Bota and Secretary, Department of Family and Community Services
[2003] AATA 246
•17 March 2003
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2003] AATA 246
ADMINISTRATIVE APPEALS TRIBUNAL )
) No N2000/912
GENERAL ADMINISTRATIVE DIVISION ) Re AUREL BOTA Applicant
And
SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION
Tribunal MS N BELL Date17 March 2003
PlaceSydney
Decision The Tribunal affirms the decision under review. [Sgd] Ms N Bell
Member
CATCHWORDS
SOCIAL SECURITY – newstart allowance - overpayment - debt - whether should be waived - whether debt resulted from knowingly failing to comply with the Act - meaning of “knowingly” - decision affirmed
Social Security Act 1991 sections 1224, 1236 and 1237AAD
Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72
REASONS FOR DECISION
17 March 2003 Ms N Bell, Member 1. This is an application by Mr Aurel Bota (“the Applicant”) for review of the decision of the Social Security Appeals Tribunal (“the SSAT”) dated 3 May 2000 to affirm the decision of the Secretary to the Department of Social Security (“the Respondent”), made on 24 November 1998, to raise and recover an overpayment of newstart allowance in the amount of $6,569.40 for the period 22 November 1997 to 22 October 1998. Subsequent to the hearing of the application, but prior to the Tribunal’s determination, the Respondent recalculated the amount of the overpayment and varied the amount of the debt to $6,514.88. Section 180(1) of the Social Security (Administration) Act 1999 provides:
Variation of decision before AAT review completed
180 (1)If an officer varies a decision after an application has been made to the AAT for review of that decision but before the determination of the application, the application is to be treated as if:
(a) the decision as varied had been affirmed by the SSAT; and
(b)the application were an application for review of the decision as varied.
2. It follows that the decision under review is the decision to raise and recover a debt of $6,514.88.
3. At the hearing of this application the Applicant appeared on his own behalf and the Respondent was represented by Mr J Kenny. The Applicant gave oral evidence to the Tribunal and the following documentary evidence was before the Tribunal:
Exhibit
Description
Date
TD1
T Documents T1 – T66 pages 1 - 276
A1
Pay advices from Chubb Security and CSAH Services
A2
Schedule of rent payments from Applicant to Landlord
18/7/2001 – 19/12/2001
A3
Bank statements, bills, correspondence 9 pages
A4
References, 8 pages
A5
Course enrolments
R1
Facsimile from Angela Smith
24/8/2000
R2
Report from Dr David Keen
29/8/2000
R3
Repayment history
8/1/2002
R4
Computer generated letter
9/1/2002
Background
4. The Applicant arrived in Australia from Hungary in 1994 and sponsored his wife and daughter to come to Australia in 1996.
5. The Applicant was in receipt of newstart allowance during the period 22 November 1997 to 22 October 1998. It is not in dispute that during this period he had some casual on-call nurse assistant work at a range of hospitals and nursing homes. A data matching exercise was undertaken by the Respondent with the Australian Taxation Office and the Respondent concluded that the Applicant had under-declared his income on the forms he had submitted to the Respondent, fortnightly, for payment of newstart allowance. The Respondent consequently decided on 24 November 1998 to recover an amount of $6,569.40 of overpayment of newstart allowance.
6. The Applicant sought internal review of the decision and on 7 February 2000 an authorised review officer reviewed and affirmed the decision.
Issues and legislation
7. The Applicant did not dispute that he had been overpaid newstart allowance. The issue of the calculation of the amount of the overpayment was not raised by the Applicant at the hearing by the SSAT but was, however, raised by him at the hearing before this Tribunal. He contended that the Respondent had double counted some of the income earned by him. This necessitated an adjournment of the hearing to enable the Respondent’s representative to obtain the materials on which the calculation of the overpayment was based. That material was obtained and the amount of the overpayment was recalculated by the Respondent with particular attention being paid to the possibility of double counting. That recalculation resulted in the variation of the debt amount referred to above. That recalculation was provided to the Tribunal and to the Applicant on 30 July 2002, together with supporting and explanatory materials. A detailed spreadsheet was also provided on that date, setting out the income included in each fortnight for which an overpayment was calculated and how payments advised by the Applicant’s employers for periods worked were apportioned over newstart payment fortnights.
