Patrick Bracks and Director, Australian Defence Force Reserves Employer Support Payment Scheme
[2013] AATA 129
[2013] AATA 129
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2012/2093
Re
Patrick Bracks
APPLICANT
And
Director, Australian Defence Force Reserves Employer Support Payment Scheme
RESPONDENT
DECISION
Tribunal Hon. Brian Tamberlin, QC, Deputy President
Date 13 March 2013 Place Sydney The decision under review is affirmed
...............[sgd].........................................................
Hon. Brian Tamberlin, QC, Deputy President
CATCHWORDS
DEFENCE: Employer support payment scheme - whether Director has power to review earlier decisions - whether Applicant employed full-time or part-time for the purposes of the Defence (Employer Support Payments) Determination 2005 – appropriate rates of payment - decision affirmed
LEGISLATION
Defence Act 1903: s 58B(1)
Defence (Employer Support Payments) Determination 2005: ss 3, 7, 10A,(1), (3)(d), B(1), 16
CASES
Formosa v Secretary, Department of Social Security (1988) 46 FCR 196
Military Template v Director, Australian Defence Force Reserves Employment Support Payment Scheme [2011] AATA 490
Sutherland Shire Council v James [1963] S.R (NSW) 273SECONDARY MATERIALS
Brochure - “Employer Support Payment Scheme” Defence Department, March 2007
REASONS FOR DECISION
Hon. Brian Tamberlin, QC, Deputy President
13 March 2013
This is an application for review of a decision of the Respondent made under s 10A(3)(d) of the Defence (Employer Support Payments) Determination 2005 (Determination). The Director decided that claims for support payments previously assessed as payable at the rate for full-time work should have been made at the rate for part-time work. The periods of defence service undertaken by the Applicant under consideration are between 19 July 2010 and 21 April 2011. The Director assessed the Applicant as having been employed in part-time work for 24 hours per week.
The decision under review was made on 2 February 2012. On 8 May 2012 the Director undertook a re-examination of the decision and affirmed the decision of 2 February 2012.
BACKGROUND
During the relevant period the Applicant operated a business under the name of “Bracks Kinesiology”. The business provided kinesiology services and the Applicant was a member of the Australian Kinesiology Association Inc. His business was operated from premises that he shared with a law firm operated by his father.
The net income of the business in the 2007/2008 financial year was $11,027 and $10,592 for the six months ending 31 December 2008. By January 2010 the business was “almost non-existent” and attempts to resurrect the business were “to all intents and purposes unsuccessful”. There were no business activity statements kept of the business and no income tax return for the 2009/2010 financial year has yet been lodged.
The Applicant applied for support payments in relation to multiple claim periods from January 2009 to April 2011. These claims were on the basis that the Applicant was self-employed on a full-time basis. They were assessed and decisions were made by the delegate approving payment of the claims as submitted by the Applicant.
On 8 August 2011, the Director wrote to the Applicant indicating an intention to review under s 10A of the Determination. The review was in respect of applications approved over the preceding 12 month period, that is claims dated in July 2010 to 29 April 2011 for various periods of service between those dates. The letter sought further information to substantiate the claims for payment that the Applicant had received employer support payments for the relevant claims in the amount of $39,531.08. There was subsequent correspondence between the Applicant and Director in relation to further information and, on 2 February 2012, the Director notified the Applicant of the outcome of the review under s 10A of the Determination. The outcome of the review was to substitute new decisions for the previously made decisions. The effect of the substituted decisions was to reduce the Applicant’s entitlement to employer support payments to $26,492.90 The Director indicated that the overpayment of $13,038.18 would be recovered. On 13 February 2012 the Applicant requested a reconsideration. This was done and the earlier decision was affirmed.
THE LEGISLATIVE SCHEME
Under the Defence Act 1903 (Defence Act) the Minister may by instrument in writing make determinations providing for payments, by way of compensation, incentives or other benefits, to employers of members of the Reserves in relation to the availability of members for defence services for inconvenience suffered because of the member’s absence while on defence service.
The Determination was made pursuant to s 58B(1) of the Defence Act.
Section 7 of the Determination sets out eligibility conditions. A self-employed member, who has been absent on defence service while self-employed, is a member who conducts a recognised business as a sole trader and for whom the business provides the member’s principal source of income, and it has been the member’s principal source of income for the previous six months.
The calculation of the amount of employer support payments depends on whether the member is in full-time work or part-time work. The expression “full-time work” is defined in s3 of the Determination to include regular paid employment for 35 hours each week. Part-time work has a corresponding definition in s3 of the Determimation which includes regular paid employment for less than 35 hours each week.
A member performing “casual work”, as defined in s3 of the Determination to include employment on an irregular or unreliable basis, is not regarded as being in employment for the purposes of the Determination and therefore not entitled to payment.
