Rowe; Department of Family and Community Services
[2001] AATA 152
•28 February 2001
DECISION AND REASONS FOR DECISION [2001] AATA 152
ADMINISTRATIVE APPEALS TRIBUNAL )
) No W2000/262
GENERAL ADMINISTRATIVE DIVISION )
Re Secretary, Department of Family and Community Services
Applicant
And Raymond Rowe
Respondent
DECISION
Tribunal Mr R D Fayle
Date28 February 2001
PlacePerth
Decision Pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the SSAT of 10 April 2000 is set aside and in substitution therefor decides that: (a) the sum of $1,599.40 paid to the respondent between 1 July 1998 and 1 December 1998 is a debt due by the respondent to the Commonwealth; and (b) there are no grounds for waiver of the debt in whole or part pursuant to sections 1237A or 1237AAD of the Social Security Act 1991.
........(-sgd RD Fayle-).........
Senior Member
CATCHWORDS
SOCIAL SECURITY – Youth Allowance; who is recipient; money paid by Centrelink to mother of youth; youth not qualified; can debt to Commonwealth be raised; who is proper debtor.
Social Security Act 1991, sections 559E, 1223, 1237A, 1237AAD
Administrative Appeals Tribunal Act, sections 37, 43.
Acts Interpretation Act 1901, sections15AA, 15AB
Explanatory Memorandum - Social Security Legislation Amendment Bill (No. 2) 1992.
Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35
Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1998) 152 ALR 127
REASONS FOR DECISION
28 February 2001 Mr R D Fayle
Mr Raymond Rowe ("the respondent") applied to the Social Security Appeals Tribunal ("SSAT") to review a decision of a delegate of the Secretary, Department of Family and Community Services ("the applicant") on 19 August 1999. An authorised review officer subsequently affirmed that decision on 14 October 1999. The SSAT set aside the decision under review and decided, on 10 April 2000, that the respondent did not have a debt due to the Commonwealth arising from payments totalling $1,599.40 pursuant to the youth allowance provisions of the Social Security Act 1991 ("the Act").
On 16 May 2000, the applicant applied to this Tribunal to review the SSAT decision. The matter came to hearing on 15 February 2001. Mr Kees de Hoog, the manager, Centrelink Advocacy & Administrative Law Team, represented the applicant. The respondent, having previously advised the applicant that he would not attend the Tribunal, either in person or by telephone, was unrepresented. The matter was heard on the papers. The Tribunal was assisted by submissions made by Mr de Hoog. The documents filed pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the T documents), being T1 to T18 comprising 53 pages, were before the Tribunal. In addition, the Tribunal received a copy of a letter written by the applicant to the respondent on 19 December 2000 relating to the forthcoming hearing, enclosing a copy of the Tribunal's decision in Every and Secretary, Department of Social Security (1993) reported at 29 ALD 604; 17 AAR 184 and 73 SSR 1064. The letter acknowledged that the respondent did not intend attending the hearing but invited him to make any written comments he thought relevant for submission to the Tribunal. Nothing was forthcoming in this respect. Two other documents were provided to the Tribunal by the applicant – a record of the respondent's notified addresses from February 1998 to July 2000; and a copy of an e-mail by an officer of the applicant explaining why she might have accessed the respondent's internal file on 29 July 1998.
The respondent, at the relevant time in 1998, was 16 years of age and attending high school. He was in year 11. Up until 30 June 1998 he was in receipt of Austudy, which was not administered at that time by the applicant. From July 1998 the administration of those payments fell to the applicant. They were termed "youth allowance". Under the provisions of s559E of the Act, the respondent's youth allowance was paid to his mother's bank account. Subsection (1) of that section relevantly provides:
559E Payment of instalments—persons under 18 and not independent
Payment to parent
(1)Subject to subsection (2), instalments of youth allowance of a person who is under 18 years of age and is not independent are to be paid on behalf of the person:
(a) if the person has only one living parent—to that parent; or
(b) if the person has more than one living parent—to the parent nominated in writing by the person to the Secretary.
