FEDERAL COURT OF AUSTRALIA SOCIAL SECURITY - appeal from decision of a primary judge to set aside decision of Administrative Appeals Tribunal ("AAT") - whether appellant entitled to job search allowance - whether appellant satisfied statutory "activity test" - appellant seeking election as Member of Parliament - requirements imposed by "activity test" - whether test requires that "reasonable steps" must be taken to find work. ADMINISTRATIVE LAW - appeal from decision of primary judge setting aside decision of AAT - AAT's decision that appellant satisfied statutory "activity test" - whether error of law in construction of expression in statute. STATUTORY INTERPRETATION - use of extrinsic material. Social Security Act 1991 (Cth) s 522 Commissioner of Stamps (South Australia) v Telegraph Investment Company Pty Ltd (1995) 184 CLR 453, applied Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511, applied Hope v Bathurst City Council (1980) 144 CLR 1, cited Collector of Customs v Agfa-Gevaert Ltd (1996) 141 ALR 59, cited Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, cited Re Australian Federation of Construction Contractors; Ex parte Billing (1986) 68 ALR 416, cited MARK SPENCER v SECRETARY, DEPARTMENT OF SOCIAL SECURITY NG 626 of 1997 JUDGES: HEEREY, MADGWICK and MERKEL JJ DATE: 1 MAY 1998 place: sydney IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG626 of 1997 On appeal from A JUDGE OF THE FEDERAL COURT BETWEEN: MARK SPENCER Applicant AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY Respondent JUDGE(S): HEEREY, MADGWICK AND MERKEL JJ DATE OF ORDER: 1 MAY 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal is allowed. 2. The respondent pay the costs of the appellant on the appeal and in the Court below. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG626 of 1997 On appeal from A JUDGE OF THE FEDERAL COURT BETWEEN: MARK SPENCER Applicant AND: SECRETARY, DEPARTMENT OF SOCIAL SECURITY Respondent JUDGE(S): HEEREY, MADGWICK AND MERKEL JJ DATE: 1 MAY 1998 PLACE: SYDNEY REASONS FOR JUDGMENT Introduction Section 513 of the Social Security Act 1991 (Cth) ("the Act") provides that a person is qualified for a job search allowance for the period the person is unemployed and satisfies the activity test. The activity test requires that the person be "actively seeking" and "willing to undertake" paid work other than work that is "unsuitable to be undertaken by the person": see s 522(1). This appeal raises the question of whether it is necessary that the person seeking work has some realistic prospect of obtaining it. The appellant was refused a job search allowance in respect of the period 20 February to 27 March 1995 when he was engaged in campaigning as New South Wales Greens candidate for election to the State Parliament as a Member for the seat of Coffs Harbour. The respondent cancelled the appellant's job search allowance for that period. After unsuccessful internal review applications the appellant appealed to the Social Security Appeals Tribunal which on 11 April 1995 rejected his application for review. He then successfully appealed to the Administrative Appeals Tribunal ("the AAT") which on 17 May 1996 set aside the decision and remitted the matter to the respondent with a direction that at all relevant times the appellant was entitled to payment of the allowance. The respondent successfully appealed to a judge of this Court who, by judgment given on 21 July 1997, set aside the decision of the AAT and remitted the matter to it for consideration in accordance with law. His Honour concluded that the AAT erred in its interpretation of s 522 and, in particular, of the expression "actively seeking" work. The appellant now appeals to the Full Court. The ACT's decision The factual background of this matter is sufficiently disclosed by the findings of the AAT which were in the following terms: "· During the period under review, being 20 February 1995 to 27 March 1995, the Applicant [Mr Spencer] was very substantially and actively involved in an election campaign when he was seeking election as a Member of the New South Wales Parliament as a member of the Greens party. His involvement in electioneering caused him to be stressed and exhausted. Notwithstanding his evidence that he was actively seeking work other than as a Member of Parliament during that period and that in the event of a job offer which could not be delayed until after the election had taken place he would have accepted the job, the Applicant would not have been able to sustain full-time or paid employment during the period under review while he was running his campaign. On the balance of probabilities, the Tribunal finds that he would not have been prepared to accept paid employment offered to him if it required him to forego or significantly down-grade his election campaign. · Even though the Applicant put a large amount of time and energy into running his campaign the Tribunal