FEDERAL COURT OF AUSTRALIA

Franich v Secretary, Department of Families, Housing Community Services and Indigenous Affairs [2011] FCA 1362

THE COURT ORDERS THAT:

1.    The application for an extension of time in which to file and serve a notice of appeal be dismissed.

2.    The applicants do pay the respondent’s costs, to be taxed if not agreed.

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

REASONS FOR JUDGMENT

INTRODUCTION

1    The applicants seek an extension of time in which to file and serve a notice of appeal from a decision made by the Administrative Appeals Tribunal (the Tribunal) on 12 May 2011 (Franich v Department of Families, Housing, Community Services and Indigenous Affairs [2011] AATA 324) (the Decision).

2    The application for an extension of time is supported by an affidavit of Mr Ante Franich (Mr Franich) sworn on 14 June 2011 and a notice of appeal dated 15 June 2011.

3    Orders were made by a judge of this Court for the application for extension of time and the appeal to be heard together.

background

4    In the Decision (at [1]-[12]) the Tribunal noted that the male applicant (Mr Franich), 76 years of age, immigrated from Yugoslavia to Fremantle, Australia in 1961. In 1966, Mr Franich married Karmela Franich (ne Cukrov) (Mrs Franich), 64 years old, also an immigrant of Yugoslavia. Mr and Mrs Franich became Australian citizens in 1968 and 1981 respectively.

5    The Tribunal noted that in 2005, Mr and Mrs Franich sold some of their land for approximately $800,000 (the sale). On 13 July 2007, they invested the proceeds from the sale in Colonial First State on the advice of a financial planner with the Commonwealth Bank. The majority of the proceeds from the sale was invested in Mrs Franich’s name in a superannuation fund (the ‘Colonial First State FirstChoice Wholesale Personal Super’) and the balance was invested in Mr Franich’s name in an allocated pension (the ‘Colonial First State FirstChoice Wholesale Allocated Pension’). On 20 July 2007, Mr Franich lodged a claim for and was granted an age pension and Mrs Franich lodged a claim for and was granted a disability support pension. Some years later, on 10 June 2010, Mrs Franich lodged a Transfer to Age Pension – Income and Asset Review form with Centrelink whereby she requested that she be transferred from a disability support pension to an age pension.

6    Centrelink issued Mrs Franich with a notice on 21 June 2010 advising her, among other things, that:

    she would be paid her age pension and that her disability support pension would be cancelled effective 3 July 2010 (being the date on which Mrs Franich turned 64 years old and which constitutes her ‘pension age’ for social security purposes);

    she would be paid her age pension of $225.61 on payday 15 July 2010 (for the payment period from 30 June 2010 to 13 July 2010) but that her regular payment of age pension from 29 July 2010 would be $143.00; and

    that the information used for calculating the regular payment of her age pension was total combined assets of $772,122.12 and total combined annual income of $27,551.89.

7    The Tribunal noted that on the same day Centrelink issued Mr Franich with a notice advising him, among other things, that:

    his payment of his age pension on payday 15 July 2010 (for the payment period from 30 June 2010 to 13 July 2010) would be $225.61 and that his regular payment of age pension from payday 29 July 2010 would be $143.00;

    the information used for calculating the regular payment of age pension was total combined assets of $772,122.12 and total combined annual income of $27,551.89; and

    the rate of his age pension had been reduced because the combined value of his and his wife’s assets had increased.

8    On 12 August 2010, Mr Franich sought a review of the decision made by Centrelink to reduce his rate of age pension. On 20 August 2010, a Centrelink Customer Service Advisor wrote to Mr Franich stating that the decision concerning his rate of pension was correct and should not be changed because:

... prior to 03/07/2010 before your wife was Age Pension age the Colonial First State Personal super fund was considered an exempt asset and not taken into consideration when assessing your rate of Pension. Once your wife turned Age Pension age on 03/07/2010 the super fund became an assessable asset and was therefore taken into consideration when assessing your rates of Pension.

9    The Tribunal recorded that Mr Gonzalez, a welfare rights advocate with the Fremantle Community Legal Service, subsequently wrote to Centrelink, on Mr Franich’s behalf, seeking a further review of Centrelink’s decision to reduce Mr Franich’s rate of age pension by a Centrelink Authorised Review Officer (ARO). On 7 September 2010, a Centrelink ARO affirmed the decision to treat Mrs Franich’s investment in the Colonial First State superannuation fund as an assessable ‘asset’ (such that it was included in calculating Mr and Mrs Franich’s ‘joint assets’), resulting in a reduction in both Mr and Mrs Franich’s rate of age pension.

