Larkham and Secretary, Department of Social Services (Social services second review) - [2023] AATA 316

Larkham and Secretary, Department of Social Services (Social services second review) [2023] AATA 316 (14 February 2023)
Division: GENERAL DIVISION
File Number(s): 2022/9989
Re:Mikayla Larkham
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

Decision
Tribunal:Senior Member Damien O'Donovan
Date:14 February 2023
Date of written reasons: 6 March 2023
Place:Canberra

The application for an extension of time in which to apply for review of the AAT first review decision is granted.
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Senior Member Damien O’Donovan
Catchwords
PRACTICE AND PROCEDURE – application for review of AAT first review decision – prescribed period – application for review outside the prescribed period – consideration of relevant factors – prospects of success not hopeless – short delay – application granted
Legislation
Administrative Appeals Tribunal Act 1975, s 29(2)(a), 29(7)
Social Security Act 1991, s 1236(1A), 1237A, 1237AAD
Social Security (Administration) Act 1999, s 68(2)
Cases
Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344
Zizza v Federal Commissioner of Taxation (1999) 55 ALD 451
Brown v Federal Commissioner of Taxation (1999) 99 ATC 4516
Arbon and Comcare (Compensation) [2017] AATA 2870
REASONS FOR DECISION
Senior Member Damien O'Donovan
6 March 2023

