FEDERAL COURT OF AUSTRALIA

Cao v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2014]

FCA 52

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The applicant pay the respondent’s costs.

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

REASONS FOR JUDGMENT

1    The applicant in these proceedings, Mr Ziming Cao, appeals to this Court from an adverse decision of the Administrative Appeals Tribunal (the Tribunal). The effect of the Tribunal’s decision was to affirm a decision of the Social Security Appeals Tribunal (SSA Tribunal) that Mr Cao had been overpaid certain social security payments and that his debt to the Commonwealth arising from these overpayments should not be waived.

2    For the reasons that follow, Mr Cao’s appeal must be dismissed.

3    Mr Cao has in the past received two benefits payable under the Social Security Act 1991 (Cth) (the Act): a disability support pension and the Newstart allowance. The rate of both of these benefits is calculated under provisions of the Act (sections 1064 and 1068 respectively) which include, as relevant variables, the amount of the recipient’s ordinary income. The combined effect of the definitions of “ordinary income” in section 1072 of the Act and the definitions of “income amount earned, derived or received” and “income amount” in sections 8(1) and 8(2) of the Act is that a person’s ordinary income can include any money received by a person, by any means and from any source, for the person’s own use or benefit.

4    On 9 August 2010, an officer of Centerlink, the trading name of the Commonwealth agency that administers payments under the Act, determined that the amounts paid to Mr Cao in respect of his disability support pension (for the period 15 January 2003 to 19 April 2005) and his Newstart allowance (for the period 16 August 2005 to 29 July 2010) were more than they should have been. The basis of this determination was that the officer found that Mr Cao had received more income during these periods than the amount of income that Mr Cao had notified to Centerlink and that had been used to calculate the rate of the benefits paid to him. This determination followed an investigation conducted by Centerlink that focused on gambling losses suffered by Mr Cao at a particular Casino and numerous deposits that had been made into an HSBC bank account operated by Mr Cao between 2003 and 2010. Such explanations that Mr Cao proffered to Centerlink in relation to the source of funds used for his gambling and the nature of the deposits into his bank account were not accepted by the Centerlink officer. The amount of the overpayments was calculated to be $14,376.53 in respect of the disability support pension and $26,933.19 in respect of the Newstart allowance.

5    Under the Act if a person receives Social Security payments to which he or she was not entitled, the amount of the overpayment is a debt due to the Commonwealth by the person: s 1223(1) of the Act. There are various provisions in the Act that allow for the writing-off or waiver of a debt due to the Commonwealth arising from an overpayment in certain circumstances. Those provisions include, relevantly, ss 1236, 1237A and 1237AAD. The latter provision gives the Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs, the respondent in these proceedings, a discretion to waive the right to recover a debt if the Secretary is satisfied, amongst other things, that there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt. That discretion was not exercised in Mr Cao’s case.

6    Mr Cao applied for an internal review, by an independent senior officer of Centerlink, of the decision to raise an overpayment debt against him. On 28 September 2012, the review officer affirmed the original decision in relation to the overpayment of the disability support pension. The review officer also effectively affirmed the decision in relation to the Newstart allowance overpayment, though he varied the amount slightly (to $26,501.43) to correct a minor error in the initial calculation. The review officer, who had interviewed and sought information from Mr Cao in relation to the matter, based his decision primarily on the HSBC deposits, which he considered had not been satisfactorily explained by Mr Cao. He pointed to various inconsistencies and inadequacies in the explanations provided by Mr Cao in relation to the deposits and various other matters. The review officer also decided not to waive the debt arising from the two overpayments. He was not satisfied that there were any special circumstances.

7    Mr Cao then applied, as he was entitled to do, to the SSA Tribunal for a further review of the decision to raise and not waive the debt arising from the alleged overpayments. Mr Cao gave unsworn evidence at a hearing before the SSA Tribunal, including evidence about the deposits in his bank account. He claimed that the deposits were business loans from various friends of his. On 14 February 2013, the SSA Tribunal affirmed the decision under review. The SSA Tribunal, like the original Centerlink decision maker and the review officer, was not satisfied that Mr Cao had provided a satisfactory explanation of the source of the deposits made to his HSBC bank account. It concluded that the deposits fell within the broad definition of income in the Act.

