Cornish and Secretary, Department of Education, Employment and Workplace Relations
[2011] AATA 817
•18 November 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 817
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/2942
GENERAL ADMINISTRATIVE DIVISION ) Re SALLIE CORNISH Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/1656
GENERAL ADMINISTRATIVE DIVISION ) Re WILLIAM CORNISH Applicant
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date18 November 2011
PlaceSydney (Heard in Gosford)
Decision The decisions under review are affirmed. .....................[sgd].........................
Ms N Isenberg
Senior Member
CATCHWORDS
SOCIAL SECURITY– whether entitled to allowance because of employment income – whether debt can be written off or special circumstances existed – partner allowance – parenting payment – decision under review affirmed
SOCIAL SECURITY– whether member of a couple – marriage-like relationship – specified criteria for forming an opinion about relationship – Newstart allowance – whether debt can be written off or special circumstances existed – decision under review affirmed
Social Security Act 1947
Social Security Act 1991 s 4, 1228B, 1236, 1237AAD, 1068
Social Security (Administration) Act 1999 s 60
Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Cullinane and Secretary, Department of Family and Community Services [2004] AATA 789
Davy v Secretary, Department of Employment & Workplace Relations (2007) 94 ALD 693
Main v Main (1949) 78 CLR 636
Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546
Secretary, Department of Family and Community Services and WAP [2000] AATA 7
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 26
Secretary, Department of Social Security v Hales [1998] FCA 219
SRWW and Secretary, Department of Family and Community Services [2001] AATA 495
Staunton‑Smith v Secretary, Department of Social Security (1991) 32 FCR 164
REASONS FOR DECISION
18 November 2011 Ms N Isenberg, Senior Member DECISIONS UNDER REVIEW
1. Sallie Cornish seeks review of the decision of the Social Security Appeals Tribunal (“SSAT”) made on 2 June 2010, affirming decisions made by a Centrelink Authorised Review Officer, to raise and recover the following debts, totalling $81 237.36:
(a)$5929.65, being an overpayment of partner allowance for the period 17 September 1994 to 23 June 1995
(b)$22 317.10, being an overpayment of parenting payment partnered for the period 6 July 1995 to 12 March 1998
(c)$19 480.52, being an overpayment of parenting payment partnered for the period 23 March 1998 to 30 June 2000
(d)$33 510.09, being an overpayment of parenting payment partnered for the period 1 July 2000 to 11 January 2004
2. Each of Mrs Cornish‘s debts was subject to a recovery fee of 10 per cent pursuant to section 1228B of the Social Security Act 1991 (‘the Act’)
3. William Cornish seeks review of the decision of the Social Security Appeals Tribunal (‘the SSAT’) made 16 March 2010, affirming decisions of a Centrelink Authorised Review Officer (‘ARO’), to raise and recover the following Newstart allowance debts, totalling $83 592.41 :
(a)$10 062.20 for the period 25 December 1993 to 16 September 1994
(b)$5390.60 for period the period 17 September 1994 to 23 June 1995
(c)$37 620.89 for the period 8 July 1995 to 30 June 2000
(d)$30 518.72 for the period 1 July 2000 to 15 January 2004
ISSUES
·Whether Mrs Cornish was paid income support payments she was not entitled to because of her income from employment.
·Whether Mr Cornish was a member of a couple (with Mrs Cornish), as defined by section 4 of the Act, and if so did Mr Cornish receive Centrelink benefits to which he was not entitled
·If there are overpayments, whether there are any grounds for non-recovery of all or part of the debts of Mr and Mrs Cornish.
THE EVIDENCE
4. Mr Cornish gave evidence, as did Mrs Cornish, Mr Cornish’s sisters Madeleine and Karen Moeller, and their husbands Greg and William Moeller, as well as Brett McGarrity. Statements in support of Mr and Mrs Cornish were also provided by R Cornish, Michael Drake, Aron Rand, Kenneth Hulbert, Barry Buist, John and Judith Buist, Bill Litchfield, Mr CJ Shoesmith, Colleen Smith, Mr FC Lawrence and Ian Press.
5. It is convenient to set out Mr and Mrs Cornish’s history.
Background
6. Mr Cornish and Mrs Cornish (nee Harris) married in 1984. Their eldest two children, M and R were born in 1985 and 1987 respectively. Shortly before R was born they moved from Sydney to rental accommodation on the Central Coast. At that time Mr Cornish was doing gyprocking and other related activities, but as is the case with the construction industry, it was seasonal and erratic.
Purchase of Pacific Avenue
7. In October 1987 Mr and Mrs Cornish moved into their own house (‘Pacific Avenue’). At the time, R had just been born and shortly thereafter, when he was about four to six months old, Mrs Cornish went back to work on night shift at St Luke's Hospital in Potts Point. She worked full-time because Mr Cornish had an accident in which he injured his back and shoulder.
8. Pacific Avenue consisted of a two storey house which, with some minor modification, provided two separate residences, each with its own entry. Mr Cornish‘s parents lived downstairs and Mr and Mrs Cornish and the two children lived upstairs. At the back of the property was a self-contained granny flat which Mr Cornish gradually did up over a couple of years. Council approval was obtained for a renovation to make a two bedroom villa in due course.
9. Mr Cornish’s parents, paid the deposit of $20,000, on the purchase price of $90,000, which with various associated expenses, came to about $100,000. as his parents were only receiving a UK veteran’s pension they were precluded from obtaining finance, so Mr and Mrs Cornish borrowed $90,000 by way of mortgage which was paid in satisfaction of the remaining purchase price. According to Mr Cornish, his parents were also ‘on the finance documents’ and ‘on the title deeds’ because they put up the ’10 per cent deposit’, which was their entire savings. In fact only Mr and Mrs Cornish are listed as joint tenants and there is no mention of the parents’ interest in the property at all. Mr and Mrs Cornish made the mortgage re-payments because they ‘would have been paying rent anyway’. Mrs Cornish said that her in-laws helped with bills but paid no rent or made any contribution towards the mortgage, which was paid by her and her husband out of his wages.
10. Mr Cornish said there was no discussion at the time of purchase about the difference between joint tenants and tenants-in-common, and he has only recently learnt the difference. He now understands that had he died before his parents, the entire property would have gone to Mrs Cornish. He said that they did not have legal advice, ‘only conveyancing’. Neither has ever considered changing the title to tenants-in-common.
11. On 7 October 2009 Mr and Mrs Cornish made a joint statutory declaration (although signed only by Mr Cornish) concerning the interests of his parents and siblings in Pacific Avenue. He wrote that his parents had paid $20,000 which was about 20 per cent of the purchase price. The agreement was that if his parents passed away ‘during the ownership of the property any profit or ownership would become a three-way split between [him and his sisters]’.
12. Mr Cornish said that the ‘arrangement’ was that if anything happened to the parents he and his two sisters would have a third share of the property each. The ‘arrangement’ was undocumented and, Mr Cornish said, only ‘came on’ in 1997 when their mother passed away. Mr Cornish provided a copy of a very short document said to be ‘attached to his mother’s will’. The handwritten note said that she had lent ‘Billy’ (Mr Cornish) a total of $26,000 in 1987 in relation to Pacific Avenue. He said ‘they all shook hands on it in front of their mother’ before she died. Madeleine Moeller, one of Mr Cornish’s siblings, understood her parents had put ‘quite a bit of money – about $60,000’ into the houses yet there was no discussion with their mother about the proposal before she passed away
13. Mr Cornish said that shortly after his mother died his sister – who was presumably the executor – had wanted something in writing about Pacific Avenue so he made a (written) ‘oath’ on 30 September 1997 that on the sale of Pacific Avenue it was to be divided equally between him and his sisters. Mrs Cornish said that she was not consulted as the arrangement was between her husband, his sisters and their mother.
14. Greg Moeller, Mr Cornish‘s brother-in-law provided, with his wife, Madeleine Moeller, Mr Cornish’s sister, a joint statement dated 4 November 2009. Greg Moeller also gave evidence. He said he had no discussions whatsoever with his mother-in-law about Pacific Avenue as it was not his business. He knew though that Mr Cornish and his sisters had discussions about it, and he knew of the arrangement between Mr Cornish and his sisters. He had no idea who was presently paying for the upkeep of the property and assumed Mr Cornish is taking care of it.
