Barber and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 349

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 349

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          Q2006/594

GENERAL ADMINISTRATIVE DIVISION        )          Q2006/680

Re ANDRE and LORRINDA BARBER

Applicants

And SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Dr KS Levy, RFD, Senior Member

Date1 May 2008

PlaceBrisbane

Decision

1. In view of the bankruptcy of Ms Lorrinda Barber, I order that her application be stayed by virtue of s 60(2) of the Bankruptcy Act 1966 until the Trustee in Bankruptcy is served with a Notice and given an opportunity to make an election in writing to prosecute or discontinue the application.

2. The order in (1) above will cease if, as prescribed by s 60(3) of the Bankruptcy Act 1966, no election is made by the Insolvency and Trustee Service Australia within 28 days of receiving the Notice, as the Trustee’s right to intervene will be regarded as being abandoned.

3.  The decision in relation to the applicant Andre Barber is affirmed.

  [Sgd]

  SENIOR MEMBER

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits and Allowances – whether applicant’s income resulted in being entitled to the amount of carer payment received – applicant bankrupt – determination to stay proceedings until involvement of Trustee.

SOCIAL SECURITY – Pensions, Benefits and Allowances – applicant had employment whilst in receipt of disability support pension – whether disability support pension level was correctly paid.

SOCIAL SECURITY – Pensions, Benefits and Allowances – whether any debts recoverable against both applicants. 

Social Security Act 1991: s 1237 AAD

Ivovic and Director General of Social Services (1984) 6 ALN N 293

Kertland v Secretary, Department of Family and Community Services [1999] FCA 1596

Dranichnikov v Centrelink [2003] FCAFC 133
Ryde v Secretary Department of Family and Community Services [2005] FCA 866

Secretary, Department of Employment and Workplace Relations v Homewood (2006) 91 ALD 103

Re Denhard and Secretary Department of Families Community Services and Indigenous Affairs and Department of Employment and Workplace Relations [2007] AATA 1165
Cook v Secretary, Department of Employment and Workplace Relations [2007] AATA 1690
Caudell v Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 196
Jess v Scott (1986) 12 FCR 187

REASONS FOR DECISION

1 May 2008 Dr KS Levy, Senior Member         

INTRODUCTION

1.      The applicant, Andre Barber was granted Disability Support Pension on 13 August 2002 with an effective commencement date of 15 July 2002.  As a consequence of an income and assets test which related to both the income of Mr Barber and his wife, Lorrinda Barber, Mr Barber has been the subject of a determination by Centrelink that an overpayment had been made and that a Disability Support Pension debt was to be recovered from him. The debt period relevant to Mr Barber is 3 September 2002 to 20 October 2005.

2.      The applicant, Lorrinda Barber, was granted a Newstart Allowance on 7 June 2002 and then also had income from work she did on a casual or part-time basis as from 25 June 2002.  On 26 August 2002 Mrs Barber was then granted a carer payment with effect from 18 July 2002.  As a result of the amounts of income she earned, Centrelink determined that a carer payment debt was to be recovered from Mrs Barber.  That debt was for the period 18 July 2002 to 2 November 2005. 

3.      A request for review of these debts was made to the Department and an Authorised Review Officer concluded that the debt relating to Mrs Barber should be increased to $14,421.39.  There was also a determination to reduce Mr Barber’s debt to $6,220.66. 

4.      Those decisions were appealed to the Social Security Appeals Tribunal.  That Tribunal affirmed the previous decisions on 19 July 2006 but required a recalculation of part of Mrs Barber’s debt based on eligibility for part of the period under review.  As a result, the debts for both applicants were recalculated, and on 25 October 2007, the revised debts were:

·Mr Barber - $5,320.07

·Mrs Barber - $11,988.12

5.      The applicants now appeal to this Tribunal from the decision of the Social Security Appeals Tribunal.

ISSUES

6.At the commencement of the hearing the issues to be determined were:

(i)Whether Mrs Barber’s income resulted in her being entitled to the amount of carer payment received (or whether there was a partial entitlement only);

(ii)In relation to Mr Barber, whether his disability support pension level was correctly paid, given the level of income earned by Mrs Barber.

(iii)Consequent upon the determinations of (i) and (ii) above, whether any debts were recoverable against either or both applicants.

7.      After hearing evidence for almost two hours, I made a direction that Mrs Barber’s application was to be stayed.  With respect to Mr Barber’s debt, and following Mrs Barber conceding that the quantum of Mr Barber’s debt was not in issue, the only issue for the Tribunal then to determine was whether Mr Barber was entitled to a waiver of the whole or part of the debt because of “special circumstances”. 

