FEDERAL COURT OF AUSTRALIA Secretary, Department of Social Security v Lowe [1999] FCA 705 ADMINISTRATIVE LAW ) SOCIAL SECURITY) – sole parent pension – choice of recipient where care of child was shared between separated parents – meaning of "in the adult's care" in s 5(2) of the Social Security Act 1991 – meaning of provision in s 251 of the Social Security Act that "a young person can be an SPP child of only one person at a time" – principle that the Act is beneficial legislation to be construed in accordance with its purpose – interpretation of the Act, as a "clear English" version of the Social Security Act 1947, in the light of that historical context – interpretation of "care" as including care given through delegation from a distance – where each parent in turn took charge of the child by agreement with the other week and week about, held s 251 applied to require a recipient of the pension to be chosen by the Secretary of the Department. APPEALS – principle that an appeal is against orders, not reasons – where an order, read in the light of the reasons, leaves open to be implemented conclusions that are erroneous, appeal court may vary the order by an appropriate declaration. WORDS & PHRASES – "time", "at a time". Social Security Act 1991 (Cth), ss 5(2), 249(1), 250, 251 Social Security Act 1947 (Cth), ss 52, 95, 160(2) Family Law Reform Act 1995 (Cth) Lowe v Secretary, Department of Social Security (1998) 159 ALR 395; 24 Fam LR 120 reversed in part Secretary, Department of Social Security v Field (1989) 25 FCR 425 at 429 applied Secretary, Department of Social Security v Cooper (1990) 97 ALR 364 applied Secretary to the Department of Social Security v Van Luc Ho (1987) 17 FCR 582 applied Re Secretary, Department of Social Security and Underwood (1991) 25 ALD 343 applied Brooks v Ellis [1972] 2 All ER 1204 referred to Blunn v Cleaver (1993) 47 FCR 111 applied Short v F W Hercus Pty Ltd (1993) 40 FCR 511 applied Van Cong Huynh v Secretary, Department of Social Security (1988) 18 FCR 402 applied B and B: Family Law Reform Act 1995 (1997) 21 Fam LR 676 referred to Vidler v Secretary, Department of Social Security (1995) 61 FCR 370 applied Re Edwards and Secretary, Department of Social Security (1994) 32 ALD 711 disapproved Secretary, Department of Social Security v Wetter (1993) 40 FCR 22 referred to Re Vidler and Secretary, Department of Social Security (1994) 20 AAR 223 approved Baxter Healthcare Pty Ltd v Comptroller-General of Customs (1997) 72 FCR 467 applied SECRETARY, DEPARTMENT OF SOCIAL SECURITY v CHARLES CRAWFORD WILSON LOWE QG 165 of 1998 Burchett, Kiefel and Hely JJ 28 May 1999 Sydney IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY QG 165 of 1998 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SECRETARY, DEPARTMENT OF SOCIAL SECURITY AND: Appellant CHARLES CRAWFORD WILSON LOWE Respondent AND BETWEEN: CHARLES CRAWFORD WILSON LOWE AND: Cross-Appellant SECRETARY, DEPARTMENT OF SOCIAL SECURITY Cross-Respondent JUDGES: BURCHETT, KIEFEL AND HELY JJ DATE OF ORDER: 28 MAY 1999 WHERE MADE: SYDNEY THE COURT ORDERS THAT: (1) The appeal be allowed. (2) The order made below be varied by the addition of a declaration that the Administrative Appeals Tribunal did not, upon its findings of fact, err in law in awarding the sole parent pension to Maria Theresa Schembri. (3) The cross-appeal be dismissed. (4) There be no order as to the costs of the appeal or cross-appeal. 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 165 OF 1998 ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SECRETARY, DEPARTMENT OF SOCIAL SECURITY AND: Appellant CHARLES CRAWFORD WILSON LOWE Respondent AND BETWEEN: CHARLES CRAWFORD WILSON LOWE AND: Cross-Appellant SECRETARY, DEPARTMENT OF SOCIAL SECURITY Cross-Respondent JUDGES: BURCHETT, KIEFEL AND HELY JJ DATE: 28 MAY 1999 PLACE: SYDNEY REASONS FOR JUDGMENT THE COURT 1 The principal question in this appeal (and in the cross-appeal) is whether there is a hole in the safety net provided by the Social Security Act 1991 (Cth), in the form of a "sole parent pension", in respect of a child of a parent living without a spouse or de facto spouse. By the decision that is challenged, some cases have been held not to be included in the apparently comprehensive coverage of the Act. 2 The facts raising the problem may be stated in a few words. The respondent Charles Lowe and his wife Maria Theresa Schembri had one child, Sarina Helen Androsia Lowe, born in January 1986. They separated when she was just five years old, and were divorced in 1992. By agreement, and without resort to custody and access orders, it was arranged that Sarina live week and week about with each parent, the changeover day being every Friday. Financial burdens have since been shared, and major decisions concerning Sarina have been made jointly. Daily decisions have been made by the parent with whom Sarina happened to be. The situation was summed up in the reasons of the Administrative Appeals Tribunal as follows: "It was agreed between the parties that in relation to their child, Mr Lowe and Miss Schembri share equally all parenting rights, duties, responsibilities, care, concern, contact time, love, affection, hopes and ambitions." 