Achis and Secretary, Department of Family and Community Services and Anor
[2003] AATA 1028
•13 October 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 1028
ADMINISTRATIVE APPEALS TRIBUNAL )
) Nº N2003/319GENERAL ADMINISTRATIVE DIVISION )
Re: LYNDA ACHIS
Applicant
And: SECRETARY,
DEPARTMENT OF FAMILY AND
COMMUNITY SERVICES
Respondent
And: JOHN ACHIS
Party Joined
DECISION
Tribunal: M.A. Griffin, Member
Date: 13 October 2003
Place: Sydney
Decision:The Tribunal affirms the decision under review.
[Sgd] M.A. Griffin
Member
CATCHWORDS
SOCIAL SECURITY – wife pension – overpayment - debt – whether arose solely from Department’s error - write off of debt - waiver - whether special circumstances exist – decision affirmed
LEGISLATION
Social Security Act 1991 sections 1223(1), 1224(1), 1236(1), 1236(1A), 1237A(1), 1237A(1A), 1237AAD
CASE LAW
Control Investments Pty Ltd v Australian Broadcasting Tribunal (1980) 3 ALD 74
Dranichnikov v Centrelink [2003] FCAFC 133 (19 June 2003)
REASONS FOR DECISION
September 2003 M.A. Griffin, Member
1. This is an application by Mrs Lynda Achis (the Applicant) for review of a decision of the Social Security Appeals Tribunal (“SSAT”) dated 24 January 2003. The SSAT affirmed a decision of an authorised review officer (“ARO”) of Centrelink dated 2 October 2002 (T59) to raise and recover a wife pension debt of $20,368.53 for the period 30 April 1998 to 26 October 2000 (“the relevant period”).
2. At the hearing of this matter on 25 August 2003, the Applicant was represented by her husband, Mr John Achis. Mr Emerson Thislethwaite, a Centrelink advocate, represented the Secretary to the Department of Family and Community Services (“the Respondent”). Mr Achis, who had been joined as a party to his wife’s application before the SSAT, sought to be joined as a party in this application. Section 30 of the Administrative Appeals Tribunal Act 1975 provides:
30Parties to proceeding before Tribunal
…
(1)Subject to paragraph 42A(2)(b), the parties to a proceeding before the Tribunal for a review of a decision are:
(a)any person who, being entitled to do so, has duly applied to the Tribunal for a review of the decision;
(b) the person who made the decision;
(c)if the Attorney‑General intervenes in the proceeding under section 30A -— the Attorney‑General; and
(d)any other person who has been made a party to the proceeding by the Tribunal on application by the person in accordance with subsection (1A).
(1A)Where an application has been made by a person to the Tribunal for a review of a decision, any other person whose interests are affected by the decision may apply, in writing, to the Tribunal to be made a party to the proceeding, and the Tribunal may, in its discretion, by order, make that person a party to the proceeding.
3. In Control Investments Pty Ltd v Australian Broadcasting Tribunal (1980) 3 ALD 74, Davies J said, at page 79:
“In their context … the words “interests are affected” denote interests which a person has other than as a member of the general public and other than as a person merely holding a belief that a particular type of conduct should be prevented or a particular law observed. The interest affected need not be a legal interest nor need the person seeking joinder establish legal ownership of the interest.
… The nature of the interest required in a particular case will be influenced by the subject matter and context of the decision under review.
… While it will ordinarily be the duty of the Tribunal to make an order joining a party whose interests are affected by the decision under review, that duty is limited by the function which the Tribunal performs and by its duty to provide a fair hearing and to deal with the matter as expeditiously as the subject matter of the review permits”.
4. The Tribunal received evidence that Mr and Mrs Achis continue to hold a joint bank account. They continue to live at the family home. Their sons have purchased Mr Achis’ interest in the home, but Mr Achis continues to live at the home on a ‘grace and favour’ basis. The history of this matter has impacted severely on the inter-family relationships. The Respondent had no objection to Mr Achis being joined as a party. In these circumstances, the Tribunal was satisfied that Mr Achis was a person whose interests may be affected by the proceedings and made an order joining Mr Achis as a party.