8. On the question of recovery of the overpayment, if it is determined that it is a debt to the Commonwealth, the Applicant did not suggest that the debt arose because of any error on the part of the Respondent. He did, however, raise the issue of special circumstances that warrant the waiving of recovery.
9. The legislation relevant to this application are sections 1224, 1236 and 1237AAD of the Social Security Act 1991 (“the Act”).
Applicant’s Evidence
10. The Applicant told the Tribunal that his mental state at the time he was receiving newstart allowance was very depressed and he was in a state of some confusion. He noted that question two on the fortnightly newstart allowance form which asked “Did you do any part time or casual work in the period…?” allowed for a “yes” or “no” answer only and that the question asked, required a more extensive answer than just “yes” or “no”. He noted that the question required information about the amount earned and whether it was expected that the work would last for 12 weeks. The Applicant said he answered “no” meaning he was unable to answer. He also said that he answered “no” because that allowed him to then proceed to another part of the form and relieved him of the need to answer another group of questions. He said he felt panicky when he was filling out the form and was trying to simplify it. He also said that on one occasion at Marrickville Centrelink Office he tried to explain his difficulty to an officer there and was advised he should just tick the box indicating "no” and move on to the next question.
11. In relation to his mental state at the relevant time, the Applicant said he had experienced fatigue, lack of energy, impatience, and avoidance of people and issues. He said he was often late to work and refused shifts. He also said he could not attend to detail, could not concentrate, could not make decisions and was unable to communicate with fellow staff. He said he attended Marrickville Community Health Centre for depression and described his particular condition and the significance of a deficiency of the chemical serotonin.
12. In relation to his work in nursing homes, the Applicant said he did not work in a position that required any exercise of judgement and merely followed someone else’s instructions. He said that the work he did was arranged by Macquarie Nursing Services and he was never told how much he was earning.
13. The Applicant said that he used to be an Operations Manager for a security company and would do cashier work. He said he was regarded as very reliable and honest. However, following a prosecution for sexual assault, he lost his security licence and his job. He said that since then the work available to him has been limited as a result of the prosecution. He said he has attempted to expand his employment options by taking a taxi-training course and enrolling in a nursing course but this has been to no avail.
14. The Applicant described his current circumstances. He said he is living in a garage in which he cannot cook or watch television. He said he is not currently in a relationship and is still estranged from his former wife and his daughter. He said he wants his dignity and honour restored, and that he knows that what he did in relation to his Centrelink payments was wrong but that at the time it was beyond his understanding.
15. The Applicant said that he has a large number of bills and accounts outstanding. In relation to some of these accounts, arrangements have been made but in respect of others recovery action has commenced. The Applicant said he is currently working as a casual nursing assistant and had a lot of work in November 2001 but very little in December 2001.
16. The Applicant also provided to the Tribunal a number of personal and employment references (Exhibit A4).
17. The Applicant said that he had asked Centrelink to have him examined by a doctor appointed by Centrelink so that he could obtain proper treatment and perhaps obtain another type of allowance.
18. In cross-examination the Applicant told the Tribunal that he had originally lived in Romania where he was qualified in military chemistry and nuclear biology and specialised in defence force work. He also said that in Hungary, after doing a business course in Budapest, he owned a lottery business which he sold. He said he then worked in the hospitality and tourism industry as a manager of a complex of hotels and restaurants at a spa. He agreed that he speaks several languages.
19. He said that he had been in debt in Australia since he sponsored his family from Romania. He said he bought things for the house and purchased a new car. He said that when problems started with his family his car was repossessed, although he had the car during some of the period during which the overpayment of newstart allowance arose.
20. A number of questions were put to the Applicant about forms he had completed during the period of the overpayment, but he was generally unable to answer either on the basis that he did not have his own records or that he simply could not recall. He did say, however, that he did not always fill in his time sheets correctly for the nursing homes he worked at and had received letters from Macquarie Nursing Services about doing this.
21. The Applicant said that at nursing homes he worked at he had to wash, feed, shower, toilet and clean up after patients. He said he generally coped with the work but at a nursing home in Ashfield he had to leave because he had a very demanding patient with whom he became impatient. He said he would usually take public transport to jobs because he often felt unable to drive a car.
