Haggerty and Department of Education, Training and Youth Affairs
[2001] AATA 857
•12 October 2001
DECISION AND REASONS FOR DECISION [2001] AATA 857
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2000/343
GENERAL ADMINISTRATIVE DIVISION )
Re GRANT JAMES HAGGERTY
Applicant
And SECRETARY, DEPARTMENT OF EDUCATION, TRAINING AND YOUTH AFFAIRS
Respondent
DECISION
Tribunal Associate Professor S D Hotop, Senior Member
Date12 October 2001
PlacePerth
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 28 October 1998 and, in substitution therefor, decides that: the applicant owes a debt to the Commonwealth, in the amount of $5,402.88, pursuant to s39 of the Student and Youth Assistance Act 1973 ("the Act"); the Commonwealth's right to recover part of that debt – namely the sum of $610.26 – from the applicant is waived pursuant to s43B(1) of the Act; the balance of that debt – namely, the sum of $4,792.62 – is recoverable from the applicant by the Commonwealth in accordance with Part 6 of the Act.
...........(sgd S D Hotop)...........
Senior Member
CATCHWORDS
EDUCATION – AUSTUDY – overpayment – debt – waiver – debt attributable solely to administrative error made by Commonwealth – whether applicant received in good faith payments that gave rise to debt
Student and Youth Assistance Act 1973 s43B(1)
Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484
Secretary, Department of Education, Employment (sic), Training and Youth Affairs v Prince (1997) 26 AAR 385
REASONS FOR DECISION
12 October 2001 Associate Professor S D Hotop, Senior Member
This matter is again before the Tribunal following a remittal by the Federal Court of Australia: see Haggerty v Department of Education, Training and Youth Affairs (2000) 31 AAR 529.
On 5 November 1999 the Tribunal made a decision affirming a decision of the Social Security Appeals Tribunal ("SSAT") dated 28 October 1998 that Grant James Haggerty ("the applicant") had been overpaid a total amount of $5,402.88 by way of AUSTUDY benefits for the period from 19 February 1996 to 31 December 1996 and that that amount constituted a debt owed by the applicant to the Commonwealth and should be recovered from him.
At the rehearing of this matter by the Tribunal the applicant was represented by Ms G Braddock of counsel and the Secretary to the Department of Education, Training and Youth Affairs ("the respondent") was represented by Mr M Ritter of counsel. The Tribunal had before it the following documentary exhibits:
·Statutory Declaration of Ian David Haggerty dated 15 April 1999 (A1);
·Statutory Declaration of the applicant dated 19 April 1999 (A2);
·Documents lodged with the Tribunal by the respondent on 4 January 1999 pursuant to s37 of the Administrative Appeals Tribunal Act 1975 in Application for Review No W1998/480 ("the T documents") (R1);
·Copy of "Application for AUSTUDY 1996" by Joanna Margaret Haggerty dated 11 February 1996 and attachments (R2); and
·Copy of extracts from "Application and Guide – AUSTUDY 1996" prepared by the (former) Department of Employment, Education and Training (R3).
Oral evidence was given by the applicant and by Ian David Haggerty.
The Factual Background
The following background facts are found by the Tribunal on the basis of the T documents and Exhibit R2.
On 14 March 1996 and "Application for AUSTUDY 1996" form in the name of the applicant was lodged with a Student Assistance Centre ("SAC") within the (former) Department of Employment, Education, Training and Youth Affairs ("DEETYA") in Perth. In that form the applicant's date of birth was stated as 5 December 1975 and it was indicated that he had commenced full-time study on 19 February 1996 in a Bachelor of Education degree course at Edith Cowan University in Perth. His "permanent home address" was stated to be an address in the town of Kojonup and his "postal address" was stated to be a post office box number in Kojonup. It was also indicated that he would be living away from the "principal family home" to study in 1996 and an address in Claremont where he would be living in 1996 was stated. Finally, the amount of income (other than AUSTUDY benefits) he expected to receive in the periods 1 January 1996 – 30 June 1996 and 1 July 1996 – 31 December 1996 was stated. That section of the form bears the applicant's signature and the date "11/2/96". Another section of the form headed "Parent/guardian details" contains details of the incomes of the applicant's parents, Ian Haggerty and Heather Haggerty, for the period from 1 July 1994 to 30 June 1995 and details of their assets. That section of the form bears the signatures of Ian Haggerty and Heather Haggerty and the date "11/3/96".
On 14 March 1996 an "Application for AUSTUDY 1996" form in the name of Joanna Margaret Haggerty was also lodged with the abovementioned SAC. In that form Ms Haggerty's date of birth was stated as 20 June 1978 and it was indicated that she had commenced full-time study on 12 February 1996 in a course entitled "Advanced Certificate in Travel and Tourism" at Alexander College in Perth. The same "permanent home address", "postal address" and 1996 living address as stated in the applicant's AUSTUDY 1996 application form were stated in Ms Haggerty's application form. Likewise, the same amounts of expected income for the periods 1 January 1996 – 30 June 1996 and 1 July 1996 – 31 December 1996 as stated in the applicant's application form were stated in Ms Haggerty's application form. That section of Ms Haggerty's application form bears her signature and the date "11/2/96". The section of her application form headed "Parent/guardian details" contains exactly the same details of the income and assets of her parents, Ian Haggerty and Heather Haggerty, as those stated in the corresponding section of the applicant's application form. That section of Ms Haggerty's application form bears the signatures of Ian Haggerty and Heather Haggerty and the date "11/3/96".