15. Madeleine Moeller said that after their mother died the climate was poor for selling the property and remains unsold. Madeleine Moeller understood her brother to be paying the mortgage and she has made no contribution. She has no idea about what is happening to the house. She understood that when it is sold she and her sister will get their parents’ share, which she hoped had increased in value. Recently there had been discussions about selling. Mr Cornish said there has been no opportune time to sell the property.
16. Karen Moeller said their mother had wanted the three children to share in the house ‘because of her input’. She knew that Mr and Mrs Cornish were on the title as joint tenants and that her parents’ interest was not recorded at all. Karen said she has other properties and is more concerned with them. Her husband, William Moeller said that nothing had been done with the property since Mrs Cornish senior had died and Mr Cornish was ‘the director of the company’ so it was in his hands. He understood there to be tenants but did not know what happened to the rent.
17. Neither sister was aware that the property has been used as security by Mr Cornish and is the subject of a substantial mortgage. Each said they trust their brother explicitly.
18. Mr Cornish said he continued to live there until he moved to Melaleuca Crescent (see below) in 2004 or 2005. He continued to pay the mortgage. Because he was living in one-third of Pacific Avenue (ie the upstairs flat) the rental from the other two thirds went to pay the mortgage. If other family members stayed they paid full rent. For example, Greg Moeller said that he and his family had stayed downstairs for a few months and thought they had paid about $100, because they had insisted on paying something. None of that income has been declared to Centrelink.
The video store
19. At the end of 1989 Mr Cornish worked in a video store with a view to seeing if they would buy the business, which they did in early 1990. To finance the purchase they obtained a second mortgage over Pacific Avenue for an additional $40,000. His parents, he said, were ‘happy to go along with it’. Mr and Mrs Cornish owned the business for about 18 months during which time both worked there in order to keep the store open extended trading hours.
20. However the business failed because of the introduction of DVDs and a new competitor only a short distance away. The former owners bought the business back in mid-1991. Mr and Mrs Cornish said that after the business failed Mrs Cornish went to work at Brisbane Waters Private Hospital, on a casual basis, doing mainly afternoon shifts two to three times a week. Records confirm that on 18 February 1991 Mrs Cornish commenced work at the hospital and worked there continuously throughout the debt periods. Mr Cornish said he went onto social security benefits and his parents covered the mortgage re-payments from their pension. Mrs Cornish said that they left the business owing a lot of money.
Mr Cornish’s parents’ health
21. At about the same time Mr Cornish’s father became particularly ill, and later in 1991 went into a nursing home, first in Sydney and then in Wyoming. Mrs Cornish said she had not got on very well with Mr Cornish's father; he was quite demented, erratic, bad-tempered and hard to get on with. Mr Cornish’s mother was also becoming ill.
22. Mr Cornish said that a major source of dispute between him and his wife was the amount of care he was providing to his parents. As a result, at the end of 1991 or early 1992 Mrs Cornish moved into the granny flat, only to find, shortly thereafter, that she was pregnant. She said it was easier for her to move into the granny flat rather than Mr Cornish because his parents remained in the house and required his care.
Mrs Cornish’s pregnancy
23. Mrs Cornish said she then moved back into the upstairs of the house for the duration of the pregnancy, although Mr Cornish said she remained in the granny flat, and only came into the house when she felt like it, such as when she needed company. The pregnancy led to a ‘reconciliation of sorts’, according to Mr Cornish but they were still living separately; they just weren’t arguing as much. During the pregnancy Mrs Cornish continued to work.
24. Mr Cornish said that his wife provided nothing by way of the children's upkeep other than toys and the like. He has never made enquires of the Child Support Agency about her responsibilities. Mrs Cornish said they worked things out between them. She was alleged by the Respondent to have told the SSAT that their arrangement was that Mr Cornish got the Centrelink benefits. She did not remember saying that. She did however pay $90 - $100 a week in cash to her husband by way of rent for the granny flat.
25. Mr Cornish thought that at the end of 1991 he had applied for carer’s payment. According to Centrelink records, on 12 June 1992 Mr Cornish signed a Newstart Allowance claim form indicating that he was married and that neither he nor his partner were employed, and he commenced receiving Newstart Allowance from 15 June 1992 (which continued until 16 January 2004). In cross-examination Mr Cornish said he did not know if his wife was working at that time. On the form he authorised his partner to make enquires about his payments. At no time did he revoke that authority. Mrs Cornish said she did know her husband to be receiving Newstart allowance. She could not recall if he mentioned he was obliged to look for work. So long as the children were happy she was not bothered ‘how he was doing it’.
Mortgage and re-financing
26. Mrs Cornish said she was unconcerned about how her husband was making the mortgage payments and assumed that if he was having trouble he would have told her.
27. During that year they re-financed again, according to Mr Cornish, with Mrs Cornish ‘co-signing’ the mortgage. He thought the monthly payments were paid out of his account.
28. In all, Pacific Ave has been re-financed 4 times, which surprised Mrs Cornish when this was discussed in cross-examination. She said that, the majority of the time, she just signed whatever Mr Cornish asked her to sign and there was no detailed discussion.
Relationship difficulties
29. Mr Cornish said they had been to see a chamber magistrate because they were ‘separated under the one roof’ but weren’t ready for a ‘formal separation with documentation’, or ‘didn’t want to start divorce’. He said they thought it was something they could get over. The crux of the matter, he said, was Mrs Cornish couldn’t be in the house with his ill parents and he knew they would pass away eventually. He was angry because he felt she was leaving it all up to him. She had wanted to move out with the children but it was their home and his parents were a big part of his children‘s life. He said in cross-examination that he had not wanted to get a divorce because that would be ‘final’ and he always hoped they would reconcile. He said there were times when their relationship was quite hostile. In submissions Mr Cornish said that they hadn’t wanted a legal separation – especially as they had seen someone they knew suicide under the stress of Family Court proceedings. They had wanted ‘to part as friends and just live apart and see how it went’.
30. Mrs Cornish said that she did not think they would get back together. Initially she did not hope that they would but after a couple of years, after his parents had died, they ‘started putting out feelers [to each other]’.
31. On 30 October 1992 Mr Cornish signed a Centrelink form giving permission for his wife to make inquiries about his social security payments.
J’s birth
32. Mr Cornish said that he accompanied his wife to the hospital for the birth (in December 1992) and took her and the baby, J, home. Mr Cornish said that he had taken the older children to visit their mother and the baby in hospital. He said that on return from hospital after the birth she lived in the house and there was a reconciliation for, alternatively ‘a few months’, ‘a couple of months’, or ‘6 or 8 weeks’.
33. Mr Cornish said that he did not know what Mrs Cornish was living on during the latter part of the pregnancy until she returned to work a month or two after the birth.
34. Mr Cornish could not recall when she moved back into the granny flat but thought it was soon after she went back to work, which was when J was six weeks old. Mrs Cornish said that she would do mainly morning and afternoon shifts and would go and see the kids in the afternoon. As to the care arrangements both said that Mr Cornish mainly took care of the baby and if he had to go to job interviews he would call on family members to take care of J. He said that the baby spent some time with his wife in the granny flat because she breastfed him for three or four months (or 3-4 weeks) but spent most of the time with him after the first few months. He said his wife would express milk for the baby in the event that she was going out or going to work. Mrs Cornish could not recall that she ever expressed milk for J.
35. Mr Cornish said that his wife mostly took the baby to baby health clinic although Mrs Cornish said her husband took him most of the time. Mr Cornish attended to the older children's needs, for example, he took them to and from school, bought their clothes, and supervised their homework. She would come into the house when she wanted to see them.
36. Mr Cornish said that people would seldom have seen them together with the baby. He said the immediate family knew the situation between him and his wife. He said some, but not all of their friends knew. He thought 7-10 friends knew and that was ‘a lot’. They wanted to keep the separation as quiet as possible because they were private people. He denied that as far as other people were concerned they might have continued to be a family unit. He said that Mrs Cornish would probably have moved out earlier had it not been for the children being young and impressionable. It was when she found the situation with respect to Mr Cornish's mother to be intolerable that she moved out. Mr Cornish thought his wife had undiagnosed postnatal depression.
