Conroy and Secretary, Department of Defence

[2011] AATA 786

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2011] AATA 786

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2010/1046

GENERAL ADMINISTRATIVE  DIVISION		)
Re		BARRY CONROY

Applicant

And SECRETARY, DEPARTMENT OF DEFENCE

Respondent

DECISION

Tribunal Dr P McDermott, RFD, Senior Member

Date4 November 2011

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

...............[Sgd]...............................

Senior Member

CATCHWORDS

DEFENCE – Defence home ownership assistance scheme – Application for subsidy certificate – Applicant not member of Defence Force at time of application – Previous application validly granted – Not entitled to subsidy certificate – Decision under review affirmed

Defence Home Ownership Scheme Act 2008 (Cth) ss 5, 8, 14, 16, 17, 75, 76

Defence Home Ownership Scheme Regulations 2008 (Cth) Regulations 8(2), 64, 124

Defence (Personnel) Regulations 2002 (Cth) Regulation 58

Financial Management and Accountability Act 1997 (Cth) s 33

Gilkinson v Repatriation Commission [2011] FCAFC 133

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Secretary, Department of Defence v Barry Conroy [2011] FCA 227

REASONS FOR DECISION

4 November 2011 Dr P McDermott, RFD, Senior Member  

INTRODUCTION

1.      Mr Barry Conroy (“the applicant”) is a member of the Army Reserve. On 30 October 2009, he applied  for a subsidy certificate under the Defence Home Ownership Scheme Act 2008 (Cth) (“the Act”). His application for the subsidy certificate was declined.  I have to decide whether his application should be granted.

BACKGROUND

2.      The applicant was a permanent member of the Australian Army from 1988 until 2008 when he transferred to the Army Reserve. He did not perform any service as a member of the Army Reserve.

3.      On 14 July 2008, the applicant applied for a subsidy certificate under s 14 of the Act.  

4.      On 15 September 2008, a subsidy certificate was granted to the applicant. The subsidy certificate contained the statement that it  would expire on 14 August 2009. On 30 October 2009, the applicant made an application for a further subsidy certificate.

5.      On 2 November 2009, the Department of Veterans’ Affairs (“DVA”) made a decision to refuse to give him a subsidy certificate.

6.      The applicant was advised by the DVA that he had one opportunity within two years of his separation to transfer the loan. He accordingly sold the home which was the subject of the subsidy certificate that was granted on 15 September 2008. The delegate has quite properly recognised that the applicant had been provided that advice. The applicant relied upon that advice in selling his home which was the subject of the earlier subsidy certificate granted in 2008.

REVIEWABLE DECISION

7.      An internal review decision is made under s 75 of the Act. On 12 February 2010, a  delegate of the Secretary (“the delegate”) made an internal review decision. Pursuant to s 75(2) of the Act, the delegate confirmed the decision of the DVA to refuse to give a subsidy certificate to the applicant under the Defence Home Ownership Assistance Scheme.  

8.      Section 76 of the Act provides that an application may be made to this Tribunal for review of an internal review decision. It is the internal review decision of the delegate which is the subject of review by this Tribunal: see s 76(1).

SUBSIDY CERTIFICATES

9.      Part 3 of the Act deals with subsidy certificates.

10.     Section 14 of the Act provides that a person may apply to the Secretary for a subsidy certificate: s 14(1). An application must be in the approved form: s 14(2).

11.     If a person applies for a subsidy certificate in accordance with s 14, then the Secretary is required under s 16 of the Act, to either give, or refuse to give, a subsidy certificate to an applicant. Significantly, for this case, s 16(2) of the Act provides, inter alia, that the Secretary must, where s 17 of the Act applies and the applicant has a service credit, give a subsidy certificate to an applicant. Section 16(3) provides that the Secretary must refuse to give a subsidy certificate to an applicant if s 16(2) does not apply.

12.     Section 17(1)  provides that, subject to that section, the Secretary must give a subsidy certificate to the applicant if the Secretary is satisfied that the applicant:

(a)       is eligible; and

(b)       does not hold a subsidy certificate that is in force; and

(c)if the person is not a member of the Defence Force – has not previously applied for a subsidy certificate since he or she has stopped being a member of the Defence Force.

13.     The Secretary submitted that the correct or preferable decision in this application was, and remains to be, to refuse to give a subsidy certificate to the applicant.[1]

[1] Pre-Hearing Document B, Respondent’s Statement of Facts and Contentions, paragraph 9.

14.     The argument of the Secretary is based upon the contention that the applicant:

… at the time of application, was not a member of the Defence Force pursuant to section 5 (for the purposes of the Scheme) and had already applied for a subsidy certificate since he stopped being a member of the Defence Force (see section 17(1)(c)).[2]

[2] Pre-Hearing Document B, Respondent’s Statement of Facts and Contentions, paragraph 9. 

CONSIDERATION

15.     There are a number of matters that I must consider in determining this application according to law.

16.     I am required to consider the basis upon which the applicant was transferred to the Army Reserve. One of the matters identified for consideration is whether the transfer of the applicant was effected under regulation 64 of the Defence (Personnel) Regulations 2002 (Cth). The transitional provisions in regulation 124(1) provide that regulation 64 does not apply to a member who is serving when Chapter 13 of those regulations commences operation. This occurred on 1 December 2002 when the applicant was then serving as a member of the Permanent Forces. This has the consequence that reg 64(4) of those regulations has no application to this case.

