Dranichnikov v Centrelink [2002] FCA 1431

FEDERAL COURT OF AUSTRALIA

Dranichnikov v Centrelink [2002] FCA 1431 SERGEY DRANICHNIKOV AND OLGA DRANICHNIKOV v CENTRELINK Q 148 OF 2002 DOWSETT J 5 NOVEMBER 2002 BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY Q 148 OF 2002

BETWEEN: SERGEY DRANICHNIKOV AND OLGA DRANICHNIKOV

APPLICANTS

AND: CENTRELINK

RESPONDENT

JUDGE: DOWSETT J

DATE OF ORDER: 5 NOVEMBER 2002

WHERE MADE: BRISBANE

THE COURT ORDERS THAT:

1. The notice of motion dated 5 November 2002 be dismissed;

2. The application for review of the decision referred to in par 1 of the amended application dated 26 September 2002 be dismissed;

3. The application for review of the decision referred to in par 3 of the amended application dated 26 September 2002 be dismissed;

4. The amended application dated 26 September 2002 be dismissed;

5. Mrs Dranichnikov pay the respondent's costs of these proceedings up to, and including, the hearing on 25 October 2002, including reserved costs;

6. Mr Dranichnikov pay the respondent's costs of the proceedings generally, including reserved costs; and

7. The total amount recoverable under orders 5 and 6 is not to exceed the amount of taxed costs properly allowable in respect of the proceedings generally.

