Thompson and Secretary, Department of Family and Community Services

[2005] AATA 588

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 588

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q2005/181

GENERAL ADMINISTRATIVE DIVISION		)
Re		REBECCA THOMPSON

Applicant

And SECRETARY, DEPARTMENT
OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Dr EK Christie, Member

Date10 June 2005  

PlaceBrisbane

Decision The Tribunal decides that Michael Beicht is not entitled to be joined as a party to Rebecca Thompson's application for review.

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

EK Christie
  Member

CATCHWORDS

PRACTICE AND PROCEDURE - application to be joined as a party to proceedings - whether another person's interests affected by decision under review - exercise of discretion - application refused

Administrative Appeals Tribunal Act 1975 ss 27(1), 30(1A)
A New Tax System (Family Assistance)(Administration) Act 1999 ss 71, 82, 92, 92A, 93

Fordham v Evans (1987) 14 FCR 474 at 476
United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520
Re City of Doncaster and Templestowe and Minister for Community Services (1987) 12 ALD 13
Re Whitney and Secretary, Department of Family and Community Services (2005) 82 ALD 685

WRITTEN REASONS FOR ORAL DECISION

21 June 2005   Dr EK Christie, Member     

1. Section 30(1A) of the Administrative Appeals Tribunal Act 1975 (“the AAT Act”) provides for joinder of parties for applications for review of decisions before the Tribunal.

2.      In this case, Ms Rebecca Thompson’s application for review relates to a decision made by Centrelink to raise and recover the following overpayments of family tax benefit made to Ms Thompson:

(a)      a debt of $2,419.43 for the period 1 July 2001 to 30 June 2002;

(b)      a debt of $2,940.87 for the period 1 July 2002 to 30 June 2003; and

(c)       a debt of $2,580.91 for the period 1 July 2003 to 30 June 2004.

3.      The respondent contends that, as a result of the overpayment, Ms Thompson alone owes a debt to the Commonwealth pursuant to section 71(2) of the A New Tax System (Family Assistance) (Administration) Act 1999 (“the FAA Act”). Section 71(2) provides:

“71      Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

Overpayment

(2)  If:

(a)an amount (the received amount) has been paid to a person by way of assistance; and

(b)the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;

the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.” [Emphasis added]

4.      Mr Beicht is not the father of Ms Thompson’s children. During the period the overpayments arose (July 2001 – June 2004), Ms Thompson and Mr Beicht had not commenced a relationship. 

5. Mr Beicht has applied to the Tribunal under section 27(1) of the AAT Act to be joined as a party to Ms Thompson’s application for review.

Issues To Be Decided

6.      The issue for the Tribunal in relation to the question of joinder of parties is whether Michael Beicht’s interests may be affected by a decision involving the recovery of past overpayments to Ms Thompson.

Contentions And Submissions Of The Parties

7.      Ms Thompson’s submissions are summarised as follows:

(a)Uncertainty in the advice provided to her by the Authorised Review Officer with respect to the implications of debt recovery for herself and Mr Beicht;

(b)Uncertainty in terms of Mr Beicht “inheriting” the past debt she may have accumulated now that she was in a relationship with him;

(c)Uncertainty whether any financial assets of Mr Beicht e.g. from the sale of his home, could be applied by the Commonwealth to recover the debt due to the Commonwealth arising from her past actions in receiving family tax benefit; and

(d)Uncertainty whether Centrelink considered her and Mr Beicht to be the one entity in terms of any recovery of the debt due to the Commonwealth.

8.      Ms C Heffner, on behalf of the respondent, submitted:

(a)The proper person to make an application for appeal against the decisions of the Social Security Appeals Tribunal and Centrelink was Ms Thompson;

(b)Mr Beicht’s interests were not directly affected by the proceedings;

(c)Mr Beicht had other means available to him in relation to questioning the actions of the Authorised Review Officer; and

(d)If Ms Thompson wished, she may call Mr Beicht as a witness to provide evidence at the hearing before the Tribunal.

9. Ms Heffner further submitted that the application of the FAA Act to Mr Beicht’s position resulted in the following outcomes:

(a)In relation to sections 82(1)(d), 82(1)(e), 82(1)(g), 92(1), 92A(1), 92A(4), 92(3), 93(1) and 93(2) of the FAA Act, that the Secretary was not authorised to recover a person’s debt from a third party unless the third party consents, and then only in one of the following limited methods:

(i)instalments being deducted from their family tax benefit payments;

(ii)offsetting an entitlement to arrears of family tax benefit that is owed to them against the debt; or

(iii)applying an income tax refund towards the repayment of the debt; and

(b)That the Secretary did not have a general or specific power, under section 82(1) of the FAA Act to require a third party to pay a debt owed to the Commonwealth by another person. As such, the Secretary contends that the Department has no power to require Mr Beicht to contribute any of the sale monies from his real property towards the repayment of Ms Thompson’s debt.