8    The SSA Tribunal also decided not to exercise the discretion to waive the debt. By this time, Mr Cao’s debt to the Commonwealth arising from the overpayments was being recovered by way of deductions from his ongoing pension. In support of his claim that any overpayment debt should be waived, Mr Cao told the SSA Tribunal about his strained financial circumstances, as well as ongoing medical problems. The Tribunal was not, however, satisfied that Mr Cao’s circumstances were so out of the ordinary as to make it desirable to waive the recovery of the debt.

9    Undeterred by the SSA Tribunal’s affirmation of the Centerlink decision, Mr Cao applied to the Tribunal for a review of the SSA Tribunal’s decision. Mr Cao gave sworn evidence in relation to the HSBC deposits at a hearing convened by the Tribunal. This time Mr Cao gave a detailed account of how the deposits supposedly related to business arrangements between his companies (Winga Enterprises Pty Ltd and Oziming-Caoziming Pty Ltd), some brothers named Yu, who ran a paint importing business in China, Barloworld Coatings Australia Pty Ltd (Barloworld), the Australian supplier of paint to the Yu brothers, and a person named Mr Rong. Mr Cao claimed that he was the “business sponsor” of the Yu brothers, that he guaranteed their obligations to Barloworld and that Mr Rong and others lent him money so that he could meet the obligations arising from the Yu brothers’ dealings with Barloworld. The HSBC deposits, or at least some of them, were, according to Mr Cao, loans from Mr Rong and others received pursuant to these relationships and arrangements.

10    Unfortunately for Mr Cao, the Tribunal did not accept his evidence in relation to these arrangements and found that Mr Cao had not provided any plausible explanation for the deposits into his bank account. The Tribunal gave detailed reasons for rejecting most, if not all, of Mr Cao’s evidence. In short, the Tribunal found that Mr Cao’s claims before that Tribunal were different to, and inconsistent with, previous explanations he had provided to Centerlink and the SSA Tribunal, that Mr Cao’s evidence was essentially uncorroborated by documentary and other evidence that had been advanced by Mr Cao, both previously and in the Tribunal proceedings, that the claims were inherently implausible for various reasons and that there were other reasons to doubt the credibility and reliability of Mr Cao’s evidence. One reason given for doubting Mr Cao’s reliability was that evidence Mr Cao had given before the Tribunal to explain the source of funding for the 30 business trips he had made since 2000 was inconsistent with explanations he had previously given to Centerlink.

11    Having rejected Mr Cao’s evidence in relation to the bank account deposits, the Tribunal found that the deposits were received by Mr Cao for his own use or benefit and therefore constituted ordinary income for the purposes of the Act.

12    In relation to the issue whether the debt raised as a result of the overpayment should be written-off or waived, the Tribunal found that the circumstances did not fall within the terms of either s 1236 or 1237A of the Act. As for the discretion under s 1237AAD, it would appear that before the Tribunal Mr Cao relied primarily on his financial circumstances in seeking an exercise of this discretion in his favour. The Tribunal found, however, that Mr Cao’s financial circumstances could not be described as “straitened” and was not satisfied that, taken as a whole, Mr Cao’s circumstances were such as to take this matter out of the usual or ordinary case. It accordingly found that it was not satisfied that there were special circumstances which enlivened the exercise of the discretion in s 1237AAD.

13    Mr Cao brings the application in this Court pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act), which provides that a party to a proceeding before the Tribunal may appeal to the Court “on a question of law”. The Court’s jurisdiction to entertain an appeal under s 44 is only properly invoked if the applicant is able to point to a question of law arising from the Tribunal’s decision. The Court has no jurisdiction to entertain an application that raises only questions of fact or attacks the merits of the Tribunal’s decision.