37. During that time, Mr Cornish said in cross-examination, Mrs Cornish continued to contribute to the mortgage. When the mortgage was due he would ask her for money.
38. On 30 December 1992 Mrs Cornish completed a Social Security form relating to Family Payments, in which she gave her name as Sallie Cornish, indicated she was married, gave her address as Pacific Ave, and gave a tax file number. It was unclear from her evidence if she or Mr Cornish had completed the form. She said the TFN was different because she had one for her work, and one ‘for the video shop’. She has always ‘worked as Sallie Harris’. She said in cross-examination that she filled out any forms that her husband asked her to. She knew nothing, she said, of any family payments. She just gave all correspondence from the Department of Social Security, Families office or Centrelink to her husband. She would not even look at them. When she was at Pacific Ave he would not even given them to her.
39. Madeleine Moeller thought Mrs Cornish had moved out some time in 1993.
Living arrangements following Pacific Ave
40. Mr Cornish said that in late in 1993 or early 1994 his mother moved from the downstairs unit to be upstairs with him and the children. The downstairs unit was then used by relatives for periods of a few weeks at a time.
41. On 10 March 1994 Mr Cornish’s father passed away. Mrs Cornish attended the funeral. Mr Cornish also said that Mrs Cornish moved into the downstairs unit for 2 to 3 weeks in about March or April 1994.
42. In all, Mrs Cornish thought she lived in the granny flat for about 12 months. She said that her close friends had a general idea of what was going on but she is not one to discuss her business with people at work. She would tell people at work about J because she knew generally how he was going. Mrs Cornish would discuss her other children too as she knew what they were doing because she: had a lot to do with the school;, usually worked weekends; was able to pick them up and drop them off after school; and went to reading and other school activities. She said she would go to sports days and she and her husband would usually meet there.
Booker Bay
43. According to Mr Cornish in mid-1994, Mrs Cornish moved out of the granny flat and moved to a ground floor bedsit in Booker Bay, a couple of kilometres away from Pacific Ave, where she remained for about three or four years. Mrs Cornish said that J was nine months old when she moved – which would be about September 1993. She said she wanted her personal space because she had no real privacy at Pacific Ave and the bedsit was quiet reasonably priced (although at $100 or $120 per week was more expensive than the granny flat). She took her personal belongings and other items from the granny flat.
44. She would see the children once or twice a week but there was no formal arrangement. Mr and Mrs Cornish said she made no contribution towards the upkeep of the children other than clothing and presents and she would take them out. They would come to stay with her overnight but there wasn't much room. Mrs Cornish said that her husband would only come around to pick up or drop of the children; he did not have a key. He said he could only ever remember going to Booker Bay once, but later thought he may have been there on more occasions if he was just passing, ‘just to say hello’. At first he said he never actually went inside, but later said he went inside once.
45. During that time Mr Cornish did the cooking and cleaning for himself, the children and his mother. Prior to their separation they would share household chores. Sometimes Mrs Cornish would have a takeaway meal (which she would pay for) with them at Pacific Ave.
46. Mrs Cornish would also go to Pacific Ave once or twice a week for an hour or two to provide assistance to Mr Cornish’s mother until she went into a nursing home in mid or late 1996. Mrs Cornish said that she took her mother-in-law to doctors’ appointments and, when she became ill, she ‘stepped up because the children were very upset’. She was ‘there for her’. Mr Cornish agreed she had ‘occasionally’ provided emotional support to him but described her support during that time as ‘like a respite’. She said that she helped the family understand what was wrong with Mrs Cornish senior and they were devastated with what was happening to her so soon after their father passed away. Neither she nor Mr Cornish could recall if she retained a key to the Pacific Ave.
47. Mr Cornish said that in the three years that his wife was at Booker Bay she had a couple of Christmas dinners with him and his family. During the time she lived at Booker Bay she made no contribution to the Pacific Avenue mortgage. She said she would see her in-laws at birthdays if she was invited to a family event or if the kids wanted her to go but she did not have a tremendous amount of contact with them. She would see her sisters-in-law but not so much of her parents in law, which somewhat contradicted her evidence about providing support to Mrs Cornish senior.
48. Despite Mrs Cornish’s new residence and the separation, on 1 July 1994 Mr Cornish signed an entitlement review form which indicated, among other things, that he was married, notwithstanding ‘separated’ was an option. He said in cross-examination that that was a mistake. He wrote that he and his wife were not employed. Mr Cornish said in cross-examination that he thought Mrs Cornish might have been doing some part time work then. He agreed that at that time Mrs Cornish was paying rent at Booker Bay, which presumably she was financing through working. The form noted balances of bank accounts held in his name and in his wife’s name, but did not include the account into which her salary was paid. He said he was trying to get Family Tax Benefit paid to him but Centrelink would only pay it to the mother. In cross-examination his attention was invited to the Family Tax Benefit claim form of 30 December 1994 which invites completion by ‘a single father of the children’.
49. Mr Cornish said in cross-examination that he would take Mrs Cornish mail that had been addressed to her at Pacific Ave. However, as he had control over the ‘child allowance’ he would open bank statements himself because the money was paid into the joint account (in fact the account was in Mrs Cornish’s name alone). Half the time he didn’t even open the statements addressed to himself. He would withdrew money from both his personal account and the ‘joint account’ on a weekly basis, although he knew Family Tax Benefit to be payable only fortnightly. He thought several withdrawals he had made at various stages of $1000 would have been given to Mrs Cornish. Mrs Cornish said she had nothing to do with the account, had given him her access card and that he was the only person accessing the account – she trusted him. For 10 years she did not look at the account and let him do whatever he liked with the account notwithstanding that they were separated.
50. Mr Cornish said it was however his practice to give Mrs Cornish letters addressed to her at Pacific Ave that were from the Department of Social Security or Centrelink. Mrs Cornish said she never opened the letters. Consequently she denied receiving any of the Centrelink correspondence she was asked about in cross-examination. She could not recall that she had contacted Centrelink at all.
51. In cross-examination Mrs Cornish was referred to a letter dated 30 August 1995 addressed to her at Pacific Ave in relation to parenting allowance including information to the effect that her income which had been used in assessing entitlement was nil.
52. On 19 January 1996 Mr Cornish signed a Centrelink application for payment form which indicated, among other things, that he was married and living with his partner, and that his partner had not worked during the previous fortnight. In response to a specific question which asked whether, amongst a list of other changed circumstances, Mr Cornish had stopped living with his partner or if his partner had received ‘any other money’ within the previous fortnight, he marked the box marked ‘no’. In cross-examination he said he couldn’t now remember what he was thinking, but said they weren’t living together. He understood that he might lose Family Tax Benefit as they weren’t ‘legally separated’ and believed that was the advice he received from someone at Centrelink. He agreed he had ticked the box that he was partnered and that this was a lie.
53. On the same day Centrelink wrote to Mrs Cornish about her obligations as the recipient of Family Payment. She agreed in cross-examination that, had she read the letter she would have seen that she was obliged to tell Centrelink about her income. She had never told Mr Cornish about her income so that he could tell Centrelink and she had never advised Centrelink of her income herself.
54. On 18 August 1997 Mr Cornish’s mother passed away and, according to Mr Cornish, Mrs Cornish then moved back to Pacific Ave for a few weeks, although Mr Cornish continued to care for the children. Mr Cornish could not recall why she moved from Booker Bay at that time.
55. Mr Cornish‘s recollection was that she stayed in the downstairs unit because the granny flat was unavailable because the renovations to convert it into a 2 bedroom villa were still underway. Mrs Cornish's recollection was that she moved into the granny flat for a short time after she left Booker Bay. Mrs Cornish said that the owners of Booker Bay had wanted to put it on the market and had wanted the bedsit to be empty at the time it was for sale so had given her three months’ notice.
56. Mrs Cornish said that from time to time there was discussion about reconciliation.
Timbertop Drive
57. Mrs Cornish said she started looking for a place to buy before she left Booker Bay. When she found something she liked she asked her husband to come and look at it because he was formerly a builder.
