THE COURT ORDERS THAT:

1.         The application for leave to appeal is refused.

2.         The applicant pay to the respondent her costs of the application.

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

REASONS FOR JUDGMENT

1                          The applicant seeks leave to appeal from the order made by the Court (Finn J) on 9 November 2009: Kronen v Secretary, Department of Education, Employment and Workplace Relations [2009] FCA 1268 (the dismissal decision).  On that date, the Court dismissed the applicant’s application by way of appeal on a question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act).  The order was made under s 31A of the Federal Court of Australia Act 1976 (Cth) and so is an interlocutory order: Kowalski v MMAL Staff Superannuation Fund Pty Ltd [2009] FCAFC 117.  Consequently, leave to appeal is necessary by reason of s 24(1A) of the Federal Court of Australia Act 1976 (Cth).

2                          There is no dispute about the principles applicable on an application for leave to appeal.  Leave to appeal will be given if the Court is satisfied that the decision sought to be appealed from is attended with sufficient doubt to warrant it being reconsidered by the Full Court, and if substantial injustice would result if leave to appeal were refused, supposing the decision to be wrong: Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397.  In this matter, if leave to appeal is refused, that may effectively bring the applicant’s claim to a Newstart Allowance for a past period to an end.  There is no reason why he cannot in the future re-establish an entitlement to a Newstart Allowance, but at least there is a significant risk that he would be unable to restore any entitlement to such an allowance in the past.  In those circumstances, in my view, the grant of leave to appeal should depend in essence upon whether the decision from which the putative appeal is brought is attended with sufficient doubt to warrant it being reconsidered by the Court.

3                          The issues decided by the Administrative Appeals Tribunal (the AAT), and the background to them, was discussed in the dismissal decision at [3] and at [16]-[21].  I shall not repeat that material, except to the extent necessary to explain the reasons for my ruling on the application for leave to appeal from the dismissal decision.  Included in those reasons is an extensive description of the decisions of the Social Security Appeals Tribunal (the SSAT) upon which the review to the AAT was based at [20]. 

4                          The application by way of appeal to the Court was brought from a decision by the AAT affirming various decisions made under the Social Security Act 1991 (Cth) (the SS Act), culminating in the decision to cancel the applicant’s Newstart Allowance which, to the time of the cancellation, he had been receiving under the SS Act.  The legislative provisions concerning eligibility for, and more relevantly the circumstances in which, Newstart Allowances may exist or be terminated are largely also set out in the decision at [5]-[13].  Again I shall not repeat them, except to the extent necessary to explain my reasons for the ruling on the application for leave to appeal from the dismissal decision.

5                          Under s 605(1) of the SS Act, subject to that section, the Secretary of the Department (or a delegate) may require a person to enter into a Newstart Activity Agreement.  The relevant provision of s 605 is subsection (3).  It required the Secretary or the delegate to give to the applicant notice of that requirement, and “the places and times at which the agreement is to be negotiated”.  Under s 606, the Secretary must approve the terms of a proposed agreement.  Section 606(5)(a) provides for an agreement to be “varied (in negotiation with the person)”.  The applicant’s position throughout has been based on the concept of negotiation as used in ss 605 and 606.

6                          The applicant had previously entered into a Newstart Activity Agreement.  It had expired.  The present issues arise from the circumstances in which he was required to enter into a fresh Newstart Activity Agreement.  The delegate of the Secretary, and the applicant, did not in fact reach agreement as to the terms of such an agreement.  At [17] in the dismissal decision, the issue is described in the following way:

Mr Kronen signed an activity agreement with Maxima [the delegate of the Secretary] on 10 May 2007.  That agreement expired on 26 September 2007.  He then fell into a dispute with Maxima about signing another agreement as he insisted that certain terms be included in the new agreement, which he considered would “protect him” from Maxima’s conduct.  He also objected to some terms that Maxima wanted to include in the agreement.  Over the following months Mr Kronen failed to attend a number of pre-arranged interviews with Maxima despite having notice of them and that they had been arranged for the purpose of negotiating an activity agreement.  He chose not to attend.

