Commonwealth of Australia v Ware

[1992] TASSC 105

Serial No B28/1992

List "B"

COURT:  SUPREME COURT OF TASMANIA

CITATION: Commonwealth of Australia v Ware [1992] TASSC 105; B28/1992

PARTIES:  COMMONWEALTH OF AUSTRALIA
  v
  WARE, Gaye Lillian

FILE NO/S:  871/1988
DELIVERED ON:  2 July 1992
JUDGMENT OF:  Zeeman J

Judgment Number:  B28/1992
Number of paragraphs:  21

Serial No B28/1992

List "B"

File No 871/1988

COMMONWEALTH OF AUSTRALIA v GAYE LILLIAN WARE

REASONS FOR JUDGMENT  ZEEMAN J

2 July 1992

Constitutional Law – Operation and effect of the Commonwealth Constitution – Revenue and appropriation generally – Money paid from consolidated revenue without legal authority – Recoverability.

Social Security – Sickness, unemployment, family allowance and other benefits – Eligibility for widow's pension – Whether widow living with a man as his wife on a bona fide domestic basis although not legally married to him.

1. It is an admitted fact that on various dates between 8 March 1984 and 18 September 1986 the defendant was paid instalments of widow's pension pursuant to the provisions of the Social Security Act 1947 ("the Act"). The plaintiff brings this action to recover the instalments of pension paid during this period. The basis of its claim is that the instalments of pension were paid to the defendant when she was not qualified to receive a widow's pension. The plaintiff claims the total of the instalments paid as money paid without Parliamentary authority, relying upon Auckland Harbour Board v R [1924] AC 318. The defendant has not submitted that the principle enunciated in that case ought not to be applied if the plaintiff has established that the defendant was not entitled to receive the instalments of pension paid to her.

1. Relevantly, that principle was explained by Newton J in Commonwealth of Australia v Burns [1971] VR 825 at pp827 – 8, in the following terms:

"In Auckland Harbour Board v R, [1924] AC 318, Viscount Haldane, speaking for the Privy Council, said at pp326, 327: '... it has been a principle of the British Constitution now for more than two centuries, a principle which their Lordships understand to have been inherited in the Constitution of New Zealand with the same stringency, that no money can be taken out of the consolidated fund into which the revenues of the State have been paid, excepting under a distinct authorization from Parliament itself. The days are long gone by in which the Crown, or its servants, apart from Parliament, could give such an authorization or ratify an improper payment. Any payment out of the consolidated fund made without Parliamentary authority is simply illegal and ultra vires, and may be recovered by the Government if it can, as here, be traced ... to invoke analogies of what might be held in a question between subject and subject is hardly relevant.' (Italics are mine.)

By the words 'if it can, as here, be traced' Viscount Haldane was, in my opinion, not referring to tracing in the equitable or proprietary sense, but to tracing the identity of the recipient of the money. ...

The principle set out in the passage which I have cited from Viscount Haldane's judgment in the Auckland Harbour Board Case has never since been questioned, so far as I have discovered. On the contrary it has been referred to in later cases without disapproval and has on occasion been applied."

1. I hold that if the plaintiff has established that the defendant was not qualified to receive a widow's pension at the relevant times, the payment thereof amounts to a payment made without the authority of Parliament and may be recovered by the plaintiff from the defendant as the recipient thereof.

1. At all relevant times the qualifications for an entitlement to a widow's pension were prescribed by the Act, s60 (later renumbered as s44). An essential qualification was that the recipient was a widow. At all relevant times the Act, s59(3) (later renumbered as s43(1)), provided that "widow" did "not include a woman who is living with a man as his wife on a bona fide domestic basis although not legally married to him". It is the plaintiff's case that at all relevant times the defendant was living with one Bruce Nettlefold as his wife on a bona fide domestic basis although not legally married to him. There is no suggestion in the evidence that the defendant was legally married to Mr Nettlefold at any time. The evidence is to the contrary. The plaintiff's case is that throughout the whole of the relevant period the defendant was living with Mr Nettlefold as his wife on a bona fide domestic basis.

