Harfouche and Secretary, Department of Social Services (Social services second review)
[2019] AATA 2484
•9 August 2019
Harfouche and Secretary, Department of Social Services (Social services second review) [2019] AATA 2484 (9 August 2019)
Division:GENERAL DIVISION
File Number: 2018/2896
Re:Gabriel Harfouche
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Brigadier A G Warner, Member
Date:09 August 2019
Place:Perth
The Tribunal sets aside the decision under review and makes a decision in substitution that the Applicant’s Newstart Allowance be suspended for the period 15 June 2016 to
7 December 2016.............[sgd]............................................................
Brigadier A G Warner, Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance (NSA) – failing to comply with requirement – whether applicant has been notified – whether notice is reasonable – whether Tribunal is not satisfied that applicant had a reasonable excuse – whether NSA payable – suspension or cancellation – decision under review set aside and substituted – applicant’s NSA be suspended for the period 15 June 2016 to 7 December 2016
LEGISLATION
Acts Interpretation Act 1901 (Cth) – ss 28A, 29
Administrative Appeals Tribunal Act 1975 (Cth) – s 42B
Social Security (Administration) Act 1999 (Cth) – ss 63, 64, 80, 85, 109
CASES
Mentink v Secretary, Department of Social Services (2016) 238 FCR 1
REASONS FOR DECISION
Brigadier A G Warner, Member
09 August 2019
INTRODUCTION
Mr Harfouche seeks review of the decision of the Administrative Appeals Tribunal, Social Services and Child Support Division (AAT1) dated 16 May 2018 (T2), affirming the decision of the Department of Human Services (the Department) on 5 July 2016 to cancel his Newstart Allowance (NSA) (T13).
Mr Harfouche attended and gave evidence at the hearing in Perth on 23 April 2019.
Mr A Burgess of Sparke Helmore Lawyers represented the Respondent.
During the hearing an issue arose as to whether Mr Harfouche’s NSA payment should have been cancelled or suspended pursuant to s 80(1) of the Social Security (Administration) Act 1999 (Cth) (the Administration Act). The matter was adjourned for the parties to provide written closing submissions confined to this issue.
BACKGROUND
Mr Harfouche was in receipt of NSA when he was selected by a Random Sample Review and required to attend an interview with the Department on 17 May 2016 (T19/133).
On 31 May 2016, the Department issued a notice under s 63 of the Administration Act requiring Mr Harfouche to provide information by 14 June 2016, in particular:
(a)a completed MOD R for rental property (MOD R is a Real Estate Details Form used to advise share of a property’s asset value and income to the Department); and
(b)a current mortgage balance and mortgage agreement (T11/86-87).
The Department suspended and then cancelled Mr Harfouche’s NSA from 8 June 2016 after he failed to comply with the notice (T20/138). In the Respondent’s written closing submissions, the Respondent states (para 12):
The AAT1 incorrectly referred to the cancellation occurring on 20 June 2016, and this mistake was repeated in the Secretary’s Statement of Facts, Issues and Contentions.
A Department file note of a conversation with Mr Harfouche on 20 June 2016 provides in part: “[c]ustomer has advised he will be faxing Mod R and docs as per Q002 later today. He has been advised NSA sus and will check fax once docs received I will call and restore NSA” (T21/170).
A Department file note of a further conversation between Mr Harfouche and an officer of the Department on 24 June 2016 provides in part (T21/171):
Customer called as customer has been suspended due to not supplying documents (MOD R) and asked to speak to the Manager. I explained to Mr Harfouche the reason he was suspended as we were waiting on the MOD R documents that [sic] and reminded him of the letter sent out on the 31 May requesting this information. Mr Harfouche became upset and said we already have this information...
...I assured him that we have not received any other documents from him. Again I advised Mr Harfouche that I was not able to restore his NSA payment until we receive [sic] the documents requested. I asked Mr Harfouche would he be able to supply the documents and he said ‘ok’ and then hung up the telephone.
On 5 July 2016, the Department cancelled Mr Harfouche’s NSA on the basis that he still had not complied with the requirement set out in the notice dated 31 May 2016 (T13/91).
