Strang and Secretary, Department of Employment and Workplace Relations

[2006] AATA 51

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 51

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2005/483

GENERAL ADMINISTRATIVE DIVISION		)
Re		ELIZABETH STRANG

Applicant

And SECRETARY, DEPARTMENT
OF EMPLOYMENT AND
WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date25 January 2006

PlaceBrisbane

Decision The Tribunal affirms the decision under review. This means Ms Strang’s application for review is unsuccessful.

....................[Sgd]..........................

EK Christie
  Member

CATCHWORDS

SOCIAL SECURITY - parenting payment (single) - overpayment - special circumstances -  discretion to waiver debt – two debts reviewed separately – relevance of facts occurring after the decision on the first debt – relevance of facts arising after waiver of original debt due to the Commonwealth - Words and phrases: “out of the ordinary”.

Social Security Act 1991 ss 1236, 1237AAD

Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316
Haidar v Secretary, Department of Social Security (1998) 157 ALR 359
Secretary, Department of Family and Community Services v Verney (2000) 60 ALD 737
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Dranichnikov v Centrelink [2003] FCFCA 133
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Re L and Secretary, Department of Social Security (1995) 21 AAR 412
Caswell v Powell Duffryn Associated Collieries Ltd [1939] 3 All ER 722

REASONS FOR DECISION

25 January  2006 Dr EK Christie, Member     

1.      This is an application for review of the decision of the Social Security Appeals Tribunal (the “SSAT”) made on 29 June 2005 to recover a parenting payment debt of $1,428.60 for the period 11 March 1999 to 1 July 1999.

2. The evidence before the Tribunal comprised the documents filed pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T” Documents) [Exhibit 1] and the various exhibits lodged by the parties.

3.      The applicant was represented at the hearing by Mr J Stannard, Welfare Rights Centre.  The respondent was represented by Ms S Oliver, a Departmental Advocate.

Issues Before The Tribunal

4.      The only issue for the Tribunal to decide was whether the parenting payment debt could be waived, in part or in full, under the “special circumstances” provision of the Social Security Act 1991 (“the Act”). 

History

5.      This application for review is related to a case previously decided by the Tribunal.  In the initial case decided by the Tribunal on 2 March 2005, the Tribunal waived Austudy overpayments of $15,299.67 received by Ms Strang for the period 19 July 1999 to 30 June 2001 under the “special circumstances” provisions of the Social Security Act: Re Strang and Secretary, Department of Family and Community Services [2005] AATA 193.

6.      This application for review involved a parenting payment overpayment for a three and a half month period immediately preceding the Austudy overpayment period.

7.      In its reasons for its decision in Re Strang and Austudy overpayments (supra), the Tribunal concluded [at para. 43]:-

“…the debt should be waived under the ‘special circumstances’ provision of the Act as the following findings of part represent ‘unusual’ or ‘uncommon’ facts (Beadle’s case) – and do not necessarily have the quality of being ‘extremely’ ‘unusual’ or ‘uncommon’ facts (Boscolo’s case);  in addition, that the outcome is unintended or unjust (Groth’s case):-

(a)Ms Strang’s lack of control and knowledge on the status of her partner’s [Mr H Burford] involvement in his personal company as he failed to disclose any of his financial information to her;

(b)Ms Strang’s complete reliance on her partner [Mr H Burford] to provide Centrelink with the correct financial information as to his personal company business;

(c)no indication given by Ms Strang’s partner [Mr H Burford] that there may have been problems with the amount of Austudy entitlement Ms Strang received based on his involvement in his personal company;

(d)that Ms Strang had trusted her partner [Mr H Burford] to perform the role of correctly informing Centrelink of his financial situation;

(e)       that Ms Strang was not a “nominated” person for Centrelink purposes; and

(f)in these circumstances, Ms Strang did not have a basis to raise a query with Centrelink whether she had been paid the correct social security entitlements;”

Facts

8.      At the commencing of the hearing the parties acknowledged that the following Findings of  Facts made by the SSAT were not in dispute:

“12.         In relation to the evidence as to Mrs Strang’s knowledge and         understanding of Mr Burford’s business matters at the time she         applied for and received parenting payment, the Tribunal accepts that her understanding was the same as that found by Dr Christie to be the case in her later application for and receipt of austudy payments. (T2,       Folio 7)

….

