Yao v Administrative Appeals Tribunal [2011] FCA 11 (19 January 2011)

Last Updated: 20 January 2011

FEDERAL COURT OF AUSTRALIA

Yao v Administrative Appeals Tribunal [2011] FCA 11

Citation:		Yao v Administrative Appeals Tribunal [2011] FCA 11
Appeal from:		Yao v Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 516
Parties:		QING QANG YAO v ADMINISTRATIVE APPEALS TRIBUNAL and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
File number:		NSD 919 of 2010
Judge:		KATZMANN J
Date of judgment:		19 January 2011
Catchwords:		ADMINISTRATIVE LAW – appeal from a decision of the Administrative Appeals Tribunal dismissing the applicant’s application as frivolous or vexatious – where the outcome was held to be devoid of any practical effect – whether error in the AAT’s decision – whether convenient for the Court to make findings of fact - Administrative Appeals Tribunal Act 1975 (Cth), ss 42B(1), 44(7)
Legislation:		Administrative Appeals Tribunal Act 1975 (Cth) ss 42B(1), 44(7) Administrative Decisions (Judicial Review) Act 1977 (Cth) s 10(2)(b)(ii) Social Security (Administration) Act 1999 (Cth) ss 131, 145 Social Security Act 1991 (Cth) s 629 Social Security Legislation Amendment (Employment Services Reform) Act 2009
Cases cited:		Croker v Secretary, Department of Education, Employment and Workplace Relations (No 3) [2008] FCA 1473 Duncan v Hotop [2004] FCA 274 Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3 Kioa v West [1985] HCA 81; (1985) 159 CLR 550 Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366 Ugur v Commissioner of the Australian Federal Police [2010] FCA 303
Date of hearing:	6 October 2010
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	47
Counsel for the Applicant:	The applicant appeared in person with the assistance of an interpreter
Solicitor for the Respondents:	Ms D Watson of Australian Government Solicitor

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 919 of 2010

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	QING QANG YAO Applicant
AND:	ADMINISTRATIVE APPEALS TRIBUNAL First Respondent SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Second Respondent

JUDGE:	KATZMANN J
DATE OF ORDER:	19 JANUARY 2011
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The appeal is dismissed.
2. The applicant is to pay the second respondent’s costs.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 919 of 2010

ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	QING QANG YAO Applicant
AND:	ADMINISTRATIVE APPEALS TRIBUNAL First Respondent SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS Second Respondent

