Mudge and Department of Education, Training and Youth Affairs

DECISION AND REASONS FOR DECISION [2001] AATA 409

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/980

GENERAL ADMINISTRTIVE DIVISION          )
           Re      Anthony Mudge
  Applicant
           And    Secretary, Department of Education, Training and Youth Affairs
  Respondent

DECISION

Tribunal Ms SM Bullock, Senior Member

Date15 May 2001
PlaceSydney

Decision      The decision under review is affirmed
  ..................[sgnd].......................
  Ms SM Bullock
  Senior Member
Catchwords
AUSTUDY – Application for Review to the Social Security Appeals Tribunal - Extension of Time - Special Circumstances – Overpayment - Debt

Legislation
Student Assistance Act 1973 (Cth) s 311
Social Security Act 1991 (Cth) ss 1184, 1237AAD
Income Tax Assessment Act 1936 (Cth) s 6
AUSTUDY Regulations 86, 90, 109

Authorities
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Riddell v Secretary, Department of Social Security (1993) 42 FCR 443
Re VZF and Secretary, Department of Education, Employment, Training and Youth Affairs [1999] AATA 102

REASONS FOR DECISION

15 May 2001 Ms SM Bullock, Senior Member

This is an application for review to the Administrative Appeals Tribunal ("the Tribunal") by Mr Anthony Mudge ("the Applicant") of a decision of the Social Security Appeals Tribunal ("SSAT") made on 21 June 2000, that the SSAT did not have jurisdiction to review the decision of a Review Officer of the Department of Education, Training and Youth Affairs ("the Department") regarding the recovery of debt arising from the overpayment of 1992 and 1993 AUSTUDY allowances (T2).
A hearing was held before the Tribunal on 30 January 2001. The hearing was adjourned part-heard on that day to allow further inquiries by the Respondent and subsequently further submissions from both parties. Final submissions were lodged with the Tribunal on 20 April 2001. Mr Mudge represented himself and provided oral evidence to the Tribunal. The Respondent, the Department, was represented by Mr G Peek, Principal Solicitor with the Australian Government Solicitor's Office. The Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (Cth) ("T Documents, T1-T9") and the following exhibits:
Exhibit Number    Description Date
T1-T9 Section 37 Statement and Documents Various
A1      Extract from Departmental "STAR monitoring records" 9 June 2000
A2      Letter from Mr MT Linz, Partner, Price Waterhouse     20 February 1992
A3      Final Submission from Mr A Mudge        19 April 2001
R1      Final Submission from the Respondent 16 March 2001

Issues

The issue in this matter is whether or not there are any circumstances which would allow the Tribunal to extend the period in which Mr Mudge could lodge his application for review to the SSAT of a decision made by a Review Officer of the Department on 9 February 1998.
Legislation
The relevant legislation in this matter is the Student Assistance Act 1973 (Cth) ("the Act").
Section 311 of the Act deals with an application for review to the SSAT and as relevant at the time, subsection 311(3) required that an application for review to the SSAT must be made within three months of a decision, or a longer period allowed by the Secretary in special circumstances.
Regulation 86(2) of the AUSTUDY Regulations provided at the relevant time that the income of a student's parents comprises of his or her taxable income within the meaning of subsection 6(1) of the Income Tax Assessment Act 1936 (Cth). "Taxable income" was defined in subsection 6(1) of the Income Tax Assessment Act 1936 (Cth) as including "income from personal exertion" or "income derived from personal exertion", which was in turn defined to mean "income consisting of … superannuation allowance …". This has relevance to Mr Mudge's circumstances, as superannuation drawn upon by Mr Mudge's father in the 1991/1992 financial year was included by the Australian Tax Office as taxable income in assessing his tax return from that financial year and therefore is a type of "superannuation allowance" within the definition of taxable income in subsection 6(1) of the Income Tax Assessment Act 1936 (Cth).
Considering the combined effect of AUSTUDY Regulations 86(1), 90 and 109(1)(d) in the relevant period, the Gross Parental Income ("GPI") would be, as noted by the Respondent:
"(a) the financial year ending in the year of study if parental income:
(i)exceeds 25% of the estimate provided in the AUSTUDY application, or
(ii)becomes substantially less than it was in the most recent financial year ending before the year of study, and is likely to remain so for two years after the later of either 1 January in the year of study, or the day the parent's income reduced,
or otherwise
(b) the most recent financial year ending before the year of study" (Exhibit R1)

Background

The following information is provided by way of background and is not disputed by the parties:

On 1 June 1994, a decision was made by a departmental officer to raise an AUSTUDY overpayment debt for 1993 (T4).
On 8 June 1994, a decision was made by a departmental officer to raise an AUSTUDY overpayment debt for 1992 (T4).
On 5 August 1994, the Newcastle Student Services Centre ("SSC") received a letter from Mr Mudge's parents requesting details about the AUSTUDY entitlement requirements for 1992 and 1993. These details were sent by letter dated 18 August 1994 to Mr Mudge's parents.
On 26 August 1997, Mr Mudge lodged an appeal to the SSAT. However as an internal departmental review had not been undertaken at that stage, the matter was referred to the Newcastle SSC.
On 3 October 1997, Mr Mudge was sent a letter by the SSAT advising that his matter had been referred to the Newcastle SSC and the letter contained a paragraph which noted:
"I stress that the Tribunal cannot hear your appeal, even if you are dissatisfied with Centrelink's decision, unless you contact us again after the internal Review Officer has made a decision." (T4, p15)
On 9 February 1998, following an internal review, Ms G Holloway, Review Officer with the Newcastle SSC wrote to Mr Mudge, confirming that the original decision of the departmental delegate was correct and that there had been an overpayment of AUSTUDY during 1992, because his parents had underestimated their 1991/1992 taxable income. A further AUSTUDY overpayment was confirmed as having occurred in 1993 because Mr Mudge's parents did not include in their income assessment amounts withdrawn from superannuation (T3). Mr Mudge was informed by Ms Holloway that if he did not agree with her decision, then he might apply to the SSAT for review of the decision. Mr Mudge was informed:
"If you disagree with this decision you may apply to the Social Security Appeals Tribunal (SSAT) for review of the decision. The SSAT do not have discretion to vary the regulations and their decision must be made within the AUSTUDY regulations. You must apply within 3 months of receiving this notice. The application may be made in writing and lodged with any office of Centrelink or directly with the SSAT at the following address:
GPO Box 9943
SYDNEY NSW 2001
          Ph: (02) 9264 7888
          Toll Free: 1800 011 140
          Fax: (02) 9264 1784
Alternatively you may lodge an application for review with the SSAT by telephoning the Registrar." (T3, p14)
A record is available that on 25 May 1998, Mr Mudge telephoned an AUSTUDY debt recovery officer concerning his previous internal review and his wish to appeal further. Mr Mudge inquired as to whether repayment of the debt would affect the appeal.
On 19 July 1999, the Student Review Unit of Centrelink received an enquiry from the office of Mr J Lloyd, MP, regarding Mr Mudge's AUSTUDY overpayment debts. Mr Giddings, of Mr Lloyd's office, was advised on 6 August 1999 that an internal review of the overpayment decisions had previously been undertaken and the next avenue, should Mr Mudge be dissatisfied with the internal review, was for him to appeal to the SSAT.
On 14 March 2000, Mr Mudge completed an application for review to the SSAT which was lodged on 16 March 2000. Mr Mudge requested a review of a decision made in August 1999, requiring him to repay a debt to the Commonwealth arising out of overpayment of AUSTUDY in 1992 and 1993. Mr Mudge stated that he believed the decision was incorrect because:
"Owing to my parents (sic) income and general situation at the time, I believe I should have been given independent status. I believe this would have been most appropriate given the unique financial circumstances at the time I was at University in Newcastle." (T5)
In an undated letter from Mr G Bowe, Delegate of the Secretary, Student Review, Mr Mudge was informed that as he had not lodged an appeal to the SSAT within three months of the Department's internal review decision of 9 February 1998 and, as there were no special circumstances impacting on his making an appeal, his request to lodge an appeal out of time was denied (T4).
On 15 May 2000, Mr Mudge was notified by the Registrar of the SSAT that as the decision he was arguing against was made over three months ago, the SSAT had no power to accept or hear his appeal. The appeal had been sent to Centrelink and would be treated as a request for an extension of time to make an application for review to the SSAT. Mr Mudge was further informed that if the extension of time was not granted, then he could reapply to the SSAT for review of this decision (T7).
On 7 June 2000, Mr Mudge was informed by Ms A Bashford, a Delegate of the Department's Student Review Section, that his deemed request for an extension of time to lodge an appeal to the SSAT was denied, as he had not demonstrated any special circumstances which prevented him lodging his appeal within three months (T8).
On 9 June 2000, Mr Mudge lodged an application for review to the SSAT concerning the Department's decision of 7 June 2000.
On 21 June 2000, the SSAT decided to affirm the Review Officer's decision of 7 June 2000 and further determined that as a consequence, the SSAT did not have jurisdiction to review the decision of the Review Officer dated 9 February 1998.

