Wallander v Sdeewr - [2010] FMCA 26

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WALLANDER v SDEEWR

[2010] FMCA 26

ADMINISTRATIVE LAW – Appeal from Administrative Appeals Tribunal – whether appellant’s entitlement to Newstart allowance should be reduced on account of income earned by him – whether hobby income is income for the purposes of the Social Security Act.

ADMINISTRATIVE LAW – Appeal from Administrative Appeals Tribunal – whether constitutional validity of governing statute should be determined on appeal.

Administrative Appeals Tribunal Act1975, s.44
Social Security Act1991, ss.8, 541, 593, 1068, 1223, 1237
Judiciary Act1903, s.78B

Applicant:

ROLAND WALLANDER

Respondent:

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT & WORKPLACE RELATIONS

File Number:

BRG 375 of 2009

Judgment of:

Wilson FM

Hearing date:

11 September 2009

Date of Last Submission:

11 September 2009

Delivered at:

Brisbane

Delivered on:

22 January 2010

REPRESENTATION

Counsel for the Applicant:

N/A

The Applicant:

In person

Counsel for the Respondent:

N/A

Solicitors for the Respondent:

Australian Government Solicitor

ORDERS

That the appeal be dismissed.
That the appellant pay the respondent’s costs of and incidental to the appeal, to be taxed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
BRISBANE