10    As they were dissatisfied, on 10 September 2010, Mr and Mrs Franich applied to the Social Security Appeals Tribunal (SSAT) for a review of the decision made by the Centrelink ARO on 7 September 2010.

11    On 8 October 2010, the SSAT affirmed the decision of the Centrelink ARO. Mr and Mrs Franich then sought review of the decision of the SSAT by the Tribunal. In Mr Franich’s application for review he stated as the ‘Reasons for Application’ as:

I disagree with the SSAT decision because the [SSAT] did not take into account that I was advised that Superannuation would not impact on our pension when my wife turn pension age. In about 2007 I spoke to the Commonwealth Bank and Centrelink and [they] said that if we left the superannuation in Colonial First State Fund it will have no impact on our pensions. It was not made plainly clear to me in any event. This has impacted adversely on my and my family health.

12    Mrs Franich’s ‘Reasons for Application’ were stated in almost identical terms.

ORAL ARGUMENT

13    At the joint hearing of the application and the appeal, Mr Franich, unrepresented, appeared on his own behalf and on behalf of his wife. He was assisted by an interpreter but made submissions himself in English and also read to the Court a letter which I will shortly reproduce in the judgment.

14    Mr Franich confirmed that he had received the respondent’s (the Secretary) written submissions about eight days prior to the appeal but from the nature of his oral submissions, he was not by any means fully conversant with the principles addressed by the Secretary in those submissions. The oral submissions made by Mr Franich were almost entirely directed to a merits review but I indicated to him that I would consider the contents of the letter dated 11 October 2011 (reproduced in the next paragraph) together with his oral submissions to see whether they supported his application and appeal. If I were to conclude that they did provide a form of support, I would then give an opportunity for the Secretary to make submissions in relation to them. The letter which was read to the Court, was not, as I understood it, conveyed in advance to the Secretary.

15    The letter from Mr Franich, in substance, said the following:

My name is Ante Franich & Karmela Franich. We are both living at 3 Kalla Vista, Success WA 6164.

In 2005 we sold 5 acres of land approximately $900,000.00 we left the money at Commonwealth Bank. In 2007 my plan was to buy 15 acres of land in Baldivis, the cost being $384,000.00. My plan around that time, the government put news that between husband and wife that they can have up to $800,000.00 in the bank and full pension. We went to Commonwealth Bank to see an advisor Mr Troy Davey. Everything was okay. After that we went to Centrelink to swear what we have. I told Centrelink that I have a house 53 Briggs Street, South Lakes, plus a block of land 700sqm plus I also have a unit in Croatia. Centrelink take the advice of the money and they start giving to us a full pension. We decide like that will be all the time till we leave. Commonwealth Bank advisor said that everything will be fine. Centrelink everything is alright. After three and a half years Centrelink ring Mrs Franich to see if she can take an aged pension at 64 years old. Mrs Franich asked Centrelink whether that be affecting the pension, there answer was it would not. Mr Franich sent the papers to Centrelink. Centrelink called us to see them. We went and saw them at the Spearwood branch in July last year. We are going to see Centrelink and they tell us that we will be losing most of our pension. We have a big shock that we are starting to blame each other, and we do not know what we are doing. We lost the land and we lost money and also our health and most important things my family and generation. I cannot help them for a better future. My son was living with me and my wife before and now he is living with his brother because he doesn’t like seeing us not happy. From last year to now we have black dice and distress not satisfaction somebody has got to have an answer about the future. Why do they not have an answer, why do they not tell me, the future nothing just catch me like a fish in a net and they destroy me and my family. If they tell me what has happened in future I would never have held that opportunity. The man from Centrelink’s name is Paul he told me to provide him with how much the unit cost in Croatia I did not answer because if I tell him all Australia and Croatia have agreements that they can check themselves. I am not telling him because if it is not correct then I will get in trouble. Now I am due to tell Centrelink how much it is approximately how much it is worth. Now I am asking myself why there giving me pension before and now they take it away. Now I want compensation for my land, my money, my family destroyed and my generation because I couldn’t help them. Paul told me you thinking now if I take that land before I would be better off that means that I am not thinking before only you think. Now I am going for the truth I am giving my life for the truth.

16    I have considered the matters raised in this letter together with the oral submissions which focussed very much on the contribution Mr Franich had made to Australia and the hardship to which he, his wife and family are now subjected as a result of the decision under appeal.

