Secretary to the Department of Social Security v Goudge, K.J
[1989] FCA 198
•05 MAY 1989
Re: THE SECRETARY TO THE DEPARTMENT OF SOCIAL SECURITY
And: KENNETH JOHN GOUDGE
No. ACT G 16 of 1988
FED No. 198
Administrative Law
COURT
IN THE FEDERAL COURT OF AUSTRALIA
AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY
GENERAL DIVISION
Neaves J.(1)
CATCHWORDS
Administrative Law - appeal from Administrative Appeals Tribunal - Social Security - Invalid pension - Claimant not qualified to receive pension at date of lodgement of claim or within three months thereafter - Determination by Tribunal that claimant qualified to receive pension at date of Tribunal's decision - Whether Tribunal entitled to consider claimant's qualification as at that date.
Administrative Appeals Tribunal Act 1975 (Cth), s.44(1)
Social Security Act 1947 (Cth), ss.158, 159
HEARING
CANBERRA
#DATE 5:5:1989
Counsel for the applicant : Mr R.B. Wilson
Solicitor for the applicant : Australian Government Solicitor
Counsel for the respondent : Mr I.W. Nash
Solicitor for the respondent : The Welfare Rights & Legal Centre
ORDER
The application be dismissed.
The applicant pay the respondent's costs of the application.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
The Secretary to the Department of Social Security ("the Secretary") has applied to the Court by way of appeal pursuant to s.44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) from a decision of the Administrative Appeals Tribunal. That decision was given upon an application made to that Tribunal pursuant to s.17 of the Social Security Act 1947 (Cth) ("the Act") by Kenneth John Goudge, the respondent to the proceeding in this Court.
The history of the matter begins on 3 June 1985 when the respondent lodged a claim (dated 3 May 1985) for the grant of an invalid pension under the Act. At that time s.24 of the Act, a provision within Division 3 of Part III, provided:
"24. (1) Subject to this Act, a person above the age of 16 years who is not receiving an age pension and -
(a) is permanently incapacitated for work or is permanently blind; and
(b) is residing in, and is physically present in, Australia on the date on which he lodges his claim for a pension, shall be qualified to receive an invalid pension."
A person was to be deemed to be permanently incapacitated for work if the degree of his permanent incapacity for work was not less than 85% (s.23). Subject to Division 4 of Part III of the Act, the rate of invalid pension was in each case to be a rate determined by the Secretary as being reasonable and sufficient, having regard to all the circumstances of the case, but was not to exceed the maximum rate fixed by or in accordance with the appropriate sub-section of s.28. Section 135TA(1) provided that the grant or payment of, inter alia, an invalid pension was not to be made except upon the making of a claim for that pension. A claim was to be made in writing in accordance with a form approved by the Secretary and lodged at an approved place or with an approved person (s.135TB(1)). The Secretary was, subject to the Act, to determine claims (s.135TA(3)). Section 135TB(2), so far as material, provided:
"(2) Where, on the day on which a claim for -
(a) a pension under Part III ....; or
(b) ....
is lodged, the claimant is not qualified to receive the pension .... but the claimant becomes qualified to receive the pension .... on a day (in this sub-section referred to as the 'relevant day') occurring not later than 3 months after that first-mentioned day, the Secretary may determine that the claim be treated as having been lodged on the relevant day, and, upon the making of that determination, the claim shall, for the purposes of section 39 ...., be deemed to have been lodged on the relevant day."
The reference to a pension under Part III included a reference to an invalid pension. Section 39 provided:
"39. Where an .... invalid pension .... is granted, it shall be paid from a date determined by the Secretary, but the date so determined shall not be prior to the date on which the claim for the pension was lodged or later than the first pension pay day occurring after the date on which the claim was lodged, except where the determination of the claim has been delayed by neglect or default on the part of the claimant, in which case the Secretary shall fix such later date of commencement as he considers reasonable in the circumstances."
