Christos Kyrgios and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2009] AATA 907
•25 November 2009
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2009] AATA 907
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/2070
GENERAL ADMINISTRATIVE DIVISION ) Re Christos Kyrgios Applicant
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Respondent
DECISION
Tribunal Professor RM Creyke, Senior Member Date25 November 2009
PlaceCanberra
Decision The Tribunal finds that the amount of $151,136 is not a deprived asset and should not have been taken into account in assessing the amount of Mr Kyrgios’s age pension. The matter is remitted to Centrelink to calculate the amount, if any, of any payment owing to Mr Kyrgios as a result of this decision. ....................[sgd].......................
Professor RM Creyke, Senior Member
CATCHWORDS
Age Pension – disposal of assets in excess of the limit in an income year – asset – intention at the date of the purchase – constructive trust – not a deprived asset
Social Security Act 1991 ss 9, 11, 1123, 1124, 1126AC
Social Security (Administration) Act 1999 s 68
Kintominas v Secretary, Department of Social Security (1991) 30 FCR 475
Martin v Martin (1959) 110 CLR 297
Calverley v Green (1984) 155 CLR 242
Gissing v Gissing [1971] AC 886
Muschinski v Dodds (1985) 160 CLR 583
Baumgartner v Baumgartner (1987) 164 CLR 137
Kidner v Secretary, Department of Social Security (1993) 31 ALD 63
Department of Social Security v Agnew (2000) 96 FCR 357
Repatriation Commission v Tsourounakis (2007) 158 FCR 214
Napier v Public Trustee (WA) (1980) 32 ALR 153
REASONS FOR DECISION
25 November 2009 Professor RM Creyke 1. In 1982 the Kyrgios family purchased a half share in a property at 80 Sunpatch Parade, Tomakin, on the New South Wales south coast. The half share of the title was registered under the names Mr Christos Kyrgios and Mrs Spiridoula Kyrgios. The settlement for the sale of the Tomakin property took place on 27 August 2008. The proceeds from the sale were approximately $335,000. This money was paid directly into the trust account of the vendor’s solicitor, Hansteins Lawyers. Mr and Mrs Kyrgios’s share of the proceeds, $161,137 was paid directly from the trust account to Mr and Mrs Kyrgios’s sons, John, George and Nick.
2. Mrs Kyrgios has been in receipt of the age pension since February 1989 and Mr Kyrgios, since May 1993. Centrelink assessed the amount of $151,136, being the settlement proceeds less the $10,000 limit for disposal of assets in an income year as asset deprivation, and deemed income on the balance for five years from 28 October 2008.
3. Mr Kyrgios sought review of the decision by a Centrelink authorised review officer on 29 October 2009. On 7 January 2009, the review officer affirmed the decision. On further review by the Social Security Appeals Tribunal (SSAT), the decision was affirmed on 26 March 2009. Mr Kyrgios again sought review by the Administrative Appeals Tribunal (Tribunal).
Background
4. Mr Kyrgios was injured in a work related car accident in the 1970s and has not worked since. He received a compensation settlement of $39,096 on 11 March 1980 and from 1986 weekly workers’ compensation payments of $498.30.
5. Mrs Kyrgios and two of her sons, John and George, owned the Dickson Foodlands for ten years. Mrs Kyrgios’s share in the business was intended to belong to the youngest brother who was still a minor at the time of the purchase of the supermarket. The three sons ran or assisted in the running of the supermarket. Mrs Kyrgios did not work there.
6. In 1982 the family bought a half-share of the property at Tomakin, the other half share was purchased by their cousins, Mr and Mrs Tsongas. The half share belonging to the Kyrgios family was put in the names of Mr and Mrs Kyrgios. However, the claim is that, being pensioners, the couple did not provide the purchase price; the deposit was provided from the Dickson Foodlands business and the balance was an overdraft and a loan from either a godfather or a cousin, repaid from the supermarket takings.