On 10 August 2016, the Department’s visiting service was in Mount Magnet and spoke with Mr Harfouche. The related Department file note records (T21/182):
…visiting service went to Mt Magnet & spoke to customer about reclaiming NSA. They adv’d him that he would not get backdated and customer at this time stated he was registered for mygov & was capable of compleing [sic] online claim.
A CCD was coded and 2 x Mod R’s given to customer.
Customer submitted online claim 6/12/2016 and was backdated to 30/11/2016.
At the beginning of the conversation, customer discussed his Random Review and that he was interviewed by someone in Osborne Park (where we are located), however by the end of the call he advised he did not know he had a review.
On 30 November 2016, Mr Harfouche lodged a new claim for NSA, and on
7 December 2016, Mr Harfouche’s wife provided the Department with MOD Rs and associated documents for two investment properties owned by them (T15/105-116, T16/117-130). On 14 January 2017, the new NSA claim was granted with effect from
30 November 2016 (T21/178).
On 21 November 2017 (one year, four months and 16 days after his NSA was cancelled), Mr Harfouche sought review of the decision, seeking arrears of NSA between the date of cancellation and the re-grant (T21/179). An authorised review officer (ARO) affirmed the decision on 22 March 2018 (T19/132-136).
On 11 April 2018, Mr Harfouche requested further review of the decision by the AAT1.
Mr Harfouche and his wife, Mrs Kelsie Harfouche, attended the AAT1 hearing on
16 May 2018. The AAT1 found that (T2/10):
23.… Mr Harfouche failed to comply with a requirement that was notified to him under subsection 63(2) of the Administration Act. The requirement was reasonable and Mr Harfouche did not have a reasonable excuse for not complying. This means that in accordance with section 64, the newstart allowance was not payable.
24.As the payment was not payable to Mr Harfouche it was correctly suspended, and subsequently cancelled in accordance with section 80 of the Administration Act.
On 25 May 2018, Mr Harfouche lodged an Application for Review of Decision in the Administrative Appeals Tribunal (T1/1-5). In his application Mr Harfouche provided lengthy reasons why he wanted the decision reviewed and summarised those reasons as
(T1/4-5):
The person who made the decision does not have the jurisdiction to make the decision; … The decision involved an error of law; … The enactments do not authorise the making of the decision; … The decision maker has asked itself the wrong questions; … The procedures that were required in law to be observed were not observed; … The decision fails to take relevant considerations into account; … The decision was an exercise that constitutes an abuse of power; … The decision is so unreasonable that no reasonable person would have so exercised the power.
On 21 August 2018 an interlocutory hearing to consider an application by the Respondent for dismissal of the matter pursuant to s 42B of the Administrative Appeals Tribunal Act 1975 (Cth) took place. Deputy President Boyle declined to dismiss the matter at that time.
ISSUE
The issue to be decided is whether the Department’s decisions to suspend and cancel
Mr Harfouche’s NSA on 8 June 2016 and 5 July 2016 respectively, were correct.
LEGISLATION
The relevant legislation is contained in the Administration Act.
Section 80 of the Administration Act provides that:
(1)If the Secretary is satisfied that a social security payment is being, or has been, paid to a person:
(a)who is not, or was not, qualified for the payment; or
(b)to whom the payment is not, or was not, payable;
the Secretary is to determine that the payment is to be cancelled or suspended.
A person may be required to attend the Department, or provide information to the Department, in accordance with s 63 of the Administration Act which provides:
(2)If the Secretary is of the opinion that a person to whom this subsection applies should:
(a)attend an office of the Department; or
(b)contact the Department; or
(c)attend a particular place for a particular purpose; or
(d)give information to the Secretary;
the Secretary may notify the person that he or she is required, within a specified time, to do that act or thing…..
…
(7) If a person is notified under subsection (2) or (4) and the notice does not inform the person of the effect of section 64, subsection 64(1) or (5) (as the case requires) does not apply to the person in relation to the requirement in the notice.
