Secretary, Department of Social Security v Schofield, L.M

Re: SECRETARY, DEPARTMENT OF SOCIAL SECURITY
And: LYNELLE MARGARET SCHOFIELD
No. WA G116 of 1991
FED No. 547
Administrative Law
(1992) 27 ALD 619

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Lee J.(1)

CATCHWORDS

Administrative Law - Social Security - review of decision of AAT confirming decision of SSAT to grant special benefit to person ceasing full-time course of education due to illness - whether exercise of discretion by AAT miscarried due to error of law.

Administrative Appeals Tribunal Act 1974 s.44

Social Security Act 1947 ss.117, 125, 126, 127, 129, 183, 205; sub-ss.127(2), (3), (5), (9), 129(2); paras.127(1)(a), 129(1)(c)

Social Security Act 1991 Pt.6.4; s.729; sub-ss.23(1), 1283(1); cl.15 of Schedule 1A; sub-cl.3(1) of Schedule A, sub-cll.15(2), 15(3) of Schedule 1A

Social Security (Rewrite) Transition Act 1991 s.4

Esber v. The Commonwealth (1992) 66 ALJR 373

House v. The King (1936) 55 CLR 499

Klein v. Domus Pty. Limited (1963) 109 CLR 467

Nevistic v. Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639

Reg. v. Anderson; Ex parte Ipec-Air Pty. Limited (1965) 113 CLR 177 Whim Creek Consolidated N.L. v. Colgan (1989) 25 FCR 50

HEARING

PERTH

#DATE 30:7:1992

Counsel for the Applicant: Ms R.A. Layton

Solicitor for the Applicant: Australian Government Solicitor

Counsel for the Respondent: Mr S.A. Walker

Solicitor for the Respondent: Mr S.A. Walker

ORDER

THE COURT ORDERS AND DECLARES THAT:

1. The application be dismissed.

2. By consent there be no order as to costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal under s.44 of the Administrative Appeals Tribunal Act 1974 from a decision of the Administrative Appeals Tribunal ("the Tribunal") which affirmed a decision made by the Social Security Appeals Tribunal ("the SSAT") on 19 June 1991 that a special benefit pursuant to s.129 of the Social Security Act 1947 ("the Act") be paid to the respondent. The decision of the SSAT set aside a decision of the applicant ("the Secretary") not to pay the respondent that benefit.The pertinent facts are not in dispute.

The respondent is now 20 years of age. She left secondary school at 16 and commenced a three year course at a College of Technical and Further Education obtaining an Asssociate Diploma of Business. Apparently she obtained regular part-time employment in the course of her studies which contributed approximately $50 per week towards her upkeep. She continued to live at home and was supported by her parents. In December 1989 she commenced full-time employment as an accounts clerk. After the first month of employment she commenced to pay board to her parents in the amount of $50 per week. The Tribunal found that although such payments were not made pursuant to a contractual obligation there was a family expectation that the payment would be made and received. In due course, for reasons about to be stated, the respondent fell into arrears in the payment of board.
On 21 January 1990 the respondent suffered several injuries as a result of a motor vehicle accident. She was admitted to a public hospital for a period of two and a half weeks and then spent two weeks' convalescence at home. She suffered quite severe injuries: both ankles were fractured and fractures were sustained to her finger, ribs and cheek bone. Partly because of the desire to retain the job she had held for only five weeks and partly because she was not entitled to any payment from her employer in the period of her absence from work, the respondent resumed employment after a short period of convalescence and contrary to medical advice that she would not be fit for employment for three months.
After three months the severe ankle fracture had not healed and it was necessary to undergo further surgery. She was admitted to hospital for one week and spent another week in convalescence after surgery. She then returned to her employment. She did not receive any sickness leave payment from her employer for that period.
In January 1991 Miss Schofield was admitted to hospital once more, this time for an operation to fuse the ankle joint. She was discharged from hospital after one week and certified unfit for work for the following two and a half months. She was permitted by her employer to take sick leave without pay. Miss Schofield applied for and was granted a sickness benefit under the Act. She continued to pay board to her parents of $50 per week. On 25 February 1991 she resigned to commence full-time studies at Curtin University.
Miss Schofield advised the Department of Social Security ("the Department") of her intention to commence full-time studies. Payment of the sickness benefit ceased upon commencement of those studies.
However, Miss Schofield continued to have trouble with her ankle and in April 1991 a stress fracture was diagnosed and the leg was re-encased in plaster. At the same time Miss Schofield began to exhibit worsening systems of a condition described as anoxeria nervosa. In April 1991 she consulted a physician who was satisfied that Miss Schofield could not cope with her studies and that she required intensive treatment for her psychological problems. Accepting that advice Miss Schofield withdrew from her university course and on 16 April 1991 applied for the payment of sickness benefit. The application for a sickness benefit was accompanied by a medical certificate which stated that by reason of the condition of anorexia nervosa and psychological problems Miss Schofield would be unfit for employment for two months. Later that month Miss Schofield consulted a psychiatrist who provided the following report on her condition on 29 May 1991:

"I have been seeing Lynelle Schofield since the 30 April of this year for management of an eating disorder. Specifically, Lynelle has a condition called bulimia nervosa which is characterised by episodic bingeing and vomiting. This is a condition which tends to occur in females in late adolescence and early adult life which has a significant morbidity and mortality attached to it, and which can certainly be precipitated or exacerbated by undue stress. In Lyn's current situation, she faces a number of stresses which relate to both emotional and family issues but also to her financial situation. It is my opinion that financial insecurity at the moment is aggravating her psychological problem and, as such, I feel that from a psychological view point, it would be in Lynelle's best interest for this situation to be resolved."

The financial problems to which the psychiatrist referred were those relating to a lack of income and continuing liabilities for board and for substantial medical expenses.

On 10 May 1991 Miss Schofield suffered another stress fracture in the same injured leg which was again immobilized in plaster for another six weeks.
The application for sickness benefit was granted from 16 April 1991 but was subject to deferment for a period of thirteen weeks, the first payment not to be made until 15 July 1991.
On 13 May 1991 Miss Schofield lodged a claim for the payment of a special benefit under the Act. The claim was rejected. Miss Schofield applied to the SSAT for a review of the decision to reject her claim. On 19 June 1991 the SSAT set aside the decision of the Department and decided that a special benefit was payable from 13 May 1991, the date of application for the benefit. On 15 July 1991 the Secretary lodged with the Tribunal an application for review of the decision of the SSAT.
On 1 July 1991 the Act was repealed by the Social Security (Rewrite) Transition Act 1991 (s.3). By sub-cl.3(1) of the Savings and Transitional Provisions of Schedule 1A of the Social Security Act 1991, inserted by s.4 of the Social Security (Rewrite) Transition Act 1991, a determination granting a benefit under the Act has effect from 1 July 1991 as if it were a determination under the Social Security Act 1991. The terms of s.183 of the Act suggest that a decision of the SSAT under the Act is a determination for the purpose of the above clause and is, therefore, a decision, as defined in sub-s.23(1) of the Social Security Act 1991, for the purpose of Pt.6.4 of that Act. Clause 15 of Schedule 1A of the Social Security Act 1991 provides that an application for review made to the Tribunal under sub-s.205(1) of the Act before 1 July 1991 and not determined before 1 July 1991 has effect from 1 July 1991 as if it were an application for review made under sub-s.1283(1) of Pt.6.4 of the Social Security Act 1991. Sub-cll.15(2) and 15(3) of Schedule 1A confirm that a decision upon such an application may have effect from a date before 1 July 1991 and if the decision has such effect it is to be treated for the period to 30 June 1991 as if it were a decision made under the relevant provisions of the repealed Act. It appears to be the intent of the Social Security Act 1991 that the right provided by s.205 of the Act to seek a review by the Tribunal of a determination or decision made under the Act that has not been availed of and has been extinguished by the repeal of the Act, be replaced by the right to apply to the Tribunal provided by Pt.6.4 of the Social Security Act 1991. (cf. Esber v. The Commonwealth (1992) 66 ALJR 373.)
It follows that the application made to the Tribunal on 15 July 1991 was made under sub-s.1283(1) of the Social Security Act 1991 and that Act applied to the application. It may be noted that Pt.6.4 of the Social Security Act 1991 does not repeat the provisions of sub-cll.15(2) and 15(3) of Schedule 1A and it seems to have been overlooked that an application for review under that Part may be in respect of a decision made under the repealed Act and involve a retrospective date of effect for the decision of review.
It was not submitted to the Tribunal or to this Court that provisions other than those set out in the repealed Act were to be considered by the Tribunal. A like provision to s.129 of the repealed Act is to be found in s.729 of the Social Security Act 1991 but s.729 is not a simple re-enactment of s.129. No argument was addressed to the Court that consideration of the terms of s.129 necessarily led the Tribunal to misunderstand or misapply the relevant statutory provisions in determining the application for review.
The provisions of the Act considered by the Tribunal were as follows:

"117(1) Subject to this Part, a person (not being a person in receipt of a pension under Part IV or V, or Schedule 1B or an allowance under Part VI or XIV) is qualified to receive a sickness benefit in respect of a period (in this subsection referred to as the 'relevant period') if -

(a) the person attains or had attained the age of 16 years on or before the commencement of the relevant period and, being a man, had not attained the age of 65 years, or, being a woman, had not attained the age of 60 years, before the end of the relevant period;

(b) the person was an Australian resident and in Australia throughout the relevant period and on the day on which the person lodged the claim for the benefits;

(c) the person -

(i) satisfies the Secretary that, throughout the relevant period, he was incapacitated for work by reason of sickness or accident (being an incapacity of a temporary nature) and that he has thereby suffered a loss of salary, wages or other income; or

(ii) not being a person who is qualified to receive sickness benefit by virtue of the operation of subsection (2), satisfies the Secretary that, throughout the relevant period, he was incapacitated for work by reason of sickness or accident (being an incapacity of a temporary nature) and that he would, but for the incapacity, be qualified to receive an unemployment benefit in respect of the relevant period. 117(1A) A person who is temporarily absent from Australia shall be treated, for the purposes of subsection (1), as if the person were in Australia:

(a) if the period of temporary absence is not longer than 3 months - throughout that period; or

(b) in any other case - throughout the first 3 months of that period.

117(2) Where -

(a) a person who is receiving -

(i) an invalid pension under Part IV;

(ii) a sheltered employment allowance under Part XIV; or

(iii) a rehabilitation allowance under Part XVI and who was, immediately before he became eligible to receive that allowance, eligible to receive an invalid pension under Part IV, a sheltered employment allowance under Part XIV or a sickness benefit,

ceases to receive that pension or allowance (in this subsection referred to as the 'relevant pension or allowance'); and

(b) the person (in this subsection referred to as the 'relevant person') would, immediately upon ceasing to receive the relevant pension or allowance, be qualified under subsection (1) to receive a sickness benefit in respect of a period if 'and that he has thereby suffered a loss of salary, wages or other income' were omitted from subparagraph (1)(c)(i), the relevant person is qualified to receive a sickness benefit in respect of that period and, for the purposes of the application of paragraph 121(1)(a) in relation to the relevant person -

(c) in a case where a pension under Part IV was, immediately before the relevant person ceased to receive the relevant pension or allowance, payable to another person by reason of the relevant person being in receipt of the relevant pension or allowance - the aggregate of the amount of the relevant pension or allowance and the amount of that pension under Part IV; and

(d) in any other case - the amount of the relevant pension or allowance, shall be deemed to be salary, wages or other income that the person has lost by reason of his incapacity. 117(3) Where, by reason of section 125, a sickness benefit is payable only after the expiration of a particular period (in this subsection referred to as the 'waiting period'), then, for the purposes of the application of subsection (1) of this section in relation to a relevant period that immediately followed the waiting period, that subsection has effect as if-

(a) the reference to the commencement of the relevant period in paragraph (1)(a) were a reference to the commencement of the waiting period; and

(b) the references to the relevant period in paragraphs

(1)(b) and (c) were references to the period constituted by the aggregate of the waiting period and the relevant period. 117(4) A person is not qualified to receive a sickness benefit in respect of a period of incapacity if the Secretary is satisfied that the incapacity was brought about with a view to obtaining a sickness benefit.

117(5) Where the Secretary is satisfied that:

(a) a person who is in receipt of a sickness benefit that was granted before 2 August 1982;

(b) a person who is in receipt of a sickness benefit and who, immediately before commencing to receive that benefit, was in receipt of an unemployment benefit that was granted before 1 November 1977; or

(c) a person who is in receipt of a sickness benefit and who, immediately before commencing to receive that benefit, was in receipt of a prescribed pension the last payment of which was in respect of a period that ended after the day on which the payment was made; may reasonably be expected to fulfil, or has fulfilled, the requirements of the preceding provisions of this section in respect of a period, the person is qualified to receive a sickness benefit in respect of that period. 117(6) Where a payment is made by a person to another person who acts as his substitute during any period of incapacity, the Secretary may, for the purposes of subsection (1), if he is satisfied that the payment was made justifiably and bona fide, regard the first-mentioned person as having suffered a loss of income equal to the amount of that payment. 117(7) For the purposes of this section, the income of a person includes:

(a) a payment received by the person under the New Enterprise Incentive Scheme; and

(b) any amount payable to the person or to the person's spouse under Part IX.