14.           On the basis of the evidence before it, the Tribunal made the following      findings:

…..

(v)      Mrs Strang had no personal knowledge of Mr Burford’s financial and business interests. (T2, Folio 8)

…..

22.The Tribunal is satisfied that neither Mrs Strang nor Mr Burford knowingly made a false statement or failed to comply with the Act in not fully disclosing their assets, in particular Mr Burford’s company and the existence of a company loan. The term ‘knowingly’ requires actual knowledge (see by way of guidance Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435). Mrs Strang had no knowledge of her partner’s business interests and Mr Burford had a misguided but honest opinion as to what information         Centrelink was seeking in asking whether he had any involvement in a company or business”  (T2, Folio 9) [Emphasis added].

9.      The parties further acknowledged that the debt did not arise because of any deliberate fraud on the part of Ms Strang or another person.

Further Oral Evidence of Elizabeth Strang

10.     Ms Strang stated that she had relied on two Centrelink notices (Exhibits 4, 5), sent to her, which she believed incorporated the amount of the overpayment for Austudy and parenting payment.  Specifically, she referred to the following notices which she found confusing:-

(a)      Exhibit 4 (Issued 8 August 2003)

Details of amount payable

for Austudy

Period  Received       Entitled         Amount Payable

26 Feb 1999 to 6 May 2002             $19,708.42     $4,459.28       $15,249.14

(b)      Exhibit 5 (Issued 30 September 2003)

Details of amount payable

for Parenting Payment

Period  Received       Entitled         Amount Payable

26 Feb 1999 to 18 Jul 1999              $1,532.30       $462.00         $1,070.30

11.     Ms Strang stated that since the details of both overpayments commenced on the same date (26 February 1999) she believed that the SSAT would have been reviewing both debts.  If she had been aware that this was not to be the case - that is, separate debts existed, she would have made application to the SSAT to review both debts at the one hearing.  This was not the case, however.  It was not until 23 March 2005 – after the review of the SSAT decision by this Tribunal that she first became aware that a separate parenting payment debt existed.

12.     Ms Strang said that she had queried the debt on 6 March 2002 (T17A) and was informed as to the process that would take place.  Based on this advice she thought the Authorised Review Officer (the “ARO”) would review both debts. 

13.     Ms Strang described her current employment situation as a permanent part-time naturopath.  She has 3 regular days of work each week plus relief work for other staff on an “ad hoc” basis.  She works 22-23 hours per week regularly – but this varied up to 28 hours per week maximum.

14.     Based on the Statement of Financial Circumstances she had prepared (Exhibit 6), Ms Strang agreed that her income was about the same as her expenses, provided she “kept up with payments”.  She acknowledged that she had a substantial equity in her home:  a current value of $295,000 relative to the mortgage of $117,800.

15.     Ms Strang conceded that it was possible to transfer her debts to her mortgage loan by borrowing on the equity on her home to repay these debts.  However, she qualified this response by stating that, in such a situation, she would have to be able to demonstrate to the lender that she had the capacity to repay the increased mortgage repayments.

Contentions and Submissions of the Parties

16.     Mr Stannard submitted that the matter of parenting payment overpayments should have been dealt with at the Tribunal hearing at Ballina in March 2005.  However, there were a number of factors that contributed to this situation not arising:

(a)The original notice (Exhibit 4, August 2003) sent to Ms Strang was confusing and was incorrect.  On receiving the notice Ms Strang made a query and sought a review.

