Lee, Patti-Mae v Secretary, Department of Social Security [1996] FCA 677

CATCHWORDS

JUDICIAL REVIEW - repeal & amendment of the provisions of the Social Security Act 1991 (Cth) in 1993 - whether there was an "accrued right" to seek review of decision not to waive debt - s.8 Acts Interpretation Act 1901 (Cth) - whether a "mere matter of procedure" or a "substantive right" - whether legislative intention to the contrary - function of the Administrative Appeals Tribunal.

SOCIAL SECURITY - application to waive debt under s.1237 of the Social Security Act - whether section limits situations in which the debt may be waived - application to write off the debt under s.1236 of the Act - whether Administrative Appeals Tribunal has power to review decision not to write off debt - whether a write off is a "decision" - whether write off provision available to a current pensioner - whether Administrative Appeals Tribunal has jurisdiction to write off.

Acts Interpretation Act 1901 (Cth) - s 8(c)

Administrative Appeals Tribunal Act 1975 (Cth)

Compensation (Commonwealth Government Employees) Act 1971 (Cth)

Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth)

Social Security Act 1991 (Cth) - s 1223(1)

Social Security (Budget and Other Measures) Legislation Amendment Act 1993

Trademarks Act 1955 (Cth)

Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd (1942) 66 CLR 161 Bropho v Western Australia (1990) 171 CLR 1

Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27

Colonial Sugar Refinery Co v Irving [1905] AC 369

Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc (1960) 103 CLR 422

Deloitte Touche Tohmatsu v Australian Securities Commission (unreported, Lindgren J, 4 April 1996).

Director-General of Social Security v Hales (1983) 47 ALR 281

Director of Public Works v Ho Po Sang [1961] AC 910

Esber v The Commonwealth (1992) 174 CLR 430

Gerrard v Mayne Nickless Ltd (1996) 135 ALR 494

La Macchia v Minister for Primary Industry (1986) 72 ALR 23

Mathieson v Burton (1971) 124 CLR 1

Maxwell v Murphy (1957) 96 CLR 261

Robertson v City of Nanawading [1973] VR 819

Rodway v The Queen (1990) 169 CLR 515

Secretary, Department of Social Security v Hodgson (1992) 37 FCR 34

Secretary, Department of Social Security v Kratochvil (1994) 53 FCR 49

Tasmanian Conservation Trust Inc v Minister for Resources (unreported, Davies J, 9 February 1996)

Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246

PATTI-MAE LEE v SECRETARY, DEPARTMENT OF SOCIAL SECURITY

No NG 697 of 1995

Davies, Cooper & Moore JJ

7 August 1996

Sydney

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No NG 697 of 1995

)

GENERAL DIVISION )

BETWEEN: PATTI-MAE LEE

Applicant/Cross Respondent

AND: SECRETARY, DEPARTMENT OF SOCIAL

SECURITY

Respondent/Cross Applicant

Coram: Davies, Cooper & Moore JJ.

Date: 7 August 1996

Place: Sydney

MINUTES OF ORDER

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The decision of the Administrative Appeals Tribunal affirming the decision not to waive be set aside.

3. The matter be remitted to the Administrative Appeals Tribunal to hear and determine the matter again with or without the hearing of further evidence.

4. The cross-appeal be dismissed.

5. The respondent pay the applicant's costs of the proceedings.

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

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 697 of 1995

)

GENERAL DIVISION )

BETWEEN: PATTI-MAE LEE

Applicant/Cross Respondent

AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY

Respondent/Cross Applicant

Coram: Davies, Cooper & Moore JJ.

Date: 7 August 1996

Place: Sydney

REASONS FOR JUDGMENT

Davies J: This is an appeal from a decision of the Administrative Appeals Tribunal ("the Tribunal"), constituted by Mathews J (President), which affirmed a decision made by the respondent, the Secretary, Department of Social Security ("the Secretary"), not to waive the applicant's debt of $1576 pursuant to s.1237 of the Social Security Act 1991 (Cth). The respondent has cross-appealed against a decision of the Tribunal setting aside a decision of the respondent not to write off the debt and remitting the matter to the respondent to write off half the debt and directing that the respondent accept payment of the balance by instalments of $12 per fortnight.

The applicant, Ms Pattie-Mae Lee, was in receipt of a sole parents pension of
$20 per week when, on 23 April 1992, the Family Court of Australia ordered that the amount of maintenance payable by the father of her child be increased to $80 per week. Although she had been sent a letter by the Department of Social Security ("the Department") on 16 March 1992 advising her that if her "maintenance goes above $20 p.w.", she should notify the Department, she did not do so until 15 April 1993. On that date, a letter was sent to the Department from her local Member of Parliament, Mr Allan Morris, MHR, advising the Department that Ms Lee had been ill for the past twelve months and had been confused, resulting in her failure to notify the Department of the increase in maintenance. He requested that the Department "not seek to recover any overpayment" due to Ms Lee's illness and her inability to cope with anxiety.

The overpayment continued to be paid without taking into account the increased maintenance payments until 31 December 1993. On 30 November 1993, an overpayment in the sum of $1516 was calculated for the period 21 May 1992 to 15 April 1993, and, on 15 December 1993, a decision was made that this amount was a debt to the Commonwealth which should be recovered. A letter advising of the overpayment was given to Ms Lee on 23 December 1993.

Ms Lee sought review of the decision which was subsequently affirmed on 9 February 1994 by a Review Officer, save that the amount owed was increased to $1576, taking 15 May 1992 rather than 21 May 1992 as the starting date for the overpayment. A letter was given to Ms Lee the following day advising her of this decision. Ms Lee then appealed to the Social Security Appeals Tribunal on 14 February 1994, which, on 15 March 1994, affirmed the decision to recover the overpayment. Ms Lee then applied to the Tribunal for orders of review.

The Social Security Act 1991 (Cth) ("the Act") confers on the Secretary statutory powers to waive and to write off debts or part thereof. These powers first appeared in s.146 of the Social Security Act 1947 introduced by Act No. 127 of 1985, after the decision in Director-General of Social Security v Hales (1983) 47 ALR 281. The power to waive is now contained in s.1247 of the Act and the power to write off in s.1246 thereof.

Section 1237 of the Act initially read, inter alia:

"1237. (1) The Secretary may, on behalf of the Commonwealth, decide to waive the Commonwealth's right to recover from a person the whole or a part of a debt.

(2) In exercising the power conferred under subsection (1), the Secretary must act in accordance with directions from time to time in force under subsection (3).

(3) The Minister may, by determination in writing:

(a) give directions relating to the exercise of the Secretary's power under subsection (1); and

(b) revoke or vary those directions."

In Riddell v Secretary, Department of Social Security (1993) 42 FCR 443, the Federal Court held that certain directions which had been given by the Minister pursuant to subsection 1237(3)(a) were invalid. After this decision, the section was, by the Social Security (Budget and Other Measures) Legislation Amendment Act 1993 ("the 1993 Amendment Act"), which commenced on 24 December 1993, repealed and replaced by provisions which themselves incorporated certain rules. Section 1237 of the Act provided, at the relevant time, inter alia:-

"1237. (1) The Secretary may, on behalf of the Commonwealth, decide to waive the Commonwealth's right to recover the whole of a debt from a person but only in accordance with this section.

(2) The Secretary must waive if:

(a) the debt arose solely because of an administrative error made by the Commonwealth; and

(b) the person received in good faith the payment or payments that gave rise to the debt.

(3) The Secretary must waive if:

(a) a person is convicted of an offence; and

(b) in sentencing the court indicated that it imposed a longer custodial sentence on the person because the person was unable or unwilling to pay the debt.

(4) The Secretary must waive if:

(a) the debt arose because the person or the person's partner underestimated the value of particular property of the person or partner; and

(b) the estimate was made in good faith; and

(5) The Secretary must waive if:

(a) the debt is, or is likely to be less than $200; and

(b) it is not cost effective for the Commonwealth to take action to recover the debt.

..."

Under s.87 of the 1993 Amendment Act, s.1236A was added to the Act, which provided:-

"S.1236A. Sections 1237 and 1237A apply to all debts, whenever incurred, owed to the Commonwealth and arising under this Act or under the Social Security Act 1947."

The write off provision contained in s.1236 of the Act, which was not altered by the 1993 Amendment Act, read, inter alia:-

"1236. (1) The Secretary may, on behalf of the Commonwealth, decide to write off a debt.

..."

"Debt" was defined in s.1235 to mean, inter alia, "a debt recoverable by the Commonwealth under Part 5.2". The provision of Part 5.2 under which Ms Lee owed a `debt' to the Commonwealth was s.1224(1) which read, inter alia:-

"1224. (1) If:

(a) an amount has been paid to a recipient by way of pension, benefit or allowance under this Act or the 1947 Act; and

(b) the amount was paid because the recipient or another person:

(i) made a false statement or a false representation; or

(ii) failed or omitted to comply with a provision of this Act or the 1947 Act;

the amount so paid is a debt due by the recipient to the Commonwealth."

The other relevant provision on which the Tribunal relied was sub-s.1234(1) which provided:-

"1234. (1) The Secretary may, on behalf of the Commonwealth, decide to allow a person to pay a debt in one or more instalments."

