Parrett v Secretary, Department of Family and Community Services
[2002] FCA 716
•7 JUNE 2002
FEDERAL COURT OF AUSTRALIA
Parrett v Secretary, Department of Family & Community Services
[2002] FCA 716ADMINISTRATIVE LAW – application for review of decision of Administrative Appeals Tribunal – applicant applied for financial assistance under Farm Household Support Act 1992 – Tribunal found applicant did not satisfy definition of “farmer” and was therefore ineligible for financial assistance – consideration of the Act – statutory interpretation - use of s 15AA and 15AB of Acts Interpretation Act 1901 to determine purpose of Act – legislation intended to provide financial assistance to farmers unable to meet living expenses and/or providing incentive to leave farm
WORDS AND PHRASES – “derives a significant part of his or her income from the farm enterprise” – “restart income support”
Acts Interpretation Act 1901 (Cth) ss 15AA, 15AB
Farm Household Support Act 1992 (Cth) ss 3(2), 8BCIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, followed
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355, referred to
Mills v Meeking (1990) 169 CLR 214, applied
Bermingham v Corrective Services Commission (1988) 15 NSWLR 292, applied
R v Young (1999) 46 NSWLR 681, consideredRepatriation Commission v Vietnam Veterans’ Association (2000) 48 NSWLR 548, referred to
Re Drinkwater and Secretary, Department of Family and Community Services (1999) 58
ALD 243, referred to
Kidston Goldmines Ltd v Commission of Taxation (1991) 30 FCR 77, referred to
Director-General of Social Services v Chaney (1980) 31 ALR 571, followedDC Pearce and RS Geddes Statutory Interpretation in Australia 5th ed 2001
JAMES PARRETT v SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
N945 of 2001MADGWICK J
7 JUNE 2002
CANBERRA
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N945 of 2001
BETWEEN:
JAMES PARRETT
APPLICANTAND:
SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
RESPONDENTJUDGE:
MADGWICK J
DATE OF ORDER:
7 JUNE 2002
WHERE MADE:
CANBERRA
THE COURT ORDERS THAT:
1.The decision of the Administrative Appeals Tribunal dated 21 May 2001 be set aside.
2. The matter be listed for further directions on Friday 14 June 2002 at 9:30am.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
N945 of 2001
BETWEEN:
JAMES PARRETT
APPLICANTAND:
SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
RESPONDENT
JUDGE:
MADGWICK J
DATE:
7 JUNE 2002
PLACE:
CANBERRA
REASONS FOR JUDGMENT
Introduction
This case concerns whether a farmer who was receiving no actual farm income is ineligible for certain statutory financial help that he would receive if he had had significant farm income coming in. Questions arise concerning the permissible scope of the “purposive” approach mandated by s 15AA of the Acts Interpretation Act 1901 (Cth) (“the AI Act”) and the meaning and reach of, and the propriety of resort, to s 15AB of the AI Act which, in certain circumstances, enables consideration of “material” extrinsic to a Commonwealth statute to cast light on the meaning of its provisions.
Mr James Parrett, the applicant appeals on questions of law from a decision of the Administrative Appeals Tribunal (“the Tribunal”) dated 21 May 2001 setting aside a decision of the Social Security Appeals Tribunal (“the SSAT”) dated 4 November 1999 holding that the applicant was not eligible for what is known as a “restart re-establishment grant” under the Farm Household Support Act 1992 (Cth) (“the Act”) as he failed to meet the qualifications for “restart income support” (now, post 7 December 2000 amendments known as “farm help income support” and “farm help re-establishment grant”).
Section 52A of the Act authorised the relevant Minister by written instrument to formulate a scheme to be known as the restart re-establishment grant scheme (“the scheme”). The statutory purpose of the scheme was to be “provision of payments to be made … by way of grant of financial assistance to people on the sale of farm enterprises, or rights or interests in farm enterprises”. Section 52(2)(a) provided that the scheme might deal with the circumstances in which people are qualified to apply for re-establishment grants. The scheme provides that eligibility to apply for such a grant depends upon qualification for “restart income support” under the Act.
The legislative framework
Eligibility for restart support income is set out in s 8B of Division 1B of Part 2 of the Act:
“Subject to this Division, a person is qualified for restart income support in respect of a period if:
(a)the period begins on or after the re-start scheme payment commencement day; and
(b)throughout the period, the person:
(i)is a farmer; and
(ii)is at least 18; and
(iii)is an Australian resident; and
(iv)is in Australia; and
(c)the person has been a farmer for a continuous period of at least 2 years immediately before the period; and
(d)a certificate of inability to obtain finance issued in respect of the person has effect throughout the period.”
The word “farmer” is defined in s (3)(2) of the Act, “unless the contrary intention appears”, as:
“a person who:
(a)has a right or interest in the land used for the purposes of a farm enterprise; and
(b)contributes a significant part of his or her labour and capital to the farm enterprise; and
(c)derives a significant part of his or her income from the farm enterprise.”
“Farm enterprise” is also defined in s 3(2) of the Act, “unless the contrary intention appears”, as:
“an enterprise carried on within any of the agricultural, horticultural, pastoral, apicultural or aquacultural industries.”
