Secretary, Department of Social Security v Alvaro, G

[1994] FCA 320

SECRETARY, DEPARTMENT OF SOCIAL SECURITY v GUISEPPE ALVARO
No. 85 of 1993
FED No. 320/94
Administrative Law Number of pages - 13

(1994) 19 AAR 460

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIAN DISTRICT REGISTRY
GENERAL DIVISION
SPENDER, FRENCH and VON DOUSSA JJ

CATCHWORDS

Administrative Law - Administrative Appeals Tribunal - jurisdiction to review decisions - whether jurisdiction to review decision made beyond power

Administrative Law - Social Security - decision to recover overpaid social security benefit - whether raising a debit for an overpayment and advising beneficiary that recovery would occur involved the making of a "decision" - whether waiver considered - whether delegate of the Secretary or officer making decision authorised to make it.

Administrative Appeals Tribunal Act 1975, ss.25, 43, 44 Social Security Act 1991, ss.1224, 1231, 1237, 1239, 1247, 1253, 1283, 1295, 1299, 1302

Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 followed

The Hospital Benefit Fund of Western Australia Inc v Minister for Health, Housing and Community Services (1992) 16 AAR 566 followed

Director General of Social Services v Hangan (1982) 45 ALR 23 applied

Director General of Social Services v Hales (1982) 47 ALR 281 applied

HEARING

ADELAIDE, 11,12 November 1993
#DATE 27:5:1994

Counsel for the applicant: Ms S Singh

Solicitor for the applicant: Australian Government Solicitor

Counsel for the respondent: Mr W J N Wells QC with Mr H I P Patsouris

Solicitor for the respondent: Patsouris and Associates

ORDER

1. The appeal be allowed.

2. The matter be remitted to the Administrative Appeals Tribunal with the direction that the Tribunal decide the application for review of the decision of the Social Security Appeals Tribunal.

3. The parties forward written submissions to the Court in accordance with directions to be given by a member of the Court as to the appropriate orders for costs of the appeal.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

SPENDER J I agree in the judgment of von Doussa J.

JUDGE2

FRENCH J I agree with the orders proposed by von Doussa J for the reasons which his Honour has given.

JUDGE3

VON DOUSSA J This is an appeal pursuant to s.44 of the Administrative Appeals Tribunal Act 1975 ("the AAT Act"). Upon an application by the respondent, Mr Alvaro, for the review of a purported decision to recover overpayments of Supporting Parents Pension and Unemployment Benefits totalling $66,682.04, which decision had been affirmed in turn by a Review Officer and by the Social Security Appeals Tribunal ("the SSAT"), the Administrative Appeals Tribunal ("the AAT") brought down a decision that "The Tribunal has no jurisdiction to entertain this application for review which is therefore dismissed". The literal effect of the AAT's decision is that the decision to recover the overpayments as affirmed by the SSAT stands. Nevertheless this appeal is brought by the Secretary, Department of Social Security, as it is said that the reasons for decision handed down by the AAT, if correct, could have wide reaching consequences in the day to day administration of the Department.

1. The purported decision to recover overpayments made to the respondent was made in connection with the operation of s.1224 of the Social Security Act 1991 ("the Act"). At the date when the purported decision was originally made, 31 July 1991, s.1224 provided:
   

"1224(1) If:

(a) an amount has been paid to a recipient by way of pension, benefit or allowance under this Act or the 1947 Act; 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 this Act or the 1947 Act; and

(c) the amount has not been deducted from the recipient's pension, benefit or allowance under section 1223 of this Act or section 246 of the 1947 Act;

the amount so paid is a debt due by the recipient to the Commonwealth.

(2) A debt due to the Commonwealth under subsection (1) is recoverable by the Commonwealth by means of:

(a) if someone is receiving a pension, benefit or allowance under this Act - deductions; or

(b) legal proceedings; or

(c) garnishee notice.

(3) ... (not relevant)"

1. The following undisputed facts were formally recited as findings of fact by the Tribunal:
   

"1. The applicant was born on the 9th day of July, 1938.