A "Notice of Assessment – AUSTUDY – Tertiary", dated 28 March 1996, was sent to the applicant at his designated postal address in Kojonup from the abovementioned SAC informing him that he was eligible for AUSTUDY at the "Away rate" for the period from 19 February 1996 to 31 December 1996 and that the total amount payable to him for the year 1996 was $5,402.88.
A "Notice of Assessment – AUSTUDY – Tertiary", dated 2 April 1996, was sent to Joanna Haggerty at her designated postal address in Kojonup from the abovementioned SAC informing her that she was not eligible for AUSTUDY. The following explanation was provided:
"-You cannot get AUSTUDY because the actual means available to your family exceed the Pay-As-You-Earn (PAYE) benchmark (Regulation 12k(sic)). Refer to page 7 of the AUSTUDY 1996 NUS GUIDE for further details on the PAYE benchmark.
·This assessment is based on information provided in your AUSTUDY application. …
…".
The applicant received a total amount of $5,402.88 by way of AUSTUDY payments during 1996, the first payment being received on 30 March 1996 (in the amount of $610.26 for the period from 19 February 1996 to 30 March 1996) and subsequent payments being received thereafter on a regular fortnightly basis until 30 December 1996.
By letter dated 1 October 1997 an officer of Centrelink informed the applicant that his AUSTUDY entitlement for the period from 1 October 1996 to 31December 1996 was to be reassessed because a recent "data-matching" check with the Australian Taxation Office had revealed that his parents' taxable income for the 1995/96 financial year was over 25% greater than their taxable income for the 1994/95 financial year (as set out in his "Application for AUSTUDY 1996" form). A similar letter of the same date was sent to the applicant's parents, Ian Haggerty and Heather Haggerty.
A "Notice of Assessment – AUSTUDY – Tertiary", dated 10 October 1997, was sent to the applicant at his designated postal address in Kojonup from the abovementioned SAC informing him that he was "no longer entitled to a grant". The notice went on the state (inter alia):
"-Your entitlement has been reassessed on the basis of the information provided by the Australian Taxation Office (ATO).
-You cannot get AUSTUDY because the actual means available to your family exceed the Pay-As-You-Earn (PAYE) benchmark (Regulation 12k(sic)). Refer to page 7 of the AUSTUDY 1996 NUS GUIDE for further details on the PAYE benchmark.
·This assessment is based on information provided in your AUSTUDY application. …
…
·You have been assessed from 1 October on the basis of your parental income for the 1995/96 financial year as it exceeds the 1994/95 income by at least 25%.
·The Current Income assessment has been applied from 01/10/96. …
…
·You are not entitled to assistance this year.
·As a result of this reassessment a grant amount of $5402.88 has been overpaid.
·This amount must be repaid. …
…".
In an internal memorandum dated 20 October 1997 a Centrelink officer explained that the payment of AUSTUDY benefits to the applicant in 1996 was due to departmental error and recommended that part of the total abovementioned overpayment debt (namely, the part comprising AUSTUDY payments for the period from 19 February 1996 to 30 September 1996 totalling $3,829.89) be waived, and the remainder of the total debt (namely, $1,572.99) be recovered from the applicant. In a handwritten file note dated 28 November 1997, however, a (presumably) superior officer of Centrelink did not approve the abovementioned recommendation of waiver on the ground that the payment of AUSTUDY benefits received by the applicant in 1996 were not received by him in good faith.
Following a request on behalf of the applicant for a review of the decision not to waive the applicant's AUSTUDY grant debt for 1996 and to recover the full amount of that debt (namely, $5,402.88), a delegate of the respondent, by letter dated 22 August 1998, notified the applicant that that decision had been affirmed.
On 28 October 1998 the SSAT affirmed the delegate's decision of 22 August 1998.
On 1 December 1998 the applicant lodged with the Tribunal an application for review of the SSAT's decision of 28 October 1998 (Application for Review No W1998/480).
On 5 November 1999 the Tribunal affirmed the decision of the SSAT.
On 8 September 2000 the Federal Court of Australia set aside the Tribunal's decision of 5 November 1999 and remitted the matter to the Tribunal to be dealt with according to law.
The Applicant's EvidenceThe applicant told the Tribunal that he presently lives in the town of Narrogin in Western Australia and teaches the subject "Design and Technology" at Narrogin Senior High School.
A statutory declaration of the applicant, dated 19 April 1999, was tendered in evidence (Exhibit A2). The contents of that statutory declaration are as follows:
"1.I applied for a Grant of Austudy under the provisions of the Student & Youth Assistance Act on or about the 11th February 1996.