JUDGE:	KATZMANN J
DATE:	19 JANUARY 2011
PLACE:	SYDNEY

REASONS FOR JUDGMENT

Background

1. The applicant, Mr Yao, is in receipt of social security benefits. For some time until February 2010 Centrelink paid him a newstart allowance, a benefit payable to the unemployed, generally speaking where they are actively seeking and willing to undertake paid work. On 8 February 2010, instead of newstart, Mr Yao began to receive Austudy, a payment for students which is made through the social security system.
2. On 11 August 2008 a Centrelink officer decided to withhold payments of the newstart allowance to Mr Yao for eight weeks pursuant to s 629 of the Social Security Act 1991 (Cth) because of Mr Yao’s three failures (on 30 May 2008, 22 July 2008 and 11 August 2008) to sign a “Newstart Activity Agreement” with Mission Australia at Punchbowl requiring him to undertake certain activities. Mission Australia is one of the organisations, known as job network members, which assist jobseekers to find work under contract with the Australian government. It appears that Mr Yao refused to sign the agreements because he did not wish to attend the Mission Australia office at Punchbowl. He was unable to see why he should have to bear the costs of travelling from his home in Bankstown to Punchbowl when there were three job network members in Bankstown.
3. At the time of Centrelink’s decision in August 2009 s 629 of the Social Security Act relevantly provided that a newstart allowance is not payable to a person for a period of eight weeks, if the person commits a newstart participation failure, having committed newstart participation failures on two or more other occasions during the previous 12 months. A “newstart participation failure” was defined at the time in s 624 of the Social Security Act to include a failure to comply with a requirement to enter into a Newstart Activity Agreement.
4. Mr Yao was unhappy with Centrelink’s decision and asked for the matter to be referred to a Centrelink authorised review officer. On 15 September 2008 the authorised review officer affirmed the decision. Mr Yao appealed to the Social Security Appeals Tribunal (“the SSAT”) which, on 2 March 2009, dismissed his appeal. He then applied on 3 April 2009 to the first respondent (“the AAT”) for a review of that decision.
5. Mr Yao continued to receive payments of newstart allowance up until the time the SSAT delivered its decision upholding the original decision to apply the eight-week non-payment penalty. This was apparently because of the effect of ss 131 and 145 of the Social Security (Administration) Act 1999 (Cth). These sections apply in circumstances where a person seeks a review of a Centrelink decision by, respectively, an authorised review officer or the SSAT and they confer a discretion on the second respond (“the Secretary”) to continue payment until the determination of the review. It appears that this discretion was exercised in Mr Yao’s favour as the evidence (which the Secretary led before me, although not before the AAT, and which I discuss below) shows that he continued to be paid until the date of the SSAT decision.
6. In fact, I am satisfied from the same evidence that Mr Yao was paid newstart allowance without interruption from the time of the original decision to impose the non-payment penalty until he moved from newstart to the Austudy payment in February 2010. After the SSAT decision was made, this was not as the result of a decision of the Secretary, as no equivalent discretion exists in relation to applications to the AAT (or beyond). An applicant for review who wishes to continue to receive his or her payment after an unsuccessful application to the SSAT must seek a stay of that decision, presumably from the SSAT itself or the AAT, and Mr Yao did not do this. I return to the significance of this below.
7. At the hearing in the AAT on 29 June 2010 the Secretary’s advocate submitted that, although the Secretary maintained that the SSAT was correct to uphold Centrelink’s decision, the question was “moot” as Mr Yao was not in debt to the Commonwealth, the Commonwealth could not apply the eight-week non-payment period to his Austudy payment and could not otherwise “raise” a debt. She also said she had invited Mr Yao to withdraw his application in the circumstances.
8. Mr Yao contended at the hearing that in fact he had lost two weeks of his payment but the Secretary’s representative, although conceding this, claimed that the money had been refunded and that she had shown him documents establishing this. The AAT was not informed about the period to which this issue related, but it seems that this was not part of the eight-week non-payment period at issue before the AAT, because, as I said above, this was in fact never applied.
9. The AAT accepted the Secretary’s submission and dismissed the application pursuant to s 42B(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). Section 42B(1) relevantly provides:

(1) Where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious:

(a) dismiss the application...

10. On 26 July 2010 Mr Yao appealed to this Court from the AAT’s decision. He is unrepresented as, indeed, he was before the AAT.
11. The right to appeal arises under s 44 of the AAT Act and is confined to a question of law. The notice of appeal combined questions of law for the purpose of an appeal under s 44 with grounds of review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“ADJR Act”). This Court has observed, however, that, in general, the expression “question of law” in s 44 encompasses the grounds available under s 5 of the ADJR Act: Duncan v Hotop [2004] FCA 274 at [10] per RD Nicholson J.
12. On 1 September 2010 the applicant filed what was entitled an Amended Notice of Appeal but which was in fact an application for an order of review under the ADJR Act (“the application”). The applicant was given leave to rely on the amended notice of appeal. In the circumstances of this case it is appropriate to deal with the case without too rigid adherence to the technicalities. See Ugur v Commissioner of the Australian Federal Police [2010] FCA 303 at [12]- [19]. This appears to be the approach the Secretary adopted, too. Certainly, the Secretary treated the amended application as supplementing, not superseding the original. Accordingly, I have proceeded on the basis that I was hearing an appeal under s 44, encompassing the grounds of review Mr Yao raised in his application. This is advantageous to Mr Yao as relief under the ADJR Act is discretionary and can be refused because a right of appeal is conferred by s 44. See ADJR Act s 10(2)(b)(ii).