58. In about September or October 1997, with the assistance of Mr Cornish, Mrs Cornish moved to a two-bedroom two-storey house (‘Timbertop Drive’). She took some of Mr Cornish’s mother's furniture and the vendor had also left some furniture. Mr Cornish said his wife had brought a lot of household items from New Zealand when she had first come to Australia in the early 1980s and things were still in boxes. Mrs Cornish said that she had accumulated things and bought household items at garage sales, the Salvos and Vinnies.
59. Mr Cornish said his wife acquired the property ‘in her own name’ using a ‘low doc’ loan through a broker he knew. He said that "some of the equity in Pacific Avenue was put down as a deposit”. Mrs Cornish thought the mortgage was for about $160,000, which was the whole of the purchase price. Mr Cornish said he thought he was ‘on the title deeds’ because Pacific Avenue had been used as security; it was just ‘the way it was set up’. Mrs Cornish thought the property had been acquired in joint names because she would have been unable to get a loan on her own, notwithstanding that she, and not Mr Cornish, was working. She acknowledged that she was prepared to buy the property as joint tenants with her husband notwithstanding that he had, by that time, made arrangements with his sisters in relation to Pacific Avenue without consulting her.
60. Mr Cornish said his sisters and brother-in-laws had guaranteed his wife’s loan because of their share in Pacific Avenue, notwithstanding that she was estranged from their brother. Mr Cornish said that his sisters ‘signed a guarantor [sic] of the original loan document for the deposit’ which was 10% of the purchase price. Greg and Madeleine Moeller said they were never asked to guarantee any loans to Mr and Mrs Cornish nor did they lend them any money. Karen recalled guaranteeing a loan for Mr and Mrs Cornish in relation to Timbertop Drive because her brother asked her to, because she had ‘equity in the home’. She had also loaned Mr and Mrs Cornish between $3000 to $4000 which had been paid back.
61. As to why he assisted his wife in purchasing a property of her own Mr Cornish said that he still loved her and had always loved her, so he was not going to stop helping her. Mrs Cornish was ‘desperate to get a place of own’ when she learned of his sisters having a share in Pacific Avenue on their mother's death. Mr Cornish said that Mrs Cornish paid the mortgage on Timbertop Drive out of her own bank account and he made no contribution. Similarly, she made no payment towards Pacific Avenue because “she had no equity in it”. He said that even though she might have been on the title, after his mother died, Mrs Cornish had no equity and she respected the fact that he and his sisters owned it.
62. Mrs Cornish said that while at Timbertop Drive the children would visit her on some weekends. Sometimes Mr Cornish would stay over if the children wanted him to do so - sleeping in the garage - notwithstanding that it was 5 minutes from his home. Mr Cornish said that at first the children were quite frightened of being there because it was relatively isolated. He stayed once or twice in the first six months. If he were staying the children might pitch a tent on the lawn. Mrs Cornish said he would stay over from time to time.
63. During that time Mrs Cornish made no contribution towards the children's upkeep other than general items like clothing and presents. As to making parenting decisions about the children they always, according to Mrs Cornish, "get things together about the kids" and tried not to fight in front of them. On a couple of occasions, according to Mr Cornish, his wife would be present at the children’s birthday celebrations.
64. Mr Cornish said she would have Christmas at his place or, once or twice, at his sisters’. Otherwise Mr Cornish thought she went to friends. She would always come around on Christmas Day for presents but she may not have stayed. They would buy each other a small gift, as they had always done. Mrs Cornish said that if she wasn't working she would ordinarily spend Christmas at Timbertop Drive with friends or with the children. She might only see her husband when he was dropping off or picking up the children.
65. Mr Greg Moeller had no recollection of Mrs Cornish ever attending his home for Christmas but did recall her at his sister in law’s home for Christmas. Madeleine Moeller could not remember. Karen said Mrs Cornish came with the children and that once Mr Cornish, the children, his sisters and their husbands went to her place.
66. From 10 October 1997 Mr Cornish advised Centrelink that his home address and address for correspondence had changed to Timbertop Drive. Centrelink also records Mrs Cornish’s address as changing to Timbertop Drive on the same date. However, neither advised Centrelink of a change to their contact telephone number until 2004. Mrs Cornish also continued using the same telephone number in documents from 2002 concerning a workers compensation claim (see below).
67. Electricity bills at Timbertop Drive were issued in the name of ‘WJ and SE Cornish’. Mr Cornish explained in cross-examination that this was because Mrs Cornish ‘took’ the Pacific Ave account with her because she had no payment history. He opened a new account for Pacific Ave.
68. Mr Cornish said that once or twice a week he would go to Timbertop Drive to collect his mail. He said there had been a lot of mail tampering in the area of Pacific Ave so had his mail re-directed. Mrs Cornish added that he had been unable to obtain a post box.
69. On 23 October 1997 the Roads & Traffic Authority of NSW (‘the RTA’) recorded a change of Mr Cornish’s address to Timbertop Drive.
70. From 9 May 1998 Mr Cornish provided the Timbertop Drive phone number to Centrelink as well as his mobile.
71. It was not until 25 March 1999 Mrs Cornish changed her address recorded with the RTA to Timbertop Drive. She said she may not have needed to renew her licence until then.
72. On 10 November 1999 Mr Cornish completed a statutory declaration, detailing the circumstances of his separation from his wife. It stated that an initial separation occurred in 1992, but the numeral ‘2’ appears to have been altered to ‘4’. He wrote that they remained under one roof until a ‘more final’ separation in October 1997, at which point his wife moved to Timbertop Drive. He wrote that the split had been amicable. He agreed in cross-examination that they had still cared for each other.
73. Mrs Cornish said that in about 2000 she had contemplated returning to New Zealand to live and went there for 6 to 8 weeks on her own to visit family and friends and investigated how she might live there.
74. On 20 November 2000 Mrs Cornish completed a tax file declaration, in which she declared her name was Sallie Harris and gave a different tax file number to that declared to Centrelink. In response to a request made by Centrelink, her employer advised that she had used that different tax file number throughout her employment.
75. On 19 January 2001 Mr Cornish completed a driver’s licence renewal form giving his address as Timbertop Drive.
76. On 8 March 2001 Mr Cornish was recorded as having enquired of Centrelink about Mrs Cornish’s Family Tax Benefit.
77. On 25 May and 16 June 2001 Mr Cornish and Mrs Cornish opened two separate home loan accounts with the Commonwealth bank.
78. Timbertop Drive was re-financed again in 2001 because it needed major renovations and a further $90,000 was borrowed.
79. In March 2002 Mr Cornish contacted Centrelink to advise that Mrs Cornish, described by Centrelink as ‘his partner’, had gone overseas.
80. In May 2002 Mrs Cornish was injured at work and on 20 June 2002, using the surname Harris, made a claim for workers compensation in which she recorded she was married and that her spouse was not working. She agreed in cross-examination that she considered Mr Cornish to be her spouse at that time.
81. On 6 August 2002 Mrs Cornish changed her name to Sallie Harris with the RTA.
82. From 15 August 2002 onwards Mrs Cornish was employed and earning income from Smart Health Solutions.
Final reconciliation
83. Mr Cornish said from the end of 2003 (although in submissions said 2002) they started seriously talking about reconciliation, although they had been talking about it prior to that. By that time his mother had been gone for a few years and the situation was more stable. Mrs Cornish said they were seeing more of each other and spending more time together. Mr Cornish said they felt a lot more at ease with each other and because they still felt a lot for each other it was the right thing to do. He said in submissions that he had always loved his wife and there were ‘no third parties’. The children also were very keen for them to get back together. They decided to put Timbertop Drive on the market and any profit Mrs Cornish made out of the property was to go towards the deposit for another property for them to move into as a family. Timbertop Drive was sold in about September or October 2003 with a long settlement period. Mrs Cornish said that after the mortgage and other loans were paid off there was probably about $100,000 to $120,000 available to put towards the next property they were to own (‘Melaleuca Cres’).