2. The applicant received supporting parents pension from the respondent from the 1st July, 1978 to the 5th November, 1981.

3. The applicant received unemployment benefits from the respondent from the 27th December, 1981 to the 30th June, 1986. (sic - should be 1987)

4. Applying the pension and benefit income test for the relevant periods, the applicant had no entitlement to a pension or benefit for the whole of the period between 1 July 1978 to 30 June 1986.

5. Between 1 July 1978 and 30 June 1986, the applicant received from the respondent the amount of $66,682.04 in the form of:

(a) supporting parent's pension (now sole parent pension) paid from 1.7.78 to 5.11.81, totalling $16,035.80, and

(b) unemployment benefit paid from 27.12.81 to 30.6.87, totalling $50,646.24.

6. On the 27th day of September, 1990 an agreement ('the agreement') was reached between the Director of Public Prosecutions and the applicant in relation to certain criminal charges faced by the applicant alleging conspiracy to defraud the Commonwealth of Australia under section 86(1)(e) of the Crimes Act 1914...

7. In the agreement the applicant agreed to plead guilty before Mr Harris SM to a charge of conspiracy to defraud the Commonwealth under section 86(1)(e) of the Crimes Act 1914 between 1978 and 1984 and upon the basis set forth in an agreed statement of facts and a written statement signed by the applicant. Mr Alvaro and others pleaded guilty to the charge and were committed for sentence to the Supreme Court before Justice Millhouse on 14 November, 1990.

8. On 2 November 1990, the Deputy Commissioner of Taxation petitioned by the bankruptcy of Mr Alvaro in respect of the sum of $1,179,317.30, by way of unpaid assessed tax and interest.

9. As at October 1991, proofs of debt in excess of $1,600,000 had been received.

10. In the absence of any evidence to the contrary, the applicant's financial circumstances are as was found by the SSAT: . the applicant receives $487 per fortnight job search allowance;

. the applicant is currently doing a small amount of work in a bakery for a friend and receiving $80 per week; . the applicant has no money in the bank; . the applicant has an overdraft at the Commonwealth Bank in the sum of $18,960."

1. On 31 July 1991 Mr Rodda, then holding the position of an Administrative Services Officer Class 5 in the Port Adelaide Regional Office of the Department calculated that overpayments had been made to the respondent, and, on the same day wrote to him on Departmental letterhead saying, in part,
   

"...An overpayment of $66,682.04 has been calculated and the Department is required to recover this debt from you...I have made this decision as a delegate of the Secretary under the Social Security Act..."

(Signed) S.F. Rodda

for L Niehuss

Delegate of the Secretary"

1. The letter also informed the respondent that if he disagreed with the decision he had avenues of review and appeal against the decision open to him under the Act.

2. Through solicitors the respondent advised the Department that he "strenuously objected" to the assertion that he was not entitled to the benefits which he had received, and sought a review of the decision.

3. An authorised Review Officer, Mr Parker, reviewed the purported decision made on 31 July 1991. The Review Officer advised the respondent in writing that "I have...decided to affirm the original decision to raise and recover the amount of pension and benefit paid", and gave reasons for that decision. The Review Officer considered that the sum of $66,682.04 was a debt due to and recoverable by the Commonwealth under s.1224, and that in the circumstances of the case it would be inappropriate for the discretion to waive the debt under s.1237 to be exercised in the respondent's favour.

4. The respondent appealed to the SSAT. On his application for review the challenged decision was described as: "The decision to raise and recover an overpayment..." The ground of appeal was that:
   

"An agreement was entered into as between Mr Alvaro and the Commonwealth of Australia whereby no such action could be taken by the Department. A copy of this agreement is enclosed. The Departments actions are in breach of that agreement."