...

127(1) Subject to this section, where a person (not being a person who is receiving a prescribed pension) who is undertaking a course of education of at least 6 months' duration on a full time basis ceases to undertake that course on or after 1 September 1987 and lodges a claim for an unemployment benefit or a sickness benefit within 6 months after so ceasing, an unemployment benefit or a sickness benefit, as the case may be, is not payable to the person in respect of any period of unemployment or incapacity for work during:

(a) if the person is an unmarried person who is under the age of 21 years and has no dependants and is not a person to whom paragraph (b) or (c) applies - the period of 13 weeks commencing on the day (in this subsection called the 'lodgment day') on which the person lodged that claim;

(b) if the person ceases to be a person to whom paragraph (a) applies before the end of 6 weeks after the lodgment day - the period of 6 weeks commencing on the lodgment day;

(c) if the person ceases to be a person to whom paragraph (a) applies after the end of 6 weeks after the lodgment day but before the end of 13 weeks after that day - the period commencing on the lodgment day and ending on the day on which the person so ceases; or

(d) in any other case - the period of 6 weeks after the lodgment day.

127(1A) Subsection (1) does not apply in relation to a claim for unemployment benefit or sickness benefit lodged by a person where:

(a) immediately before starting to undertake the course of education concerned, the person was in receipt of unemployment benefit or sickness benefit; and

(b) the person had been continuously in receipt of unemployment benefit or sickness benefit since the end of a period during which unemployment benefit or sickness benefit was not payable to the person because of subsection (1); and

(c) the claim was lodged within 4 weeks after the person started to undertake the course of education concerned. 127(2) Where a person to whom paragraph (1)(a) applies had, at any time after ceasing to undertake the course of education, been employed on a full time basis, the period referred to in that paragraph shall be reduced by so much of that period of employment as does not exceed 13 weeks. 127(3) Where a person to whom paragraph (1)(b) or

(d) applies had, at any time, been employed on a full time basis, the period referred to in that paragraph shall be reduced by so much of that period of employment as does not exceed 6 weeks. 127(4) For the purposes of subsection (1), where a person is, under another section of this Act, deemed to have lodged a claim for an unemployment benefit on a day before the day on which the person actually lodged the claim, that earlier day shall be taken to be the lodgment day. 127(5) For the purposes of subsection (2) and (3), any period commencing after a person ceases to undertake a course of education during which the person has been paid special benefit shall be taken to be a period during which the person is engaged in full time employment.

127(6) Where paragraph (1)(a) ceases to apply to a person as mentioned in paragraph (1)(b) or (c) otherwise than because the person attains the age of 21 years, an unemployment benefit or a sickness benefit is not payable to the person in respect of any period of unemployment or incapacity for work before:

(a) the end of the period of 13 weeks referred to in paragraph (1)(a); or

(b) the person notifies the Department that the person has ceased to be a person to whom paragraph (1)(a) applies; whichever first occurs.

127(7) Where:

(a) subsection (1) applies to a person;

(b) an unemployment benefit or a sickness benefit would not, under this section, be payable to the person during a particular period; and

(c) that period is longer than the period (in this subsection referred to as the 'shorter period') commencing on the day on which the person actually lodged the claim for the unemployment benefit and ending at the end of 6 months after the person ceased to undertake the course of education;

the shorter period shall be treated as the period during which an unemployment benefit is not payable to the person under this section.

127(7A) Where:

(a) subsection (1) applies to a person who has lodged a claim for unemployment benefit or sickness benefit; and

(b) the person started to undertake the course of education concerned at a time when unemployment benefit or sickness benefit was not payable to the person because of a previous operation of subsection (1); and

(c) the claim was lodged within 4 weeks after the person started to undertake the course of education concerned; subsection (1) applies to the person in relation to that claim as if the reference in the applicable paragraph of subsection

(1) to 13 weeks or 6 weeks, as the case may be, were a reference to that period reduced by the period starting when subsection (1) previously started to apply to the person and ending when the person started to undertake the course of education concerned.

