Castleman and Department of Family and Community Services
[2000] AATA 543
•30 June 2000
DECISION AND REASONS FOR DECISION [2000] AATA 543
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N1999/1018
GENERAL ADMINISTRATIVE DIVISION )
Re HARVEY WILLIAM DAVID CASTLEMAN
Applicant
And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal S M Bullock, Member
Date30 June 2000
PlaceSydney
Decision The decision in part is set aside and in substitution therefor, the Tribunal finds that Mr Castleman was unemployed and qualified for Newstart Allowance for the following periods: 1 January 1998 to 4 May 1998 1 July 1998 to 25 October 1998 6 February 1999 to 29 September 1999 The Tribunal remits the issue of the rate of pension for the above periods to the Secretary, Department of Family and Community Services. The Tribunal further decides that in relation to the period 26 October 1998 to 5 February 1999, the decision under review is affirmed. …………………………… S M Bullock Member
CATCHWORDS
Social Security - Newstart Allowance – Unemployed - Activity Test
Social Security Act 1991 ss593, 601
Castleman v Secretary, Department of Social Security [1999] FCA 836
Director-General of Social Services v Thomson (1981) 38 ALR 624
Re McKenna and Director-General of Social Services (1981) 3 ALD 219
McAuliffe v Secretary, Department of Social Security (1991) 23 ALD 284
Re Te Velde and Director-General of Social Services (1981) 3 ALN N111
Re Weekes and Director-General of Social Services (1981) 3 ALN N141b
Re Doyle and Secretary, Department of Social Security (1985) 26 SSR 313
REASONS FOR DECISION
MS S M BULLOCK
This is an application for review to the Administrative Appeals Tribunal ("the Tribunal") by Mr Harvey William David Castleman ("the Applicant") in relation to a decision made by the Social Security Appeals Tribunal ("the SSAT") on 3 March 1998 (T2). The SSAT affirmed a decision of an Authorised Review Officer ("ARO") of the Department of Family and Community Services made on 3 February 1998 (T26) that Mr Castleman did not meet the Activity Test requirement for a Newstart Allowance claim made on 23 December 1997 (T4) in Bundaberg. The original decision not to grant Mr Castleman a Newstart Allowance was made by a delegate of the Secretary, Department of Family and Community Service's ("the Department") on 6 January 1998 (T13).
Mr Castleman initially appealed to the Tribunal on 2 April 1998. That Tribunal decided on 14 August 1998 to affirm the decision under review. An appeal was lodged to the Federal Court in relation to the Tribunal's interpretation of subsections 593(1) and 601(1) of the Social Security Act 1991 ("the Act"). On 24 June 1999, the Federal Court determined that the Tribunal had misconstrued subsections 593(1) and 601(1) of the Act. The matter was remitted to the Tribunal for further consideration according to law.
The present matter came before the Tribunal in Sydney on 8 March 2000. Mr Castleman provided oral evidence and was represented by Mr S Hodges, solicitor. Mr J Kenny, departmental advocate, represented the Respondent, the Department. Mr Kenny was assisted briefly by Ms S Antcliffe, Manager of the Administrative Law Section of the Department. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T documents", T1 – T33) and the following exhibits.
Exhibit Description Date
A1 Applicant's Statement of Facts and Contentions 28 February 2000
A2 Chronology of Correspondence and attachments 8 March 2000
R1 Respondent's Statement of Facts and Contentions 7 March 2000
R2 Statement of Ms T Potter, IBM Australia Ltd 3 March 2000
R3 Offer of Employment to Mr Castleman from Mr S W J Holloway, Chief Operating Officer, NSW Home Loans, with attachments of spreadsheet and letter of acceptance of terms and conditions. 1 October 1998
R4 Bundle of documents of facsimiles and letters between Mr Castleman and Mr D Saillard, Centrelink, Hurstville 2 January 2000, 1 February 2000, 3 February 2000, 6 February 2000
R5 Fascimile from Ms R Nelson, Payroll Administrator, IBM Australia Ltd. 8 March 2000
R6 Correspondence and Mr Castleman's 1999 Income Tax Return 25 November 1999
R7 Business Partnership Agreement Number 1, 1999 - 2002 between the Secretary to the Department of Employment, Workplace Relations and Small Business and the Chief Executive Officer of Centrelink
issues
It was conceded by the Department at the hearing that during certain periods within the period under review, Mr Castleman was unemployed and satisfied the Activity Test for a Newstart Allowance. Following receipt of certain information from the Payroll Administrator of IBM Australia, the Respondent agreed that during the following periods, Mr Castleman qualified for Newstart Allowance:
1 January 1998 to 4 May 1998
1 July 1998 to 25 October 1998
6 February 1999 to 29 September 1999
Accordingly, the only issue for determination in this matter is whether or not Mr Castleman was qualified for Newstart Allowance from 26 October 1998 to 5 February 1999, a period during which he was involved in activities with the company NSW Home Loans.
legislationA determination in this matter requires consideration of the provisions of the Act dealing with Newstart Allowance
Part 2.12 of the Act deals with Newstart Allowance and section 593 of the Act establishes the qualification criteria for this allowance. So far as is relevant subsection 593(1) provides:
"593 Qualification for newstart allowance
593(1)Subject to section 596, 596A, 597 and 598, a person is qualified for a
newstart allowance in respect of a period if:
(a)the person satisfies the Secretary that throughout the period the
person is unemployed; and
(b)throughout the period, or for each period within the period,
the person either;
(i) satisfies the activity test; or
(ii)is not required to satisfy the activity test; and
..."
