FEDERAL COURT OF AUSTRALIA Condren v Secretary, Department of Family & Community Services [2000] FCA 268 ADMINISTRATIVE LAW – appellant not entitled to receive disability pension while he was imprisoned – appellant failed to inform the Department of Family and Community Services of his imprisonment as required by s 132(5) of the Social Security Act 1991 (Cth) - recovery, as a debt under s 1224(1)(b)(ii), of the amount paid to the appellant in excess of his entitlement – whether there were "special circumstances (other than financial hardship alone)" which made it desirable for the Secretary to exercise his discretion under s 1237AAD to waive the right to recover all or part of the debt Social Security Act 1991 (Cth) 1991, ss 1224(1)(b)(ii), 1237AAD(b) Beadle v Director‑General of Social Security (1985) 60 ALR 225, referred to Kertland v Secretary, Department of Family & Community Services [1999] FCA 1596, referred to JAMES CONDREN v SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES N 927 OF 1999 LEHANE J 14 MARCH 2000 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 927 OF 1999 BETWEEN: JAMES CONDREN APPLICANT AND: SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES RESPONDENT JUDGE: LEHANE J DATE OF ORDER: 9 MARCH 2000 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The application be dismissed. 2. The respondent have liberty to apply, not later than 28 April 2000, for an order that the applicant pay the respondent's costs of the application. 3. Tuesday, 21 March 2000, be fixed under O 52 r 15(1)(a)(iii) of the Federal Court Rules as the date within twenty-one days after which any notice of appeal is to be filed and served. 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 N 927 OF 1999 BETWEEN: JAMES CONDREN APPLICANT AND: SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES RESPONDENT JUDGE: LEHANE J DATE: 14 MARCH 2000 PLACE: SYDNEY REASONS FOR JUDGMENT 1 This is an appeal, under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth),from a decision of the Administrative Appeals Tribunal. By that decision, made on 4 August 1999, the Tribunal affirmed a decision of the Social Security Appeals Tribunal affirming a decision of an Authorised Review Officer of the Department of Social Security affirming, in turn, a decision made by an officer of the Department to recover, and not waive, a debt due by Mr Condren to the Commonwealth under s 1224(1) of the Social Security Act 1991 (Cth). 2 Mr Condren represented himself before me but was assisted by two people, Mr Thomas Ward and Ms Margaret Thomas, who told me that they were helping Mr Condren in the management of his affairs. At the commencement of the hearing, Mr Condren sought an adjournment in order to obtain legal advice and representation. For reasons which I gave in the course of discussion at the hearing, I refused the application for an adjournment. I shall summarise, later in these reasons, the considerations which led me to take that course. Then, having heard some brief submissions by Mr Condren and by Mr Ward and Ms Thomas, I proceeded to order that the proceeding commenced by Mr Condren's notice of appeal be dismissed. I said that I would deliver written reasons for that decision, and these are those reasons. Counsel for the Secretary sought an order for the payment of costs. I declined to make an order at that time, but reserved liberty to the Secretary to apply, not later than 28 April 2000, for an order for costs should the Secretary be so advised. Background; Tribunal's decision 3 Mr Condren suffers from cerebral palsy and has intellectual disability. During the period in question, in 1997, he received a disability support pension. If a person, otherwise qualified to receive such a pension, is in gaol the pension is not payable during the period of imprisonment except on the first and last pension paydays during that period (Social Security Act s 98(1)(e) and s 1158(1)). Mr Condren was imprisoned on 10 March 1997 and was in gaol until 18 June 1997. Throughout that period the pension was paid to him by transfer to the bank account which he had nominated for the purpose. 4 On 24 February 1997, an officer of the Department had written to Mr Condren about his pension, informing him particularly of an increase in its amount. The letter included a notification of a number of things which Mr Condren was required to tell the Department. They included a requirement that Mr Condren tell the Department if he was charged with an offence and in custody on remand or was in gaol after being convicted of an offence. Section 132 of the Social Security Act authorised the Secretary to give Mr Condren that notification, and s 132(5) provided: "A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice." The result was that Mr Condren was required to inform the Department of his imprisonment and was not entitled to receive his pension during his imprisonment except on the first and last paydays during that period. Consequently, by virtue of s 1224(1) of the Social Security Act, the amount paid to Mr Condren in excess of his entitlement was a debt due by him to the Commonwealth – at least, if it was correct to say that the overpayment was made because Mr Condren failed or omitted to comply with a provision (s 132(5)) of the Social Security Act (s 1224(1)(b)(ii)). 