Bolton and Anor and Secretary, Department of Families, Community Services and Indigenous Affairs and Anor

[2006] AATA 685

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 685

ADMINISTRATIVE APPEALS TRIBUNAL      )

)         No Q2006/26

GENERAL ADMINISTRATIVE DIVISION		)
Re		CARROL BOLTON

Applicant

And SECRETARY, DEPARTMENT OF FAMILIES, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

No Q2006/27

Re ALAN BUTLER

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms MJ Carstairs, Member

Date8 August 2006

PlaceBrisbane

Decision

The Tribunal sets aside the decisions under review, namely:

§  the decision to raise and recover the sum of $16,834.85, being widow allowance paid to Carrol Bolton in the period 4 July 2003 and 22 June 2005;

§  the decision, as varied, to raise and recover the sum of $6,025.92 being disability support pension paid to Alan Bolton in the period 4 July 2003 and 22 June 2005.

The Tribunal substitutes the decision that during all relevant times Ms Carroll Bolton and Mr Alan Butler and were not members of a couple within the meaning of the Social Security Act 1991.  This means that no debts arise on that basis.  Any moneys already recovered from Ms Carrol Bolton and Mr Alan Butler on that basis are to be repaid to them in full.

..........[Sgd]..........

M J Carstairs
  Member

CATCHWORDS

SOCIAL SECURITY - widow’s payments – disability support pension – marriage-like relationship – personal loan in joint names - factors relevant to assessment of marriage-like relationship – background of relationship relevant – assessment of the relationship as a whole

Social Security Act 1991 s4

Pelka v Secretary Department of Family and Community Services [2006] FCA 735

REASONS FOR DECISION

8 August 2006 Ms M J Carstairs, Member            

1.      Ms Carrol Bolton was receiving widow’s allowance between 2003 and 2005, and Mr Alan Butler was receiving disability support pension.  They were each paid their respective pension entitlements at the single rate, that is, a higher rate than they would be paid if Centrelink assessed them as members of a couple.  Centrelink subsequently decided that they should have been paid at the lower married rate and took action to raise debts against each of them.

2.      Mr Butler and Ms Bolton acknowledged that there was a time in the past when they were in a de facto relationship.  However they say that this had ended, and they were not members of a couple during the time relevant to the debts, even though for much of this time they shared residences. 

3.      If Ms Bolton and Mr Butler are right, then, looking solely at that ground, neither has a debt.  I will canvas the issue that is the basis of the debt first.  If that issue is resolved in the applicants’ favour, there will be no need to consider the other relevant issue – namely whether the Commonwealth should recover the debt.

ISSUES

4.        The issue to be decided, by applying the legislative provisions and taking into account all aspects of the relationship between these two people, is whether their relationship was marriage like. 

LEGISLATION

5.      The statutory framework for determining these questions about relationships has been examined recently by the Federal Court in the decision of Pelka v Secretary Department of Family and Community Services [2006] FCA 735. That case deals with the proper interpretation of s4(2) and s4(3) of the Social Security Act 1991.  

6.      A person will be considered to be a member of a couple if the requirements of s4(2) and s4(3) of the Act are met. Directly in issue in Ms Bolton’s and Mr Butler’s case is s4(2)(b) which provides:

“4(2)    Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:

(a)…….

(b)all of the following conditions are met:

(i)        the person has a relationship with a person of the opposite sex (in this paragraph called the ‘partner’);

(ii)       the person is not legally married to the partner;

(iii)the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;………..

7.      As the section makes plain, forming opinions takes place by reference to the matters set out in sub-section 4(3) of the Act:

4(3)  In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:

(a)       the financial aspects of the relationship, including:

(i)any joint ownership of real estate or other major assets and any joint liabilities; and

(ii)any significant pooling of financial resources especially in relation to major financial commitments; and

(iii)any legal obligations owed by one person in respect of the other person; and

(iv)      the basis of any sharing of day-to-day household expenses;

(b)       the nature of the household, including:

(i)        any joint responsibility for providing care or support of children; and

(ii)       the living arrangements of the people; and

(iii)      the basis on which responsibility for housework is distributed;

(c)       the social aspects of the relationship, including:

(i)        whether the people hold themselves out as married to each other; and

(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and

(iii)the basis on which the people make plans for, or engage in, joint social activities;

(d)       any sexual relationship between the people;

(e)       the nature of the people's commitment to each other, including:

(i)        the length of the relationship; and

(ii)the nature of any companionship and emotional support that the people provide to each other; and

(iii)whether the people consider that the relationship is likely to continue indefinitely; and

(iv)whether the people see their relationship as a marriage-like relationship.”

