Austin; Secretary, Department of Social Services and (Social services second review)
[2021] AATA 3300
•14 September 2021
Austin; Secretary, Department of Social Services and (Social services second review) [2021] AATA 3300 (14 September 2021)
Division:General Division
File Number(s): 2020/4260; 2020/4263
Re:Secretary, Department of Social Services
APPLICANT
AndWilliam Austin
RESPONDENT
AndCarmel Fahey
JOINED PARTY
DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:14 September 2021
Place:Sydney
The decision under review is set aside and remitted to the Applicant with directions that:
(a)the debt for the period 8 February 2017 to 15 February 2017 is to be calculated and subject to or considered for recovery from the Respondent.
(b)the debt for the period 10 April 2017 to 17 October 2017 is to be waived pursuant to section 1237AAD of the Social Security Act 1991 (Cth).
................................[sgd]........................................
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – Disability Support Pension overpayment – where the Department is the Applicant – correspondence and payment nominee joined as interested party – whether Respondent was overpaid DSP – whether Respondent owes a debt to the Commonwealth – whether Respondent obtained benefit of the debt – whether special circumstances exist to waive part or all of the debt – information exchange between NSW Department of Corrective Services and Centrelink – notification of imprisonment – decision set aside and remitted
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) ss 29AC, 30, 31 and 33
Social Security Act 1991 (Cth) ss 23(5),1158, 1223, 1236, 1237A and 1237AAD
Social Security (Administration) Act 1999 (Cth) ss 123B, 123C, 123F and 123O
CASES
Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25
Assie and Secretary, Department of Social Services [2017] AATA 328
Baskin et al v Bogan et al, United States Court of Appeal for the Seventh Circuit, Nos. 14-2386 to 14-2388, decided 4 September 2014
Beadle and Director General of Social Security (1984) 6 ALD 1
Commonwealth Director of Public Prosecutions v Poniatowska [2011] HCA 43
Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114
Dranichnikov v Centrelink [2003] FCAFC 133
Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162
Jess v Scott and Ors (1986) 70 ALR 185
Poniatowska v Director of Public Prosecutions (Cth) [2010] SASCFC 19
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Segran and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 799
In the Marriage of Phillippe [1997] 4 Fam LR 153
Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569
XXBN v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 1047
SECONDARY MATERIALS
Corrective Services NSW, “Frequently asked questions”: Security Guide
REASONS FOR DECISION
Chris Puplick AM, Senior Member
14 September 2021
INTRODUCTION
This is a peculiarly complicated matter involving, as it does, a Respondent who has been in receipt of the Disability Support Pension (DSP) as a result of suffering from permanent brain damage;[1] his sometimes partner who has significant cognitive issues of her own, both of whom have been in and out of jail on a revolving-door basis, who somehow, between them were in receipt of DSP payments to which they had legitimate access at some times and at other times were paid when they had no such entitlement.
[1] Tribunal documents (T-documents) at 5. The Respondent (born July 1987) apparently acquired this brain injury (with associated post-traumatic stress disorder) as a result of being the victim of an assault at age 17.
These proceedings involve an attempt by the Secretary, Department of Social Services (the Applicant) to recover overpayments of DSP from either Mr William Austin (also known as William Scott) (the Respondent) or from Ms Carmel Fahey, his former partner and one-time correspondence and payment nominee (the Joined Party).
KEY DATES AND FACTS
In terms of arriving at this point, the skeleton outline of the narrative is as follows:
(a)The Respondent was first granted the DSP on 7 February 2008.
(b)During the course of 2017 the Respondent was in and out of custody on a number of occasions.
(c)Effective from 7 March 2017 the Joined Party was appointed as the Respondent’s correspondence and payment nominee.
(d)As result of this appointment, the Respondent’s DSP was paid into a bank account in the name and control of the Joined Party.
(e)On 8 December 2017 the Applicant raised a debt against the Respondent on the basis that he had been paid DSP while he was in jail and was not entitled to be so paid.
(f)These payments were, at this stage calculated to be for periods between 9 February 2017 and 23 March 2017 and 10 April 2017 and 17 October 2017.
(g)Subsequent reconsiderations of the dates of the Respondent’s incarceration, have led to an amendment of the Applicant’s position so that the claimed relevant periods of payment are between 8 and 15 February 2017 and between 9 April 2017 and 17 October 2017.[2]
(h)Between 31 January 2016 and 20 February 2017 and between 11 May 2017 and 23 September 2017 the Joined Party was in jail.
(i)On 8 February 2017 while the Respondent was remanded in custody, the Police applied an Apprehended Violence Order (AVO) which forbade the Respondent from having any contact with the Joined Party for a period of two years.
(j)The raising of the debt was confirmed by a decision by an Authorised Review Officer (ARO) of the Department on 22 July 2019.
(k)On 11 June 2020 the Social Services and Child Support Division of this Tribunal (AAT1) set aside the decision of the ARO finding, inter alia, that the Respondent had not obtained the benefit of the payments which had been paid rather to the Joined Party.
