Julien v Department of Employment and Workplace Relations
[2008] FMCA 1429
•15 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JULIEN v DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS | [2008] FMCA 1429 |
| ADMINISTRATIVE LAW – Appeal from AAT – superannuation – definition of benefit as it applies to an international agreement concerning social security benefits between Australia and the United States of America – special circumstances. |
| Acts Interpretation Act 1901 (Cth) Administrative Appeals Tribunal Act 1975 (Cth) Social Security Act 1991 (Cth) Social Security (International Agreements) Act 1999 (Cth) Superannuation Guarantee (Administration) Act 1992 (Cth) |
| Applicant A v Minister for Immigration and Ethnic Affairs (Chinese One Child Policy Case) (1997) 190 CLR 225 Dietrich v R (1992) 177 CLR 214 Garrard t/as Arthur Anderson & Co v Email Furniture Pty Ltd (1993) 32 NSWLR 662 Mace v Murray (1955) 92 CLR 370 Mills v Meeking (1990) 169 CLR 214 Minougue v Williams (2000) FCA 0125 Norbis v Norbis (1986) 161 CLR 513 Shipping Corporation of India Limited v Gamlen Chemical Co (Australasia) Pty Ltd (1980) 147 CLR 142 |
| Applicant: | ARCHIE JULIEN |
| Respondent: | DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS |
| File Number: | BRG 896 of 2007 |
| Judgment of: | Burnett FM |
| Hearing date: | 19 December 2007 |
| Date of Last Submission: | 19 December 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 15 October 2008 |
REPRESENTATION
| The Applicant appeared on his own behalf |
| Solicitors for the Respondent: | Minter Ellison |
ORDERS
That the appeal be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRG 896 of 2007
| ARCHIE JULIEN |
Applicant
And
| DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant is a citizen of the United States. For many years he was employed in that country as an engineer. During the course of his employment in the United States he and his employer made contributions to the US Government run social security fund. That entitled him to retirement benefits upon obtaining the age of 62.
He married an Australian woman and permanently relocated to Australia some years ago.
In April 2004 he commenced receiving Newstart payments provided by the Australian Government. In the meantime as he approached his 62nd birthday he applied for retirement benefits payable by the US Social Security Administration. There were delays in the processing of his application but once approved he was advised he would be paid arrears totalling $3,950 in respect of the period 1 December 2005 to 30 April 2006 with an ongoing benefit of $790 per month thereafter. The letter of advice describes the payments as Social Security.
The applicant approached Centrelink and enquired about the effect of any lump sum payments received from the US Government upon his entitlement to benefits in Australia. Centrelink provided him with relevant policy statements and took his inquiry on notice. After a review of policy documentation provided by Centrelink to him he concluded it would have no effect and the payment would be exempt.
Ultimately Centrelink took a different view and decided that the lump sum payment must be taken into account when calculating his entitlement to Newstart. They also determined he was overpaid Newstart benefits in the amount of $3,021.50 during the period 1 December 2005 to 30 April 2006.
An agreement exists between the United States and Australia regulating the payment of social security. Centrelink’s view was that the agreement regulated the payment of benefits to persons who might have an entitlement to benefits from the social security system of either or both countries. The agreement seems to be directed to preventing double dipping, unfair treatment and to avoid misunderstandings.
Insofar as it concerned the Applicant Centrelink determined that his entitlements from the United States were benefits as defined and accordingly the benefits were to be taken to be income within the meaning of section 8 of the Social Security Act 1991 (“ the SS Act”). Upon that basis the applicant had been overpaid Newstart benefits after account was allowed for benefits received from the United States. Accordingly the overpayment was recoverable as a debt due to the Commonwealth.
The applicant contended, in essence, the sum received was in the nature of superannuation and was not a “benefit”. He contended Centrelink was wrong in deciding against him in the manner in which it did and that he was thereby not indebted to the Commonwealth.
The applicant sought a review of Centrelink’s decision by the Administrative Appeals Tribunal (“the AAT”). That matter was heard by the AAT constituted by a senior member. He affirmed the decision of Centrelink under review and in the exercise of his discretion declined to waive the debt pursuant to section 1237AAD of the SS Act.
