Federal Court of Australia
Frugtniet v Secretary, Department of Social Services [2021] FCAFC 127
ORDERS
Appellant | ||
AND: | SECRETARY DEPARTMENT OF SOCIAL SERVICES First Respondent ADMINSTRATIVE APPEALS TRIBUNAL Second Respondent | |
DATE OF ORDER: | 30 July 2021 |
THE COURT ORDERS THAT:
1. The appeal be dismissed.
2. The appellant pay the respondents’ costs of the appeal.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
O’CALLAGHAN J:
1 I agree with the joint reasons of Wheelahan and Snaden JJ.
2 It is in addition necessary for me to give reasons for my refusal to accede to multiple requests by the appellant that I should have recused myself from sitting on this appeal.
3 On 5 November 2020, the appellant sent an email to the court in the following terms (omitting formal parts):
I formally and respectfully request the recusal of O’Callaghan J, on the principle basis of apprehended bias. In doing so I do not believe a ‘fair minded lay observer’ would reasonably surmise that His Honour would bring an impartial, unprejudiced mind to the matter. Where there is doubt over apprehended bias, His Honour should disqualify himself on the basis that he determined the matter that is inextricably connected to this matter siting I presume as a single justice exercising the discretion not to place it before the Full Court in Frugtniet v Secretary, Department of Social Services (No 2) [2018] FCA 1767.
The Applicant duly submits that in appealing to the Full Court and lodging one’s application on the 27th day, on the belief that appeals from the AAT to the Federal Court was 28 days, but at that time an appeal from the Primary Judge of the Federal Court to the Full Court was 21 days. That resulted in the application after filing the requisite affidavits giving rise as to why this misapprehension had arisen requesting His Honour exercise the discretion that the matter be heard before the Full Court determine the matter, instead refused to do so, and heard the matter himself sitting either as a single justice or as a Full Court .
That decision as far as the Applicant is concerned was in principle erroneous, contained fundamental errors leading to an adverse decision by His Honour which was further tainted by the fact that the Federal Court Rules subsequently changed this anomaly from 21 days from which to appeal a single judge decision became 28 days consistent with the rest.
Furthermore, His Honour has sat on a Full Court hearing regarding the Applicant’s ex-partner Callychurn v Australian Securities and Investments Commission [2017] FCAFC 137 (1 September 2017) ‘in which those matters involved the Applicant, which is further reason why His Honour should recuse himself from this matter.
If His Honour was not minded to recuse himself, given that the applicant had foreshowed in his correspondence in response to the request of which justice may have had any involvement previously, it would be helpful if His Honour was to recuse himself now, the applicant who is self-represented will formally request the Chief Justice to ensure fairness and replace His Honour with any other justice as the matter to be determined in this case is one of construction and interpretation that has not been determined before and should not be tainted and infected with this problem.
(Errors and emphasis in original.)
4 I declined to recuse myself. The parties were advised of this fact by email, and the appeal was heard on 18 November 2020 as planned.
5 On 21 December 2020, after the exchange of some further correspondence, the appellant sent another email to the court, which relevantly stated:
… I make the following requests specifically addressed as a matter of law so that natural justice is extended to me when the final reasons for decision of the Full Court are handed down that reasons for decision will include refusal by Callaghan J to recuse himself …
1. In response to part of the Listing arrangements and request by the registry in relation to VID1148/2019 Rudy Frugtniet v Secretary Department of Social Services & Anor, of 7th August 2020, I specifically requested on the 10th August 2020, that O’Callaghan J not comprise the Full Court, given his involvement in other related matters, but that has not been adhered too.
2. I made a formal request for O’Callaghan J to recuse himself from the proceedings for the reasons I gave in my email correspondence of the 5th November 2020, for which His Honour declined to recuse himself in response by way of email dated 5th November 2020, but gave no reasons for which the Appellant duly requests same. I note that in the Callychurn matter notwithstanding the ultimate decision of the Full Court as a matter of law, Rares J and Collier J expressed a clear and cogent error of law, contrary to His Honour’s reticence in this regard. In correspondence of the 3rd December 2020, including attachment of supplementary submission which was attached a procedural matter of hearing an application from a single judge not comprising a Full Court, but instead sitting as single judge comprising the Full Court when it was only a matter of 21 days to appeal to a Full Court instead of the misapprehension of 28 days which the applicant filed his appeal, which the Federal Court changed eventually. What we cannot have in the interests of justice is colleagues from the same state all comprising the Full Court simply upholding decisions from the same state whereas in this matter both of the other justices have not had any dealings with the Appellant so that no objection is taken to either.
…
8. I therefore reiterate as part of the reasons for decision by the Full Federal Court that it provide reasons for Callaghan J refusing to recuse himself from the proceeding, including reasons for not entertaining the application for leave to include a further ground of appeal that was listed as a fundamental ground of law that did not require any fact finding, although s44(7) does also provide for same should any fact have arisen, was within the discretion the of the Court which it could either have refused or granted and given reasons, instead suggesting that it was not within the scope of the appeal, is simply fundamentally wrong in law, and must therefore give reasons why so it was not within the scope of the appeal.
The Appellant besides making the request for reasons in relation to both matters referenced in this correspondence merely reiterates with emphasis the submissions already made and trust the Court will make its decision in accordance with law.
(Errors and emphasis in original.)
6 On 11 March 2021, the court received another lengthy email from the appellant, which relevantly stated:
Subsequently extension of time application was refused by the Federal Court of which the present Justice O’Callaghan J as a single justice comprised the Full Court and would not exercise the discretion to determine the matter as a Full Court comprising himself with two other Justices of the Federal Court given that the application was within 28 days of the primary decision but not within 21 days, which has since been amended and is consistent with other deadlines between Tribunal’s, Courts, and the High Court.
(Errors in original.)
7 In my view, none of the appellant’s communications to the court discloses any cogent reason for me to have recused myself.
8 The basis for the appellant’s request was simply that I had heard two other matters involving him or his former spouse. In one of those cases, Frugtniet v Secretary, Department of Social Services (No 2) [2018] FCA 1767, I refused his application for an extension of time in which to appeal a decision of a single judge of this court. In the other, Callychurn v Australian Securities and Investments Commission [2017] FCAFC 137, a Full Court of which I was a member allowed his former spouse’s appeal in relation to a banning order made under s 80(1) of the National Consumer Credit Protection Act 2009 (Cth).
9 The appellant did not identify or explain any relevant connection between those two proceedings and this one.
10 In those circumstances, I adopt, without the need further to elaborate upon, the following passages from the joint judgment of Gleeson, Leeming and McCallum JJA in Quach v New South Wales Civil and Administrative Tribunal [2020] NSWCA 214 at [4]-[8]:
The test for apprehension of bias is objective. It does not require an assessment of the state of mind of the judge in question, as is necessary on an inquiry about actual bias. The test for recusal is whether a fair-minded lay person, with knowledge of the matters relied upon by the applicant, might reasonably consider that the respective members of the Court might not carry out their judicial functions as a member of the Court with an impartial and unprejudiced mind.
We are satisfied that such a person would not reach that conclusion based on the complaint made by Mr Quach that we have sat on other matters involving unsuccessful applications by Mr Quach. In none of these matters have we made findings adverse to Mr Quach’s credibility. Our involvement in them does not demonstrate an inability to deal fairly, according to law, with any additional application made by Mr Quach.
Mr Quach was unable to identify any logical connection between the dismissal of his previous applications to set aside the vexatious proceedings order and the issues that need to be determined on the present application, such that a fair-minded lay person might reasonably apprehend that the members of the Court might not bring an impartial and unprejudiced mind to the resolution of the questions for decision on the notice of motion.
We are mindful that it is our duty to determine matters which come before us as members of the Court and also that it is our duty not to withdraw unless there are reasons which require us to do so. As Mason J said in Re JRL; Ex parte CJL [(1986) 161 CLR 342] at 352:
Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of a judge, they will have their case tried by someone thought to be more likely to decide the case in their favour.
(Footnotes omitted.)
11 For those reasons, I declined to recuse myself.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice O’Callaghan. |
Associate:
REASONS FOR JUDGMENT
WHEELAHAN AND SNADEN JJ:
Introduction
12 The appellant appeals the dismissal by a judge of this court of an appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the General Division of the Administrative Appeals Tribunal that affirmed a decision of a delegate of the Secretary to apply unpaid family tax benefit due to the appellant in partial discharge of the appellant’s indebtedness to the Commonwealth on account of his receipt of parenting payments to which he was not entitled.