On 13 June 1995, the Tribunal affirmed the decision not to waive the debt pursuant to s. 1237 of the Act. The Tribunal held that s.1237, as inserted by the 1993 Amendment Act, did not allow for any discretion to waive outside the circumstances set out in sub-ss. (2), (3), (4) and (5) which did not apply to Ms Lee. On 11 August 1995, the Tribunal remitted the matter to the Secretary with a direction to recalculate the total and to write off half the debt pursuant to s.1236. The Tribunal further directed that Ms Lee be allowed to pay off the balance of the debt by instalments of $12 per fortnight pursuant to s.1234.

Waiver

Section 8 of the Acts Interpretation Act 1901 (Cth) provides, inter alia:-

"8. Where an Act repeals in the whole or in part a former Act, then unless the contrary intention appears the repeal shall not:

...

(e) affect any investigation legal proceeding or remedy in respect of any such right privilege or obligation liability penalty forfeiture or punishment as aforesaid;

and any such investigation legal proceeding or remedy may be instituted continued or enforced, and any such penalty forfeiture or punishment may be imposed, as if the repealing Act had not been passed."

Counsel for Ms Lee contends that, under these provisions, Ms Lee had a right which accrued prior to the commencement of the 1993 Amendment Act to have her application for review heard and determined on its merits before the Tribunal. Counsel submitted that, under s.8 of the Acts Interpretation Act, this right was not affected by the 1993 Amendment Act and that the Tribunal should have applied s.1237 as it read before 24 December 1993.

The usual operation of statutory amendments in relation to proceedings of the Administrative Appeals Tribunal was explained by Brennan J in his dissenting judgment in Esber v The Commonwealth (1992) 174 CLR 430, where his Honour said, at 448-9:-

"The appellant's application to the A.A.T. invoked an administrative jurisdiction to review his application under s.49(1) for a redemption payment. Exercising an administrative jurisdiction, the A.A.T. determines applications for review on a rehearing de novo, acting on the materials before it when it makes its determination (Builders Licensing Board v. Sperway Constructions (Syd.) Pty. Ltd. (1976), 135 C.L.R.
616, at pp. 620-621; Drake v. Minister for Immigration and Ethnic Affairs (1979), 24 A.L.R. 577, at pp. 589, 599; Re Costello (1979), 2 A.L.D. 934, at pp. 940, 943). Where, on a rehearing de novo, the question for decision is whether an applicant should be granted a right, the law as it then exists is applied, not the law as it existed at an earlier time (Harris v. Caladine (1991), 172 C.L.R. 84, at p. 125; Re Costello (1979), 2 A.L.D., at p. 944). By contrast, in a judicial proceeding brought to enforce an alleged right accrued at the time when the proceedings were instituted, the question for decision is determined according to the law existing when the proceedings were instituted unless statute otherwise provides."

In Esber, the majority, Mason CJ, Deane, Toohey & Gaudron JJ, considered that, in the circumstances of that case, the operation of that principle was overridden by s.8 of the Acts Interpretation Act. The matter before the Administrative Appeals Tribunal had been an application to review a decision refusing a claim for the redemption of an entitlement to weekly payments of compensation which had been made under the earlier repealed legislation. The application to the Administrative Appeals Tribunal had been lodged prior to the commencement of the new legislation. Their Honours said, at 440-1:-

"To borrow a sentence from the judgment of Hope J.A. in N.S.W. Aboriginal Land Council v. The Minister [The Winbar Claim] ((1988) 14 N.S.W.L.R. 685, at p. 694):

`The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional.'

Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely `a power to take advantage of an enactment' (Mathieson v. Burton (1971), 124 C.L.R. 1, at p. 23, per Gibbs J.; and see Robertson v. City of Nunawading, [1973] V.R. 819). Nor was it a mere matter of procedure (See Newell v. The King (1936), 55 C.L.R. 707, at pp. 711-712); it was a substantive right. (See, by way of analogy, Australian Coal and Shale Employees Federation v. Aberfield Coal Mining Co. Ltd.(1942), 66 C.L.R. 161, at pp. 175, 178, 185, 194; Colonial Sugar Refinery Co v. Irving, [1905] A.C. 369, at pp. 372-373.) Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, `although that right might fairly be called inchoate or contingent' (Free Lanka Insurance Co. Ltd. v. Ranasinghe, [1964] A.C. 541, at p. 552; see also Continental Liqueurs Pty. Ltd. v. G.F. Heublein and Bro. Inc. (1960), 103 C.L.R. 422, at pp. 426-427; Director of Public Works v. Ho Po Sang, [1961] A.C. 901). This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s. 8 of the
Acts Interpretation Act and was not affected by the repeal of the 1971 Act." (emphasis added)

As their Honours pointed out, s.8 of the Acts Interpretation Act refers to a right or privilege which has been acquired or accrued under a repealed enactment. In Mathieson v Burton (1971) 124 CLR 1 at 23, Gibbs J had said:-

"That section in referring to a right acquired or accrued does not preserve a power to take advantage of an enactment, assuming that that may properly be described as a right (Abbott v. The Minister for Lands ([1895] A.C. 425, at p. 431), and does not apply where there is merely a hope or expectation that a right will be created (Director of Public Works v. Ho Po Sang ([1961] A.C. 901)); but it does protect anything that may truly be described as a right, `although that right might fairly be called inchoate or contingent' (Free Lanka Insurance Co. Ltd. v. Ranasinghe ([1964] A.C. 541, at p. 552))."

The majority in Esber held that the right there in question was an accrued right, not "a mere matter of procedure", but "a substantive right."

In the present case, however, the subject of Ms Lee's claims before the Tribunal was not "a right acquired or accrued" in the sense explained by the majority in Esber. The powers conferred by the Act to write off or to waive a debt or part thereof gave no right to the debtor other than a right to request that the waiver or write off provisions be considered. There was a mere "power to take advantage of an enactment", to use the words of Gibbs J in Mathieson v Burton. The powers to waive or to write off a debt or part thereof, as relied upon by counsel for Ms Lee, were not conditional but discretionary. No right was conferred thereby: Director of Public Works v Ho Po Sang [1961] AC 901; Robertson v City of Nunawading [1973] VR 819; R v Registrar of Titles; Ex parte John Wolbers Constructions Pty Ltd [1973] VR 723.

It may be noted, moreover, that, in Esber, the application had been lodged with the Administrative Appeals Tribunal prior to the commencement in 1988 of the new legislation. The majority of the Court held that that legislation, the Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), specifically continued the proceedings under the repealed provision. At 440, the majority said:-

"... at the least, the appellant had, at the time of the repeal of the 1971 Act [Compensation (Commonwealth Government Employees) Act 1971], a right to have his application to the Tribunal determined pursuant to Pt V of the 1971 Act. [which Part deals with rights of review] ...

...

Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal."

Such a circumstance does not apply in the present case.

In Secretary, Department of Social Security v Kratochvil (1994) 53 FCR 49, O'Loughlin J found that it was the intention of Parliament that the new provisions of s.1237 were to apply to the exclusion of the former. Likewise, in Taylor v Secretary, Department of Social Security (1988) 18 FCR 322, Lockhart J, with whom Wilcox J agreed, proceeded on the footing, the contrary of which was not argued, that the 1985 amendments to the Social Security Act, of which I have spoken, operated to cover the field. At 328, Lockhart J said:-

"... the later decision [4 November 1986] must be read in the light of the amending legislation then in force ..."

In my opinion, therefore, the Tribunal was correct in applying the Act as amended by the 1993 Amendment Act when reviewing the decision not to waive.

As my colleagues, Cooper & Moore JJ, take a different view on this point, it is desirable that I should make one or two further comments. There are three particular factors to which regard must be had in a case such as the present. The first is the nature of the function which the review tribunal performs. See R v Lukin; Ex parte Sunshine Pty Ltd [1967] Qd R 49 at 53, per Gibbs J, with whom Hart & Lucas JJ agreed. The Administrative Appeals Tribunal performs the function of determining applications on their merits, having regard to the material which is before it. In Azevedo v Secretary, Department of Primary Industries and Energy (1992) 35 FCR 284, French J said at 297:-

"The Tribunal is empowered in reviewing a decision to exercise `all the powers and discretions that are conferred by any relevant enactment on the person who made the decision': s 43(1), Administrative Appeals Tribunal Act. In so doing it does not discharge a merely supervisory role considering whether the decision under review was the correct or preferable one on the material before the primary decision-maker. It is required to determine whether the decision was the correct or preferable one on the material before the Tribunal: see Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409, per Bowen CJ and Deane J (at 419) and per Smithers J (at 438). It is not confined to a consideration only of events which occurred up to the time of the decision under review: see Commonwealth v Ford (1986) 9 ALD 433 at 437, per Wilcox J. The proper approach for the Tribunal is to regard the administrative decision-making process as a continuum and to look upon its function as a part of that continuum so that within the limits of reconsideration of the decision under review, the Tribunal considers the applicant's entitlement from the date of application or other proper commencing date to the date of the Tribunal's decision: see Jebb v Repatriation Commission (1988) 8 AAR 285 at 289, per Davies J. ... The nature of the decision under review must, however, be kept in mind."

