FEDERAL COURT OF AUSTRALIA

Croker v Minister for Finance and Deregulation [2011] FCA 1188

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1        This is an application, filed on 19 July 2011, to review the decision of the respondent denying to the applicant, Mr Croker, a payment under s 33 of the Financial Management and Accountability Act 1997 (Cth) ("the FMA Act”) "for the difference between the cancellation date of [Mr Croker's] first statutory entitlement (Disability Support Pension) and the grant date of [Mr Croker's] second statutory entitlement".

2        In essence, there is a period of some 23 months between the date from which the Disability Support Pension ("DSP") paid to Mr Croker was cancelled, 6 June 2006, and the date with effect from which Mr Croker was again paid DSP by a decision of the Social Security Appeals Tribunal (SSAT), 29 April 2008.

3        Mr Croker invokes the Court’s jurisdiction under the Administrative Decisions (Judicial Review) Act 1977.

4        Written submissions were filed on 13 September by Mr Croker and by the respondent on 20 September, and those written submissions and the oral submissions made this morning enable me to deal with the matter today.

5        The application identifies the date of the decision as 22 June 2011, that being the date of the statement of reasons. In fact 3 May 2011 was the date of the decision to deny the application for a payment under s 33 of the FMA Act but nothing turns on that and I will treat the application as one for judicial review of the 3 May 2011 decision. Mr Croker agreed that I should do so.

6        Mr Croker relies on two affidavits he has sworn, the first dated 19 July 2011 and the second dated 13 September 2011. Annexed to the earlier of those affidavits is a letter dated 3 May 2011 from the Assistant Secretary, Special Claims and Land Policy Branch, Asset Management and Parliamentary Services, Department of Finance and Deregulation. In that letter the Assistant Secretary states that he has declined, pursuant to s 33(1) of the FMA Act an act of grace payment to Mr Croker equivalent to arrears of DSP from 6 June 2006 to 29 April 2008.

7        Also annexed to Mr Croker's first affidavit is a letter from the Assistant Secretary dated 22 June 2011 in answer to Mr Croker's e-mail of 25 May 2011 requesting a statement of reasons under s 13 of the Administrative Decisions (Judicial Review) Act 1977 and enclosing such a statement of reasons.

The decision-making

8        Section 33(1) of the FMA Act, so far as is relevant, is in the following terms:

(1)    If the Finance Minister considers it appropriate to do so because of special circumstances, he or she may authorise the making of any of the following payments to a person (even though the payment or payments would not otherwise be authorised by law or required to meet a legal liability):

(a)    one or more payments of an amount or amounts specified in the authorisation (or worked out in accordance with the authorisation);

(b)    periodical payments of an amount specified in the authorisation (or worked out in accordance with the authorisation), during a period specified in the authorisation (or worked out in accordance with the authorisation).

9        The respondent made the following findings of fact:

(i)     On 24 April 1994, Mr Croker was granted DSP. He continued to receive DSP for twelve years until on 6 September 2005, after a periodic review of his DSP, it was determined that he was no longer eligible and he was notified that the DSP would be cancelled.

(ii)     After the decision to cancel his DSP on 6 September 2005, Mr Croker continued to receive DSP pending the outcome of his appeal against the decision. On 2 December 2005, the ARO [the Authorised Review Officer] affirmed the decision to cancel Mr Croker's DSP as he was not eligible on medical grounds.

(iii)    On 4 January 2006, Mr Croker applied to the SSAT for a review of the decision to cancel his DSP and on 28 April 2006, the SSAT affirmed the decision to cancel Mr Croker's DSP on the basis that he was not eligible on medical grounds.

(iv)    On 15 May 2006, Mr Croker applied to the AAT for a review of the decision and a stay of the SSAT decision. On 19 May 2006, Centrelink wrote to Mr Croker and advised him that in accordance with the decision of the SSAT his DSP would be cancelled from 6 June 2006.

(v)     On 13 June 2006, the AAT refused the request to stay and Mr Croker appealed the decision to the FC [Federal Court] which dismissed the application on 27 October 2006.

(vi)    On 13 April 2007, the AAT affirmed the SSAT decision to cancel Mr Croker's DSP. Mr Croker appealed to the FC for review of the AAT decision and this application was dismissed on 30 October 2007, as no legal error was found in the decision of the AAT.

(vii)    Mr Croker appealed to the full FC and on 6 March 2008, the application was stayed until Mr Croker could provide security for costs. As Mr Croker was unable to do this, this matter remains stayed.