7. The ownership arrangement for the Tomakin property, according to Mr John Kyrgios, Mr Kyrgios’s first son, was a mark of respect for his parents, and because the Tsongas only had two children while the Kyrgios family had three. The mathematics made it easier to put the property in four names rather than five. The minority at that time of the youngest Kyrgios son was seen as a further complicating factor.
8. When Mrs Kyrgios applied for the age pension in 1989, she declared that she owned a quarter share of the property at Tomakin, estimated value $50,000- $60,000. Similarly, in 1993, when Mr Kyrgios applied for the age pension, he completed a Module R – Real Estate Details form, and advised that he too owned a quarter share of the Tomakin property.
9. On 7 February 2007, Mr Kyrgios attended a Centrelink office together with his son, John and his wife, seeking information from the specialist contact officer concerning the gifting provisions in the Social Security Act 1991 (Cth). The Centrelink Financial Information Service provided information to them about the potential impact on his age pension if the real estate at Tomakin was sold and the proceeds were given to their sons.
10. On 27 October 2008, Mr Kyrgios again contacted Centrelink concerning his age pension. The Centrelink officer was given permission to speak to Mr John Kyrgios, Mr Kyrgios’s nominee, Mr Kyrgios by then being frail. Mr John Kyrgios advised that the Tomakin property had been sold for $166,000 and Mr Kyrgios was intending to give the money to his three sons. The officer provided advice about the gifting rules and its potential impact on the age pension. The notation states Mr John Kyrgios ‘was not happy with this information and cannot understand why pension should be affected’.
11. On 28 October 2008, Mr Kyrgios contacted the Centrelink office and lodged information about the sale of the Tomakin property and the receipt of his share of the sale price, namely, $161,137 thus providing notification of a change of circumstances.[1] Mr Kyrgios also advised that the money was paid into the trust account of Hansteins Lawyers and then distributed to his three sons each of whom received $53,712. Mr Kyrgios requested that 28 October 2008 be regarded as the date the money was disbursed. As a consequence, the amount of age pension received by Mr and Mrs Kyrgios has been reduced.
[1] Social Security (Administration) Act 1999 (Cth) s 68.
Legislation
12. Section 68 of the Social Security (Administration) Act 1999 (Cth) requires an individual to notify Centrelink of any relevant change of circumstances.
Section 11(1) of the Social Security Act 1999 (Cth) (Act) defines asset:
asset means property or money (including property or money outside Australia).
Section 9 of the Act defines deprived asset:
(4) For the purposes of this Act, an asset is a deprived asset if:
(a) a person has disposed of the asset; and
(b) the value of the asset is included in the value of the person's assets by section … 1126AC.
Section 1123 of the Act deals with disposal of assets and provides that:
(1) For the purposes of this Act, a person disposes of assets of the person if:
(a) the person engages in a course of conduct that directly or indirectly: …
(ii) disposes of all or some of the person’s assets; … and
(b) one of the following subparagraphs is satisfied:
(i) the person receives no consideration in money or money’s worth for the … disposal.
Section 1124 of the Act enables a calculation to be made of the amount of the asset disposed of. The section, as relevant, provides:
If a person disposes of assets, the amount of the disposal or disposition is:
(a) if the person receives no consideration for the … disposal … - an amount equal to: …
(ii) the value of the assets that are disposed of; or …
(b) if the person receives consideration for the … disposal … -, an amount equal to: …
(ii) the value of the assets that are disposed of; …
less the amount of the consideration received by the person in respect of the … disposal …
Section 1126AC of the Act deals with the disposal of assets in an income year by a member or members of a couple. The section provides as relevant:
Disposals to which section applies
(1) If there is a disposal (the relevant disposal) on or after 1 July 2002 of an asset by:
(a) a person who, at the time of the relevant disposal, is a member of a couple; …
Increase in value assets
(2) Subject to this section, if the amount of the relevant disposal, or the sum of that amount and the amounts (if any) of other disposals of assets previously made by the person, the person's partner, or the person and the person's partner, during the income year in which the relevant disposal took place (whether before or after they became members of the couple), exceeds $10,000, then, for the purposes of this Act, the lesser of the following amounts is to be included in the value of the assets of the person and in the value of the assets of the partner for the period of 5 years starting on the day on which the relevant disposal took place:
(a) one‑half of the amount of the relevant disposal;
(b) one‑half of the amount by which the sum of the amount of the relevant disposal, and the amounts (if any) of other disposals of assets previously made by the person, the partner, or the person and the partner, during the income year in which the relevant disposal took place, exceeds $10,000.