8.      But these questions are not decided solely through examining those factors, as His Honour in Pelka reminds us::

46.  Having regard to the current provisions of s4(3) and the approaches discussed in the earlier authorities mentioned, a decision maker concerned with whether an unmarried person is in a marriage-like relationship with another person of the other sex:

1.        Must have regard to their interpersonal relationship as a whole not limited by the factors listed in s 4 (3).

2.        Must have regard to each of:

a)        the financial aspects of the relationship;

(b)       the nature of the household;

(c)        the social aspects of the relationship;

(d)       any sexual relationship between the people;

(e)       the nature of the people’s commitment to each other.

3.        In having regard to the preceding five matters, must have regard to all factors relevant to each and, in particular, must have regard to the factors listed under each heading ins 4 (3).

4.         Must specifically consider the total picture of the relationship created by all of these factors bearing in mind that consideration must be given to those which weigh against a marriage-like relationship and those which weigh in favour of it.

5.         Must undertake the preceding consideration bearing in mind that a marriage-like relationship is not disclosed solely by any one of the following matters:

(a)       financial cooperation;

(b)       cohabitation;

(c)        a sexual relationship;

(d)        cooperative household arrangements;

(e)       mutual commitment…….

9. I will approach the task before me with that guidance, firstly by considering the background to the relationship before the relevant period, and then by examining Mr Butler’s and Ms Bolton’s relationship taking into account the factors in s4(3), and finally by making an assessment of the relationship as a whole.

BACKGROUND

10.     Mr Butler is aged sixty three and Ms Bolton is fifty eight.  They have known each other for about twenty years.  In about 1999 they commenced living together in a de facto relationship at a property Ms Bolton owns at Agnes Waters.  The relationship lasted about a year, following which Mr Butler returned to Moore Park and rented a flat alone.  Ms Bolton stayed on at Agnes Waters. 

11.     There is no dispute that they told Centrelink about this prior de facto relationship, specific instances of such disclosure being in documents dated 26 October 2003 (Q2006/27, T6) December 2003 (Q2006/26, T13) and January 2004 (Q2006/27,T9).

12.     Ms Bolton’s and Mr Butler’s Centrelink records indicated that in the time under review, they moved to several different residences.  Centrelink investigations, carried out before the two debts were raised (Q2006/26, T32) summarised the address histories in the Table below. Ms Bolton’s and Mr Butler’s oral evidence and the documentary evidence, supports this being a reasonably accurate reflection of where they were from time to time (apart from Mr Butler maintaining that in 2004 for several months he was travelling around visiting various parts of Australia on his own). 

Dates	Carrol	Alan	Notes
16/12/97-4/7/01	427 Davis Rd, Agnes Water, 4677
18/2/00-5/12/00	427 Davies Rd, Agnes Water, 4677
6/12/00-23/10/03	1/30 Moore Park Rd, Moore Park QLD 4670	RA paid for $105 per wk
5/7/01-10/1/03	5 Bangalow St, Moore Park
11/1/03-7/9/03	1/30 Moore Park Rd, Moore Park QLD, 4670	8 months
8/9/03-30/3/05	3C Plum Tree Cres, Moore Park QLD, 4670
24/10/03-	3C Plum Tree Cres, Moore Park QLD, 4670
7/9/04-30/3/05	8 Palm Crt, Moore Park, 4670	7 months (205 days) Rent $180.00 per wk
31/3/05	37 Pacific Blvd, Moore Park, QLD, 4670

13.     The first of the addresses is Ms Bolton’s property at Agnes Waters at which they agree that they were in a de facto relationship.