2.At the same time that I made application for Austudy, a similar application was made by my sister Joanna Margaret Haggerty and after that my application was left with my Father, Ian David Haggerty to lodge.
3.On or about the 28th March 1996, I was advised by Centrelink that I had been granted Austudy at the away rate and I began to receive certain payments from Centrelink.
4.I learnt that the application of my sister Joanna Margaret Haggerty had been refused. At that time my sister and I were living at the same address.
5.At the relevant time I was 20 years of age and was about to commence university whereas Joanna was 17 and was about to go to a private college.
6.The fact that my application had been successful and Joanna's application had been unsuccessful did not strike me as particularly odd.
7.I recall discussing the situation with my Father, Ian David Haggerty and my Mother Heather Margaret Haggerty by telephone. There may have been one discussion or possibly more than one discussion. I cannot now recall the situation. The main matter that I recall discussing was the fact that Austudy was to go into my account …".
The applicant confirmed the circumstances regarding his commencement of a Bachelor of Education degree course of study at Edith Cowan University, and his application for AUSTUDY, in early 1996, as set out in the above factual background. He also confirmed that his sister, Joanna, with whom he was then sharing a home unit in Claremont, also applied for AUSTUDY at the same time.
As regards his own application for AUSTUDY, the applicant said that the information regarding his parents' "earnings and assets" had to be included in the application form and he and his father completed the form and he then signed it.
The applicant said that subsequent correspondence from Centrelink regarding his AUSTUDY application was sent to the family farm in Kojonup and that his father telephoned him in Perth from Kojonup and informed him that he had been granted AUSTUDY but that his sister (Joanna) had not. He said that he could not recall having any further conversation about that matter and that he did nothing about it. Asked what he thought about the fact that he had been granted AUSTUDY and his sister had not, he responded:
"I just figured it was because of the age difference, because I was older and that I was in a bigger … tertiary education place."
(Transcript, p11)
He added that his sister was then 17 years of age and was enrolled in a "business/tourism" unit at Alexander College.
The applicant, when asked whether he had seen any further documentation from Centrelink in relation to his AUSTUDY grant during the time he was receiving the grant, or any correspondence between his father and Centrelink at any time, or any correspondence between Centrelink and his sister at any time, responded "No" to each question. He said that the next thing he "heard directly or indirectly" about his AUSTUDY grant was that he had to pay it back, and that his reaction to that was one of "surprise". Asked whether he had any reason to think at the end of March or the beginning of April [1996] that he should not receive AUSTUDY, the applicant responded "No".
In cross-examination the applicant agreed that his family was a "fairly close" family, that he communicated with his parents regularly, and that he and his sister, Joanna, were "fairly close". He confirmed that he and Joanna lived together in Claremont from early 1996 to the end of 1999 when he left to teach in the country.
The applicant said that when he submitted his application for AUSTUDY in 1996 he thought that the basis for assessing whether he was entitled to AUSTUDY or not would be his family's assets and income, and that he was aware that his application could be refused if the level of family assets and income was too high.
The applicant was referred to a booklet entitled "Application and Guide – AUSTUDY 1996" (Exhibit R3) and he agreed that he had that booklet when he completed his AUSTUDY 1996 application form. He also agreed that the notes in that booklet emphasised that, for a person in his situation, parental income was the major criterion according to which his entitlement to AUSTUDY would be determined.
The applicant was then referred to Joanna Haggerty's "Application for AUSTUDY 1996" form (Exhibit R2). He agreed that the details of parental income contained in that document were the same as those contained in his "Application for AUSTUDY 1996" form.
The applicant was next referred to the "Notice of Assessment – AUSTUDY – Tertiary" dated 28 March 1996 (T6) whereby he was notified that he had been assessed as eligible for AUSTUDY for the period from 19 February 1996 to 31 December 1996. He said that that notice was posted to his postal address in Kojonup and that his father informed him by telephone form Kojonup that he had been granted AUSTUDY. He said that he had not himself seen that notice prior to the previous hearing before the Tribunal (September 1999). He said that the only other thing his father told him about that notice was that his AUSTUDY payments were to be deposited in his bank account in Claremont.
As regards his sister Joanna's application for AUSTUDY in 1996 the applicant said that his father told him that Joanna had not been granted AUSTUDY but he could not recall whether that occurred in the abovementioned telephone conversation or not. He confirmed, however, that at the time when his father informed him that Joanna had not been granted AUSTUDY, he was aware that he had been granted AUSTUDY.
The applicant acknowledged that at the relevant time the family's financial situation was "tight" and that it was important to the family that both he and Joanna should be granted AUSTUDY for 1996 and that, for that reason, the decision not to grant AUSTUDY to Joanna was of interest to him. He agreed that it would have been "natural" or "obvious" for him to inquire why Joanna had not been granted AUSTUDY, but he did not recall whether he had asked his father that question at the time. He was then referred to the "Notice of Assessment – AUSTUDY – Tertiary" dated 2 April 1996 (T7) whereby Joanna Haggerty was notified that she had been assessed as ineligible for a grant of AUSTUDY for 1996 because "the actual means available to [her] family exceed the Paye-As-You-Earn (PAYE) benchmark". He said that he now understood that reason to refer to the family's assets and income but that he did not see that notice at the relevant time and he did not recall whether he was ever told that that was the reason that Joanna was refused a grant of AUSTUDY. He then agreed that he "could have been told" the reason at the time. His cross-examination continued as follows:
"There was an application decision by the Department that you got Austudy and Joanna didn't?---That's right.
