Galatis; Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2000] AATA 728

ADMINISTRATIVE APPEALS TRIBUNAL )

) No S1997/342

GENERAL ADMINISTRATIVE DIVISION       )
           Re      SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Applicant
           And    GREGORY GALATIS
  Respondent

DECISION

Tribunal Senior Member J.A Kiosoglous MBE

Date21 August 2000
PlaceAdelaide

Decision      Pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal sets aside the decision under review, and in substitution therefor, decides that the applicant is entitled to recover that part of the debt relating to the period of overpayment between 8 November 1991 to 5 November 1993 inclusive, over and above amounts already received from the respondent.
  (Signed)
  J.A. KIOSOGLOUS MBE
  (Senior Member)
CATCHWORDS
SOCIAL SECURITY – pensions, benefits and allowance – Job Search Allowance – Newstart Allowance - failure to declare income – effect of criminal proceedings – waiver – estoppel – special circumstances
Social Security Act 1991 ss. 1224, 1237AA, 1237AAB, 1237AAD, 1299, 1357
Social Security Act 1947 s.251
Crimes Act 1914 s.21B
Director of Public Prosecutions Act 1983
Magistrates Court Act 1991 (SA)
Re Green and Secretary, Department of Social Security (1988) 16 ALD 187
Re Secretary, Department of Social Security and Wornes (AAT 12395, 14 November 1997)
Commonwealth of Australia v Hamilton (1992) 2 Qd. R. 257
Re Ryan and Secretary, Department of Family and Community Services [2000] AATA 642
Ramsay v Ramsay and Lett [1914] SASR 246
Maguire v Simpson (1977) 139 CLR 362