THE FACTORS IN SECTION 4(3) OF THE ACT.

14. Turning now to the matters raised by the evidence as this relates to the factors set out in s4(3) of the Act:

(a)     the financial aspects of the relationship:

·     any joint ownership of real estate or other major assets and any joint liabilities;

15.     It was evident that one matter that Ms Bolton had not disclosed to Centrelink took on a great deal of significance in Centrelink’s assessment of their case.  Ms Bolton acknowledged that she had not told Centrelink about various personal loans that she had taken out jointly with Mr Butler.  She said that she had not understood that having a joint personal loan was a matter that had anything to do with her Centrelink payments.  She said that the loan with the Commonwealth Bank was debited from her account only, a point confirmed by the Debit Authority (T14).  I accept their evidence that she regarded herself as solely responsible for repaying the loans and that the extent of Mr Butler’s involvement was to make the application with her. This became necessary because she was refused on the grounds of her low income when she applied on her own. 

16.     I considered that Mr Butler’s preparedness to join with her in the applications for personal loans showed a level of trust and involvement with personal affairs that was well beyond what would happen with a casual acquaintance, but I did not consider that it pointed strongly towards a marriage-like relationship on its own, although their presentation to credit providers that they were in a relationship is a matter that must be taken into account as well.

17.     Mr Butler seems to have no significant assets apart from household effects.  Ms Bolton owns the land at Agnes Waters over which there is a mortgage.  Ms Bolton said she was aware that Mr Butler had stated to Centrelink that he expected a half share of the proceeds of Agnes Waters when it was sold, but she said that as far she was concerned he had no claims upon that land, which she had purchased with her husband and was transferred to her in their marriage settlement.  Mr Butler said that while he lived at Agnes Waters (about a year in 1999/2000) he had paid half the mortgage, had built an extension onto the cabin and had landscaped the garden, so he had expected to get something if she was selling.  However he said that it was an assumption on his part, one clearly not shared by Ms Butler.

18.     Ms Bolton has been unable to sell the land.  Her sister is now making mortgage payments because Ms Bolton cannot meet them, and her sister intends purchasing a half share of the land.

§  any significant pooling of financial resources especially in relation to major financial commitments;

19.     There was no pooling of financial resources.  There was sharing of financial commitments in the domestic setting, but I did not consider that this amounted to pooling of financial resources: Pelka.  

§  any legal obligations owed by one person in respect of the other person;

20.     There were no legal obligations owed to each other apart from the possibility that if Ms Bolton defaulted on the personal loans that Mr Butler might be called upon to repay.  However, taking into account that Ms Bolton had employment and Mr Butler did not, it was not a likely occurrence. 

§  the basis of any sharing of day-to-day household expenses

21.     Their evidence, which I accept, was that they tried to balance out expenses so that the overall result was a 50/50 split.  However, Ms Bolton said that she would lend Mr Butler $20 every now and then.  She said that she would not lend him too much in case he spent it on alcohol.  She also acknowledged that because she was working, and had more, Mr Butler came out ahead from a financial point of view.  I concluded that this suggests more than simply flat mates, but was not inconsistent with a long term friendship, in which Ms Bolton was happy to help out where she could. 

22.     I concluded that there was minimal financial interaction between Mr Butler and Ms Bolton. However there was a relationship of generosity and cooperation towards Mr Bulter but the intention of a 50/50 spilt of household expenditures remained.

the nature of the household, including:

§  any joint responsibility for providing care or support of children;

23.     Not applicable.

§  the living arrangements of the people; the basis on which responsibility for housework is distributed

24.     In the last shared residence I accept that the living accommodation was quite separate, as it seems it was a larges house with two levels.  There were separate bedrooms, bathrooms and living areas.  They acknowledged that they might eat together sometimes, but Ms Butler had the capacity to prepare meals downstairs where she resided with her grandson, unless she needed to use the oven upstairs.  She had a microwave and other kitchen appliances downstairs.  Washing and cleaning seems to have been carried out by each independently.