7                          There were a series of findings adverse to the applicant by the SSAT that, contrary to the obligations imposed by ss 615(1) and (4), the applicant had failed to attend on 8 February 2008, 29 February 2008 and 14 March 2008, and subsequently on 1 May 2008, interviews to discuss the proposed fresh agreement, and that such failures amounted to “newstart participation failures” on his part under s 624 of the SS Act.  That led to the decision to impose two periods of eight week non-payment periods upon the applicant under s 629(1).  It also led to the decision under s 80 on 24 July 2008, affirmed by the AAT, to cancel the applicant’s Newstart Allowance from 6 June 2008. 

8                          On 22 April 2009, each of those decisions was affirmed by the AAT. 

9                          The AAT found as a matter of fact that:

(a)        Mr Kronen’s activity agreement having expired in September 2007, he thereafter refused to enter into an activity agreement in the terms required by Maxima;

(b)        Maxima’s terms were reasonable in all the circumstances;

(c)        the terms Mr Kronen insisted be inserted were not reasonable in all the circumstances;

(d)        Centrelink provided him with all required notices of meetings and warnings in respect of participation failures; and

(e)        there appeared to be no factual basis for such of his complaints against Maxima as were investigated by the Ombudsman and by DEEWR and no evidence that Maxima breached the Code of Practice for providers of employment related services.

10                        Consequently, the AAT found that newstart participation failures had occurred, and that the applicant did not have a reasonable basis for declining to attend meetings and discussing the proposed agreement in the way in which he did.  It therefore found that his failures did not reasonably excuse his participation or his refusal to participate in the agreement-making process, and it considered that the proposed terms of the agreement which he sought to have included were not reasonable in the circumstances.

11                        Section 624 of the SS Act explains why the AAT made findings in those terms.  It relevantly provides:

(1)        A person commits a newstart participation failure if the person:

(a)        fails to comply with a requirement;

(i)         that was notified to the person under subsection 63(2) or 64(2) of the Administration Act; and

(ii)        that was reasonable; and

(iii)       the notification of which included a statement to the effect that a failure to comply with the requirement could constitute a newstart participation failure; or

(b)        fails to satisfy the activity test; or

(c)        fails to comply with a requirement to enter into a Newstart Activity Agreement; or

…

(2)        Despite subsection (1), a failure of a kind referred to in that subsection is not a newstart participation failure if the person satisfies the Secretary that the person had a reasonable excuse for the failure.

In particular, as can be seen, there can only be a newstart participation failure if the requirement under s 605(1) is properly made – which is dependent on the validity of the notification under s 605(3)(a) and (b) – and is subject to the applicant under s 624(2) satisfying the Secretary (or the delegate) that he had a reasonable excuse for the failure.

12                        The applicant, as he pointed out in the course of submissions on this application, took the view that he should not have been required to further negotiate with the delegate of the Secretary because, under his previous Newstart Activity Agreement, he had some difficulties in dealing with that particular delegate and he considered that that particular delegate had inaccurately represented his attitude to participating and complying with the earlier agreement, including in particular an assertion by that delegate that the applicant had exhibited a pattern of work avoidance.  He therefore sought to have included in any proposed Newstart Activity Agreement clauses which, from his point of view, would oblige the delegate to act in a way which would avoid that sort of difficulty in the future.  When the delegate declined to entertain those suggestions at all, he deliberately chose not to attend further meetings because he saw no point in them.  He did not consider that the delegate was reasonably negotiating with him as to the terms which he sought in the proposed agreement.

13                        In effect, however, as noted at [8] above, the AAT found as a fact that in the negotiating process the delegate did not act unreasonably or seek to impose terms which were, in fact, unreasonable.  The Tribunal did not define the boundaries of the negotiation required, because it was not called upon to do so.  It was only called upon to decide the issues which the SS Act dictated.  On those issues, it found on the facts that there had been no failure on the part of the delegate to negotiate in the way the SS Act required.  Consequently, that being the case, it concluded that the conduct of the applicant amounted to newstart participation failures for which there was no reasonable excuse.

