George and Repatriation Commission
[2003] AATA 538
•10 June 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 538
ADMINISTRATIVE APPEALS TRIBUNAL )
) No Q2002/988
VETERANS' APPEALS DIVISION ) Re RONALD GEORGE Applicant
And
REPATRIATION COMMISSION
Respondent
DECISION
Tribunal Dr E K Christie, Member Date10 June 2003
PlaceBrisbane
Decision The Tribunal affirms the decision under review. This means Mr George’s application for review is unsuccessful. The Tribunal raises the possibility of an Act of Grace payment in the factual circumstances.
(Sgd) Dr E K Christie
Member
CATCHWORDS
VETERANS’ AFFAIRS – benefits and entitlements - GST rebate on purchase of motorcycle – meaning of “motorcycle” - whether vehicle purchased by applicant falls within statutory definition of motorcycle – Act of Grace payments
Veterans’ Entitlement Act 1986 s 120(4)
Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 rr 3, 4
Departmental Policy Guidelines, Part 3, Chapter 9 - Act of Grace Payments
Jackman v Repatriation Commission [1997] FCA 564
REASONS FOR DECISION
10 June 2003 Dr E K Christie, Member 1. This is an application by Ronald George to review a decision of the Repatriation Commission delegate, made on 25 September 2002, that Ronald George was ineligible for payment of motorcycle benefit under the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 (“the Regulations”).
2. The delegate made the following findings in reaching this decision:
“To be granted a motorcycle GST rebate a person must satisfy the legislative requirements set out in the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001.
…
Regulation 3 of the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 relates to the purchase of a motorcycle.
The term ‘motorcycle’ is defined in regulation 3 which stipulates that it must have ‘fewer than 4 wheels’.
A quad bike has 4 wheels and therefore does not meet the definition of motorcycle under the Motorcycle GST rebate scheme.
I have noted Mr George’s comments regarding the steps he took before lodging the application and the different advice he received. Nevertheless my determination of this case has to be based on the regulations. The circumstances of application cannot overrule legal requirements.” (T6 folios 16, 17)
Facts
3. The general facts are not in dispute and may be stated briefly.
4. On 19 July 2002, Mr George lodged an Application for Motorcycle GST rebate form. The application was in respect of the purchase of a quad bike (Polaris Sportsman ATV 500) and was accompanied by a receipt from Vanderfield Machinery Pty Ltd dated 27 July 2002 in the amount of $12,100.00
5. Mr George sought advice from the Veterans’ Affairs Network (VAN) prior to purchasing the quad bike.
6. Mr George has the following accepted service related disabilities:
§deafness and tinnitus
§post traumatic stress disorder
§psychoactive substance abuse or dependence
§gastro-oesophageal reflux disease
7. It is not in dispute that Mr George is an “eligible person” under Reg 4 of the Regulations. In addition, the Commission is satisfied that there are special circumstances justifying the purchase mentioned in sub-regulation (1) of Reg 5.
8. The Regulations came into effect as Statutory Rules No 209 on 26 July 2001.
Issues to be Decided
9. There were two related issues for the Tribunal to decide:
(a)whether the vehicle purchased by Mr George falls within the definition of a motorcycle provided in Reg 3 of the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 (“the Regulations”); and, in turn,
(b)whether Mr George was entitled to a GST rebate in respect of his purchase of a Polaris Sportsman ATV.
10. Both parties have consented for the Tribunal to decide the application for review on the papers.
The Basis for Mr George’s Review of the Repatriation Decision
11. Mr George states that:
“The decision to purchase the Quadbike was dependent on being refunded the GST component. I made inquiries with Veterans’ Affairs Network and the Australian Tax Office as to whether I was eligible for the GST refund on at least four separate occasions prior to the actual purchase and on each occasion I was informed that ‘yes’ a quadbike would qualify under the motorcycle GST Rebate Scheme, even after explaining to the VAN inquiries officer just exactly what a Quadbike was.
