Case: Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Outcome: considered
The Tribunal member made no express finding in terms of s 1237AAD(c). He did find that the debt was not capable of being written off under s 1236(1) and (1A) of the Act and there is no challenge to that conclusion. It is not a pre-requisite to the satisfaction of the matter in s 1237AAD(c) that it be appropriate to write off the debt: Secretary, Department of Social Security v Hales (1998) 82 FCR 154 at 163-164 per French J. 6 As I have said, the focus of the applicant's challenge on the appeal was to the Tribunal member's approach and findings with respect to the question of special circumstances. In particular, he submits: 1. That the Tribunal member misconstrued the term 'special circumstances' in s 1237AAD(b) and failed to apply the correct legal test; 2. In considering whether there were special circumstances, the Tribunal member took into account an irrelevant matter, being the applicant's entitlement to certain assets; and 3. In considering whether there were special circumstances, the Tribunal member failed to take into account a relevant matter, namely, that the applicant had changed his position by spending the overpayment which had been caused, primarily at least, by an error of the respondent. 7 The following facts are taken from the reasons of the Tribunal member and are not in dispute. 20 The Tribunal member referred to a number of cases which have considered the meaning of 'special circumstances'. He referred to the decision of the Tribunal in Re Beadle v Director-General of Social Security (1984) 6 ALD 1 where it was said that the circumstances must be unusual, uncommon or exceptional, and the reasons for judgment of Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 where her Honour referred to a circumstance taking the case out of the usual or ordinary case. The Tribunal member also referred to observations of the Full Court of this Court in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31 and of French J in Secretary, Department of Social Security v Hales (supra). I will discuss the relevant authorities later in these reasons. 29 In Dranichnikov v Centrelink (supra) the Full Court, in considering a similar statutory provision to s 1237AAB said (at [65] and [66]): '65. The decision maker clearly also determined that the circumstances were such that they were not exceptional or unusual so that waiver could not be made as a matter of discretion under s 101. That equates "special circumstances", as that expression is used in the Administration Act with either exceptional circumstances or unusual circumstances. The origin of the test apparently adopted by the Secretary appears to be the decision of the first instance Judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225. That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154. The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words "unusual, uncommon or exceptional" come was not actually affirmed by the Full Court. 66. To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as "special reasons" has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss.' 30 In Secretary, Department of Social Security v Hales (supra) French J considered the provisions of s 1237AAD. One particular argument his Honour was required to consider was whether the reference in s 1237AAD(b) to 'other than financial hardship alone' meant that there must be financial hardship before a finding of special circumstances can be made. His Honour rejected that argument and in the course of doing so made some general observations as to the concept of special circumstances. His Honour said (at 162): 'The concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion. ... The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.' 31 French J also made the point that the Secretary has a discretion even if the three conditions in s 1237AAD are satisfied. In other words, the Secretary is not obliged to waive the debt even if the three conditions are satisfied.