(l)On 13 July 2020 the Applicant applied to this Tribunal for a review of the AAT1 decision.
(m)On 27 August 2020 the Applicant made a submission that this Tribunal invite Ms Fahey to become joined as a party to the proceedings under sections 29AC, 30 and 31 of the Administrative Appeals Tribunal Act 1975 (Cth).
(n)That invitation was extended and eventually Ms Fahey agreed to become a Joined Party to the proceedings.[3]
(o)The hearing of the matter occurred on 25 August 2021. The Joined Party was able to participate on the Microsoft Teams platform in accordance with the Tribunals COVID-19 protocols whereas the Respondent was only able to participate by telephone as he had subsequently been taken back into custody and the custodial facility in question did not have access to technology compatible with the Tribunal’s requirements.
[2] Applicant’s Statement of Facts, Issues and Contentions at [5.1]-[5.2].
[3] An initial invitation was extended on 31 August 2020 and in the absence of a reply was extended again on 22 January 2021. Ms Fahey replied by completing the necessary form dated 15 April 2021 and a formal order joining her to the proceedings was issued on 16 June 2021.
The Tribunal notes that it found both the Respondent and the Joined Party to be credible witnesses who answered questions directly and to the best of their ability. It accepts that, due to his brain injury, the Respondent was not always able to recall precise dates and details, but he made a conscious effort to do so and to co-operate with both the Tribunal and the Applicant’s representative throughout the hearings. The Joined Party was equally forthcoming and indeed supplied information to the Tribunal (for example bank account statements and Release Certificates) which greatly assisted in its proceedings, and which were acknowledged as helpful by the Applicant.
The sums in question by way of payment sought to recovered are as follows:
·8 February 2017 to 15 February 2017 (the first period) = a sum to be assessed.
·10 April 2017 to 17 October 2017 (the latter period) = $12,131.14.
There are a series of questions which the Tribunal is required to answer in order to determine what debts, if any, exist and from whom they should be recovered.
Question 1: Were DSP payments made to the Respondent when he was not entitled to receive them?
Yes, these DSP payments were made to the Respondent in spite of the fact he was not entitled to receive them at the relevant time.
The Respondent was properly in receipt of DSP as from 7 February 2008, however section 1158 and subsection 23(5) of the Social Security Act 1991 (Cth) (the Act) provide that:
1158 Some social security payments not payable during period in gaol or in psychiatric confinement following criminal charge
An instalment of a social security pension… is not payable to a person in respect of a day on which the person is:
(a) in gaol…
23 Dictionary
(5) For the purposes of this Act, a person is in gaol if:
(a) the person is being lawfully detained (in prison or elsewhere) while under sentence for conviction of an offence and not on release on parole or licence; or
(b) the person is undergoing a period of custody pending trial or sentencing for an offence.
The Respondent served a number of terms of imprisonment,[4] some comprising a matter of days and others of years. Relevantly in these proceedings the Respondent was paid DSP between 8 and 15 February 2017 and between 10 April 2017 and 17 October 2017 which were periods when he was incarcerated.
[4] The AAT1 at [7] notes “11 occasions... since 2006”, T-documents at 5.
Therefore, these payments should not have been made.
Question 2: Are the debts ones which legislation requires be recovered, and if so, from whom?
Notionally, yes. Such debts are prima facie required to be recovered from the Respondent.
Section 1223 of the Act provides:
1223 Debt arising from lack of qualification, overpayment etc.
(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.
(1AA) If a social security payment is made to, or as directed or authorised by, the person who is entitled to obtain the benefit of the payment, subsection (1) does not apply to any other person who afterwards obtains the benefit of the payment unless the other person obtained the benefit because of a mistake made by the first person in connection with the giving of the direction or authorisation.
(1AB) Without limiting by implication the circumstances to which paragraph (1)(b) applies apart from this subsection, a person who obtained the benefit of a social security payment is taken not to have been entitled to obtain the benefit if the payment should not have been made for any one or more of the following reasons:
(a) the payment was made to the person by mistake as a result of a computer error or an administrative error;
(b) the person for whose benefit the payment was intended to be made was not qualified to receive the payment;
(c) the payment was not payable;
(d) the payment was made as a result of a contravention of the social security law, a false statement or a misrepresentation;
(e) the payment was made in purported compliance with a direction or authority given by the person who was entitled to obtain the benefit of the payment but the direction or authority had been revoked or withdrawn before the payment was made;
(f) the payment was intended to be made for the benefit of someone else who died before the payment was made.
A question arises as to whether the Respondent “obtained the benefit” of the payment in question.
What actually happened was that on 7 March 2017 the Joined Party was appointed as both the Respondent’s “correspondence nominee” and his “payment nominee”. On that date Centrelink wrote to the Respondent[5] stating:
[5] Supplementary T-documents at 302.
