Gray v Secretary, Department of Family and Community Services

[2002] FCA 768

FEDERAL COURT OF AUSTRALIA

Gray v Secretary, Department of Family & Community Services [2002] FCA 768

Social Security Act 1991 (Cth)s 1184(1)
Administrative Appeals Tribunal Act 1978 (Cth) s 43(1)

Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577
Puhlhofer v Hillingdon London Borough Council (1986) 1 AC 484
Hooke v The Repatriation Commission (1988) FCA 20
Apthorpe v Repatriation Commission (1987) 77 ALR 42
Blackwood Hodge (Australia) Pty Ltd v Collector of customs (NSW) (1980) 47 FLR 131
Secretary, Department of Social Services v Ellis (1997) 46 ALD 1
Beadle v Director-General of Social Security (1985) 60 ALR 225

GRAY v SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
S 59 OF 2002

O’LOUGHLIN J
17 JUNE 2002
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 59 OF 2002

BETWEEN:	BARBARA GRAY APPLICANT
AND:	SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES RESPONDENT
JUDGE:	O’LOUGHLIN J
DATE OF ORDER:	17 JUNE 2002
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1.        The Application be dismissed.

2.The Applicant pay the Respondent’s costs, such costs to be taxed in default of agreement.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	S 59 OF 2002

BETWEEN:	BARBARA GRAY APPLICANT
AND:	SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES RESPONDENT

JUDGE:	O’LOUGHLIN J
DATE:	17 JUNE 2002
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1. The applicant, Ms Barbara Gray, has appealed against the decision of the Administrative Appeals Tribunal (“the Tribunal”) which denied her the benefit of a Newstart Allowance.  The history of this matter goes back as far as July 1989 when Ms Gray was injured in an industrial accident.  From then until July 2000, she was in receipt of Workers Compensation payments.

2. In 1992, Ms Gray and her partner, Mr Pollitt, purchased a small rural property in the Barossa Valley with the ultimate intention of running it as a cattle stud.  The acquisition was partly funded by way of a bank mortgage of $80,000 bearing interest at the annual rate of 8 per cent.

3. In July 2000, Ms Gray’s compensation claim was finalised with a lump sum payment of $120,000.  There was an element of future economic loss in that payment.  Legal expenses and moneys owing to Centrelink accounted for a large part of the compensation payment and, acting on professional advice, Ms Gray used the balance of the money to discharge the bank mortgage and to buy a stud bull for $5,000.

4. The Tribunal found that Ms Gray’s solicitors contacted Centrelink “regarding the extent of the consequential preclusion period and that Centrelink communicated the required information …”.  The Tribunal also noted that Ms Gray acknowledged that she was aware of the preclusion period.

5. The financial position of Ms Gray and her partner, Mr Pollitt, immediately following the receipt of the compensation payment and the discharge of their various liabilities was reasonably sound.  They owned an unencumbered property on which there was erected a transportable home.  They had a small herd of cattle plus a valuable bull and they had some sundry other assets including some motor vehicles and a tractor.  At that stage, Mr Pollitt was working full time in the security industry.

6. Their difficulties started a few months later in January 2001 when circumstances caused Mr Pollitt to resign from his employment.  He has been unemployed since apart from occasional odd jobs of short duration.  Both Ms Gray and Mr Pollitt applied for a Newstart Allowance as a result of Mr Pollitt’s changed circumstances.  Mr Pollitt was ultimately successful but Ms Gray was not.  The decision of the respondent, the Secretary of the Department of Family and Community Services (“the Secretary”) was that there should be a Pension Allowance Preclusion Period of approximately two years – from 14 July 2000, the date upon which she received her lump sum compensation, until 22 August 2002.  That was the decision that Ms Gray challenged in the Tribunal and which she now challenges in this Court.

7. Ms Gray has based her appeal on the contents of subs 1184(1) of the Social Security Act 1991 (Cth) (“the Act”). The subsection provides as follows:

   “For the purposes of this Part, the Secretary may treat the whole or part of a compensation payment as

   (a)     not having been made; or

   (b)     not liable to be made,

   if the Secretary thinks it is appropriate to do so in the special circumstances of the case.” (emphasis added)

8. The Tribunal identified three factors that, according to the submissions of Ms Gray, constituted “special circumstances”:

   ·the unexpected curtailment of her partner’s income earning activities;

   ·her state of health:  (she suffers a residual lung impairment which warrants her living in an unpolluted country location); and

   ·her strained financial position.

