Norrington and Department of Family and Community Services - [2002] AATA 623

DECISION AND REASONS FOR DECISION [2002] AATA 623

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/989

GENERAL ADMINISTRATIVE DIVISION       )
           Re      ROBERT NORRINGTON
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr O Rinaudo, Member

Date26 July 2002
PlaceBrisbane

Decision The Tribunal affirms the decision under review.

..................(Sgd)…................
O RINAUDO
MEMBER
CATCHWORDS
SOCIAL SECURITY – youth allowance – overpayment – administrative error – whether debt arose solely as a result of an administrative error by the Department – whether monies received in good faith – whether recovery of debt should be written-off – whether special circumstances exist to warrant the waiver of the debt

Social Security Act 1991

Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186

Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287
Jazazievska v Department of Family and Community Services [2000] FCA 1484
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Taylor's Central Garages (Extra) Ltd v Roper [1951] WN 383
RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123

REASONS FOR DECISION

26 July 2002 Mr O Rinaudo, Member

Mr Norrington appeals against a decision of the Social Security Appeals Tribunal of 4 October 2001 which had affirmed a decision by Centrelink of 28 February 2000 to raise and recover an overpayment of youth allowance in the amount of $5,057.68 for the period 4 March 1999 to 22 November 1999.
HEARING
The application was heard by the Tribunal on 21 March 2002. Mr Norrington attended the hearing, together with his mother. Mr Norrington gave evidence. Mrs Norrington made submissions on behalf of her son.
The evidence provided to the Tribunal did not differ in any substantial way from the evidence provided to the Social Security Appeals Tribunal.
In broad terms, Mr Norrington confirmed that on 22 March 1999 he advised Centrelink that he intended deferring his studies. An appointment was made for him for 30 March for a newstart allowance interview. On that day Mr Norrington had obtained employment in a restaurant for 10 to 15 hours per week at the Albion Creek Tavern. Having become employed, he phoned Centrelink and cancelled the appointment.
EVIDENCE PROVIDED AT THE HEARING
In addition to oral evidence provided by Mr Norrington, the following documents were admitted into evidence as exhibits.

Exhibit 1 "T" Documents
Exhibit 2 Letter from Centrelink to ALH Group re employment history of applicant
Exhibit 3 Statement of R Norrington dated 28 January 2002

