FEDERAL COURT OF AUSTRALIA

Wang v Secretary, Department of Employment & Workplace Relations

[2006] FCA 898

PRACTICE – claims against Secretary of Department of Employment and Workplace Relations alleging criminal offences and civil liability to pay social security benefits

Held: no jurisdiction

Federal Court of Australia Act 1976 (Cth) s 19(1), s 31A

Migration Litigation Reform Act 2005 (Cth) sch 2

Wang v Australian Industrial Relations Commission [2006] FCAFC 31 cited

Fencott v Muller (1983) 152 CLR 570 applied

Scott v Secretary, Department of Social Security (2000) 65 ALD 79 at [24] applied

Scott v Pedler [2004] FCAFC 67 at [1], [53], [93], [102-103] and [106] applied

Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 discussed

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 150 cited

NAN WANG v SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS

VID 1296 of 2005

QIAN XIAO v SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS

VID 1297 of 2005

HEEREY J

14 JULY 2006

MELBOURNE

THE COURT ORDERS THAT:

Both applications are dismissed with costs, including reserved costs.

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

REASONS FOR JUDGMENT

1                     The applicants Mr Nan Wang and Mrs Qian Xiao are husband and wife. They have brought separate applications against the Secretary of the Department of Employment and Workplace Relations complaining of wrongful conduct by Centrelink in connection with their claims for social security benefits following the termination of their employment with Demos Property Services (Australia) Pty Ltd (Demos).

2                     The Secretary has brought motions seeking that the respective applications be dismissed. The Secretary submits that the Federal Court has no jurisdiction to hear and determine the matters raised in the applications or to grant the relief sought.

3                     In the alternative, the Secretary contends that each application discloses no reasonable cause of action.

Termination of employment with Demos

4                     The applicants were employed by Demos as office cleaners working in the central business district of Melbourne at certain buildings for which Demos held cleaning contracts. Demos terminated their employment in December 2003.

5                     The applicants sought relief in the Australian Industrial Relations Commission (the Commission) claiming that their termination was harsh, unjust or unreasonable. They succeeded before a single Commissioner who awarded each ten weeks pay and, in the case of Mrs Xiao, ordered reinstatement. They successfully appealed to a Full Bench of the Commission. On the remitter back to the single Commissioner essentially the same orders were made.

6                     The applicants then sought an order to show cause in the High Court. On remitter to this Court a Full Court consisting of North, Madgwick and Siopis JJ dismissed the application: Wang v Australian Industrial Relations Commission [2006] FCAFC 31.

7                     On 10 April 2006 the applicants filed an application for special leave to appeal to the High Court from the decision of the Full Court. A copy of the special leave application was produced to me. I am satisfied that it is confined to issues concerning the termination of their employment by Demos and the conduct of the matters in the Commission. The respondents are the Full Bench of the Commission, Commissioner Lewin and Demos. The Secretary is not a party. Of course if the application for special leave covered matters in the present proceedings it would not be appropriate for me to proceed with the Secretary’s applications. However I am satisfied that is not the case. The present proceedings are confined to the complaints concerning Centrelink, the Secretary being the only respondent.

Initiating applications in the present proceedings

8                     The initiating applications are in substantially the same form. Taking Mr Wang’s application, it commences by alleging that it is made “as a result of several breaches of law by Centrelink … against the applicant”. Paragraphs 1 and 2 state:

“1. Centrelink conspired to defraud, breached the criminal law and the

common law, as well as committing misprision of serious offence.

2. Breaches of the Social Security Act 1991 (Cth) and the Social Security (Administration) Act 1999 (Cth), and Racial Discrimination Act 1975 (Cth).”

9                     Paragraphs 3 and 4 allege that the applicant has tried to resolve these matter in “other authorities of law” including the Social Security Appeals Tribunal (SSAT) and Administrative Appeals Tribunal (AAT), which “were powerless in dealing with some aspects of this matters” and also tried to contact other parties including the Commonwealth Ombudsman and offices of federal MPs.

10                  Paragraph 5 alleges that Demos provided false and misleading information to Centrelink.

11                  In par 6 it is said that the matter “mostly involved legislations of the Commonwealth, so we believe this matter is best dealt with in the Federal Court”.