And that was a matter of significance for the family?---Yes.
Now because of that, I suggest, it is overwhelmingly likely that you would have asked your father: why didn't Joanna get it?---Probably, yes.
And he would have told you - or he told you, did he not, because the means available to the family were too high?---Well, if I'd asked the question I presume he would have told me that, yes."
(Transcript, p36)
Then followed an especially significant part of the applicant's cross-examination which the Tribunal sets out at length:
"…Now the situation where yours was accepted and her application was rejected, there was really three possibilities I'd suggest to you at that stage. One possibility was that her application had been rejected in error - okay?---Right.
A second possibility was that your application was accepted in error?---Right.
And the third possibility is that there was some difference between you and Joanna?---Yes.
Okay. Now as far as you were aware, the basis upon which applications were assessed, as you've agreed earlier, was based on family income and assets and income and assets of the student, agreed?---That's right.
And the income and assets of you and Joanna was identical, so far as you were concerned as individuals and as a family?---Yes.
So on the basis of your understanding of how the system was assessed, there was no difference between you and Joanna was there?---That's right.
That then made it a lot more likely did it not, that either your application was accepted in error or Joanna's was rejected in error?---Right.
You agree?---Yes.
Now did you give that some thought at the time?---Not from memory.
Again, not from memory - what does that mean?---I don't recall giving it thought.
No. I would suggest to you at the time you must have had some doubts about the matter?---I don't recall whether I had doubts or not.
Okay, so you could have had doubts which you now don't remember. Is that right?---Possibly.
Yes?---Yes.
And you could have had, suspicions, is another way to put it, that you may - your application may have been accepted in error?---I don't know that I even thought about that.
Oh well, you can't remember what - - - ?---I mean I presume, I mean I've always presumed that these people knew what they were doing.
No, well I'm talking about what your thoughts were at the time and you said in answer to my questions that you can't remember whether you had doubts but I think possible or likely that you did have doubts and now I've just used a slightly different word which is suspicions, but really what I mean by that is thoughts about it. You thought about: has my application been accepted in error?---Well, it'll be the same as before, I don't, I mean I don't remember thinking about that sort of stuff.
Right, you don't remember but, again, you concede it's possible?---It's possible.
Right. Would you go beyond possible and say it's likely?---Well, I can't really commit to something I don't remember.
No, I'm not asking you to commit to something definitely, I'm asking you now, given that we're reconstructing, because you say you have no memory, and you agree with possible, but would you agree with likely?---Yeah.
Yes, okay. And did it strike you as odd that your application was accepted that your application was accepted (sic) and Joanna's was rejected?---No, not really.
When you say 'not really', what does that mean?---Well, I mean, cause I figured it was because there was two of us it cut assets, sort of in half, so that it made it easier for either one of us or both of us to get it.
Okay. How would that work though, to produce an effect that one of you did get it and one of you didn't?---Difference in age.
Sorry?---Difference in age and tertiary, what do you call it?
Institution?---Yes, tertiary institution, sorry.
But there was nothing in the notes which suggested that the difference between your age and Joanna's age and the difference between your institution and hers would make a difference, was there?---No.
No, but what the notes emphasised at all times, is that it's based on income and assets?---Right.
Okay. So given your state of knowledge at the time, that the system is based on income and assets, didn't you think it was odd, that you were accepted and Joanna was rejected?---No, I didn't.
Are you aware that your father has previously said that all four of you, meaning he and his wife, your mother, and you and Joanna all thought it was odd?---Am I aware of that?
Yes, that he said that previously?---No.
Okay. If he did say that, you would disagree with that assessment?---Yes.
…
Okay. You yourself didn't make any - take any steps to communicate with the Department after you got your acceptance, to check that that was right?---No.
Did you discuss that with your father?---No.
You didn't say to him: Look, dad, you'd better check to see if this is right because Joanna's got rejected and mine got accepted?---No.
I want to put to you a series of things that I would suggest lead to the conclusion that you must have had doubts, rather than it was just likely. Okay. These are the various facts which I say together form that overwhelming impression. Firstly, you and Joanna were living at the same address at the time?---Right.
You're brother and sister?---Yes.
You're both living away from home?---Yes.
Your parents finances was identical?---On the two different sheets?
On the application form?---Yes.
And your personal finances were identical?---Yes.
You knew that it was means tested?---Yes.
You hadn't been able to get Austudy in previous years?---That's right.
You thought that it might be different this year because the family income was different?---Yes.
Money was tight in the family?---Yes.
Your application and Joanna's application were submitted at the same time?---Yes.
And they were decided at about the same time?---Yes.
Yours was accepted?---Yes.
