FEDERAL COURT OF AUSTRALIA Secretary, Department of Social Security v Payne [1999] FCA 95 DUTY TO REVIEW BY ADMINISTRATIVE APPEALS TRIBUNAL - whether Administrative Appeals Tribunal hand to consider facts for itself - whether Administrative Appeals Tribunal able to review credit OVERPAYMENT OF SOCIAL SECURITY BENEFIT (PENSION) - whether waiver provisions to be applied Social Security Act 1991 ss 1224, 132, 1223, 1237A, 1283, 1265 Administrative Appeals Tribunal Act 1975 ss 43, 40, 37, 38 Social Security Act 1991 s 1224 Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409 Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32 THE SECRETARY, DEPARTMENT OF SOCIAL SECURITY v BARBARA ANN PAYNE QG 64 OF 1998 KIEFEL J 12 FEBRUARY 1999 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 64 OF 1998 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL, GENERAL ADMINISTRATIVE DIVISION CONSTITUTED BY DEPUTY PRESIDENT BREEN, PRESIDENTIAL MEMBER BETWEEN: THE SECRETARY, DEPARTMENT OF SOCIAL SECURITY Applicant AND: BARBARA ANN PAYNE Respondent JUDGE: KIEFEL J DATE OF ORDER: 12 FEBRUARY 1999 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The decision of the Administrative Appeals Tribunal of 3 June 1998 be set aside. 2. The matter be remitted to the Administrative Appeals Tribunal, differently constituted, for reconsideration. 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 QG 64 OF 1998 ON APPEAL FROM THE ADMINISTRATIVE APPEALS TRIBUNAL, GENERAL ADMINISTRATIVE DIVISION CONSTITUTED BY DEPUTY PRESIDENT BREEN, PRESIDENTIAL MEMBER BETWEEN: THE SECRETARY, DEPARTMENT OF SOCIAL SECURITY Applicant AND: BARBARA ANN PAYNE Respondent JUDGE: KIEFEL J DATE: 12 FEBRUARY 1999 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The Secretary, Department of Social Security appeals from the decision of the Administrative Appeals Tribunal (the "AAT"), given on 3 June 1998, which affirmed the decision of the Social Security Appeals Tribunal (the "SSAT") limiting the recovery of sums which had been paid to Mrs Payne by way of Disability Support Pension, but to which she was not entitled. At issue was the question whether the Secretary was obliged to waive the right to recover some payments, which in turn involved an enquiry as to whether they had been received by Mrs Payne in good faith. Background 2 Mrs Payne had been in receipt of a Disability Support Pension since 4 November 1993. Prior to September 1994 Mrs Payne had been given notice by the Department that she was obliged to advise it, within 14 days, in the event that her gross income exceeded a specified figure. Mrs Payne did communicate with the Department in this period and advised when she undertook casual employment and when she was not in employment. The amount of Mrs Payne's pension was adjusted as a result of these advices. 3 In late September 1994 Mrs Payne obtained part-time employment which had the effect that she was no longer entitled to the rate of pension which she had been receiving. Mrs Payne did not however advise the Department within the period required. The earliest notification which Mrs Payne said she provided was by letter dated 21 November 1994, but the Department's records did not contain it. The earliest advice it considered it had received, dealing with Mrs Payne's current level of income, was Mrs Payne's letter dated 5 April 1995. It was this letter upon which the Department acted in reducing the level of her pension, although on this occasion it took until July 1995 to put it into effect. These matters were not in dispute. 4 In July 1997 the Department advised Mrs Payne that it considered that there was a debt due by her of some $4024 for the period from 6 October 1994 to 29 June 1995 on the basis of her failure to provide the information that had been required of her, and referred to s 1224 of the Social Security Act 1991. There had been earlier correspondence on the matter. The Authorised Review Officer determined that there was a recoverable debt, but that it should be reduced to accord with a period which took account of the receipt of Mrs Payne's letter of April 1995. In October 1997 the SSAT set aside that decision and remitted the matter for recalculation of the sums due to the Commonwealth with respect to the period from 6 October 1994 to 21 November 1994 only. In so doing the SSAT accepted that Mrs Payne had advised the Department of her current earnings by the letter of 21 November 1994. That was the principal issue before the SSAT. No serious attempt appears to have been made to challenge that view in the proceedings before the AAT and I was informed that its correctness or otherwise did not form any part of the appeal before this Court. The Recovery Provisions 5 Section 1224(1) of the Social Security Act 1991 provided: "1224(1) If: (a) an amount has been paid to a recipient by way of social security payment; and (b) the amount was paid because the recipient or another person: (i) made a false statement or a false representation; or (ii) failed or omitted to comply with a provision of this Act or the 1947 Act; the amount so paid is a debt due by the recipient to the Commonwealth." 