Towle v Secretary, Department of Social Services
[2018] FCA 407
•28 March 2018
FEDERAL COURT OF AUSTRALIA
Towle v Secretary, Department of Social Services [2018] FCA 407
Appeal from: Towle v Secretary, Department of Social Services [2017] AATA 565 File number: SAD 131 of 2017 Judge: CHARLESWORTH J Date of judgment: 28 March 2018 Catchwords: ADMINISTRATIVE LAW – suspension of social security payment for failure to give a requested statement – requested statement relevant to whether recipient of benefit should continue to be treated as a single person – deficiency in reasons given by Administrative Appeal Tribunal – submissions of recipient liable to be rejected in any event – appeal from decision of Tribunal dismissed Legislation: Administrative Appeals Tribunal Act 1975 (Cth) s 44
Migration Act 1958 (Cth) s 65
Social Security (Administration) Act 1999 (Cth) ss 68, 81
Social Security Act 1991 (Cth) ss 4, 24, 1062, 1063, 1064
Cases cited: Haritos v Commissioner of Taxation (2015) 233 FCR 315 Date of hearing: 29 November 2017 Registry: South Australia Division: General Division National Practice Area: Administrative and Constitutional Law and Human Rights Category: Catchwords Number of paragraphs: 48 Counsel for the Applicant: The Applicant appeared in person Counsel for the Respondent: Mr Schatz Solicitor for the Respondent: Legal Services Division, Department of Human Services ORDERS
SAD 131 of 2017 BETWEEN: THOMAS WILLIAM RAYMOND TOWLE
Applicant
AND: SECRETARY, DEPARTMENT OF SOCIAL SERVICES
Respondent
JUDGE:
CHARLESWORTH J
DATE OF ORDER:
28 MARCH 2018
THE COURT ORDERS THAT:
1.The appeal is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
CHARLESWORTH J:
This is an appeal from a decision of the Administration Appeals Tribunal concerning the suspension of the applicant’s Disability Support Pension (DSP) under the Social Security (Administration) Act 1999 (Cth) (SSA Act).
The applicant, Mr Thomas Towle, received the DSP at the rate applicable to a single person. In early 2013, he met a citizen of Taiwan, Ms Ya-Fen Chang. They commenced living together later that year. In 2015, Ms Chang made an application for a Partner (subclass 820) visa pursuant to s 65 of the Migration Act 1958 (Cth).
Section 81 of the SSA Act confers a discretionary power on the Secretary to suspend certain social security payments if the person in receipt of the payment does not comply with a notice given (relevantly) pursuant to s 68.
A delegate of the Secretary determined that Mr Towle had not complied with a notice provided to him under s 68 of the SSA Act (the s 68 notice) on or around 30 June 2016 in the form of a cover letter and questionnaire. The letter commences:
This letter is to ask for information to help us make the right decision about your Disability Support Pension.
The accompanying questionnaire sought Mr Towle’s responses to certain questions about his relationship with Ms Chang and about Ms Chang’s financial affairs. Two of the questions, and Mr Towle’s responses to them, were expressed as follows:
4.Please describe your partners employment status. If working please advise her current employer and how much money she earns each fortnight.
I am not privy to her bank accounts or any income. She is not supported by Australian Government. She gets casual work as needed in agriculture industry.
5.Please provide payslips for all work your partner has done in the last three months. If you do not have payslips please provide a letter from the employer with hours/amount paid each fortnight in this period
She is not a permanent resident. I am not privy to her private information. Centerlink does not support her.
Mr Towle’s DSP was suspended by the delegate because his answers to these questions were considered inadequate. The delegate’s decision was affirmed on internal review, and then upon further review by the Social Services & Child Support Division of the Tribunal (AAT1). The decision of AAT1 was subsequently affirmed by the Tribunal upon further review. It is the decision of the Tribunal that now forms the subject of this appeal.
QUESTION OF LAW
The appeal is commenced pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act). Although titled as an appeal, the proceedings involve the exercise of the Court’s original jurisdiction. An appeal lies from the Tribunal only on a question of law.
The purpose of limiting the appeal to a question of law is to ensure that the Tribunal, and not the Court, deals with the merits of the case: Haritos v Commissioner of Taxation (2015) 233 FCR 315 at [194] (Allsop CJ, Kenny, Besanko, Robertson and Mortimer JJ).