Section 601 of the Act is concerned with the Activity Test and so far as is relevant, section 601 provides:
"601 Activity Test
601(1)Subject to subsections (1A) and (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is:
(a) actively seeking; and
(b) willing to undertake;
paid work, other than paid work that is unsuitable to be undertaken by the person.
…
601(1A)the Secretary may notify a person (other than a person who is not required to satisfy the activity test) who is receiving a newstart allowance that the person must take reasonable steps to apply for a particular number of advertised job vacancies in the period specified in the notice."
background
The following information is provided by way of background and the facts contained herein are not disputed.
Mr Castleman was born on 29 June 1944. He is a qualified, certified, practising accountant having obtained a Bachelor of Business (Accounting) from the Darwin Institute of Technology, granted on 26 May 1989 (T3).
Mr Castleman has been employed variously as a lecturer at the Northern Territory University where he taught for five years and had approximately 20 years working in the public service including at the Australian Taxation Office.
In 1967, Mr Castleman had all but completed a Graduate Diploma of Teaching and at the time of cessation of this course, had only a number of weeks practical to complete. He received Austudy during that time.
On 23 December 1997, Mr Castleman claimed Newstart Allowance (T4). The claim was rejected on 6 January 1998 as the departmental delegate decided that Mr Castleman did not meet the Activity Test. On 4 May 1998 to 30 June 1998, Mr Castleman commenced casual employment with IBM (Exhibit R5). It was clarified at hearing that while Mr Castleman was paid after 30 June 1998, he had not worked after 30 June 1998 and was late in receiving his earnings.
On 26 October 1998, Mr Castleman took up a position of "Finance Consultant" for NSW Home Loans, reporting directly to the State Manager (Exhibit R3). Mr Castleman was advised of his success in obtaining this position by letter of 1 October 1998 from Mr S W J Holloway, who wrote:
"Dear Harvey
Re; OFFER OF EMPLOYMENT
Subsequent to recent meetings and discussions within NSW Home Loans, I am pleased to extend our offer of employment to you and upon accepting the terms and conditions set out below, I look forward to welcoming you on board as part of the NSW Home Loans' team.
The terms and conditions of the offer are as follows:
Position
You will be employed in the capacity of Finance Consultant for NSW Home Loans reporting directly to the State Manager
Duties
It is expected your duties will include the following and you will agree:To achieve sales performance levels as agreed upon with your State Manager.
To work exclusively for the company.
To act in accordance with the Consumer Credit Code.
To use only financial institutions recommended by the company.
Not to pass on client details to any unauthorised person.
To give weekly reports of sales activity to the Sales Coordinator and attend rostered office duty, sales meetings, training sessions, and other activities. (e.g. Home Show, etc.) as required.
To actively promote the Company's business, including presentations to real estate agents and their clients, advising them of the loan facilities which are available on an ongoing and regular basis.
To follow up all new loan applications to insure that the loan is processed in an efficient and professional manner and to advise and liase with the client with regards to the loan application and if necessary, provide assistance until the settlement of the loan…" (Exhibit R3)
The offer of employment advised that a retainer was paid after the training period of two weeks. In relation to commission, it was based on an approval points system. Direct deals had a value of 100 points and Referral Agreement deals were valued at 75 points. Mr Castleman was to take up the new position on 26 October 1998. He was to organise to have a pager and suitable office equipment. Further, there were provisions for a car allowance, telephone expenditure and he was provided with stationery and other material. Mr Castleman was expected to strictly comply with the organisation's Code of Conduct. On 11 October 1998, Mr Castleman accepted the terms and conditions of employment offered to him by NSW Home Loans (Exhibit R3).
evidence of mr castleman
Mr Castleman provided evidence of difficult times during 1998 seeking employment, living out of his van, sleeping in parks and requiring the assistance of brothers in Canberra and Port Macquarie and a sister and nephew in Sydney to provide accommodation, financial support and other practical help, for example in the form of developing an up to date resume.
On 11 October 1998, Mr Castleman signed an "Acceptance of Terms and Conditions of Employment" with NSW Home Loans. His position was described as a Finance Consultant, reporting directly to the State Manager and required him to sell home mortgages. Initially, Mr Castleman undertook a training course of approximately two weeks, 9 am to 5 pm, after which he obtained a Certificate to Practice from NSW Home Loans. Mr Castleman saw the position advertised in the Sydney Morning Herald, and thought it was something he could do, he told the Tribunal. Mr Castleman submitted an application, was interviewed and successful in obtaining the position.
In relation to his hours, Mr Castleman told the Tribunal that the General Manager had informed trainees on a number of occasions that they were not bound by particular hours.
"…it wasn't a 9 to 5 job…we could play golf every day a week, in fact one person did play golf and did all their business on the golf course, we could go surfing, we could sleep in, we could do anything. There was no reporting in,…the hours – were up to us and all he was interested in was that we sell mortgages." (Pages 14 and 15 of the Transcript).