10.     Accordingly, Ms Heffner concluded with the submission that in the circumstances Mr Beicht’s interests were not sufficiently affected as to justify the exercise of the discretion by the Tribunal to join him as a party to these proceedings.  The Secretary further contended that Mr Beicht’s interests would be adequately protected by his participation in the proceedings as a witness.

Statutory Requirements And Legal Principles

11. The relevant provision of the AAT Act is section 30(1A). Relevant case law in the consideration of the question of joinder of a party can be summarised as follows:

(a)      Person Whose Interests Are Affected By The Decision

12.     In Fordham v Evans (1987) 14 FCR 474 at 476 Jenkinson J said:

“It is sufficient …to say that in my opinion a person whose legal rights against another may be affected by a decision, is a person interested in the decision with s12(1), if the possibility is a real, and not a remote, fanciful possibility.”

13.     In United States Tobacco Co v Minister for Consumer Affairs (1988) 20 FCR 520 the Full Federal Court construed the terms “interested” and “interests” as broad technical terms going beyond legal proprietary, financial or other tangible interests or interests necessarily peculiar to the person.

(B) Joinder Of Parties

14.     A party whose interests are affected by the decision does not have a right to party status.  The Tribunal has a discretion not to join such parties and may do so if their joinder would cause expense, delay and transform the Tribunal proceedings into a general inquiry:  Re City of Doncaster and Templestowe and Minister for Community Services (1987) 12 ALD 13.

15.     An analysis of these authorities indicates that joinder of parties is discretionary and consideration relates to the consequences of joinder on time and costs of the hearing.  In addition, the term “interest” is to be given a broad meaning.  Furthermore, the possibility that a person’s interests may be affected by the Tribunal’s decision must be seen to be real – and not a remote or fanciful possibility.

16. The relevant provisions of the FAA Act in relation to this application are:

(a)Section 71(2) establishes the basis for overpayments as being a debt due to the Commonwealth:

“Section 71     Debts arising in respect of family assistance other than child care benefit and family tax benefit advance

Overpayment

71.(2)  If:

(a)an amount (the received amount) has been paid to a person by way of assistance; and

(b)the received amount is greater than the amount (the correct amount) of assistance that should have been paid to the person under the family assistance law;

the difference between the received amount and the correct amount is a debt due to the Commonwealth by the person.”

(b)Section 82 deals with methods of recovery.  The Secretary has the following powers to recover debts of family tax benefit owed by a person to the Commonwealth:

“Section 82     Methods of recovery

(1) A debt owed by a person, other than an approved child care service, is recoverable by the Commonwealth by one or more of the following means:

(a)deductions from instalments of family tax benefit to which the person is entitled;

(b)setting off arrears of family assistance to which the person is entitled against the debt;

(c)repayment by instalments under an arrangement entered into under section 91;

(d)if section 92 applies to another person who is entitled to be paid family tax benefit by instalment—deductions from that other person’s instalments of family tax benefit;

(e)if section 92A applies to another person who is entitled to arrears of family assistance—setting off the arrears against the debt;

(f)        the application of an income tax refund owed to the person;

(g)if section 93 applies to another person to whom an income tax refund is owed—the application of that refund;

(h)       legal proceedings;

(i)        garnishee notice.”   [Emphasis added]

(c)Section 92 deals with deduction, by consent, from a person’s family tax benefit to meet another person’s debt:

“Section 92     Deduction by consent from a person’s family tax benefit to meet another person’s debt

(1)        If:

(a)       a person (the debtor):

(i)has a debt under this Act or under the Data-matching Program (Assistance and Tax) Act 1990, the Farm Household Support Act 1992, the Social Security Act 1947, the Social Security Act 1991, the Student Assistance Act 1973, the Veterans’ Entitlements Act 1986 or the Military Rehabilitation and Compensation Act 2004; or

…..

(b)another person (the consenting person) is entitled to be paid family tax benefit by instalment; and

(c)for the purpose of the recovery of the debt, the consenting person consents to the deduction of an amount from the consenting person’s instalments;

the Secretary may deduct the amount from the consenting person’s instalments of family tax benefit.