Mr Towle represented himself before the Tribunal and on the appeal. His amended notice of appeal is inexpertly drafted. It effectively identifies a single question of law. The question is whether the Tribunal failed to “correctly and fully take into account” a determination that had been made pursuant to s 24 of the Social Security Act 1991 (Cth) (SS Act) in December 2015 (the s 24 determination). Details of the s 24 determination are given below.
The respondent’s submissions proceeded on an assumption that Mr Towle had intended to assert that the Tribunal had failed to take into account a mandatory relevant consideration, namely the fact that the s 24 determination had been made.
I do not consider that to be a correct interpretation of the question posed by Mr Towle on the appeal. By the phrase “correctly and fully” Mr Towle should be fairly understood to contend that the Tribunal failed to comprehend and grapple with the submissions he claims he had advanced about the legal relevance of the s 24 determination to the exercise of the power to suspend his payments. The contentions are summarised in the grounds of appeal, which are expressed as follows:
1.The Tribunal wrongly held that the Appellant’s disability support pension (‘DSP’) was correctly suspended pursuant to section 81 of the Social Security (Administration) Act 1999 in that:
a.The Tribunal failed to correctly and fully take into account the determination made by the Respondent pursuant to section 24 of the Social Security Act 1991 on or about 10 December 2015 that for a special reason in the particular case, the Appellant was not to be treated as a member of a couple for the purposes of the Social Security Act 1991 even though the Appellant has a relationship with Ya-Fen Chang and the relationship between the Appellant and Ya-Fen Chang is a de facto relationship;
b.The Tribunal failed to correctly and fully take into account the determination made by the Respondent pursuant to section 24 of the Social Security Act 1991 on or about 10 December 2015 that for a special reason in the particular case, Ms Ya-Fen Chang was not to be treated as a member of a couple for the purposes of the Social Security Act 1991 even though Ya-Fen Chang has a relationship with the Appellant and the relationship between the Appellant and Ya-Fen Chang is a de facto relationship;
cThe Appellant correctly responded to question 1 of the questionnaire annexed to the Respondent’s letter of 30 June 2016 (‘the questionnaire’) that ‘yes’ he still considered himself partnered to Ya-Fen Chang, which was consistent with the determination made pursuant to section 24 of the Social Security Act 1991 that he was not to be treated as a member of a couple even though he was partnered with Ya-Fen Chang;
d.In questions 3 and 4 of the questionnaire the Appellant declined to advise the Respondent how much money Ms Chang earns each fortnight and payslips for the last 3 months;
e.There was no necessity for the Appellant to provide the Respondent with information concerning how much money Ms Chang earns each fortnight and her payslips for the last 3 months as the Respondent had determined that the Appellant was not to be treated as a member of a couple;
f.There was no necessity for the Appellant to provide the Respondent with information concerning how much money Ms Chang earns each fortnight and her payslips for the past 3 months as the Respondent had determined that Ms Chang was not to be treated as a member of a couple;
g.The Appellant complied with the requirement of the notice given to the Appellant under section 68 of the Social Security (Administration) Act 1999 (‘the Administration Act’) contained within the letter of 30 June 2016 (‘the section 68 notice’);
h.As the Appellant had complied with the section 68 notice, the Appellant’s DSP should not have been suspended pursuant to section 81 of the Administration Act.
As expressed particularly in grounds 1(e) and 1(f) it was, and remains, Mr Towle’s primary position that he was not obliged to provide any more detailed responses to the s 68 notice than he did because, by reason of the s 24 determination, he was not to be treated as a member of a couple with Ms Chang. As elaborated upon in written and oral submissions, the ground in 1(g) is to the effect that Mr Towle was in no position to compel Ms Chang to provide him with the information sought in the s 68 notice because she was, by virtue of the s 24 determination, not to be treated as a member of a couple with him, and not recognised under the Migration Act as his partner.
THE SECTION 24 DETERMINATION
The rate of DSP payable to Mr Towle depends on whether he is to be treated as a single person (in which case a higher rate is payable) or as a “member of a couple” (in which case a lower rate is payable): see ss 1062 to 1064 of the SS Act, particularly Module A to Module H in s 1064.
The phrase “member of a couple” is defined in s 4(2) of the SS Act. A person is not a member of a couple if a determination under s 24 of the SS Act is in force in relation to the person: see s 4(6).
