Walker, Kelvin v Department of Social Security

[1997] FCA 41

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY  No QG 54 of 1996

GENERAL DIVISION

BETWEEN:KELVIN WALKER

Applicant

AND:DEPARTMENT OF SOCIAL SECURITY

Respondent

CORAM:                   Spender J
PLACE:  Brisbane
DATE:            4 February 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

The application be dismissed with no order as to costs.

Note:   Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY  No  QG 54 of 1996

GENERAL DIVISION

BETWEEN:KELVIN WALKER

Applicant

AND:DEPARTMENT OF SOCIAL SECURITY

Respondent

CORAM:                   Spender J
PLACE:  Brisbane
DATE:            4 February 1997

REASONS FOR JUDGMENT

This is an appeal pursuant to s 44 of the Administrative Appeals Tribunal Act (‘the AAT Act’) from a decision of the Administrative Appeals Tribunal (‘the AAT’) given on 8 March 1996 whereby the AAT decided, in the terms of paragraphs 6 and 7 of the reasons given on that day by the AAT:

“6.  I take the view that the Social Security Appeals Tribunal (‘the SSAT)’ had no power to review this decision of the delegate to recover a debt by way of garnishee notice and neither does the AAT.

7.   The decision of the SSAT that it had no power nor any discretion to enable it to change the decision sought to be reviewed was correct.  The decision will be affirmed.”

It seems to me that there is a disconformity between the absence of power in the SSAT referred to in paragraph 6 and the absence of any power or discretion which is referred to in paragraph 7 of those reasons. 

On 5 April 1995, the Department of Social Security decided to recover moneys owing to the Commonwealth by Mr Walker, the present applicant, by garnishee action. Recovery action took place on that day, a garnishee notice being served on the Advance Bank at which Mr Walker had an account and into which the Department had deposited funds of $2134.40 on 5 April 1995. 

On 5 July 1995, an authorised review officer of the Department of Social Security affirmed the decision to take garnishee action.  Mr Walker appealed on 11 July to the SSAT.

It would be useful to summarise the history of the matter.

The AAT regarded the application before it as an application to review a decision to garnishee the applicant's bank account.  The history of the matter was summarised by the AAT and I adopt that summary:

“(a)Between early 1984 and late 1987 the applicant made false claims on the Department of Social Security (DSS) which resulted in his being paid $20,287.03 to which he was not entitled.

(b)The applicant was prosecuted and convicted of offences arising out of the false claims. (He was imprisoned on 12 April 1989).

(c)On 8 November 1988 the applicant applied for sickness benefits.  The application was rejected.  He applied for a review by the AAT.  Deputy President Breen affirmed the decision to not pay sickness benefits.  The applicant appealed to the Federal Court.  Spender J allowed the appeal and sent the matter back to the Tribunal for rehearing.

(d)On 21 June 1991, Bulley J found in favour of the applicant and decided that he was entitled to be paid sickness benefits from 20 October 1988.

(e)DSS calculated the back payment, for the period 20 October 1988 to 11 April 1989, to be $2,134.40.

(f)On 9 July 1991 a delegate of DSS determined to offset the sum of $2,1344.40 against the overpayment of $20,287.03.  The appellant was not paid the $2,134.40.

(g)The appellant sought a review of the decision to set off the back payment against the overpayment.  The Social Security Appeals Tribunal (SSAT) overturned the delegate’s decision.  At the AAT Senior Member Muller restored the delegate’s decision to set off the two amounts.

(h)The applicant appealed to the Federal Court.  Von Doussa J dismissed the appeal.

(i)The applicant appealed to the Full Federal Court.  Cooper J said that he would allow the appeal because ”no occasion for a set-off of mutual debts could arise”.  Drummond J would have dismissed the appeal because ”the respondent’s delegate was lawfully entitled to take the action he did on 9 July 1991”.  Spender J agreed with Cooper J and went on to say:

“If the department wished to apply the $2,134.40 payable to Mr Walker for sickness benefits in reduction of the debt of $20,287.03 owed by Mr Walker to the Commonwealth, in my opinion, it was, and still is, necessary to comply with the provisions of s 1233, dealing with recovery by way of a garnishee notice.”