22. The Applicant said that he couldn’t explain why there was consistent underdeclaration of his earnings on the continuation forms he submitted other than his depression. He said he considered that he had been underpaid by Macquarie Nursing Services who, he said, had been taken to court by some of the workers it employed. He said he had not approached the Department of Industrial Relations about this because he was depressed. He said he is still depressed.
23. When shown the continuation form and records of payments for work at two nursing homes during the period 24 November 1997 to 5 December 1997, the Applicant agreed that he had stated on the continuation form that he had been unfit for work and had not done any work. He said that he did not agree that he knew it was incorrect when he completed the form because his judgement was poor at that time.
24. Exhibit T11 contains details of payments made by Macquarie Nursing Service to the Applicant, provided to Centrelink by the Nursing Service. The Applicant said he disputed the gross figures and the amounts of tax said to have been paid. He also said he considered the details had been influenced by Centrelink’s request for the information. He said he could not say whether or not he received the pays indicated in T11 without his bank statements. He said he does not have his bank statements because his depression prevents him from having such information organised. When asked why he had not provided an estimate on the continuation form in question he said he didn’t have the judgement or mental ability to do so. He gave the same reason as to why he hadn’t answered “yes” and then referred to Macquarie Nursing Services, in answer to the question about whether he had done any paid work in the relevant period.
25. The Applicant’s attention was directed to document T15, a computer file note dated 9 March 1998 of a conversation between the Applicant and a Ms Holder from Centrelink in which the Applicant is recorded as having advised that he had thought he only had to declare earnings if the work done was for more than eight hours. The note also indicates that the Applicant supplied to the Centrelink officer the names of employers in addition to the ones he had already provided information to Centrelink on. The Applicant, in cross examination, said that he did not recall a letter of 23 February 1998, referred to in the note, but did recall a conversation with the Centrelink officer, Ms Holder, who, he says, telephoned him. He said that in their telephone conversation he told her that he was not coping.
26. In relation to a notice to the Applicant dated 6 July 1998 setting out his reporting obligations (T31), the Applicant said that he did not recall whether he told Centrelink about the changes in his income at that time or during the following two months. He agreed that he had submitted a medical certificate to the effect that he was unfit to work from 6 July 1998 to 7 September 1998 and yet he worked in August. He said that he did not notify Centrelink of this work because of his psychological condition.
27. The Applicant also confirmed his evidence to the SSAT to the effect that on continuation forms he had sometimes written “any figure”.
28. The Applicant said that he has seen Dr Khan and Dr Robertson at Marrickville Community Centre and various doctors at Marrickville Mental Health Centre about his condition. He explained that he had not provided a report or certificate in relation to his ability to correctly fill out continuation forms because he is the only one who knows what his situation was at that time and also because of the expense involved in obtaining a report.
29. Finally, the Applicant said that he had written two or three letters to Centrelink advising that he had additional income and describing his psychiatric condition. He was unable to advise the dates of these letters.
Other evidence
30. Documents T8, T9, T10, T12, T13, T19 are some of the fortnightly continuation forms that were required to be lodged by the Applicant during the relevant period. Documents T11, T14, T16, T17, T21, T22, T24A, T26, T27, T28, T35, T36, T37, T38, indicate earnings by the Applicant from various sources during the relevant period or are Employment Declaration Forms signed by the Applicant with various employers. These are at significant variance with the information provided by the Applicant in his fortnightly continuation forms.
31. Document T18 is a medical certificate dated 19 March 1998 in respect of the Applicant’s depression. The certificate declares the Applicant unfit to work for three months from 19 March 1998 to 19 June 1998. Document T20 is a file note dated 30 March 1998 recording the Applicant’s exemption from the activity test from that date until 19 June 1998. The Tribunal notes that documents T11, T28 and T38 show that the Applicant worked at St Vincent’s Hospital, Belvedere Nursing Home, Ashley House Nursing Home and Clermont Nursing Home on a number of days during that period.
32. Document T30 is a file note recording provision by the Applicant of a medical certificate declaring him unfit to work from 6 July 1998 to 7 September 1998. The Tribunal notes that documents T11 and T37 show that the Applicant worked at Sirius Cove Nursing Home, Macquarie Lodge, St Ann nursing home, Elizabeth Lodge, Transitional Living Units, Lewisham Nursing Home, Montefiore Jewish Home and Goondee Nursing Home on a number of days during that period.
