FEDERAL COURT OF AUSTRALIA Secretary, Department of Employment, Education, Training & Youth Affairs v Allen [1999] FCA 25 ADMINISTRATIVE LAW – SOCIAL SECURITY – ABSTUDY Scheme – effect of garnishee and waiver provisions of Student and Youth Assistance Act 1973 (Cth) in application to non-statutory scheme – administrator's task under statute of deciding what overpayment there was before applying garnishee provision – rights of internal review and review by Social Security Appeals Tribunal ("SSAT") – appeal to Administrative Appeals Tribunal ("AAT") – effect, on application to SSAT and AAT, of section denying them, when reviewing on the merits, the discretion of the original decision-maker – availability nevertheless of power to determine sum due and power of waiver. Student and Youth Assistance Act 1973 (Cth), ss 3, 42, 43, 289, 302, 304, 309, 316, 323, 324 Walker v Secretary, Department of Social Security (1997) 75 FCR 493, applied Secretary, Department of Social Security v Riley (1987) 17 FCR 99, distinguished SECRETARY, DEPARTMENT OF EMPLOYMENT, EDUCATION TRAINING & YOUTH AFFAIRS v MASON ALLEN, SENIOR MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL and DOMINIC KANAK NG 249 OF 1998 EINFELD, CARR AND LEHANE JJ 28 JANUARY 1999 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 249 OF 1998 BETWEEN: SECRETARY, DEPARTMENT OF EMPLOYMENT, EDUCATION, TRAINING & YOUTH AFFAIRS Appellant AND: MASON ALLEN, SENIOR MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL First Respondent DOMINIC KANAK Second Respondent JUDGES: EINFELD, CARR AND LEHANE JJ DATE OF ORDER: 12 NOVEMBER 1998 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The appeal be dismissed with costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 249 OF 1998 BETWEEN: SECRETARY, DEPARTMENT OF EMPLOYMENT, EDUCATION, TRAINING & YOUTH AFFAIRS Appellant AND: MASON ALLEN, SENIOR MEMBER, ADMINISTRATIVE APPEALS TRIBUNAL First Respondent DOMINIC KANAK Second Respondent JUDGES: EINFELD, CARR AND LEHANE JJ DATE: 28 JANUARY 1999 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT: Introduction 1 On 12 November 1998, after hearing this appeal, the Court dismissed it and stated that reasons would be published later. These are our reasons. 2 The appeal was from the decision of a judge of this Court, on 5 March 1998, to dismiss an application for order of review of a decision of the Administrative Appeals Tribunal, made on 2 October 1996. On that date, as a preliminary ruling, the Tribunal decided that it had jurisdiction to determine the amount of overpayment of an allowance known as "ABSTUDY" (if any) made to the second respondent, Dominic Kanak. Factual Background 3 Mr Kanak is of Aboriginal descent. Over a period of some three years in 1992, 1993 and 1994 he attended a number of tertiary institutions, receiving Commonwealth assistance under what was known as The Aboriginal Study Assistance Scheme ("ABSTUDY"). At least some of the payments received by him were or included amounts to which he was not entitled. He has refunded some of that money. Other amounts have been deducted from payments to which he was entitled. Substantial amounts have also been recouped by the issue of statutory garnishee notices under s 42 of the Student and Youth Assistance Act 1973 (Cth) ("the Act"). 4 The second respondent disputed the decision made by the Department of which the appellant is secretary ("the Department") to recover monies from him and to issue the garnishee notices. He sought review of those decisions. The decisions were affirmed upon internal review, whereupon the second respondent sought further review by the Social Securities Appeal Tribunal ("the SSAT"). On 29 February 1996 the SSAT handed down its decision in the following terms: "On 29 February 1996 the tribunal decided to vary the decision. This means that the right to recover the sum of $3,980.30 is waived and that this amount should be refunded to Mr Kanak. This means that the appeal was partly successful." 5 In its published reasons the SSAT held that its jurisdiction was limited to the recovery of the debt i.e. that it had no power to decide whether the debt was correctly raised or even if the amount of the debt was correctly calculated. However, it found that the overpayment of $3,980.30 arose out of an administrative error made by the Commonwealth and should be waived. In doing so it applied s 289(2) of the Act which relevantly provides that the appellant must waive if a debt arose solely because of an administrative error made by the Commonwealth. 