25.     Ms Bolton borrowed money for the purchase of a fridge.  Mr Butler said in evidence that he already had a fridge; Ms Bolton was buying her own fridge.  The purchase of a second fridge for a household that already had one fridge supports a conclusion that Mr Butler and Ms Bolton had separate quarters.

(c)      the social aspects of the relationship, including:

§  whether the people hold themselves out as married to each other

26.     I had evidence in the form of statutory declarations from Ms Bolton’s employer and friends, stating that these people were not in a de facto relationship.  Nevertheless, I must take into account that Mr Butler and Ms Bolton were prepared to sign as de facto partners to obtain personal loans.  Ms Bolton said they did not specifically use that term about themselves in the course of the loan interviews but acknowledged that they were prepared to acquiesce in its use in order to secure the loans.  I concluded from that Mr Butler and Ms Bolton were prepared to present as married when there was financial benefit to be gained, but they were not presenting themselves that way in social settings or with friends or in employment.

§  the assessment of friends and regular associates of the people about the nature of their relationship

27.     A statutory declaration by Ms Bolton’s employer Ms D Hatherly, stated that she had known Ms Bolton for five years.  She attested that Ms Bolton shared housing with Mr Butler but the accommodation had separate living areas and there was no sharing of a social life.  She noted that Ms Bolton’s grandson Luke Stevens also resided at the house.  The statutory declaration by Ms M Gardener agreed.  With regard to this part of the evidence I concluded that people who knew them did not regard them as in a relationship like that of marriage.  

§  the basis on which the people make plans for, or engage in, joint social activities.

28.     Ms Bolton said it was not difficult to live with Mr Butler because she was busy working and away a lot of the time, whereas Mr Butler was more sedentary and happy to sit in front of the television.  She said that she believed his entitlement to a disability support pension had something to do with his alcoholism.

29.     Ms Bolton said that neither of them was involved with the other’s family.  She regularly visited her own daughter at Moore Park, but alone.  She said that her daughter understood that she was not in a relationship with Mr Butler.  Ms Bolton said that she had met Mr Butler’s daughter, and could say that the relationship was polite, but nothing more.  Mr Butler and Ms Bolton do not celebrate Christmas together.  Mr Butler said that he would spend Christmas with his daughter, and Ms Bolton with her daughter.

30.     Ms Bolton said that she would drive Mr Butler to the shops once a week, but then they would shop separately.  She said that she did not allow Mr Butler to drive her car. 

31.     With regard to a holiday to New Zealand in 2004, Ms Bolton stated that Mr Butler had planned a trip to New Zealand to see his sister who lives on the North Island and Ms Bolton decided to take the opportunity to visit an aunt who lives on the South Island.  Although they travelled by plane together, and returned together they went their separate ways while there. They produced bank withdrawal records to show withdrawals occurring in the different locations.  Ms Bolton said that one of the personal loans was for this trip.  The Social Security Appeals Tribunal accepted that they had gone their separate ways but they concluded that the shared departure and return is only reasonably explicable in terms of their being a couple.   I see this matter rather differently, given the savings engendered by shared travel costs to and from airports for people on low income.  Sharing the holiday in New Zealand would be a matter of greater significance in terms of relationship issues.  I concluded that the shared plane travel did not point to a marriage-like relationship.

32.     I concluded that the social aspects of the relationship between Mr Butler and Ms Bolton pointed away from theirs being a marriage-like relationship.  All the expected aspects of marriage such as involvement with family, sharing time together with friends and in joint activities are absent.

(D)      the sexual relationship

33.     I accept their evidence that there is no sexual relationship. I also accept since they ceased their de facto relationship they have lived in shared housing and had separate bedrooms.

(e)      the nature of the people's commitment to each other, including:

§  the length of the relationship;

34.     Ms Bolton said that she had known Mr Butler for about twenty years before they entered a committed relationship about 1999-2000 at Agnes Waters.  The relationship came to an end because Ms Bolton could not cope with Mr Butler’s drinking.  He moved out.  Centrelink was notified of the separation (Q2006/26 T7).  She later moved to Moore Park to care for her daughter’s children.  At some stage she moved in with him at his flat at Moore Park.  It was not disputed that Centrelink was informed of these arrangements when they moved residences – one example being a telephone call on 16 October 2003 stating that they were moving to 3C Plum Tree Crescent, Moore Park (T7) and stating that they had previously lived in a de facto relationship at Agnes Waters (Q2006/26 T9). 