The preamble declares the Act to be an act:
“relating to:
(a) the provision of income support and advice to farmers who may not have a long-term productive, sustainable and profitable future in the sector; and
(b)the provision of financial incentives to farmers to leave farming; and
(c)the provision of relief payments to farmers who are in exceptional circumstances.”
Section 6 provides:
“6. The objects of this Act are:
(a)to provide financial assistance and advice to farmers who are unable to meet day-to-day living expenses and cannot obtain commercial loans; and
(b)to provide a financial incentive for such person to leave farming; and
(c)to provide financial assistance to farmers who:
(i) are experiencing difficulty in living expenses; and
(ii) are in exceptional circumstances.”
The commencement date for the scheme was 1 December 1997. The relevant clauses of the scheme are as follows:
“Part 2 – Applying for a re-establishment grant
Division 1 – The application
2.1Who can apply?
A person is eligible to apply for a re-establishment grant if he or she is qualified for restart income support under Division 1B of Part 2 of the Act.
…Part 3 – The re-establishment grant
Division 2 – Qualifying for the re-establishment grant:
…
Who is qualified for a re-establishment grant?(1)A person is qualified to receive a re-establishment grant if:
(a)the person was eligible to apply for the re-establishment grant when the person applied; and
(b)the person’s farm enterprise has been sold (and completion of sale has taken place) within 1 year after:
(i)if the person has received restart income support – the person last received income support; or:
(ii)in any other case – the person applied for the re-establishment grant; and
(c)the Secretary is satisfied that the sale was on commercial terms and at arm’s length; and
(d)the Secretary is satisfied that the person has disposed of all of the person’s farm assets; and
(e)the person has complied with any direction under Division 2 of Part 2 of this Scheme or section 13A of the Act to obtain advice [i.e. as to their long-term prospects]; and
(f)the person’s net assets, plus the total of any restart income the person has received, is [sic] less than $157,5000 [sic]; and
(g)the person has not previously received a grant under this scheme or under an agreement subject to the Rural Adjustment Act 1992; and
(h)if the person has applied for a grant under an agreement subject to the Rural Adjustment Act 1992 – he or she has withdrawn that application.”
Thus, eligibility to apply for a re-establishment grant (and for restart income support) requires an applicant, among other things, to fall within the definition of “farmer” in s 3(2) of the Act.
Background: an unfortunate farmer
It was accepted that Mr Parrett was the owner of a 40 per cent interest in a rural property known as “Jays” at Jack’s Creek Road, Narrabri. The property was purchased by Mr Parrett (actually, though it has been treated as of no significance, by a company controlled by him) and a co-venturing investor in June 1980 and was initially comprised of 455 hectares. The main activities carried out by Mr Parrett on the property included pig production until 1991; cattle raising and fattening until 1993 and cropping until 1998, with crop results being dependent in a very large part on the weather.
By 1995 the farm’s fortunes had declined and Mr Parrett sold 300 hectares of land to settle debt and provide capital for the farm, including money to develop the remaining land for irrigation. During this period Mr Parrett also commenced breeding, at the farm, toy dogs for sale. In late 1995 and early 1996, 250 acres were prepared for sowing and Mr Parrett had intended to prepare a further 50 acres but his tractor broke down. The crops were, in any case, not sown because of Mr Parrett’s poor health. Mr Parrett underwent a coronary artery by-pass operation in April 1996 having suffered a heart attack in February 1996. The income he derived during this difficult period was essentially from dog sales, the capital gain and profit on the sale of (non-specified) non-current assets and some interest. In late 1996 and early 1997, Mr Parrett again prepared and sowed 300 acres. However, the crop failed due to drought, and again he relied primarily on dog sales and some interest as his source of income. Mr Parrett paid wages for assistance with his dog-breeding programme for the financial years ending 30 June 1996 and 1997. In 1998, due to wet weather, only 150 acres were sown down, but again the crops failed, this time as a result of excessive rains. Mr Parrett sold the remaining land and farm assets on 21 June 1999.
Mr Parrett lodged an application for restart income support and a re-establishment grant on 17 December 1997. His application was refused on 23 December 1997 by a Centrelink officer on the basis that he was not a “farmer” and was not carrying out a “farm enterprise” as defined under the Act. Mr Parrett provided additional material and evidence of his farming activities, and the delegate reconsidered the earlier decision but again rejected his claim on 21 January 1998. The decision was reviewed by an Authorised Review Officer (“ARO”) from Centrelink on 9 February 1998, who affirmed the earlier decision.
On 31 August 1999 Mr Parrett lodged an application for review to the SSAT. On 4 November 1999 the SSAT found that Mr Parrett satisfied the definition of “farmer” in s 3(2) of the Act at the time he filed his application and qualified for restart income support and, therefore, a re-establishment grant. However, because Mr Parrett had not lodged his application for review within three months of the ARO’s decision dated 9 February 1999, the SSAT, relying on s 1255 of the Social Security Act 1991 (Cth) (“the Social Security Act”), held that its decision took effect as of 31 August 1999. This was the date on which Mr Parrett lodged the application for review with the SSAT. Consequently, he was still ineligible to apply for either restart income support or a re-establishment grant because he had sold his farm prior to 31 August 1999, having sold the remaining land and farm assets on 21 June 1999.