finds that at no time was there even a slight chance that he would be successful in the election, and whilst he was hopeful that he would win he realised that it was not a realistic goal. · The evidence of the Applicant that he was looking for work as outlined in exhibit A was not consistent with contemporaneous evidence in his income statements T.5 and T.8, and in his Work Intentions form T.6, nor was it consistent with the evidence which he gave to the Social Security Appeals Tribunal. The Tribunal finds that during the period under review the Applicant was not seeking paid employment other than as a Member of Parliament, notwithstanding his evidence to the contrary to which the Tribunal gives little weight. .... · On the basis of my findings, the Applicant was not actively seeking paid employment during the period under review other than as a Member of Parliament. However, the Applicant was engaged for long periods each week in his campaign to be elected as a Member of Parliament and to this extent the Applicant was actively seeking paid work during the election campaign which he was willing to undertake. .... · Having regard to subsections 522(1) and 522(2A), the issue in this proceeding is not whether the Applicant was likely to be elected as the Member for Coffs Harbour, but whether the paid work sought was unsuitable by virtue of the nature or conditions of the work or the ability of the Applicant to undertake such work. The Tribunal agrees with the Respondent that the Applicant's election as a Member of Parliament at the 1995 election was unrealistic. The Applicant admitted that he had little chance of succeeding in the election and in fact he obtained only 5.4% of the votes. However, it cannot be argued that the work of a Member of Parliament was unsuitable for the Applicant merely because he was not supported by many persons in the electorate. · The Tribunal is of the view that work as a Member of the New South Wales Parliament cannot be considered work which is unsuitable to be undertaken by the Applicant. There is no evidence before the Tribunal to indicate that the Applicant lacks the particular skills, experience or qualifications that are needed to perform the work of a Member of Parliament in a democratic society, nor was that suggested by the Respondent. Nor is there any other reason which the Tribunal considers would render the work unsuitable to be undertaken by the Applicant. The Tribunal concludes that the Applicant satisfied the activity test in s. 522 of the Act." The AAT accepted that electioneering per se would not preclude the appellant from entitlement to the job search allowance. It pointed out that to conclude otherwise would have the effect of precluding the unemployed from standing for parliament while continuing to receive benefits under the Act. The AAT considered that pursuing work as a member of parliament was not "fundamentally incompatible with being unemployed" (see Director-General of Social Services v Thomson (1981) 53 FLR 356) and did not demonstrate a commitment to an activity other than employment. The AAT said that although the appellant was not actively seeking other paid employment he was engaged for long periods each week in his campaign, and to this extent was actively seeking, during the election campaign, paid work which he was willing to undertake. In making that finding the AAT implicitly rejected any notion that the appellant was using his candidature merely as a platform for his political views rather than for his election. The AAT found that the paid work which the appellant was seeking was not "unsuitable to be undertaken" by him within the meaning of ss 522(1) and 522(2A). The fact that the applicant admitted that he had little chance of succeeding in the election, and in fact only obtained 5.4 per cent of the votes, did not mean that the work of a member of parliament was unsuitable for him. The respondent had not suggested, nor was there evidence before the AAT to indicate, that the appellant lacked the particular skills, experience or qualification needed to perform the work of a member of parliament in a democratic society. (It may be noted that subsequently the appellant was elected to the Coffs Harbour City Council.) On the approach the AAT took the critical issue was not whether the appellant was likely to be elected as the member for Coffs Harbour but whether paid work as a member of parliament was unsuitable by virtue of the nature or conditions of the work or the ability of the appellant to undertake such work. The Judgment Below The critical part of his Honour's reasoning was as follows: "The findings of the AAT in the present case make it somewhat special. The finding that Mr Spencer did not seek, nor would he have taken up any position which would distract him from his political campaign, indicates that he devoted his efforts solely to obtaining a position within an extremely narrow field. There