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

Poyton and Secretary, Department of Social Services (Social services second review) [2022] AATA 1320 (23 May 2022)
Division:GENERAL DIVISION
File Number:2021/3379
Re:Dr Curtis Poyton
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Member Andrew McLean Williams
Date23 May 2022
Place:Brisbane

The decision of the Social Services and Child Support Division of the Administrative Appeals Tribunal dated 28 April 2021 is affirmed.
...........................[SGD].............................................
Member Andrew McLean Williams
CATCHWORDS
SOCIAL SECURITY – Newstart allowance – overpayment – debt due to the Commonwealth – where conceded debt attributable solely to administrative error and recovery of debt waived – previous Tribunal decision set aside – meaning of “setting aside” of a decision – question as to whether the setting aside of a decision extends to include the elimination of prior facts used in the formulation of the decision set aside – question as to whether a subsequent decision maker can reconsider the same set of prior facts – Tribunal answer in the affirmative – Decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth): s.43
Social Security Act 1991 (Cth)
REASONS FOR DECISION
Member Andrew McLean Williams
23 May 2022
INTRODUCTION

By an Application for Review of a Decision filed on 5 January 2021, Dr Curtis Poyton seeks a review of a decision of the Social Services and Child Support Division (‘SSCSD’) of the Administrative Appeals Tribunal made on 28 April 2021, affirming a decision made on 17 December 2020 by an Authorised Review Officer (‘ARO’) within Services Australia that had determined:
(a)the Applicant had been over-paid Newstart Allowance (‘NSA’) in the amount of $1,733.57 during the period 27 March 2018 to 22 April 2019 (‘the overpayment’);
(b)the overpayment was a debt to the Commonwealth (‘the debt’); and
(c)the debt had arisen in circumstances in which it was appropriate that the debt be waived, pursuant to s.1237A of the Social Security Act 1991 (Cth) (‘Social Security Act’).
Applicant’s Contentions
Dr Poyton does not dispute the fact of his having received an overpayment, in the amount specified. Rather, Dr Poyton contends that the ARO failed to properly act upon an earlier decision of the SSCSD (as made by Member Amundsen on 7 May 2020), which had ‘set aside’ various NSA payment decisions, before sending the matter back to the Chief Executive of Centrelink for re-consideration. Dr Poyton contends that the fact of the setting aside of the payment decisions required that any subsequent re-consideration of his entitlement to NSA proceed on the basis that “Centrelink was not able to use any existing payments” during the re-calculation, “as these existing payments were never correctly made”.[1] In effect therefore, Dr Poyton submits that his entitlement to NSA during the subject period must be assessed afresh, as if no monies had ever been paid to him previously as NSA, on the basis that these prior payments had been set aside by the SSCSD, such that it was now as if “the payments were never made”.[2]
[1] Exhibit 1, T Documents, T1, p.2.
[2] Exhibit 3, Submissions of the Applicant, dated 24 November 2021, at [15].
Dr Poyton contends that because the re-calculation of his entitlement to NSA had included acknowledgement of his prior receipts of NSA payments during the subject period meant that Centrelink had failed to correctly implement the decision of the SSCSD. By extension, Dr Poyton contends that the subsequent decision of the SSCSD by Member Grossman on 28 April 2021 – affirming the correctness of the recalculation – then only served to galvanise the essential error.
FACTUAL BACKGROUND
To make sense of Dr Poyton’s contentions it is necessary to set out the history of the matter. At all material times, Dr Poyton had been in receipt of NSA. In addition, Dr Poyton had been in receipt of some income from paid employment, and Dr Poyton had (in the manner required under the Social Security Act), declared the fact of his receipt of that other income to Centrelink.
On 20 March 2020, Dr Poyton applied to the SSCSD for a review of decisions made by Centrelink to pay him the following NSA payments:
·$185.18 for the period 29 September 2017 to 8 April 2019.
·$4,415.60 for the period 22 May 2018 to 27 August 2018; and
·$4,441.85 for the period 28 August 2018 to 3 December 2018.
