Laverick and Secretary, Department of Social Services (Social services second review)
[2023] AATA 1719
•20 June 2023
Laverick and Secretary, Department of Social Services (Social services second review) [2023] AATA 1719 (20 June 2023)
Division:GENERAL DIVISION
File Number: 2023/1935
Re:Troy Laverick
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Senior Member D. J. Morris
Date:20 June 2023
Place:Melbourne
Not being satisfied that it is reasonable in all the circumstances to do so, the Tribunal refuses to extend time under s 29(7) of the Administrative Appeals Act 1975 in response to the Applicant’s 31 March 2023 request.
.................................[SGD].......................................
Senior Member D. J. Morris
Catchwords
SOCIAL SECURITY – pensions, entitlements and benefits – where the applicant was the beneficiary of a trust – where authorised review officer decided applicant’s asset attribution percentage in a specified period was 100 per cent – where applicant incurred debt for payment of Newstart allowance – where First Review set aside decision and directed that it be reconsidered with an asset attribution percentage in a specified period of 50 per cent – where debt had wholly been repaid – refund therefore due – where applicant sought Second Review – where application lodged outside prescribed time
PRACTICE AND PROCEDURE – where the First Review set aside decision with direction – where consequence of direction was that debt was recalculated – where debt had been fully repaid – where refund therefore due to applicant – where respondent allotted a sum of money to recover other debts – where respondent submitted he had complied with the First Review’s decision – applicant entitled to fruits of decision – respondent has obligation to implement all the consequences of a decision
PRACTICE AND PROCEDURE – where Applicant sought extension of time – principles relating to extension of time – where Applicant did not have satisfactory explanation for delay – failure of Respondent to implement First Review decision would be prima facie grounds for time to be extended – Tribunal adjourned matter to allow Respondent to implement decision and provide proof to Tribunal – extension of time refused
Legislation
Administrative Appeals Tribunal Act 1975
Social Security Act 1991
Cases
Englezos v Secretary, Department of Social Services [2023] FCA 31
R v Secretary of State for the Home Department; Ex parte Mehta [1975] 1 WLR 1087
Secondary Materials
Social Security (Attribution of Assets) Principles 2017 (made by the Secretary of the Department of Social Services on 8 March 2017)
REASONS FOR DECISION
Senior Member D. J. Morris
20 June 2023
BACKGROUND
Mr Troy Laverick is the Applicant in this matter. On 31 March 2023 he lodged an extension of time application for the General Division of the Tribunal to undertake a Second Review of a First Review decision made by a Member of the Social Services and Child Support Division.
This decision is about whether time should be extended for Mr Laverick’s application for Second Review to be accepted. However, as became apparent when the Tribunal held a telephone hearing to consider the extension of time, the Secretary of the Department of Social Services (‘the Department’), who is the Respondent in this matter, had failed to refund money to Mr Laverick which was a consequence of the decision at First Review.
The Tribunal therefore made in-hearing requests to both parties and adjourned the matter until it had received advice of certain actions, and upon their completion it would make a decision as to whether to extend time.
INTERLOCUTORY HEARING
An interlocutory hearing by telephone took place on 28 April 2023. Mr Laverick participated and made submissions. Ms Raveendiran, a Senior Government Lawyer with Services Australia, part of the Department, represented the Respondent.
The Tribunal took into account the following documents submitted by the parties:
(a)Applicant’s extension of time application, lodged 31 March 2023;
(b)Applicant’s letter to Tribunal, dated 12 May 2023;
(c)First Review decision and reasons, dated 25 October 2022; and
(d)Respondent’s submissions, with annexures of 511 pages lodged on 23 May 2023 (‘A’ documents).
WHAT HAPPENED?