6 The Department was dissatisfied with the decision of the SSAT and applied to the Administrative Appeals Tribunal for review of the decision to waive. The second respondent was also dissatisfied with the decision, contending that a more basic question than waiver of one of the claimed debts should be examined. He sought review of all the recovery decisions, arguing that the recoverability of the sums claimed by the Commonwealth should be reviewed first and then the question of waiver of any amount due should be considered. He has not filed any application in the nature of a cross-application in the Administrative Appeals Tribunal, but, as the learned primary judge noted, he could doubtless apply to do so. To date his contention has been met by the Department's submission that the Administrative Appeals Tribunal has no jurisdiction to entertain the matters which he seeks to raise. The Administrative Appeals Tribunal heard argument on that point, as a separate issue. Its decision on the point was expressed in the following terms: "9. As I read s 42 [of the Student and Youth Assistance Act], before the Secretary can give a notice to a third party requiring payment of any amount to the Commonwealth he must first make a decision as to what amount is then due and owing to the Commonwealth. That in turn requires the Secretary to ascertain what was the recoverable amount, and whether any repayments have been made. 10. The decisions made by the Secretary in calculating the amount or sum to be specified in the notice issued under subsection 42(3) are decisions under the Act relating to the recovery of amounts as per the wording of paragraph 309(c) of the said Act. 11. It is therefore open to the Respondent upon this review to challenge the amounts alleged by the Applicant to have been overpaid." The Statutory Framework 7 The section under which the garnishee decisions were made is s 42. That section relevantly provides that the term "recoverable amount" (used in the section) means an amount of certain kinds specified in the section. One of those is described as "a special educational assistance scheme overpayment". Section 3 of the Act defines "special educational assistance scheme overpayment" as "an amount paid under a current special educational assistance scheme … that should not have been paid". The same section defines a "current special educational assistance scheme" as including "the ABSTUDY Scheme (also known as the Aboriginal Study Assistance Scheme)". It is necessary to refer to these definitions because part of the applicant's case at first instance in this Court depended upon the fact that ABSTUDY was a scheme of educational assistance inaugurated by the Commonwealth under special administrative arrangements, not as a statutory scheme. However, from these definitions it can be seen that an overpayment under the ABSTUDY Scheme is "a special educational assistance scheme overpayment" and hence a "recoverable amount" within the meaning of s 42. Section 42 further provides as follows: "(2) This section applies where: (a) the liability of a person (in this section called the "debtor") to the Commonwealth in relation to a recoverable amount has not been fully satisfied; and (b) there is another person (in this section called the "third party"): (i) by whom any money is due, or may become due, to the debtor: or … (3) The Secretary may, by written notice given to the third party, require the third party to pay to the Commonwealth: (a) a specified amount, not being an amount more than: (i) the amount then due to the Commonwealth in relation to the recoverable amount; or (ii) the amount of the money referred to in whichever of the subparagraphs of paragraph (2)(b) is applicable; or (b) a specified amount out of each payment that the third party becomes liable from time to time to make to the debtor until the total of the amounts paid to the Commonwealth under the notice equals the amount then due to Commonwealth in relation to the recoverable amount." 8 There are other relevant statutory provisions, but it is convenient to refer to them in the course of discussing the reasoning of the learned primary judge. The Decision at First Instance 9 The primary judge noted that because the decision of the Administrative Appeals Tribunal was on a preliminary point, it did not give rise to an appealable question of law under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). However, referring to the relevant authorities, his Honour noted that the decision was one in respect of which s 39B of the Judiciary Act 1903 (Cth) conferred jurisdiction upon the Court. His Honour also noted that normally the Court would, as a matter of discretion, refuse to grant relief by way of judicial review where a proceeding before the Administrative Appeals Tribunal would be fragmented by interlocutory appeals; particularly in view of the right of appeal under s 44 of the Administrative Appeals Tribunal Act. However, his Honour found that the question sought to be raised by the application was both important and of significance for similar cases. Accordingly he said that he would not in the exercise of his discretion, have declined to grant relief if the applicant's contentions had proved to be well-founded. 