The appeal

13. Mr Yao stated he was aggrieved by the AAT decision for two reasons. They were (without alteration):

(1) That senior member of Administrative Appeals Tribunal (AAT) failed to set aside the decision made by Centrelink, Department of Education, Employment and Workplace Relations (DEEWR) and Social Security Appeals Tribunal (SSAT) to apply three participation failures on 30 May 2008, 22 July 2008 and 11 August 2008 under section 624 of the Social Security Act 1991, which has and will continue to cause severe stress and emotionally hurt the applicant.

(2) That senior member of AAT failed to set aside the decision made by Centrelink, DEEWR and SSAT to apply eight weeks non-payment period under section 626 or section 629 of Social Security Act 1991, which has and will continue to cause severe stress and intended to emotionally and financially hurt the applicant.

14. The grounds of the application (included as grounds of appeal in the original notice of appeal in substantially the same terms) are listed as follows (again, without alteration):

(1) The member of AAT failed to take a relevant consideration into account in the exercise of a power. Hence his decision should be set aside under section 5(2) (b) of Administrative Decisions (Judicial Review) Act 1977 (“ADJR”). For example, he failed to consider any issue raised in Social Security Appeals Tribunal's decision. He also failed to consider the fact that the respondent claimed the applicant had breached Social Security Act 1991 and threat to apply or recover eight-week non-payment period. Furthermore, he failed to consider the fact that the applicant has not claim Austudy when the applicant applid for AAT review.

(2) The member of AAT was taking an irrelevant consideration into account in the exercise of a power. Hence his decision should be set aside under section 5(2) (a) of ADJR. For example, he considered irrelevant issues raised by the respondent, which is NOT the issue raised in Social Security Appeals Tribunal’s decision and/or NOT when the applicant applied for AAT review.

(3) The decision of AAT member involved an error of law. Hence his decision should be set aside under section 5(1) (f) of ADJR. For example, he has error in applying Williams v Australian Electoral Commission and Another [1995] AATA 160; (1995) 38 ALD 366.

(4) The member of AAT made the finding(s) and/or decision without any evidence. Hence it is “a breach of the rules of natural justice occurred in connection with the making of the decision.” Hence his decision should be set aside under section 5(1) (a) of ADJR. For example, his decision based on his finding that the current case is “frivolous or vexatious”. However, no evidence shows that current case is “frivolous or vexatious”. No evidence shows that “the Applicant will not suffer any advantage or disadvantage.” No evidence shows that “there no longer exists any mechanism by which that eight-week period payments can be recovered from him.” No evidence shows that “the eight-week non-payment period of Newstart Allowance cannot be deducted from the applicant’s Austudy”.

15. The applicant claims (without alteration):

(1) An order that set aside the decision of Senior Member M.D. Allen made on 29 June 2010.

(2) An order that set aside the decision of SSAT that applies eight-week period payment to the applicant.

(3) An order that set aside the decision of SSAT that applies three participation failures to the applicant on 30 May 2008, 22 July 2008 and 11 August 2008.

The AAT decision

16. The AAT’s reasons were delivered ex tempore. They were short. It is therefore convenient to set them out in full:

By application made the 3rd day of April 2009, the Applicant sought review of a decision by the Social Security Appeals Tribunal. The decision subject to review was a decision to impose on the Applicant an eight-week preclusion period relating to his Newstart Allowance.

It is unnecessary for these reasons to canvas why the eight-week preclusion period was imposed. This morning, Ms Sharma, who appears for the Respondent, informed
me that in fact at no time has the eight-week preclusion period been imposed upon the Applicant. In other words, to date he has not been penalised by withholding from him the money which would have been paid to him over an eight-week period. There was apparently a fortnight period where some deductions were made, but they have been reimbursed.