Background
13 The primary judge set out a chronology of events as an appendix to his Honour’s reasons for judgment. That chronology indicates that this matter has some history to it. However, the facts relevant to the disposition of the appeal are of smaller compass. We will set out the facts before referring in greater detail to the applicable legislation.
The Newstart debt
14 Between 21 August 1988 and 6 July 2000, the appellant received social security payments in the form of a Newstart allowance in the total sum of $19,665.85. The appellant was not entitled to these payments, and we will refer to the total of such payments as the Newstart debt.
15 On 11 February 2002, a delegate of the Secretary decided to recover the Newstart debt. The delegate’s decision to recover the Newstart debt was affirmed on an internal review, but on 24 September 2004 the decision to recover the debt was set aside by the Administrative Appeals Tribunal: Frugtniet v Secretary, Department of Family and Community Services [2004] AATA 996. The Tribunal’s determination to set aside the delegate’s decision to recover the Newstart debt was based on the ground that there had not been compliance with s 11 of the Data-Matching Program (Assistance and Tax) Act 1990 (Cth) (Data-Matching Act), which required that notice be given by an agency before taking action to recover an overpayment of personal assistance because of information given in a data matching cycle authorised by the Act. At the time the Tribunal set aside the decision, the Secretary had recovered the sum of $8,701.09 from the appellant. That sum was subsequently repaid to the appellant by a cheque issued on 8 November 2004.
Family tax benefit
16 Following the Tribunal’s decision of 24 September 2004, the Secretary sought to recover the Newstart debt by withholding payments that were due to the appellant by way of family tax benefit, and by applying those payments to discharge the Newstart debt. Between 22 December 2004 and 28 July 2011, payments of family tax benefit in the total sum of $19,665.85 were withheld from the appellant.
17 On 31 October 2016, and following a complaint made by the appellant to the Ombudsman, a delegate of the Secretary determined that the appellant had, again, not been given notice under s 11 of the Data-Matching Act following the Tribunal’s decision of 24 September 2004, and that therefore a requirement for the further attempt to recover the Newstart debt had not been satisfied.
The parenting payment debt
18 Separately, in the period 8 May 2011 to 17 February 2015 the appellant received social security payments in the form of parenting payments to which he was not entitled. Because the appellant was not entitled to the parenting payments, there arose a debt due to the Commonwealth: Social Security Act 1991 (Cth), s 1223(1). We will refer to this debt as the parenting payment debt.
19 Calculations by the Secretary of the amount of the parenting payment debt have varied from time to time. The Tribunal’s reasons for the decision that is the subject of this appeal record at [25] that on 6 April 2016, a delegate of the Secretary calculated the parenting payment debt in the sum of $65,620.02. That calculation followed an earlier decision of the Tribunal dated 15 February 2016 which had remitted the question of the parenting payment debt for reconsideration and recalculation.
20 On 31 October 2016, a delegate of the Secretary informed the appellant that the withheld payments of family tax benefit would be applied to the parenting payment debt. The Tribunal’s reasons at [26] set out some passages of a letter from the delegate to the appellant which stated –
On 22 December 2004, upon your claim and grant of Family Tax Benefit, recovery of Debt Id 35225379 [i.e., the [Newstart] debt of $19,665.85] recommenced, via withholdings from your Centrelink payments. Withholdings continued until the debt was fully recovered on 22 December 2004.
We accept that a fresh notice was not given to you after the AAT decision of the 24 September 2004 and therefore the Department did not strictly satisfy the requirements to recommence recovery on 22 December 2004.
On that basis the Department has given consideration to refunding withholdings for Debt 35225379. However, under the debt recovery provisions of the Social Security Act 1991, the withholdings can be applied to an outstanding debt owed to the Department. Accordingly, repayments recovered from Debt Id 35225379 will be transferred to outstanding debt Id P2243926. As you are aware, Debt Id 2243926 relates to a parenting payment debt as first notified to you on 18 May 2015.
21 The Tribunal found that on 7 December 2016, a delegate of the Secretary determined that the withheld family tax benefit payments due to the appellant (from 22 December 2004 to 28 July 2011) would be applied to reduce the appellant’s parenting payment debt. On 3 February 2017, the delegate’s decision of 7 December 2016 was confirmed by a review officer. That confirmation is evidenced by a letter from the authorised review officer to the appellant dated 3 February 2017. No primary record of the decision of 7 December 2016 was before the court apart from the Tribunal’s finding at [27], and the decision of the review officer of 3 February 2017, which confirmed the decision of 7 December 2016 as being correct.
22 A chronology prepared by the lawyers for the Secretary that was before the primary judge and which formed the basis for the appendix to his Honour’s reasons records that on 27 September 2017 the Secretary amended the parenting payment debt by reducing it to $34,097.41. The reason for the reduction of the parenting payment debt, and its calculation, are not issues before this court.
First review by the Tribunal
23 On 8 March 2017, the appellant applied to the Tribunal to review the delegate’s decision to apply the family tax benefit that was owing to the appellant in reduction of the parenting payment debt. The application for a first review was authorised by the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (Administration Act), s 111.
24 On 18 October 2017, the Social Services and Child Support Division of the Tribunal affirmed the decision under review.
Second review by the Tribunal
25 On 24 October 2017, the appellant applied to the Tribunal for a second review of the delegate’s decision to apply the family tax benefit that was owing to the appellant in reduction of the parenting payment debt. The application for the second review was authorised by the Administration Act, s 128.
26 On 28 March 2019, the Tribunal affirmed the decision under review. In affirming the decision, the Tribunal held that as a result of the Secretary’s admission and determination that there had been no entitlement to withhold the family tax benefit payments on account of the Newstart debt, the appellant had an entitlement to be paid family tax benefit payments in the sum of $19,665.85, and that payments in this sum had been incorrectly withheld from the appellant. The Tribunal also determined that the appellant had an obligation to pay the Secretary the parenting payment debt in the sum of $65,620.02, and that part of this debt could be recovered by applying the family tax benefit in the sum of $19,665.85 that remained owing. In so determining, the Tribunal had regard to the terms of s 84A(1) of the Administration Act, which establishes a form of statutory set off, and to which we will refer in more detail below.
27 The Tribunal held that s 84A of the Administration Act was engaged because: (1) the appellant was entitled to an amount of family assistance, being the sum of $19,665.85 that had been withheld without notice under s 11 of the Data-Matching Act; and (2) a debt was owed by the appellant, being the parenting payment debt, which was a debt due by the appellant to the Commonwealth under s 1223(1) of the Social Security Act. The Tribunal held that the Secretary was therefore empowered to determine that the appellant’s entitlement to the family assistance payments be set off against the parenting payment debt, and the Tribunal affirmed the decision of the delegate of the Secretary to do so.
The legislation
28 There are five Acts to which the parties to the appeal referred –
(1) the Social Security Act 1991 (Cth), to which we have already referred;
(2) the A New Tax System (Family Assistance) Act 1999 (Cth) (Family Assistance Act);
(3) the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (to which we have referred as the Administration Act);
(4) the Budget Savings (Omnibus) Act 2016 (Cth) (Omnibus Act); and
(5) the Data-Matching Program (Assistance and Tax) Act 1990 (Cth) (to which we have referred as the Data-Matching Act).
Social Security Act 1991 (Cth)
29 The Social Security Act is relevant to the parenting payments that the appellant received, and to which he was not entitled. An entitlement to receive a parenting payment arises under Part 2.10 of Chapter 2 of the Social Security Act if the conditions set out therein are engaged. Under the definitions in s 23 of the Act, a parenting payment is a “social security payment”. Part 5.2 of the Social Security Act provides for the recovery of social security payments to which a person was not entitled. Section 1223 provides that the amount of a payment made to a person who was not entitled to the payment is a debt due to the Commonwealth –
1223 Debts arising from lack of qualification, overpayment etc.
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
30 Part 5.3 of the Social Security Act provides for a number of methods for the recovery of debts, including: deductions from any social security payments or arrears of social security payments (s 1231); legal proceedings (s 1232); a garnishee notice (s 1233); and repayment by entering into an arrangement (s 1234). Additional methods of recovery of debts due under the Social Security Act are provided for by the Administration Act by the deduction from instalments of or other entitlements to family assistance, to which we refer below.