Evidence of Mr Mudge

Mr Mudge told the Tribunal that he found out in 1994 that the Department had raised AUSTUDY overpayment debts for 1992 and 1993, based on his parent's income.
Mr Mudge thought that the debts were not justified and knew that his father had sought information from the Newcastle SSC about these debts. Mr Mudge stated that his father had taken over the carriage of pursuing these overpayment debts because the issue related to parental income. Mr Mudge told the Tribunal that the context of these debts arising occurred following his father's business being forced to close and subsequently being liquidated. This occurrence was catastrophic for the family in many ways, including forcing the sale of the family home. Mr Mudge senior was in a situation where he had no finances and was faced with the option of applying for Unemployment Benefit. Rather than accept income support, Mr Mudge stated that his father decided to cash in his superannuation. It was the way in which superannuation was characterised as income which has caused the problem with Mr Mudge being paid higher AUSTUDY allowances than he was entitled to, given that superannuation should have properly been included in Mr Mudge Senior's estimation of parental income.
Mr Mudge agreed that his father received AUSTUDY entitlement information following his having made inquiries of the Newcastle Student Service Centre early in August 1994. Mr Mudge further confirmed that his father received written information from the Department on 18 August 1994. Mr Mudge was not aware of whether or not his father had provided the Department with Income Tax returns for the 1991/1992 and 1992/1993 financial years.
Mr Mudge stated that he kept track of what was happening with the overpayments, but did not make any direct inquiries himself until he made his application for review to the SSAT. Mr Mudge told the Tribunal that he did have an understanding of the time limits required for applications for review to the SSAT. Although he did not necessarily consider that the time limits for appeal did not apply to him, he believed that because of the magnitude of the debt and the fact that it was being repaid, that his application for review could not possibly be dismissed. During this early time, Mr Mudge noted that the family was having to deal with the closing of the business, the loss of the family home and his parents living in Gosford while Mr Mudge remained in Newcastle to complete his university degree. Mr Mudge stated that he was trying to study, was inexperienced in relation to AUSTUDY matters and found that period very traumatic. Mr Mudge stated that he felt very alone and frustrated by these events.
Mr Mudge informed the Tribunal that he had tried to request reviews, but may have been misguided in his attempts. He reiterated that he often felt frustrated because he had to deal with a number of different people and there were numerous forms to be completed. Mr Mudge acknowledged that he did not apply for review to the SSAT until 14 March 2000, but stated that he had misunderstood the process and also misunderstood what his father had done. Mr Mudge acknowledged that there was some urgency in progressing his application for review and stated "I did not necessarily think that the time limit did not apply to me".
Mr Mudge further acknowledged that there was a gap between written advice provided to his father by the Newcastle SSC on 18 August 1994 and his letter to the SSAT on 26 August 1997, some three years later. Mr Mudge tried to explain that there were a lot of loose ends with his father's business, particularly his finances, including the superannuation issue. To a large degree, the delay in action between 1994 and 1997 was related to trying to resolve that superannuation issue. Also, the delay could be accounted for by Mr Mudge attempting to complete his degree, for which he graduated in 1995.
Mr Mudge was asked about the records contained in Exhibit A1, which indicate he had a dealing with the Department in 1996. The context of this contact related to a discussion over Mr Mudge's debt repayment schedule. Mr Mudge had informed a departmental officer during this discussion, that he would be appealing the original decision of the departmental delegates concerning the 1992 and 1993 AUSTUDY debts. It was recorded that it was not clear to the departmental officer whether the appeal was about the debt repayment schedule, or in terms of the fundamental issue of whether the debt should exist. Mr Mudge acknowledged, as is recorded in the departmental computer record, that he took an "an appeal form home". Mr Mudge agreed that at that time there was no actual appeal on foot, although he reiterated that he understood his father's earlier inquiries constituted an appeal. Mr Mudge did not agree that his father's inquiries had ceased following the letter sent to Mr Mudge Senior on 18 August 1994. Mr Mudge stated, however, that he had no evidence of his father's ongoing inquiries or an appeal.