5. The Tribunal received into evidence the documents lodged under section 37 of the Administrative Appeals Tribunal Act 1975 (T1-T76, pages 1-363) together with the following exhibits:
Exhibit
Document
Date
A1
Letter from the Applicant to the Administrative Appeals Tribunal authorising Mr Achis to act on her behalf
25 August 2003
A2
Letter from Dr Kremer stating that Mrs Lynda Achis is not fit to attend court
18 August 2003
A3
Letter from Dr Kremer about Mr John Achis’s medical history
23 August 2003
A4
Statutory Declaration of Mrs Lynda Achis
19 August 2003
A5
Outline of Events by Mr Achis
Undated
A6
Freedom of Information Request by Mr Achis
11 June 1996
A7
Respondent’s record of Freedom of Information Request
11 July 2002
A8
Respondent’s printout
27 June 2002
A9
Respondent’s printout
11 July 2002
A10
Letter of Mr Achis to Centerlink [sic]
23 August 2001
A11
Respondent’s printout with bank statements attached
11 July 2002
A12
Centrelink letter to Mr Achis
1 October 2002
R1
Respondent’s Statement of Facts and Contentions
8 August 2003
BACKGROUND
6. The background of this application is somewhat complex and requires reference to the history of Mr Achis’s disability pension as well as the Applicant’s wife pension. Mr and Mrs Achis were married in Sydney on 19 May 1973. They have two sons, Christopher, aged 28, and Leigh, aged 25. During the relevant period and to date, Mr and Mrs Achis have lived at the same address in Sydney. Mr Achis ran a small business until he suffered injuries in an accident in 1986. He has not been employed since then. In March 1994, Mr Achis applied for a Disability Support Pension (“DSP”) and the Applicant applied for a wife pension.
7. The wife pension claim form, completed and lodged by the Applicant on 20 March 1994, stated that she was married and unemployed (T3 page 28). On 27 June 1994, the wife pension was granted, effective from 24 March 1994 (T5). After some initial administrative confusion, Mr Achis had, by 24 June 1994, been granted the DSP. Both pensions were paid to the one account, which was, and continues to be, held jointly by Mr and Mrs Achis.
8. On 23 April 1998, the Applicant commenced full-time employment (T30). On 1 September 2000, the Respondent wrote to the Applicant requesting information about her and her husband’s assets and income (T31). On 7 November 2000, the wife pension was suspended (T21). On 10 January 2001, the wife pension was cancelled (T22). On 5 July 2001, the Respondent decided, on the basis of the couple’s income and assets, that the Applicant had been overpaid and raised a debt of $20,368.53 of wife pension during the relevant period (T35). On 2 October 2002, an ARO affirmed the decision (T59). The Respondent also decided that Mr Achis had been overpaid the DSP on the basis of his wife’s income, and sought to recover a debt. That decision was also affirmed by an ARO.
9. Mr and Mrs Achis sought review of those decisions by the SSAT. The SSAT set aside the decision concerning Mr Achis’s pension and substituted a decision that there was no debt for Mr Achis to repay. However, the SSAT affirmed the decision concerning the overpayment to the Applicant (T76).
10. The SSAT heard the separate applications of Mr and Mrs Achis on the same day and each applicant was joined as a party in the other’s proceeding. The SSAT found that the parties were separated and had effectively been living apart under the one roof during the relevant period. The SSAT decided that, as Mr Achis was living separately and apart from his wife throughout the relevant period, he therefore was also entitled to payment of arrears of payments as a single person for that period. The SSAT found that the Applicant had no entitlement to the wife pension during the relevant period. The SSAT did not find any grounds to waive or write off the overpayment debt against the Applicant for the wife pension.