A second factor is the nature of the claim that is made, whether it has characteristics appropriate to an accrued right or characteristics merely of a
procedural matter or of "a power to take advantage of an enactment". In JR Exports Pty Ltd v Australian Trade Commission (1986) 71 ALR 717, Fox J said at 719:-

"It is not possible to define an `accrued right', anymore than it is a `right', but the notion which underlies the latter, when dealing with the present type of problem, is that there is something in the nature of a cause of action which has arisen, or is claimed to have arisen, before the repeal or amendment, in circumstances which would render it manifestly unjust for the repealing or amending Act to affect the situation adversely.

What is not an `accrued right' is a right to claim an indulgence, without which there can be no claim of substance."

In Esber, the majority of the Court discussed this point in greater detail. The majority referred to the finding by Hope JA, with whom Samuels & Clarke JA agreed, in New South Wales Aboriginal Land Council v The Minister (1988) 14 NSWLR 685 at 694 that the claim in that case was a right notwithstanding that it was "conditional upon the relevant facts being established". The majority so regarded the subject claim in Esber's case.

A further matter for consideration is whether the review proceedings were commenced prior to the commencement of the amending or repealing Act. In New South Wales Aboriginal Land Council v The Minister, Hope JA said, at 696:-

"These decisions satisfy me that a statutory right will be preserved notwithstanding the repeal or amendment of the statute even though the right can only be implemented by a non-discretionary decision of an official or a court, provided that the statutory machinery for obtaining that decision has been set in train before the repeal or amendment."

Similarly, in Continental Liqueurs Pty Ltd v GF Heublein & Bro Inc (1960) 103 CLR 422, Kitto J held that the Trademarks Act 1955 (Cth), which repealed the Trademarks Act 1905 (Cth), did not apply to an application made to the High Court of Australia
for the removal of a trademark from the register when that application had been lodged with the Court prior to the commencement of the new legislation. His Honour said at 426:-

"If the application had not been pending in the Court when the new Act came into force, I should have agreed that the applicant company had not a right to relief under s. 72 which it could thereafter enforce."

In The Australian Coal & Shale Employees' Federation v Aberfield Coal Mining Co Ltd (1942) 66 CLR 161, it was held that an amending Act did not take away an existing "right of appeal" in the circumstance where the appeal had been lodged prior to the coming into effect of new regulations. Of course, there are cases such as Colonial Sugar Refining Co Ltd v Irving [1905] AC 369, where it has been held that a statute did not retrospectively take away a prospective right of appeal from a judgment when given in a pending suit. Those cases merely show that the whole context must be examined. In Esber's case, the majority specifically referred to the fact that the application to the Administrative Appeals Tribunal had been lodged prior to the commencement of the amending legislation.

In the present case, having regard to the function which the Administrative Appeals Tribunal performs, to the fact that Ms Lee's claim was at most a claim to have a debt waived, which was a claim for the favourable exercise of an unstructured discretion, and to the fact that the application had not been lodged with the Administrative Appeals Tribunal when the amending legislation commenced, I am satisfied that Ms Lee had no accrued right which entitled her to rely upon the law as it stood before the amendment.

The case is similar to JR Exports Pty Ltd v Australian Trade Commission, in which Fox & Sheppard JJ, Beaumont J dissenting, held that there was no accrued right within the meaning of s.8 of the Acts Interpretation Act in the circumstance that a primary decision-maker had refused an application for an extension of time in which to lodge an application for an Export Market Development Grant. After the decision had been given and before its reconsideration by the Export Market Development Grants Board or the lodgment of an application for review with the Administrative Appeals Tribunal, the legislation had been amended so as to remove the power to extend time.

The present is a similar case, for not only had there been no application to the Administrative Appeals Tribunal at the time when the legislation was amended, but the claim that was being pursued was a claim for the favourable exercise of a statutory discretion and therefore not a right, either inchoate or contingent.

Counsel for Ms Lee further contended that s. 1237(1) of the Act conferred upon the Secretary an overriding discretionary power to waive a debt, notwithstanding that the power was required to be exercised in the circumstances set out in sub-ss. (2), (3), (4) and (5). This submission does not, however, give effect to the words "but only in accordance with this section" which appear in sub-s. (1). These words indicate that the parameters to, criteria for or conditions of the exercise of the power are to be found within the section. Such parameters are found in the provisions of sub-ss. (2), (3), (4) and (5). Sub-section (1) is, therefore, merely anexpress empowering provision, required, no doubt, because the power conferred is different from that
expressed in s.70C of the Audit Act 1901 (Cth). The decision to waive must be made in conformity with sub-ss. 1237(2), (3), (4) or (5). The Tribunal was therefore correct in refusing to direct the waiver of the appellant's debt.

Write Off

The Secretary has cross-appealed from the decision of the Tribunal to direct that one half of the debt be written off pursuant to s.1236 of the Act. Counsel for the Secretary challenged the direction, made under s.1234 of the Act, that the Secretary should accept payment of the balance of the debt by instalments of $12 per fortnight. Counsel for the Secretary contended that ss.1234 and 1236 did not confer decision-making powers reviewable by the Administrative Appeals Tribunal. Counsel contended that such decisions were not substantive and did not affect the position of the debtor. Counsel submitted that, as a write off of a debt does not alter the liability of the debtor to repay the debt if at any time the creditor decides to pursue the debt, the order made by the Tribunal was meaningless and was outside the power of the Tribunal.

However, in Director-General of Social Services v Hangan (1982) 45 ALR 23 and in Director-General of Social Services v Hales, it was held by Full Courts of this Court that a decision to recover a debt was reviewable by the Administrative Appeals Tribunal notwithstanding that the decision did not, in itself, alter legal relationships. Subsequently, in Re Taylor and Secretary, Department of Social Security (1984) 6 ALD 500, the Administrative Appeals Tribunal (Davies J, Deputy President Jennings
and Senior Member Dwyer) held that a decision to raise an overpayment was reviewable by the Administrative Appeals Tribunal.

In Hales, Lockhart J said at 305:-

"No narrow or pedantic approach is called for in determining whether a decision falls within the scope of review by the Administrative Appeals Tribunal."

His Honour said that the word "decision" must take its colour and content from the enactment which is the source of the decision itself. At 306, his Honour said that the word generally has a wider scope than a pronouncement which alters rights or infers liabilities. His Honour said that a "decision":-

"... may include a declaration or statement which has a real, practical effect although not altering rights or imposing liabilities: Duncan v Defence Force Retirement and Death Benefits Authority and Commonwealth of Australia (1980) ALR 165 at 169-70; 3 ALD 113 at 117."

In Hangan, similar observations were made. See Fox J at 26, Toohey J at 31 and Fitzgerald J at 46-47. Recent decisions applying this approach are Tasmanian Conservation Trust Inc v Minister for Resources (unreported, Davies J, 9 February 1996); Deloitte Touche Tohmatsu v Australian Securities Commission (unreported, Lindgren J, 4 April 1996).

Section 1239(1) of the Act provides that the Secretary may review, inter alia, "a decision of an officer under this Act." Such a power of review includes, in my opinion, the exercise of the decision-making powers conferred by sections such as s.1236. Section 23(1) of the Act defines "decision" as having the same meaning as it has in the Administrative Appeals Tribunal Act 1975 (Cth) which, in sub-s. 3(3), includes the "doing or refusing to do any other act or thing." In a provision such as s.1239, there is no reason to read the word "decision" as not including the exercise of the powers conferred by ss.1234 and 1236 of the Act, which are express statutory powers whose exercise has a significant effect upon the position of a pensioner.

Counsel for the Secretary also submitted that the write off provision should be read as being unavailable to a current pensioner, ie, someone receiving a pension that can be subject to recovery by deduction in s.1231. However, as counsel for Ms Lee pointed out, that submission ignores the effect of sub-s.1231(2) which provides that the debt or overpayment must be deducted unless (emphasis added) inter alia, "the Secretary takes action under Part 5.4 (write off and waiver) in relation to the amount." That sub-section specifically envisages the write off or waiver of the debt of a person currently receiving a pension.

It follows that the contention of counsel for the Secretary that the Tribunal did not have the power to order a write off of Ms Lee's debt should be rejected.

Counsel for the Secretary further submitted that the Tribunal had no jurisdiction as the primary decision-maker had not made a decision whether to waive or to write off the appellant's debt. I do not accept the factual basis for this submission. The recommendation which went to the primary decision-maker included the recommendation that "(f) waiver and write off considered but not appropriate." The decision-maker put his signature against the subsequent words: "Overpayment approved." I read this decision as encompassing a decision that waiver or write off were not thought to be appropriate.

Such a decision was, of course, not intended to be final in the sense that it could not be reconsidered. Nevertheless, waiver and write off were considered but rejected. On the raising of the overpayment, the debt became payable under what is now s. 1224A(i) of the Act. Therefore, a decision to raise an overpayment, in the context where the powers of waiver and write off and the existence of an application seeking waiver had been brought to the decision-maker's attention, implied a refusal to exercise these powers.

Thus, in Taylor v Secretary, Department of Social Security, in relation to a decision made by a delegate of the Secretary on 4 November 1986 which stated that the delegate "decided to affirm the original decision [unreported, 22 August 1985] to raise and recover an overpayment of widow's pension", Lockhart J said at 661-662:-

"Taking a sensible and practical view, it is my view that the fair reading of what occurred is that on 4 November 1986 the delegate of the Secretary decided not to waive recovery of the overpayment pursuant to the powers in that behalf conferred by s 186, thus bringing into play by its own force the statutory requirement of s 181(2) that the overpayment be recouped; ..."

