Mahmoud v Department of Family and Community Services

[2002] FMCA 248

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MAHMOUD v DEPARTMENT OF FAMILY AND COMMUNITY SERVICES [2002] FMCA 248

ADMINISTRATIVE LAW – Appeal from decision of the Administrative Appeals Tribunal – social security benefits – overpayment of Newstart Allowance – whether payment of allowance correctly cancelled – whether applicant owes a debt to the Commonwealth.

Administrative Appeals Tribunal Act 1975 (Cth), s.44
Federal Magistrates Court Rules 2001 (Cth)
Social Security Act 1991 (Cth), ss.593, 658, 1224, 1236, 1237A, 1237AAD

Re Tosson Mahmoud v Secretary DFCS [2001] AAT 839

Applicant: TOSSON MAHMOUD

Respondent: SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

File No: SZ250 of 2002

Delivered on: 9 October 2002

Delivered at: Sydney

Hearing Date: 9 October 2002

Judgment of: Driver FM

REPRESENTATION

Applicant appeared in person

Counsel for the Respondent: Mr T Reilly

Solicitors for the Respondent: Sparke Helmore

ORDERS

1. The application for review is dismissed.

2. The applicant is to pay the respondent’s costs and disbursements of and incidental to the application, fixed at $10,000, which costs are to be paid within 28 days of the date of entry of these orders.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SZ250 of 2002

TOSSON MAHMOUD

Applicant

And

SECRETARY, DEPARTMENT OF
FAMILY AND COMMUNITY SERVICES

Respondent

REASONS FOR JUDGMENT

1. This ex tempore judgment relates to an application to review a decision of the Administrative Appeals Tribunal (an appeal on a question of law) under s. 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”). The appeal has been transferred from the Federal Court to this Court in accordance with the requirements of the legislation, noting that a direct appeal cannot be made to this Court. I am satisfied that this Court has jurisdiction to deal with the matter in consequence of the transfer from the Federal Court.

2. The applicant challenges a decision of the Administrative Appeals Tribunal (“the AAT”) made by Dr J.D. Campbell on 8 October 2001.  The decision under review was to affirm a decision of the Social Security Appeals Tribunal (“the SSAT”) to the effect that the applicant's Newstart Allowance under the Social Security Act 1991 (Cth) (“the SSA”) was correctly cancelled with effect from 25 February 1999, that the applicant owes a debt to the Commonwealth in the amount of $16,247 in respect of Newstart Allowance overpaid and that there were no grounds for not recovering all or part of that debt.

3. The decision of the AAT is reported as Re Tosson Mahmoud v Secretary DFCS [2001] AAT 839.  The applicant, in an amended notice of appeal filed on 30 September 2002, raises the following questions of law:

   (1)the decision of the AAT to affirm a prior decision of the SSAT to cancel payment of the applicant’s Newstart Allowance from 25 February 1999 was either a decision made with no evidence or a situation in which no decision was made at all.  In other words, a failure to consider the very issue;

   (2)there was no material before the AAT on which it could properly reach the conclusion which led to its decision to affirm the prior decision of the SSAT, namely that the appellant owed a debt to the Commonwealth of $16,247 in respect of Newstart Allowance overpaid;

   (3)the AAT ought to have received into evidence, but did not, material which evidenced that the applicant had, at all material times, disclosed or ought to be regarded as having disclosed to the respondent his self-employment;

   (4)the AAT's finding that the appellant stated that he was not self‑employed was a finding contrary to the only evidence before the AAT and was, in any event, against the weight of the evidence which ought to have been before the AAT;

   (5)in paragraph (2) page 2 of the AAT’s reasons for decision, the presiding member, Dr Campbell, stated that the applicant presented oral evidence; it is alleged that Dr Campbell "deliberately" refused to state that the applicant presented to him personally at the hearing on 24 April 2001 eight documents, each consisting of many pages.  Those are then elaborated upon. 

4. The amended notice of appeal which is, in effect, also written submissions, then goes on to expand on these asserted errors of law.

5. The respondent has filed written submissions on 3 October 2001 and Mr Reilly, for the respondent Secretary, has relied upon those written submissions today. The first point made by Mr Reilly is that the essential issue before the AAT was whether the applicant was unemployed between 1 August 1997 and 25 February 1999 within the meaning of s.593(1)(a) of the SSA; if not, whether there was a debt to the Commonwealth under s.1224 of the SSA and if so, whether that debt should be written off or waived under ss.1236, 1237A or 1237AAD of the SSA.

6. The facts before the AAT were that the applicant was running a business known as “Tosson Hire a Worker” from 1 August 1997 onwards. The AAT, after examining the evidence, concluded that the applicant was not unemployed within the meaning of s.593(1)(a) over the relevant period in view of his running of his business. This was essentially the same conclusion as was reached by the SSAT and, I am told, also by the authorised review officer in the Department of Family and Community Services.

7. The applicant, in his oral submissions today and in his written submissions, has placed stress on his financial circumstances.  This is because the original decision to cancel the applicant's Newstart Allowance was made on the basis that the applicant had failed to disclose income.  This was an issue that has taken up a considerable amount of time both leading up to the decision of the AAT and in the course of these proceedings.