Dr Poyton’s application was heard in the SSCSD on 5 May 2020, before Member Amundsen. Reasons were delivered by Member Amundsen on 7 May 2020. Dr Poyton contended that the NSA payments had been made in contravention of the Social Security Act, but Member Amundsen determined that the issue should be approached on the basis of ascertaining whether the NSA payments were correct payments, made in accordance with Benefit Rate Calculator B specified by s.1068 of the Social Security Act.[3] It was noted by Member Amundsen that it was “common ground” between the parties that the payments in issue had been made without Centrelink taking into account the income earned by Dr Poyton, and declared to Centrelink. In these circumstances Member Amundsen was satisfied that the NSA payment decisions were incorrect: such that these should be set aside, and sent back to the Chief Executive of Centrelink for reconsideration, ‘in accordance with the conclusions in the Reasons for Decision’.[4] Member Amundsen further noted,[5] that it was always open to Centrelink to reconsider payment decisions at any time, and that the submissions before the SSCSD indicated that Centrelink may have already commenced steps towards that end.
[3] Exhibit 1, T Documents, T6, Decision of SSCSD dated 7 May 2020 p.111 at [4] & [5].
[4] Exhibit 1, T Documents, T6, Decision of SSCSD dated 7 May 2020p.112 at [13].
[5] Exhibit 1, T Documents, T6, Decision of SSCSD dated 7 May 2020, p. 112 at [9].
On 22 June 2020, Centrelink reconsidered Dr Poyton’s entitlement to NSA for the relevant periods. In a letter of that date, Centrelink advised Dr Poyton that “an income reassessment calculation was completed for the period 27^th March 2018 to 22^nd April 2019 and on the 27 May 2019, a decision was made at that time to waive any debts that occurred from this assessment due to clerical error”.[6]
[6] Exhibit 1, T Documents T7, Letter of Services Australia dated 22 June 2020, p. 114.
Dr Poyton sought an internal review of the recalculation notified to him on 22 June 2020.
On 17 December 2020 an ARO advised Dr Poyton by letter,[7] that the decision made on 22 June 2020 had been further considered by the ARO and had been determined to be correct. The ARO noted[8] that Dr Poyton had been overpaid NSA in the amount of $1,733.57 over the period 27 March 2018 to 22 April 2019, yet Services Australia had waived any right to recover that sum from Dr Poyton under the “administrative error” provisions.
[7] Exhibit 1, T Documents T9, ARO Decision dated 17 December 2020, p. 117-119.
[8] Exhibit 1, T Documents T9, ARO Decision dated 17 December 2020, p. 119.
On 5 January 2021, Dr Poyton sought a further review of the 17 December 2020 decision of the ARO before the SSCSD of this Tribunal.
On 28 April 2021, Member Grossman in the SSCSD affirmed the decision under review.[9] In delivering the Tribunal’s reasons, Member Grossman noted,[10] that Dr Poyton had contended that the Tribunal’s decision on 7 May 2020 had been one to set aside the NSA payment decisions, rather than to vary them, and in those circumstances it was necessary to proceed as if “the applicant had not been paid NSA for the relevant period, as “the payments”, as a matter of law, no longer exist, by virtue of the original NSA payment decisions having been set aside”.
[9] Exhibit 1, T Documents T2, pp. 7-11.
[10] Exhibit 1, T Documents T2, p.9 at [20].
In response to that contention Member Grossman said, in part:
[25] “I do not agree with Dr Poyton’s submission that a set-aside decision renders all payments under the original NSA payment decisions, to have never been made. While the original decisions are certainly vacated, the amounts paid by way of NSA under those decisions, may and indeed must be considered when making recalculations of entitlements. To deem those payments as never having been made and to now require them to be paid again under the set-aside decision, is to effectively pay the recipient twice. There is no provision under social security legislation that would allow a person to be paid a benefit twice in relation to the same period.
[26] In this regard Dr Poyton sought to draw a distinction between lawful and unlawful payments to a recipient. He contended that while no recipient can be “lawfully” paid twice, in his case Centrelink had paid his NSA payments “unlawfully” given the set-aside decision. Therefore, by now paying his lawful entitlements, he was not being paid twice. I do not consider that the NSA payments were “unlawful”. They were decisions made pursuant to the lawful exercise by Centrelink of its mandate to calculate the rate at which NSA is payable to a person in accordance with Benefit Rate Calculator B under section 1068 of the Act. Innocent errors made in such calculations do not of themselves render such decisions unlawful.”[11]
[11] Exhibit 1, T Documents T2 pp.10-11 at [25] – [26].