3 One might have thought that these arrangements, representing an ideal at which provisions of the Family Law Act 1975 are aimed, would be unlikely to be found inimical to any policy of the Social Security Act. However, s 251 of that Act at the relevant times provided: "(1) A young person can be an SPP child of only one person at a time. (2) If the Secretary is satisfied that, but for this section, a young person would be an SPP child of 2 or more persons, the Secretary is to: (a) make a written determination that the Secretary is satisfied that that is the case; and (b) specify in the determination the person whose SPP child the young person is to be; and (c) give each person a copy of the determination." Because of this section, the Administrative Appeals Tribunal, faced with competing claims by the parents for the payment of a sole parent pension (SPP), held that a choice was required. On the basis of a concession by Mr Lowe that he was not, at the time, in any particular need of the pension, whereas "Miss Schembri … [had] ceased work … to devote more personal time to her daughter", the Tribunal "assessed the financial needs of Miss Schembri to be greater than those of Mr Lowe", and affirmed a decision to grant the sole parent pension to her. Mr Lowe appealed to a judge of the Court, contending that s 251 did not fit the case, which requiredand that the pension to should be shared. 4 The ruling of the Court at first instance (reported as Lowe v Secretary, Department of Social Security (1998) 159 ALR 395; 24 Fam LR 120) was that indeed s 251 did not fit the case, but for reasons which denied the pension to either parent. Disputing that denial, the Secretary, Department of Social Security has appealed, and Mr Lowe has cross-appealed. 5 An understanding of the questions of construction in the case requires some outline of the context of the key provisions involved. By s 249(1), a person is qualified for a sole parent pension who (inter alia) "is not a member of a couple" (s 249(1)(a)(i)), and has an "SPP child" falling within the terms of ss 249(1)(b) and (c), and also ss 250 and 251. Section 250 makes a natural child of another person (called the "adult") an SPP child of the adult if (inter alia) the child is "a dependent child of the adult" (s 250(1)(a)(i)), who has "not turned 16" (s 250(1)(b)(i)). Importantly, a "dependent child" is defined in s 5(2) as follows: "Subject to subsections (3) and (6) to (8) [not here applicable], a young person who has not turned 16 is a dependent child of another person (in this subsection called the 'adult') if: (a) the adult is legally responsible (whether alone or jointly with another person) for the day-to-day care, welfare and development of the young person, and the young person is in the adult's care; or …". 6 The difficulty found at first instance to be fatal to either parent's claim arose out of the terms of s 5(2)(a) and s 251. It was held that, for any single week, Sarina was "in the adult's care" in relation to one only of her parents, and for the next week "in the adult's care" of the other. Applying, on that basis, the words of s 251 to each week separately, the learned judge held it was never the case that Sarina was an SPP child of both at the one time, so there never was any occasion for a determination under s 251(2)(b). It may be desirable to point out that this reasoning does not deny the satisfaction by each of the parents, all of the time, of the first part of s 5(2)(a). As the joint judgment of the Full Court states in Secretary, Department of Social Security v Field (1989) 25 FCR 425 at 429: "Absent the order of a competent court depriving a parent of his common law right to custody of his child, the parent will have the right referred to in s 3(2)" (ie, "to have, and to make decisions concerning, the daily care and control of the child"). However, the fly in the ointment, on the judge's view, was that the child was never in either parent's care for a full fortnight, the period in respect of which an instalment of pension is paid (see ss 270-273); and so, his Honour thought, neither became entitled to any payment. 