FEDERAL COURT OF AUSTRALIA

SOCIAL SECURITY - newstart allowance - whether forgetting "within the person's control" or reasonably foreseeable - whether person who failed to comply with term of agreement due to circumstance within the person's control and/or reasonably foreseeable amounts to failure to take reasonable steps to comply with the terms of the agreement.

Employment Services Act 1994 ss 45(5)(b) and 45(6)

Social Security Act 1991 ss 593(1)(b), 601(4), 601(5), 601(6), 608(1)(j)(iii), 626(1), 630A(1) and 660I

Re Secretary, Department of Employment, Education, Training and Youth Affairs and Ruiz (1996) 23 AAR 211, considered

Rohrmoser v Registrar of Trade Marks (1987) 70 ALR 613, considered

The Turul [1919] AC 515, considered

Southwark London Borough Council v Williams [1971] 1 Ch 734, considered

SECRETARY, DEPARTMENT OF EMPLOYMENT, EDUCATION AND YOUTH AFFAIRS v FERGUSON

VG 374 OF 1996

MANSFIELD J

ADELAIDE (Heard in Melbourne)

24 JULY 1997

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) VG 374 of 1996

)

GENERAL DIVISION )

BETWEEN: SECRETARY, DEPARTMENT

OF EMPLOYMENT, EDUCATION

AND YOUTH AFFAIRS

Applicant

AND: DARYL FERGUSON

Respondent

JUDGE: MANSFIELD J

PLACE: ADELAIDE (Heard in Melbourne)

DATED: 24 JULY 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

(1) Appeal allowed.

(2) Application remitted to Administrative Appeals Tribunal for further consideration in accordance with these reasons.

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

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) VG 374 of 1996

)

GENERAL DIVISION )

BETWEEN: SECRETARY, DEPARTMENT

OF EMPLOYMENT, EDUCATION

AND YOUTH AFFAIRS

Applicant

AND: DARYL FERGUSON

Respondent

JUDGE: MANSFIELD J

PLACE: ADELAIDE (Heard in Melbourne)

DATED: 24 JULY 1997

REASONS FOR JUDGMENT

INTRODUCTION

This appeal from the Administrative Appeals Tribunal ("the Tribunal") raises questions of law as to the proper construction and operation of s 45 of the Employment Services Act 1994 ("the ES Act") and s 601(6)(a) of the Social Security Act 1991 ("the SS Act").

The respondent did not appear at the hearing of the appeal. At the commencement of the hearing, counsel for Welfare Rights Centre Limited ("the WRC") sought leave to appear as amicus curiae. That centre is a community legal centre, involved to a large degree in the provision of free legal assistance to those involved in seeking payment of, or endeavouring to establish entitlement to payment of, benefits under the SS Act, or to those seeking to understand rights and obligations under either the SS Act or the ES Act. It did not seek to put any submission adverse to the interests of the respondent. Its application for such leave was not opposed. It is common ground that there has been little authority on the proper operation of s 45 of the ES Act, and how it intercepts with provisions of the SS Act, and further that those matters are of recurring practical significance. In those circumstances it seemed to me appropriate to give the leave sought, and I accordingly gave such leave. See generally United States Tobacco Company v Minister for Consumer Affairs (1988) 20 FCR 520 at 536.

The WRC sought also to contend for a construction of s 45(5) and (6) of the ES Act which was different from the construction adopted by the Tribunal, as well as upholding the decision of the Tribunal. In particular, as appears below, the Tribunal in addressing the matters arising under s 45(6) of the ES Act had assumed that the respondent had failed to comply with the terms of a Case Management Activity Agreement into which he had entered under s 38 of the ES Act by failing to attend an interview of which he had had notice. It sought to argue that such a failure did not, in terms of s 45 of the ES Act, amount to a failure to comply with the terms of that agreement because either:

(a) substantial compliance only was required with that agreement, or

(b) compliance or non-compliance with the terms of the agreement is to be considered only in respect of that agreement as a whole, rather than in respect of a particular term of that agreement.

I do not consider it appropriate in the particular circumstances to permit the WRC in submissions as amicus curiae to pursue those questions over the opposition of the applicant. They were not raised before the Tribunal. It is unnecessary to determine them to resolve this appeal: cf. Tefonu Pty Ltd v Insurance & Superannuation Commissioner (1993) 18 AAR 236; Ferriday v Repatriation Commission (1996) 24 AAR 29. Counsel for the applicant suggested that there may also be some disadvantage to the respondent in dealing with those submissions. The matter did not proceed on the basis that it was in the nature of a test case. Such questions should be determined in a matter in which they are specifically raised for determination. I also observe that those matters are not the subject of any cross-appeal or notice of cross-contention by the respondent: see Federal Court Rules, O 53 rr 13(1) and (3).