The Applicant was in receipt of Newstart Allowance. In 2010 his father died. At the time of his death, the Applicant’s father was no longer married to the Applicant’s mother, but was engaged to another person who I will call TR. The father had made a will in 2009 in contemplation of marrying his fiancée. The will was substantially in favour of TR until her death, and thence to be distributed to the Applicant’s father’s two children and TR’s two children. It is not necessary to set out the details of the will here, but suffice to say that the Applicant and his sister felt they had been excluded.
By way of a Deed of Settlement agreed to by TR, the Applicant and his sister, the estate was redistributed: 40 per cent to TR; and 30 per cent to each of the Applicant and his sister. However, in the will, the Applicant’s father had expressed a view that any beneficial interest his son and daughter received after TR’s death should be held in trust until each reached the age of 25. They had not attained that age in 2010. Accordingly, the Deed of Settlement which was drawn up reflected that wish. Discretionary trusts were set up for both Mr Laverick and his sister. I need say no more about Miss Laverick, because she is not the subject of these reasons.
The discretionary trust established for the benefit of the Applicant was the Troy Laverick Trust (‘the Trust’). The Applicant’s paternal aunt, who I will call AH, was appointed as the trustee and appointer. Provision was made that, when Mr Laverick turned 25, he would become the appointer. The Trust was a discretionary trust, and the trust deed was a conventional one providing that the corpus of, and interest earned by, the Trust was solely for the benefit of the Applicant. However, AH as trustee took what appears on the papers to be a narrow view that she would not permit Mr Laverick access to the Trust funds until he turned 25. AH told the Authorised Review Officer (ARO) that she felt this was consistent with what her late brother intended (A5, p 47).
In December 2012 the Trust received $450,000 from the estate (A, p 452). It would appear that only three releases of funds were made before Mr Laverick turned 25 in October 2015. Two of the releases were to pay taxation assessments relating to the Trust, and another amount was released around 2014 by the trustee to allow Mr Laverick to buy a motor car. The interest earned by the Trust monies was invested back into the Trust. During the hearing, the Tribunal directly questioned the Applicant about the money for the car. He said that AH agreed in 2014, after some negotiation, to release about $20,000 so he could buy a second-hand car, ‘only because it would help me find work’ but he said AH made clear she would not authorise the release of other funds. The Tribunal notes that this evidence is consistent with what AH told the ARO.
Centrelink, the service delivery arm of the Department, wrote to Mr Laverick on periodic occasions reminding him to declare any other assets and income which might affect his entitlement to benefits, in his case, Newstart Allowance. In 2013 the Applicant told Centrelink he had an inheritance. He was asked to provide a copy of the will and the Trust details. There is no record that he did so. He continued to receive Newstart Allowance.
In December 2014 Mr Laverick’s Newstart Allowance was suspended and he contacted Centrelink in response to this suspension. Centrelink sent him a ‘private trusts and companies module’ (i.e. a form), and it was returned to Centrelink later in December 2014.
On 24 March 2015 the Department made the decision to cancel Mr Laverick’s Newstart Allowance from 5 March 2015 and raise a debt due to the assets of the Trust.
Mr Laverick requested internal review of this decision. On 30 August 2015 an ARO affirmed the decision to attribute Mr Laverick with 100 per cent of the income and assets of the Trust, which resulted in the cancellation of the Applicant’s payments and the raising of a debt in the amount of $32,128.70.
Mr Laverick sought review by the Social Services and Child Support Division of the Tribunal and on 25 October 2022 a hearing was held by telephone, at which the Applicant gave evidence. On 25 October 2022 Member Bubutievski made her decision.
The First Review decision was in the papers before the Tribunal. The learned Member set out comprehensive reasons. The Tribunal found that the Trust is a designated private trust under s 1207P of the Social Security Act 1991 (‘the Act’) and under s 1207X of the Act that Mr Laverick was an attributable stakeholder of the Trust, and his attribution percentage is 100 per cent unless the Secretary of the Department (or the Tribunal) determines otherwise.