5 Assuming such a debt to have arisen, the Secretary was bound to waive the right to recover any proportion of it that was "attributable solely to an administrative error made by the Commonwealth" if Mr Condren received it in good faith (s 1237A(1)). Additionally, the Secretary had a discretion to waive the right to recover all or part of the debt under s 1237AAD, which provided: "The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that: (a) the debt did not result wholly or partly from the debtor or another person knowingly: (i) making a false statement or a false representation; or (ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and (b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and (c) it is more appropriate to waive than to write off the debt or part of the debt." 6 The effect of the Tribunal's decision was that a debt arose under s 1224; the Secretary was not obliged to waive it under s 1237A; and that it should not be waived under s 1237AAD, there being no relevant special circumstances. Evidence before the Tribunal; Tribunal's reasons; consideration 7 Mr Condren's evidence to the Tribunal was that on his arrival at Long Bay Correctional Centre he asked an officer of the Centre to notify the Department of his imprisonment. He also claimed to have asked another officer whether that had been done. The evidence of the former officer was that she had no recollection of any such request; the evidence of the other was that she did not believe that any request had been made to her. Certainly there was no evidence that anyone in fact notified the Department: it learnt of Mr Condren's imprisonment through a data matching process only after he had been released. The Tribunal decided that even if Mr Condren's evidence was correct, and the officers' evidence mistaken, a debt arose under s 1224. An amount (to which Mr Condren was not entitled) was paid to him by way of social security payment and, as a matter of fact, he had not complied with his obligation to notify the Department of his imprisonment; and the payment was made because he had not done so. That same reasoning – coupled with a finding that the failure to discover earlier, through data matching, that Mr Condren had been imprisoned could not be regarded as an administrative error on the part of the Department – led also to the conclusion that no proportion of the debt could be regarded as attributable solely to an administrative error made by the Commonwealth, so that no duty to waive arose under s 1237A. No error is apparent in those aspects of the Tribunal's reasons. 8 The Tribunal accepted that Mr Condren may have believed that the officers at the Correctional Centre would notify the Department of his imprisonment. That meant that the debt did not result wholly or partly from Mr Condren knowingly failing or omitting to comply with a provision of the Social Security Act (despite the fact that he was aware, according to his evidence, of his obligation to notify the Department) (s 1237AAD(a)(ii)). The question to be answered, then, was whether there were special circumstances (other than financial hardship alone) that made it desirable to waive the debt (s 1237AAD(b)). 9 Mr Condren gave evidence to the Tribunal of a number of matters on which he relied in order to establish the existence of special circumstances. He gave evidence – and there appears to have been no dispute about it – that he was imprisoned for longer than he had expected because of difficulty in finding other suitable accommodation for him; for the same reason he did not know, at any time during the period he was imprisoned, how much longer he would remain there. He gave evidence also of his limited access, while in prison, to a telephone. He claimed also that he had not actually received the amounts overpaid, because they had been fraudulently taken from his account by a third person, whom he named (bank statements tendered to the Tribunal did not reveal any such transaction). Mr Condren also relied upon medical records which threw light, he said, on the extent to which he was able to understand complex matters. 10 The Tribunal described its task in this way: "However, in order to properly exercise the power of waiver under section 1237AAD, the Tribunal must be satisfied that the circumstances of this case are unusual, uncommon or exceptional to such an extent that it would be 'unjust, unreasonable, or otherwise inappropriate' to recover the debt: Re Beadle and Director‑General of Social Security (1984) 6 ALD 1 at 3." The decision from which the Tribunal quoted was that of the Full Tribunal considered, among other cases, by the Full Court on appeal in Beadle v Director‑General of Social Security (1985) 60 ALR 225. The words "unjust, unreasonable or otherwise inappropriate"are not in fact to be found in the reported decision of the Full Tribunal, though the words "unusual, uncommon or exceptional" are. It may be that, in this case, the Tribunal has embarked on the somewhat dangerous course of placing a gloss on, or at least paraphrasing, the words of the section, a course against which the Full Court cautioned in Beadle at 228 and at 230. It may, however, be noted that the words "unfair or inappropriate" appear, in a slightly different context, in the Full Court's discussion in Beadle at 228. 