The Tribunal’s decision
Mr Parrett applied to the Tribunal for review of the SSAT’s decision on 2 December 1999. The Tribunal set aside the SSAT’s decision, finding that Mr Parrett did not meet the definition of “farmer” and in substitution, found that he did not qualify for financial assistance under the Act. The Tribunal made the following findings of fact:
“(a)the Applicant was a 40 per cent owner of a property "Jays", which when purchased in 1980 encompassed some 455 hectares;
(b)the main activities carried out on the property between 1980 and 1995 were:
· pig production until 1991;
· cropping with results depending upon prevailing weather conditions; and
· cattle raising and fattening until 1993.
(c)a pasture improvement program was commenced in 1990 by way of sinking a bore, fitting a pump and providing a limited reticulation system to some acres. 300 hectares of land were sold in 1995, to return debt and provide capital;
(d)in 1995, breeding of toy dogs commenced and continued throughout 1996 and 1997;
(e)in late 1995 early/ 1996, some 300 acres were prepared for sowing. The Applicant had a heart condition in February 1996, which required a coronary artery by-pass in April 1997 [actually April 1996]. The crop was not sown because of the Applicant's health disabilities and wages were paid for assistance of the dog-breeding program in both financial years 1995/96 and 1996/97;
(f)income received or derived in the financial year 1995/96 was essentially from dog sales ($4524), the capital gain on sale of non current assets (12,722), the profit on sale of non current assets ($2,225), and interest ($1,509);
(g)in 1997, the Applicant prepared some 300 acres for sowing with triticale, which was planted in May 1997, with no fertiliser having been used in soil preparation. The crop failed because of adverse weather conditions (drought);
(h)income received or derived in the financial year 1996/97 was essentially from dog sales ($11,346), with other income coming from interest ($1,346) and sundry income ($309);
(i)further land preparation and crop planting ceased in 1998, but on this occasion too much rain ruined the crop and a nil crop was harvested; and
(j)the remaining land and assets were sold on 21 June 1999.”
In its reasons dated 21 May 2001, the Tribunal was satisfied that the applicant met the first two requirements of the definition of “farmer” under the Act, finding that:
“(a)the Applicant has a right or interest in the land used for the purpose of a farm enterprise. The reason for such a finding is that the Applicant had a 40 percent interest in the company which owns the land and assets;
(b)apart from a period of illness in 1996, the Tribunal finds that the Applicant did contribute both a significant part of his labour and capital to the farm enterprise. In so finding, the Tribunal accepts the evidence of the Applicant in relation to the labour and capital inputs into soil preparation and sowing of crops in 1996, 1997 and 1998. That no crop was planted in 1996 and that no crops were harvested in 1996, 1997 and 1998 is not an issue, nor does it detract from the fundamental finding of significant quantities of labour and capital being applied by the Applicant to a farming enterprise. The Tribunal, in making a finding of a significant part, concludes that the word ‘significant’ implies nothing more than being not insignificant or not negligible at one end of the spectrum, and being noteworthy of considerable amount, effect or importance (Concise Oxford Dictionary). In this regard the Tribunal recognises, that while the dog breeding activity may have taken a significant amount of labour and to a lesser extent capital, the concept of a number of activities being carried out and all requiring significant inputs of labour and capital by an individual, is not incongruent with the findings in this matter;
However, the Tribunal was not satisfied that the applicant “derive[d] a significant part of [his] income from the farm enterprise” as required under s 3(2)(c) of the Act, although there was evidence before the Tribunal that Mr Parrett’s intended income from his crops, if they had not been ruined, or the planting thwarted by ill-health, was estimated at $20,000 or more per annum for the financial years ending 1996 and 1997 compared to a gross annual income of approximately $11,000 from dog sales for those same years. Further, as indicated, the Tribunal was satisfied that Mr Parrett had contributed a significant part of his labour and capital to the farm enterprise despite the fact that no crops were harvested between 1996 and 1998. The Tribunal’s reasons were:
“(c)the Tribunal has already concluded findings of fact in relation to income received or derived in both financial years 1995/96 and 1996/97. For the two financial years in question, no real income was received or derived from the farming enterprise. Any income received or derived was from the sale of toy dogs or from the sale of capital assets. In further analysing the income received or derived, the Tribunal finds that any income from dog sales could be described as significant, with again interest being derived from monies accumulated as a result of a sale of capital (land and other assets in 1995), and the creation of a cash reserve; and
(d)the Tribunal also notes the submission presented by the Applicant, that the issue of income is best addressed by studying the intentions of the Applicant in relation to the activities undertaken in pursuit of income as opposed to the actual results of those endeavours. In this regard, the Applicant relied upon the findings in the matter of Re Drinkwater and Secretary, Department of Family and Community Services (1999) 58 ALD 243. The Tribunal notes the submission and recognises that the major objective of the Act was to provide income support to low income farmers who could not borrow further against their assets. However, the Tribunal concludes that in the circumstances of this matter, the Applicant did not derive a significant part of his income from the farm enterprise. More particularly, the Tribunal concludes, that where the Applicant’s submission conceded ‘that the Applicant did not derive any actual income from the farm enterprise in 1996 or 1997’ (paragraph 6, exhibit A2) that the concept of an applicant’s intention as to his principal source of income is incongruent with the concept of drawing a significant part of his income from the farming enterprise, the latter in the Tribunal’s view defining an actual as opposed to theoretical circumstance. As a consequence of the conclusion reached, the Tribunal finds that the Applicant does not satisfy subsection 8B(c) and the definition of farmer contained within section 3(2) of the Act.”