The respondent told the SSAT that he obtained employment to commence on 1 July 1998 and as a consequence he asked his mother to notify the applicant (Centrelink) that he would no longer be entitled to youth allowance. According to the respondent's evidence he said that his mother told him that she had advised Centrelink accordingly. On 27 June 1998 the applicant had sent a letter addressed to the respondent (T3). It advised that the allowance would be changed to youth allowance from 1 July 1998 and that he would receive his first payment on 15 July 1998. That letter was in response to the respondent having notified the applicant of his intention to claim youth allowance and, presumably, nominating his mother as the parent to whom the payments should be remitted (T4). The Tribunal understands that the youth allowance in question was paid following a proper application by the respondent subsequent to which and before the first payment he was not qualified to receive. Those facts were not in dispute at the SSAT.
The respondent also told the Tribunal that he never saw the letter of 27 June 1998 (T3). His evidence to the SSAT was that he assumed the letter had been intercepted by his mother. There was no suggestion that the letter was not correctly addressed nor is there any record of it not having been delivered. Further, there is no record of the applicant having received any communication as a result of that letter, informing it that the respondent had commenced work.
The applicant continued to pay the youth allowance, by regular fortnightly remittances to the bank account of the respondent's mother. It seems that the payments stopped in December 1998. In early 1999 the respondent went to Adelaide to live with his father. His father telephoned the applicant's office on 30 July 1999 to inquire about the group certificate sent by the applicant to the respondent showing that he had been paid $1,599.40 for the period 1 July 1998 to 1 December 1998. He explained that his son did not receive any such payments as he had started full-time work in July 1998. Later, after an investigation, the applicant's officer advised the respondent that the payments had indeed been made by remittance to the nominated parent's bank account, being his mother's (T5). That triggered the raising of the overpayment in question.
It was not in issue that the respondent was not qualified to receive the youth allowance once he left school and undertook full-time employment. It was not disputed that the amount of the youth allowance payments remitted to the respondent's mother's bank account for the period totalled $1,599.40 (see T18). In this regard the Tribunal merely notes that for the entire time that the payments in question were made, from July to December 1998, the respondent was living with his mother. Not having heard evidence from her, no conclusion can be reached about whether the money was used for the respondent's benefit. The issue is whether the respondent, not having received the payments should be required to repay them. That is, is the $1,599.40 a debt due to the Commonwealth and if so, by whom?
The applicant relies on s1223(1) of the Act which establishes a debt due to the Commonwealth of amounts not payable to the recipient in circumstances where the recipient was not qualified for the payment. That provision states:
Recipient not qualified for payment or amount not payable
1223.(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and:
(a)the recipient was not qualified for the social security payment 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.
The applicant submitted that although the term "recipient" is not defined in the Act, in this case it is the person to whom, "on behalf of", the payment is made. In this instance it is clearly the respondent. In the alternative, it was submitted that s559E operates to ensure that the liability to make the payment of youth allowance to a minor (the respondent), who was not independent of his parent, is discharged by remitting it to their nominated parent or guardian. Therefore, it was submitted, the true recipient in this context is the person on whose behalf the money is received.
It was further submitted by the applicant that any remittances of youth allowance benefits pursuant to s559E are received by the person as agent for the person who qualifies for the youth allowance. The Tribunal understands this submission to be that as an agent is required to account fully to his/her principal for any money belonging to his/her principal then the principal (in this case, the respondent) is the recipient. As mentioned at the hearing, the Tribunal prefers the analogy of a bare trustee and beneficiary (cestui que trust) or object of that trust. Mozley & Whiteley's Law Dictionary, 11th edition, Butterworths, defines "bare trustee" as
"Bare trustee. A trustee who has no duty to perform other than, on request, to convey the estate to his cestui que trust or according to the latter's direction."
And Osborn's Concise Law Dictionary, 7th edition, Sweet & Maxwell define the term as:
"bare trustee. One who merely holds property on trust with no interest in or duty as to the trust property, except to convey it when required according to the directions of the beneficial owner."