By Notice of Appeal filed in the Federal Court on 21 August 2007 the applicant appealed against the decision of the AAT.
The basis for appeal
The appeal is one governed by section 44 of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”). It was one permissible for transfer to this Court; section 44AA(1) of the AAT Act. By order of Justice Spender made 12 October 2007 the appeal was transferred to this Court. In particular section 44(4) and (5) and (6) of the AAT Act apply in relation to the Court’s hearing and determination of the appeal. Those provisions require that the appeal be disposed of in a manner corresponding with the way in which they would apply to a hearing and determination of the appeal as if it was being heard by the Federal Court.
It follows the appeal is one limited to questions of law: section 44(1) AAT Act. Accordingly only questions of law posed in the appeal can be the subject of any order made by this court consequent upon the hearing of the appeal.
The Appeal
The Notice of Appeal itself is a turgid and prolix document being 28 pages in length. Although discursive in form the appeal can be distilled to raise two questions of law being:
a)The Tribunal erred in its construction of the term “benefit” as applied in the agreement between the Government of Australia and the Government of the United States of America on Social Security contained in the Social Security (International Agreements) Act 1999 (“the SSIA Act”) – Schedule 13; and
b)The Tribunal miscarried in the exercise of its discretion to refuse a waiver of the lump sum pursuant to section 1237AAD of the SS Act.
A number of other matters were raised by the applicant in the Notice of Appeal they being allegations:
a)The Tribunal failed to resolve the applicant’s claims;
b)The Tribunal wrongly identified the purpose of the Policy was to prevent double dipping;
c)Allegations of fraud and misconduct on the part of Centrelink in its processing of the applicant’s claim;
d)Allegations that the Tribunal engaged in collusive conduct.
The first two matters did not concern questions of law arising from the decision. The latter two complaints were premised upon unfounded speculation by the applicant. None of those complaints fall within the ambit of matters permissible for review on appeal as provided by section 44(1) of the AAT Act and accordingly they cannot be prosecuted on the appeal.
First Ground
The first ground concerns the Tribunal’s construction of the term “benefit” for the purpose of the “Agreement between the Government of Australia and the Government of the United States of America on Social Security” being Schedule 13 to the SSIA Act. The terms of the Agreement have force of law by operation of section 6 of that Act.
Relevantly Article 1 of the Agreement defined the term “benefit”. It provides in Part 1 Article 1(b)
““benefit” means in relation to a party, a benefit, pension or allowance for which provision is made in the laws of that Party, and includes any additional amount, increase or supplement for which a beneficiary is qualified but, for Australia, does not include any benefit, payment or entitlement under the law concerning the superannuation guarantee;”
The focus of the Appellant’s argument is that the benefit is superannuation and not a “benefit” as defined. There is no definition provided in the Agreement for superannuation. Nor does any definition appear in the SS Act or the Superannuation Guarantee (Administration) Act 1992.
He contends it is clear the benefits are superannuation benefits as commonly understood. He says that is how the term should be construed because the fund from which the benefit is paid is one created by payments made by both himself and his employer during the course of his employment. I infer he contends that the fact the fund is administered by the US Government which in turn pay the benefits is merely incidental. In other words they merely act out as a fund manager and that function could be undertaken by any other competent agency.
The first issue to resolve concerns the approach that should be taken to construction of the Agreement contained in Schedule 13.
The approach to the interpretation of international agreements is well settled. Australian courts have taken the view that Parliament has intended that such instruments be interpreted by reference to the rules applicable to the interpretation of treaties with the principles governing the interpretation of domestic legislation giving way to those rules; Shipping Corporation of India Limited v Gamlen Chemical Co (Australasia) Pty Ltd (1983) 147 CLR 142 at 159. A question arises as to whether the agreement becomes part of domestic law despite it being set out as a schedule to an Act; see Minogue v Williams (2000) FCA 0125 at [20]-[27] following Dietrich v R (1992) 177 CLR 292 at 305 and at 360. In the event, the agreement is to be treated as consistent with a treaty. The approach identified in Applicant A v Minister for Immigration and Ethnic Affairs (Chinese One Child Policy Case) (1997) 190 CLR 225 is to construe the agreement consistent with the provisions of the Vienna Convention on the Law of Treaties (1969) (“the Vienna Convention”).