1. I proceed to examine the evidence with a view to making findings of fact as to the nature of the relationship between the defendant and Mr Nettlefold. I make one preliminary observation and that is that I have concluded that I can place no reliance on the evidence of the defendant on any of the critical issues unless that evidence is supported by other credible evidence. I found her to be a thoroughly unsatisfactory witness who was prepared to tailor her evidence to suit the circumstances as she perceived them from time to time. I refer to one example. In January 1985 the defendant and Mr Nettlefold, as hirers, entered into a hire purchase agreement with Australian Guarantee Corporation Limited in respect of a new Toyota Corona automatic station wagon. At that time the defendant was residing in a flat at Bay Road, New Town. The plaintiff asserted, and the defendant denied, that she was residing at that flat with Mr Nettlefold. The hire purchase agreement required that the hirers pay 60 monthly instalments of hire of $334.22 each. At the time that the agreement was entered into the defendant was in receipt of a widow's pension at the rate of $261.80 per fortnight. The defendant asserted that at that time she was paying the rent for the flat (in circumstances to which I will refer later). The rent then appeared to have been at the rate of $65.00 per week or possibly a little less. When initially cross–examined in relation to the acquisition of the Toyota, the defendant said that although the hire purchase agreement was entered into by her and Mr Nettlefold jointly, it was her car and that she paid the monthly instalments to the finance company until her widow's pension was terminated (which on the evidence was in September 1986). She said that thereafter Mr Nettlefold continued to make the payments to prevent a repossession, which payments she repaid out of earnings when she obtained employment at Trident Seafoods. The whole thrust of her evidence at that stage was that it was her car. Later in the course of her cross–examination it was pointed out to the defendant that whilst she was living at Bay Road the amount of the pension then being received by her was insufficient to meet both the monthly hire purchase payment and the rent, not to mention ordinary household and other expenses in respect of her and her son. She then said that she and Mr Nettlefold were each paying one half of the monthly hire purchase instalments. That was in complete contradiction to her earlier evidence. It was an explanation given when she was faced with the impossible task of explaining how she was making various payments which she said she was making out of her pension. She gave that explanation without a moment's hesitation. In examination–in–chief the defendant said that she could well afford the monthly hire purchase payments (when patently she could not afford to pay them if her domestic and financial arrangements were as she related them in evidence) but that she required Mr Nettlefold's name on the contract as "a backup" if she could not afford the payments at any time. The suggestion that she could afford to make the hire purchase payments stood in stark contradiction to her evidence in relation to the arrangement which she said she made with Mr Nettlefold in relation to the payment of rent in respect of the flat in Bay Road to which I refer later.

1. The defendant is aged 49. She was formerly married and told me that she was divorced in about 1970, although other evidence given by her suggests that the divorce may have occurred some years earlier. She has three children, Jillian Maree Lindsay aged 30, Caroline Elizabeth Bindon aged 28 and Marko Ware aged 21. The two daughters are apparently issue of her marriage. Both daughters are married. There was no evidence as to who is the father of Marko. He is a single man who has continued living with the defendant. Subsequent to her divorce, the defendant and her two daughters took up residence at 35 Wyndham Road, Claremont, that being the home of the defendant's brother. Mr Nettlefold lived in the house next door, apparently with his parents. The defendant told me that the families were on friendly terms. Mrs Lindsay recalled meeting Mr Nettlefold socially during this time. Mr Nettlefold told me that he went out with the defendant occasionally during this period. I am satisfied that during the time that the defendant was living at her brother's house she was on quite friendly terms with Mr Nettlefold and that they went out together socially from time to time. After living at Wyndham Road for a year or so the defendant moved to Victoria with her daughters. Whilst she was there Marko was conceived. The defendant returned to Tasmania prior to his birth and he was born in Hobart. At about the time of his birth the defendant was allocated a Housing Department house at 33 Carcoola Street, Chigwell and she lived there with her three children for some seven years. I have no evidence as to what relationship, if any, she maintained with Mr Nettlefold during that period. In about 1977 the defendant and her three children moved to Queensland. She told me that the reason for this move was that it enabled her to assist her sister in caring for her ailing mother. The defendant remained in Queensland for some six or seven years and during that time lived at a number of addresses. For the majority of that time Mr Nettlefold also lived in Queensland and the evidence persuades me that he and the defendant had contact from time to time and were on friendly terms whilst both lived in Queensland. At one stage Mr Nettlefold occupied a house at 900 Rochedale Road, Rochedale which later was occupied by the defendant. Mr Nettlefold told me that whilst living at that address he obtained employment at Maroochydore, which was quite some distance away, and that the defendant took over "the running of the house". He later said that she moved in virtually as he left. I infer that there was some short period of time when both occupied that house. Mr Nettlefold returned to Tasmania when he lost his employment. His return was some little time before the defendant returned to Tasmania. For a short period of time (Mr Nettlefold said 4–6 weeks immediately prior to returning to Tasmania) Mr Nettlefold lived at a house at 7 Bart Street, Rochedale which was occupied by the defendant and at least some of her children.