The respondent was represented by counsel before the SSAT. Two issues were identified and argued; first, that the agreement made on 27 September 1990 with the DPP referred to in the ground of appeal estopped the Department from raising an overpayment and taking recovery action against the respondent, and secondly, (if there were no estoppel) whether the Secretary should exercise his discretion pursuant to s.1237 of the Act to waive in full or in part the recovery of the debt. The SSAT considered each of these issues and reviewed the available factual information. It decided that the agreement with the DPP did not have the effect contended for; that the Department's contention that there is a debt due pursuant to s.1224 was correct as the overpayment clearly was paid as a result of false statements or false representations made by the respondent in respect of his income during the relevant period; and that in all the circumstances it would be inappropriate for the Secretary to waive recovery of the debt either wholly and partially.

1. After setting out the background facts the AAT in its reasons for decision said:
   

"Before proceeding on a review of any decision, the Tribunal must identify the decision of which review is being sought, and must also determine whether the Tribunal has jurisdiction to review that decision."

The AAT held that the decision made on 31 July 1991 by Mr Rodda was one that could only have been made under s.1224(1) of the Act. The Tribunal referred to the decisions of the Full Court of this Court in Director General of Social Services v Hangan (1982) 45 ALR 23 and Director General of Social Services v Hales (1982) 47 ALR 281. In the latter of these cases, which concerned s.140(1) of the 1947 Act, the forerunner of s.1224 of the Act, Lockhart J at 306 said:

"A vexing problem in the present case has been to identify the relevant decision said to have been made and to be reviewable by the Administrative Appeals Tribunal. It received various descriptions in the course of the litigation. Its clearest formulation is that it is a decision that a benefit which had been paid to Mrs Hales was not payable, that if had been paid in consequence of her failure or omission to notify changes in her income, that it would not otherwise have been paid, that it may be recovered and that it should be recovered."

and later at p 307:

"...Certain administrative processes must precede any action for recovery in a court pursuant to s 140(1). Some officer in the Department must form an opinion that there has been a failure or an omission to comply with a provision of the Social Services Act or that there has been a false statement or representation, and that a benefit has been paid in consequence of that failure or omission or false statement or representation that would not otherwise have been paid."

The AAT held that the decision under review purported to be a valid decision under s.1224(1) that Social Security benefits had been paid to the respondent, that the whole of these benefits were not payable, that the benefits were paid "in consequence of" (although under s.1224 the requirement is that payments were made "because" of) the respondent making a false statement or false representation or "as a consequence of" his failure or omission to comply with the provisions of the 1947 Act (e.g. s.239(c)), and that the amount was recoverable and should be recovered.

1. Having made the finding as to the decision under review, the AAT proceeded to hold that the evidence did not establish that the original decision- maker, Mr Rodda, held a delegation of power which authorised him to make such a decision under s.1224, and:
   

"As the Tribunal is not satisfied that the delegate was authorised to make a decision under s.1224, it follows that there was no decision...to be reviewed..."

The AAT stated its ultimate conclusion thus:

"The Tribunal finds that because there exists no reviewable decision of Mr Rodda in respect of the operation of s.1224, and no decision in this regard before the SSAT, there is no jurisdiction in the AAT to review the application before it."

On reaching the conclusion that the AAT had no jurisdiction to review the purported decision, it might have been expected that the AAT would desist from further hearing the matter so that someone with the requisite authority in the Department could proceed afresh to make decisions uninfluenced by expressions of opinion made beyond power by the AAT. However the AAT went on, and made findings that assumed that there was jurisdiction to review the merits of the purported decision. In particular the AAT held that the respondent had made a number of false statements or representations, that he had received $66,682.04 as the result of those false statements or false representations, that his actual level of income at the relevant times precluded him from being entitled to any of the amounts he received and that the whole of the amount he received was paid as the result of the false statements or false representations. The AAT considered submissions that had been made to it about the possible application of s.1237(1). Mr Rodda had given evidence that he believed an instrument of delegation under s.1299 authorised him to exercise power to waive debts under s.1237(1) up to $1,000, but to refuse to waive debts no matter what the amount. The AAT held that the delegation did not have this effect, but in any event there was no debt to waive, and if there had been, the circumstances would not warrant any waiver. The AAT considered the merits of the respondent's argument about the effect of the agreement with the DPP, and held that the agreement did not preclude recovery proceedings against the respondent.