BRG 375 of 2009

ROLAND WALLANDER

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT & WORKPLACE RELATIONS

Respondent

REASONS FOR JUDGMENT

The appellant is a recipient of Newstart allowance from the Commonwealth. On 28 March 2008 Centrelink decided to raise a debt against the appellant in the sum of $752.65, alleging that the appellant had been overpaid due to his receipt of undeclared income in the period 14 July 2007 – 19 December 2007.
The appellant applied for a review of that decision. On 18 September 2008 an authorised review officer affirmed the original decision. The appellant appealed to the Social Security Appeals Tribunal. On 29 October 2008, that Tribunal affirmed the original decision. The appellant appealed to the Administrative Appeals Tribunal. On 11 March 2009 the Administrative Appeals Tribunal affirmed the decision under review.
On 6 April 2009 the appellant filed in the Federal Court of Australia an application for an extension of time within which to appeal the decision of the Administrative Appeals Tribunal.
On 29 April 2009 Collier J in the Federal Court acceded to the application for an extension of time and ordered that any Notice of Appeal be filed and served on or before 29 May 2009. A Notice of Appeal was filed on 29 May 2009.
On 3 June 2009 Collier J ordered that the proceedings be transferred to this Court.
An appeal lies only to the Federal Court, and to this Court, on a question of law: s.44(1) Administrative Appeals Tribunal Act 1975.
The appellant, who has at all times acted on his own behalf, framed the question of law that he contended arose in this matter as follows:
“That the ‘Activity’ Agreement’ from Centrelink is mischievous under normal contract law is not means tested (unmeasured punishments) & is void or voidable under contract law definitions (see attachment Reference 1) because of duress and undue influence. If this thing – that looks like a contract – is not a contract, and can not be dealt with by the courts, then it can not be set aside by SSAT & AAT.”
Like the appellant’s outline of argument, the Notice of Appeal is not an easy document to read.
The grounds of the appeal are stated to be as follows:
a)That the words used in the Activity Agreements and surrounding them need to be deleted or unmasked into their true form;
b)That they cannot put aside this material on an ‘Activity Agreement’ being unreasonable and excessively coercive by using duress and undue influence – even if such words use the word contract – since no one else in the legal system can handle a thing that seems like a contract – but is not.
The appellant obviously has a strong philosophical objection to the concepts of “activity agreements” and “mutual obligation” referred to in the Social Security Act 1991, and in documents generated by Centrelink. He mounts a passionate case, by reference to numerous academic articles, that welfare recipients ought not be ‘forced’ to enter into obligations, or forced to seek work, as a condition of their receipt of benefits. He uses emotive language, asserting that the withholding of benefits amounts to a ‘death threat’ against him.
Whilst interesting reading, all of the appellant’s submissions are beside the point.
Newstart allowance is dealt with at Part 2.12 of Chapter 2 of the Social Security Act. Section 593 deals with the qualification for Newstart allowance. Besides being unemployed, a recipient of the benefit must also satisfy what is described as an ‘activity test’. That is given meaning by s.541 of the Act. Relevantly, a recipient of the benefit must satisfy Centrelink that he or she is actively seeking paid work during the period in respect of which the benefit is paid.
The rate of Newstart allowance is calculated under s.1068 of the Act. It is apparent from the calculation module that any ‘income’ earned by a benefit recipient is to be taken into account. ‘Income’ is a defined term, in s.8(1) of the Act. The definition, at the relevant time, is usefully set out at paragraph 10 of the reasons of the Administrative Appeals Tribunal.
Any overpayment of Newstart allowance gives rise to a debt under s.1223 over the Act. That debt can be recovered, or, in certain circumstances, waived or reduced.
Although the Act is not an easy piece of legislation to read, the entitlement to Newstart allowance, the rate of that benefit, and the recovery of any overpayment are spelt out in the statute. The appellant’s right to receive the benefit, and the Commonwealth’s right to recover any overpayment of it, are each expressly dealt with by the statute.
There was no factual contest that in the period in relation which the debt has been raised the appellant received money from distributing pamphlets and other advertising literature for PMP Publications. The appellant initially declared the receipt of this money to Centrelink. He ceased doing so, having formed the opinion that it was hobby income, and therefore did not need to be declared.
Before the Administrative Appeals Tribunal, the question to be decided was whether the receipt of money from the activity undertaken by the appellant was ‘income’ as defined in the Act, and therefore had to be taken into account. A subsidiary issue arose as to whether it mattered that the money received was from carrying out a hobby.
I can discern no error in the reasoning process of the Tribunal.
At paragraph 3 of the reasons of the Tribunal it is stated:
“I accept that the applicant’s intention in going into this particular venture with PMP was perhaps twofold. One was to see whether it could turn into something, in due course, that would be a source of profit. But the venture was also intended to satisfy what he (or Centrelink) regarded as his obligations under the mutual obligation social security system. Over the last few years, in particular, social security has proceeded on the basis that people needed to do things in order to remain qualified for the assistance they receive; they could not just sit about. I accept that Mr Wallander tried to meet his obligations in a good faith way.”
The Tribunal member correctly identified at paragraph 5 of his reasons that the central issue was whether the money received from distributing pamphlets was properly characterised as income. At paragraph 12 he analysed the facts and concluded that what the appellant received was income. The Tribunal member correctly concluded that classifying the income as being from a hobby or otherwise was beside the point under the Social Security Act. The Tribunal member correctly pointed out that the definition of income under that legislation was materially different than under the taxation statutes, which are primarily concerned with “assessable income”.
The Tribunal member then turned to consider whether the appellant should be excused from the requirement to pay the money back. After analysing the facts, and the requirement of ‘special circumstances’ under s.1237AAD of the Act, the Tribunal member found against the appellant. Again, there is no appealable error in that analysis or decision.
If the question of law sought to be agitated by the appellant is whether his receipt of money from a hobby can constitute income under the relevant definition in the Social Security Act, then in my view, the decision of the Tribunal was plainly correct.
There is no question of law that arises in respect of the Tribunal’s decision not to set aside the debt under the special circumstances provision.
However, the appellant seemingly wants to go further and argue that it is unlawful for the Commonwealth, by the Social Security Act, to require a recipient of Newstart allowance to satisfy an ‘activity test’. Although the question of law formulated by the appellant is difficult to understand, he does seem to be challenging the validity of activity agreements generally.
The appellant argues that in forcing an unemployed person to sign an ‘activity agreement’ the Commonwealth uses undue influence and duress.
The appellant also argues that an activity agreement should be treated as any other contract, and be set aside if procured under duress, or as a result of undue influence. The appellant argues that unemployed persons have no real option if they want to receive benefits but to sign the activity agreement. He argues that the requirement to satisfy an activity test is discriminatory against unemployed persons.
As I have said, all of these arguments are interesting, but irrelevant to the disposition of the appeal. The decisions below have dealt with the matter in an orthodox manner, by simply construing the statute that governs the payment of the benefits that the appellant seeks to receive.
If the appellant now wishes to challenge the constitutional validity of that part of the Social Security Act that imposes the obligation to satisfy an activity test, he should do so in the proper manner. He should specifically seek a declaration that particular parts of the Act are beyond the power of the Commonwealth parliament. Notices will have to be given to Attorneys-General pursuant to s.78B Judiciary Act 1903.
It is not appropriate, on an appeal from the Administrative Appeals Tribunal for this Court to decide the question of the constitutional validity of parts of a Commonwealth statute. The appeal is, after all, on a question of law, arising from the Tribunal’s decision. The validity of the Act was not argued before the Tribunal.
Further, it is not the function of this Court on this appeal to re-write the Social Security Act, nor to require the removal (or, to use the language of the appellant to ‘unmask’) of words such as ‘mutual obligation’ from Centrelink documents, as the appellant implores the Court to do
Nothing I have said in the preceding few paragraphs should be taken as any encouragement to the appellant to make the challenge discussed. On the contrary, my view is that any such challenge is hopeless and doomed to fail. Equating a statutory obligation to a contractual obligation is misconceived. Introducing notions of undue influence and duress to what are really issues of statutory interpretation are misconceived. However, as I have said, it is not necessary, nor appropriate, for me to decide that question to dispose of this appeal.
The appeal must be dismissed, with costs.

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate: Lynnette Chin

Date: 22 January 2010