Section 64 of the Administration Act provides that the social security payment is not payable if the person does not comply with the requirement:
(1) If:
(a)a person is receiving, or has made a claim for, a social security payment; and
(b)the Secretary notifies the person under subsection 63(2) or (4); and
(c)the requirement in the notice is reasonable; and
(d)the person does not comply with the requirement; and
(e)except if the person is receiving, or has made a claim for, a participation payment-the Secretary is not satisfied that the person had a reasonable excuse for not complying with the requirement; and
(f)the Secretary is satisfied that it is reasonable for this subsection to apply to the person;
the payment that the person is receiving or has claimed is not payable.
Should this Tribunal determine that Mr Harfouche’s NSA should not have been suspended or cancelled, s 85 of the Administration Act is relevant and provides:
(1)If:
(a)a person’s social security payment is:
(i) cancelled by force of section 93 or 94; or
(ii) cancelled or suspended under section 80, 81 or 82; or
(iii) cancelled under Part 3C (schooling requirements); and
Note: For reconsideration of the suspension of a schooling requirement payment, see sections 124J, 124N and 124NG.
(b)the Secretary reconsiders the decision; and
(c)as a result of the reconsideration, the Secretary is satisfied that, because of the decision:
(i) the person did not receive a social security payment that was payable to the person; or
(ii) the person is not receiving a social security payment that is payable to the person;
the Secretary is to determine that the social security payment was or is payable to the person, as the case requires.
(2)The reconsideration referred to in paragraph (1)(b) may be a reconsideration on an application under section 129 or a reconsideration on the Secretary’s own initiative.
Should the Tribunal make a favourable decision with respect to Mr Harfouche’s NSA,
the date of effect rules provided in s 109 of the Administration Act apply as follows:
(2)If:
(a)a decision (the original decision) is made in relation to a person’s social security payment; and
(b)a notice is given to the person informing the person of the original decision; and
(c)more than 13 weeks after the notice is given, the person applies to the Secretary, under section 129, for review of the original decision; and
(d)the favourable determination is made as a result of the application for review;
the favourable determination takes effect on the day on which the application for review was made.
EVIDENCE
The evidence before the Tribunal comprised:
·the Tribunal documents (T1-T21, pp 1-196);
·Applicant’s outline of submissions dated 9 August 2018 (Exhibit A1);
·Applicant’s statement of facts, issues and contentions dated 18 October 2018 (Exhibit A2);
·documents filed under cover email dated 7 November 2018 (Exhibit A3);
·Secretary’s outline of submissions dated 9 August 2018 (Exhibit R1); and
·Secretary’s statement of facts, issues and contentions dated 10 September 2018 (Exhibit R2).
The Tribunal also had before it:
·Secretary’s closing submissions dated 30 April 2019; and
·Applicant’s closing submissions dated 20 May 2019.
At the hearing, the Tribunal heard the oral evidence of:
·the Applicant’s partner, Mrs Kelsie Harfouche; and
·the Applicant.
At the hearing, Mr Harfouche sought to introduce a witness, described as a captain and communications expert in the Army Reserve to give oral evidence, without previously advising his intention to do so and without a witness statement. The Respondent objected on the grounds of procedural fairness and relevance. Mr Harfouche failed to convince the Tribunal regarding the relevance of any potential evidence and the witness was consequently refused.
CONSIDERATION
Mr Harfouche’s evidence before the Tribunal included the following:
(a)he repeatedly emphasised that he and his wife were a couple, had been in a family/household relationship since 1999, and that at the relevant time of the cessation of his NSA in 2016 they were a family of seven.
(b)
Mr Harfouche provided a number of different explanations in relation to the response “No” to the question “[d]o you (and/or your partner) have an interest in any other real estate in and/or outside Australia?” (Q49) contained in the Income and Assets form completed on 21 May 2016 (T10/84). During the hearing he said that he had misread the question to mean only real estate outside Australia,
that he or his wife had misread the question, that he had signed the form without being involved in filling it out, that at the time there was a lot of stress on him and his family, and that it was “just an error”.
(c)
He submitted that the Respondent’s position was complicated because its
“own internal policy and a higher agency, the Auditor General, has articulated that random reviews in remote areas are exempt”(Transcript at 15). He further questioned the conduct of a random review “when that person’s got a legal qualification and knows the ramifications of a misstatement or a negligence or a fraud” (Transcript at 19).