Mr Castleman told the Tribunal that generally the consultants would work in their own geographical area, but Mr Castleman thought his area at Greenacre was unsuitable because of its "demographics", particularly its "cultural factors". He discussed these difficulties with the General Manager and proposed that he work either in the Coffs Harbour or Wollongong areas. The General Manager rejected the Coffs Harbour location, but agreed that Mr Castleman should work in the Wollongong area.
Initially Mr Castleman commuted to Wollongong from Sydney each day. Later, he decided to move to Wollongong and rented a flat which he used as a combined office and domestic accommodation, staying there usually from Sunday afternoon and returning to his Greenacre home on the following Friday afternoon. This arrangement not only provided him with accommodation and reduced the travelling he had to do from Sydney to Wollongong, but also provided a visible face and location for the company. It was important, Mr Castleman informed the Tribunal, for NSW Home Loans to have a visible and physical place in Wollongong in which to conduct its business. Mr Castleman stated that he took the flat in about November of 1998. It was furnished with a bed, and other usual domestic furniture. He also purchased a telephone/fax/answering machine, and a pager. The rent was approximately $125.00 per week and there was another $25.00 to cover other incidental operating costs. In Mr Castleman's Income Tax Return for the period, there is an amount of $1500.00 to reflect his various business costs, which included the purchase of the telephone/fax/answering machine for approximately $650.00, with telephone costs and charges amounting to approximately $700.00. Mr Castleman acknowledged his financial commitment to the business was substantial and that he had put in more money than he earned. Mr Castleman stated that it was his intention from the outset to do the best he could in this new position and make the position work with his substantial input of time and energy.
Business could be achieved by Mr Castleman initiating his own contacts either with real estate agents or private customers. "Cold starts" occurred where he would without any introduction, attend real estate agents offices or particular customers or accounting firms. Further, there were referrals made from NSW Home Loans. Mr Castleman advised the Tribunal that he thought that he had received more referrals from NSW Home Loans than was apparent from the spreadsheet of referrals contained in Exhibit R3. Mr Castleman thought that in addition to the 13 Head Office referrals in that spreadsheet, there were a further six or eight from the company and he believed that he himself found another four to six.
The process of selling mortgages also required "network building" with real estate agents, local enterprises and private customers. Networking could then lead into the development of sales.
In terms of his work schedule, Mr Castleman stated that he would travel from Wollongong to Sydney most usually on Sunday or very early Monday morning. On Mondays, Tuesdays and Wednesdays, he would spend time generally from about 9 am until about afternoon-tea time at about 3 pm making contact with real estate agents. Before 9 am, on these three days, Mr Castleman would spend time from 8.30 am looking through newspapers for employment opportunities. On Thursdays and Fridays, it was a bad period for making contacts with real estate agents, but he would most usually try to make appointments with real estate agents for restricted times, from late morning before lunch. The remainder of the day on Thursdays and Fridays was available for him to work on his primary objective of "surviving in the long term and finding employment".
Outside the time spent dealing with real estate agents, potential clients could come to his office to consult but this was rare, Mr Castleman stated. It was more likely that Mr Castleman would visit customers after 7 pm because, as Mr Castleman explained, potential customers worked during the day and were not available until the evenings for discussions. It was very important to be responsive to the potential customer, Mr Castleman acknowledged.
In the three months period he was engaged by NSW Home Loans, Mr Castleman signed up one person for a loan and he was extremely pleased about that.
Mr Castleman did not have a log of hours worked. Because of his frequent changes of location during 1998 and the various situations he found himself in, many of his records had been either lost or misplaced. Mr Castleman estimated that he would spend 33 hours working for NSW Home Loans and 33 hours looking for work, but also indicated that his activities for NSW Home Loans could extend from between 35 to 40 hours per week (page 68 of the Transcript).
Mr Castleman told the Tribunal that the Wollongong area, so far as NSW Home Loans was concerned, extended from Bulli to South Nowra. In the initial period, Mr Castleman was commuting from Sydney daily as well as in and around the Wollongong area and believed that his travel kilometres could be high and in the order of perhaps 1500 kilometres per week. Later, when Mr Castleman had relocated to Wollongong, his business kilometres dropped to approximately 1000 kilometres per week. Mr Hodges, Mr Castleman's solicitor, had estimated in written submissions that Mr Castleman's travel was in the order of 18000 kilometres for the period from 26 October 1998 through to 6 February 1999, but Mr Castleman thought this may be an overestimation and considered 12000 kilometres a more realistic estimate. There was travel not only in the search of customers and networking, but Mr Castleman was required to attend the Head Office in Parramatta from time to time in relation to administrative matters, collection of stores, correspondence and stationery and the like. Further, Mr Castleman's contract required him to attend weekly sales meetings. Mr Castleman stated that he attended only one sales meeting in Parramatta for the duration of his time with NSW Home Loans and also indicated that there was a monthly meeting with the General Manager.
Describing his travel in the Nowra area, Mr Castleman gave the example of working in the South Nowra area which would require him travelling 200 kilometres on a return trip each day. If he was working in the Bulli area, then he would be travelling 30 to 40 kilometres per day and for the Shoalhaven area, 160 kilometres for the return trip.