Section 24 of the SS Act relevantly provides:
24 Person may be treated as not being a member of a couple (subsection 4(2))
…
(2) Where:
(a)a person has a relationship with another person, whether of the same sex or a different sex (the partner); and
(b) the person is not legally married to the partner; and
(c)the relationship between the person and the partner is a de facto relationship; and
(d)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
…
The respondent’s records were in evidence before the Tribunal. The records show that in late September 2015, Mr Towle contacted Centrelink to enquire how his DSP may be affected should he become partnered. He told a delegate of the Secretary that he had formed a relationship with someone who resided in Australia on a temporary visa. The records indicate that further communications occurred in December 2015 about Mr Towle’s relationship with Ms Chang. By no later than 24 December 2015, a delegate of the Secretary had made a determination pursuant to s 24 of the SS Act that Mr Towle not be treated as a member of a couple with Ms Chang. An entry in the respondent’s records on that day states:
Disability Support Pension assessed at single rate even though customer is partnered under Section 24 SSA from 10/12/2015. Thomas is partnered to Ya-Fen Chang. Ya-Fen is on visa 010, which means she is not residentially qualified for an income support payment. … Section 24 is appropriate as Ya-Fen is on a temporary working visa, and Thomas is unemployed and receiving DSP. Ya-Fen is not residentially qualified to claim a Centrelink payment, only Thomas has some support in the form of his income support payment. Thomas and Ya-Fen are in financial difficulty, and have a special reason for being eligible for Section 24, and treating Thomas as single. Ya-Fen does not own any income or assets, and is currently unemployed. Thomas only has enough money to support himself. There is a lack of being able to pool resources for the couple as a result of the circumstances above. They have insufficient income to support each other.
There was no evidence before the Tribunal to suggest that Mr Towle had been advised in writing in or around December 2015 that a determination had been made pursuant to s 24 of the SS Act. He claimed in the Tribunal that he had not been advised of the determination. The Tribunal accepted that he had not.
In March 2016, the respondent undertook a review of Mr Towle’s situation so as to determine whether the s 24 determination should remain in force. Mr Towle completed a questionnaire around 24 March 2016, in which he confirmed that he still considered himself partnered to Ms Chang. On that occasion, he provided information about Ms Chang’s immigration and employment status and her modest earnings. An entry in the respondent’s records dated 29 March 2016 states:
s 24 to remain. will review in 13 weeks.
Consistent with that entry, there is evidence that at the time that the next questionnaire was provided to Mr Towle in June 2016, a review was again underway as to whether the s 24 determination should remain in force.
Neither of the questionnaires provided to Mr Towle made reference to the s 24 determination having been made, nor to the circumstance that the determination was subject to regular review. The reasons why the information sought might affect Mr Towle’s DSP entitlements were not stated.
THE TRIBUNAL’S REASONS
Section 68 of the SSA Act relevantly provides:
68 Person receiving social security payment or holding concession card
(1)Subsection (2) applies to a person to whom a social security payment (other than utilities allowance or energy supplement under Part 2.25B of the 1991 Act) is being paid.
(2)The Secretary may give a person to whom this subsection applies a notice that requires the person to do any or all of the following:
…
(b)give the Department one or more statements about a matter that might affect the payment to the person of the social security payment;
…
Broadly speaking the two issues before the Tribunal were, first, whether the s 68 notice met the description of a notice requiring Mr Towle to give the Department of Social Services statements about a matter that might affect the payment of his DSP and, second, (assuming the s 68 notice to be validly issued) whether Mr Towle complied with its terms. It then remained necessary for the Tribunal to determine for itself whether the discretionary power to suspend the DSP payment should or should not be exercised.
The Tribunal noted that at the time of its hearing Mr Towle “had been receiving DSP and had been paid at the single rate, purportedly under s 24 of the [SS Act]”. It held that the s 24 determination was made “because” Mr Towle had become partnered to Ms Chang. Ms Chang, the Tribunal held, had arrived in Australia on a tourist visa and had then been granted a bridging visa to enable her to remain in Australia during the processing of her application for a partner visa.
The Tribunal then referred to the review proceedings before AAT1. It said (at [15]):
When the applicant made submissions to the AAT1 Member regarding the application of s 24 of the Act, the Member explained that any decision under s 24 was not before her. She said this was because the [person who made the decision under review] did not make any determination under that section of the Act in the statement before the AAT1.
(Footnote omitted)
Later in its reasons, the Tribunal held that as the s 24 determination was not the decision reviewed by AAT1, “it is on further review also not relevantly before this Tribunal”.
