Nakad and Secretary, Department of Social Services (Social services second review)

[2019] AATA 39

Nakad and Secretary, Department of Social Services (Social services second review) [2019] AATA 39 (22 January 2019)

Division:GENERAL DIVISION

File Number(s):      2018/6909

Re:Najwah Nakad

APPLICANT

AndSecretary, Department of Social Services

RESPONDENT

DECISION

Tribunal:Chris Puplick AM, Senior Member

Date:22 January 2019

Place:Sydney

The application for an extension of time is refused.

...........................[sgd]...........................................

Chris Puplick AM, Senior Member

CATCHWORDS

PRACTICE AND PROCEDURE – extension of time – explanation for delay – whether Applicant rested on rights - where prejudice would be incurred by respondent and public by allowing extension of time –merits of substantive application – extension of time refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth)

Migration Act 1958 (Cth)

Social Security Act 1991(Cth)

CASES

Angelakos v Department of Employment and Workplace Relations [2007] FCA 25

Berkelaar v Comcare [3 July 1997] AAT V97/447

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541

Dranichnikov v Centrelink [2003] FCAFC 133

Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 3 FCR 344

Jamal v Secretary, Department of Social Services [2018] FCA 513

McKenzie and Secretary, Department of Social Security [1998] AATA 841

Rust-oleum Australia Pty Ltd v Australian Pesticides and Veterinary Medicines Authority [2017] AATA 298

Swanton v Military Rehabilitation and Compensation Commission [2017] FCA 1142

SECONDARY MATERIALS

Social Security (Assurances of Support) Determination 2018

Social Security Guide

REASONS FOR DECISION

Chris Puplick AM, Senior Member

22 January 2019

APPLICATION FOR EXTENSION OF TIME

BACKGROUND

1. On 4 November 2005 Ms Najwah Nakad (the Applicant) made an application to provide an Assurance of Support (AoS) in support of her uncle and aunt, Mr Mikhael Chatah and Mrs Marie Chatah. The application was accepted and became effective as of 16 November 2005.

2. The terms of the AoS were to the effect that, for a ten year period, the Applicant would be liable to repay to the Commonwealth any specified social security payments made to either Mr or Mrs Chatah during that period.

3. Mr and Mrs Chatah were granted visas (subclass 143) in December 2005 and arrived in Australia (from Lebanon) on 5 January 2006. This had the effect of bringing the AoS into operation for a period commencing on the date of their arrival, 5 January 2006 for the ten years up to and including 4 January 2016.

4. The effect of an AoS is that the person giving that assurance undertakes to support the nominated person(s) for the specified period of time before that person(s) becomes eligible to receive any specified benefits from the Commonwealth. If, in that period of time they do receive such benefits, then the Assurer is liable to repay that amount to the Commonwealth.

5. The Applicant’s uncle, Mikhael Chatah was granted Special Benefit (SpB) from 22 December 2011.

   SpB is a discretionary income support payment that provides financial assistance to people who, due to reasons beyond their control, are in financial hardship and unable to earn a sufficient livelihood for themselves and their dependants.

   To receive SpB, it must be established that the person is not eligible for any other pension or allowance. The circumstances under which it is granted and the amount paid are determined by a delegate of the Secretary of the Department.[1]

   [1] Social Security Guide 1.2.6.10.

6. Not all benefits paid by the Commonwealth are subject to coverage under any AoS. However, Special Benefit is defined as a “social security payment” (and hence covered under the AoS scheme) under the Social Security (Assurances of Support) Determination 2018 (the Determination).[2]

   [2] Social Security (Assurances of Support) Determination 2018. Part 2 (6) (1) Item 8.

   ASSURANCES OF SUPPORT: THE SCHEME

7. The Social Security Act 1991 (the Act) establishes the AoS scheme:

   1061ZZGA What is an assurance of support?

   assurance of support means an undertaking by a person under this Chapter that the person will pay the Commonwealth an amount equal to the amount of social security payments that are:

   (a)  received in respect of a period by another person who:

   (i)  is identified in the undertaking; and

   (ii) becomes the holder under the Migration Act 1958 of a visa granted in connection with the undertaking (whether or not the person continues to hold the visa throughout the period); and

   (b)  specified in a determination in force under section 1061ZZGH when the payments are received.