12                  Paragraphs 7 and 8 state:

“7. The acts committed by officers of Centrelink are deeply concerning, and seriously affected our lives, as well as destroying the reputation of the Commonwealth of Australia. The applicant's wife (Ms Qian Xiao) had applied for places at Victoria University for the course Certificate III in ESL Employment, and was offered places with no costs to the applicants. However on 28 February 2005 the Mrs Xiao was told by VU that she was no longer qualified to participate in the course, because she did not complete her Work for the Dole program, and only additional payments can ensure that she can remain in the Course. It is intriguing how VU knew that Ms Xiao did not complete her Work for the Dole program. Centrelink may have used their powers outside of their duty, and into places where their `customers' are working or studying. This is alarming, and Centrelink should be restricted to ensure they do not abuse their powers like in this incident.

8. The applicant understands that the Federal Court may not be able to deal with all the unlawful acts committed. He hopes that the Federal Court will refer some of the matters to an appropriate court to deal with, to ensure that no crime should be unpunished.”

13                  The claims are for:

“1. All social security payments lost by the applicant.

2. Compensation to the applicant for the mental pain and suffering totalling $100,000.

3. Costs associated with legal proceedings, totalling $9,000.”

Applicants’ submissions

14                  The applicants filed detailed submissions on which I base the following account of their complaints. In effect these submissions are to be treated as particulars. To some extent they fill out the gaps in the initiating applications, although detailed particulars cannot overcome a fundamental problem of lack of jurisdiction which, for reasons discussed hereafter, I am satisfied exists in the present case.

15                  I should also mention that in addition to the submissions Mr Wang addressed the Court through an interpreter. Also the applicants’ son, who is apparently only 16, gave a polished and articulate address and demonstrated a natural talent for advocacy.

16                  After their dismissal by Demos on 2 December 2003 the applicants on 22 December contacted Centrelink via telephone and made claims for Newstart Allowance. The significance of first contact is that, generally speaking, a Newstart Allowance when granted will be calculated from the date of first contact. However, there is an exception where payment has been received on termination, for example for accumulated leave. In such a case the start date is calculated by taking into account an “income maintenance period” which assumes the person has the support of the amount received. The allowance does not commence until that period has expired. The income maintenance period can be shortened in cases of “extreme financial difficulty”.

17                  On 22 December 2003 Centrelink wrote (to Mr Wang only) enclosing an application form. On 31 December Mr Wang contacted Centrelink by telephone to rectify this error.

18                  On 5 January 2004 Centrelink wrote to Mr Wang mistakenly stating the initial contact date as 31 December 2003. Again Mrs Xiao was not mentioned and the application form was not enclosed.

19                  On 6 January the applicants’ son contacted Centrelink on his parents’ behalf. An arrangement was made for an interview with the applicants in early February. Also on 6 January Centrelink wrote to Mrs Xiao wrongly confirming her initial contact date as the same date. The letter also failed to enclose a claim form for Newstart Allowance.

20                  On 5 February the applicants attended at Centrelink and were interviewed separately. The Centrelink officer told Mr Wang to produce an “Employment Separation Certificate” (ESC), a document which provides various details about a termination, and also proof of bank account balances. Mr Wang immediately produced proof of his bank account balance, thus the only outstanding requirement was the ESC.

21                  Mrs Xiao was separately interviewed by another Centrelink officer, Ms Ely Hanson, who asked the interpreter to leave. Mrs Xiao had to fill in forms she could barely understand. She signed documents without understanding their contents and left in confusion. She was given a letter by the Centrelink officer requiring her to produce certain documents, including bank balances and an ESC.

22                  The applicants on 9 and 11 February supplied all the documents required to Centrelink, including loan statements and council rate notice. Still they did not receive social security.

23                  Between 5 February and 5 March Mr Wang contacted Centrelink regularly to try and collect the social security benefits. However Centrelink officers told him that the records showed that his former employer had not completed the ESC.

24                  On 5 March the applicants visited Centrelink. A lady named Cindy said that Centrelink had still not received the ESC. When asked to state that in writing, Cindy altered her response and told them that Centrelink had indeed already received the ESC. She said the applicants could obtain a copy if an application were made in writing.