The Tribunal carefully considered the evidence of the Applicant and other material before it and was satisfied that Mr Laverick was unable to exercise effective control of the assets of the Trust. Relevantly, the First Review found that the operating arrangements of the Trust showed that Mr Laverick never had effective control of the Trust: he did not know how much money was in the Trust and received no statements about trust funds. AH was able to veto his requests for funds, and she did so, even when he was in financial hardship. Apart from payments required to the Australian Taxation Office, there was only one other release of monies for Mr Laverick, to enable him to purchase a second-hand motor vehicle. The First Review decided that it was not reasonable to expect that Mr Laverick could exercise a level of control of the Trust which is commensurate with a 100 per cent asset attribution and determined that ‘at best’ he could exercise 50 per cent control.
The First Review found that the Applicant’s asset attribution percentage as an attributable stakeholder of the Trust was 50 per cent from 2 December 2012 to 2 October 2015 and that his income attribution percentage remained at 100 per cent.
The Tribunal remitted the matter to the Department to determine the correct rate of Newstart Allowance payable to Mr Laverick for the relevant period, with the learned Member noting that as he had fully repaid the debt, it was ‘likely he would be refunded a considerable sum’. The First Review also found that the cancellation of the Applicant’s Newstart Allowance was incorrect and noted there was recourse for him if he could show he suffered financial loss, through the scheme for Compensation for Detriment caused by Defective Administration.
What happened after the First Review decision?
The Respondent submitted that on 2 December 2022 Services Australia ‘implemented’ the First Review decision and recalculated the debt to $21,385.78 for the period 2 December 2012 to 5 March 2015. The Respondent noted in written submissions that as the debt had been repaid in full, Services Australia “refunded $7,428.10 after applying the remaining $2,777.57 to recover another debt”
However, at the hearing, Mr Laverick said he had not received any refund. Ms Raveendiran told the Tribunal that there had been some problem when Services Australia attempted to transfer the reimbursement into the Applicant’s bank account in December 2022, and that she had lately been advised that the refund had not been processed. There was no explanation forthcoming as to why the Department had not attempted to contact the Applicant to check with him about his bank account, nor why nothing further had been done to reimburse the money in the succeeding seven months.
SHOULD TIME BE EXTENDED?
The Administrative Appeals Tribunal Act 1975 (‘AAT Act’) provides that the prescribed time for a person to lodge an application for review is 28 days from the day on which the decision is made (section 29(2) of the AAT Act).
However, section 29(7) of the AAT Act provides:
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.
(Emphasis added)
Therefore, the general rule is that a person who receives a reviewable decision has 28 days (or such other period as an enactment may provide) to lodge an application for review with the Tribunal.
Mr Laverick says that he received the First Review decision on 27 October 2022. He therefore had until 23 November 2022 to lodge an application for Second Review with the Tribunal. He did not request a Second Review until 31 March 2023, which is some four months and six days after the prescribed time period ended.
In this matter, the principal question that the Tribunal must address is not whether the First Review decision was correct, but whether Mr Laverick’s application, having been lodged late, should be accepted. However, the Tribunal does have some regard to the First Review decision because, as Lord Denning MR said in R v Secretary of State for the Home Department; Ex parte Mehta [1975] 1 WLR 1087, where there is a strong case on its merits to extend time, that alone might support time being extended.
The Federal Court of Australia recently restated the principles which govern the Court’s exercise of the discretion as to whether to extend time, and this informs the Tribunal. In Englezos v Secretary, Department of Social Services [2023] FCA 31 (‘Englezos’), Collier J said at [32]-[33]:
The principles governing the Court’s discretion to grant an extension of time are well settled. In summary, the Court will have regard to:
(1) Whether there is an adequate explanation for the delay on behalf of
the applicant;
(2) Prejudice to be faced by the parties;
(3) Merits of the proposed grounds of appeal.
See AZAFF v Minister for Immigration, Citizenship and Multicultural Affairs [2022] FCAFC 176 at [35]; GOK18 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2021] FCAFC 169 at [23]; Singh v Minister for Immigration and Border Protection [2017] FCAFC 195 at [20].