REASONS FOR DECISION

21 August 2000 Senior Member J.A Kiosoglous MBE

This is an application by the Secretary, Department of Family and Community Services (the applicant) for review of a decision of the Social Security Appeals Tribunal (SSAT) dated 19 September 1997 (T2) which set aside a decision of an authorised review officer (ARO) of the respondent dated 22 November 1994 (T19) affirming a delegate of the respondent's decision of 23 June 1994 to raise and recover a debt in the amount of $18,765.17 (T3). The SSAT determined in its place that the balance of the debt, over and above an amount of $10,649.80, was waived pursuant to section 1237AAB(1) of the Social Security Act 1991 (the 1991 Act).
The Tribunal received into evidence the documents lodged pursuant to s.37 of the Administrative Appeals Tribunal Act 1975 (T1-T57), together with six exhibits, three lodged by the applicant (Exhibits A1-A3) and three lodged by the respondent (Exhibits R1-R3). In addition, the Tribunal heard evidence from Mr M. Loftus, a Commonwealth Prosecutor with the Director of Public Prosecutions, and Ms J. Fuller, Barrister. The applicant was represented by Ms S. Maharaj and the respondent was represented by Mr M. Edwardson, both of counsel.
The issues before the Tribunal are whether or not there is a debt owing the Commonwealth; and if so, whether or not part or all of the debt can be waived.
history of the application
The respondent was in receipt of Job Search and Newstart Allowance for the period 8 November 1991 to 5 November 1993, during which time he failed to provide accurate details of his earnings and income.
A debt was raised in the amount of $18,765.17 on 23 June 1994, representing overpayment in the above stated period. The respondent was advised of the raising of the debt by letter dated 14 July 1994 (T3). This decision was affirmed by the ARO on 22 November 1994 (T19).
On 14 December 1994 a delegate of the applicant wrote to the Director of Public Prosecutions (T23) stating (inter alia):
"…
An overpayment of $18765.17 due to failing to declare earnings from employment and rental income was raised on 20 July 1994.
Mr Galatis has disputed the debt and has had it reviewed both by our regional office and the Authorised Review Officer at Area South. …
…
I refer file papers for your reference. Please follow up recovery action on our behalf.
…
Yours faithfully
J Webster
Delegate of the Secretary
…"
On 10 January 1995 the respondent lodged an appeal with the SSAT (T26). Consideration of such was deferred pending a decision as to prosecution against the respondent.
It is apparent from the oral evidence of Mr M. Loftus that instructions to prosecute were received by the Commonwealth Director of Public Prosecutions (CDPP) on 21 August 1995. A complaint and summons was sworn by an officer of the applicant on 1 November 1995 (T54), and forwarded to the CDPP with an accompanying letter of the same dated (Exhibit R2) which stated (inter alia):
"…
Please find enclosed the Complaint and Summons for Mr Galatis.
The overpayment amount in accordance with the specified charges is $18753.86, ie $11.31 less than the original amount advised.
…"
In a letter dated 12 July 1996 (T36), Mr Loftus of the CDPP wrote to the respondent's solicitors stating (inter alia):
"…
In checking the overpayment calculations a figure has been included in respect of each fortnight in relation to a non disclosure by the defendant of unearned income which includes income from a rental property. I would be prepared to delete this figure from the overpayment calculations on the basis that your client, from time to time, disclosed such income. The overall effect of removing this amount from the overpayment figure reduces the overpayment to $12,072.16.
In the event of the defendant pleading guilty to all other counts I am prepared to withdraw counts 1, 2 and 3 on the basis that he did not receive payment in respect of the fortnights covered by those counts until 19 December 1991. If these counts were to be withdrawn that would further reduce the overpayment by $775.20 making a total of $11,296.96.
…"
Ms J. Fuller, then solicitor for the respondent, wrote to the CDPP on 23 October 1996 (T56) stating (inter alia):
"… Mr Galatis has indicated that he wishes to commence repaying the Department of Social Security for the amount outstanding. To that end Mr Galatis attended at the Department of Social Security in an attempt to make payments. He was told that the amount outstanding was $18,000.00 which is not in accordance with the amount agreed upon recently in relation to the charges.