33. Dr David Keen’s report dated 29 August 2000 (Exhibit R2) is a reply to a letter from an officer of the Centrelink Advocacy and Administrative Law Team dated 24 August 2000 requesting his views on the question of whether the Applicant’s medication for depression, as described to Centrelink by the Applicant, would have sufficient effect on him to prevent him from knowing that an answer to the relevant questions on his fortnightly form would be incorrect. Dr Keen’s opinion was that, while the Applicant’s medication can cause impaired alertness and concentration and drowsiness or insomnia, it would not be expected to affect his judgement in circumstances requiring answers to fairly straightforward questions. He also said those medications would not be expected to affect the Applicant’s ability to differentiate right from wrong or between truth and falsehood unless they were consumed in excessive doses sufficient to cause temporary delirium or acute intoxication. Dr Keen noted that there has been no suggestion of excessive consumption by the Applicant.
34. Exhibit R4 is a letter to the Applicant from Centrelink dated 23 February 1998 advising him that Centrelink had received information from the Australian Taxation Office that the Applicant had recently signed an Employment Declaration Form and requesting details from the Applicant about his employment. The letter also advised the Applicant that he should contact Ms Holder at Centrelink by 16 March 1998.
Submissions and Additional Evidence
35. The Applicant’s central submission was that, during the relevant period, he was suffering from depression which affected his ability to deal with information and to organise himself. He also submitted that the information he had available about his earnings, because he was largely employed through an agency, made it difficult to determine his amount of earnings. He submitted that he had not knowingly made a false representation or failed to provide information to the Respondent.
36. Mr Kenny, for the Respondent, submitted that the Applicant is a very intelligent and educated person, with a firm employment background and experience as a successful entrepreneur. He submitted that with these qualities, the Applicant had more than the requisite skills to accurately complete the fortnightly forms, even in a depressed state. He also submitted that, taking into account his depression, the Applicant could have included some of the information about his employment on his forms.
37. Mr Kenny noted that the Applicant’s errors in reporting his earnings were consistently by way of under reporting rather than being more randomised and that the Applicant had, in his straitened circumstances, every reason to want to maximise his social security income.
38. Mr Kenny also submitted that the Applicant had no medical evidence of impaired judgement or cognitive function during the relevant period and that Dr Keen’s opinion was that the medication being taken by the Applicant would not affect his ability to differentiate between right and wrong or truth and falsehood or affect his ability to answer straightforward questions. Mr Kenny also noted that the Applicant had continued to work throughout the relevant period and so could not have been incapacitated to the extent alleged by him.
39. In reply, the Applicant said that his circumstances are indeed “special”, given his level of debt, other than to the Respondent, and his family breakdown, and he referred the Tribunal to the reasons of the SSAT in support of his submission. The Applicant also submitted that the Respondent’s submission about the lack of randomness in the Applicant’s errors in reporting his income and Dr Keen’s opinion are both purely speculatory. He noted that Dr Keen had not examined him and had no knowledge of his background or his circumstances.
40. At the close of the hearing, Mr Kenny, for the Respondent, undertook to search for the letters the Applicant said he had written to Centrelink about his earnings and his psychiatric condition. He also undertook to print out all computer file notes and on line advices for the period of the debt (22 November 1997 to 22 October 1998) for the purpose of identifying any instances of contact with Centrelink by the Applicant during that period. Finally Mr Kenny undertook to provide to the Tribunal an analysis of how the Applicant’s earnings were treated in the Respondent’s calculation of the Applicant’s overpayment.
41. By letter dated 15 April 2002, Mr Kenny advised the Tribunal of the results of this further examination. A copy of that letter and attachments was provided to the Applicant and he was given an opportunity to respond. In relation to letters received by the Respondent from the Applicant, Mr Kenny described his exhaustive search of the file held by him and files obtained by him in relation to the possible prosecution of the Applicant, and advised that, apart from a letter from the Applicant to the Respondent dated 15 March 1999 (T51) requesting a review of its decision to raise and recover a debt of overpayment, there are no other letters from the Applicant in those files.
42. In relation to computer file notes and on line advice records of contact by the Applicant with the Respondent during the period of the debt, Mr Kenny provided copies of all computer file notes and on line advices for the relevant period. These comprise 14 computer file notes, none of which refer to any correspondence from the Applicant, and concern mainly contact with and information received from employers of the Applicant. The copies of on line advices provided by Mr Kenny do not indicate or make mention of any correspondence received from the Applicant in relation to his earnings or his depression.