A New Tax System (Family Assistance) Act 1999 (Cth)
31 The Family Assistance Act provides for the payment of a range of benefits that are defined in s 3 of the Act as “family assistance”. One of those benefits is the family tax benefit which is payable to persons who are eligible under Division 1 of Part 3 of the Act. In broad terms, a person is eligible for a family tax benefit if: (1) the person has a dependent child or full time secondary student aged 16 to 19 who is not receiving a pension, payment or benefit such as youth allowance; (2) the person provides care for the child for at least 35% of the time; and (3) the person meets an income test. There are a number of exclusions and qualifications for which provision is made in the Act.
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth)
32 The Administration Act makes further provision for the entitlement to receive payment of family tax benefit. Expressions used in the Administration Act that are defined in the Family Assistance Act have the same meaning as in that Act: s 3(2). Under Division 1 of Part 3 of the Administration Act, the general position is that the only way a person can become entitled to a benefit is to make a claim (s 5), which can include a claim for the payment of family tax benefit by instalment (s 23), or for a past period (s 7(1), s 17). Currently, a claim for a past period must relate to a period that falls wholly within one income year, and must be made within the income year after the relevant income year, or such further period no later than the end of the second income year as the Secretary allows (s 10(2), (2A)). Prior to the amendments to s 10 that commenced on 28 June 2013, the time within which to make a claim for a past period was a fixed period of time terminating at the end of two income years immediately following the relevant income year. Generally, if a person is entitled to be paid family tax benefit by instalment, then after each instalment period the Secretary must pay the instalment into a bank account nominated and maintained by the claimant, where instalment periods are successive periods of 14 days after a determination is made by the Secretary that the person is entitled to be paid family tax benefit: s 23.
33 Section 13(1) of the Administration Act imposes a duty on the Secretary to determine a claim for family tax benefit –
13 Secretary must determine claim
(1) If an effective claim is made, the Secretary must determine the claim in accordance with this Subdivision. If a claim is not effective, it is taken not to have been made.
34 In relation to the payment of family tax benefit by instalment, s 16(1), (2) and (4) of the Administration Act provide for the determination of the entitlement –
16 Determination of instalment entitlement claim
(1) This section applies if the claim is one for payment of family tax benefit by instalment.
(2) If the Secretary is satisfied that the claimant is, at the time the Secretary makes the determination on the claim, eligible for family tax benefit in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act, the Secretary must determine that the claimant is entitled to be paid family tax benefit for each day on which the determination is in force at the daily rate at which the Secretary considers the claimant to be eligible.
Additional entitlement in subsection (2) cases
(4) If:
(a) the Secretary is satisfied as mentioned in subsection (2); and
(b) the Secretary is also satisfied that the claimant was eligible for family tax benefit in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act during the whole or part of the period since the claim was made;
the Secretary must determine that the claimant is entitled to be paid that amount of family tax benefit.
35 Section 17 of the Administration Act provides for the determination of the entitlement to family tax benefit for a past period –
17 Determination of past period entitlement claim
If:
(a) the claim is one for payment of family tax benefit for a past period; and
(b) the Secretary is satisfied that the claimant was eligible for family tax benefit:
(i) for the whole of the period in accordance with Subdivision A or C of Division 1 of Part 3 of the Family Assistance Act; or
(ii) for part of the period in accordance with Subdivision A of that Division and for the remainder of the period in accordance with section 31 of that Act;
the Secretary must determine that the claimant is entitled to be paid family tax benefit for the past period.
36 Section 66(1) of the Administration Act provides that payments of identified benefits, including family tax benefit, are “absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise”. There are a number of exceptions in s 66(2), including that the inalienability is subject to s 84A, relating to setting off a person’s entitlement to family assistance against a debt of the person.
37 Part 4 of the Administration Act is titled “Overpayments and debt recovery”. Section 68 provides that, for the purposes of Part 4, an amount of family assistance is taken to be paid to a person if (inter alia) it was applied against a debt under the Social Security Act –
68 References to amount paid to person
For the purposes of this Part, an amount of family assistance is taken to be paid to a person if:
(a) the amount is applied against a liability of that person or another person for:
(i) a primary tax; or
(ii) a debt under this Act or the Social Security Act 1991; or
(b) the amount is set off under this Part against another amount.
Note: CCS or ACCS is also taken to have been paid to a person if a fee reduction amount is passed on to an individual (see section 201A).
38 Section 82 of the Administration Act provides for methods of recovery of debts due to the Commonwealth under several provisions of the Administration Act, and provides (inter alia) –
82 Methods of recovery
(1) A debt owed by a person is recoverable by the Commonwealth by one or more of the following means:
(a) deductions from instalments of family tax benefit to which the person is entitled;
(b) setting off family assistance to which the person is entitled against the debt;
…
(i) legal proceedings;
(j) garnishee notice.
Note: For child care service payment see subsection 3(1).
(3) In this section:
debt means:
(a) a debt due to the Commonwealth under section 71, 71A, 71B, 71C, 71D, 71E, 71F, 71G, 71H, 71I, 71J, 71K, 71L, 71M, 73, 74, 76, 77, 78B or 80; or
(b) a debt due to the Commonwealth for which a person is liable because of section 75.
39 The debts referred to in s 82 do not include debts due under the Social Security Act, which are the subject of s 84 and s 84A. Section 84 provides (inter alia) –
84 Deductions from debtor’s family tax benefit
(1) This section applies to a debt if:
(a) under section 82, the debt is recoverable by the Commonwealth by means of deductions from instalments of family tax benefit to which the person is entitled; or
(b) the debt is a debt due by the person to the Commonwealth under the Social Security Act 1991, …; or
…
(2) The debt is to be deducted from instalments of family tax benefit to which the person is entitled in the following way:
(a) the Secretary is to determine the amount by which each instalment of family tax benefit is to be reduced; and
(aa) a determination under paragraph (a) may be an amount that would reduce the payment to nil if the person has consented to the amount of the deduction being an amount that would reduce the payment to nil; and
(b) each instalment of family tax benefit is to be reduced by the amount determined by the Secretary until the sum of those amounts, and any amounts recovered under an Act referred to in paragraph (1)(b), is equal to the debt.
The Secretary may from time to time vary the amount by which instalments of family tax benefit are to be reduced.
40 Section 84A of the Administration Act enables the Secretary to set off an amount of family assistance against a debt due under the Social Security Act. Section 84A has its genesis in s 227 of the Administration Act as originally enacted, which provided for the setting off of arrears of family assistance against debts under the Administration Act –
227 Setting off arrears against debt owed
(1) If:
(a) a person is entitled to an amount by way of arrears of family assistance; and
(b) the person incurs a debt under this Act;
the Secretary may determine that the whole or a part of the entitlement to arrears is to be set off against the debt.
(2) Under subsection (1), the Secretary may set off a person’s arrears of child care benefit only against a debt the person incurs in relation to child care benefit.
(3) If the Secretary makes a determination under subsection (1), the amount of the entitlement to arrears and the amount of the debt are reduced accordingly.
41 Section 227 of the Administration Act was repealed, and s 84A was inserted by the A New Tax System (Family Assistance and Related Measures) Act 2000 (Cth), Schedule 2, items 82 and 144. Under s 84A as first enacted, the debts against which an entitlement to family benefit could be set off extended beyond debts arising under the Administration Act to debts due under the Social Security Act, as provided for by s 84A(1)(b)(ii) –
84A Setting off arrears of family assistance against debt owed
(1) This section applies:
(a) to a person if the person is entitled to an amount by way of arrears of family assistance; and
(b) to a debt owed by the person if:
(i) under section 82, the debt is recoverable by the Commonwealth by means of setting off arrears of family assistance to which the person is entitled against the debt; or
(ii) the debt is a debt due by the person to the Commonwealth under the Social Security Act 1991.
(2) The Secretary may determine that the whole or a part of the entitlement to arrears is to be set off against the debt.
…
(4) If the Secretary makes a determination under subsection (2), the amount of the entitlement to arrears and the amount of the debt are reduced accordingly.
42 Both s 227, and s 84A as originally enacted, applied to entitlements to an amount by way of arrears of family assistance. The prospect that there might be arrears of family assistance to which a person may be entitled was specifically contemplated by s 83(2) of the Administration Act as originally enacted, which referred to “a payment of arrears to cover earlier underpayments” –
(2) For the purposes of this Division, a person is taken to be receiving family assistance even if the person is only to be paid a single payment (for example, a lump sum payment paid pursuant to a retrospective claim or a payment of arrears to cover earlier underpayments). In such a case, a deduction from the single payment may be made under the relevant section.