In any event, s.43(1) of the Administrative Appeals Tribunal Act provides that, in reviewing a decision, the Administrative Appeals Tribunal may exercise the powers and discretions vested by the relevant enactment in the primary decision-maker. In Secretary, Department of Social Security v Hodgson (1992) 37 FCR 34, Hill J held
that this power encompassed the powers of write off and waiver to which I have referred.

Counsel for the Secretary further submitted that there was an error in the approach taken by the Tribunal, or the decision of the Tribunal was so unreasonable that no reasonable decision-maker could have arrived at it. However, the Tribunal did not err in its interpretation of the provisions or in its understanding of the factors which were to be taken into account and, in my opinion, the decision arrived at was not unreasonable.

It would be wrong for a decision-maker deliberately to circumvent, by making a decision to write off, the restrictions which the Legislature has imposed on the power to waive. Yet there is a distinction between the waiver and the write off powers of which the Tribunal was clearly aware. In my opinion, the Tribunal gave attention to appropriate considerations, considerations which were relevant to the administration of the Act. The Tribunal directed that one half of the debt should be written off having regard to Ms Lee's psychiatric problems and to the need to reduce the financial pressures which would otherwise exacerbate those psychological problems. A write off is not restricted to cases where the debtor cannot be found or has no funds from which recovery can be made. The write off of debts by commercial enterprises is a very common thing and there is no limit to the range of matters which may be taken into account in the making of a particular write off. If circumstances change, of course, the debt may be recovered. In my opinion, the decision was one at which a reasonable decision-maker could have arrived, though one would not be surprised if officers of the Department preferred, in other cases, to follow the policy inherent in the amendments made to s. 1237 rather than her Honour's guide.

I see no error in the decision of the Tribunal. I would dismiss the appeal and the cross-appeal and would order that the parties abide their own costs of the proceedings.

I certify that this and the 18 preceding pages

are a true copy of the reasons for judgment herein of

the Honourable Justice Davies.

Associate:

Date: 7 August 1996

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

No NG 697 of 1995

BETWEEN:

PATTI-MAE LEE

Applicant

AND:

SECRETARY, DEPARTMENT OF

SOCIAL SECURITY

Respondent

CORAM: Davies, Cooper and Moore JJ

PLACE: Sydney

DATE: 7 August 1996

REASONS FOR JUDGMENT

Cooper J

I have had the opportunity to read the draft reasons of each of Davies J and Moore J. A detailed recapitulation of the relevant facts and statutory provisions is therefore unnecessary although some repetition is required to set the context in which the issues arise.

The application to waive the debt

On 15 April 1993 Mr Alan Morris MHR made application on behalf of the applicant for the respondent “not to seek to recover any overpayment” of the sole parent’s benefit received by the applicant for the period 15 May 1992 to 15 April 1993. That request was considered by Mr D Murray of the Department of Social Security (“the Department”) who treated the request as one for waiver of the recovery of the overpayment. In a “Pension Overpayment Submission” dated 30 November 1993 Mr Murray recommended that an
overpayment of $1,516 be raised and that the applicant be advised and requested to refund the amount. He also recommended that “waiver and write off considered but not appropriate”. As appears from a Review Officer Referral (T25) a “[d]ecision to raise and recover overpayment for the period from 21/5/92 to 15/4/93 - an amount of $1,516 - to stand as breach of SSA [SocialSecurity Act] notification provisions occurred” was made on 13 December 1993 by C Kelly, an officer of the Department. That decision, in my view, included as a fact the additional decision to refuse the request to waive recovery of the overpayment. To suggest, as counsel for the respondent did on the appeal, that no decision was made as to waiver and that the decision made was one limited to raising the overpayment and determining to recover it, is artificial and inconsistent with the factual context in which the decision was made, including the specific request of Mr Morris.

On 15 December 1993 Mr Murray, as delegate for the Secretary of the Department (“the Secretary”), wrote to the applicant claiming $1,516 as a debt due and requesting repayment of the sum. As at that date the overpayment, in the circumstances in which it occurred, constituted a debt due by the applicant to the Commonwealth (s 1223(1) of the Social Security Act 1991 (Cth) (“the Act”)). At the time the decision was made not to write off or waive the debt, the Secretary’s power to do so was contained in subsections 1236(1) and (1A) and s 1237 respectively of the Act. Upon the making of the decision not to waive or write off the debt the applicant had a right of review (s 1240). The review under the section was an internal review by the Secretary or by an officer authorised by the Secretary (s 1301(1)). If necessary, the applicant had a further right of review to the Social Security Appeals Tribunal (“the SSAT”) (s 1247) and to the Administrative Appeals Tribunal (“the AAT”) (s 1283).

On 23 December 1993 the applicant applied for review of “the decision to recover the debt raised against me referred to in the letter from D Murray dated 15 December 1993.” The applicant submitted that by initiating the review on that date she obtained an accrued right to have the review conducted on the basis that the power of the Secretary to waive the debt was that contained in s 1237 of the Act as it stood on 23 December 1993 and that the discretion in that section ought to have been exercised notwithstanding its repeal on 24 December 1993.

The respondent submitted that by initiating the review on 23 December 1993 in accordance with s 1240 of the Act, the applicant did no more than take advantage of the provision in the Act to apply for a review of the decision to raise and recover the debt and to refuse to waive the debt or write it off. The decision on that review or upon any subsequent review, it was submitted, involved an investigation of whether the applicant had a then present entitlement to a favourable exercise of the discretion to waive or write off to be determined at that time having regard to the then form of s 1237 and s 1237A of the Act.

Neither at 15 April 1993 nor 13 December 1993 did the applicant have a right to an exercise by the Secretary of the discretionary power contained in s 1237 to waive the overpayment. At best she had the opportunity to take advantage of the power by requesting the Secretary to exercise it in her favour and had done so by Mr Morris’ request on her behalf. If exercised in her favour by the Secretary, the power to waive would then have created a right in the applicant to thereafter be released from repayment of the sum owing to the Commonwealth. Until the favourable exercise of the discretion the applicant had no right to a waiver of the debt conferred on her by the Act. Until a decision on the request for waiver
was made by the Secretary or a delegate, she had no accrued right of any type under the Act for the purpose of s 8(c) of the Acts Interpretation Act 1901 (Cth) (Mathieson v Burton (1971) 124 CLR 1; Robertson v City of Nanawading [1973] VR 819; Director of Public Works v Ho Po Sang [1961] AC 910). On the other hand the applicant did have some rights in relation to the exercise of the administrative discretion vested in the Secretary (or the delegate) under s 1237 of the Act as it then stood which gave rise to the decision to refuse to waive or write off the debt and as to the review process in respect of that decision. The nature of those rights was considered in Esber v The Commonwealth (1992) 174 CLR 430.

In Esber, the applicant applied for redemption of weekly payments paid to him under the Compensation (Commonwealth Government Employees) Act 1971 (Cth) (“the 1971 Act”). The application was rejected. The applicant applied for review of the decision to the AAT. After filing the application but before hearing, the 1971 Act was repealed by the Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth) (“the 1988 Act”) which provided that weekly payments over $50 were not redeemable. The 1988 Act had transitional provisions which the majority of the High Court (Mason CJ, Deane, Toohey and Gaudron JJ) held gave the applicant a substantive right to have the application heard under the 1971 Act. However, their Honours also considered the alternative argument that the applicant had an accrued right to have the matter heard and determined under the 1971 Act by the AAT which right was protected by s 8(c) and s 8(e) of the Acts Interpretation Act 1901 (Cth).

In dealing with the alternative argument their Honours assumed that the applicant had no right to redemption of the weekly payments. Rather, the argument was considered on the basis of the applicant’s rights on review. Their Honours said (at 440 - 441) :-

“... If it be assumed that the appellant did not have a right to redemption in the sense first discussed, he had a right to have his claim to redemption determined in his favour if the delegate had wrongly refused his claim. To borrow a sentence from the judgment of Hope JA in NSW Aboriginal Land Council v The Minister [The Winbar Claim] (1988) 14 NSWLR 685 at p 694:

‘The right might be said to be a conditional one, namely, conditional upon the relevant facts being established, but the right was nonetheless a right because it was conditional.’

Once the appellant lodged an application to the Tribunal to review the delegate’s decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely ‘a power to take advantage of an enactment’ (Mathieson v Burton (1971) 124 CLR 1 at p 23, per Gibbs J; and see Robertson v City of Nunawading [1973] VR 819). Nor was it a mere matter of procedure (see Newell v The King (1936) 55 CLR 707 at pp 711 - 712); it was substantive right (see, by way of analogy, Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd (1942) 66 CLR 161 at pp 175, 178, 185, 194; Colonial Sugar Refinery Co v Irving [1905] AC 369 at pp 372 - 373). Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, ‘although that right might fairly be called inchoate or contingent’ (Free Lanka Insurance Co Ltd v Ranasinghe [1964] AC 541 at p 552; see also Continental Liqueurs Pty Ltd v G F Heublein and Bro Inc (1960) 103 CLR 422 at pp 426 - 427; Director of Public Works v Ho Po Sang [1961] AC 901). This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s 8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act.”