Section 10A of the Determination enables the Director to review a decision in relation to a claim for employer support payment. The power to review may be exercised where the decision concerned the payment of an amount having regard to the evidence that requires or required substantiation, or where the decision was made 12 months before the start of the review. The purpose of the review is to determine whether the decision was made in accordance with the Determination or is appropriate. If the Director believes that the decision may not have been in accordance with the Determination or may have been inappropriate, the Director may substitute a decision which the Director believes should have been made in place of the first decision.
Section 10B(1) of the Determination enables the Director to re-examine a previous decision in relation to a claim for employer support payment on the request in writing of a self-employed member or of a member who submits new information.
Provision is made for review of a Director’s decision by the Administrative Appeals Tribunal under s 16 of the Determination. The reviewable decision in the present case is that of the Director on 2 February 2012 which was affirmed later on 8 May 2012.
ISSUES
The issues in this matter are:
(a)Whether the Director has power, in the present case, to review earlier decisions.
(b)Whether the Director is estopped, or prevented, from reviewing earlier decisions in the present case by reason of statements made in a brochure titled “Employer Support Payment Scheme” issued by the Defence Department in March 2007.
(c)Whether the Applicant was in regular paid employment in his business for 35 hours each week and therefore in “full-time work”.
(d)If the Applicant was not employed in “full-time work”, whether the Applicant was employed in “part-time work” or “casual work”.
(e)If the Applicant was employed in “part-time work”, the number of hours he was employed each week.
(a) Power to review
The Applicant submits that the Director has no power under s 10A(1) of the Determination to review the decision to pay as claimed. This argument is based on the premise that because earlier decisions have been made and implemented to pay the Applicant’s claim as payable at the rate for full-time work under the Determination, the Director does not have power to later review or vary a decision and determine that payments should have been made at the lower rate for part-time work.
The Applicant refers to the publication referred to earlier, which appears to be a brochure designed to assist and guide in understanding the employer support payment scheme. The relevant passage on which the Applicant relies include the following:
How Often Do I Need To Provide Evidence Of My Principal Source Of Income?
Every three years, unless you have a break of six months or longer between periods of continuous Defence service. If you have such a break you need to establish a new principal source of income.
However, you may provide new principal source of income evidence with any claim if you wish to do so (this may re-start the three year period during which you can use previously submitted principal source of income evidence).
The Applicant says that since the original claims made within the three year period had been accepted by the Respondent within that period, the Determination should be interpreted to preclude a review because the earlier information, in effect, must be accepted as conclusive.
The Applicant also refers to another statement in the brochure which states:
You must provide principal source of income evidence for an assessment period of six months or longer. Once you have established principal source of income, you may use this evidence up to three years.
This latter quote appears under a heading in the brochure entitled “How Do I Determine My Principal Source Of Income?
I do not accept the submission that the Director does not have power to review the earlier decisions and payments in this case. My reasons are as follows.
First, the decision of the Director under review proceeded on the basis that the Applicant was in fact entitled to rely on the previously provided source of income evidence for periods in respect of service claimed. The Director specifically stated in a letter of 28 September 2011 that he was satisfied the requirement was met. The letter states, inter alia:
3. In determining whether you were entitled to ESPS payments, I must consider whether you met the Principal Source of Income (PSI) requirements…Following receipt of the ATO Notice of Assessment for your 2008 Individual tax return, I am satisfied that this requirement was met. In order to determine the correct amount of any ESPS payment, it is also essential to determine whether you were in full-time or part-time employment in your business.
The second reason is that there is no reason to read down the broad language of ss 10A(1) and 10(3)(d) of the Determination as contended by the Applicant These sections are cast in far-reaching terms and give wide power to examine whether the first or earlier decision was made in accordance with the Determination.
The third reason is that as a matter of legal interpretation the language identified in the brochure relied on by the Applicant cannot be used to govern or read down the wording of the Determination. The extract relied on is a General Guideline and does not purport to prohibit the Director, in any way, from considering new information, or evidence that he considers appropriate at the time a decision is made to review. The extracts quoted provide only that the earlier evidence of the principal source of income may be used; it does not purport to make it conclusive or prohibit the Director from examining what is considered by the Director to be relevant new evidence on entitlement. The Director has a statutory discretion to consider whether an earlier decision should be reviewed. The extracts from the brochure do not justify a conclusion that evidence giving rise to the earlier decisions is the only evidence which can be looked at.
For these reasons I reject the submission as to lack of power.
(b) Estoppel
The Applicant contends that even if the Director has power to review the earlier decision it cannot be exercised in this case, as there is an estoppel by reason of the extracted material referred to above.
The short answer to this submission is that the material in the publication cannot give rise to an estoppel against the effect of the Determination which has legislative force, having been made pursuant to the Defence Act: see Sutherland Shire Council v James [1963] S.R. (NSW) 273 at 278-9; Formosa v Secretary, Department of Social Security (1988) 46 FCR 196 at 208, 210. There is no estoppel against a legislative instrument in this case.