And hers was rejected?---That's right.
Now, given that combination of factors, I suggest you must have had doubts about whether yours was properly accepted?--- I don't recall having any doubts about my application.
So you don't change from your position that it was likely?---That's right.
Okay, but you've agreed that you didn't do anything yourself?---That's right.
Okay. You agree that it would have been, at least on the surface, easier enough for you to ring up the Department and say: My application's been accepted, my sister's has been rejected, is there any mistake?---I suppose.
There's nothing to stop you doing that?---That's right.
But you didn't?---No.
Now I suggest to you that a reason that you didn't do that, make that telephone call, is because you might find out that you weren't entitled?---Possibly, but it's not something that crossed my mind.
Well I'm talking about what was in your mind at the time, that you didn't want to find out - sorry I'll start that again, you didn't want to ring the Department because you might find out you weren't entitled?---I didn't even think to ring the Department, it wasn't something that crossed my mind.
…".
(Transcript pp 38-40, 41-42)
The applicant, when asked whether he remembered that Joanna was upset at the decision not to grant AUSTUDY to her, responded that he did not recall. Asked whether he had ever spoken to Joanna about that decision, he initially responded "No" but when it was put to him that it was likely that he would have, he responded:
"It is possible I suppose".
(Transcript, p45)
The Evidence of Ian Haggerty
A statutory declaration of Ian David Haggerty, dated 15 April 1999, was tendered in evidence (Exhibit A1). The contents of that statutory declaration are as follows:
"1. I am the father of GRANT HAGGERTY who is my son aged 23.
2. I have a daughter JOANNA MARGARET HAGGERTY who is aged 20.
3.Applications were made for Austudy allowance for both Grant and Joanna. The Applications were both made at approximately the same time namely on or about the11th March 1996.
4.The Application forms were signed by myself and my wife HEATHER HAGGERTY was father and mother of our son Grant. I recall grant having previously signed the Application on or about the 11th February 1996.
5.On or about the 28th March 1996 my son Grant was notified that he was eligible for Austudy and on or about the same date my daughter Joanna was advised that she was not eligible to receive Austudy.
6.I discussed with my wife Heather the fact that our son Grant had received Austudy whereas our daughter Joanna had not. There was only one discussion that took place and that took place at the residence on our family farm which is known as 'Woodville' in the Kojonup shire.
7.Following the discussion between myself and Heather, I spoke to both my children and told them of the fact that Grant had received Austudy whereas Joanna had not.
8.I suggested to Grant and Joanna that the reason why one had received Austudy and the other had not was possibly due to the fact that they were undertaking different study courses and there was a difference in age between them. I also said that the Department of Social Security would know what they were doing as I did not.
9.After that there were no further discussions on the subject of Austudy to my recollection until I was advised of the fact that a claim was being made against my son Grant for repayment of Austudy."
Mr Haggerty told the Tribunal that he and his wife had filled in the "Application for AUSTUDY 1996" forms on behalf of the applicant and Joanna Haggerty and lodged them with the SAC in March 1996 and that correspondence from Centrelink pursuant to those applications was addressed to his post office box number in Kojonup. He said that he received departmental notification that the applicant had been granted AUSTUDY and that Joanna had not been granted AUSTUDY, and that he received those notices at approximately the same time. He said that he then telephoned the applicant and Joanna in Claremont and informed them of those decisions. Asked whether he forwarded the relevant correspondence to the applicant and Joanna, or took any steps to clarify matters for them, he responded "No". Nor, he said, did he make further contact with Centrelink until he was notified in October 1997 that the applicant had to repay the amount of AUSTUDY paid to him for 1996.
Mr Haggerty said that the applicant and Joanna had
"asked the question why one got it and one didn't".
(Transcript, p49)
He said that they (ie he and his wife) could not really give them an answer to that question because they did not know the reason, but merely suggested that perhaps it was because of their different ages and courses of study. He said that he could not remember having any discussion with the applicant about the reason for the rejection of Joanna's AUSTUDY application. He said that they did not consider appealing against the decision not to grant AUSTUDY to Joanna; they "just accepted it" because they thought that the department "knew what they were doing". (Transcript, p50)
In cross-examination Mr Haggerty acknowledged that important criteria in assessing the applicant's and Joanna's eligibility for AUSTUDY were his and his wife's income and assets, and he confirmed that the financial details provided in the applicant's and Joanna's AUSTUDY application forms were identical. He agreed that it seemed peculiar to him at the time that the applicant had been granted AUSTUDY for 1996 but that Joanna had not been granted AUSTUDY for 1996, because he thought that their respective assessments would be based on his and his wife's income and assets, identical details of which had been provided in the relevant AUSTUDY application forms.
Mr Haggerty was then referred to the "Notice of Assessment – AUSTUDY – Tertiary" dated 2 April 1996 stating that Joanna Haggerty was not eligible for a grant of AUSTUDY – in particular, the stated reason for her ineligibility. He initially said that he and his wife were "a bit confused" when they received that notice but he ultimately agreed that he would have understood at that time, from reading the notice, that Joanna had been assessed as ineligible for AUSTUDY because the means available to her family exceeded a particular benchmark. He also agreed that they had been informed that Joanna had been refused AUSTUDY effectively because of the level of her family's assets and income.
