Kuklis and Secretary, Department of Social Services (Social services second review)

[2022] AATA 4411

Kuklis and Secretary, Department of Social Services (Social services second review) [2022] AATA 4411 (21 December 2022)

Division:GENERAL DIVISION

File Number:2022/4301          

Re:Dorota Kuklis   

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

Decision

Tribunal:Member S Barton

Date:21 December 2022

Place:Perth

The application for an extension of time in which to lodge an application for review is refused.

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Member S Barton

CATCHWORDS

PRACTICE AND PROCEDURE – extension of time application – social security – age pension – recoverable debt – length of delay – explanation for delay – prejudice to Respondent – merits of the application – extension of time refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth) – ss 29, 29(2), 29(7)

Social Security Act 1991 (Cth) – ss 1237, 1237A, 1237AAD

Social Security (Administration) Act 1999 (Cth) – ss 123H, 123J(2)(c)

CASES

Beadle and Director-General of Social Security (1984) 6 ALD 1

Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 3 FCR 344

Jamal v Secretary, Department of Social Services [2017] FCA 916

RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123

Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76

Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190

Swanton v Military Rehabilitation and Compensation Commission (2017) 73 AAR 56

REASONS FOR DECISION

Member S Barton

21 December 2022

BACKGROUND

The Application

1. The Applicant’s substantive application seeks a review of a decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal (AAT1) dated 7 October 2021, which affirmed the decision of a Services Australia (the Agency) Authorised Review Officer (ARO) on 20 November 2020 to raise an age pension debt totalling $71,303.48 for the period from 27 February 2014 to 10 May 2018.  

2. The debt was raised on the basis that the Applicant’s assets exceeded the asset limit threshold for age pensions resulting in no entitlement for the pension.

3. On 24 May 2022, the Applicant applied to the Tribunal for an extension of time and for a review of the decision of the AAT1. The issue before the Tribunal is whether it is reasonable to grant this application for an extension of time.

   Facts

4. On 27 February 2014, the Applicant lodged a claim for age pension and completed an Income and Assets form. In response to the below questions, the Applicant ticked ‘no’ (R1, Annexure A).

   (a)Do you (and/or your partner) own, or are buying, or have a life interest in your home?

   (b)Do you (and/or your partner) have an interest in any other real estate in and/or outside Australia?

5. On 21 March 2014, the Applicant’s partner was appointed her nominee and continued to do so until his death on 8 December 2021.

6. The claim for age pension was granted on 11 April 2014, commencing 27 February 2014 (R1, Annexure C).

7. On 29 November 2017, the Agency commenced an investigation which determined the Applicant had an interest in five properties (R1, Annexure F).  On 15 May 2018, the Agency cancelled the Applicant and her partner’s age pension on the basis that their combined assets ($1,233,272) exceeded the asset limit threshold of $1,040,000 (R1, Annexure G).

8. On 2 August 2018, an age pension debt of $71,303,48 was raised against the Applicant from the period 27 February to 10 May 2018.

9. The Applicant’s partner also had his pension cancelled and he appealed to the Tribunal, which affirmed the decision (R1, Annexure I).

10. The Applicant sought an appeal of the decision with an ARO, who affirmed the decision. The Applicant appealed to the AAT1, which also affirmed the decision on 7 October 2021.  

11. AAT1 posted the decision to the Applicant on 22 December 2021 and, with time for postage allowed, the 28-day time limit for the Applicant to lodge an application for a review expired on 3 February 2022.

    MATERIAL BEFORE THE TRIBUNAL

12. The interlocutory hearing took place on 15 November 2022. The Applicant appeared via teleconference and was represented by her daughter, Ms Zaklina Kuklis-Foj. An interpreter for the Applicant was present via teleconference. The Respondent was represented by Ms Cindy Huang who also appeared via teleconference.

13. The Tribunal admitted the following documents into evidence at the hearing:

    (a)Ms Kuklis-Foj’s letter to Senior Member Dr M Evans-Bonner requesting an extension of time, dated 6 July 2022 (Exhibit A1);

    (b)Death Certificate of Wally Kuklis, dated 18 January 2022 (Exhibit A2);

    (c)Explanation or formal review of a decision (SS35) form, dated 24 March 2022 (Exhibit A3);

    (d)Applicant’s letter, dated 25 March 2022 (Exhibit A4); and

    (e)Secretary’s Outline of Submissions, with Annexures A-R, dated 28 June 2022 (Exhibit R1).