On 21 May 2021 Dr Poyton lodged this application for review, seeking a further review of the SSCSD decision, as made by Member Grossman on 28 April 2021. The review now proceeds in the General Division of the Tribunal.
Applicant’s Contentions Before the Tribunal
The hearing of this matter occurred on 22 April 2022, by means of written submissions supplemented by oral argument conducted by means of audio-visual link. Dr Poyton maintains the same argument that the necessary implication of the SSCSD having “set aside” the NSA payments decision is that it is now as if the NSA overpayments had never been made;[12] as there is “no such record” of the making of the NSA payments,[13] such that, it must “logically follow….as a matter of law” that these payments were never made to him.[14]
[12] Exhibit 3, Submissions of the Applicant, dated 24 November 2021, at [5] - [6].
[13] Exhibit 3, Submissions of the Applicant, dated 24 November 2021, at [14].
[14] Exhibit 3, Submissions of the Applicant, dated 24 November 2021, at [15].
During the hearing of oral argument on 22 April 2022 the following key exchanges took place between Dr Poyton and the Tribunal:
[Dr Poyton]: “...the way that I kind of see this issue – I really see it being about what does the word “set aside” actually mean? When a decision is set aside, what does that mean? And my understanding and my interpretation of what the meaning of “set aside” means, essentially, if something is set aside it is void ab initio. It is void from the beginning. And anything that flows from it must also be void.
And I’ve referred to in my submissions just some case law from the Court – the High Court, I think it was – and they would also seem to agree that something must be void ab initio. So, my submission is that because the decision to make the payments was set aside by Member Grossman[15] [sic] originally, it follows therefore that any decision that flows from that must also have been set aside – many actions that flow from that must also have been set aside. So, as ---
[15]    The reference should be to Member Amundsen.
[Member]:I’ll pause you there.
[Dr Poyton]: Yes.
[Member]:Doesn’t the correct question become what are the correct parameters of a decision? Because it is a decision that is being set aside. So, the question therefore becomes what, in fact, has been set aside?
[Dr Poyton]: Yes. I would agree with that, yes”.[16]
[16]    Transcript, p. 2 lines 20 – 45.
…
[Member]:“All right. Well, perhaps we could cast it this way. One might describe a decision as being a conclusion. A conclusion that somebody – a decision-maker – has derived after an assessment of a set of facts.
[Dr Poyton]: Yes.
[Member]:Now, if a decision is set aside, one may well argue that what has been set aside is the conclusion on that set of facts, but not the set of facts themselves, and therefore another decision-maker can reassess the same set of underlying facts and come to a different – or indeed, the same – decision?
[Dr Poyton]That’s correct. I wouldn’t disagree with that.
[Member]:Well, isn’t that what has happened here?”[17]
…
[Dr Poyton]: “… I would say that essentially because those payments – because the decision was set aside, anything that flows from the decision must also be set aside.
[Member]:But aren’t the fact of the payments – or in this case the mistaken overpayments – they’re not consequences that flowed; they are underlying facts upon which the decision was made. Now, didn’t you agree with me previously that the underlying facts continue to exist and the only thing that is removed by the setting aside of the decision is the conclusion derived from an assessment of those underlying facts?
[Dr Poyton]I would say that the – my understanding is that the decision was made to make those payments. Those payments were then made.
[Member]: Yes.
[Dr Poyton]: If the decision had not been made to make the payments, then there would have been no payments made. Therefore, the payments flowed from the decision.
[Member]:But aren’t the decisions to make the payments – they’re antecedent decisions. The decision under review is the decision to raise a debt and waive a debt. That’s the decision under review.”[18]
…
[Dr Poyton]: Yes, well, again, my understanding was when Member Edmundsen [sic] set aside the decision he set aside all of the payment decisions. He wasn’t confined to just considering the debt. He said, you know, it has – reading what he said, he said: “the NSA payment decisions were incorrect and must be set aside” So he’s set aside all of the payment decisions. He wasn’t confining himself simply to the issue of the debt. Everything was set aside. And because everything was set aside, the authorised review officer was required to essentially go, “okay, well none of those payment decisions exist anymore, therefore I need to make afresh all of those payment decisions again”.[19]
