FEDERAL COURT OF AUSTRALIA

Paschke v Secretary, Department of Social Services [2023] FCA 6

ORDERS

THE COURT ORDERS THAT:

1.    The proceedings be dismissed.

2.    There be liberty to the respondents or any of them to apply for an order as to costs on or before 27 January 2023.

3.    The liberty reserved by these orders may be exercised by filing written submissions of no more than three pages stating the costs orders sought and any submissions in support of those orders together with any affidavit.

4.    If costs orders are sought then the applicants shall file any submissions of no more than three pages and any affidavit in opposition within 10 days of the exercise of the liberty.

5.    Subject to further order, any question of costs shall be determined on the papers.

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

REASONS FOR JUDGMENT

COLVIN J:

1    Mr Winfried Paschke is an aged pensioner. He has taken exception to the way in which relevant officers of the Commonwealth government approach the assessment of the value of 'curtilage' for the purposes of determining whether a person meets the asset test requirements for obtaining a pension. Curtilage refers to the land on which a residence or dwelling and any associated outbuildings are situated even though it forms only part of a lot or parcel.

2    Mr Paschke says that the Secretary of the Department of Social Services has been instructing officers of the department to adopt a particular approach to determining the value of assessable curtilage. He says that the Secretary, by that practice, has taken on the role of a real estate valuer for the purposes of administration of relevant legislative provisions in circumstances where the Secretary has no statutory authority to do so. He relies upon provisions of the Social Security (Administration) Act 1999 (Cth) to support his contentions. He also claims that the Commonwealth Ombudsman acted improperly in failing to deal with his complaints about the practice of the Secretary.

3    Mr Paschke has commenced proceedings in this Court as a representative applicant seeking to rely upon Part IVA of the Federal Court of Australia Act 1976 (Cth). He has brought those proceedings against the Secretary, Services Australia and the Ombudsman.

4    Orders were made requiring Mr Paschke to show cause why the proceedings should not be dismissed without notification to class members on the basis that:

(1)    he is seeking to conduct representative proceedings in person without engaging legal representatives to act for him in his capacity as a representative applicant;

(2)    he has no personal interest in the claim the subject of the proceedings; and

(3)    the Ombudsman is entitled to rely upon s 33 of the Ombudsman Act 1976 (Cth) as a complete defence to the claim.

5    It was further ordered that the question whether Mr Paschke has shown cause for the proceedings not to be dismissed will be determined on the papers. Mr Paschke was content for that course to be followed. He has now filed submissions as to why the proceedings should not be dismissed.

6    For the following reasons, having considered those submissions, I am satisfied that the proceedings must be dismissed.

Issue 1: Whether Mr Paschke should be allowed to conduct the representative proceedings in person

7    It appears that Mr Paschke seeks to bring the proceedings on behalf of those persons whose payment of the age pension has been cancelled on the basis of an assessable amount for curtilage. He says that there were 2,657 such persons between 1 January 2016 and 31 December 2017. However, the form in which the members of the relevant group have been described means that it is not possible to identify them with precision. Mr Paschke seeks relief that would require the discontinuance of the current practice adopted by the Secretary in relation to the assessment of curtilage and orders requiring a different practice (as set out in the originating application).

8    For reasons that I gave in Wilkinson v Wilson Security Pty Ltd [2022] FCA 756, the appropriate course to be followed where a person seeks to take on an active role in the conduct of representative proceedings without being represented by a lawyer is to seek leave to do so. Further, for the reasons there explained, it is to be expected that leave would be refused in almost all instances: as to which, see also Wilkinson v Wilson Security Pty Ltd (No 2) [2022] FCA 1161.

9    In his submissions, Mr Paschke says that he thoroughly researches things to back up what he says. He says he has been successful in dealing with the Secretary in relation to his own aged pension to his considerable financial benefit. He says that he lives by mantras that include 'If you can help someone, why not do that' and 'There are not many things in life you can't do yourself'. He says he has conducted property, conveyancing, probate and a 'do-it-yourself divorce' and has conducted tribunal and court cases. He says he was successful in defending 'a red traffic light matter' in which after four court hearings the magistrate asked the prosecuting officer if there was any objection if the case was dismissed to which the quiet response came 'No your honour'.

10    Whilst these matters may demonstrate that Mr Paschke has shown admirable initiative and has been able to apply himself with some persistence to achieve success as to legal issues that affect him personally, they do not establish reasons why Mr Paschke should be allowed to have the conduct of representative proceedings on behalf of a large group of people having regard to the fiduciary obligations that arise: Kelly v Willmott Forests Ltd (in liq) (No 4) [2016] FCA 323; and Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [40] (French CJ, Bell, Gageler and Keane JJ). Representative proceedings are also of considerable complexity. There is no reason to believe that the group members are personally connected to Mr Paschke in some way or that he has some responsibility for their interests that has caused him to bring the proceedings. In short, there is no exceptional reason that would justify leave being given to Mr Paschke to have conduct of the proceedings even though he is not legally qualified.

11    For those reasons, Mr Paschke should not be allowed to conduct the proceedings as group proceedings.

Issue 2: Whether Mr Paschke has a sufficient personal interest

12    It is apparent that Mr Paschke is receiving the aged pension. He says that for the last 10 years he has received that benefit. However, he says that his entitlement has been determined on the basis of a flawed approach as to the valuation of curtilage. He points to the fact that the Secretary has informed him that the department will maintain the value of his property through relevant updates and he is exposed to the prospect that the practice to which he objects may affect him adversely in the future. He says that in those circumstances the likelihood of an adverse decision concerning his pension based upon the approach adopted to curtilage is not hypothetical. He says he wants the ongoing practice to cease as it is a matter of ongoing and great concern to him (and to all group members).

