FEDERAL COURT OF AUSTRALIA Dudzinski v Harris [2003] FCA 440 SOCIAL SECURITY – where entered Newstart Allowance Activity Agreement – where referred for intensive assistance – where rescind from agreement – where error in employment record – whether satisfied activity test – whether acted in bad faith or dishonestly – whether adequate notice – whether agreement misrepresented – whether Newstart Activity Agreement is agreement for purposes of Social Security Act 1991 (Cth) – whether entitled to Newstart Allowance – whether entitled to Newstart Allowance whilst case is reviewed – where did not seek review in Administrative Appeals Tribunal. Judiciary Act 1903 (Cth) s 39B Social Security Act 1991 (Cth) ss 23, 593, 596, 596A, 597, 598, 601, 601(1), 601(5), 604, 604(1B), 604(1C), 605(2), 605(3), 606, 606(1), 607, 1242A Social Security (Administration) Act 1999 (Cth) s 196 Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 applied WALDEMAR DUDZINSKI AND ANNA DUDZINSKI v BRIAN HARRIS, STEVE UHLMANN, S M ROSSINGTON AND DAVID ROSALKY Q 61 OF 2001 DOWSETT J 13 MAY 2003 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q 61 OF 2001 BETWEEN: WALDEMAR DUDZINSKI FIRST APPLICANT ANNA DUDZINSKI SECOND APPLICANT AND: BRIAN HARRIS FIRST RESPONDENT STEVE UHLMANN SECOND RESPONDENT S M ROSSINGTON THIRD RESPONDENT DAVID ROSALKY FOURTH RESPONDENT JUDGE: DOWSETT J DATE OF ORDER: 13 MAY 2003 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The application be dismissed. 2. The second applicant pay the respondents' costs of the application. 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 61 OF 2001 BETWEEN: WALDEMAR DUDZINSKI FIRST APPLICANT ANNA DUDZINSKI SECOND APPLICANT AND: BRIAN HARRIS FIRST RESPONDENT STEVE UHLMANN SECOND RESPONDENT S M ROSSINGTON THIRD RESPONDENT DAVID ROSALKY FOURTH RESPONDENT JUDGE: DOWSETT J DATE: 13 MAY 2003 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The first applicant has been dismissed from these proceedings. It is not necessary to say anything more about his claims. The second applicant's claims concern her entitlement to what is described as "Newstart Allowance" during the latter part of the year 2000 and early 2001. The various respondents are, to use neutral language, public servants engaged in the administration of various aspects of the social security system. For present purposes it may be accepted that the second applicant seeks relief against the Commonwealth or an officer or officers thereof pursuant to s 39B of the Judiciary Act 1903 (Cth) (the "Judiciary Act"). She claims such relief upon the basis that she has been denied her entitlement to Newstart Allowance. I will refer to the relevant government agency as "Centrelink". This was the course adopted at the hearing. I will include in that description the Secretary of the relevant Department who has particular powers under the Social Security Act 1991 (Cth) (the "Act"). 2 As to the facts of the case, I generally accept the version of events given by Mr Uhlmann in his affidavit filed on 16 September 2002. At all relevant times, he was working at the Centrelink office at Toowong. On 28 August 2000 the second applicant applied for the Newstart Allowance. She was not then a party to a Newstart Activity Agreement which, in Mr Uhlmann's view, was a statutory pre-condition to receiving the allowance. As a result Mr Uhlmann caused a letter (exhibit A to his affidavit) to be written to the second applicant, inviting her to attend at the Centrelink office on 7 September 2000 to "… talk to one of our Customer Service Officers." It was said that such officer "… will answer any questions you have and help you if you need to lodge a claim for payment with us." It was also said that if the second applicant did not attend or did not get in touch with the office, her claim "… may not be paid". 3 The second applicant attended at the appointed time and place and was interviewed by Mr Uhlmann. He asked her a number of questions and entered the answers into the Centrelink computer. It generated a document setting out the information which had been provided. The second applicant was given an opportunity to correct certain aspects of it. She then signed the document. It is exhibit B to Mr Uhlmann's affidavit. In the document, she indicated that she was willing to enter into an "Activity Agreement". The second applicant was then asked to sign a "Preparing for Work Agreement" which she did. It is exhibited to Mr Uhlmann's affidavit. The agreement states that in the case of a person who is to receive Newstart Allowance, it is a "Newstart Allowance Activity Agreement" under the Act. It also states that it is an agreement under subs 604(1C) of the Act. That subsection provides: A Newstart Activity Agreement is a written agreement in a form approved by the Secretary and the Employment Secretary. The agreement is between the person and the Secretary. I will return to the sub-section at a later stage. As a result of these events, the second applicant received Newstart Allowance payments, commencing on 8 September 2000. 