Bateman v Centrelink - [2004] SADC 97

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
BATEMAN v CENTRELINK
Judgment of His Honour Judge Kitchen
16 July 2004
TORTS - NEGLIGENCE - ESSENTIALS OF ACTION FOR NEGLIGENCE - WHERE ECONOMIC OR FINANCIAL LOSS - CARELESS ADVICE, STATEMENTS AND NON-DISCLOSURE
Application to review judgment of Magistrates Court dismissing plaintiff's claim for damages. Plaintiff was advised that rent assistance paid to him as a Newstart recipient would be continued were he to apply for and be granted Austudy allowance as a full-time student. Relying on that advice, plaintiff borrowed or engaged to pay moneys for courses at a TAFE; the advice was erroneous, rent assistance was subsequently terminated - plaintiff derived no benefit from courses he engaged to pay for from which precluded when unable to pay by due date. Judgement of Magistrates Court rescinded and in substitution therefor judgment for plaintiff against defendant in sum of $1,959.90.
Magistrates Court Act 1991 38(6), referred to.
Shaddock & Associates v Parramatta City Council 150 CLR 225, applied.

BATEMAN v CENTRELINK
[2004] SADC 97

This is an application pursuant to Section 38(6) of the Magistrates Court Act 1991 to review the matter of a judgment entered in a minor civil action dismissing the claim by the applicant (the plaintiff in the action) for damages and ordering that the applicant pay the respondent’s costs of action to be agreed or taxed.
The applicant’s first particulars of claim, filed on 16^th October 2002, was:
“The defendant made an agreement with the plaintiff to pay the plaintiff rent allowance of $69 per fortnight commencing 24^th July 2001 which it paid until 16^th September 2002. On that basis the plaintiff entered into debt contracts of $2,885.90. On several occasions the defendant assured the plaintiff that he was entitled to rent allowance – verbally and in writing. The defendant has since sought to rescind the contract and recover amounts paid of $2070. The plaintiff seeks to have the original agreement enforced until completion of course and payment of debt end 2003. “
He claimed $6,000.00.
On a date prior to 11^th February 2003 the secretary of the Department of Family and Community Services determined not to seek to recover from the applicant $2,070, the sum of the rental allowance (sometimes called rental assistance) payments made to him between 24^th July 2001 and 16^th September 2002. On 11^th February 2003 an order was made that the applicant file an amended particulars of claim; after some further interlocutory steps the applicant provided a document headed “Statement of Claim” comprising thirty five numbered paragraphs which the court, on 25^th March 2003, ruled should stand as the applicant’s statement of claim. The respondent filed an amended defence.
In substance the statement of claim alleges that the respondent advised the applicant that the applicant would continue to be entitled to a rent allowance of $69 per fortnight in the event he undertook full-time study, ceased to be a recipient of a Newstart allowance and received instead Austudy payments, that the applicant relied on that advice and he thereby suffered loss and damage. It is alleged that the advice amounted to a negligent mis-statement.
The substance of the respondent’s defence filed on 14^th April 2003 was that the applicant as a recipient of the Austudy payment was not entitled to a rent allowance. The advice which the appellant alleges was given to him by the respondent was put in issue; the respondent admitted that the applicant had been paid the rent allowance, although the recipient of the Austudy payment, from 25^th

July 2001 until it was discontinued on 16^th September 2002 when the respondent discovered that the applicant was not entitled to it and it had been paid to him in error.

The application to review states the grounds, upon which the review is sought, to be:
“The Magistrate erred in law and in fact. * details to follow”
and the order sought by the applicant is:
“A review of the decision to dismiss the plaintiff’s claim and to award costs to the defendant. An order that the original claim be upheld and an order for costs in favour of the plaintiff. * details to follow”.
At the hearing of the review the applicant handed up a type-written document of two pages in which he set out his submissions concerning several of the Magistrate’s findings. The respondent also handed up written submissions in response to those of the applicant.
The principal events which led to the applicant instituting his proceedings against the respondent can be shortly stated.
A business which the applicant conducted failed, he became unemployed and in early 2000 he became the recipient of what is known as the Newstart allowance pursuant to the Social Security Act (the Act). Pursuant to the provisions of the Act the applicant was also entitled to, and was paid, rental assistance of $69 per fortnight.