13    Mr Paschke relies upon Ansett Transport Industries (Operations) Pty Ltd v Kenneth F Wraith (1983) 48 ALR 500 a case in which it was claimed that under the Administrative Decisions (Judicial Review) Act 1977 (Cth) reasons for a decision should have been provided. By the time that case was decided, the administrative decision the subject of the review application was no longer of operative effect. Nevertheless, Woodward J ordered the provision of a statement of reasons on the basis that the decision was still of importance because it was the first of its kind to be made and it had been replaced by a similar decision in very similar terms covering the same subject matter.

14    The position of Mr Paschke is different. He seeks to bring an administrative law claim to the effect that there is invalidity in the practices that have been adopted concerning the valuation of curtilage. In order to do so, he must demonstrate that he has a sufficient 'special interest' in the subject matter: Bateman's Bay Local Aboriginal Land Council v Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 at [46] (Gaudron, Gummow and Kirby JJ). The rule is flexible. Despite the fervent interest of Mr Paschke, he is not adversely affected by any decision made concerning his entitlement to the pension. Also, there is no evidence to suggest that he will be adversely affected in the future. Altruism is an insufficient foundation for him to maintain the administrative law proceedings.

15    On the basis that the administrative law claim demonstrates invalidity in the actions of the Secretary concerning the assessment of curtilage, Mr Paschke also claims that group members who have been refused the aged pension are entitled to some form of 'backpay'. The precise basis for the claim is not identified. What is clear is that Mr Paschke is not amongst those who would be entitled to any such claim as he has been receiving the aged pension.

16    For those reasons, Mr Paschke has not demonstrated a sufficient personal interest to bring the proceedings as a representative applicant (or on his own behalf on the assumption that the proceedings were to be declassed).

Issue 3: Whether the Ombudsman is entitled to rely upon s 33 of the Ombudsman Act as a complete defence to the claim

17    Section 33(1) of the Ombudsman Act provides:

Subject to section 35, neither the Ombudsman nor a person acting under his or her direction or authority is liable to an action, suit or proceeding for or in relation to an act done or omitted to be done in good faith in exercise or purported exercise of any power or authority conferred by this Act or Division 7 of Part V of the Australian Federal Police Act 1979.

18    Section 35 provides for a statutory obligation of confidentiality and the penalties if an Ombudsman (or other specified officer) was to breach that obligation.

19    I note that Mr Paschke submitted as to the claims against the Ombudsman that:

I do not wish for the Court to spend too much time on this, save, if thought expedient, to establish that [the Ombudsman] staff need additional training in regards to the implementation and compliance with the [Ombudsman Act] (and to mention, compliance with the Ombudsman Work Practices Manual).

20    In his submissions, Mr Paschke claims that the Ombudsman did not act in good faith in dealing with his complaint. He identifies various matters said to amount to a lack of good faith. However, in his concise statement for the representative proceedings he makes no such claim. Rather, he complains that the Ombudsman failed to actually explain or address the lawfulness of the action taken in determining the value of assessable curtilage (para 15). As has been noted, the claim that he makes is for all group members to have their assessable curtilage lawfully re-assessed and for compensation 'in the form of backpay' to be paid. As to the Ombudsman the complaint made is that, by refusing to investigate the unlawful action, the Ombudsman has encouraged its continuance. These claims are within the immunity afforded by s 33. They do not involve any claim of lack of good faith.

21    Further, it is not explained how a representative claim might be brought in respect of the alleged lack of good faith by the Ombudsman in responding to the complaint made by Mr Paschke to the Ombudsman. Nor is it explained how the relief sought in those group proceedings to the payment of compensation 'in the form of backpay' might be maintained against the Ombudsman on the basis of an alleged lack of good faith in investigating the complaint made by Mr Paschke. In short, the representative claims brought on behalf of group members against the Ombudsman are fully answered by reliance upon s 33 of the Ombudsman Act.

Proposed notification to group members

22    Mr Paschke submitted that 'before any decision was made to discontinue the case as a class action' provision should be made to notify all group members. He relied upon the fact that such a course was followed in Wilkinson v Wilson Security. However, in those proceedings no issue arose as to whether there was a proper basis for the claims that were sought to be advanced by Mr Wilkinson. The only issue was whether those claims should be allowed to be conducted by Mr Wilkinson without engaging lawyers to act on behalf of the group members in the conduct of the common questions and any negotiations in respect of the claims. Further, numbers of the group had communicated to the Court that they wished the proceedings to continue as group proceedings.

23    In the present case, for reasons that have been given, Mr Paschke has not demonstrated a proper basis for his commencement of the proceedings. The consequence of the determinations made as to the three issues is that there was no basis for Mr Paschke to bring the proceedings as a representative applicant. There is no other person proposed as a representative applicant and no indication that any person other than Mr Paschke wishes to maintain the proceedings.

24    Mr Paschke says that he has tried to enlist the assistance of the staff of the department to contact those persons who he considers may have claims. He says that the department has not assisted. He also says that he has put a letter in the local paper and received two telephone calls in response. He says that, on his advice, one of them contested the valuation which resulted in an adjustment and the payment of the full pension. He says that adjustments of this kind does not address his claim that the Secretary is involved in the valuation process in a manner that is not lawful. These matters are an insufficient foundation for requiring some form of notification in circumstances where Mr Paschke has not demonstrated a basis for advancing the claims made on a group basis.

Dismissal of the proceedings

25    For reasons that have been given, Mr Paschke has failed to show cause why the proceedings should not be dismissed. It follows that the proceedings should be dismissed. My preliminary view based upon the show cause procedure to which Mr Paschke agreed is that there should be no order as to costs. However, I will reserve liberty to the respondents or any of them to apply for orders as to costs.

Associate:

Dated:    12 January 2023