(2)  The debtor’s debt is reduced by an amount equal to the amount deducted from the consenting person’s family tax benefit.

(3)       The consenting person may revoke the consent at any time.”  [Emphasis added]

(d)Section 92A deals with setting off arrears of family assistance of a person against another person’s debt:

“Section 92A  Setting off arrears of family assistance of person against another person’s debt

(1)       If:

(a)       a person (the debtor):

(i)has a debt under this Act ….; or

(ii)       …..                

(b)another person (the consenting person) is entitled to an amount by way of arrears of family assistance; and

(c)for the purpose of the recovery of the debt, the consenting person consents to the deduction of an amount from the consenting person’s arrears;

the Secretary may determine that the whole or a part of the entitlement to arrears is to be set off against the debt.

(2)Subsection (1) does not apply to an entitlement to arrears of child care benefit.

(3) If the Secretary makes a determination under subsection (1), the amount of the entitlement to arrears and the amount of the debt are reduced accordingly.

(4)       The consenting person may revoke the consent at any time.” [Emphasis added]

(e)      Section 93 deals with the application of an income tax refund owed to another person:

“Section 93     Application of income tax refund owed to another person

(1)       If:

(a)       a person (the debtor) has a debt under this Act; and

(b)another person (the consenting person) is entitled to an income tax refund; and

(c)for the purpose of the recovery of the debt, the consenting person consents to the application of an amount from the consenting person’s refund to the debt;

the Commissioner of Taxation may apply the whole or a part of the refund to the debt.

(2)The amount of the refund and the amount of the debt are reduced accordingly.

(3)       The consenting person may revoke the consent at any time.”

17. The FAA Act does not define the term “consenting” person.  Accordingly, the Tribunal gives “consent” its plain, ordinary meaning:  to give assent [permission]; agree; comply [Macquarie Dictionary 3^rd Edition 1997].

Consideration Of The Issues

18.     Mr Beicht’s “interests” in Ms Thompson’s application for review relate to a “financial interest” associated with a family tax benefit overpayment made to Ms Thompson.  The family tax benefit overpayments were made to Ms Thompson over a four year period 2001 – 2004, a period when Ms Thompson and Mr Beicht were not in any relationship.

19. The provisions of the FAA Act specify the circumstances for which a family tax benefit overpayment can be recovered. The provisions clearly distinguish between recovery of a debt owed by a person (the debtor e.g. Rebecca Thompson) and the consequences for another person (e.g. Michael Beicht). The FAA Act further defines the other person as the consenting person i.e. consent to releasing the debtor’s debt by (a) deduction from family tax benefit, (b) setting off arrears of family assistance, and (c) application of income tax refund. Moreover, the FAA Act provides the consenting person with the power to revoke the consent at any time.

20. Given the above reasons and the application of the provisions of the FAA Act, the Tribunal concludes that it accepts the respondent’s submissions that the Secretary does not have a specific or general power to require another person/third party to pay a family tax benefit overpayment to the Commonwealth where he or she is not the person who incurred the debt (viz. in this case the debt was incurred by Ms Thompson).

21.     Given this conclusion, the Tribunal finds that in these circumstances there would only be a “remote possibility” that Mr Beicht’s interests may be adversely affected.  Accordingly, in these circumstances the Tribunal cannot exercise its discretion to join Michael Beicht as a party to the proceedings before the Tribunal.

22.     The Tribunal makes the observation that the implications of the term “consent” were considered in relation to the recovery provision (section 1234A) of the Social Security Act 1991 in Re Whitney and Secretary, Department of Family and Community Services (2005) 82 ALD 685. In this case the Tribunal concluded that:

§There is no requirement in the Act that a consenting person must be advised that he or she may revoke consent to repayment.  Nor is there a provision under which the tribunal may treat consent as never given when such advice is absent.

§Although consent should be given in writing, there is no requirement in the Act.  The tribunal cannot disregard the oral consent to the withholdings that is the subject of the field officer’s note.”

23.     For all of the above reasons, the Tribunal decides that Michael Beicht is not entitled to be joined as a party to Rebecca Thompson’s application for review.

I certify that the 23 preceding paragraphs are a true copy of the reasons for the decision herein of Dr EK Christie, Member

Signed:         Jenny Tran
  Associate

Date/s of Hearing  18 May 2005; 10 June 2005
Date of Decision  10 June 2005
Date of Written Reasons          21 June 2005    
The Applicant appeared for herself (by telephone)
For the Respondent                  Ms C Heffner, Departmental Advocate