7 But, in our respectful opinion, the conclusion at which his Honour arrived is erroneous, for two broad reasons. In the first place, it gives the expression "at a time" a narrow and inflexible meaning which ignores the purpose and context of s 251. This is not the way beneficial legislation should be construed. The purpose is plainly to identify the parent who should receive the provision in respect of the child, not to eliminate the provision. A generous construction of the language of this legislation, preferring the substance to the form, and so as to promote the fair and consistent effectuation of its objects, is required of the Court: Secretary, Department of Social Security v Cooper (1990) 97 ALR 364 at 370; Secretary to the Department of Social Security v Van Luc Ho (1987) 17 FCR 582 at 584-585; Re Secretary, Department of Social Security and Underwood (1991) 25 ALD 343 at 347. Such a construction would give weight to the range of meanings of which the word "time" is capable. It is not confined to a short time, whether an instant, a day, or a week, but may refer to a substantial period. Even the expression "at the same time", which attracts a flavour of precision through the definite article and the word "same", may convey the broad meaning "during the same period": Oxford English Dictionary, 2d ed. (1989), vol. XVIII, 104, where the example is given: "Tertulian … lived at the same time of this Pope". Section 251, fairly understood, refers to a period during which particular arrangements with respect to the care of the child endure. The section looks at those arrangements and asks whether, during that period, more than one person would, but for the section, fulfil the statutory conditions for entitlement to the pension. It stands to reason the period in question must be long enough to make the inquiry meaningful – the period must be sufficient to be capable of entitling a person or persons to the pension. Cf. Brooks v Ellis [1972] 2 All ER 1204, where a comparable view was taken of a statutory reference to time, even in the context (calling for some exactness) of a criminal offence. It follows that his Honour, in looking to each week separately, a period he held to be too short to give rise to any entitlement, misapplied the section. 8 Subject to some immaterial amendments made later, s 251 formed part of the Social Security Act 1991 at its enactment. As was pointed out in Blunn v Cleaver (1993) 47 FCR 111 at 121, 127-128, the object of this legislation, stated by the Minister when it was before Parliament, was "to overcome the problem of readability by using a 'clear English' drafting style and format", so as to "make it a more accessible piece of legislation that ordinary Australians can reasonably be expected to understand". The Act was "intended to reflect existing policy … reflected by the existing legislation". It would be incongruous, in the light of those statements of the Minister, if s 251, as a piece of "clear English" designed to make the meaning plain, actually had the effect of creating a hole in the legislation which was not there before. But the fact is that the previous provision, s 52 of the Social Security Act 1947, did not use the ambiguous expression "an SPP child of only one person at a time". Without any tie to "a time", s 52 simply provided: "Where a child is a qualifying child of 2 or more persons, that child shall … be taken to be a qualifying child of one of those persons only". There was then provision for a determination identifying the person who was to receive the pension under that Act corresponding to a sole parent pension under the 1991 Act. Unembarrassed by any suggestion of a need to focus upon "a time", rather than upon the sharing of responsibilities and care, we do not think the Court would have had any difficulty in applying s 52 to the present case. Since it is clear s 251 was not intended to amend the law, but only, ironically enough, to make it simpler to read, the original form of the section may be used to confirm its construction: cf Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 518-519, 523. 9 The second error in the approach adopted at first instance relates to the concluding words of s 5(2)(a), "and the young person is in the adult's care". It is wrong to regard these words as requiring the adult's immediate physical presence at all times over a period of a fortnight, or any other period. After all, most children will be at school for a large part of each year, and a few may board for weeks or months at some institution, such as a hospital, or a boarding school. Children stay at times with relatives. The delegation of daily care involved in such arrangements need not be regarded as denying the enduring role of a caring parent. While a child is at school, or in hospital, or staying with a relative, the child may remain, in a perfectly intelligible sense, "in the … care" of a parent or parents. It is appropriate to understand s 5(2)(a) accordingly. 