43. By letter dated 30 July 2002 Mr Kenny provided a recalculation of the Applicant’s overpayment together with supporting and explanatory materials and a detailed spreadsheet setting out the income included in each fortnight for which an overpayment was calculated and how payments advised by the Applicant’s employers for periods worked were apportioned over newstart payment fortnights. The material isolates those employers who paid the Applicant direct, rather than through Macquarie Nursing Service, and deals with each of those employers separately showing that no double counting took place. The material also deals with the way in which payments made to the Applicant by employers were apportioned across newstart allowance fortnights where necessary.
44. In answer to the material provided by the Respondent under cover of Mr Kenny’s letter of 20 July 2002, the Applicant, by letter dated 11 September 2002, provided the Tribunal with original group certificates which he said related to the relevant period. He raised inconsistencies between the answers provided by his various employers at the request of Centrelink and those Group Certificates. The employers noted by Mr Bota included Macquarie Nursing Service, San Antonio Nursing Home, St Anne’s Nursing Home, Ashley House Nursing Home, Elizabeth Lodge Nursing Home, St Vincent’s Hospital, Ryde Nursing Home, Hillmont Nursing Home and Goondee Nursing Home.
45. The Applicant claimed that the information obtained from his various employers and relied upon by Centrelink was inaccurate, incorrect and inconsistent. In particular he claimed, among other things, that:
a) there is an inconsistency between the amount stated by Macquarie Nursing Agency as paid ($2781.08) and the amount recorded on the Group Certificate from Macquarie Nursing Agency ($428);
b) there is an inconsistency between detailed pay history report relating to St Antonio Da Padova Nursing Home ($1108.16) and the Group Certificate ($2530);
c) shifts stated as worked at St Anne’s Nursing Home were actually not worked by the Applicant;
d) there is an inconsistency between pay periods declared by Ashley Nursing Home to Centrelink and those stated on the Group Certificate;
e) there is an inconsistency between declared payments from St Vincent’s Hospital ($1215.21) and the relevant Group Certificate ($186);
f) there are inconsistencies between start dates declared by employers to Centrelink and those recorded by Macquarie Nursing Services;
46. The Applicant also noted that Centrelink had mistakenly used a “female client’s statement” under his name. He noted his concern that the information that Centrelink had obtained from his employers was “unreliable”, “misleading” and “fabricated”.
47. The Applicant also repeated his submission as to the effect of his depression during the relevant period and provided, with his submission, a report from Dr Makram Girgis, Psychiatrist, dated 6 September 2002 which states that the Applicant is suffering from Post traumatic stress disorder with severe anxiety/depression, memory deficits and lack of concentration. He also stated that the Applicant suffers from dizziness, headache and concussion resulting from a motor vehicle accident, hypertension and arteriosclerosis, diabetes, chronic angina and asthma. He said that the Applicant “is now on antidepressants” and that he is seeing him on a regular weekly basis for counselling. He concluded:
“Mr Bota’s conditions (both psychiatric and physical) are such that they could very well cause confusion due to the lack of concentration and memory deficits. It is not unusual that such patients could carry out what appear to be socially unacceptable act (sic). While actually, they are basically good, law abiding citizens (sic). I have throughout the years similar patients and I am convinced that Mr Bota is a similar person. I read a letter which was written by Dr David Keen, and I do not agree with his views. Mr Bota had already a psychiatric condition and he need not be in a state of “delirium” to carry out such action. It is determined by his state of mind at that time. I do hope that all the above will be taken into consideration and that he be treated humanely as he is a disadvantaged person.”
48. By letter dated 31 January 2003 Mr Kenny responded to the submissions made by the Applicant, and commented generally on the group certificates provided by him as follows:
“The debt calculations for 1997/98 identify relevant 19 group payers, including the Macquarie Nursing Service. Mr Bota has supplied only 9 group certificates (including Centrelink and Elizabeth Lodge, neither of which figure in the 1997/98 debt calculations) covering only $12,503.67 of his taxable income for that financial year, rendering a full reconciliation impossible. Moreover, the employment period stated by Mr Bota regarding certificate for San Antonio falls outside the debt period.
