Tribunal Act as a model. Under this kind of provision, the duty of a tribunal charged with the administrative review of a decision is not limited to consideration of whether that decision was the correct or preferable one on the materials before the decision-maker; instead, the tribunal is bound to consider the relevant facts proved on the evidence before it and to decide on the basis of those facts what is the correct or preferable decision. See Federal Commissioner of Taxation v Swift (1990) 18 ALD 679 at 691 and The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services [1992] FCA 599; (1992) 39 FCR 225 at 234. It is the tribunal's power to exercise for itself all the powers and discretions of the original decision-maker that enables it to conduct this merit review. Merit review offers a more extensive remedy than that which courts with jurisdiction at common law to review administrative action can provide:

"Except in a case where only one decision can lawfully be made, it is not ordinarily part of the function of a court either to determine what decision should be made in the exercise of an administrative discretion in a given case or, where a decision has been lawfully made in pursuance of a permissible policy, to adjudicate upon the merits of the decision or the propriety of the policy. That is primarily an administrative rather than a judicial function."

See Drake v Minister for Immigration and Ethnic Affairs [1979] AATA 179; (1979) 24 ALR 577 at 589. Judicial review is essentially concerned with correcting errors in the decision-making process: Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 622.

There is, however, no counterpart in the Administrative Appeals Tribunal Act to s 1253(4), a provision which limits the wide power of merit review that would be exercisable by the SSAT if only s 1253(1) and (3) governed the matter.

Decisions under s 1233 are not in the class of decision declared by s 1250 to be non-reviewable by the SSAT and s 1253(4)(f) does not purport to make decisions under s 1233 non-reviewable: s 1253(4) appears to have a more narrow objective than that. All that s 1253(4)(f) in terms does, is withdraw from the SSAT the right to exercise the powers and discretions conferred by s 1233 on the initial decision-maker, when it is reviewing a decision made under s 1233. The sub-section does not purport to deny the SSAT power to examine whether the original exercise of those powers and discretions has miscarried but is confined to limiting only the range of decisions the SSAT itself can make, once it decides that interference with the decision under review is justified.

This suggests that, in reviewing a decision to which s 1253(4) applies, the SSAT can properly determine that a power or discretion conferred by s 1233 has been erroneously exercised and can, accordingly, set that decision aside pursuant to s 1253(1)(c). But in so far as s 1253(4)(f) denies the SSAT power to exercise for itself the powers and discretions conferred by s 1233 on the original decision-maker, the SSAT could not substitute a new decision of its own for a decision determined by it to have been erroneous. Nor can s 1253(4)(f) be interpreted as permitting the SSAT to send a matter back for reconsideration with "directions", ie, binding directions; that, as the learned primary judge said, would be to permit the SSAT to do indirectly what s 1253(4) prevents it doing directly. See also Minister for Immigration and Ethnic Affairs v Pochi [1981] HCA 58; (1981) 149 CLR 139 at 142. The next question is whether the SSAT could send the matter back for reconsideration with "recommendations", ie, non-binding recommendations. The position of a decision-maker to whom a matter is remitted for consideration with non-binding recommendations under a provision such as s 1253(1)(c)(ii) can, we think, be taken to be that which the High Court in Pochi at 143 said the Minister was in, when the AAT remitted a matter for his reconsideration in accordance with its recommendations under the legislation then in force governing migration appeals to that tribunal:

"Although the Minister would be obliged to reconsider the matter, he would not be bound to exclude from his consideration evidence which the Tribunal ... considered was of insufficient probative value, or to give weight to material which the Tribunal ... considered to be of decisive importance. He would not be required to accept as correct any views as to the facts, or as to the weight of the evidentiary material, expressed by the Tribunal ...; he would merely be required to have regard to the Tribunal's recommendation."

If the SSAT were to set aside a decision under s 1233 and send it back to the Secretary for reconsideration in accordance with non-binding recommendations, that would not, we think, involve anything prohibited by s 1253(4): if the SSAT did that, it could not be said to be exercising any of the powers or discretions conferred on the original decision-maker. Pochi shows that such a limited power cannot be dismissed as lacking any utility. There is therefore no good reason why s 1253(3) and (4) should not be read as conferring such a power on the SSAT.