This is an application for an extension of time to seek review of a decision of the Tribunal (Tier 1), in respect of the waiver or writing off of a social security debt accrued by the applicant, Ms Mikayla Larkham.
The application was heard on 14 February 2023. Ms Larkham attended by telephone and the Tribunal had an opportunity to ask her questions relevant to the application.
In determining the application, the Tribunal had regard to the evidence provided by the Respondent on 10 February 2023 and the answers given by Ms Larkham at the hearing.[1]
[1] Secretary, Department of Social Services, ‘Submission on Extension of Time’ and ‘Attachments’, Submissions in RE Larkham and Secretary, Department of Social Services, AAT2022/9989, 10 February 2023.
The relevant facts are as follows. Ms Larkham commenced studies at the University of Canberra at the start of the academic year in 2018. She was granted youth allowance in respect of this study, which was paid from 23 January 2018, based on a decision made on 1 February 2018.
On 5 March 2018 Ms Larkham withdrew from her studies at the University of Canberra as she was experiencing issues with her mental health. Her evidence to this Tribunal was that at this time in 2018 she was suffering from depression and anxiety which manifested as a difficulty leaving her house with anxious thoughts and suicidal ideation.
She did not advise Centrelink that she had withdrawn from her course at the University until 20 August 2018. As a result of this delayed advice to Centrelink the applicant incurred a significant debt.
Despite her mental health issues, the applicant did engage in work following her withdrawal from the University of Canberra. Between March 2018 and April 2018 Ms Larkham undertook work at the Department of Education. Between March 2018 and August 2018 Ms Larkham undertook work at a Coles Supermarket. She did not work full time at either place but did work multiple days each week.
Ms Larkham also visited a Centrelink office on 28 March 2018 and informed Centrelink of a change of address. She did however describe this event as provoking significant anxiety and requiring significant mental effort.
When asked why she did not take the opportunity to inform Centrelink that she had withdrawn from her University of Canberra course on that occasion, Ms Larkham told this Tribunal that she believed she was still entitled to youth allowance on the basis of her enrolment in an online course. This explanation differs from the explanation given at Tier 1 which was that her mental state prevented her from understanding that she was not entitled to youth allowance.
On 29 July 2019, a decision was made that the applicant had accrued a debt of $5,750.87 across the period of 12 February 2018 to 22 July 2018 because she was not a full-time student in this period. Interest of $134.44 was also applied to the accrued debt on 28 November 2019.
The applicant contested this decision, and on 25 February 2020 the decision was varied so that the period of debt accrual was from 6 March 2018 to 22 July 2018. This decision reduced the amount owed to $5,298.07. The applicant again contested this decision, and a review was brought before the Tribunal.
On 3 November 2022, Tribunal Member Kannis, sitting in the Tribunal’s Social Security Division, affirmed the decision under review not to waive or write off the debt which the applicant owed. This decision (the decision) was emailed to parties on 8 November 2022.
On 7 December 2022, the applicant lodged an application for review of the decision, as well as an application for an extension of time in which to make the application for review. In the application, she confirmed that she had received the decision on 8 November 2022.
On 22 December 2022, the respondent informed the Tribunal that it opposed the application for an extension of time, on the grounds of:[2]
(a)The delay in appealing;
(b)Awareness of appeal rights and explanation for the delay;
(c)Prejudice to the general public;
(d)Prospects of success; and
(e)Available alternative avenues of relief.
[2] Secretary, Department of Social Services, ‘Notice of Opposing Application for Extension of Time’, Submission in RE Larkham and Secretary, Department of Social Services, AAT2022/9989, 22 December 2022.
On 17 January 2023, the respondent informed the Tribunal that it withdrew its opposition to the application. The Tribunal advised the parties that it would benefit from submissions before making a decision.
On 10 February 2023, the respondent filed an outline of submissions on the extension of time, as well as the following materials:
(a)A Centrelink notice to the applicant dated 16 May 2016 relating to the initial grant of youth allowance;
(b)A Centrelink notice dated 1 February 2018 which indicated payment on the basis of full-time study at the University of Canberra;
(c)Centrelink notices dated 29 July 2019, 14 November 2019 and 28 November 2019 relating to the accrued debt and subsequent interest owed;
(d)A list of the applicant’s debts; and
(e)A copy of each decision made during the review process, including:
(i)The AAT Tier 1 decision dated 3 November 2022;
(i)The reviewable decision dated 25 February 2020; and
(ii)Relevant cover letters and notices providing rights of appeal.
The prescribed time for lodging an application for review of the AAT first review decision is set out in section 29(2)(a) of the Administrative Appeals Tribunal Act 1975 (the AAT Act):’
2Subject to subsection (3), the prescribed time for the purposes of paragraph (1)(d) is the period commencing on the day on which the decision is made and ending on the twenty-eighth day after:
(a)if the decision sets out the findings on material questions of fact and the reasons for the decision – the day on which a document setting out the terms of the decision is given to the applicant;
The Tribunal has discretion to extend this period under section 29(7):
(7)The Tribunal may, upon application in writing by a person, extend the time for the making by that person of an application to the Tribunal for a review of a decision (including a decision made before the commencement of this section) if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.
Traditionally, the factors considered relevant to the exercise of this discretion include:[3]
(a)The length of the delay;
(b)Any explanation for the delay;
(c)Prejudice to the respondent or anyone else; and
(d)The prospects of success.
[3] Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 (‘Hunter Valley’); Zizza v Commissioner of Taxation (1999) 55 ALD 451.
Length and Explanation for the Delay
As set out in paragraph 17, the prescribed time for lodging an application ends 28 days after the applicant receives the original decision. In the present circumstances, that day fell on 6 December 2022, causing the application to be 1 day late.
The shortness of the delay weighs in favour of granting the extension of time.