From the commencement of the academic year 2010, the Applicant has been in receipt of Austudy. I am informed by Ms Sharma that the eight-week non-payment period of Newstart Allowance cannot be deducted from the Applicant’s Austudy.

The net result is, whether the decision under review is affirmed or set aside, the Applicant will not suffer any advantage or disadvantage. He has been paid during the eight-week preclusion period and there no longer exists any mechanism by which that eight-week period payments can be recovered from him. Subsection 42B(1) of the Administrative Appeals Tribunal Act 1975 (“AAT Act”) states inter alia:

“Where an application is made to the Tribunal for the review of a decision, the Tribunal may, at any stage of the proceeding, if it is satisfied that the application is frivolous or vexatious, dismiss the application.”

As to what is frivolous and vexatious, this Tribunal consisting of the then President and Deputy Presidents Beaumont and Hill J said in Re Williams v Australian Electoral Commission and Another [1995] AATA 160; (1995) 38 ALD 366 at 374:

“It is difficult to categorise this case into any of the accepted heads of vexatiousness, even the collateral-purpose head does not sit easily with a situation where the applicant genuinely believes in the legitimacy of the collateral object which he is seeking. Perhaps this provides a good reason for not stultifying the situations in which the proceedings will be found to be vexatious by requiring that they fall within preordained categories. In this case, the outcome of the proceedings, whether successful to the applicant or otherwise, will be devoid of any practical effect.”

As far as I can ascertain, and I accept what Ms Sharma has told me, whatever the outcome of today’s proceedings might be, they will be of no practical effect to the Applicant or, indeed, to the Respondent. Consequently, pursuant to subsection 42B(1) of the AAT Act, this matter is DISMISSED.

The grounds

17. I propose to deal with the grounds in a different order than that listed in the application.

Error of law/making a decision without evidence

18. Mr Yao submitted that the Senior Member erred by selectively quoting from Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366 (“Williams”). He also argued that the AAT erred because it refused to follow a judgment of this Court to which he and the Secretary drew the Senior Member’s attention. That was Croker v Secretary, Department of Education, Employment and Workplace Relations (No 3) [2008] FCA 1473. He complained, too, that the Senior Member made his decision without evidence, specifically, that he had no evidence that the applicant had been paid during the eight-week preclusion period and that there no longer exists any mechanism by which the eight-week period payments can be recovered from him.
19. In Williams the AAT held at 374:

[38] It is difficult to categorise this case into any of the accepted heads of vexatiousness. Even the ``collateral purpose'’ head does not sit easily with a situation where the applicant genuinely believes in the legitimacy of the collateral object which he is seeking. Perhaps this provides a good reason for not stultifying the situations in which proceedings will be found to be vexatious by requiring that they fall within pre-ordained categories. At the same time, it is important to re-affirm that the power to dismiss under this head must be exercised cautiously and sparingly.

[39] In this case the outcome of the proceedings, whether successful to the applicant or otherwise will be devoid of any practical effect. Nor is there any reputation at stake or ``face'’ to be saved. The interest which gave the applicant standing to commence the proceedings has long since ceased to exist. He has no legitimate interest in pursuing them further. Accordingly, in our opinion, while the proceedings were not instituted vexatiously, they have become vexatious. They have been thus ever since 22 December 1992, when the only interest of the applicant which could possibly have been affected by the disputed decision, ceased to exist. It would impose unnecessary expense and hardship upon the respondent and the Greens if the case were to proceed further. Accordingly, we consider that the application should be dismissed as requested.

(Emphasis added)

20. Mr Yao pointed to the AAT’s failure to quote these passages in their entirety and, in particular, to cite or otherwise refer to the sentences emboldened above. Alternatively, he claims the passages were “chunked by Auscript”, which I took to mean removed by Auscript from the transcript.
21. There is no question that the proceeding was not brought frivolously or vexatiously. At the time the applicant applied for review to the AAT he had a legitimate interest to pursue.