17    However, for reasons expressed in the remaining paragraphs of these reasons (which reflect in substantial measure, the Secretary’s argument), it is not within my power, as a matter of law, to set aside the decision which is under appeal either for the reasons advanced in the letter or in the oral submissions.

CONSIDERATION

18    Pursuant to s 44(2A) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), an appeal is to be instituted not later than the twenty-eighth day after the day on which an applicant is given a document setting out the terms of the decision of the Tribunal, or within such further time as the Court may allow.

19    The extension of time is sought under s 44(2A) of the AAT Act and O 53 r 7 of the Federal Court Rules (r 33.13 of the Federal Court Rules 2011). The Court has a discretion to extend time for the purpose of enabling the Court to do justice between the parties: see Gallo v Dawson (1990) 64 ALJR 458 (at 459).

20    It is a broad discretion in the sense only that the discretion to extend time to institute an appeal is not expressly confined by specified criteria. The principles listed by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (in respect of applications for extension of time under s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth)) have been applied to applications under s 44 of the AAT Act: see Peczalski v Comcare (1999) 58 ALD 697 (at [19]); Dent v Australian Electoral Commissioner (2008) 249 ALR 523 (at [48]). Relevant considerations are:

1.    The application should not be granted unless the Court is satisfied that it is proper to do so. The prescribed period is not to be ignored (Ralkon Agricultural Co Pty Ltd v Aboriginal Development Commission (1982) 43 ALR 535 (at 550)). Although it is not an essential pre-condition for a favourable exercise of the discretion that the applicant show an acceptable explanation for the delay, it is to be expected that such an explanation will normally be given (Comcare v A’Hearn (1993) 45 FCR 441 (at 444)).

2.    Any action taken by the applicant, other than to make an application for appeal, may be relevant to the consideration of whether an acceptable explanation for the delay has been furnished. In other words, can it be said that the applicant has ‘rested on his rights’?

3.    Any prejudice to the respondent, including any prejudice in defending the proceedings occasioned by the delay, is a material factor militating against the grant of an extension.

4.    The mere absence of prejudice is not enough to justify the grant of an extension. Consideration needs to be given to whether any wider prejudice to the public is involved.

5.    The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.

6.    Considerations of fairness as between the applicants and other persons otherwise in a like position are relevant to the manner of exercise of the Court’s discretion (see Wedesweiller v Cole (1983) 47 ALR 528 (at 534-535)).

The explanation for delay

21    The application for review is less than one week out of time. The explanation given for the delay is that the applicants could not find, within the prescribed time, a lawyer or interpreter to advise them or to translate to them all information in relation to the appeal procedure.

22    The affidavit sworn in support of the application for an extension of time, does not detail what steps (if any) the applicants took to seek legal advice or to engage the assistance of an interpreter. There is no evidence that the applicants ultimately obtained such assistance and that shortly thereafter the application for an extension of time was made.

23    However, I would not refuse the application simply because no adequate explanation for the delay has been provided. That deficiency could be cured by requiring adequate information to be put on affidavit. The real issue is whether there are reasonable prospects of the appeal being successful, if an extension of time were granted.

Merits of appeal

24    Under the heading ‘Questions of Law’ in the notice of appeal, the applicants contend that the questions of law raised on the appeal are:

-    Whether the Applicants’ investments in the Colonial First State First Choice Wholesale Personal Super is an exempt asset and as such to be disregarded under s 1118(1) of the Social Security Act 1991 (“the Act”) (the “Exempt Asset Ground”).

-    Whether the Applicants are entitled to receive the pension in accordance with the Act (the “Entitlement to Pension Ground”).

-    Whether Centrelink’s officers mislead the Applicant when the Applicants applied for the pensions (the “Misleading Ground”).

25    A threshold issue is whether the notice of appeal complies with the requirements of O 53 r 2 of the Federal Court Rules (r 33.12 of the Federal Court Rules 2011) for an appeal from the Tribunal, having regard to s 44 of the AAT Act. In particular, do all or any of the questions in the proposed notice of appeal constitute an appeal on a question of law and attract the jurisdiction of the Court under s 44(1) of the AAT Act.

26    The Court’s jurisdiction under s 44(1) is limited to pure questions of law: Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 (at [17]-[18]); Price Street Professional Centre Pty Ltd v Commissioner of Taxation (2007) 97 ALD 593 (at [35]).

27    Whether a decision gives rise to a question of law that will support an appeal under s 44(1) requires consideration of how the decision was arrived at and the point that the applicant seeks to raise: Price Street Professional Centre (at [25]). The Court must consider the question sought to be raised and the grounds relied upon (Birdseye (at [18]); Price Street Professional Centre (at [40])).