“Our records show that you recently asked us to appoint Carmel Fahey to act on your behalf. We are writing to advise you that your request has been approved and Carmel is now your correspondence nominee. This arrangement will remain in place until it is cancelled.
What happens next
As your correspondence nominee, Carmel is now authorised to act on your behalf and is able to:
• advise us of any changes in your circumstances which may affect your payments
• view and make updates to your personal information online using the myGov website
• request to receive copies of your Centrelink letters online
• complete forms and statements on your behalf and provide us with relevant documents relating to your circumstances
• attend some appointments on your behalf, and
• request relevant information about your records.”
It then sent a separate further letter as follows:
“Our records show that you recently asked us to appoint Carmel Fahey to act on your behalf. We are writing to advise you that your request has been approved and Carmel is now your payment nominee. This arrangement will remain in place until it is cancelled.
What happens next
As your payment nominee, Carmel will receive payments on your behalf while this arrangement is in place. Your nominee is required to ensure that the payments are used only for your benefit.
They are also advised to keep records of the payments received and money spent on your behalf, as these arrangements may be reviewed.”[6]
[6] Ibid at 305.
A third letter of the same date advised the Respondent that:
“We are writing to advise that your payment nominee arrangement with Michael Austin has now ended. This is because you have requested that the arrangement be ended.”[7]
[7] Ibid at 300.
Next, again on that same date, Centrelink wrote to the Joined Party as follows:
“We are writing to advise that you have been appointed as a payment nominee for William Scott, reference xxx xxx 559J. This arrangement will remain in place until it is cancelled.
What happens next
As William’s payment nominee, you will receive payments on their behalf while this arrangement is in place. It is important that we make sure these payments are used in William’s best interest. To assist us with this, please keep records of the payments you receive and the money you spend, as these arrangements may be reviewed. You may request limited information from us about issues affecting William’s payments.
You can receive your Centrelink letters, access your own details and view William’s payment related information online through the myGov website. Go to my.gov.au and sign in to your account to access Centrelink services. If you do not have a myGov account, you will need to create one first and then link it to Centrelink.”[8]
[8] Ibid at 307.
And finally, another letter of 7 March 2017 was sent to the Joined Party stating:
“We are writing to advise that you have been appointed as a correspondence nominee for William Scott, reference xxx xxx 559J. This arrangement will remain in place until it is cancelled.
What happens next
As William’s correspondence nominee, you are now able to act on their behalf. This means that you must tell us within 14 days (28 days if residing outside Australia) of any changes in William’s circumstances which may affect their entitlement to payments and services.”[9]
[9] Ibid at 309.
It appears that when the Respondent was first granted the DSP he nominated his father, Mr Michael Austin as his nominee to act on his behalf. This arrangement continued until 7 March 2017 when he replaced his father with his previous partner in this role.
Sections 123A to 123S of the Social Security (Administration) Act 1999 (Cth) (the Administration Act) establish a regime where a social security recipient may nominate another person to act on their behalf, either as a “payment nominee” or as a “correspondence nominee”.
123B Appointment of payment nominee
Subject to section 123D, the Secretary may, in writing:
(a) appoint a person (including a body corporate) to be the payment nominee of another person for the purposes of the social security law; and
(b ) direct that the whole or a specified part of a specified relevant payment that is payable to the nominee's principal, or would, but for subsection 45(1), be so payable, is to be paid to the nominee.
123C Appointment of correspondence nominee
Subject to section 123D, the Secretary may, in writing, appoint a person (including a body corporate) to be the correspondence nominee of another person for the purposes of the social security law.
From 7 March 2017 (and presumably to this date since there is no indication that such nominations have been altered) the Joined Party was both the payment nominee and the correspondence nominee of the Respondent. Payments due to him were made to her account and correspondence relating to the Respondent, requiring attention were sent to her.
It should be noted that section 123O of the Administration Act provides:
Duty of nominee to principal
(1) It is the duty of a person who is the payment or correspondence nominee of another person at all times to act in the best interests of the principal.
(2) A nominee does not commit a breach of the duty imposed by subsection (1) by doing an act if, when the act is done, there are reasonable grounds for believing that it is in the best interests of the principal that the act be done.
(3) A nominee does not commit a breach of the duty imposed by subsection (1) by refraining from doing an act if, at the relevant time, there are reasonable grounds for believing that it is in the best interests of the principal that the act be not done.
There is no obvious judicial guidance as to the meaning of the term “obtained the benefit”.
The Oxford English Dictionary (online) gives for “obtain”:
“Get, acquire or secure (something).”
The Macquarie Dictionary (7th edition) gives:
“Come into possession of; get or acquire, procure, as by effort or request.”
The Australian Law Dictionary (3rd edition) gives:
“In its general sense of getting something for one’s self or for one’s own benefit, the word ‘obtain’ is widely used in criminal law to define a physical element of an offence.”