The respondent submitted no medical report in support of his claim. He was examined by a Commonwealth Medical Officer who reported that he was not permanently incapacitated for work to the extent of at least 85%. The claim for the grant of a pension was rejected on 20 August 1985 by a delegate of the Secretary and the respondent was so informed by letter dated 27 August 1985.
There the matter rested until 1 May 1987 when the respondent lodged an appeal to a Social Security Appeals Tribunal against the decision made on 20 August 1985. By his appeal the respondent contended that he was eligible for the grant of an invalid pension from the date of the lodgement of his claim, viz. 3 June 1985. He did not submit any supporting medical evidence.
By provisions which came into operation on 5 September 1985, s.24 was amended by omitting "(1)" and substituting "invalid pension" for "pension" in par.(b), s.39 of the Act was repealed, s.135TB(2) was omitted and a new provision substituted and s.135TBA was inserted (see Social Security and Repatriation Legislation Amendment Act 1985 (Cth), ss.112, 113 and 120 and Schedule 4). Section 135TB(2) then provided:
"(2) Where -
(a) a claim is lodged for the payment of a pension under Part III ....;
(b) on the day on which the claim is lodged, the person is not qualified to receive the pension ....; and
(c) during the period of 3 months commencing immediately after the day on which the claim is lodged, there occurs a later day on which, if the claim had been lodged on the later day, the person would have been qualified to receive that pension .... or there occur 2 or more such later days, the claim shall, for the purposes of this Act, be deemed to have been lodged on that later day or on the earlier or earliest of those later days."
The effect of the amendment was to remove the discretion which formerly resided in the Secretary to determine that the claim be treated as having been lodged on the day on which the claimant became qualified to receive the pension. Further, the deeming provision was to apply "for the purposes of this Act" and not, as the provision previously read "for the purposes of section 39".
Section 135TBA contained the following provisions:
"(2) Where a person who is entitled to receive a pension is in Australia, an instalment of the pension is, subject to sub-section (3), payable to the person on each pension pay-day on which the person is so entitled.
(3)Where a person became entitled to receive a pension on a pension pay-day or pension pay-days that occurred before the day (in this sub-section referred to as the 'relevant day') on which, but for the operation of section 135TB, the person would have become entitled to receive that pension, any instalment of that pension that, but for this sub-section, would be payable to the person on that pension pay-day or those pension pay-days is payable to the person -
(a) if the relevant day is a pension pay-day - on the relevant day; or
(b) in any other case - on the first pension pay-day occurring after the relevant day."
It is by no means clear how s.135TBA(3) was to be applied in a case in which a person became entitled to an invalid pension. It is, however, unnecessary to explore that question for the purposes of this application.
Section 123(2) of the Social Security and Repatriation Legislation Amendment Act 1985 (Cth) provided:
"(2) Where -
(a) before the commencement of this section a claim was made and lodged in accordance with the requirements of the Principal Act as then in force for the payment to a person of a pension under Part III ....; and
(b) during the period commencing on the day on which the claim is lodged and ending immediately before the commencement of this section, no payment of the pension .... claimed has been made to the person or to another person on behalf of the person, the Principal Act as amended and in force after the commencement of this section applies to the claim for the payment to the person of the pension..."
The date of commencement of s.123 was 5 September 1985.
The next relevant amendment to the Act was effected by the Social Security Legislation Amendment Act 1986 (Cth) which inserted s.135TA(1A) reading as follows:
"(1A) For the purposes of sub-section (1), where a claim for a pension .... is made by or on behalf of a person and at the time the claim is made, the claim cannot be granted because the person is not qualified or eligible to receive that pension .... the claim shall, subject to sub-section 135TB (2), be deemed not to have been made."
That provision came into operation on 1 July 1986.