1. In late 1984 or early 1985 the defendant returned to Tasmania with Marko. Initially she obtained temporary accommodation with a friend, Judith Whitehouse. She stayed with her for some weeks and then took up occupation of a flat at 65 Bay Road, New Town owned by Vernon Clark, by occupation a police sergeant. Sergeant Clark's evidence satisfies me that that was some time in February 1984. It is common ground that Mr Clark let the flat to Mr Nettlefold. Central to this case is the question as to who actually occupied the flat. The plaintiff conducted its case upon the basis that it was occupied by the defendant, her son Marko and Mr Nettlefold. The defendant, Mr Nettlefold and Marko all gave sworn evidence to the effect that Mr Nettlefold did not ever reside at that flat. It is common ground that the flat contained two bedrooms, one of which was occupied by Marko and the other of which was occupied at least by the defendant. At all times the latter bedroom contained a double waterbed. This bed was owned by the defendant. It is not disputed that insofar as Sgt Clark was concerned, the rent was paid by Mr Nettlefold although questions arise as to how those payments were made and by whom they were ultimately met. The effect of the defendant's evidence was that after she returned to Tasmania she had little money, and certainly insufficient to pay a bond and rent in advance. She sought the assistance of Mr Nettlefold and he agreed to provide assistance. The flat had been advertised in a newspaper upon the basis that prospective tenants were to attend at a particular time on a Saturday afternoon, no doubt with a view to inspecting the flat and, if appropriate, to enter into negotiations with Sgt Clark who had arranged to be present at the advertised time. The defendant said that she inspected the flat, that Mr Nettlefold went to the address but remained seated in a car, that he gave her a cheque for an amount equal to the "bond" of $200.00 and two weeks' rent; and that she handed that cheque to the landlord. Sergeant Clark had no recollection of Mr Nettlefold staying in the car. His recollection was that Mr Nettlefold and the defendant inspected the flat together. He said that he had with him a form of lease and that that was signed by Mr Nettlefold. I prefer the evidence of Sgt Clark.

1. The defendant said that she had difficulty with paying a fortnight's rent in advance on the rent days because the weeks in which the rent fell due were alternate weeks to those during which she received her fortnightly pension cheque. She said that in order to meet that difficulty Mr Nettlefold agreed to pay the rent when it fell due on the basis that the defendant would reimburse him during the following week when she received her pension cheque. The defendant told me that Mr Nettlefold called on alternate Fridays to bring a cheque in payment of a fortnight's rent which he often left in the meter box and that Sgt Clark called on the following Saturday and either took the cheque from the meter box or collected it from the defendant. She said that Mr Nettlefold was present at Bay Road only on odd occasions when Sgt Clark called for the rent. Mr Nettlefold told me that he called each fortnight with the rent which he either placed in the meter box or gave to the defendant so that she could hand it on to Sgt Clark. That evidence of the defendant and Mr Nettlefold stood in stark contrast to the evidence of Sgt Clark. He gave no evidence that he had ever collected the rent from the meter box. Importantly, it was never put to him in cross–examination that he had ever done so. His evidence was that it was his practice to call at the flat to collect the rent on Fridays and, if no person was then present at the flat, to return on the following day. He estimated that on 60% – 70% of the occasions that he collected rent he received it from Mr Nettlefold and that on the other occasions he received it from the defendant. Sergeant Clark said that on various occasions he observed that both the defendant and Mr Nettlefold were present at the flat. Sergeant Clark's evidence, which I accept, points to the defendant and Mr Nettlefold both residing at the flat. The evidence of the defendant and Mr Nettlefold as to their arrangements in relation to the payment of rent has an air of unreality about it and I reject it.