Grounds for appeal
The questions of law raised on appeal before the Court were:
(i)Whether the Tribunal erred in its construction of the Act by finding that the applicant did not meet the definition of “farmer” as set out in s 3(2) of the Act; and
(ii)Whether the Tribunal erred in failing to address and correct an alleged error of the SSAT, being the SSAT’s construction of s 1255 of the Social Security Act in relation to the date of effect of its decision, namely that the decision took effect as of 31 August 1999.
Eligibility as a “farmer” under the Act
As set out above at [12], the Tribunal found that, apart from some moneys on account of interest that he received, Mr Parrett’s only income during 1996 and 1997 was derived from the sale of toy dogs and non-capital assets, activities that the Tribunal found did not fall within the definition of “farm enterprise” under the Act. The Tribunal made this finding in the knowledge that the factors which had contributed to the lack of income from what was accepted to be his farm enterprise during those years, including his poor health and bad weather conditions, were outside his control.
Counsel for the applicant argued that the Tribunal’s construction is contrary to the purpose of the Act, which was amended in 1997 with the purpose, so counsel contended, of providing “a welfare safety net for the farming community”.
Extraneous materials
Reference was made to the Explanatory Memorandum for the Bill to amend the Act, which, relevantly, contains the following:
“This Bill proposes to amend [the Act] to provide a welfare safety net for farmers who are experiencing financial hardship by introducing the Farm
Family Restart Scheme as well as adjustment assistance to farmers who wish to leave the industry.”In his Second Reading Speech to the House of Representatives on 2 October 1997, the responsible Minister, Hon. John Anderson, said:
“This bill has been carefully designed to meet the coalition’s longstanding commitment to address these important welfare issues while at the same time taking account of the uniqueness of family farm business structures and the vulnerability of farming families to natural events.
Just as importantly, the measures contained in this bill offer carefully targeted assistance to those who wish to adjust out of farming. Additionally, it provides income support for those farm families who find themselves suffering financial hardship as a result of exceptional circumstances which are beyond their capacity to manage. The new farm family restart scheme is the government’s key program for delivering income support to the farm sector. It also provides assistance to those who wish to leave the industry.
The proposed amendments offer an innovative approach to assisting farm families. This legislation provides farmers with the opportunity to give serious consideration to the future of the farm and family without having to rush decisions. It recognises that it takes time to come to grips with the possibility of a future that does not entail farm ownership. It allows them to keep working the farm while they review their situation. It relieves the tremendous pressure that can arise from literally not being able to put food on the table.
The farm family restart scheme will provide a decision support system for farmers considering exiting the industry as well as those who need the breathing space to refocus their farm enterprises. This scheme provides access to professional advice for farmers to help them access the future viability of their business. The farm family restart scheme will begin on 1 December 1997. I will now provide the House with details of the features of the new scheme.
Income support will be provided to low income farmers who cannot borrow further against their assets.”
An excerpt from a policy document from the government agency (Centrelink) charged with administering the Act, concerning the Act and its application, dated 4 November 1999, was also provided. The document is evidently an instruction to persons assessing applications such as that made by the present applicant. So far as is relevant, it provides:
“You might consider the following points when trying to decide whether a person derives a significant part of their income from the farm enterprise:
·when determining whether a FFRS applicant derives a significant part of their income from the farm enterprise, gross income figures should be used. In some instances net farm income is nil (or a loss) and to use this figure when determining eligibility for FFRS would clearly disadvantage genuine farmers in this situation.
·Significant income is not defined in the [Act] and each case should be treated individually when determining what is significant income for a particular farmer. The basis of deriving the income needs to be considered. An absolute level of income or proportion of income can not be prescribed.
·Where a person primarily contributes labour to the farm and the person’s partner also contributes labour but obtains part-time off-farm income and where the farm is not generating a sufficient level of income to meet the living costs of the farm family, the labour contribution or effort becomes paramount.
ºExample: A farmer with gross farm income of $10,000 last year also made $20,000 from shearing wages. Even though the farm income is less than the wages, the farm income may have been dramatically affected by a poor season or some other disaster. The farmer may have needed the off-farm employment to support the farm enterprise.”
The context generally
The following matters it seems to me are notorious.
Farming in most parts of Australia is a risky business, subject to dramatic seasonal variations, fluctuations in the prices of primary products and the health of the farmer and any family he or she may have on the farm, whose services may not be easily replaceable by those of outside employees.