1. Before this Court counsel for the applicant did not seek to argue that the decisions in Hangan or Hales did not apply in the administrative application of s.1224. However in the course of submitting that an authorised officer of the Department could validly take the administrative steps necessary to implement s.1224 without being the holder of delegated power, counsel for the applicant argued that s.1224(1) operates of its own force so that where the factual circumstances prescribed in paragraphs (a), (b) and (c) exist, there is a debt due to the Commonwealth without there being any administrative decision or step taken by an officer of the Department. In a sense that is correct, but no practical consequence flows from the mere statutory prescription that a debt exists. Administrative processes are necessary to recognise and record that debt as a debit in the accounting and other records of the Department. Sheppard J in Hales at 318 declined to express an opinion whether the mere entry of a debit against a beneficiary could constitute a "decision" reviewable by the AAT, but here the steps taken went further and included a decision that the debt should be recovered. It was the decision that the debt should be recovered that caused the recognition of the statutory debt to affect the interests of the respondent in a real, practical manner. The decisions in Hangan and Hales should be applied to s.1224, and the issues raised in this appeal should be considered on that footing.

2. The AAT has taken an erroneous view of the scope of its jurisdiction. The jurisdiction of the AAT arises under the combined operation of s.25 of the AAT Act and s.1283(1) of the Act. Section 25 of the AAT Act relevantly provides:
   

"25(1) An enactment may provide that applications may be made to the Tribunal :

(a) for review of decisions made in the exercise of powers conferred by that enactment; or

(b) ...

(2) ...

(3) ...

(4) The Tribunal has power to review any decision in respect of which application is made to it under any enactment."

Section 1283(1) of the Social Security Act 1991 relevantly provides:

"1283. (1) If a decision has been reviewed by the Social Security Appeals Tribunal (SSAT) and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for a review of the decision of the SSAT."

(2) For the purpose of subsection (1), the decision made by the SSAT is to be taken to be:

(a) where the SSAT affirms a decision - the decision as affirmed;..."

The scope of the jurisdiction of the AAT in the present case must depend upon the interpretation given to these provisions. The AAT has taken the narrowest view possible as to the meaning of "decision", namely that there must be a decision which constitutes a legally effective exercise of power conferred by the Act. On this interpretation if a purported decision lacks legal effect for any reason there is no "decision" within the meaning of s.1283. It would follow by parity of reasoning that there is no "decision made in the exercise of powers conferred" by the Act within the meaning of s.25(1) of the AAT Act. In relation to s.25 of the AAT Act this interpretation is contrary to the decision of the Full Court of this Court in Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 where it was held that a decision made by an administrator in purported or assumed pursuance of a relevant statutory provision is reviewable under the AAT Act even if the administrative decision is legally ineffective or void: see Bowen CJ at 314-315, Smithers J at 339. That decision has been applied by another Full Court of this Court in The Hospital Benefit Fund of Western Australian Inc v Minister for Health, Housing and Community Services (1992) 16 AAR 566 at 573.

1. Section 1283 refers simply to "a decision" which has been reviewed by the SSAT, and "the decision" of the SSAT. Unlike the context in which the word "decision" appears in s.25 of the AAT Act, "decision" in s.1283(1) is not qualified by the words "made in the exercise of powers conferred by that enactment". In s.1283(1), even on a literal reading, there is no reason why "decision" should be narrowly construed. The reasons of convenience given by Brennan J at first instance in Re Brian Lawlor Automotive Pty Ltd and Collector of Customs (NSW) (1978) 1 ALD 167, and by the majority of the Full Court on appeal, supra, apply to require that the narrow interpretation of "decision" in s.1283(1) adopted by the AAT must be rejected. To hold otherwise would defeat the purposes of the review procedures established under the Act. A similar conclusion was reached by the AAT in Re Secretary, Department of Social Security and Pomersbach (1991) 15 AAR 1 at 9.