(viii)     Mr Croker was granted NSA [Newstart Allowance] with effect from 6 June 2006, and continued to receive NSA until he was granted DSP with effect from 29 April 2008.

(ix)    NSA is a payment designed to assist recipients to return to work and includes a number of activities to enhance recipients' employment prospects. As part of the requirements for receiving this payment, Mr Croker was required to undertake activities such as job searching and attending a third party organisation for assistance with job search activities. Mr Croker makes various claims against Centrelink officers related to the requirements of meeting the NSA activity agreement.

(x)     On 29 April 2008, Mr Croker contacted Centrelink regarding a new claim for DSP and on 7 May 2008 he submitted a claim. On 3 November 2008 Centrelink rejected Mr Croker’s claim. On 7 January 2009, an ARO affirmed the decision.

(xi)     On 16 January 2009, Mr Croker appealed to the SSAT for review of the decision to decline his DSP application and on 1 June 2009, the SSAT set aside Centrelink's decision and granted Mr Croker DSP with effect from 29 April 2008. It was not considered that Mr Croker’s condition had changed in any significant manner from the previous cancellation of his DSP and the determination of the SSAT resulted from the subjective nature of the impairment tables that are used in determining medical eligibility for DSP.

(xii)     Between 21 April 2010 and 6 April 2011, Mr Croker unsuccessfully appealed the start date of the second grant of DSP with Centrelink, an ARO, the SSAT, and the AAT.

(xiii)    Centrelink advised that Mr Croker’s DSP is due for review and that it may be reviewed at any time but is unlikely to be reviewed before July 2011.

10        The reasons for the decision are set out in eight paragraphs of the Statement of Reasons as follows (retaining the original numbering):

6.    I considered that extensive appeals at the time of the cancellation of Mr Croker’s DSP established that he was not eligible for DSP during this period.

7.    The views expressed by the SSAT, which granted Mr Croker DSP from 29 April 2008, related specifically to his application for DSP on 7 May 2008 and do not alter the effect of the previous decisions made on Mr Croker's eligibility for DSP in 2006.

8.    While Mr Croker claimed that the SSAT decision of 1 June 2009 circumvents the ruling of the FC of 30 October 2007, I noted that the SSAT does not have the authority to circumvent the FC even if that was their stated intention. In this case it does not appear that this was the intention of the SSAT.

9.    I considered that while Mr Croker objected to the requirements that he had to comply with in order to receive, this is the normal and intended function of the job seeker payment system. I noted that Mr Croker acknowledged that he signed an activity agreement, therefore agreeing to the document, and that this agreement would have clearly stated what was required of him to receive NSA.

10.    Given that Mr Croker applied for and was granted NSA after he had been found ineligible for DSP, it is considered that the claim for NSA was not incorrect and cannot be taken to be a claim for DSP.

11.    Mr Croker was supported by the Commonwealth through NSA for the period that he is seeking arrears of DSP and, as he was able to meet the activity test it was considered that he was receiving the appropriate level of support.

12.    Mr Croker has not suffered due to actions of the Commonwealth and the relevant social security legislation has been applied as intended.

13.    I consider that Mr Croker is not eligible for payment of DSP for the period between the cancellation of his first DSP to the grant of his second DSP by the SSAT and that there were no special circumstances or moral obligation that would warrant payment of an act of grace equivalent to DSP for that period.

11        Mr Croker submits in his Outline of Submissions dated 13 September 2011 first that the Statement of Reasons are in error and in particular failed to acknowledge that special circumstances were present in the applicant's application for the payment of the statutory entitlement claim, which includes continual disabilities, defective legislation, defective administration and maladministration and inadequate guidelines for providing compensation and a detriment caused by defective administration.

12        Mr Croker also submits in his Outline of Submissions that the Statement of Reasons "are in bad faith" and in particular failed to acknowledge illnesses and injury that the applicant has endured since approximately April 1994 and inadequate acts and omissions by relevant government agencies, unreasonable delay, and the duty of the Minister to determine and pay legitimate claims to support the moral obligations of the Commonwealth and make timely and cost effective decisions and to act as a model litigant.