THE FACTS

The respondent made a claim for a newstart allowance under the SS Act on 23 November 1993. That claim was accepted, and he was in receipt of that allowance until it was cancelled by the applicant on 5 July 1995. It is the circumstances of its cancellation which give rise to this appeal.

Chapter 4 of the ES Act establishes the case management system. It provides how persons become participants in that system, and how such a participant is then interviewed and then referred to a nominated case manager. That sets in train a one to one service to job seekers to endeavour to place them in suitable and sustainable employment. The vehicle for that arrangement is a Case Management Activity Agreement, to be negotiated between the job seeker and the case manager: s 38. There are provisions as to how it is to be negotiated in s 38, and as to its terms in s 39. Section 44 deals with the consequences of failure to negotiate a Case Management Activity Agreement. Section 45 deals, amongst other things, with the consequences of not properly performing a Case Management Activity Agreement. In either event, as the Minister for Employment, Education and Training said in the Second Reading Speech:

"Failure ... will have the same effect for the job seeker as failure to enter into a Newstart activity agreement ... or failure to comply with the terms and conditions of those agreements. In other words, it will lead to a loss of allowances for some period of time."

(Hansard, House of Representatives, 24 August 1994, 247). The legislative steps involved in producing that consequence are not easy to follow.

It is clear that the respondent became a case management participant under the ES Act, and that a case officer pursuant to s 29 was appointed to him.

No doubt as a result of following the procedures prescribed, a Case Management Activity Agreement ("the agreement") was signed by the respondent on 23 March 1995. It is a document which is in part a pro forma document and in part completed by adding handwritten components. Its relevant provisions include:

"1. I will do everything I can to get a job and I am willing to undertake suitable paid work;

2. I will undertake the following activities, within the timeframes specified, to help me get a job;

Only sections 2(ii)-(v) of the agreement as set out above are completed in handwriting. The balance of the agreement also includes a number of printed terms to which the respondent has added his signature at the bottom including the following:

"5. I agree to contact, attend or provide information to my Case Manager when I have information concerning this Agreement or when asked; and . . .

I understand that:

. . .

4. I may be required to enter into a new or revised Agreement; and

. . ."

On 5 May 1995 the respondent's case officer wrote to him advising him that he was required to attend an interview with her on 19 May 1995. It was a pro forma letter headed "Formal CMAA Review Appointment" in the following terms:

"You are required to attend an interview to review your Case Management Activity Agreement. This may involve varying your existing agreement or negotiating another agreement to replace your existing one.

The interview will be held at the above address at:

[details provided]

Under the terms of the Employment Services Act 1994, if you do not attend this interview [your Jobsearch/Newstart/Youth Training Allowance may be cancelled and/or] case management services may be withdrawn.

If you are unable to attend the interview, please contact me on 371200 as soon as possible so that another interview time can be arranged. Otherwise, I look forward to seeing you."

The respondent received that letter, read it, understood it, and placed it under a magnet on the refrigerator at his home, so that he would be reminded of it whenever he went to the refrigerator. He did not attend the interview. He was at the time in Western Australia and had forgotten about it. He had travelled to Western Australia with a friend to look for employment. The Tribunal's finding was specifically, after a challenge to his reliability on that evidence, that:

"He went to W.A. with his friend to look for work in the mines. I find that he was in W.A. on 19 May 1995 and that he travelled there to look for employment. I also find that in the excitement of deciding to go to W.A. he forgot about his appointment with his case manager."

On 5 June 1995, the respondent contacted the applicant to indicate that he had missed the appointment on 19 May 1995 because he was looking for work interstate, and had forgotten about it.

That apparently set in train the process leading to the decision. A "Fail to Contact Breach Report" was prepared, recording breach of "Departmental policy" relating to s 630C and s 660I of the SS Act. The decision was made to cancel the respondent's newstart allowance for that failure. An application to review the decision was made to an authorised review officer, and on 5 July 1995 that decision was affirmed. The initial decision maker had ticked the box indicating that the job seeker's explanation was not accepted as a reasonable excuse for the breach identified. By the time of the review officer's decision, she said:

"I have decided not to change the decision. In making my decision I applied section 45(5) and (6) of the Employment Services Act and section 601(4) and (5) of the Social Security Act which means that where a person has entered into an Activity Agreement then that person must take reasonable steps to comply with the terms of that Agreement."

And after referring to the material events, and without apparently addressing independently the reasonableness of the oversight, or the irony of having lost the allowance for failure to attend an interview whilst looking for work, having regard to the objectives of the Act, the authorised review officer then continued:

"In summary, you had entered into an Activity Agreement and were therefore required to comply with the terms of that Agreement. You were required by that Agreement to contact your Case Manager when asked to do so. You forgot to contact your Case Manger (sic) regarding an appointment for the purpose of entering into a review of your existing Agreement.