Given the shortness of the delay and that having a good explanation for the delay is not essential, I do not consider that this factor is significant in whether an extension should be granted.
Prejudice to the Respondent
The Respondent accepts that she suffered no prejudice arising from the delay in making the application.[4] This factor does not weigh against the granting of the extension.
[4] Secretary, Department of Social Services, ‘Submission on Extension of Time’, Submissions in RE Larkham and Secretary, Department of Social Services, AAT2022/9989, 10 February 2023, [49].
Prospects of Success
The factor which requires closer examination is the applicant’s prospects of success. If the application is hopeless, there is no point in granting the extension of time.
The general principle as distilled in the judgment of Wilcox J in Hunter Valley Developments Pty Ltd v Cohen is stated as follows:
…the merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted.[5]
[5] Hunter Valley (n 3) [22].
The Tribunal must be satisfied that there is some chance of success should the application proceed. More specifically, the case put by the applicant should not be hopeless.
The principles that are applied in considering the merits of the applicant’s application for review are well articulated by SM Britten-Jones (as he then was) in Arbon and Comcare in the following terms:[6]
[6] Arbon and Comcare (Compensation) [2017] AATA 2870 [5]–[7].
In terms of an assessment of the merits of the case, French J (as his Honour then was) observed in Seiler v Minister for Immigration, Local Government and Ethnic Affairs that:
… To say a substantive application has a reasonable prospect of success is to say no more than that there is a finite non-trivial probability that it will succeed… It is difficult to imagine any case which appeared weak but not hopeless in which it would be proper to refuse an extension on that account. On the other hand, the stronger the case appears to be, the higher may be the probability that an injustice will be done if an extension is refused. So a strong case may be a positive factor in favour of the grant of extension, but an apparently weak case cannot be treated as a factor weighing against it…
As to the required extend of investigation into the merits Katzmann J said in Actew AGL Distribution v Australian Energy Regulator that:
… it is inappropriate for this purpose to fully investigate the merits, although an obvious strength or weakness in the applicant’s case is a factor for or against the exercise of the discretion. …
Further, Besanko J said in Hamden v Secretary, Department of Human Services:
As far as the merits of the substantive application are concerned, it is not for the Court to determine the application at this stage. However, an extension of time should not be granted if the substantive application is not reasonably arguable. Furthermore, if the prospects of success of a substantive application are plainly strong or plainly weak, then that may be a relevant consideration depending on the nature of the other factors (for example, the period of the delay and the explanation for it) relevant to the application for an extension of time.
In my assessment the applicant’s case is plainly weak but not hopeless.
On the evidence available to me, Ms Larkham incurred a youth allowance debt which is due to the Commonwealth.
A debt can be written off pursuant to section 1236(1A) of the Social Security Act 1991 (the Act) if, and only if:
(a)the debt is irrecoverable at law; or
(b)the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
The evidence indicates that Ms Larkham has recently purchased a home and taken out a mortgage. In those circumstances I am satisfied that none of the conditions for writing off the debt are satisfied.
A debt can be waived under section 1237A of the Act which allows for the waiver of a debt if it arises from an error that is attributed solely to an administrative error made by the Commonwealth.
In this case the debt arose from Ms Larkham’s failure to notify Centrelink of her changed circumstances and not from any error made by the Commonwealth. In these circumstances section 1237A is not available.
Section 1237AAD of the Act allows for waiver of debts in special circumstances. It provides as follows:
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.
It is clear on the evidence that the debt arose from the applicant’s failure to comply with the Administration Act referred to in this section.
Section 68(2) of the Social Security (Administration) Act 1999 (the Administration Act) provides that a person may be given a notice that requires them to inform Centrelink about specified events or changes in their circumstances.
On 1 February 2018 the applicant was given a notice under section 68(2) which stated:
What you must tell us:
You must tell us within 14 days about events of changes in circumstances affecting your payment… This request is an information notice given under social security law.
You must tell us if any of the changes listed below happen or are likely to happen to you…
- Start of stop being a part-time or full-time student
- Apply for, or change, your enrolment at school, college or university or other technical institution
Consequently, the Administration Act obliged the applicant to inform Centrelink of her change in circumstances.
I am satisfied that Ms Larkham’s debt arose as a result of her failing to comply with a provision of the Administration Act, with the consequence that if Ms Larkham knowingly failed to comply, there is no discretion at all to waive the debt (even if special circumstances were to be established).
While it is hard to believe that the applicant’s failure to notify Centrelink was not done knowingly in circumstances where:
(a)Ms Larkham had received notice in relation to her obligations;
(b)Ms Larkham was able to undertake work in the relevant period when the debt was accruing; and
(c)Her claims about why she did not advise Centrelink of her withdrawal from her course have changed over time,
the evidence about her mental health leaves open the possibility that it was not a knowing failure. Given the stage that the matter is up to it would not be appropriate to affirmatively conclude that Ms Larkham ‘knowingly’ failed to notify Centrelink and thus that her case is hopeless.
In circumstances where I am satisfied that Ms Larkham’s case is weak but not hopeless, and the other factors generally favour granting an extension of time, I am satisfied that the appropriate decision is to grant the extension.
Decision
The application for an extension of time in which to apply for review of the AAT first review decision is granted.

I certify that the preceding 42 (forty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member Senior Member Damien O'Donovan

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Associate
Dated: 6 March 2023

Date(s) of hearing: 14 February 2023

Applicant: Self-Represented

Solicitors for the Respondent: Glenda Heggen

Date(s) of hearing:	14 February 2023
Applicant:	Self-Represented
Solicitors for the Respondent:	Glenda Heggen