(j)On 5 April 1995 a delegate of DSS made the following decision.

“This gentleman has an overpayment of $20,287.03.  He successfully appealed to the Federal Court about the Department’s decision to offset Sickness Benefit arrears of $2,134.40 against this debt.  However the Federal Court did say that if the Department wished to offset the arrears against the debt ‘it was, and still is, necessary to comply with the provisions of s 1233 dealing with recovery by way of a garnishee notice.”

“After consultation with Security, Fraud and Control and with External Appeals I have decided to impose a garnishee on these arrears at the time they are paid into his account.  In order to impose a garnishee successfully I need to know when the payment goes into the account.  I therefore ask that you arrange for a manual cheque to be drawn for Mr Walker for the amount of $2,134.40 to be handed to Maret Summerhill of the Debt Recovery Unit.  Maret will deposit this in Mr Walker’s bank account where a garnishee will be waiting.  The garnishee will be imposed according to s 1233 and the Debt Recovery Manual.”

(k)The procedure outlined in the delegate’s decision was carried out.

(l)The applicant applied to the SSAT for a review of the garnishee decision. The SSAT decided on 1 August 1995 that the DSS complied with section 1233 of the Act and that it had no power to direct that garnishee action proceed in a manner different from that. The SSAT affirmed the delegate’s decision.”

The summary in the last paragraph reflects the submissions by Mr Walker to the SSAT.  In giving its reasons the SSAT said that:

“The issue in this case is whether Mr Walker was denied natural justice by the Department.”

The essence of that complaint was a claim that he was entitled to have advance notice of the intention by the Department to issue a garnishee notice. The AAT referred to s 1233, the section of the Social Security Act 1991 (‘the Act’) dealing with a garnishee notice. That section relevantly provided:

“1233.(1) If a debt is recoverable from a person (in this section called the ”debtor”) by the Commonwealth under section 1223, 1223AA, 1223AB, 1223A, 1223B, 1224, 1224AA, 1224A, 1224B, 1224C, 1224D, 1224E, 1225, 1226A, 1227 or 1230 of this Act or under the 1947 Act, the Secretary may by written notice given to another person:

(a)by whom any money is due or accruing, or may become due, to the debtor; or

(b)who holds or may subsequently hold money for or on account of the debtor; or

(c)who holds or may subsequently hold money on account of some other person for payment to the debtor; or

(d)who has authority from some other person to pay money to the debtor;

require the person to whom the notice is given to pay the Commonwealth:

(e)an amount specified in the notice, not exceeding the amount of the debt or the amount of the money referred to in the preceding paragraph that is applicable; or

(f)such amount as is specified in the notice out of each payment that the person becomes liable from time to time to make to the debtor until that debt is satisfied; or

(g)such percentage as is specified in the notice of each payment that the person becomes liable from time to time to make to the debtor until that debt is satisfied.

1233.(2) The time for making a payment in compliance with a notice under subsection (1) is such time as is specified in the notice, not being a time before the money concerned becomes due or is held or before the end of the period of 14 days after the notice is given.

1233(3) A person who fails to comply with a notice under subsection (1) to the extent that the person is capable of doing so is guilty of an offence.

Penalty: Imprisonment for 12 months.

1233.(4) If the Secretary gives a notice to a person under subsection (1), the Secretary must give a copy of the notice to the debtor.

1233.(5) A person who makes a payment to the Commonwealth in compliance with a notice under subsection (1) is to be taken to have made the payment under the authority of the debtor and of any other person concerned.

...

