Re Davy and Secretary, Department of Employment and Workplace Relations
[2007] AATA 1114
•9 March 2007
CATCHWORDS – SOCIAL SECURITY – DISABILITY SUPPORT PENSION – recovery of pension – failure or omission to comply with obligation to notify that working – whether pension paid to applicant when paid to solicitor’s trust account at direction of third party – whether third party acting as agent of applicant – whether paid to applicant on basis that applicant had benefit of all or any of pension – whether that part of pension paid to applicant because of failure or omission of third party – whether debt should be waived – no special circumstances – decision set aside and decision substituted that debt a lesser amount.
Administrative Appeals Tribunal Act 1975 ss 33(c), 37
Commonwealth Services Delivery Act 1997 ss 6, 8(1)(a)
Country Fires Act 1976 (SA) ss 42(2), 42(3)
Disability Discrimination Act 1992 ss 5, 10
Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001 s3, Schedule 1: items 10 and 34(1)
Legal Practice Act 1996 (Vic) ss 3(1), 173(1), 174
Patents Act 1952 s 160
Prisons Act 1952 (NSW) s 36
Social Security (Administration) Act 1999 ss 3, 11(a), 43(1), 43(2), 44, 52, 53, 55, 60, 61, 68, 68(2), 72, 72(1)(b), 234(2), schedule 5 cll1(1), 1(2),
Social Security Act 1947 s 246(1)
Social Security Act 1991 ss 23(1), 94, s 117, 1064, 1222A, 1223, 1224, 1224(1)(b)(ii), 1224AB, 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC, 1237AAD
Social Security and Repatriation (Budget Measures) Amendment Act 1985
Beadle v Director-General of Social Security (1985) 60 ALR 225; (1985) 7 ALD 670
Department of Family and Community Services v Chamberlain [2002] FCA 67, (2002) 71 ALD 423
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Kalwy v Secretary, Department of Social Security (1992) 29 ALD 28; (1992) 110 ALR 38
Lyons (carrying on business as Mitty’s Authorised Newsagency) v Registrar of Trade Marks (1983) 50 ALR 496
Makin v Attorney-General (NSW) [1894] AC 57; [1891-1894] All ER 24
Purvis (on behalf of Hoggan) v New South Wales (Department of Education and Training) and Anor (2003) 217 CLR 92; (2003) 202 ALR 133
R v Blinkhorn (1994) 32 NSWLR 706
Re Secretary, Department of Family and Community Services and Jonauskas (2001) 65 ALD 553; [2001] AATA 72
Riera v Gore (1981) 28 SASR 228
Trust Co of Australia Ltd v Commissioner of State Revenue [2006] VSC 64
Vickers v Minister of Business and Consumer Affairs (1982) 43 ALR 389
© Commonwealth of Australia (2007)
DECISION AND REASONS FOR DECISION [2007] AATA 1114
ADMINISTRATIVE APPEALS TRIBUNAL )
) V2006/443
GENERAL ADMINISTRATIVE DIVISION )Re:TIMOTHY DAVY
Applicant
And:SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS
Respondent
DECISION
Tribunal: Deputy President S A Forgie
Date: 9 March 2007
Place: Melbourne
Decision:The Tribunal:
1.sets aside the decision of the delegate of the respondent dated 29 November 2002 and affirmed by the Social Security Appeals Tribunal dated 12 April 2006;
2.substitutes a decision that the amount of $1,192.85 paid by way of a Disability Support Pension to the applicant in the period from 3 May to 28 November 2000 is a debt owed by the applicant; and
3. declines to waive the debt.
S A FORGIE
Deputy President
REASONS FOR DECISION
The respondent, the Secretary of the Department of Employment and Workplace Relations (Secretary), has asked the applicant, Mr Timothy Davy, to repay a sum of $6,561.51 for the period 3 May 2000 to 28 November 2000. The Secretary says that the sum is Disability Support Pension (DSP) that would not have been paid to Mr Davy had he complied with an obligation to notify the Secretary that he had started working. Mr Davy has said that he believes that his father used his name to make a claim and to obtain DSP in his, Mr Davy’s, name. I have decided that the amount of $1,192.85, rather than $6,561.51, is the amount of DSP paid to Mr Davy. I have decided that Mr Davy should repay that amount and that the debt should not be waived.
BACKGROUND
On the basis of the evidence in the documents lodged under s 37 of the Administrative Appeals Tribunal Act 1975 (T documents), the written material and the oral evidence given by Mr Davy and his mother, Mrs Dianne Davy, I have made the findings of fact in the following paragraphs.
Mr Davy is now 26 years of age. He was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD). For many years, he has received treatment to assist him with ongoing difficulties caused by his condition. He spent his early years with his mother but, when he was about 17, moved to Melbourne to live with his father. On receiving a claim for DSP, a decision was made by a delegate of the Secretary that he would be paid that social security payment from 24 July 1997.[1]
[1] T documents at 173
Mr Davy’s father, Mr John Davy, had a number of convictions spread across four States. They date from 1973 and concluded in 1999. I have grouped the offences of which he has been convicted with the number of counts for each as follows: larceny (1); false pretences (153); obtain property by false pretences (1); imposition (7); escape lawful custody (1); false representation (5); obtain credit by fraud (17); wilful and corrupt perjury (3); wilful false promise (3); unlawfully use motor vehicle (1); make false complaint to police (1) uttering (9); forgery (2); stealing (7); stealing as a servant (5); breach of probation (21); breach of community service order (20); forge and utter (1); and obtain credit while bankrupt (3). His last conviction was for fraud in September 1999 and he was gaoled in Port Phillip Prison. Mr John Davy was released from prison in December 2000. He died on 31 July 2004. At the time, six counts of obtaining a benefit that was not payable were pending in the Perth Magistrates’ Court.
Centrelink sent a number of letters addressed to Mr Davy at a number of addresses setting out his entitlement. A number of them had words to the following effect:
“… To work out your pension under the income test, the income assessed from your financial investments has been added to any other income you have. …
WHAT YOU MUST TELL US
Under sections 132 and 133 of the Social Security Act 1991 you must tell us within 14 days … if any of these things happen, or may happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices.
Income (income means your gross income before payment of any tax, or if self employed, your net profits after allowable deductions).
if your income, not including financial investments or maintenance, increases;
…
if you start work or recommence work;
…”[2]
[2] T documents at 174
Centrelink conducted a data matching exercise by asking the Australian Taxation Office (ATO) for information regarding Mr Davy’s salary in the year 1999/2000. The ATO reported that Mr Davy had an income of $7,410 in that year.[3] On 8 August 2002, Centrelink sent Mr Davy a “section 11 letter” but no response was received.[4]
[3] T documents at 202
[4] T documents at 206-207
On 28 November 2002, an officer of Centrelink calculated Mr Davy’s entitlement to DSP in the period from 16 May 2000 to 28 November 2000. The officer did so on the basis of averaging Mr Davy’s earnings over the period from 1 July 1999 to 29 November 2000 as Mr Davy had not provided a Group Certificate. He had not declared any of it. He had been paid $6,663.21 as DSP. Apart from the payday on 16 May 2000 when he would have been entitled to a DSP of $101.70, Mr Davy’s income was such that he was not entitled to any payment of it for the remainder of the period.[5]
LEGISLATIVE BACKGROUND
[5] T documents at 230-231
Qualification for and rate of payment of DSP
There is no question between the parties that Mr Davy was qualified to receive a DSP at the relevant times.[6] One of the qualifications is that the person has a physical, intellectual or psychiatric impairment and that impairment is of 20 points or more under the Impairment Tables.[7] Another qualification is that he either had a continuing inability to work or that the Health Secretary had informed the Secretary that he was participating in a supported wage system administered by the Health Department.[8] The rate at which it was to be paid to him was worked out according to the Pension Rate Calculator A (PRCA) at the end of s 1064 of the Social Security Act 1991 (SS Act).[9] Among other matters, the effect of the PRCA is to reduce the amount of DSP if the recipient receives other income. It does so by applying the ordinary income test set out in Module E of the PRCA.