Applying the language of the High Court in Esber to the present case the applicant “had a right to have [her] claim to [waiver] determined in [her] favour if the delegate had wrongly refused [her] claim”. That right arose, in my view, at the time the decision on the application for waiver was made on 13 December 1993. The right was thereafter enforceable by recourse to the review procedures provided for under the Act. Once those review procedures were initiated by a request for review on 23 December 1993, she had
the right to have the decision of 13 December 1993 reconsidered and determined by the authorised officer in the first instance. The reference by the majority in Esber to the decisions in Australian Coal and Shale Employees Federation v Aberfield Coal Mining Co Ltd (1942) 66 CLR 161 at 175, 178, 185, 194 and Colonial Sugar Refinery Co v Irving [1905] AC 369 at 372 - 373 characterises the right of review, analogously with the right of appeal, as a substantive and not a procedural right. The right of review was to have the application for waiver reconsidered de novo in accordance with the discretion vested in s 1237 as it stood on 13 December 1993. That the majority judgment in Esber should be so construed was also the view of a Full Court of the Industrial Relations Court of Australia (Wilcox CJ, Ryan and Marshall JJ) in Gerrard v Mayne Nickless Ltd (1996) 135 ALR 494 at 509 - 514.

The submission of the respondent that the decision at each stage of the review process became the relevant operative decision and that the original decision of the delegate became incorporated in each new decision on review and thereby lost its character as the operative decision under review is inconsistent with the decision of a Full Court of this court in Yolbir v Administrative Appeals Tribunal (1994) 48 FCR 246 and is rejected.

As the rights of the applicant arising on 13 December 1993 were substantive and not procedural at each stage of the review process, the operative decision, being the refusal by the delegate on that date to waive the debt, falls to be determined by reference to the law operating on the decision-maker with respect to the decision and its subject matter on that date.

Section 1237 of the Act was repealed by s 87 of the Social Security (Budget and Other Measures) Legislation Amendment Act 1993 (“the 1993 Act”). The repeal took effect on 24 December 1993. In lieu of the repealed section, new sections 1236A, 1237 and 1237A were substituted. The new s 1237(1) restricts the exercise of the power by the Secretary to waive the Commonwealth’s right to recover the whole debt (s 1237(1)) or part of it (s 1237A(1)) to accord with the provisions of the sections. By s 1236A the new sections 1237 and 1237A “apply to all debts, whenever incurred, owed to the Commonwealth and arising under this Act or under the Social Security Act 1947”.

Does the 1993 Act in any way reveal an intention to deny to the applicant the protection of s 8(c) and s 8(e) of the Acts Interpretation Act 1901 (Cth)?

The general rule of the common law as to the retrospective operation of a statute was stated in Maxwell v Murphy (1957) 96 CLR 261 by Dixon CJ (at 267) :-

“... a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to past events.”

(See also Rodway v The Queen (1990) 169 CLR 515 at 518; Bropho v Western Australia (1990) 171 CLR 1 at 17).

Sections 1237 and 1237A of the Act upon their commencement on 24 December 1993 did not have a retrospective operation. They created a new, albeit limited, power in the Secretary to waive in whole or in part the Commonwealth’s right to recover debts due to it. The sections operated in respect of all present debts whether they were
incurred under the Act or the Social Security Act 1947 (Cth) (“the 1947 Act”) irrespective of the date upon which they were incurred (s 1236A).

The new sections do not purport to deal with past decisions as to waiver of debts due to the Commonwealth under either the Act or the 1947 Act. Thus, where the previous law has operated on past facts and resulted in a decision under the repealed s 1237, the new sections do not as a matter of construction or statutory purpose operate to displace whatever rights have accrued in consequence of a decision of the Secretary made before 24 December 1993.

Where there has been no decision in respect of the waiver of a debt due to the Commonwealth and that debt was incurred prior to 24 December 1994, that fact does not make the operation of the sections retrospective. All the new sections do is take into account that the present debt may have been incurred prior to the commencement of ss 1237 and 1237A and prescribe for the future how the debt may be waived in whole or in part (Coleman v Shell Co of Australia Ltd (1943) 45 SR (NSW) 27 at 31; Robertson v City of Nunawading at 824; La Macchia v Minister for Primary Industry (1986) 72 ALR 23 at 33).

It was submitted by the respondent that the decision in Secretary, Department of Social Security v Kratochvil (1994) 53 FCR 49 is authority for the conclusion that the changes to the Act brought about by s 87 of the 1993 Act indicated an intention that s 8 of the Acts Interpretation Act 1901 (Cth) was not to operate to require the various reviews of the operative decision of 13 December 1993 to be conducted in accordance with the repealed s 1237.

In Kratochvil, O’Loughlin J said (at 52) :-

“The 1993 amendments that now deal with the subject of waiver were introduced as a consequence of the decision by a Full Court of this Court in Riddell v Secretary, Department of Social Security (1993) 42 FCR 443. The court was there concerned with the attempt by the Minister to give directions to the Secretary relating to the exercise of the Secretary’s power of waiver. As previously noted, s 1237(1) of the 1991 Act contained the Secretary’s power of waiver, but s 1237(3) stated that the Minister may give directions relating to the exercise of that power. In Riddell’s case the Minister gave directions, on 8 July 1991, to the Secretary in purported exercise of the power conferred by the subsection. These were challenged successfully on the ground that they went beyond giving guidance in the exercise of the power and attempted to deny the existence of the Secretary’s power.”

His Honour continued (at 54 - 55) :-

“It seems to me that when one has regard to the reason for the introduction of the 1993 amendments, it is easy to perceive that the legislature felt it necessary to set out, as part of the statutory framework, guidelines for the exercise of the Secretary’s power of waiver. An earlier attempt to achieve that objective by the use of administrative directions had been rejected by the Full Court in Riddell’s case. The legislature now sought to entrench those guidelines by statutory enactment. It is not likely that the legislature only intended the 1993 amendments to operate as guidelines for those applications that were made after the introduction of the new legislation when it knew, as a consequence of the decision in Riddell’s case, that all earlier directions that had been given by the Minister were of no effect. After all, the purpose of the exercise was to perfect that which had earlier been imperfectly attempted.”

I agree with O’Loughlin J that the 1993 Act did not indicate an intention on the part of the legislature that the new provisions were only intended to operate with respect to applications for waiver made after 24 December 1993. I agree that it was intended that applications pending and not decided by the Secretary or a delegate before that date were to be determined in accordance with the new provisions. In any event, pending applications in this category do not involve any accrued right of the applicant to have the waiver determined under the repealed s 1237 (Mathieson v Burton at 23, Director of Public Works v Ho Po Sang at 924; Robertson v City of Nunawading at 825 - 826). Therefore, s 8 of the Acts
Interpretation Act 1901 (Cth) does not operate to require the pending applications to be dealt with under the repealed sections.

I do not agree that the 1993 Act evinced an intention to abrogate substantive rights given by the ordinary principles of administrative law and the Act in respect of an operative decision of the Secretary or a delegate to refuse waiver where that decision was made prior to 24 December 1994. In respect of this limited category of cases I differ from O’Loughlin J in Kratochvil as to the continued right to have the review conducted in accordance with the provisions of the repealed s 1237. For the reasons which I have given above, I do not consider that the new s 1237 and s 1237A, as a matter of statutory construction, operate retrospectively. Additionally, on and from 24 December 1993 the sections are capable of having a rational operation in respect of all pending and future applications for waiver where the Secretary or a delegate has not made an operative decision, without the need to abrogate any rights vested in an applicant in consequence of a prior operative decision. There is nothing, in my view, to displace the general principle against construing the new sections retrospectively or to indicate that the legislature intended to abrogate accrued rights. I have come to this conclusion without reference to the explanatory memorandum accompanying the 1993 Act. However, reference to the memorandum does not disclose any legislative intention to abrogate any accrued rights in respect of decisions given by the Secretary prior to the commencement date So far as is relevant the memorandum states :-

“

1. Summary of proposed changes

This Division contains changes that will define the circumstances when, and only when, the Secretary to the Department of Social Security can waive the right to recover all or part of a debt due to the Commonwealth recoverable
under the Principal Act.

2. Background

Section 1237 of the Principal Act permits the Secretary to waive ‘the Commonwealth’s right to recover from a person the whole or part of a [social security] debt’. Subsection 1237(2) requires the Secretary, in exercising this power, ‘to act in accordance with directions from time to time in force under subsection (3)’. Subsection 1237(3) permits the Minister for Social Security to issue in writing directions relating to the exercise of the Secretary’s waiver power.

The Minister has issued two sets of directions: the first was issued on 8 July 1991; the second on 5 May 1992.

In the Federal Court decision, Riddell v Secretary to the Department of Social Security (1993) 114 ALR 340, the Minister’s 1991 instrument was set aside and the Court suggested that the second instrument would also be disallowed if it came before the Court. The Court considered that the directions inappropriately limited the wide discretion given to the Secretary in subsection 1237(1).

The purpose of the directions was to foster consistency in decisions on waiver made by the different delegates of the Secretary and by the Social Security Appeals Tribunal and the Administrative Appeals Tribunal. Riddell’s Case has clarified that the only certain way to secure this result is to incorporate the Minister’s waiver directions into the Principal Act.