The appeal lodged on 1 May 1987 was considered by a Social Security Appeals Tribunal on 8 July 1987. The members of that Tribunal concluded that there was no evidence warranting a variation of the decision of the Commonwealth Medical Officer referred to above and recommended the dismissal of the appeal. On 24 July 1987 that recommendation was accepted by a delegate of the Secretary and the appeal was dismissed. The respondent was notified of that decision by letter dated 29 July 1987. The respondent then applied to the Administrative Appeals Tribunal for a review of the decision of the delegate.
Before the matter was considered by the Social Security Appeals Tribunal and by the delegate of the Secretary, certain relevant amendments to the Act had been made by the Social Security Amendment Act 1987 (Cth) and the Social Security and Veterans' Entitlements Amendment Act 1987 (Cth). Section 10 of the latter statute, a provision which came into operation on 1 July 1987, repealed s.23 and substituted a new section. By s.50 of the former statute (with which must be read s.5 of the latter statute), the provisions of the Act were renumbered with effect from 2 July 1987. As a result Part III became Part IV, s.23 became s.27, s.24 became s.28, s.28 became s.33 and ss.135TA and 135TB became ss.158 and 159. Although it may involve some repetition, it may be convenient to refer to the relevant parts of those sections in the form in which they stood on 2 July 1987.
Section 28, a provision within Division 3 of Part IV of the Act, provided that, subject to the Act, a person above the age of 16 years who was not receiving an age pension, who was permanently incapacitated for work and who was residing in, and physically present in, Australia on the date on which he lodged his claim for an invalid pension was qualified to receive an invalid pension. Section 27 provided:
"27. A person is permanently incapacitated for work for the purposes of this Division if:
(a) the degree of the person's permanent incapacity for work is not less than 85%; and
(b) that permanent incapacity, or at least 50% of that permanent incapacity, is directly caused by a permanent physical or mental impairment of the person.:
The reference to "this Division" was a reference to Division 3 of Part IV of the Act. Section 33 dealt with the rate of invalid pension payable. Its provisions need not be referred to in detail.
Section 158(1) provided that the grant or payment of, inter alia, an invalid pension was not to be made except upon the making of a claim for that pension. Section 159(1) provided that a claim was to be made in writing in accordance with a form approved by the Secretary and to be lodged at an office of the relevant Department or at a place, or with a person, approved for the purpose by the Secretary. Section 158(4) provided that the Secretary was, subject to the Act, to determine claims.
Section 158(2), so far as material, provided:
"(2) For the purposes of sub-section (1), where a claim for a pension .... is made by or on behalf of a person and at the time the claim is made, the claim cannot be granted because the person is not qualified or eligible to receive that pension ...., the claim shall, subject to sub-section 159(2), be deemed not to have been made."
Section 159(2), so far as material, provided:
"(2) Where -
(a) a claim is lodged for the payment to a person of a pension under Part IV ....;
(b) on the day on which the claim is lodged, the person is not qualified to receive the pension ....; and
(c) during the period of 3 months commencing immediately after the day on which the claim is lodged, there occurs a later day on which, if the claim had been lodged on the later day, the person would have been qualified to receive that pension ...., or there occur 2 or more such later days, the claim shall, for the purposes of this Act, be deemed to have been lodged on that later day or on the earlier or earliest of those later days."
Part IV of the Act provided for the payment of, inter alia, invalid pensions.
No relevant amendment to the legislation came into operation between 2 July 1987 and the date of the decision of the Administrative Appeals Tribunal ("the Tribunal") to which reference will now be made.
The matter was heard by the Tribunal on 8 and 9 March 1988. On 14 April 1988 the Tribunal gave its decision. It concluded that the Social Security Appeals Tribunal and the delegate of the Secretary were correct in saying that, on the material before them, "there was no evidence on which they could find that the applicant (respondent) was entitled to the invalid pension under the law as it then stood". The respondent has not challenged this conclusion.
The Tribunal's decision, after referring to the medical evidence before it, proceeded:
"11. The psychologist and the general practitioner gave evidence as to their examination of the applicant (respondent) during the latter half of 1987. I accept their evidence and on that evidence I find that the applicant (respondent) has now established that he is incapacitated to the requisite degree, as set out in section 23 of the Act. I also find that he had not established this at the time of application in 1985. In making these findings I have applied the decision in the Federal Court in McDonald's case."