[6] Social Security Act 1991 (SS Act), s 94
[7] SS Act, s 94(1)(a) and (b)
[8] SS Act, s 94(1)(c)
[9] SS Act, s 117
Obligations to notify Secretary of certain matters
Section 68(2) of the Social Security (Administration) Act 1999 (SSA Act), as in force at the time the DSP was paid and the notices given, “… applies to a person to whom a social security payment … is being paid”. A DSP is a “social security payment.[10] The Secretary may give such a person a notice:
“… a notice that requires the person to do either of both of the following:
(a)inform the Department[[11]] if:
(i)a specified event or change of circumstances occurs; or
(ii)the person becomes aware that a specified event or change of circumstances is likely to occur;
(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment.”[12]
[10] SSA Act, s 68(1). A “social security payment” includes any kind of payment made under Chapter 2 of the SS Act and not specified in the definition of that term in s 23(1) of that legislation. A DSP is a payment under Chapter 2.
[11] The Commonwealth Services Delivery Agency, commonly known as Centrelink, was established under s. 6 of the Commonwealth Services Delivery Act 1997. Acting in accordance with one of its functions specified in s 8(1)(a), Centrelink has entered arrangements with the Secretary of the Department of Employment and Workplace Relations for the provision of Commonwealth Services being pensions, benefits and allowances paid or payable under the under the SS Act. Under s. 234(2) of the SSA Act, the Secretary may delegate them to the Chief Executive Officer of Centrelink (CEO) or to an employee of Centrelink. If the Secretary delegates powers to give the Secretary or the Department a document or information, the delegate may, in exercising that power, require that it be given to the CEO or to Centrelink, as the case may be (SSA Act, Schedule 5, cll 1(1) and (2)).
[12] SSA Act, s 68(2)
Payment of social security payment
A social security periodic payment is to be paid in arrears and by instalments relating to such periods, not exceeding 14 days, as the Secretary determines.[13] A “social security periodic payment” means, among others, a “social security pension”. A “social security periodic payment” includes a “social security pension”[14] which itself includes a DSP.[15]
[13] SSA Act, s 43(1)
[14] SSA Act, s 3 and Schedule 1, 1(1)(b)
[15] SSA Act, s 3(2) and SS Act, s 23(1)
Subject to ss 52 and 53 of the SSA Act, which are not relevant in this case, instalments are to be paid at such times as the Secretary determines.[16] Subject to s 45, which relates to the payment of Youth Allowance, s 44(1)[17] provides that:
“… instalments of a person’s social security periodic payment are to be paid to that person.”
[16] SSA Act, s 43(2)
[17] Since 1 July 2003, s 44(1) now has effect subject to Part 3A of the SSA Act. It was inserted by the Family and Community Services Legislation Amendment (Budget Initiatives and Other Measures) Act 2002, s 1, Schedule 1, Item 9. Part 3A is concerned with nominees; both correspondence and payment of nominees. It permits payments to be made to a payment nominee in some circumstances.
Section 55(1) provides that an amount that is to be paid to a person under, among others, s 44, is to be paid in the manner set out in s 55. Section 55(2) provides that:
“Subject to subsection (4), the relevant amount is to be paid to the credit of a bank account nominated and maintained by the person.”
The account may be an account that is maintained by the person either alone or jointly or in common with another person.[18] The Secretary may direct that the whole or part of the amount to be paid to the person be paid to the person in a different way from that provided for by s 55(2).[19]
[18] SSA Act, s 55(3)
[19] SSA Act, s 55(4)
If a person has not nominated a bank account within 28 days of being asked to do so by the Secretary under s 55(2) and the Secretary has not given a direction under s 55(4), the relevant amount ceases to be payable to the person.[20] If the person subsequently nominates an account, the relevant amount becomes payable and is payable from a date nominated in s 55(6).
[20] SSA Act, s 55(5)
Protection of social security payment
A social security payment is “… absolutely inalienable, whether by way of, or in consequence of, sale, assignment, charge, execution, bankruptcy or otherwise.”.[21] If the person to whom a social security payment is payable asks the Secretary to do so, the Secretary may make deductions and pay the amounts deducted to the Commissioner of Taxation.[22]
[21] SSA Act, s 60
[22] SSA Act, s 61
Recovery provisions
Section 1222A of the SS Act provides, in part, that:
“If an amount has been paid by way of social security payment under this Act …, the amount is a debt due to the Commonwealth if, and only if:
(a)a provision of this Act …expressly provided that it was or expressly provides that it is, as the case may be;
(b)…”
That was the section that was in force when the delegate of the Secretary decided to recover the amount of DSP overpaid in the period from 3 May 2000 to 28 November 2000. It requires me to have regard to the provisions of the SS Act that applied during that period. They are not necessarily the same as the recovery provisions that were amended with effect from 1 July 2001 by the Family and Community Services and Veterans’ Affairs Legislation Amendment (Debt Recovery) Act 2001 (2001 Amendment Act).
Amounts recoverable before 1 July 2001
Section 1224 of SS Act was repealed with effect from 1 July 2001[23] but, until that time, it provided that:
[23] 2001 Amendment Act, s 3, Schedule 1, items10 and 34(1)
“(1) If:
(a)an amount has been paid to a recipient by way of social security payment or fares allowance; and
(b)the amount was paid because the recipient or another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of the social security law or this Act as in force immediately before 20 March 2000 …;
the amount so paid is a debt due by the recipient to the Commonwealth.”
Section 1223 was also amended with effect from 1 July 2001. Until that time, only s 1223(1) was relevant and, subject to a qualification that is not relevant in this case, it provided that:
“… if an amount has been paid to a person by way of social security payment or fares allowance on or after 1 October 1997 and:
(a) the recipient was not qualified for the social security payment or fares allowance when it was granted; or
(b) the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.”
Section 1224AB extends liability for a debt that had already arisen under s 1224 of the SS Act. It provides that:
“If:
(a)a recipient is liable to pay a debt under section 1224 because the recipient contravened a provision of this Act or the Social Security (Fares Allowance) Rules 1998, as in force immediately before 20 March 2000, or a provision of the social security law; and
(b) another person is convicted of an offence under section 5, 7A
or 86 of the Crimes Act 1914 in relation to that contravention;
the recipient and the other person are jointly and severally liable to pay the debt.
Note 1: Subsection (1) does not create a new debt. It extends liability for a debt that has already arisen under section 1224 to a person who is convicted of certain offences.
Note 2: In recovering a debt, the Department may have regard to any view expressed by a court as to the responsibility of a person to pay the debt.”
THE EVIDENCE
Charges relating to a charge of Mr John Davy’s knowingly obtain a payment of a pension under the SS Act, which was not payable at all contrary to s 1347
Mr John Davy was charged with knowingly obtain a payment of a pension under the SS Act, which was not payable at all contrary to s 1347, which was in force at the time. The Summary of Facts noted that Mr John Davy was in receipt of Sole Parent Pension between 19 November 1990 and 19 October 1995. Between 23 December 1993 and 9 November 1995, he also received Additional Family Allowance, Child Disability Allowance and Basic Family Payment. Mr John Davy was in prison in Perth between 22 June 1995 and 20 August 1996 but, between 22 June 1995 and August 1996, he received all four payments. He had to complete at least one review form during his imprisonment while his son lived with his former wife.