.....

4. Explanation of the changes

Clause 94 provides for the repeal of the current section 1237 and for the insertion of new sections 1236A, 1237 and 1237A.

New section 1236A is an application provision to the effect that new sections 1237 and 1237A are to apply to all debts, whenever incurred, owed to the Commonwealth and arising under the Principal Act or under the Social Security Act 1947. This section is designed to prevent any ambiguity about the applicable law where a debt was incurred in whole or in part before the new sections 1237 and 1237A came into effect.”

The explanatory memorandum is consistent with my view as to the operation of the new sections as a matter of statutory construction. That is, decisions as to waiver by the Secretary or a delegate made after the commencement date are to be made under the new
sections and those sections apply to all debts whenever incurred. Section 1236A is to avoid any argument that debts incurred prior to 24 December 1993 could not be waived because the 1993 Act only operated in respect of debts incurred after that date or alternatively, that any power to waive the prior debts remained in the Secretary under the repealed section.

In my opinion the Tribunal erred in failing to determine the issue of waiver by reference to the repealed s 1237 of the Act.

I agree with Davies and Moore JJ that, on the proper construction of the present s 1237 and s 1237A of the Act, there is no residual discretion in the Secretary to exercise the power of waiver in other than the circumstances in subsections 1237(2), (3), (4) or (5) and subsections 1237A(2), (3) and (4).

I would allow the appeal and remit the matter to be heard by the AAT in accordance with law and these reasons. In the event that the AAT orders that the operative decision of 13 December 1993 be set aside and that the debt due by the applicant be waived, the order writing off one-half of the debt should also be set aside and so much of the debt as the applicant has repaid in accordance with that order should be paid to her by the respondent.

Cross-Appeal

For the reasons given by Davies J, I agree that the cross-appeal should be dismissed.

Costs

The respondent should pay the applicant’s costs of the appeal and cross-appeal to be taxed if not agreed.

I certify that this and the preceding twelve (12) pages are a true copy of the reasons for judgment of his Honour Justice R E Cooper.

Date: 7 August 1996

Associate

IN THE FEDERAL COURT OF AUSTRALIA )

)

NEW SOUTH WALES DISTRICT REGISTRY ) No. NG 697 of 1995

)

GENERAL DIVISION )

BETWEEN: PATTI-MAE LEE

Applicant

AND: SECRETARY, DEPARTMENT

OF SOCIAL SECURITY

Respondent

CORAM:Davies, Cooper & Moore JJ

PLACE:Sydney

DATE: 7 August 1996

REASONS FOR JUDGMENT

Introduction

MOORE J: I have read the reasons for judgment of Davies J in a draft form. They succinctly set out many of the relevant facts and legislation and it is unnecessary to repeat all of it. However in relation to one issue dealt with by his Honour, I respectfully disagree with his conclusion and it is necessary to set out some further facts to explain why.

Amendments were made to the Social Security Act 1991 (Cth) ("the Act") by the Social Security (Budget and Other Measures) Legislation Amendment Act 1993 (Cth) ("the 1993 Amendment Act"). Prior to its amendment the Act conferred on the Secretary of the Department of Social Security a discretionary power to waive the Commonwealth's right to recover a debt: see s1237(1). This power was exercisable by a delegate of the Secretary: see s1299. It was a broad discretionary power to be exercised having regard to the scope, purpose and objects of the Act though subject to any lawful directions made by the Minister under s1237(3): see Riddell v Secretary, Department of Social Security (1993) 42 FCR 443. The Act also contained a mechanism for the internal review of decisions made under the Act and for further review after internal review.

An issue in this appeal is the legal character of the right to seek internal review and whether, and in what way, the right was affected by the 1993 Amendment Act. That is, whether the appellant had a right to have the internal review of the decision made under the Act in its unamended form conducted by reference to the power conferred by the Act before its amendment even though the review occurred after the amendments made by the 1993 Amendment Act took effect. A related issue is the legal character of the right to further review after internal review and the effect of the 1993 Amendment Act on that right.

The decision of the primary decision maker

The appellant was informed by letter dated 15 December 1993 from a delegate of the Secretary, Mr Murray, that it had
been ascertained she was indebted to the Commonwealth and should pay the sum of $1,516.00 to the Department by 30 December 1993. While the letter was expressed in conciliatory language the plain import of the letter read as a whole was that a decision had been made to ask her to repay that sum. The consideration of the appellant's position was the direct result of the letter from Mr Morris MHR of 15 April 1993, who had asked that "the Department not seek to recover any overpayment".

It is apparent from a file note dated 1 December 1993 that Murray viewed Morris' letter as a request that the overpayment "be waived". Another document signed by Murray on the same day took the form of a report to a more senior officer containing six recommendations in the following terms:

"Recommendations

a)an overpayment of $1,020.00 be raised;

b)the pensioner be advised and requested to refund;

c)automatic withholdings be commenced to effect partial recovery;

d)Recoveries Section be notified;

e)taxation adjustments be effected where necessary;

f)waiver and write-off considered but not appropriate;"

The typed amount of $1,020 was altered by hand to read $1,516. The senior officer signed the report in a space next to the words "overpayment approved by ....". The letter of 15 December 1993 made no mention of the automatic withholding of payment, and I infer that the approval was of the recommendation that the overpayment "be raised", that is, steps be taken to recover the overpayment. The first step
taken was to write the letter. However the failure of the authorising senior officer to adopt, or Murray to implement, one recommendation does not lead to the conclusion that the matter in paragraph (f) was viewed as irrelevant or that it was not addressed.

Section 1224 of the Act provided that an overpayment of the type made to the appellant was a debt due to the Commonwealth and, having regard to the provisions of s1224(2), recoverable by deductions from a pension, legal proceedings or a garnishee notice. However steps are not taken to recover the debt if the right to recover is waived under s1237. The characterisation of the act of commencing to recover an overpaid amount, and whether it constitutes a "decision" in the context of administrative review, has been considered in Director-General of Social Services v Hangan (1982) 45 ALR 23, Director-General of Social Services v Hales (1983) 47 ALR 281, Re Taylor and Director-General of Social Security (1984) 6 ALD 500 and Taylor v Secretary, Department of Social Security (1988) 14 ALD 655.

In the last mentioned case the relevant decision, to affirm a decision to recover the overpayment, was made in the context of a statutory framework conferring on the Secretary a power to waive the right to recover. The decision maker described the decision affirmed as a "decision to raise and recover an overpayment". Nonetheless it was characterised by Lockhart J at 661, Wilcox J agreeing, as a decision not to
waive recovery of the overpayment. However it may be accepted that a decision to proceed to recover does not necessarily involve a decision not to waive recovery: see Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32.

While the letter of 15 December 1993 invited the appellant to discuss any disagreement as to whether the debt should be recovered, I am satisfied that at least by 15 December 1993 and probably on 13 December 1993 a decision was made not to waive the right to recover the debt. The decision to recover from the appellant was made in circumstances where the departmental officer and delegate who made the demand was responding to a letter he treated as requesting that the right to recover be waived and where he had indicated in a report seeking approval to recover the debt, that waiver had been "considered but (was) not appropriate". In the present case a decision was made not to waive the right to recover.

The appellant was given the letter on 23 December 1993. At that point the appellant was able to exercise the right conferred by s1240 to seek an internal review of any decision that had been made including a decision not to waive the right to recover. A file note of a conversation with her on that day records that she "formally requested that the decision to raise the overpayment against her, be reviewed". It was, in part, the decision not to waive the right to recover that the appellant sought to be reviewed. Thus, if the appellant had a right to seek a review of the decision not to waive recovery
of the debt, she exercised the right to seek an internal review a day before s1237 in its amended form came into effect.

The mechanism for review - the Act

The various stages of review of decisions under the Act were dealt with in Chapter 6. Chapter 6 was not amended by the 1993 Amendment Act save for an amendment to s1250 which is not directly relevant. Section 1240, found in Part 6.1, conferred on a person affected by a decision made under the Act a right to apply to the Secretary or an authorised review officer: see s1301, for a review of the decision. This was described as an internal review. While these provisions contained qualifications and exceptions, they are not presently relevant. The combined effect of s1240(3) and 1243(1) was to oblige the Secretary or authorised review officer to review the decision and affirm it, vary it or set it aside. Section 1243(2) required that the applicant for review be given written notice of the decision. The contents of the notice were addressed by s1244(1) which provided:

"1244. (1) If a person gives the applicant notice under subsection 1243(2), the notice must include:

(a) a statement to the effect that the applicant may, subject to this Act, apply to the Social Security Appeals Tribunal for review of the person's decision; and

(b) a statement about the person's decision that:

(i) sets out the reasons for the decision; and

(ii) sets out the findings by the person on material questions of fact; and

(iii)refers to the evidence or other material on which those findings were based; and

(c) a statement to the effect that, if the person is dissatisfied with the Social Security Appeals Tribunal's decision, application may, subject to the Administrative Appeals Tribunal Act 1975, be made to the Administrative Appeals Tribunal for review of the Social Security Appeals Tribunal's decision."

Part 6.2 contained s1247 which conferred a right on a person whose interests were affected by the decision made under s1243, to apply to the Social Security Appeal's Tribunal (SSAT) for review of that decision. Again this process of review was subject to exceptions and qualification which are not presently relevant. Section 1253 obliged the SSAT to affirm, vary or set aside the decision and, if setting it aside, either substitute a new decision or send the matter back to the Secretary for reconsideration.