6 Section 132 of the Social Security Act 1991 relevantly provides: "132(1) The Secretary may give a person to whom disability support pension is being paid a notice that requires the person to inform the Department if: (a) a specified event or change of circumstances occurs; or (b) the person becomes aware that a specified event or change of circumstances is likely to occur. 132(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the payment of the pension." 7 It was a breach of this requirement upon which the Department had relied when raising the debt in July 1997. It was submitted on this appeal that a debt could also be said to be due to the Commonwealth because of the provisions of s 1223(1): "1223(1) Subject to subsections (1A) and (1B), if an amount has been paid to a person by way of social security payment on or after 1 October 1997 and: (a) the recipient was not qualified for the social security payment when it was granted; or (b) the amount was not payable to the recipient; the amount so paid is a debt due to the Commonwealth." 8 The proper characterisation of the debt does not appear to me to be of importance in these proceedings. The question to which the decision of the AAT was relevant was that posed by s 1237A(1), which provided: "1237A(1) Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt." In view of the finding made by the SSAT, that the letter of 21 November 1994 had been received, it follows that the overpayments were attributable to the Department's error as referred to in the section. There remains then only the question whether Mrs Payne received the payments in good faith, which is to say that she received them not appreciating that the quantum of the payments were incorrect and that she was not entitled to the whole of the sums paid by way of pension between 6 October and 21 November 1994. The Decision of the AAT 9 The Department applied to the AAT to review the decision of the SSAT (s 1283(1) Social Security Act 1991). Section 43(1) of the Administrative Appeals Tribunal Act 1975 provides: "43(1)[Manner of review; decisions] For the purpose of reviewing a decision, the Tribunal may exercise all the powers and discretions that are conferred by any relevant enactment on the person who made the decision and shall make a decision in writing: (a) affirming the decision under review; (b) varying the decision under review; or (c) setting aside the decision under review and: (i) making a decision in substitution for the decision so set aside; or (ii) remitting the matter for reconsideration in accordance with any directions or recommendations of the Tribunal" and s 43(2B) provides: 43(2B)[Material questions and evidence] Where the Tribunal gives in writing the reasons for its decision, those reasons shall include its findings on material questions of fact and a reference to the evidence or other material on which those findings were based." 10 The AAT, constituted by a Deputy President, affirmed the decision of the SSAT and concluded that there was no basis for disturbing the finding of that Tribunal in relation to good faith, particularly since the Department had not put material before the SSAT and raised it as an issue. The AAT concluded: "8. Prior to the hearing before the Administrative Appeals Tribunal, the Department did not dispute that the respondent received the monies in good faith. The Department was given ample opportunity within the normal procedures of the Social Security Appeals Tribunal to place such information as it wished before that Tribunal for its consideration. However, as the respondent's credibility was not challenged at a lower level and as Mr Muir advised his client not to give evidence before me, the Department had no way in which to impugn the credibility of the respondent. Thus, there is no basis whatsoever to justify the Administrative Appeals Tribunal disturbing the findings of fact of the Social Security Appeals Tribunal. 9. The decision of the Social Security Appeals Tribunal, being one lawfully made and the credibility of the respondent being in tact, I can only concur with the findings of fact as they are set out by the Social Security Appeals Tribunal, and that is, that the respondent did notify the Department on 21 November 1994 of her increase in income. I therefore attribute the totality of the debt, with the exception of the period of 6 October 1994 to 21 November 1994, to Departmental error." 11 The SSAT had accepted Mrs Payne's evidence, given before it, which was to the effect that she had not been surprised when there was no automatic reduction in the amount of the pension following the November advices, since her income from employment was for a finite period and she surmised that the Department must have averaged it out. The SSAT also observed that the Department's view was that she had received payments of pension in good faith and expressed concurrence with that view. 12 The Department had placed its file before the SSAT which contained its opinion expressed in a letter from the Authorised Review Officer to Mrs Payne dated 26 August 1997. This was taken by the SSAT to represent its written submissions, which the Secretary of the Department was entitled to put forward pursuant to the procedure provided by the Social Security Act 1991 (s 1265(2)), although it had no right to make oral submissions at the hearing. In that letter the Authorised Review Officer explained that he had considered whether recovery of the debt ought to be waived under s 1237A(1). It is sufficient to observe, for present purposes, that the focus of the Officer's considerations was when advices were first received from Mrs Payne and the question whether there was administrative error. In the process however there was expressed an acceptance that "the payments" had been received in good faith. Contentions on the Appeal 13 The principal submission for the Secretary was that the AAT was wrong to hold that it was not open to it to reach different findings of fact and that it failed to consider for itself whether the evidence of Mrs Payne ought to be accepted by it when regard was had to the history of communications between Mrs Payne and the Department, from which she must reasonably have inferred that an adjustment downwards would be made to her pension. In this regard a chronology of events, which was not disputed, had been placed before the AAT. It disclosed that, depending upon the nature of Mrs Payne's advices prior to September 1994, an adjustment, either to increase or decrease the amount of pension, was made shortly after receipt of such advice. This was clearly a factor which might be taken into account. 14 It was submitted for Mrs Payne that the AAT is to be taken as having adopted the SSAT's findings of fact as its own, as it was entitled to do. That is not, in my view, disclosed by the reasons, which convey the AAT's belief that it was unable to consider the matter further. They do not disclose an assessment of the SSAT's findings, particularly in light of the additional argument concerning the history of adjustments to pension payments which was sought to be advanced before it. 15 The function of the AAT is not restricted to questions relevant to a judicial determination, by way of appeal from a decision. The question for the Tribunal is not whether that decision was correct on the facts before it, or one reasonably arrived at. Its duty to review requires it to make its own assessment and determination: Drake v Minister for Immigration and Ethnic Affairs (1979) 46 FLR 409, 419, 429-30. In this case it had the power to consider for itself whether the provisions of s 1237A(1), relating to the obligation upon the Secretary to waive recovery, were made out: and see Secretary, Department of Social Security v Hodgson (1992) 37 FCR 32, 38-40. 16 The view of the AAT appears to have proceeded, in part, on the belief that there was no alternative open to it, in a practical sense, upon the evidence since Mrs Payne's evidence was not to be subjected to examination, since her Solicitor declined to call her at least in the circumstances then prevailing. There was however other relevant and cogent evidence put before the Tribunal which might have weighed against the Tribunal's view as to credit which, it must be recalled, did not itself follow upon any challenge to the explanation offered and was determined in the absence of any issue then being raised as to Mrs Payne's state of mind when receiving the payments. It is, of course, to be hoped that parties will raise all issues relevant to administrative decision-making at the earliest point. Nevertheless it cannot be said that the Secretary was debarred from later putting in issue one of the requirements of s 1237A(1). 17 It was for the AAT to come to a correct decision upon the material placed before it and not to undertake a mere supervisory role: Drake 438-9. In this respect it ought also be borne in mind that it has powers of enquiry to facilitate that outcome: see, for example, subsections 40(1A), (2)-(4) and ss 37(2) and 38 of the Administrative Appeals Tribunal Act 1975. I do not however suggest that the exercise of those powers was necessarily required in this case. That remains a matter for the Tribunal. Decision on Appeal 18 In my view the reasoning of the AAT discloses a misunderstanding concerning its function in considering the question of waiver for itself and an error of law is disclosed (Drake, 439,422). The remaining grounds take the matter no further. That which complains of a denial of opportunity to present the Secretary's case before the AAT was not, argument disclosed, referrable to the process of the hearing itself but to the AAT's view of its function which coloured the views it expressed during the hearing as it did its ultimate decision. That which relied upon the lack of reasons merely reflected the fact that the available evidence and arguments were not considered. Orders 19 The decision of the AAT of 3 June 1998 will be set aside and the matter remitted to the AAT, differently constituted, for reconsideration. No order as to costs is necessary. I was informed on the hearing that Mrs Payne's costs are to be met by the Department. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate: Dated: 12 February 1999 Counsel for the Applicant: Mr P Applegarth Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: Ms K Magee Solicitor for the Respondent: Eric Muir Date of Hearing: 2 February 1998 Date of Judgment: 12 February 1998