Claims for DSP
On 22 July 1997, a claim for DSP was lodged. It was made in Mr Davy’s name and gave his date of birth and his then address. His occupation was shown as a student. When asked for the account into which his DSP was to be paid, the claim showed an account number at a branch of the ANZ Bank in the name of TJ Davy. The claim form showed that Mr John Davy, father, of the same address had helped Mr Davy fill in the form. It also showed that Mr Davy wanted Centrelink to contact Mr John Davy about his claim. The form was signed as “Tim Davy”.[24]
[24] T documents at 139-145
Mr Davy said that the signature appearing on the Pension Claim form lodged on 22 July 1997 was not his signature. The writing on the form was his father’s.[25] Mr Davy said that he had not completed the claim for DSP lodged on 11 February 1999 in his name and showing his details.[26] The address was an Eltham address at which Mr Davy said he lived with his father. He had not signed it although his mother had earlier said that it might have been her son’s writing.
[25] T documents at 158
[26] T documents at 176-182
Mr Davy said that his father gave him money as any parent did. If he were going out with his friends or to the shops, his father would give him $10.00. They were still living together when his father went to gaol. At the time, Mr Davy had just finished studying at TAFE and he had no money. That is why he started working, he said.
Correspondence from Centrelink addressed to Mr Davy
The T documents contain copies of various letters addressed to him at various addresses. I will refer to only some of them. On 6 August 1997, Centrelink wrote a letter addressed to Mr Davy advising him that he would be paid DSP from 24 July 1997. Payments of $225.30 per fortnight would be paid from 21 August 1997. Of that amount, $145 represented the DSP payment.[27] In the same letter, Centrelink advised, in part, that:
[27] T documents at 173
“… To work out your pension under the income test, the income assessed from your financial investments has been added to any other income you have. …
WHAT YOU MUST TELL US
Under sections 132 and 133 of the Social Security Act 1991 you must tell us within 14 days … if any of these things happen. You can tell us by writing to us, by phoning or you can come in and talk to us at any of our offices.
Income (income means your gross income before payment of any tax, or if self employed, your net profits after allowable deductions).
if your income, not including financial investments or maintenance, increases;
…
if you start work or recommence work;
…”[28]
Other letters to similar effect, including one dated 15 March 2000,[29] were addressed to Mr Davy.
[28] T documents at 174
[29] T documents at 184
Mr Davy said that he might have been at an address in Nunawading in June 1999. Centrelink sent him a letter to that address. It was dated 21 June 1999[30] but Mr Davy said that he did not receive any mail from Centrelink while at that address. A letter sent to the same address on 5 July 1999 advised that he must tell Centrelink under ss 132 and 133 of any changes in his income or if he had started work.[31] Mr Davy agreed that he moved to an address in Kew in 1999. Letters dated 19 August 1999, 27 August 1999, 17 September 1999 and 14 December 1999 were sent to him there.[32] Some of those letters gave him similar notice of the requirement that he notify of any changes in his income or if he started work. Mr Davy said that he never received mail at that address. Centrelink’s records show that his address from 8 March 2000 was “C/O Patrick Dwyer” and, from 20 February 2001, “C/O John Davey”.[33]
[30] T documents at 352
[31] T documents at 353-355
[32] T documents at 361-371
[33] T documents at 515
Communications with and by officers of Centrelink
On 8 June 1997, Mr John Davy sent a facsimile message to DSS reading:
“Re. D.S.P. claim TIMOTHY J. DAVY. … I wish to apply for immediate payment of pension of the above now that it is granted. Due the ceasing of C.D.A. Austudy etc, the only monies for support of Tim since July 16th has been $142 special benefit and this barely covers medication etc. could you please advise if I need to collect a form for Timothy to sign for immediate payment or fax it to … as before, or alternately advise if the payment can be in the bank before the weekend.”[34]
[34] T documents at 172
Centrelink submitted its computer records showing various actions and enquiries relating to Mr Davy’s DSP. I have summarised those that have some relevance to this matter in the following table:
| DATE | SUBJECT/ACTION |
| 7 August 1997 | Mr John Davy has permission to enquire regarding his son’s DSP. |
| 14 August 1997 | Counter cheque paid but no record of who requested it or to whom it was paid. |
| 4 February 1998 | Mr John Davy telephoned to advise of his son’s change of address. |
| 27 April 1998 | “Rate letter sent/posted at customer’s request 27/04/98 …” |
| 24 August 1998 | “father notified coa [change of address]… Paying no rent …” |
| 27 August 1998 | “Grant advance $398.30, paid by chq” |
| 8 October 1998 | “Cust adv of new bank account …” |
| 10 November 1998 | “a/n requires dso to call on … re employment opportunities” |
| 1 July 1999 | “… a/n told that he could not get an EBT or advance of his DSP” |
| 1 July 1999 | “Cust has had money stolen on 01 JUL 1999” |
| 16 July 1999 | “Special Contact Considerations. Clt has given authority for release of fin info to patrick dwyer, solicitors of …” |
| 16 July 1999 | “banking details updated -” |
| 19 August 1999 | “A/n rang re no pmnt – advised dsp sus-wuk” |
| 19 August 1999 | “a/n called to request payday change. I have updated from D (thur) to” |
| 27 August 1999 | “Grant $500 advance of DSP. Repayment Amt $38.50 pf” |
| 23 November 1999 | “returned corre from …” |
| 14 December 1999 | “Customer attened [sic] states he was away from address for 2 wks and is back” |
| 10 January 2000 | “Unactioned corres. ret corro-” |
| 14 January 2000 | “Unactioned corres: returned corre-” |
| 24 January 2000 | “Forms/info sent to customer. 24 JAN 2000 15:49. Receipt No.: …” |
| 24 January 2000 | “Cust advised COA see txt r0681” |
| 18 February 2000 | “Unactioned corres: pes claim” |
| 21 February 2000 | “grant pes continuing course” |
| 22 February 2000 | “adv cust that pes and edep will be paid on 23/02/2000” |
| 28 February 2000 | “Cust pho re change of pay day, cust req pay day be Thurs ddc ‘D’.” |
| 01 March 2000 | “Supp Entlment Notice Q750 sent to cust on 1/3/2000” |
| 01 March 2000 | “Cst enq about Supp Ent Notice, advised that I could sent him one out” |
| 01 May 2000 | “Cust request payday to be paid on DDC’5’” |
| 11 July 2000 | “Payment was correct but a reconciliation error” |
| 20 July 2000 | “a/n phd seeking new pmt amt adv, via ps screen also adv pes pmt …” |
| 21 August 2000 | “A/n called to query why RA amount reduced. …” |
| 4 December 2000 | “Cli req payday changed fr 5 to D, Thu to prev thu …” |
| 7 December 2000 | “Cust required Pes amt to be amended. …” |
| 19 October 2001 | “QSS40 returned by bank 20/08/01. Cust does not have legal access to A/C … at Bendigo Bank. QO92 sent 20/08/01. Cust to provide details of A/C they have legal access to within 28 days. Failure to respond may result in payment being suspended, match no: … … QO92 and nominee form resent as cust has moved and may not have received the original request. …” |
Opening bank account with Westpac Banking Corporation
On 23 March 1998, an account with the Westpac Banking Corporation (Westpac) was opened in the name of Mr Davy. It showed his details but Mrs Davy said that the application had been signed by his father.