43 Section 83 was repealed by the 2000 amendments which inserted s 84A. The explanatory memorandum to the Bill which led to the 2000 amendments referred in a number of contexts to arrears of family tax benefit: Australia, House of Representatives, A New Tax System (Family Assistance and Related Measures) Bill 2000, Explanatory Memorandum, items 22, 82, 97, 99, 103. Those contexts included where there was a review of a decision pursuant to s 105, s 109A or s 113 of the Administration Act, and the entitlement of a person to family benefit was increased.
44 Section 84A of the Administration Act has been amended several times. Part 1 of Schedule 3 of the Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Act 2008 (Cth), which commenced on 25 June 2008, omitted the reference to “arrears” from the heading to s 84A, from s 84A(1)(a), (1)(b)(i), (2) and (4), and from related provisions (the 2008 amendments). There was no transitional provision for the 2008 amendments to which we have referred. The background to these amendments was set out in the explanatory memorandum to the Bill: Australia, House of Representatives, Family Assistance Legislation Amendment (Child Care Budget and Other Measures) Bill 2008, Explanatory Memorandum. On page 40 of the explanatory memorandum, the following was stated –
Part 1 – Setting off of [sic] entitlements
Background
Part 4 of the Family Assistance Administration Act deals with overpayments and debt recovery. Section 82 sets out the methods of recovery of debts. One way in which a debt may be recovered is through setting off ‘arrears’ of family assistance against the debt. Debts recoverable under the Family Assistance Administration Act are being recovered under these provisions from any amount of family assistance, to which the person who owes a debt, or another consenting person, is entitled.
Amendments are made for two purposes.
The amendments clarify debt recovery provisions to alleviate concerns that the current provisions authorising recovery of debts from ‘arrears’ of family assistance may not be robust enough to support recovery from any ‘family assistance entitlement’ amounts. The amendments made in this Part ensure that an amount of family assistance to which a person is entitled under the family assistance law may be set off against the person’s debt due to the Commonwealth or against another person’s debt if the entitled person consents to the set off. These amendments do not alter the range of family assistance payments from which debts may be recovered.
45 On page 41 of the explanatory memorandum under the heading “Explanation of the changes”, the following was stated (inter alia) –
Generally, the amendments replace the reference to arrears of family assistance, with the reference to family assistance to which the person is entitled.
Section 82 of the Family Assistance Administration Act sets out the methods of recovery of debts, which are recoverable under this Act. One way in which a debt may be recovered is through setting off ‘arrears’ of family assistance to which the person is entitled against a debt of the person (subsection 82(1)(b)). Item 3 removes the reference to arrears from paragraph 82(1)(b), with the effect that any amount of a person’s entitlement to family assistance payment can be used to offset the person’s debt. Item 3 also makes it clear that recovery of a debt by deduction from instalments of family tax benefit under paragraph 82(1)(a) is a distinct method of recovery which does not fall in the ambit of the recovery method, to which paragraph 82(1)(b) applies.
Item 4 makes a similar amendment to paragraph 82(1)(e) which provides for setting off arrears of a consenting person’s family assistance to which the person is entitled against another person’s debt. Item 4 also makes it clear that recovery of a person’s debt by deduction from a consenting person’s instalments of family tax benefit under paragraph 82(1)(d) is a distinct method of recovery which does not fall in the ambit of the recovery method to which paragraph 82(1)(e) applies.
Section 84A sets out the rules that apply to setting off a person’s entitlement to arrears of family assistance against the person’s debt. Amendments made by items 5 to 9 remove the reference to ‘arrears’ from section 84A with the effect that the same rules apply to setting off a person’s family assistance entitlement against the person’s debt.
Following the amendments made to section 84A, item 1 removes the reference to ‘arrears’ from paragraph 66(2)(ba) which refers to a set off from arrears of family assistance under section 84A and items 15, 16 and 17 make similar consequential amendments to subparagraphs 95(3)(ia) and paragraphs 95(4)(b) and 99(2)(b) respectively.
(Emphasis added.)
46 In summary, the explanation given by the explanatory memorandum for the omission of the references to “arrears” in s 84A and related provisions of the Administration Act was to broaden the type of entitlements to family benefit which could be set off against a debt.
47 As a result of several amendments, s 84A of the Administration Act now provides –
84A Setting off family assistance against debt owed
(1) This section applies:
(a) to a person if the person is entitled to an amount of family assistance; and
(b) to a debt owed by the person if:
(i) under section 82, the debt is recoverable by the Commonwealth by means of setting off family assistance to which the person is entitled against the debt; or
(ii) the debt is a debt due by the person to the Commonwealth under the Social Security Act 1991 …; or
…
(2) The Secretary may determine that the whole or a part of the entitlement is to be set off against the debt.
…
(4) If the Secretary makes a determination under subsection (2), the amount of the entitlement and the amount of the debt are reduced accordingly.
Budget Savings (Omnibus) Act 2016 (Cth)
48 Part 2 of Schedule 13 of the Omnibus Act effected amendments to the Administration Act which commenced on 1 January 2017. Prior to these amendments, s 86(1) of the Administration Act provided for a six year limitation period for action under s 84, 84A, or 87A of the Act for the recovery of a debt –
Subject to subsections (3), (4) and (5), action under section 84, 84A or 87A for the recovery of a debt is not to be commenced after the end of the period of 6 years starting on the first day on which an officer becomes aware, or could reasonably be expected to have become aware, of the circumstances that gave rise to the debt.
49 Section 86 was repealed by the Omnibus Act, and s 93B was inserted –
93B No time limit on debt recovery action
For the purposes of this Part, legal proceedings, or any action under a provision of this Part, for the recovery of a debt may be commenced or taken at any time.
50 The Omnibus Act contained transitional provisions in item 39 of Part 2 of Schedule 13 –
39 Application provisions—family assistance amendments
(1) The amendments of the A New Tax System (Family Assistance) (Administration) Act 1999 made by this Part apply in relation to:
(a) a debt that arises on or after the commencement of this item; and
(b) a debt that arose before the commencement of this item, to the extent that the debt was outstanding immediately before that commencement.
(2) Paragraph (1)(b) applies in relation to a debt only if, immediately before the commencement of this item, action under section 84, 84A, 87, 87A or 89, or legal proceedings under section 88, of the A New Tax System (Family Assistance) (Administration) Act 1999 could be commenced or taken for the recovery of the debt.
51 Item 39(2) is an important qualification on the retrospectivity effected by clause 39(1)(b) which has the effect that the enforceability of a debt in respect of which the six year period under s 86 has lapsed is not revived: cf, Maxwell v Murphy (1957) 96 CLR 261.
Data-Matching Program (Assistance and Tax) Act 1990 (Cth)
52 Data-matching involves transferring data about persons between Commonwealth agencies, and matching the data through data-matching cycles. The Data-Matching Act regulates how the various assistance agencies and the Australian Taxation Office may use tax file numbers to compare personal information so that incorrect payments may be detected.
53 Section 11 of the Data-Matching Act contains a notice requirement where an agency considers taking action because of information given in a data-matching cycle, and provides –
11 Notice of proposed action
(1) Subject to subsections (1A), (1B) and (4), where, solely or partly because of information given in Step 1, 4 or 6 of a data matching cycle, an assistance agency considers taking action:
(a) to cancel or suspend any personal assistance to; or
(b) to reject a claim for personal assistance to; or
(c) to reduce the rate or amount of personal assistance to; or
(d) to recover an overpayment of personal assistance made to;
a person, the agency:
(e) must not take that action unless it had given the person written notice:
(i) giving particulars of the information and the proposed action; and
(ii) stating that the person has 28 days from the giving of the notice in which to show cause orally or in writing why the action should not be taken; and
(f) must not take that action until the person has responded orally or in writing to the notice or the 28 days end, whichever occurs first.
…
(1B) If the assistance agency takes action referred to in subsection (1A), it must give the person written notice, with particulars of the information and the action:
(a) if practicable—before the action is taken; or
(b) if not—as soon as practicable after the action has been taken.
…
The appeal under s 44 of the Administrative Appeals Tribunal Act 1975
54 Before the primary judge, the appellant was self-represented. The notice of appeal from the Tribunal raised three matters that the appellant characterised as questions of law –
(a) Whether the Tribunal erred in its interpretation and construction of the provisions of A New Tax System (Family Assistance) Act 1999 (Cth), A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), Data-Matching Program (Assistance and Tax) Act 1990 (Cth), and the Social Security Act 1991 (Cth).