1. There was another piece of evidence from Sgt Clark which is of significance. He gave evidence that he went to the flat from time to time to mow the lawn. In the course of cross–examination he was asked why he had gained the impression that the defendant and Mr Nettlefold were living together at the flat. One of the matters he then mentioned was that on two or three occasions when he was mowing the lawn a female person called and enquired of him whether "her father and Gail were at home or away". Even if strictly inadmissible, that evidence is to be treated as evidence in this case. In any event I consider that the evidence was admissible. Its purpose was not to prove the truth of anything that was said by the female person, but rather to prove the making of the sort of enquiry which one would expect to be made if the enquirer's father and the defendant were both residing at the flat and which one would not expect to be made if that were not the case. (See Walton v The Queen (1988 – 1989) 166 CLR 283 per Wilson, Dawson & Toohey JJ, at p300 FF) The reference to the father and Gail could only have been a reference to Mr Nettlefold and the defendant.

1. As I have already mentioned, the defendant and Mr Nettlefold entered into a hire purchase agreement with Australian Guarantee Corporation Limited in January 1985. They were described in that agreement as residing at 265 Bay Road, New Town. Upon a proper construction of that agreement, it appears that Mr Nettlefold was described as being a shift worker employed by the E.Z. Company at Risdon and the defendant was described as being in receipt of workers' compensation in respect of employment in Queensland. There is no suggestion that the defendant was ever employed in Queensland, nor that she was ever in receipt of workers' compensation paid by any employer in that State. Each of Mr Nettlefold and the defendant signed that agreement. I have already expressed some reasons for concluding that the financial obligations assumed by the hirers under the agreement were patently beyond the financial resources of the defendant. Mr Nettlefold's evidence in relation to the entering into of the hire purchase agreement was that the defendant approached him indicating that she wished to purchase a car, that as a pensioner she would not be able to obtain the necessary finance, and that therefore she asked whether the agreement could be taken in their joint names. He said that he paid only several of the instalments. Later he quantified the number of payments made by him as being about 6. He said that he did not pay any of the instalments until the defendant's widow's pension was terminated. The last payment of pension prior to termination was made on 18 September 1986. Although I can infer that the defendant would have been receiving family allowance in respect of Marko, the position remains that if she was meeting the rent in respect of the flat at Bay Road and meeting the hire purchase instalments, the defendant would have had absolutely no income out of which to meet her normal living expenses including items such as food, clothing, light and power, school expenses and car running expenses. The inevitable conclusion is either that the defendant was not paying the whole of the rent and the car payments or that she had other independent financial resources. There is no suggestion that the latter was the case. The evidence points to Mr Nettlefold providing significant financial support to the defendant.

1. In August 1985 the defendant completed two Entitlement Review forms required by the Department of Social Security. In the first of those forms she stated that she was residing at 265 Bay Road, New Town and that she shared the flat with her daughter and her husband. She said that she paid her daughter rent of $35.00 per week and board of $35.00 per week. I observe that there was evidence from the defendant that her daughter, Caroline Bindon, and her husband stayed at the flat for some period, the length of which was variously described but which was not less than one and not more than four months, whilst they were looking for accommodation. There was no evidence from the defendant that she had financial arrangements with her daughter to the effect of those set out in the Entitlement Review form. The defendant could not have complied with such arrangements if at the same time she was meeting her hire purchase commitment. A week or two later the defendant completed the second of the Entitlement Review forms. She had been asked to complete this as she had not fully completed the earlier form. In this form she said that she paid her daughter, Mrs Bindon, $40.00 per week. Again there was no evidence from the defendant that she had any such arrangement with Mrs Bindon.

1. The answers contained in the forms suggest that the defendant was then endeavouring to hide something. I note that neither Mr nor Mrs Bindon was called to give evidence, although there was no suggestion that either was unavailable.

1. The totality of the evidence persuades me that the defendant and Mr Nettlefold lived together at Bay Road in an intimate relationship.