Section 45(6) of the Employment Services Act states that a person is taking reasonable steps to comply with the terms of their Case Management Activity Agreement unless the main reason for failing to comply with those terms involved a matter that was within the person's control. Forgetting to contact your Case Manager falls into the category of being within your control. Your reason is therefore not an acceptable excuse for failing to comply with the terms of your Activity Agreement.

I have therefore decided that decision to cancel your allowance was correct and now affirm that decision. I have advised the Ballarat CES of my decision. You should contact that office if you want to know more about this matter."

It may be significant that the decision was expressed as a decision to "cancel" the allowance, rather than to suspend it.

Subsequent communications between the respondent and the applicant indicate that a further claim for a newstart allowance had been approved but there was a period of time when it was not paid because he "failed the activity test". Subsequently payment at least for part of the period in dispute appears to have been made in the exercise of the discretion under s 1241A of the SS Act pending the outcome of his application to the Social Security Appeals Tribunal ("the SSAT") to review the decision. An application for review had in fact been made to the SSAT which, on 19 September 1995, affirmed the decision. It is not clear from the material before me precisely how many weeks' payments of newstart allowance were withheld from the respondent.

The decision then proceeded to the Tribunal.

It is accepted that the decision under review was the decision made by a delegate of the Secretary to the Department of Employment Education and Training ("the Employment Secretary") on 5 June 1995 and affirmed by an authorised review officer on 5 July 1995 to cancel the respondent's newstart allowance, made because of a failure to attend the appointment with the case manager on 19 May 1995 in the circumstances set out above.

Because the decision maker referred to s 45 of the ES Act, I set out its relevant provisions:

"(5) The person is not qualified for a newstart allowance or a youth training allowance in respect of a period unless (in addition to meeting any other requirements set out in the Social Security Act 1991 or Part 8 of the Student and Youth Assistance Act 1973 as the case may be):

(a) when the person is required under section 38 to enter into a Case Management Activity Agreement in relation to the period, the person enters into that agreement; and

(b) while the agreement is in force, the person satisfies the Employment Secretary that the person is taking reasonable steps to comply with the terms of the agreement; and

(c) at all times during the period when the person is a party to the agreement, the person is prepared to enter into another such agreement instead of the existing agreement if required to do so under section 38.

(6) For the purposes of paragraph (5)(b), a person is taking reasonable steps to comply with the terms of a Case Management Activity Agreement unless the person has failed to comply with the terms of the agreement and:

(a) the main reason for failing to comply involved a matter that was within the person's control; or

(b) the circumstances that prevented the person from complying were reasonably foreseeable by the person."

The decision maker also referred to s 601(4) and (5) of the SS Act, and I refer to those provisions below.

THE TRIBUNAL'S REASONS

The Tribunal reversed the decision of the SSAT. It set aside the cancellation of the respondent's newstart allowance.

The Tribunal, and the parties, appear to have accepted or assumed that the failure to attend the meeting on the occasion notified in the letter did amount to a failure to comply with the terms of the agreement, and therefore directed their attention to s 45(6) of the ES Act. It also seems to have been assumed by the Tribunal (contrary to the submission of both counsel for the applicant and for the amicus curiae on this hearing) that s 45(6) defines the circumstances in which a person will be found to have failed to have taken reasonable steps to comply with the terms of an agreement. In other words, the Tribunal seems to have assumed that if a person has in fact failed to comply with the terms of a Case Management Activity Agreement, then unless such failure is due to one of the reasons set out in sub-pars (a) or (b) of subs (6), there will inevitably be a finding of a failure to take reasonable steps to comply with the terms of the agreement. Nor do the precise steps for the decision maker in the process leading to the ultimate decision, as provided by the legislation, appear to have been fully addressed. It was, given the reasons of the Tribunal, unnecessary for it to do so.

Because it seems to have been assumed by the Tribunal, if not by the initial decision maker, that there was a breach of the agreement by the respondent by the failure to attend the interview, and that therefore unless the respondent fell within either subclauses (a) or (b) of s 45(6) of the ES Act, then ipso facto there had been a failure to take reasonable steps to comply with the agreement, the focus on the Tribunal was on those subclauses. Furthermore, its focus was in the context that the consequence of the respondent not falling within either of those subclauses would be that the decision would be upheld.

For reasons which appear below, I think that reflects a mistaken apprehension as to the inter-action of subss (5) and (6) of s 45 of the ES Act, and thus gives to the subclauses of subs (6) an interpretation which was designed to produce a result which I think s 45(5)(b) itself achieves or can achieve in appropriate cases.