DISCUSSION OF THE EVIDENCE
Administrative Error

Mr Norrington's main argument is that he attended at Redcliffe Centrelink office on 22 March 1999 and informed a counter officer that he was deferring studies. On this basis, Mr Norrington says that the debt arose as a result of Centrelink's mistake and not as a result of anything which he did.
It is conceded by Centrelink that Mr Norrington advised the Redcliffe office on 22 March 1999 that he intended to defer his studies. It is also accepted that an administrative error contributed to the debt because it was not until 14 June 1999 that Centrelink sent a letter to Mr Norrington (which is contained in T4, Exhibit 1), which obliged him to notify them if, amongst other things, he started to receive income or his income changed or was different from the income shown above. Mr Norrington did not respond and Centrelink concedes that the debt arising after that date could not be considered as having arisen solely from administrative error.
The question that therefore arises is whether any, and in particular the debt between 22 March 1999 and 14 June 1999, or all of the debt can be waived on the basis of administrative error.
It is the respondent's view that none of the debt can be waived on the basis that it was not received in good faith by Mr Norrington. To consider this, regard must be had of the applicable law.
The relevant Section of the Social Security Act 1991 relating to "administrative error" is contained in section 1237A(1) of the Act. That section states as follows:
"(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that rise to that proportion of the debt.
Note:Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor)."
The Tribunal is satisfied that any debt arising after 14 June 1999 up until 22 November 1999 was not due solely to administrative error and therefore cannot be waived.
It is clear, and in fact accepted, that administrative error caused the debt at least to some part. It is conceded that the debt arose solely due to administrative error between 22 March 1999 and 14 June 1999. In accordance with the provisions of the section, the question for the Tribunal is then whether Mr Norrington received payments during this period in good faith.
The Tribunal is grateful to the reference by the respondent to the authorities on this point. In particular, the Tribunal has had regard to the matters raised in the case of Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186 where it was held that if a person "knew or had reason to know" payments were erroneous, payments could not be received in good faith, even if the person was not aware of ongoing payments. The respondent considered that it was irrespective whether the applicant was aware of receipt of ongoing payments or not. In this case, the respondent considered that there was a lack of "good faith".
In the decision of Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287 the Federal Court held that if a person had a suspicion or doubt payments were erroneous, and there was an objective basis for such doubt, payments could not have been received in "good faith". The Tribunal was referred by the respondent to the further case of Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484 where it was held that payments were not received in good faith if the person acts without an honest belief he or she was entitled to it, and good faith could not be established where a person turns a blind eye to circumstances which raise doubt about entitlement, or refuses to make reasonable enquiries where doubt exists.
As did the Social Security Appeals Tribunal, this Tribunal does not accept the evidence provided by Mr Norrington that he believed he was entitled to continuing youth allowance payments because he had deferred rather than cancelled his course at Griffith University. Mr Norrington had received youth allowance before.
He was aware of the consequences of payments from Centrelink if he were employed. Mr Norrington knew, or should have known, that he was receiving continuing payments from Centrelink to which he was not entitled. This is particularly so after he gained employment on 30 March 1999.
Special Circumstances
The Tribunal accepts the finding by the Social Security Appeals Tribunal that the debt cannot be waived in this case pursuant to section 1237AAD of the Act. That section states as follows:
"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 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."
Of particular relevance in this case is whether the applicant knowingly failed to comply with his obligations under the Act. The principles in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 are relevant with respect to the meaning of "knowingly" in s 1237AAD:
"There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."

In Taylor's Central Garages (Extra) Ltd v Roper [1951] WN 383 at 385, Devlin J considered the meaning of the word "knowledge" and found that actual knowledge can be inferred from the evidence and the nature of the acts done. Further, in RCA Corporation v Custom Cleared Sales Pty Ltd (1978) 19 ALR 123 at 126, Hope, Reynolds and Hutley JJA, in a joint judgment stated:
"… a court is entitled to infer knowledge on the part of a particular person on the assumption that such a person has the ordinary understanding expected of persons in his line of business, unless by his or other evidence it is convinced otherwise. In other words, the true position is that the court is not concerned with the knowledge of a reasonable man but is concerned with reasonable inferences to be drawn from a concrete situation as disclosed in the evidence as it affects the particular person whose knowledge is in issue. In inferring knowledge, a court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the court can conclude that such a person has the knowledge. However, this conclusion may be easily overturned by a denial on his part of the knowledge with the court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge."
Following the RCA Corporation case, it is open to the Tribunal to infer that the applicant had actual knowledge of his obligations under the Act where there were opportunities for him to gain that knowledge and where there were no obstacles to him acquiring the knowledge. In this case, the respondent has sent letters to the applicant notifying him of his obligations under the Act. The Tribunal is not aware of any obstacles that would prevent Mr Norrington from understanding those letters and from gaining an understanding of his obligations under the Act.
In this case the Tribunal accepts the finding of the Social Security Appeals Tribunal that the debt arose from Mr Norrington knowingly omitting to comply with his obligations under the Act, namely, his failure to notify Centrelink of his change of circumstances and earnings. Given this finding, the Tribunal need not consider the question of whether special circumstances exist.
DECISION
In this case, therefore, the decision of the Social Security Appeals Tribunal affirming the decision by Centrelink of 28 February 2000 to raise and recover an overpayment of youth allowance in the amount of $5,057.68 for the period 4 March 1999 to 22 November 1999 is affirmed.
I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed:         Sarah Oliver
  Associate
Date of Hearing  21 March 2002
Date of Decision  26 July 2002
The Applicant was represented by his mother, Mrs H Norrington
Solicitor for the Respondent    Mr S Letch, Departmental Advocate