8. It also provides for the recovery of debts incurred under the Scheme:

   1227  Assurance of support debt

   (1)  If a person is liable to pay an assurance of support debt, the debt is a debt due to the Commonwealth.

9. A more detailed outline of the operation of the Scheme is provided in the Social Security Guide as follows:

   An AoS is a commitment by one or more Australian residents as defined by the SSAct section 7(2) (the assurer) to provide financial support to a new resident (the assuree) during the AoS period. It is also a legal commitment to repay the Commonwealth certain social security payments, if such payments are made to the new resident while the AoS is in force.[3]

   An AoS is a legally binding agreement between one or more Australian residents (the assurer/s) and the Australian Government, whereby the assurer/s agree/s to provide support to a person or persons (the assuree/s) in Australia.

   The AoS period commences on the day an assuree arrives in Australia or is granted the relevant visa, whichever is the later date. In most cases the AoS period is 2 years depending on the visa subclass. New migrants who are holders of the contributory parent visa (permanent subclass 143 and subclass 864) have a 10-year AoS period. For subclass 202 visa holders under the Community Support Programme, the AoS period is 12 months.

   Any social security payments specified under the Social Security (Assurances of Support) Determination 2018 and made to the assuree during the AoS period becomes a debt to the Commonwealth under SSAct section 1227. As for other debts under the SSAct, Chapter 5 provides the framework for recovering the debt.[4]

   [3] Ibid 1.1.A.310

   [4] Ibid 6.7.1.30

10. Once an AoS is in place, and once the assures have arrived in Australia in possession of the specified visa, the AoS cannot be withdrawn:

    1061ZZGEA  Assurance cannot be withdrawn once visa issued

    A person who has given an assurance of support that has been accepted under this Chapter cannot withdraw that assurance once the person in respect of whom the assurance was given becomes the holder under the Migration Act 1958 of a visa granted in connection with the assurance.

11. The AoS remains in force and enforceable regardless of any changes in the circumstances of the assurer:

    1061ZZGF  When an accepted assurance is in force

    (1)  For the purposes of this Act, an assurance of support that has been given in respect of a person identified in the assurance and has been accepted under this Chapter:

    …………..

    (b)  remains in force in respect of the person until the earliest of the following times:

    (i)  the end of the period specified for the purposes of this subparagraph in a determination under section 1061ZZGH;

    (ii)  the time (if any) determined by the Secretary under

    …………………….

    (4)  Except as provided by paragraph (1)(b), an assurance of support that has come into force in respect of a person remains in force in respect of that person in spite of any change in circumstances whatsoever (including any purported withdrawal, however described, of the assurance).

12. The AoS scheme establishes a clear liability on assurers in the following terms:

    1061ZZGG

    Liability to pay for social security payments

    (1)  This section has effect if:

    (a) person (the assurer ) has given an assurance of support that has been accepted under this Chapter; and  

    (b)  a social security payment is received, by another person who is identified in the assurance, in respect of all or part of the period for which the assurance is in force in respect of the other person; and

    (c)  the social security payment is specified for the purposes of this section in a determination in force under section 1061ZZGH when the payment is received.

    (2)  The assurer is liable to pay the Commonwealth the amount of the social security payment.

    (3)  If the assurance was given by more than one person, all of the persons who gave it are jointly and severally liable to pay the Commonwealth the amount of the social security payment.

13. Section 1061ZZGD(3) of the Act requires that some security be lodged when the Secretary accepts the AoS. In this case Mrs Nakad lodged a sum of $14,000 in an account with the Commonwealth Bank. The deposit is still held in that account.

    ASSURANCE OF SUPPORT: THE APPLICANT’S POSITION AND CLAIM

14. As noted above, Mr Mikhael Chatah was paid Special Benefit commencing on 22 December 2011 and continuing until 3 December 2015. Throughout this period the Applicant was repeatedly advised by the Department that, as a result of her having given the AoS she was accruing a debt to the Commonwealth. Along with this advice the Applicant was sent Assurance of Support – Review Assessor forms to be completed and returned at regular intervals, although she failed to return any of them.[5]

    [5] Secretary, Department of Social Services Outline of Submissions at [38].