1. In November 1985 the defendant moved to 14 Regina Street, Glenorchy. I accept Sgt Clark's evidence that when leaving the flat in Bay Road the defendant and Mr Nettlefold told him that they had bought a house in Claremont. The defendant gave evidence that Mr Nettlefold approached her in relation to living at that address. The effect of the defendant's evidence was that Mr Nettlefold had arranged to rent the house at that address and then enquired of the defendant whether she wished to share the house. I do not accept that evidence. It is common ground that both the defendant and Mr Nettlefold occupied 14 Regina Street from November 1985 and that they have continued to do so, at least until relatively recently, subject at least to one short break. In about December 1985 the defendant apparently advised the Department of Social Security of her change of address. What she then told the Department was recorded in a departmental form, although it does not appear as though the defendant completed that form. I do find that she then informed an officer of the Department that her new address was 14 Regina Street, Glenorchy, that she was paying rent of $50.00 per week and that she was paying that rent to Mr B E Nettlefold of Garden Island Creek. Plainly that was not the true situation. On any view, Mr Nettlefold was living at the same address and I infer that by telling the Department that his address was Garden Island Creek the defendant was seeking to conceal from the Department the fact that Mr Nettlefold was living at the same address. It does not necessarily follow that any adverse inference can be drawn against the defendant by reason of that misrepresentation. That misrepresentation might be explicable upon the basis that the defendant was seeking to avoid telling the Department that Mr Nettlefold was living at the same address, not because the domestic circumstances were such that they disentitled her to a pension, but because she thought that the Department might construe the circumstances to be such as to disentitle her to a pension. Nevertheless on the facts of this case I infer that the defendant misrepresented Mr Nettlefold's address because she was seeking to hide from the Department the fact that she and Mr Nettlefold had an intimate relationship. I draw that inference because it was the fact that they had had such relationship during the time they had lived at Bay Road.

1. The premises at 14 Regina Street were owned by the members of a firm of accountants whose offices were nearby. One of the members of the firm, Mr Spencer, gave evidence that the rent was paid at those offices and was brought in by Mr Nettlefold or the defendant. He said that he addressed the defendant as Mrs Nettlefold from time to time. I accept that Mr Spencer assumed that the defendant was Mrs Nettlefold but I am not persuaded that he actually addressed her as such.

1. The house at 14 Regina Street contained three bedrooms. I find that one was occupied by Marko, and that as to the other two bedrooms at least notionally one was occupied by Mr Nettlefold and the other by the defendant. The defendant's evidence was that she shared the rent with Mr Nettlefold, he paying $60.00 per week and she paying $50.00 per week. She said that she paid half of the electricity accounts, purchased and paid for her own food, i.e. for herself and Marko, and did her own washing and ironing. Generally she gave the impression that she and Marko led their own lives looking after themselves, and that Mr Nettlefold led his own life, looking after himself. Mr Nettlefold did not go so far. He said that the defendant did the shopping and that he reimbursed her for what he considered to be his share of the cost of purchases. He said that the defendant did the cleaning of the house and did all washing for all the occupants, except that he washed his heavy work clothing. As to the overall expenses, he said that he paid what he described as "a good half or more". Mr Nettlefold said that he and the defendant shared the cooking and I accept that to have been the case, although his shift work no doubt meant that he prepared some of his own meals.

1. In August 1986 the defendant was interviewed by Mr Cook, an officer of the Department of Social Security. I accept that the defendant then told him that she was living at 14 Regina Street with Mr Bruce Nettlefold and Mrs Dorothy Nettlefold, whom she described as friends, and that she was sharing expenses with Mr & Mrs. Nettlefold. I reject the defendant's evidence that she did not mention Mrs Dorothy Nettlefold. I observe that the former Mrs Dorothy Nettlefold, now Mrs. Dorothy O'Donnell, gave evidence. She was formerly married to Mr Nettlefold but separated from him as long ago as 1968. I accept her evidence that the defendant approached her and made a request of her to say that she was living at 14 Regina Street. By informing Mr Cook that she shared the house with Mr & Mrs Netlefold the defendant was endeavouring to hide the true nature of her relationship with Mr Nettlefold. Subsequent to being interviewed by Mr Cook, the defendant requested that her pension be terminated. I reject her denials that she made any such request. Such a request was inconsistent with any belief on the part of the defendant that she had any entitlement to a widow's pension. The pension was terminated in September 1986. Although the plaintiff does not seek to recover such payments of widow's pension, if any, which were made on any subsequent occasion, it is appropriate to examine relevant subsequent events insofar as they throw light on the relationship between the defendant and Mr Nettlefold up until September 1986.