4 The Centrelink computer, acting upon the information provided by the second applicant, identified her as a suitable candidate for what is described as "intensive assistance". This expression apparently describes services designed to overcome particular disadvantages in the labour market. The computer generated a letter to the second applicant dated 22 November 2000 in which she was advised that Centrelink had identified her as being eligible for intensive assistance. A list of appropriate Job Network members suitable for providing such assistance was attached. Although the matter is not entirely clear, Job Network members are apparently private organizations (commercial or charitable) which are active, in conjunction with Centrelink, in placing people in employment. The second applicant was invited to identify an appropriate Job Network member to provide her with intensive assistance and to advise Centrelink of her choice. The letter indicated that Centrelink would then refer her to one of the members of the Job Network. Presumably, in the usual course of events, the reference would have been to the member chosen by the second applicant. The second applicant was also told that she would be required to re-negotiate her "Preparing for Work Agreement" to include the activities to be undertaken as part of the intensive assistance. Such re-negotiation is contemplated by subs 605(2) of the Act. The letter concluded with the following paragraphs: Under the terms of the Social Security Act 1991 you must attend the interview(s) and renegotiate your Preparing for Work Agreement. If you do not, Centrelink may reduce or stop paying your Newstart Allowance for some time. Remember, you need to phone Centrelink on 13 25 60 by 4 December 2000 to tell us your choice of Job Network member. The Job Network member that Centrelink refers you to will provide you with both Intensive Assistance and Job Matching services. Documentation attached to the letter outlined the kinds of intensive assistance which might be provided. It is not clear whether the second applicant responded to this letter. 5 On 4 December 2000 Centrelink received a letter dated 4 November 2000 from the second applicant (exhibit F to Mr Uhlmann's affidavit). In the letter the second applicant stated: I withdraw my signature from Preparing for Work Agreement (PFW Agreement) and rescind from this agreement signed on 7 September 2000 because you have failed to give me any notice and what is mandatory statutory requirement; Also I am prepared for work so I do not need any preparation for work. Also you told me on 7.9.2000 that this is not Newstart Activity Agreement but Preparing for Work Agreement (PFW Agreement) I have signed on 7 September 2000 … . 6 Mr Uhlmann denies having made any such representation to the second applicant. The second applicant also purported to "withdraw" her execution of a claim for Job Network assistance and otherwise appears to have challenged the validity of the various procedures adopted by Centrelink in dealing with her claim. She asked that both her Newstart Allowance and "my partner's allowance" be continued pending review of Centrelink's decision. 7 On 7 December, Centrelink again wrote to her (perhaps without regard to her letter dated 4 November), advising that she had been referred to Mission Employment: Oxley (presumably a Job Network member) for intensive assistance. The letter stated: Mission Employment : Oxley will interview you and will renegotiate your Preparing for Work Agreement to include Intensive Assistance. This Preparing for Work Agreement will include a plan of action tailored for your circumstances to help you get a job. It will also include your responsibilities and obligations. 8 The letter went on to identify the person to be contacted, the location of the relevant office and the time and place of the interview. The second applicant was told that she was obliged to attend the interview and to renegotiate her Preparing for Work Agreement and that if she did not do so, her Newstart Allowance might be stopped "… for some time". The time fixed for the meeting was 12 pm on Thursday, 4 January 2001. 9 Mr Uhlmann considered that the second applicant had withdrawn from her Newstart Activity Agreement and therefore no longer satisfied what is described as the "Activity Test". He concluded that she was therefore ineligible to receive Newstart Allowance. He wrote to her on 21 December 2000 (exhibit G to his affidavit) as follows: To qualify for Newstart Allowance you must be able to demonstrate that you are able to meet all the qualification criteria for payments of Newstart Allowance, including the requirements to enter into a Newstart Activity Agreement as required by the Secretary under section 593 of the Social Security Act 1991. You have indicated in your letter 4 December 2000, that you wish to withdraw all signatures from your current Activity Agreement and current Looking for Work claim, and therefore you would lose eligibility for Newstart Allowance. I give you notice under section 593 of theSocial Security Act 1991 that your Newstart Allowance will be cancelled from 21 December 2000 as you refuse to enter into a Newstart Activity Agreement, and failure to satisfy the activity test. In making my decision, I used your letter 4 December 2000 and information already on your record. I have considered your request to have payments continued under section 1242A of the Social Security Act. I have decided that you are not eligible for continuation of Newstart Allowance as you do not meet the qualification and payability criteria for Newstart Allowance under section 593 of the Social Security Act. You may reclaim Newstart Allowance, however you would need to meet all qualifications and payability criteria including signing a Newstart Activity Agreement (sic) before Newstart Allowance could be paid to you. 10 Mr Uhlmann then advised the second applicant as to avenues for review of the decision. He made it clear in his affidavit that although some of the language used in his letter may not have been precisely accurate, he had acted in reliance upon the second applicant's purported withdrawal from the Newstart Activity Agreement. 