The applicant was unemployed throughout the year 2000. During the course of that year, the applicant attended counselling sessions conducted by Centrelink. A course of study with a view to employment as a conveyancer was identified as being a likely career for which the applicant was suited. At the beginning of 2001 the applicant enrolled as an external student to study part-time, by correspondence, for the certificate and advanced diploma in conveyancing offered by the Douglas Mawson Institute of Technology.
In about April 2001, as the applicant recalls, he attended at the offices of Centrelink concerning his “situation” at that time; he was interviewed by a female officer. The applicant’s evidence is that it was suggested to him he should become a full-time student in which event he would be entitled to an Austudy payment. As I understand, a recipient of a Newstart allowance is obliged to continue to seek work but the recipient of an Austudy payment is not. The applicant related that he told the officer he was aware Austudy “was a lower payment than Newstart”, in response to which the officer informed him that for long term unemployed persons there was a “no disadvantage” policy and he could “go from one form of welfare to another without losing benefits, without having my income reduced”. His evidence continued:
“She further said to me that there was a financial supplement loan scheme and that I’d be entitled to take advantage of that. She explained to me how that would work and so we went through the payments and I asked all about it you know, how it would be in the actual dollars. She worked it out and said to me – and we got up to the rent allowance, and she said yes you will get rent allowance, its exactly the same, you will get the same payments. So if I don’t want to use the financial supplement loan, my Austudy and rent assistance will be exactly the same as Newstart and rent assistance.” (T33-34)
In July 2001 the applicant enrolled for the subjects he would study full-time in the second semester of the conveyancing course, and completed a form to claim the Austudy payment; a copy is Exhibit AD1. In that document the applicant identified the subjects for which he enrolled.
Commencing on, it would appear, 24^th July 2001 the applicant received Austudy payments – there was credited to his bank account on 7^th August 2001 the sum of $426.80 (an amount identical to that which had previously been paid to him as a Newstart payment and rental assistance) and he received from Centrelink written notification dated 7^th August 2001 that he would be paid from 4^th September 2001:
“Aust Study   $223.63
Plus Rent Assistance              $ 69.00
Total  $292.63”
(Exhibit D1 “List of Documents” page 14). The applicant periodically received similar documents from Centrelink, the last dated 2^nd July 2002, in which the Austudy payment and the rent assistance are separately itemised.
At the trial in the Magistrates Court, there was a malfunction of the tape system used to record the evidence, with the consequence that evidence taken during some thirty minutes was not recorded. The missed block of evidence commenced at about the point I have reached in these reasons. In his application for review the applicant complained, in effect, that the learned Magistrate had erred in giving no weight, or insufficient weight, to evidence adduced before the court concerning the content of the applicant’s application to Centrelink for a loan in relation to additional subjects he undertook in the second semester in 2002. That evidence was part of the evidence which, unfortunately, was not recorded . I determined that the applicant should give that evidence before me, and be cross-examined upon it.
The applicant’s evidence is that in the second half of 2001 and the first half of 2002 he, on about four occasions, spoke on the telephone with officers of Centrelink to enquire what the effect on his Centrelink payments and allowances would be were he to obtain paid work; his calls were prompted whenever he saw a job he might have a chance of securing. He said his conversation with a particular officer would include the applicant being told that he was not entitled to rental assistance, he would respond to the effect that he was in a special category, the officer would make some inquiry and then agree.
In 2002 the applicant enrolled for subjects to continue the conveyancing course in the first semester and also enrolled for some components of the real estate course. Leading up to the second semester the applicant decided to not only continue with the conveyancing course and components of the real estate course but to also enrol for some subjects of the accounting course.
On 1^st July 2002 the applicant made a written application to Centrelink for an advance of $500 against his future payments from Centrelink. By that date he was receiving an Austudy payment of $230.35 and rent assistance of $69 per fortnight, a total of $299.35. In the written application the applicant showed his “Social security payments” to be $299 per fortnight plus $269 per fortnight “other income” as part of his fortnightly income totalling $568.
The applicant’s evidence is that he attended at a Centrelink office to complete the written application, told an employee of Centrelink which courses he intended to enrol for and discussed with that employee his “budget”; there is no extant document which Centrelink has recording information concerning the applicant’s proposed courses. In the written application the applicant estimated his “education expenses” to be $80 per fortnight, which together with expenses for housing, transport and food resulted in a surplus of $23 per fortnight.