Part 6.4 dealt with the review of an SSAT decision by the Administrative Appeals Tribunal ("the Tribunal"). Section 1283 provided:

"1283. (1) If a decision has been reviewed by the Social Security Appeals Tribunal (SSAT) and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for a review of the decision of the SSAT.

(2) For the purposes of subsection (1), the decision made by the SSAT is to be taken to be:

(a) where the SSAT affirms a decision - the decision as affirmed; and

(b) where the SSAT varies a decision - the decision as varied; and

(d) where the SSAT sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the SSAT - the directions or recommendations of the SSAT.

(3) Subsection (1) has effect subject to section 29 of the Administrative Appeals Tribunal Act 1975.

(4) If:

(a) the Administrative Appeals Tribunal sets a decision aside; and

(b) the Secretary is satisfied that an event that did not occur would have occurred if the decision had not been made;

the Secretary may, if satisfied that it is reasonable to do so, deem the event to have occurred for the purposes of this Act.

This section must be read in conjunction with s27 of the Administrative Appeals Tribunal Act 1975 ("AAT Act") which states that where an Act provides that an application may be made to the Tribunal for a review of a decision, the application may be made by or on behalf of any person whose interests are affected. Section 43 of the AAT Act invests the Tribunal, when reviewing a decision, with power to exercise all the powers and discretions that are conferred on the person who made the decision under review. Even if there had been, contrary to the facts in this case, no decision to waive the right to recover, the Tribunal could exercise the power to waive in reviewing a decision to raise the debt: see Hodgson (supra) at 39-40 per Hill J. The Tribunal must make a decision and the range of decisions that may be made is the same as those to be made by the SSAT described earlier.

There are provisions in the Act dealing with the character of the decision considered at each stage of the review process and, for present purposes, it is only necessary to consider the chain resulting from a decision adverse to a person which is affirmed in the internal review and by SSAT. At the point of review by the SSAT, the decision under review is the decision originally made by the primary decision maker as affirmed by the Secretary or authorised review officer at the preceding level of internal review under part 6.1: see s1247(1A). At the point of review by the Tribunal the decision under review is the decision made by SSAT at the preceding level of review under part 6.2, namely the decision considered by the SSAT as affirmed by it: see s1283. Ordinarily the affirmation of an earlier decision leaves, as the operative decision, the earlier decision of the primary decision maker: see Gee v Director General of Social Services (1981) 58 FCR 347 at 354 and more generally it is the decision of the primary decision maker under review: see Yolbir v Administrative Appeals Tribunal & Anor (1994) 48 FCR 246. Thus, in the present case, the decision to be reviewed by the Tribunal was the decision of the primary decision maker affirmed both in the internal review and by SSAT.

The Internal Review

The internal review was conducted by an authorised review officer who, on 8 February 1994, decided that "recovery of the debt should proceed". The officer noted that s1237 had been amended and that the appellant's circumstances did not fall within any of the identified circumstances that would enliven the power to waive recovery. While the review officer expressed the view that a further $60 should be recovered, the substantive decision she made was to affirm the decision including the decision not to waive recovery. The respondent
submitted the identification of a further sum to be recovered constituted a variation of the original decision. I do not accept that this is so at least as concerns any decision to waive recovery. The computation of the debt was necessary to establish the factual framework in which that decision was made.

Further review

As noted by Davies J, the appellant sought a review by the SSAT and the SSAT affirmed the decision to recover payment. The appellant sought a further review by the Tribunal. The appellant submitted to the Tribunal that s1237 in its unamended form was the law to be applied by the Tribunal. However the Tribunal considered itself bound by the judgment of O'Loughlin J in Secretary, Department of Social Security v Kratochvil (1994) 53 FCR 49 and was obliged to apply s1237 in its amended form. The Tribunal concluded that the appellant's circumstances did not fall within one of the classes specified in s1237 which permits the exercise of the power to waive the right to recover.

The effect of the Amendment Act on the right to seek review

Central to a consideration of the effect of the 1993 Amendment Act on the review process is the decision of the High Court in Esber v The Commonwealth of Australia (1992) 174 CLR 430. Esber had applied to redeem weekly payments, which
exceeded $50.00, paid under the Compensation (Commonwealth Government Employees Act 1971 ("the 1971 Act"). Section 49 of the 1971 Act empowered the Commissioner for Employees' Compensation ("the Commissioner") to redeem weekly payments exceeding $50.00. Esber unsuccessfully sought the exercise of that power. He then made application to the Tribunal for a review of the decision of the Commissioner refusing the application to redeem. Before the matter was determined by the Tribunal but after it had been heard, the Commonwealth Employees' Rehabilitation and Compensation Act 1988 ("the 1988 Act") repealed the 1971 Act.

In issue in Esber was whether the Tribunal could exercise the power conferred by the 1971 Act to redeem a weekly payment in excess of $50 notwithstanding its repeal. The 1988 Act made no provision for the redemption of weekly payments exceeding $50.00. The 1988 Act also contained transitional provisions which were considered by the High Court. Having regard to those provisions, the majority concluded the Tribunal could exercise the power conferred by the 1971 Act. However the majority, Mason CJ and Deane, Toohey and Gaudron JJ, also dealt with the matter on an additional and discrete basis which did not depend directly upon the effect of the transitional provisions. It involved the operation of s8 of the Acts Interpretation Act 1901 (Cth). In order to explain, for present purposes, the approach taken by the majority it is desirable to set out in full a lengthy passage of their joint judgment at 438-440:

"Section 8 of the Acts Interpretation Act, so far as it was relied on by the appellant, reads:

"Where an Act repeals in the whole or in part of a former Act, then unless the contrary intention appears the repeal shall not;

...

(d) affect any investigation legal proceeding or remedy in respect of any such right privilege obligation liability penalty forfeiture or punishment as aforesaid ..."

The first step in a consideration of s. 8 is to identify the "right" which the appellant says was acquired or accrued under the repealed Act. Paragraph (e) operates in relation to such a right, not independently of it.

In this regard the appellant puts his case on s. 49 of the 1971 Act on two footings. First, he says that he had, in the circumstances, a right to redemption of weekly payments. Alternatively, he says that he had a right to have the Tribunal determine his application to review the delegate's decision. In either event, the appellant contends, the repeal of the 1971 Act did not affect the right.

Although the appellant put this aspect of his case in two ways, it is fair to say that he relied much more on the second approach. As to the first approach, the question is whether, if the Commissioner was satisfied of the matters in pars (a), (b) and (c) of s. 49(5), he had any residual discretion to refuse redemption or, perhaps more accurately, whether there were other factors he could properly take into account in so refusing. Could the Commissioner, for instance, determine that the liability of the Commonwealth should not be redeemed because of the budgetary circumstances of the Commonwealth? This is not an easy question to answer. Clearly, the Commissioner must act according to law. If he took into account a consideration that was irrelevant, for instance the colour of the appellant's eyes, he would not have acted according to law. In the present case the delegate wrote to the appellant a letter in which he said: "I have disallowed your claim under section 49." He added: "The reason I have made this decision is because I am not satisfied in your case that the requirements of sub-section 49(4) have been met." Unless the reference to sub-s. (4) was a mistake for sub-s. (5), the letter is a curious one. Sub-section (4) is concerned with the calculation of the amount of the lump sum to be paid in redemption; it presupposes a determination under sub-s (3) that the liability of the Commonwealth is to be redeemed. However, the balance of the letter does indicate that the delegate was referring to sub-s (4) because he spoke of his inability to predict the level at which weekly payments of compensation would continue and that, without this information, "it is not possible to determine the value of your right to receive further payments under section 46 (sub-section 49(4))".

It is not profitable to explore this aspect any further. One cannot easily extract from the letter a conclusion that the delegate was satisfied of the matters in pars (a), (b) and (c) of s. 49(5). And in the end it does not matter because, at the least, the appellant had, at the time of the repeal of the 1971 Act, a right to have his application to the Tribunal determined pursuant to Pt V of the 1971 Act. It may not be possible to say of a person in the position of the appellant that he had a right to a favourable determination from the Tribunal. The Tribunal was required to stand in the shoes of the decision-maker (the delegate) and arrive at its own decision (16). In Drake, Bowen CJ and Deane J said of the Tribunal (16):

"The question for the determination of the Tribunal is not whether the decision which the decision maker made was the correct or preferable one on the material before him. The question for the determination of the Tribunal is whether that decision was the correct or preferable one on the material before the Tribunal."

But that is not to the point here. If it be assumed that the appellant did not have a right to redemption in the sense first discussed, he had a right to have his claim to redemption determined in his favour if the delegate had wrongly refused his claim. To borrow a sentence from the judgment of Hope JA in NSW Aboriginal Land Council v. The Minister [The Winbar Claim] (17):

"the right might be said to be a conditional one, namely, conditional upon the relevant facts being established but the right was nonetheless a right because it was conditional."

Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely "a power to take advantage of an enactment" (18). Nor was it a mere matter of procedure (19); it was a substantive right (20). Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, "although that right might fairly be called inchoate or contingent" (21). This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s. 8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act."