Issues
13. The issues are:
·Whether Mr Kyrgios made a gift in excess of the allowable gifting threshold.
·If so, whether this amount is a deprived asset.
·If so, whether this amount should be taken into account in calculating the rate of age pension.
14. There is no question that Mr Kyrgios agreed that his sons should each receive a one-third share of the proceeds of the sale of the Tomakin property. Nor is there a question that, if a gift, the amount exceeded the allowable gifting threshold. The issue is whether the money belonged to Mr and Mrs Kyrgios and was theirs to give to their sons. Mr Kyrgios claims in relation to the final issue that the Tomakin property was purchased by his sons, and although the legal title to half of the property was in the names of himself and his wife, that interest was held by them on trust for their sons. Accordingly he claims that the proceeds of the sale of the Tomakin property should not be considered his asset. If that argument is accepted, the distribution of the proceeds of the sale among his sons would not be construed as a deprived asset in the calculation of the amount of his aged pension. The Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs disagrees with this argument.
Other evidence
15. Evidence of the source of monies for the purchase of the Tomakin property in 1982 was sketchy. The property was purchased for $27,000. The share of the Kyrgios family in the purchase would have been $13,500. At the hearing, Mr Kyrgios maintained that he had not paid any of the purchase price for the property, nor had he contributed to the rates or other outgoings.
16. Mr Kyrgios had received a lump sum compensation settlement of $39,096 on 11 March 1980. From his statements in Module C of his application in 1993 to Centrelink for age pension, Mr Kyrgios was also in receipt of gross weekly compensation of $498.30. At the hearing Mr Kyrgios stated that he only received the weekly payments from 1986. In 1989 when Mrs Kyrgios applied for the age pension, Mr Kyrgios stated in the Module P, Partner details that he had $15,000 invested in a term deposit.
17. These figures seemed to indicate that Mr Kyrgios had a lump sum which he could have used to contribute to the purchase of the Tomakin property. The SSAT found that it was satisfied ‘that the evidence supports a finding that Mr Kyrgios purchased the Tomakin property, possibly using monies he received from his workers compensation payout in 1980’. Mr Kyrgios, who is 81, and has mobility and other health issues, did not attend the SSAT hearing and was represented before the SSAT by his son, Mr John Kyrgios.
18. At the hearing before the Tribunal, Mr Kyrgios strongly denied that this finding by the SSAT was correct. He maintained that his sons alone had paid the purchase price of the Kyrgios’s family portion of the purchase price. His evidence was supported by the oral and written evidence of Mr John Kyrgios, Mr George Kyrgios, Mr Nick Kyrgios, Mrs Spiridoula Kyrgios, and Mrs Tsongas. Although, as family members or a cousin of Mr Kyrgios their evidence lacks independence, it was consistent, and the credibility of the witnesses was not impugned.
19. At the Tribunal, Mr Kyrgios said that the decision to purchase the property at Tomakin was made by two of his sons, John and George, that the money came from their business, Dickson Foodlands, and that his sons paid the rates, taxes and other bills. He acknowledged that sometimes the sons would give him the money and he would pay the bills but once his mobility reduced, his sons usually did so. Mr Kyrgios said that his sons had made the decision to sell the property. He claimed he had never considered the property to be his.