In his amended statement of claim the application pleaded:
“9. On 2 July 2002 the plaintiff applied in person at the defendant’s Glenelg office for a Cash Advance of $500 for the specifically stated purpose of being a deposit on course fees. The plaintiff completed an application form in which he prepared a budget to justify his ability to repay the Cash Advance and in which he declared his income of Austudy plus the Rent Assistance and which was subsequently approved by the defendant who then authorised a Cash Advance payment to him on that basis.
By paragraph 13 of its defence, Centrelink pleaded “The defendant admits paragraph 9 of the claim”. As I infer, a purpose of the written application for the advance was to show that he, the applicant, had sufficient surplus income to repay the advance of $500 by thirteen fortnightly payments of $38.59.
The application for an advance was granted and the applicant used the advance as a payment toward the cost of the various courses which he enrolled to study during the second semester of 2002.
The applicant’s evidence is that in relation to the second semester of 2002 he incurred fees for the courses for which he enrolled, expense purchasing text books for the accountancy course and other expenses to purchase stationery and photocopying (among other things); the fees for the subjects in accounting and real estate were $1,737.50, accounting text books were purchased at a cost of $357.40 and his expenditure for stationery and other items was $250, a total of $2,344.90.
In the bundle of documents which was before the Magistrates Court, there is (at page 43) a computer generated type-written note of a telephone conversation between the applicant and an employee of Centrelink on 24^th September 2002. It appears that the subject matter of the call was the applicant’s request for information concerning the effect on his social security payments of income he had received. The employee recorded that she noted the applicant was receiving Austudy payments and rent assistance, and explained to the applicant that “Rental assistance is not payable on AUS and end dated same on RCO screen raising a debt of $2,065.04… (the applicant) states RA has been discussed with him and has never been cancelled”. On 2^nd October 2002 Centrelink wrote to the applicant (Exhibit D1 page 46):
“On 24 Jul 2001 you ceased being eligible for Rent Assistance when granted Austudy. You continued to receive this payment until 16 Sept 2002. You were not entitled to receive rent assistance for this period. You have, therefore, been overpaid $2,070. We are required to recover this amount.”
On the same day, the applicant completed a Centrelink form seeking a review, by an authorised review officer (ARO), of the decision to cancel the payment of rent assistance to him. That form was received by Centrelink on 4^th October 2002.
On 14^th October 2002 the section manager of Centrelink’s Glenelg office (the office to which the applicant’s request for a review had been sent) forwarded to the ARO a document (Exhibit D1 page 49) referring the applicant’s request to the ARO.
The applicant complained, in his evidence, that Centrelink had failed to comply with the stricture in the document of referral viz: “Remember, this case must get to the ARO within 4 days of the customer requesting an ARO review”. That is not a matter which, or the legislative consequences of which, can be adjudged upon by the Magistrates Court or by this Court, but the failure (if it be a failure) of the original decision maker to comply with the four day requirement explains, to an extent, the events which followed the referral to the ARO.
In respect of the subjects which he enrolled to study in the second semester of 2002 the applicant entered into an agreement, on 1^st July 2002, with the Minister of Education, Children’s Services and Training to pay $1,557.50 by two instalments; $467.25 at the time of enrolment and $1,090.25 on 11^th October 2002. It was a term of the agreement that “No refund will be applicable after fifty percent of the course has been delivered”.
The applicant’s evidence is that he had embarked upon the additional subjects he enrolled for in 2002 to put himself in a position where, during the first semester of 2003, he would be studying only part-time and from enquiries he had made there could be an opportunity to obtain employment (because of the additional courses he was undertaking) with a taxation agent or a real estate agent; to meet the fees for his courses his evidence is that he obtained an advance from Centrelink upon his Austudy payment, borrowed from relatives, entered into the agreement with the Minister and relied upon the continued payment to him of rent assistance.
When he was informed that the rent assistance payment had been withdrawn and Centrelink was demanding repayment of the total of the rent assistance payments he had received since July 2001, amounting to $2,070, the applicant says he realised the budget he had drawn up and worked to was in disarray and money was due for payment to the Minister on 11^th October 2002; by that date the applicant had received no response to his request for a review. He approached the TAFE College and asked if there could be a refund of moneys he had paid, or (as I understand) he was liable to pay, for his courses and when that was refused he became despondent, he, as he put it, “threw up” all his courses and he did no course work for a period of one month at least.
