Robodebt class action lawsuit is not ready and contains 'obvious errors', federal judge says

The class action lawsuit brought on behalf of Australia’s robodebt victims “does not look ready” and contains some “obvious errors”, a federal court judge has said.

In a rebuke three weeks before the trial, Justice Bernard Murphy on Monday criticised an application from Gordon Legal to add exemplary damages to its claims for unjust enrichment and damages.

The firm wants to claim exemplary damages – which are intended to punish a defendant – by arguing that the commonwealth knew the botched Centrelink program was unlawful.

But Murphy told a pre-trial hearing the updated case brought on behalf of about 600,000 current and past welfare recipients contained some “obvious errors”.

“This pleading does not look ready,” he said.

He said he was inclined to refuse the application but did not want to “lock out hundreds of thousands of claimants on the basis of inadequate pleadings”.

Bernie Quinn QC, for Gordon Legal, said the firm had done its best in a short time frame. He said the firm could “elaborate” on the pleading as the discovery process continued.

But Murphy noted that the trial date was only three weeks away and that the class action was worth hundreds of millions of dollars.

“You’re telling me that various clauses need to be fixed up,” he said. “Come back to me with a statement of claim in its best form … Today I would dismiss it.”

Murphy will consider Gordon Legal’s request to amend its statement of claim at a future hearing.

The federal government committed in May to repaying $721m in unlawful debts raised over four and a half years but is resisting the class action’s claims for interest and damages.

It conceded in November that the income averaging method – which used yearly Australian Taxation Office pay summaries to allege welfare recipients has misreported their income on a fortnightly basis – was unlawful.

In what it hopes to be its updated claim, Gordon Legal argues the commonwealth knew the scheme was unlawful because of the “self-evident” fact that it also knew these calculations were not correct.

Michael Hodge QC, for the commonwealth, said this did not mean the government also knew the “debts were unlawful”.

Murphy appeared to agree, saying he was “quite unlikely” to accept the argument made by Gordon Legal. The firm’s claim would need to include “actual knowledge of unlawfulness”.

“Telling me it’s obvious is not going to cut it,” Murphy said.

He said Gordon Legal would also need to identify which ministers or public servants knew the debts were illegal, which it had not done it its updated pleadings.

Quinn said the firm would see what was “available” to it as more documents were discovered and “tidy up what’s required”.

Murphy also raised the prospect of a delay to the 21 September trial date, saying he did not want the trial to “run like a dog’s breakfast”.

“If I have this view on a pleading, what’s the evidence going to be like?” he said.

But Quinn and Hodge agreed there was no need to delay the trial.

Quinn said the trial would likely last six or seven days and the bulk would be “legal argument and some document tender”.

Terry Carney, a former administrative appeals tribunal member who ruled against the scheme several times in 2017, will be among the firm’s witnesses, the court heard.

Figures released to a Senate inquiry on Monday showed the government had now paid out $568m in refunds to 297,859 people over 339,720 debts.

Guardian Australia has revealed that the commonwealth has also identified hundreds of unlawful debts issued before the robodebt scheme and which it has declined to pay back.


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