10 The authorities support a broad understanding of "care" in a provision of this kind. Van Cong Huynh v Secretary, Department of Social Security (1988) 18 FCR 402 is an extreme case, but it makes the point all the more strongly for that. It concerned the construction of s 95 of the Social Security Act 1947 as it stood until 5 September 1985. By s 95, it was provided that "a person who has the custody, care and control of a child", subject to other provisions, was "qualified to receive a family allowance in respect of each such child". A father who had fled Vietnam by boat, leaving behind his wife and three young children as they were unable to bear the rigours of the voyage, having established himself in Australia, maintained his care of the children, so far as he could, by sending his wife material assistance (to the extent of over $1,000 per annum) as well as advice and counsel about the education and needs of the children. The Full Court (Sheppard, Morling and Burchett JJ) unanimously held the Administrative Appeals Tribunal to have been entitled to find that the father had the factual "custody, care and control" of the children, exercised through his wife, although his efforts to reunite his family in the one home had so far been thwarted by the refusal of the Vietnamese Government to issue exit visas to his wife and children. Morling J (with whom Sheppard J generally agreed) recognized (at 406) that "there may be a delegation by a parent of the custody, care and control of his child to a third person". Burchett J (with whom also Sheppard J generally agreed), held (at 413-414) that "the mutual acceptance of the ties and responsibilities between members of the appellant's family", which was "sustained by communication, sacrifice and the determined provision of support", was "substantial enough … to support the existence of custody care and control in the appellant". It is true that the Court, in Van Cong Huynh, was assisted in reaching its conclusion by a special context, but the decision shows that the expression "a person who has the … care … of a child" is capable of embracing a person who exercises that care from a distance. Whether, in a particular provision, a similar expression should be similarly understood, is just a question of construction. 11 In Secretary, Department of Social Security v Field (1989) 25 FCR 425, another Full Court (Morling, Beaumont and Burchett JJ) had to consider the definition of "dependent child" in s 3 of the Social Security Act 1947, which referred to "a child … in the custody, care and control of the person …", but also provided that "a person shall not be taken to have the custody of a child unless the person, whether alone or jointly with another person, has the right to have, and to make decisions concerning, the daily care and control of the child". It will be apparent that this provision was concerned with both the factual position in respect of custody, care and control, and also the legal right to exercise care and control. At issue was what was then known as a "supporting parent's benefit" (SPB). The situation was that the respondent, the father of a child Jacob, had access to the child under an order of the Family Court for four nights and five days in each period of two weeks when the child was attending school, and during school holidays the time was divided equally between the parents, but the mother was awarded custody. The joint judgment of the Full Court recognizes (at 430) that a right to access may also involve "the right to have, and to make decisions concerning, [the child's] care and control". However, the Court added, with reference to the recurring periods of four nights and five days that were in question: "But the intermittency of the access days is such as to lead us to conclude that the respondent's right cannot properly be characterised as the right to have the daily care and control of his child." The corollary of the Full Court's view is that the general right of the custodial parent with respect to the care and control of the child continues during short periods of access, even where those periods are frequent. It is a very short step to conclude from this that the custodial parent's right is actually exercised, during those periods of physical separation from the child, through the parent having access. The Court went on to consider the general position with respect to access for periods of up to fourteen consecutive days. There is no hint, in this consideration, that a period of access for a significant part of a fortnight might deprive the custodial parent of any right to a supporting parent's benefit on the basis that the child was not in the immediate and physical custody care and control of the custodial parent for such a large part of the period to which a pension payment would relate. (Amendments to the Family Law Act 1975 effected by the Family Law Reform Act 1995 which became effective on 11 June 1996, have shifted the focus of the Family Law Act from rights which parents had with respect to children to parental responsibility for children: see generally B and B: Family Law Reform Act 1995 (1997) 21 Fam LR 676 at 725-726 (Part 9(a)). The notions of custody and access have been replaced with the concepts of residency and contact. Butthis does not affect the relevance of the foregoing discussion to the present case.) 12 Vidler v Secretary, Department of Social Security (1995) 61 FCR 370 is a decision of O'Loughlin J in respect of a sole parent pension entitlement under the Social Security Act 1991. The parents of a child Jullie had been awarded joint custody by the Family Court. They shared the physical tasks of care (as is stated at 374) in accordance with a "consistent