1233.(8) In this section, ”person” includes:

(a)the Commonwealth; and

(b)a State; and

(c)a Territory; and

(d)any authority of the Commonwealth or of a State or Territory

...

Section 1253 of the Act sets out the review powers of the SSAT:

“1253.(1) If a person applies to the Social Security Appeals Tribunal (SSAT) for review of a decision (other than a decision referred to in subsection (7)), the Tribunal must:

(a)affirm the decision; or

(b)vary the decision; or

(c)set the decision aside and:

(i)substitute a new decision; or

(ii)send the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the Tribunal.

1253.(2) If the Social Security Appeals Tribunal sets a decision aside and substitutes for it a decision that a person is entitled to a social security payment, the SSAT must:

(a)assess the rate at which the social security payment is to be paid to the person; or

(b)ask the Secretary to assess the rate at which the social security payment is to be paid to the person.

1253.(3) Subject to subsection (4), the Social Security Appeals Tribunal may, for the purposes of reviewing a decision under this Act, exercise all the powers and discretions that are conferred by this Act on the Secretary.

1253.(4) The reference in subsection (3) to powers and discretions conferred by this Act does not include a reference to powers and discretions conferred by:

(a)omitted;

(b)omitted;

(c)section 28 (approval of voluntary organisations - JSA work test); or

(d)a provision dealing with the form and place of lodgment of a claim; or

(e)a provision dealing with the manner of payment of a social security payment; or

(f)section 1233 (garnishee notice); or

...

(n)a provision dealing with the imposition of requirements before grant of social security payment; or

(o)a provision dealing with the deduction of amounts from social security payment payments for tax purposes.”

The SSAT set out in some detail the submissions by Mr Walker and in particular recorded:

“His main argument was that he had been deprived of natural justice in not being advised of the decision to garnishee in advance, he not being advised of the reasons of the decision to garnishee, and he not being given the opportunity to address the Department on matters relevant to the decision to garnishee, such as his [financial] situation.“

The SSAT found the facts as follows: that Mr Walker owed a debt of $20,032.23 to the Commonwealth, the Department had deposited $2134.40 into Mr Walker's Advance Bank account on 5 April 1995 and that the Department garnisheed that account on 5 April 1995 and recovered $2134.40 in part payment of Mr Walker's debt to the Commonwealth.  Importantly, the SSAT proceeded on the following basis.  It said:

“Pursuant to subsection 1253(4) of the Act [this should be subsection 1253(1)]-

when a person applies to the Tribunal for a decision, the Tribunal must affirm the decision, vary it, or set it aside.  Under 1253(4) the Tribunal cannot exercise any power or discretion contained in section 1233.  The Tribunal has no power to direct that garnishee action proceed in a manner different from that manner in which the Department proceeded to take garnishee action.”

The conclusion by the SSAT continued:

“The Department took garnishee action against Mr Walker in compliance with the terms of section 1233 of the Act. In Mr Walker's appeal to the Full Federal Court in relation to previous actions taken by the Department against Mr Walker, the Court held that if the Department wished to apply the $2134.40 payable to Mr Walker for sickness benefits in reduction of the debt of $20,287.03 owed by Mr Walker to the Commonwealth, it was necessary for the Department to comply with provisions of s 1233.”

The SSAT also noted:

“The Full Court held that Chapter 5 of the Act constitutes a code for the recovery of overpayments as debts due to the Commonwealth. Section 1233 provides for notice to be given after the event of garnishee action. Further, s 1233(7E) of the Act allows the time limit for recovery of a debt to be extended with internal Department activity on the file. The Tribunal therefore affirms the decision of the Department to recover the sum of $2134.40 from Mr Walker.”

The reasons for the decision are terse, but from the paragraphs dealing with the application of the law by the SSAT to the findings of fact, the decision of the SSAT was based on its view that it had no power to direct that garnishee action proceed in a manner different from the manner in which the Department proceeded to take garnishee action. The SSAT found that what the Department had done was to proceed in accordance with the provisions of s 1233 of the Act.