20. When asked to explain what happened to the $39,096 compensation settlement monies, Mr Kyrgios said that the money had substantially been spent on renovating his home at 36 Lowanna Street, Braddon. The renovations took place between 1980 and 1982. He estimated the cost to be about $26,500. He had sought bank statements or other documents from the Commonwealth Bank, and the Australia and New Zealand Banking Group Limited to corroborate these amounts, but he claimed records were kept by the banks only for seven years. Electronic records were not kept at that time. The balance of about $15,000 was put in an account for ‘rainy days’. None of this evidence about the renovation had been available to the SSAT.
21. The Tribunal was provided with the plans and specifications for the renovation, and invoices for plumbing and for building approvals. It appears that the additions included a new kitchen, laundry, bathroom, hall, sunroom, verandah, brick cladding and some paving.[2] The renovation included demolition work, as well as plumbing, electrical and constructions work. Given the extensive additions, and the fact that they included plumbing, an expensive item, despite the absence of evidence as to the actual costs of the renovations, the Tribunal is satisfied that the claimed cost of approximately $26,500 is probably accurate. In addition, as the representative for the applicant pointed out, given that $15,000 of the compensation payment was held in a term deposit account, if Mr Kyrgios had paid for the Tomakin property, the deduction of the purchase price of $13,500 and the $15,000 in the term deposit from the $39,096 would only have left some $10,500 for the renovations, which the Tribunal considers would have been inadequate to cover the work undertaken.
[2] Exhibit A3.
22. Assuming the amount spent on the renovations is correct, the figure of $26,500 in combination with the $15,000 in the term deposit amounts to $41,500, a figure in excess of the compensation settlement. This finding means that the Tribunal is satisfied that Mr Kyrgios is unlikely to have had spare funds to assist with the purchase of the Tomakin house. In turn this means, despite the lack of independent and corroborative evidence, that the Tribunal is satisfied that the Tomakin house was paid for, as they claimed, by Mr Kyrgios’s sons. Mr Kyrgios confirmed that money for the purchase price came from Dickson Foodlands and he thought from a loan and an overdraft from the Australia and New Zealand Banking Group Limited. Given that Mr Kyrgios was a pensioner and had limited savings, it is also more probable than not that the rates, taxes and other outgoings on the Tomakin property were also not paid for by Mr Kyrgios.
23. This raises the central issue in this application, namely, whether the Tomakin property should be regarded as an asset of Mr and Mrs Kyrgios. Mr Kyrgios acknowledged to Centrelink that his name was on the title of the Tomakin property and that he had a 25 per cent share in the property. At the hearing, he said he did so because he ‘did what is right’. At the same time, he said at the hearing that he never considered it was his property. He also told the Tribunal that he could not remember whether he told Centrelink in 2007 that the property was purchased for his sons, and that his sons paid the bills, nor could he remember whether the property was included in his will. In his written statement, however, he does state that he told the Centrelink officer of these circumstances. At the hearing he did recall that at one stage, transfer of the title to his sons was discussed but the stamp duty inhibited him taking that step.
24. Mr Kyrgios also said at the hearing that he could not remember that in 2007 a Centrelink finance officer had told him that if he gave away the proceeds of the property it would be considered a gift and could affect the amount of his age pension. He said that on the occasion of the 2007 visit to Centrelink, his son, John had done the talking. Following the sale of the Tomakin property he did recall that he had agreed that the solicitor who handled the sale was to divide the proceeds equally between his sons. However, he said the money was never deposited in his account. The money went into the solicitor’s trust account and was then disbursed to his sons. Mr Kyrgios also paid tribute to his sons’ financial assistance over the last couple of years with his medical and care expenses. He estimated that they have paid some $25,000 in total for these purposes.