EVIDENCE

8.      A considerable volume of documentary material was available in respect of both applicants.  Mrs Barber appeared as advocate for both she and her husband, as Mr Barber did not appear at the hearing. 

9.      Following approval of the social security allowances as outlined above, it was critical evidence that Mrs Barber was advised on 26 August 2002 that it had been approved that she receive a carer payment.  This was to commence with effect from 18 July 2002.  On the same day as advising Mrs Barber of the carer payment, Centrelink also wrote and advised her that the basis of the payment was that there was a ceiling of $449.44 (total) as combined annual income for both her and Mr Barber.  She was also advised that she was required to inform Centrelink, if, inter alia, she undertook any work for more than 20 hours per week or if her income (or their combined income) increased; or if her income (or their combined income) changed. 

10.     The evidence centred on whether one form was actually received by Centrelink as claimed by Mrs Barber.  The accuracy of the disclosures were also raised where, with one form which was submitted, Mrs Barber indicated she had not done any additional work in that particular period.  Evidence was also presented to show that the gross earnings for the majority of pay periods from July to September 2002 were more than double the annual threshold stated in the department letter of 26 August 2002.  

11.     During cross-examination, Mrs Barber told the Tribunal that because she and her husband were involved in extensive litigation over that period, she had not looked closely at the documentation provided by Centrelink.  Indeed, she stated that she did not read the forms properly but then asserted that it was not her error but that of Centrelink.

12.     In relation to her current financial situation, the Tribunal was informed that the financial commitments that Mr and Mrs Barber now have are a little different to when she provided a statement in October 2006, although the income which she and Mr Barber now have access to is substantially greater.  She also informed the Tribunal that a lump sum compensation payment received by Mr Barber in 2004 has now all been spent.  There are no dependent children at home although, while she stated that Mr Barber’s physical health has not improved (and may never improve), his psychological health has improved.  She spoke also of Mr Barber having recently lost both parents and having had a number of serious ailments including pneumonia and a brain tumour.  She submitted that this evidence should be regarded as “special circumstances”. 

CONSIDERATION

13.     I have taken into account all of the relevant evidence and all of the relevant law in resolving the issues as far as practicable. 

Mrs Barber

14. It was apparent towards the conclusion of Mrs Barber’s evidence that she had become bankrupt. She has not been released from that bankruptcy. The Tribunal then adjourned to allow the respondent time to make some submissions on the effect of the Bankruptcy Act 1966 on Mrs Barber’s application.

15. Following an adjournment, and submissions by the respondent, it was apparent that Mrs Barber had no standing in this application because of her bankruptcy. Section 58(1) of the Bankruptcy Act 1966 provides that from the date of bankruptcy, all of Mrs Barber’s property vested in the Official Trustee in Bankruptcy. That has been confirmed in a number of recent decisions[1]. In addition, s 60(2) of the Bankruptcy Act 1966 is also relevant. That requires that if a matter on behalf of a bankrupt is to be prosecuted or discontinued, that should be a decision for the Trustee. The Tribunal then made various orders on the basis that the respondent would advise the Trustee of the application in the context of s 60(2) of the Bankruptcy Act 1966. The Tribunal then ordered that the application by Mrs Barber be stayed. The following orders were made:

(i)As Lorrinda Barber has been made bankrupt, I order that her application be stayed by virtue of s 60(2) of the Bankruptcy Act 1966 until the Trustee is served with a Notice and given an opportunity to make an election in writing to prosecute or discontinue the application;

(ii)The order in (i) above will cease if, as prescribed by s 60(3) of the Bankruptcy Act 1966, no election is made by the Trustee within 28 days of receiving the Notice, as the Trustee’s right to intervene will be regarded as being abandoned.

[1] Cook v Secretary, Department of Employment and Workplace Relations [2007] AATA 1690

Mr Barber

16.     Mrs Barber continued to appear on behalf of her husband, Andre Barber.  This applicant’s initial objections were clarified by Mr McQuinlan (for the respondent) about the operation of an income and assets test which is applied to the joint income of Mr and Mrs Barber.  This test determines the level of disability support pension to which Mr Barber was entitled.  It was also put to the Tribunal that any social security benefits paid to Mrs Barber were not part of the calculation of entitlement for Mr Barber.

17.     On that basis, Mrs Barber conceded that she would not contest the quantum of that debt.  However, she did still maintain that Mr Barber should be entitled to a waiver of all or part of his debt because of “special circumstances”.