In recent years changes in, and to the administration of, the revenue laws have tightened the availability of concessional treatment of, and the availability of some ordinary business-related deductions, for people whose non-farm based means and/or income permits them to conduct a farm-associated hobby, wearing the mere appearance of a serious farming venture. The image of the hard-working but economically struggling farmer remains a powerful one in Australia, as does the ethic that people who are needy but trying hard deserve assistance from government. On the other hand, there is little popular support for assistance to well-off farmers or rural dilettantes. Measures applicable to farming are increasingly, legislatively and administratively, targeted to reflect these values.
Section 15AA: the purposive approach
Section 15AA of the AI Act provides:
“In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.”
It is now clear, if it were ever not, that blinkered literalism has no place in the interpretation of federal statutes. Indeed, regard to context precedes any finding of ambiguity. The “purpose or object underlying the Act” will usually be ascertained by a consideration of the statute’s context, in the widest legitimate sense of that term, “in the first instance, not merely at some later stage when ambiguity might be thought to arise”: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow J. See also Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-4 per McHugh, Gummow, Kirby and Hayne JJ. Put another way, this requires, as Dawson J had earlier put it in Mills v Meeking (1990) 169 CLR 214 at 235, that the statutory purpose must be taken into account:
“not only where those provisions on their face offer more than one construction, but also in determining whether more than one construction is open.”
However, as Dawson J also put it at 235,
“if the literal meaning of a provision is to be modified by reference to the purposes of the Act, the modification must be precisely identifiable as that which is necessary to effectuate those purposes and it must be consistent with the wording otherwise adopted by the draftsman [or woman]. [A section such as s 15AA] requires a court to construe an Act, not to rewrite it, in the light of its purposes.”
In relation to such consistency, the question of “reading words into” an Act needs to be understood. As DC Pearce and RS Geddes state in their valuable Statutory Interpretation in Australia, 5th ed, 2001) at p 40:
“courts can never literally read words into legislation as part of a process of interpretation. The phrase ‘reading words into legislation’ should be understood for what it is; nothing more than a metaphor for implying words in legislation, to give effect to its underlying purpose or object.”
In Bermingham v Corrective Services Commission (1988) 15 NSWLR 292 at 302 McHugh JA (adopting the approach of Lord Diplock in Wentworth Securities Ltd v Jones [1980] AC 74 at 105-6) suggested certain necessary conditions for “[construing] a statute with the effect that certain words appear in the statute” (per Spigelman CJ in R v Young (1999) 46 NSWLR 681 at 687) although Parliament did not put them there, and thereby justifying even a “strained” construction. That suggestion has become authoritative in Australia: see Pearce and Geddes op cit pp 41-2. McHugh JA said that those conditions were:
“First, the court must know the mischief with which the Act was dealing. Secondly, the court must be satisfied that by inadvertence Parliament has overlooked an eventuality which must be dealt with if the purpose of the Act is to be achieved. Thirdly, the court must be able to state with certainty what words Parliament would have used to overcome the omission if its attention had been drawn to the defect.”
Even so, although a strained construction can be justified,
“the words which actually appear in the statute must be reasonably open to such a construction. Construction must be text based.” (Young per Spigelman CJ, loc. cit.)
In accordance with these principles, s 15AA must be applied.
Section 15AB of the same Act provides:
“(1)Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a)to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b)to determine the meaning of the provision when:
(i) the provision is ambiguous or obscure; or
(ii)the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
(2)Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:
(a)all matters not forming part of the Act that are set out in the document containing the text of the Act as printed by the Government Printer;
(b)any relevant report of a Royal Commission, Law Reform Commission, committee of inquiry or other similar body that was laid before either House of the Parliament before the time when the provision was enacted;
(c)any relevant report of a committee of the Parliament or of either House of the Parliament that was made to the Parliament or that House of the Parliament before the time when the provision was enacted;
(d)any treaty or other international agreement that is referred to in the Act;
(e)any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted;
(f)the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House;
(g)any document (whether or not a document to which a preceding paragraph applies) that is declared by the Act to be a relevant document for the purposes of this section; and
(h)any relevant material in the Journals of the Senate, in the Votes and Proceedings of the House of Representatives or in any official record of debates in the Parliament or either House of the Parliament.
(3)In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
(a)the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b)the need to avoid prolonging legal or other proceedings without compensating advantage.”
Section 15AB(1)(a) has sometimes been considered as being of limited utility – see Pearce and Geddes op cit pp 60-62. The view seems to have been taken that one cannot look to extrinsic material under para (1)(a) of s 15AB if the effect of such resort would be to depart from the ordinary meaning of the statutory text. However, with respect, para (1)(a) permits resort to extraneous material for the purpose of confirming (“to confirm”) that the real meaning of the text is its ordinary meaning. Para (1)(a) does not prohibit sensible use of a contrary indication resulting from a lack of such confirmation after looking at the non-statutory material, nor would it seem logical or profitable that such a prohibition should be implied, having regard to the far-reaching effect, which I take now to be settled, of s 15AA.