35.     Ms Bolton said that she moved from Agnes Waters to live at her daughter’s at Bangalow St Moore Park because her daughter was away studying for 12 months and required her help with the three young children.  When her daughter returned, having completed her studies, Ms Bolton lived for a time in a caravan behind her daughter’s house but later her daughter and her husband needed to sell the van and Ms Bolton had to find alternative accommodation.  Ms Bolton said she could not afford rent by herself and fortuitously ran into Mr Butler at a local Bowls Club, and he suggested she move into his 2-bedroom flat and share the rent.  Ms Bolton advised Centrelink that she was moving.

36.     Ms Bolton said that Mr Butler’s drinking was the issue that brought the relationship to an end.  In his oral evidence Mr Butler agreed that his drinking was a problem at Agnes Waters and they reached a mutual agreement to separate.  Ms Bolton said that the split was not acrimoniousand they remained friends.  When she later had to leave a caravan that she was living in behind her daughter’s house, she arranged to move in to Mr Butler’s because it had two-bedrooms and was closer for getting to her job than if she returned to Agnes Waters 120kms away.  She said that Mr Butler had to vacate this flat at the end of a lease, and she was willing to have him share her two bedroom flat that she had subsequently moved to, because she believed that with his poor history with alcohol, he might otherwise end up in the gutter.  She said she felt sorry for him. 

§  the nature of any companionship and emotional support that the people provide to each other;

37.     I concluded from Ms Bolton’s evidence that she feels compassion towards Mr Butler.  Their respective actions in offering accommodation to each other whenever each has been in special need, either without somewhere to live or unable to afford rent alone, show an abiding friendship and concern.  However this behaviour is explicable in terms of the overall length of time they have known each other (some twenty years), and their previous close personal relationship, without this behaviour necessarily indicating a marriage-like relationship at the relevant time.

38.     I accept the truth of Mr Butler’s and Ms Bolton’s evidence about the earlier de facto relationship coming to an end because Ms Bolton would not accept Mr Butler’s behaviour with alcohol.  It seems to me that having had the earlier close relationship, however, they were in a good position to differentiate their later relationship.  That is, they had something to compare it with.  When they put on Centrelink forms that they were friends living together I accept that as the true state of affairs.

§  whether the people consider that the relationship is likely to continue indefinitely.

39.     Ms Bolton said that she does not want to be known as someone’s de facto and for this reason she had moved out of their shared premises at 37 Pacific Boulevard.  She relocated to Tasmania in early 2006 and lives with her sister.  She said that after this experience with Centrelink, if she came back to Queensland as she wishes to, she would either stay with her daughter or live at the property at Agnes Waters.

§  whether the people see their relationship as a marriage-like relationship.

40.     I accepted as truthful Ms Bolton’s and Mr Butler’s evidence that neither saw their relationship at the relevant time as marriage-like.  I was impressed with the consistency of the information that each provided in a series of Centrelink forms designed to give information about their relationship and any interactions in their shared household.  This was information upon which Centrelink officers were satisfied at the time that they qualified for their payments as single persons.  The Centrelink view changed after finding that they had jointly applied for personal loans.  I do not agree that this was sufficient on its own to make Centrelink’s earlier conclusions incorrect, for reasons that will be evident from my earlier discussion about the joint applications for loans. 