The reference to McDonald's case is a reference to McDonald v. Director-General of Social Security (1984) 1 FCR 354. The Tribunal then directed its attention to the effect of those findings of fact. Reference was made to Re Tiknaz and Director-General of Social Services (1981) 4 ALN N44 and Re Easton and Repatriation Commission (1987) 6 AAR 558, which were relied on by the present respondent, and to Secretary to the Department of Social Security v. Riley (1987) 17 FCR 99, relied upon by the Secretary. Reference was also made to ss.27 and 159(2) of the Act. The Tribunal expressed the view that s.159(2) "only has the effect of deeming a date other than the date of lodgement in certain specific circumstances and does not repeal the general principle enunciated in Tiknaz and Easton's case". The decision continued:
"It was also submitted that Riley's case affects that principle. Riley's case turned on a question whether the Tribunal had jurisdiction to consider a question not in issue before the SSAT from which the appeal was brought. Here, what I am considering is the same issue that was considered by the SSAT and the delegate, merely considering all available evidence as at a different date. The principle is, of course, that the Tribunal stands in the place of the respondent and makes its own decision. It is not reviewing the decision of the respondent. I do not therefore think that sub-section 159(2) of the Act or Riley's case have the effect of preventing the Tribunal making a decision on the application of law to facts as those facts are established at the day of review by the Tribunal."
The Tribunal found, in terms of s.27, that, on the evidence presented to it, the respondent's permanent incapacity for work was not less than 85% and that the whole of that incapacity was directly caused by permanent physical or mental impairment of the respondent. Accordingly, the Tribunal set aside the determination of the delegate of the Secretary and remitted the matter to the Secretary with a direction that the respondent was not entitled to the invalid pension to the date of the Tribunal's decision but was entitled to that pension as from that date, viz. 1 April 1988.
From that decision the Secretary has appealed to this Court. Such an appeal lies only upon a question of law.
Counsel for the applicant made two separate, though closely related, submissions in support of his contention that the Tribunal had erred in law in reaching its decision. He submitted that, in deciding that the respondent was entitled to an invalid pension as from 14 April 1988, the Tribunal failed to give effect to ss.158 and 159 of the Act. The further submission was made that the Tribunal had no power to consider the question whether the respondent was, as at the date of its decision, qualified to receive an invalid pension.
Counsel for the respondent made submissions to the following effect -
(a) The relevant law to be applied by the Tribunal was the law in force at the date of the respondent's claim for an invalid pension, viz. 3 June 1985;
(b) Upon lodging his claim for an invalid pension on 3 June 1985 the Act as then in force gave the respondent a right which was not affected by the enactment, with operative effect from 1 July 1986, of s.135TA(1A), subsequently renumbered s.158(2), of the Act, that provision having no retrospective operation so as to affect claims already in existence and there being no relevant transitional provisions;
(c) There was no discretion to refuse the respondent an invalid pension if the relevant criteria were met at the date of the Tribunal's decision;
(d) Section 159(2) of the Act had no application to the circumstances of the respondent's case.
(e) There was, accordingly, nothing in the Act to preclude the Tribunal from assessing the respondent's entitlement to an invalid pension as at the date of the Tribunal's decision.
In essence, according to the submissions advanced on behalf of the applicant, it would have been open to the Tribunal, under the provisions of the Act as they stood at the date of its decision, viz. 14 April 1988, to find that the respondent was qualified to receive an invalid pension as from that date if, and only if, that date was coincidental with the date of lodgement by the respondent of a claim for such pension or was a date not later than three months after the date of lodgement of such a claim. This was said to be the result of the provisions of ss.158 and 159 of the Act and, in particular, of s.158(2). It was submitted that the Tribunal was bound to apply those provisions.