Mr Haggerty was asked about his communicating to the applicant and to Joanna the determinations on their 1996 AUSTUDY applications. He said that he could not remember how he communicated that information to them at the time but he ultimately agreed that it was probably by telephone, although he could not remember speaking either to the applicant or to Joanna on the telephone about that matter. He did remember, however, that Joanna was "emotionally disturbed" and "crying" by reason of the refusal of her AUSTUDY application on a particular weekend which she spent on the family farm at Kojonup.
Mr Haggerty agreed that the refusal of Joanna's AUSTUDY application was a serious matter, not only for her but also for the whole family, and he also agreed that, because of its implications for the family, he probably would have discussed that matter with the applicant as well as with Joanna.
Mr Haggerty was referred to the reasons of the SSAT for its decision of 28 October 1998 (the decision under review) – in particular, para 7 which commences:
"Mr Haggerty also told us that Grant and Joanna got their letters from the Department on the same day. He said it did strike them all as odd that Grant's application had been approved while Joanna's was not."
He agreed that his recollection was that the approval of Grant's application coupled with the refusal of Joanna's application struck all 4 family members – namely, himself, his wife, Grant (the applicant) and Joanna – as odd. He also agreed that, for him to have that recollection, the applicant must have communicated to him in some way that he thought that situation was odd.
The Issue
The applicant does not dispute that he received an overpayment of AUSTUDY benefits in 1996 and that the total amount of that overpayment was $5,402.88. The respondent does not dispute that the whole of that overpayment was attributable solely to an administrative error made by the Commonwealth. The only issue in dispute in this case is whether the whole or part of the debt owed by the applicant to the Commonwealth, by reason of that overpayment, must be waived in accordance with the relevant legislation (see below).
The Relevant LegislationThe governing statute at the relevant time was the Student and Youth Assistance Act 1973 ("the Act") (now called the Student Assistance Act 1973). Both parties presented their case to the Tribunal on the basis that the crucial provision of the Act for the determination of the abovementioned issue is s43B(1). That subsection came into effect on 1 July 1998: see the Social Security Legislation Amendment (Youth Allowance Consequential and Related Measures) Act 1998 (No 45, 1998), s2(1) and Sched 11, item 39. Given that the original decision not to waive, but rather to recover, the relevant overpayment debt was made on 28 November 1997 (see paragraph 12 above) it may be that the appropriate provision of the Act to apply is not s43B(1) but, instead, its statutory predecessor which was in force on that date, namely s289(1). For all practical purposes, however, it matters not which of those provisions is applied by the Tribunal in this case because their terms are relevantly identical. Given that s43B(1) was regarded as the applicable provision by the parties, and was the provision applied by the Federal Court in Haggerty (above), the Tribunal will henceforth refer to that subsection.
Part 6 (ss38-43F) of the Act deals with debts arising from overpayments under the Act, and the recovery and non-recovery of such debts by the Commonwealth. Section 43B(1) relevantly provides:
"… the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note:Subsection (1) does not allow waiver of part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor)."
By reason of s38 of the Act, the word "debt" in s43B(1) includes a "student assistance overpayment", the definition of which phrase in s3(1) of the Act includes an overpayment of AUSTUDY. By s39 of the Act the amount of such an overpayment is a debt owed by the recipient to the Commonwealth.
Consideration and Findings
As mentioned above, it is common ground that an overpayment of AUSTUDY in the total amount of $5,402.88 was made to the applicant during 1996 (more specifically, during the period from 30 March 1996 to 30 December 1996) and that the whole of that overpayment was attributable solely to an administrative error made by the Commonwealth. The question for the Tribunal's determination is, as previously mentioned, whether the debt (constituted by that overpayment) thereby owed by the applicant to the Commonwealth must be waived in accordance with s43B(1) of the Act. The answer to that question depends entirely on whether or not the applicant "received in good faith" the payment or payments that gave rise to that debt, within the meaning of s43B(1) of the Act.
The meaning of the phrase "received in good faith" in s43B(1) of the Act (and its abovementioned statutory predecessor and other corresponding statutory provisions) has been explained in recent decisions of the Federal Court of Australia. In Secretary, Department of Education, Employment (sic), Training and Youth Affairs v Prince (1997) 26 AAR 385 Finn J, referring to s289 of the Act (the predecessor of s43B), said (at 388):
"For my own part, I consider the burden of the formula in the s289 setting to be obvious enough. Its concern is with the state of mind of a person concerning his or her receipt of the payment: if that person knows or has reason to know that he or she is not entitled to a payment received – that is, is not entitled to use the moneys received as his or her own - that person does not receive the payment in good faith. Absent such knowledge or reason to know, the receipt would be in good faith.