pattern of care and control alternating every few days". O'Loughlin J held that it was appropriate, in these circumstances, for the Administrative Appeals Tribunal to exercise the power under s 251 so as to determine the recipient of the sole parent pension. His Honour held (at 375): "Difficult though it may be, there was a statutory obligation to make a choice in favour of one of the competing parties to the entire exclusion of the other." His Honour did not suggest that the absence of the exercise of immediate physical care for approximately half the time deprived each parent of any entitlement. Of course, the contrary was implicit in his assertion that s 251 applied. Furthermore, in the course of his consideration discussion of the caseissues, he referred (at 380-381) to the decision in Re Edwards and Secretary, Department of Social Security (1994) 32 ALD 711, where the Administrative Appeals Tribunal had considered a case remarkably similar to the present. The difference, which seems to us, if not immaterial, to make the matter a fortiori, was that the parents there had immediate physical care of the child week and week about pursuant, not to any agreement between them, but to an order of the Family Court which awarded each parent custody during the week when that parent had the child. The Tribunal took a view very like the view taken at first instance in the present matter. It said (at 724) that the child "may be the SPP child of two persons but she is not the SPP child of two persons at the same time." It considered the question of entitlement at the date of each pension pay-day, and concluded that the claimant parent did not on each of those days have an SPP child. O'Loughlin J commented in Vidler (at 381): "I do not consider that Edwards' case should be followed. I do not consider that the identity of the parent who had actual care and control of a child on a particular pension day was the correct approach. The better position would have been to recognise that the parents now had like legal rights and if as a matter of fact (as seems to be the case because of the Tribunal's reference to s 251 of the Act) the Tribunal was of the opinion that the parents now shared equally the actual care and control of the child to call in aid s 251." 13 Secretary, Department of Social Security v Wetter (1993) 40 FCR 22 is another case where each parent took charge of a child for alternate weeks. The husband had custody pursuant to an order of the Family Court of Western Australia. The case fell to be decided under the provisions of the Social Security Act 1947, and is not precisely in point. However, Hill J referred to s 52 of that Act, which we have already identified as the progenitor of s 251. He made it clear (at 30) that the Administrative Appeals Tribunal had erred in not taking account of s 52. His Honour also referred to s 160 of the same Act, subs (2) of which provided: "Where a person who is entitled to receive a pension is in Australia, an instalment of the pension is, subject to sub-section (3), payable to the person on each pension pay-day on which the person is so entitled." This, of course, is a provision of the kind that was considered by the Court at first instance to demonstrate the inapplicability of the legislation to a parent having the care of a child for a series of discontinuous periods not exceeding one week. But Hill J did not see the matter in that light. His Honour said (at 30): "In a narrow sense, s 160(2) might suggest that the question of entitlement to a pension has to be determined on each date on which the pension is, in fact, paid. To look at the matter of dependency of a child on a particular day would seem somewhat ludicrous. In my view a common sense approach should be taken. It is appropriate to consider a period, being perhaps the whole of the period of two weeks prior to the pension payment date, to see whether in the whole of that period it is appropriate to categorise the child as relevantly being dependent. This is no more than saying that the question of dependency on one day requires looking at the facts immediately before that day and perhaps even immediately after. Ultimately, the scheme of the Act is for a continuous entitlement to pension, but subject to the fact that the pension is to cease where some event or circumstances change so that the person receiving the pension ceases to be qualified or eligible to receive it: s 169. Indeed, the provisions of s 169 tell against treating, in a case where there are alternating weekly or fortnightly periods of access, each of the parents as wholly or substantially maintaining the child in that fortnightly period. Once that fortnightly period came to an end it would be necessary for the person giving up custody for the next fortnight to notify a change of circumstances so that the pension would cease and then be resumed a fortnight later. The Act cannot be assumed to have such a capricious application." 