The debt calculations for 1998/99 identify relevant 11 group payers, including the Macquarie Nursing Service. Mr Bota has supplied only 3 group certificates (including Ashley house and Sisters of St Joseph, neither of which figure in the 1998/99 debt calculations), rendering a full reconciliation with his declared taxable income impossible.”
49. In relation to the points made by the Applicant concerning individual group certificates, in brief summary, Mr Kenny said:
a) as to Macquarie Nursing Services, it is likely that the discrepancy arises because the Group Certificate reflects only part of the period for which the Applicant was employed and/or several employers listed by Macquarie are the primary payers for tax purposes and not included in group certificates issued to the Applicant by Macquarie;
b) as to San Antonio Nursing Home, there is no evidence to establish that the group certificate provided by the Applicant was the only group certificate issued for the 1997/98 financial year in relation to the Applicant’s earnings from that nursing home, either directly or through Macquarie Nursing Services;
c) as to St Anne’s Nursing Home, there is no evidence of the shifts worked by the Applicant at St Anne’s or of any steps taken by the Applicant to rectify any error by dealings with either St Anne’s or with the Macquarie Nursing Service;
d) as to Ashley Nursing home, the small discrepancy of a few days is to the Applicant’s advantage and does not warrant the recalculation and increase of the debt;
e) as to St Vincent’s Hospital, Centrelink was advised by that employer that there were six direct payments of $186.00 within the period 12 January 1998 to 4 June 1998 together with two further payments totalling $158.10.
f) the differing dates of employment commencement have no bearing on the debt calculation;
g) as to the claimed use of a “female client’s statement” under the Applicant’s name, an incorrect assumption had been made about the gender of the Applicant’s first name (Aurel) but Centrelink did not use another client’s statement.
50. In relation to the Applicant’s medical condition, Mr Kenny stated that given that the Applicant was working there is no evidence to show that he was so impaired that he would not be able to appreciate his actions nor that his work was considered by his many employers as deficient. He also noted that Dr Guirgis’ report was written four years after the overpayment ended and in the present tense and there is no suggestion that Dr Guirgis was treating the Applicant during the period of debt accrual. Mr Kenny also noted that the Applicant suffered injuries in a motor vehicle accident in October 2000 and continued in employment after the debt was raised and claimed no income support from Centrelink between late October 1998 and August 2002 when he claimed disability support pension.
Consideration
51. It is not in dispute that the Applicant was overpaid newstart allowance but the Applicant has disputed the amount of that overpayment. He did not, however, provide the Tribunal with any details of the basis for this assertion other than that he alleged the Respondent had double counted some of his earnings and that there are some inconsistencies between payments advised to Centrelink by his employers and some of the group certificates issued to him. The Respondent, on the other hand, has provided the Tribunal with a spreadsheet detailing the precise amounts, and sources of those amounts of earnings by the Applicant during the period of the overpayment. The material shows that double counting of the Applicant’s income was avoided by isolating those employers who paid, or sometimes paid, the Applicant direct rather than through Macquarie Nursing Services. The spreadsheet also shows the calculations made by the Respondent in arriving at the total amount of the overpayment to the Applicant. The Applicant was given the opportunity to provide comments on the spreadsheet and covering material and he responded with reference to the group certificates mentioned above.
52. The Tribunal agrees with the Respondent’s submission that the inconsistencies claimed by the Applicant are insufficient to displace the detailed and documented calculations of the Respondent. Those calculations are based on the information provided to Centrelink by the Applicant’s employers and take careful account of the complexity of the Applicant’s employment and the need to avoid double counting of payments.
53. On the basis of the spreadsheet provided by the Respondent, and the material provided with it, the Tribunal is satisfied that the Applicant was overpaid $6,514.88 for the period 22 November 1997 to 22 October 1998.
54. Section 1224 of the Act provides in part:
"1224 (1) If:
(a) an amount has been paid to a recipient by way of social security payment; 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 this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth".
55. The Applicant did not dispute that he had entered incorrect information on his fortnightly continuation forms or that he had failed to include relevant information on the forms. On this basis, and pursuant to section 1224(1) of the Act, the amount overpaid to the Applicant is a debt due to the Commonwealth.