15. As a consequence of these payments, the Applicant was advised on 13 July 2016 that she had accrued a debt to the Commonwealth (as the assurer) of $31,750.51.

16. The Applicant requested a review of this decision which was affirmed by an Authorised Review Officer (ARO) on 20 September 2016.

17. The Applicant then appealed that decision to the Social Services and Child Support Division of this Tribunal (AAT1) which, on 2 July 2017 upheld the ARO’s decision and confirmed the existence of the debt.

18. The Applicant was notified of the AAT1’s decision (received 7 July 2017) from which she had until 4 August 2017 to lodge a further appeal to this Tribunal for a second review. She failed to do so but then did so on 26 November 2018.

19. That application is thus some 68 weeks out of time and it is in order to enliven that late request that the Applicant now seeks an extension of time to lodge her appeal.

20. It is important to note that while the AAT1 made certain decisions about the Applicant’s case, namely that she had the debt to the Commonwealth and that there did not appear, to the Tribunal, any reason to order that the debt be waived or cancelled in its entirety (although it was suspended for 12 months), those are not the matters before this Tribunal.

21. This Tribunal is concerned only with the question of whether or not an extension of time should be granted for the Applicant to bring a further appeal against the substance of that AAT1 decision.

22. What the Applicant is seeking is to have the opportunity to bring a case before the Tribunal in order to ensure that both the $14,000 recoverable by the Commonwealth (from the Commonwealth Bank deposit) is returned to the Applicant and that her remaining debt of $17,750.51 be written off under the “hardship” provisions of sections 1237AAD and 1237AAE of the Act.[6]

    [6] The debt is accruing interest as long as it remains unpaid. To date that interest amounts to $170.73.

23. There is a great deal of confusion in relation to how Mr Chatah applied for and received Special Benefits and the extent to which the Applicant (as his Assurer) was aware of these details. This is complicated by the fact that, during the relevant time, the Applicant left Australia and took up permanent residence in first in Canada and now in the United States of America. Correspondence with her from the Department, on her instructions, was directed to her father’s address in Coburg, Victoria.

24. The Applicant’s recollection of correspondence with the Department and discussion with departmental officers in relation to Mr Chatah’s payments are at odds with information recorded in departmental files. The Applicant also stated to the AAT1 that she was under the impression that the AoS only ran for five years (until 2010) although this is clearly not the case.

25. The sad truth of the matter is that the Applicant finds herself with a debt to the Commonwealth (which cannot be disputed) because of a breakdown or series of miscommunications and misunderstandings within her family regarding the claim and receipt of Special Benefits by Mr Chatah and the obligations/debts which these generated for his assurer. In evidence to the Tribunal Ms Nakad said that her Uncle had indicated to her that the benefits paid were either carers benefits or sickness benefits. Even if this were the case, her position would not be helped as sickness benefits are also scheduled under the Determination[7] – and hence would have been repayable.

    [7] Part 2 (6) (1) Item 7.

26. Leaving aside the Applicant’s feeling that it is somehow “unjust” that she is required to pay a debt because of the actions of her family member (about which she says she was unaware), her reason for making a late application is that her financial circumstances have worsened such that she is unable to pay the debt and faces financial hardship, especially after her children’s father lost his job.

27. However, apart from this baldly stated reason no details of her financial position are before this Tribunal.

    BASIC PRINCIPLES – EXTENSIONS OF TIME

28. Appeals for extensions of time may be granted by the Tribunal under section 29(7) of the Administrative Appeals Tribunal Act 1975 (the Act):

    “.. if the Tribunal is satisfied that it is reasonable in all the circumstances to do so.”

29. In dealing with extension of time applications the Tribunal is mindful of the rationale set out clearly by McHugh J in the High Court case of Brisbane South Regional Health Authority v Taylor[8] indicating why statutory time limits are an important part of the legal process. His Honour noted that:

    First, as time goes by, relevant evidence is likely to be lost. Second, it is oppressive, even “cruel”, to a defendant to allow an action to be brought long after the circumstances which gave rise to it have passed. Third, people should be able to arrange their affairs and utilise their resources on the basis that claims can no longer be made against them.

    The final rationale for limitation periods is that the public interest requires that disputes be settled as quickly as possible.

    [8] Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 at [552]-[553].