13        Mr Croker identifies four special circumstances said to arise (I have corrected transcription and other errors where possible):

(vi)    the Respondent is in breach of the rules of natural justice in that what occurred in connection with the making of the decision was exacerbating injuries and illness that were established by the Secretary, Department of Employment and Workplace Relations (the Secretary) on at least two occasions;

(vii)    the Respondent and the Secretary were well aware that the legislative changes on or about the time of the applicant’s statutory entitlement cancellation, and those legislative changes were of an extremely pertinent influence on the applicant’s statutory entitlement cancellation. The Social Security Act 1991 (Cth) and agencies practices were not followed, in that the Secretary was aware of the applicant’s continual illnesses and injuries but continued with the cancellation of the applicant’s statutory entitlement;

(viii)    The Respondent and the Secretary are well aware the applicant has been under disability that qualified the applicant for the statutory entitlement since at least April 1994 to today and the foreseeable future; and

(ix)    The re-grant of the statutory entitlement did establish that an injury and or illness was present and that injury or illness was of the same nature “in which the original grant was of the statutory entitlement was given in April 1994”

14        Mr Croker also gave particulars in his Outline of Submissions of bad faith which he said arose. Those particulars were – and as repeated in oral submissions this morning – as follows (again correcting transcription and other errors where possible):

(i)     That the Respondent failed to acknowledge that there was defective and/ or maladministration which manifested the loss of the applicant’s statutory entitlement and the decision 9/6/2009 of the SSAT that restored the applicant’s statutory entitlement was on legislative requirements that substantially raise the bar for the qualification for the entitlement and backdated it to the 28/4/008, approximately 1 month after the Federal Court of Australia effectively locked out the applicant from continuing to appeal the first cancellation of the applicant’s statutory entitlement by requiring security for costs;

(ii)    That the Respondent failed to come to the matter with clean hands and to acknowledge pertinent criticism expressed in the undertaking of Croker v Department of Families, Housing, Community Services & Indigenous Affairs [2010] FCA 1136 and in particular at paragraph 23 :-

. . .

(iii)    That the Respondent failed to acknowledge defective legislation that prevented the applicant from receiving the statutory entitlement the applicant was always intended to receive;

(iv)     That the Respondent failed to acknowledge misdirections that provided wrong, misleading or wholly inadequate advice, and in particular those decisions of the Federal Court of Australia and the Administrative Appeals Tribunal that failed to restore the statutory entitlement; and

(iv)    The Respondent failed to approach the material facts of the application and in particular the fact that the cancellation and subsequent re-grant of the entitlement left a time line gap which has no reasonable grounds to be established in a conceptual view.

Consideration

15        Mr Croker is a bankrupt but the respondent takes no issue as to the competency of the proceeding, given the nature of the relief sought.

16        In Toomer v Slipper [2001] FCA 981, Weinberg J considered s 33 of the FMA Act. In that case, in the letter of denial, the respondent wrote:

"My power to approve act of grace payments under the FMA Act is only exercised where it is considered that the application of Commonwealth legislation has produced unintended, anomalous, or inequitable results, or where, because of its direct role in a particular situation the Commonwealth considers that it has a moral responsibility to redress the circumstances of the individual concerned."

17        The applicant in that case submitted that the respondent had erred in law by adopting an unduly narrow interpretation of the term "special circumstances" in s 33(1) of the FMA Act. The Court rejected that submission.

18        Weinberg J said, at [28] and following :

The expression "special circumstances" has been the subject of extensive judicial consideration. However, there does not appear to have been any occasion on which that expression has been considered in the context of s 33(1) of the FMA Act.

In Wu v Attorney General (1997) 79 FCR 303 at 307, Burchett J dealt with an interlocutory motion for the grant of bail in which the meaning of the expression "special circumstances" arose for determination. His Honour referred to Jess v Scott (1986) 12 FCR 187, a case involving an application to extend time in which to file a notice of appeal, in which the Full Court discussed a number of decisions concerning the terms "special circumstances", and "special reasons", terms which were treated as having essentially the same meaning. The Court said that "special reasons":

"...is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served."

Burchett J went on to say:

"The same principle was applied to the expression "special circumstances", in relation to an application for release from an implied undertaking, in Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 at 578-579, where it was pointed out that the word "special" derives almost all of its meaning from its context. See also Springfield Nominees Pty Ltd v Bridgelands Securities Ltd (1992) 38 FCR 217; Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 at 132-133..."

The statutory context in which the term "special circumstances" arises in the present case is one in which the Minister is given a discretion to authorise the making of act of grace payments where such payments "would not otherwise be authorised by law or required to meet a legal liability". There are any number of circumstances which may give rise to a claim for a payment of this type. It is impossible to anticipate the situations in which such payments may be warranted. The discretion vested in the Minister is obviously broad.

The respondent said in the letter of denial that the power to approve act of grace payments under the FMA Act was only to be exercised where it was considered that the application of Commonwealth legislation had produced unintended, anomalous, or inequitable results, or where because of its direct role in a particular situation the Commonwealth considered that it had a moral responsibility to redress the circumstances of the individual concerned. . . There is nothing in the formulation of "special circumstances" adopted by the respondent which strikes me as being too narrow, or otherwise erroneous in law.