(d)He submitted that the requested Mod R had already been given and “nothing had changed at that time” (Transcript at 10) and that notwithstanding, he did not receive the request purported to have been sent on 31 May 2016 (T11/86-87).
(e)He considered the cancellation of his NSA a punitive and rash measure by an employee of the Department “because of her perception of my tone or otherwise” (Transcript at 12), and further that he thought the Department was looking for a reason to cut people off Centrelink, perhaps for monetary or government savings reasons.
The Tribunal, and the Respondent, afforded Mr Harfouche considerable latitude adducing evidence from his wife, despite his failure to advise his intention to call her to give oral evidence and the absence of a witness statement. Mrs Harfouche’s evidence was that:
(a)The reason for the delay in reinstating Mr Harfouche’s NSA was that documents were still boxed following their move to Mount Magnet and “who knows where things were” (Transcript at 42).
(b)Mr Harfouche was not getting NSA because the requested MOD R had not been provided. She was present during Mr Harfouche’s telephone conversations with Centrelink in the period May to November 2016 and was aware of the documentation Centrelink was seeking from Mr Harfouche (Transcript at 46).
(c)
She was uncertain whether she and Mr Harfouche received the Department’s
31 May 2016 letter (T11/86-87) by mail, however Mrs Harfouche did recall a telephone call from Vicki Wilson at Centrelink saying “that we have a review and needing MOD Rs and all of this…” (Transcript at 49).
(d)The response to Q49 in the Income and Assets form completed on 21 May 2016 was “just an error” (Transcript at 47).
(e)At the relevant time the family was under stress with both Mr and Mrs Harfouche being charged with trespass and Mr Harfouche and their son being charged with assault, although “all of that got dismissed” (Transcript at 42). Mount Magnet was a toxic town (Transcript at 41).
It is appropriate for the Tribunal to address Mr Harfouche’s submission regarding the exemption of remote areas from random reviews (Exhibit A3, see para [28](c) above).
The Auditor-General authority relied upon by Mr Harfouche is an audit report completed in 2006 to assess a random sample review program after its inception in 2002.
The Respondent told the Tribunal that the report found “that generally speaking customers excluded due to remoteness are reasonably similar to the general population except they have less total income and assets and there are more customers with partners on benefits, this makes them more likely to be receiving incorrect benefits” (Transcript at 56). The Australian National Audit Office report is not Centrelink policy and the Tribunal finds it irrelevant to the current consideration.
The Tribunal’s consideration starts with s 63 of the Administration Act which provides that the Secretary may require a person to attend or contact the Department, attend a particular place for a particular purpose or give information to the Secretary. Subsection 63(5) of the Administration Act provides that the Secretary may notify a person by sending the notice by prepaid post addressed to the person at his or her postal address last known to the Secretary, or in any other way the Secretary considers appropriate.
The evidence is, and both Mr Harfouche and Mrs Harfouche confirmed, that their postal address at the relevant time was [omitted] and that previous correspondence from the Department had been sent to that address and received (T7/45-46). The Tribunal has regard to ss 28A and 29 of the Acts Interpretation Act 1901 (Cth) which provide that where correspondence is sent as in the preceding paragraph, it will arrive within the normal course of the post and is deemed to be delivered. The Department’s request for information dated 31 May 2016 is correctly addressed and contains the advice:
[i]f you do not provide this information to us by 14 June 2016 your Newstart Allowance payments may be stopped. If you cannot provide the information by the due date you need to contact us (T11/86)
(original emphasis).
Further, in her oral evidence Mrs Harfouche was unable to confirm that she or
Mr Harfouche did not receive the 31 May 2016 notice (T11/86-87) (Transcript at 49).
The Tribunal is satisfied that the 31 May 2016 request for information was valid and validly given.
The Tribunal then considers the provisions of s 64 of the Administration Act – “Effect of failing to comply with requirement to attend Department etc.” As Mr Harfouche was in receipt of Newstart Allowance when the 31 May 2016 notice was issued (see para [5] above), s 64(1)(a) is satisfied and the Tribunal has already found that s 64(1)(b) is satisfied.