The reference to a “physical element” was referenced by the majority in the South Australian Supreme Court where their Honours said, in relation to a case of “obtaining” financial advantage by way of receiving social security payments by deceptive conduct, that the Criminal Code definition:
[P]rovides for a further physical element which requires proof that a person obtained a financial benefit as a result of the conduct.[10]
[10] Poniatowska v Director of Public Prosecutions (Cth) [2010] SASCFC 19 at [27].
That Court went on to say:
The third consideration is also a practical one. If s 135.2 is read as Ms Chapman suggests, how does one identify the omission to perform an act that attracts criminal liability? Is it the failure to inform Centrelink that the recipient is not entitled to a particular payment that has been received? It is one thing to punish conduct (in the affirmative sense) that results in a person obtaining a financial advantage. It is another thing to punish an omission to perform an act that results in a person obtaining a financial advantage. In the latter case the link to the obtaining of the financial advantage is far less clear.[11]
[11] Ibid at [34].
The Justice in the minority likewise referred to the “physical element of the offence”:
In my view, s 135.2 provides that an omission can constitute the physical element of the offence if, as a result of the failure of a defendant to advise of his or her change in financial circumstances, that defendant obtains a financial advantage. It does not require the court to look to a duty which the law imposes.[12]
[12] Ibid at [58].
On appeal to the High Court, the decision of the South Australian Supreme Court was upheld, and the reasoning of the majority approved.[13]
[13] Commonwealth Director of Public Prosecutions v Poniatowska [2011] HCA 43.
By analogy, this suggests there is not a clear link to “obtaining a benefit” where there has simply been an omission, as opposed to a scenario where the party allegedly obtaining benefit has taken a physical action towards that objective.
A reading of subsection 1223(1AB) also suggests such an element of a physical receipt of a benefit when it describes the non-exhaustive list of circumstances where a person is taken not to have obtained the benefit. That temporal and physical element also is suggested by the Tribunal in Assie where it said:
Section 1223(1AB) is a non-exhaustive list of circumstances in which a person is taken not to have been entitled to obtain the benefit of a payment. A person who obtains a benefit in any of the prescribed circumstances has a debt which arises when he or she obtains that benefit.[14]
[14]Assie and Secretary, Department of Social Services [2017] AATA 328 at [110]. Emphasis added.
Of course, what must be “obtained” is the “benefit”, in this case, the payment of DSP. There is no evidence that the Respondent himself ever received the DSP money and there is no evidence, in relation to the latter period that any of the money paid into the Joined Party’s account was ever spent to his “benefit”.
In relation to the first period, 8 February 2017 to 15 February 2017 it appears that the Respondent’s DSP was paid into an account which was under the control of his then payment nominee, his father, Michael Austin. It was the Respondent’s testimony that, at this time he was living in the same household as his parents and siblings. To this extent it may fairly be argued that he benefitted from the shared resources of the household. It is also clear that his father, as his correspondence nominee would have been aware of when the Respondent might have been in or out of custodial care and that as the correspondence nominee, he was appraised of his reporting obligations to Centrelink.
In relation to the latter period, 10 April 2017 to 17 October 2017 the Respondent’s DSP was paid into an account in the name of and under the control of his payment (and correspondence) nominee Carmel Fahey (the Joined Party).
Her bank records are before the Tribunal and it is clear, commencing with an entry on 23 March 2017 she received such payments, being recorded as:
Direct credit pension …559J… $684.40.[15]
[15] Corresponding to the reference number for Mr Austin contained in the excerpts from Centrelink’s letters referred to at [17] and [18] of this decision.
Such entries continue up until the last one so recorded on 27 October 2017.
This would lead to an obvious conclusion that the payments made on behalf of the Respondent were never actually in his hands or under his control. They were at all times paid to a person other than himself.
It is hard to comprehend that, in any meaningful sense, the Respondent “obtained the benefit” of the payment nor is there any clear indication that either of the payment nominees expended the money directly or indirectly on behalf of the Respondent.
It was the Respondent’s direct sworn testimony to the Tribunal that there were no regular payments made into his prison account by either his father or the Joined Party. He stated that the only payments into that account were by way of money he was paid for work within the prisons (as a sweeper and a general weekly allowance) and “irregular” payments which were made very occasionally by his sister and his mother.
The proposition advanced by the Applicant was to the effect that the Respondent “obtained” a benefit because his nominee was in receipt of payment of monies. The Applicant urges that, especially when the payment nominee is “family” that the improvement of the “family” situation constitutes a benefit to the Respondent, albeit perhaps, a very indirect one.
A similar approach is taken in the Social Security Guide which is issued to assist decision-makers in their administration of the social security system. It is relied upon by the Applicant[16] and states at 6.7.1.20:
[16] Applicant’s Statement of Facts, Issues and Contentions at [6.13].
6.7.1.20 Debts arising under the SS Act from 1/7/2001
Summary
SSAct section 1223 aims to simplify and outline debt recovery processes and define more clearly what is a recoverable debt.