On 16^th October 2002 the applicant commenced these proceedings.
On 21^st October 2002 the ARO wrote to the applicant to inform him he had received the file papers and hoped to complete the review by 11^th November 2002 but if more information was needed he may contact the applicant. The ARO telephoned the applicant on 6^th November 2002, elicited from the applicant his version of the events which had led up to the request for a review and also ascertained the applicant’s then position concerning his studies and the proceedings he had commenced.
In a letter to the applicant dated 6^th November 2002 the ARO informed the applicant he was satisfied:
“… that, while you were not entitled to rent assistance as a component of your Austudy payment and so there was a legally recoverable debt, the debt was due solely to administrative error on the part of Centrelink, he received the payments of rent assistance in good faith and the debt was not raised within six weeks of the first incorrect payment.
This means that recovery of this debt must be waived under Section 1237A of the 1991 Act. The consequence of my decision is that you do not have to repay this debt. This means your request for a review has been successful.”
The letter also informed the applicant that the ARO had asked the Glenelg office of Centrelink to take no further recovery action.
In the same letter, the writer informed the applicant of his right to appeal against the decision made by the ARO, and suggested that if he wished to appeal he should do so quickly. In his application for review, the applicant requested that the rent assistance be continued while his application for review was being considered; no further rent assistance was paid to the applicant. The applicant’s evidence to the Magistrate was that by his application for review he was seeking the re-instatement of the rent assistance. He did not appeal against the ARO’s decision; he said that in these proceedings he is seeking:
“To recover the cost that I incurred for moneys that I spent in expectation of receiving the rent allowance down the track. (T26) …(Plus) an amount of $3,000 for the stress of having to get here, basically in the fact that I couldn’t finish those courses that I was enrolled in, in which I had some reasonable employment prospects…” (T29)
By a further administrative error, an amount of $88.60 was withheld from the applicant’s payment of Austudy, made on 12^th November 2002, as an instalment in reduction of the incorrectly paid rental assistance totalling $2,070; that error was corrected on 15^th November 2002 when the withheld amount was credited to the applicant’s bank account.
On 22^nd October 2002 the applicant paid the balance of the fees he owed to the Douglas Mawson Institute (Exhibit P1 page 15); he said a relative volunteered to lend him money so he could make that payment, however his evidence is that during the period the fees were overdue students were excluded from using computer facilities necessary for the courses being studied, results in respect of work handed in would not be credited and, as to the accounting course it was obligatory for students to meet “set fortnightly requirements”. As I understand his evidence, the applicant assessed he did not have the time before the end of the second semester to complete the work for all three courses, he judged he was excluded from the accountancy course because of fortnightly assignments he had not been able to complete as a consequence of not paying the fees due on 11^th October 2002 and so he directed his efforts to catching up on the conveyancing course, belatedly handing in work in that subject which was accepted, and he completed the second semester in that course. In the year 2003 the applicant continued in only the conveyancing course as a full-time student intending to complete it by the end of the year.

In his reasons for judgment the learned special magistrate accepted the evidence of the applicant that before the applicant embarked upon the conveyancing course part-time at the beginning of 2001 “he first ensured that he would be able to receive rental assistance … It was only after he was assured of his eligibility for rental assistance by officers of the defendant, that he undertook the studies and entered into an agreement with the defendant” (para 13). I infer that His Honour also found that in July 2001 when the applicant changed to Austudy, from Newstart, to study full-time the applicant was told by an officer of Centrelink “of there being a “no disadvantage” policy, which included rental allowance. It was on this basis and as a result of other things mentioned to him at the interview that he was prompted to undertake full time studies”.
After referring to the applicant undertaking in the first semester of 2002 the real estate course part-time in addition to the full time conveyancing course, and adding in the second semester subjects for the advanced diploma in accountancy, the learned special magistrate summarised the events which resulted in the rental assistance being discontinued and the decision of the ARO to waive the recovery of the rental assistance paid to the applicant. His Honour went on:
“19.       As previous (sic) stated, the court, whilst mindful of the evidence as a whole, has only summarised it herein. The court recognises that the sum of $2,070 was recovered (sic) by the defendant, but the plaintiff has had this amount reimbursed. The court also accepts and is satisfied that the plaintiff’s request for consideration was complied with and that the original decision maker and an authorised review officer rejected the claim for payment of further rental allowance”.