25                  The applicants, according to their submissions, “were immediately sent into outrage”. They asked to see the manager but were referred to Mr Michael Harper, a supervisor. He said that two other documents were still required by Centrelink, a land valuation notice and a home loan statement. He said as soon as the two documents were produced the applicants’ claims would be granted and the social security benefits paid. The applicants sent the documents to Centrelink and Ms Hanson provided them with copies of the ESCs.

26                  On the same day, that is 5 March 2004, Mr Kevin Donnellan, an officer of the Commission, supplied the applicants with copies of their ESCs. In the case of Mr Wang the copy of the ESC obtained from the Commission was different from that supplied by Centrelink. The Centrelink copy listed the reason for termination as “threatening to kill superiors & poor work performance”. In the copy obtained from the Commission that answer read “threatening”, then there was a space, then the words “behaviour superiors & poor work performance”. The words “to kill” appear to have been deleted and the word “behaviour” added. The fax date of transmission in the latter case is 4 March, in the earlier case 5 February 2004.

27                  On 10 March, benefits still not having been received, the applicants again visited Centrelink and met Mr Harper. He said that he had not received the fax sent by the applicants on 5 March.

28                  The applicants’ son’s social security was inexplicably cancelled, delayed unreasonably and was paid in wrong amounts.

29                  The applicants complained to a number of authorities including the Commonwealth Ombudsman, Centrelink Customer Relations and Ms Julia Gillard MP.

30                  On 18 March the applicants contacted Centrelink to ask for a review of its decision. Centrelink responded on the same day. Its letter referred to an enclosed form but did not in fact provide one.

31                  The applicants and their son lodged forms on 2 April 2004 seeking review of their respective decisions by an Authorised Review Officer. A decision was not made until March 2005. The Ombudsman is seeking a reason for this delay.

32                  On 22 September 2004 Mrs Xiao attended an interview with Ms Raelene Harrip, an Employment Consultant. Ms Harrip misled Mrs Xiao into signing a Job Seeker Statement and attached Job Seeker Plan. Ms Harrip gave her a letter from Centrelink advising her to attend an interview for the Work for the Dole Program. Ms Harrip threatened her that failure to attend the interview would result in automatic cancellation of her social security benefits. Mrs Xiao started her Work for the Dole Program on 2 October.

33                  Mr Wang had signed his Preparing for Work Agreement on 5 February 2004 which required him to start a language, literacy and numeracy program by 22 June but he was not admitted into that program until 15 December 2004.

34                  On 3 November 2004 the applicants attended another interview with Centrelink. Mrs Xiao was “further misled” to sign her second Preparing for Work Agreement “without comprehension of the outcome or consequence of committing to such agreements”. This agreement was to “cover up” the fact that Mrs Xiao was forced into the Work for the Dole Program and imposed an incorrect starting date of 15 December 2004. This later resulted in her exclusion from the English language lessons, instead she was confined by this agreement to participation in Work for the Dole Program only.

35                  Both applicants were offered places in Vocational Education, Certificate III in ESL Employment (Aged Care) at Victoria University, St Albans Campus. The applicants’ tuition costs should have been fully funded by Centrelink. Soon after the applicants started this course Mrs Xiao was informed by the Head of Department at the University that she was no longer eligible for the course because she had not finished her Work for the Dole Program. Her teacher showed her a handwritten note to Centrelink.

36                  The applicants having obtained the intervention of the Ombudsman, a Centrelink officer at Werribee, arranged a meeting with Mr Wang on 23 March 2005. Mr Wang asked for permission to use a voice recorder. Mr Harper of Centrelink immediately asked the applicants to leave or the police would be called. On the same day the manager wrote a letter to Mr Wang alleging verbally threatening behaviour by him.

37                  The applicants appealed to the SSAT. On 30 May 2005 the SSAT handed down a decision dismissing their appeals. The applicants say that the SSAT failed to consider the evidence and arguments presented by way of submissions and erred in law.

38                  The applicants sought review in the AAT. On 20 October 2005 their appeals were dismissed after the applicants filed notices of discontinuance.