84. Mrs Cornish said that she and her husband were talking about getting back together and it was getting too hard for her to pay the Timbertop Drive mortgage on her own because she had over financed. She did not ask anyone for financial assistance. Also, they wanted to get a place together and she didn't want to move back to Pacific Avenue because there was too much family interest in the house and it had not been her home.
Plane Street
85. On 3 February 2004 the Timbertop Drive sale was settled for a total purchase price of $408,000 and Mrs Cornish moved into a four-bedroom house where the children would each have their own room because they were going to spend more time there (‘Plane St’). Mr Cornish said it had a pool and his wife wanted somewhere nice for the kids to spend ‘the summer’, although they did not move in until the end of summer. Mrs Cornish said she just wanted to ‘get a nice place’.
86. On 10 February 2004 her address on record with the RTA was changed to Plane Street.
87. Again she said did not want to live at Pacific Avenue. In any event, Mr Cornish said, she was unable to move into the ground floor at Pacific Avenue or the granny flat because both were being rented.
88. Mrs Cornish said that she lived at Plane St with the children and Mr Cornish would stay for a few days at a time. The rest of the time he was at Pacific Avenue. She considered they had reconciled by that time.
89. On 15 June 2004 Mr Cornish changed his address with the RTA to Plane St, but said in cross-examination that it was ‘only for a month’. On 21 July 2004 he had his Centrelink mail re-directed to Pacific Ave.
90. In 2004 Mr Cornish purchased a grocery delivery run which he did for six or seven years. Mrs Cornish said that things between them then ‘changed [for the better]’.
Melaleuca Cres
91. In July 2004 Mr and Mrs Cornish purchased Melaleuca Cres as joint tenants in the names Sally Harris and William Cornish. Subsequently, at the request of the bank when it was re-financed, they changed it to Sally and William Cornish.
92. In cross-examination Mr Cornish said that by the time they purchased the property they were ‘fully reconciled’. For the first 6 months Mr Cornish lived there on weekends and then moved in full-time. He had continued to live part-time at Pacific Avenue because he was able to park his delivery van there. Melaleuca Cres has 4 or 5 bedrooms and they continue to live there.
93. In his land tax return for 2005 Mr Cornish wrote that he and his wife were separated.
Current circumstances
94. For about the last 12 months Mr Cornish has been taxi driving in excess of 40 hours a week. Mrs Cornish works at Gosford Hospital full-time. Both are in reasonable health.
95. Mr and Mrs Cornish continue to reside at Melaleuca Cres, but the elder two children have now left home. Their youngest child, J, receives youth allowance and makes no contribution to the household. They have credit card debts of about $50,000 which have been accumulated since 2004. Mrs Cornish owes about $18,000 on the car which is being paid off at $160 a fortnight.
96. The mortgage on Melaleuca Cres is about $390,000. The mortgage on Pacific Avenue is currently about $330,000, and all three dwellings – upstairs, downstairs and the granny flat which has been converted into a villa – are rented for a total of about $585 a week. Mr Cornish said that Pacific Avenue is falling into some disrepair and the rent only just covers the mortgage of about $2300 a month and there may even be a shortfall of about $100 a month or so which he and Mrs Cornish pay. Conversely, Mr Cornish estimated in cross-examination that, if Pacific Ave were sold he and his sisters would each receive between $20,000 and $30,000 each.
97. Mr Cornish said that from time to time there had been disagreement with his sisters about Pacific Avenue and whether it should be sold. He estimated that on sale they would only achieve about $400,000.
Other witnesses
98. Karen and William Moeller, Mr Cornish’s sister and her husband, provided a statutory declaration that indicated during the early to mid-1990s, Mr and Mrs Cornish were living at Pacific Ave but were unable to continue to live together, but for the sake of the children they agreed to remain under one roof, but no longer as a married couple. Family, friends and colleagues at the time understood that they were separated and led separate lives. This arrangement continued for several years, during which time Mr Cornish continued to be the main carer for his parents. Then after his mother died in 1997, Mrs Cornish moved out of the house in Pacific Ave to Timbertop Drive.
99. In her evidence Karen Moeller said that it was obvious that her brother and sister in law were under stress. Mrs Cornish had told her she ‘couldn’t take it anymore’. She observed that they were very unhappy with each other and Mrs Cornish would get very upset. She would not, however, tell her all her troubles because she is a very quiet person. She understood her to have moved out of the house when Mrs Cornish senior died.
100. Mr Greg Moeller said that he had had discussions with both Mr and Mrs Cornish about their relationship – ‘just surface stuff’ and ‘didn’t want to probe’. He said he and his wife realised there was ‘a little bit of friction going on’; there was ‘a bit of tension, a bit uneasy’. He and his wife were upset for the kids. He said they did not see Mr and Mrs Cornish often. He dated this as sometime in 1994 or 1995.
101. Madeleine Moeller said in the statement she and her husband Greg provided that Mrs Cornish had ‘moved away to Timbertop after her parents had died’. She said in her evidence that she knew that because it was general knowledge that they had spilt up. She said it was none of her business. She said she and her husband were overseas in 1993 and 1994.
102. Mrs Karen Moeller said she did not know what the arrangement at Pacific Ave had been – she just knew that her brother and sister in law wanted to be apart. She was not a regular visitor to Pacific Ave.
103. Mr William Moeller said they did not go to Pacific Ave very often but knew Mrs Cornish to have moved into the ‘garage conversion’ before Mrs Cornish senior died in 1997. He said that Mr and Mrs Cornish had not discussed their relationship but he and his wife hoped they might get together. He said they tried to unify them on many occasions and if there was any family events on they would ask both of them to come.
104. Brett McGarrity completed a statutory declaration dated 26 October 2009, stating he was aware that Mr and Mrs Cornish were separated whilst at Pacific Avenue, as she was living in the flat at the back of the property, whilst Mr Cornish and the kids lived in the main house. He also stated he did work at both Pacific Ave and, for Mrs Cornish, at Timbertop Drive. He gave evidence that he did not really know Mrs Cornish and did not know the couple socially. He said that Mr Cornish bought paint from him in the mid-to-late 1980s and that was how he got to know him. He might have a couple of beers at the pub with Mr Cornish. He said he did some gardening and painting at Timbertop Drive which Mr Cornish had arranged on behalf of his wife. He could not recall who had paid him. He said that he did not like getting involved in other people's business. Mrs Cornish said she did not know Mr McGarrity at all and had only met him 2 or 3 times, and never socially.
105. Kenneth Hulbert wrote that he could confirm that Mr and Mrs Cornish lived separate lives during this time, but lived under the same roof for the sake of the children.
106. Ian Press stated he had been involved in the construction of the granny flat at Pacific Avenue, and that its purpose was ‘to accommodate his estranged wife Sallie’. He also stated he inspected the Timbertop Drive property prior to purchase and carried out minor works on the property over a period of time for Sallie. Mr Press was not available to give evidence. Mr Cornish was cross-examined about how Mr Press knew that the granny float was being built to accommodate Mrs Cornish in circumstances where Mr Cornish said they were ‘private people’. Mr Cornish said that his family and certain friends of Mr Press knew they were separated. Mrs Cornish said she had no social connection with Mr Press, but had nursed both his parents.
107. R, one of Mr and Mrs Cornish’s children, wrote an undated statement, purportedly on behalf of his parents. He said that his mother and father separated when he was around 7 or 8 years old and his mother moved out to Booker Bay. He wrote that during this time his parents did not argue in the presence of the children and that his father made sure the children attended school. Following this, he said, the children lived with their father at Pacific Avenue. He said when he was 9 or 10 his mother moved to Timbertop Drive. When he was around 16 he said his parents reconciled and the family moved to their current residence.
108. Barry Buist wrote in a statutory declaration on 23 October 2009 that when he met the couple in the 90’s Mr Cornish lived upstairs with the children and Mrs Cornish lived in the granny flat. In 1997, he said Mrs Cornish moved elsewhere and Mr Cornish continued to live in Pacific Ave; these living arrangements continued until the couple reconciled.
109. John and Judith Buist made a statement on 12 December 2008 indicating they had known the couple for 18 years. Mrs Cornish, however, said she did not come to know the Buists until after the debt period. She had only met Mr Buist quite recently.