…"
In a letter dated 30 October 1996 (T57), Ms F. Propsting of the CDPP replied:
"…
Mr Galatis was correctly advised by the Department of Social security that the overpayment was $18,765.17. This amount was raised by the DSS on 27 July 1994. As Mr Galatis did not agree with the debt the Regional Office of the DSS reviewed the overpayment and affirmed it. Mr Galatis then went to an Authorised Review Officer who also affirmed the debt. On the 18 August 1994 Mr Galatis appealed to the SSAT against recovery of the overpayment. I understand that the decision to recover was affirmed.
The amount outstanding in relation to the criminal charges is $11,296.96. I advise that any monies payable to the DSS should be paid directly to them, and not to this Office.
…"
Ms Fuller in oral evidence stated that she had not seen this letter at that time.
On 6 December 1996 the respondent plead guilty in the Adelaide Magistrates Court to 17 counts of obtaining a benefit not payable (counts one to three having been withdrawn) and 31 counts of making a false statement. The matter was adjourned until 12 December 1996 to enable consideration of a number of documents submitted by Ms Fuller. The respondent had also provided a bank cheque in the amount of $10,649.80 which was subsequently forwarded to the applicant.
In sentencing on 12 December 1996, Deputy Chief Magistrate Mr D. Swain stated in his ex tempore remarks (inter alia) (T55):
"…
A deterrent penalty is called for and certainly a custodial sentence must be imposed. There is one factor however, which assumes some significance in dealing with you, and weighs with me in deciding whether or not you should be called upon to serve the term forthwith. You placed your solicitors in funds and have now arranged for a cheque to be delivered to the Director of Public Prosecutions for the total overpayment. That certainly is to your credit. The only question is whether or not it is of sufficient weight to keep you out of gaol. That is a vexed question. I do not think offenders should be able to buy their way out of trouble. On the other hand you have shown good faith. You had to borrow the funds; the taxpayer has been fully recompensed for the loss you caused. The repayment of monies illegally obtained in my experience is rare. I must I think give significant weight to the fact you have paid it back. Therefore with some hesitation I have decided to immediately release you but it will be subject to conditions. If you do not abide the conditions then I guess I will see you again.
I order pursuant to Section 1353 of the Social Security Act that you be convicted on counts 4 to 51 inclusive with one penalty imposed. You will be imprisoned for nine calendar months. You will be released forthwith pursuant to Section 20(1)(b) of the Crimes Act upon entering into a bond in the sum of $500- to be of good behaviour for 18 calendar months. Conditions: (1) To undertake 140 hours community work within 12 months and to be under the supervision of a community work officer and to obey that persons directions. (2) To report forthwith to the Courts Unit Adelaide Magistrates Court. Court fees $89-00; counsel fee $195-00; total $284-00; time to pay one month."
By decision dated 19 September 1997 (T2) the SSAT set aside the decision of the ARO waiving any amount over and above that already recovered by the applicant (T2). In that decision the SSAT stated (inter alia):
"…
It is the Tribunal's view that in accepting the guilty plea to the lesser amount and in accepting a bank cheque for $10,649.80 "as full repayment for the new overpayment" (see "Result of Proceedings" from the Commonwealth DPP) the Department has waived its right to recover any greater amount relating to those overpayments. The Tribunal notes that the Department did not seek to reserve its right to recover any greater amount and the Tribunal is of the view that Mr Galatis' guilty plea, the payment of the amount of $10,649.80 and the sentence imposed on Mr Galatis, constituted full and final satisfaction of any debt arising out of events leading to overpayment in the period 8 November 1991 to 5 November 1993.
The Department accepts the submission by Ms Fuller on behalf of Mr Galatis that the recovery from Mr Galatis of $10,649.80 constituted settlement of the debt owed to the Commonwealth (whatever its full amount may have been). Accordingly the recovery of any outstanding balance is waived, pursuant to subsection 1237AAB(1) of the Act.
…"