It was on the basis identified that the Tribunal determined that:

"... if the reason given for failing to attend an interview is that the person forgot the appointment, that could well be a matter that was not "within the person's control" "

under s 46(6)(a) of the ES Act or its apparent analogue in s 601(6)(a) of the SS Act. It also found that because the legislation concerning a breach of the activity test is of a quasi-penal nature, it must therefore be strictly construed. Thus it said:

"Decision-makers should only decide that there has been a failure to take reasonable steps to comply with an Agreement, if they are satisfied of their power to make such a decision and are satisfied that "the legislation distinctly enacts" that there has been a failure to comply in the circumstances of the matter."

It continued:

"In the light of these findings I cannot be satisfied that the legislation "distinctly enacts" that Mr Ferguson failed to take reasonable steps to comply with the terms of his Case Management Activity Agreement. I find:

(i) that Mr Ferguson forgot about his appointment when he decided to go to W.A.

(ii) that the "forgetting" was not within his control

(iii) that as he had forgotten the appointment it was not reasonably foreseeable by him that by going to W.A. he would be prevented from complying with the terms of his Case Management Activity Agreement.

I do not find that the main reason for Mr Ferguson's failure to comply with the terms of his Case Management Activity Agreement involved a matter that was within his control. Nor do I find that the circumstances that prevented Mr Ferguson from complying were reasonably foreseeable by him."

The Tribunal noted that the provisions of s 45(5)(b) and (6) of the ES Act are reflected in substance in respect of the newstart allowance in provisions of the SS Act: s 593(1)(f) and (2A), and s 601(5) and (6). It observed that it is hard to understand why the legislative scheme requires that substantial repetition.

CONSEQUENCES OF BREACH OF CASE MANAGEMENT ACTIVITY AGREEMENT

I have referred above to the structure of Chapter 4 of the ES Act setting up the case management system.

Once the agreement was duly entered into, s 45 of the ES Act prescribes the consequences to the respondent of a breach of the agreement. For reasons which are mentioned at the commencement of this judgment, I assume for its purposes that the respondent's non-attendance at the interview on 19 May 1995 when notified to do so amounted to a failure on his part to comply with the terms of the agreement: subs 45(6). In making that assumption, I am not to be taken as necessarily making such a finding myself nor to be making any observation either way on the two matters of construction of the agreement which the WRC sought, but is refused, leave to argue.

The consequence of failure to take reasonable steps to comply with the agreement as expressed in s 45(5)(b) of the ES Act is that the respondent "is not qualified for a newstart allowance". In that context, however, it is noteworthy that s 45(9) of the ES Act provides that during the person's case management period s 601 of the SS Act has effect, and s 45(11) provides similarly that ss 608, 625 and 626 of the SS Act have effect, as if a reference in those sections to a Newstart Activity Agreement were a reference to a Case Management Activity Agreement.

Section 601 of the SS Act relevantly provides:

"(4) A person also satisfies the activity test in respect of a period if, throughout the period, the person is taking reasonable steps to comply with the terms of a Newstart Activity Agreement between the CES and the person.

(5) If a person fails to take reasonable steps to comply, throughout a period, with the terms of a Newstart Activity Agreement between the CES and the person, the person cannot be taken to satisfy the activity test in respect of the period in spite of any compliance of the person with subsection (1).

(6) For the purposes of this section, a person takes reasonable steps to comply with a notice under subsection (1A), with a requirement of the Secretary under subsection (2), or with the terms of a Newstart Activity Agreement (as the case requires) unless the person has failed so to comply and:

(a) the main reason for failing to comply involved a matter that was within the person's control; or

(b) the circumstances that prevented the person from complying were reasonably foreseeable by the person."

Although there is more or less a parallel between s 45(6) of the ES Act and s 601(6) of the SS Act, unlike the expressed consequence of the activation of s 45(5) of the ES Act, the consequence of the activation of s 601(5) of the SS Act is that a person cannot be taken to "satisfy the activity test" in respect of the period. Section 593(1)(b) of the SS Act provides that a person is qualified for a newstart allowance in respect of a period if, throughout that period, the person satisfies the activity test. Indirectly therefore the activation of s 601(5) of the SS Act is that, by reason of the person not satisfying the activity test, the person is (as activation of s 45(5) of the ES Act directly provides) not qualified for the newstart allowance. The status of not being qualified for a newstart allowance by the activation of s 45(5) of the ES Act, or by the activation of s 601(5) of the SS Act via the operation of s 593(1)(b) of that Act, means that the newstart allowance is not payable to the person.

The consequence of a person not being qualified for a newstart allowanced is then identified in s 608 and s 626 of the SS Act. As s 45(11) of the ES Act effectively imports their operation into the ES Act, I think it is plain enough that those provisions are the ones which dictate the consequence. Those provisions provide:

"608(1) A newstart allowance is not payable to a person for a period during which the person is qualified for newstart allowance (see section 593) if during that period:

. . .