Mr Kenny put to Mr Castleman that his work on behalf of NSW Home Loans with all its administrative requirements, networking and attempting to sell mortgages was in fact busier and more time consuming than he had indicated, especially as he was in the early stages of trying to establish the business.
During the period when Mr Castleman was working with NSW Home Loans, Mr Castleman stated that his job seeking activities reduced. He was not submitting as high as seven job applications but was more likely submitting four or five applications per fortnight. He also received half a dozen calls per fortnight in relation to possible employment opportunities from agencies or organisations and estimated he was interviewed by phone on six occasions. During this period, Mr Castleman recalled, for example, being interested in a position as a Statistical Clerk with the NRMA, and had contacts with banks about the possibility of employment. His number of job applications dropped because:
"I wasn't shall we say, full-time on job applications. I had something else to do besides just looking for employment, I had something else to fill in my time, it didn't take very much time, but it did allow me to sort of not just concentrate totally on employment, as I was in the period prior to, you know, September, prior to that period. All I had was why do you get out of bed, you only get out of bed to make an application for a job, that's the only reason you get up, right. And in this period at least I had some reason to get out of bed. I had an activity which I could do and therefore I could concentrate more on the longer term survival. My primary concern was for surviving in the longer term, that is true. My shorter term survival was assured, right, I had enough credit in my credit cards and I had the cash flow, which wasn't adequate to pay by bills but it just meant I wasn't necessarily going down as fast as I was if I didn't have the cash flow. But the primary concern was to get a job. I could not survive unless I got a job, therefore I could concentrate on other jobs rather than have to go for, you know, impact…
When I can't do a proper application that's it, you draw the line, because what's the use of putting a ridiculous application in , one which doesn't stand you a chance of getting a job, right. I was able to try for a little more quality in my applications, more appropriate, more convincing to the people, and since I was not on unemployment benefits, unemployment benefits come into this, I wasn't under any obligation to any particular number of applications
… I was unemployed, I only had retainer money coming in because it was not enough to cover living expenses. I had a job, right, but the hours allotted to that was basically part-time." (page 36 of the Transcript)
Considering specifically his job seeking activities, Mr Castleman would look at the newspapers each morning between 8.30 to 9 am and in the afternoon between 3pm to 6pm, Mondays to Wednesdays. Job seeking activities included newspaper searches and putting together an application which could take some time, depending on the position. It may have meant only submitting a resume or writing a more detailed application. Further, there may have been telephone contacts in relation to job opportunities. While Mr Castleman was in the NSW Home Loan position, he would, from time to time, try to sell mortgages by contacting accounting firms. On such occasions, Mr Castleman acknowledged that he would seek information as to whether or not there were employment opportunities for himself within these firms. Mr Castleman agreed that he might not have made such contacts had it not been for his position with NSW Home Loans. Mr Kenny put it to Mr Castleman that his job seeking activities were primarily "passive" in that he was not actively seeking employment by going around and making personal contact with organisations and that his job seeking activities revolved around passive paper applications. Mr Castleman stated:
"Clearly, the bulk of what I did was in terms of applications that is true. I wasn't like most of the unemployed people, going around canvassing for jobs, that's true. I kept an eye open, I sort of spoke to various people at various stages about work when I saw a sign, but for some reason or other I was knocked back, they wanted someone – well - I was knocked back, shall we say, I never had any success with any of those conversations and I was somewhat discouraged from doing that, but that did not take a great proportion of my time. The emphasis of my job search clearly was on applications." (page 59 of the Transcript).
In the evenings, Mr Castleman could be engaged in job search activities or may have been interviewing or contacting potential clients.
Mr Castleman explained to the Tribunal that he had wanted to make a success of his NSW Home Loan activities. He stated that on the last day of his training course however, he realised that it was going to be a miracle for him to make ends meet. Mr Castleman only continued to work with NSW Home Loans because it gave him a cash flow. He acknowledged, however, that it would take six months to really establish one's business in that area but there was always hope. It was not a job, Mr Castleman explained, but it did provide him with a cash flow and money for telephone calls, and travel/motor vehicle costs. There was not enough money for food, shelter or clothing, Mr Castleman stated. Mr Castleman told the Tribunal that he had to obtain a proper job to survive in the long term and he saw NSW Home Loans as providing temporary relief. Mr Castleman stated that he was very sincere about everything that he did with NSW Home Loans and he gave it his best attempts. Mr Castleman told the Tribunal;
"I knew – it was one of things you know that you are not going to succeed but it doesn't stop you giving it your best effort to try to succeed. Now, the advantages to me are in so for say, I could convert some of my – well, it slowed down the use of my credit cards. It slowed it down because telephone bills come three months in advance. The other major importance was that by claiming depreciation on the car through the 5000 kilometres method of 53 cents, I was able to convert my car to depreciation quite legally." (page 76 of the Transcript)
submissions
At the outset, Mr Hodges expressed his extreme dissatisfaction with the manner in which Centrelink had conducted itself in relation to Mr Castleman. Mr Hodges submitted that two years after the events giving rise to this application, Mr Castleman had received no payments for periods which the Department had conceded he was unemployed and eligible for Newstart allowance. Given some of the correspondence sent to Mr Hodges and Mr Castleman, it was understandable that Mr Castleman might be apprehensive that there was any concession to him at all in terms of him being unemployed, Mr Hodges submitted. What appeared on one occasion to be concessions concerning Mr Castleman's status of being unemployed and satisfying the Activity Test, were often later qualified by the Department. Information had been supplied by Mr Hodges and Mr Castleman which should have allowed payment of the Newstart allowance including details of periods of unemployment, tax returns, tax deductions, tax concessions and the like. Further, Mr Hodges expressed grave concern that the Department had tried to "detour around him" when he was, as Mr Castlemans lawyer, entitled to act for him, advise him and to be made a party to correspondence.