mr m. loftus' evidence

Mr M. Loftus, legal practitioner since 1967 and prosecutor with the CDPP for the past eleven years, told the Tribunal that the initial charges were drawn up in relation to the overpayment of some $18,765.17 but that following discussions he had with the applicant, the overpayment was recalculated to exclude rent components, and subsequently the wife's income also. He stated that the CDPP received instructions to recover an amount of $18,765.17 and to prosecute the respondent. He further stated that the instruction letter dated 14 December 1994 (T23) was not a typical type of letter received by his office, and that it is difficult to say what the meaning of the letter is. He could not recall reading the letter during the course of his involvement with the matter.
He stated that it is not common practice to seek reparation pursuant to section 1357 of the 1991 Act, and that section 21B of the Crimes Act 1914 was used instead. He was unsure as to whether the amount of the overpayment was a significant factor in negotiations between the parties. He agreed, in cross-examination, that it is rare that the amount of overpayment is equal to the amount which is prosecuted.
He stated that he always alleges the amount of an overpayment as it is "in relation to the charges" and that whilst he may not have said that the applicant would pursue the respondent for any outstanding amounts, he would certainly not have indicated that the applicant would not pursue any such amounts.
ms j. fuller
Ms J. Fuller was the respondent's solicitor in relation to the criminal proceedings, and is now a barrister at chambers. She told the Tribunal that Mr Loftus indicated he was prepared to withdraw certain counts, reducing the quantum of the overpayment to about $11,000 in return for a guilty plea. She stated that there was no discussion that the applicant would recover over and above the amount paid by way of bank cheque at the time of sentencing.
She considered that the amount of overpayment referable to the charges was in the order of $18,765.17 and that no negotiation was required with the applicant, as she was dealing with the CDPP in relation to that amount. She stated that she did not see the letter dated 30 October 1996 (T57) at that time, but that even if she had, it would have made no difference to her submissions in either the criminal or SSAT proceedings, as it is factually inaccurate, in that the SSAT proceedings had been adjourned pending the outcome of the criminal proceedings.
She stated that as an officer of the court she obviously would not have submitted to the Magistrate that the debt had been fully satisfied, had that not been her understanding on the basis of representations made to her by the CDPP.
applicant's submissions
Ms Maharaj submitted, on behalf of the applicant, that the provisions of section 1237AAB of the 1991 Act were not satisfied in this case, and that such provisions had to be accorded their strict statutory meaning, there being no room for common law notions.
She submitted that there was no "civil action", taking that term to mean "civil proceedings". She further submitted that the CDPP does not satisfy the definition of "Commonwealth" for the purposes of sub-section 1237AAB(1), and that there was no delegation to the CDPP pursuant to sub-section 1299(1) of the 1991 Act.
She submitted that on the factual material before the Tribunal, it was clear that at no stage did the CDPP or its officers represent to the respondent that they were dealing with anything other than the overpayment in respect of the charges, and that if Ms Fuller or the respondent gained a different impression, then that mistaken belief should not be visited upon the applicant.
respondent's submissions
Mr Edwardson submitted, on behalf of the respondent, that the CDPP was first instructed to recover the overpayment relating to the November 1991 to November 1993 period and then later instructed to prosecute in respect of the same period. He further submitted that the overpayment arose on the same basis as the prosecution. He also submitted that in this case, the CDPP was specifically instructed to recover by means of reparation orders.
He submitted that the prosecution and defence proceeded in good faith in the criminal proceedings, and that in such circumstances, the defence counsel had made submissions to the court that total restitution had been made. He submitted that the prosecution had not objected to this submission being made, and such was reflected in Deputy Chief Magistrate Swain's comments. In the absence of any such objection, he submitted that the applicant was bound by their representative's silence. In the absence of the "agent" of the Commonwealth specifically reserving the right to recover, the Commonwealth has effectively waived that portion of the debt.
He submitted that "civil action" is no more than a cause of action, and that it is clear from the provisions of sub-paragraph 1224(2)(b) of the 1991 Act that recovery is possible through criminal proceedings. He also submitted that "Commonwealth" includes the CDPP. He sought to distinguish Re Green and Secretary, Department of Social Security (1988) 16 ALD 187 and rely on the initial decision of Senior Member Burton in Re Secretary, Department of Social Security and Wornes (AAT 12395, 14 November 1997).
discussion and findings
This is a matter which has caused the Tribunal considerable consternation. There is an immediate thought of course, that a person who defrauded the system and received public monies to which he was not entitled should not be allowed to "profit" in any way. There is a far more important principle at stake however, that in the course of criminal (or any other) proceedings, there must be good faith between the parties for justice to be done.
The Tribunal has evidence before it suggesting that the criminal proceedings were not satisfactorily resolved between the parties, and hence, the need for these current proceedings. In that context, it also has a number of serious allegations made by Ms Maharaj against Ms Fuller, a fellow member of the independent bar. What was perhaps initially more a question of law raised by the applicant on appeal, has mutated into a matter which therefore needs to address some matters perhaps not strictly pertaining to the central question of whether or not there is a recoverable debt as a matter of law.
Sub-section 1237AAB(1) of the 1991 Act came into existence by Amending Act No. 143 of 1995, replacing section 1237A(2) which itself came into existence by Amending Act No. 121 of 1993. Sub-section 1237AAB(1) provides:
"If the Commonwealth has agreed to settle a civil action against a debtor for recovery of a debt for less than the full amount of the debt, the Secretary must waive the right to recover the difference between the debt and the amount that is the subject of the settlement."
Of particular note, are the words "Commonwealth" and "civil action". Ms Maharaj submitted that the CDPP could not be the Commonwealth, whilst Mr Edwardson submitted that they were an agent thereof, instructed by the applicant. Ms Maharaj further submitted that "civil action" is to be strictly construed to mean "civil proceedings", whilst Mr Edwardson advanced a broader definition, "no more than a cause of action", which could include criminal proceedings.
In relation to the first point, there is a distinction to be made between the waiver provisions that are brought into being by virtue of the Commonwealth agreeing to settle, and any issue estoppel that may possibly arise as a result of a prior judicial determination. Indeed, much of the relevant case law (and Re Green in particular) is more concerned with the effect of reparation orders made in criminal proceedings, and the judge's intention by making such an order.
What distinguishes this case to some extent, is the fact that there was no need for a reparation order to be part of the learned Magistrate's sentence, as on his understanding, "the taxpayer has been fully recompensed for the loss you caused". That judgement gives rise to both the question of issue estoppel and the learned Magistrate's intentions, and also how he came to understand that the overpayment had been fully satisfied. The Tribunal will return to both issues in due course.
As a preliminary point, the Tribunal is faced with the question of whether the CDPP falls into the definition of "Commonwealth" as that term is understood in section 1237AAB of the 1991 Act. The respondent has agreed that the CDPP has no delegation under the 1991 Act to adjust the amount of a recoverable debt (Exhibit R1). The argument of the respondent is that the CDPP were, in effect, an agent of the Secretary (or the Secretary's delegate) in respect of the total overpayment.
The Tribunal has three difficulties with that argument. First, the parties are clear that the negotiations between the respondent's then solicitor and the CDPP were in relation to matters over which charges were pending. The charges were eventually reduced, resulting in a plea to charges, in relation to which the overpayment was somewhat less. At the time the CDPP was making representations in respect to sentencing therefore, there was a difference between the overpayment in relation to the charges, and the original overpayment. The difference between the two figures would therefore be a civil matter. In that regard, the Director of Public Prosecutions Act 1983 (the CDPP Act) limits the civil recovery powers of the Director to those matters specified in sub-paragraphs 6(1)(fa) and (h) of the CDPP Act. As far as the Tribunal is aware (and no submission was put to the contrary) there has been no specification instrument pursuant to sub-section 6(3) of the CDPP Act which would so empower the CDPP in relation to matters of the current type.