(j) a period of non-payment has been imposed because:

. . .

(iii) the person had previously ceased to be qualified for newstart allowance for failure to comply with a Newstart Activity Agreement (see section 626); or

. . ."

and

"626(1) A newstart allowance is not payable to a person for the activity test deferment period if:

(a) the person is required to take reasonable steps to comply with the terms of a Newstart Activity Agreement in order to qualify, or to continue to qualify, for a newstart allowance; and

(b) the person fails to take reasonable steps to comply with the terms of the Newstart Activity Agreement."

Those sections contemplate a period of non-payment for failure to take reasonable steps to comply with the terms of a Case Management Activity Agreement in circumstances where otherwise that person would be qualified to receive the newstart allowance. Section 45(5) does not explicitly state that the status of becoming ineligible for payment of the newstart allowance is only a temporary period of ineligibility, but consistency of application dictates that that should be so as well as the intent evident in the reference in s 45(9) and (11) of the ES Act to those provisions of the SS Act. It is not clear why there is the need to provide alternative avenues either directly through s 45(5) of the ES Act or less directly through s 601(4), (5) and (6) of the SS Act to that consequence. It may be that there are circumstances not arising in the present matter which make it desirable to preserve those two routes.

By that somewhat tortuous process, it is provided that the failure to take reasonable steps to comply with the provisions of a Case Management Activity Agreement contrary to s 45(5) of the ES Act has the consequence that the newstart allowance is not payable to a person for a period during which the person is not qualified for newstart allowance.

Section 630A(1) of the SS Act provides:

"Subject to subsections (2) and (3), if an automatic deferment provision of this Subdivision applies to a person, the deferment period applicable to the person is:

(a) if, at the time the provision becomes applicable, the person's unemployment duration is less than 12 months - 2 weeks; or

(b) if, at the time the provision becomes applicable, the person's unemployment duration is 12 months or more, but is less than 18 months - 4 weeks; or

(c) if, at that time, the person's unemployment duration is 18 months or more - 6 weeks."

Subsections (2) and (3) operate to extend the deferment period for second or subsequent instances of conduct identified as delictual under the Act. The term "automatic deferment period" is defined in s 23 of the SS Act to include "a NS automatic deferment provision" which is also defined under the heading "'NS allowance automatic deferment provision' (newstart allowance automatic deferment provision)" in s 23 to include subs 626(1) "failure to comply with Newstart Activity Agreement". Depending on the length of time a person had been unemployed, the deferment period is two to six weeks. As eligibility to participate in the case management system under the ES Act at present depends on a person being unemployed for a period of longer than twelve months, the minimum deferment period when s 45(5) of the ES Act is activated is therefore four weeks and in the case of the respondent it was six weeks as he had been unemployed for longer than eighteen months. That period can be prolonged if s 630A(2) applies.

Section 630B provides for the implementation of activity test deferment periods by written notice from the Secretary of the Department of Social Security. That process was not apparently followed when the benefit was cancelled, but the decision was apparently made under s 660I which provides:

"If the Secretary is satisfied that a newstart allowance is being, or has been, paid to a person to whom it is not, or was not, payable under this Act, the Secretary is to determine that the allowance is to be cancelled or suspended."

The decision to cancel the respondent's newstart allowance was then made, and he went through the process of re-applying for, and being granted, that allowance.

I observed during the course of submissions whether it would, in the circumstances, have been more appropriate to have suspended the newstart allowance, as the structure of the provisions seems to contemplate a period of non-entitlement to payment rather than total loss of the entitlement to the benefit. That is, I think reinforced by s 630A with its provisions for longer periods of ineligibility for "repeat offenders". Section 630B of the SS Act provides for notice of commencement of the activity test deferment period, and so of the suspension of entitlement to payment, to be given and also provides for cumulative periods of ineligibility for that reason. Such notice was given to the respondent by letter of 19 July 1995 in express terms:

"Your claim for Newstart Allowance has been approved and you will be paid from 7 August 1995.

However, Newstart Allowance will not be paid for the period 24 June 1995 to 4 August 1995 because you failed the activity test.

The decision not to pay you Newstart Allowance for this period has been made under Section 624 of the Social Security Act."

As appears, that seems to have rolled together the new decision to grant newstart allowance to the respondent with the period of ineligibility due to his failure, by operation of the legislation, to satisfy the activity test deferment period.

In the present matter there have been no practical consequences adverse to the respondent by that process. I do not therefore need to resolve whether it was entirely correct to cancel his newstart allowance, rather than to suspend it. I refrain from doing so.