Mr Mudge also agreed with Mr Peek that he had taken home an appeal form following the discussion with the departmental officer in 1996, but could not say whether this was the same appeal form that he lodged with the SSAT in 1997.
During the three years between 1994 and 1997, Mr Mudge did speak to his father about the AUSTUDY debts, he informed the Tribunal. Mr Mudge could not recall, however, the specifics of conversations but genuinely believed his father was working on these matters noting, "I left it in his hands". Mr Mudge found out that his father had not really progressed matters when he approached the SSAT in 1997. Mr Mudge could not recall what caused him to appeal to the SSAT in 1997.
Following Mr Mudge's receipt of the results of an internal review on 9 February 1998, in which the original decision was affirmed and Mr Mudge was advised of his appeal rights to the SSAT, nothing further occurred for some time, Mr Mudge acknowledged. However, Mr Mudge stated that in early 1999, his papers were sent to the office of Mr Mudge's Federal Member of Parliament, Mr J Lloyd, MP. In so doing, Mr Mudge denied that he was attempting to have the political process utilised to override the requirements of the administrative appeal process. Mr Mudge informed the Tribunal that it had been his mother's idea to seek Mr Lloyd's involvement, because it was thought that the Member of Parliament had knowledge of such matters and Mr Mudge was himself inexperienced in AUSTUDY issues. Mr Mudge told the Tribunal that by asking for the involvement of the local Member of Parliament, he believed that this in itself constituted an appeal. Mr Mudge stated that he thought that one could not have a much higher or obvious an appeal than by seeking the involvement of and investigation by one's local Member of Parliament. Mr Mudge explained to the Tribunal that as long as he was making repayments, which he was, and the matter was in the hands of his Member of Parliament, then those circumstances warranted acceptance of an application for review, regardless of the expiration of time limits for any appeal. Mr Mudge denied approaching his local member of Parliament because he had missed the deadline for an application for review to the SSAT.
Mr Mudge was asked about a telephone conversation he had with Mr G Bowe, the delegate who undertook the internal review in February 1998. Mr Mudge agreed that he had had a telephone conversation in which he had stated that he was advised by the MP's office in August 1999, of the need to lodge an application for review to the SSAT. He did not follow through with that advice until March 2000 because he had been waiting to obtain paperwork from the MP's office. Mr Mudge also agreed that he was asked to provide verification of this reason for delay, but had been unable to do so. Mr Mudge further stated that it was now difficult to obtain any information from his father about any of these matters because he and his father were no longer on speaking terms.
Mr Mudge explained to the Tribunal that he had started planning an overseas trip in March 2000, which his grandfather subsequently paid for. This was the time he was making his application for review to the SSAT. Mr Mudge stated that he wanted to finalise everything before his travels and it was his final attempt after seven years to have the matter dealt with. Mr Mudge further informed the Tribunal that he told Mr Bowe that he should deny Mr Mudge's request for an extension of time to lodge an appeal to the SSAT because Mr Mudge felt he was running out of time and he wanted to expedite the matter going immediately to the SSAT. Mr Mudge stated that in fact he had "forfeited that internal review because of expediency". Mr Mudge did not know what Mr Bowe had said in reply to this conversation, but noted that Mr Bowe had obviously obliged him by refusing his request for an extension of time.
Evidence of Mrs C Mudge
Mrs Mudge, Mr Anthony Mudge's mother, told the Tribunal that it had been her husband's and her intention to support Anthony through University. Unfortunately, everything went terribly wrong following the Newcastle earthquake. The follow-on effects of that disaster were that their business slowed down and began to lose money. There were problems through 1990 and eventually in 1991, Mr Mudge Senior was forced to liquidate the business. The family home had to be sold and this was devastating for all concerned. Mrs Mudge stated that they were left only with the clothes on their back. Mrs Mudge continued to work part-time and her husband travelled to work in Sydney. They were living is Gosford and their son remained living in Newcastle to complete his studies. Mrs Mudge stated that all the money that she and her husband earned went to paying off debts. They were assisted financially from time to time by her father and friends. There were many occasions on which they had only $20.00 to live. Mr Mudge Senior did not want to accept governmental income support. The only viable option for Mr Mudge Senior was that he cash in his superannuation in order that his family could live and pay the bills. Also, during this period there were court proceedings with which the family had to deal.