Even if it is assumed that there are no impediments for constitutional reasons in construing s 1253(1), (3) and (4) as prohibiting merit review of those decisions listed in s 1253(4) of the kind ordinarily performed by an administrative tribunal such as the SSAT or the AAT, but as permitting a limited review by both those Tribunals of decisions listed in the sub-section to read these provisions as confining the SSAT to a power of review analogous to the judicial review available at common law would fail to give any recognition to the entitlement we think the SSAT has, if it sets aside a decision within s 1253(4), to send the matter back to the Secretary with non-binding recommendations, something outside the scope of judicial review at common law.

We therefore think that s 1253(4) should be read as permitting the SSAT to review decisions within s 1253(4) for any error of fact or law, but as preventing the SSAT, even where it identifies error in such a decision, from making any decision of its own on the merits. That is the sole province of the Secretary. But that the SSAT cannot do more than set aside an erroneous DSS decision within s 1253(4) and remit it to the DSS for reconsideration does not absolve the SSAT from examining the DSS decision for error. It follows that the only orders the SSAT may make on the review it can conduct of decisions within s 1253(4) are either to affirm the decision or to set it aside and, if it sets the decision aside to remit the decision for reconsideration, with or without non-binding recommendations.

It is with some diffidence that we have reached this conclusion. Section 1253(4), however, neither permits unrestricted merit review by the SSAT of the various decisions of the Secretary referred to in the sub-section nor does it prohibit all review of those particular decisions. It is not possible to discern why this intermediate approach was adopted with respect to the unrelated decisions listed in s 1253(4). But the sub-section is, in our opinion, intractable in so far as it can only be read as providing for a limited review of the decisions there referred to which is less expansive than full merit review, but a review nevertheless.

Ordinarily, the AAT, in exercising its review powers under s 43 the Administrative Appeals Tribunal Act, can conduct a full merit review of its own. But s 1283(1) and (2) the Social Security Act limit the AAT's authority to review of the relevant DSS decision as dealt with by the SSAT. It follows that, since the SSAT, on review of a decision within s 1253(4), can only determine whether the DSS decision in question is erroneous or not, the AAT cannot conduct a merit review itself of the DSS decision and is confined to determining whether the DSS decision as dealt with by the SSAT is erroneous in fact or law.

The learned trial judge was in error in failing to recognise that, notwithstanding s 1253(4), the AAT was bound to consider whether Mr Walker's complaints about the DSS decision were made out: only once a conclusion was reached on that issue could the AAT properly determine whether to affirm the DSS decision as affirmed by the SSAT or to set it aside and remit it to the DSS for reconsideration.

Was there a denial of natural justice by DSS?

For the reasons given, the only decision that the SSAT had jurisdiction to review was the original decision of 5 April 1995 to recover the debt owing by Mr Walker by garnishee of his bank account as affirmed by the review officer's decision of 5 July 1995.

The review officer is bound on a review under s 1243 to give the applicant procedural fairness: such a review can only take place if the person affected by the original decision makes application for its review and a right to apply for review must include the right to support the application with argument and material which the person considers will justify the overturning of the original decision. Moreover, there is no limitation on the scope of the internal review provided for by s 1243; the review officer would therefore be bound to consider new material not available to the original decision-maker that was brought to his attention by the applicant.

After receiving notice on 13 April 1995 of the Department's decision to garnishee his bank account, Mr Walker promptly contacted the Department and requested the review that led to the decision of 5 July 1995; he explained why he objected to the decision to take garnishee action. The material before this Court does not reveal just what Mr Walker had to say to the Department concerning his objection to the garnishee action between learning of that action and the making of the decision on 5 July 1995. But whatever passed between Mr Walker and the Department, it is clear that he had full opportunity to draw to the attention of the review officer any matters that he considered that officer should take into account in conducting the review and that he took advantage of that opportunity. It is also clear, from the review officer's letter of 5 July 1995, and in particular the second paragraph of that letter, that the review officer took into account what Mr Walker had to say with respect to the issue of the garnishee notice. Counsel's submission that, despite what is recorded in the second paragraph of this letter, the review officer should be taken to have ignored Mr Walker's representations because that officer failed to mention them in listing certain facts is untenable: the facts he specifically listed were those upon which he said he relied to arrive at his decision.