(b)The second notice sent to Ms Strang (Exhibit 5, September 2003) was unclear and was interpreted as incorporating part of the debt (i.e. the Austudy debt) with the parenting payment debt.

(c)Although there were separate debts on file at that time, and notwithstanding that Ms Strang had made a query about the debt, she had not been given an opportunity by the respondent to seek a review of both debts at the one time.

17.     Mr Stannard submitted that the query raised by Ms Strang for a request for a review should have led to the respondent instituting a process for a review of both debts at the one time.

18.     It was his contention that if Ms Strang had been aware that two separate debts existed she would have sought a review of both debts together.  He contended that it would have been unlikely for the Tribunal to make a decision on the parenting payment debt and a different decision for the Austudy debt – given that similar facts applied to both debts!

19.     Mr Stannard challenged the proposition that Ms Strang had “benefited” through the financial relief arising from the waiver of the Austudy debt from the Tribunal decision in March 2005, the application of special circumstances were somehow cancelled out or negatived by this relief.

20.     Mr Stannard conceded that Ms Strang now had income, but that her income was not going forward; apart from the fact that she no longer had to repay the large Austudy debt, her financial situation was no different from the time the matter first came before the Tribunal in March 2005.

21.     It was his further contention that had the respondent acted as a “model litigant” the current matter before the Tribunal would not have arisen.

22.     Mr Stannard concluded with the submission that the Tribunal decision (T3, 2 March 2005) to waive the “parenting payment” debt for “special circumstances” was correct, and applied equally to the “Austudy debts”, as the facts were the same. Furthermore, natural justice issues arose in Ms Strang’s situation as her two debts had not been reviewed together and the Respondent “had been the architect of the situation”.

23.     Ms Oliver submitted that although the Austudy debt was raised in August 2003 and the parenting payment debt raised in September 2003, there was no record of Ms Strang seeking a review of the parenting payment debt until 23 March 2005.

24.     With respect to the “special circumstances” waiver provision of the SS Act (s. 1237AAD), Ms Oliver submitted that the questions of “innocent mistake” and “knowing failure” were threshhold questions; if a debt arose due to “innocent mistake” then the Tribunal could proceed to consider whether there were special circumstances. If the debt arose due to a “knowing failure” or “deliberate fraud”, then the section had no application.

25.     Ms Oliver submitted that the legislative scheme prescribing the repayment of a debt due to the Commonwealth may lead to an application which may seem “harsh or unfair”. However, such an outcome was not a “special circumstance”.

26.     Ms Oliver contended that the internal review by the ARO of the Austudy debt had been undertaken correctly according to standard procedures; there was no indication for the ARO to consider the parenting payment debt at this time.

27.     Ms Oliver further contended that there was no basis for any claim that the respondent had acted contrary to the model litigant policy in undertaking two separate internal reviews of the Austudy and parenting payment debts. There were two debts that were raised with Ms Strang at separate times. In this situation, Ms Strang had to take some responsibility for addressing this situation in order to be aware whether both debts were related or not.  

28.     Ms Oliver submitted that the “special circumstances” provision no longer applied to Ms Strang’s case following the Tribunal hearing and decision in March 2005 and the waiver of overpayments of $15,299.67 of Austudy received by Ms Strang.  Ms Strang’s “present circumstances”, that is, those which existed at the time of the hearing [and decision] of the Tribunal in March 2005, had improved considerably. Ms Strang had graduated, was now working and no longer a student, no longer received social security benefits and received income from tenants [boarders in her home]; there had been a “material improvement” in her financial circumstances. Ms Oliver acknowledged that whilst Ms Strang may have some financial difficulty, her financial situation could not be described as straitened or impecunious.  She also had considerable equity in her home.

29.     Ms Oliver concluded with the submission that all of the circumstances of the case, including any events that had occurred since the Tribunal hearing and  decision in March 2005 – as well as Ms Strang’s current circumstances, needed to be considered in order  to assess the question of “special circumstances”. When the entirety of circumstances was considered for Ms Strang’s case, there was no basis for applying the “special circumstances” waiver provision of the SS Act – or to write off the debt.