14    The importance of formulating what is truly a question of law in a notice initiating an appeal under s 44 of the AAT Act has been repeatedly highlighted and emphasised by this Court: Australian Telecommunications Corp v Lambroglou (1990) 12 AAR 515 at 524; Birdseye v Australian Securities and Investments Commission (2003) 38 AAR 55; Australian Securities and Investments Commission v Saxby Bridge Financial Planning Pty Ltd (2003) 133 FCR 290 at 300-302; Comcare v Etheridge (2006) 149 FCR 522 at 526-527; Kowalski v Repatriation Commission [2011] FCAFC 43 at [16]; Rana v Repatriation Commission (2011) 126 ALD 1 (Rana) at [11]. A notice of appeal under s 44 of the AAT Act which does no more than raise questions of fact, or challenge findings of fact or the merits of the Tribunal decision, does not properly invoke the jurisdiction of the Court.

15    The notice of appeal filed by Mr Cao specifies one supposed question of law in the following terms:

These deposits are not income. This judgment to me is not fair. Take back the investment is not are income. Borrowing is not are income.

16    The notice of appeal also specifies the following ground relied upon by Mr Cao:

I have depression. Life is difficult. Request to stop deduct money. This decision affect my marriage.

17    The respondent has filed a notice of objection to competency on the basis that Mr Cao’s notice of appeal does not identify any question of law. The objection to the competency of this appeal has considerable force.

18    The question of law specified in the notice of appeal appears to do no more than challenge findings of facts relevant to the Tribunal’s conclusion that the bank account deposits constituted income for the purposes of the Act and that there were no special circumstances sufficient to enliven the discretion in s 1237AAD of the Act. The grounds relied on by Mr Cao as set out in the notice of appeal appear to do no more than advance reasons why the discretion under 1237AAD should be exercised in his favour.

19    Mr Cao’s submissions also do not appear to raise any question or questions of law. In his written submissions, Mr Cao points to a number of payments or other transactions that he appears to contend show that the Tribunal should have found that the deposits were not income, but rather were payments pursuant to the arrangements between Winga Enterprises and Barloworld. The payments referred to by Mr Cao primarily involve deposits into and withdrawals from the bank account of Winga Enterprises, as well as payments to Barloworld. Mr Cao’s written submissions refer to various documents that supposedly evidence these payments. Some of the documents referred to in the submissions were not in evidence before the Tribunal, including the Financial Statements and Annual Reports of Winga Enterprises for the years ending 30 June 1999, 2000 and 2001. Other transactions and documents referred to in the written submissions were expressly or impliedly considered and addressed by the Tribunal in its reasons. For example, deposits or transfers that supposedly relate to the deposit of $85,000 referred to in paragraph 2 of the written submissions are addressed in paragraphs 17 and 18 of the Tribunal’s reasons. Mr Cao also appears to contend (consistent with the supposed question of law specified in the notice of appeal) that the deposits were not income because they were “taking back investment money.” This contention was explained by Mr Cao in his oral submissions, considered later in this judgment.

20    Mr Cao’s written submissions also refer to the number of matters that he appears to contend should be, or should have been, considered in the context of the exercise of the discretion to waive the overpayment debt. He refers to the fact that he has depression, that he needs medication, that he can’t work, that welfare is his only income, that he now has to rely on borrowings to support himself and that his wife arrived in Australia in August 2011 and is unable to work. Mr Cao does not expressly contend in his written submissions that there was evidence of any these matters before the Tribunal. Nor is there anything before the Court to suggest that there was.

21    Mr Cao’s oral submissions at the hearing of this matter did not provide any further enlightenment in relation to any question or questions of law arising from the Tribunal’s decision and reasons that could properly be the subject of his appeal. Some of the arguments advanced orally by Mr Cao amounted to nothing more than a complaint that the Tribunal did not accept some of the evidence advanced by him. For example, he referred to a letter from his accountant that he tendered in the Tribunal (exhibit 1) which stated, in relation to the financial years 2001 to 2007, that “based on our records and tax returns lodged”, Mr Cao had not taken any salary from Winga Enterprises or Oziming-Caoziming. Even if accepted by the Tribunal, the statement in this letter is not necessarily inconsistent with the Tribunal’s conclusions concerning the deposits. In any event, non-acceptance by the Tribunal of a party’s evidence does not involve an error of law.