The recent request for Mr Castleman to attend Hurtsville Centrelink Office for an interview with Mr Saillard, was unacceptable because Mr Castleman had already provided information and should not have to "jump through the hoops" yet again, Mr Hodges submitted. It was as if the Department was setting out:
"…to cause problems and to find more reasons why this man who has been without income now for two years apart from when he worked, has been without income support from the government, and the government talks about mutual obligation, well that is a two-sided thing if it is mutual…by the time the matter had got to the Federal Court, a representative from Centrelink hops up and says we can see that all of the policy that we presented to the AAT was all incorrect. We are not relying on that any more. So that is the type of behaviour he has been subjected to. It is continuing. There is some reason which has not been made known to us why Centrelink just refuses to pay him his entitlements. There would appear to be absolutely no reason why his eligibility in the periods conceded has to be investigated any further." (page 81 of the Transcript).
The Department's conduct in this matter is an example of a gross duplication and wasting of time, Mr Hodges submitted. Mr Hodges submitted that Mr Castleman is not happy with any decision from the Tribunal which is qualified by other criteria and contended that the Tribunal's orders should be in terms of Centrelink's letter of 9 November 1999. Mr Hodges submitted that the order should be that:
"…this Tribunal finds that Mr Castleman was entitled to Newstart Allowance during the period 1 January 1998 to 4 May 1998, 1 July 1998 to 25 October 1998 and 6 February 1999 to 29 September 1999." (page 84 of the Transcript).
The only issue of dispute in this matter remains the period during which Mr Castleman was attached to NSW Home Loans. Referring to Mr Castleman's evidence, Mr Hodges submitted that Mr Castleman is honest and gave many answers which "were not in his interest". He was not attempting to provide evidence to suit the issues, Mr Hodges submitted and in many respects, Mr Castleman was "too honest for his own good". Mr Castleman is a person who has high principles and is prepared to put himself at risk of disadvantage in his pursuit of the truth, Mr Hodges further submitted.
Referring to Re McKenna and Director-General of Social Services (1981) 3 ALD 219, Mr Hodges submitted that this case is not authority for the conclusion that just because you are engaged enthusiastically in some activity you are not qualified or entitled for a Newstart Allowance. Further, Mr Hodges referred the Tribunal to Director-General of Social Services v Thomson (1981) 38 ALR 624 in relation to its considerations of the Activity Test, the inter-relationship of factors or circumstances in a claimant's life and the qualification requirements.
Mr Castleman knew from the start of his dealings with NSW Home Loans that he was not going to be successful, Mr Hodges submitted. It was always his interest to obtain a "proper job" and his job seeking activities during this period were beyond the average job seeker in terms of hours spent, Mr Hodges contended. Mr Hodges asked the Tribunal to consider the context in which Mr Castleman found himself, he was in his fifties, had been in long term employment, had suddenly become a sole parent and found for the first time in his life he had to go into a Centrelink office to apply for Newstart Allowance because he required income support. Mr Castleman had no recent history of job seeking activities. He was desperate, with high debts and then tried to make a success of his new venture with NSW Home Loans. Re McKenna (supra) and Thomson (supra) are authority for the proposition that if one's prime focus is to obtain a job and your job seeking activities are the main aim, then other activities in spare time such as helping your cousin in a pizza shop or your wife in a corner shop to keep yourself occupied while you are continuing your job seeking activities, do not detract from your status of being an unemployed job seeker.
Mr Hodges submitted that Mr Castleman could have told the Department of his job seeking activities in Wollongong and then gone to the beach and he would most probably have been paid Newstart Allowance. Instead, he reported honestly and put himself into a situation where he is penalised.
Mr Hodges submitted that Mr Castleman continued his job seeking pursuits and devoted 26.5 hours per week to this activity. Further, during the period under review, Mr Castleman received a retainer of $3176.00 but had essential business expenses of $5480.00 resulting in a loss of $2404.00. During this period, Mr Castleman's overriding priority was to obtain paid work and the Tribunal should so find, Mr Hodges contended.
Mr Kenny for the Department, concurred with Mr Hodges that the only issue in contention is that concerning the period 26 October 1998 to 5 February 1999. During the other periods, the Department had agreed, Mr Castleman met the Activity Test and was qualified for Newstart Allowance.
