Michelle Dennis and Secretary, Department of Employment
[2014] AATA 942
•18 December 2014
[2014] AATA 942
Division GENERAL ADMINISTRATIVE DIVISION File Number
2014/6070
Re
Michelle Dennis
APPLICANT
And
Secretary, Department of Employment
RESPONDENT
DECISION
Tribunal Senior Member Bernard J McCabe
Date 18 December 2014 Place Brisbane The application for an extension of time is refused.
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Senior Member Bernard J McCabe
CATCHWORDS
APPLICATION FOR EXTENSION OF TIME – Considerations for exercise of the discretion – Merits of the application for review – Substantive application – Meaning of ‘spouse’ for purposes of relevant legislation – Applicant an ‘excluded employee’ under relevant scheme – Not reasonable in the circumstances to grant the extension of time – Application refused.
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 29(7)
Fair Entitlements Guarantee Act 2012 (Cth)
Corporations Act 2001 (Cth) s 556(2)
REASONS FOR DECISION
Senior Member Bernard J McCabe
18 December 2014
Ms Michelle Dennis (“the applicant”) requests an extension of time under s 29(7) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) so she can seek review of a decision made by a delegate of the Secretary of the Department of Employment, dated 20 October 2014, to deny her an advance payment under the Fair Entitlements Guarantee Act 2012 (Cth) (“the FEG Act”).
I will begin by addressing the principles applicable to applications under s 29(7) of the AAT Act for an extension of time before considering the particular question of statutory construction that arises in this case: that is, is a person who is legally married to, but separated from, an executive director properly regarded as the spouse of that individual for the purposes of s 556(2) of the Corporations Act 2001 (Cth)?
EXTENSIONS OF TIME
Time limits apply to filing applications for review. In most cases, the applicant has
28 days after the date on which he or she is deemed to receive the decision to approach the Tribunal. The application process is an easy one: while the application must be in writing, there are few other formal requirements. Potential applicants are ordinarily informed of their appeal rights when they receive notice of the decision from the decision-maker; if the recipient is unhappy with the decision, he or she is expected to act promptly to take advantage of the right to seek a review.The Tribunal may grant an extension of time where an application for review is lodged late. But the power to extend time in s 29(7) of the AAT Act is not unlimited: it may only be exercised where the Tribunal “is satisfied that it is reasonable in all the circumstances to do so”.
There is no point setting out a check-list of items that must be considered when undertaking this inquiry. One must have regard to the circumstances of each case and determine whether, in those circumstances, it is reasonable to grant the extension of time. Having said that, it is possible to generalise about the sorts of matters that are often relevant to the discussion. For example, it will ordinarily be relevant to consider the applicant’s excuse for the delay. If the applicant has rested on his or her rights – especially if the delay is significant – that may count against the exercise of the discretion. One might also have regard to the prejudice which the respondent may experience if the review proceeds. If the delay in bringing the application is such that the respondent will be unfairly disadvantaged in the conduct of proceedings (because files have been lost or witnesses can no longer be traced, for example), that may count against the exercise of the discretion. Of course, the prejudice to the applicant will also be relevant: if the review does not proceed, the fact they have alternative avenues of relief open to them might militate against the exercise of the discretion.
In this case, the delay was short. The applicant said she missed the deadline because she approached her member of parliament for assistance, and there appears to have been some confusion about what course she should adopt. She should have approached the Tribunal, but I accept she was not resting on her rights. I also accept there is no suggestion of prejudice to the respondent, although the stakes for Ms Dennis are somewhat higher: if she is ineligible for an advance, she will have to take her chances along with other creditors (albeit that she ranks higher than most unsecured creditors).
The real question here is whether the substantive case appears to have merit.
The Tribunal is ordinarily reluctant to shut out an applicant with a good and arguable case simply because he or she has been dilatory. Time limits are important and they must be taken seriously, but the discretion in s 29(7) affords the Tribunal the flexibility to entertain an application for review that is filed late if the applicant appears to have a good case, and it is otherwise appropriate to do so. (The respondent is in a similar position, as it is a model litigant. It should not object to an application to extend time unless it has a reason for doing so.) However, there is no point going on if the case appears to lack merit. The application for an extension of time should be refused in those circumstances. To do otherwise would be to create false hope and expend public monies to no end.The respondent says Ms Dennis’s case lacks merit because she is an excluded employee within the meaning of s 556 of the Corporations Act. To understand that argument,
I must begin by discussing the legislation before referring to the details of this case.The legislation
The FEG Act establishes a scheme under which employees of insolvent companies may apply for advance payments from a fund administered under the FEG Act in respect of a range of employee entitlements identified in s 5 of that Act. The FEG Act is designed to reduce the chances of an employee being out-of-pocket in the event his or her employer becomes insolvent and unable to meet its obligations.
Not surprisingly, there are limits on who is eligible to apply for an advance. One of the limits is set out in s 11 of the FEG Act, which refers to persons who have a “personal connection” with the employer. One way in which a personal connection is established is dealt with in s 11(1). Section 11(1) operates where the employer company has been wound up and s 556 of the Corporations Act applied to the winding up. In such a case,
s 11(1) of the FEG Act provides that any person who is an excluded employee within the meaning of s 556 of the Corporations Act will be ineligible to make a claim under the scheme established under the FEG Act.
Section 556(2) of the Corporations Act defines the expression excluded employee to include a person who was (in the 12 months preceding the “relevant date”, namely the date on which the winding up is deemed to have commenced) or is (at any point after the relevant date) a spouse of an executive director of the employer company.
The purpose of the exclusion is clear enough: it ensures only those who operate at
arms’ length from company management are eligible for benefits under the scheme. Excluded employees must instead wait their turn to participate in the distribution of any surplus following the winding up.
Was Ms Dennis the spouse of an executive director at the relevant time?
The parties accept Ms Dennis was, and is, married to Mr Anthony Dennis, who is an executive director of the employer company. But Ms Dennis says she and her husband separated around early 2011. They have been living apart since that time. She says
Mr Dennis gave her the job because it suited them both (it helped him reduce his liability to pay child support, for example), but they are no longer living as a married couple.The respondent said none of that is relevant for the purposes of the present proceedings: the ordinary definition of the word spouse includes persons who are legally married to each other (although s 9 of the Corporations Act extends the definition to include
a de facto partner). The fact the individuals have separated does not change anything: unless and until they are divorced, they remain spouses for the purposes of the Corporations Act.In order for Ms Dennis to succeed, it would be necessary for me to read down the plain English expression spouse so that it only includes people who are married (or who
are de facto partners) who continue living together as a couple. I do not think there is any basis for doing so. Indeed, this case demonstrates the problem in that approach.
The limitation is designed to prevent persons who do not have an arms’ length relationship with the management of the failed employer from benefitting from the scheme: that much is evident from the legislation as a whole. Yet Ms Dennis explained at the hearing she was employed by the company because it suited both her and Mr Dennis in light of their family arrangements. She was not in an arms’ length relationship when she got the job. There is nothing improper about that, of course, but the circumstances in which she came to work for the employer company are exactly those which the parliament presumably had in mind when it passed the legislation incorporating the limit.CONCLUSION
Ms Dennis is clearly an excluded employee within the meaning of the legislation, which means she is not eligible to receive an advance under the FEG Act. Her application is therefore unable to succeed, and there is no point in extending the time for making an application in the circumstances.
I certify that the preceding 16 (sixteen) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe. ........................................................................
Associate
Dated 18 December 2014
Date of hearing 10 December 2014 Applicant In person Solicitors for the Respondent Clayton Utz
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