25. At the hearing, Mr John Kyrgios said that the Tomakin property was purchased as a family holiday home and to help his father get better. He confirmed the source of the monies as stated by his father but said he could not remember whether he had borrowed money from his godfather or from Mr Tsongas. In relation to the interview with a Centrelink finance officer in 2007 he confirmed that he had made the appointment and had attended with his parents. He explained that the property was in his parents’ name but that he and his brothers had paid for it. He said the Centrelink officer did not appear to understand the arrangement and simply talked about ‘gifting’.
26. When asked who made the decision to sell the Tomakin property, he replied: ‘All of us’. When the property was sold, he said he and his father went to the solicitor to sign the transfer papers, and the papers concerning the distribution of the funds. He confirmed there was no discussion at that time about who was to receive the monies from the sale of the Tomakin property ‘because we all understood what was to happen’.
27. Mr George Kyrgios told the Tribunal that the family had bought the Tomakin property as an investment property. As he said, ‘since we worked at Foodlands, Dickson and did not receive regular wages, this was part of our remuneration’. He confirmed that the property was owned by his parents but used by the family. His view was that when the property was purchased, it was ‘more convenient’ to put it in the name of his parents. He denied that when the property was sold, thought was given to providing the proceeds to his parents.
28. The evidence at the hearing of Mr Nick Kyrgios was that his two older brothers’ owned the Tomakin house. He said that sometimes he paid the bills for the house. When asked why the house was not in the names of the three Kyrgios brothers, he said it was ‘just our house, for us’.
29. Mrs Tsongas told the Tribunal that her husband and John Kyrgios had undertaken the negotiations for the purchase of the Tomakin property. She said John paid for it. The money was the ‘boys’ money from the shop’. Her husband usually gave money for the bills to Mr Kyrgios, or sometimes her husband paid them but the payments were not made separately. When asked how she knew that the purchase price came from the sons, Mrs Tsongas said, ‘Because we discussed it from the beginning’. When asked why the property was not put in the sons’ names, she said words to the effect: ‘I only knew the money came from the boys’.
Consideration
30. The principal issue is whether the Tomakin property should be considered to be an asset of Mr and Mrs Kyrgios. The interest will not be an asset if Mr Kyrgios’s sons had a beneficial interest in the Tomakin property at the time it was purchased. It is accepted that it is appropriate to exclude from the assessable property, a pensioner’s property held only as trustee.[3] This requires an examination, when the property was purchased, of whether the beneficial title to the property was intended to be in the name of the Kyrgios’s sons, rather than their parents.
[3] Kintominas v Secretary, Department of Social Security (1991) 30 FCR 475.
31. The intention of the parties must be assessed as at the date of the purchase. As the Full Court said in Martin v Martin[4], ‘The attention must be kept steadily fixed on the one fact in issue – What was at the time the intention of the purchaser or transferor?’ The principle was confirmed by the High Court in Calverley v Green[5] when Gibbs CJ (with whom the majority of the Court agreed) said:
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser.
[4] Martin v Martin (1959) 110 CLR 297 at 305. See also Calverley v Green (1984) 155 CLR 242 at 261 per Mason and Brennan JJ.
[5] Calverley v Green (1984) 155 CLR 242 at 246.
32. The burden of proof of establishing intention is on the person asserting that a trust was intended. It depends on the intention with which the property was purchased by one party in the name of another.[6] Applying this principle, the burden falls on Mr Kyrgios’s three sons. However, assessment of intention is frequently not easy, particularly in family situations. In Calverley v Green[7] Mason and Brennan JJ quoted from Lord Diplock’s speech in Gissing v Gissing[8] which contains the principle ordinarily applied:
As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party’s words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct. It is in this sense that in the branch of English law relating to constructive, implied or resulting trusts effect is given to the inferences as to the intentions of parties to a transaction which a reasonable man would draw from their words or conduct and not to any subjective intention or absence of intention which was not made manifest at the time of the transaction itself. It is for the court to determine what those inferences are.