In that context, the respondent's mother, in agreeing to accept the youth allowance on behalf of her son, the respondent, is in an equitable relationship of trustee to her son, the absolute beneficiary whose only impediment at law is that he was, at the time, a minor. In the Tribunal's opinion the analogy of a bare trustee relationship is appropriate in this matter. The respondent's mother agreed to receive the payments of youth allowance for the absolute benefit of her son. She therefore became a trustee of that property for her son. Whilst legal title to the money remained with the respondent's mother so long as it remained in her bank account, she was obliged to discharge her responsibilities in that regard by paying them over to her son or using them for his benefit at his direction. In the Tribunal's opinion, any legal title that the respondent's mother may have had to the moneys in question did not make those moneys hers to be used other than for the exclusive benefit of her son, the respondent. In that sense, the recipient of the moneys was the respondent, the applicant having discharged its legal obligation to pay over those moneys on behalf of the respondent by remitting them to his trustee, his mother.
The Tribunal is mindful that the operative provision, s1223(1), uses the word "recipient" which is defined in the Macquarie Dictionary as:
"recipient … n. 1. One who or that which receives; a receiver. …"
In a strict literal sense that better describes the respondent's mother than it does the respondent. However, the word is used in the context of the Social Security legislation. French J, in Secretary, Department of Social Security v McLaughlin (1997) 81 FCR 35 said:
"The general approach to construction (of the Social Security Act) was considered in Rose v Department of Social Security (1990) 21 FCR 241 at 244:
'The Act is a remedial provision in that it gives benefits to persons and thereby remedies Parliament's perceptions of injustice. It calls for no narrow or pedantic construction; but, as mentioned earlier, it contains both enabling and excepting provisions which do not therefore necessarily require beneficial interpretation. It depends on the particular statutory provision and an analysis of its language and purpose. Aids to construction, including the principle of liberal interpretation of remedial provisions, are generally invoked when there is some ambiguity on the fact (sic) of the particular statutory provision'"
In the present matter, in relation to the meaning of the word "recipient" in s1223(1) of the Act, there is some ambiguity "on the face of the particular statutory provision" – that ambiguity being whether the person who received the payment or the person on behalf of whom the payment was received, fits the description of "recipient". In these circumstances the Tribunal is required to adopt a construction that would promote the purpose or object underlying s1223(1), rather than a construction that would not promote that purpose or object: s15AA of the Acts Interpretation Act 1901. Furthermore, given the above mentioned uncertainty of meaning or ambit of the word "recipient" in that context, it is appropriate, in the Tribunal's opinion, for it to have regard, pursuant to s15AB(1) of the Acts Interpretation Act 1901, to "extrinsic material" which is capable of establishing the purpose or object underlying the term and thereby assisting in the ascertainment of its meaning.
Section 15AB of the Acts Interpretation Act 1901 relevantly provides:
"(1) Subject to subsection (3), in the interpretation of a provision of an Act, if any material not forming part of the Act is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material:
(a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; or
(b) to determine the meaning of the provision when:
(i)the provision is ambiguous or obscure; or
(ii)the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act leads to a result that is manifestly absurd or is unreasonable.
(2)Without limiting the generality of subsection (1), the material that may be considered in accordance with that subsection in the interpretation of a provision of an Act includes:
…
(e)any explanatory memorandum relating to the Bill containing the provision, or any other relevant document, that was laid before, or furnished to the members of, either House of the Parliament by a Minister before the time when the provision was enacted;
(f)the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House;
…
(3)In determining whether consideration should be given to any material in accordance with subsection (1), or in considering the weight to be given to any such material, regard shall be had, in addition to any other relevant matters, to:
(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the purpose or object underlying the Act; and
(b) the need to avoid prolonging legal or other proceedings without compensating advantage."
In the opinion of the Tribunal, to treat an amount received by a person on behalf of another as a debt due by the first mention person because the latter was not entitled to it would be manifestly unfair. That is, the ordinary meaning conveyed by the word "recipient" in s1223(1), taking into account its context in the Act and the purpose or object underlying the Act, leads to a result that is at least unreasonable.