Article 31 of the Vienna Convention relevantly provides:
“General Rule of Interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context of the purpose of the interpretation of the treaty shall comprise, in addition to the text, including its preamble and annexures:
(a) Any agreement relating to the treaty which was made between all parties in connection with the conclusion of the treaty;
(b) Any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. It shall be taken into account, together with the context:
(a) Any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provision;
(b) Any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) Any relevant rules of international law applicable to the relations between the parties;
4. A special meaning shall be given to a term if it is established that the parties to intended to.”
Article 32 of the Vienna Convention is also relevant. It provides:
“Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of Article 31, or to determine the meaning when the interpretation according to Article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.
That approach mirrors the approach provided for by the Acts Interpretation Act 1901. Accordingly I do not consider that factor should materially impact upon the approach to or final determination of the matters in issue.
The words of the SSIA Act, Schedule 13, are plain in their expression. The applicant seeks to apply a purposeful approach to the construction of the word “benefit” consistent with section 15AA of the Acts Interpretation Act 1901. The approach to be adopted in those circumstances was clearly articulated by His Honour Dawson J[1] in Mills v Meeking (1990) 169 CLR 214 at 234-235 where he stated:
[1] Although Justice Dawson was in the minority the approach to resolving issues of statutory interpretation was common to the members of the court.
“The difficulty has been in ascertaining the intention of Parliament rather than giving effect to when it is known. Indeed, as everyone knows, the intention of Parliament is somewhat of a fiction. Individual members of parliament, or even the Government, do not necessarily mean the same thing by voting on a bill or, in some cases, anything at all. The collective will of the legislature must therefore be taken to have been expressed in the language of the enactment itself, even though that language has been selected by the draftsman who is not a member of parliament.
In the past this has meant that preference has been given to the literal meaning of a statute, this being the only safe guide to the intention of the legislature. Such was the approach of Gibbs CJ in Cooper Brooks (Wollongong) Pty Ltd v FCT (1981) 147 CLR 297 at 305 where he said:
“…if the language of a statutory provision is clear and unambiguous, and is consistent and harmonious with other visions of the enactment, and can be intelligibly applied to the subject matter with which it deals, it must be given its ordinary and grammatical meaning, even if it leads to a result that may seem inconsistent or unjust…. On the other hand, if two constructions are open, the court will obviously prefer that which will avoid what it considers to be inconvenience or injustice.”
Perhaps that approach gives insufficient emphasis to the purpose of the legislation, for as Mason and Wilson JJ in the same case observed (at 312):
“Quite obviously question of degrees arise. If the choice is between two strongly competing interpretations, as we have said, the advantage may lie with that which produces the fairer and more convenient operation so long as it conforms to the legislative contention. If, however, one interpretation has a powerful advantage in ordinary meaning and grammatical sense, it will only be displaced if its operation is perceived to be unintended.”
However, the literal rule of construction, whatever the qualifications with which it is expressed, must give way to a statutory injunction to prefer a construction which would promote the purpose of an Act to one which would not, especially where that purpose is set out in the Act. Sections [15A of the Acts Interpretation Act 1901] must, I think, mean that the purposes stated in [the Social Security (International Agreements) Act 1999] are to be taken into account in construing the provisions of that [schedule], not only where those provisions on their face offer more than one construction, but also in determining whether more than one construction is open. The requirement that the Court look to the purpose or object of the Act is more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction. The mischief or purpose rule requires ambiguity or inconsistency before a Court can have regard to purpose…. The approach required by [section 15AA] needs no ambiguity or inconsistency; it allows a Court to consider the purpose of the Act in determining whether there is more than one possible construction. Reference to the purposes may reveal that the draftsman has inadvertently overlooked something which he would have dealt with had his attention been drawn to it and if it is possible as a matter of construction to repair the defect, then this must be done. However, if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman. Section [15AA] requires the Court to construe an Act, not to rewrite it, in light of its purposes.”