2. The right of review by the AAT of a decision of the SSAT given by s.1283(1) arises where an administrative decision made in purported exercise of powers conferred by the Act has, as a matter of fact, been reviewed by the SSAT. That right exists whether or not the decision reviewed by the SSAT, or the decision of the SSAT itself, was legally effective. A similar construction should also be accorded to "decision" in ss.1239 and 1247 which respectively provide for internal review of decisions by the Secretary, and the review of decisions by the SSAT.

1. In the present case, as a matter of fact, there plainly was a decision of the SSAT. That decision by its terms affirmed the decision to recover an overpayment of $66,682.04. Whilst that decision stood undisturbed by administrative review or an order of a court on judicial review it affected the rights and interests of the respondent as the decision was likely to be implemented by the Department.

2. Prior to the decision of the SSAT there was the original decision made on 31 July 1991, and the decision of the Review Officer. In the hierarchy of reviews from original decision-maker to the AAT it was not necessary that there be at the outset an original decision that was in all respects validly made, and at each level of review thereafter another decision that was in all respects validly made. The person or tribunal to whom application for each of the reviews was made had jurisdiction to undertake that review so long as the preceding decision-maker had made what purported to be a decision in exercise of powers conferred by the Act affecting the interests of the person seeking review. It mattered not whether the ground of complaint made about the preceding decision was merely that it is wrong on the merits, or that in law it was not an effective decision because it was made by someone without authority, or in excess of authority, or for improper purposes, or was vitiated through procedural irregularity such as a failure to accord natural justice.

3. The purpose of a review provided for by the Act is to allow the reviewing authority to correct error and substitute a new decision where error is detected. Relevantly in the present case the SSAT by s.1253(3) was empowered for the purpose of reviewing a decision (in this case the original decision as affirmed by a Review Officer) to exercise all the powers and discretions that are conferred by the Act on the Secretary.

4. In the present case, as the review required by the AAT was a review of the decision of the SSAT, that is of the original decision as affirmed by the SSAT, the AAT was not literally correct to describe the decision under review as one encompassing only the conclusions that there was an amount recoverable under s.1224 and that it should be recovered. The decision also included the conclusion that the discretion to waive the debt under s.1237(1) should be exercised against the respondent. The former decision does not necessarily involve and include a decision as to waiver: Secretary, Department of Social Security v Hodgson (1992) 108 ALR 322 at 329.

5. The SSAT in performing its function concentrated on the merits of the proposed recovery from the respondent including the merits of the contention that the debt should be waived, and did not consider the question of Mr Rodda's authority. In the manner in which the review was conducted before the SSAT, his authority was not raised as an issue. Had it been, and if the SSAT had concluded that the decision made on 31 July 1991 was made in excess of the authority of the decision-maker, the SSAT had power to substitute its own decision in place of an earlier ineffective decision. Likewise the AAT would have jurisdiction and power to substitute its own decision if it concluded that an earlier decision-maker in the process of decision-making and review had acted in excess of authority: Secretary, Department of Social Security v Hodgson at 330.

6. In the course of argument before this Court counsel for the respondent sought to explain why questions of "jurisdiction" were raised before the AAT. Counsel said that this was done so that the ruling of the Tribunal would establish that a number of decisions were required to authorise recovery under s.1224, namely
   first; that there is a recoverable debt;
   secondly; that action should be taken to
   

recover it;

thirdly; that one of the modes of recovery

specified in s.1224(2) should be adopted; and

fourthly; that there be no waiver under

s.1237(1).

It was contended that a question of "jurisdiction" arose because no decision had been made either as to the mode of recovery or as to waiver by the original decision-maker.

1. It is unfortunate that those submissions were expressed as ones going to the jurisdiction of the AAT rather than as ones touching the legal effectiveness of the decision under review. The emphasis placed on the alleged absence of jurisdiction has caused the review by the AAT to miscarry.