30.     In response to questions raised by the Tribunal, Ms Oliver stated that the entirety of circumstances the Tribunal needed to consider were (a) the factors how the debt arose and (b) changes in circumstances arising from the improved financial situation for today.

31.     In addition, Ms Oliver submitted that, in the context of other social security recipients, Ms Strang’s current circumstances were not sufficiently difficult that she would not have the capacity to repay the debt.

Statutory Requirements And Case Law

§The Tribunal’s Decision Making Powers

32.     There is only one decision possible in this application for review: whether the debt due to the Commonwealth can be waived under the “special circumstances” provisions of the Social Security Act 1991. Accordingly, the question for the determination of the Tribunal is whether the decision under review is the correct one: see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 68.

33.     Administrative decision-makers are generally required to address the evidence before them and not confine themselves to evidence before a prior decision-maker whose decision is being reviewed unless the relevant legislation requires a decision to be based upon the circumstances at a particular point of time: see Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316 at 324-326. In this application for review, the Tribunal considers all the evidence and information before the Tribunal as at the date of the hearing, and supplementary submissions following the hearing to the extent those facts are relevant to the decision by reference to the subject matter, scope and purpose of the legislation pursuant to which the discretion is conferred: Haidar v Secretary, Department of Social Security (1998) 157 ALR 359 at 367. In this regard, the Tribunal considers the evidence of events at the time of the Tribunal hearing and of the original decision [2 March 2005] - as well as evidence of events which had occurred since the date of this original decision: see Secretary, Department of Family and Community Services v Verney (2000) ALD 737 at 749.

§The Special Circumstances Waiver Provision

34.     In this application for review the “special circumstances” provision is the only issue in dispute for the Tribunal to decide. Section 1237AAD of the Act provides for a debt due to the Commonwealth to be waived, either in part or in full, because of “special circumstances”:

“1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES

“The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)the debt did not result wholly or partly from the debtor or another person knowingly:

(i)        making a false statement or false representation; or

(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)        it is more appropriate to waive than to write off the debt or part of the debt.”         [Tribunal emphasis].

35. For this section of the Act to apply to Ms Strang’s factual situation, there must be “special circumstances” that led to the overpayment of social security entitlements. In addition, Ms Strang must not have “knowingly” made a false statement or false representation or “knowingly” failed to have complied with a provision of the Act. Both these requirements must be satisfied for Ms Strang to succeed under the “Waiver in Special Circumstances” provision of the Social Security Act.

36.     The Respondent acknowledged, at the commencement of the hearing, that there was no question of any deliberate fraud on the part of Ms Strang, or any other person, which led to the debt arising.

37.     The Respondent also acknowledged that Ms Strang had not “knowingly” made a false statement or representation or that she had “knowingly” failed or omitted to comply with a provision of the Social Security Act.  As this element of the “Waiver in Special Circumstances” provision is satisfied, and is not an issue between the parties, the Tribunal next considers case law in relation to the “special circumstances” element of this provision. 

38.     The Explanatory Memorandum [“EM”][1] to the Social Security Legislation Amendment (Carer Pension and Other Measures) Bill 1995 is significant in relation to the application of the “special circumstances” element to Ms Strang’s factual situation:

[1] The Tribunal provided a copy of the EM to both parties at the commencement of the hearing and gave them time to review this document before proceeding with the hearing.

(a)      Under “2. Background [Special Circumstances]” the EM states:

“The problem is that there are some cases involving an innocent mistake by a debtor that makes waiver desirable although not possible under the current waiver provisions.  Accordingly, it is proposed to insert a new special circumstances waiver provision, but with some restrictions on the circumstances under which the new clause can be used.