56. It remains for the Tribunal to consider whether the debt should be recovered. Section 1236 of the Act provides for the write off of debts to the Commonwealth in certain circumstances. Section 1236 provides in part:
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)the debtor is not receiving a social security payment under the Act and it is not cost effective for the Commonwealth to take action to recover the debt.
57. None of the circumstances listed in section 1236(1A) apply to the Applicant and so it follows that the debt may not be written off.
58. Section 1237A of the Act provides for the waiver of recovery of a debt to the Commonwealth where the debt arose from the administrative error of the Commonwealth. There has been no suggestion of such an error in this matter.
59. Section 1237AAD of the Act provides for the waiver of recovery of a debt to the Commonwealth in the special circumstances of the case. Section 1237AAD provides:
Waiver in special circumstances
1237AAD. 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.
60. Section 1237AAD requires three conditions to be met before waiver by the Secretary is permitted: waiver must be more appropriate than write off, there must be special circumstances that make it desirable to waive and the debtor must not have knowingly made a false statement or representation or knowingly failed to comply with a provision of the Act.
61. The Tribunal has already established that it is not appropriate in this case to write off the debt. Turning next to the question of whether the Applicant knowingly made a false statement or representation or knowingly failed to comply with a provision of the Act, it was not disputed by him that the information he included on his fortnightly continuation forms was incorrect and incomplete. The issue for the Tribunal to determine is whether the Applicant knowingly included this incorrect and incomplete information. The meaning of the word “knowingly” was considered by Deputy President Forgie in the Tribunal’s decision in Secretary, Department of Family and Community Services and Jonauskas [2001] AATA 72. Deputy President Forgie said:
“67. Mr Walsh drew my attention to the Tribunal’s decision in Re Saunders and Secretary, Department of Family and Community Services (unreported, [1999] AATA 952, 15 December, 1999, per Senior Member Kiosoglous). After reviewing other authorities in the Tribunal (Re Callaghan and Secretary, Department of Social Security (1996-97) 45 ALD 435, Deputy President Forgie; Re Morgan and Secretary, Department of Family and Community Services, unreported, [1999] AATA 390, 8 June, 1999, Associate Professor Hotop, then Senior Member; and Re Armitage and Secretary, Department of Family and Community Services [1999] AATA 700, 17 September, 1999, Dr Christie (Member)), Senior Member Kiosoglous concluded:
“Following these decisions, in this Tribunal’s opinion, the interpretation to be given the phrase ‘knowingly failing’ requires a standard of conscious, deliberate failure to comply with a provision of the Act. Inadvertent or unintentional failure does not constitute ‘knowingly’, even when an applicant knows he needs to notify. It is a civil standard of proof where ‘knowingly’ is a conscious and deliberate choice (Re Morgan) and also can include recklessness to the consequence of failing to comply with a provision of the Act.” (paragraph 22)
68. Although I am reluctant to disagree with a colleague and have only respect for Senior Member Kiosoglous, I must do so on this occasion and maintain the position I adopted in Re Callaghan when I said:
“(48) There is nothing in s 1237AAD which suggests that the word ‘knowingly’ should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.” (page 445)
69. I reached that conclusion after considering the discussion of “knowledge” by Matheson J in Hooi v Brophy (1984) 52 ALR 710; 3 IPR 16. He referred at pp. 712-713, to a discussion of “knowledge” by Devlin J (as he then was) in Taylor’s Central Garages (Extra) Ltd v Roper [1951] WN (Eng) 383 at 385:
“…‘There are, I think, three degrees of knowledge which it may be relevant to consider in cases of this sort. The first is actual knowledge, and, of course, the justices may find it because they infer from it the nature of the act that was done, for no man can prove the state of another man’s mind; and they may find it, of course, even if the defendant gives evidence to the contrary. They may disbelieve him, and think that that was his state of mind. They may feel that the evidence falls short of that, and, if they do, they have then to consider what might be described as knowledge of the second degree: they have to consider then whether what the defendant was doing was, as it has been called, shutting his eyes to an obvious means of knowledge. Various expressions have been used to describe that state of mind. I do not think it necessary to look further, certainly not in cases of this type, than the expression used by Lord Hewart CJ, in a case under this section. Evans v Dell (1937) 53 TLR 310 at 313: “… the respondent deliberately refrained ‘from making inquiries’, the results of which he might not ‘care to have’.”