14 In our opinion, these authorities are united in suggesting that the whole of the arrangements for the care of a child should be considered when a determination is made as to whether the child is in a particular parent's care. It is not appropriate to dissect overall arrangements into discrete segments, unless those segments are sufficiently substantial to attract the principle discussed in Field, where it was suggested a period of a month during school holidays would, on the facts of that case, have required separate consideration. In the present case, if an overall approach is taken to the arrangements, it is clear that the care of Sarina is shared by her parents, and it is not appropriate to regard either of them as having that care in an exclusive sense each alternate week. Rather, their agreement necessarily involved, and was found to involve, joint participation in major decisions regarding the care of the child (cf Van Cong Huynh), although minor decisions requiring to be made immediately might be made by the parent with whom the child happened to be. Since even minor decisions were made pursuant to the mutual arrangements between the parties, they could not properly be seen as exercises of some exclusive capacity residing in each parent alternatively for a week. That would be quite unrealistic. 15 When Re Vidler was before the Administrative Appeals Tribunal, the decision of which is reported as Re Vidler and Secretary, Department of Social Security (1994) 20 AAR 223, Deputy President Forgie said (at 236): "The structure of the sole parent pension scheme does not concern itself with variations in the actual care arrangements from day to day but with care over a period of time. This structure, together with the provisions relating to family allowance, which shares many features in common with the scheme relating to sole parent pension, leads me to conclude that the time to which I am having regard in determining whether Jullie is the dependent child, and so an SPP child, is not day by day but over a period. What is an appropriate length of period over which to consider that issue I do not need to consider in this case. In this case, there is a consistent pattern of care and control alternating every few days between Mr Vidler and Mrs Ashford with them both having joint custody at all times. The pattern is such that I find that Jullie is the dependent child of both of them for the whole of the period I must consider in this case." We think that was the correct approach to take in that case, and that it expresses the underlying principle which governs this case also. 16 The appeal poses one remaining difficulty. The order made at first instance simply dismissed an appeal, so called, from the decision of the Administrative Appeals Tribunal. That appeal was brought by Mr Lowe against the denial of any payment of sole parent pension to him, the Tribunal having decided under s 251 that it should be paid solely to Miss Schembri. But she was not a party to the proceeding brought in this Court. (We observe, in passing, that she should have been joined, as Mr Lowe's appeal could have affected her rights.) The difficulty is that, although the appellant Secretary of the Department has persuaded us the learned judge was wrong in holding neither parent eligible to receive a sole parent pension, we are satisfied he was correct so far asin dismissing Mr Lowe's appeal is concerned, since no error of law was shown to vitiate the decision of the Administrative Appeals Tribunal., and it was therefore appropriate for him to dismiss Mr Lowe's appeal. Courts of appeal have repeatedly held that a right of appeal relates to a court's orders, not to its reasons. Can we, then, correct the error we perceive in the reasons given for the making of an order which we consider should stand? The answer is to be found in a series of cases, which are cited and applied in Baxter Healthcare Pty Ltd v Comptroller-General of Customs (1997) 72 FCR 467 at 483, 491, 499. An order, read in the light of the reasons justifying it, may leave open to be implemented conclusions which a full court holds to be erroneous. Had those conclusions been expressed in a declaration, it would have been set aside or varied. In such a case, Baxter Healthcare affirms the power of the court on appeal to vary the order made below by the addition of an appropriate declaration, as was actually done in that case at 501. 17 Accordingly, the appeal should be allowed, and there should be added to the order made at first instance a declaration that the Administrative Appeals Tribunal did not err in law in awarding the sole parent pension to Miss Schembri. The cross-appeal should be dismissed. There should be no order as to costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court. Associate: Dated: 28 May 1999 Counsel for the Appellant: Mr P D T Applegarth Solicitor for the Appellant: Australian Government Solicitor Counsel for the Respondent: Mr S Miller Solicitor for the Respondent: Paul Denmeade & Co Date of Hearing: 20 May 1999 Date of Judgment: 28 May 1999