General provision
SSAct section 1223 describes the categories of debts recoverable under the SSAct.
…
SSAct section 1223
SSAct section 1223(1) defines debts that are recoverable. If a social security payment is made and a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit the amount of the payment is a debt to the Commonwealth by the person who obtained the benefit of the payment. The term 'obtains the benefit of the payment' in broad terms means where a social security payment is made and a person's wealth is directly increased as a result, the person has obtained the benefit of the payment.
…
Section 1223(1AB) sets out some examples where section 1223(1) applies but it does not limit the provisions to those examples.
Presumably, the Tribunal is to take from the Applicant’s submission that the Respondent obtained the benefit because “his wealth [was] directly increased as a result”.
As the distinguished American Judge Richard Posner once stated: “Go figure”.[17]
[17] Baskin et al v Bogan et al, United States Court of Appeal for the Seventh Circuit, Nos. 14-2386 to 14-2388, decided 4 September 2014 at [20].
The AAT1 took the approach that where the Respondent had not personally received a benefit, it should be held that he had not “obtained” such a benefit. The AAT1 stated:
18. In Segran[18] the tribunal considered the application of a woman whose husband had applied for parenting payment on her behalf, and had the payments directed to a bank account he controlled. The tribunal decided she had not received the benefit of those payments and consequently did not owe a debt. The tribunal made the following remarks regarding the application of section 1223 of the Act:
The use of the expression 'a person who obtains the benefit of the payment' rather than simply 'a person who obtains the payment' suggests a requirement that the person is in some way advantaged - better off, or in an improved state - by the fact of the payment. Ordinarily a person into whose account a payment is made will obtain the benefit of the payment, by being immediately entitled to use the money that it represents for his or her own purposes. But it will not always be so.
19. Mr Austin's DSP was paid into his former partner's bank account. If Ms Fahey used this money solely for her own purposes, without any benefit to Mr Austin, direct or indirect, then Mr Austin did not receive the benefit of his DSP payments and does not owe a debt.[19]
[18] Segran and Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 799.
[19] T-documents at 7.
That would appear to be the common sense understanding of whether or not the Respondent “obtained” the benefit of the DSP payments.
However, it is not a matter of common sense which must prevail. Section 123F of the Administration Act contains deeming provisions in the following terms:
123F Payment of instalments etc. to payment nominee
…
(2) An amount paid to the payment nominee of a person:
(a) is paid to the payment nominee on behalf of the person; and
(b) is taken, for the purposes of the social security law (other than this Part), to have been paid to the person and to have been so paid when it was paid to the nominee.
The Applicant, in its SFIC, using what the Tribunal agrees is entirely the appropriate terminology submits:
“In view of the legal fiction in section 123F(2)(b), Mr Austin obtained the benefit of the DSP payments within the meaning of section 1223(1)(b) of the SS Act.”[20]
[20] Applicant’s SFIC at [6.19].
With the greatest respect to the AAT1, its finding, based on common sense, that the Respondent did not owe the debt because he never meaningfully obtained the benefit must be overborne by the “legal fiction” that he did, because that is what is deemed to be the case by the legislation.
What follows from this finding is simply that:
(a)The Respondent owes a debt to the Commonwealth.
(b)It equally follows that the Joined Party does not owe a debt to the Commonwealth.
The second of these conclusions is important because it means that the Tribunal has no need to consider any other matters directly impinging upon the question of any debt by the Joined Party – there is none.
It equally follows that the evidence taken by the Tribunal about the operation of the Joined Party’s bank account and the clear implications arising from the evidence that her bank account was improperly accessed by at least one third party, need be considered no further.
Question 3: Should the debt in question be recovered from the Respondent?
Yes – the debt should be recovered for the period 8 February to 15 February 2017.
No – the debt should not be recovered for the period 10 April to 17 October 2017.
Before explaining its rationale for this decision, the Tribunal must indicate that it has undertaken research of its own relevant to this matter.
Paragraph 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth) provides:
In a proceeding before the Tribunal:
….
(c) The Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate.
The nature and operation of this section has been subject to significant judicial commentary within just the last few weeks. In XXBN v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCA 1047, Murphy J explained:
59. First, s 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth) provides that the Tribunal “is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks appropriate”. While persons before the Tribunal must be provided with natural justice there was no requirement for the Tribunal to apply the rules of evidence; relevantly to the present case, the rule against hearsay evidence in s 59 of the Evidence Act 1995 (Cth). Section 33(1)(c) establishes a scheme under which “the Tribunal, subject to the rules of natural justice, properly may rely on any probative material that is relevant to its function”: Re Tarrant and Australian Securities and Investments Decision [2013] AATA 926; 62 AAR 192 at [75], cited with approval in Sullivan at [91] (Flick and Perry JJ). In Collins v Minister for Immigration and Ethnic Affairs [1981] FCA 162; 36 ALR 598 at 601 (Fox, Deane and Morling JJ) the Full Court said “subject to the obligation to observe the requirements of natural justice [the Tribunal] can inform itself as it chooses. (See s.33(1)(c) of the Administrative Appeals Tribunal Act, 1975.)”