ISSUES
11. It is not in dispute that the Applicant was in employment during the relevant period. It is not in dispute that the Applicant was not entitled to payment of a wife pension for the relevant period. It is not in dispute that Mr and Mrs Achis had separated and were no longer living as a couple during the relevant period.
12. The first issue is whether or not the Applicant incurred a debt under the Social Security Act 1991 (“the Act”). If she did, the issues then become whether the debt is attributable solely to an administrative error made by the Commonwealth and, if so, whether she received the overpayment in good faith. Further issues are whether the overpayment resulted from the Applicant, or another person, knowingly failing to comply with a provision of the Act, and whether there are any special circumstances that apply.
EVIDENCE
13. The Applicant gave oral evidence by telephone. She said she was unwell, but did not require an adjournment, and wanted to proceed with the hearing of her application and with Mr Achis representing her.
14. The Tribunal asked the Applicant what she thought she was applying for when she completed the wife pension claim form on 20 March 1994. She said, “Nothing. I thought I was assisting my husband to obtain a benefit to assist him.” The Respondent had written to the Applicant personally, about the wife pension, on at least nine occasions up to and during the relevant period. Those letters specifically referred to the amount of the pension being paid to her. The Respondent also wrote to Mrs Achis annually, enclosing her pension concession card for the year. The Tribunal questioned the Applicant as to what she thought the purpose was of these letters to her from the Respondent. She replied, “I thought it was part of his pension”. When asked if she read all the letters, she said “probably not”.. She was asked what she did with the letters and stated in reply, “I answered some. They were all repetitive”..
15. The Applicant said that she was separated from her husband at the time she completed the pension claim form in March 1994. She said that an officer of the Respondent told her at the counter that she had to submit that form. She said that the officer spoke to her in an abrupt manner. The Applicant stated that he told her that she had to sign the form, even though it was incorrect in the details of her marital status, because she was still legally married. She said, “I had no other option to help him get it”. The Applicant stated that as far as she was concerned it was her husband’s pension and not hers, and that it had nothing to do with her. She said she gave Mr Achis most of the letters she received from the Respondent for him to deal with. She was adamant that she did not use the pension payments he received and repeated they were nothing to do with her.
16. The Tribunal asked the Applicant why she held the joint account, with the Colonial Bank, into which the pension payments were made, with Mr Achis. She replied “It’s in name only. I have no need of it”.. The evidence shows that the Applicant’s salary has always been paid into a St George Bank account in the name of Filmboom P/L, a private company of which she is the company secretary and a director. The other directors of the company are her two sons. Mr Achis was a director until February 1994. The signatories to the Filmboom bank account are Mr and Mrs Achis and their two sons.
17. The Respondent obtained the last five cheques drawn against the Colonial Bank joint account between 20 January 2001 and 17 March 2001. The cheques are sequential in number and are the only ones drawn against the account for that period. The Applicant signed all five cheques. Three of them were made to “fishmonger” and two were made to “cash”. The payments to “fishmonger” were $82.00, $120.00 and $109.00. The payments to cash were $700.00 on 19 February 2001 and $500.00 exactly one month later on 19 March 2001. The Tribunal asked the Applicant why she signed those cheques. She replied, “I never used that account. The only thing I can think of, he was ill at the time and a couple were to buy fish for him and the others were just to take cash out for him”.
18. The Applicant was asked why her husband was a signatory to the Filmboom St George Bank account. She stated, “I didn’t know he was and if he is, I don’t know about it”.. The Tribunal asked the Applicant if she received any financial benefit from Filmboom P/L, to which she replied, “I do not get director’s fees”.. When asked if she received a salary for the work she does for the company, the Applicant stated that “sometimes they pay a bill or if I need something I go and take it. If I need it, I draw the money”.
19. The Applicant was questioned as to a record of the Respondent’s, which states that she attended the office on 2 March 1995 and asked about payment of arrears of her pension. She said she knew nothing about it and that she had never been to the office since the date of lodgement of the claim form in 1994. Mr Achis said it was he who attended on that day and not his wife.
