PERRY and SECRETARY, DEPARTMENT OF DEFENCE
[2010] AATA 458
•18 June 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 458
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/5939
GENERAL ADMINISTRATIVE DIVISION ) Re RAYMOND PERRY Applicant
And
SECRETARY, DEPARTMENT OF DEFENCE
Respondent
DECISION
Tribunal Dr P McDermott, RFD, Senior Member Date18 June 2010
PlaceBrisbane
Decision The Tribunal sets aside the decision under review and substitutes the decision that the payment of subsidy to the applicant is not revoked under section 44(2) of the Defence Home Ownership Scheme Act 2008 (Cth).
..................[Sgd]..................
Senior Member
CATCHWORDS
DEFENCE – Defence Home Ownership Assistance Scheme – Application for Subsidy Certificate – Applicant did not perform effective service as a member of the Reserves - Application no longer a member of the Reserves – Application of the discretion to revoke the authorisation of the payment of subsidy to the subsidised borrower – Applicant with one star rank appointed to a War Establishment (Band 4) position – Applicant ready, willing and able to service – Decision set aside.
Acts Interpretation Act 1901 (Cth)
Defence Home Ownership Assistance Scheme Act 2008 (Cth) ss 3, 5, 7, 8, 11, 14, 16, 17, 27, 28, 29, 36, 44, 46, 66, 67, 71, 73, 76, 85
Defence Force (Home Loans Assistance) Act 1990 (Cth)
Taxation Assistance Act 1953 (Cth) s8AAD
Mann v Minister for Immigration and Citizenship (2009) 112 ALD 25
Re Elston and Australian Community Pharmacy Authority (1996) 44 ALD 126
R v Kelly (Attorney-General’s Reference No 53 of 1998) [2000] 1 QB 198
REASONS FOR DECISION
18 June 2010 Dr P McDermott, RFD, Senior Member INTRODUCTION
1. Air Commodore Raymond Perry (the applicant) is a reservist in the Royal Australian Air Force (RAAF). He has been granted financial assistance under the Defence Home Ownership Assistance Scheme. He seeks review of a decision by a delegate of the respondent confirming a Department of Veterans’ Affairs (DVA) decision to revoke the authorisation of the payment of assistance under that Scheme.
REVIEWABLE DECISION
2. On 23 November 2009, the delegate of the Secretary (the delegate) made a decision confirming the DVA decision to revoke the authorisation of the payment of subsidy to the applicant under the Defence Home Ownership Assistance Scheme. That decision was made pursuant to s 75(2) of the Defence Home Ownership Assistance Scheme Act 2008 (Cth) (the Act). The applicant is required to repay to the Commonwealth the subsidies that were paid to him under the Act plus interest (at the taxation general interest charge rate)[1] on that amount, pursuant to sections 66 and 67 of the Act. On 16 December 2009, the applicant applied to this Tribunal for review of the decision of the delegate.
[1] Taxation Assistance Act 1953 (Cth) s8AAD. See Defence Home Ownership Assistance Scheme Act 2008 (Cth) s 67(3)
BACKGROUND
3. The applicant gave evidence of his considerable service in the Defence Force. He was a permanent member of the Royal Australian Air Force for 34 years from 1966 until 2000. He has extensive experience as a fighter pilot. He originally flew Sabres in Thailand as well as the Mirage in South East Asia. When Australia acquired the F111, he ferried two F111s from the USA to Australia. At Amberley, he commanded a F111 wing and later had higher command responsibilities. In another capacity, he also provided advice to the Chief of the Air Force.
4. In his evidence, the applicant remarked that he resigned as a permanent member of the RAAF in July 2000. He then transferred to the Active Reserves with the RAAF. At all relevant times he has retained his commission. Since he has been a member of the Active Reserves he has always been ready, willing and able to perform duties in the Reserves. Since he has joined the Reserves he has had an annual medical examination as well as maintaining his security classification.
5. The applicant stated that from 1 July 2008 there was some administrative uncertainty as to his position in the Reserves. The uncertainty of his status came to light when, as an officer with a minimum rank of 1 star status, he was called upon to attend an Australian Defence Medal Presentation as a Military Representative. On that occasion a Minister of the Crown would be in attendance. The uncertainty of his status was resolved when, on 14 October 2008, he was appointed to a War Establishment (Band 4) position within the office of Director General Personnel ‑ Reserves. This means that the applicant, as an experienced senior officer with operational experience, can be called upon to assume high level responsibilities in the RAAF. In any year he is obliged to render 90 days service if required.