9. The power of the Secretary that is contained in subs 1184(1) is wholly discretionary. That is evident from the use of the word “may” and the phrase “if the Secretary thinks it is appropriate to do so”. Those discretions are not, however, limited to the Secretary. On an application for a review of the Secretary’s decision, the Tribunal enjoys the same discretionary powers: see subs 43(1) of the Administrative Appeals Tribunal Act 1978 (Cth) which provides:

   “For the purposes of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment of the person who made the decision …”

   Thus, the Tribunal had, in this case, the same discretion as was conferred on the Secretary.  Its duty, in the exercise of that discretion, was not limited to a consideration of the matters that were before the Secretary, nor to a determination whether the decision of the Secretary was the correct or a preferable one.  It was, rather, bound to consider the relevant facts that were proved on the evidence before it and to decide, on the basis of those facts, what was the correct or preferable view: Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577 at 589 per Bowen CJ and Deane J.

10. The position with respect to an appeal from the Tribunal’s decision to the Federal Court is quite different.  Where the existence or non-existence of a fact (such as, in this case, the presence or absence of special circumstances) is left to the judgment and discretion of the Tribunal

    “… and that fact involves a broad spectrum ranging from the obvious to the debateable to the just conceivable, it is the duty of the Court to leave the decision of that fact to the public body to whom Parliament has entrusted the decision making power save in a case where it is obvious that the [Tribunal] consciously or unconsciously, are acting perversely”

    Puhlhofer v Hillingdon London Borough Council (1986) 1 AC 484 at 518 (“Puhlhofer”) per Lord Brightman. That passage from Puhlhofer was quoted with approval by a Full Court of this Court in Hooke v The Repatriation Commission (1988) FCA 20 (unreported judgment delivered 11 February 1988). The Full Court went on to note at p 10, that an earlier Full Court in Apthorpe v Repatriation Commission (1987) 77 ALR 42 had said that:

    “… where Parliament has committed to the Tribunal a decision which requires an exercise of judgment, it is necessary for an appellant to show an error of law in that exercise of judgment before the Tribunal’s decision can be disturbed on appeal.”

11. The proper approach to the exercise of the Court’s jurisdiction under s 44 of the Act is one of restraint, recognising that only in exceptional circumstances, as when an error of law is identified, should the Court intervene: Blackwood Hodge Australia Pty Ltd v Collector of Customs (NSW) (1980) 47 FLR 131 at 145 per Fisher J.

12. The complaints that Ms Gray made are factual; they have failed to identify any error of law.  The Secretary moved to have the appeal struck out as incompetent for that reason.  However, as Ms Gray was unrepresented, it seemed to me that justice would be better served if she were to be given the opportunity to address the Court, just in case there might be some issue that had not found its way into the written material.  Unfortunately for Ms Gray no such issue was identified.

13. She based her argument for the Court’s intervention upon the following facts:

    ·her partner’s loss of employment was unexpected and his ongoing inability to obtain employment has created an enormous financial burden of them;

    ·her partner’s Newstart allowance is insufficient to meet their living costs and the costs of running their small property;

    ·they have had to survive on charity from friends and charitable organisations; and

    ·her health renders it difficult for her to obtain employment.

    These are, in my opinion, factors that a decision-maker should properly take into account.  However, the difficulty that Ms Gray faces is that the Tribunal did refer to each of these matters and it did take them into account.  It is true, as Ms Gray submitted, that the Tribunal failed to mention her age and that of her partner.  She is fifty-three and he is fifty.  As she said, the ability of people of that age to obtain employment is harder than it is for younger people.  On reflection however, I do not think that the failure to mention their ages is of such a consequence as to warrant the intervention of the Court.  The fact that they could not obtain employment was emphasised by the Tribunal and that, in my opinion, was sufficient.