127(8) For the purposes of subsection (1) of this section, section 116 and subsection 125(2), where a person to whom subsection (1) applies registered with the Commonwealth Employment Service as being unemployed before ceasing to undertake the course of education, the person is to be taken to have become so registered on the last day on which the person was undertaking the course. 127(9) For the purposes of subsection (1) and subsection 125(3), where a person to whom subsection (1) applies became incapacitated while undertaking the course of education, the person is taken to have become incapacitated on the last day on which the person was undertaking the course. 129(1) Subject to subsections (2) and (3), the Secretary may, in his discretion, grant a special benefit under this Division to a person -

(a) who is not in receipt of a pension under Part IV or V or Schedule 1B, an allowance under Part VI or XIV or a rehabilitation allowance under Part XVI;

(b) who is not a person to whom an unemployment benefit or a sickness benefit is payable; and

(c) with respect to whom the Secretary is satisfied that, by reason of age, physical or mental disability or domestic circumstances, or for any other reason, that person is unable to earn a sufficient livelihood for himself and his dependants (if any).

129(2) A special benefit is not payable to a person in respect of a period if -

(a) the person is not qualified to receive an unemployment benefit in respect of that period by reason of paragraph 116(1)(d) or subsection 116(5) or (6A); or

(b) an unemployment benefit is not payable to the person in respect of that period by reason of section 126. 129(3) A special benefit is not payable to a person in respect of a period unless:

(a) the person is a resident of Australia throughout that period; and

(b) the person is not, at any time during that period, an illegal entrant within the meaning of the Migration Act 1958."