In any case, of relevance to s 15AB(1)(b), is that the recent High Court cases referred to in the discussion above of s 15AA indicate an approach justifying that taken by Spigelman CJ in Repatriation Commission v Vietnam Veterans’ Association (2000) 48 NSWLR 548 at 577-8 to the notion of ambiguity:
“The use of the word ‘ambiguity’ in the context of statutory interpretation is not restricted to lexical or verbal ambiguity and syntactic or grammatical ambiguity.”
Section 15AB(1)(b)(i) authorises access to extrinsic material to determine a provision’s meaning where the provision is “ambiguous or obscure” (emphasis added). Such language seems apt to dispel, similarly to the view put by Spigelman CJ, any notion that a narrow conception of ambiguity is appropriate. In any case, para (1)(b)(ii) permits consideration of material if “the ordinary meaning conveyed by the text … is unreasonable” once account is taken of the “context in the Act” of the provision to be construed and the “purpose or object underlying the Act”. These are broad empowerments of the construing court.
Likewise, it seems to me, there is no warrant to read the expression “material”, as a description of the permissible extrinsic sources, with less than the breadth that that word naturally and ordinarily has. Subs (2), in referring to various formal executive or parliamentary documents, expressly acknowledges that its inclusive references of particular kinds of documents are “(w)ithout limiting the generality of sub-section (1)”. The safeguards against litigation becoming delayed in a flood of extraneous material of doubtful value, appear to lie not in narrowing the kinds of material to which reference can be made but by keeping a close and sensible eye on whether, as a practical and discretionary matter, one should look at such material: see subs (3).
In this case, it is only the desirability of referring to the post-enactment departmental policy document referred to at [20] above, which I doubt. That document was, on the one hand, promulgated at a time when it could not have influenced any Member of Parliament. On the other hand, it is by no means merely the expression of a self-serving view of the departmental authority. However, it is unclear how senior within the department its author was and, having regard to the matters mentioned in subs (3) of s 15AB, especially para (b) thereof, in my view, consideration should not be given to it.
The competing arguments
Counsel for the applicant submits that the Tribunal’s construction of “farmer” does not promote the objects of the Act nor address the mischief that the amendments were designed to remedy because it fails to provide a welfare safety net to those members of the farming community suffering the greatest hardship. Further, the applicant submits that the Tribunal erred by failing to take into account the applicant’s intended farm income which had been prevented from becoming actual income only by the vicissitudes of farming life.
Reference was made to Re Drinkwater and Secretary, Department of Family and Community Services (1999) 58 ALD 243 where the Tribunal took into account that a farmer had intended that his principal source of income would be derived from the farm enterprise. His expectations were undermined by the international collapse of the ostrich industry. In addition, Mr Drinkwater and his wife suffered off-the-farm injuries which not only affected their capacity to work on the farm but also resulted in their combined workers compensation payments being greater than Mr Drinkwater’s “notional” income derived from the farm. I say “notional” because the farm income claimed was an estimate of Mr Drinkwater’s wages for his work on the farm, estimated by his accountant for accounting purposes.
In Drinkwater, when considering whether Mr Drinkwater met the definition of “farmer”, the Tribunal said at 249:
“The question which must be considered is whether Mr Drinkwater derives a significant part of his income from the farm enterprise, bearing in mind that the purpose or object of the 1997 amending legislation, which introduced the restart scheme was to ‘to provide a welfare safety net for farmers experiencing financial hardship’
…
In the tribunal’s view, in the light of the purpose or object of the restart scheme, it is the person’s intention as to their principal source of income which is crucial, evidenced by their labour contribution or effort in the farm business.”
As the farm was the main focus of Mr Drinkwater’s labour and effort, the Tribunal was satisfied that Mr Drinkwater met the definitional requirements of “farmer” and was eligible to apply for restart support income under the Act.
Counsel for the respondent argues that the Tribunal’s construction was correct and that there was nothing in the Act to suggest that the word “derive” should be understood other than in its ordinary meaning. The definition of “derive” in the Macquarie Dictionary is “to receive or obtain from a source or origin” and as such, the only income that should have been considered was the applicant’s actual income and not his theoretical income. Counsel referred to Kidston Goldmines Ltd v Commissioner of Taxation (1991) 30 FCR 77, in which Hill J was required to consider the meaning of “derive” in the phrase “income…derived from the working of a mining company …” in s 23(o) of the Income Tax Assessment Act 1936 (Cth). The issue in this matter was whether moneys derived by the applicant through investment on the short-term money market of moneys derived from gold sales was sufficiently proximate to the original exploitation of the mining property to be exempt from tax. Hill J found that it was not sufficiently proximate and in doing so indicated a requirement for some immediacy between the derivation of income and the mining activity. It was also made clear that the money in issue was that which had accrued (ie derived), suggesting that the relevant moneys were actual not theoretical amounts. His Honour observed that whilst the legislation was beneficial and designed to encourage the gold mining industry, the words could not be strained to a meaning they could not bear and cautioned against taking such an approach with statutory construction.