DSP payments between 3 May 1999 and 14 December 2000
In a letter dated 4 April 2006, Mr Patrick Dwyer, a Barrister and Solicitor, wrote that his bookkeeper had informed him that funds were received and paid to Mr Davy between 3 May 1999 and 14 December 2000. The funds were paid at the direction of Mr John Davy. Mr Dwyer added that Mr Davy suffered from a number of psychological disorders including Adult Attention Deficit Disorder. In addition, Mr Davy was very immature. He could not recall whether Mr Davy was aware of the source of the funds deposited in his account.[35]
[35] T documents at 256
Payments made from Mr Dwyer’s trust account while Mr John Davy in prison after 17 November 1999
Mr Rino Nicolazzo is Mr Dwyer’s bookkeeper and was employed in that position during 1999 and 2000. He gave evidence that money was deposited by direct debit in Patrick Dwyer’s trust account. All payments received in the trust account were social security payments. Some were marked with Mr John Davy’s name and some with Mr Timothy Davy’s name. Mr Dwyer authorised Mr Nicolazzo to pay disbursements on the instructions of Mr John Davy. Correspondence addressed to Mr Timothy Davy, as well as any other correspondence, was delivered to the office and it was collected and taken to Mr John Davy in prison. Mr John Davy, Mr Nicolazzo said, dealt with all of his son’s affairs.
Mrs Davy submitted copies of correspondence between Mr John Davy and Mr Dwyer or members of staff in Mr Dwyer’s office. Each is headed with Mr John Davy’s name and number. Four show his address as Port Philip Prison and a fifth at Murchison. An undated note from one of Mr Dwyer’s staff members reads:
“John,
Do you want me to send everything received in the mail for Tim to you?”
The first facsimile sent by Mr John Davy, dated 17 November 1999 and addressed to Mr Dwyer’s staff members, reads:
“Tim has to return to you a trust account cheque payable to Windscreens O’Brien for $147.00 as it is not required at the moment. When he does this could you cancel that cheque & issue one payable to him (Tim Davy) for $120.00 & to put $20.00 from it in to my account here. Could you please ring Tim on … and tell him the contents of this fax
Also, could you ask P… to see me ASAP.
…”
On 25 November 1999, Mr John Davy sent another facsimile to staff members:
“Can you please make an appointment for Tim to see P… either this afternoon or tomorrow and ring Tim on … to advise him when appt. is, also give him attached note when he comes in.
Trust a/c cheques needed:
(1) Storage King $100.00
(2)Tim Davy $175.00 (Not $120 as previously requested)
(3)Department of Justice/Perin Court $60.00
…”
An undated facsimile addressed to two staff members by Mr John Davy reads:
“(1) Could you please advise by return fax regards Commonwealth matters URGENTLY.
(2)Also have not received cheque here for telephone a/c.
(3)Please arrange chq for Tim this afternoon for $120.00. Further monies have been credited to Trust today.
(4)Letter attached for Tim to sign and take to MAG Court.”
Mr Davy sent a facsimile dated 26 November 1999 to Mr Dwyer:
“Have sworn affidavits re traffic matter to be booked for hearing & Tim will deliver to you today
Also please issue another cheque for $50.00 payable to Tim Davy if Patrick is able to sign this afternoon.”
On 4 April 2000, Mr John Davy sent a facsimile to Mr Dwyer:
“ Tim advises you are going to ring … at Greensborough Police re driving matter listed for Thursday at Heidelberg.
…
S…Could you please arrange cheque for $40.00 payable to me & Tim will collect later today.”
An undated facsimile is signed by Mr John Davy and addressed to one of Mr Dwyer’s staff members. It does not have an address for Mr Davy:
“Just confirming the details of cheques needed from the Trust account:
1.Storage King
$100.00$400.002.Windscreens O’Brien $147.00
3.Tim Davy $140.00
Could you please tell Tim to purchase a Money Order for $20.00 payable to W… out of his money and also to put $20.00 in my account.
I will tell Tim when I see him where to send the money order. It is for payment of newspapers.”
Mr Dwyer wrote on 2 November 2006 that he had been advised by his bookkeeper, Mr Nicolazzo, that Mr John Davy would call him on a regular basis to authorise the withdrawal of funds from the trust account. Mr Nicolazzo had told him that he had issued 57 trust account cheques over the specified period. Mr Davy would attend at his office to collect the cheques.
The list shows cheques dated from 16 September 1999 to 14 December 2000. There are a number of cheques made out to entities such as Storage King, Administration Costs, John Davy, Windscreens O’Brien, Telstra and Vicroads. In the specific period relating to the overpayment in this case, the cheques were:
| Name | Date | Amount |
| Storage King | 4/5/2000 | $100.00 |
| Administration Costs | 4/5/2000 | $ 20.00 |
| Telstra | 4/5/2000 | $160.00 |
| John Davy | 8/5/00 | $ 50.00 |
| Victor De Beer | 18/5/00 | $304.50 |
| Storage King | 18/5/00 | $100.00 |
| John Davy | 18/5/00 | $ 50.00 |
| John Davy | 25/5/00 | $100.00 |
| Murchison Newsagency | 29/5/00 | $ 39.40 |
| Administration Costs | 1/6/00 | $ 25.00 |
| Storage King | 1/6/00 | $100.00 |
| Victor De Beer | 1/6/00 | $315.50 |
| John Davy | 8/6/00 | $ 30.00 |
| Telstra | 15/6/00 | $250.75 |
| Storage King | 15/6/00 | $100.00 |
| Vicroads | 15/6/00 | $199.35 |
| John Davy | 15/6/00 | $ 30.00 |
| Storage King | 29/6/00 | $100.00 |
| John Davy | 29/6/00 | $ 50.00 |
| Vicroads | 29/6/00 | $ 58.00 |
| John Davy | 3/7/00 | $100.00 |
| Victor De Beer | 3/7/00 | $315.50 |
| John Davy | 10/7/00 | $ 50.00 |
| Telstra | 10/7/00 | $ 75.55 |
| Storage King | 13/7/00 | $200.00 |
| John Davy | 17/7/00 | $ 50.00 |
| Storage King | 27/7/00 | $200.00 |
| John Davy | 27/7/00 | $133.00 |
| Telstra | 7/8/00 | $168.70 |
| John Davy | 7/8/00 | $ 50.00 |
| Storage King | 14/8/00 | $300.00 |
| Dhurringile Prison | 14/8/00 | $ 36.60 |
| Telstra | 24/8/00 | $172.05 |
| Storage King | 24/8/00 | $300.00 |
| Administration Costs | 24/8/00 | $100.00 |
| John Davy | 24/8/00 | $100.00 |
| Storage King | 31/8/00 | $300.00 |
| Administration Costs | 31/8/00 | $100.00 |
| Storage King | 7/9/00 | $200.00 |
| Administration Costs | 7/9/00 | $100.00 |
| John Davy | 7/9/00 | $100.00 |
| Storage King | 21/9/00 | $300.00 |
| Administration Costs | 21/9/00 | $100.00 |
| John Davy | 21/10/00 | $ 50.00 |
| Storage King | 5/10/00 | $200.00 |
| Administration Costs | 5.10/00 | $100.00 |
| John Davy | 12/10/00 | $ 50.00 |
| Storage King | 19/10/00 | $200.00 |
| Administration Costs | 19/10/00 | $100.00 |
| John Davy | 19/10/00 | $100.00 |
| Doctor Bond | 19/10/00 | $100.00 |
| Administration Costs | 19/10/00 | $100.00 |
| Telstra | 23/10/00 | $200.00 |
| Storage King | 2.11/00 | $200.00 |
| John Davy | 2/11/00 | $ 50.00 |
| Administration Costs | 2/11/00 | $100.00 |
| Telstra | 2/11/00 | $150.00 |
| L. Tomey | 9/11/00 | $ 50.00 |
| Administration Costs | 9/11/00 | $100.00 |
| John Davy | 13/11/00 | $ 50.00 |
| Telstra | 16/11/00 | $153.15 |
| Storage King | 16/11/00 | $200.00 |
| Administration Costs | 16/11/00 | $100.00 |
| John Davy | 20/11/2000 | $100.00” |
Mr Davy said that he would collect the mail and take it to his father in gaol. He never looked at it as his father had told him to take it to him. It was still in its envelopes. His father would ring him and ask him to pick up the cheques and pay the bills. He did pay a couple of bills from boarding houses where he was himself staying. The person called “P Davy” in the table above is his uncle, Mr Davy said, but he did not know who “L Tomey” is. Mr Davy said that he had stayed with his uncle for a few days after his father went to gaol. His uncle kicked him out after a few days and he has since had nothing to do with his uncle. In all, Mrs Davy said, her son received the benefit of approximately $2,000.00, if that, of the moneys paid from Mr Dwyer’s trust account. In the period under consideration, a total of $16,537.89 was paid by Centrelink to Mr Dwyer’s account.