60. The procedural flexibility afforded to a statutory tribunal such as the Administrative Appeals Tribunal, freed from the rules of evidence, does not though absolve it from the obligation to only make findings of fact based upon evidence which is logically probative, to which the rules of evidence provide a guide: Sullivan at [97] (Flick and Perry JJ). It is established that a decision of such a tribunal must be based on evidence which is reasonably capable of sustaining it: Minister for Immigration and Ethnic Affairs v Pochi [1980] FCA 106; 44 FLR 41 at 67 (Deane J, with whom Evatt J agreed). For example, the Tribunal cannot make findings based on “evidence” which is no more than “suspicion, opinion and hearsay” or speculation; nor can it be left, on the material before it, “in the situation where the Tribunal considered that, while the conduct may have occurred, it was unable to conclude that it was more likely than not that it had”: Pochi at 58, 62 (Deane J with whom Evatt J agreed). Facts can be fairly found without demanding adherence to the rules of evidence: Consolidated Edison Co v National Labour Relations Board 305 US 197 at 229 (Hughes CJ), cited with approval by Brennan J in Pochi v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 33; 36 FLR 482 at 492.
In accordance with this section, the Tribunal sought advice from the NSW Department of Corrective Services (NSWDCS) as to the protocols in place between that Department and Centrelink. It was provided with a reply by Deputy Commissioner Luke Grant on 21 January 2021. A copy of the correspondence was provided to the Applicant prior to the Tribunal hearing and was taken into evidence and discussed at the hearing.
The document states:
“Further to your enquiry I am providing the following advice as to the arrangements for information sharing with Centrelink concerning prisoners.
Clause 326(1) of the Crimes (Administration of Sentences) Regulation 2014[21] permits the Commissioner of Corrective Services to disclose information to assist the Commonwealth Department of Human Services in determining the eligibility of an offender or other person under the care, control, management or supervision of the Commissioner, for a social or health related payment or service, if the Commissioner considers it reasonably necessary.
[21] (NSW). Note MIN = Master Index Number, a unique 6-digit identifier for each inmate which once assigned remains their identifier for all subsequent Corrective Services admissions and purposes.
There are three sets of data which are provided to Human Services (Centrelink).”
Name of report Summary Method & Format Frequency Detail Actual release date report (OIRRAREL) Contains a 4 week future projection of scheduled releases of inmates in all correctional centres in NSW OIMS generated
PDF document, emailed by OSASOWeekly Thursday AM MIN, full name, housing location, DOB, release date, registerable offender (Y/N), release notification (Y/N), outstanding s 77 Orders (Y/N), BR/BGNM court matter prior to release (Y/N), BR/BCNM court matter after release (Y/N), Federal sentence (Y/N) Offender admission Daily list of all offender admitted into NSWCS custody (in the past 24 hours) Business objects generated spreadsheet, Emailed by SAC Daily AM (Monday to Friday) weekend and public holidays will be sent on the subsequent working day MIN, full name, DOB, current location, current residential address, alias full names, alias DOB Offender releases Daily list of all offenders released from CSNSW (in the past 24 hours) Business objects generated spreadsheet, Emailed by SAC Daily AM (Monday to Friday) weekend and public holidays will be sent on the subsequent working day MIN, full name, DOB, current location, current residential address, alias full names, alias DOB
When a person is taken into custody, within a few days of that admission they are screened by NSWDCS using an Intake Screening Questionnaire. This establishes, among many items, whether or not an inmate is in receipt of various social security payments. Question 42 of the Questionnaire asks, “Are you receiving a Disability Support Pension?” and question 43 asks the basis upon which the DSP was granted.
On 9 April 2017 the Respondent was taken into custody and on 13 April 2017 the Respondent provided answers to NSWDCS to the effect that he was in receipt of the DSP because of his brain injury. A copy of that questionnaire is before the Tribunal.[22]
[22] T-documents at 125.
There is no reason for the Tribunal to believe that the normal processes described in the statement of Deputy Commissioner Grant were not followed on this occasion. The day of receipt into custody was a Sunday, the questionnaire was completed on a Thursday, and it would have been in the hands of Centrelink immediately thereafter.
The fact that Centrelink relies on documents such as this is evidenced by the notation in the Centrelink files on 25 October 2017 to the effect:
“Customer Service Officer actioned record on 25 OCT 2017 regarding Review of Entitlement for Disability Support Pension. Information was obtained via External using Electronic Data Transfer.”[23]
[23] T-documents at 206.