. . .

The legislature has entrusted the power to make act of grace payments to the Minister. Such payments are not based upon any legal entitlement but are made in response to moral obligations assumed by the Commonwealth as a result of the actions of its employees or instrumentalities. The power to make such payments is, by its very nature, one which is particularly suited to be exercised by the Minister. The role of the Court is to ensure that the Minister exercises that power lawfully. Provided he does so, his decision cannot be impugned.

19        Turning to the present case, as to “special circumstances” first, I do not see how a breach of the rules of natural justice occurred in connection with the making of the decision under review either as submitted by Mr Croker or at all. In oral submissions Mr Croker submitted that a break in the payments, later reinstated, constituted a denial of natural justice, but, in my view, this is legally unsustainable. It may be that on analysis an allegation of breach of the rules of natural justice outside the decision-making process with which the Court is presently concerned could constitute special circumstances, but it is not easy to see how that could be so. It is certainly not so in the present case.

20        The remaining "special circumstances" relied on by Mr Croker centre on the alleged awareness by the relevant agencies of Mr Croker’s stated illnesses and injuries and that those illnesses and injuries were of the same nature as those which underlay the original payment of DSP.

21        However I see no error of law in the decision of the respondent under s 33 of the FMA so far as concerns "special circumstances".

22        The respondent found that the cancellation of DSP for the effective period 6 June 2006 to 29 April 2008 was not incorrect or unintended or anomalous. The respondent also decided that the views expressed by the SSAT granting DSP with effect from 29 April 2008 did not imply otherwise.

23        The respondent also found that there was no moral obligation that would warrant payment under s 33 of the FMA.

24        The respondent found that the claim for NSA was not incorrect. In any event, Mr Croker was paid NSA for the period for which he is, in effect, seeking arrears of DSP. As he was able to meet the activity test for NSA, the respondent considered that Mr Croker was receiving the appropriate level of support.

25        In my view the respondent did not err in law in construing "special circumstances" within the meaning of s 33 of the FMA: the respondent applied s 33 as explained by Weinberg J in Toomer v Slipper (above).

26        As to the allegations of bad faith, these largely relate to the merits of the decision. As I have indicated, the written submissions by Mr Croker were largely repeated in his oral submissions.

27        As to the first, third, fourth and fifth grounds, in my view it is not "bad faith" for the respondent to form a view that there was, on the facts as found, no defective administration or maladministration. Neither is there a basis for concluding "bad faith" has been established because the legislation was “defective”, as alleged or because there were "misdirections" constituted by decisions of the Federal Court and the AAT, as alleged.

28        As to the second ground, Mr Croker relied on the decision of Rares J in Croker v Department of Families, Housing, Community Services & Indigenous Affairs [2010] FCA 1136. However that decision casts no direct light on the present issue which is the lawfulness of the decision made on 3 May 2011 under s 33 of the FMA Act.

29        Rares J in that case was critical of the application of the general policy to the effect that an act of grace payment or an exercise of the power conferred by s 33 of the FMA Act would not be considered until legal avenues were exhausted. No such issues arise in the present case. In addition, the nature and period of the payments sought are different.

30        Mr Croker referred in oral submissions to a report Commonwealth Ombudsman, “To compensate or not to compensate?” (1999) p 16, but the report there contains in substance case studies where s 33 payments could be or would be appropriate. I do not see it as being of assistance in the application for judicial review of the respondent’s 3 May 2011 decision.

31        Mr Croker also relied on the Legal Services Directions, particularly in relation to the timeliness of decisions. Mr Croker put that the respondent should have known that legal rights had been exhausted and, as I understood the submission, should have dealt with the s 33 application made by him sooner. In my view, that matter does not constitute error of law for present purposes either as going to special circumstances or as going to bad faith.

32        Mr Croker briefly mentioned in oral submissions other legal cases involving him where the Commonwealth was alleged to have been in error. Reference was briefly made to tax cases involving Mr Croker. I do not regard those matters as relevant to judicial review of the present decision.

33        Also referred to by Mr Croker was s 29 of the Disability Discrimination Act 1992 (Cth). It seemed to be suggested that there had been a contravention of that Act. In my view, this is not a matter with which I am presently seised on this application for judicial review.

Conclusion

34        For these reasons I dismiss the application. The respondent does not seek costs and I therefore make no order as to costs.

Associate:

Dated:    26 October 2011