(c) Full-time or Part-time work
The Applicant has given evidence, been cross-examined and has filed a statement in support of his application.
He states that between 18 January 2010 and 30 June 2010 he served 22 days as a Reservist. His first day of service was 18 January 2010 and he served all that week and the following two weeks until 8 February 2010. During this time he was not in a position to devote any time to his business of kinesiology. After 8 February 2010 he tried to reinvigorate his business but these efforts were considerably interfered with by him being available for service. During the 26 weeks in the six months from 1 January 2010 to 30 June 2010 he served as a Reservist.
The Applicant gave evidence that the practice of kinesiology does not just involve clinical treatment. He said his time was given to actions required to re-stimulate the business and he spent many hours every day thinking about plans and actioning them. However, he cannot give a day by day description of his thoughts or actions. He says he discussed the work needed with his parents, acquaintances and some professionals and looked at literature. This took a lot of time and he spent about $286 on stationery and diaries whilst attempting to reinvigorate his business, and also spent some time looking for a stationery store. He did not apply himself to the practice until 9 February 2010 because of what he refers to as the “silly season” and his Reservist service. He says he checked his records on 9 February and attended to his files and did some other work. On 10 February he consulted with two clients. During weekdays and some nights he attended to his business. He said he took part in promoting it. The results were not always fruitful. He made telephone calls in relation to appointments but many of these involved goodwill only and advice and chatter. He put advertisements in the paper that were small inserts and these are in evidence. The design and the booking of the advertisements involved many telephone calls and a great deal of work. The design of the advertisements in evidence produced in evidence did not appear to be very complex or time consuming. He said that he carried out general office duties including vacuuming and cleaning. He had 40 paid consultations with 10 different clients and made contact with Japanese and Korean acquaintances for a particular problem in relation to translations of kinesiology literature into Japanese and Korean which took up a considerable part of his time and spoke to a number of translators in this respect.
The Applicant, however, did not keep any detailed records as he did not think they would be required to prove his working hours. He had assumed that earlier records had been accepted. He claims to have worked more than the required 35 hours per week.
The evidence establishes that the Applicant was self-employed in the business “Bracks Kinesiology”. The evidence is that he considered that the business had become almost non-existent in January 2010. However, he provided services to a small number of clients during the period 9 February 2010 to 1 July 2010 for which he received some remuneration. In that period January to June 2010 he also engaged in some unpaid activities in connection with the business.
In my view, the evidence does not support any reasonable inference that the Applicant was in regular paid employment for 35 hours per week, and I conclude that there is no basis for the claim that he was in full-time work. His pattern of employment indicates that he is claiming for work which cannot be properly characterised as being carried out in regular paid employment: see Military Template v Director, Australian Defence Force Reserves Employer Support Payment Scheme [2011] AATA 490 at [16] – [19]. The fact that a person “thinks” about his business from time to time does not of itself support a conclusion that he is then engaged in “employment”.
The material before the Tribunal in support of the Applicant’s case is limited and unsatisfactory in the extreme. It is mainly based on unsubstantiated assertions as to the amount of work and the pattern of work. His sparse diary records show 39 appointments for the period February 2010 to 1 July 2010, which indicates an average at most of four direct client contact hours per week. There are said to be a number of unpaid activities. When asked to give information as to these activities and the conduct of his business and the times and dates of normal work hours, the Applicant was only able to give a very general response. He referred to “very limited management, refreshing knowledge” and interviews with clients at the client’s convenience. The extent and nature of the references to “thinking” and acting on problems, which he claims to be part of his work, is impossible to evaluate.
The records produced are extremely limited and are unhelpful and vague. There is no corroborative evidence before me to support the Applicant’s contention that he was engaged in full-time work or did full-time work, nor has any evidence been called from clients or any other person to verify or substantiate times, dates and work patterns.
On the hearing before me the representative for the Respondent contended that the Applicant’s work should be characterised as “casual” work and therefore not compensable at all. Although the evidence does not support the conclusion that there was full-time work, I am not persuaded that it could not be properly characterised as part-time work, therefore compensable. I therefore consider it should be treated as part-time work.
Due to the highly unsatisfactory nature of the evidence before me as to the pattern and hours of work, it is difficult to determine the number of hours of part-time work in respect of which payments should be made. On the limited material provided, I am satisfied that the conclusion reached, that an allowance should be made of a figure of 24 hours per week on a part-time basis, is both reasonable and generous.
DECISION
For the above reasons the decision under review is affirmed.
I certify that the preceding 37 (thirty -eight) paragraphs are a true copy of the reasons for the decision herein of the Hon. Brian Tamberlin, QC, Deputy President
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Associate
Dated 13 March 2013
Date of hearing 7 February 2013 Solicitors for the Applicant Mr Noel Bracks, Noel F. Bracks & Company Solicitors for the Respondent Mr Will Sharpe, Sparke Helmore
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