22    Mr Cao also argued, in this context, that if the Commissioner of Taxation accepted that his income was a certain amount, the Tribunal had no right to make a different finding. This supposed question or argument is not addressed or advanced in Mr Cao’s notice of appeal. Nor does it appear to have been the subject of evidence (other than perhaps the accountant’s letter previously referred to) or even argument before the Tribunal. It is essentially no more than a round-about way of attacking the Tribunal’s finding of fact in relation to the deposits. To the extent that it raises any question or questions of law, it is entirely unmeritorious. There is no basis for concluding that in addressing whether the deposits fell within the broad statutory definition of “ordinary income” in the Act, the Tribunal was in any way bound by any finding the Commissioner of Taxation may have made about Mr Cao’s assessable income under an entirely different statutory regime.

23    Mr Cao also raised, in his oral submissions, an argument concerning the fact that for various periods in 2006 and 2007 he did not receive Centerlink payments. This appeared to arise from the fact that at various times in 2006 and 2007 Mr Cao was overseas, often for lengthy periods. This argument is not addressed or advanced in Mr Cao’s notice of appeal and does not appear to have been canvassed either before the Tribunal or at any earlier stage of the decision making process. It is, in any event, clear that the respondent’s calculations, which were before the Tribunal, took into account the fact that for various periods Mr Cao was not in receipt of benefits.

24    Mr Cao appeared to argue that because he did not receive benefits during various periods the Tribunal should not have concluded that deposits received by him during those periods represented income received by him. This argument again, at best, simply raises a question of fact. In any event it has no merit. Even if it could be shown that some of the deposits were received whilst Mr Cao was not in receipt of any benefits, it does not necessarily follow that the deposits could not be considered to be an amount of his ordinary income relevant to a period when he was in receipt of benefits. For example, the rate of disability support pension is worked out on the basis of, amongst other things, the amount of the recipient’s income on a yearly basis.

25    In relation to his reference to “taking back investment” in his notice of appeal and written submissions, Mr Cao explained in his oral submissions that what he meant by this was that he had loaned money to Winga Enterprises and that the deposits, or at least some of them, were the repayment by Winga Enterprises of these loans. These loans and repayments supposedly formed part of the arrangements involving the Yu brothers and Barloworld that he gave evidence of before the Tribunal. Mr Cao conceded, in argument, that his complaint here was simply that the Tribunal did not accept his evidence. That complaint does not raise a question of law. The evidential basis of this argument is also, at best, highly doubtful. Indeed, it appears to be inconsistent with Mr Cao’s evidence and submissions before the Tribunal

26    One final matter raised by Mr Cao in the course of his oral submissions should be addressed. At various stages during his submissions, usually when seeking to explain why certain evidence or arguments had not been put before the Tribunal, Mr Cao appeared to suggest that the Tribunal did not give him an adequate opportunity to complete his case. In some circumstances, if made good, such a contention could raise the question whether there had been a denial of procedural fairness by the Tribunal. That is a question of law. Mr Cao does not, however, raise any such question or allegation in either his notice of appeal or written submissions. Nor did he seek to lead any evidence in support of such an allegation. Nor is there anything in the material before the Court to support the allegation or warrant any further investigation of it. Mr Cao did not seek to amend his notice of appeal to include any question of law based on a contention that he had been denied procedural fairness. Had he done so, leave to amend would have been refused on the basis that there was no evidentiary or factual basis to support the contention.

27    A question of law specified in a notice of appeal which is inelegantly drafted may nonetheless be a question of law which attracts the jurisdiction of this Court if its purport is tolerably clear having regard to the context in which it appears: Ergon Energy Corp Limited v Commissioner of Taxation (2006) 153 FCR 551 at [51]. In an appropriate case the Court itself may be “prepared to frame questions in order to found its jurisdiction”: Secretary Department of Education, Employment and Workplace Relations v Ergin [2010] FCA 1438 at [11]; 119 ALD 155 at 159; Goodricke v Comcare [2011] FCA 694 at [14]-[22]; 122 ALD 546 at 549-550. An appropriate case may arise where, as here, an applicant is unrepresented and where it is possible to discern the question which, if properly framed, could found the jurisdiction of the Court: Hoe v Manningham City Council [2011] VSC 37 at [6]-[7]; Kolya v Tax Practitioners Board [2012] FCA 215 at [8]. Care must be taken, however, especially in the face of an objection to competency, not to visit upon a party a judicially attractive question of law which the notice of appeal does not fairly raise: Rana at [14].