6. On 5 August 2008, the applicant lodged an application under s 14 of the Act for a Subsidy Certificate. In the application form the applicant stated that he had Active Reserve service since he joined the Reserves. The Squadron Leader of the 23 Squadron had earlier on 31 July 2008 inserted a tick next to the following statement: “I verify that the service details attached are in accordance with those held on the service member’s personal file”. The application form contained the following note “Where you have ineffective service, including failure to complete your 20 days minimum training obligation as a reservist, your subsidy may cease, and you may be liable for repayment of overpaid subsidy in excess of your entitlement”.
7. On 2 September 2008, the application for a subsidy certificate was approved under s 16 of the Act.
8. On 14 November 2008, the Department of Veterans Affairs advised the applicant to confirm that his monthly subsidy payments under the Scheme would commence from 1 January 2009 and that his ADF service entitled him to Tier 3 benefits.
9. Eight monthly payments of subsidy have been paid to the home loan provider. These instalments are the amount of $357.59 for the month of December 2008; the amount of $342.49 for the month of January 2009; the amount of $315.17 for the month of February 2009; the amount of $285.44 for the month of March 2009; the amount of $282.50 for the month of April 2009; the amount of $278.99 for the month of May 2009; the amount of $277.53 for the month of June 2009 and the amount of $277.82 for the month of July 2009. In total the respondent claims that the applicant is overpaid the sum of $2,516.84 which includes interest charged at the general interest charge.
10. It is not in issue that the applicant did not complete 20 days Reserve service in the 2008-2009 period or in any of the earlier financial years in which he has been a member of the Active Reserves.
11. On 7 August 2009, the Department of Veterans Affairs determined that the applicant did not complete effective service in the 2008-09 financial year. The Department also advised that: he was ineligible to receive a subsidy certificate; that he was not entitled to the subsidy; and, that his monthly subsidy payments would cease and that he was required to repay all subsidy amounts overpaid plus interest.
12. On 1 September 2009, the applicant sought reconsideration of the decision that was made by the Department of Veterans Affairs on 7 August 2009. The applicant made a submission that exceptional circumstances existed such that his ineffective service for the financial year 2008-09 should be deemed to be effective service pursuant to reg 20 of the Defence Home Ownership Scheme Regulations 2008 (Cth).
13. On 23 November 2009, the delegate affirmed the original decision.
LEGISLATION
Serving member
14. The eligibility of an applicant to receive assistance under the Act is governed by Part 2 of the Act. Section 7(a) of the Act provides that the applicant as a “serving member” was eligible to receive assistance under the Act.
15. Section 8 of the Act provides that a person is eligible as a serving member at a particular time if, at that time, the person is a member of the Defence Force; and has completed (whether before or after the commencing day) the relevant qualifying service period: s 8 (1). The relevant qualifying service for a serving member who is, at the eligibility time, a member of the Reserves is 8 years of effective service: s 8(2)(b).
Effective service
16. Having regard to s 8(2) of the Act, it is important to consider what amounts to “effective service”. There are a number of provisions in the Act and the Defence Home Ownership Scheme Regulations 2008 (the Regulations) which concern “effective service”.
17. Section 3 of the Act contains a definition of "effective service" in relation to a person who is, or has been, a member of the Defence Force. That definition contains two paragraphs: paragraphs (a) and (b).
18. Paragraph (a) refers to a “person who at any time before, on, or after the commencing day, stopped being a member of the Defence Force, and, more than 5 years later, again become a member of the Defence Force”. This paragraph has no relevance to this application as there was no interval of 5 years between his service as a permanent member and his service in the Reserves.
19. Paragraph (b) in that definition refers to effective service which “is recognised as effective service in accordance with the regulations”. I consider that it is this paragraph which has relevance to this application. I must therefore have regard to the regulations which have been made under s 85 of the Act.