Until amended on 20 September 1990 s.127 did not apply to a claim for a sickness benefit. After that date para.127(1)(a) provided, inter alia, that a person under 21 years of age and unmarried and forced to withdraw from a full-time course of education of at least six months' duration because of serious illness or injury was not entitled to receive a sickness benefit for the period of thirteen weeks which followed the day of lodgment of a claim for that benefit.
Pursuant to s.117 a person over 16 years of age incapacitated for work by reason of sickness or accident thereby suffering a loss of salary, wages or other income was qualified to receive a sickness benefit.
By sub-s.127(2) an unmarried person under 21 years of age could reduce the disqualifying period of thirteen weeks by applying to it any period of full-time employment engaged in after ceasing a full-time course of education. Under sub-s.127(3) a person over 21 or married was entitled to reduce the disqualifying period of six weeks that would otherwise apply to such a person by applying to it a period of full-time employment engaged in at any time. No such credit was available to an unmarried person under 21 years of age who may have worked full-time before commencing a full-time course of education.
Sub-section 127(9) contained oblique recognition of the prospect of sickness or accident which occasioned incapacity also being the cause of cessation of a full-time course of education and sub-s.127(5), inserted by an amendment to the Act which also took effect from 20 September 1990, acknowledged that a person to whom para.127(1)(a) applied may thereafter receive a special benefit under s.129 in which event the period of payment of that benefit was to be taken to be equivalent to a period of engagement in full-time employment for the purpose of sub-s.127(2).
No doubt the purpose of the disqualifying periods applied by s.126 and s.125 to persons who became unemployed by choice or fault or voluntarily ceased a full-time course of education was to discourage such persons from regarding the receipt of a benefit under the Act as an alternative to continuing in employment or in a course of education which may improve the prospect of employment. However, when broad provisions such as those contained in s.127 which extend to reducing eligibility for the payment of a sickness benefit in periods of incapacity for employment are considered, due regard must be given to the fact that unlike s.126, which imposed various limitations upon eligibility for the payment of an unemployment benefit, the Act imposed no such restrictions upon eligibility for the payment of a sickness benefit under s.117 of the Act. Accordingly, the provisions of s.129 which provided the Secretary with a wide discretion to grant the payment of a special benefit became all the more important in ensuring that the operation of s.127 of the Act was not unduly harsh or penal in its consequences. The discretion vested in the Secretary was provided for the clear purpose of alleviating hardship or ameliorating what would otherwise be unnecessary harshness in the operation of the Act.
Obviously a full-time student forced to cease his or her full-time course of education by reason of an incapacitating sickness or injury of indefinite duration would be a person whose circumstances would be required to be considered under the provisions of s.129. Clearly, the amendment to s.127 increased the prospect of hardship occurring in such cases and thereupon s.129 had an additional function to perform in respect of such cases after 20 September 1990.
Sub-section 129(2) expressly excluded a discretionary payment of a special benefit to a person not entitled to receive an unemployment benefit in respect of that period by reason of the provisions of s.126, namely the disqualifying period which followed voluntary cessation of work, unemployment resulting from misconduct as a worker, refusal to accept employment or cessation of registration for employment. But s.129 imposed no limitation upon the discretion to make a payment of special benefit to a person who had ceased a full-time course of education. At the relevant time the rate of sickness benefit payable to a person over 18 years of age and under 21, unmarried and living "at home" was $74.50 per week, approximately $40 per week less than the rate payable to a person of like age and status not living "at home". Pursuant to s.129 of the Act the maximum amount of special benefit payable to a claimant at the discretion of the Secretary was the amount of sickness benefit the applicant would have been entitled to receive. Therefore, the maximum amount of special benefit payable to Miss Schofield was $74.50 per week. It may be concluded that the limitation upon the amount of benefit payable already took into account the contribution made by the parents or received by the claimant by virtue of the claimant staying "at home".
Miss Schofield's injury and subsequent treatment caused her to incur substantial medical and ancillary expenses over and above refunds provided by private insurance and Medicare.
The printed form provided by the Department for application for a special benefit requested a claimant to supply details of the monies to which the claimant had access. The form did not request a statement of any current liabilities.
In the form completed by Miss Schofield she disclosed that she had a sum of $3,000 in a bank account and a sum of $1,000 in "other investments". The latter sum was treated as part of Miss Schofield's available cash assets by the Tribunal and by preceding decision-makers but the evidence before the Tribunal indicated that the sum referred to consisted of several investments made by Miss Schofield's grandmother in Miss Schofield's name controlled and maintained by the grandmother until Miss Schofield reached the age of 21. It was apparent that the grandmother had no intention of completing a gift until Miss Schofield reached that age and Miss Schofield had no claim upon, or access to, the deposit notwithstanding that it stood in her name. It would appear that the sum was either an unperfected gift or a declared trust and that the deposits maintained by the grandmother should not have been included in the reckoning of Miss Schofield's current assets.
When the matter came on for hearing before the Tribunal Miss Schofield had incurred approximately $4,000 in medical costs and had borrowed $3,000 from her parents to meet those liabilities. She had repaid her parents $1,500 of that sum in May 1991. She had continued to incur regular medical costs of $52 per week. Miss Schofield was unable to pay board because of the extra medical expenses she had incurred and her continued incapacity for employment, however, the evidence before the Tribunal was of an expectation by the parents that Miss Schofield would make good the "arrears" of board when she was able. Mr Schofield was 57 years of age but was only able to engage in casual employment for one and a half days a week. Mrs Schofield was employed and earned $306 net per week.
At the time the matter came on for hearing before the Tribunal in August 1991 the disqualifying period of thirteen weeks from the date of lodgment of the application for special benefit had expired and determination of the issue involved a retrospective exercise. At that time it was a fact that the applicant was still totally incapacitated for employment and had been so since ceasing her full-time course of education and that she had exhausted her savings.
It was conceded by the Secretary before the Tribunal and this Court that Miss Schofield satisfied the provisons of para.129(1)(c) in that she was unable to earn a sufficient livelihood for herself.
In arriving at its decision the Tribunal had regard to Miss Schofield's circumstances, including the facts set out in the medical report dated 29 May 1991 to which I have previously referred, guidelines prepared and published by the Department, opinions expressed in prior decisions of the Tribunal and the general scope and purpose of s.129 in the context of the objects and purposes of the Act.
An appeal to this Court under s.44 of the Administrative Appeals Tribunal Act 1974 is limited to a question of law.
The question of law raised by the Secretary was whether the Tribunal had erred in law by having regard to matters that were extraneous to the exercise of the discretion provided by s.129 resulting in a miscarriage of that discretion. The task undertaken by the Secretary is one of well-known difficulty. (See House v. The King (1936) 55 CLR 499.) Although House was concerned with the exercise of an appellate jurisdiction in respect of the exercise of a judicial discretion and not original jurisdiction in respect of the exercise of an administrative discretion, the following statement at pp 504-505 is apposite:

"It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance."

The Tribunal expressed its understanding of the nature of the discretion to be exercised as follows:

"19. Reference to the guidelines set forth in the Manual is in many instances a proper starting point for the exercise of a discretion such as that contained in s.129(1) of the Act. Although the guidelines are not enshrined and given statutory force in the Act, as has been observed by the Tribunal in the past:

'it is appropriate that guidelines for the assistance of departmental officers responsible for the day to day exercise of discretion be formulated from time to time to accord with policy. The guidelines have no legislative force. They are not "set in stone", but provide an administrative guide and a basis for the decision maker to exercise his or her discretion. They are no more than that "(Deputy President B Forrest in re Secretary, Department of Social Security and David (Decision No 5783, 23 January 1990, p8)).' Similar views about the place of the departmental administrative guidelines were expressed by Senior Member A Hall in Te Velde (supra, at N116).