The Tribunal now considers s 64(1)(c) – whether “the requirement in the notice is reasonable”. Mr Harfouche contends that the requirement in the notice was not reasonable as he had previously provided the information and before the Tribunal he repeatedly said that “nothing had changed”. Mr Harfouche had recently moved to Mount Magnet and the Tribunal considers it reasonable that the Department might use a random sample review to confirm information. Further, on 21 May 2016 (10 days before the Department’s 31 May 2016 request for information) Mr Harfouche provided an income and assets form to the Department in which he stated (at Q49) that he did not have an interest in any other real estate (T10/84, also see paras [28](b) and [29](d) above). This advice was inconsistent with information previously provided. Despite his repeated assertions that “nothing had changed”, when pressed before the Tribunal, Mr Harfouche admitted that the response provided at Q49 might be seen as a significant change to someone reading the document that he submitted on 21 May 2016.
In regard to the significance of the inconsistent information Mr Harfouche provided in the 21 May 2016 income and assets form (T10/84), the Respondent stated:
The alternative is that his answer in the income and assets form is recorded on the system and he’s overpaid payments, because he did in fact own investment properties and declared he hadn’t (Transcript at 58).
Having regard to all the evidence, the Tribunal is satisfied that the requirement in the
31 May 2016 notice is reasonable.
The evidence is clear that Mr Harfouche did not comply with the information requirement. His response to the Department (T21/171) and the reason given before the Tribunal was that he had previously provided the documents and should not have to provide them again. In her evidence before the Tribunal, Mrs Harfouche said Mr Harfouche was not receiving NSA because the requested MOD R had not been provided.
In a telephone conversation on 24 June 2016, the Department explained the requirement for the requested information. Mr Harfouche responded that he would seek an injunction with the Federal Court but then advised that he was able to supply the documents (T21/171). In an earlier telephone contact on 20 June 2016, Mr Harfouche advised that he would fax the required documents that same day but failed to do so (T21/170).
The Tribunal now turns to s 64(1)(e) of the Administration Act to consider whether it is not satisfied that Mr Harfouche had a reasonable excuse for not complying with the requirement. Mr Harfouche submits that the original decision-maker made insufficient enquiry regarding this provision. The current review by this Tribunal is of course de novo, however the Tribunal notes that the AAT1 made relevant enquiry as detailed in the AAT1 decision dated 16 May 2018:
21.Mr Harfouche told the tribunal that from 2015 to 2017 he was involved in litigation for 10 or more matters involving money owing, pursuance of debtors and defending his reputation in the small community in which he and his family were living. He said his son was assaulted and the whole family was subject to harassment from the police and a number of prominent families in the community. He said that all of these matters had an effect on his health. He provided medical reports indicating that he has been treated over a long period for depression.
22.The tribunal is not satisfied that Mr Harfouche’s pursuance of a number of other matters should take precedence over his obligations in respect of his social security payments. Nor is the tribunal satisfied that Mr Harfouche was unable to comply with the requirements due to medical incapacity.
(T2/9-10).
In her evidence relevant to the time of the Department’s notice requesting information, Mrs Harfouche told the Tribunal that she and Mr Harfouche had a business, although inactive, established in the hope that he would secure a contract at the airport, and that
Mr Harfouche was helping “a lot of the Indigenous people with their court matters” (Transcript at 42). Although there was some evidence that Mr Harfouche was receiving medical treatment at the relevant time, the Tribunal notes that his medical condition did not preclude his involvement in these activities nor his move to Mount Magnet and there was no corroborative medical evidence offered to suggest that Mr Harfouche was unable to comply with his social security payment obligations.
The Tribunal also considered the evidence regarding involvement of members of the Harfouche family in legal/police matters in Mount Magnet and the evidence of
Mrs Harfouche that a lot of stuff they moved to Mount Magnet was still boxed and that there was a problem finding documents.
Before the Tribunal, Mr Harfouche expressed satisfaction that this Tribunal had heard his excuse for not complying with the 31 May 2016 requirement.
In his written closing submissions, Mr Harfouche stated:
The cancellation of NSA affected the family of 7 in that their quality of life was affected and the cancellation of his NSA disadvantaged Mr Harfouche in finding employment since without NSA to use to purchase paper, ink, transport costs in order to apply for jobs, send letters, buy toiletries for presentation of himself in interviews affected his family life.