11 The principles and the authorities are discussed in the judgment of Merkel J in Kertland v Secretary, Department of Family & Community Services [1999] FCA 1596 at par 30 to par 45. What the discussion makes clear is that the question whether particular circumstances are "special" involves questions of fact and degree, peculiarly matters for the Tribunal. It is perhaps not surprising that, although counsel for the Secretary referred me to a number of authorities, and I have looked at several, none of them resulted in the success of an appeal on the basis of legal error in deciding whether or not there were special circumstances. 12 The Tribunal's findings included that there was no evidence of the alleged fraudulent withdrawal from Mr Condren's account other than his own assertion; that Mr Condren had been in a position twice to repay the debt but had not done so (particularly, he had received an amount of $13,000 by way of compensation which he had expended on other things); Mr Condren's financial circumstances, though straitened, were not exceptionally serious (the Tribunal noted that Mr Condren was presently paying the debt back at the rate of $25 per week); despite his intellectual disability, he was able to live independently, he had "represented himself admirably at the hearing" and "was able to follow the hearing process and competently cross‑examine witnesses"; and Mr Condren not only was aware of his obligation to notify the Department of his imprisonment but had done so (through a welfare officer) during a previous period in gaol. In short, having taken account of the material before it, the Tribunal found that there were no special circumstances which made it appropriate or desirable to waive the debt. 13 Reading the Tribunal's reasons as a whole – and I have read and re‑read them – I do not think it can be said that the Tribunal's approach to the question was erroneous, that it took into account matters which it ought not to have taken into account or that it failed to take into account relevant matters. Those were the reasons which led me to order that the appeal be dismissed. Adjournment 14 I have mentioned that an adjournment was sought (and it was sought without forewarning) at the commencement of the hearing. Mr Condren asked for the adjournment on the ground that, having made inquiries through his local member with the assistance of Mr Ward and Ms Thomas, he had been referred to the Bar Association and wished to seek legal representation. Mr Condren had, as I have mentioned, represented himself before the Tribunal. He had done so also in the interlocutory stages of this proceeding, both at a directions hearing and on an application for a stay of the Tribunal's decision heard by Lindgren J on 9 November 1999 ([1999] FCA 1590). Mr Condren submitted that he was entitled, as a matter of legal right, to legal representation. There is, however, no broad principle to that effect, and the question I had to determine was what was the appropriate course in the interests of justice: justice not only to Mr Condren but also to the Department and, more generally, in the public interest. I had considered the papers with some care; my clear impression was, as counsel for the Secretary submitted, that the case was a clear one. The question involved was one of law. If I were to decide it adversely to Mr Condren, he would have a right of appeal as to which he could proceed to take advice, if he wished. It seemed to me in the circumstances that the better course was to proceed to deal with the matter rather than to defer it. Consequently, I refused the adjournment which Mr Condren requested. Costs 15 The Secretary sought an order that Mr Condren pay his costs. In the circumstances, however, I thought it appropriate not to deal with the matter finally but to reserve liberty to the Secretary to apply. It seemed to me that there would be difficulties in requiring Mr Condren to deal with the question of costs then and there; and the matter was not entirely uncomplicated, the costs of the stay application before Lindgren J having been reserved. Time for Appeal 16 This matter was not touched upon at the hearing, but in the circumstances, and particularly, where I have pronounced the Court's orders before delivering reasons, I think it is appropriate that the time for filing and serving a notice of appeal should run only from a date when Mr Condren will have received these reasons. I informed him at the conclusion of the hearing that it was not necessary for him, if he preferred not to do so, to attend when the reasons were handed down. Accordingly, I fix Tuesday, 21 March 2000, under O 52 r 15(1)(a)(iii) of theFederal Court Rules, as the date within twenty‑one days after which any notice of appeal is to be filed and served. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lehane. Associate: Dated: 14 March 2000 Counsel for the Applicant The applicant appeared in person Counsel for the Respondent: T Reilly Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 9 March 2000 Date of Order: 9 March 2000 Date of Delivery of Reasons 14 March 2000