The difficulties involved in discerning intention are the reason the courts often impose an objective test for determining intention. As Deane J put it in Muschinski v Dodds[9]: ‘[The constructive trust] differs from … other forms of trust … in that it arises regardless of intention’.
[6] Martin v Martin (1959) 110 CLR 297 at 305.
[7] Calverley v Green (1984) 155 CLR 242 at 261.
[8] Gissing v Gissing [1971] AC 886 at 906.
[9] Muschinski v Dodds (1985) 160 CLR 583 at 613.
33. The evidence does not clearly disclose the intention of the sons. In 1982, Mr Nick Kyrgios was only fifteen and it is unlikely that his intention was relevant to the purchase of the Tomakin property. Nonetheless, his perception may be relevant. In evidence when asked why the house was not in the name of Mr Kyrgios’s sons, he said it was ‘just our house, for us’. Mr John Kyrgios said in his evidence that the Tomakin property was purchased as a family holiday home. Similarly, when asked who made the decision to sell the property he said, ‘All of us’. Mr George Kyrgios also said that although the property was owned by his parents it was used by the family. The conclusion is that the Tomakin property was regarded as a family home, for the general benefit of the family. The issue of who had the legal or the beneficial title was not something to which the family had turned their mind.
34. If the evidence of Mr and Mrs Kyrgios is taken into account, it is clear from their declaration to Centrelink of their joint 50 per cent interest that they understood that they were the legal owners. At the same time, as Mr Kyrgios’s evidence as to the conversation with the Centrelink financial officer in 2007 indicates, he concurred in his son, John’s description that although he had the legal title, all the payments on the property had been made by his sons and hence he did not regard the beneficial interest in the property as belonging to him. This understanding is borne out by the disbursement of the proceeds of the sale of the property immediately upon receipt in equal shares between his sons. The Tribunal notes that at the time of the purchase, neither Mr Kyrgios nor Mrs Kyrgios were in receipt of an age pension, so their intentions at that time were not coloured by the issues which have caused this case to be brought to the Tribunal.
35. Although no reasonable inference can be drawn from the words of the family at the time, the Tribunal considers such an inference may be drawn from the conduct of the family and their subsequent statements to Centrelink.[10] The fact that the actual payments of the purchase price and other outgoings were made by the sons, not the parents, is conduct which would, had the parents on sale attempted to retain the monies from the property, raise a reasonable inference of intention. That intention was that the beneficial interest in the property belonged to the boys who were paying for the property. The Tribunal finds that this inference is sufficient in equity to give rise to a beneficial interest in the sons.
[10] Calverley v Green (1984) 155 CLR 242 at 261.
36. If this finding is accepted, the legal consequences must be assessed. The constructive trust is a remedy only. It operates only where it would be unconscionable for the person to assert the beneficial as well as the legal ownership of certain property.[11] The effect of a finding that a constructive trust existed would be to impose on the legal owner, here Mr and Mrs Kyrgios, an obligation not to act in a manner which would be unconscionable in the circumstances. It is at this point that a finding that there is a constructive trust appears to be problematic. There is no apparent need for equitable assistance in these circumstances.[12] Mr and Mrs Kyrgios have not denied the sons the benefit of their investment in the Tomakin property. They have repaid their contribution by disbursing the proceeds of the sale to them. The sons do not need to assert their beneficial interest in a manner which would be protected by equity.
[11] Baumgartner v Baumgartner (1987) 164 CLR 137.
[12] Muschinski v Dodds (1985) 160 CLR 583.