[17]    Transcript, p. 4, lines 7 – 20.
[18]    Transcript, p. 6, lines 19 – 41.
[19]    Transcript, p. 7 lines 38 – p.7 line 1.
CONSIDERATION
In the Tribunal’s view, Dr Poyton’s argument before the Tribunal incorporates an essential misconception regarding the nature of ‘the decision’ set aside by Member Amundsen in the SSCSD on 7 May 2020.
Although Member Amundsen used the shorthand descriptor “the NSA payments” in reference to antecedent payments to Dr Poyton that included an element of overpayment, the actual decision under review by the SSCSD in its decision on 7 May 2020 related to the question of Dr Poyton’s entitlement to NSA, in the amount of the sums specified and referred to by means of the short descriptor “the NSA payments” during the relevant period. So much becomes clear from Member Amundsen having identified, in paragraph 4 of his reasons, that the issue on the review was the question “whether the NSA payments decisions are correct”.
Expressed in another way, the question before the SSCSD at that time was whether Centrelink had correctly calculated Dr Poyton’s entitlement to NSA, in accordance with Benefit Rate Calculator B. By his having identified that the payments had been previously determined without regard for the income declarations made to Centrelink by Dr Poyton, Member Amundsen determined that the conclusions regarding entitlement – as embodied in what he termed “the NSA payments” – should now be set aside, and re-considered, in light of the ‘other income’ declarations.
The ‘setting aside’ of the NSA payments by Member Amundsen, coupled with a direction to Centrelink for reconsideration had the effect of setting aside the conclusions regarding entitlement to NSA embodied in the three separate dollar amounts specified in paragraph 1 of Member Amundsen’s reasons; yet this did not have the effect of ‘vanishing, as if by magic’ any NSA payments already previously made to Dr Poyton in the relevant period; the fact of which still remain for any subsequent decision maker to consider afresh, in light of the methodology specified in Benefit Rate Calculator B, which includes the requirement to ‘factor in’ any other income, as declared by Dr Poyton.
In the Tribunal’s reconsideration, the matters previously expressed by Member Grossman in paragraphs 25 and 26 of the decision now under review,[20] do correctly identify Dr Poyton’s misconception.
[20] See at [13] of these reasons.
The setting aside of a ‘decision’ is the vacating of a conclusion, reached by a prior decision-maker in relation to a set of antecedent facts that had been presented to that prior decision-maker for their assessment, in the form of his or her making a conclusion – or an assessment – upon the set of antecedent facts. The setting aside of that conclusion does not also thereby remove the antecedent facts, and these continue to exist even after the setting aside of the decision. The accompanying direction given by the Tribunal under s.43 of the Administrative Appeal Act 1975 (Cth) – to reconsider in accordance with the conclusions embodied in the Tribunal’s reasons – amounts to a binding directive to the Chief Executive of the agency (in this instance Services Australia) to have another decision maker within the agency reconsider the same set of antecedent facts, in the manner directed by the Tribunal, in order to derive a fresh decision (ie: ‘a new conclusion’) in relation to the existing set of antecedent facts.
The Tribunal concludes that the decision of SSCSD Member Amundsen as made on 7 May 2020 has been correctly implemented, in that Dr Poyton’s entitlement to NSA for the review period has been reconsidered and confirmed as correct by the decision of the ARO made on 17 December 2020; and that decision was then correctly affirmed in the decision made by SSCSD Member Grossman, on 28 April 2021.
DECISION
Accordingly, the decision of the SSCSD made on 28 April 2021 is affirmed.

I certify that the preceding 23 (twenty three) paragraphs are a true copy of the reasons for the decision herein of Member Andrew McLean Williams

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Associate
Dated: 23 May 2022

Dates of hearing:

22 April 2022

Applicant:

By videoconference

Solicitor for the Respondent:

Mr C Bishop

Mills Oakley

[2022] AATA 1320

23 May 2022

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Appeal

Statutory Construction

Res Judicata