Counsel for the respondent submitted that, whilst the Tribunal’s construction may not assist those farmers in greatest need, that did not necessarily mean that such construction was contrary to Parliament’s intention. It was submitted that the legislation was intended to offer those farmers on the brink of financial disaster encouragement to vacate the industry and was not designed to be a general scheme for every farmer in hardship. The legislation was carefully aimed at a select group with the purpose of providing short-term benefits whilst these farmers considered their options and to provide a grant to those vacating the industry. Farmers already earning no money from the farm enterprise would have sufficient incentive to leave the industry whilst those substantially helping themselves through off-the-farm activities would be unlikely to need financial assistance. In effect, counsel argued, that the legislation was intended to offer financial encouragement to “farmers” who derived some money from their farm enterprise but were blinded from the truth that their farms were no longer financially viable. Indeed, the title of the Act (as set out in [2] above) suggests that the very sentiment of the Act was to provide “income support and advice to farmers who may not have a long-term productive, sustainable and profitable future in the sector” (emphasis added) as well as providing “financial incentives to farmers to leave farming”, where such incentives are, objectively, necessary. In short, counsel argued that the statutory language was clear and required consideration of only an applicant’s actual not theoretical income. The language of the legislation could not be nor should be strained to allow for the inclusion of applicants in circumstances such as Mr Parrett.
Conclusions as to statutory interpretation
The legislation in question is beneficially intended for needy farmers and, in cases of doubt, should be liberally interpreted. I agree with counsel for the applicant that the result produced by the Tribunal’s construction of the legislation seems at odds with the purpose and objects of the Act. The 1997 amendments to the Act were designed, among other objectives, with the purpose of achieving a welfare safety net for the farming community. It seems unsatisfactory and anomalous that, whilst satisfying the Tribunal that he had contributed a significant amount of labour and capital to the farm enterprise, Mr Parrett’s application should fail because factors outside his control had led to his failure to derive any actual income from the farm enterprise during 1996 and 1997.
That the Tribunal’s construction leads to apparently anomalous results may be otherwise demonstrated. Take the case of an applicant who, despite great contributions of labour and capital, makes no income at all from either the farm enterprise or from off-the-farm activities in the relevant two year period. Quite apart from no income having been literally “derived”, it would appear that an applicant would be ineligible to apply for assistance, as nothing cannot in ordinary language be considered a “significant part” of nothing. A similar result would occur in the case of an applicant who derives $1 from off-the-farm activities and nothing from the farm enterprise (a situation not so far from that of Mr Parrett). However, this is in contrast to an applicant who earns $1 from the farm enterprise and nothing else; in the Tribunal’s approach, such a person would receive financial assistance under the Act: as a significant part of the income, albeit only $1, is “derived” from the farm enterprise. It is difficult to accept, given s 6 of the Act, let alone the extrinsic material set out above, that such a variation in results should be imputed as being within the parliamentary purpose.
The real question in the case, it seems to me, is whether the language of the Act, and in particular the phrase “derives a significant part of his or her income” can fairly be given a construction, even if a strained one, that is nevertheless text-based and seems more consonant with the Act’s stated purpose, and its other purposes more generally to be inferred. In my opinion, such a construction can be found in one of two ways.
Firstly, s 8B(c) makes it a sufficient requirement (for present purposes) that a person “has been a farmer for a continuous period of at least 2 years …”. The present applicant is a person who for eighteen years was a farmer as that term would ordinarily be understood. There is nothing in the definition of “farmer” in s 3(2) that limits a consideration of his income-deriving (and other) attributes to the last two of those eighteen years. It will be sufficient if:
(a)there has been a single period of putative farming that lasted for at least two years; and
(b)taking that period as a whole, it can be said that he derived a significant part of his income from one or more “farm enterprises”, as defined.
The error of the Tribunal, it seems to me, even as a matter of literal interpretation, was to read the phrase “derives a significant part of his or her income”, as if such derivation were required for the period of two years preceding the period for which eligibility for the income support benefit is being assessed. On the contrary, s 8B only requires that, for a continuous period of which those two years were at least a part, a significant part of income was so derived, even though throughout that period, and in particular in the last two years, such a significant income was not continuously derived. The reference to two years was, in my view, designed to introduce a threshold requirement for those eligible to apply but was not designed to be a limitation on the scope of the investigation as to a particular applicant’s eligibility. If an applicant worked at a farm enterprise continuously for a period of ten or twenty years and, viewed over the ten or twenty year period, would qualify, it would be strange if the application should succeed or fail, depending only on, say, complete crop failures in the two years immediately preceding the application. That is particularly so, in light of the ever present vicissitudes of farming to which I have referred. If such a result were to follow, it would be because of a construction that would produce other strange results, very unlikely to have been the parliamentary purpose: it cannot have been the intention to deprive a farmer of the entitlement if he or she were ill for twelve months and therefore, in the Tribunal’s approach, would not have been continuously contributing a significant part of his or her labour to the farm enterprise – see para (b) of the definition of “farmer”.