Given the conventional liability of a mistaken payee of money from consolidated revenue to repay that money irrespective of his or her belief as to an entitlement to it (that is, the 'rule' in Auckland Harbour Board v The King [1924] AC 318), the concession made to the mistaken payee by s 289 of the SYA Act does seem in all probability to be directed to a payee who receives the money (to put the matter positively) in the good faith belief that he or she is entitled to receive it. In other words the frame of the section is to exclude from the right to a waiver, a person who knows or has reason to know that he or she is not entitled to receive the payment. It would be surprising to find that the Parliament intended otherwise."
In Haggerty (above) French J, after quoting the first of the above paragraphs from Finn J's judgment in Prince, said (at 534):
"I do not take what his Honour said in that case as supporting the proposition that a person can be found to be receiving payments other than in good faith simply by reason of the fact that there are facts in existence which are known to the recipient sufficient to negative the recipient's entitlement. In my opinion that is not a sufficient criterion. Knowledge of relevant facts is not enough to generate reason to know of the lack of entitlement.
The criterion of receipt in good faith may be characterised as a positive one as counsel for the respondent submitted. That is not to say that a recipient of a mistaken payment must prove that he or she has considered the entitlement to the money and positively concluded that there is an entitlement. There is no question of an onus here to be met by the recipient who claims benefit of the mandatory waiver. Nor is there some twilight zone between good faith and want of good faith. A waiver can only, in my opinion, be declined where there has been a receipt, without good faith, of moneys mistakenly paid. This accords with the general approach taken by Finn J whose construction of the provision is related to the criteria for want of good faith.
Consistently with what his Honour said in the Prince case, want of good faith will arise where there is a positive belief that the payment has been made by mistake. It will also arise where there is a suspicion held by the recipient that he or she may not be entitled to the payment made or a doubt as to the entitlement coupled with some objective basis for such suspicion or doubt. The provision does not, however, authorise the imputation of want of good faith in any of the senses above described simply because there are in existence objective facts which would raise a belief or a doubt or a suspicion of non-entitlement in the mind of some imaginary recipient. That proposition is quite consistent with the view that the existence of such facts may support an inference that the recipient disbelieved or doubted or was suspicious about his or her entitlement. 'Reason to know' as Finn J used that term in Prince does not necessarily import a criterion of imputed as distinct from actual want of good faith as I have described it."
Most recently, in Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 Cooper J, referring to s1237A(1) of the Social Security Act 1991 (whose terms are relevantly identical to those of s43B(1) of the Act), said (at paras 40-41):
"40 Prima facie, s1237(1) is concerned with actual personal receipt by the debtor of the payment or payments which give rise to the debt. The issue of good faith is, for the purpose of the section, to be determined when the debtor commences to exercise control over the payment by retaining it. It is at this time that the recipient must act with the requisite good faith. A lack of good faith does not mean that the recipient of the payment must be acting fraudulently when the payment is received and retained. It means that for whatever reason, the recipient acts without an honest belief that he or she was entitled to receive and retain the payment when he or she receives the payment and decides to exercise control over it by retaining it.
41 A person does not act in good faith where the person turns a blind eye to circumstances which raise doubt as to the entitlement of the person to receive and retain the payment or refuses to make reasonable inquiries where doubt exists…".
In the Tribunal's opinion a critical finding in this case is the date when the applicant first became aware of the decision of DEETYA that his sister (Joanna) was not eligible to be paid AUSTUDY for 1996. That finding is critical because there is no evidence before the Tribunal to suggest that the applicant, prior to his becoming aware of that decision, had any reason to know or suspect that he might not be entitled to be paid AUSTUDY for 1996 or to doubt his entitlement to be paid AUSTUDY for 1996.
The facts in the present case are that a notice, dated 28 March 1996, of DEETYA's decision that the applicant was eligible for AUSTUDY, and a notice, dated 2 April 1996, of DEETYA's decision that Joanna was not eligible for AUSTUDY, were sent by post to them at their postal address (being their parents' post office box) in Kojonup. The Tribunal is satisfied on the evidence before it that, upon receiving those notices, Ian Haggerty in Kojonup telephoned the applicant and Joanna in Claremont and informed them of the abovementioned decisions of DEETYA. On the balance of probabilities the Tribunal finds that Ian Haggerty informed the applicant and Joanna by telephone of DEETYA's decisions – namely, that the applicant was eligible for AUSTUDY for 1996 but that Joanna was not eligible for AUSTUDY for 1996 – in the first week of April 1996, during which period the notices of those decisions would have been received by him in the ordinary course of post.
The next critical finding to be made relates to the applicant's state of mind regarding his own entitlement to be paid AUSTUDY for 1996 upon his becoming aware of DEETYA's decision that Joanna was not eligible for AUSTUDY for 1996. The applicant's own evidence during cross-examination (see paragraph 31 above) was that he did not recall whether he had doubts at the relevant time about his entitlement to AUSTUDY but he acknowledged, initially, that it was "possible", and, ultimately, that it was "likely", that he did have such doubts at that time.