MR BUTLER’S AND MS BOLTON’S RELATIONSHIP TAKEN AS A WHOLE

41.     Moore Park Beach is a small community and it is quite plausible that Mr Butler and Ms Bolton would regularly run into each other, and more readily learn of the other’s housing needs when leases expired, or when, for instance the caravan that Ms Bolton was living in at her daughter’s had to be sold.  I accepted that they each had times when they needed to share for financial reasons.  Quite clearly they were comfortable doing so.  However I was satisfied that this comfort was entirely consistent with a long-standing friendship.  At their last shared address, where Mr Butler still lives, Ms Bolton’s grandson resided downstairs with his grandmother.  That house seems to have been particularly suited to shared-but-separate living, being on two levels, each with sufficient kitchen facilities and living facilities to allow independence of two households in one.  Ms Bolton lived downstairs in a two-bedroom flat with her grandson and Mr Butler upstairs.  Mr Butler told me that his invitation to Centrelink officers to come and view the premises was declined by them, stating that Centrelink does not make home visits these days, no doubt for privacy reasons.

42.     Ms Bolton and Mr Butler gave prompt notice of changes of address to Centrelink.  I was satisfied that theirs was not the behaviour of people setting out to deceive or mislead Centrelink.  Contrary to the conclusion reached by the Social Security Appeals Tribunal that they were unconvincing and not credible, I was satisfied that they were honest people, who were trying to be mindful of and carry out their reporting responsibilities to Centrelink.  However improbable it might be that Ms Bolton did not understand that Centrelink would require the information about the personal loans, I was satisfied that that truthfully was her mistaken understanding.  I more readily accepted her evidence on this because I considered that the documentary evidence demonstrated honest answers to questions when carrying out their reporting responsibilities to Centrelink.  They completed two sets of Assessment of Living Arrangements forms in the relevant period.  I thought that they were accurately completed.  Centrelink officers at the time were satisfied that theirs was not a marriage-like relationship.

43.     It is undoubtedly true, as Mr McQuinlan submitted that it is vital that Centrelink be provided with comprehensive, correct information from recipients, to be able to assess entitlements properly.  But what if, as I accept has happened here, the person does not understand the need to provide a particular piece of information and fails to give it?  Ms Bolton acknowledged her error and apologised for it, and tried to explain that it was a simple mistake on her part, not deceptive behaviour. 

44.     It seems to me that she is entitled to have the matter examined dispassionately, taking into account her additional information about the basis of her failure to advise Centrelink about the loans.  She should not be branded as deceitful solely on the basis of her mistake, with the added consequence that other parts of her evidence have been discounted. 

45.     Ms Bolton submitted that her personal loans were for small amounts - to buy a fridge, repair the car, and to have the New Zealand holiday.  She had the repayment responsibility.  I note that Ms Bolton and Mr Butler had no joint assets, no joint bank accounts and continued to sort out their overall finances on a roughly 50/50 basis.  They were not pooling finances as that is properly understood (Pelka), nor did the personal loans amount to major financial undertakings, which the legislation particularly emphasises.  It seemed to me that her failure to notify the occurrence of these small personal loans has led to too much emphasis on financial aspects of the relationship to the detriment of a consideration of their relationship as a whole.

46.     As pointed out in Pelka, judgments about relationships can be finely balanced.  However it does not seem to me that this relationship falls into the finely balanced category.  It seemed quite plain that this relationship was not marriage-like at the relevant time.  The evidence supported a lasting friendship, something quite beyond casual flatmates, but well short of a marriage.

DECISIONS

47.     The Tribunal sets aside the decisions under review, namely:

§  the decision to raise and recover the sum of $16,834.85, being widow allowance paid to Carrol Bolton in the period 4 July 2003 and 22 June 2005;

§  the decision, as varied, to raise and recover the sum of $6,025.92 being disability support pension paid to Alan Bolton in the period 4 July 2003 and 22 June 2005.

The Tribunal substitutes the decision that during all relevant times Ms Carroll Bolton and Mr Alan Butler and were not members of a couple within the meaning of the Social Security Act 1991.  This means that no debts arise on that basis.  Any moneys already recovered from Ms Carrol Bolton and Mr Alan Butler on that basis are to be repaid to them in full.

I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of Ms M J Carstairs, Member

Signed:          ………………………………………           

Associate

Date/s of Hearing  9 May 2006, 31 July 2006
Date of Decision  8 August 2006
The Applicants were self represented
For the Respondent                  Mr R McQuinlan, Departmental Advocate