20. Regulation 8 prescribes the service types and periods that can be used to calculate the effective service that is to be counted in calculating a member's qualifying service period: see reg 8(1). Subregulation 8(2) provides that the qualifying service period of a serving member who is also a member of the Reserves is 8 years of effective service.
21. Subregulation (1) of regulation 20 provides that the Secretary may, on the application of a member, treat the member’s service as effective service. The Secretary may exercise this discretion in those circumstances that are mentioned in the regulation: that is where a member’s service is not effective service under Part 2 of the Act and where the Secretary is satisfied that exceptional circumstances exist.
22. Subregulation (2) of regulation 20 provides that without limiting subregulation (1), the following are taken to be exceptional circumstances:
(a)the member has had an extended period of illness or injury that prevents the member from performing their effective service;
(b)service has been performed but, as a result of a defective decision, is not recognised as service.
Failure to complete effective service
23. A member of the Reserves must complete effective service in each service year to be treated as a member of the Reserves for the purposes of the Act having regard to s 5(1)(b) of the Act.
24. Subsection 5(1) of the Act provides that for the purposes of this Act, a person who has been engaged (by enlistment or appointment) as a member of the Reserves at a particular time (the engagement time) is to be treated as a member of the Reserves until:
(a)the engagement ends; or
(b)during a service year the engagement does not end; but the person does not perform effective service as a member of the Reserves.
Effect of failure to perform effective service
25. Subsection 5(2) of the Act provides if a person's membership of the Reserves ends under paragraph (1)(b) in relation to a service year, this Act applies to the person, and is taken to have applied to the person, as if he or she had:
(a)in the case of a person who was a member of the Reserves at the end of the previous service year—stopped being a member of the Reserves immediately after the end of the previous service year; or
(b)in any other case—not been engaged as a member of the Reserves at the engagement time.
26. The following note and example is found at the end of section 5:
Note: This section may have the following effects:
(a)the time at which a person is taken to stop being a member of the Reserves (or of the Defence Force) may be affected;
(b)there may be a retrospective loss of entitlements in relation to subsidy certificates, the payment of subsidy, service credits and accrued subsidy periods and loan limits;
(c)in particular, an authorisation of the payment of subsidy on the basis of a person's membership of the Reserves may be revoked retrospectively (see section 44);
(d)if a subsidised borrower who is taken not to have been a member of the Reserves because of the operation of subsection (2) would have been otherwise entitled to subsidy, the authorisation of the payment of subsidy to the person may be varied retrospectively (see section 45).
Example: A person is engaged as a member of the Reserves. The person is given a subsidy certificate under Part 3 on the basis of eligibility as a serving member of the Reserves. The person starts to receive amounts of monthly subsidy accordingly.
However, at the end of the service year, the person has not performed effective service as a member of the Reserves.
Because of subsection (2), this Act applies as if the person was not entitled to be given the subsidy certificate (because he or she was not eligible as a member of the Reserves).
As a result, the original authorisation of the payment of subsidy may be revoked or varied (see sections 44 and 45). Amounts of subsidy to which the person is not entitled (because of the revocation or variation) are recoverable as overpayments under Division 6 of Part 4.
Subsidy certificates
27. Part 3 of the Act deals with subsidy certificates.
28. Section 14 of the Act provides that a person may apply to the Secretary for a subsidy certificate: s 14(1). An application must be in the approved form: s 14(2).
29. If a person applies for a subsidy certificate in accordance with s 14 (that is, in the approved form) then the Secretary may make a decision under s 16(2) of the Act whether to give or refuse to give a subsidy certificate: s 16(1) and (2). Subsection (2) of section 16 provides that the Secretary is required in certain circumstances to give a subsidy certificate to the applicant. The parts of that subsection that are material to this application provide that the Secretary must give a subsidy certificate in a case where s 17 of the Act applies and the applicant has a service credit. The Secretary must refuse to give a subsidy certificate to the applicant if subsection (2) does not apply: s 16(3).
30. Subsection (1) of s 17 provides that, subject to that section, the Secretary must give a subsidy certificate to the applicant if the Secretary is satisfied that the applicant is eligible; and does not hold a subsidy certificate that is in force.
Subsidy
31. Once a subsidy certificate is given to a person the Secretary is required to authorise the payment of the subsidy. This is a consequence of subsection (1) of s 27 of the Act which provides that the Secretary must authorise the payment of subsidy to a person if subsidy becomes payable to the person under subsection 28(1).