Secondly, the 1991 Act is quite specific as to who must (or may, depending on the particular provision) waive the right to recovery of debts arising pursuant to the various sections of the 1991 Act. The power to waive is conferred to the Secretary. The Secretary may delegate his or her authority (sub-section 1299(1) of the 1991 Act). However such delegation must be in writing, and must be to an "officer", as defined in sub-section 23(1) of the 1991 Act:
"officer means a person performing duties, or exercising powers or functions under or in relation to this Act …"
Commonwealth prosecutors would be very busy people if they were exercising the dual functions of officers pursuant to the CDPP Act and the Social Security Act simultaneously. In any event, the respondent agrees that there is no such delegation. In the absence of such a delegation, the Tribunal is reticent to attempt to expand the boundaries of the waiver provisions to include some sort of agency understanding. There is, in this case, the complicating factor of the initial letter of instruction from the Department to the CDPP (T23). Mr Loftus conceded that this is an unusual type of letter of instruction for his office to receive. The Tribunal considers that whilst this letter instructs the CDPP in so far as "recovery", there is a distinction to be drawn between recovery and waiver, for the following reasons.
There is a specific inclusion in the 1991 Act of the need for written delegation of authority, to ensure that, in the huge and complex task of administering the Social Security system, there are clear lines of demarcation as to who may exercise the Secretary's authority at any given time. The goal of clarity has clearly not been met here, but the Tribunal must still give regard to what it considers the purpose of the legislation to be.
In that regard, the respondent referred the Tribunal to the sections of the 1991 Act pursuant to which a debt may rise, and in particular the reference in sub-paragraph 1224(2)(b) to recovery by "legal proceedings". The Tribunal notes that sub-section 1224(2) was repealed by Act No. 84, 1996, s.3, Sch. 18, Part 3(53), thereby being in existence at the time of the delegate's decision, but not at the time of the finalisation of the criminal proceedings. The Tribunal would make a distinction in any event between the recovery provisions of the 1991 Act, and authority thereunder, and the waiver provisions of the 1991 Act. In the Tribunal's opinion, whilst authority may exist to recover a debt by various means, including, perhaps, the employment of an agent to so recover, that does not necessarily convey to that agent the authority to waive a portion of the debt. The ultimate authority must remain with a duly authorised delegate of the Secretary.
In the context of sub-section 1237AAB(1) of the 1991 Act, there is of course the question of whether there is a difference between the "Commonwealth" and the "Secretary". It could be said that as both the CDPP and the Department of Family and Community Services are of the same Commonwealth, that "the Commonwealth", in the form of the CDPP settled the debt. The Tribunal would not accept this proposition however as concerns the current matter before it, for whilst the debt arises against the Commonwealth in the broader sense of that word, it is the Department of Family and Community Services (formerly Department of Social Security) who bear the ultimate brunt of paying the benefit, and recovering subsequent debts in this case. It would not be possible, in the Tribunal's opinion, for the Commonwealth to agree to settle a civil action without the agreement of a delegate of the Secretary. On the documents before the Tribunal, the only indication is that the delegate agreed with the CDPP (as the client of the CDPP) to a reduction in the charges along the lines of the advice given by Mr Loftus. It is not apparent that a delegate of the Secretary went any further than this. In the context of sub-section 1237AAB(1), "Commonwealth" must be read in conjunction with "Secretary", given the latter is the one who must exercise the waiver powers.
Thirdly, the Tribunal considers that the case law is supportive of the proposition that the power and authority of the prosecutor to make binding agreements in respect of civil matters is limited and circumspect. This matter was canvassed at some length in Commonwealth of Australia v Hamilton (1992) 2 Qd. R. 257. That case arose in the context of the Social Security Act 1947 (the 1947 Act) with sub-section 251(1) of the 1947 Act being particularly at issue. That sub-section provides (inter alia):
"The Secretary may, on behalf of the Commonwealth, decide to –
(a) …
(b) waive the right of the Commonwealth –
(i) to recover from a person the whole or part of a debt that is payable under or as a result of this Act; or
(ii) to recover debts under or as a result of this Act included in a class of debts specified by the Minister by notice in writing published in the Gazette; or
…"
In Hamilton, representation had been made by the prosecutor during the guilty plea that "restitution was not sought at this time". In subsequent debt recovery proceedings, a three member jury had answered "yes" to the question "had the plaintiff "by its agent Wheeler [the prosecutor]" represented that it would not seek repayment of the overpayments made by the plaintiff to defendant?". Accordingly, the trial judge had held that the plaintiff was estopped from recovering the debt. Whilst the case ostensibly concerned estoppel (of which this Tribunal gave more substantive consideration in the recent decision of Re Ryan and Secretary, Department of Family and Community Services [2000] AATA 642), McPherson ACJ made a number of salient observations as to the purported authority of Commonwealth prosecutors (inter alia at p266-267):
"…
The result is, as I see it, that on 26 June 1987, which is when Mr Wheeler was found to have made to the magistrates court at Mount Isa the representation that "restitution of the said unemployment benefits by repayment was not sought by the plaintiff", the monetary limit imposed by s.251(1)(b)(ii) of the Act on the power of the Secretary to waive the right of the Commonwealth to recover debts under the Act was "less that $50" in amount. There have since been some further amendments which added to s. 251 a series of additional restrictions in the form of subsections numbered (1A), (1B) and (1C); but none of them is relevant to determination of the present question.