20. In the present case, on first acquaintance, one can see some sense in the guidance provided by the Manual. In relation to a person requiring assistance by way of special benefit for a period of no longer than 3 months, it would seem not unreasonable to expect a person to have recourse to cash or other realisable assets which are readily accessible by that person.

21. Furthermore, behind the somewhat mechanical formula set forth in the Manual concerning recourse to available liquid funds, a wider rationale is discernible. Although the discretion to grant special benefit is not controlled by any particularised factor or consideration - so that in a sense there are no limits on the discretion set forth in s.129 - nevertheless the decision-maker, when assessing the circumstances of an applicant, must have regard to the essential nature of the benefit considered within the framework and object of the Social Security legislation (Water Conservation and Irrigation Commission (NSW) v Browning (1947) 74 CLR 492; O'Sullivan v Farrer

(1989) 89 ALR 71) re David supra, p8). As Mason J (as he then was) said in Minister for Aboriginal Affairs v Peko Wallsend Ltd (1986) 162 CLR 24, at 39-40: 'If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act.' The nature of the benefit, viewed purposively, has been identified as a 'safety net' (re Guven and Director-General of Social Services (1983) 5 ALN N373), directed to ensuring 'very fundamental levels of support' (re Beames and Director-General of Social Services

(1981) 3 ALN N84) though at a standard something more than mere survival (re Spooner and Secretary, Department of Social Security (1985) 8 ALD 80, 89). Therefore, if special benefit, in the short term at least, is intended to furnish a means of sustaining someone's physical existence pending a more permanent resolution of that person's needs, there is no basis for extending relief if that person has adequate resources of his or her own. That understanding is reflected in the Manual."

The Secretary did not contend that in the above paragraphs the Tribunal displayed a misunderstanding of the nature of the discretion available to it other than to suggest that the Tribunal's parenthetic reference to a lack of limitation on the discretion set out in s.129 was inappropriate. A reading of the relevant paragraph shows the caveat to be without weight.
An appropriate starting point in reviewing the Tribunal's exercise of discretion is the observation by Dixon C.J. in Klein v. Domus Pty. Limited (1963) 109 CLR 467 at p 473:

"We have invariably said that wherever the legislature has given a discretion of that kind you must look at the scope and purpose of the provision and at what is its real object. If it appears that the dominating, actuating reason for the decision is outside the scope of the purpose of the enactment, that vitiates the supposed exercise of the discretion. But within that very general statement of the purpose of the enactment, the real object of the legislature in such cases is to leave scope for the judicial or other officer who is investigating the facts and considering the general purpose of the enactment to give effect to his view of the justice of the case."

The Secretary contended that the dominating, actuating reason for the Tribunal's decision was a consideration of medical and social grounds pertinent to Miss Schofield and that such considerations were outside the scope and purpose of s.129 of the Act.
It was said that the Tribunal failed to restrict itself to financial considerations. It was said that once it was conceded, as it was in this case, that the applicant for special benefit met the criteria set by s.129 for the exercise of the discretion, the remaining question for the decision-maker was whether the applicant was able to obtain a sufficient livelihood without the payment of a special benefit notwithstanding that the applicant may not be able to earn such a livelihood. It was further contended that had the guidelines of the manual been followed, matters such as Miss Schofield's liability to her parents for board and repayment of monies borrowed to discharge medical expenses and the prospect of future medical expenses would have been disregarded and no regard given to Miss Schofield's physical and psychological circumstances.The Secretary placed particular weight on the need for "consistency" in the exercise of the discretionary power.
In respect of the issue of consistency, it is important that there be no confusion as to what should be consistent in the exercise of a broad discretionary power. By its very nature such a power is intended to cover a myriad of ever changing circumstances. It is not the outcome of the exercise of such a power that is to be consistent but the application of appropriate principles in the use of the power. Only by the adherence to consistency in that regard can the exercise of the power be seen to be lacking arbitrariness and tending to just and acceptable results.
As Deane J. said in Nevistic v. Minister for Immigration and Ethnic Affairs (1981) 34 ALR 639 at p 647:

"...while consistency may properly be seen as an ingredient of justice, it does not constitute a hallmark of it. As Smithers J pointed out in Re Gungor and Minister for Immigration and Ethnic Affairs (Administrative Appeals Tribunal: 30 May 1980), consistency must ultimately be related to policy and is safely sought by reference to policy only when the policy is appropriate and acceptable. Decision makers may be consistently wrong and consistently unjust. The Tribunal is not bound by either its own previous decisions or by the content of government policy. There have been and will be cases in which the Tribunal concludes that it should refuse to follow a previous decision of the Tribunal or reject or disregard the dictates of a relevant policy of the government. The existence of such cases serves to emphasize the fact that each applicant to the Tribunal is entitled to have his or her application for review decided on its own particular merits. The desire for consistency should not be permitted to submerge the ideal of justice in the individual case."