11 In the second applicant's amended statement of claim filed on 18 April 2001, she asserts that the respondents "… deliberately use(d) fabricated employment record(s) …". This relates to an error which apparently occurred in the Centrelink records concerning the second applicant's work history. The record erroneously suggested that certain employment had been for only a few days when it had actually lasted for a substantially longer period. The second applicant also asserts that a letter in which she drew attention to the error was destroyed or concealed by Mr Harris. As far as I can see there is no evidence to that effect, nor do I see any reason to conclude that the error was caused by dishonesty or was dishonestly exploited. I also see no evidence suggesting that the second applicant was in any way disadvantaged by the error. 12 The second applicant alleges that Mr Uhlmann induced her to sign the "Preparation for Work Agreement" by representing that it was not such an agreement and without giving her notice as required by s 605(3) of the Act and s 196 of the Social Security (Administration) Act 1999 (Cth) (the "Administration Act"). She also asserts that the relevant agreement is not a Newstart Activity Agreement for the purposes of the Act asit was not approved by the Employment Secretary as required by s 604(1C). The second applicant asserts that the true intention of Centrelink and/or Mr Uhlmann was to force her to take "unattractive jobs" and that the various decisions demonstrated jurisdictional error and "… wrongly applied discretion". 13 Review is sought of two decisions, namely: Ÿ the decision cancelling the second applicant's Newstart Allowance from 21 December 2000; and Ÿ the decision refusing to continue such payments on an interim basis thereafter. I will consider them separately. Decision to cancel Newstart Allowance 14 Section 593 of the Act provides that subject to ss 596, 596A, 597 and 598, a person is qualified to receive the Newstart Allowance for a period if he or she satisfies certain conditions. Relevantly, the person must: Ÿ be unemployed throughout the relevant period; Ÿ satisfy the activity test or be exempted from so doing; Ÿ enter into a Newstart Activity Agreement; and Ÿ take reasonable steps to comply with the terms of such agreement. 15 Section 601 deals with the activity test. Subsection 601(1) provides: Subject to subsections (1A) and (3), a person satisfies the activity test in respect of a period if the person satisfies the Secretary that, throughout the period, the person is: (a) actively seeking; and (b) willing to undertake; paid work, other than paid work that is unsuitable to be undertaken by the person. 16 Subsection 601(5) provides: If a person fails to take reasonable steps to comply, throughout a period, with the terms of a Newstart Activity Agreement between the Secretary and the person, the person cannot be taken to satisfy the activity test in respect of the period in spite of any compliance of the person with subsection (1). 17 Pursuant to the Agreement entered into on 7 September 2000, the second applicant undertook certain responsibilities. She was required to register with a Job Network member within five working days and to undertaken ten job search contacts each fortnight, recording such contacts in her diary. She also acknowledged that the agreement could be varied and that it did not over-ride her obligation to respond to Centrelink requests. She was obliged actively to seek, and to accept a suitable job offer. 18 Two of the second applicant's complaints can be disposed of shortly. The first concerns the error in employment records. The second applicant no doubt finds it annoying that such an error has occurred. She takes it as a personal slight and is concerned that such incorrect information may convey a false impression as to her employment history and so affect both the attitude of Centrelink towards her, and perhaps the attitudes of potential employers. Nonetheless, Mr Uhlmann said that it had no relevance to the dealings presently under consideration. I accept that evidence. The second applicant also relies upon this matter as being demonstrative of bad faith on the part of Centrelink officers. I see no basis for inferring bad faith. As far as I can see, Mr Uhlmann, who was the principal officer responsible for dealing with the second applicant, dealt with her entirely in accordance with his understanding of the Act. There is no evidence of bad faith or any other dishonesty. 