Having careful regard to the evidence and Mr Harfouche’s circumstances at the time the Department issued its notice on 31 May 2016, the Tribunal finds that Mr Harfouche was not denied procedural fairness and did not have a reasonable excuse for not complying with the requirement of the notice. The Tribunal is satisfied that in this matter it is reasonable that s 64(1) of the Administration Act applies to Mr Harfouche and that the payment of NSA being received by Mr Harfouche was not payable following his
non-compliance with the notice of 31 May 2016.
The Tribunal now goes to s 80 of the Administration Act which provides (as already stated at para [19] above) that a social security payment should be cancelled or suspended if the decision-maker is satisfied that the recipient is not, or was not, qualified for the payment or the payment is not, or was not payable. In this matter, the Tribunal has found that the NSA payment was not payable.
The Department notice of 31 May 2016 (T11) required Mr Harfouche to provide the requested information by a specified date, that being 14 June 2016, and he failed to comply by that date. The Tribunal finds that the correct date for suspension of
Mr Harfouche’s NSA is 15 June 2016, the day following the specified date by which he failed to provide the required information.
Mr Harfouche’s NSA was initially suspended when the Department’s delegate determined that payment was not payable pursuant to s 64 of the Administration Act. In a telephone contact, the delegate again made the requirement for the MOD R forms clear to
Mr Harfouche and gave him further time to provide them. When the requirement was still not met, the delegate cancelled Mr Harfouche’s NSA on 5 July 2016, cancelled from
8 June 2016 (T13/91-92). Mr Harfouche eventually provided the requested forms to the Department on 7 December 2016 (T16/117-130).
The Respondent’s written closing submissions address the question of when to suspend and when to cancel a payment. The Respondent cites the Full Court of the Federal Court in Mentink v Secretary, Department of Social Services (2016) 238 FCR 1 and the Respondent submits that the preferable decision would be that Mr Harfouche’s payment should have been suspended rather than cancelled, and that the Tribunal could terminate the suspension from the date Mr Harfouche complied with the Department’s notice and provided the required forms – 7 December 2016. The Tribunal agrees.
The Tribunal has careful regard to Mr Harfouche’s written closing submissions, however, they largely fail to address the reason behind their request, that being the question of when to suspend and when to cancel a payment. Rather, Mr Harfouche agitates his previous contentions again and describes the cancellation of his NSA as “capricious, arbitrary, malicious and random” (para 12), a description not supported by the evidence and not accepted by the Tribunal. The submission concludes:
The government/Respondent has spent much more than this amount sought by
Mr Harfouche in their legal fees in an effort to thwart Mr Harfouche’s request and this calls into question the legal practitioners conduct in not endeavouring to reach a negotiate settlement on this matter and the on-going legal costs they face in the event of Appeal to the Federal Court (Applicant’s written closing submissions, para 23).
Given that Mr Harfouche has been paid NSA from 30 November 2016 (T21/178) consequent to a new claim, reinstating Mr Harfouche’s NSA from 7 December 2016 would have no practical effect on the amount of NSA payable to him.
CONCLUSION
Having regard to all the evidence and the circumstances of this matter, and having satisfied itself regarding the criteria in s 64 of the Administration Act, the Tribunal finds that Mr Harfouche’s NSA was not payable as a consequence of his failure to comply by
14 June 2016 with a requirement detailed in the notice dated 31 May 2016. The Tribunal determines that the correct and preferable decision is to suspend Mr Harfouche’s NSA from 15 June 2016, being the day after he failed to meet the requirement.
DECISION
Based on the above reasons, the Tribunal sets aside the decision under review and makes a decision in substitution that the Applicant’s NSA is suspended for the period
15 June 2016 to 7 December 2016.
I certify that the preceding 51 (fifty-one) paragraphs are a true copy of the reasons for the decision herein of Brigadier A G Warner, Member
.....[sgd]...................................................................
Associate
Dated: 09 August 2019
Date of hearing: 23 April 2019 Applicant: In person, self-represented Representative for the Respondent: Mr A Burgess Solicitors for the Respondent: Sparke Helmore
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