10 His Honour stated the question before him in the following terms: 'The question is, when s 42 provides the statutory tool of a garnishee power for the recovery of a non-statutory overpayment, what statutory incidents are involved? It seems to me that the terms of s 42 afford a reasonably clear answer. The section only applies to an "overpayment", the liability to repay which, in the terms of subsection (2), "has not been fully satisfied". When it applies, the Secretary is empowered to give the notice, but only, as subsection (3) is careful to state, in respect of an amount "not being an amount more than … the amount then due to the Commonwealth" in respect of the overpayment. Those provisions cannot be satisfied unless the Secretary determines what the overpayment was, and how much of it remains due. Accordingly, although the original decisions to make the payments, and to seek to recover them as overpayments, were apparently outside the scope of the statute, once the garnishee provision was availed of, statutory decisions had to be made in respect of the same sums. Furthermore, once the statutory scheme comes to apply to the particular means of recovery chosen, the exercise of the discretion involved in s 42(3) may also require, in a particular case, consideration of the power of waiver attracted by s 43. So to hold, would not only be in accordance with ss 42 and 43, but would also accord with the construction which has been given to the very similar provisions of ss 1233 and 1237 of the Social Security Act 1991: Walker v Secretary, Department of Social Security (1997) 147 ALR 263 at 269-274; Lee v Secretary, Department of Social Security (1996) 139 ALR 57 at 67; Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32." 11 His Honour held that "not the least important" of the statutory incidents of a decision to issue a garnishee notice under s 42 was the right of review which that decision attracted. His Honour referred to s 302(c) of the Act which includes among the decisions of which internal review may be sought "all decisions of an officer under this Act relating to the recovery of amounts paid under a current or former special educational assistance scheme". Section 309, as his Honour noted, then uses precisely the same language to bring such decisions within the purview of the Social Security Appeals Tribunal. He held that the expression [in s 302(c)] "all decisions of an officer under this Act relating to the recovery" was certainly wide enough to go well beyond the decision to exercise the discretion conferred by s 42(3). His Honour referred to a line of authorities on the width of the expression "relating to". 12 His Honour then addressed a problem created by s 316 of the Act which he noted mirrored the language of s 1253 of the Social Security Act 1991 and which he dealt with in the context of deciding whether the SSAT had power to carry out the review which it purported to carry out in this case and, if not, whether the Administrative Appeals Tribunal was, "as a consequence", left without power to do so either. 13 So far as the SSAT was concerned, the relevant powers were conferred upon it by s 316(4) which provides: "(4) Subject to subsection (5), the Social Security Appeals Tribunal may, for the purpose of reviewing a decision under the Act, exercise all of the powers and discretions that are conferred by this Act on the Secretary." 14 Section 316(5)(c) relevantly provides that the reference in s 316(4) to powers and discretions conferred by the Act does not include a reference to powers and discretions conferred by: "(c) subsection 42(3) (notice requiring payment to the Commonwealth); …" 15 His Honour noted that in the present case the second respondent's application to the SSAT was not merely an application to review the issue of a garnishee notice, but was expressly an application to review all of the anterior decisions relating to the recovery of the alleged debt. They included a decision under s 42(1) and s 42(2) [not s 42(3)] that the second respondent had received ABSTUDY overpayments, in respect of which his liability had not been fully satisfied. They also included a decision, which his Honour held was authorised by the Act by necessary implication but not one which fell within s 316(5)(c), to fix "the amount then due to the Commonwealth", so that an amount not being more than that amount could be determined for the purpose of s 42(3)(a). His Honour held that s 316(5)(c) should be construed as limited to the power and discretion to issue the garnishee notice, in order to leave an appropriate area of operation for s 309(c); in recognition of its nature as a restriction upon a remedial provision; and to preserve consistency with s 1253(4) of the Social Security Act 1991, a restricted interpretation of which was required by its context and confirmed by the relevant explanatory memorandum as his Honour stated had been made clear in Walker v Secretary, Department of Social Security (1997) 75 FCR 493. His Honour then turned to the question of what power was possessed by the Administrative Appeals Tribunal. As his Honour noted, Division 3 of Part 9 of the Act gives a right of review of decisions of the SSAT by the Administrative Appeals Tribunal. Section 323 applies that Division to the same decisions to which the provisions for internal review and review by the SSAT are applied by ss 302 and 309. Section 324(1) provides: "If a decision has been reviewed by the Social Security Appeals Tribunal (the '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." 