His Honour referred to the applicant’s claim to recover the fees he had paid for the accounting and real estate courses for the second semester in 2002, the cost of text books and stationery items and compensation for “pain and suffering”, noting that Centrelink “did not dispute the (aggregate of the) amount claimed”, and went on:
“24.       The court found the plaintiff to be a very conscientious person keen to better himself by undertaking a heavy load of study. Unfortunately, through no fault of his own, he found himself to be confronted with his current predicament. Whilst the Court sympathises with the plaintiff, it is satisfied that the defendant has acknowledged that the rental assistance was paid in good faith and as a result decided not to recover those payments made of the sum of $2,070.
25.        The Court is further satisfied that the plaintiff’s entitlement to compensation is limited to the amount of rental assistance as already received by him and that he is not entitled to further rental assistance.
26.        As to the additional expenses incurred by the plaintiff in undertaking extra studies, the Court is satisfied that this was a voluntary act on his part. Such action by the plaintiff could not be objectively viewed as the reasonable consequence of advice on the level of rental assistance he could expect to receive. The Court is further satisfied that those expenses were not in the nature of living expenses and far exceeded the amount of rental assistance expected.”
The learned Magistrate found there was no evidence to support, and rejected, the applicant’s claim to damages for pain and suffering, and held that a claim for travel accommodation and meals was for expenses incurred for the applicant’s attendance at court and only recoverable if the applicant had succeeded. His Honour wrote:
“29. Whilst the Court has arrived at its decision to dismiss the plaintiff’s action, it repeats that the plaintiff was a well-intentioned person with a keen desire to study hard and to improve his position. Rightly or wrongly he undertook a much heavier workload than may normally be undertaken by others. The Court is satisfied that there was at no time any attempt by him to deceive the defendant and that he received the rental assistance in good faith as a result of the administrative error of the defendant.
30. Unfortunately, based on law, the Court in its judgment could not arrive at any other decision. It accepts that the plaintiff embarked on this heavy workload as he believed that by receiving the rental assistance it afforded him some form of security to be able to do so. Had he found out the true situation before embarking on the extra studies then there is no doubt that he would not have done so.”
and concluded (para 31) by urging the Secretary of the Department of Social Security to make an ex gratia payment to the applicant if the Secretary had the discretion to do so.
The applicant’s submission is that:
·the Magistrate erred in concluding the additional expense incurred by the applicant to undertake extra studies was not “the reasonable consequence of advice on the level of rental assistance” the applicant could expect to receive and that those expenses “far exceeded the amount of rental assistance expected”. The applicant submitted that having made the findings contained in paragraphs 13 and 30 of the Reasons for Judgment the Magistrate should have found “as a matter of law” that the applicant had relied upon Centrelink’s advice as to the level of rental assistance he could expect to receive from Centrelink. In support of this submission the applicant pointed to Centrelink’s admission of the plea in paragraph 13 of his Statement of Claim and complained that the Magistrate made no reference to that admission as being evidence that the applicant’s expense for the extra studies was incurred in reliance upon the rental assistance he expected to receive from Centrelink.
·the Magistrate was in error in finding that the expense of the additional courses for which the applicant enrolled “far exceeded the amount of rental assistance expected” (paragraph 26 of the Reasons). The applicant contends that his expectation was that rental assistance would continue to the end of 2003, when he completed his courses, by which time rental assistance totalling $2,691 (39 fortnightly payments of $69 counted from July 2002) would have been received by him with which he would have been able to repay $2,344.90, the cost of the additional courses for the second semester in 2002.
Before I summarise Centrelink’s submissions, it is necessary to canvass evidence given concerning the applicant’s history as a recipient of Newstart before he applied for Austudy.
The applicant said that as a recipient of Newstart he could be, and was, required by Centrelink to attend meetings or interviews the purpose of which, as I understand, was to equip unemployed persons with the information and skills to prepare a resumé, make presentations at job interviews and obtain other instruction about seeking employment. For his part the applicant saw attendance at such courses to be at worst an irritant and at best unnecessary; he said that when he did attend meetings or interviews of this kind he, (and he understood) some of those he spoke to, regarded them to be, as it were, “formulaic” – he had been entirely unsuccessful in obtaining any work. As a consequence he failed to meet his obligations and by May 2001, as I understand his evidence, he had been what is called “breached” the effect of which was that there would likely be a reduction of his Newstart payment by a significant percentage for the period of 26 weeks thereafter. By deciding to change from being a Newstart recipient to an Austudy recipient there would be no reduction from the full sum of the Austudy payment.