20. Mr Achis said his wife drew and signed the five cheques in January to March 2001 because he was ill at the time and could not fend for himself. He said he had been with the Applicant in March 1994, when she lodged the wife pension claim form, but that they were separated at the time. He said that an officer of the Respondent told the Applicant that she had to submit that particular form because they were still legally married. He said this was typical of the erroneous advice he had received over the years from Respondent’s officers. He said he had attempted many times to correct the record by advising the Respondent that he and his wife had separated. He produced a letter dated 14 January 1998 advising of the marital separation since 1991 and enclosing a Centrelink “Separation details” form to that effect. The Respondent conceded that this letter and the form were received in January 1998.
21. The Applicant continues, despite her recent illness, to be in full time employment. She also participates in her son’s film business doing administrative and clerical tasks. Mr Achis, despite his ailments, works part time “repairing videos”. He also helps in the Filmboom business. He said “sometimes I contribute to the work by doing Excel spreadsheets”. He said he does not take money from the business, “the fact I have a roof over my head is enough”.
CONSIDERATION OF THE ISSUES
22. The relevant sections of the Act are sections 1223 and 1224 (as they were at the relevant time):
“1223 Debts arising from lack of qualification, overpayment etc.
1223(1)Subject to subsection (1B), if an amount has been paid to a person by way of social security payment or fares allowance on or after 1 October 1997 and:
(a)the recipient was not qualified for the social security payment or fares allowance when it was granted; or
(b) the amount was not payable to the recipient;
the amount so paid is a debt due to the Commonwealth.
…
1224 Debts arising from recipient’s contravention of Act
1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment or fares allowance; and
(b)the amount was paid because the recipient or another person:
(i) made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of the social security law or this Act as in force immediately before 20 March 2000, the 1947 Act or the Social Security (Fares Allowance) Rules 1998;
the amount so paid is a debt due by the recipient to the Commonwealth.…
…
1236 Secretary may write off debt
1236(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A)The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a) the debt is irrecoverable at law; or
(b) the debtor has no capacity to repay the debt; or
(c)the debtor’s whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d)it is not cost effective for the Commonwealth to take action to recover the debt.
1237A Waiver of debt arising from error
1237A(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
1237A(1A) Subsection (1) only applies if:
(a)the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b)if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
…
1237AAD Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or false representation; or
(ii)failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b)there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c)it is more appropriate to waive than to write off the debt or part of the debt.
23. Mr Thisthlethwaite submitted that, as the Applicant received a payment to which she was not entitled, there was an overpayment under the Act, and the debt was raised correctly. He said that the administrative error was not solely attributable to the Commonwealth because the Applicant knowingly made a false statement as to her marital status on the pension claim form, and did not advise the Respondent about her subsequent employment and income. He said there were no special circumstances to justify waiver of the debt and no grounds to write off the debt.
24. Mr Achis submitted that the overpayment was due solely to the fault of the Respondent, because the initial advice on completing the claim form was wrong and the Respondent consistently failed to act on his advice to it that he and the Applicant were separated. He stated, “we did what the Department asked us, the fact the poorly trained staff were saying one thing and meaning another was not our fault”..
CONCLUSION
25. In reaching its decision, the Tribunal takes into account the written material, the oral evidence and the submissions made at the hearing.
26. The Applicant completed and lodged a claim form for a wife pension in March 1994. On that form she stated that she was unemployed and married and she gave details of a bank account for payment of the pension. She held then, and she continues to hold, that account jointly with her husband. Over succeeding years, the Respondent wrote to her about the rate of that pension and advised her of her rights and obligations in respect of that pension. She paid little attention to the content of those letters and gave them to her husband to deal with. He attempted on several occasions to inform the Department that he and Mrs Achis were separated. The Respondent did not act on the separation advice. In April 1998, the Applicant commenced full time employment. The wife pension continued to be paid into the joint account. The Applicant signed cheques against the account.