Regulation 3 of the Regulation stipulates a ‘motorcycle’ means a vehicle with fewer than four wheels that is steered by means of handle bars. A Quadbike meets all of that criteria with the exception that it has ONE too many wheels, technically it is a motorcycle with four wheels.
The Regulation that Veterans’ Affairs relies upon, in their definition of a motorcycle is ambiguous to say the least. In the true sense of the word a motorcycle has two wheels, that’s fine, but if you add another wheel, according to their regulation it is still a motorcycle but, of course, everybody else knows it’s a ‘trike’. When you look at them, how anybody could call them a motorcycle is totally beyond me, for the large part they are constructed and powered from car parts (Volkswagen).
Quadbikes have four wheels, no question about that, but essentially they can be a motorcycle with four wheels, powered by a motorcycle engine driving through a motorcycle transmission (ie sequential shift) to sprockets and chains, etc steered and controlled by means of handle bars. They are more of a motorcycle than any ‘trike’ I have ever seen.” (T1, Folio 3)
12. Mr George, in summary, states that his decision to purchase the Quadbike was based on information provided to him by DVA which subsequently proved to be incorrect. In addition, he believes the meaning of “motorcycle” as defined in the Regulations is ambiguous (T1, Folio 4).
The Statutory Meaning of Motorcycle
13. Sub-regulation 3 of the Regulations defines “motorcycle” to mean “a motor vehicle with fewer than 4 wheels that is steered by means of handle bars”.
14. One ground of Mr George’s application for review relates to being given confusing and conflicting information by DVA, with respect to his eligibility for rebate of the GST costs incurred with the purchase of his quad bike. Consequently, the Tribunal has reviewed the available information that may have facilitated the accuracy of information given to him by DVA prior to the time of purchase of the quad bike.
15. In a Ministerial press release by the Hon Bruce Scott MP on 20 March 2001, the Minister stated:
“Totally and permanently incapacitated (T&PI) war veterans who ride motorcycles will soon be eligible for a rebate from the Repatriation Commission, to cover the cost of the goods and services tax on the purchase of their bikes, the Minister for Veterans’ Affairs, Bruce Scott, announced today. Mr Scott announced a proposed new rebate scheme in Cairns during a meeting with members of the Vietnam Veterans’ Motorcycle Club. ‘As this club demonstrates, the motorcycle is a popular vehicle among T&PI veterans, particularly in the Vietnam veteran community’, he said.
Under the old system T&PI veterans were eligible for sales tax exemptions on the purchase of personal motor vehicles, including motorcycles. However, while the new legislation maintains GST exemption for T&PI veterans’ cars, it does not cover motorcycles. This rebate will ensure that T&PI riders are treated fairly compared to their follow veterans who prefer to drive a car. Mr Scott said the rebate would be paid as special assistance under the provisions of the Veterans’ Entitlements Act 1986 and would require regulations for the scheme to be drafted and tabled in Parliament. T&PI veterans who designated a motorcycle as their personal vehicle would receive a refund for GST on the cost of the bike by making a claim to the Repatriation Commission.
Subject to the Parliamentary process, the scheme is expected to begin operating mid-year and will be made retrospective to the commencement of the New Tax System on 1 July 2000. Veterans should not apply until a further announcement is made about the start of the scheme.”
16. The Tribunal observes that the Ministerial press release only refers to motorcycles in a general way without any distinction on the meaning of “motorcycle”.
17. The DVA Annual Report 2000/01 states (under Output 1.2 – Compensation) in relation to GST exemptions:
“Motorcycles
On 20 March 2001, the Minister for Veterans’ Affairs, Bruce Scott, announced that T&PI recipients who ride motorcycles would become eligible for a rebate from the Repatriation Commission to cover the cost of the GST on the purchase of their bikes. At the end of the financial year work continued on making the Parliamentary regulation to establish the scheme, which will operate retrospectively from 1 July 2000.
To maintain parity with the tax system, the motorcycle GST rebate will be available to T&PI recipients who replace their bike after two years or 40,000 kilometres, whichever comes first. This rebate will ensure that T&PI motorcycle riders are treated equally with to [sic] their fellow veterans who prefer to use a car.”
