The Federal Court of Australia on Thursday held a case management hearing for a case brought on by Gordon Legal against the Commonwealth of Australia relating to the Centrelink Online Compliance Intervention (OCI) scheme, colloquially known as robo-debt.
In November, Gordon Legal launched the robo-debt class action on behalf of five representative applicants and hundreds of thousands of people who are included in the case as group members.
The essence of the applicants' case is that debts raised by robo-debt are unlawful, and all recipients should be compensated by the federal government.
Previous discussions before Justice Michael Lee were centred on the applicant's request to determine if the Commonwealth had knowledge that the OCI scheme, in its many forms, could potentially miscalculate a debt owed.
Before Justice Bernard Murphy on Thursday, the Commonwealth, represented by Michael Hodge QC, questioned the semantics within the applicant's claim. Specifically, Hodge debated the period of time the applicants are basing their claim on. He also claimed there was ambiguity around who exactly is alleged to have known that robo-debt was "unlawful".
"The conventional way to allege knowledge would be to identify the people who it is said knew certain things," Hodge said. "There's no attempt to identify who it is that is said to have known certain things. There's a strange ambiguity about this"
Justice Murphy said it was clear the allegation is that the Commonwealth knew because the Commonwealth Ombudsman had made enquiries about officers of the Commonwealth and the Administrative Appeals Tribunal had also made decisions on certain debts being invalid.
"The Commonwealth must have known that," Justice Murphy added.
Hodge also took issue with the allegation that Commonwealth is aware of the status of specific medical conditions, disabilities, or other claimed vulnerable circumstances of the particular group members involved in the class action.
Additionally, Hodge said it is difficult to understand the opposing side's pleadings regarding damages.
"It's not clear what the loss is that is sought to be compensated; that is distinct from the loss that is already claimed as part of the negligence claim," he said.
The applicants are required to reply to the questions raised by the defence.
The applicant's legal team is based in Melbourne, which is currently under stage four COVID-19 lockdown restrictions. Stage four places a curfew on individuals and limits the reasons they can leave their home. Counsel for the applicants Bernard Quinn QC said preparing an amended statement of claim in response to Hodge's remarks under stage four, and potentially stricter restrictions, has given him "grave concerns over the trial date".
"It is becoming apparent within our team that stage four restrictions are creating some difficulties … in the preparation for trial," he said. "The realities of working remotely … those logistical issues are one thing, but simply getting a team together is also difficult.
"Frankly If stage four restrictions are extended … I will not be able to run the trial.
"We are a little apprehensive of going to a trial of this magnitude, of this importance, without the confidence that we've got a situation where we can prepare adequately when we know our counterparts are not in quite the same position."
In response, Hodge said he understands that restrictions could potentially create an issue to the case as currently pleaded, but he said it seems impossible that the case would take three weeks to prepare and that a more realistic timeframe was no longer than 1.5 weeks.
He said that this may change substantially if the case is substantially varied, but if it sticks to as currently pleaded, Hodge said the defence could make adjustments to accommodate working arrangements so as to avoid either creating difficulty for the applicants' legal team or pushing the trial back.
"If they're kept to their pleaded case, the reality is likely to be that we're able to run the trial sensibly," Hodge said.
"It is looking like the case will not be ready," Justice Murphy declared. "We're getting perilously close to the trial ... for the moment, let's push forward."
The Department of Human Services, now Services Australia, kicked off the data-matching program of work in 2016, which saw the automatic issuing of debt notices to those in receipt of welfare payments through the Centrelink scheme. Centrelink's OCI program, from 1 July 2016 through 31 August 2019, saw 1,159,662 assessments be initiated using the automated data-matching technique.
"The strangest thing about this case is that at its heart, it looks simple … there was a process in place to raising debts which is now admitted to being invalid," Justice Murphy said.
"In so far as monies having received or unjust enrichment, one will think on first principles the Commonwealth would be obliged repay those monies and repay any amount that could be attributed [such as interest]."
Justice Murphy said however, when the case is delved into, it becomes a lot more complex.
Hodge said among the complexities is that some of those debts were, in fact, valid. Quinn argued that the debt validity was not relevant but rather, it was the way it was retrieved that is in question.
"The juristic reason is that, in fact, they owe … there's a new decision that has been made that determines they owe an amount," Hodge claimed.
Quinn said the money needs to be obtained by legitimate means.
"You've got to give it back and start again … it's important for the Commonwealth to do it by lawful means," Quinn said.
The class action trial is currently scheduled to commence on 21 September 2020 and is expected to run for approximately three weeks.
Robo-debt class action on track for September 21
Friday's interlocutory hearing will continue next week, where Justice Lee's team will wade through 'two lever arch folders'-worth of legal and professional privilege claims made by the Commonwealth.
4,000 complainants in robo-debt class action
Only avenue of recourse for robo-debt victims is legal action, Shadow Minister for Government Services Bill Shorten has said.