30. His Honour also noted that:

    An applicant for an extension of time who satisfies those conditions [i.e. the conditions laid down in the relevant Act] is entitled to ask the court to exercise its discretion in his or her favour. But the applicant still bears the onus of showing that the justice of the case requires the exercise of the discretion in his or her favour.[9]

    [9] Ibid at [551].

31. It is generally accepted that the “check-list” outlined by Wilcox J in Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment[10] may be taken safely as a guide by this Tribunal in determining extension of time applications.

    [10] Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 3 FCR 344.

32. That list provides as follows:

    ·an applicant must show an “acceptable explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time;

    ·a distinction is to be made between an applicant who has “rested on his rights” and allowed the decision-maker to believe that the matter was finally concluded, and one who has continued to make the decision-maker aware that he or she contests the finality of the decision;

    ·any prejudice to the respondent caused by the delay;

    ·whether any  others or the general public would suffer any prejudice as a result of the extension, or established practices be upset;

    ·the merits of the substantial application; and

    ·“considerations of fairness as between the applicant and other persons” in a similar position.

33. Wilcox J did, however, warn that:

    Although the section [s 11 of the Administrative Decisions (Judicial Review) Act] does not, in terms, place any onus of proof upon an applicant for extension, an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied that it is proper so to do. The “prescribed period”….. is not to be ignored.” (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 530). Indeed it is the prima facie rule that proceedings outside that period will not be entertained (Lucic v Nolan (1962) 45 ALR 411 at 416). It is a precondition to the exercise of discretion in his favour that the applicant for extension show an “acceptable; explanation of the delay” and that it is “fair and equitable in the circumstances” to extend time. (Duff v Freijah (1982) 43 ALR 479 at 485; Chapman v Reilly, Neaves J, 9 December 1983, not reported at 7).[11]

    [11] Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 3 FCR 344 at [348].

    THE SECRETARY’S POSITION

34. The Secretary relies in the first instance on the fact that there is no doubt that there is a debt to the Commonwealth owing as a result of the Applicant’s AoS. Otherwise the Secretary asserts that no extension of time should be granted because:

    1.The Applicant has not provided a reasonable excuse for the substantial delay in lodging her application,

    2.In any merits hearing the Applicant would have little or no prospect of success in having the debt waived or reduced as there are no “special circumstances” (as required under section 1237AAD of the Act) which would justify this and further than mere financial hardship alone does not qualify as being “special circumstances”,

    3.The Applicant has other means of redress including the right to apply to the Department for a further review of the decision if her circumstances have changed and she is genuinely unable to repay the debt, or else to enter into an agreement with the Department for the repayment of the debt to be managed in an appropriate fashion.

35. Relevantly, in this context, section 1237AAD of the Act provides:

    Waiver in special circumstances

    The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

    (a)  the debt did not result wholly or partly from the debtor or another person knowingly:

    (i)  making a false statement or a false representation; or

    (ii)  failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and

    (b)  there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

    (c)  it is more appropriate to waive than to write off the debt or part of the debt.

36. The Secretary’s objections will be considered within the context of apply the tests established in Hunter Valley to this application.

    THE HUNTER VALLEY TESTS

37. Explanation for the delay: The Tribunal notes that although explanations for delays are generally sought and provided, they are not statutorily required.[12] This was made explicit by the comments of Wilcox J in Hunter Valley where he said (as set out above), “There is no onus of proof upon an applicant for extension of time though an application needs to be made.”[13]

    [12] McKenzie and Secretary, Department of Social Security [1998] AATA 841 at [25]; Swanton v Military Rehabilitation and Compensation Commission [2017] FCA 1142 at [33].

    [13] Hunter Valley Developments Pty Ltd and Others v Minister for Home Affairs and Environment (1984) 3 FCR 344 at [348].

38. The Secretary contends that a delay of some 68 weeks is unreasonable and no satisfactory explanation for the delay has been provided. 

39. The Tribunal is inclined to take a somewhat different view.

40. The Applicant explained that she had taken no immediate action to secure a review because the AAT1 had suspended her repayments for a period of twelve months from July 2017 with a direction that “Mrs Nakad’s circumstances and capacity to repay should be reviewed at the end of that period.”[14]

    [14] Social Services and Child Support Division, Administrative Appeals Tribunal; Mrs Najwah Nakad v Chief Executive Centrelink 2016M104940, 2 July 2017.