Ms Chang gave evidence to the Tribunal to the effect that she would have been willing to supply her information to Mr Towle if he had explained the reasons for seeking it. In light of that evidence, the Tribunal rejected Mr Towle’s submission that he could not compel Ms Chang to provide information to him about her financial affairs because she was not to be treated as a couple for the purposes of the SS Act, and because they had not been recognised as partners under the Migration Act. It further held that there was no inconsistency between s 81 of the SSA Act in its application to Mr Towle and Ms Chang and the provisions of the Migration Act, which established the criteria for the grant of a partner visa.
In affirming the decision under review, the Tribunal said (at [32]):
In the decision under review by this Tribunal, I note that the AAT1 found that it was reasonable for Centrelink to request information from the applicant under s 68 of the [SSA Act]. I agree with this finding. The AAT1 found that, under s 81 of the [SSA Act], Centrelink was able to suspend the applicant’s DSP pending further enquiries. I agree with this finding. …
No elaboration is given as to why the Tribunal considered the questions to be “reasonable”, nor as to why “Centerlink was able” to suspend Mr Towle’s DSP pending further enquiries.
It may be fairly inferred that the Tribunal determined the questions to be “reasonable” because it had rejected Mr Towle’s contention that he was not required by law to respond to the questionnaire in any more detail than he had. The reasons otherwise make no reference to the evidence in the respondent’s records indicating that the s 24 determination was subject to, and in fact undergoing, a review at the time that the s 68 notice was issued.
CONSIDERATION
Mr Towle represented himself on this appeal. As already mentioned, his grounds of appeal are expressed in somewhat vague terms. They are given particulars by his submissions.
Mr Towle contended that a notice issued under s 68 of the SSA Act could not compel him to provide information about Ms Chang that he could not legally compel Ms Chang to disclose. He submitted that unless and until the Minister for Immigration and Border Protection had granted Ms Chang a partner visa, nothing in the SS Act could compel her to disclose her financial information to him, nor him to disclose that information to the Secretary.
The difficulty with that submission is that the Tribunal made factual findings about Ms Chang’s willingness to disclose her financial information to Mr Towle and those findings are not challenged on the appeal. Moreover, as a question of law, the circumstance that Ms Chang has not been granted a partner visa under the Migration Act does not present any legal barrier to Mr Towle asking her to disclose her financial information to him, nor does it present a legal impediment to him, in turn, forwarding the information to the Secretary. All of that is consistent with Mr Towle’s acknowledgment to the Secretary (and before the Tribunal and on this appeal) that he considers himself to be partnered with Ms Chang.
Had it been the case that Ms Chang in fact refused to share the information with Mr Towle, then different considerations might have arisen, particularly insofar as the exercise of the Secretary’s residual discretion under s 81 of the SSA Act was concerned. But all of that is academic. There is no legal basis to disturb the Tribunal’s finding that Ms Chang could and would have provided the requested information to Mr Towle had he sought it from her. It was not open to him to refuse to comply with the s 68 notice on that basis, whether as a matter of fact or law.
In large part, Mr Towle’s submissions were otherwise directed at whether the statutory criteria for a determination under s 24 of the SS Act were met, whether presently or at the time of the issue of the s 68 notice. He submitted that the Tribunal failed to properly grapple with his submission that Ms Chang’s entitlement to a partner visa under the Migration Act had not been finally and favourably determined, such that there remained “special reasons” for the Secretary not to treat him as a member of a couple with her.
That part of the submissions is misconceived.
The Tribunal was correct to observe that the decision subject to its review was a decision to suspend Mr Towle’s DSP pursuant to s 81 of the SSA Act because he had not complied with a request for information made pursuant to s 68 of the SSA Act. The respondent has presently made no decision to revoke the s 24 determination and so treat Mr Towle as a member of a couple. No occasion arose for the Tribunal itself to determine whether the criteria under s 24 of the SS Act were fulfilled, nor does the issue properly arise for determination on this appeal.
As Mr Towle properly acknowledged, a determination made pursuant to s 24 of the SS Act is one that might affect the payment to a person of a social security payment. Accordingly, if the information sought in the s 68 notice provided to Mr Towle was reasonably capable of informing the question of whether the s 24 determination should remain in force, it will have been validly issued. In that event, Mr Towle’s non-compliance with it is a circumstance that would enliven the Secretary’s discretion to suspend his payments altogether under s 81 of the SSA Act. It is noted that the financial consequence of the decision (namely the cessation of payments altogether) is more harsh than that which would follow if the s 24 determination were to be revoked, but that issue was not raised by Mr Towle in his grounds of appeal.