The new special circumstances clause will be available where:

·        there are special circumstances other than financial hardship alone;

·        the Secretary is satisfied that the debt did not arise wholly or partly because of        deliberate fraud by the debtor (including deliberate non-compliance with the   Principal Act); and

·        it is more appropriate to waive the debt than to write off the debt pursuant to          section 1236.”

(b)Under “4. Explanation of the Changes”, the EM refers to the meaning of “special circumstances” as defined in Beadle’s case – but the “amendments make several exceptions to the broad definition of ‘special circumstances’” (at p. 31):

(i)“… that the Secretary will be prevented from exercising the discretion in section 1237AAD where the debt arose either solely or partly because of deliberate fraud by the debtor or another person….That is, the discretion may be exercised where a debt arose wholly because of an innocent mistake.”

and

“… The rationale for this exception is that it is not considered appropriate to provide relief under section 1237AAD if a debtor has deliberately set out to defraud the Commonwealth.”

(ii)“Secondly, financial hardship, of itself, is not a sufficient reason to waive under the new special circumstances provision.”

(iii)“Thirdly, it must not be more appropriate to write off the debt than to waive the debt.  Consideration as to the circumstances of a debtor are central to a decision to write off a debt under section 1236 of the Principal Act and should not be the basis for a decision to waive.  Where a debtor has no present capacity to repay it is proper that write off action be taken, leaving the Commonwealth with the right to commence recovery proceedings at a later stage if the person’s financial circumstances improve.”  [Emphasis added]

39.     The Tribunal has had to consider the common law meaning and application of the expression “special circumstances” on many occasions.  The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has been an oft-quoted benchmark as to the interpretation of “special circumstances”.  In that case the Tribunal said (at 3):

“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition.  The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional.  Whether circumstances answer any of these descriptions must depend upon the context in which they occur.  For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

40.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541 (a case on “special circumstances” and section 1184 of the Act) at 545, Kiefel J, after referring to the Federal Court’s decision in Beadle, observed that special circumstances:

“…would require something to distinguish Mr Groth’s case from others, to take it out of the usual or ordinary case…It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”

41.     This line reasoning by Kiefel J was later followed in Haidar v Secretary, Department of Social Security(1998) 157 ALR 359, Dranichnikov v Centrelink [2003] FCAFC 133 and Ryde v Secretary, Department of Family and Community Services [2005] FCA 866.

42.     In Dranichnikov v Centrelink [2003] FCAFC 133, the Full Federal Court (Hill, Kiefel and Hely JJ) made the following conclusions on the “special circumstances” provision in the context of the A New Tax System (Family Assistance) (Administration) Act 1999(Cth):            

“65. … The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given.  The reference to the first instance decision from which the words “unusual, uncommon or exceptional” come was not actually affirmed by the Full Court.

66      To some extent the question whether there were special circumstances must depend on how it came about that the error occurred …

67      However, the real problem with the exercise of discretion under s 101 as with the mandatory provisions of s 97, is that the decision maker appears not to have considered at all what the circumstances were which gave rise to the overpayment.  Whether those circumstances were or were not special will obviously be a matter for the decision maker when the factual circumstances have been ascertained.” [Tribunal emphasis].

43.     Later, in Dranichnikov’s case, the Full Federal Court made the further observation:

“There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss[2].”

[2] “Special reasons” …is an expression describing a flexible discretionary power, but one requiring a case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule [a ground to take the case out of the ordinary]

44.     More recently,  in Ryde v Secretary, Department of Family and Community Services [2005] FCA 866, Branson J added further clarity to the interpretation of “special circumstances” in her application of some of the above authorities:-

“5.       The approach adopted by the Full Court in Beadle is similar to the approach adopted by the Court in applications made under O 52 r 15(2) of the Federal Court Rules.  Order 52 r 15(2) authorises the Court or a Judge ‘for special reasons’ at any time to give leave to file and serve a notice of appeal.

‘In Jess v Scott (1986) 12 FCR 187 at 195 the Full Court stated:

…Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression “for special reasons” implies something narrower than this.