THE CONSTRUCTION OF S 45(5)(b) AND (6) OF THE ES ACT

It is important to observe that s 45(5)(b) has primacy over s 45(6) of the ES Act. It is explicit. The consequence which s 45(5) provides for will only arise, relevantly, if the respondent satisfies the Employment Secretary that he is taking reasonable steps to comply with the terms of the agreement. Section 45(6) then provides the threshold over which the Employment Secretary must pass before any onus lies on the respondent to satisfy the Employment Secretary that he is taking reasonable steps to comply with the terms of the agreement. So long as he has not failed to comply with the terms of the agreement, he is necessarily to be taken as taking reasonable steps to comply with the agreement. If he has failed to comply with the terms of the agreement, he is still to be taken as taking reasonable steps to comply with the agreement if

(a) the main reason for that failure involved a matter that was within his control, or

(b) the circumstances that prevented his compliance were not reasonably foreseeable by him.

In a practical sense, therefore, if he has not failed to comply with the terms of the agreement or if any failure was something that he could not reasonably have done anything about, then he is safe from otherwise having to satisfy the Employment Secretary under s 45(5)(b) of the ES Act.

It does not follow that if he has failed to comply with the terms of the agreement, and either that failure was within his control or that the circumstances that prevented compliance were reasonably foreseeable by him, then necessarily he will not satisfy the Employment Secretary that he is taking reasonable steps to comply with the terms of the agreement. Section 45(6) of the ES Act is not expressed to be a definition of the circumstances in which there will be the taking of reasonable steps to comply with the terms of the agreement. It could have done so, but it does not. It operates only to prescribe circumstances where a person will be taking such steps.

Consequently, only if a person falls under s 45(6) will the operation of s 45(5)(b) arise and then the quality of the conduct of the respondent, or the person in receipt of newstart allowance, will need to be considered in relation to it. If the Employment Secretary were to consider that the fact that a person in receipt of newstart allowance fell within s 45(6) meant that that person, per se, was not taking reasonable steps to comply with the terms of the agreement, I think that would be wrong. If the Employment Secretary imposed the policy that, upon it being determined that s 45(6) was activated adversely to a recipient of newstart allowance, then the decision should be made that the Secretary was not satisfied that the person was taking reasonable steps to comply with the terms of the agreement, then that also would be erroneous. That observation also reflects the conclusion of the Tribunal in Re Goodson (1996) 23 AAR 209n. (I do not know what was the departmental policy to which reference is made in the 'Fail to Contact Breach Report' referred to above).

It follows that, in my view, the Tribunal erred in the assumption which was made to the contrary. That assumption has clearly tended to colour the approach which the Tribunal took to its consideration of the issues. It is now put by counsel for both the applicant and the amicus curiae that in fact s 45(5)(b) required a determination of a matter of fact by the Employment Secretary which extended beyond subs (6). In other words subs (6) provided a filter through which the conduct of the respondent would have to pass before the person could be called upon to satisfy the Employment Secretary that that person had been taking reasonable steps to comply with the terms of the agreement.

I have assumed that the respondent's failure to attend the interview did amount to a failure to comply with the terms of the agreement. Obviously, an obligation under the agreement to attend when requested for interview does not involve an obligation to attend at any request however little notice is given. That clause of the agreement, properly construed, would require the giving of reasonable notice and would accommodate some reasonable delay within which the attendance was effected. It is not every failure which would amount to a failure to comply with that term. For example, being a few minutes late would not necessarily be in breach of the agreement as properly construed. In addition, the obligation to attend, being but part of the entire document, would also be construed having regard to the other parts of the document including those specifically negotiated. If, for instance, through oversight there was a requirement made to attend an interview at the same time as there was an obligation under the agreement to attend a particular training course, it would need to be construed as one obligation being subject or superior to the other or that the obligation would not be unreasonably imposed.

Once there is a failure to comply with the terms of the agreement, such failure must fall within one or other or both of the subclauses of s 45(6)(a) and (b) before the question under s 45(5)(b) as to the taking of reasonable steps to comply with the terms of the agreement arises. One example of where the failure to comply was not captured within those subclauses is provided by Re Secretary, Department of Employment, Education, Training and Youth Affairs and Ruiz (1996) 23 AAR 211. In that case, the beneficiary failed to attend a particular course because, due to his inability to comprehend the explanation of his case manager that in fact there were two separate courses he was required to attend, he attended one believing that was the only one he needed to attend. The main reason for the failure to attend in that case was found to be the inadequacy of the explanation of the case manager, rather than his oversight.

In the construction then of s 45(6)(a) and (b), in the context that s 45(5)(b) separately requires a consideration of reasonableness of the respondent's conduct on all the facts, in my view the scope of those provisions is not confined to external factors or matters. That is, if there is a failure to comply with the terms of the agreement, those provisions direct consideration of matters which may include factors going to his state of mind or his physical condition, eg illness. They may also go to entirely external factors. But I do not think they permit consideration of matters which are entirely internal, eg forgetting.