Mrs Mudge stated that her husband wrote letters and made inquiries for Mr Mudge in relation to the AUSTUDY debts. Mrs Mudge further noted that Mr Mudge was "depending on them".
Mrs Mudge explained that her husband never really recovered from the business failure, either financially or mentally. Mrs Mudge also opined that her husband, during this time, was going through a midlife crisis. Mr Mudge Senior withdrew and it was very difficult to talk to him, although Mrs Mudge stated that she did discuss the AUSTUDY issue with her husband from time to time. Mrs Mudge described her husband as a very proud man and the family's business and other dealings had always been left to him. In hindsight, Mrs Mudge could see that her husband was not handling anything he was trying to deal with and she regrets that she did not follow the AUSTUDY matter more closely. Mr and Mrs Mudge have since separated.
Mrs Mudge stated that having realised her husband's inability to deal with matters, she took the AUSTUDY debts issue into her own hands. When she did this, however, she was not aware of the time limits. Mrs Mudge stated that she also believed that her husband was unaware of the time limits for an application for review to the SSAT and indeed she herself did not become aware until 2000. Mrs Mudge thought that the issue would be eventually resolved either by way of Mr Mudge repaying the debts or because the original decision would be changed.
In relation to contact with the office of the Local Member of Parliament, Mrs Mudge stated that she only ever dealt with Mr Giddings and not Mr Lloyd, MP. Mrs Mudge thought that she gave papers regarding Anthony's AUSTUDY debts to the Member's office in June, July or August of 1999.
Mrs Mudge told the Tribunal that it was not Anthony's fault that the debts had arisen. She reiterated that she herself felt guilty that she had not spoken to her husband more frequently or firmly about the issue.
Mrs Mudge noted that she had suffered two "mini strokes" in November 1999 and December 1999. There was a further delay in progressing this matter following the Member of Parliament's involvement, because Mrs Mudge did not collect the paperwork from the Member's office until about November 1999.
Submissions
Mr Mudge submitted that the original decision to raise AUSTUDY overpayment debts for 1992 and 1993 was unjust and unfair. Referring to subsection 311(3) of the Act, Mr Mudge stated that the SSAT's interpretation and application of this legislation was also unfair and flawed. He referred the Tribunal to the discussion of "special circumstances" in Beadle v Director-General of Social Security (1985) 7 ALD 670 where the Full Court concluded:
"…It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase "special circumstances", although lacking precision, is sufficiently understood in our view not to require judicial gloss."
The Full Federal Court approved the conclusions in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 in which that Tribunal determined:
"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 on 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."
Referring to paragraphs 16 and 17 of the SSAT's decision (T2), which dealt with the case law in Re Beadleand Director-General of Social Security (supra) and Beadle v Director-General of Social Security (supra), Mr Mudge contended that everything he spoke about at hearing could be characterised as "special circumstances" .
Mr Mudge further referred the Tribunal to Riddell v Secretary, Department of Social Security (1993) 42 FCR 443 in which the Full Federal Court concluded:
"… Each particular case must be considered on its merits. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other."
Mr Mudge contended that he had demonstrated special circumstances to indicate that an extension of time to apply to the SSAT should be granted. These circumstances were;