It is unsatisfactory that the notices issued to Mr Towle did not alert him to the circumstance that the s 24 determination was subject to review at the relevant time, and that the questions posed to him were directed toward obtaining information that may be taken into account upon such a review. It is also unfortunate that the reasons given by the Tribunal did not explain the relevance of the questions that had been put to Mr Towle by reference to the Secretary’s own review of the s 24 determination. In all of the circumstances, the Tribunal’s conclusion that the questions put to Mr Towle were “reasonable” is a starkly uninformative one. It is not a conclusion that would assist Mr Towle to understand the legal and factual basis for the Tribunal’s decision.
Nevertheless, Mr Towle has acknowledged on this appeal that the Secretary may conduct a review of a s 24 determination from time to time so as to determine whether it should remain in force. Had the issue been expressly addressed by the Tribunal it would have been bound to conclude, on the material before it, that such a review was in fact contemplated or underway when the s 68 notice was issued to Mr Towle on 30 June 2016. Accordingly, whilst I accept Mr Towle’s submission that the Tribunal’s reasons do not adequately grapple with and determine the issues arising before it on review, I would not grant Mr Towle the relief he seeks on this appeal.
Mr Towle made a final submission to the effect that the Tribunal failed to take into account the circumstance that the s 24 determination was originally made on the singular ground that Ms Chang’s immigration status was uncertain. It was not, he submitted, made by reference to her personal financial circumstances. Accordingly, he submitted, her financial information was irrelevant upon the Secretary’s consideration of whether the s 24 determination should continue in effect. It is unclear whether Mr Towle made any submission to this effect before the Tribunal. I will nonetheless deal with it on its merits.
The submission should be rejected for two reasons.
First, Mr Towle has not established on the evidence that the s 24 determination was originally founded solely upon Ms Chang’s undetermined immigration status. The evidence referred to at [16] of these reasons is to the contrary.
More fundamentally, however, the criteria for the making of a determination under s 24 of the SS Act require consideration of the financial circumstances of both parties to the relationship. The financial circumstances of Ms Chang were relevant not only to the criterion in s 24(2)(c) (that is, the existence of a de facto relationship), but also relevant to the question of whether special reasons might exist for the purposes of s 24(2)(d). Moreover, from at least March 2016, Ms Chang’s financial circumstances were again taken into account in determining the capacity of Ms Chang and Mr Towle to pool their financial resources. At that time, their financial position was indeed taken into account to support a decision that the s 24 determination should remain in force.
There is nothing in the SSA Act to preclude consideration of the financial resources of both parties to a relationship, whether upon an initial determination made pursuant to s 24 of the SS Act, or upon any subsequent reconsideration as to whether the determination should remain in force. Nor is there anything in the SS Act or the SSA Act to suggest that the initial factual basis for the determination must remain constant, such that other relevant factors must be ignored upon any subsequent review.
In conclusion, I accept Mr Towle’s submission that the Tribunal did not “fully” comprehend and deal with the nature of some of his arguments. The task of the Tribunal was to make the correct or preferable decision on the material before it, and to adequately explain in its reasons as to how the discretion to suspend Mr Towle’s DSP payment was enlivened on the facts and why the discretion should be exercised in his particular case. It was not sufficient to determine that “Centerlink was able” to suspend the payments. However, notwithstanding the shortcomings in the Tribunal’s reasons, I would not allow the appeal. On the evidence before the Tribunal, the only conclusion open was that the s 68 notice was validly issued and that Mr Towle had not complied with it.
I have not overlooked that the suspension of Mr Towle’s DSP involved the exercise of a discretionary power. Even if the power to suspend was enlivened, it remained necessary for the decision-maker to consider whether the discretion should be exercised adversely to the social security recipient. Relevant to the exercise of the discretion is the circumstance that the materiality of the information has not been adequately explained to the social security recipient. Also relevant is the harshness of the financial consequence, particularly when the financial information went to the rate payable to Mr Towle and not to his personal entitlement to receive the DSP. There is nothing in the Tribunal’s reasons to indicate that it recognised the existence of the residual discretion, nor is it clear what, if any, circumstances were taken into account in its exercise. That is unsatisfactory. However, Mr Towle has not raised arguments on this appeal concerning the exercise of the residual discretion, assuming the s 68 notice to have been lawfully issued and so I would not disturb the Tribunal’s decision on that basis.
The appeal should be dismissed.
I will hear the parties as to costs.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Charlesworth. Associate:
Dated: 28 March 2018
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