19 Underlying the second applicant's concerns is her perception that Centrelink wishes to subject her to programmes which might lead to her being employed in jobs which she considers to be inappropriate, having regard to her experience and training. Although I accept that she has this view, I can see no objective evidence which could justify it. Neither Mr Uhlmann nor any other employee of Centrelink sought to impose any particular programme upon her. She was merely referred to an appropriate agency for consideration of possible suitable assistance. There is nothing in this point. 20 The balance of the second applicant's complaints can best be addressed by tracing the course of dealings between her and Centrelink. The second applicant complains that she received no notice of Mr Uhlmann's intention to negotiate a Newstart Activity Agreement in advance of the meeting on 7 September. In the statement of claim, she relies upon subs 605(3) as the source of her alleged entitlement to notice. It is probable that subs 604(1B) is the real source of any entitlement to notice for present purposes. In any event, the requirements are the same in each case. Although the second applicant was notified of the time and place of the meeting, the relevant letter said nothing about a Newstart Activity Agreement, nor was she advised in that letter of the intention to negotiate such an agreement at the meeting. However s 604 does not require any particular period of notice, nor that such notice be in writing. Given the content of the documents which the second respondent signed, there can be little doubt that she knew that the agreement was a Newstart Activity Agreement. It may be a little inaccurate to describe the process which led to the agreement as "negotiation", but the agreement itself speaks of its having been prepared by the second applicant and the relevant officer, Mr Uhlmann, or at least I draw that inference from the use of the words "we prepared" in par 1. I see no reason to believe that the second applicant was unable to look after her own interests at the meeting. The extent of Mr Uhlmann's explanation of the process is not clear. However she was aware, before she signed the agreement, that she was being asked to do so. Its identity appears from its terms and those of the claim form which she also signed. That is sufficient to constitute compliance with subs 604(1B). In any event, failure to comply with this procedural requirement would not lead to such an agreement being void. In Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 at [93] the majority observed: … a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. ... In determining the question of purpose, regard must be had to 'the language of the relevant provision and the scope and object of the whole statute'. 21 It is inconceivable that Parliament intended that a voluntary agreement entered into for the purposes of s 593, without notice of the kind contemplated by s 604(1B), would be invalidated by the failure to give such notice. 22 As to the second applicant's purported reliance on s 196 of the Administration Act, the section is concerned with the provision of information, not with the negotiation of agreements. The section has no present relevance. 23 Next, the second applicant submits that Mr Uhlmann misrepresented to her the nature of the agreement. Mr Uhlmann denies this, and I am inclined to accept his denial. He had no apparent motive for misrepresenting the nature of the agreement. In any event, as I have said, the application form which the second applicant signed on 7 September contained an acknowledgement that she was willing to enter into an Activity Agreement with Centrelink. The term "Activity Agreement" is defined in a passage which appears immediately after her signature as: … a written agreement that sets out the action(s) you agree to take to improve your employment prospects and to find work. 24 It is true that in the Preparing for Work Agreement itself, it is said that it is a "Newstart Allowance Activity Agreement" rather than a "Newstart Activity Agreement", the expression used in the course of the evidence and in the Act. It was not suggested that anything turned upon the inclusion of the word "allowance". Although Mr Uhlmann could not remember the actual conversations which he had with the second applicant, I am willing to accept his denial (which appears in his affidavit) that he made any misrepresentation as to the nature of the agreement. As I have said, it is difficult to see any motive for him to have done so. 25 The second applicant asserts that the agreement which she executed was not a Newstart Activity Agreement for the purposes of the Act. Subsection 604(1C) provides that a Newstart Activity Agreement is a written agreement in a form approved by the Secretary and the Employment Secretary. The "Secretary" is the secretary of the Department of Family and Community Services, or at least the second applicant so pleads, and this seems to be correct. She pleads that the agreement was approved by that Secretary but not by the Employment Secretary. The Employment Secretary is the Secretary of the Department of Employment, Education and Training. See s 23 of the Act. Exhibited to an affidavit of the second applicant filed on 19 March 2003 and read by leave is a document which appears to be an approval of the relevant form by the then Secretary to the Department of Employment, Workplace Relations and Small Business. It has not been suggested that this person was other than the person described in s 604(1C) as the "Employment Secretary". Thus the form of agreement executed by the second applicant was approved for the purposes of s 604. 