14                        The dismissal decision held that the AAT, in reaching that conclusion, did not commit any sufficiently arguable error of law to warrant the matter going to a full hearing.  Consequently, his Honour dismissed the application.

15                        Commonly, in cases such as the present, there is some difficulty in discerning and confining the putative appeal to a question of law as permitted under s 44 of the AAT Act, and in avoiding an appeal which in reality asserts that the primary decision-maker or the AAT made a mistake of fact.  Finn J identified two propositions of law from the material submitted to him on behalf of the applicant, namely that the SS AAT had failed to apply the correct sections of the SS Act, and that it had misconstrued or misapplied the terms of the SS Act, in particular as to the nature of the “negotiation process”.  However, although his Honour was satisfied that those matters were properly described as errors of law, he did not think there was any real prospect of success in relation to them.

16                        The applicant did not contend that the identification of those questions of law was erroneous, or that it did not represent fairly the questions of law which he sought to ventilate.  They involved the contentions that the requirement that he attend the meetings was not reasonable as required by s 605(3)(a), that the terms of the proposed agreement were not “negotiated” as stipulated by s 605(3), and consequently that he had a reasonable excuse for not attending the meetings.  Nor did the applicant cavil with the description of Finn J that, central to those propositions, the meaning and scope of the words “to be negotiated” in s 605(3) was critical.  He contended that there was at least a reasonably arguable proposition that the AAT had wrongly construed or applied the provisions imposing the obligation to negotiate, and that Finn J had failed to appreciate that the proposition of law which he sought to develop was arguable with some prospect of success.

17                        In identifying where that error appeared in the dismissal decision, the following at [39] was particularly identified.  There Finn J said:

In this scheme, the “right to negotiate” could be illusory in quite some degree for some purposes and especially when the Secretary (or a delegate) takes decisions or actions in effectuation of the purposes of the [SS Act] itself.  This is not to say that there was no room for discussion, accommodation and compromise.  Rather, it is to recognise that the actual terms of the negotiation itself were something in relation to which the Secretary, acting reasonably and in good faith, could ultimately dictate, approve or disapprove, if there was to be an agreement.

18                        The applicant, in his submissions, appeared to regard that passage as indicating that the “right to negotiate” is illusory.  It does not say that.  It is plainly a qualified statement.  Moreover, in my view, it is a correct description of the role and power of the Secretary.  There is really no scope for a contrary argument: ss 593 and 605 of the SS Act make that clear.

19                        The more refined argument on the part of the applicant refers to the proposition that the Secretary (or the delegate) must act reasonably and in good faith, derived from the exposition of newstart participation failures in s 624(1)(a) and (c) and (2).  As the dismissal decision at [35] indicates, the AAT appears to have acted on the failure to comply with the requirements to attend meetings to discuss the proposed fresh Newstart Activity Agreement rather than the failure to comply with a requirement to enter into such an agreement.  That approach involves the requirement referred to in s 624(1)(a) being reasonable: s 624(1)(a)(ii).

20                        The draft notice of appeal identifies the proposed grounds of appeal in the following terms:

1.   The failure of the Court to consider section 606(4) of the Social Security Act 1991 (the Act) in making its determination regarding the requirement for Newstart Activity Agreement “to be negotiated” by the parties – please refer to attached Affidavit for greater detail.

2.   The failure of the Court to fully consider, or attach sufficient weight to, section 606(5) of the Act regarding the same matter as in 1. above.

The supporting affidavit asserts that Finn J did not consider ss 606(4)(g) and 606(6) in deciding the significance of the words “to be negotiated”.  The applicant there, and orally, argued that the delegate was informed in accordance with s 606(6) of the previous conduct of the delegate about which he was concerned during the currency of the Newstart Activity Agreement previously in force, and that those matters (referred to the broad terms in [11] above) should have been the subject of rational negotiations conducted in good faith between him and the delegate.  Instead, the delegate rejected his proposals “out of hand”, so that it was reasonable for him not to have attended the meetings which were found to have been Newstart participation failures, and to have refused to enter into the fresh Newstart Activity Agreement proposed by the delegate.  He asserted that he was prepared to enter into an agreement, but that it was no longer “reasonable” for him to attend meetings because of the attitude of the delegate.