2. It will be noted that the decision made on 31 July 1991, was that "the Department is required to recover this debt" of $66,682.04 which had been calculated by Mr Rodda. The decision did not purport to decide on the manner of implementation of that recovery. Alternative means of recovery are provided for by s.1224(2). One means is by way of deductions if a person is in receipt of a pension, benefit or allowance under the Act. Section 1231 sets out the method of recovering a debt by deductions. The respondent at the time the decision was made to raise and recover overpayments was in receipt of an allowance (in places it is referred to in the appeal papers as a Job Search Allowance, and in other places as a Newstart Allowance). The affirming decisions of the Review Officer and the SSAT did not purport to decide which means of recovery was to be pursued, or to exercise any discretion which was a prerequisite to implementing a particular means of recovery. However the reasons for decision of both the Review Officer and the SSAT assumed that if the decision under review were affirmed, recovery would be made by withholding in part the payments of the allowance. Section 1231(2) would appear to impose a mandatory requirement that a debt or overpayment must be deducted from ongoing payments of a pension, benefit or allowance where a person is in receipt of such payments. However the means of recovery by deductions in July 1991 required a decision by the Secretary under Step 1 in the Method Statement in s.1231(1), and now requires a decision by the Secretary under s.1231(1A), as to the amount by which each payment of a person's pension, benefit or allowance is to be reduced: see Kevin Walker v The Secretary, Department of Social Security, unreported judgment of von Doussa J, 22 December 1993 at 10-12. In the present case there is no suggestion in the appeal papers that the Secretary or a delegate gave consideration to the matters relevant to s.1231, or that any decision was made as to the amount of deductions, at or about the time of the decision on 31 July 1991 (nor, indeed at any time thereafter, perhaps because the appeal process challenging that decision was underway). In the course of argument before this Court counsel for the respondent asserted that deductions had been made after the review by the Review Officer, but there was no evidence of this before the AAT.

3. If it is the case that the Secretary or a delegate had not made a decision as to the amount by which each payment of the respondent's allowance was to be reduced, it would follow that deductions could not lawfully have been made under s.1231. If a decision had been made, the review process initiated by the respondent did not seek to challenge that decision. Either way issues arising in connection with the third of the required decisions identified in the respondent's "jurisdiction" argument had nothing to do with the jurisdiction of the AAT to undertake the review of the decision of the SSAT.

4. The contention of the respondent before the AAT that there had been no decision on the issue of waiver under s.1237(1) rested in part on the submission that although Mr Rodda purported to make a decision as to waiver, he was not authorised to do so by an instrument of delegation from the Secretary. This submission was repeated before this Court. It was also contended by the respondent that Mr Rodda had no authority to make any other aspect of the composite decision that there was a debt due to the Commonwealth under s.1224 and that it should be recovered. It is not strictly necessary for this Court to consider these submissions, as for the reasons already given the AAT erred in law in holding that it did not have jurisdiction, and the appeal must be allowed, and the matter remitted to the AAT with a direction that it review the decision of the SSAT. However the submissions of the parties before this Court illustrate that the question of the effectiveness in law of the decision made on 31 July 1991 turns on questions other than those considered by the AAT. It is desirable that these other questions be identified so that if they are raised again before the AAT they will be addressed by counsel and fully argued. They have not been fully argued before this Court and it is inappropriate that this Court seeks to answer them at this stage.

5. It is clear on the evidence that on 31 July 1991 Mr Rodda prepared a file note (Exhibit T19) relating to the respondent which summarised the calculation of overpayments of Supporting Parents Pension and Unemployment Benefits made to the respondent. This document preceded the Departmental letter prepared by him addressed to the respondent advising him of the decision to recover the debt of $66,682.04. Section 1302 of the Act requires that all decisions of an officer under the Act must be in writing. The internal file note does not record that a decision has been made to recover the calculated overpayment from the respondent, and it does not bear the appearance or character of a decision. The subsequent letter to the respondent is the document which has that appearance and character as it does record that such a decision has been made. Moreover, the word "decision" ordinarily refers to an announced or published ruling or adjudication: Director-General of Social Services v Chaney (1980) 31 ALR 571 at 590. The letter, not the file note, announced and published the decision. The letter purported to be the letter of, and to announce the decision of, Ms Niehuss as the Delegate of the Secretary. Mr Rodda signed for Ms Niehuss, in effect as her agent. The decision by its terms did not purport to be the decision of Mr Rodda in exercise of a delegated power vested in him. It purported to be an exercise of delegated power vested in Ms Niehuss.