The reference in Article 2 Section 1(A) to the “Federal Old Age, Survivors, and Disability Insurance Program” is clear and unequivocal. It is immaterial that the scheme may involve co-contribution as alleged by the appellant. Perhaps the appellant was incorrect in his characterisation of the co-payment being akin to a superannuation contribution. It might more readily be characterised as a tax, co-payment or levy of the kind for instance that applies in Australia to the Medicare scheme. In that event the taxpayer makes a contribution and the government provides the balance of any cost of paying for a later service. In any event it does not appear to me that there was anything overlooked by the draftsman which he would have dealt with had his attention been drawn to it. I particularly note that the definition of “benefit” in Article 1 Section 1(b) provides for it not to include a “benefit, payment or entitlement under the law concerning the superannuation guarantee.” It is clear that, insofar as it concerns Australia, the superannuation guarantee payments or entitlements were not to be included in its calculation. Given the applicant’s description of the manner in which provision is made for superannuation benefits in the United States the absence of any expression of the meaning of superannuation in its context provides a stark contrast. The only reasonable inference to be drawn is that the omission was intentional.
Furthermore given the description of the manner in which provision is made for superannuation benefits in the United States mainly by co-payment by the employee to government in the nature of a tax or levy the co-payment appears to have the character of an insurance premium to make provision for a claim in the event the prospective beneficiary can demonstrate an entitlement to claim by achieving a statutory age qualification. In that context the benefit has a quality of social security and it follows that the applicant’s submission that the benefit should be construed as superannuation and treated as such is inconsistent with the purpose of the Act.
It follows in my view, that irrespective of which approach is adopted the outcome is the same. The payments received by the appellant are a “benefit” for the purpose of Schedule 13 of the SSIA Act. No error can be demonstrated in the approach of the Tribunal in its construction of the agreement. Accordingly the appeal on this ground fails.
Second Ground
The second ground of appeal alleged by the applicant is that the Tribunal erred in the exercise of its discretion to forgive the debt due. Pursuant to section 1237AADof the SS Act the Secretary may waive the right to recover all or part of a debt if he is satisfied, inter alia, “there are special circumstances” that make it desirable to waive the debt.
The Tribunal found that the applicant did not adduce any evidence demonstrating any special circumstances which may have enlivened the discretion on the part of the Secretary to make it desirable to waive the debt. On that basis it declined to waive the debt pursuant to section 1237AAD of the SS Act.
The principles governing a review of the exercise of discretion are well established. In Mace v Murray[2] the Court observed:
“[A] Court of Appeal is not justified in interfering with the decision appealed from unless it reaches a clear conclusion that by reason of some error, whether of fact or law, the primary judge not only has taken a view different from that which judges of the Court of Appeal will have taken if they had been in his place, but has failed properly to exercise the discretion.”
[2] (1955) 92 CLR 370 at 378
To rebut the presumption that the decision appealed from is correct it is necessary for the appellant to demonstrate that the Tribunal, exercising the discretion, acted upon a wrong principle of binding law or permitted itself to be influenced by extraneous or irrelevant matters or that otherwise the decision was so plainly unreasonable or unjust as to warrant the Appeal Court interfering on the basis that there has been a failure to properly exercise the discretion; see Norbis v Norbis (1986) 161 CLR 513; Garrard t/as Arthur Anderson & Co v Email Furniture Pty Ltd (1993) 32 NSWLR 662.
In this case the applicant has failed to demonstrate any error on the part of the Tribunal. This ground is dismissed.
Summary
The applicant presses an appeal on two bases namely:
a)The Tribunal misconstrued the term “benefit” insofar as it applied to an international agreement concerning the application of social security benefits between Australia and the United States; and
b)The Tribunal miscarried in the exercise of its discretion to waive an outstanding debt due by it to the Commonwealth.
The Tribunal did not err in its construction of the relevant agreement and no basis can be advanced by the applicant to demonstrate the Tribunal erred in the exercise of its discretion to refuse his application for waiver of the debts.
Orders
The appeal is dismissed.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Burnett FM
Associate: Beverley Schmidt
Date: 15 October 2008
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