110. In a statement dated 22 January 2009 Aron Rand, who Mr Cornish had known since early the early 1990’s and later worked with, wrote that he knew the couple had separated but had reconciled sometime in 2004. On 19 October 2009 he completed a Statutory Declaration as to the truth of this statement
111. Bill Litchfield wrote in a statement, made in January 2009, that he had known the couple for 22 years and that the couple split then reconciled at unspecified times. He said he was assisted by Mr Cornish while Captain of the NSW Rural Fire Boat Brigade.
112. Michael Drake prepared an undated character reference and indicated he lived with the couple in early 2005 in order to finish his High School Certificate when his family moved interstate. He said that he lived with them until 2008 and during that time was treated as one of the family
113. Mr CJ Shoesmith made a statutory declaration on 28 Dec 2009 and wrote that he rented a room at Pacific Ave in early 2002. He said that the couple resumed living together in 2005.
114. Colleen Smith and Mr FC Lawrence wrote of Mr Cornish’s character in undated statements.
CONSIDERATION
Did Mrs Cornish receive payments to which she was not entitled?
115. Mrs Cornish was sent numerous notices between August 1995 and September 2002 which required her to notify Centrelink (previously, the Department of Social Security) of changes in her circumstances, including any separation from her partner or if her personal income exceeded a specified amount per fortnight. Each of these notices was sent to Mrs Cornish’s address of record with Centrelink as at the time issued. There is no record whatever that her employment (and the income received as a result) was ever declared to Centrelink.
116. She was also sent notices (between January 1996 and August 2004) concerning the Family Payment (as it was then known) and later the Family Tax Benefit she was being paid. These notices also required Mrs Cornish to notify Centrelink of changes, including in relation to income.
117. Mrs Cornish said she never received any Centrelink payments and that she gave the ATM card for the account into which family payments were paid to Mr Cornish as he was the primary carer for the children. All payments of income support payments and family assistance payments made to Mrs Cornish were paid into an account number held in her name only and she was sent regular statements of account. Numerous notices were sent to her regarding these payments, addressed to her personally. Her evidence was that she did not open those notices, and left all dealings with Centrelink to her husband.
118. In accordance with section 60 of the Act and the Social Security (Administration) Act 1999 (‘Administration Act’), social security payments are absolutely inalienable. That means a recipient's right to receive a payment or benefit cannot be transferred to another person either by a voluntary act or by the operation of the law. Although, under the Act, the Secretary may direct that a payment be made to another party, according to the Guide to Social Security Law, this would normally only occur with the consent of the recipient. This does not operate as alienation since the third party payment is made on behalf of the recipient, for example, the Secretary may direct that payments be made to a payment nominee at the request of the recipient.
119. I accept that Mrs Cornish did not personally spend the income support payments paid to her, but, on her own evidence, Mrs Cornish received a benefit in that it relieved her of the obligation to pay child support. What Mrs Cornish then chose to do with those payments is irrelevant.
Does Mrs Cornish owe debts to the Commonwealth?
120. All the social security payments paid to Mrs Cornish were subject to an income test. In simple terms, the rate calculator for each type of pension requires the ordinary income of a person (and their partner where relevant) to be worked out on a fortnightly basis. The maximum payment is then reduced by reference to how much of that income is in excess of set thresholds (the ‘income reduction’) to arrive at the person’s correct fortnightly entitlement.
121. The Act has defined income widely, so as to include, amongst other things, personal earnings. Throughout the debt periods, Mrs Cornish’s income was not taken into account in determining her entitlements. Centrelink calculated, and I accept, that her income was such that she was not entitled to be paid any of the income support payments she received.
122. Each debt includes a recovery fee of 10%, imposed pursuant to section 1228B of the Act. That section provides that a penalty is added to a debt if the debt arose wholly or partly because the person had failed to provide information in relation to their income from personal exertion or if they knowingly or recklessly provided false or misleading information about their income from personal exertion when required to do so.
123. I accept that each fee was correctly applied in accordance with section 1228B of the Act, on the basis that the debts arose because of Mrs Cornish’s failure to provide information in relation to income from personal exertion.
124. The section does not apply if the Secretary is satisfied that the person had a reasonable excuse for refusing or failing to provide the information. That Mrs Cornish chose not to read the notices sent to her by Centrelink does not, in my view, constitute a reasonable excuse for not informing Centrelink of her income.
Did Mr Cornish receive payments to which he was not entitled?
125. Mr Cornish was issued with numerous notices by Centrelink (and its predecessor) between March 1999 and January 2004 which required him to notify Centrelink of a range of changes to his circumstances, including if he or his partner started paid work, he or his partner started receiving income, if he or his partner’s income changed or if he stopped living with his partner. There is no record of Mr Cornish ever advising Centrelink of his wife’s income or their separation.
Were Mr and Mrs Cornish member(s) of a couple?
126. The relevance of whether Mr Cornish was a member of a couple is that this affects the amount of his entitlement to Centrelink benefits, that is, if he was a member of a couple with Mrs Cornish her income was to be taken into account in order to determine the correct level of payments to Mr Cornish. If they were not a couple, her income is irrelevant to his level of entitlement.
127. Section 4(2)(a) of the Act relevantly provides that a person is a member of a couple for the purposes of that Act if:
the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis.
128. In general terms Mr and Mrs Cornish contend that they ‘separated’ in 1994 but resumed their relationship in 2004. From their evidence, by this they meant that they lived separately until they resumed co-habitation.
129. I was referred to a number of authorities dealing with the expression “living separately and apart”, each of which ultimately turned on its own facts. In Main v Main (1949) 78 CLR 636 at 642 the High Court said:
Although usually the existence of the conjugal or matrimonial relationship or consortium vitae means that the spouses share a common home and live in the closest association, it is not inconsistent with absences one from another, even for very long periods of time. It rests rather on real mutual recognition by husband and wife that the marital relationship continues to subsist and a definite intention to resume the closer association of a common life as soon as the occasion or exigency has passed which has led to an interruption regarded by both as temporary.
130. In Staunton‑Smith v Secretary, Department of Social Security (1991) 32 FCR 164 at 170, O’Loughlin J said:
... The tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.
131. Simply put, living apart is not, of itself, and determinative of whether 2 people who are married to each other, are no longer a couple.
132. In order to determine whether Mr Cornish and his wife were living separately and apart on a permanent or indefinite basis between 1994 and 2004, I must, as I explained at the hearing, take into account the factors listed at section 4(3) of the Act:
(a)the financial aspects of the relationship, including:
(i)any joint ownership of real estate or other major assets and any joint liabilities; and
(ii)any significant pooling of financial resources especially in relation to major financial commitments; and
(iii)any legal obligations owed by one person in respect of the other person; and
(iv)the basis of any sharing of day-to-day household expenses;
(b)the nature of the household, including:
(i)any joint responsibility for providing care or support of children; and
(ii)the living arrangements of the people; and
(iii)the basis on which responsibility for housework is distributed;
(c)the social aspects of the relationship, including:
(i)whether the people hold themselves out as married to each other; and
(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d)any sexual relationship between the people;
(e)the nature of the people’s commitment to each other, including:
(i)the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage-like relationship
(Emphasis added.)
133. Each matter is to be considered on its merits and the Tribunal should remain flexible in its approach: SRWW and Secretary, Department of Family and Community Services [2001] AATA 495. The ‘list’ in s 4(3) is not exhaustive and no guidance is given as to the weight of any factor; they are common-sense indicators: Cullinane and Secretary, Department of Family and Community Services [2004] AATA 789. The total picture of the relationship that emerges from the factors must be weighed and the test is an objective one: Secretary, Department of Family and Community Services and WAP [2000] AATA 7
134. As to the indicia of a “marriage like relationship” in s 4(3) of the Act, there is no one feature in Mr and Mrs Cornish‘s relationship that stands out as dictating a conclusion. I have reached my conclusion from the totality of the evidence.