In his evidence, the Respondent was quite clear that his lengthy experience with being in and out of custody had indicated to him that it was his responsibility to inform NSWDCS of his social security/pension status and thereafter they would advise Centrelink. This is clearly what Deputy Commissioner Grant’s document confirms.
By contrast, the Applicant insists that it was the Respondent’s personal responsibility to inform Centrelink when he was sent to prison. It draws attention to numerous letters sent to the Respondent under subsection 68(2) of the Administration Act which requires recipients to provide a response. It states:
“What you must tell us
You must tell us within 14 days… if any of the changes listed below happen or are likely to happen to you…
This request is an information notice given under social security law.
…
What you must also tell us
• Prison: If you are sent to prison or charged with an offence and are in custody on remand.”
A question arises – how is this to be done?
Upon sentencing a person is taken into custody in the cells most adjacent to the Court. Their personal items are taken from them, including any mobile phones.[24] After being (strip) searched they wait for transfer from court to a custodial facility where they are admitted. Once admitted they go through the screening process described above and become part of the inmate population. As such they are entitled to limited contacts with the “outside” world, which may (depending on their classification or other disciplinary issues) involve personal visits and access to telephone calls.
[24] Personal items include watches, pens, notebooks, wallets while belts and shoelaces are also removed.
Telephone calls are of significant value to most inmates and are subject to the following regulations:
“Corrective Services NSW has an Offender Telephone System that is used by inmates to contact their families, friends and solicitors. Inmates are allowed up to 10 nominated personal numbers (family and friends) and three legal numbers (solicitors). The recommended maximum call duration is six minutes for local personal calls and 10 minutes for legal calls and international personal calls.
There are also preset numbers known as CADL (Common Auto Dial List) numbers. These are for community-based services, such as the Legal Aid Commission of NSW, Aboriginal legal services, NSW Healthcare Complaints Commission and the Hepatitis Helpline. These calls are all free to inmates.”[25]
[25] Corrective Services NSW, “Frequently asked questions”:
The proposition put by the Applicant is that an inmate should seek to have NSWDCS guidelines varied and replace one of their personal nominated numbers with the telephone number of Centrelink (presuming they know it) and then call Centrelink to inform them that they are in prison and make sure that the call to Centrelink takes less than six minutes.
The Tribunal is inclined to repeat Judge Posner’s comment.
There is, presumably an alternative. That would be for the inmate to request (and pay for) stationery, envelope and postage stamp and write to Centrelink to advise them of their incarceration. That of presumes a level of literacy, knowledge of the Centrelink address and that the mail was sent in a timely fashion by the correctional facility as it cannot be posted directly by the inmate.
At some stage there must be a sense of practicality and reasonableness in all this and indeed there is – the established notification protocols between NSWDCS and Centrelink.
The complexities of this particular case are further evidenced by the notation in Centrelink files on 4 July 2017:
“Customer contacted CC ILLAWARRA on _ 4 JUL 2017 regrading Advance Payment for Disability Support Pension.”[26]
[26] T-documents at 205.
This is simply not credible. The “customer” (the Respondent) was in jail at the time and could not have made such a call. It is unclear how Centrelink would record that they spoke to the “customer” when clearly, they were speaking to some other person. It is assumed that this also cannot be the Joined Party as the Centrelink officer would have been able to distinguish a female voice from that of the male customer.
There is then the question of whether the correspondence nominee should or could have undertaken the task of informing Centrelink of the Respondent’s incarceration.
It is at this stage that the Tribunal separates the two time periods in question.
In relation to the period 8 February to 15 February 2017, as noted above, the Respondent’s father was his correspondence nominee. The Respondent was living at home with his family. As such he was (indirectly) obtaining the benefit of the DSP payments as a member of a shared household. His father had clear obligations as the correspondence nominee to inform Centrelink if and when his son was taken into custody. He would have been fully aware of such details and there was no inhibition on his part from providing the information as he was obliged to do. He failed to do so. The Tribunal notes however that the period of time is sufficiently short so that Centrelink may not have been able to process a cancellation of payment upon receipt of advice from NSWDCS within that period.
Under these circumstances, this period is deemed to give rise to a debt which should be recovered from the Respondent. The Tribunal accepts that proposition.
The Tribunal now turns to the period 10 April to 17 October 2017 and its findings below are exclusive to that period.
In the first instance there is no evidence that the Joined Party was aware of the Respondent’s position in April 2017. On 8 February 2017 the Respondent was placed under an AVO which prohibited him from any contact with the Joined Party and in any case, he told the AAT1 that “his relationship had already broken down when the AVO was imposed.”[27]
[27] AAT1 decision at [6], T-documents at 5.
In April and May 2017, the Joined Party was engaged in various contacts with the criminal justice system and on 11 May 2017 was herself taken into custody.
There must be some doubt about both the knowledge and the capacity of the Joined Party to provide the information as required by the Applicant.