On that view, a reconsideration of the applicant’s position by reference to his entire period of farming would be necessary. However, it does not seem useful or appropriate to conclude the matter on that limited basis: that may only defer a consideration of the proper approach to a case where, despite bona fide attempts to make an income from a farming venture, no income was derived.
I turn therefore to that case and the second basis for my conclusion. In my opinion it is sufficiently clear that Parliament did not, in terms, deal at all with such a case, although that case would be:
·well within the “mischief[s] with which the Act was dealing”, as explained by s 6(a) and (b) and by the Explanatory Memorandum and the Second Reading Speech; and
·an eventuality that must be dealt with if the Act’s purpose, as thus understood, is to be achieved.
In the latter regard, it is relevant that a farmer in Mr Parrett’s position would not be eligible for any alternative form of welfare assistance. Counsel for the applicant is knowledgeable in matters of welfare law and, at my request, provided additional written submissions regarding this matter. Those submissions indicate that, for a variety of reasons, there is no other welfare payment available to farmers who are unable to make ends meet from their farm enterprise. Some farmers may receive social security benefits because they are eligible for an age pension, have young children or a disability, but many farmers would be ineligible to receive unemployment benefits as their level of commitment of time and effort to the farm enterprise would be too great and they would fail to meet the necessary “unemployment” requirement. The respondent indicated that it had no further submission to make as to these matters. I therefore feel more confident in adopting those submissions of the applicant.
Thus, two of McHugh JA’s tests in Bermingham have been satisfied (see [28] above), and I turn to the third, namely, can it be stated “with certainty” what words Parliament would have used to overcome the omission of the case of the farmer receiving no farm income if its attention had been drawn to the omission?
For a judge to state a conclusion with “certainty” is, in almost all disputed circumstances, a bold claim. Nevertheless, I feel sufficiently confident that Parliament would not have wished to provide for nothing in this eventuality. On the other hand, Parliament would, as I judge it, certainly not have wanted to benefit the mere hobby farmer or a farmer with such a large off-farm income as to make the farmer’s intended farming income insignificant.
As I analyse the matter, therefore, it can be said “with certainty” that Parliament would have provided that para (c) of the definition of “farmer” should have had added to it the italicised words which follow:
“(c) derives or attempts to derive a significant part of his or her income from the farm enterprise but is prevented from so doing by the vicissitudes of ill-health, seasonal factors or lack of means to continue farming”.
It would have been unnecessary for Parliament to add that the attempted derivation of income should have been bona fide: that would be implied. Further, a lack of a reasonable degree of possibility of success might bear on a judgment of bona fides.
Parliament may, had its Members adverted to the problem, have wished to do more than I have suggested, but it seems quite clear that Parliament would have expressed a wish to have done at least that much.
Finally, one must be able to view the interpretation as text-based. The interpretation I favour involves construing the expression “derives … income” as including a reference to both the actual and, in the circumstances, indicated in [50], intended derivation of income from the farm enterprise. In my opinion, in its present statutory context, the literally expressed criterion “derives … income” is sufficiently textually apt to include engaging in activity (in the circumstances mentioned in [50]) with the intention that income be derived from it. The concepts of “income” and “derivation” remain integral.
The Tribunal thus erred in its construction of the legislation and the result for Mr Parrett may very well have been different, had the Tribunal not so erred.
SSAT’s construction of s 1255 of the Social Security Act
The second issue raised by the applicant concerns the Tribunal’s failure to consider whether the SSAT erred in its application of s 1255 of the Social Security Act when it determined that its decision would take effect as of 31 August 1999. The Tribunal did not feel the need to address this determination in its reasons for judgment dated 4 November 1999, once it had determined that Mr Parrett was not eligible for financial assistance under the Act.
Section 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) provides the jurisdiction for appeals to the Federal Court:
(1)A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.
Therefore, an appeal under s 44(1) under the AAT Act lies only from a decision that constitutes the effective decision or determination of the application under review. A “decision” in this context is given a restricted meaning, and means a final decision or determination: Director-General of Social Services v Chaney (1980) 31 ALR 571. On this basis, counsel for the respondent argued that as the Tribunal did not decide the matter, no error of law had been made for the Court to review in this proceeding. In an attempt to minimise cost to the parties I proposed that I would hear the applicant on this issue and provide the respondent with an opportunity to file written submissions at a later date. It would only be necessary to consider this issue if the applicant succeeded in establishing that the Tribunal had legally erred in its conclusion that Mr Parrett was not eligible to receive financial assistance under the Act. I indicated that if this was established, I would then consider granting leave to the applicant to amend his application to seek a declaration in respect of the SSAT’s determination concerning s 1255 of the Social Security Act so as to clothe the Court with jurisdiction to hear and determine all matters in dispute between the parties. The parties agreed with this approach.
I will therefore list this matter for further directions in seven days’ time.
I certify that the fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick.
Associate:
Dated: 7 June 2002
Counsel for the Applicant:
Mr A Anforth
Solicitor for the Applicant:
Welfare Rights & Legal Centre
Counsel for the Respondent:
Ms RM Henderson
Solicitor for the Respondent:
Minter Ellison
Date of Hearing:
12 October 2001
Date of Judgment:
7 June 2002
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