32. Section 28 sets out the criteria when payment of the subsidy becomes payable and continues to be payable.
33. Subsection (1) of s 28 provides that the “subsidy becomes payable to a subsidised borrower in relation to a loan to the borrower if (a) the loan is made by a declared loan provider; and (b) the loan is secured by a mortgage over an interest (including a leasehold interest) in land; and (c) the conditions under Subdivision B are met”. Such subsidy becomes payable with effect from the beginning of the monthly instalment period during which subsection (1) starts to apply in relation to the borrower: see s 28(2).
34. Subsection (3) of s 28 provides that “after the subsidy becomes payable to a subsidised borrower, monthly subsidy continues to be payable to him or her during a continuous period (an entitlement period) until it stops being payable under section 36, subject to s 44 (revocation of authorisation of payment of subsidy)”.
35. Note 3 to subsection (3) of s 28 states: “If the Secretary revokes an authorisation under section 44 in relation to an entitlement period, subsidy is taken never to have been payable during the period”.
36. Section 29 provides that subsidy becomes payable when a subsidy certificate held by the subsidised borrower is in force and the subsidised borrower has a service credit under s 46.
Revocation of subsidy
37. Section 44 enables the Secretary to revoke the payment of subsidy to an authorised borrower under s 27 in the circumstances mentioned in subsection (2).
38. Subsection (2) of s 44 provides:
(2)The Secretary may, by written notice to the subsidised borrower, revoke the authorisation of the payment of subsidy to the subsidised borrower in relation to the entitlement period if the Secretary is satisfied that:
(a) the subsidy certificate ought not to have been given; or
(b)the subsidy certificate was only given because of a false or misleading statement by the subsidised borrower (or anyone else); or
(c)payment of subsidy at any time during the entitlement period was only made (or continued) because of a false or misleading statement by the subsidised borrower (or anyone else).
39. Subsection (3) of s 44 provides that “the Secretary may give a notice under subsection (2) during the entitlement period, or at any time after the end of the entitlement period”.
40. Subsection (4) of s 44 provides that “if an authorisation is revoked under this section, subsidy is taken not to have become payable to the subsidised borrower during the entitlement period”.
41. A Note to subsection (4) states: “The Commonwealth may recover, as overpayments, any subsidy paid to a subsidised borrower during the entitlement period if subsidy is taken not to have become payable to the borrower”.
When subsidy stops being payable
42. Section 36 provides that subsidy stops being payable to the subsidised borrower, in relation to the entitlement period if an event mentioned in an item in the table in that section occurs. Item 10 of that table refers to the following event: “Authorisation for the payment of subsidy to the subsidised borrower is revoked in accordance with a notice given by the Secretary under subsection 44(2)”. If such an event occurs then it has effect from the start of the monthly authorisation period in which the critical time provided for that item occurs. Item 10 of the table states that the critical time is when the subsidy first became payable.
43. A Note to s 36 states: “The Commonwealth may recover, as overpayments, any subsidy paid to a subsidised borrower after subsidy has stopped (or is taken to have stopped) being payable to him or her”.
Recovery of overpayments
44. Division 6 of Part 4 of the Act provides for the recovery of overpayments. Section 66 refers to the circumstances when the Division applies.
45. Subsection 66(1) (a) and (b) provides that Division 6 applies “if the Secretary has paid an amount (the overpaid amount) to a loan provider as subsidy, by way of a payment into a subsidised loan account for the benefit of a subsidised borrower (the debtor); but the overpaid amount is not payable to the debtor under the Act”.
46. Subsection 66(2) provides that Division 6 “applies in relation to a debtor who is not, or who has stopped being, a subsidised borrower as if the person were a subsidised borrower”.
47. Section 67 provides for the recovery of overpayments and provides as follows:
67 Recovery of overpayments—amount payable
(1)The debtor must pay the amount (the due amount) covered by subsection (2) to the Commonwealth.
(2) The amount covered by this subsection is the sum of the following:
(a) the overpaid amount;
(b)interest, at the general interest charge rate per day, on so much of the overpaid amount as remains unpaid from time to time after the overpaid amount was paid to the loan provider.