It is also well established that, as a general principle, the Court will not exercise its discretion unless it is in the interests of justice to do so; AZAFF at [35], Singh v Minister for Immigration and Border Protection [2017] FCAFC 195 at [20]; Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349; MZABP v Minister for Immigration and Border Protection [2015] FCA 1391; (2015) 242 FCR 585 at [62].
Her Honour then continued on in her decision to summarise the submissions made by the parties, including a submission that account should be taken that the applicant before her was self-represented. Collier J then said, at [39]:
Without good reason, a litigant in person is not inherently exempt from the rules. The time limits prescribed by the Federal Court Rules and AAT Act are not “mere aspirational guidelines” and the applicant must provide a good reason to explain the delay, particularly when that delay is lengthy: BLD16 v Minister for Immigration and Border Protection [2017] FCA 1400 at [3]; BJT19 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 870 at [40].
Is there an adequate explanation for the delay?
Mr Laverick wrote, in his application for an extension of time, as follows:
After Centrelink sent me their response to the AAT’s decision, it took hours of being on the phone only to be sent in circles to continue pursuing access to more information. It then took two weeks to be mailed information that didn’t include everything I needed. I was originally directed by AAT that I needed to get Centrelink to do a Second Review before AAT would be able to step in again. Centrelink advised this was not the case.
(Minor grammatical errors corrected.)
In his written submissions to the Tribunal dated 12 May 2023, Mr Laverick wrote:
I have been under significant financial stress which has only become more challenging with the increased cost of living. I have been unable to afford many utilities including my phone and internet connection and heating in order to afford rent and food. This has impacted my ability to review and respond to communications received in a timely manner.
I also experience anxiety and PTSD; I have been fighting and advocating for myself for several years now over the debt which has impacted upon my mental health and wellbeing significantly. The entire process to appeal is triggering for me as I reflect upon the hardships I have endured over the years as a result of the error thus I have been very cautionary in ensuring I look after myself health first and foremost.
I also have deficits in my executive functioning skills due to attention deficit hyperactivity disorder (current informal diagnosis as I cannot afford the assessments for a provisional diagnosis, though I am trying to save for this).
This means I have increased difficulty initiating tasks, planning and organising my thoughts and maintaining attention to cognitively demanding tasks. It is often recommended that Individuals with ADHD be provided additional time to complete tasks in comparison to neurotypical individuals for these above reasons.
I often require informal support from my sibling to assist me with such tasks however she has been unavailable due to her own health related issues though has been able to support me today to complete this letter.
I have also been utilising this time to seek formal support and representation which again is very triggering for myself. The original findings carried out suggested I might make a further claim for remuneration for the hardships I have experienced which I intend to do in due course.
I am requesting special consideration on the grounds of my mental health and neurological disorder that have impaired my ability to respond within the given time frame.
The Respondent submitted that Mr Laverick contacted Centrelink on 9 January 2023. A file note taken by a Centrelink officer on that date states:
Customer has called in regards [sic] to AAT decision. Customer has submitted a review of a debt to the AAT. AAT decision was that the customers assets attribution percentage is 50% See doc tools 1 NOV 2022. This was to be updated on the customers record and as a result the customer received payment back to him. The customer has advised that he is not happy with this amount as he was expecting a higher figure. The customer wanted this to be reviewed. Customer has requested documents of the calculation. Multi cal documents to be sent. Once customer has received documents the customer will submit them for a second review to the AAT. Request for an explanation or application review OB, Background, AAT sets aside and remits decision.
The Respondent submitted that given that Mr Laverick was able to request an explanation as to the recalculated debt because he was expecting a higher figure, he had capacity to request a Second Review within time.
The Respondent also noted that on 24 January 2023 the Applicant contacted the Tribunal and was, on the following day, sent the application form for Second Review, with an invitation to complete the form and email it back to the Tribunal. He did not do so until 31 March 2023.