Mr Mudge's family's business problems;
Mr Mudge's father's health;
Mr Mudge's mother and father's separation;
Bureaucratic requirements and various attempts by Mr Mudge to appeal;
Mr Mudge's sense of helplessness and frustration;
The fact that because of a legislative change, the three month limit on application for review to the SSAT no longer applied.

Mr Mudge further submitted that the SSAT had made light of his feelings of frustration and inexperience. It was unfair of the SSAT to state that Mr Mudge did not care or was haphazard in his approach to this matter. Mr Mudge contended that however misguided his attempts to resolve the matter, he had always been trying and there were issues of emotional, financial and family hardship, which should not be dismissed, particularly in light of the case law. Further, the involvement of the Local Member's office seems to have been ignored as a type of appeal, Mr Mudge submitted. Mr Mudge contended that the approach made to the Local Member's office in 1999 had higher authority and standing than the appeal process to the SSAT.
Mr Mudge further contended that an AUSTUDY debt of $10,000.00 was significant and that it was not appropriate that he should only have had a period of three months within which to appeal to the SSAT.
Mr Mudge concluded that his circumstances were beyond his control and he had not been negligent in his handling of the AUSTUDY debt issues and the process of an application for review to the SSAT.
In a final written submission to the Tribunal dated 19 April 2001 (Exhibit A3), Mr Mudge advised that his inquiries to the Australian Tax Office had not revealed any concession whereby his father's superannuation could be discounted as taxable income. Mr Mudge noted
"…As my final submission in this case I am left with no alternative but to appeal to the Tribunal for the most favorable (sic) consideration it can afford to me, taking into account both my efforts in the appeal process as well as the large proportion of debt which I have repaid, when making its decision.
I have made inquiries into the reassessment of my own taxable income with regard to the monies repaid to the commonwealth (sic), and in the event that any tax refunds are made to me, would be happy to offer them towards the debt.
Similarly, in the event that my appeal is unsuccessful, I would propose a lump sum settlement negotiated between D.E.E.T.Y.A and myself.
However, I am still hopeful that the A.A.T (sic) provide me with a more favorable (sic) outcome given the merits of this case as tabled in the Tribunal hearing and the precedents related to it.
I look forward to your response, and am very eager to close what has been a stressful, troublesome and disillusioning 7-year chapter in my life…" (Exhibit A3)
Mr Peek for the Respondent agreed that in relation to the consideration of "special circumstances", each case must be considered on its merits. While noting the case law in relation to sections 1184 and 1237AAD of the Social Security Act 1991 (Cth), which deals with special circumstances, Mr Peek submitted that subsection 311(3) of the Act was more limited in looking at the special circumstances behind the reasons for not lodging an application for review to the SSAT.
Mr Peek contended that there was a lack of satisfactory explanation for the extreme delay in Mr Mudge bringing this matter to the SSAT for appeal. Mr Mudge relies on his father and mother's failures to progress the matter, Mr Peek noted. Even allowing for the difficulty being experienced by Mr and Mrs Mudge, Mr Peek submitted that there is still an unexplained delay of approximately five years. At best, Mr Peek submitted that Mr Mudge Senior might have had the intention of appealing or challenging the decision. In making his submissions, Mr Peek acknowledged the trauma of business collapse and Mr Mudge's parents' marital difficulties. However, Mr Peek noted that following October 1997, when it appeared Mr Mudge had himself set the matter in train to make an application for review, he did nothing after the 9 February 1998 decision to progress an application for review until 14 March 2000.
There was no obvious administrative or glaring error which could be considered as a special circumstance in this matter, Mr Peek also contended. The fundamental issue of Mr Mudge's concerns about his AUSTUDY debts is the characterisation of superannuation, in terms of income, for the purposes of determining AUSTUDY allowances. Mr Peek submitted that neither the SSAT nor indeed the Tribunal, if it got to that point, had any discretion in this matter as to superannuation being characterised as income for the purposes of the AUSTUDY legislation. Superannuation was not declared by Mr and Mrs Mudge in their income when it should have been and this is why the AUSTUDY overpayment debts arose. The Tax Office has not indicated that it would change its characterisation of superannuation.
Final written submissions from the Respondent were made on 16 March 2001 (Exhibit R1). It was submitted that the Respondent understood Mr Mudge's submissions as to the substantial matter of the debts and that superannuation was not properly included as income for the purposes of the parental income test: because (a) it was a superannuation payout and/or (b) it was properly classified as a loan under hardship provisions in the "superannuation legislation". The Respondent submitted that as the superannuation drawn on by Mr Mudge Senior in the 1991/1992 financial year was included by the Australian Tax Office as taxable income in assessing his tax return for that financial year, it is "prima facie a type of "superannuation allowance" within the definition of taxable income in subsection 6(1) of the Income Tax Assessment Act 1936 (Cth). The Respondent further submitted that the assessment by the Australian Tax Office on this issue would undoubtedly be adopted by the SSAT in conducting any review on that basis. The Tribunal was referred by the Respondent to Re VZF and Secretary, Department of Education, Employment, Training and Youth Affairs [1999] AATA 102, in which that Tribunal took the approach described above when assessing an application which involved a discrepancy between a student's income estimate and the student's taxable income for the relevant period as advised in a Data Matching Exercise. The student had failed to include a lump sum superannuation payment in the estimate of his taxable income.
Finally, the Respondent noted that it is unable to identify any provision in the Income Tax Assessment Act 1936 (Cth), which allows superannuation payments to be discounted as taxable income by the Australian Tax Office because they have been assessed due to financial hardship or on a temporary basis as a loan. Provisions in the superannuation legislation generally deal, the Respondent submitted, with criteria for accessing superannuation in such circumstances as opposed to dealing with the tax implications of access being permitted.
The Tribunal was informed that in the event that Mr Mudge succeeded in having his father's tax return for the 1991/1992 financial year amended by the Australian Tax Office, so as not to include the superannuation component, the Respondent acknowledged that it would be obliged to reassess Mr Mudge's entitlement to AUSTUDY on the basis of any amended tax return. It was reiterated in final submissions as it was at hearing, that any review of the Department's decisions to raise overpayments by the SSAT would be futile, unless the amount of taxable income on Mr Mudge Senior's 1991/1992 tax return had been amended by the Australian Tax Office (Exhibit R1).