The expression in s 45(6)(a) requires that the main reason for the failure was something that the person had within that person's control. The concept of 'control' in that context is one of fact, but I think it is intended to mean something which the person could have done something about. If the person is ill, or there is some entirely external factor eg a transport strike, it may amount to circumstances which are not within that person's control. The person, in those circumstances, would not recriminate that something should or should not have been done. To forget to attend an appointment does not fall within that description; it is an occasion where there is an element of recrimination - the person could have done something about it, but for whatever reason, did not do so.

The expression "circumstances beyond the control of the person concerned" appears in s 131 of the Trade Marks Act 1955, and was considered in Rohrmoser v Registrar of Trade Marks (1987) 70 ALR 613. The case involved a review of a decision refusing an extension of time to lodge notice of opposition to the registration of a trade mark. One issue was whether the late lodgment, which was caused by the negligence of an employee of the patent attorney engaged by the applicant, fell within that description. Jenkinson J decided that question adversely to the applicant. He said (at 619):

"In the context in which it is found, the expression "circumstances beyond the control of the person concerned" does in my opinion designate - and designates only - occurrences which neither the person concerned nor any person acting on his behalf to do the act or take the step could prevent. The operations of nature and the activities of strangers may result in such occurrences. So, too, may the acts and omissions of certain independent contractors engaged by the person concerned or by his agent, as, for example, the carrier of mail or the office cleaner, either of whom causes the loss or destruction of a document to be filed. But the acts or omissions of the agent who, on behalf of the person concerned, is to do the act or take the step are not occurrences of the description specified in s 131(1)(a), in my opinion. Nor, in my opinion, are the acts or omissions of that agent's servants. The section is, I think, correctly described as a force majeure provision."

Of course that observation is made in legislation with a different context, and where the focus was whether the failure of some other person was a failure to which the expression applied.

That decision does, in my view, support the conclusion which I have reached. It recognises the focus of the expression upon occurrences which the person concerned could not realistically prevent. It recognises that it is "the operations of nature and the activities of strangers" that are the sorts of factors which it is designed to accommodate. Of course, the expression is not exactly the same. I have considered whether the context, or the differences in wording, might not warrant using that case in support of my conclusion. The question posed under s 45(6)(a) is as to the reason for the failure, but I think that that is wide enough to encompass "the circumstances". I do not think it is so much wider in scope as to indicate some different meaning is intended for the term "the person's control", even though s 45(6)(b) uses the term "the circumstances". Nor do I think that the difference in emphasis by reason of the question being directed at whether the reason was within the person's control, rather than whether the reason was beyond the person's control, indicates a legislative intent to depart from the meaning of the expression "the person's control" which both common usage and authority would give it.

In another context, too, the expression "circumstances beyond its control" has been given the same meaning. In The Turul [1919] AC 515, the question was whether an enemy ship which had been seized upon the outbreak of war should be condemned. That depended upon whether a proclamation made under the sixth Hague Convention, but made shortly after its seizure, granting enemy ships a period of grace after the declaration of war to leave port operated with respect to it; and in turn that depended upon whether its non-departure after its seizure was due to "circumstances beyond its control". The Privy Council advised that its detention was due to circumstances beyond its control, although the seizing authorities would have returned its papers and released it following the proclamation but they had not in the proclamation made that apparent. By way of contrast, in the advice of the Board Lord Sumner said (at 518):

"If the captain of the vessel had had the opportunity of departing, and had for reasons of his own decided not to avail himself of it, as, for example, because he could not sail without coals and could get no money to procure them, or that he was not sufficiently confident that a British passport would protect him from capture by vessels belonging to His Majesty's Allies, then it has been settled that in such a case it is his own choice - it may be also his own misfortune - that detains him in the port, but the ship is liable to be confiscated, because it cannot be truly said that force majeure is what has prevented his taking advantage of the opportunity."

I think the same line is drawn as is, in my judgment appropriate to be drawn under s 45(6)(a) of the ES Act.

In my view, the structure of s 45(6)(a) of the ES Act is to put the relevant question in an affirmative way, that is to require that the reason for failure to comply with the terms of the agreement be positively shown to have been within the person's control, rather than requiring possibly the lesser matter to be made out that the reason was not within (i.e. that it was beyond) the person's control. It may have the consequence that it will be a little harder for the filter which s 45(6) creates to be passed through. However, I do not think it evidences a legislative intent to depart from the meaning of the expression "the person's control" as it is commonly used, and has been accepted by authority.