135. Those statutory criteria are considered below, having regard to the evidence before me.
Financial aspects of the relationship
136. Throughout the period of alleged separation, Mr and Mrs Cornish remained sole legal owners of Pacific Ave. Notwithstanding that Mr Cornish may have reached an agreement with his sisters about their inheritance in relation to the property, Mrs Cornish remained, and continues to remain, the legal joint owner. I do not accept that Mr Cornish did not understand until recently what this means. He has facilitated multiple loans, including re-financing in relation to that and other properties over the years and has embarked upon a number of business enterprises. There was also a preparedness to accept a caveat and to amend Mrs Cornish’s name on Melaleuca Cres. In my view Mr Cornish had a familiarity with legal concepts associated with property ownership and I do not accept him to be as financially naïve as he suggests.
137. Further, despite an alleged separation of over 10 years, no property settlement, financial settlement or child support arrangement was pursued by either Mr or Mrs Cornish. On the contrary, their joint financial obligations increased during the period of separation.
138. Although a mortgage over Pacific Ave was in both names, Mr Cornish said he alone made repayments, with the assistance of his parents when he was unemployed. Mrs Cornish said that when she moved into the granny flat she paid her husband between $90 and $100 per week in rent. Mrs Cornish said she was unconcerned about how her husband was making the mortgage payments and assumed that if he was having trouble he would have told her. In contrast, Mr Cornish said that while in the granny flat Mrs Cornish continued to contribute to the mortgage and when the mortgage was due he would ask her for money.
139. Mr and Mrs Cornish purchased a second property, Timbertop Drive as joint tenants, taking out another joint mortgage to do so. This mortgage was also secured against Pacific Ave. This property was then re-mortgaged in late 2001. A third property was bought jointly in July 2004, at Melaleuca Cres. In 2001 Mr Cornish and his wife jointly borrowed money on two occasions, opening 2 further home loan accounts.
140. Mrs Cornish gave her husband the ATM card for access to her bank account, into which Centrelink and Family Assistance Office payments were made to Mrs Cornish.
141. Power bills for Timbertop Drive from 2000 to 2004, which show the account there, were in both his and his wife’s name.
142. Although one factor alone will not be determinative of a marriage like relationship (per Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546), in this matter there has been long-standing and continual financial intermingling of funds and accordingly attracts significant weight.
The nature of the household
143. The evidence of both Mr and Mrs Cornish was that Mr Cornish retained primary care of the three children throughout the period of purported separation. There was no formal shared care arrangement, and the evidence was that the children regularly spent time with their mother. Parenting decisions in respect of the children were made together and they endeavoured, to their credit, to minimise their conflict in front of the children. Mrs Cornish made little contribution to the children’s upkeep, apart from small gifts. She said she could not recall telling the SSAT that their arrangement was that Mr Cornish would receive the Centrelink benefits in lieu of her contribution.
144. There were some inconsistencies in the evidence as to when Mrs Cornish moved to a granny flat at Pacific Ave. For example, Mr Cornish told the SSAT that the initial separation had in fact occurred in 1991, with a brief reconciliation resulting in the birth of their youngest child. There was evidence that it was at the end of 1991 or early 1992 when Mrs Cornish moved into the granny flat, but Mr and Mrs Cornish gave differing accounts of whether she moved back into the main house during her pregnancy. Mr Cornish gave several versions of the duration of Mrs Cornish’s return into the house after J’s birth. They also differed in their accounts of the care of J. Mrs Cornish was said to have moved back into the (downstairs) of the house for a few weeks after Mr Cornish’s father died in March 1994. In all Mrs Cornish estimated that she lived in the granny flat for about 12 months, but this, from the evidence appears to be an over-estimate. I accept though that she lived in the granny flat for some period.
145. Mrs Cornish’s evidence was that she moved to Booker Bay for 3 or 4 years from mid-1994. However, she was recorded as having told the SSAT that she lived there for a year from 1995 before returning to the villa at Pacific Ave. Her employer had no record of the Booker Bay address. Similarly, both Mr Cornish’s sisters seemed to think that Mrs Cornish moved directly out of Pacific Ave into Timbertop Drive. There was no evidence that their address was ever formally changed to Booker Bay.
146. The Respondent submitted, and I agree that it is unclear to what extent separate residences were ever maintained by Mr and Mrs Cornish, given their continued sharing of addresses and telephone numbers, and concurrent changes to these details. Documents supporting this contention were provided, for example:
·Both changed their home and postal address as recorded by Centrelink to the Timbertop Drive with effect from 10 October 1997.
·On 23 October 1997 this same address change for Mr Cornish was also recorded by the RTA, some 5 months prior to his wife.
·In Mrs Cornish’s 1999 tax return Pacific Ave is listed as her home address and Timbertop Drive as her postal address.
·On 19 January 2001 Mr Cornish completed a driver’s licence renewal form giving his address as Timbertop Drive.
·In February and June 2004 respectively, Mrs Cornish and Mr Cornish changed their address as recorded by the RTA to Plane St.
·Both Mr and Mrs Cornish changed their address for Centrelink purposes back to Pacific Ave with effect from 21 July 2004, despite the fact that the following day, 22 July 2004, Melaleuca Cres was transferred to them.
·Mrs Cornish retained the same telephone (landline) number for Centrelink and Workcover purposes throughout the debt periods.
·It is said the children primarily lived with Mr Cornish at Pacific Avenue, but two appear to have had mobile phone accounts billed to Timbertop Drive.
147. There was a variety of explanations, the main one being that mail was being tampered with at Pacific Ave, so Mr Cornish redirected his mail to Mrs Cornish’s home because he was unable to obtain a post box. While there is some initial plausibility in this explanation, I am doubtful that such a situation would have continued between 1997 and 2004 (see above). Even if that were the case, it is inexplicable that Mrs Cornish’s 1999 tax return should then have Pacific Ave as her postal address. Further there was no attempt by Mrs Cornish to change the address from Pacific Ave for correspondence in relation to important correspondence such as her bank statements sent between 1994 and 1999.
Social aspects of the relationship
148. Mr Cornish provided several statements from people whom he described as friends, who indicate they were aware of his separation. I have reservations about the helpfulness of those statements. Mr McGarrity, for example, was best described as an acquaintance of Mr Cornish, as was Mr Press. Mrs Cornish had only met him two or three times. Mr Cornish’s sisters and their husbands were able to give limited evidence. Karen and William Moeller, for example, dated Mr and Mrs Cornish’s problems to the ‘mid 1990s’ and thought they stayed together in the house, albeit leading separate lives, until 1997. Madeleine Moeller also thought it was after their mother died in 1997. Neither, from their evidence was in a position to observe the nature of the relationship between their brother and his wife. Mrs Cornish continued to be invited to family events.
149. Mrs Cornish did not tell her workmates about her situation and was able to discuss with them the children’s progress and other general family matters. She did not tell them she was living apart from her husband and children because she is, she said, a private person. Mr Cornish also said they are private people, which is somewhat inconsistent with him having told the acquaintances that provided statements of the situation.
150. Curiously, there was no evidence from anyone who might properly be described as a friend of the family, nor from any friends of Mrs Cornish.
151. Mr Cornish and his wife continued to hold themselves out as married in other contexts. Mr Cornish repeatedly confirmed his marriage to Centrelink, his wife indicated she was married on forms relating to workers compensation, and they applied for mortgages jointly. Despite being issued with numerous notices requiring him to so do, there is no record Mr Cornish ever advising Centrelink of the alleged separation until after debts were raised.
152. Mr Cornish told the SSAT he and his wife did not go out as a couple during the period they were separated. However, they might have gone out with the children and did attend school sports days and other school functions together.
153. Mr Cornish also indicated that he would on occasion spend the weekend at his wife’s, so as to spend further time with their children.
Sexual relationship
154. Mr Cornish told the SSAT he and his wife stopped having sex (though at what time is not recorded in the SSAT decision). Given the birth of their youngest child in December 1992, it is clear some sort of sexual relationship existed until shortly before or at a point sometime after their separation.
155. They resumed ‘dating’ in 2002 or 2003.
Nature of commitment
156. Despite an apparent separation of over 10 years, Mr and Mrs Cornish have remained married for over 25 years. Mr Cornish described their relationship to the SSAT as amicable. He told me that he had always loved his wife. Mrs Cornish said that from time to time there was discussion about reconciliation.