1. At the end of the period, in July 2018 the Applicant contacted Centrelink and was advised that she had been granted a further three month delay on repayments (until October 2018) and she then understood that it would be up to the Tribunal to determine the review of her circumstances to which the AAT1 decision had referred. This is a perfectly understandable position for the Applicant to have taken and neither the fact of the AAT1 decision or the Centrelink extension was disputed by the Secretary.

2. If this is accepted as being the case then the Applicant lodged her application within a few weeks of what she understood to be the time in question, being the period at which the repayments were to recommence.

3. Resting on Rights:  For the reasons given immediately above the Tribunal is satisfied that the Applicant did not rest on her rights.

4. Prejudice to the Respondent: The Tribunal is not satisfied there would be any such prejudice, especially in the light of the fact that the Secretary advances the proposition that the Applicant has alternate avenues of redress and review, all of which would involve the Department in re-engaging with the Applicant to resolve repayment issues.

5. Interests of the general public / established practices /fairness to other parties: The Tribunal does not believe that any of the parties identified or any of the established practices of the Department would be upset were an extension of time to be granted. There is no hard-and-fast rule about whether such extensions should be granted. They can be refused even if the time which has passed is relatively short, or indeed if it has on some occasions even reached as far as five years.[15]

   [15] Berkelaar v Comcare [3 July 1997] AAT V97/447.

6. Merits of the Application: The Tribunal is not empowered to conduct a detailed merits review when dealing with extension of time applications. However this must be qualified by saying that it is well established that if an application is so unlikely to succeed or so lacking in merit that it has little or no prospect of success then an extension of time should not be granted.

7. In Jamal[16] Bromwich J stated:

   “ …it will seldom be in the interests of justice to grant an extension of time where an appeal would have little prospect of success, given the additional resource demands that it would impose upon the parties and the Court, and the inevitable impact it would have on other users of the Court.”

   [16] Jamal v Secretary, Department of Social Services [2018] FCA 513 at [6].

8. Even where the Tribunal has questioned whether or not the merits of an application should even be considered: “there is a very real question whether the prospects of success are a relevant consideration”[17] it is conceded that in relation to “an application which is… lacking in substance (or) has no reasonable prospect of success ….(the Tribunal) may dismiss that application at any stage of the proceeding.”[18]

   [17] Rust-oleum Australia Pty Ltd v Australian Pesticides and Veterinary Medicines Authority [2017] AATA 298 at [34] per Deputy President Forgie

   [18] Ibid at [footnote 30].

   CONSIDERATIONS

9. Unfortunately for the Applicant, and appreciating her feelings that she has been treated unfairly because of the actions of others, the Tribunal cannot but conclude that there are no realistic prospects of success with her application on the merits. The facts are

   1.    The Applicant signed the necessary Assurance of Support;

   2.    A recoverable debt was created as a result of her Assuree’s receipt of  Specified Benefit  payments within the time limits of that AoS;

   3.    There appear to be no “special circumstances” which would justify the Secretary waiving the debt.[19] The Applicant’s circumstances do not appear to be so unique or distinguishable[20] as to qualify as “special circumstances” or to justify setting aside the Act’s clear intention that debts should be recovered.[21]

   [19] It should be noted that the Secretary does have a more general power to waive debts under section 1236(1A) of the Act where the debtor has no capacity to pay (s.1236(1A)(a)) or where the cost of recovery makes that action not cost effective (s. 1236(1A)(d)).

   [20] Dranichnikov v Centrelink [2003] FCAFC 133.

   [21] Angelakos v Department of Employment and Workplace Relations [2007] FCA 25.

10. Despite the other limbs of the Hunter Valley test not being against the Applicant, failure on this critical point must be fatal to her case.

11. This however does not deprive the Applicant of the right to seek further review of the determination through the processes outlined by the Secretary. That is an option entirely within her own determination.

    DECISION

12. The application for an extension of time is refused.

I certify that the preceding 52 (fifty- two) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

.............................[sgd]...........................................

Associate

Dated: 22 January 2019

Date(s) of hearing:	17 January 2019
Solicitors for the Respondent:	Ms B Salaji, Department of Human Services (by phone)
Applicant:	By phone