6. The evidence of Mr Rodda was that the decision made by him (in whatever capacity) on 31 July 1991 included a decision that the discretion under s.1237(1) should not be exercised. The advice to the respondent that a decision had been made to recover the overpayments was capable of conveying the meaning that the discretion to waive the debt had been exercised against him. To determine whether the decision made on 31 July 1991, and its component parts, was made within power it would be necessary to consider a number of questions which flow from the provisions of Chapter 7 of the Act, and in particular from s.1295 which vests the general administration of the Act in the Secretary. Those questions would be:
   

a) whether the decision to raise a debit under s.1224, or any component part of that decision, required the decision-maker to hold a delegation of power from the Secretary under s.1299. That section provides for the Secretary, by signed instrument, to delegate to an officer "all or any of the powers of the Secretary" under the Act;

b) whether the decision that the discretion to waive the debt should not be exercised in the respondent's favour required the maker of the decision to hold a delegation of power from the Secretary under s.1299;

c) in the event that a delegation of power under s.1299 was required in either situation, was there a delegation which by its terms authorised the decision which was made; and d) if yes to c) was it necessary for the delegate to exercise the delegated power personally, or could it be exercised through a properly authorised officer.

It was the submission of the applicant before this Court that a formal delegation of power by instrument under s.1299 is required only in those cases where the relevant power is vested expressly in the Secretary e.g. as in the sections specifically mentioned in s.1299 viz, ss.518, 597, and in sections such as 1231 and 1237 which are directly relevant to the issues in this case. In all other situations the applicant contends that the Secretary, in the general administration of the Act, may act through authorised officers, who do not hold formal delegations under s.1299, in the performance of functions or the exercise of powers arising under the Act. There is force in this submission. It will be noted that s.1299 provides for the delegation to an officer of all or any of the powers of the Secretary. It does not provide for the delegation of the multifarious functions which must be performed under the Act, and realistically can only be performed by officers of the Department. Whilst s.1295 vests the general administration of the Act in the Secretary, it obviously was not the legislative intention that the Secretary personally perform all the functions necessary to carry the Act into effect. Chapter 7 clearly contemplates that numerous functions in the daily administration of the Act will be performed in the name of the Secretary by officers authorised to do so.

1. In re reference under s.11 of the Ombudsman Act 1976 for an advisory opinion; ex parte Director-General of Social Services (1979) 2 ALD 86 at 94 Brennan J observed:
   

"There is a confusing similarity between the exercise of an authority's power by the authorized acts of another, and the exercise by an authority's delegate of the power delegated to him. In either case the act - whether the act of the authorized person or the act of the delegate - is a valid exercise of power. Nonetheless, the sources of validity are different, though it must be said that the term 'delegation' has frequently been used to describe either case without distinguishing between them. For some purposes, a distinction must be made.

Where an authority has not delegated his power but he has authorized another to act in exercise of his power, the act is to be done in the name of the authority: London County Council v Agricultural Food Products Ltd (1955) 2 QB 218 per Romer LJ at 224. But where a delegate is exercising the power delegated to him, he may validly exercise that power in his own name: Owendale Pty Ltd v Anthony

(1967) 117 CLR 639 at 562, 611."

A determination of which powers arising under the Act must be exercised personally by the Secretary or by his delegate, and which powers and functions may be exercised and carried out by officers acting in the course of and within the authority of their position in the Department is a matter of the construction of the Act. Referring to the maxim "delegatus non potest delegare" the Court of Appeal of New South Wales said in Ex parte Forster; re University of Sydney (1963) SR (NSW) 723 at 733:

"As a matter of the construction of the statute conferring the power, the application of the maxim, and its extent, must be considered with due regard to the purpose and objects of the statute, the character of the power which is conferred, the exigencies of the occasions which may arise with respect to its exercise, and other relevant considerations."

See also O'Reilly and Others v The Commissioner of the State Bank of Victoria and Others (1982-1983) 153 CLR 1 at 11, 30.