Prejudice to be faced by the parties
The Respondent contended that he would suffer some prejudice if an extension of time were to be granted, due to the historical nature of the debt period (2012 to 2015). The Respondent submitted that the passage of time affects the ability to obtain relevant documents and elicit reliable evidence from witnesses. The Respondent further submitted that, as a general proposition, it is in the public interest that there is an end to the appeal process.
The merits of the substantive application
The Respondent submitted that Mr Laverick’s substantive application has limited merit and poor prospects of success, and that he is unlikely to obtain a more favourable outcome at Second Review.
The Respondent noted that, if the matter proceeded to a substantive hearing, a Second Review may find that Mr Laverick should be attributed 100 per cent of the Trust assets which would lead to a detrimental outcome for the Applicant as he would need to repay the increased resultant debt to the Commonwealth, and therefore it may not be in his best interests to proceed.
CONSIDERATION
The Tribunal notes Mr Laverick’s contentions about an executive cognition condition which he says he has, while acknowledging he could not provide a formal diagnosis. The Tribunal accepts this submission as honestly made, but also notes that the Applicant was able to articulate his arguments effectively at the interlocutory hearing and, as is shown by the interactions with Centrelink and the Tribunal above, was able to prosecute his case at First Review (and achieve some success). He was also able to engage with Centrelink and seek the forms for a Second Review by the General Division in January, some nine or so weeks before he lodged the forms. Without disputing Mr Laverick’s submissions about his medical situation, there was no evidence before me that he lacked the ability to interact with the Tribunal or with the Department within the prescribed period, or indeed afterwards. The Tribunal finds that he rested on his rights.
The Tribunal also notes the Respondent’s submissions that it may not be in the best interests of Mr Laverick to seek a Second Review because it is arguable that he may receive a less favourable outcome which could result in him having to return debt monies reimbursed to him.
During the hearing, I explained to Mr Laverick that any Second Review would be done afresh, in other words, that the Second Review Member would not be relying on the conclusions the learned Member came to at First Review and the outcome may be less favourable. Mr Laverick queried that the facts would be the same, but I explained that the learned Member at First Review applied a discretion, and by its nature another Member might apply the discretion differently, or not at all. The Applicant said he still wished to proceed.
The Tribunal does not accept that there would be particular prejudice to the Respondent, were time to be extended. This is a matter that turns on the facts relating to the Trust, which is well documented, and witness evidence is not essential.
The Tribunal cannot speculate on whether or not, in this case, the Applicant would succeed at Second Review. However, although it is true that a Second Review is not reviewing the First Review and is considering the matter afresh, I make the point that the First Review was very comprehensive and the discretion exercised by the learned Member was, at least at my impression, based on solid grounds. I do not necessarily consider that Mr Laverick has ‘poor’ prospects of success, but the likelihood of succeeding in a case where the Trust was fully devoted to the (ultimate) benefit of the Applicant, and where he did ultimately receive the totality of the Trust holdings, is not strong.
However, the Tribunal agrees with the Respondent’s submissions, which are in line with Federal Court precedents, that prescribed times for the lodgement of applications with the Tribunal are not aspirational, and are expected to be adhered to.
Special consideration - the failure to repay the money owed
It was of significance to the Tribunal that, during the hearing, Mr Laverick noted he had not received the money owed to him as a result of the First Review decision. Ms Raveendiran said her advice from the Department was that it attempted to transfer the funds but it ‘bounced back’.
It appeared Centrelink took no further action from December 2022. I do not accept the Respondent’s arguments that it ‘implemented’ the First Review decision. Implementation of a decision not only means carrying out whatever direction has been made – in this case to recalculate the debt – but also to undertake whatever consequential administrative steps may directly flow from that decision. In this case it was to repay Mr Laverick $7,428.10, after an amount of $2,777.57 was applied to recover two other separate debts.