157. Mrs Cornish said that she did not initially think they would get back together but after Mr Cornish’s parents had died, that is by 1997, they ‘started putting out feelers [to each other]’.
158. Mr Cornish said that some time prior to the end of 2003 (although in submissions said 2002) they started seriously talking about reconciliation. Mr Cornish said they felt a lot more at ease with each other and because they still felt a lot for each other. He said in submissions that he had always loved his wife and there were ‘no third parties’. They decided to put Timbertop Drive on the market with a view to moving elsewhere together. As Timbertop Drive was sold in about September or October 2003 it is more likely that their ‘reconciliation’ as they describe it, occurred towards the end of 2002, rather than 2003.
159. Throughout the period of separation, by his own evidence, Mr Cornish continued to assist his wife financially by helping her get a loan to buy a property (albeit in both their names) and allowing that loan to be secured against the family home he still lived in. Mr Cornish told the SSAT he was happy to do so and trusted her to repay the loan.
160. Mr Cornish said there were times when their relationship was quite hostile, but it remained sufficiently amicable that he sometimes spent the weekend at his wife’s house during their separation. They also managed to share care of their three children over a 10 year period without any formal arrangements.
161. No steps were ever taken towards a divorce. Mr Cornish told the SSAT his and his wife’s Catholic religion was the reason but in fact Mrs Cornish had previously been divorced. They had wanted ‘to part as friends and just live apart and see how it went’. In his evidence before me he said he thought they ‘could get over it’ and that ‘divorce is final’ and he always hoped they would get back together. They had been to see a chamber magistrate because they were ‘separated under the one roof’ but weren’t ready for a ‘formal separation with documentation’. It appears they never reached that point.
Overall assessment of the relationship
162. Determining whether a married couple are living separately and apart on a permanent or indefinite basis is a difficult task. Each matter is different. No two relationships, however described, will be the same. The assessment is made only somewhat easier by the common sense criteria identified in the legislation, as addressed above.
163. There are a number of factors, looking at the material objectively, that point to Mr and Mrs Cornish being a couple. At the same time there are a number of factors that suggest they are not. I must weigh these factors.
164. On balance, weighing up the objective evidence in respect of each factor, I have come to the view I cannot be satisfied that Mr and Mrs Cornish were living separately and apart on a permanent or indefinite basis from 1994 to 2004. I found the evidence of their financial arrangements to be particularly persuasive. Importantly too, I found Mr Cornish to be sincere in his distaste for the finality of divorce and his continued hope that they they would get back together. They therefore were not living separately and apart from the other person on a permanent or indefinite basis.
165. I accept that they had marital difficulties and that there was significant pressure on the relationship because of the demanding commitment to Mr Cornish’s aged parents.
Mr Cornish owes debts to the Commonwealth
166. As a member of a couple, in accordance with the rate calculator at section 1068 of the Act, Mrs Cornish’s income is to be taken into account in determining the rate of Newstart allowance payable to Mr Cornish. During the debt periods Mrs Cornish’s income was such that Mr Cornish was not entitled to be paid any Newstart allowance.
167. Mr Cornish repeatedly failed to comply with the requirement to advise of Mrs Cornish’s income, as set out in numerous notices sent to him under the Act and the Administration Act. He made a false statement to the effect that his partner was not employed on 12 June 1992 when according to information provided by her employer she recommenced work with them the year before. He made a false statement to the effect that his partner was unemployed on 1 July 1994 when she had been regularly employed for 6 months by that point, and a further false declaration on 19 January 1996 that his wife had not worked in the previous fortnight.
Is there any reason for Mr or Mrs Cornish’s debts not to be recovered in full?
168. The Act makes provision in limited circumstances for debts not to be recovered. Pursuant to s 1236(1A) of the Act a debt may be written-off in very specific circumstances, 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)it is not cost effective for the Commonwealth to take action to recover the debt.
169. None of these apply to either Mr or Mrs Cornish.
waiver under section 1237AAD : “special circumstances”
170. The waiver is only available if the debt did not result wholly or partly from the debtor (or another person) knowingly making a false statement or a false representation; or failing or omitting to comply with a provision of the Act, the Administration Act or the Social Security Act 1947. Therefore before considering Mr and Mrs Cornish’s circumstances I must be satisfied that each is not precluded from consideration.
171. The meaning of ‘knowingly’ was considered by DP Forgie in Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445:
(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.
(49)…Mr Callaghan has acknowledged that he had received notices under s 727 of the Act and that he had read at least one of them. I am satisfied both on the material in the T documents and on his oral evidence that he received more than one of them and that he read the first one. On the basis of the notices themselves I am satisfied that they clearly set out his obligation to advise the department should his income, or that of Mrs Callaghan, change. I am also satisfied from the notice that it quite clearly stated that income included Austudy benefits. Taking into account Mr Callaghan's knowledge of the notice and of his having read at least one of them, I find that he knew that he had an obligation to advise of a change in Mrs Callaghan's income. Therefore, when he failed to advise of the change he knowingly omitted to comply with a provision of the Act.
172. Whilst it is clear that actual rather than constructive knowledge is required, the Respondent notes actual knowledge may be inferred from the circumstances where a debtor had the opportunity to gain that knowledge and there were no obstacles preventing him acquiring that knowledge. For example, in Woolley and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 26 at [37]:
To avoid meeting the definition of ‘knowingly’ by turning a blind eye and throwing Centrelink’s notices, unread, into a draw is in the view of the Tribunal to knowingly fail or omit to comply with an obligation with a provision of the Act where the recipient has a duty, under s 68 of the Administration Act, to respond to a notice to provide information requested by the Secretary. The currently accepted manner for the Secretary to give notice that he wants information is by way of corresponding to a recipient. A recipient who refuses to open such a letter sent by the Secretary is knowingly refusing to comply with the request.
173. Mr Cornish received valid information notices and knew of – or had the opportunity to acquire – the knowledge of his reporting obligations from the letters he received, which clearly set out his obligation to advise Centrelink of his partner’s income. As discussed above, Mr Cornish has clearly made false statements concerning his wife’s income and knowingly failed to comply with the requirement to notify Centrelink of changes to his personal and financial circumstances and, as such, section 1237AAD cannot apply in respect of Mr Cornish.
174. Mrs Cornish also received valid information notices and knew of – or had the opportunity to acquire – the knowledge of her reporting obligations from the letters she received, which clearly set out her obligation to advise Centrelink of her income. Mrs Cornish knowingly omitted to comply with a provision of the Act.
175. Further, there is evidence which demonstrates that Mr Cornish made false representations to Centrelink which are likely to have contributed to Mrs Cornish’s debts. Accordingly, subsection 1237AAD(a) of the Act is not satisfied in this case.
176. Even if I were satisfied that Mr and Mrs Cornish were not precluded from consideration, the Act provides no guidance as to the meaning of the term “special circumstances”; it is an expression incapable of precise or exhaustive definition.
177. Evidence was given, and referred to above, about several aspects of Mr and Mrs Cornish’s personal circumstances which were said to be ‘special’. None, even taken together, amount to special circumstances, in respect of either Mr or Mrs Cornish. Their most pressing problem, it seems, is one of having over-extended themselves financially. However, financial hardship alone is not enough to establish special circumstances.
178. Further, Mr and Mrs Cornish together have had the benefit of about $160,000 they were not entitled to. Taxpayers are entitled to expect that in the ordinary course money paid to Centrelink beneficiaries to which they are not entitled will be recovered: Secretary, Department of Social Security v Hales [1998] FCA 219, Davy v Secretary, Department of Employment & Workplace Relations (2007) 94 ALD 693 at 716.
DECISION
179. The Administrative Appeals Tribunal affirms the decisions under review.
I certify that the preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member.
Signed: ............................[sgd].................................................
Nicholas Olson, AssociateDates of Hearing 8 and 9 September 2011; 4 and 5 October 2011
Date of Decision 18 November 2011
Advocate for the Applicants Self-representedSolicitors for the Respondents Jennifer Maclean and Stefanie Memmott, DHS Legal Services Division
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Entitlement to Allowance
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Special Circumstances
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Marital Status
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Judicial Review
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