14. The Tribunal was aware that there will be instances where financial hardship may be so unusual and severe as to constitute “special circumstances”: Secretary, Department of Social Services v Ellis (1997) 46 ALD 1. As to this, however, the Tribunal pointed out that “the net value of assets under their joint control exceeds $200,000”. The Tribunal went further, adding that, in its opinion, the retention of their present assets was “uneconomic and impractical”. Their last partnership tax return had revealed a business income of $1,192 against expenses of $39,553. That was, however the 1997 return and, according to the Tribunal was “evidently, the last one prepared”.

15. The term “special circumstances” was considered by a Full Court of this Court in Beadle v Director-General of Social Security (1985) 60 ALR 225 at 228. That was a case that dealt, among other things, with subs 102(1) of the Act, which provided for a family allowance; it would be payable if a claim were lodged within six months after the date on which the claimant became eligible or, “in special circumstances, within such longer period as the Director-General allows”. The Full Court discussed the expression “special circumstances” in these terms:

    “As we have seen the Director-General in acting under s 102(1) is concerned with the period between the date a claimant became eligible and the time when the claim was lodged.  The legislature has indicated that six months latitude is sufficient in the normal case.  The Director-General has power to fix a longer period in special circumstances.  Presumably in this context special circumstances must include events which would render the six months unfair or inappropriate.  For example, where the delay beyond six months was due to the claimant’s being misled by a departmental officer or was due to the negligence of a third party it might be thought the normal six months would be in appropriate; that special circumstances had been shown which warranted a longer period.  More difficult would be questions of ignorance, illiteracy, isolation, illness and the like.  It would depend upon the circumstances of the particular case whether these constituted special circumstances.  We do not think it is possible to lay down precise limits or precise rules.  The matter is one for the Director-General bearing in mind the purpose for which the power is given.  The phrase “special circumstances”, although lacking precision, is sufficiently understood in our view not to require judicial gloss.”

16. The Tribunal balanced the obvious hardship that Ms Gray and her partner were facing against other factors, such as:

    ·the component for loss of future earnings that was included in the lump sum;

    ·the election to use the lump sum to discharge the bank mortgage instead of holding it, or some of it, back to meet living expenses;

    ·Ms Gray’s knowledge, prior to repayment of the bank mortgage that there would be, in her case, a preclusion period that would affect any social welfare benefits to which she might otherwise become entitled;

    ·The fact that Ms Gray and her partner personally have unencumbered assets in excess of $200,000 and have elected to retain these assets.

17. I cannot fault the conclusion at which the Tribunal arrived.  No error of law was identified by Ms Gray and I have not located any.  The Tribunal gave a fair and balanced consideration to the factors that weighed for and against the application and came down, reasonably in my opinion, against Ms Gray.

18. Her appeal to this Court must be dismissed.

19. There remains the question of costs.  In her written submissions, Ms Gray argued that she was entitled to protection from a costs order because of the provisions contained in O 16 r 34(1) of the High Court’s Rules.  That subrule states:

    “Where a person intends to apply to be allowed to sue, defend or become a party as a poor person, a person who, with knowledge of that intention , takes or agrees to take or seeks to obtain from him a payment, fee, profit or reward for the conduct of the proceedings in the Court is guilty of contempt of Court.”

    The first problem with the applicant’s submission is that the High Court Rules do not apply to a proceeding in the Federal Court.  The second problem is that the Federal Court Rules do not contain a parallel provision to O 16 r 34(1).  The third problem is that even if such a rule existed, the applicant could not rely upon it.  It seems to me that Ms Gray has misunderstood the effect of the High Court rule.  Her written submissions were to the effect that the respondent was aware of her status as a poor person and was, therefore, in breach of the rule.  The rule in question, however, applies to some third party, perhaps a friend or adviser of Ms Gray who, knowing that the applicant intends to sue as a poor person, offers to act for that person against the respondent for a fee.  The rule has no application to the respondent in these proceedings.  It is therefore appropriate that the usual costs order be made against Ms Gray.  She is to pay the respondent’s taxed costs.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O’Loughlin.

Associate:

Dated:            17 June 2002

The Applicant appeared in person
Counsel for the Respondent:	Mr J. Telfer
Solicitor for the Respondent:	Sparke Helmore
Date of Hearing:	22 April 2002
Date of Judgment:	17 June 2002