    ISSUES

14. Section 29 of the Administrative Appeals Tribunal Act 1975 details the manner of applying for a review of a decision. Section 29(2) provides a general prescribed time for making an application, which is 28 days of the Applicant receiving notice of the decision. However, s 29(7) provides that, upon application in writing by a person, this time period may be extended if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.

15. The issue before the Tribunal is whether it is satisfied, in all the circumstances, that it would be reasonable to agree to an application for the extension of time.

16. Section 29(7) is ordinarily interpreted in the light of principles set out in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 3 FCR 344. This decision of the Federal Court, and subsequent decisions made by the Tribunal, have set out a non-exhaustive list of considerations that may guide the decision of whether an extension of time may be granted. These considerations include the following:

    (a)the length of delay;

    (b)explanation for the delay;

    (c)prejudice to the Respondent or the wider public arising from a delay;

    (d)merits of the application under review, that is, its prospect for success; and

    (e)alternative avenues of relief.

    Length of Delay and Explanation

17. As was detailed above, the Applicant had from 6 January 2022 to 3 February 2022 to lodge an application for a review. The Applicant lodged her application for a review on 24 May 2022, 110 days after that period had closed.

18. There is a well-established principle that there needs to be finality in administrative decision making and therefore there is a requirement for limitation periods. A delay of this length would, in ordinary circumstances, be given significant weight.

19. The circumstances of the Applicant’s life early 2022, following the sudden and unexpected death of her husband on 8 December 2021, may have warranted consideration as to whether it would be reasonable to extend the time period. The Tribunal notes that the Applicant’s husband, upon whom she appeared to rely for attending to administrative matters, as evidenced by him acting as her nominee, had died the previous month. It is understandable that in these circumstances the lodging of an appeal to the Tribunal was not given the priority it might in normal circumstances. However, a 110 day delay, nearly four times the times limit, must be given some weight.

20. In terms of explanation for the delay, the Applicant stated that she was unsure if she should proceed with second review, and if, due to her changed circumstances, she was required to request a review through the Agency (R1/5). The Applicant, through her daughter, approached the Agency requesting the waiving of the debt (R1/Annexure Q).

21. This does suggest some confusion on behalf of the family regarding their appeal rights, despite them being clearly communicated in the correspondence accompanying the AAT1’s decision. However, it should also be noted that on 23 February 2022, the Applicant had withdrawn an application for the Tribunal to review two decisions, namely the decision to reject her and her husband’s claim for age pension (R1/Annexure P). This does suggest a level of familiarity with the review process and undermines the explanation for delay.      

    Prejudice

22. The Respondent contends that it would not be prejudiced, aside from the cost of defending an application. Such an application, in the Respondent’s view, has limited prospects of success (R1/6).

23. The Tribunal must also consider the interests of the public, the necessity of timeframes for administrative decision making and the interests of those applicants that appear before the Tribunal having complied with time limits, which the Applicant has not done.

    Merits of the Application

24. With respect to the merits of the proposed review, it is not necessary for the Tribunal to undertake a complete consideration of the matter. It must, however, assess the merits in a 'fairly rough and ready way' as noted in Jamal v Secretary, Department of Social Services [2017] FCA 916, [12], quoted with approval in Swanton v Military Rehabilitation and Compensation Commission (2017) 73 AAR 56, [32].

25. The relevant legislation for the decision the Applicant has sought to review is the Social Security Act 1991 (Cth) (the Act).

26. The Respondent contends that the debt of $71,303.48 was correctly raised on 2 August 2018 for the following reasons:

    (a)The Applicant’s age pension was subject to the asset test in accordance with Module G in section 1064 of the Act.

    (b)At the beginning of the debt period, on 27 February 2014, the asset limit for partnered homeowners was $1,110,500.

    (c)The Applicant was a registered owner of five properties in which she had a 50 per cent share for four of them and a 33 per cent share for one.

    (d)The Applicant’s interest in these properties exceeded the asset test.