As appears from what has already been said, the jurisdiction of the Tribunal was invoked by the respondent seeking a review of the decision of the delegate of the Secretary made on 24 July 1987. That decision was given upon the review, at the instance of the respondent, of an earlier decision rejecting the claim lodged by him on 3 June 1985 for the grant of an invalid pension.
For the purpose of reviewing the decision of 24 July 1987, the Tribunal was, by virtue of the provisions of s.43 of the Administrative Appeals Tribunal Act 1975 (Cth), entitled to exercise all the powers and discretions conferred by any relevant enactment on the person who made the decision under review. The Tribunal was required by that section to make a decision in writing affirming or varying the decision under review or setting aside that decision and either making a decision in substitution for the decision so set aside or remitting the matter for further consideration.
The question then arises what were the powers and discretions conferred by the Act on the person who made the decision under review? I shall assume, for the purpose of considering that question, that the person who made the decision was the Secretary, so avoiding any limitation which might arise from the terms of the instrument of delegation (which is not in evidence) under which the decision of 24 July 1987 was made.
It is appropriate, I think, to approach the matter historically. In Re Tiknaz and Director-General of Social Services (supra) the Administrative Appeals Tribunal, constituted by Davies J., Mr Ballard and Dr Garlick, reviewed a decision not to grant Mr Tiknaz an invalid pension. In the result, the Tribunal set aside the decision under review and determined that Mr Tiknaz be granted an invalid pension as from 22 May 1980, the first pension day after the date of lodgement of his claim for such pension. Although it acknowledged that it was unnecessary to do so, the Tribunal dealt with, and rejected, a submission made on behalf of the Director-General that, if a claimant was not entitled to a pension or benefit at the time of the making of the claim, although circumstances might change so that the claimant became qualified to receive a pension or benefit before the decision on the claim was made, the claim could not be granted. The Tribunal in its reasons for decision said:
"One can hardly think that in the context of social welfare legislation, entitlement to benefit should depend upon strict compliance with provisions requiring the lodgement of a written application. The answer to Mr Cunliffe's submission is that the procedural provisions of ss.37 and 39 are directory only and do not preclude the Director-General from acting under s.7 of the Act, which confers upon him the general administration of the Act, so as to grant benefits and pensions notwithstanding that strict compliance with the procedural provisions of s.37 or s.39 would preclude him from doing so. In our opinion, the Director-General may grant a pension or benefit notwithstanding that no claim in writing is before him in the form approved. In a case where there is such a claim in writing before him but the pensioner is not then entitled, he may refuse that claim and may grant a pension from a subsequent date notwithstanding that no new form of claim has been lodged. He may also grant the claim from the date of entitlement without going through the formal step of refusing the written claim. This interpretation simply recognises that the Social Services Act is welfare legislation which should be administered beneficially and with common sense rather than by a strict insistence upon compliance with the provisions of s.37. As the Director-General was authorised to grant a pension to Mr Tiknaz as from the date of entitlement without requiring the lodgement of a further claim form, so also the Administrative Appeals Tribunal, which is empowered by s.43 to exercise all the powers and functions which are vested by the Social Services Act in the Director-General, may do so if, in the course of the proceedings before it, it comes to the view that there was not entitlement at the date of application but that there was entitlement at a later date."
The Tribunal was there concerned with the legislation in the form in which it stood between May 1980 and December 1981. The only provisions then in force which bore on the question discussed in the part of the decision cited above were ss.37 and 39. Section 37 required that a claim for an invalid pension be in writing, be supported by such a declaration as was approved by the Director-General and be lodged as prescribed. Section 39 was concerned with the date from which an invalid pension was to be paid and was not materially different from the text of that section set out earlier in these reasons.