Centrelink’s submission is that the appellant was not induced to change to Austudy by any representation concerning a continuation of rent assistance – he made a decision to transfer to Austudy for reasons wholly unconnected with such a representation.
I reject that submission.
In my opinion although a likely reduction in the Newstart allowance may have been a factor in the applicant’s decision to undertake full-time study, it does not negate, or even significantly lessen, the applicant’s reliance on the advice he was given that as an Austudy recipient he would continue to be entitled to rental assistance.
In Shaddock & Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225, a solicitor for an intending purchaser of land inquired over the telephone from an unidentified officer of the Council, in whose district the land was, whether there were any road widening proposals affecting the land. He was told there were not. The solicitor then applied, by a common form, for a certificate from the Council. The form sought an answer to a question whether there was any road widening proposal in respect of the land. The certificate which the solicitor received from the Council did not mention any road widening proposal. Relying on the certificate the purchaser completed the contract. There were, in fact, road widening proposals which had been accepted by the Council.
Mason J, with whom Aicken J agreed, referred to the judgment of Barwick CJ in Mutual Life and Citizens Assurance Co Limited v Evatt (1968) 122 CLR 556, and wrote (at page 250):
“According to the Chief Justice, whenever a person gives information or advice to another upon a serious matter in circumstances where the speaker realises, or ought to realise, that he is being trusted to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to act on that information or advice, the speaker comes under a duty to exercise reasonable care in the provision of the information or advice he chooses to give.”
He continued, at page 251:
“I consider that this court should now adopt Barwick CJ’s statement of the conditions which give rise to a duty of care in the provision of advice or information. It will be noted that His Honour specifically equated the provision of information with the giving of advice, a conclusion which conformed to His Honour’s view that liability is not confined to those who carry on a profession or business.”
and, at page 252:
“There is no ground for confining the liability to those who engage in a business activity and for excluding those who provide negligent advice or information in the course of discharging a government or administrative responsibility. The citizen is just as likely to rely on the accuracy of advice or information given to him by a government department, a statutory authority or a local authority as he is to act on similar advice or information given by a person who carries on a business. And there is no persuasive reason for saying that the citizen who sustains damage as a result of information negligently given by a government department or authority has no remedy, although the citizen who sustains similar damage as a result of information negligently given by an investment advisor has a remedy.”
It was held by the whole court that although, in the circumstances, the oral advice given to the solicitor over the telephone was informal and not a breach of the Council’s duty of care, the certificate provided by the Council upon the written request of the solicitor “stood in a different position … It was a formal request”. Mason J rejected the Council’s argument that no duty of care arose because the solicitor:
“… did not bring home to it the purpose to which the information would be put. True it is that he did not state why the information was wanted or what action his clients proposed to take on the strength of it. But the existence of a duty of care does not depend upon knowledge on the part of the speaker of the precise use to which the information will be put. It is enough if he knows, or ought to know, that the inquirer is requesting it for a serious purpose, that he proposes to act upon it and that he may suffer loss if it proves to be inaccurate.”
It could not be doubted, and certainly the learned Magistrate did not find or imply otherwise, that the person who in about April 2001 gave the applicant information about the continuation of rent assistance knew, or should have known, that the applicant’s request for information, or advice, on the matter was for a serious purpose.
The advice the applicant received that he would be entitled to rent assistance while in receipt of Austudy allowance was reinforced by that assistance being paid and the written notifications he periodically received which itemised “rent assistance” as a specific component of his entitlements.
In July 2002 the applicant, in the application he made for an advance against his Austudy allowance, set out the total of the payments he was receiving by way of that allowance and rent assistance, as a component of the information he was required to provide so that his ability to repay the debt could be assessed by the respondent (or its principal). That was an occasion when the respondent had the opportunity once again to correct the information given to the applicant; the erroneous advice given to the applicant, more than twelve months earlier, was not corrected and the applicant, as I infer the learned Magistrate found, relying on the continuation of rent assistance committed himself to incurring a substantial debt for the cost of study to be pursued in the second semester of 2002.