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 Q 148 OF 2002

BETWEEN: SERGEY DRANICHNIKOV AND OLGA DRANICHNIKOV

APPLICANTS

AND: CENTRELINK

RESPONDENT

JUDGE: DOWSETT J

DATE: 5 NOVEMBER 2002

PLACE: BRISBANE

REASONS FOR JUDGMENT

1 This morning the applicants, by notice of motion, sought to amend the application in four particulars. The first concerns a decision allegedly made on 25 October 2002. In my reasons for striking out par 2 of the existing amended application, I referred to the circumstances in which a decision had allegedly been made on 10 September concerning the applicants' entitlements to benefit. I indicated also that they had subsequently been provided with application forms and that their applications were still pending. It may be that the first proposed amendment relates to a subsequent decision with respect to such entitlement. If so, and if the applicants are aggrieved by the decision, they make seek review in other proceedings. It is too late to seek it in these proceedings. 2 The second proposed amendment is to join the applicants' daughter in these proceedings. I cannot see that she is a necessary party and, in any event, as she is an infant, it would be necessary for me to make provision for a tutor. The applicants have asserted that one of them would act, and I have no doubt that they would. However I am by no means satisfied, having regard to the way in which these proceedings have been conducted to date, that if the daughter had a legitimate interest to be vindicated, it would be appropriate to make either Mr or Mrs Dranichnikov the tutor. In any event, the question does not arise. 3 The third proposed amendment relates to another decision, apparently of the Human Rights and Equal Opportunity Commission. That body is not presently a respondent. The matter has nothing to do with those with which I am presently concerned. There is no justification for that order. The fourth amendment seems to relate to matters which are already before the Court in the existing application. No further amendment is necessary. The notice of motion will therefore be dismissed. 4 There is also a further application for a stay of these proceedings because the applicants have applied to remove them into the High Court. When this matter was mentioned prior to the hearing date, there was some suggestion of a constitutional question. At that time, I advised the applicants to give early notice to the Attorneys-General of any question. They said that they would do so. At the commencement of this hearing, it seemed to me that no valid constitutional point was identifiable from their notice, and I therefore saw no bar to proceeding. In any event, by that stage the Attorneys-General had had some opportunity to appear, had they been minded to seek removal of the matter. As of today's date, they have had more than adequate opportunity, and there is no indication of an intention to intervene. In those circumstances, and given the fact that I am unable to identify a constitutional question, it is appropriate that the matter proceed. 5 Pursuant to s 21 of the A New Tax System (Family Assistance) Act 1999 (Cth) (the "Assistance Act"), an individual is eligible for family tax benefits in certain circumstances, one of which is that he or she is an Australian resident. The definition section of the Act defines the term "Australian resident" to have the meaning which it has in the Social Security Act 1991 (Cth). It is, as I understand it, common ground that Mr Dranichnikov does not meet that test. Mr Dranichnikov claims to be an Australian resident for the purposes of the Income Tax Assessment Act 1936 (Cth), and he asserts, perhaps with some moral justification, that it is unfair that he should not be similarly treated for the purposes of entitlement to family assistance. Be that as it may, the point is that he is, as far as I can see, clearly not entitled in law to any benefit pursuant to s 21. 6 Nonetheless he apparently applied for such a benefit and was told by the relevant Department that he was not entitled to it. This appears at various places in the evidence, but particularly in exhibit 4. This is a statutory declaration by a tax agent which demonstrates that Mr Dranichnikov knew that the Department considered that he was not entitled to a benefit. Notwithstanding that knowledge, his tax agent submitted his 2001 tax return claiming the benefit. 7 Because of the self-assessment system which is administered by the Tax Office, the return was accepted and credit given for the benefit. Subsequent investigations disclosed that Mr Dranichnikov was not entitled to it and, as a result, it was determined that an amount was repayable pursuant to s 71 of the A New Tax System (Family Assistance)(Administration) Act 1999 (Cth) (the "Administration Act"). Mr Dranichnikov complained of this decision, although it was clearly correct. He also sought the exercise of the Secretary's discretion pursuant to s 97 and/or s 101 of the Administration Act. Section 97 permits a waiver if it is demonstrated that any part of the relevant debt is attributable solely to an administrative error made by the Commonwealth. It might be said that it was an error on the part of the Commonwealth Parliament to permit self-assessment, but it cannot be said that there was any error by the Commonwealth which led to the overpayment. It was as a result solely of the representation made by the tax agent on behalf of Mr Dranichnikov that he was entitled to the benefit. There was, therefore, no question of a waiver pursuant to s 97. 8 Section 101 also confers a power to grant a waiver in special circumstances. That discretion was exercised unfavourably to Mr Dranichnikov. The relevant decision appears in exhibit PFK10 to Mr Kanowski's affidavit filed on 24 October this year. It dealt both with the entitlement to the benefit and with the question of recovery of the overpayment. Mr Dranichnikov had applied in respect of both matters in a letter from him to Centrelink which is exhibit PFK9. The reasons refer extensively to the previous correspondence between Mr Dranichnikov and Centrelink and summarise the issues in a concise way. As I have said, there can be no doubt that the debt is due. Mr Dranichnikov made some challenge to this proposition, but it seemed to relate to matters of policy rather than to any questions of law. Whether or not a waiver should be given pursuant to s 101 is a matter of discretion. Mr Dranichnikov seeks review of the exercise of the discretion. The respondents have not raised any challenge to the validity of such application pursuant to the Administrative Decisions (Judicial Review) Act 1977 (Cth). 