Referring to Exhibit 7, the Business Partnership Arrangement between the Department of Employment, Workplace Relations and Small Business and Centrelink's Chief Executive Officer, this gave the framework for the manner in which Centrelink officers were required to administer a claimant who was eligible for Newstart Allowance. This agreement dealt with the issues of payability once qualification had been determined. Mr Kenny submitted that the Department was not trying to frustrate Mr Castleman, but to expedite his being paid Newstart Allowance for the periods which had been conceded represented times when he was unemployed and met the Activity Test. Mr Kenny submitted that the Department had not been trying to side step Mr Hodges but trying to, with Mr Hodges knowledge, have Mr Castleman attend the Hurstville office for a maximum of 15 minutes to complete the paper work. Mr Kenny noted that it was imperative that Centrelink obtain up to date information in relation to Mr Castleman as it wished to ensure that the quantum of Newstart Allowance received by Mr Castleman truly reflected his financial circumstances. It may be that Mr Castleman is entitled to rent assistance or other "add ons" which could boost the quantum of his entitlement. Having Mr Castleman attend the Husrtville Centrelink office was also an opportunity to provide him with information as to job networks, the computer job search screens and the other benefits and activities available to Mr Castleman as a result of his entitlement to the Newstart Allowance. Given that the entitlement goes back to 1998, it was extremely important that the Department, for Mr Castleman's sake, ensured that it had up to date information and fully assessed the level of his entitlement.
Turning to the issue under contention, Mr Kenny directed the Tribunal's attention to the activity Mr Castleman was engaged in with NSW Home Loans. Was it paid employment, or looking for work? Mr Kenny submitted that Mr Castleman had a full time job with NSW Home Loans. He was on probation, but on his evidence he was engaged in activities for NSW Home Loans for between 33 and up to 40 hours per week. Such activity was characteristic of a full time job, duties of which Mr Castleman was performing on a full time basis, Mr Kenny submitted. Considering Mr Castleman's level of activity, the prime parts of his day were engaged with work for NSW Homeloans, Mr Kenny submitted. He did not look actively for other employment during periods when he was on "time out" from NSW Home Loans, he was available at night for NSW Home Loans and had acknowledged that he had to be flexible and available to meet the demands of a fledgling enterprise.
Mr Kenny noted that Mr Castleman put a great deal of his own personal and financial resources into this position. He travelled at least 12000 business kilometres in pursuit of his work for NSW Home Loans. He installed a fax/telephone/answering machine, utilised a mobile telephone and rented accommodation in Wollongong away from his principle residence in Greenacre, Sydney. Further, Mr Castleman received a $1000 per month retainer and had acknowledged that one would have to be in practice for at least six months to build up a viable business. Mr Castleman gave the position his best attempts Mr Kenny contended and he also claimed business deductions through his tax.
Contrary to Mr Hodge's and Mr Castleman's submissions that Mr Castleman was engaged in NSW Home Loans activities in his spare time, Mr Kenny submitted that Mr Castleman's job seeking activities were fitted around his NSW Home Loans activities. This employment seeking activity was passive, relying on written applications and sending out resumes to agencies.
The fact that Mr Castleman was unprofitably employed trying to set himself up in the business, should not be construed as satisfying subsection 593 (1)(a) of the Act, Mr Kenny contended. Mr Kenny further submitted that during this period, Mr Castleman would not fulfil the Activity Test as provided in subsection 593(1)(b)(1) of the Act.
Mr Kenny concluded that Mr Castleman had a full time job and was therefore not unemployed. His concerns at the time and the way he spent his time during this period indicated that Mr Castleman's duties with NSW Home Loans were his primary focus and his job seeking activities were secondary to this.
findingsThe Tribunal has reached a decision in this matter, taking into account the oral and documentary evidence, submissions, and by applying the law and case law.
Mr Castleman was cooperative in the provision of evidence and the Tribunal considered his evidence to be frank. Although there were some inconsistencies in some details, the Tribunal did not consider that these indicated a lack of honesty, merely a difficulty in recalling details over a considerable period of time.
The Tribunal notes that there is no issue between the parties that Mr Castleman qualified for Newstart Allowance for the following periods, from:
1 January 1998 to 4 May 1998
1 July 1998 to 25 October 1998
6 February 1999 to 29 September 1999
The Tribunal has no evidence to cause it to find other than that during the above detailed periods, Mr Castleman was qualified to receive Newstart Allowance. The issue of the actual rate of payment must be determined based on full information and this matter is remitted to the Department to determine, if this has not already been undertaken. The Tribunal requests that the poor communication between the parties come to an end. The misunderstanding and miscommunication between Mr Castleman and his solicitor and the Department and its delegates has been unhelpful and has caused this matter to be prolonged and the person who has suffered in these circumstances has been Mr Castleman.
Turning to the issue of whether or not Mr Castleman qualified for Newstart Allowance during the period 26 October 1998 through to 5 February 1999, the Tribunal notes a letter of 1 October 1998 to Mr Castleman for NSW Home Loans which related to "an offer of employment" and which extends to Mr Castleman the offer of employment in the position of a Finance Consultant. The position had a two week training period and then a probationary period for three months. It also provided a monthly retainer and commission was available for sale of mortgages after a certain period. The position required that Mr Castleman provide weekly reports of sales activities, attend meetings and management meetings. Mr Castleman signed the Acceptance of the Terms and Conditions of Employment on 11 October 1998. Mr Castleman conducted his activity for this company in Wollongong and although initially commuting from Sydney, moved in November 1998 to Wollongong, renting a flat in which he lived for up to for five days per week, returning to his primary residence in Sydney on the weekends.