Findings
The Tribunal has reached a decision in this matter, taking into account the oral and documentary evidence, the legislation and case law.
Considering subsection 311(3) of the Student Assistance Act 1973 (Cth), the Tribunal stands in the shoes of the Secretary of the Department and is able to decide whether an extension of time beyond three months can be granted to Mr Mudge to lodge an application for review to the SSAT, if there are special circumstances in his case.
The decision giving rise to Mr Mudge's wish to make an application for review to the SSAT arose out of AUSTUDY overpayment debts for 1992 and 1993.
Mr Mudge submitted that there were special circumstances which operated in his case and which should be taken into account in deciding this matter.
Mr Mudge stated that his father had been handling the issue of the AUSTUDY overpayment debts and had made attempts to investigate this matter and resolve it with the Department. Mr Mudge did not deny that he knew of the time limits in seeking an application for review, but he believed that his father was handling the matter. Mr Mudge's father had, as stated by Mr Mudge and his mother and accepted by the Tribunal, suffered great emotional and financial strain in the early 1990's as a result of the liquidation of his business, with numerous traumatic consequences, including the loss of the family home.
Mrs Mudge described her husband's anguish, his withdrawal and the guilt she felt at not making more overt and assertive efforts to support her husband in his handling of the AUSTUDY overpayment debts attributed to their son. Mrs Mudge stated, and again the Tribunal accepts her evidence, that she did not know of the time limits for application for review and possibly neither did her husband.
Mr Mudge's evidence was that he was aware of time limits but believed that the size of his AUSTUDY debts and the fact that his father had made inquiries was sufficient for the time limit not to apply. Mr Mudge also believed that the later handling of the matter for investigation and inquiry by his Local Member of Parliament's office in early 1999, meant that that approach should also be considered as an application for review.
In addition, Mr Mudge was trying to complete his degree, following which he graduated in 1995. The family was suffering from breakdown and Mr Mudge himself was inexperienced in AUSTUDY matters.
In the Tribunal's view, all of these types of circumstances could well be considered and have been determined by courts and other tribunals as special circumstances.
The difficulty for the Tribunal is that there remain unexplained delays to progress Mr Mudge's application for review, which lay at the direct responsibility of Mr Mudge and not with his mother or father. In this regard, the Tribunal notes that following the departmental internal review of 9 February 1998, Mr Mudge was clearly advised in writing that if he did not agree with the decision arising out of the internal review, he could appeal and must do so within three months of receiving the decision. Mr Mudge was advised that he could do this in writing or by telephoning the Registrar of the SSAT. There is then a record of a telephone conversation between Mr Mudge and a debt recovery officer in which it is noted that Mr Mudge was going to appeal further. Therefore, Mr Mudge had to know of the time limit and he had been advised of this. Mr Mudge's evidence confirms this knowledge.
No action was then taken with the matter, it seems, until Mrs Mudge took papers pertaining to the AUSTUDY debt to the office of Mr J Lloyd MP. Mr Giddings of that office was then advised by the Department of the circumstances surrounding Mr Mudge's case, including the next step which involved Mr Mudge making an application for review to the SSAT if he was not satisfied with the internal review. That advice was provided to the Local Member's office on 6 August 1999. There was then no application for review by Mr Mudge until seven months later in March 2000. The reason for not then applying to the SSAT after August 1999 has not been explained. Mrs Mudge, in evidence, stated that she was to blame for the delay in picking up her son's papers. The Tribunal finds, however, that there were a number of opportunities for Mr Mudge himself to make application for review on a number of occasions, yet he did not do so. Mr Mudge could have made an application for review after his telephone call with a departmental officer on 25 May 1998; he could also have made an application for review after August 1999, when the matter was in the hands of the Local member of Parliament. There is also no explanation for the delay between the 9 February 1998 decision of the internal Review Officer and the matter being provided to the Local Member of Parliament for assistance. There is even evidence from Mr Mudge that he did not wish to push the issue of an extension of time with Mr Bowe, and that he deliberately urged Mr Bowe not to grant him an extension of time so his matter could go straight to the SSAT.
Even if the Tribunal accepted Mr Mudge's evidence, as detailed on the SSAT's application for review form, that he became aware of the Department's decision to confirm the debt in August 1999, there is no explanation as to why it took him until March 2000 to apply to the SSAT for review.
While the Tribunal finds that there were special circumstances which occurred around 1994 in terms of the collapse of the family business, the financial and emotional strain on all the family members and Mr Mudge's reliance on his father at a time when his father was ill-equipped to deal with such matters, there is no reasonable explanation of why post 1994, Mr Mudge did not try to progress the matter. Mr Mudge stated that he was aware as early as October 1997 that his father had not progressed the matter and indeed he had made an approach to the SSAT, although it was subsequently ascertained that this was premature given no internal review had been done, but Mr Mudge was aware of the process. From 1998, once Mr Mudge had received the written decision following internal review, again there was no action taken despite his own direct contact with the SSC. No further action was then taken until August 1999, following the Local Member of Parliament's dealing with the matter. During these later times, during 1998, 1999 and early 2000, Mr Mudge was directly aware of the decisions which had been made and should have known from the clear and written advice of the steps he must take in order to seek review of the decisions made by the Department.
The Tribunal can well understand Mr Mudge's frustration and his inexperience with such matters. The Tribunal can also understand Mr Mudge's early reliance on his father and his belief that the matter was being progressed by his father and was out of his hands. However, at the point from February 1998 when he had direct knowledge of the Department's decision and the advice as to how he could progress the matter if he was dissatisfied with the decision, he delayed in progressing the matter. The Tribunal could also accept that Mr Mudge may have relied upon the Local Member to resolve the issue. However, the fact that Mr Mudge did not then, in August 1999, immediately make an application for review to the SSAT once he was aware of the lack of success by the Local Member, causes the Tribunal to doubt the existence of special circumstances. Instead, Mr Mudge waited, for no reason apparent to the Tribunal, until March 2000 to make an application for review to the SSAT.