Mr Davy said that he was not aware that he was getting DSP at the times with which I am concerned. He knew that his father got the pension as a result of his health condition and that he was prescribed medicine. His father gave him a blue healthcare card from Centrelink and told him that the bus fares would be cheaper. He said that he did not ask his father too many questions. When asked why that was so, he replied that it was because he would get yelled at. I am mindful that Centrelink’s computer records show that, on 14 December 1999, the customer attended to say that he was away for two weeks. That suggests that Mr Davy himself attended the office. There is no evidence as to the age of the “customer” who attended the Centrelink office or any general description of him identifying him as Mr Davy. It is probably impractical to record such information as a matter of general course but, in its absence or in the absence of evidence relating to the steps taken to identify each “customer”, it leaves open a question whether the person is who that person claims to be. It may well be that, in many cases, there will be no difficulty in deciding that the person claiming to be the “customer” is that person. This is not one of them. Mr Davy denied that he had attended Centrelink. There is evidence that his father has adopted his identity for other purposes and I have made findings about those other purposes later in these reasons. In view of them, I am not satisfied on the evidence that I have that Mr Davy attended the Centrelink office in December 1999.
His father owned all of the furniture that they had. All that Mr Davt had himself was an old Falcon car which had been paid for and which was registered in his father’s name. He had a mobile telephone, which his father had given him, and he had his own SIM card.
DSP payments after 14 December 2000
Records obtained by Centrelink from the Bendigo Bank show two different accounts held in the name of Mr John Davy. One shows his address in St Kilda and another in Blairgowrie. They cover different periods but begin in 1 May 2001 and extend to 2004. They both show two pensions being paid into Mr John Davy’s account.
Account with ING
In response to Centrelink’s request on 26 June 2006, ING produced a copy of an application to open a Savings Maximiser Account in the name of “Timothy Davy Car Savings”. Reference is made on the form to a note attached regarding the total amount of the opening deposit but none is attached. Mrs Davy said that it had been completed by Mr Davy.
A statement from ING dated from 12 December 2000 shows four withdrawals totalling $970.00 paid to an account with a number matching an account held in the Commonwealth Bank in the name of Mr JL Davy. This is the account to which I refer in the next paragraph.
Payments into accounts from December 2000
Statements from the Commonwealth Bank beginning 15 December 2000 show two Centrelink pensions being paid to an account in the name of “Mr JL Davey” of a Brighton East address. They are distinguishable by their code endings of “108C” and “36T” and continue into April 2001.[36] Amounts from ING totalling $970.00 are also shown as credited to the account.
[36] T documents at 9-16
Data matching process and aftermath
A note of a telephone call made on 25 September 2002 stated that:
“Clt called … He said he worked for … and he believed he did not earn over $7000. I told him I would contact the employer to work out his actual earnings. …”[37]
[37] T documents at 205
CONSIDERATION
At the outset, there are three issues to consider:
1.When has “an amount been paid to a recipient” within the meaning of s 1224(1)(a)?
2.If Mr Davy is a recipient to whom an amount has been paid between 3 May 2000 to 28 November 2000, did he or another person fail to comply with a provision of the SS Act and, in particular, with the requirements of s 68 SSA Act and any notice issued under it?
3.Was DSP, or any part of it, paid to Mr Davy between 3 May 2000 and 28 November 2000 “because the recipient or another person … failed or omitted to comply …” with that provision?
When has an amount been paid to a recipient by way of a social security payment?
There is no question that the DSP to which Mr Davy was entitled was paid into an account in his name and showing details that related to him. Does that mean that the DSP was paid to him? That question must be answered from various points of view.
The first point of view arises from the way in which s 55(2) SSA Act requires Mr Davy’s DSP to be paid. Its requirement is that DSP be paid into an account “nominated and maintained” by him. If it has been paid in accordance with s 55(2), there can be no question that it has been “paid to” him.
Putting aside whether Mr Davy or his father nominated the accounts, what is meant by “maintained” in that context? Its ordinary meanings range from those related to both the tangible and intangible. They include:
“… 1 to continue to keep something in existence must maintain this level of commitment. 2 to keep something in good condition to preserve it. The property has been beautifully maintained. …”[38]
[38] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
The word has also been used by Parliament in a range of circumstances ranging from the care and support of children and landlord and tenant disputes to fire regulation. In relation to the last circumstance, I refer to s 42(3) of the Country Fires Act 1976 (SA). Under it, it is an offence to light or maintain a fire in the open air on days of extreme fire danger and contrary to a warning broadcast given under s 42(2). Walters J of the South Australian Supreme Court[39] held:
“… It is true that in law, several meanings may be ascribed to the word ‘maintain’, it becomes a question of falling back on the ordinary meaning of the word, in the context of the circumstances in which it is said to apply, and in a context not detached from the purpose of that part of the statute in which the word appears – the creation of a ‘prohibition against lighting and maintaining of fires in the open on days of extreme fire danger’ … It is true that in law, several meanings may be ascribed to the word ‘maintain’, but for the purposes of s. 42(3), I think the word covers any act or omission calculated to keep a fire, or to allow it to continue, in existence. It involves two conceptions – knowledge of the existence of the fire, and either a positive act to keep it burning, or an omission to take reasonable means to bring the fire to an end. The positive act may be the keeping of the fire in the same state, or the improving of its state by heaping combustible material on to it. The omission may simply be the neglect to take prompt and efficient means to extinguish it. In the present case, the appellant knew the fire – in the wide sense that I have ascribed to the meaning of that word – was burning. It was possible and practicable for him to extinguish the fire completely, and since he neglected to do so, I hold that in that way, he maintained the fire. …”[40]
[39] Riera v Gore(1981) 28 SASR 228
[40] (1981) 28 SASR 228 at 233-234
51. The word “maintain” has also been considered in the context of maintaining an escaped prisoner. Section 36 of the Prisons Act 1952 (NSW) makes it an offence to knowingly maintain an escaped prisoner. The Court of Criminal Appeal (NSW) considered that section in R v Blinkhorn.[41] Hunt CJ at CL, with whom Finlay and Allen JJ agreed, noted that the word:
“… ‘maintain’ [is] ‘a verb with many wide and different meanings.’ …
… Where a word has more than one meaning, it will usually be the context which dictates the particular meaning applicable. … In the context of s 36, there is no doubt in my mind that the only relevant meaning of those nominated by the Macquarie Dictionary is that numbered 7: ‘To provide with the means of existence.’
That is not to suggest that that definition should be treated as if it were part of the statute. …
In my view there must be some further narrowing of the meaning by reason of the context in which the word appears in s 36. …”[42]
His Honour went on to conclude that the appropriate meaning in the context was that of “the provision of the necessities of life of such a nature as (objectively) to assist the escapee to continue to exist without being taken back into custody.”[43]
[41] (1994) 32 NSWLR 706 (Hunt CJ at CL, Finlay and Allen JJ)
[42] (1994) 32 NSWLR 706 at 708-709
[43] (1994) 32 NSWLR 706 at 710
As far removed as these two examples are from the maintenance of a bank account, I consider that their principles are equally pertinent. The meaning that I must give the word “maintain” are dictated by its context. The context in this case is that of a DSP. The general rule is that a claim for a social security payment such as a DSP must be made by the person.[44] DSP is paid to a person who meets a number of qualifications. Each of the qualifications is personal to the person. The payment of a pension for the benefit of the person entitled to it. Mr Davy’s entitlement to it was only considered after the claim for it had been made. In order to maintain a bank account, a person must first be aware of it. Second, a person must be in a position to operate it as in, for example, deposit and withdraw money and receive regular statements or be entitled to hold a deposit book to record all transactions relating to that account. The person must be in a position to check and query the transactions that occur in that account. Those transactions may relate to their own deposits and withdrawals but may also relate to deposits, such as interest or other payments made into the account made by others, or withdrawals made by others. It does not matter whether the person ever makes a deposit or withdrawal or ever reads a statement or an entry in a deposit book. The important thing is that the person is in a position to do so.