Even if the original decision-maker was bound to give Mr Walker a hearing before the decision to issue the garnishee notice was made, Mr Walker had full opportunity, of which he availed himself, to put any matters he considered appropriate to the review officer who acted under s 1243 before that officer made the decision of 5 July 1995 and that officer took Mr Walker's representations into account: Mr Walker received a full and fair hearing in the course of this review and in those circumstances any denial of natural justice in connection with the original decision was irrelevant. The Queen v Marks; Ex parte Australian Building Construction Employees and Builders Labourers' Federation [1981] HCA 33; (1981) 147 CLR 471 at 484-485; Calvin v Carr [1979] UKPC 1; [1980] AC 574 at 592-593.

But there are good reasons why s 1233 should not be construed as requiring the Secretary to comply with the rules of natural justice in deciding whether to serve a garnishee notice under s 1233. The garnishee procedure provided for by s 1233 is similar to the procedure for the collection of tax by attachment of debts provided for by s 218 the Income Tax Assessment Act 1936 (Cth) and s 74 the Sales Tax Assessment Act. In General Electronics International Pty Ltd v DFC of T (1996) 96 ATC 5036, Lindgren J applied certain obiter dicta of Burchett J in Edelsten v Wilcox (1988) 83 ALR 99, a decision on s 218 of the Income Tax Assessment Act; his Honour rejected the proposition that the special garnishee power conferred on the Commissioner by s 74 of the Sales Tax Assessment Act subjected the Commissioner to the obligation to give the taxpayer an opportunity to be heard before it was invoked and said, at 5045:

"The remedy given to the Commissioner by s 74 is additional and special ...

Often, perhaps usually, it would put at risk the effectiveness of the remedy afforded by s 74 if a taxpayer knew in advance of the Commissioner's intention to give a direction under the section, since the taxpayer would be enabled to cause the third party to pay to it or to its nominee the amount in question which could then be dissipated. This consideration provides some indication that in the absence of special factual circumstances distinguishing a particular case, a taxpayer does not have a reasonable expectation of being afforded an opportunity to be heard before the Commissioner gives a direction under s 74."

These considerations provide good reason for holding that s 1233 cannot be construed as imposing on the decision-maker, by implication, a general obligation to comply with the requirements of natural justice before determining to issue a garnishee notice. The difficulty of finding a requirement, implied in s 1233, that the Secretary must give the debtor an opportunity to be heard before invoking the garnishee procedure under s 1233 is increased when it is seen that s 1233(4) expressly deals with the notice that is required to be given to the debtor by the Secretary in respect of the garnishee procedure: notice is required to be given to the debtor only after the decision to invoke the procedure has been made and the garnishee notice itself has been given to the person who owes money to the debtor.

As Edelsten v Wilcox, at 114, and General Electronics show, the circumstances of the particular case may, however, impose an obligation on the Secretary to give a debtor opportunity to be heard before taking garnishee action under s 1233. But no attempt was made to suggest that there was anything in the circumstances of Mr Walker's case sufficient to have conferred on him a legitimate expectation that he would be given opportunity to be heard before the garnishee action was taken against him.

Was a relevant consideration ignored by DSS?

Counsel for Mr Walker also submitted that, quite apart from any obligation of natural justice that rested on the initial decision-maker, s 1233, on its proper construction, required that decision-maker, in every case before he could properly decide upon garnishee action, to take into account such matters as the financial circumstances of the overpaid benefits recipient. The submission fails to recognise the essential characteristic of a statutory discretionary power that is in terms unfettered, ie, one which is not required to be exercised by reference to specific considerations spelled out in the provision creating that power.

That it may be appropriate, in the circumstances of a particular case, for the decision-maker, before deciding whether to exercise the discretionary power conferred by s 1233, to have regard to a matter peculiar to the person who is indebted to the Commonwealth does not mean that, before there can be a valid exercise of the particular power, regard must be had to that kind of matter in every case. Riddell v Secretary, Department of Social Security [1993] FCA 261; (1993) 114 ALR 340, a decision relied on by the appellant, does not support his argument, but rather exposes the fallacy in it. Riddell was concerned with the discretionary power conferred on the Secretary by s 1237 to waive the Commonwealth's rights to recover overpaid benefits; the Full Court said, of the "wide discretion" conferred by the section, at 347:

"The court was invited to give general guidance to the Administrative Appeals Tribunal as to the circumstances relevant to be taken into account in exercising the discretion conferred by s 1237(1). However, we do not think it is appropriate for the court to accept that invitation. Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other."