1. In the present case, the steps leading to a decision to raise a debit under s.1224 are identified in the passage earlier cited from the judgment of Lockhart J in Hales at 307, namely that an officer in the Department form an opinion that there has been a failure to comply with a provision of the Act or the 1947 Act, or that there has been a false statement or representation, and that a benefit has been paid because of that, and that it would not otherwise have been paid. These are facts capable of being ascertained from objective evidence. The opinion to be formed is simply that the facts exist. Upon a review, the correctness of the opinions of the officer can be tested against the available evidentiary material. The officer in forming the requisite opinion, and raising a debit under s.1224 is not exercising discretionary power. These are considerations which favour the view that an authorised officer may lawfully exercise functions of this kind in the name of the Secretary, or delegate of the Secretary, without holding a formal instrument of delegation under s.1299.

2. If this view be correct, where a question arises whether the officer who formed the requisite opinion and raised a debit under s.1224 had authority to do so, it will be necessary to consider evidence as to the nature and scope of the duties of the position which the officer held. In the present case this enquiry was not undertaken in the evidence placed before the AAT. Rather, the AAT assumed that in the absence of an instrument of delegation under s.1299 delegating power to Mr Rodda to act under s.1224 he could not validly do so.

3. In contrast with the terms of s.1224, the power in s.1237(1) to waive a debt is clearly a discretionary power, and it is one vested expressly in the Secretary. The exercise of the discretion is one that significantly affects the rights and liabilities of a person who is otherwise indebted to the Commonwealth. Moreover, the discretion is one that is likely to be exercised in a manner that implements broad policy objectives under the Act, and where applicable, directions of the Minister given under s.1237(3). These are considerations which favour the view that the discretionary power is to be exercised personally and not by an authorised officer in the name of the Secretary, but they are not decisive. Even if the power is one that must be exercised personally, it is one that may be delegated to an officer by instrument under s.1299, in which case the delegate must exercise the power personally.

4. In the present case the purported exercise of the waiver power, assuming that the decision made on 31 July 1991 incorporated a decision under s.1237(1), was made in the name of Ms Niehuss. The exercise of the discretion could not therefore be justified as an exercise of delegated power by Mr Rodda as he did not purport to act in his own name: re Reference under Section 11 of Ombudsman Act 1976 at 95. In any event the instrument of delegation identified by Mr Rodda as the source of his power to exercise the discretion under s.1237(1) as a delegate limited the delegation to an officer of his position to debts not exceeding $1,000. The debit raised against the respondent exceeded this sum, so Mr Rodda was plainly without power as a delegate to exercise the discretion in his own name. The suggestion that the instrument of delegation authorised Mr Rodda to waive debts up to $1,000, and to refuse to waive debts no matter what the amount is untenable. The proper exercise of the discretion required the decision-maker to decide whether or not the debt should be waived in whole or in part. If the decision-maker was without authority to decide to waive the debt, he was unable to exercise the power. If the exercise of the s.1237(1) discretion by the original decision-maker were to be within power, it would have to be on the ground that Ms Niehuss, as a delegate of the Secretary, could lawfully act through a properly authorised officer: cf O'Reilly v The Commissioner of the State Bank of Victoria where it was held that the powers conferred by s.264(1) of the Income Tax Assessment Act 1936 were not intended to be exercised only by the Commissioner or his delegate but might be exercised through a properly authorised officer. This question has not been explored so far in the proceedings. If the power under s.1237(1) is one that may be exercised through a properly authorised officer, it would be necessary to investigate the scope of the delegation to Ms Niehuss (in particular whether it extended to debts as great as that of the respondent), and also the extent of the powers and functions carried out by officers in the position of Mr Rodda acting in the course of and within the authority of that position. These matters were not covered by the evidence adduced before the AAT.

1. The appeal should be allowed. The matter must be remitted to the AAT with a direction that the AAT decide the application for review of the decision of the SSAT.

2. The Court will receive written submissions from the parties as to the appropriate orders for the costs of the appeal.