26 The second applicant voluntarily executed the Newstart Activity Agreement. I see no reason to conclude that she was not bound by it. As a result, she became entitled to receive the Newstart Allowance. Probably as a result of the letter dated 22 November 2000 referring to intensive assistance, she chose to resile from all agreements with Centrelink. It is this letter which appears to be the real source of the second applicant's dissatisfaction. She feels strongly that she did not need intensive assistance. That is a matter about which opinions may differ. Generally speaking Centrelink is entitled to require that a person who has previously entered into a Newstart Activity Agreement enter into a new agreement in place of the existing agreement. See s 605(2). Section 606 sets out activities which may be required of a person pursuant to a Newstart Activity Agreement. The various programmes referred to in the letter of 22 November 2000 and the attachment thereto readily fit within the activities prescribed in subs 606(1). The requirement that the second applicant agree to undergo intensive assistance was within power. The letter of 22 November did not justify the second applicant in resiling from the obligations which she had voluntarily undertaken. 27 In any event, pursuant to s 593, the second applicant was not entitled to Newstart Allowance unless she was prepared to enter into a Newstart Activity Agreement, entered into such an agreement and continued to comply with its terms. When she indicated her intention not to continue to be bound by the existing agreement, Centrelink could only accept such indication as terminating the agreement. It is inconceivable that a court would have decreed specific performance of it. In those circumstances, once the repudiation was accepted, the second applicant was left without a Newstart Activity Agreement. She was therefore not entitled to receive the Newstart Allowance. 28 Although the relevant sections use the language of contract, it may not be possible to apply all of the law concerning contracts to such agreements. Nonetheless Parliament obviously intended that receipt of the Newstart Allowance be conditional upon a continuing commitment to a Newstart Activity Agreement. The clear indication by the second applicant of her intention not to be bound by such an agreement inevitably led to loss of her entitlement to receive that benefit. Refusal to make interim payments 29 In her letter received on 4 December, the second applicant asked that her Newstart Allowance and her partner's entitlements continue, pending review of the relevant decision. This was treated as an application for payments to be continued pursuant to s 1242A of the Act. The second applicant has not sought to justify the application on any other basis. That section relates to review of a decision under s 607. The section provides that where a person unreasonably fails to attend to negotiate such an agreement, to respond to relevant correspondence or to agree to proposed terms of such an agreement, Centrelink may give notice that the relevant person has failed to enter into an agreement as required by the Act. Such a notice must be in writing, set out the reasons for the decision and include a statement describing the person's right to apply for review. Although the situation which arose in this case was, in some respects analogous to that described in s 607, Centrelink did not purport to act pursuant to that section. The circumstances there contemplated involve failure to enter into an agreement. The section says nothing about what is to happen in the event that somebody enters into an agreement and subsequently resiles from it. If the negotiation process were to recommence, then the situation contemplated in s 607 might well arise, but that is not to the point. Despite the available analogies between the circumstances described in s 607 and those presently under consideration, I do not consider that Centrelink acted, or could have acted pursuant thereto. In those circumstances no entitlement pursuant to s 1242A arose. Conclusion 30 It follows that the second applicant is not entitled to the relief sought. Her arguments are simply incorrect in law. It is not necessary to decide whether her complaints are of the kind which are capable of leading to such relief. Even if she had a prima facie case for that relief, I would have been inclined to exercise the general discretion to refuse it. She has availed herself of internal merits review and of the right to further review in the Social Security Appeals Tribunal, where she was unsuccessful. It seems that she was also entitled to seek review in the Administrative Appeals Tribunal. Such right was not exercised. For that reason prerogative relief would usually be denied. However it is not necessary that I finally resolve that aspect of the case. 31 The application will be dismissed with costs. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 13 May 2003 The Applicants appeared in Person. Solicitor for the Respondents: Australian Government Solicitor Date of Hearing: 18 & 19 March 2003 Date of Judgment: 13 May 2003