is only one State member for Coffs Harbour. Of itself, I do not think that this is sufficient to disqualify him from being actively engaged in seeking paid work. Nor do I consider that the work he sought could be classified as 'not suitable'. There can be no suggestion in the present case that there was any impediment, inability, or obstacle to him performing work as a Member of State Parliament. However, that being said, in addition to the very narrow field of endeavour to which he confined himself, the Tribunal also found that there was not even a slight chance of success. Moreover, although he was 'hopeful' of being elected, the AAT found he appreciated that his election was not a realistic goal. In my view, the requirement in s 522 that a claimant actively seek paid work, calls for a claimant to make a genuine positive effort to secure work in relation to which the claimant has some realistic expectation of success and that there must be some objective prospect of success. The prospect of success need not be such as to support a conclusion that it was likely he would be successful. But it must have some real prospect in the sense that it should be more than fanciful, extremely remote or patently futile. This is especially so where the field of activity is limited to a very narrow field of work. The obvious purpose of the job search allowance is to alleviate the hardship and distress suffered by unemployed persons who, despite genuine efforts, are realistically seeking but unable to find paid work. It is designed ultimately to provide the means to obtain or to return to employment. The section must, of course, be given a beneficial interpretation in favour of the claimant. However, it is difficult to perceive any reason why Parliament would pay an allowance to a person who, during the relevant period, exclusively confines his efforts to an extremely narrow area of work where there is not even a slight chance of success." (at 7- emphasis in original) The trial Judge supported his view that it was appropriate to import the requirement that there be a real prospect of success by reference to the Explanatory Memorandum to the amendments made when the Act was amended by Act No 68 of 1991 which stated, inter alia, that the new s 522(1) "would reflect the current work test provision in the Principal Act". His Honour concluded that that statement demonstrates that Parliament did not intend to depart from the substance of the previous requirement that the job seeker had taken "reasonable steps" to obtain suitable work during the relevant period. Accordingly, his Honour concluded that the AAT erred in its interpretation of s 522 by not importing into it a requirement that, viewed objectively, the applicant must have a realistic prospect of success, that is, one that is "more than fanciful, extremely remote or patently futile". In view of the importance attached by the primary judge to the legislative history of s 522, it is desirable to turn to that history at the outset. The Legislative History Prior to the 1991 amendments unemployment benefits were payable under the Act, inter alia, where an applicant satisfied the Secretary that he or she was unemployed, capable and willing to undertake suitable paid work and had taken during the relevant period "reasonable steps to obtain such work" (s 116(1)(c)). The relevant provision was amended by Act No 46 of 1991 which introduced the "work test" which was in substantially the same form as s 116(1)(a): see ss 513 and 518(1) of Part 2.11 in the amending Act. Act No 68 of 1991, which further amended the Act, replaced unemployment benefits with a "job search allowance" and substituted the present "activity test" for the "work test": see ss 513 and 522(1) of Part 2.11 of the amending Act. The activity test was provided for in ss 522(1), (2) and (3). Section 522(1) provided: "(1) Subject to subsection (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is: (a) actively seeking; and (b) willing to undertake; paid work that in the opinion of the Secretary is suitable to be undertaken by a person." Section 522(2) provided that a person also satisfied the activity test if the Secretary notified the person that particular requirements of the kind set out in the sub-section are to be satisfied and the person takes reasonable steps to comply with the requirement. Sub-section (3) provided: "(3) If a person fails to take reasonable steps to comply, throughout a period, with a requirement of the Secretary under subsection (2), the person cannot be taken to satisfy the activity test in respect of that period in spite of any compliance of the person with subsection (1)." The amending Act changed the work test by removing the requirement of "reasonable steps" as a general precondition to an entitlement to the job search allowance but retained the "reasonable steps" requirement where there was a particular requirement of the Secretary