The precursor to the present provision, s1223(1) found its genesis in the Social Security Legislation Amendment Bill (No. 2) 1992. At page 44 of the Explanatory Memorandum to that Bill it states relevantly:
"The whole of section 1223 has been rewritten to reflect the clear English drafting principle that each subsection should limit itself to stating only one legal rule. …
New subsection 1223(1) will establish a debt if a person receives a social security payment for which the person was not qualified and which was not payable to her or him."In the opinion of the Tribunal the passage from the EM cited above makes it abundantly clear that it is the person who was not qualified to receive the benefit who would owe the debt. In the present case that is the respondent. In the opinion of the Tribunal it would be manifestly unfair or even absurd if the section operated to make anyone other than that person liable. And as an aside, if the person who, pursuant to s559E(1)(b) of the Act, received the child's youth allowance paid pursuant to that provision simply failed to pay it over or use it for the child's benefit, then the remedy for the child is not to be found in the Social Security law but either at Common Law or in Equity for a breach of trust.
ConclusionIn its decision the SSAT made the following statement in regard to the evidence before it:
"Copies of [the respondent's mother's] bank accounts show clearly that amounts of $145.40 were made fortnightly to her bank account from July to December 1998. Since [the respondent] commenced work on 1 July 1998, his mother was not eligible to receive youth allowance payments from that date." [emphasis added]
With respect, it seems that that conclusion led the SSAT to its findings that:
"[a]lthough payments were made in respect of [the respondent], they were not made to him and were made instead to his mother."
And earlier in their decision the SSAT said:
"to the [SSAT's] mind, the debt can only be raised under this section [a reference to s1223] against the person to whom the payment had been made."
The SSAT therefore concluded:
"Accordingly, although it was [the respondent's] entitlement which led to the youth allowance payment to be made to his mother, the moneys were not made to him and the debt cannot be raised against him as he is not the recipient."
In the Tribunal's respectful opinion and for reasons expressed above, the SSAT's decision is flawed and cannot be affirmed. In the opinion of the Tribunal, s1223(1) of the Act applies to establish that the amount of youth allowance in question, $1,599.40, for which the respondent was not qualified, is a debt due by him to the Commonwealth pursuant to that provision of the Act.
The SSAT, having found that there was no debt due to the Commonwealth did not fully canvass the question of whether the debt should be waived in full or in part. Mr de Hoog submitted that the debt was paid to the respondent in good faith (c/f Secretary, Department of Employment, Education, Training and Youth Affairs v Prince (1998) 152 ALR 127). It was money to which he had no entitlement and he was aware of that, even if he was unaware that the money was paid. Further, it was submitted that there is no evidence of the debt being due solely to administrative error made by the Commonwealth. For those reasons the debt cannot be waived pursuant to s1237A of the Act. It was further submitted that there were no special circumstances (other than financial hardship alone) upon which the debt might be waived pursuant to s12337AAD of the Act.
The Tribunal accepts the submissions of Mr de Hoog in relation to waiver. There is no evidence that the respondent is suffering financial hardship as he is employed. In the opinion of the Tribunal there is nothing else out of the ordinary or unusual surrounding the events that led to this debt. A letter advising the respondent about the youth allowance was sent, and whether or not he actually received it, the respondent understood his obligations to the applicant when he commenced work because he asked his mother to contact the applicant and duly notify them of that fact. His evidence suggests that his mother assured him that due notification had been made. In fact, it would appear that no such notification was made but that does not alleviate the respondent's responsibility to have notified the applicant of his employment which commenced in July 1998.
Decision
Pursuant to s43 of the Administrative Appeals Tribunal Act 1975, the decision of the SSAT of 10 April 2000 is set aside and in substitution therefor decides that:
(a) the sum of $1,599.40 paid to the respondent between 1 July 1998 and 1 December 1998 is a debt due by the respondent to the Commonwealth; and
(b) there are no grounds for waiver of the debt in whole or part pursuant to sections 1237A or 1237AAD of the Social Security Act 1991.I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Mr R D Fayle
Signed: ....(-sgd W Treasure).......
AssociateDate/s of Hearing 15 February 2001
Date of Decision 28 February 2001
Counsel for the Applicant Mr C de Hoog
Solicitor for the Applicant
Counsel for the Respondent unrepresented
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