(b) Whether the Tribunal erred in affirming the decision of the Secretary which was an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made.
(c) Whether the Tribunal erred in law in that procedures that were required by law to be observed in connection with the making of the decision to withhold family tax payments for the period 2004 to 2011 were not observed, so that the decision was otherwise contrary to law.
55 In relation to the questions of law that the appellant identified, before the primary judge the appellant relied upon the following grounds in his notice of appeal from the Tribunal –
1. The Tribunal erred in its construction and application that withholding family tax benefits for the period 2004-2011 that were in law, payable to the applicant in lieu of a future debt, was not only unlawful in that that it was obliged to not recover the debt arising from the decision of Frugtniet and Secretary, Department of Family and Community Services [2004] AATA 996 unless it served the proper notice under the Data Matching Act which the Respondent has admitted to not doing at any time so that the decision was otherwise contrary to law.
2. The Tribunal erred in its construction and application of the principles according to law relating to the respective statutory acts of Parliament in that the debt that arose as a result of the decision that the applicant was member of a couple was made in 2014, for the period 2011-2015 which required re-calculation was reduced from $60,000 to $30,000, independent of any withheld payments, could not be offset further by payments withheld unlawfully during the period 2004-2011 for a completely different debt for which it had not complied with by serving the proper notice that would have permitted withholding of family tax benefit towards that debt.
3. The Tribunal erred in its construction and application of the respective acts in that the payments that were withheld unlawfully as recovery or offsetting of any debt at that time could only be implemented if the proper notice pursuant to the Data Matching Act had been served which it did not do, was further statute barred as more than six years had elapsed.
4. The Tribunal erred in affirming the 1st Tier Tribunal decision’s to affirm the decision of the Secretary to use withholding family tax payments towards a debt that did not exist as no notice had been provided to offset a completely different debt raised beyond the statutory time limit to recover of six years being an improper exercise of the power conferred by the enactment in pursuance of which it was purported to be made.
56 The primary judge treated the appellant’s grounds of appeal from the Tribunal as giving rise to five issues –
(1) whether the Secretary failed to provide proper notice in accordance with s 11 of the Data-Matching Act and was therefore not entitled to withhold payments of family tax benefit to repay the Newstart debt;
(2) whether the Secretary failed to commence action within 12 months of receiving the information from the matching agency, as required by s 10(3) of the Data-Matching Act;
(3) whether the family tax benefit payments were withheld unlawfully with the consequence that they could not be applied to the appellant’s parenting payment debt under s 84A of the Administration Act;
(4) did s 84A of the Administration Act apply only to current entitlements of family assistance, and not to past or accrued entitlements; and
(5) was the Secretary “statute barred” on the ground that the Secretary had not taken action within the six year limitation period to recover the Newstart debt and therefore there was no longer any debt.
57 In addition, the primary judge addressed a sixth issue that was raised by the appellant before his Honour at the hearing, namely whether the determination by the Secretary under s 84A of the Administration Act was for an improper purpose.
58 In relation to the first and second issues, the primary judge held that the Data-Matching Act had no relevance to the decision under review. That was because the appellant’s parenting payment debt did not arise as a result of information received through data-matching.
59 As to the third issue identified by the primary judge, his Honour held that any failure to provide a notice in accordance with s 11 of the Data-Matching Act in relation to the Newstart debt did not preclude the Secretary from using the family tax benefit to which the appellant was entitled to off-set the appellant’s parenting payment debt in accordance with s 84A of the Administration Act.
60 In relation to the fourth issue, the primary judge captured the appellant’s submission as being that the set off mechanism in s 84A of the Administration Act applied only to debts which arose prior to the accrual of the entitlement to receive the payment. His Honour rejected the appellant’s claim, holding that the Tribunal had not been in error in determining that the appellant had been entitled to the family tax benefit, which was family assistance for the purposes of s 84A(1)(a) of the Administration Act, and that the appellant’s submissions to the contrary were misconceived. His Honour held that the evident object of s 84A was to enable the recovery of debts owed to the Commonwealth where there was an ability to do so through offsetting entitlements, and that the appellant’s contention, if accepted, would undermine that object, and otherwise derived no support from the purpose or policy of the provision.
61 As to the fifth issue, this issue did not in truth arise because, as the primary judge recognised at [22] of his Honour’s reasons, the decision relevant to the appeal concerned the offsetting of the family tax benefit payments that were due against the parenting payment debt that had arisen. In any event, his Honour addressed the point and accepted a submission that had been advanced on behalf of the Secretary, namely that amendments to the Administration Act that were effected by the Omnibus Act removed the relevant limitation period, and that the effect of the transitional provisions was that the removal of the limitation period applied to debts that arose before the commencement of the relevant amendments. Later, we will refer briefly to the fact that the submissions that were made on behalf of the Secretary to the primary judge on this question, and the corresponding submissions that were made to this court, contained incomplete references to the relevant statutory provision.
62 Finally, in relation to the appellant’s claim that the determination had been made for an improper purpose, the primary judge observed that the claim was largely unparticularised, and concluded that having read the relevant documents referred to by the appellant, there was no basis for concluding that the determination of the Secretary for the purposes of s 84A(2) of the Administration Act was for an improper purpose.
The appeal to this court
63 Before this court, the appellant remained self-represented, and prepared his own documents. He relied on an amended notice of appeal dated 18 February 2020 which he was given leave to file. By his amended notice of appeal, the appellant raised two grounds of appeal, which were accompanied by particulars. In the main, the grounds set out in the appellant’s amended notice of appeal are confused and difficult to follow. Rather than summarising the grounds of appeal, they are set out in the annexure to these reasons. Likewise, the appellant’s submissions on appeal, both in writing and at the hearing, were disordered and difficult to follow. The appellant’s submissions were broad-ranging, venturing beyond matters within the reasonable scope of the appeal from the Tribunal to the primary judge, and the appeal to this court. Further, following the conclusion of the hearing of the appeal, and without leave having been given, the appellant sent to the court further written submissions, and a proposed further amended notice of appeal which we will address later in these reasons.
64 In order to seek to address the case advanced by the appellant on appeal, it is necessary to seek to distil the essential points that he advanced by the grounds in his amended notice of appeal. In relation to the first ground of appeal, the particulars appear to advance the following claims, which overlap to some extent –
(a) Claim 1(a) – Having regard to the history of s 84A of the Administration Act, which originally applied to arrears of family assistance, s 84A was limited in its operation to arrears of payments due to an individual who made a claim to receive family tax benefit in annual payments.
(b) Claim 1(b) – For the purposes of s 84A of the Administration Act, the question whether a person is entitled to an amount of family assistance is not to be assessed by reference to the ordinary meaning of the word “entitled”, but by reference to whether an entitlement arose under s 16 or s 17 of the Act. Consequently, the appellant’s entitlement to family tax benefit was not a present entitlement that could be set off against the debt arising under the Social Security Act.
(c) Claim 1(c) – An entitlement to receive family tax benefit resulted in the benefit being payable at the time that the entitlement accrued, and a person was receiving a pension, benefit or allowance under the Act only during the period commencing from the earliest day on which the payment is payable and concluding on the latest day for which the benefit is payable, so that deductions could be made only during that period, and could be made only progressively. Section 84A did not authorise the deduction of a single sum from a lump sum referrable to entitlements that had accrued over the period between 2004 and 2011.
(d) Claim 1(d) – Section 84A of the Administration Act did not authorise the extinguishment of the entitlement to receive family tax benefit that was payable by instalment in the period 2004 to 2011 when the parenting payment debt did not arise until the later period of 2011 to 2015.
65 In relation to the second ground of appeal which alleges improper purpose, the particulars advance the following claims –
(a) Claim 2(a) – The primary judge erred at [48] of his Honour’s reasons in holding that a six year limitation period for the recovery of the debt arising under s 86 of the Administration Act in the form it took before the amendments effected in 2016 by the Omnibus Act did not apply to the recovery of that debt.
(b) Claim 2(b) – By reason of the failure to comply with s 11 of the Data-Matching Act, the Newstart debt was not recoverable, and the transfer of the deductions that had been made from the family tax benefit payments to discharge the parenting payment debt was not authorised.