18. The DVA Annual Report only refers to motorcycles in a general way without any distinction on the meaning of “motorcycle”.
19. In response to a Question on Notice to the Senator, Foreign Affairs, Defence and Trade Legislation Committee made by Senator Bishop – relating to the DVA Annual Report 2000/01 and the GST exemption for motorcycles and spare parts for cars (Question 14) - the following answer was given:
“…A car means a motor vehicle (except a motorcycle or similar vehicle) designed to carry a load of less than 1 tonne and fewer than 9 passengers.
Paragraph 6 of the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 provides eligibility for reimbursement of the GST component of the purchase price of a motorcycle part for the same classes of veterans who are eligible for a GST exemption on car parts.
In essence, the only distinction is that motorcycle parts are covered by a GST rebate arrangement, while car parts are GST exempt.”
20. No distinction is made as to the meaning of “motorcycle” in this answer.
21. The DVA Facts document (DP42) dealing with the Motorcycle GST Rebate Scheme describes who can claim a rebate from the Federal Government to cover the cost of the Goods and Services Tax (GST) on the purchase of their motorcycles and the cost of motorcycle replacement parts.
22. The DVA Facts document states:
“That a veteran who on or after 1 July 2000, purchases a motorcycle in respect of which GST is payable; and the person intends to use the motorcycle for his or her personal transportation (whether or not as the driver) will be eligible for the benefit.
The benefit is not payable if in the 2 years immediately before the purchase of the motorcycle the person received motorcycle benefit in relation to another motorcycle or received a GST-free car or previously exempt vehicle unless:
§ the earlier purchased motorcycle, car or vehicle has been used to transport the person for distances totalling more than 40,000 kilometres; or
§ the earlier purchased motorcycle, car or vehicle is no longer reasonably capable of being used for the purpose for which a motorcycle of that kind is ordinarily used and is not insured for its replacement value; or
§ the Commission is satisfied that there are special circumstances justifying the purchase of the motorcycle.”
23. However, the DVA Facts document only refers to “motorcycles” in a general way without any distinction on the meaning of “motorcycle”.
24. The Tribunal notes that the DVA Facts document contains the following statement on “Oral Advice”:
“While we make every effort to ensure that you are given accurate information, it is important that you seek written confirmation of oral information or advice before making any major decisions based on that information.
We continually strive to improve the level of service you receive and make this request as an added safeguard for you.”
Consideration of the Issues
25. The objective of the Tribunal is to review administrative decisions not only on their merits, but in accordance with the law at all times. The relevant law in this case is the Veterans’ Entitlements (Special Assistance – Motorcycle Purchase) Regulations 2001 (the “Regulations”).
26. Matters before the Tribunal must be satisfied to the reasonable satisfaction of the Tribunal in accordance with the standard in subsection 120(4). That meant, as Tamberlin J noted in Jackman v Repatriation Commission [1997] FCA 564:
“The AAT had to determine, to its reasonable satisfaction, whether the applicant’s war-caused disabilities were the only reason for him not being in remunerative employment. Burchett J in Cavell stated that this determination is not to be made upon ‘nice philosophical distinctions’, equally it is not to be made upon complex calculations of the probability that an intervening event may have occurred. The approach is to be guided by commonsense with an ‘eye to reality’.”
27. The Tribunal has considered the relevant sections of the Regulations in relation to Mr George’s application for review and makes the following conclusions:
(a)that the meaning of “motorcycle” as defined in sub-regulation 3 of the Regulations is clear and unambiguous; and
(b)that a quad bike as purchased by Mr George does not come within the statutory meaning of “motorcycle”. The legislative meaning of “motorcycle” defines motorcycle with a strict and narrow interpretation.
28. As a result of these conclusions, and applying the legislation, the Tribunal can make no other finding other than to find that Mr George is not entitled to a GST rebate in respect of the purchase of a Polaris Sportsman ATV.