When the matter came before the AAT, it recognised in its reasons that the SSAT had the power to review decisions made under the Act. The AAT specifically noted:

“Section 1253(3) subject to subsection (4), gives the SSAT the power, for the purpose of review, to exercise all the powers and discretions that are conferred by the Act on the Secretary.”

The AAT continued:

“Subsection (4) excludes from the powers and discretions given in subsection (3) the following matters (inter alia):

(e)a provision dealing with the manner of payment of a social security payment; or

(f)section 1233 (garnishee notice) “

Section 1283 of the Act provides for the review of SSAT decisions by the AAT. Section 1283 (1) and (2) provide:

“1283.(1) If a decision has been reviewed by the Social Security Appeals Tribunal (SSAT) and has been affirmed, varied or set aside, application may be made to the Administrative Appeals Tribunal for a review of the decision of the SSAT.

1283.(2) For the purpose of subsection (1), the decision made by the SSAT is to be taken to be:

(a)where the SSAT affirms the decision - the decision as affirmed; and

(b)where the SSAT varies a decision - the decision as varied; and

(c)where the SSAT sets a decision aside and substitutes a new decision - the new decision; and

(d)where the SSAT sets a decision aside and sends the matter back to the Secretary for reconsideration in accordance with any directions or recommendations of the SSAT - the directions or recommendations of the SSAT.”

After making reference to those provisions, the AAT concluded that the SSAT had no power to review the decision of the delegate to recover a debt by way of garnishee action and expressed the view that it had no power or any discretion to enable it to change the decision sought to be reviewed and, as a consequence, affirmed the decision.

There is a difference between a power to review a decision and a power in the course of that review to exercise other powers or discretions. This is a distinction which does not seem to have been drawn by the AAT in this case, or about which at least there was confusion.

Section 1253(4) clearly prevents the SSAT and, it follows in my opinion, the AAT, from exercising any of the powers or discretions of the Secretary in relation to s
1233. The exercise of a power entails the grantee of a power doing something which he or she is authorised to do by virtue of that conferral.  Merely forming an opinion is not the exercise of a power or the exercise of a discretion.

The power of the SSAT to review decisions under the Act is conferred by 1253(1). It is in the exercise of that power that there is the restriction imposed in the appropriate case - (in this case, decisions under s 1233) by section 1253(4). A distinction must be drawn between those decisions which are non-reviewable, those which are able to be reviewed by the SSAT and those which are reviewable but for which it is open to the SSAT to exercise any power or discretion of the Secretary.

I think the error to which I have made reference is recognised by Mr Walker and, if I may say so, his written submission correctly states the submission.  He said, amongst other things:

“It would appear that subsection 1253(4) clearly prohibits the SSAT from issuing a garnishee notice. It is also likely that the sub-section would prevent the SSAT from deciding that such a notice should not be issued, for that might entail an exercise of the discretion to issue the notice or not to do so.  Nor is it likely that the SSAT  could set aside a decision to issue a garnishee notice and substitute a decision that a notice should be issued to a third party requiring them to pay a lesser amount than that specified in the original notice.”

Thus far I agree.  His submissions continue:

“On the other hand, it is possible that the SSAT’s jurisdiction would extend to remitting the matter back to the Secretary for reconsideration in accordance with any directions or recommendations it might make.”

He submitted:

“...it is arguable that setting the original decision aside and sending the matter back to the Department to make a fresh decision in accordance with directions or recommendations is not in itself an exercise of the
discretion conferred by section 1233.  By so doing the SSAT would not be deciding to issue a notice or not to do so.”

This submission raises the following question: on what basis would the SSAT set the original decision aside before sending the matter back? That would only be done if the SSAT held the view that the exercise of the discretion by the Secretary of the powers conferred by s 1233 was wrong in the circumstances and should be altered. It seems to me that to permit the original decision to be set aside in those circumstances and to send the matter back to the Department to make a fresh decision in accordance with directions or recommendations, is indirectly to permit the SSAT to do that which it is prevented from doing by the legislature in s 1253 (4).