Consideration
66 It is desirable to identify the nature of the appellant’s entitlement to receive family tax benefit, and the Commonwealth’s entitlement to recover debts due to it on account of overpayment of social security payments. Any right of the appellant to receive outstanding family tax benefit does not give rise to a debt enforceable by action. Rather, if there has been any failure to pay an entitlement in accordance with statutory criteria, then the appropriate remedy is a public law remedy: Health Insurance Commission v Peverill [1994] HCA 8; 179 CLR 226 at 242-243 (Brennan J) (Peverill); Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300 at 310-312 (Williams J), 324 (Fullagar J, Dixon CJ agreeing at 305). Correspondingly, the Secretary’s entitlement to set off an entitlement to family tax benefit in whole or in part against other liabilities must be authorised by statute as a qualification or condition on the performance of the duty to administer the schemes established by the Family Assistance Act, the Administration Act, and the Social Security Act. With that foundation, we turn to the appellant’s two grounds of appeal.
The first ground of appeal
67 Section 84A of the Administration Act in its current form is engaged if a person is entitled to an amount of family assistance. The section is not confined, as it was before the 2008 amendments, to an entitlement to an amount by way of “arrears” of family assistance. One question which was not argued before this court was whether s 84A in the form it took following the 2008 amendments could be invoked in relation to amounts of family assistance to which the appellant was entitled for the period prior to the commencement of the 2008 amendments on 25 June 2008. However, it is not necessary to resolve that question. That is because the 2008 amendments to s 84A which omitted reference to “arrears” were made for the purpose of broadening and not narrowing the scope of entitlements that could be set off against the debts referred to, as the passages of the explanatory memorandum for the Bill to which we referred at [44]-[45] indicate. We conclude below that the appellant’s entitlements were “arrears” for the purposes of s 84A prior to the 2008 amendments, and consequently also constituted “an amount of family assistance” to which the appellant was entitled for the purposes of s 84A following the 2008 amendments. Therefore, to the extent that the payments were “arrears”, the 2008 amendments did not alter any right or entitlement that the appellant had to receive payments, which was always subject to the power of the Secretary under s 84A to direct that they be set off against other debts.
Claim 1(a)
68 The appellant submitted before the primary judge that s 84A of the Administration Act applied only to current entitlements to family assistance, and not to past entitlements. On appeal, the appellant developed that submission by seeking to distinguish between entitlements to family benefit by way of instalments under s 16, and entitlements to family benefit in respect of a past period under s 17, and submitted that the operation of s 84A in respect of past entitlements was limited to the latter.
69 Seemingly in the alternative, the appellant also addressed submissions directed to whether the outstanding entitlements to family tax benefit that were the subject of the set off were “arrears”. The appellant submitted by reference to section 7.2.3 of an online Family Assistance Guide published by the Australian Government that family tax benefit arrears payments were limited to circumstances where there was a reassessment of an entitlement with retrospective effect –
FTB arrears payments
An FTB arrears payment is a lump sum amount that arises when a reassessment of an individual’s entitlement (1.1.E.30) occurs with retrospective effect. This can occur when an individual provides some additional information or does something that gives rise to additional entitlement (e.g. resolving their non-lodger status and having a prohibition on instalment payments lifted). These arrears amounts can be used to offset any outstanding FA, social security, and/or other debts due to the Commonwealth.
Act reference: FA(Admin)Act section 84A Setting off FA against debt owed
70 We do not accept the appellant’s submission that, to the extent that the concept of arrears is relevant, it is confined to an entitlement to payments on account of family tax benefit for a past period as determined under s 17 of the Act. That is because there is within the contemplation of the legislation a range of circumstances in which there might be an entitlement to arrears of instalments of family assistance.
71 The ordinary meaning of the word “arrears”, and the context and history of the provisions of the Act do not support the confined construction which the appellant advanced. As to the ordinary meaning, the Shorter Oxford English Dictionary (6th edition) defines “arrear” in meanings 2 and 5 as –
2. Behind in time; behind in the discharge of duties or liabilities; esp. behindhand in payment
…
5. Something in which one has fallen behind; something remaining to be done; a duty or liability undischarged; an outstanding debt. …
72 The amount payable to the appellant as a result of the Secretary’s acceptance that instalments had been withheld without giving a notice under s 11 of the Data-Matching Act are fairly characterised as “arrears” within the ordinary meaning of the word. Further, there are other circumstances in which instalments of family assistance may be payable in arrears that were contemplated by the legislation. As we mentioned at [42] above, s 83(2) of the Act which was originally enacted together with s 227, referred to “a payment of arrears to cover earlier underpayments”. Other circumstances in which payment in arrears may arise include payment following the determination of an entitlement to payments upon internal review, and upon reassessment as contemplated by the Family Assistance Guide. Having regard to the history of s 84A, with its genesis in s 227 of the Act as originally enacted, we consider that “arrears” for the purposes of s 84A as first enacted encompassed entitlements to payments referrable to earlier underpayments. Further, we do not accept that “arrears” for the purposes of s 84A of the Administration Act prior to the 2008 amendments, was confined to arrears of family assistance of the type specifically referred to in the Family Assistance Guide, the terms of which are only a guide and are not a substitute for the text of the legislation. In any event, the Guide refers to the “reassessment” of an entitlement, which is used in a number of places in the Guide, and which we do not regard as a term of art, or as having some special meaning that is founded in the legislation. We consider that the delegate’s acceptance on 31 October 2016 that a fresh notice under the Data-Matching Act had not been given to the appellant, and that therefore the Department did not strictly satisfy the requirements to commence recovery, involved a reassessment of the appellant’s entitlement within the ordinary meaning of “reassessment”. That acceptance was communicated to the appellant in writing in the same document dated 31 October 2016 that gave the appellant notice of the decision to apply the withheld amounts to the parenting payment debt and which was the subject of the Tribunal’s findings at [26] and [57].
73 For the above reasons, the amounts of family tax benefit that the Secretary set off against the parenting payment debt was an amount of family assistance to which the appellant was entitled, and was in the nature of an entitlement to arrears of family assistance. The entitlement therefore fell within the terms of s 84A of the Administration Act both before and after the 2008 amendments.
Claims 1(b) to 1(d)
74 It follows from our reasoning set out above that there was no implied limitation in s 84A of the Administration Act that would prevent the Secretary from determining that an entitlement to arrears of family assistance may be set off against a debt due at the time of the determination. Although payments of family tax benefit are expressed by s 66 of the Administration Act to be inalienable, there are significant exceptions, including in s 66(2)(ba) which refers expressly to the power of the Secretary under s 84A to set off family assistance, in whole or in part, against a debt. Having regard to the history of s 84A and the historical references to “arrears” in s 83(2), s 84A, and s 227 of the Administration Act as originally enacted, s 84A directs attention to the position at the time of the Secretary’s determination to set off. That is because the immediate condition that engages s 84A(1)(a) of the Act is the existence of an entitlement to an amount, which we consider may include arrears. And the reference in s 84A(1)(b)(ii) to “a debt due” by the person to the Commonwealth, is necessarily a reference to a debt owed in the present tense. Therefore, no unauthorised alteration of the appellant’s entitlement to family tax benefit is involved by setting-off the entitlement to be paid arrears of family tax benefit against a debt that subsequently arises under the Social Security Act. The Secretary’s duty to pay the family benefit, albeit in arrears, was modified by the Secretary’s determination to set off the benefit against the parenting payment debt.
75 Some of the language employed by the appellant in his amended notice of appeal, including the claims in paragraphs 4 to 7 of the particulars which are attached, appears to draw inspiration from the reasons for judgment of von Doussa J at first instance in Walker v Secretary, Department of Social Security [1993] FCA 978; 120 ALR 123. In Walker, the appellant received sickness benefits in the sum of $20,287.03 purportedly pursuant to an entitlement under the Social Security Act 1947 (Cth), but as a result of making fraudulent claims in the name of his dead brother. The amount of the sickness benefits that the appellant received as a result of the fraudulent claim was held to be a debt due to the Commonwealth under s 1224(1) of the Social Security Act 1991 (Cth). Subsequently, the appellant made a claim for sickness benefits for a later period which was ultimately accepted by the Tribunal upon review as being valid. The appellant’s entitlement in respect of the claim for the later period was calculated at $2,134.40. A delegate of the Secretary determined to offset this sum against the overpayment of $20,287.03, and this decision was affirmed by the Tribunal. The appellant appealed the Tribunal’s decision. The first issue was whether s 1224 and s 1231 of the Social Security Act 1991 (in the terms that were in force at the relevant time) authorised the recovery of the overpayment by deduction of that amount from the sickness benefits that the appellant was entitled to receive for the subsequent period. Von Doussa J held that the overpayment could not be deducted from the sickness benefits under s 1224 because the appellant was not someone who at the time of the Tribunal’s decision was receiving a pension, benefit or allowance for the purposes of s 1224. His Honour held by reference to the definitional provisions in s 23(2) and (4) of the Social Security Act that a person “is receiving” a pension, benefit or allowance under the Act only during the period commencing from the earliest day on which the payment is payable and concluding on the latest day for which the benefit is payable, and the paragraph contemplates that deductions will be made during that period. His Honour held that because this period had expired before the Tribunal gave its decision, s 1224 had no application to the case, leaving the Secretary to the remedies of legal proceedings, or a garnishee notice under s 1224(2) of the Act (in the terms then in force). However, von Doussa J held that if the appellant took proceedings to recover the sickness benefits of $2,134.40, then the Commonwealth could plead a set off of the overpayment under general law principles, and on this ground the decision of the Tribunal was correct.