39                  The present proceedings were instituted in the Federal Court on 20 October 2005.

40                  The applicants allege “serious criminal offences” by officials of Demos during the course of the Commission proceedings, including perjury and making false corrections to Mr Wang’s ESC. It is also alleged that Mr Demos provided false information to Centrelink in regard to the applicants, including particulars as to their last working day, average daily working hours and reasons for termination of employment.

41                  Under the heading “Serious Criminal Offences of Centrelink” it is said that Centrelink “conspired to defraud the applicants as defined under common and criminal law”. Centrelink conspired with the applicants’ former employer and used its authority, power and trust to take advantage of the applicants “appalling English skills and their severe hardship”. Centrelink deceived the applicants in relation to their ESCs and assisted Mr Demos “to commit criminal acts to Mr Wang’s ESC”.

42                  Centrelink disregarded and ignored evidence given by the applicants as to their last working day and average daily working hours and “instead based their decision using false and misleading information”. Although the applicants have made it clear to the SSAT and the AAT that most information Demos had given to Centrelink was false and misleading, the SSAT and AAT “simply ignored this, and still naively accepted the false information without taking any further action”.

43                  Centrelink had current and comprehensive information in regard to the applicants and their family because they had claimed family tax benefits but nevertheless the applicants were sent an application form “for another unqualified payment, despite the disqualification was obvious to the officer”.

44                  Centrelink officers deceived Mrs Xiao into signing an agreement she could not understand and failed to act in her best interests. They forced her into a program which was not in her interests. Centrelink conspired and passed on private information to Victoria University. This was in breach of the Privacy Act 1998 (Cth).

45                  Under the heading “Breaches of SSA 1991, SSAA 1999 and Respondent’s Policies”, it is said that Centrelink officers conspired with Demos to use false evidence in regard to the applicants’ average daily working hours.

46                  Centrelink failed to apply the relevant law to whether the applicants qualified as under “severe financial hardship”. Centrelink noted that they had a total of $700.21 in cash at bank and liquid assets exceeding $694.60. Centrelink irresponsibly assumed that the applicants had more funds available to them on the day of termination of employment than on 5 February 2004, but that was not so because they had to pay mortgage instalments of $850 per fortnight. Thus the $700.21 was not available.

Lack of jurisdiction

47                  In their submissions the applicants submit “the Federal Court has general power to hear all matters subject only to express legislative restriction”. This is fundamentally incorrect. Section 19(1) of the Federal Court of Australia Act 1976 (Cth) provides that the Court “has such original jurisdiction as is vested in it by laws made by the Parliament”. The Federal Court only has such jurisdiction as is conferred on it by the Commonwealth Parliament, together with accrued jurisdiction over non-federal claims as arise out of transactions and facts common to the federal claims: Fencott v Muller (1983) 152 CLR 570.

48                  The claims of the applicants are not within the jurisdiction of the Federal Court. The Court does not have jurisdiction to try criminal offences such as fraud and conspiracy. Breaches of the Social Security Act do not confer private rights for damages: Scott v Secretary Department of Social Security (2000) 65 ALD 79 at [24], Scott v Pedler [2004] FCAFC 67 at [1], [53], [93], [102-103] and [106]. Nor is there any duty of care owed: Scott v Pedler. The Federal Court does not have a jurisdiction of general oversight of the administrative efficiency of federal government entities.

49                  Because there is no jurisdiction for this Court to deal with various claims made it is not appropriate to consider whether any reasonable causes of action are raised. Such an exercise would amount to exercising a jurisdiction which the Court does not have. However, I should take this opportunity to correct an error I made in Duncan v Lipscombe Child Care Services Inc [2006] FCA 458 in relation to the new s 31A of the Federal Court of Australia Act which introduces for strikeout applications the lower threshold of “reasonable prospects of success” as against the test laid down in such cases as General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 150. I was not referred in Duncan to item 44 of Pt 2 of Sch 1 to the misleadingly titled Migration Litigation Reform Act 2005 (Cth) (misleading because it applies to all litigation) which makes it clear that s 31A does not apply to proceedings commenced before that Act came into force.

Orders

50                  Both applications will be dismissed with costs.

Associate:

Dated: 14 July 2006