28    It is perhaps possible to discern two questions of law from what Mr Cao has articulated in his notice of appeal and submissions.

29    The first possible question of law is whether the facts as found by the Tribunal were capable of falling within the statutory definition of ordinary income in the Act. The question whether or not the facts fall within the terms of a statutory provision, properly construed, is a question of law: Hope v Bathurst City Council (1980) 144 CLR 1 at 7; Australian National Railways Commission v Collector of Customs (SA) (1985) 8 FCR 264 at 277; Collector of Customs v Pozzolanic Enterprises (1993) 43 FCR 280 at 287-288. Additionally, or perhaps alternatively, it is perhaps open to view Mr Cao’s submissions as amounting to a contention that the Tribunal’s findings that the HSBC deposits constituted ordinary income within the meaning of the Act were unsupported by, or not reasonably open on, the evidence before the Tribunal. The question whether there was any rationally probative evidence capable of supporting a finding by the Tribunal is a question of law: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 355-356; Rawson Finances Pty Ltd v Commissioner of Taxation (2013) 296 ALR 307.

30    Even if it is possible to construe Mr Cao’s notice of appeal and submissions as raising either or both of these questions of law, the appeal in respect of such questions of law must nonetheless be dismissed. It was open to the Tribunal to conclude, on the basis of the evidence before it, that the HSBC deposits fell within the statutory definition of income. The Tribunal’s findings in this regard were supported by rationally probative evidence.

31    The fundamental difficulty for Mr Cao is that, for the reasons given by the Tribunal, it was open to the Tribunal to reject his evidence that sought to explain the nature of the deposits. Findings in relation to the reliability and credibility of Mr Cao and his evidence are quintessentially matters of fact finding for the Tribunal and are rarely open to challenge in proceedings under s 44 of the AAT Act: Hill v Repatriation Commission (2005) 218 ALR 251 at [93]. Once the Tribunal rejected Mr Cao’s explanation of the deposits, as it was open to it to do, it was then open to the Tribunal to infer and conclude that the deposits constituted money received by Mr Cao (by any means or from any source) for his own use or benefit. It was accordingly open to it to conclude that the deposits fell within the statutory definition of ordinary income.

32    The second possible question of law potentially raised by what Mr Cao has put in his notice of appeal and submissions is whether the Tribunal failed to consider the case he advanced, or ignored evidence or arguments that it was bound to consider. The question whether the Tribunal failed to take into account considerations that it was, under the relevant statutory provisions, bound to take into account, is a question of law: Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24 at 39 - 42. In some circumstances, failure to take into account obviously relevant evidence may constitute, or at least give rise to an inference that there has been, an error of law: Abebe v The Commonwealth (1999) 197 CLR 510; Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 (Yusuf). Likewise, a failure by a Tribunal to consider submissions of substance advanced by an applicant, or a failure to consider the case or claims advanced by an applicant, may in some circumstances constitute an error of law: Yusuf at 346, 349-352; Comcare v Rowe (2002) 35 AAR 410 at [12]; Defence Force Retirement and Death Benefits Authority v House (2009) 49 AAR 525 at [31].

33    Again, however, even if it is possible to construe Mr Cao’s notice of appeal and submissions as raising such a question or questions of law, however framed, his appeal on such a question or questions must nevertheless be dismissed as having no substance. There is no basis for concluding that the Tribunal ignored or failed to consider any evidence before it that was relied on by Mr Cao. Many, if not most, of the factual contentions now advanced by Mr Cao in this appeal do not appear to have been supported by evidence before the Tribunal. Mr Cao has not satisfactorily demonstrated, for example, that many of the documents referred to in his written submissions were in evidence before the Tribunal or that there was any other evidence of the payments or transactions to which he now points. Nor has Mr Cao satisfactorily demonstrated that the matters now relied on by him in support of the discretion to waive the overpayment debt, such as his supposed depression or the supposed dependency of his wife, were supported by evidence before the Tribunal.