The Tribunal finds that despite early difficulties in progressing the matter in relation to his AUSTUDY debts and there being special circumstances in 1994, by the time an internal review of the Department's decision was undertaken and notified to Mr Mudge on 9 February 1998, Mr Mudge himself should have taken more direct responsibility for the progress of his matter towards an application for review to the SSAT. While the involvement of Mr and Mrs Mudge in this matter in their attempts to assist their son were delayed because of the extreme and special circumstances operating in their lives at the time, by 1998 when Mr Mudge was fully aware of the steps he needed to take to progress the matter and lodge his dissatisfaction with the internal review, the Tribunal can find no satisfactory explanation for his delay, nor any special circumstances at that particular time. Mr Mudge may well have been frustrated and inexperienced in dealing with AUSTUDY and the subsequent debts, but Mr Mudge is not an unintelligent person and by 1998 he should have been in a position to follow through with the progress of his matter to appropriately voice his dissatisfaction in the form of an application for review. Further, by 1998, it was not sufficient, in the Tribunal's view, for Mr Mudge to rely on the efforts of others when he himself should have properly taken on more responsibility. The Tribunal is confirmed in its view in this matter, particularly when it considers Mr Mudge's lack of action in making an application for review to the SSAT in August 1999, following the notification that the Local Member of Parliament was unable to assist him. Again there was no satisfactory explanation for the delay in progressing the matter.
Mrs Mudge tried to accept the blame for lack of progress beyond this point because she did not pick up the papers from the Local Member's office. While the Tribunal was most impressed with Mrs Mudge and her selfless devotion to her son, it seemed apparent to the Tribunal that it would have been equally as easy, if not preferable, if Mr Mudge himself had made the effort to collect the papers from the Local Member's office and progress his own matter.
In all the circumstances and for the reasons set out above, the decision under review is affirmed. This means that the Tribunal agrees with the SSAT's decision that there were no special circumstances in Mr Mudge's case to justify extending the period allowed for Mr Mudge to lodge an application for review to the SSAT from three months to 25 months.
I certify that the 59 preceding paragraphs are a true copy of the reasons for the decision herein of Ms SM Bullock, Senior Member
Signed:         ............[sgnd]..................................................................
  Stella Vaughan, Associate
Date of Hearing  30 January 2001
Date of Final Written Submissions  19 April 2001
Date of Decision  15 May 2001
Representative for the Applicant              Self Represented
Solicitor for the Respondent  Mr G Peek, Principal Solicitor, Australian Government Solicitor

[2001] AATA 409

15 May 2001

Key Legal Topics

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Administrative Law

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Appeal

Jurisdiction

Standing

Limitation Periods

Unconscionable Conduct