He identified that interest in his written submissions in this way (without alteration):

Those legitimate interests included set aside the decisions of SSAT applying three participation failures and applying eight week non-payment period to the applicant.

22. But s 42B of the AAT Act empowers the AAT to dismiss an application at any stage of the proceedings if it is satisfied that the application is frivolous or vexatious. In Williams the AAT held that it was permissible for it to take into account matters that had arisen since the application for review had been made. The question is not whether the proceeding has been instituted frivolously or vexatiously but whether it is in fact frivolous or vexatious. In Fearnley v Australian Fisheries Management Authority [2006] FCAFC 3 (“Fearnley”) the Full Court approved Williams. Emmett J held at [97]:

Where an interest that gives an applicant standing to commence a proceeding in the Tribunal ceases to exist, that applicant has no interest in pursuing the proceeding further. Although such a proceeding might not be vexatious when instituted, it becomes vexatious when no legitimate purpose can be achieved by continuing with the proceeding (see Re Williams and Australian Electoral Commission [1995] AATA 160; (1995) 38 ALD 366).

23. Williams is not authority for the narrower proposition (as Mr Yao seemed to think) that a proceeding will not be frivolous or vexatious if a party’s reputation is at stake or “face to be saved”. Even if it were, the principle I am required to apply is the principle set out in Fearnley.
24. Mr Yao relies on Croker, not for anything established by the judgment, but for an observation of the AAT (made by the same senior member) that was extracted in the judgment:

The difficulty in this matter is that the tribunal can only review decisions of the Social Security Appeals Tribunal. As set out in that Decision, the question before the Social Security Appeals Tribunal was the decision on 8 November 2007 to require the Applicant to enter into the Newstart Agreement. The question regarding the terms of that agreement, and whether it was a suitable agreement for the Applicant, have never been considered either by an Authorised Review Officer or by the Social Security Appeals Tribunal, and, consequently, are not before me today. The only question before me is whether the Applicant could be required to enter into the Newstart Activity Agreement, and what is abundantly clear from subsection (6) [of] section 605 of the Social Security Act 1991 is that he could be so required. In these circumstances, therefore, the decision under Review is affirmed.

Mr Yao submitted that the question whether the eight-week non-payment period cannot be deducted from the applicant’s Austudy was never considered by an authorised review officer or by the SSAT and therefore could not be considered by the AAT. The submission, however, is misconceived. The AAT was considering the utility of the appeal in the context of its jurisdiction to dismiss proceedings under s 42B(1) of the AAT Act. It was relevant to that issue to consider whether the debt could be recovered through a deduction from the applicant’s Austudy because that, in turn, was relevant to whether Mr Yao had a legitimate interest in pursuing the proceeding. Nothing said in Croker bears upon this point.

26. The alternative submission can be quickly disposed of. There are two answers to it. First, there is no evidence that Auscript removed passages from the transcript and there is no reason why it would do so. Mr Yao filed an affidavit affirmed by him on 13 September 2010 to which he referred in his written submissions but which he did not read on the hearing. In it he referred to two alleged omissions and mistakes he claims were made in another case (in the Federal Magistrates Court) in which he was a party. But he did not there suggest that the absence of the references to the extended passages in Williams was an omission or mistake on the part of Auscript. Secondly, Mr Yao (and the Secretary’s solicitor) signed a certificate of correctness, which appears in the appeal book, certifying that he (and the solicitor) had examined the appeal papers (which include the transcript of the reasons) and they are correct.
27. The second aspect of this ground is the complaint that the AAT made two factual findings without evidence. One was that the applicant had been paid during the eight-week non-payment period. As the Secretary accepted in this Court, Mr Yao’s complaint is well made. Not only was there no evidence, but Mr Yao disputed the submission that the Secretary’s solicitor made. In those circumstances the AAT should not have made the finding. The Secretary recognised the problem and tendered evidence on the appeal to prove what its advocate had submitted and what the AAT accepted as fact.
28. Section 44 of the AAT Act relevantly provides:

Federal Court may make findings of fact

(7) If a party to a proceeding before the Tribunal appeals to the Federal Court of Australia under subsection (1), the Court may make findings of fact if:
(a)
the findings of fact are not inconsistent with findings of fact made by the Tribunal (other than findings made by the Tribunal as the result of an error of law); and
(b) it appears to the Court that it is convenient for the Court to make the findings of fact, having regard to:
(i) the extent (if any) to which it is necessary for facts to be found; and
(ii) the means by which those facts might be established; and
(iii) the expeditious and efficient resolution of the whole of the matter to which the proceeding before the Tribunal relates; and
(iv) the relative expense to the parties of the Court, rather than the Tribunal, making the findings of fact; and
(v) the relative delay to the parties of the Court, rather than the Tribunal, making the findings of fact; and
(vi) whether any of the parties considers that it is appropriate for the Court, rather than the Tribunal, to make the findings of fact; and
(vii) such other matters (if any) as the Court considers relevant.
(8) For the purposes of making findings of fact under subsection (7), the Federal Court of Australia may:
(a) have regard to the evidence given in the proceeding before the Tribunal; and
(b) receive further evidence.

29. The evidence consisted of an affidavit from Andrew Wingrave, a policy officer with the Compliance Framework Team of Centrelink. Mr Wingrave testified that he had accessed the Centrelink database that records details of entitlements and payments to Centrelink customers. Annexed to the affidavit were computerised payment records relating to Mr Yao showing, amongst other things, that at no time since Centrelink made its decision to impose the eight-week non-payment period was Mr Yao in fact not paid his allowance each fortnight. The records also disclosed some earlier payments of arrears relating to earlier periods in which he had apparently not been paid. Mr Yao ultimately accepted that the records produced by Mr Wingrave accurately recorded the payments made to him. That evidence established that at all material times Mr Yao had been paid the newstart allowance to which he was entitled. It is unquestionably convenient to make a finding of fact to this effect, which would certainly not be inconsistent with the finding made by the AAT. The Secretary submitted that it was appropriate for the Court to do so. To require the matter to return to the AAT for it to make the same factual findings would be an unjustifiable burden on both parties. For this Court to make the relevant factual findings is an expeditious and efficient means of resolving the matter. Having regard to the evidence of Mr Wingrave I therefore find that the Secretary has not in fact imposed any penalty on Mr Yao and, in particular, has not withheld from him any payment of newstart allowance for eight weeks, the subject of the original Centrelink decision.
30. The second factual finding about which Mr Yao complained was that “there was apparently a fortnight period where some deductions were made, but they have been reimbursed”. This finding is strictly irrelevant because the only decision properly before the AAT was the 11 August 2008 decision to impose the eight-week penalty. It only became an issue because Mr Yao raised it in response to the Secretary’s assertion that he had always been paid. Nevertheless, I note that the evidence of Mr Wingrave also establishes that there was a payment of arrears in the sum of $437.10 made to Mr Yao for the payment of an allowance for the period from 14 June 2008 to 27 June 2008, which appears to be the “fortnight period” in question.
31. After Mr Yao applied to the AAT for a review of the SSAT’s decision and before the AAT hearing, the Social Security Act was amended: Social Security Legislation Amendment (Employment Services Reform) Act 2009 (Cth) (“the amending Act”). The amending Act consolidated the compliance provisions for a number of payments for which there are participation requirements, such as newstart. It repealed subdivisions F and FA of Division 1 of Part 2.12 of the Social Security Act (see Sch 1 Pt 2 cl 23) which contained the provision permitting the imposition of an eight-week non-payment period for repeated newstart participation failures. Schedule 1 Pt 3 cl 56(1) provides that the amendments made by the Schedule only apply to failures, voluntary acts or misconduct committed after the Schedule commences. The Schedule commenced on 1 July 2009. Schedule 1 Pt 3 cl 56(2) provides (in effect and amongst other things) that in cases where a newstart allowance is not payable to a person under s 629 immediately before the commencement of the Schedule, the Social Security Act in force immediately before the commencement continues to apply. Ms Watson, who appeared for the Secretary, relied upon the amendments to show that the eight-week non-payment period could not be applied against any future newstart payment, a concern voiced by Mr Yao. It is apparent that, if Mr Yao were to receive a newstart allowance at some point in the future, the new provisions would apply. Ms Watson also tried to exclude the transitional provisions by submitting that Mr Yao’s newstart allowance was payable immediately before 1 July 2009; indeed it was paid, so that the effect of the legislative changes is that the provisions permitting the imposition of an eight-week non-payment period could not be applied. There is, however, a problem with the submission. The fact that the allowance was paid does not necessarily mean that it was payable.
32. Once the SSAT determined that the original decision to impose the eight-week non-payment penalty was the correct one, it should have been applied to Mr Yao’s payment unless a stay of that decision was sought. As I said, Mr Yao did not seek a stay of that decision but the evidence shows that he continued to be paid. This means that, for an eight week period beginning more or less from the date of the SSAT decision, Mr Yao was paid when he was not in fact entitled to be paid. As the SSAT decision was delivered on 2 March 2009, this eight week period would have expired in May 2009. At that point, assuming Mr Yao did not commit any more participation failures, his newstart allowance would have become payable again and would therefore have been payable immediately before 1 July 2009 when the amending legislation came into force. I therefore accept Ms Watson’s submission that the transitional provisions were inapplicable.
33. However, as Ms Watson pointed out, it also means that the payments made for the eight-week period after the SSAT decision qualified as a debt due to the Commonwealth according to s 1223 of the Social Security Act, which provides that, if a social security payment is made and the person is not entitled to that payment, the amount of payment is a debt due to the Commonwealth. Still, the position the Secretary took was that the debt would be waived.
34. Ms Watson told the Court that the payments were made on the basis of a mistaken belief that Mr Yao had obtained a stay of the SSAT decision. Section 1237A of the Social Security Act provides:

1237A Waiver of debt arising from error

Administrative error

(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).

(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.

35. Ms Watson said she was instructed to concede that both of the conditions in subs (1A) are satisfied. She also conceded that the amount was paid solely due to an administrative error and that Mr Yao received the payments in good faith. In the circumstances, the Secretary is obliged to waive the debt.
36. Mr Yao was concerned that the Social Security Act might be amended in the future and he had no guarantee that the Secretary would not at a later stage try to recover the debt. That concern would not affect the exercise of the power under s 42B(1). A similar submission was made and rejected in the AAT in Fearnley and the AAT’s decision was not disturbed on appeal.
37. The AAT’s other “finding” that the eight-week non-payment period cannot be deducted from Austudy was not a finding of fact. It was a restatement of what Ms Sharma, the Secretary’s advocate, had told the tribunal. Still, it appears that the AAT accepted it and my attention was not drawn to any provision of the current legislation that would permit the eight-week non-payment period of the newstart allowance to be taken into account in the payment of Austudy. In fact, as Ms Watson submitted, under the new legislation Austudy is not a “participation payment” to which the new compliance provisions apply. See Schedule 1, cl 1 of the Social Security Administration Act.
38. In the result, I am satisfied that the proceeding before the AAT would have been devoid of any practical effect.
39. Making factual findings without evidence does not constitute a breach of natural justice. But Mr Yao submitted orally that there was a breach of natural justice for a different reason in that his attention was not drawn to the decision in Williams and he was denied an opportunity to be heard on whether it should be applied in his case. A perusal of the transcript tends to bear out his submission. Nevertheless, the Senior Member did raise directly with Mr Yao his concern that the disposition of the application would be futile. The transcript records the following exchange:

MR ALLEN: ...It seems to me that whatever happens in this matter it’s just – it doesn’t advance your situation one way or the other.