17.     I have examined the documents that were produced by the respondent. These documents confirm that on 13 March 2008 the transfer of the applicant to the Standby Reserve was approved under regulation 58 of the Defence (Personnel) Regulations 2002 (Cth). The transfer of the applicant to the Army Reserves took effect on 7 July 2008.

18.     I am also required to examine the status of the applicant for the purposes of s 17(1)(c) of the Act. The Federal Court of Australia has ruled that s 5 of the Act is relevant in constructing the words ‘member of the Defence Force’. Whilst the applicant is a member of the Defence Force due to his  being a member of the Army Reserve, I find that he was not “a member of the Defence Force” for the purposes of his second application under the Act. This is because s 5 of the Act requires me to consider whether the applicant performed effective service in the relevant service year when he made his application. 

19.     There is no issue that the applicant has not performed any service in the Army Reserve in the 2008 –  2009 service year or in any later service year. He is thereby deemed not to have performed effective service under the terms of reg 8(2) of the Defence Home Ownership Scheme Regulations 2008 (Cth) which defines “effective service” as being 20 or more days in the 2008 – 2009 service year. In my view s 5(2) of the Act deems the applicant as having not been a member of the Reserves for the purposes of the Act at the engagement time. The term “engagement time” is defined in s 5(1) of the Act “as being the particular time when the applicant was engaged as a member of the Reserves”.

20.     The applicant was not, for the purposes of the Act, a member of the Defence Force on 30 October 2009, as he had not performed effective service since his transfer to the Standby Reserve. This has the consequence that s 17(1)(c) of the Act operates so that he is eligible to be granted a subsidy certificate only if he has “not previously applied for a subsidy certificate only since he or she has stopped being a member of the Defence Force”. The applicant had applied for a subsidy certificate on 14 July 2008 after he had transferred to the Standby Reserve.  On that date he was deemed, by the operation of s 5(2) of the Act, not to be a member of the Reserves. He was not eligible to be granted another subsidy certificate as his first application was made at a time when he was deemed (by the operation of s 5(2) of the Act) to be not a member of the Defence Force.

21.     I am required to consider whether there was a defect in the first application that was made by the applicant (purportedly as a separated member) on 14 July 2008. The respondent has submitted that the application was in the approved form in accordance with s 14. The respondent has also submitted that it is strongly arguable that at the time that the certificate was granted (15 September 2008) the applicant was eligible as a serving member. The subsidy certificate that was given to the applicant indicated that he was a serving member.

22.     I consider that at the time that the applicant first applied for the subsidy certificate, he was eligible to apply for the subsidy certificate as a serving member. He had then satisfied s 8(1)(a) of the Act. This is because he was “at that time” (as that expression is used in s 8(1) of the Act) a member of the Defence Force. There is an accepted principle of statutory interpretation that it is important to give effect to every word of a statutory provision.[3] This principle of statutory interpretation requires me to give effect to the expression “at that time” in s 8(1) of the Act in considering the status of the member at the time when he made his first application on 14 July 2008.  He had also at the time of his first application also satisfied s 8(1)(b) of the Act. This is because before the eligibility date the applicant had completed the relevant qualifying service period  of more than four years effective service as a member of the Permanent Forces: s 8(2)(a).

[3] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; Gilkinson v Repatriation Commission [2011] FCAFC 133 at [41] per Nicholas and Robertson JJ.

23.     The question of the capacity in which the applicant made his first application on 14 July 2008 is a question not without some difficulty. At the time when he made his first application, the deeming provision of s 5(2) could not have then operated to disqualify him from being regarded as a member of the Defence Force for the purposes of s 8(1)(a) of the Act. A provision such as s 5(2) could only operate after the expiry of the relevant service year. It would only be after the expiry of a particular service year that it would be possible to ascertain whether the applicant had performed “effective service” in terms of regulation 8(2) of the Defence Home Ownership Regulations 2008 (Cth) and not before.

24.     I therefore consider that the first application of the applicant was valid and was made by the applicant when he was properly regarded as a serving member. This is why the subsidy certificate that was granted to the applicant had correctly described the applicant as a serving member.

COMPENSATION

25.     One reason why the applicant is maintaining his application is because he intends to apply for compensation under the scheme for “Compensation for Detriment caused by Defective Administration” (“CDDA”). When this application first came before this Tribunal, I was advised that before a person makes an application for compensation under the CDDA scheme he or she must have "no other avenues of redress" and that he could apply for compensation under the CDDA scheme if his application to this Tribunal was not successful.

26.     The applicant can also seek an act of grace payment under s 33 of the Financial Management and Accountability Act 1997 (Cth). 

27.     The respondent has quite properly provided the applicant with relevant policy documents to assist him. Another matter that may or may not have some bearing on the application is the fact that the subsidy certificate was issued for 11 months instead of the actual 12 months.

DECISION

28.     I affirm the decision under review.

I certify that the 26 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member

Signed: .......................[Sgd]......................................................
              Research Associate

Date/s of Hearing  7 September 2011

Date of Decision  4 November 2011
Applicant was self-represented
Solicitor for the Respondent       Scott Moloney, Clayton Utz