21                        The difficulty with the applicant’s contentions is that the case did not, for its resolution, require a definitive statement of the content of the “right to negotiate”, or require a statement of the content of that right in a way which might illustrate legal error on the part of the AAT.  Nor did the dismissal decision.  Neither says that there is no “right to negotiate”.  Each says that the extent of that right is not unlimited, but must be construed in its particular statutory context.  So far, it would appear that those propositions are unexceptionable.  The applicant did not present any cogent argument to the contrary, which might merit consideration by a Full Court.

22                        The statutory context, as the applicant pointed out, may include s 606(3), (4) and (5).  They provide:

(3)        In considering whether to approve the terms of an agreement with a person, the Secretary is to have regard to the person’s capacity to comply with the proposed agreement and the person’s needs.

(4)        In having regard to a person’s capacity to comply with an agreement, the Secretary is to take into account, but is not limited to the following matters:

(a)        the person’s education, experience, skills and age; and

(aa)      the impact of any disability, illness, mental condition or physical condition of the person on the person’s ability to work, to look for work or to participate in training activities; and

(b)        the state of the local labour market and the transport options available to the person in accessing that market; and

(c)        the participation opportunities available to the person; and

(d)        the family and caring responsibilities of the person; and

(e)        the length of travel time required for compliance with the agreement; and

(f)        the financial costs of compliance with the agreement, such as travel costs, and the capacity to pay for such compliance; and

(g)        any other matters that the Secretary or the person considers relevant in the circumstances.

(5)        An agreement with a person:

(a)        may be varied (in negotiation with the person) or suspended; and

(b)        if another Newstart Activity Agreement is made with the person, may be cancelled; and

(c)        may be reviewed from time to time at the request of either party to the agreement; and

(d)        may be cancelled by the Secretary after a review under paragraph (c).

The applicant pointed out in particular the obligation on the part of the Secretary or delegate to have regard to the person’s capacity to comply with the proposed agreement and the person’s needs; and in that regard to take into account any other matters that the person considers relevant by reason of s 606(4)(g), and to the variation after negotiation provided for in s 606(5)(a).

23                        However, as the dismissal decision indicates, the AAT recognised that there was a “right to negotiate” in its reasons at [106]-[108].  In deciding whether that right, as provided for and explained by the SS Act, had been given, it asked whether the requirement on the applicant to attend the interviews was, in all the circumstances, reasonable.  It also then asked whether it was satisfied that the newstart participation failures of the applicant occurred in circumstances where the applicant had a reasonable excuse for them.  Those are the questions required to be addressed by s 624(1)(a)(ii) and (2).  It did not approach the matter on the basis that the applicant’s concerns with the delegate were irrelevant or need not be considered.  They were treated as relevant to those issues, and so as relevant to whether the “right to negotiate” had been granted.

24                        In my judgment, the applicant’s contentions on this application do not expose a reasonably arguable proposition that the AAT, or the dismissal decision, involved an error of law in the proper construction or application of the relevant provisions of the SS Act to the particular findings of fact made by the AAT.  The contentions really amount to the applicant, on the complex findings of fact of the AAT, disagreeing with the AAT.  That is, he disagrees with the findings of fact that, in the circumstances, it was reasonable for the delegate to require him to attend the meetings where his non-attendance was treated as newstart participation failures, and that he disagrees with the finding of the AAT that it was not satisfied that the applicant had a reasonable excuse for those failures.

25                        I respectfully agree with Finn J that the applicant’s contentions do not reveal that there is any arguable error of law on the part of the AAT.

26                        Accordingly, the application for leave to appeal must be refused.  The applicant should pay to the respondent her costs of the application.

Associate: 

Dated:         23 December 2009