MS SHARMA: What to do---

MR ALLEN: Would you mind, please, miss – thank you. You see, it comes down to this. If I set aside the decision under review you gain nothing because the money has never been taken from you. No please don’t interrupt. Please don’t interrupt me. If I affirm the decision under review you lose nothing because Centrelink can’t recover the money.

40. Unfortunately, Mr Yao’s response to the Senior Member’s observation is unintelligible. It was in these terms:

MR YAO: Well, I haven’t seen legal quantity to what Ms Sharma have the potentially why the Centrelink the payment out, recover that and – actually, actually that’s – they’re already outside the two weeks of payment.

41. The transcript then records the following exchanges.

MR ALLEN: Yes, you’ve got the money back Ms Sharma tells me. It’s been refunded to you.

MS SHARMA: Yes, Senior Member.

MR ALLEN: Yes.

MR YAO: No, I haven’t seen it, I haven’t got it. And—

MR ALLEN: Well, you’ll get. Ms Sharma said that she’s been able to trace the money and show you that it has in fact been paid into your bank account. Now, Mr Yao—

MR YAO: Yes.

MR ALLEN: --there are certain matters of law that apply to this.

42. The Senior Member did not proceed to inform Mr Yao what those matters of law were.
43. I am satisfied that Mr Yao’s attention was not drawn to the decision in Williams or to the terms of s 42B(1) of the AAT Act (and it would have been preferable for the AAT to have done so). But I am also satisfied he was given an opportunity to be heard on the matter that troubled the Senior Member and the critical issue or factor on which the decision turned, namely, the utility of proceeding with the application. For this reason I am not satisfied that Mr Yao was denied natural justice. See Kioa v West [1985] HCA 81; (1985) 159 CLR 550 at 587.

Failure to take into account relevant considerations

44. Subsection 5(1)(e) of the ADJR Act lists as a ground of review “that the making of the decision was an improper exercise of the power conferred by the enactment in pursuance of which the decision it was purported to be made”. Subsection 5(2)(b) provides that the reference in paragraph (1)(e) to an improper exercise of a power shall be construed as including a reference to a failure to take a relevant consideration into account in the exercise of the power. Mr Yao submitted, in effect, (relying on Williams) that before an application could be summarily dismissed the AAT must be satisfied that that there was “no reputation at stake or face to be saved”. He said it was obvious that the three participation failures would cause “the applicant ‘reputation at stake or face to be lose”. Hence, he said, the AAT failed to take into account a relevant consideration.
45. It is not self-evident that Mr Yao’s reputation was adversely affected by the decision of the SSAT or that he had “face to be saved”. Mr Yao told the Court he was concerned that he would be prejudiced in his future dealings with job network agencies because of his record of participation failures, including through the imposition of stricter activity agreements. Mr Yao’s concern is understandable, but it is entirely speculative. The difficulty for Mr Yao in any event, however, is that a failure to take into account a relevant consideration will only vitiate a decision if the consideration was one which the AAT was bound to take into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39 per Mason J. As I indicated earlier, Williams is not authority for the proposition that the AAT is bound to take reputation into account in the exercise of the power to dismiss under s 42B(1) of the AAT Act and I was taken to no other authority to support such a proposition. I therefore accept the Secretary’s submission that, although reputation may be relevant to whether the outcome of an application for review would be futile, it is not a matter that the AAT was bound to take into account.

Taking irrelevant considerations into account

46. The issue raised by the respondent was the utility of the application. As the foregoing discussion shows, that was not irrelevant to the exercise of the AAT’s power.

Conclusion

47. I am satisfied that there was no legitimate purpose in pursuing the application before the AAT and that the AAT was justified in dismissing it on that account. Although the power to dismiss under s 42B(1) is to be exercised cautiously and sparingly, this was a proper case in which to do so. Accordingly, the appeal should be dismissed with costs.
    

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Katzmann.

Associate:

Dated: 19 January 2011