Because the discretion conferred by s 1233 is in terms unfettered and because it is a discretionary power which will fall to be exercised in a wide variety of circumstances, each presenting different considerations to be taken into account before the decision whether to exercise the power can properly be made, there is no justification for interpreting the section in the way the appellant suggests, ie, as conferring a discretion which can only lawfully be exercised if consideration is given in every case to a range of specific matters. What the decision-maker acting under s 1233 must take into account in each case, in order to validly exercise that wide discretionary power, must be governed by the circumstances of the particular case.

The appellant did not attempt to point to anything in the material before the SSAT, the AAT or this Court that might have required the original decision-maker to have regard to particular considerations peculiar to Mr Walker before it could be said that that decision-maker did have regard to all the considerations he was required by s 1233 to take into account. There is nothing before this Court that throws any light on Mr Walker's financial circumstances in early April 1995 when the decision to issue the notice was made and, importantly, nothing that suggests that the DSS had reason to think that immediate attachment of the whole $2,134.40 which it paid into his account that day might inflict significant hardship upon him.

What the DSS did know was that, in attaching the whole of that sum, it was not taking moneys from Mr Walker which he was then receiving under a current entitlement to periodic social security benefits: the $2,134.40 represented Mr Walker's entitlement to sickness benefits for a period that had ended six years before and the DSS was attaching that sum to recover a small part of the benefits paid to Mr Walker in respect of a period that ended seven and a half years before to which Mr Walker was never entitled. Mr Walker not having attempted to show that in early April 1995 he was in such circumstances of financial difficulty that attachment of the whole $2,134.40 would inflict significant hardship upon him and that the DSS should then have known that, there is no basis for the submission that the DSS was bound, when deciding to issue the notice, to take into account Mr Walker's then current financial circumstances.

It was not suggested that Mr Walker could rely on the DSS's apparent departure from its own guidelines by attaching the entire $2,134.40. The bare fact that such guidelines existed could not, in the circumstances of this case, which include the fact that the moneys attached did not comprise a current entitlement to social security benefits, give Mr Walker a legitimate expectation that he would be given an opportunity to be heard before the DSS departed from those guidelines.

The result of this appeal

This Court's jurisdiction to hear an appeal from a judgment of a single judge of the Court disposing of an appeal under s 44 the Administrative Appeals Tribunal Act comes not from that provision, but from s 24(1)(a) the Federal Court of Australia Act 1976 (Cth). The position is different when an appeal under s 44 comes before the Full Court in the first instance, ie, in its original jurisdiction, either because s 44(3)(c) requires that or in other circumstances provided for by that sub-section: see Minister for Immigration and Ethnic Affairs v Gungor [1982] FCA 99; (1982) 42 ALR 209 at 219-221. This Court's powers in exercising its appellate jurisdiction in this case are set out in s 28 the Federal Court of Australia Act. They include unfettered discretionary power "to give such judgment ... as, in all the circumstances, it thinks fit": s 28(1)(b).

The learned primary judge erred in law in failing to recognise that s 1253(1) conferred power on the SSAT to review the relevant DSS decision and set it aside if it involved error of any kind, as did the AAT and the SSAT: the limitation imposed by s 1253(4) on the review powers of both the SSAT and the AAT did not absolve those tribunals from examining the DSS decision for error. But Mr Walker limited his challenge to the decision to issue the garnishee notice to two complaints. For the reasons given, he cannot show any denial by the DSS of natural justice. Nor can he show that the DSS failed to take a relevant consideration into account with respect to the decision to take garnishee action against him.

Given this and given the history of the litigation, we do not consider that Mr Walker is entitled to yet another opportunity to attempt to get his hands on the $2,134.40 in sickness benefits to which he has long been entitled, while ignoring entirely his obligation to repay the much larger amount of sickness benefits which he obtained by fraud, because the various tribunals below, by misconstruing s 1253(4), failed to investigate his empty complaints against the DSS's actions. It would not be appropriate, in these circumstances, to remit the matter to the DSS for reconsideration. Rather is it appropriate to terminate Mr Walker's challenge to the DSS's garnishee action now.

We would dismiss the appeal.

I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Drummond and the Honourable Justice Mansfield.

Associate:

Dated: 3 July 1997

Counsel for the appellant: S Langman

Solicitor for the appellant: Welfare Rights A.C.T.

Counsel for the respondent: P Hack

Solicitor for the respondent: Australian Government Solicitor

Date of hearing: 1 May 1997