[44] SSA Act, s 11(a)
The second point of view from which to consider whether an amount has been paid to a person is from the platform of the law relating to principals and agents.[45] Normally, it would be expected that the person would open the account and be a signatory to it but there may be instances in which it could be said that a person opens an account as an agent of another. If that were to be the case, consideration would need to be given to whether both the principal and the agent could be said to maintain the bank account.
[45] Since the introduction of Part 3, payments may be directed to payment nominees but that Part was not in operation during the relevant time.
The third point of view is from the platform viewing where the benefit falls. Where the payment of DSP has been paid to a person or entity other than the person entitled to it but the person entitled to it benefits from it, can it be said to have been paid to that person? This was considered by the Full Court of the Federal Court in Kalwy v Secretary, Department of Social Security.[46]At the time, s 246(1) of the Social Security Act 1947 was drafted in terms similar to s 1224. Mr Kalwy and another had conspired to defraud the Department, which had paid monies into bank accounts opened and operated in false names. The Court said:
“ It follows in our view, that it was an essential ingredient of the operation of s 246(1) in the present case that the secretary demonstrate that the amounts in question were paid to Mr Kalwy. Only by identifying the recipient of the payments in question was it possible to have the statutory debt to the Commonwealth created in any effective sense. In our opinion, the tribunal did not, in truth, address this question and failed to make any specific finding, positive or negative, on the point.
It is true that the tribunal found that the bank accounts into which the amounts were paid were held in the names of fictitious persons. But it does not follow that it was not open to the secretary to seek to trace the proceeds, or part of the proceeds, into the hands of Mr Kalway, if that be the fact.”[47]
[46] (1992) 29 ALD 28; (1992) 110 ALR 38 (Beaumont, Hill and O’Connor JJ)
[47] (1992) 29 ALD 28; (1992) 110 ALR 38 at 32; 43
Has an amount been paid to Mr Davy by way of a DSP?
I am not satisfied that Mr Davy maintained the account into which DSP was paid between 3 May and 28 November 2000. Rather, it was maintained by Mr Dwyer. Having regard to the reference by Mr Dwyer’s staff to a “trust account cheque” paid to Windscreens O’Brien, I am satisfied that the bank account from which the cheque was paid must be the trust account that Mr Dwyer, as a solicitor, is required to maintain. At the time with which I am concerned, s 173(1) of the Legal Practice Act 1996 (Vic) provided that a legal practitioner or firm that was authorised to receive trust money must establish a trust account in an authorised deposit-taking institution in Victoria before receiving any money that was required to be paid to a trust account. The way trust money was dealt with was the subject of s 174. “Trust money” included money that was “… given or paid to a firm, a legal practitioner … in the course of legal practice in Victoria for, or on behalf of, a person or body other than the firm or practitioner ….”[48]
[48] Legal Practice Act 1996, s 3(1)
The obligations imposed by the Legal Practice Act are imposed upon the solicitor and not upon the person whose money is deposited in it and passes through it. Certainly, a solicitor may pay money from the trust account in accordance with instructions of another but it is the solicitor who makes payments into and payments from the account, who is entitled to receive statements and the like from the authorised deposit-taking institution and who is responsible to comply with the legislative obligations.
That brings me to notions of principal and agent. Having regard to all of the evidence, I accept that Mr Davy did not know that DSP continued to be payable to him in 2000 or that DSP was in fact paid into a bank account or bank accounts that had been opened in his name by his father or, in the case of Mr Dwyer’s trust account, to which they had been directed by Mr Davy. With regard to the former accounts, I make my findings on the basis of his mother’s evidence as to her late former husband’s writing, Mr Davy’s evidence regarding his lack of knowledge of the bank accounts and Mrs Davy’s evidence regarding the various payments into various accounts in Mr John Davy’s name and at addresses at which, in some instances, Mr Davy did not live. In particular, I accept that the bank accounts in Mr Davy’s name with Westpac and ING were opened by Mr John Davy and not by his son. That finding does not answer the question whether Mr John Davy was acting as an agent for his son. If he were, the payments made to Mr John Davy’s account could be regarded as being paid for Mr Davy’s benefit and so as being paid to him by way of a social security payment for the purposes of s 1224 of the SS Act.
I have referred to the evidence of Mr John Davy’s convictions. He is not here to defend his name and his reputation but his convictions for dishonesty including false pretences, false representations, obtaining credit by fraud and forgery are indicative of his having engaged in dishonest conduct over many years. They are indicative of his propensity for dishonest conduct. A person’s propensity for a certain form of conduct in the past does not necessarily mean that the person has engaged in that form of conduct on a later occasion. The rules of evidence do not apply in the Tribunal.[49] Therefore, I do not need to decide whether the evidence of Mr John Davy’s propensity is admissible as understood by the rules of evidence. Rather, I must decide the weight that I should give evidence of propensity. Even so, the rules of evidence provide guidance as to the weight I should accord it.
[49] Administrative Appeals Tribunal Act 1975, s 33(c)
In Makin v Attorney-General (NSW),[50] the Privy Council said:
“It is undoubtedly not competent for the prosecution to adduce evidence tending to shew that the accused has been guilty of criminal acts other than those covered by the indictment for the purpose of leading to the conclusion that the accused is a person likely from his criminal conduct or character to have committed the offence for which he is being tried. On the other hand, by the mere fact that the evidence adduced tends to shew the commission of other crimes does not render it inadmissible if it be relevant to an issue before the jury, and it may be so relevant if it bears upon the question whether the acts alleged to constitute the crime charged in the indictment were designed or accidental, or to rebut a defence which would otherwise be open to the accused.”[51]
I am not, of course, making any findings about a crime. What I am concerned about is whether Mr John Davy acted in some way as an agent for Mr Davy. In broad terms, a person may be an agent of another, who is the principal, if the person has been instructed to represent that other person, the person acts for that other person and the outcome of carrying out those instructions is to affect the legal relations between that other person and the third parties with whom the person has been dealing.[52] These are the broadest of terms but are sufficient to show that, without more, Mr John Davy’s propensity for dishonest conduct is not relevant to an issue of whether or not there is a relationship of principal and agent between Mr Davy and his father. It follows that I have had no regard to the evidence regarding Mr John Davy’s propensity for dishonest conduct in coming to my conclusion on this aspect of the case.
[50] [1894] AC 57; [1891-1894] All ER 24
[51] [1894] AC 57; [1891-1894] All ER 24 at 65; 25-26
[52] The Law of Agency, Raphael Powell, 2nd edition, 1961, Pitman at 4-7
I accept that Mr Davy did not operate, or even know about, any accounts in his own name until his father went to prison. Having regard to the same sources of evidence but also to the records produced by Mr Dwyer’s office, I am satisfied that it was Mr John Davy, and not Mr Davy, who directed the way in which the payments into the account, and so Mr Davy’s DSP, was to be spent. It was not Mr Davy. Again, I am satisfied that he did not know that the money spent by his father or given to him by his father was in fact his own money. In light of that, I am satisfied that Mr John Davy was not acting as an agent for his son when his son’s DSP was paid into his accounts. Rather, Mr Davy was acting on his father’s instructions in collecting the mail and taking it to Mr Dwyer’s office for his father to deal with it. He was acting on his father’s instructions at all stages in relation to his DSP rather than his father acting on his instructions.