Mr Castleman expended his own finances on a fax/answering machine/telephone and he travelled extensively. The Tribunal finds that Mr Castleman travelled at least 12000 business kilometres in pursuit of his duties during this period and also his job seeking activity reduced to making four to five applications per month. His job search activity involved over 26.5 hours per week. In relation to his duties with NSW Home Loans, the Tribunal finds that Mr Castleman spent at least 33 hours per week on this activity. The Tribunal believes that the more likely estimate of Mr Castleman's work load to be about 35 to 40 hours per week, based on his evidence about the type of activity he undertook, in addition to the Tribunal's consideration of the work required as detailed in the terms and conditions of his employment.
Mr Castleman's evidence was that during the period with NSW Home Loans, his job seeking activities were not his primary concern as he was active with his duties for the company. This was contradicted later in Mr Castleman's evidence where he indicated that in fact his primary concern was to obtain a different job. It is clear to the Tribunal that Mr Castleman was not suited to the type of work provided by NSW Home Loans, but he continued. The job had the potential to provide him with an income and certainly it was considered by the organisation itself, NSW Home Loans, to be a position which involved Mr Castleman being employed by an organisation to sell mortgages.
The Tribunal considers that the nature of the position of Finance Consultant provided flexible working arrangements. This suited Mr Castleman because, as with many employed people, he was also interested in improving his position and whilst employed, sought other employment. This is not an unusual situation and the fact that he was employed seeking alternative employment does not, in the Tribunal's mind, characterise Mr Castleman as having the status of an unemployed person. Mr Castleman worked for NSW Home Loans and he also, to a lesser extent, continued to look for further employment. Mr Castleman acknowledged that it would have taken approximately six months to make the NSW business in Wollongong succeed. That it did not, was probably related to a number of factors including Mr Castleman not being suited to that type of work. The Tribunal does accept that Mr Castleman did in fact try to make this position succeed and this is evidenced by his commitment of time, energy and his finances. Further, the Tribunal notes the Mr Castleman moved from his primary home in Sydney to Wollongong where he spent five days per week. This action is not suggestive to the Tribunal of a person who is unemployed. Mr Castleman moved to Wollongong because it enabled him to more properly perform his duties, to ensure that the face of NSW Home Loans was identifiable with the local area and to make him accessible and flexible in dealing with potential customers during the evenings. Further, Mr Castleman acknowledged that while he may have only attended at the head office in Parramatta once or perhaps twice, he had a number of trips to Parramatta for administrative purposes, the collection of stores, stationery and that like. This contact was foreshadowed in the terms and conditions of the offer of employment made by NSW Home Loans.
The Tribunal considered Re McKenna (supra) and notes that Tribunal's discussion of the term "unemployment". The Tribunal concluded in that matter:
"…The apparent legislative intent of the provisions of the Act concerned with eligibility for and payment of unemployment benefit is to provide those people who are not engaged in work of a remunerative nature with the means of subsistence in circumstances, where, despite capacity and willingness and effort on their part, they have been unable to find paid work to maintain themselves…
…When regarded in the context of the apparent legislative intent and the other terms and expressions used in the subsection, it seems to us that the word "unemployed" bares its colloquial or popular meaning of not being engaged in work of a remunerative nature. This meaning, however, must be modified to some extent in that the means test provisions of the act recognise that some income may be earned by a grantee of an unemployment benefit resulting in the diminishing of the grant but without destroying eligibility for it. It must also be modified to allow for those special cases where a person is not engaged in work of a remunerative nature but who's commitment to some activity, eg study or domestic duties demonstrates a preference for that activity rather than employment…"The Tribunal further notes the decision in Thomson (supra) where the court stated at pages 626-627:
"The concept of a paid work" provides a useful starting point. At its broadest the description "unemployed" encompasses those who are without paid work. We appreciate that the statute itself, for example s107(3), [now s516] admits some limited extension of this, but, subject to that qualification, the notion of "paid work" as the antithesis of 'unemployment' seems to accord with common sense and with the statutory context…"
At pages 628 to 629 the court further stated:
"For all that, the possibility must be recognised that activities being pursued by a person without paid work may be so fundamentally incompatible with the person's being regarded as unemployed that no further inquiry is necessary. However, we anticipate that such a case would be exceptional. In the usual case of which we think this is an example, the solution will be arrived at by reference to all the circumstances, of which the activities being pursued for the time being by the applicant for benefit will be one."