If the power of the Secretary of the Department under s. 251(1)(b) to waive the right of the Commonwealth to a debt due by the defendant arising under or as a result of the Act was at the relevant time in June 1987 limited to an amount of less than $50, then it would be astonishing if the authority of Mr Wheeler, as a member of the prosecuting staff of the Commonwealth Director of Public Prosecutions, extended to waiving an amount of over $14,000. The same observation applies with equal force to the provisions of s. 70C(c) of the Audit Act 1901 (Cth) authorising the relevant Minister (presumably the Treasurer or Minister of Finance) to "write off" irrecoverable debts and overpayments; in any event, the impression conveyed by the use of the expression "write off" in s. 70C is that it refers to the duty of public accounting imposed on the Executive, and is not in law intended to enable the relevant Minister to forego a debt due to the Commonwealth from a person who owes it.
In my opinion, and contrary to the submission of the respondent on appeal, the effect of the particular provisions of s. 251(1)(b)(ii) of the Social Security Act is to restrict the power of waiving the right of the Commonwealth to recover a debt such as this to an amount of less than $50, and in any event to confine its exercise to the Secretary of the Department. The Secretary may by s. 14(1) delegate his powers under the Act to an "officer" as defined in s. 3; but, even if a prosecutor could somehow be brought within the terms of that definition, a delegation under s. 14(1) is required to be in writing; and by s. 15(1) the decision of an officer under the Act is also required to be in writing. Everything urged by the defendant in support of its defence in this case is opposed to a proposition that the representation alleged to have been made by Mr Wheeler was a decision in writing, or the result of such a decision. The answer of the jury to question 3 that was put to them assumes that the representation in question was made by the plaintiff "by its agent Wheeler"; but, although he no doubt possessed ample authority in his character of counsel to prosecute for the plaintiff, the finding that he was its agent to make representation that bound the Commonwealth to forego forever its statutory right to a debt of over $14,000 due to it by the defendant is, as a matter of law, quite contrary to the provisions of s. 251(1)(b) of the Act.
…" (this Tribunal's emphasis)
With respect, this Tribunal would concur with the approach taken in relation to section 251(1)(b) therein, in so far as that approach is consistent with the Tribunal's view that there are also legislative limits as to who can exercise the waiver provisions of the 1991 Act. Without a delegation or clear evidence that a duly authorised delegate of the Secretary agreed to a settlement of that part of the proceedings in 1997 concerning civil liability, the Tribunal is not satisfied that "the Commonwealth" is satisfied for the purposes of section 1237AAB on the facts of this case.
The Tribunal is mindful however, of Senior Member Burton's comments in the original Tribunal decision of Re Wornes at paragraph 23:
"23. … the Department's statutory powers to recover overpayments are exercisable on behalf of the Commonwealth. The prosecutor, representing the Crown, was prosecuting an offence by Mrs Wornes against the Commonwealth. The prosecutor was there to represent the Commonwealth so far as any reparation order was concerned. The power given to the court to order reparation to the Commonwealth or a public authority under the Commonwealth in respect of Commonwealth offences provides an alternative means of recovering a loss to the Commonwealth, to the taking of separate civil proceedings (See Re WVC and Secretary, Department of Social Security (1992) 27 ALD 221 at 225, 227-8). The power to order reparation aids, rather than compromises, the Commonwealth's ability to recover its loss. That its exercise may preclude the Commonwealth from taking further proceedings at civil law is clearly envisaged by the legislature. Nothing in the Social Security Act 1947 as it then applied, or its successor precludes a court vested with relevant power under another statute from so doing. The tribunal is of the opinion that the Judge had the power to make the order he did with the intention of the debt being extinguished on compliance by the offender with the reparation order."
The Tribunal notes that Re Wornes went on appeal, but it has been unable to find any published reasons of the Federal Court, who then remitted the matter back to a differently constituted Tribunal, the reasons of which, do not assist in relation to the present matter. The Tribunal does not consider that the reasons herein are inconsistent with the approach of Senior Member Burton, as there is clearly a factual distinction to be made between this case and those in which a reparation order has been made. In this case there was no need for a repatriation order, as that part of the total overpayment relating to the charges was recovered. In that sense, the CDPP had done their job. The issue that arises of course, is what effect the fact that the repayment was apparently forefront in the mind of the learned Magistrate in setting sentence should have on these proceedings. One could well imagine, that were the outstanding $8,000 or so mentioned, the outcome could have been different at sentencing, and it may, for example, have afforded an opportunity to bring section 1237AA of the 1991 Act into play. The Tribunal will return to the issue of the Magistrate's remarks shortly. At this point in the decision it is sufficient to draw a distinction between this case, and those involving reparation orders made by a court.
In regards to the question of "civil action", the Tribunal notes that "civil action" finds definition in sub-section 3 of the Magistrates Court Act 1991 (SA):
"…
"civil action" means an action or proceeding brought in a civil division of the Court;
…"
In Ramsay v Ramsay and Lett [1914] SALR 246, the court considered proceedings in a matrimonial suit were not a civil action, so exempting the husband (appellant) from paying jury expenses. Murray J noted (inter alia) at page 251:
"…
An "action" no doubt, has a wide generic signification, meaning any suit either in the name or on behalf of the Crown, or by a subject, as pointed out by the House of Lords in Bradlaugh v Clarke, (1883), 8 A.C. 354, per Lords Selborne and Blackburn, but it also has a more restricted or popular sense. It was originally the term applied to proceedings instituted in the Court of Common Pleas for the redress of a legal wrong suffered by a private individual. After the Courts of King's Bench and Exchequer assumed jurisdiction in the matter of private wrongs, the term was extended to proceedings in those Courts also. An action began with an original writ, and ended in judgement or execution.