Having said that, has the DSP been paid to Mr Davy even though not paid into a bank account that he nominated and maintained by him? On the basis of the evidence from Mr Dwyer’s records and on the basis of Mr Davy’s spoken evidence, I find that he received cheques for various amounts that benefited him. It benefited him either because he received the money to do as he would with it or it was paid to another for his benefit. Those cheques include cheques made to meet his rent, and car registration for a car that was registered in his father’s name but that he used. They total $1,192.85.[53] That money was paid to Mr Davy from Mr Dwyer’s trust account in the sense that it was given to him or, to use the words of the Court in Kalway, it found its way into his hands. I accept that he did not know that the cheques authorised by his father were funded by DSP that was properly his. That, however, does not alter my conclusion. His knowledge is irrelevant in deciding the factual matter of whether the DSP, or any part of it, was paid to Mr Davy. That part totalling $1,192.85 was, I find, paid to Mr Davy by way of social security payment within the meaning of s 1224(1)(a) of the SS Act.
Did Mr Davy or another person fail to comply with a provision of the SS Act and, in particular, with the requirements of s 68 and any notice issued under it?
[53] I find that the cheques and the amounts for which they were written are: Victor De Beer ($304.50, $315.50 and $315.50) and Vicroads ($199.35 and $58.00).
Having read the various notices preceding the period in question, I find that they met the requirements of s 68 of the SSA Act in that they specified events which might, if changed, affect the payment of the DSP to Mr Davy. They also complied with the administrative requirements of s 72 of the SSA Act. Those requirements include their being in writing and specifying the period within which Mr Davy had to give notice of any changes. I am satisfied that he did comply with any of them.
I accept also that he was not aware of any of the notices at the time that they were sent to him. My finding is based on his evidence after taking into account the difficulties that he has endured as a result of ADHD. His father dealt with all of his affairs and that continued to be the case even when his father was imprisoned. I find, however, that notice was given to him by their being posted. This is one of the ways in which notice can be given under s 72(1)(b). This is not a case in which it could be said that Centrelink should have been on notice that Mr Davy was unlikely to be in receipt of the notices. Therefore, it is not a case in which to explore whether a notice can be said to “be given” as required by s 72.
There is no question that neither Mr Davy nor any other party advised Centrelink that he had started work or was receiving an income. As the requirement to do so was made under s 68, I am satisfied that Mr Davy has failed or omitted to comply with an obligation imposed under the SSA Act, and so a social security law, within the meaning of s 1224(1)(b)(ii) of the SS Act.
Was DSP, or any part of it, paid to Mr Davy between 3 May 2000 and 28 November 2000 “because” of that failure or omission to comply?
My finding in the previous paragraph does not mean that Mr Davy automatically owes the Commonwealth a debt. He will only do so if, “because” of his failure or omission to comply with a provision of the SSA Act, DSP, or any part of it, was paid to Mr Davy in the relevant period.
What is meant by the word “because”? Its ordinary meaning is “… for the reason that …”.[54] In Purvis (on behalf of Hoggan) v New South Wales (Department of Education and Training) and Anor,[55] McHugh and Kirby JJ considered the meaning of the word in the context of the Disability Discrimination Act 1992. Section 5 provides that a person (the discriminator) discriminates against another on the ground of a disability if, because of the other’s disability, the discriminator treats that person less favourably than the discriminator would treat a person who did not have a disability and who was in the same circumstances. They said:
“ The words ‘because of’ in s 5(1) of the Act indicate that it is the reason why the discriminator acted that is relevant. This interpretation is also consistent with s 10 of the Act, which refers to an act done for two or more ‘reasons’. …”[56]
“ The reasoning in discrimination cases in this Court is consistent with the view that, while it is necessary to consider the reason why the discriminator acted as he or she did, it is not necessary for the discriminator to have acted with a discriminatory motive. Motive is ordinarily the reason for achieving an object. But one can have a reason for doing something without necessarily having any particular object in mind.”[57]
[54] Chambers 21st Century Dictionary, 1999, reprinted 2004, Chambers
[55] (2003) 217 CLR 92; (2003) 202 ALR 133
[56] (2003) 217 CLR 92; (2003) 202 ALR 133 at 139; 168
[57] (2003) 217 CLR 92; (2003) 202 ALR 133 at 142-143; 171
In Trust Co of Australia Ltd v Commissioner of State Revenue,[58]Hansen J said:
“The critical question is the meaning and application of the expression ‘because of’ as it appears in the exemption. The Concise Oxford Dictionary defines ‘because of’ as meaning ‘by reason of’. So defined, the expression ‘because of’ is reduced to its bare bones, so to speak. To seek to clarify the expression by language of my own would involve the risk of placing a judicial gloss or qualification on the expression. Further, to go beyond this definition with further definition would be to go around in circles or at least, hopefully, in a circle that would return one to the beginning, but also with the risk I have mentioned. I merely observe that ‘because of’ is an expression of causation; if event Y occurred ‘because of’ event X, it follows that event X caused event Y.”[59]
[58] [2006] VSC 64
[59] [2006] VSC 64 at [40]
The meaning that I must give the word “because” in s 1224 must be influenced by s 1224 and the context of the SS Act itself. The Explanatory Memorandum accompanying the Social Security and Repatriation (Budget Measures) Amendment Act 1985 provides the setting for s 1224:
“ The bill clarifies and rationalises the rules concerning overpayments of social security pensions. Specific rules will provide for the creation of a legally recoverable debt if payment continues after the pensioner ceases to qualify for the pension. In addition, specific rules will provide for the creation of a legally recoverable debt where the amount of pension to which a pensioner is entitled is reduced, but the pensioner does not duly notify the change in his or her circumstances.”
It is clear from the provisions of the SS Act and the SSA Act that Parliament intended that social security payments reach those who are entitled to receive them. I have already referred to s 55 of the SS Act. That represents one way in which it attempts to ensure that social security payments are paid to those entitled to them. At the same time, Parliament has made provisions relating to the recovery of misappropriated social security payments that do not reach their intended recipients. Section 1224AA(1) of the SS Act, for example, provides for a situation in which a person other than the payee obtains payment of a cheque:
“If:
(a) either:
(i) an amount of a social security payment or an amount of fares allowance is paid by cheque; or
(ii) a pension bonus is paid by cheque; and
(b) a person other than the payee obtains possession of the cheque from the payee; and
(c) the cheque is not endorsed by the payee to the person; and
(d) the person obtains value for the cheque;
the amount of the cheque is a debt due by the person to the Commonwealth.”
In view of these provisions, it seems to me that, when I am looking at s 1224, Parliament intends me first to look to the reason why the social security payment was paid to the recipient. Having found the reason, I must ask whether it was for that reason that the social security payment was paid to the recipient. In ascertaining whether it was for that reason, I must have regard to whether there was a relationship of cause and effect between the payment and the failure or omission. That relationship may be a direct relationship of cause and effect. If, for example, the person entitled to the payment omits to comply with an obligation and a social security payment continues to be paid to the person even though no longer entitled to it, there is a direct relationship of cause and effect. There may, however, be other steps between the failure or omission and the payment. Despite that, there may still be a relationship of indirect causation that is sufficient to support a finding that, because of the failure or omission, the social security payment was paid to the person. To conclude otherwise would be contrary to the object of the SS Act and the SSA Act as I have found them to be.[60]
[60] Although considered in different contexts, I have drawn upon the reasoning of Morling J in Vickers v Minister of Business and Consumer Affairs (1982) 43 ALR 389 at 408 in considering the expression “by reason of”. I have also had regard to the judgment of Beaumont J in Lyons (carrying on business as Mitty’s Authorised Newsagency) v Registrar of Trade Marks (1983) 50 ALR 496 at 509 in considering the meaning of “because” in s 160 of the Patents Act 1952.