The Respondent suggested in written submissions prior to the hearing that the money had been repaid. This turned out to be untrue, as was explained at the hearing by Ms Raveendiran. The Tribunal therefore adjourned the interlocutory hearing and asked Mr Laverick to check with his bank that it could accept a transfer of $7,428.10, given the Respondent’s suggestion that there may have been some problem at the bank’s end. The Tribunal also asked that the Respondent arrange for the money to be transferred within a week to the Applicant, together with a letter sent to him confirming the transfer had been processed, and copied to the Tribunal.
At the hearing, the Tribunal expressed the view that, by itself, the failure of the Respondent to implement the consequences of the First Review decision could well constitute grounds for time to be extended, because it was reasonable for the Applicant to be confounded by the fact that this had not happened, without any explanation. Therefore, the provision for merits review had been frustrated.
The Parliament has decided which enactments will include provisions to provide for review by this Tribunal. Consequently, there is a general obligation on parties before the Tribunal, in particular respondent parties, to take whatever steps are necessary to ensure a decision is implemented. If a party wishes to seek for a decision to be stayed, s 41 of the AAT Act sets out the relevant procedure. That sometimes happens when the Respondent wishes to seek a Second Review of a First Review decision. There was no suggestion that the Respondent disagreed with the First Review outcome at the time it was made.
Just as in judicial proceedings, in administrative decision-making, a party is entitled to the ‘fruits’ of a decision. In this case it was a decision to reduce a debt that had been previously repaid, with the obvious consequence of reimbursement of the overpaid funds. It was clear that, by allotting some of the reimbursable funds to settle two other debts, the Respondent had not denied himself his portion of the ‘fruits’ of the First Review decision.
It is not correct for the Respondent to contend that it had ‘implemented’ the decision. The First Review did not need to explicitly direct that “money be reimbursed to the Applicant in accordance with this decision” for the effect of the decision to be clear, especially as the learned Member referred in the body of her reasons to the fact that Mr Laverick would likely be refunded ‘a considerable sum’. It is reasonable to expect that a party will do what it must do to ensure that a Tribunal decision is fully implemented.
On 31 May 2023 the National Manager of Services Australia wrote to Mr Laverick, and a copy of the letter was provided to the Tribunal. The letter spelt out that on 2 December 2022 the First Review decision was ‘implemented’ and that two amounts were transferred to an outstanding Newstart Allowance debt and a smaller Coronavirus Supplement debt. The letter relevantly went on:
On 7 December 2022, the Agency also initiated the refund for the remaining $7,428.10, however this payment failed to be delivered to your bank account. As discussed on Tuesday 30 May 2023, we have now re-initiated the refund for the amount of $7,428.10, this will be paid into your nominated bank account as two deposits over the next few days. We will monitor this to ensure that the refund is processed correctly. We apologise for any inconvenience the delay in this process may have caused.
The Tribunal also was provided with an email from Mr Laverick to the Respondent dated 5 June 2023 confirming that he had received the money.
The Tribunal is satisfied that the consequences of the First Review have now, some seven months later, been implemented by the Respondent.
Conclusion
The Tribunal is not satisfied that it is reasonable in all the circumstances to extend time for Mr Laverick to lodge an application for Second Review. He had ample time to do so in the prescribed period. During that period he was able to interact effectively with both the Department and the Tribunal in the months before he decided to lodge his late application.
The Tribunal does not consider that the Applicant has offered an adequate explanation for waiting over four months to lodge his application for Second Review.
DECISION
Not being satisfied that it is reasonable in all the circumstances to do so, the Tribunal refuses to extend time under s 29(7) of the AAT Act in response to the Applicant’s 31 March 2023 request.
55. I certify that the preceding 54 (Fifty-four) paragraphs are a true copy of the reasons for the decision herein of Senior Member D. J. Morris
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Associate
Dated: 20 June 2023
Date of hearing:
25 May 2023
Applicant:
Self-represented
Advocate for the Respondent:
Ms Aarabi Raveendiran
Solicitors for the Respondent:
Services Australia
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