9 The grounds advanced by Mr Dranichnikov in challenging the decision are diverse, but they are summarised fairly succinctly in the amended application. The first ground is that the present respondent, Centrelink, had no standing to recover the overpayment. This may or may not be so as a statement of fact, but Mr and Mrs Dranichnikov chose to join Centrelink. The debt is a debt due to the Commonwealth pursuant to ss 70 and 71 of the Administration Act. As appears below, the Secretary of the relevant Department has sought to garnishee Mr Dranichnikov's pay pursuant to s 89 of the Administration Act. It seems that the garnishee proceedings were issued by an officer of Centrelink pursuant to a relevant delegation. No defect in that process has been demonstrated. It would not suit Mr Dranichnikov's purposes if I were to dismiss these proceedings solely upon the basis that he has not joined the appropriate respondent. 10 Mr Dranichnikov then submits that he is an Australian resident for tax purposes. As I have said, that is irrelevant. He also alleges that the respondent failed to take into consideration applications for permanent protection visas made by him and his wife. That also is irrelevant. He says that the respondent acted in breach of legislation affecting Centrelink including the Income Tax Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth), the Child Care Act 1972 (Cth), the Child Support (Assessment) Act 1989 (Cth), the Human Rights and Equal Opportunity Act 1986 (Cth), the International Covenant on Civil and Political Rights, the Declaration of the Rights of the Child and the Public Service Act 1999 (Cth). 11 There are no particulars of these criticisms. Most, if not all of these matters were raised by Mr Dranichnikov in the correspondence with the Department and apparently considered by the decision maker in the relevant decision-making process. It is difficult to see how any of these matters could have had any relevance to the exercise of a discretion to waive an over-payment. 12 It is asserted that the respondent took into account irrelevant considerations, namely, certain policy guidelines. The document in question appears to be a description of the effects of various visas granted pursuant to the Migration Act 1958 (Cth), rather than a policy document in the usual sense. It does little more than identify those visas which are recognised pursuant to the Social Security Act 1991 (Cth) as constituting the holder an Australian resident for the purposes of that Act. It is a statement of law rather than of policy. 13 It is said that the respondent failed to take into account the Universal Declaration of Human Rights and the decision of the High Court in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273. I am unable to see any substance in this complaint. Finally, it is submitted that the respondent engaged in conduct, "with breach of the rules of natural justice, by demanding money, although he was notified about outgoing review process in Centrelink, the Social Security Appeals Tribunal and in the Human Rights and Equal Opportunity Commission." This appears to be an assertion that because Mr Dranichnikov had started other proceedings, recovery proceedings should have ceased until those fresh proceedings had been resolved. The applicants have, on a number of occasions, tried the same method in seeking to derail these proceedings. There is nothing in this point. In the circumstances, I dismiss the application to review the decision referred to in par 1 of the amended application. 14 The next decision presently under review is that allegedly made on 28 August 2002. It appears at exhibit PFK13 to Mr Kanowski's affidavit. It is an indication by Centrelink of an intention to exercise the power pursuant to s 89 to garnishee Mr Dranichnikov's wages to recover the overpayment. I have already explained how this came about. The arguments advanced in this regard appear to be very similar to those advanced with respect to the earlier decision not to waive the obligation. They should fail. There is also some suggestion of a denial of natural justice. Whilst there may have been an obligation to hear Mr Dranichnikov on the question of an application for waiver, I see no justification for the view that there was an obligation to hear him again prior to exercising the right to take garnishee proceedings pursuant to s 89. Such a requirement would make a nonsense of the rules of natural justice. It follows from the refusal to waive the overpayment that the Commonwealth must be entitled to seek to recover the debt by such means as are available to it. The substantive obligation has been established. It is for the Commonwealth to take such steps as it is advised with respect to enforcement. The letter of 28 August invites Mr Dranichnikov to discuss the matter with them should he wish to do so. There seems to me to be no reason to believe that they would not have heard him sympathetically had he raised any question with them. It may well be that if he were to seek to make a case of hardship even at this stage, they would listen to him. The application for review of the decision referred to in par 3 of the amended application will also be dismissed. 15 The question of costs is complicated slightly by the fact that with respect to the decision identified in par 2 of the application, Mrs Dranichnikov was the appropriate applicant. With respect to the other decisions, Mr Dranichnikov was the appropriate applicant. There is no reason why costs should not follow the event. Mrs Dranichnikov's matter was disposed of fully on the last day of hearing, 25 October. I order that Mrs Dranichnikov pay the respondent's costs of these proceedings up to, and including the hearing on 25 October. I order that Mr Dranichnikov pay the respondent's costs of the proceedings generally. The total amount recoverable under both orders is not to exceed the amount of taxed costs properly allowable in respect of the proceedings generally. In each case the orders are to include reserved costs. The amended application is dismissed. 16 I wish to make a few observations with respect to the way in which these proceedings have been conducted. Mr and Mrs Dranichnikov have repeatedly accused me of corruption, unfairness, rudeness and a variety of other weaknesses in the way in which I have conducted these proceedings. It may be that I have not been as tolerant of Mr and Mrs Dranichnikov as I should have been or as they may have wished. However I have no doubt that the proceedings have been conducted appropriately. In my view, Mr and Mrs Dranichnikov have been determined from the outset, for reasons which I do not fully understand, to make sure that these proceedings took as long as possible. Whether this has something to do with other proceedings in which they are involved, I do not know. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.