(3) In this section:
“general interest charge rate” means the general interest charge rate worked out under section 8AAD of the Taxation Administration Act 1953.
Note: The debt may be reduced (or discharged) under section 68 or 69.
Rejoining members
48. Section 11 of the Act provides:
A person is eligible as a rejoining member at a particular time (the eligibility time) if the person:
(a)before, on or after the commencing day, stopped being a member of the Defence Force; and
(b) was eligible immediately before he or she stopped being a member; and
(c)before, on or after the commencing day, again became a member of the Defence Force within 5 years after the day on which the person stopped being a member; and
(d) is a member of the Defence Force at the eligibility time.
Reviewable decision
49. Part 5 of the Act deals with the review of decisions.
50. Section 71 of the Act provides for the internal review of reviewable decisions. The section provides that each of the decisions mentioned in that section is a reviewable decision. Item 8 of the table of reviewable decisions which is contained in that section refers to a decision “To revoke an authorisation of the payment of subsidy” which is made under s 44(2) of the Act.
51. Section 73 of the Act requires the Secretary to “take such steps as are reasonable in the circumstances to give notice in writing, to each person whose interests are affected by a reviewable decision, of: the making of the decision; and the person’s right to have the decision reviewed under Part 5.
52. Section 74 of the Act provides that a person whose interests are affected by a reviewable decision may apply to the Secretary for review of a reviewable decision. The reviewable decision may be reviewed in accordance with section 75 of the Act. Section 76 of the Act provides that an application may be made to this Tribunal for review of an internal review decision.
CONSIDERATION
53. I have earlier mentioned that it is the decision of the delegate that was made on 23 November 2009 which is the reviewable decision. This is a consequence of s 71 of the Act.
54. At the outset, it should be appreciated that the fact that a member has an appointment under the Defence Act 1903 (Cth) is not decisive of the eligibility of that member to receive assistance under the scheme established under the Act. This may not be appreciated by those members who are seeking financial assistance under the Act. That misconception may be reinforced by the application form in this instance where the commanding officer of the applicant’s unit was required to certify as follows: “I verify that the service details attached are in accordance with those held on the service member’s personal file”. That file would reveal that the applicant was a member of the Active Reserves.
55. Under the Act, a member of the Reserves must complete effective service in each service year to be treated as a member of the Reserves for the purposes of the Scheme. The terms of s 5, which apply “for the purposes of this Act”, require that a person who has been engaged as a member of the Reserves at a particular time is to be treated as a member of the Reserves until during a service year the person does not perform effective service as a member of the Reserves. Having regard to the definition of “effective service” in s 3 of the Act, what amounts to “effective service” is service that “is recognised as effective service in accordance with the regulations”. Subregulation 8(2) provides that if the member performs reserve service on 20 or more days in a service year, the member has one year of effective service.
56. There is no issue that the applicant did not perform 20 days service in the Reserves for the financial year 2008-09 or indeed since he was admitted to the Reserves. This has been admitted by the applicant and I find that the applicant did not perform 20 days service in the Reserves for the financial year 2008-09 or in all of the proceeding financial years since he became a member of the Active Reserves.
57. Under the terms of s 5(1)(b) of the Act the applicant did not perform effective service as a member of the Reserves for the financial year 2008-09. A consequence of such failure is that he “stopped being a member of the Reserves immediately after the end of the previous service year”: s 5(2)(a). Having regard to this finding, the terms of s 5(2)(b), which apply “in any other case”, are inapplicable. For the purposes of the Act, the applicant “stopped being a member of the Reserves” immediately after 30 June 2008 if not before.
Exercise of discretion to revoke the authorisation of the payment of subsidy to the subsidised borrower
58. My finding that for the purposes of the Act the applicant “stopped being a member of the Reserves” immediately after 30 June 2008, has led me to the conclusion that the Secretary certainly has discretion under s 44(2) of the Act, to revoke the authorisation of the payment of subsidy to the subsidised borrower in relation to the entitlement period.
59. Before the Secretary can exercise discretion under s 44, there has to be the establishment of one of the grounds that are mentioned in paragraphs (a), (b) and (c) of s 44(2) of the Act. The Secretary has quite properly submitted that there can be no basis for the exercise of the discretion under s 44(2)(b) and (c) as there is no suggestion that the applicant has made a false or misleading statement.