On the basis of the applicant's oral evidence the Tribunal is satisfied on the balance of probabilities, and finds, that, upon being informed of DEETYA's decision that Joanna was not eligible for AUSTUDY for 1996, the applicant then commenced to have doubts about his own entitlement to be paid AUSTUDY for 1996 and that those doubts were based on the following objective facts:
he and Joanna each lodged an application for AUSTUDY for 1996 with DEETYA on 14 March 1996 on the basis that they were each undertaking full-time tertiary study in that year;
each application form contained the necessary information regarding the tertiary course of study to be undertaken and the tertiary institution at which it was to be undertaken;
each application form contained identical information regarding his and Joanna's expected income in 1996 and their parents' income in the 1994/95 financial year and assets; and
DEETYA decided at about the same time that he was eligible to be paid AUSTUDY for 1996 but that Joanna was not eligible to be paid AUSTUDY for 1996.
In making the abovementioned finding that the applicant then commenced to have doubts about his own entitlement to be paid AUSTUDY for 1996, the Tribunal has also had regard to the applicant's evidence that he was aware that AUSTUDY eligibility was means tested and was determined on the basis of family income and assets.
The Tribunal also finds, on the basis of the evidence of the applicant and of Ian Haggerty, that no subsequent inquiry was made by, or on behalf of, the applicant to DEETYA during 1996 regarding the applicant's entitlement to be paid AUSTUDY for that year.
It follows from the Tribunal's abovementioned findings that the payments of AUSTUDY received by the applicant after the first week of April 1996 - at which time he first became aware of DEETYA's decision that Joanna was not eligible for AUSTUDY and accordingly commenced to have doubts about his own entitlement to AUSTUDY – were not received in good faith, within the meaning of s43B(1) of the Act: Haggerty (above) at 534; Jazazievska (above) at para 41. The Tribunal hastens to add, however, that in finding that the applicant did not receive those payments in good faith, it does not find that the applicant received those payments fraudulently: Jazazievska (above) at para 40.
According to the T documents, the applicant received his first payment of AUSTUDY for 1996 on 30 March 1996 in the amount of $610.26: see T6, p37; T13, p51. As stated in paragraph 46 above, however, there is no evidence before the Tribunal to suggest that, as at that date, the applicant had any reason to know or even suspect that he might not be entitled to be paid AUSTUDY for 1996 or to doubt his entitlement to be paid AUSTUDY for 1996. The Tribunal finds, therefore, that the payment of AUSTUDY benefits received by the applicant on 30 March 1996 in the amount of $610.26 was received by him in good faith, within the meaning of s43B(1) of the Act.
According to the T documents the applicant received the remainder of his payments of AUSTUDY benefits for 1996 in regular fortnightly instalments commencing on 10 April 1996 and ending on 30 December 1996: see T6, p37; T13, p51. In accordance with the Tribunal's findings set out in paragraphs 49-51 above, the Tribunal finds that none of those fortnightly payments of AUSTUDY, commencing on 10 April 1996 and ending on 30 December 1996, was received by the applicant in good faith, within the meaning of s43B(1) of the Act.
ConclusionThe Tribunal's ultimate findings in this matter are as follows:
the applicant received an overpayment of AUSTUDY in 1996 in the total amount of $5,402.88 and that overpayment constitutes a debt owed by the applicant to the Commonwealth;
the whole of that overpayment of AUSTUDY was attributable solely to administrative error made by the Commonwealth;
the payment of AUSTUDY benefits in the amount of $610.26 to the applicant on 30 March 1996 (being part of the abovementioned overpayment debt of $5,402.88) was received by the applicant in good faith;
none of the subsequent regular fortnightly payments of AUSTUDY benefits to the applicant, commencing on 10 April 1996 and ending on 30 December 1996 (being the balance of the abovementioned overpayment debt of $5,402.88) was received by the applicant in good faith.
The tribunal concludes, therefore, that the Commonwealth's right to recover that proportion of the total debt of $5,402.88 represented by the abovementioned overpayment of AUSTUDY benefits on 30 March 1996 in the amount of $610.26 must be waived pursuant to s43B(1) of the Act, but that the balance of that debt – namely, the sum of $4,792.62 – is recoverable from the applicant by the Commonwealth in accordance with Part 6 of the Act.
DecisionFor the above reasons the Tribunal sets aside the decision of the SSAT dated 28 October 1998 and, in substitution therefor, decides that:
the applicant owes a debt to the Commonwealth, in the amount of $5,402.88, pursuant to s39 of the Act;
the Commonwealth's right to recover part of that debt – namely the sum of $610.26 – from the applicant is waived pursuant to s43B(1) of the Act;
the balance of that debt – namely, the sum of $4,792.62 – is recoverable from the applicant by the Commonwealth in accordance with Part 6 of the Act.
I certify that the 56 preceding paragraphs are a true copy of the reasons for the decision herein of Associate Professor S D Hotop, Senior Member
Signed:
................................(sgd S Railton).................................
AssociateDate/s of Hearing 4 April 2001
Date of Decision 12 October 2001
Counsel for the Applicant Ms G Braddock
Solicitor for the Applicant Michael Rogers & Associates
Counsel for the Respondent Mr M Ritter
Solicitor for the Respondent Australian Government Solicitor
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