The applicant’s intention was to borrow from relatives the amount he had undertaken to pay the Minister by 11^th October 2002, and then repay those borrowings by the end of 2003 from his income which he believed upon the advice he had been given by the respondent included rent assistance. When he was informed on 24^th September 2002 (and it was confirmed in the respondent’s letter dated 2^nd October 2002) that rental assistance would not be paid to him after 16^th September 2002 and he would be required to repay $2070 the aggregate of rental assistance paid to him since 24^th July 2001, the applicant says he realised he could not repay the moneys he had intended to borrow to pay the Minister. There is no reason not to accept the applicant’s evidence that he became despondent, did no course work for at least a month and by the time he recovered himself to continue his studies he could not resume the accountancy and real estate courses.
It is in my view clear that the learned Magistrate accepted the applicant as a frank and truthful witness. The applicant’s evidence included that at the time he made a written application in July 2002 for an advance of $500 against his Austudy allowance he told an employee of the respondent which courses he intended to enrol for in the second semester of 2002 and discussed with the employee his “budget”. That evidence was not challenged and no evidence was called by the respondent to controvert it. In my opinion that evidence was important – it made known to the respondent that the applicant was embarking on courses the cost of which he calculated, in the form he completed and submitted to the respondent, to be $80 per fortnight and to meet that and his living expenses he was relying on the continuation of rent assistance as a component of the social security payments he disclosed in the form. The applicant did not, it would appear, disclose with detailed precision the courses he was undertaking or the means by which he intended to arrange payment for them or the precise terms of his agreement with the Minister; that however was not necessary to impose a duty of care upon the respondent – it is enough (to adapt from Mason J’s judgment in Shaddock’s case) that the respondent had informed the applicant of a continuing entitlement to rent assistance, periodically confirmed that to be the case, knew the applicant was proposing to act on the basis he had such an entitlement and knew or ought to have known the applicant may suffer loss if the information concerning rent assistance proved to be inaccurate. In my opinion the learned Magistrate, on the evidence before him, erred in not finding to that effect.
The applicant’s inability to pay the Minister by the due date, in accordance with his agreement, was tested by the respondent, but in my opinion there is no basis in the evidence upon which to find that the applicant failed to take reasonable steps to mitigate his loss. The applicant’s default under the agreement with the Minister had the consequences the applicant described and upon that he was not seriously challenged. The aggregate of the sums paid by the applicant for, or in connection with, his two “additional” courses was not in issue before the Magistrate; those payments were the measure of the applicant’s loss – he effectively derived no benefit for his expenditure. Whilst the applicant was pressed upon his evidence about falling into despond and forsaking his studies for at least a month, in my opinion his reaction to being told his rent assistance had ceased was not so unreasonable that he should be held to have caused or contributed to his loss. However I see no reason to come to a different conclusion from that of the Magistrate in his finding that there was no evidence to substantiate the applicant’s claim for pain and suffering. Further in my opinion the applicant’s claim, faintly pressed in his evidence, that he lost the opportunity to secure employment, in effect a claim for economic impairment, was not supported by any evidence upon which the court could identify, or quantify, such an impairment.
The total of the applicant’s claim for amounts paid in relation to the additional subjects for the accountancy and real estate courses was $2,344.90. He borrowed that amount from various sources and by various means, intending to repay it from the 39 fortnightly rental assistance payments of $69 he expected to receive from July 2002. In that period he received approximately five fortnightly repayments until they ceased on 16 September 2002, a total of $385.00 the recovery of which the respondent waived; that sum should be deducted from $2,344.90, reducing it to $1,959.90. There is no evidence to suggest that the plaintiff paid, or had a liability to pay, interest on the amounts he borrowed to pay for the additional courses, therefore an award of interest is not appropriate.
There will be the following orders:
1. Pursuant to Section 38(7) of the Magistrates Courts Act 1991:
(a)the judgment of the Magistrates Court dated 3 July 2003 in action number AMCCI 02-13137 is rescinded and in substitution therefor judgment be entered for the plaintiff against the defendant in the sum of $1,959.90
(b)the defendant to pay the plaintiff’s costs of the action to be taxed if not agreed
2.The respondent to pay the applicant’s costs of and incidental to the review, to be taxed if not agreed.