27. Having heard from Mr and Mrs Achis, the Tribunal finds that the Applicant was aware that the pension was being paid into her account and that she on occasion used the account. The Tribunal is satisfied this amounted to the exercise of control over the funds and therefore finds that the Applicant was in receipt of the payments. On the material presented, the Tribunal finds that, as a result of receipt of wife pension payments during the relevant period, the Applicant received a payment to which she was not entitled. The overpayment is a debt to the Commonwealth in the amount of $20,368.53 under sections 1223 and 1224 of the Act.
28. The Applicant and her husband say the overpayment is solely the result of administrative error on the part of the Respondent. The Applicant concedes that she was aware at the time she lodged the claim form that it contained factual errors, but she says that the Respondent’s officer told her she had to submit it in that form. There is evidence that the Respondent failed to act on the separation advice provided by Mr Achis. Indeed, this was conceded by the Respondent. There is evidence that the Respondent regularly and frequently wrote to the Applicant about her pension and her notification obligations, but she took no action in response to any of these letters other than to give them to her husband.
29. Having heard the oral evidence of Mr and Mrs Achis, the Tribunal doubts the credibility of their claims that they were mislead by the Respondent’s officer about the wife pension claim form. The Tribunal does not accept that the officer told Mrs Achis not to record that she was separated from her husband. Indeed, the Tribunal holds serious concerns about the truth of the financial relationship between the couple. They continue to maintain a joint bank account and both are signatories to the Filmboom P/L account from which both draw some financial benefit. The Applicant has withdrawn several hundreds of dollars from the pension account. The Tribunal found her explanation of these transactions to be glib and unconvincing. In all the circumstances, the Tribunal finds that the Applicant, by her actions and omissions, contributed to the overpayment of the wife pension. The Tribunal therefore finds that the debt is not attributable solely to an administrative error made by the Commonwealth.
30. The Tribunal accepts Mr Thisthlethwaite’s submission that, as the Applicant is in full-time employment and has an equity interest in a solvent trading film company, there are no grounds to write off the debt under section 1236(1A) of the Act. With respect to the waiver of the debt, the Tribunal finds that the debt was not attributable solely to an administrative error made by the Commonwealth, so the debt may not be waived under section 1237A of the Act.
31. In relation to s1237AAD of the Act, the various sub-sections are conjunctive. That is, the discretion to waive is only enlivened where s1237AAD (a) and (b) and (c) are made out. s1237AAD(b) requires “… special circumstances (other than financial hardship alone)…”. In Dranichnikov v Centrelink [2003] FCAFC 133 (19 June 2003) at paragraph 65, Hill J in considering the term “special circumstances” said:
“65. … 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.
67. It is possible to read the decision statement as suggesting that the present case was one incapable of falling within the words “special circumstances”.. If that is what was held, it would involve legal error. However, the real problem with the exercise of discretion under s 101 as with the mandatory provisions of s 97, is that the decision maker appears not to have considered at all what the circumstances were which gave rise to the overpayment. Whether those circumstances were or were not special will obviously be a matter for the decision maker when the factual circumstances have been ascertained.
On the evidence presented, the Tribunal finds that there are no personal or financial, or other matters raised by the Applicant that could constitute special circumstances, nor is there anything in the circumstances which gave rise to the overpayment that constitute special circumstances. Therefore, the Tribunal finds that the Applicant does not satisfy s1237AAD(b) of the Act. As a result, she is unable to satisfy s1237AAD, and the debt may not be waived.
DECISION
32. The Tribunal affirms the decision under review.
I certify that the preceding 32 paragraphs are a true copy of the reasons for the decision of M.A. Griffin, Member
Signed:
Per C. Gregson
Associate
Date of hearing: 25 August 2003
Date of decision: 13 October 2003
Advocate for Applicant: Mr Achis
Advocate for Respondent: Mr E. Thistlethwaite, Advocate with Centrelink
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