16 His Honour observed that in the present case the decisions under review were varied by the SSAT, and otherwise affirmed, implicitly if not expressly. Accordingly, so his Honour held, the Administrative Appeals Tribunal had power to review those decisions. His Honour noted that the difficulty discussed in Walker (where the SSAT had simply declined jurisdiction) did not arise in the present matter, notwithstanding that the SSAT had wrongly excluded an aspect of the matter from its review. He held that that was an error in the exercise of its powers, not a refusal to exercise those powers. The Appeal Appellant's Contentions 17 The Department submitted that the Act contains no provisions dealing with entitlement to receive ABSTUDY or liability to repay it. Part 6 of the Act is concerned with overpayments made under Acts or schemes other than those conducted under the Act. Part 6 contains sections which authorise the use of certain procedures for recovery of overpayments, deal with the subject of late payment charges and interest, and generally adopt the write-off and waiver provisions found elsewhere in the Act. The Department submitted that s 42(3) did no more than empower a delegate to decide to use a certain method of recovery. It assumed that a debt had already been found to exist and that the amount of the debt had been ascertained. Section 42(3), so it was put, did not provide that the delegate exercising the relevant power was empowered or required either to decide that an overpayment had arisen, or to calculate the quantum of the overpayment. Accordingly, the Administrative Appeals Tribunal could not embark on a review of an entirely different decision to that which s 42(3) empowered the Department to make. 18 In support of that proposition, the appellant cited Secretary, Department of Social Security v Riley (1987) 17 FCR 99 at 105 and Civil Aviation Safety Authority v Coburn (1997) 24 AAR 389. The Department said that the primary judge had correctly determined that the decisions to pay ABSTUDY to the second respondent and to determine that the amounts he had received were overpayments, were outside the scope of the Act. However, the Department challenged the next step in his Honour's reasoning. It contended that invoking the provisions of the Act to recover overpayments did not involve the making of the "statutory decisions" that the second respondent had received ABSTUDY overpayments in respect of which his liability had not been fully satisfied, or a decision fixing "the amount then due to the Commonwealth" so that an amount not being more than that amount could be determined for the purpose of s 42(3)(a). 19 The appellant submitted that the cases of Walker, Lee and Hodgson, relied upon by his Honour, were not in point, save for one passage of obiter dicta in Walker. Submissions of the second respondent 20 Mr Kanak contended that the appellant had mis-stated the question. The decision before the first respondent, the Administrative Appeals Tribunal, was not "an antecedent non-statutory decision". The decision under review was the appellant's decision under s 42 of the Act to recover overpayments. The second respondent submitted that such decisions were clearly within the jurisdiction of the Administrative Appeals Tribunal. The second respondent referred to paragraph 6 of the appellant's written submissions in which s 323 of the Act was referred to as the source of the jurisdiction of the Administrative Appeals Tribunal, not s 309 as involving the question of law said to be raised on appeal in the Notice of Appeal which brought the matter to us. 21 The second respondent submitted that the interpretation (contended for by the appellant) of s 42(3), which assumed that a debt exists and is therefore "antecedent" to a decision made under s 42(3), was inconsistent with the inclusion of definitions in s 42(1). The second respondent submitted that whether the appellant was bound to take into account factors such as the quantum of overpayment and the existence of a debt were properly questions to be considered as part of the substance of a review. Accordingly, so it was submitted, the appeal was misconceived. Reasoning 22 As his Honour noted, the ultimate question was whether the Administrative Appeals Tribunal had power to review the decision that the second respondent had received ABSTUDY overpayments in respect of which his liability had not been fully satisfied and the decision fixing "the amount then due to the Commonwealth", so that an amount not more than that amount could be determined for the purposes of s 42(3)(a). 