A federal court trial set to decide whether robodebt victims are entitled to compensation has been delayed after fresh claims were levelled against government minister Alan Tudge.
The court heard at a pre-trial hearing on Monday that Gordon Legal plans to argue Tudge, who was human services minister in 2016-17, either knew or was “recklessly indifferent” to the fact the botched program was unlawful.
The government agreed to repay $721m to 370,000 people in May after it settled an earlier legal challenge in November, but it insists it only learned the debts were “legally insufficient” last year when it suspended the program.
Tudge was named in Gordon Legal’s updated statement of claim filed last week but Michael Hodge QC, for the commonwealth, said the allegations were general in nature and had not explicitly stated that the minister knew the program was unlawful.
The court heard on Monday, however, that Gordon Legal had argued in written opening submissions that Tudge knew the scheme was unlawful or was “recklessly indifferent”. Hodge said that was one of several allegations that did not appear in the firm’s statement of claim.
Hodge said it created an unfair situation where the commonwealth didn’t know whether it had to defend those claims or if they fell outside the case and would be ignored by the court.
The distinction would weigh on the commonwealth’s preparation for the trial, including whether it would call witnesses. These could now potentially include Tudge, another frontbencher, Paul Fletcher, and top department officials.
Given Gordon Legal had now made the serious allegation the government knew the scheme was unlawful, Hodge said the commonwealth would also need to consider whether to waive privilege over legal advice, “if any”, that it may have possessed.
Bernie Quinn QC, for Gordon Legal, said the firm was happy to consider Hodge’s concerns and further amend its case if required.
Though the trial had been set down for Thursday, Justice Bernard Murphy had already said last week he would be likely to give the commonwealth more time to prepare its case because Gordon Legal had introduced new claims only a week before the start date.
The court heard on Monday the trial may now be held in November, though a new date has not been set.
A further case management hearing to sort out the current disagreement has been scheduled for next Thursday.
It remains possible the two parties could reach a settlement.
Guardian Australia revealed on Saturday Gordon Legal’s fresh statement of claim includes the allegation that the commonwealth lost a staggering 76 robodebt cases at the Administrative Appeals Tribunal.
The cases, Gordon Legal will argue, add to proof the government was aware the scheme was unlawful because it declined to appeal on each occasion. The government will likely point to other judgments where robodebts were upheld by the tribunal.
The bulk of the 76 judgements were handed down when Tudge was minister in 2017, though he has not been identified in any evidence made public as being aware of them.
Gordon Legal has also pointed to documents viewed by Tudge and other senior bureaucrats that the firm said demonstrates the commonwealth was aware of major problems with the way robodebts were calculated.
There is also one reference to the communications minister, Paul Fletcher, who was the social services minister in 2018. Fletcher, according to Gordon Legal, was also told in 2018 about the problem of raising welfare debts based on annual ATO pay data when Centrelink recipients reported their income on a fortnightly basis.
Gordon Legal had already been demanding interest payments and damages, claiming the government had unjustly enriched itself and breached a duty of care to welfare recipients.
It has now asked the court to also impose exemplary damages, which would punish the government for its conduct.
The robodebt scheme ran from 2015 until it was wound up in November 2019. The government has been forced to repay debts where it used annual pay data to assert welfare recipients had underreported their fortnightly employment income.