6.        The intended effect of s 1237AAD has been considered by French J in      Secretary, Department of Social Security v Hales (1998) 82 FCR 154 (‘Hales’) at       162      where his Honour observed:

‘The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. …

…

8. While, as French J pointed out in Hales, the evident purpose of s 1237AAD is to enable a flexible response to the wide range of circumstances which could give rise to hardship or unfairness, the statutory requirement for ‘special circumstances’ discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness to which French J referred must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case [Tribunal emphasis].”

45.     Haidar v Secretary, Department of Social Security(1998) 157 ALR 359 dealt with the question of “special circumstances”, albeit in a slightly different context to the application for review before the Tribunal. Hill FCJ made the following observation in regard to the question of the application of the “special circumstances” provision in the context of the “preclusion period”:

“In the case such as the present where the preclusion period required by the statutory formula in the absence of discretion had finished, it cannot be said that events at the time of hearing would necessarily be irrelevant. It is clear enough that the Tribunal sitting on appeal from a decision maker, be it the Minister or another Tribunal, must take into account the facts as they exist at the time the matter is heard by the Administrative Appeals Tribunal, to the extent those facts are relevant to the decision. It is not limited to taking into account events which occurred at the time the original decision was made, nor for that matter facts as they were known at that time, notwithstanding that later knowledge would lead to a revision of the earlier factual assessment. However, the fact that the Tribunal can consider facts after the date the initial decision was made does not mean that every fact after that date is necessarily relevant.

Where, between the end of the preclusion period and the time of the decision, a claimant's economic situation is good and that arose as a result of receipt of a lump sum compensation amount, clearly the decision maker or Tribunal in place of the decision maker could take into account the economic circumstances existing at the time of the decision. But that is because those economic circumstances bear some relationship to the matter under decision, namely the relevance of the lump sum payment and its impact upon the question whether a pension be paid notwithstanding the receipt of a lump sum.”

46.     The Tribunal has applied the above legal principles and the materials contained in the EM in its interpretation and consideration of the “special circumstances” provision to the entirety of Mrs Strang’s factual situation.

Consideration of the Issues

47.     The evidence and information before the Tribunal central to this application for review involves two social security debts, having some similar facts in the manner the overpayment occurred.  These facts are not in dispute.  The first overpayment (Austudy) was heard and decided by the Tribunal in March 2005.  The second debt (parenting payment partnered) was heard by the Tribunal in November 2005.  The three and one half month period of the parenting payment overpayments coincides with part of the entire period of the Austudy overpayments. 

48. The first issue for the Tribunal to consider is whether it is more appropriate to waive than to write off the parenting payment debt or part of the debt [s.1237AAD (c)] by considering the issue of write off under the Act.

49.     The EM makes it quite clear that the circumstances of the debtor are central to the write off provision [section 1236]. In addition, the EM and Secretary, Department of Social Security v Hales (1998) 82 FCR 154, also makes it clear that financial hardship is not a “special circumstance”.  A debt may only be written off under section 1236(1A), inter alia, “if the debtor has no capacity to repay the debt”. Moreover, a former President of the Tribunal, Mathews J, concluded [in Re L and Secretary, Department of Social Security (1995) 21 AAR 412]:

“The essential inquiry will always be whether recovery is a feasible proposition, bearing in mind the financial means and obligations of the individual concerned.  Will recovery cause such personal hardship as to run contrary to the beneficial nature of the legislation?  If an affirmative answer is reached to this question, then it would be appropriate to defer recovery in the manner contemplated by s 1236(1).”

50.     Ms Strang’s present financial circumstances have improved in the eight month intervening period between the two Tribunal hearings.  Following the Tribunal hearing and decision in March 2005 and the waiver of overpayments of $15,299.67 of Austudy received by Ms Strang, she is no longer a student as she has now graduated, is working as a health professional, no longer receives social security benefits and obtains income from tenants living in her home.