under s 522(2). In our view the Explanatory Memorandum in respect of the amending Bill (the Social Security (Job Search and Newstart) Amendment Bill 1991) confused rather than explained the effect of the amendments. In respect of s 522(1) it stated (in our view, inaccurately) that the sub-section: "would reflect the current work test provision in the Principal Act"(at 17). Section 522(2) was said to: "reflect and expand on the current activity test arrangements" (at 18). However, in respect of s 522(3), the Memorandum stated (in our view, accurately): "Subsection 522(3) would clarify that the activity test comprises the requirements in both subsections 522(1) and (2). If a person refuses to take reasonable steps to comply with a requirement of the Secretary under subsection 522(2), the person cannot be taken to have complied with the requirements of the activity test even though the person has been actively seeking and willing to undertake suitable work." A fair reading of the Memorandum, in conjunction with the amendments, discloses that although in a broad sense the new activity test reflects the substance of the work test, the latter test has been modified in that the "reasonable steps" requirement is now provided for in, and is only to be activated under, ss 522(2) and (3) and is not a general precondition to the activity test in s 522(1). If the Memorandum is viewed in that way it may not be misleading or inaccurate. The Act was subsequently amended further by the enactment of additional sub-sections to s 522. It is unnecessary to explore the detail of the amendments for present purposes save to say that they modify and expand the "reasonable step" provisions provided for previously in ss 522(2) and (3) without affecting the operation of sub-section (1). The amendments confirm, rather than detract from, Parliament's intention that the reasonable steps requirement is only a precondition to the activity test in s 522(1) if activated by a requirement of the Secretary under s 522(2) as originally enacted or in the now expanded provisions of s 522(1A) or (2). An Act which is amended and the amending Act are to be read together as a combined statement of the will of the legislature: see Commissioner of Stamps (South Australia) v Telegraph Investment Company Pty Ltd (1995) 184 CLR 453 at 462-463; Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511 at 529 and Acts Interpretation Act 1901 (Cth) s 15. Accordingly, the amendments reinforce and confirm the conclusion at which we have arrived that s 522(1) does not import a requirement of "reasonable steps" or some other objective criterion which might be derived therefrom. We now turn to the arguments advanced on the appeal. A Question Of Law? The appellant argued that the phrase "actively seeking work" was not a legal term of art with the consequence that the ordinary meaning of that expression was a question of fact: Cozens v Brutus [1973] AC 854 at 861, Hope v The Council of the City of Bathurst (1980) 144 CLR 1 at 7, Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 288, Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389. Accordingly, so it was said, the learned primary judge should not have disturbed the finding of fact made by the Tribunal in the respondent's favour: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 358. In our view the respondent's appeal to the Court against the decision of the AAT did involve a question of law within the meaning of s 44 of the Administrative Appeals Tribunal Act 1977 (Cth). That question was whether or not the expression "actively seeking work" is to be read as importing a requirement that there is, objectively speaking, some reasonable prospect of the person obtaining the work in question. "Actively Seeking Work" In substance s 522(1) required that during the relevant period an applicant for a job search allowance actively seek and be willing to undertake work that is suitable to be undertaken by that person. The requirements that the person actively seek suitable work and be willing to undertake the work that is being sought, imply that the applicant is genuinely seeking the work. However there is nothing in the context of s 522(1) or in the natural meaning of the words used in the section that imports a further requirement that the steps taken be reasonable or have realistic prospects of success. The question of reasonable steps is now dealt with in ss 522(1A), (2) and (3) and only arises when activated by a requirement of the Secretary. No such requirement was imposed in the present case. As pointed out above, we do not accept that any "reasonable steps" requirement, or some other objective criterion which might be derived therefrom, is to be imported into s 522(1). Accordingly, in our view, the "reasonable steps" requirement stands as an alternative to, and does not expressly or impliedly form part of, the activity test stated in s522(1). The legislative