37. These circumstances, however, do not prevent reliance on the principle. In Kidner v Secretary, Department of Social Security[13], Drummond J said:
Before a constructive trust can arise in a case in which one person has increased the value of another’s property, it is essential that the circumstances of the case must show that it would be unconscionable on the part of the legal owner to assert his legal title free of any claim by the person who has improved the property. I do not, however, think that a constructive trust can only arise in such a case if the legal owner in fact asserts that his legal title is unfettered by any interest in favour of the improver. The critical thing must be that the claimant has acted in circumstances in which it would be unconscionable for the legal owner to deny that person’s claim in respect of the property … I see no reason why, in an appropriate case, the Court would not exercise its jurisdiction to grant a declaration that a constructive trust exists even though the legal owner has not, in fact, denied the other’s claims in respect of the property because it would be unconscionable for him to do so, if he were so minded. (emphasis added)
[13] Kidner v Secretary, Department of Social Security (1993) 31 ALD 63 at 75-76.
38. Mr and Mrs Kyrgios’s sons have clearly paid for and increased, by their payments for its upkeep and maintenance, the value of the Tomakin property. In other words, the sons acted to their detriment in reliance upon a believed state of affairs.[14] In these circumstances equity would have been prepared to assert the existence of a constructive trust. So, although there was no unconscionable conduct on the part of Mr and Mrs Kyrgios this would not necessarily deny that a finding of a beneficial interest can be made.[15]
[14] Department of Social Security v Agnew (2000) 96 FCR 357 at 363.
[15] See also Repatriation Commission v Tsourounakis (2007) 158 FCR 214 at [104].
39. Applying these principles to the facts of this case means that the argument that Mr Kyrgios and his wife were not entitled to the beneficial ownership of the Tomakin property is correct. Before concluding, however, it must be determined whether the trust is subject to any exception. Such an exception could apply if the relationship of the parties indicates that the intention was to make a gift to the non-purchasing party at the time of the purchase.[16] Such cases are said to arise when a parent gives the legal title to a child or a husband to a wife, that is, in cases in which one party has a legal obligation of financial support of the other.[17] The Tribunal has not been able to identify any cases in which the exception has applied where it is the children who are the actual purchasers of the property and the legal title is in the name of their parents. Nonetheless, it is possible to contemplate a case in which children are financially responsible for their parents.
[16] Calverley v Green (1984) 155 CLR 242.
[17] Napier v Public Trustee (WA) (1980) 32 ALR 153 at 158.
40. In 1982, although neither of their parents were working, Mr Kyrgios had received the compensation settlement which he substantially used to pay for his renovations. So, although his regular compensation payments did not commence until 1986, it can be assumed from the fact that he was undertaking renovations, that his financial circumstances were then manageable. So it is unlikely that the sons then regarded themselves as having an obligation of support for their parents. No evidence was provided to this effect, other than the statements by Mr John Kyrgios that since his father was a pensioner, he did not have money to contribute for the Tomakin purchase. Accordingly, the Tribunal finds that even if there is a legal obligation of financial support, there was no practical obligation of financial support by the sons for their parents in 1982. In those circumstances, any exception to the principle that the legal and the beneficial ownership were held by different parties, does not apply.
41. The Tribunal, therefore finds that the proceeds of the sale of the Tomakin property which were held on trust are not an asset for the purposes of section 11(1) and section 1126AC of the Act.[18] On that basis, the distribution of the proceeds to Mr Kyrgios’s sons is not a deprived asset and should not have been taken into account in assessing the amount of Mr Kyrgios’s age pension.
[18] Kintominas v Secretary, Department of Social Security (1991) 30 FCR 475.
42. The Tribunal is mindful that the consequences of the Tribunal’s findings in this case are that Centrelink will need to make more careful enquiries of applicants for age pension who assert ownership of property in order to ascertain whether the person has both the beneficial and the legal ownership of any property which is claimed by the person.
I certify that the 42 preceding paragraphs are a true copy of the reasons for the decision herein of Professor RM Creyke, Senior Member.
Signed: .....................[sgd]........................................
J. Lakin, AssociateDate of Hearing 26 October 2009
Date of Decision 25 November 2009
Solicitor for the Applicant Welfare Rights and Legal CentreSolicitor for the Respondent Centrelink Legal Services
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