That view reflects also what I think is the purpose of the legislature in this part of the ES Act, namely to ensure adherence to an agreement by imposing personal accountability upon a recipient of newstart allowance under the agreement: s 15AA, Acts Interpretation Act 1901. It does not, I think, lie with that objective that the filter created by s 45(6) of the ES Act should be clouded by complex issues as to the degree of forgetfulness or awareness of such a recipient. Such matters may be relevant to the more general question which s 45(5)(b) postulates once the filter is passed through. That point is recognised, albeit as the Tribunal noted in its reasons, in a somewhat different statutory context, in Re Secretary, Department of Social Security and Schmidt (1994) 35 ALD 799.

Accordingly, in this respect, in my view the Tribunal has fallen into error as to the proper construction of s 45(6)(a) of the ES Act.

I am also of the view that the Tribunal erred, for the same basic reason, in its approach to s 45(6)(b) of the ES Act. That is, it erred in assuming that s 45(5)(b) had no work to do once the respondent fell within s 45(6)(a) or (b). Once that point is recognised, the reasons for the Tribunal's approach to achieve what it perceived as a sensible outcome do not propel one to its conclusions.

The use of the expression "reasonably foreseeable" is commonplace. It imports an objective assessment about a set of facts as they apply to a particular circumstance or to a particular person. To say that, as here, they direct attention to the particular person does not import the need to determine the actual state of mind of that person. It is to direct the objective assessment on the relevant facts in relation to particular person, with that person's health, knowledge and background. Some persons would be able to reasonably foresee circumstances more readily than others. However, in my view the Tribunal erred in taking the step of concluding, in relation to the applicant, that

"... as he had forgotten the appointment it was not reasonably foreseeable by him that by going to W.A. he would be prevented from complying with the terms ..."

of the agreement. Such an assessment does not involve any objective assessment of the circumstances that prevented him from complying with the terms of the agreement to see whether they were reasonably foreseeable by him. Whether one takes the proximate or the less proximate circumstances, nothing is in the material which could show that the circumstance was not reasonably foreseeable by him. That is, it was reasonably foreseeable to him both that in going to Western Australia he would be unable to attend the interview, and that at the point in time when he decided to go to Western Australia he might forget or have overlooked the appointment. After all, it was precisely because the risk of forgetting the appointment was reasonably foreseeable to him that he took the steps described above to help him to remember the appointment. See Southwark London Borough Council v Williams [1971] 1 Ch 734 per Lord Denning M.R. at 742-743.

As the question which s 45(b) poses is the wider question as to the conduct of the recipient of newstart allowance in relation to the agreement, which does not simply look to the particular failure to comply with the terms of the agreement, it would not follow as a matter of course, if the person forgot an appointment (as happened here) and that did amount to a failure to comply with the terms of the agreement within that person's control and/or which was reasonably foreseeable (assuming those matters), that that person had not been taking reasonable steps to comply with the terms of the agreement. That would depend in other respects upon the person's attitude to performance of the terms of the agreement, attendances on other occasions, attempts to seek work and the range of information. It does not appear that that decision was addressed in that way here, although the approach of the initial decision maker may implicitly suggest that that decision maker decided that issue by rejecting the excuse. I do not think the Tribunal approached the matter that way.

I have not separately dealt with s 601(5) and (6) of the SS Act, but for the same reasons I think the above also reflects the way those provisions also operate.

CONCLUSION

It follows from the above that, in my view, the Tribunal has fallen into error in its interpretation of s 45(6) of the ES Act. I do not think that there was any evidence that was available to it that enabled it to conclude that the respondent forgetting about the appointment was either a reason for his failure to comply with the terms of the agreement which was beyond his control, or was other than from circumstances that were reasonably foreseeable by him. On the other hand, in accordance with these reasons, the Tribunal did not itself consider whether, judged overall including that oversight on his part, he was taking reasonable steps to comply with the terms of the agreement.

I have considered whether I should remit the matter to the Tribunal for further consideration in accordance with these reasons, or whether despite the error identified, the findings of fact by the Tribunal are so clear that it would find in the respondent's favour on that question so as to make the remission of the matter unnecessary. It is not of course for me to find facts; that is the role of the Tribunal. Although I suspect the outcome of further review by the Tribunal, I nevertheless do not find in its reasons a sufficiently explicit finding on or applicable to the relevant question.

Accordingly, I allow the appeal and I remit the matter to the Tribunal for further consideration in accordance with these reasons, in particular to determine whether the respondent has satisfied it (as it stands in the place of the Employment Secretary for this purpose) that the respondent was taking reasonable steps to comply with the terms of the agreement.

In the absence of the respondent before the Court, and in the light of my findings, I think this is an appropriate matter in which there should be no order as to costs.

Associate:

Dated: 24 July 1997

Counsel for the Applicant: Ms D Mortimer

Solicitors for the Applicant: Australian Government Solicitor

No appearance by or on behalf of the Respondent

Counsel for amicus curiae: Mr D Meadows

Solicitors for amicus curiae: Welfare Rights Centre

Date of Hearing: 13 May 1997