34    Even if Mr Cao was able to demonstrate that there was evidence of some or all of these matters before the Tribunal and that the Tribunal did not deal with that evidence in its reasons, it does not follow that the Tribunal ignored the evidence. The mere fact that a Tribunal does not expressly refer in its reasons to particular evidence or submissions does not mean that the Tribunal ignored such evidence or submissions: Australian Postal Commission v Sellick [2008] FCA 236 at [27]; Tobacco Institute of Australia Ltd v National Health and Medical Research Council (1996) 71 FCR 265 at 279. Here, it is tolerably clear from the Tribunal’s reasons that the Tribunal rejected Mr Cao’s explanation of the deposits, in its entirety, on the basis that it was inconsistent with explanations previously given by him, as well as being implausible and unreliable. It was in these circumstances not incumbent on the Tribunal to refer to every item of evidence that might have been before it, or every submission made by Mr Cao in respect of that evidence. That is particularly the case where, as here, Mr Cao has failed to demonstrate that he specifically drew the Tribunal’s attention to most of the matters he now apparently relies on: Commissioner of Taxation v Perkins (1993) 26 ATR 8 at 10.

35    Likewise, there is no basis for concluding that the Tribunal failed to have regard to or consider the case Mr Cao advanced in the Tribunal, or any submissions of substance made by him. Mr Cao has not demonstrated, for example, that the argument he has advanced on appeal to the effect that the deposits constituted the “taking back of investment money” (being loans he had made to Winga Enterprises) was an argument he advanced in the Tribunal, let alone that any such argument had or has any substance or support in the evidence. Nor has he demonstrated that his arguments concerning the supposedly inconsistent position taken by the Commissioner of Taxation, or his argument concerning the deposits he received while he was not in receipt of benefits, were advanced before the Tribunal or had any evidential basis. Mr Cao has also not demonstrated that the arguments he now advances in support of the exercise of the discretion to waive the overpayment debt were specifically advanced in the Tribunal, or that they had or have any substance or support in the evidence. There is unlikely to be any error of law where the Tribunal fails to deal with an argument not put to it: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Applicants S134/2002 (2003) 211 CLR 441 at [32].

36    The balance of the submissions or contentions advanced by Mr Cao in this appeal, however viewed, amount to nothing more than questions or contentions of fact or matters that go, at best, to the merits of the Tribunal’s factual findings and conclusions. They are not matters properly the subject of an appeal under s 44 of the AAT Act.

37    There is no discernible legal error in the Tribunal’s decision and reasons. The factual findings made by the Tribunal were open to it on the evidence before it. Mr Cao has not demonstrated otherwise. The Tribunal’s construction of the relevant statutory provisions and its application of the facts as found to those provisions is uncontroversial and involves no apparent legal error. The Tribunal’s consideration of the exercise of the discretion under s 1237AAD of the Act is consistent with binding authority in relation to that section and the Tribunal’s finding that there were no special circumstances was a finding that was open to it on the evidence before it.

38    Accordingly, to the extent that Mr Cao’s notice of appeal and submissions could be said to raise any question or questions of law, his appeal must be dismissed on the basis that he has not demonstrated that the question or questions of law should be decided in his favour, or that the Tribunal erred in law as apparently contended. Otherwise, the application must be dismissed as incompetent on the basis that it does not involve any question or questions of law and therefore does not invoke the Court’s jurisdiction under s 44 of the AAT Act.

39    Mr Cao has advanced no reasons why he, as the unsuccessful applicant, should not be required to pay the respondent’s costs. Nor does there appear to be any such reasons. Accordingly, Mr Cao should pay the respondent’s costs of the application.

Associate:

Dated:    14 February 2014