…"
Strouds Judicial Dictionary (5th ed) also makes reference to Bradlaugh v Clarke (1883) 8 AC 354 in defining "action" as follows:
"(1) This is a generic term, and means a litigation in a civil court for the recovery of individual right or redress of individual wrong, inclusive, in its proper legal sense, of suits by the Crown, …"
The Tribunal considers that the notion of an "action" therefore, is bound up with the notion of "civil" in the context of the 1991 Act. Indeed, the language of section 1237AAB of the 1991 Act is "civil action". Applying common sense, and mindful of the various definitions as stated, the Tribunal considers that it is something of a stretch to hold that criminal proceedings in the South Australian Magistrates' Court come within the scope of "civil action" as that term is meant to be interpreted in section 1237AAB of the 1991 Act. The very Court in which the criminal proceedings were brought makes a clear distinction in its own definitions section, confining "civil action" to the civil jurisdiction of that Court. There was surely a "cause of action" in respect of the civil debt, but that cause of action was being pursued by the administrative review process, being stayed at the SSAT at the time, pending the outcome of the criminal proceedings. The cause of action as understood in terms of "civil action" cannot be said to extend to criminal proceedings. In the process of such criminal proceedings however, it is often the case that it may be appropriate to consider overpayments in toto during negotiations, but the fact of negotiations does not give rise to a "civil action" being in place, and in this case, there is a lack of evidence to demonstrate that a delegate of the Secretary was involved in such processes.
On this basis, the Tribunal so finds that section 1237AAB is not applicable in this case.
The Tribunal has canvassed the issue of estoppel in Re Ryan at some length. Ms Maharaj submitted that the doctrine has no role to play in these proceedings, but the Tribunal does not entirely accept that submission for the reasons stated in Re Ryan, to which the Tribunal would add the following. The Tribunal sits in the shoes of the original decision-maker, and may exercise all the powers conveyed to that decision-maker. That decision-maker has the power to decide that he or she is estopped from a certain course of action because of a representation by another officer, or indeed, because of the outcome of prior court proceedings. Whilst this Tribunal cannot obviously exercise a common law discretion to estop the applicant, it can, sitting in the shoes of the original decision maker, exercise the powers that person has, which include the discretion to consider that they are estopped from taking a certain course of action.
The existence of a statutory framework does not remove the applicant from participation in the greater legal system, and where good faith undertakings are given to courts, they must be considered binding upon both parties to any matter. In this case, representations were made by Ms Fuller to the Magistrate, that went uncontested by the CDPP. Evidently it was not Mr Loftus who was present upon the day that such submissions were made. Those submissions were to the effect that full and total satisfaction had been achieved in respect of amounts owing the applicant.
It is reflected in the learned Magistrate's sentencing remarks, that he proceeded to sentence the respondent on the basis that such full satisfaction had been achieved. Mr Edwardson presents a persuasive argument that the prosecution's silence at this vital time is indicative of acceptance of that fact, and that any further recover is thereby estopped.
The Tribunal considers however, that whilst the silence of the CDPP was certainly poor conduct (albeit perhaps inadvertently so), the doctrine of estoppel is not such so as to empower someone to lawfully do that which the law says he shall not do (per Gibbs J in Maguire v Simpson (1977) 139 CLR 362 at p387). The CDPP's capacity in law (and factually by its silence) to raise an estoppel binding on the Commonwealth to forego its right to the debt cannot have been more extensive than the CDPP's power to make an effective waiver of the debt (Hamilton per McPherson ACJ at p267). Given the Tribunal has found that the CDPP did not have the lawful authority to waive the debt on behalf of the Commonwealth, it follows that the CDPP equally does not have the capacity to estop the recovery of such a debt, for it has no lawful standing (in the absence of a formal delegation) in that regard. Waiver and estoppel in that regard are conjunctive, as Williams J notes in Hamilton (inter alia) at p274:
"…
An estoppel of the type in issue here must involve, at least as an element, a waiver by the Commonwealth of its right to recover. Such an estoppel is really another way of saying that by the conduct in question the Commonwealth has waived the right to recover the debt and the court will enforce that waiver by applying the doctrine of estoppel.
There is no suggestion on the evidence that the formalities of s. 146 [s251] were complied with in this case and in those circumstances there is in my view no legal basis for the defence of estoppel which succeeded before the learned trial judge.
…"
The next issue is whether or not the fact of the Magistrate's determination has any binding effect on the applicant's capacity to recover. It is clear that the prosecution remained silent whilst the Magistrate indicated his understanding that the respondent had fully recompensed the public. In the final analysis of those reasons however, it must be recognised that the Magistrate was exercising his properly conferred jurisdiction, and dealing with the overpayment only in so far as it related to the charges. It was the defendant who stood before him in relation to specific charges and alleged offending, not a defendant in debt recovery proceedings. Of course it is open to a Magistrate in such circumstances to order repatriation be made. The Tribunal considers however, that once the charges in relation to the overpayment, over and above that which the respondent plead to, were dropped, the Magistrate lost jurisdiction to deal with any portion of the overpayment aside from that relating to the live charges before him. His judgment does not give rise to estoppel. The Tribunal notes that the 1991 Act has specific waiver provisions dedicated to matters of sentencing (section 1237AA for example).