It is now established by the majority decision of this Court (Davies and Gummow JJ., Burchett J. dissenting) in Formosa v. Secretary to the Department of Social Security (1988) 81 ALR 687 that the requirement in s.135TB(1), renumbered s.159(1), that a claim for an invalid pension is to be made in writing is mandatory. In the present case, that requirement was fulfilled by the lodging of a claim on 3 June 1985. There is, however, nothing in that case touching upon the question whether an invalid pension may be granted upon such a claim even though the claimant is not shown to have been qualified to receive the pension on the date of lodgement of the claim or on a date within three months thereafter.
The next question to be asked is whether the provisions of the Act in the form in which they stood following the amendments made by the Social Security and Repatriation Legislation Amendment Act 1985 (Cth) required the conclusion, contrary to that which would be consistent with what was said by the Tribunal in Re Tiknaz and the Director-General of Social Services (supra), that an invalid pension could only be granted if the claimant was qualified to receive the pension on the date of lodgement of the claim or within three months thereafter.
In my opinion, the amendments effected by the Social Security and Repatriation Legislation Amendment Act 1985 (Cth) did not have the effect of requiring that conclusion. Section 135TB(2), in the form which it then took, relevantly did no more than provide that, in the circumstances envisaged, a date other than the date on which a claim for an invalid pension was lodged was to be treated as being the date of lodgement. It is somewhat curious that at the same time as that amendment was made, s.39, which, in prescribing the date from which an invalid pension was payable, did refer to the date on which the claim for the pension was lodged, was repealed and replaced by a provision (s.135TBA(2)) which contained no express reference to the date of lodgement of the claim, the criteria of its operation being the date upon which the person was entitled to receive the pension. It is not easy to comprehend what effect the deeming provision had other than in relation to the requirement in s.24, renumbered s.28, that the claimant be resident in, and physically present in, Australia at the date of lodgement of the claim. It seems to me, however, that there is no sufficient basis for concluding that the effect of the deeming provision was that an invalid pension could not be granted unless the claimant was qualified to receive it on the date of lodgement of the claim or within three months thereafter.
I should interpolate that it is immaterial to ask what was the position as at the date of the lodgement of the respondent's claim on 3 June 1985 as the effect of s.123(2) of the above Act was to apply to the respondent's claim the Principal Act as amended and in force after the commencement on 5 September 1985 of that provision. I reject the submission made by counsel for the respondent that the relevant law to be applied by the Tribunal was that in force on 3 June 1985.
The enactment by the Social Security Legislation Amendment Act 1986 (Cth) of s.135TA(1A), renumbered s.158(2), gave effect for the first time to a legislative intention that the grant of an invalid pension is to be made only if the claimant is qualified to receive the pension at the date of the lodgement of a claim for such pension or on a date within three months thereafter. It did so by providing that, if the claim cannot be granted because that requirement is not satisfied, the claim is to be deemed not to have been made. As the existence of a claim is a mandatory requirement for the grant of a pension, the result is that a claimant may not be granted an invalid pension as from a date subsequent to the expiration of the period of three months after the date of the lodgement of the claim. This, clearly would be the position in a case where the claim for the grant of the pension was lodged after the date of commencement of s.135TA(1A), viz. 1 July 1986. The question, however, is whether that provision had any operation in respect of a claim lodged prior to that date.
The Social Security Legislation Amendment Act 1986 (Cth) contained no provision expressly providing that s.135TA(1A) was to apply to claims lodged before it came into operation. Nor did it contain a provision similar to s.123(2) of the Social Security and Repatriation Legislation Amendment Act 1985 (Cth). In my opinion, the provision is to be read as having a prospective operation only. So read, it did not affect claims lodged prior to 1 July 1986. If it had been intended that it should do so, one might have expected that that intention would have been made clear by making express reference to claims whether lodged before or after the commencement of the provision.
It follows, in my opinion, that, as the respondent's claim was lodged prior to 1 July 1986, the Secretary, and consequently the Tribunal, was not precluded by the provisions of s.158 or s.159 from considering whether the respondent was qualified to receive an invalid pension at any time between the date of the lodgement of the claim and the date upon which the matter was determined. The application is, therefore, dismissed. The applicant must pay the respondent's costs of the application.
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