Turning to Mr Davy’s circumstances, it could be said that he gained the benefit of $1,192.85 because his father decided to direct that those payments be made to him from Mr Dwyer’s trust account. Had his father not given those directions, he would not have had the benefit of them. Equally, though, it could be said that, had the DSP not been paid to the trust account, Mr John Davy would not have given the directions to make payments to his son. Had there not been a failure or omission to comply with the notices given to Mr Davy to notify Centrelink of his income, the DSP would not have been paid into the trust account. A delegate of the Secretary would have re-calculated his entitlement in light of the information and found that, except in relation to the first fortnight of the period, DSP was not payable. I think that this second way is the better way of looking at the matter. Although the actions of Mr John Davy intervene between the failure or omission and Mr Davy’s being paid a part of DSP (in the sense of his receiving the benefit of that part), there is a sufficient link between the failure and omission and the payment for it to be said that there is a relationship of causation between the two. There is a sufficient link for it to be said that, the part of the DSP paid to Mr Davy between 3 May 2000 and 28 November 2000 was “because the recipient or another person … failed or omitted to comply …” with the notice or notices given to him. Therefore, I find that Mr Davy owes a debt to the Commonwealth amounting to $1,192.85.
Should the debt be waived?
The Secretary may waive the Commonwealth’s right to recover the whole or part of a debt from a person only in the circumstances set out in ss. 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD of the Act.[61] Two sections may be relevant in this case. The first is s 1237A(1) which provides that:
“(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
(1A) Subsection (1) only applies if:
(a)the debt is not raised within period of 6 weeks from the first payment that caused the debt; or
(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.”
This section is not relevant in this case as I am not satisfied that any part of the debt is attributable solely to an administrative error made by the Commonwealth. Centrelink sent the notices to the addresses and paid the DSP into the accounts it thought that Mr Davy had given it. It relied on the information that it had been given. The fact that the DSP, or all of it, did not make its way directly to Mr Davy is not, in the circumstances of this case, an administrative error on its part. There is nothing in the information that it was provided with that should have alerted it to the possibility of its being misled.
[61] SS Act, s 1237(1)
The second section that may be relevant is s 1237AAD, which provides:
“The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i)making a false statement or a false representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.”
In Re Secretary, Department of Family and Community Services and Jonauskas,[62] I reviewed previous cases that had considered the meaning of the word “knowingly” as used in s 1237AAD(a) and the way in which the SS Act has consciously distinguished amongst three meanings of the word. I concluded that “knowingly” means actually knowing as opposed to the other two of the three degrees of knowledge. The first of the other two sorts is the sort of knowledge that comes from deliberately refraining to make enquiries because the enquiries will lead to answers that are not desired by the enquirer. The second is constructive knowledge in the sense that the person ought to have known the specific information or had the means of knowledge.
[62] (2001) 65 ALD 553; [2001] AATA 72 at [63]-[73]
On the findings that I have already made, I am satisfied that Mr Davy satisfies the requirements of s 1237AAD in that the debt did not result wholly or partly from his knowingly making a false statement or representation or failing or omitting to comply with a provision of the Act. He might have received one or two of the letters after his father was imprisoned but I accept that he took the mail to his father to be dealt with. His father was the person who controlled his affairs. He did not see it as his mail and he did not have actual knowledge of the contents of the letters and the obligations imposed upon him in the notices given under s 68.
The debt may only be waived if the second aspect of s 1237AAD is also satisfied. That is it can only be waived if there are special circumstances that make it desirable to waive. The expression, “special circumstances”, has been considered in the past. I have had regard first to the words of the Full Court of the Federal Court when it said that it is not “... possible to lay down precise limits or precise rules.”[63] Of the expression “special circumstances”, it has been said by Kiefel J in Groth v Secretary, Department of Social Security[64] that:
“… although imprecise [it] is sufficiently understood not to require judicial gloss: Beadle’s case [(1985) 60 ALR 225, 7 ALD 670] (at ALR 229; ALD 674), and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case… It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”[65]
[63] Beadle v Director-General of Social Security (1985) 60 ALR 225; (1985) 7 ALD 670 at 228; 674 Bowen CJ, Fisher and Lockhart JJ
[64] (1995) 40 ALD 541
[65] (1995) 40 ALD 541 at 545
More recently, the expression was considered again by Kiefel J in a different context in Secretary, Department of Family and Community Services v Chamberlain.[66] Her Honour adopted similar principles and considered their application in the context of determining the length of a preclusion period when a person has received a compensation payment. In doing so, she clearly referred not only to the circumstances of the individual affected by the preclusion provisions of the Act but to the effect that those preclusion provisions were intended to achieve and the consequences for every person who was affected by them. Having regard to all of the circumstances, would the result be one that is unfair, unintended or unjust so that the circumstances may be described as special?
[66] [2002] FCA 67; (2002) 71 ALD 423
In this case, the provisions of the Act are clearly intended to characterise as debts owed to the Commonwealth amounts of Commonwealth money paid to a person who was not entitled to receive them regardless of whether that person received them in good faith or not. The objective is to recover those debts but latitude is allowed if there are special circumstances.
Mr Davy is a young man who has endured very difficult times in his life. He has obviously worked hard to overcome many difficulties and is succeeding both in his personal life and in his working life. Why his father directed his DSP payments to himself and did not inform him of his entitlement will remain a mystery. It is to be hoped that his actions are not the usual course of action for fathers who care for their sons.
Having said that, are Mr Davy’s circumstances such that they can be regarded as special circumstances? Centrelink sent the notices under s 68 having no reason to think that they reached other than their intended recipient. Events outside Mr Davy’s control have brought about his current circumstances. They are out of the ordinary but I do not consider that they are special circumstances within the meaning of s 1237AAD(b). The “special circumstances” are not merely directed to the person’s own circumstances. Rather, they are directed to those that are “special circumstances … that make it desirable to waive”. That necessarily requires a consideration of the person’s individual circumstances but also a consideration of the general administration of the social security system. Waiver of the debt would mean that Mr Davy would have had the benefit of part of his DSP in circumstances in which he was not entitled to it. Certainly, he did not know that his father was giving him his own money but the fact that he was deceived by his father does not mean that it is desirable to waive the debt. He has had the benefit of the money and there is no injustice in requiring him to repay the money of which he has had the benefit but not the entitlement. His not knowing that his father had continued to receive the money does not take him outside the expectation that all social security recipients should repay money when they receive money but are not entitled to it. The system of administration of the SS Act does not visit any injustice for many if not all social security recipients but it did not lead to any injustice or unfairness on Mr Davy that is not visited, or potentially visited, upon all other recipients of social security payments under the Act. Therefore, I am not satisfied that there are special circumstances that make it desirable to waive the debt under s 1237AAD of the Act.
For the reasons I have given, I:
1.set aside the decision of the delegate of the respondent dated 29 November 2002 and affirmed by the Social Security Appeals Tribunal dated 12 April 2006;
2.substitute a decision that the amount of $1,192.85 paid by way of a Disability Support Pension to the applicant in the period from 3 May to 28 November 2000 is a debt owed by the applicant; and
3.decline to waive the debt.
I certify that the eight-two preceding paragraphs are a true copy of the reasons for the decision herein of
Deputy President S A Forgie,
Signed: ...............................................................
Jayne Rathjen Associate
Date of Hearing 7 December 2006 and 19 January 2007
Date of Decision 9 March 2007
Solicitor for the Applicant Self represented with assistance of Mrs Dianne Davy
Solicitor for the Respondent Ms U Jayasinghe
Clayton Utz
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