76 An appeal from the decision of von Doussa J was allowed: Walker v Secretary, Department of Social Security [1995] FCA 130; 56 FCR 354. Cooper J, with whom Spender J agreed, held that Chapter 5 of the Social Security Act was a code providing for the methods of recovery by the Commonwealth of debts in the nature of overpayments of social security benefits. In arriving at this conclusion, Cooper J cited the reasons of Brennan J in Peverill at 242-243. It followed that the decision of the Tribunal that the appellant was entitled to be paid the sickness benefit did not give rise to a debt enforceable by action, and that accordingly no occasion for a set off under general law principles arose.
77 The basis on which von Doussa J held that deductions of payments of social security benefits could not be made in order to recover a debt due to the Commonwealth turned on the terms of the legislation that were considered by his Honour, namely provisions of the Social Security Act that have since been repealed and replaced, and in respect of which there are no parallel provisions in the Administration Act that fall for consideration in this appeal. In particular, and as we have held, s 84A of the Administration Act authorises the application of the whole or a part of an entitlement to arrears of family assistance to be set off against a debt due under the Social Security Act.
Claim 2(a)
78 One of the submissions made by the appellant to the primary judge in support of his appeal from the Tribunal was that the Secretary had failed to recover the Newstart debt within the six year limitation period that was prescribed by s 86 of the Administration Act in the terms in force prior to its repeal by the Omnibus Act. In response, at [46]-[47] the primary judge accepted a submission that was made on behalf of the Secretary that as a result of the amendments effected by the Omnibus Act the former limitation period did not apply to the recovery of the Newstart debt. This finding was in error because account must be taken of the effect of the qualification in item 39(2) of the transitional provisions in Schedule 13 of the Omnibus Act, which we set out at [50] above. Contributing to that error were the written submissions before the primary judge of the legal representative of the Secretary, which referred to the effect of item 39 of the transitional provisions, but made no reference to the qualification in item 39(2). The same omission was made in the written submissions on behalf of the Secretary before this court, which misrepresented the effect of item 39.
79 It is unnecessary to consider whether action to recover the Newstart debt was barred by s 86 of the Administration Act at any relevant time, because the issue is irrelevant to the resolution of the questions of law raised by the appellant’s appeal. As the summary of background facts at [13]-[22] above shows, the existence of the Newstart debt is no more than part of the background explanation for the partial withholding of instalments of family tax benefit which gave rise to the arrears that were applied in reduction of the parenting payment debt. No question of action to recover the Newstart debt arises on this appeal.
Claim 2(b)
80 As to claim 2(b), which relies on a failure by the Secretary to comply with s 11 of the Data-Matching Act in relation to the recovery of the Newstart debt, this is irrelevant for the same reason, namely that no question of action to recover the Newstart debt arises on this appeal.
81 Before the primary judge the appellant claimed that the application of the arrears of family tax benefit against the parenting payment debt was for an improper purpose. As we have already mentioned, the primary judge held at [39]-[41] that this claim was largely unparticularised, and upon reading some documents on which the appellant had relied, his Honour did not identify any basis for concluding that the Secretary’s determination under s 84A of the Administration Act was for an improper purpose. The appellant referred to the primary judge’s rejection of his claim of improper purpose at [10] of his amended notice of appeal, and at [11] tied this to his claims about non-compliance with the Data-Matching Act, which are irrelevant. In addition, in written submissions, the appellant tied the claim of improper purpose to some incoherent claims about the effect of transitional provisions in item 41 of Schedule 13 of the Omnibus Act affecting amendments made to the Social Security Act. Otherwise, the appellant advanced no coherent submissions to support his contention on appeal that there was error in the primary judge’s rejection of his claim of improper purpose.
The appellant’s post-hearing submissions
82 At the hearing of the appeal, the court gave leave to the legal representative for the Secretary to provide the court with a note to clarify a reference in the Tribunal’s reasons at [57] to the recovery of an amount of “approximately $8,000”, and the court gave the appellant an opportunity to respond to the note. A brief note of four paragraphs was duly provided to the court on behalf of the Secretary that explained that the Tribunal’s reference was to the sum of $8,701.09 that the Secretary had recovered prior to the decision of the Tribunal on 24 September 2004, which was then refunded by cheque, to which we referred at [15] above.
83 Following receipt of the note from the legal representative of the Secretary, the appellant sent a number of documents to the court, without leave –
(a) a document titled “Applicants’ Supplementary Reply Submissions” dated 2 December 2020;
(b) an email to the court dated 3 December 2020 which attached his supplementary submission, and which raised a question relating to the decision of 7 December 2016, to which we will return;
(c) a proposed further amended notice of appeal dated 7 December 2020 together with a covering email, which sought to raise a new ground of appeal which raised a matter not argued before the primary judge, and which challenged the factual premise of the review by the Tribunal, namely that there had been an initial decision of the Secretary dated 7 December 2016 which determined to set off the withholding of instalments of the family tax benefit against the parenting payment debt;
(d) an email from the appellant to the court dated 14 December 2020;
(e) written submissions from the appellant dated 14 December 2020 in support of leave being given to further amend the notice of appeal to raise the question whether a decision of the delegate had been made on 7 December 2016 which had been the subject of internal review;
(f) an email to the court dated 21 December 2020;
(g) an email to the court dated 22 February 2021; and
(h) an email to the court dated 11 March 2021.
84 By an email to the appellant dated 15 December 2020 from the chambers of the presiding judge, the appellant was informed that much of the material that he had submitted to the court after the hearing, including the draft notice of appeal and supporting submissions, was outside the scope of the leave that was given to respond to the Secretary’s note that clarified the reference to the amount of “approximately $8,000” referred to at [57] of the Tribunal’s reasons. The appellant was informed that his further material would not be entertained by the court.
85 The High Court has stated that the time and place to present argument is at the hearing, and that communications to the court after the hearing without leave should not be made: Stuart v The Queen (1959) 101 CLR 1 at 10 (Dixon CJ, McTiernan, Fullagar, Taylor and Windeyer JJ); Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246 at 258 (Mason J); Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28; 214 CLR 318 at [27]-[31] (McHugh J, Gummow J at [32] agreeing); NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48; 219 CLR 90 at [191]-[192] (McHugh A-CJ, Gummow, Callinan and Heydon JJ); Application by Chief Commissioner of Police (Vic) [2005] HCA 18; 79 ALJR 881 at [54] (Kirby J). These principles have been applied by the full court of this court, and by other intermediate courts of appeal: Singh v Secretary, Department of Employment and Workplace Relations [2009] FCAFC 59 at [66]-[72] (Spender, Lander and Flick JJ); Bale v Mills [2011] NSWCA 226; 81 NSWLR 498 at [54]-[61] (Allsop P, Giles JA and Tobias AJA); Frugtniet v Law Institute of Victoria Ltd [2012] VSCA 178 at [44]-[47] (Warren CJ, Nettle JA and Beach AJA). The condemned practice of sending material to the court after the hearing is not legitimated by seeking leave in the material: Bale v Mills at [59]. If a new point of importance arises, then the proper course may be to relist the proceeding so that application to enlarge the court record can be made and determined in open court: Application by Chief Commissioner of Police (Vic) at [54] (Kirby J).