51.     The Tribunal finds that as a result of improved financial circumstances, Ms Strang now has a capacity to repay the parenting payment debt in that recovery would not cause such personal hardship as to run contrary to the beneficial nature of the legislation: See Re L’s case.

52.     Given this finding that the parenting payment debt cannot be written off, the Tribunal next considers whether it is appropriate to waive this debt under the “special circumstances provisions” of the Act.

53.     The EM is a relevant consideration as an initial step in this approach.  There is no dispute between the parties that the overpayment arose because of any deliberate fraud on the part of Ms Strang or another person. 

54.     As there is no issue of “deliberate fraud”, the Tribunal proceeds to consider whether there were “special circumstances” to justify waiver through a evaluating the entirety of Ms Strang’s factual circumstances from the time of the hearing and decision of the Tribunal in March 2005 -  to her  present circumstances.

55.     Firstly, the Tribunal has adopted the Full Federal Court’s approach in Dranichnikov’s case by considering the factual circumstances which gave rise to the parenting payment debt i.e. “how such an error occurred”.

56.     As for the case for the Austudy overpayments, the overpayments of parenting payment to Ms Strang’s arose from her lack of control and knowledge on the status of her then partner’s involvement in his personal company, as he had failed to disclose any of his financial information to her. In addition, Ms Strang’s completely relied on her partner to provide Centrelink with the correct financial information as to his personal company business. Moreover, Ms Strang had trusted her partner to perform the role of correctly informing Centrelink of his financial situation. This evidence was before the Tribunal at the date of the hearing and decision for the Austudy overpayments in March 2005.

57.     A further issue for the Tribunal to consider is evidence of later events that was not before the Tribunal at the time of the March 2005 decision.  In this regard, the applicant has relied on two inferences. If Ms Strang had been fully aware that two separate debts existed, she would have sought a review of both debts together. Furthermore, had the respondent acted as a “model litigant” the current matter before the Tribunal would not have arisen?

58.     The decision of LJ Wright in Caswell v Powell Duffryn Associated Collieries [1939] 3 All ER 722 at 733 is particularly relevant with respect to understanding the common law evidentiary requirements that apply to “inferences”: -

"There can be no inference unless there are objective facts from which to infer the other facts which it is sought to establish… But if there are no positive proved facts, from which any inference can be made, the method of inference fails and what is left is mere speculation or conjecture."

59.     The Tribunal concludes the inference that, had Ms Strang been aware that two separate debts existed she would have sought a review of both debts together, cannot be supported by sufficient positive proved facts; that is, it represents conjecture on the part of the applicant. The query raised by Ms Strang on 6 March 2002 (T17A, Folio 149) makes no mention of a request to have both debts considered together. Two separate Centrelink notices (Exhibits 4, 5) were sent to Ms Strang, in August 2003 and September 2003 that raised two separate overpayments for Austudy and parenting payment, respectively. The information before the Tribunal is that it was not until 23 March 2005, that Ms Strang first sought a review of the Austudy and parenting payment debts, as they were directly related (T31, Folio 195).  However, the reviewable decision by the Social Security Appeals Tribunal in relation to the Austudy debt was made on 13 September 2004.  The reviewable decision by the Social Security Appeals Tribunal in relation to the parenting payment debt was made on 29 June 2005. There is also no factual basis for the Tribunal to conclude that any misunderstanding on Ms Strang’s part as to the review of the two separate debts together arose due to incomplete or inadequate information provided by the Secretary.

60.     The Tribunal makes a similar finding, in relation to the inference the respondent had not acted as a “model litigant”. That is, such an inference cannot be supported by sufficient positive proved facts and so represents speculation on the part of the applicant. The evidence and information before the Tribunal is that two separate Centrelink notices (Exhibits 4, 5) were sent to Ms Strang in 2003 that raised the overpayments for Austudy and parenting payment. In turn, both overpayments were subject to internal review processes by Centrelink, according to standard procedures – and later followed by a review by the SSAT.