27. That the debt was correctly raised is not disputed by the Applicant.

28. Section 1237A of the Act states the debt may be waived if it is ‘attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment…’.

29. The notion of ‘sole administrative error’ has been addressed by the Federal Court on a number of occasions, notably in Secretary, Department of Family and Community Services v Sekhon [2003] FCA 76 and Sekhon v Secretary, Department of Family and Community Services [2003] FCAFC 190. In the former, Wilcox J stated at [41]:

    For the subsection to have effect, the “proportion” of the debt – in this case, it is common ground, that would be the whole of it – must be “attributable solely” to administrative error. It is not enough that, in the absence of administrative error,
    the debt would not have arisen. Administrative error must be the sole cause, not merely one of multiple causes.

30. In the latter, Selway J stated at [35]:

    The ordinary or usual interpretation of the phrase ‘attributable solely to’ is that it refers to the single or sole cause of the relevant act or event. The word ‘attributable’ means ‘capable of being attributed’. It involves an objective assessment of causation. The words ‘a debt attributable solely to an administrative error’ can be paraphrased as meaning that the only cause that objectively can be ascribed to the relevant debt is an administrative error.

31. The debt cannot be waived for sole administrative error because the cause of the debt was the failure to declare interests in the five properties.

32. Section 1237 of the Act provides for the waiving of the debt in ‘special circumstances’. Section 1237AAD of the Act states:

    The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

    (a)the debt did not result wholly or partly from the debtor or another person knowingly:

    (i)    making a false statement or a false representation; or

    (ii)   failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and

    (b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

    (c)it is more appropriate to waive than to write off the debt or part of the debt.

33. The meaning of the word ‘knowingly’ has been the subject of consideration across a number of jurisdictions. The Tribunal points to the Court of Appeal in the Supreme Court of

    
    

    New South Wales, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123, which said at 126:

    In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge.

34. Section 123H of the Social Security (Administration) Act 1999 states that an act by a benefit recipient’s correspondence nominee has effect, for the purposes of the Act, as if it had been done by the benefit recipient. Section 123J(2)(c) states the following:

    …if the notice requires the benefit recipient to inform the Department of a matter within a specified period and the correspondence nominee does not inform the Department of the matter within that period in accordance with the notice, the benefit recipient is taken, for the purposes of the social security law, to have failed to comply with the requirement set out in the notice.  

35. The Applicant signed the Income and Assets form which did not declare any interest in properties (R1, Annexure A). The Applicant also received correspondence from the Agency which stated the requirement to inform the Agency of any changes in circumstance (R1, Annexure B-E).

36. The Applicant’s daughter wrote to the Agency, stating that (A4):

    My father Wally Kuklis, who was her nominee, misrepresented my mother. As her lack of English, she trusted him to act on her behalf and she wouldn’t even know if he filled out the forms with an error. Her debt did not result wholly from debtor knowingly, she had no idea that she should not receive pension. 

37. The Applicant and her husband as the nominee, had many opportunities to understand that the provision of information relating to her assets were required. The requirement was explicit in the correspondence from the Agency. There is no evidence before the Tribunal that might explain where there were obstacles to the acquisition of that knowledge.

38. The question then turns to ‘special circumstances’. In Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3, the Tribunal made the following observations:

    An expression such as "special circumstances" is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.

    The question must be asked…what is the context in which circumstances are to be adjudged special or not special?

39. While the Applicant may find herself in a situation of some stress and concern, there is no evidence before the Tribunal that it is unusual, uncommon or exceptional. Indeed, the Applicant is supported by her family and has assets totalling $711,301.25.

    Alternative Avenue of Relief

40. Denying the extension of time request would deny the Applicant from relief in this matter. However, future avenues of relief from the Agency remain, in the event they are warranted by her circumstances.

    DECISION

41. The application for an extension of time in which to lodge an application for review is refused.

I certify that the preceding 41 (forty-one) paragraphs are a true copy of the reasons for the decision herein of Member S Barton

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Associate

Dated: 21 December 2022

Date of hearing:	15 November 2022
Advocate for the Applicant:	Ms Z Kuklis-Foj
Advocate for the Respondent:	Ms C Huang
Solicitors for the Respondent:	Services Australia