29. Whilst this outcome may seem harsh, it would be more appropriate to describe the outcome as unfortunate. The legislation gives the Tribunal no other option than to make such a finding as there is no discretion in the legislation for the Tribunal to make any other decision based on the statutory meaning of “motorcycle”, the factual information relating to the features of the quad bike purchased by Mr George and his eligibility for a GST rebate.
30. However, the Tribunal does raise for consideration by Mr George and the Repatriation Commission, the Departmental Policy Guideline “Act of Grace Payments” (Part 3, Chapter 9).
31. The Departmental Policy Guideline states as follows:
“Section 3 Act of Grace Payments
What is an Act of Grace Payment
An Act of Grace payment may be made where a person has suffered a loss. Although there is no legal liability on the Commonwealth to meet the loss, it is considered that the Commonwealth bears some responsibility for the loss...
Eligibility for an Act of Grace payment
Eligibility for an Act of Grace payment depends on the claimant’s circumstances and a wide range of matters may be taken into account to determine eligibility although there is no set eligibility criteria for an Act of Grace payment, claims may be considered where:
§ a person received incorrect advice leading to detriment, but where there is no legal liability
§ a matter is covered by legislation, but its application produces a result which is unintended, anomalous, inequitable or otherwise unacceptable,
§ it is considered desirable to apply the benefits of proposed legislation, or
§ there are other special circumstances where there may be a moral obligation to make a payment.
Request for an Act of Grace payment
Requests for ‘Act of Grace payments’ can arise from almost any aspect of Commonwealth administration and include payments normally paid under Part III (service pension) or Part IIIA (income support supplement) of the VEA.
Claims for Act of Grace payments
A claim for an Act of Grace payment should first be considered under the criteria for ‘compensation for detriment caused by administrative error’. If a claim satisfies that criteria it will be determined under the compensation for detriment provisions. Claims that do not satisfy the compensation criteria may be determined under the Act of Grace provisions.”
32. In relation to the “Act of Grace Policy” the Tribunal considers that there is no issue for a claim under the Policy, “Compensation for Detriment caused by Administrative Error”, as there appears to be no departmental administrative procedures that normally would have applied to Mr George’s circumstances.
33. The Tribunal is reasonably satisfied, according to the approach in Jackman’s case, that Mr George was given conflicting and inconsistent advice from DVA prior to the purchase of the motorcycle in July 2002. The sources of information available on this issue, as reviewed by the Tribunal (see paras 15-24), illustrates that a degree of uncertainty existed in relation to eligibility for GST rebates in relation to motorcycles, and that incorrect advice could have arisen in the context of the enquiries made by Mr George. Whilst, DVA has a qualification for oral advice given (see para 24), it should be recognised that Mr George sought advice “on at least four occasions” from DVA as to his eligibility for the refund from GST – and was given incorrect advice each time. Moreover, he had relied on this advice in deciding to purchase the quad bike. .. It is the recurrence of incorrect advice that is the problem in this case. The Tribunal makes the observation that these conclusions do not have any application to the questions of law as to the meaning of “motorcycle”, the subject of this application for review. However, they may have application to the Act of Grace policy
34. Accordingly, in relation to the Act of Grace policy, the Tribunal concludes that the incorrect DVA advice given to Mr George has led to an “unintended anomalous, inequitable, unjust or otherwise unacceptable result”. Moreover, the incorrect advice given to Mr George has “lead to detriment, but there is no legal liability”. On consideration of the overall circumstances, it may even lead to a conclusion “that there is a moral obligation on the Commonwealth to make a payment”.
35. The Tribunal emphasises that it has no power whatsoever to order that an Act of Grace Payment be made to Mr George. The process for such a payment is for Mr George to make a claim to the Repatriation Commission for an Act of Grace payment and to request that his claim be assessed under the specified eligibility criteria. The final authority to grant an Act of Grace payment does not rest with the Tribunal, but the Minister for Finance or their appointee.
36. For all of the above reasons, the Tribunal affirms the decision under review.
I certify that the 36 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member
Signed: .......................................................................................
AssociateHearing on the papers
Date of Decision 10 June 2003
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