The Tribunal feels it incumbent upon it to express an opinion about Ms Fuller and her role in these and the criminal proceedings. Serious allegations of negligence were made against her, but in the Tribunal's opinion, such allegations have not been made out in this case. She acted in good faith at all material times in the course of the criminal proceedings. As Mr Loftus noted, it is unusual for the overpayment period to exactly match the period in respect of which charges are brought, but that is what occurred here. The CDPP made certain representations, from which it is not unreasonable to infer that they are acting with the full authority to deal with the entirety of the debt. The CDPP did clarify matters somewhat in a letter by Ms Propsting (T57) but as a witness of credit, the Tribunal accepts from Ms Fuller that such was never received nor sighted by her at that time. In the absence of any further clarification it was not unreasonable to adopt the position Ms Fuller adopted, and certainly the prosecution's silence at time of sentencing only serves to strengthen that position. Ms Maharaj may consider it to be obvious that there is a clear separation between the CDPP and the Department, and between civil and criminal liabilities in respect of overpayments, but from the Tribunal's perspective, it has taken several weeks for it to come to a conclusion on the matter. It is a delicately balanced matter of law, and in other circumstances, the Tribunal would not consider it implausible that were the CDPP to make certain representations to defendants, the Tribunal would be prepared to come to a different conclusion than that espoused herein.
What this case has demonstrated, is that it is essential that, even given the high volume of prosecution cases in respect of the 1991 Act and the resultant pressures on all parties caused thereby, it must be communicated to defendants prior to any pleas being entered, exactly what the status of both criminal and civil liability is. It is unfortunate that the lines of communication were not clearer in this case.
The Tribunal is satisfied, and so finds, that there is an overpayment in the amount of $18,765.17, and that such was correctly raised pursuant to section 1224 of the 1991 Act, as the respondent clearly failed his obligations with respect to the 1991 Act.
With that in mind, the Tribunal has considered the application of section 1237AAD of the 1991 Act. This case is certainly unusual, uncommon, and the manner in which the proceedings unfolded is certainly exceptional. The silence of the prosecution during sentencing submissions and during the remarks of the Magistrate resulted in the court being misled. Vitiating special circumstances in this case, is the fact that the respondent received public monies to which he was not entitled, and the manner in which he received such monies. Whilst the overpayment over and above that which was prosecuted is not directly a result of any "offending", there is a clear association between the amount outstanding and the offending in this case. In these circumstances, and despite some reservations, the Tribunal does not consider it to be unreasonable, unjust or inappropriate to expect the respondent to pay back the public monies which he received as a result of his failure to meet his obligations in respect of the 1991 Act.
decision
For the reasons given, and pursuant to section 43 of the Administrative Appeals Tribunal Act 1975, the Tribunal sets aside the decision under review, and in substitution therefor, decides that the applicant is entitled to recover that part of the debt relating to the period of overpayment between 8 November 1991 to 5 November 1993 inclusive, over and above amounts already received from the respondent.
I certify that the 60 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member J.A Kiosoglous MBE
Signed:         .....................................................................................
  Personal Assistant
Date/s of Hearing  20 July 2000
Date of Decision  21 August 2000
Counsel for the Applicant        Ms S. Maharaj
Solicitor for the Applicant         AGS
Counsel for the Respondent    Mr M. Edwardson
Solicitor for the Respondent    Caldicott & Co.

[2000] AATA 728

21 August 2000

Key Legal Topics

Areas of Law

Administrative Law

Legal Concepts

Administrative Appeals Tribunal

Overpayment

Recovery of Public Monies

Section 1237AAD

Social Security Act 1991

Special Circumstances