Section 1237A of the Act provides:
1237A Waiver of debt arising from error
Administrative error
(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
The Tribunal believes, on the balance of probabilities, that Centrelink was notified of the Respondent’s incarceration within days of that occurring but failed to act upon that advice and allowed DSP payment to continue until it picked up later data-matching details in October 2017.
Whether there was “sole” administrative error on the part of Centrelink is more difficult to determine given that letters addressed to both the Respondent and the Joined Party under subsection 68(2) of the Administration Act were not responded to formally – although as the Tribunal has indicated, this compliance may not have actually been physically possible.
The authorities cited by the Applicant in its SFIC[28] are clear in establishing that to meet the test of “sole” administrative error requires that it be established that there was not any form of error on the part of any other party which may have contributed to the outcome. While the Tribunal believes that this was the case in a real-world and practical sense, it cannot hold this to be the case according to the letter of the law.
[28] At [7.8]-[7.11].
Section 1237AAD of the Act provides for a waiver of debts where “special circumstances” are found.
1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
As with so many key concepts in the Act, the term “special circumstances” is not given any precise definition. Without going into extensive detail, it can be said that the courts have identified a number of factors which go to establishing whether or not “special circumstance” exist. They must be:
·something more than ordinary or usual;[29]
·markedly different from the usual run of cases – not necessarily unique but having a particular quality of unusualness;[30]
·somehow distinguishing from usual cases of an analogous nature;[31]
·attuned to the individual circumstances of each case;[32]
·not so rigidly applied as to risk harsh or unreasonable outcomes;[33]
·involving “facts peculiar to the particular case which set it apart from other cases”;[34] and
·supportive of the overall integrity of the social security system and recognising the public interest in ensuring that public moneys are recovered where they can and should be.[35]
[29] Angelakos v Secretary, Department of Employment and Workplace Relations [2007] FCA 25; Jess v Scott and Ors (1986) 70 ALR 185.
[30] Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3.
[31] Dranichnikov v Centrelink [2003] FCAFC 133.
[32] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114.
[33] Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
[34] In the Marriage of Phillippe [1997] 4 Fam LR 153 per Kay J.
[35] Skinner and Secretary, Department of Social Services (Social services second review) [2015] AATA 569; Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114; Secretary, Department of Social Security v Hales (1998) 82 FCR 154.
Additionally, the Tribunal is invested with “a broad discretion to respond to a variety of circumstances”[36] but should note that special circumstances “are not merely directed to the person's own circumstances. Rather, they are directed to those that are “special circumstances... that make it desirable to waive”.[37]
[36] Hogan v Secretary, Department of Employment, Education and Workplace Relations [2011] AATA 162 at [82].
[37] Davy and Secretary, Department of Employment and Workplace Relations [2007] AATA 1114 at [80].
The circumstances which the Tribunal accepts import a “special” quality into this case are as follows:
(a)Advice would almost certainly have been provided from NSWDCS to Centrelink about the Respondent’s incarceration, but this was apparently not acted upon.
(b)The Respondent undertook what he believed to be his reporting obligations when he advised NSWDCS of his receipt of the DSP in the clear and reasonable understanding that they would advise Centrelink accordingly.
(c)Allowance should be made for the act that the Respondent suffers from a significant degree of mental impairment and that he has a relatively low level of literacy.
(d)It is only a “legal fiction” that the Respondent “obtained the benefit” of DSP payments, although the Tribunal recognises that legal fact.
(e)It was not practically possible for the Respondent to personally advise Centrelink of his incarceration.
(f)There is no evidence the Respondent’s then correspondence nominee was either aware of, or in a position to, advise Centrelink of the Respondent’s incarceration.
It may well be that each of these individual considerations does not distinguish this Respondent from others in analogous situations (although such situations would not appear to be common) however the concatenation of considerations is such as to establish for the Tribunal the existence of a totality of “special” circumstances.
For these reasons the Tribunal determines that the debt for the period 10 April to 17 October 2017 should be waived.
Whether the debt for the earlier period (being only some eight days) should be pursued will be a matter for the Secretary to determine bearing in mind the terms of section 1236(1A)(d) of the Act where a debt may be written off “if it is not cost effective for the Commonwealth to take action to recover the debt.”
CONCLUSIONS
For the reasons given above the Tribunal finds that the debt for the first period in question is liable to be recovered (once calculated) but for the latter period should be waived because there are special circumstances.
DECISION
The decision under review is set aside and remitted to the Applicant with directions that:
(a)the debt for the period 8 February 2017 to 15 February 2017 is to be calculated and subject to or considered for recovery from the Respondent; and
(b)the debt for the period 10 April 2017 to 17 October 2017 is to be waived pursuant to section 1237AAD of the Social Security Act 1991 (Cth).
I certify that the preceding 95 (ninety -five) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member
....................................[sgd]....................................
Associate
Dated: 14 September 2021
Date(s) of hearing: 25 August 2021 Solicitors for the Applicant: Dr S Thompson, Sparke Helmore Respondent: In person Joined Party: In person
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