60. I accept the submission of the Secretary that in this case the Secretary certainly had discretion under s 44(2)(a) of the Act to revoke the authorisation of the payment of subsidy to the applicant. The basis for the exercise of the discretion is the establishment of the ground that “the subsidy certificate ought not to have been given” having regard to the terms of s 5(2)(b) of the Act. On 2 September 2008, the application for a subsidy certificate was approved under s 16 of the Act. However, having regard to the operation of s 5(2)(a) of the Act the applicant had stopped being a member of the Reserves immediately after the end of the previous service year, that is immediately after 30 June 2008.
61. I must now consider whether it is appropriate in this instance to exercise the discretion under s 44(2) of the Act to revoke the authorisation of the payment of subsidy. At the hearing, the Secretary agreed that s 44(2) vests a discretionary power in the Secretary which may be exercised by this Tribunal. This Tribunal therefore stands in the shoes of the decision maker who made the reviewable decision.[2] The Acts Interpretation Act 1901 (Cth) provides that use of the word “may” certainly indicates that the act of making a decision to revoke the payment of subsidy may be done at the discretion of the Secretary. The discretionary nature of the jurisdiction that is vested in the Secretary under s 44(2) is also apparent from an examination of the whole of the Act as there are a number of provisions in the Act which contain the word “must” which certainly imposes a mandatory duty upon the Secretary: See for example ss 16-20. That being so, it now remains for me to consider whether the power under s 44(2) should be exercised to revoke the authorisation of the payment of the subsidy.
[2] See, Re Costello and Secretary, Department of Transport (1979) 2 ALD 934 at 943.
62. After reviewing the evidence before me, I consider that the power which is vested in the Secretary under s 44(2) of the Act should not be exercised in this instance to revoke the authorisation of the payment of subsidy. However, I should mention that in considering this application I am considering material that may well not have been placed before the delegate, such as the evidence that the applicant has shown his readiness to serve by passing his annual medical examinations. In Re Elston and Australian Community Pharmacy Authority (1996) 44 ALD 126 Deputy President Breen emphasised (at 128):
Proceedings before the [Administrative Appeals] [T]ribunal were proceedings de novo and it [is a] well established principle that the task of the tribunal [is] to arrive at the correct and preferable decision and that it [is] to do so on the material before it. It [is] inherent in that principle that the material before the tribunal might well be different from the material before the … determining authority making the reviewable decision.
63. I appreciate that in a case where there is the establishment of the ground under s 44(2)(a) of the Act, there is a need to consider the individual circumstances of the applicant before making a decision whether to revoke the authorisation of the payment of the subsidy.
64. The applicant is an officer of 1 star rank who has made himself available to serve in the Active Reserves. In his unchallenged evidence has stated that he is still ready and willing to perform service. If there were a circumstance that the applicant had declined to perform service which has been offered to him, then that would have been a circumstance that would have inclined me in favour of a decision to revoke the payment of subsidy. However, that is certainly not the case here where the applicant continues to be available to render service. The applicant has ensured that he is able to serve by having his annual medical examinations which he has passed.
65. The applicant is a senior officer with operational experience who has been appointed to a War Establishment (Band 4) position. The statement of reasons of the delegate does not refer to this position of the applicant who has a requirement to serve for 90 days in each year if required. The willingness of the applicant to perform such service is a significant matter which inclines me against making a decision to recover the payment of subsidy. The Act has to apply to all categories of rank and I am conscious that in a time of budgetary constraints the funding for a reservist of a one star rank may not be readily available.
66. The fact that the applicant is prepared to serve in the Active Reserves is apparent from the fact that in the 2005/2006 financial year the applicant performed substantial service of 16 days: the applicant allowed another colleague to utilize his allotted days for that financial year to give that colleague more experience. There is also evidence before me that the applicant has on a number of occasions, enquired as to whether there are tasks which he can perform. I am satisfied that the applicant desires in the future to perform duties in the Active Reserve.
Exceptional circumstances
67. Having regard to the decision which I have made it is not necessary for me to consider whether under regulation 20 a member’s service may be treated as exceptional where the Secretary is satisfied that exceptional circumstances exist. However, as submissions were made on this matter it is important that I state my views on whether exceptional circumstances are present in this case.