‘The third sort of knowledge is what is generally known in the law as constructive knowledge. It is what is encompassed by the words ‘ought to have known’ in the phrase ‘know or ought to have known’. It does not mean actual knowledge at all: it means that the defendant had in effect the means of knowledge.’ (my emphasis)” (page 385)”
62. The Tribunal adopts, with respect, the reasoning of Deputy President Forgie and her conclusion that the word “knowingly”, as it appears in section 1237AAD, refers to “actual knowledge”.
63. The Tribunal notes from the detailed calculations made by the Respondent and from the T documents, that there are 24 fortnights in the overpayment period. In two of these (ending 19 December 1997 and 2 January 1998) there were no earnings. The Applicant declared his earnings correctly in only one of these 24 fortnights (ending 12 March 1998). There were seven fortnights with earnings in which the Applicant declared no earnings and 14 fortnights in which he underdeclared his earnings.
64. In this application the information sought from the Applicant by the Respondent was by way of direct and straightforward questions on a form to be completed by the Applicant at fortnightly intervals. The focal question asked by the form required a simple “yes” or “no” answer. The following question asked for a figure for earnings in a particular fortnightly period. The Applicant has submitted that his depression and the medication he was taking at the relevant time for that depression had the effect of making him disorganised and unable to deal with information. His evidence was that, because he was often employed through an agency, he was unaware of his earnings in a period. He also confirmed his evidence to the SSAT that he sometimes wrote “any figure” on his continuation forms.
65. The only medical evidence available as to the state of mind of the Applicant when completing his fortnightly forms, apart from documents T18 and T30, was the letter from Dr Keen (Exhibit R2) to the effect that the doses of medication taken by the Applicant would not have the effect of making him unable to answer straightforward questions or to distinguish right from wrong. Dr Guirgis’ report provides no comment on the Applicant’s state of mind at the relevant time or on the likely effect of medication taken by the Applicant during the relevant period. It must also be kept in mind that the Applicant continued, through the relevant period, to work on a casual basis in various nursing homes and hospitals. Although he stated that this work required little thought or initiative, the same could be said of completion of fortnightly continuation forms, and, in particular, the question on the forms that asks for a “yes” or “no” answer to the question of whether the Applicant did any work in a particular period. There is no evidence to suggest that the Applicant’s thought processes were impaired to the extent of being unable to discern whether he had or had not worked or to recognise a question that required a “yes” or “no” answer to this. As to the nomination of the amount earned by him in those 14 fortnights where he indicated that he had worked, while the Tribunal accepts that the Applicant’s ability to keep track of the precise amount of his earnings may have been impaired because of his depression or because of the way in which he was paid, the Tribunal notes that on each occasion a figure for earnings was provided by the Applicant, it was significantly below the amount of his actual earnings. His errors in this respect were consistently to his advantage rather than randomly inaccurate.
66. The Tribunal also notes that, even during the periods in which the Applicant claimed he was unfit to work, and relied on the certification of doctors to that effect, he did in fact work as established by documents T11, T27, T37 and T38. While the Tribunal accepts that this work involved the carrying out of tasks set by others and required little initiative, the work was casual work at a range of different venues, which, in itself, required some planning and organisation and the ability to negotiate public transport to various different locations at short notice.
67. The Applicant told the Tribunal that he would often answer “no” to the question of whether he had had work in a fortnightly period because that allowed him to then proceed to another part of the form and relieved him of the need to answer another group of questions. The Tribunal also notes the Applicant’s evidence that he is an educated man who speaks several languages and has been an entrepreneur and manager.
68. On balance, this evidence leads the Tribunal to conclude that the Applicant was not so impaired by his depression and his medication as to not have “actual knowledge” that he was making a false statement on his fortnightly forms. It follows that he “knowingly” made a false statement. The Tribunal has already concluded that the amount was paid to the Applicant because of that false statement or statements. Consequently, the requirements of section 1237AAD are not satisfied, notwithstanding any special circumstances that may be found to exist, and the debt may not be waived.
Decision
69. The Tribunal affirms the decision under review.
I certify that the 69 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Bell, Member
Signed: L Bonouvrie
AssociateDate of Hearing 9 January 2002
Date of Decision 17 March 2003
Applicant self represented
Advocate for the Respondent Mr John Kenny
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