86 Here, the appellant has not raised any point of importance or any special circumstances that would justify leave being given to reopen the appeal, or otherwise to furnish further submissions outside the scope of the limited leave given to respond to the note provided on behalf of the Secretary. In particular, the appellant did not raise before the primary judge any challenge to the existence of the decision made on 7 December 2016 to apply the arrears of family tax benefit to the parenting payment debt, which was the subject of confirmation by the review officer on 3 February 2017. The fact that such a decision was made was the subject of an unchallenged finding by the Tribunal at [27] of its reasons, and may be readily inferred from the review officer’s letter to the appellant of 3 February 2017 which referred to the decision made on 7 December 2016.
Conclusion
87 The appeal must be dismissed. Costs should follow the event.
I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Wheelahan and Snaden. |
Associate:
Dated: 30 July 2021
ANNEXURE
APPELLANT’S GROUNDS OF APPEAL
(Emphasis in original)
Grounds of appeal 1 – Interpretation/Construction of FA(Admin) Act section 84A
1. The primary judge erred in concluding as he did at [31-37] of his reasons that by “amounts of family tax benefit that was incorrectly withheld … the appellant’s entitlement between 2004-2011 remained extant in 2016. That s 84A(1)(a) represented the appellants entitlement, to hold otherwise would entail reading into the language of s 84A an exclusion that does not arise on an ordinary reading of the provision. The statutory context of s 84A is paramount … the clear meaning of text required consideration of the context, which includes the “general purpose and policy” of a provision which could not be displaced by historical considerations or extrinsic materials so that the statute provides the surest guide to legislative intention.
Particulars
2. Upon a proper construction of FA(Admin)Act section 84A setting off FA against debt owed the primary judge ought to have held that the text and context of the provision when looked at the legislatures explanatory memorandum made clear that section 84A initially applied to a person who is entitled to an arrears payment of family assistance and to a debt owed by that person that is recoverable under the new section 84A or is a debt under the Social Security Act, that an arrears payment is a lump sum payment that occurs with retrospective effect which is the total FTB entitlement, including supplements, due to an individual who chooses to receive FTB in annual payments.
3. The primary judge ought to have held that “Entitlement” to FTB as defined under the Family Assistance Guide an individual 1.1.E.30 Entitlement (FTB) Definition: FTB for the purposes of FTB, an individual may be entitled to be paid a FTB where a claim is made that meets the eligibility requirements for an amount of FTB to be paid as determined by the Secretary over the relevant income year which correspondingly the Act reference: FA(Admin)Act section 16 Determination of instalment entitlement claim, section 17 Determination of past period entitlement claim, section 10 Restrictions on claims for payment of family tax benefit for a past period… the only way under section 5 that a person can become entitled to be paid family tax benefit is to make a claim in accordance with Subdivision A, section 6 who can claim and section 7 how to claim gives purpose and context to eligibility, not one aspect of an ordinary meaning from the dictionary regarding eligibility to displace the legislative intent as formulated in the act.
4. The primary judge ought to have held that any entitlement to a benefit "is payable" at the time when the entitlement accrues. It follows from these definitions that, for the purposes of s 16 and s 17, a person is receiving a pension, benefit or allowance under the Act only during the period commencing from the earliest day on which the payment is payable and concluding on the latest day for which the benefit is payable, so that the paragraph contemplates that deductions will be made during that period.
5. The primary judge ought to have held that it ordinarily follows from the provisions, that for the purposes of s 16, s 17 the applicant is taken to have been receiving a payment, i.e. "is receiving a...benefit" from 2004-2011, being the earliest day on which the payment is payable to him even though the first instalment is paid on a later day, it therefore is paid in arrears being the latest day for which the benefit is payable. (The term "entitled to be paid by instalment" is defined in section 3 of the Bill to mean a person in respect of whom a determination under section 16 is in force under which the person is entitled to be paid FTB at or after a particular time.)
6. The primary judge ought to have held that the text and context of the provision must be consistent and harmonious when read with other provisions within the act, and should therefore have found that to be paid FTB the individual has satisfied s 32B, FTB reconciliation conditions are satisfied, s 32C the individual must lodge his tax returns, i.e.
7. The primary judge ought to have held on an ordinary reading of the language by which the two steps in the method statement are described further support is found for this interpretation that the steps contemplate that the deduction process will take place progressively as each payment of pension, benefit or allowance is made by reason of a reduction in each payment. The language of the provision is not apt to cover the deduction of a single sum by way of debt recovery for a lump sum or fortnightly instalments paid in satisfaction of a past entitlement to a pension, benefit or allowance which has accrued over a period between 2004-2011.
8. The primary judge ought to have found that whilst the meaning of an expression appearing in a statute may be influenced by the context in which it is used, the statute must be read as a whole. However, the primary judge ought not have found that it was possible from the context to give to the words "entitled" in s.84A so wide a meaning as to permit the total withholding of each payment FTB which the person was entitled to receive and accrued at that time which the Secretary has acknowledged should not have been done to interprete [sic] as a present entitlement and therefore offset against a present debt notwithstanding that the present debt is been paid by way of instalment deductions, so that additional words are been [sic] read into the section which is not the case.
9. The primary judge ought to have found that this result is not altogether surprising as the purpose of the legislation is that a pension, benefit or allowance will be paid during, and only during, a period when the recipient qualifies under the tests laid down in the Act. The entitlement will arise by virtue of a need for the support which the pension, benefit or allowance is intended to provide, that to extinguish the past period entitlement when no debt existed towards a debt arising in 2015, altogether would run counter to the social purposes which the legislation is intended to achieve in that Family Tax Benefit and purpose and intention of the legislature is for the welfare of the children.
Ground 2 – Improper Purpose of transferring funds accrued unlawfully between 2004-2011, to offset debt arising prospectively in 2015.
10. The primary judge erred in concluding as he did at [39-48] that the Newstart Debt remained outstanding immediately before 1 January 2017, that the former six-year limitation period did not apply, and that the documents referenced did not reference an improper purpose.
Particulars
11. The primary judge ought to have found that upon an acknowledgement by the respondent that arising from the proceedings before the AAT in 2004, any such debt could only be recovered if it served the proper notice pursuant to s11 of the Data Matching Act, which it never did at any time, [sic] The Respondent further acknowledges that it should not have made those deductions between 2004-2011, that as result no such Newstart Debt was recoverable, that no s11 notice under the respective Social Security Act 991 [sic], Data Matching Act or the policy of the department, had been served. That the transfer of the withheld amounts to a new debt as of the 7 December 2016, was outside of the six-year limitation period as no “officer” as defined under the Social Security Act 1991 had any dealings with the matter of the Newstart Debt between 2005-2016. That issuing a notice on the 9 December 2016 not in compliance with the Data Matching Act s11 notice for the applicant to show cause, instead to reinstate the Newstart debt pursuant to s1229 of the Social Security Act 1991, two days after it had transferred the deductions it ought not to have made between 2005-2016 was for an improper purpose as this was not a permissible action provided for in the documents referred to the Court. That s11 notice under the DMP Act has never been served, that it could not recover the debt, according to the Social Security Act 1991, DMP Act and department’s own policy which clearly stated that it is to be classified as no debt. The Respondent acknowledged in the documents that it was too late to serve a s 11 notice, instead provided a notice under s 1229 of the Social Security Act 1999 which is more of a payment option to pay a debt, as distinct from a s11 notice that is in form of a show cause notice and providing for the appellant to respond within 28 days.
12. The primary judge ought to have found that the Budget Savings (Omnibus) Act 2016 (Cth) Part 2 of Schedule 13, section 41 Application Provisions 1) The amendments of the Social Security Act 1991 made by this Part applied in relation to a debt after 1 July 2017, or to a debt to the extent that was outstanding immediately before commencement if action could have been brought pursuant to s 1231 or 1233, or legal proceedings under section 1232, of the Social Security Act 1991, whereas causing a debt that was un-recoverable by not issuing the s11 notice, transferring those funds to the new debt arising in 2015, then issuing a debt notice pursuant to s 1229 just prior to commencement of this section was clearly for an improper purpose as this referenced in the following provision:
(a) a debt or overpayment that arises on or after the commencement of this item; and
(b) a debt or overpayment that arose before the commencement of this item, to the extent that the debt or overpayment was outstanding immediately before that commencement.
(2) Paragraph (1)(b) applies in relation to a debt or overpayment only if, immediately before the commencement of this item, action under section 1231 or 1233, or legal proceedings under section 1232, of the Social Security Act 1991 could commenced for the recovery of the debt or overpayment.