23 Section 324 of the Act provides that if a decision has been reviewed by the 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. For the purposes of that subsection the decision of the SSAT is taken to be: · if the SSAT affirmed the decision – the decision as affirmed; · if the SSAT varied the decision - the decision as varied; · if the SSAT set a decision aside and substituted a new decision – the new decision; and · if the SSAT set a decision aside and sent the matter back to the appellant for reconsideration in accordance with any directions or recommendations – the directions or recommendations of the SSAT. 24 It seems reasonably clear that the intention of Parliament was that anything decided by the SSAT was to be reviewable by the Administrative Appeals Tribunal. The appellant, as we have mentioned, relied upon Riley, a decision of a Full Court of this Court. In Riley, compensation had been paid under the Workers Compensation Act 1927 (Tas) and sickness benefits had been paid under the Social Security Act 1947 (Cth) in respect of the same incapacity. A delegate of the Department made a decision under s 115D(2) of the Social Security Act that the insurer of the worker's employer pay to the Department a sum equal to the amount of the sickness benefit payments made to the worker. The insurer paid that amount. The worker's appeal against the delegate's decision was referred to the SSAT for review. Before the SSAT the worker, through his solicitor, sought a decision under s 115D(2) that in "the special circumstances of the case", it was appropriate that the Department treat the payment of workers compensation to him as not having been made. Such a decision would have resulted in the amount paid by the insurer to the Department being paid to the worker. 25 After the review had been conducted by the SSAT, another delegate of the Department made a decision affirming the previous decision under review. This was, "perhaps" (the language of Sheppard J in Riley at 107) in conformity with s 15A(2), expressed as the dismissal of the worker's appeal against the previous decision. The worker applied to the Administrative Appeals Tribunal for review of that decision. The Tribunal set aside the decision and remitted the matter to the Department with directions which included a direction that it consider whether there was any material to warrant a finding that the worker was even qualified to receive sickness benefits. 26 After the parties had made further written submissions, the Tribunal published a document entitled "Reasons for Directions" which concluded with a determination that the Department pay to the worker an amount some $1000 less than the amount paid to the Department by the insurer. This was based on the Tribunal's conclusion that s 115D(2) (the provision under which the decision had been made that the insurer pay the specified sum to the Department) had not applied for all relevant periods. 27 The Department appealed to this Court. The Full Court held that the Tribunal had erred, because the Tribunal had not reviewed the decision sought to be reviewed by the worker whose solicitors had limited the questions to be determined before both the SSAT and the Administrative Appeals Tribunal to the exercise of the Department's discretion under s 115E of the Act. Because s 15A made it clear that the Department's decision on a matter could not be reviewed by the AAT unless the matter had been before the SSAT, the appeal on this (other) matter was incompetent. In our view, Riley is plainly distinguishable from this case. In this case the second respondent has consistently challenged, both before the SSAT and the Administrative Appeals Tribunal, the proposition that he has been overpaid to the extent of the amount stipulated in the notice issued under s 42(3) of the Act. 28 We agree, respectfully, with his Honour that the SSAT erred in deciding that it did not have power to review these anterior decisions and that the SSAT had such a power. In turn the Administrative Appeals Tribunal had power to review and rectify the error made by the SSAT. There is nothing further that we can usefully add. Accordingly, we would dismiss the appeal with costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 28 January 1999 Counsel for the Appellant: Ms R M Henderson Solicitor for the Appellant: Australian Government Solicitor Counsel for the Second Respondent: Ms J A Keys Date of Hearing: 12 November 1998 Date of Order: 12 November 1998 Date of delivery of Reasons for Judgment: 28 January 1999