It was submitted by Mr Walker that, on the merits of the decision by the delegate of the Secretary to take garnishee action, there was a failure to take into account relevant considerations, namely, Mr Walker's then financial circumstances. It was said, therefore, that in those circumstances there was default by the Department in considering relevant considerations which could be divined by reference to the purposes underlying the Act. This submission embarks on merit review; it raises the consideration of the correctness or appropriateness of the Secretary in exercising the powers and discretions of s 1233.

In my opinion, there is jurisdictional error in the way that the AAT has expressed its view.  In AnisminicLtd v Foreign Compensation Commission, [1969] 2 AC 147 at 171, Lord Reid said:

“...there are many cases where although the Tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity.  It

may have given its decision in bad faith.  It may have made a decision which it had no power to make.  It may have failed in the course of the inquiry to comply with the requirements of natural justice.  It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it.  It may have refused to take into account something which it was required to take into account.  Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account.  I do not intend this list to be exhaustive.  But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.”

In Craig v The State of South Australia (1995) 184 CLR 163, the Full Court of the High Court constituted by Brennan, Deane, Toohey, Gaudron and McHugh JJ said under the rubric ”Jurisdictional Error” (at 177):

“An inferior court falls into jurisdictional error if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist.  Such jurisdictional error can infect either a positive act or a refusal or failure to act.  Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction.”

At 189 the Court said:

“...an inferior court will exceed its authority and fall into jurisdictional error if it misconstrues that statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case.”

And at 199 the Court said:

“If such an Administrative Tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or at least in some circumstances to make an erroneous finding or to reach a mistaken conclusion, and the Tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers.  Such an error of law is a jurisdictional error which will invalidate any order or decision of the Tribunal which reflects it.”

In the present case, I find there is an error of that kind constituted by the failure to recognise the difference between what is referred to in s 1253(1) and the restriction on the powers of the SSAT in s 1253 (4). However, in my opinion, the AAT’s affirmation of the decision by the SSAT that it had no power or any discretion to enable it to change the decision sought to be reviewed, (being the decision to garnishee the applicant's bank account), is not vitiated by the presence of this error.

If the matter was sent back to the AAT in light of the error identified above, then the same conclusion would inevitably be reached.  In my view, it would be an exercise in futility.

On the entirety of the material and in particular on a full consideration of what the SSAT decided and the basis for its decision, this is a case where, notwithstanding the identification of the error, the application should be dismissed. I refer to the observations of O'Loughlin J in Dunn v The Secretary of the Department of Social Security, 21 ALD 248, where his Honour said at 249:

“...even though I have perceived error on the part of the Tribunal ... I have also concluded that this is one of those cases where it would be an exercise in futility to refer the matter back to the Tribunal to make its decision in accordance with the law.  As I have assessed the matter, the remission of the proceedings to the Tribunal would result in the Tribunal concluding that there are no facts before it upon which it could make the required finding.  The practicalities of the matter call for the dismissal of the appeal, and that is the order of the Court.”

While the position is not precisely the same in the present case, for the same reason I will not remit the matter to the AAT.  It seems to me that, having regard to the
powers of the SSAT and of the AAT concerning the decision for which review was sought, only one conclusion is possible in this case. 

For these reasons, then, application Q54 of 1996 is dismissed.

The application is dismissed, but there will be no order as to costs.

I certify that this and the preceding thirteen (13) pages are a true copy of the reasons for judgment herein of the Honourable Justice Spender.

Associate

Date: 4 February 1997

The applicant appeared in person.

Counsel for the respondent     :          Mr P Hack

instructed by  :          Australian Government Solicitor

Date of hearing  :          4 February 1997