The question, therefore, is whether the Tribunal exercised its discretion in this matter according to rules of reason and justice or did it descend to private opinion or disposition. (See Reg. v. Anderson; Ex parte Ipec-Air Pty. Limited (1965) 113 CLR 177 per Kitto J. at p 189.)
The first point to note is that the Tribunal did not disregard the guidelines as irrelevant or providing no assistance. It had due regard to the reason why such guidelines had been formulated, the experience behind them and the assistance that they could provide. Quite properly the Tribunal noted that the guidelines did not become the form of the discretion to be exercised nor bind the Tribunal in any way. The reasons of the Tribunal show that it was conscious that the guidelines prepared by the Department put flesh on the bones of the discretion provided by the Act and it had no misunderstanding of the assistance the guidelines could provide. It is obvious that the Tribunal understood that the role of s.129 was to provide a benefit of last resort and not a simple entitlement to a benefit for an applicant ineligible to receive a benefit under other provisions of the Act. It was very conscious of the fact that it was looking at the particular circumstances of Miss Schofield and that the outcome of her application would turn on its own special facts and have little or no bearing on the determination of other applications under that section.
When the Tribunal had regard to the funds on which Miss Schofield could draw whilst the disqualifying period elapsed and had regard to deferred as well as current liabilities of Miss Schofield, in particular the continuing and regular incurring of medical expenses, the Tribunal did so as part of a total consideration of Miss Schofield's circumstances.
Such considerations are not wholly extraneous to the exercise of a discretion as to whether a benefit should be paid to Miss Schofield and certainly it cannot be said that the manner in which those considerations were treated involved a dominating or actuating reason outside the scope or purpose of the enactment.Similarly, the Tribunal's consideration of the causes of Miss Schofield's incapacity for employment occasioning her cessation of a full-time course of education and the fact that the extent of her financial commitments and lack of income were exacerbating her condition of psychological disturbance and would continue to contribute to her incapacity to earn a livelihood, were relevant matters for the Tribunal to take into account in exercising its discretion. Such matters were thoroughly and properly assessed by the Tribunal and not dealt with to the exclusion of all other considerations. No error of law can be demonstrated in such a process.
As Miss Schofield stood before the Tribunal in August 1991 she was a person who had suffered a long period of incapacity for employment, incurring medical expenses that would and did drain her finances leading to a clear exacerbation of her medical condition. It was not contended that in having regard to those circumstances the Tribunal arrived at a decision that was so unreasonable that on its face the decision involved an error of law. In the end the Secretary's submissions come down to a challenge to the weight attributed by the Tribunal to aspects of Miss Schofield's particular circumstances and unless it is contended that a wholly unreasonable result ensued, such a challenge cannot involve a question of law. (cf. Whim Creek Consolidated N.L. v. Colgan (1989) 25 FCR 50.)
The Tribunal accepted the uncontested fact that Miss Schofield's incapacity for employment was exacerbated by the stress which resulted from an inability to earn income and that was a matter relevant to the exercise of the discretion. What weight the Tribunal gave to that element depended entirely upon the circumstances of the case. When looking at the scope and purpose of s.129, having regard to other provisions of the Act it would have been noted that a person, 21 years of age, with substantial savings after full-time employment, electing to cease full-time study within the period caught by s.127, would be able to reduce the disqualifying period of six weeks by applying the previous period of full-time employment against it if that person subsequently became incapacitated for employment by illness or accident after ceasing studies. No question of the extent of the assets available to that person would arise.
It cannot be said that it is beyond the scope and purpose of s.129 to exercise the discretion therein conferred by that section to grant a special benefit to a person totally incapacitated for employment incurring regular expenditure in the course of that incapacity and when the lack of ability to earn a sufficient livelihood is itself an exacerbation of the applicant's incapacitating condition. Of course, the fact that such an applicant is living at home with the benefit of parental assistance and support will be of great relevance and all competing elements will be duly weighed and balanced but once that procedure has been carried out a decision to grant a special benefit will not be beyond the ambit of the discretion provided by s.129. That other minds or differently constituted Tribunals may have decided otherwise does not in itself raise a question of law.

[1992] FCA 547

30 JULY 1992