1. On 19 November 1986 the defendant made a fresh claim for a widow's pension. In that claim she represented that she resided at 16 Regina Street, Glenorchy. I find that at that time her daughter, Mrs. Lindsay, and her husband and children were residing at that address. The defendant told me that she had in fact moved in with her daughter and her family at 16 Regina Street. Mrs. Lindsay told me that she did not. I reject the defendant's evidence that she ever lived at 16 Regina Street. I find that she continued to live at 14 Regina Street, at which address Mr Nettlefold was also residing. On 2 December 1986 the defendant was interviewed by Mr Males, another officer of the Department of Social Security. During the course of that interview she told Mr Males that she was permanently residing at 16 Regina Street, Glenorchy with her son–in–law Barry Lindsay, and that the occupants of the house included him, his wife, their two children and Marko. I should say that there was no evidence that Marko ever resided at 16 Regina Street. Even the defendant said that he continued to reside at 14 Regina Street with Mr Nettlefold. She further told Mr Males that Mr Nettlefold was residing at 14 Regina Street with a female companion, Diane, and that the defendant believed that Mr Nettlefold and Diane were living in a de facto relationship. Mr Nettlefold said that he did know a lady called Diane, with whom he went out socially on a few occasions some years ago, but that there was nothing further to the relationship. I conclude that the defendant deliberately told Mr Males of the supposed de facto relationship on the part of Mr Nettlefold so as to dissuade him from forming any view that there was an on–going de facto relationship between him and the defendant. The lies which the defendant told Mr Males are not necessarily indicative of there then having been an on–going relationship between Mr Nettlefold and the defendant as her motive might have been to deny the existence of a relationship which was innocent and which was not such as to disentitle her to a widow's pension but which the Department might construe as being so disentitling. Nevertheless in the circumstances of this case I am persuaded that by her lies the defendant was endeavouring to persuade Mr Males that she was no longer living with Mr Nettlefold in an intimate relationship when the contrary was the case.

1. There are other aspects of the relationship between the defendant and Mr Nettlefold which are of relevance. The defendant from time to time accompanied Mr Nettlefold to dinners sponsored by his employer. From time to time they attended family weddings together. The defendant conceded that Mr Nettlefold's grandchildren might well call her "Nanny" from time to time.

1. The conclusions which I draw from the facts which I have found are as follows:

1The defendant and Mr Nettlefold together resided at the flat, 265 Bay Road, New Town, from February 1984 until late 1985.

2During that period of residence the defendant and Mr Nettlefold shared the double bed contained in the main bedroom of the flat.

3During that period of residence the defendant and Mr Nettlefold applied their respective incomes to their mutual needs but in such a way that Mr Nettlefold provided substantial financial support for the defendant and her son.

4The defendant and Mr Nettlefold jointly entered into a hire purchase agreement for the acquisition of a motor car which was to be their joint property.

5Mr Nettlefold entered into a lease in respect of the flat and paid the rent in respect thereof by way of providing a home for himself, the defendant and her son.

6         The defendant and Mr Nettlefold together moved to 14 Regina Street.

7Whilst the notional sleeping arrangements at 14 Regina Street may have been different from those pertaining in Bay Road the essential nature of the relationship did not change at any time up to September 1986.

8The defendant generally provided services of the nature which might be expected from a wife in that she did the cooking, cleaning and washing whilst they lived at Regina Street and by inference the same situation prevailed whilst they were at Bay Road.

1. In considering whether the plaintiff has established that at the relevant times the defendant was living with Mr Nettlefold as his wife on a bona fide domestic basis all facts of the interpersonal relationship between those two persons must be considered (Lambe v Director–General of Social Services (1981) 38 ALR 405 at p413). The conclusions which I have drawn are relevant facts of that relationship. Whilst at Bay Road the defendant and Mr Nettlefold lived together and slept together, he provided financial support and she provided domestic services. Whilst at Regina Street the position was no different except that it appears each had a separate bedroom available to him or her. The essential nature of the relationship was unchanged. I am satisfied that throughout the relevant period the defendant lived with Mr Nettlefold as his wife on a bona fide domestic basis. As the defendant has admitted the fact of the relevant payments, it follows that there must be judgment for the plaintiff in the sum of $17,527.20.