18. A waiver in “special circumstances” is provided for in s 1237 AAD of the Social Security Act 1991. This provides as follows:

“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 a false representation; or

(ii)failing or omitting to comply with a provision of this Act, the Administration 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.

Note 1: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth.
Note 2: This section has effect subject to section 1237AAE in relation to an assurance of support debt.”

19.     In considering the claim of special circumstances, evidence was provided as to Mr and Mrs Barber’s financial circumstances.  In considering whether those circumstances are “special circumstances”, fundamentally, the Tribunal must consider whether it will be acting in accordance with the purpose of the legislation[2].  The facts must disclose a situation which is unusual in comparison to other cases[3].  In such cases, the Tribunal must also be mindful that the purpose of the legislation is to prevent injustice[4].

[2] See Ivovic and Director General of Social Services (1981) ALN N95 at N97.

[3] Re Beadle and Director Generalof Social Security (1984) 6 ALD 1 at 3

[4] Kertland v Secretary Department of Family and Community Services [1999] FCA 1596

20.     These principles have been confirmed in subsequent cases.  For example, in Dranichnikov v Centrelink[5] the Full Federal Court held that special circumstances “….distinguish the case in consideration from the usual case.  There will a requirement that the circumstance of such that takes the case out of the ordinary….”, citing Jess v Scott[6].  The Federal Court has also more recently affirmed the approach that granting of special circumstances must be in accordance with the objectives of the legislation[7].  Where special circumstances are held to exist, the decision-maker should provide adequate information to ensure that it is clear which facts or circumstances are found to be “special”; why these circumstances should be treated as regarding some Commonwealth payments as not having been made;  and the provision of some reasons or logic as to why a particular quantum (in whole or in part) is to be waived[8].

[5] [2003] FCAFC 133 at [66]

[6] (1986)12 FCR 187

[7] Ryde v Secretary Department of Family and Community Services [2005] FCA 866

[8] Secretary Department of Employment and Workplace Relations v Homewood 2006 91 ALD 103 at 109, 110.

21.     I have taken account of the fact that there was quite a lengthy and stressful period for the litigation in which the parties were involved and that during the period 2002 to 2006, Mr Barber suffered from poor health, endured surgery and deterioration of his mental health.  I also have noted Mr Barber’s health (particularly his psychological health) has improved and he is now in the workforce.  Similarly, Mrs Barber is also now working full time at Prince Charles Hospital and I was advised that she has good prospects for advancement.  I note also that her level of income is now such that their general expenses are not dissimilar to those that they outlined in their “financial information form” which was completed on 18 October 2006, yet their income since that time has been considerably better. 

22.     Mr McQuinlan submitted, that the compensation payment made to Mr Barber in 2004 had been paid in a lump sum has now all been spent.  There are no dependent children.

23.     During the difficult period while Mr Barber was undoubtedly not always well enough to look after his own administrative affairs, Mrs Barber, however, was his carer for that period.  While she worked part time and it appears considerably more than originally had been anticipated, Mr Barber was supported by his wife, who had contact with Centrelink over that period, particularly in relation to her own social security payments.  Based on the evidence presented, I recognise that her records and reporting to Centrelink were not entirely complete or dealt with satisfactorily.  Mr Barber was nevertheless cared for by Mrs Barber during that period and is not now in “special circumstances” compared to others.  It is to be acknowledged that Mr Barber has also demonstrated a responsibility by endeavouring to repay the debt by instalments but there are other circumstances where those with a far lesser capacity to pay have not been regarded as being in “special circumstances” and required to repay debts[9].

[9] Re Denhard and Secretary Department of Families Community Services and Indigenous Affairs and Department of Employment and Workplace Relations [2007] AATA 1165

24.     In the final analysis of various factors outlined earlier, particularly those in favour of the applicant for the bona fide purposes for which the “special circumstances” category was established, I find that the evidence is counter-balanced more heavily by factors which do not make this a case which might be regarded as being “out of the ordinary”. I therefore determine that the discretion in favour of granting special circumstances cannot be exercised.

CONCLUSION

25.The decision in relation to the applicant Andre Barber, the decision is therefore affirmed.

I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy, Senior Member

Signed:         .....................................................................................
  E. Young, Research Associate

Date of Hearing  8 April 2008         
Date of Decision  1 May 2008
Applicant  Mrs Barber, herself        
Counsel for the Respondent     Mr R McQuinlan, departmental advocate