68. A decision to treat service by a member as exceptional circumstances may only be made by the Secretary on the application of the member. I can certainly exercise the discretion in this application if exceptional circumstances are present as the applicant has applied for his circumstances to be treated as exceptional circumstances.
69. In exercising the discretion I should consider all of the circumstances of the applicant. Subregulation 20(2), without limiting the exercise of discretion, lists circumstances which should be taken to be exceptional circumstances: these are where the member has had an extended period of illness or injury that prevents the member from performing their effective service and where service has been performed but, as a result of a defective decision, is not recognised as service. Both of these circumstances are not present in this application.
70. The applicant relies on two circumstances as amounting to exceptional circumstances with respect to the financial year 2008-09.
71. First, the applicant states that he was ready, willing, and able to perform service, but that there was no work available to him during the 2008-09 financial year. The Secretary has asked me to be guided by the explanatory memorandum to the regulation which contains the following comment in respect of regulation 20: “There would be no exceptional circumstances where a Reserve member is simply not offered service.” This is, however, not just a case where the applicant is simply not offered service. The applicant is ready, willing and able to perform service but has not been tasked. However, I do not find these circumstances exceptional.
72. Secondly, the applicant also contends that there was a period of 'uncertainty' as to his status in the Reserves which was the subject of administrative activity from 1 July 2008 to 14 October 2008. The applicant states that during this period he was denied the opportunity to provide service in the Reserves. I decline to consider that this circumstance is an exceptional circumstance.
73. In considering the meaning of “exceptional circumstances” I have been guided by the decision of the Federal Court of Australia in Mann v Minister for Immigration and Citizenship (2009) 112 ALD 25 where Dowsett, Greenwood and Collier JJ at [51] remarked that assistance in interpreting the expression can be found in comments of Lord Bingham of Cornhill CJ in R v Kelly (Attorney-General’s Reference No 53 of 1998) [2000] 1 QB 198 at 208. I do not consider that there are circumstances which are “out of the ordinary course, or unusual, or special or uncommon”.
Eligibility as a rejoining member
74. In submissions at the hearing the Secretary quite property adverted to the possible eligibility of the applicant as a rejoining member under s 11 of the Act. The Secretary has submitted that in order to be eligible under s 11 of the Act the applicant would need to be deemed to be a member of the Defence Force within five years of separating from the service. The Secretary has also submitted that this would require a favourable exercise of discretion in favour of the applicant for the financial years 2004-05 and 2008-09. However, I do not find that there are any exceptional circumstances which warrant the exercise of discretion under regulation 20.
Eligibility as an old scheme member
75. For the sake of completeness, I should mention that during the hearing of this application I raised for consideration whether the applicant was eligible for assistance under s 13 of the Act as an old scheme member. I did this because it was evident that the applicant had received assistance under a previous scheme which may have been an old scheme. The expression “old scheme” is not itself defined in s 3 of the Act.
76. Section 13 provides that a person is eligible as an old scheme member if the person meets the requirements prescribed by the regulations. Part 3 of the regulations provides for the eligibility of old scheme members. I am satisfied that the only possible regulation that may have potential application in this instance is regulation 26 which provides that one of the conditions of eligibility is that a person “was an operational member referred to in section 3A of the Defence Force (Home Loans Assistance) Act 1990”. Section 3A of the Defence Force (Home Loans Assistance) Act 1990 (Cth) has application for an operational service member who was allocated for duty in the Middle East operational area during the period that starts on 2 August 1990 and ends on 9 June 1991. The applicant did not perform such duty and so would not qualify under reg 26.
77. For the above reasons I am satisfied that s 13 of the Act does not have any relevance to this application.
DECISION
78. I set aside the decision under review and substitute the decision that the payment of subsidy to the applicant is not revoked under s 44(2) of the Act.
I certify that the 78 preceding paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member
Signed: .......................[Sgd]....................................................
Kate Slack, Research AssociateDate/s of Hearing 21 April 2010
Date of Decision 18 June 2010
Applicant was self-represented
Counsel for the Respondent Michael Palfrey, Clayton Utz
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