Two matters emerge, in my opinion, from this part of the reasons of the majority.

The first is, as is apparent from the passages preceding the quotation from Drake and following the quotation from NSW Aboriginal Land Council, that a statutory right to seek a review of a decision made under a repealed Act is a right for the purposes of s8 of the Acts Interpretation Act 1901. Moreover it is a right to have the review undertaken by reference to the power exercised by the primary decision maker under the repealed Act. The second is that a right to seek a review can be characterised as a right for the purposes of s8 even if the decision which is to be reviewed involved the exercise of a discretionary power conferred by the repealed Act.

While it may be accepted that this approach to the scope and operation of s8 does not accord with the approach adopted by the Privy Council in Director of Public Works v Ho Po Sang (1961) AC 901: see also Robertson v City of Nunawading (1973) VR 819, the view of the majority in Esber is clear. The consequences of this construction of s8 are, in my opinion, unexceptionable. It confers on a person affected by the exercise of a statutory power, a right to have the exercise of the power reviewed and exercised again as it might have been exercised initially. Plainly Parliament may indicate that this consequence will not arise by manifesting, in the amending legislation, a contrary intention displacing the prima facie operation of s8.

Application of Esber to the circumstances of the appellant - the rights protected by s8

In the present case for the purposes of s8 and subject to any contrary legislative intention, s1240 conferred on the appellant a right to have reviewed the decision made under s1237 of the Act and to have it reviewed by reference to the
power conferred by s1237 in its unamended form notwithstanding its amendment.

It is not entirely clear whether it was critical to the reasoning of the majority that the application by Esber for review by the Tribunal had been made prior to the repeal of the 1971 Act. However, the statements in the passage quoted that "... the appellant had, at the time of the repeal of the 1971 Act, a right to have his application to the Tribunal determined..." and later "Once the appellant lodged an application to the Tribunal ... he had a right ...", indicate it was. In the present case the appellant had made application under s1240 prior to the amendment to s1237. But until that application had been determined and determined unfavourably to the appellant, no application could have been made by the appellant under s1247 to the SSAT and thereafter to the Tribunal under s1283.

In my opinion, both the right to have the decision further reviewed by the SSAT and reviewed again by the Tribunal are conditional rights of the same character as the right to apply for review considered in Esber. That is so because the Act itself established the condition precedent to the exercise of that right, namely the making of an adverse decision by a person or body exercising a power of review at an earlier stage in the process of review. Thus the Act, prior to its amendment, conferred the right to apply for a review to the SSAT and the Tribunal conditionally. Though
relied upon for a slightly different purpose, the observations of Hope JA in the NSW Aboriginal Land Council case quoted with approval by the majority in Esber, and the later reference by the majority to an "inchoate or contingent" right indicate that a conditional right is protected by s8. Thus the right to apply for a review by the SSAT, and thereafter the Tribunal, of a decision made under s1237 in its unamended form was preserved by s 8 subject to any contrary intention being manifest. It was preserved on the basis that the review would be determined by reference to the power conferred by s1237 in its unamended form.

Is there a contrary legislative intention displacing the prima facie operation of s8

This leads to a consideration of Secretary, Department of Social Security v Kratochvil (supra). That case concerned a decision the Tribunal made after the amendment of s1237. The decision under review by the Tribunal, that of the SSAT to waive recovery of a debt, had been made under the Act in its unamended form. The amendments came into effect after the Tribunal had heard the matter but before it had decided it. The Tribunal exercised the power conferred by s1237 in its unamended form. O'Loughlin J decided the Tribunal had erred in doing so and his Honour took the view that the prima facie operation of s8 was displaced by the manifestation of a contrary legislative intention. His reasons for so concluding arose from the legislative history of s1237.

In its unamended form s1237(3) permitted the Minister to give directions relating to the exercise of the discretionary power conferred on the Secretary by s1237(1). In July 1991, the Minister had purported to exercise that power and published directions that circumscribed the exercise of the discretionary power. In Riddell (supra) a Full Court of the Federal Court considered the validity of those directions and concluded that they were not authorised by s1237(3). They were not valid directions. Following this decision the amendments were made to s1237 by the 1993 Amendment Act. The significance of this was discussed by O'Loughlin J in Kratochvil (supra) at 54 and 55:

"It seems to me that when one has regard to the reason for the introduction of the 1993 amendments, it is easy to perceive that the legislature felt it necessary to set out, as part of the statutory framework, guidelines for the exercise of the Secretary's power of waiver. An earlier attempt to achieve that objective by the use of administrative directions had been rejected by the Full Court in Riddell's case. The legislature now sought to entrench those guidelines by statutory enactment. It is not likely that the legislature only intended the 1993 amendments to operate as guidelines for those applications that were made after the introduction of the new legislation when it knew, as a consequence of the decision in Riddell's case, that all earlier directions that had been given by the Minister were of no effect. After all, the purpose of the exercise was to perfect that which had earlier been imperfectly attempted.

The conclusion that I have reached has been achieved without reference to the Explanatory Memorandum which accompanied the 1993 amendments. However s15AB of the Acts Interpretation Act permits, in appropriate circumstances, access to extrinsic material and consideration may be given to that material "to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision...".

In this case the Explanatory Memorandum made express reference to Riddell's case and went on to say:

"The Court considered that the directions inappropriately limited the wide discretion given to the Secretary in subsection 1237(1).

The purpose of the directions was to foster consistency in decisions on waiver made by different delegates of the Secretary and by the Social Security Appeals Tribunal and the Administrative Appeals Tribunal. Riddell's Case has clarified that the only certain way to secure this result
is to incorporate the Minister's waiver directions into the Principal Act."

I have come to the conclusion that the Tribunal has erred in law in concluding that its decision was not to be affected by the introduction of the 1993 amendments."

Underpinning this analysis is a premise with which, for my part, I would respectfully not agree. The Full Court in Riddell (supra) determined that Parliament did not intend, by the enactment of s1237(3), that directions could be given that denied the Secretary the discretionary power conferred by s1237(1). It is not submitted in these proceedings that Riddell (supra) was wrongly decided. It must be assumed that this remained Parliament's intention till the 1993 Amendment Act was passed. It was then that a different intention was manifest. That is, the exercise of the discretionary power should be limited in the way identified in s1237 in its amended form. Thus, it cannot be assumed that Parliament was attempting to remedy what it had earlier failed successfully to do. Having regard to the terms of the Act in its unamended form, as construed by the Court in Riddell, Parliament had not attempted to limit the power in the way that had purportedly been done by the ministerial directions let alone failed to do so or attempted to do so "imperfectly". To the contrary, it had intended that the discretionary power be exercised though subject to any ministerial directions authorised by s1237(3). In my opinion the history of the legislation discussed by O'Loughlin J does not support the view that the 1993 Amendment Act was intended to operate so as to modify the rights of review arising under the Act and invoked prior to the amendments taking effect in the sense that s1237 in its
amended form was to be applied by the person or body undertaking the review. As to the intention of Parliament and the construction of legislation by Courts more generally: see Brennan v Comcare (1994) 50 FCR 555 at 572-575 per Gummow J.

Indeed the language and structure of the 1993 Amendment Act tell against the construction adopted by O'Loughlin J. Section 87 enacted the new s1237 and simply says that "Section 1237 ... is repealed ... and the following sections are substituted." Section 2(1) provided that various sections, including s87, commenced upon Royal Assent. This is to be contrasted with several other provisions which were, by dint of s2, to operate from dates in 1988 and 1991. This was achieved by use of the formulation that the provision "is taken to have commenced" on the nominated day. Other provisions were expressed in s2 to operate in relation to payments made under the Act on or after 1 January 1994. The only possible manifestation of a contrary intention is the inclusion in the Act, by s87 of the 1993 Amendment Act, of s1236A which provides:

"1236A. Sections 1237 and 1237A apply to all debts, whenever incurred, owed to the Commonwealth and arising under this Act or under the Social Security Act 1947." (emphasis added)

However the reference in s1236A to debts "whenever incurred" is intended to make plain that the power to waive, when exercised after the 1993 Amendment Act came into force, could be exercised in relation to a debt that arose prior to that time. It is not, in my opinion, intended to affect the
right of review and the manner of the exercise of the power of review arising elsewhere in the Act and the AAT Act.

Conclusion

In the present case the Tribunal followed Kratochvil and proceeded on the basis that if, in the review, any power of waiver was to be exercised, it was that conferred by the 1993 Amendment Act. It erred in law in not considering whether the recovery of the debt should be waived by reference to s1237 in its unamended form. Accordingly I would set aside the Tribunal's decision and remit the matter to it for determination.

As to the cross appeal, subject to what I earlier said about the characterisation of the decision made in December 1993 concerning the recovery of the overpayment, I agree for the reasons given by Davies J that the cross-appeal be dismissed.

I would order that the respondent pay the appellant's costs of the appeal.

I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.

Associate: ......................

Dated: 7 August 1996

APPEARANCES

Counsel for the Applicant: M.B. Smith and J. Fitzgerald

Solicitor for the Applicant:S. Coller, Welfare Rights Centre

Counsel for the Respondent: P. Roberts

Solicitor for the Respondent: Australian Government Solicitor

Dates of Hearing: 16 February 1996

Date of Judgment: 7 August 1996

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