8. The applicant has submitted that the decision that he had failed to disclose income was erroneous because income means taxable income and his financial documents established that over the relevant period his business operated at a loss.  The financial circumstances of the applicant appear fairly complex and the disclosures made by the applicant were made over a period of time and in a way that raised as many questions as were answered from time to time.  It is apparent from the AAT decision that the applicant, over the relevant period, enjoyed access to a substantial amount of money, which raised serious questions about the accuracy of his financial disclosure.

9. An audit conducted by the Australian Taxation Office established that the applicant was not entitled to taxation concessions in at least one relevant year of income but the totality of the material before the AAT, it appears, did not permit a conclusion to be drawn that the applicant was clearly operating his business at a profit over the relevant period.  That may call into question the basis for the original decision made by departmental officers.  However, the matter before the AAT was the review of decision of the SSAT and the decision of the SSAT, like the decision of the AAT, was that the applicant was not entitled to Newstart Allowance over the relevant period because he was not unemployed.  To that extent, whether the applicant's business was running at a profit or a loss is irrelevant.

10. While the applicant has devoted considerable effort to challenging any conclusion that his business was running profitably, he has not been able, in his submissions before me, to shake the conclusion of the AAT that he was not unemployed over the relevant period that he received Newstart Allowance. Mr Reilly has submitted, and I accept, that the AAT's summary and application of the law concerning the meaning of “unemployed” in s.593(1)(a) of the SSA is consistent with authority. I can see no error of law in the AAT’s approach to that issue. I find, therefore, that the AAT correctly concluded that the applicant was not unemployed over the relevant period and no error of law is disclosed in the AAT’s decision on that issue.

11. The next issue is whether the Commonwealth is entitled to recover from the applicant the overpayment of Newstart Allowance as a debt. The applicant asserts that he made no false statement causative of an overpayment under s.1224(1)(b)(i) of the SSA or that any such statement was cured by 27 March 1998 when he provided information to the Department. Mr Reilly has submitted, however, that the AAT found that s.1224(1)(b)(ii) was applicable and that an overpayment was made because of the applicant's failure to comply with notices issued under s.658 of the SSA. This is dealt with by the AAT at paragraph 53 of its decision which relevantly states:

    The Tribunal concludes that this amount of $16,247 is the correct amount of overpayment. Further, the Tribunal notes that the applicant failed to advise the respondent of his business activities until 27 March 1998, despite being requested on a number of occasions to do so and answering in the negative. The Tribunal concludes that this is a breach of section 658 of the Act. As a consequence the overpayment of $16,247 pursuant to subsection 1224(1) becomes a debt due and payable by the applicant to the Commonwealth.

12. Section 658 provides that the Secretary may require a recipient of a benefit to give particular information relevant to the payment of Newstart Allowance. Some formal requirements are set out in that section. Included in the court book are the applications for Newstart Allowance completed by the applicant from time to time. The applicant had apparently been in receipt of Newstart Allowance for some time prior to the relevant period and periodic applications were sent to the applicant at his address. In each of the relevant applications there is printed on the top of the application:

    This is a recipient statement notice under section 658 of the Social Security Act 1991 and section 150 of the Student and Youth Assistance Act 1973.

13. It is important that in completing those applications the applicant answered "no" to the question of whether he was self-employed.  It was plain to the AAT, just as it is plain to me, that these statements were not correct at the time they were made.  The applicant was operating a business and was self-employed in that business.  The applicant has presented to me documents, which I have marked as MFI A1, to the effect that he disclosed to the Commonwealth Employment Service some months prior to his first relevant application for Newstart Allowance that he was operating a business.  The applicant has submitted on the basis of those documents that the Commonwealth, in the form of the Department, was constructively aware of the facts.

14. I do not accept that submission and I do not regard the documents forming MFI A1 as relevant.  At best they constitute a very vague reference to the conduct of a business and appear to me to go no further than a declaration that the applicant was willing to be involved in the operation of the business for the purposes of his case management agreement with the Commonwealth Employment Service, as it then was.  Confronted with the express denial in the application forms by the applicant that he was engaged in a business as a self-employee, it is perfectly explicable that the Department accepted those statements until information came to hand to call those statements clearly into question.

15. The false statements made by the applicant in applying for Newstart Allowance were plainly causative of the overpayment. The AAT was correct in concluding that these overpayments became a debt due to the Commonwealth by operation of s.1224(1) of the SSA. The AAT in the passage I quoted above, was not specific in identifying which paragraph of s.1224(1) applied. In my view, both s.1224(1)(b)(i) and (ii) applied, although the AAT seems to have focussed on the latter. If that were not sufficient in itself, the applicant also provided inadequate information in response to subsequent written requests for information made by the Department when the true facts began to emerge. The applicant provided information gradually and piecemeal. Even when the matter came before the AAT the true facts were still being discovered.

16. I am not convinced that the applicant's financial circumstances were completely disclosed even by the time the AAT made its decision.  In any event there is nothing before me to satisfy me that any error or law is disclosed in the AAT decision on the issue of recovery of the overpayment. 