61.     Next, the Tribunal has applied the reasoning in Haidar’s case to the question whether Ms Strang’s “present circumstances” are a relevant consideration in relation to the exercise of the discretion to waive the debt under the “special circumstances” provision of the Act:-

vIn this application for review, it cannot be said that events at the time of the Tribunal hearing in November 2005 would necessarily be irrelevant. It is clear that the Tribunal sitting on appeal from a decision maker or the SSAT, must take into account the facts as they exist at the time the matter is heard to the extent those facts are relevant to the decision. It is not limited to taking into account events which occurred or known facts at the time the original decision was made - notwithstanding that later knowledge would lead to a revision of the earlier factual assessment.

vAs Ms Strang’s present financial circumstances have improved in the eight month intervening period between the two Tribunal hearings [see paras. 28, 50, 51]. The Tribunal, in the place of the decision maker, could take into account the economic circumstances existing at the time of the decision where those economic circumstances bear some relationship to the matter under decision: namely the relevance of improved financial circumstances and their impact upon the question whether to exercise the discretion to waive or write off the parenting payment debt due to the Commonwealth [s.1237AAD (c)]. The Tribunal concludes that Ms Strang’s present financial circumstances have “something to do with the matter at hand”.

62.     Accordingly, the Tribunal considers the case law authorities in relation to the question of “special circumstances” in relation to the totality of factual circumstances as to how the parenting payment error occurred  - and, as well, Ms Strang’s present circumstances. The Tribunal finds:  

(a)The facts as to how the parenting payment error occurred (paras. 6, 8) at the time of the original decision in March 2005 need to be counterbalanced against evidence of later events that was not before the Tribunal at the time of the March 2005 decision [see the Tribunal’s findings that the inferences raised by the applicant were speculative at paras. 59, 60]. On the balance of probabilities, Ms Strang has not taken an active and direct role to address the later situation. In addition, the evidence of later events that was not before the Tribunal at the time of the March 2005 decision demonstrates that the earlier material was incomplete in this regard: see Verney’s case.  The Tribunal concludes that the cumulative effect of these facts with respect to the overpayment of parenting payment is that there is not anything “unusual”, “uncommon” or “exceptional” (Beadle’s case).

(b)Furthermore, the Tribunal concludes that the facts as to how the parenting payment error occurred does not represent something “unintended unfair, or unjust", so taking Ms Strang’s case “out of the usual or ordinary case” (Groth’s case; Ryde’s case; Dranichnikov’s case);

(c) With respect to the material improvement in Ms Strang’s financial circumstances since the time of the decision to waive Austudy overpayments in March 2005 and the hearing of this application for review, the Tribunal concludes that the strict enforcement of the “special circumstances waiver” provision of the Act would not lead to an outcome that was unjust, unfair and unreasonable; that is, it would not give rise to hardship or unfairness when due regard is given to “hardship or unfairness sufficient to justify departure from the general rule in the particular case”(Hales case; Ryde’s case);  

(d)Based on these conclusions, the Tribunal has no alternative other than to find that the circumstances of Ms Strang’s case do not justify a finding that takes the case “out of the ordinary” sufficient to justify a departure, in the particular circumstances, from the ordinary rule.

63.     On consideration of all of the reasons in relation to the totality of Ms Strang’s circumstances the Tribunal finds that there is no basis to waive the parenting payment debt due to the Commonwealth under the “special circumstances” provision of the Social Security Act.

64.     For all of the above reasons, The Tribunal affirms the decision under review.

I certify that the 64 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Jeff Mills
  Legal Research Officer

Date/s of Hearing  9 and 28 November 2005
Date of Decision  25 January 2006
Solicitor for the Applicant          Mr J Stannard, Welfare Rights Centre Inc
For the Respondent                  Ms S Oliver, Departmental Advocate