history and, in particular, the deliberate removal of the previous general requirement of "reasonable steps" by Act 68 of 1991 reinforces our view of the operation of the relevant provisions. The policy that persons should not receive unemployment benefits (however described) unless they are genuinely making an attempt to find work is understandable. The policy, in substance, remained unchanged since the 1947 Act. What Parliament did in Act No 68 of 1991 was to introduce a different statutory mechanism for achieving that end. Instead of the broad test of taking "reasonable steps", Act No 68 introduced a statutory mechanism whereby the Secretary had the sanction of stipulating objectively determinable tests. We would accept as a fair summary of the purpose of the legislation the following statement by Mr Batley who appeared for the appellant: "Instead of asking the Secretary to make a value judgment about what job seeking efforts are reasonable, the legislature has given the Secretary power to impose fixed objective criteria against which the performance of a job seeker can be judged. A job seeker is informed that if he or she does not meet the criteria, his or her allowance may be cancelled or suspended. This approach is fairer to the job seeker because it does not involve the Secretary, with the benefit of hindsight, saying that for a period which has passed, the applicant's genuine efforts to find work were not reasonable and the applicant should be deprived of income support." In these circumstances we see no warrant for introducing into s 522(1), as the primary judge did, the additional objective criterion of the applicant having "real prospects of obtaining" the work being sought. It must be emphasised that the AAT proceeded on the basis of its finding that the appellant was genuinely seeking employment as a State member, however unrealistic the prospects of achieving that work might have been. This was a pure question of fact. As pointed out above a person who was, as a matter of fact, not acting genuinely would not be "seeking work", nor would such a person be "willing to undertake" such work. In the present case the AAT concluded that the appellant was genuinely seeking work. In the result the AAT was "satisfied" (see Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 274-277) that, as a matter of fact the applicant met the criteria in s 522(1). We are not satisfied that any error was made by the AAT in reaching the requisite state of satisfaction. Explanatory Memorandum Counsel for the appellant attacked the use made by his Honour of the Explanatory Memorandum. He argued that the criteria laid down by s 15AB of the Acts Interpretation Act 1901 (Cth) as preconditions for use of extrinsic material had not been satisfied: see Re Australian Federation of Construction Contractors; Ex parte Billing (1986) 68 ALR 416 at 420. In view of the conclusion we have reached the appellant does not need to make out this ground. However, as pointed out above we do not think that the Explanatory Memorandum is necessarily inconsistent with our construction. Even if our reading of the Memorandum was not correct, in speaking of a provision which "would reflect the current work test provision" the author of the Explanatory Memorandum might have been doing no more than saying that s 522(1) in its new context would achieve the same result as the previous test, being that people should not receive unemployment benefits unless they are actively looking for suitable work that they are willing to undertake. All that had been modified was the means by which that result was to be achieved. In any event, whatever view might be taken of the Explanatory Memorandum, ultimately the Court's task is to construe the provisions as enacted rather than the Explanatory Memorandum. Wednesbury Unreasonableness His Honour upheld the argument of the respondent that the AAT had made a decision which no reasonable tribunal could make. However this finding was based on his Honour's interpretation of s 522(1) which we have not accepted as correct. Either the AAT was correct in the construction it placed on the Act or it was not. As we have found that no error was made by the AAT in its interpretation, this ground of challenge to his Honour's decision must also fall with the issue of interpretation. Orders In our opinion the appeal should be allowed. The decision of the learned primary judge made on 21 July 1997 should be set aside and the decision of the AAT made on 17 May 1996 affirmed. The respondent should pay the costs of the appellant on the appeal and in the Court below. I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Madgwick and Merkel Associate: Dated: 1 May 1998 Counsel for the Appellant: Mr P Batley Solicitor for the Appellant: Legal Aid Commission Counsel for the Respondent: Mr G Elliot Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 18 March 1998 Date of Judgment: 1 May 1998