The Tribunal notes in Re Te Velde and Director-General of Social Services (1981) 3 ALN N111, where the issue of a self employed person was examined. This has some parallels with Mr Castleman's circumstances. That Tribunal decided at paragraph 34;
"…There may, however, be further modifications necessary to the meanings suggested in Re McKenna (supra) in relation to self-employed persons. Whilst the concept of 'work' normally connotes some activity pursuant as a means of earning one's livelihood, the absence of evidence that the activity is effective in producing a livelihood may not be critical in deciding whether a self-employed person, in particular, may be engaged in full-time activities intended to earn him a living, but which, despite his diligent efforts, fail to do so. Thus in Re Brabenec and Director-General of Social Services (1981) 3 ALN 38, a self-employed minor engaged unsuccessfully in full-time prospecting for opals was held to be 'unemployed' within the meaning of the Act. As the Tribunal commented in that case, the opal miner was no more "unemployed" than any person setting himself up on his own in a profession, trade or business (cf.s130A of the Act)…
In the present case, I am satisfied that although the applicant's labours on the property were not productive of any remuneration during the February/August period, they were directed to maintaining and improving the value of her capital investment in the property and to establishing the property as a viable concern. She was either carrying on the business of primary production or pursuing activities preparatory to carrying on that business (cf. Ferguson's Case – (supra). Either way, in my view, having regard to the time and effort she devoted to the property, her activities constituted 'work' in the ordinary meaning of that word. I do not consider therefore that she can be said to have been "out of work" or "unemployed" throughout the relevant period. Whilst the demands of the property on her time and energies were variable, I am also satisfied that she was not unable to undertake full-time work away from the property during that time..."
The issues discussed in Re Te Velde (supra) were echoed in Re Weekes and Director-General of Social Services (1981) 3 ALN N141b when that Tribunal noted:
"… we agree that a person who is self-employed need not be profitability employed in the sense that the income from his activities exceeds his outgoings. There are many self-employed businesses, including professional businesses, which would not be "profitable" in this sense in the early stages of their establishment. But it could not be said, in our view, that it followed that the persons involved were 'unemployed' within the meaning of s107 [now s513]."
The Tribunal, also notes the case of Re Doyle and Secretary, Department of Social Security (1985) 26 SSR 313 in which Mr Doyle was acting as an agent on a commission basis for a company of real estate agents. In that matter, the Tribunal found that Mr Doyle was not unemployed noting;
"Mr Doyle gave evidence that he worked between five to six hours each day for [the employer] and was aware that he would not receive commission for some time. He held himself out to the public as a real estate salesman. I accept that Mr Doyle made some attempt to find some other work during this period. Many employees dissatisfied with the emoluments of their current positions or unhappy with the environment within which they work do likewise. The provisions of the legislation as currently interpreted by the Tribunal place some employees in an invidious position in making the choice as to whether to qualify themselves within the provisions of section [593] of the Act, or whether to occupy themselves, particularly if they have some skills, so they do not lose their skills and also lose their self-esteem."
The Tribunal finds that Mr Castleman held himself out to be a Finance Consultant employed by NSW Home Loans. He worked as if he was employed by that company and the Tribunal finds that he was employed by that company. The fact that Mr Castleman was not profitability employed does not change his status as an employed person. It may be, though the Tribunal doubts it, that had Mr Castleman continued his activities with NSW Home Loans his situation might have improved, although on the documentary evidence, Mr Castleman's services were terminated by NSW Home Loans. Mr Castleman was travelling at least 12000 business kilometres in pursuit of his duties with the company. He was also making himself available by not only living in Wollongong for five days per week, but also being flexible to the needs of his potential customers and making himself available in the evenings for interviews or discussions. The fact that Mr Castleman was continuing his job seeking activities, does not detract from his status as an employed person. On his evidence, his employment seeking activities decreased and this is logical when considering the amount of travelling required and the necessity to make contact with people in the area, particularly as the company was new. Job seeking activity when seen in the context of Mr Castleman's circumstances as a whole, are not indicative of being unemployed. In this regard, the Tribunal further notes that Mr Castleman moved from his principle residence in Sydney to Wollongong for five days per week for the sole purpose of pursuing his activities with NSW Home Loans. He had committed finances, time and his own personal resources and energy in trying to make his position with NSW Home Loans a success. Mr Castleman was holding himself out as an employee of NSW Home Loans, he was using their stationery and was being assisted with subsidies for his telephone calls and travel expenses. These factors are also not suggestive to the Tribunal of indicia of a person who is unemployed. Accordingly, in all the circumstances, the Tribunal finds that Mr Castleman does not satisfy subsection 593 (1)(a) of the Act, in that he was employed during the period of 26 October 1998 to 5 February 1999. He is therefore not qualified for Newstart Allowance during this period.
For all the reasons set out above and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal makes its decision in the following terms to:
1.set aside the decision under review and substitute its decision that Mr Castleman qualified for Newstart Allowance during the following periods:
1 January 1998 to 4 May 1998
1 July 1998 to 25 to October 1998
6 February 1999 to 29 September 1999
The Tribunal remits the issue of determination of the rate of payment for Newstart Allowance for these periods to the Secretary, Department of Family and Community Services; and
2.affirm the decision under review in the terms that Mr Castleman was not qualified for Newstart Allowance for the period 26 October 1998 to 5 February 1999.
I certify that the 53 preceding paragraphs are a true copy of the reasons for the decision herein of MS S M BULLOCK
Signed: .....................................................................................
AssociateDate of Hearing 8 March 2000
Date of Decision 30 June 2000
Representative for the Applicant Mr S Hodges, SolicitorRepresentative for the Respondent Mr J Kenny, Departmental Advocate, assisted briefly by Ms S Antcliffe, Manager, Administrative Law Section.
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