28    The grounds to be specified in the notice of appeal:

… are the grounds upon which the appellant will argue that the answers for which it contends to the questions of law entitle it to the relief which it seeks. It is not possible … to extend the subject matter of the appeal beyond the specified questions of law by itemising, under the heading “Grounds”, a series of alleged errors (some being errors of law, some being errors of fact and some being errors of mixed law and fact) in the reasons for decision of the Tribunal.

HBF Health Funds Inc v Minister for Health and Aging (2006) 149 FCR 291 (at [6]).

29    As the Secretary submits, the question of law identified by the applicant must relate to the decision under appeal in such a way that a favourable answer to the question will disclose an error affecting the Tribunal’s decision: Birdseye (at [23] and [28]). It is not enough for an applicant to demonstrate that the Tribunal misstated the law in the course of its reasons if that misstatement could not have affected its decision. An immaterial error of law will not vitiate a decision of the Tribunal: BTR plc v Westinghouse Brake and Signal Co (Aust) Ltd (1992) 34 FCR 246 (at 253-254); TelePacific Pty Ltd v Federal Commissioner of Taxation (2005) 218 ALR 85 (at [44]). As the Full Court said in Hill v Repatriation Commission (2005) 218 ALR 251 (at [83]):

It is well established that, in the context of appeals from the AAT, the court may decline to set aside a decision even where an error of law has been demonstrated provided that it considers that the AAT arrived at a decision that was clearly correct on the material before it.

The Tribunal decision

30    The issue for the Tribunal was whether Mrs Franich’s investment in the Colonial FirstChoice Wholesale Personal Super (the Super Investment) was an ‘asset’ which should be disregarded under s 1118 of the Social Security Act 1991 (Cth) (the Act) for the purpose of determining the applicants’ rate of age pension.

31    The Decision records that the parties did not dispute that:

1.    Mrs Franich reached ‘pension age’, defined at subs 23(5C) of the Act, on 3 July 2010.

2.    Mrs Franich’s Super Investment constituted an investment in a superannuation fund as defined in s 9(1) of the Act.

3.    Mrs Franich satisfied s 43 of the Act and was qualified to receive age pension from 3 July 2010.

32    In the Tribunal proceeding, the Secretary contended that, as at July 2010 Mrs Franich’s Super Investment could no longer be disregarded in calculating the value of the applicants’ assets. This was because s 1118(1)(f) of the Act expressly provided that a person’s investment in a superannuation fund was an exempted asset, but not until that person reached pension age or started to receive a pension or annuity from the fund concerned. As Mrs Franich had reached the pension age, the Super Investment could no longer be disregarded.

33    The Tribunal agreed with this submission and affirmed the decision under review.

34    The Tribunal considered Mr Franich’s submission that he was entitled to compensation, on the basis that he had been provided incorrect advice by the Commonwealth Bank and Centrelink. Mr Franich alleged that both the Bank and Centrelink had told him that Mrs Franich’s investment in the Super Investment would have no future impact on the applicants’ pensions.

35    The Tribunal did not make any findings of fact on this submission, holding (at [26]) that it was not the appropriate forum for Mr Franich to pursue such a claim.

The proposed appeal

36    I accept the submissions from the Secretary that the ‘Exempt Asset Ground’ does not reveal any error of law. The relevant legislative provisions of the Act are unambiguous, the relevant facts uncontroversial, and the application of those facts to the law by the Tribunal was sound in all of the circumstances. As a result, the ‘Entitlement to Pension Ground’ falls away.

37    I also consider that the Tribunal was correct in law in finding that the Tribunal was not the appropriate forum for the ‘Misleading Ground’ to be pursued. It had correctly exercised its discretion not to make any findings in relation to that ground.

38    The ‘Misleading Ground’, as presently framed does not disclose any error of law in the relevant sense for the purposes of s 44 of the AAT Act. (Indeed, by making no finding on that ground, the Tribunal avoided, correctly, any risk of tainting further consideration of those contentions which were not then within its jurisdiction).

39    As there are no prospects of success on the appeal, the application to extend time within which to appeal will be dismissed. In any event, even if the extension of time had been allowed, the appeal would have be dismissed for the above reasons.

CONCLUSION

40    The following orders are made:

1.    The application for an extension of time in which to file and serve a notice of appeal be dismissed.

2.    The applicants do pay the respondent’s costs, to be taxed if not agreed.

Associate:

Dated:    2 December 2011