17. The third issue raised by the applicant is that the AAT should have but did not admit certain evidence from the applicant during the hearing.  Mr Reilly has pointed out that this allegation is not particularised and the applicant has not put into evidence the full transcript of the hearing before the AAT which might have thrown some light on this issue.

18. The applicant has presented to me at the end of his submissions today documents, which I have collectively marked as MFI A2, which comprise correspondence between Centrelink and himself during 1998 and 1999.  These appear to be additional requests for information from Centrelink which might usefully have been before the AAT.  It appears from the AAT file provided by the AAT to this Court that these particular documents were not before the AAT but it does not appear to me that the applicant was in any way prejudiced by the absence of those documents.  I find that the documents comprising MFI A2 do not assist the applicant in this appeal.

19. Fourthly, the applicant claims that he did not say that he was not self-employed on 1 August 1997, contrary to a statement in the reasons for decision of the AAT at paragraph 6.  It is debatable if such an error, if an error had been made, would constitute an error of law.  In any event, I accept Mr Reilly's submission that the Newstart claim form completed by the applicant and lodged by him on 1 August 1997 fails to disclose that the applicant was at the time self-employed.  I also accept Mr Reilly's submission that the AAT was in all probability referring to that application form in making that statement.

20. The applicant asserts that there was no evidence before the AAT to support its findings.  As a ground of challenge to a decision that is a high bar for any applicant to clear.  However, it is abundantly clear from the reasons for decision of the AAT and the AAT file that there was material before the AAT of a probative nature which the AAT properly based its decision upon.  There is no substance to this contention of the applicant.

21. The applicant raised a particular concern concerning an extract of the transcript of the AAT hearing at page 82 of the transcript.  This forms an annexure to the amended notice of appeal.  The applicant contends that this shows that the AAT was aware of other documents before it that the AAT should have taken into account in making its decision.  There is a somewhat obscure reference on page 82 of the transcript to documents concerning the Ombudsman.  I have formed the view that the person referring to those documents on page 82 of the transcript was the applicant himself. 

22. I reject the contention of the applicant that it was the presiding member referring to those documents.  In any event, nothing has been put before me that would persuade me that there were any other documents that the AAT had or should have had before it that ought to have led the AAT to make a different decision.  The applicant invited me to listen to a tape of the proceedings before the AAT to satisfy myself who was speaking at the relevant time but I have declined to do so, both because it is sufficiently clear to me on the face of the transcript who was speaking and, in any event, I do not see how the issue can assist the applicant in these proceedings.

23. The balance of the notice of appeal is a collection of rather wild and unsubstantiated accusations against the presiding member of the AAT.  The applicant has provided no evidence to give substance to those allegations and I reject the proposition that Dr Campbell acted in any way improperly in his conduct of the proceedings before him.  I also am not persuaded that anything untoward has occurred in the maintenance of the AAT file, notwithstanding allegations to the contrary made by the applicant. 

24. I conclude that no error of law has been disclosed in the amended notice of appeal.  Accordingly I will dismiss the application.

25. On the question of costs, Mr Reilly has sought costs in the sum of $13,195.  Mr Mahmoud resists any order for costs.  The applicant has been wholly unsuccessful in these proceedings and costs should in general follow the event.  Nothing has been advanced in this matter that would persuade me that I should depart from the general principle.  I will therefore make an order for costs.  As to the amount of the costs, the application of the fixed event base scale in the Federal Magistrates Court Rules 2001 (Cth) (“the Federal Magistrates Court Rules”) would produce a costs outcome of approximately $8,000, assuming an advocacy certificate were granted for the proceedings today, which I would be prepared to grant. In addition, the respondent has undoubtedly incurred a significant amount by way of disbursements.

26. I am prepared to accept that the respondent's costs probably exceed by a significant margin the amount of $8,000 which would ordinarily be due to the respondent by application of the scale.  The applicant has produced voluminous amounts of documents in an appeal book which, with all due respect to him, is quite difficult to follow.  The applicant has disputed rulings by the Registrar on the content of the appeal book.  A substantial amount of time has been taken up between the parties and at an earlier directions hearing before me on argument over the content of the appeal book.  That argument has been unproductive and was unnecessary.

27. The applicant, by reason of the way he has chosen to pursue the litigation, has added unnecessarily to the cost of it. The proceedings have been unnecessarily protracted. The applicant is self-represented and allowance should be made for that. Nevertheless, I conclude that the respondent is entitled to receive a costs award somewhat greater than the respondent might achieve by a strict application of the event based costs regime in the schedule to the Federal Magistrates Court Rules. I also think that it is appropriate that costs and disbursements in this matter should be fixed in order to minimise the possibility of further dispute between the parties on the question of costs.

28. It is open to me pursuant to rule 21.02(2)(a) of the Federal Magistrates Court Rules to set the amount of costs and disbursements and that is what I am going to do. In my view, in this matter the respondent is entitled to an order for costs and disbursements fixed in the sum of $10,000. I also consider it appropriate that an order be made for costs to be paid within a fixed period.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate: 

Date:  25 October 2002