Daaboul and Secretary to the Department of Family and Community S Ervices

[2003] AATA 856

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2003] AATA 856

ADMINISTRATIVE APPEALS TRIBUNAL               Nº V2003/497

GENERAL  ADMINISTRATIVE DIVISION

Re:            CHARLOTTE DAABOUL

Applicant

And:         SECRETARY TO THE
  DEPARTMENT OF FAMILY AND

COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Mr B.H. Pascoe, Senior Member

Date:             1 September 2003

Place:            Melbourne

Decision:The Tribunal affirms the decision under review. 

(sgd) B.H. Pascoe
  Senior Member

SOCIAL SECURITY – whether interest in property transferred without valuable consideration - whether value of interest a deprived asset - whether parenting payment overpaid - whether debt due to Commonwealth

Social Security Act 1991

REASONS FOR DECISION

1 September 2003  Mr B.H. Pascoe, Senior Member

1. This is an application to review a decision of the Social Security Appeals Tribunal (SSAT) dated 28 March 2003 which affirmed decisions of Centrelink officers of the Secretary to the Department of Family and Community Services (the respondent) to

   (a)raise and recover a parenting payment single debt of $2225.29 for the period 7 March 2000 to 29 January 2002; and

   (b)maintain a deprived asset of $150,000 and to cancel parenting payment.

2. The applicant, Mrs Charlotte Daaboul, was represented by her son Mr Talal Daaboul. The respondent was represented by Mr D. Perdon, a Centrelink advocate. Evidence was given by Mrs Daaboul, another son Elias and by statutory declarations by Elias and a third son Hana, known as John. The Tribunal had before it the documents provided by the respondent pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (T1‑T44)

3. The background to this application was conveniently summarised by the SSAT as follows:

   1.Mrs Daaboul has been in receipt of parenting payment single in the period 4 September 1998 to 17 February 2002.  Together with her husband George, Mrs Daaboul had been the registered proprietor of a property at 61 Osborne Street Williamstown ("Osborne Street").  This property had been valued by the Australian Valuations Office ("AVO") at $300,000 (as at December 1999) and at $320,000 (as at March 2000).

   2.On 7 march 2000 Mrs Daaboul's son Hana (also known as "John") Daaboul became the sole registered proprietor of Osborne Street.  Centrelink decided that the transfer of Mrs Daaboul interest in Osborne Street to Hana had been made without valuable consideration.  The consequence of this, according to Centrelink, was that Mrs Daaboul was to be regarded as having deprived herself of an asset, the value of which should be taken into account in assessing her rate of carer payment for the period of 5 years from the date of deprivation.

   3.Centrelink also decided that Mrs Daaboul should be deemed to have received income from the deprived asset.  When this deemed income was taken into account, an excess amount of parenting payment single was found to have been paid to her in the period 7 March 2000 to 29 January 2002.  The amount of this overpayment was calculated (after allowing for an arrears payment due to Mrs Daaboul) to be $2,225.29.

   4.Centrelink's decisions were reconsidered by an authorised review officer who noted the evidence of Mrs Daaboul's solicitor, John Anile Pty, that the consideration for the transfer to Hana Daaboul was the latter's promise to relinquish any interest that he had in a family property at 10 Walter Street Williamstown ("Walter Street").  It was, however, noted by Centrelink that Mr Hana Daaboul remained on the title to Walter Street as a tenant in common.  The failure to transfer Hana's share of Walter Street to Mrs Daaboul was explained on behalf of Mrs Daaboul as being that she and her husband could not afford to pay the stamp duty required to bring about the transfer of Hana's share to Mrs Daaboul.

   5.Centrelink did not accept that the transfer to Hana had been for valuable consideration, and decided that an amount of $150,000 was to be treated as an asset of which Mrs Daaboul had deprived herself.  This was calculated on the basis that Mrs Daaboul, being at the time separated under the one roof from her husband, had a 50% share of a property valued at $320,000 (i.e. $160,000) less the amount of $10,000 permitted under the legislation as an allowable disposal.

   6.The effect of this finding was that Mrs Daaboul's assets exceeded the asset limit for payment of parenting payment single, and that payment was accordingly cancelled.  Centrelink's decision to cancel her payments was affirmed by an authorised review officer on 24 April 2002.

   7.On 6 September 2002, Mrs Daaboul became a tenant in common in Walter Street, in effect taking what had been the share of her son Elias, which he apparently relinquished.  Hana, however, remained as a tenant in common with respect to Walter Street with the same proportionate share as previously.  On 1 October 2002 this change in ownership was notified to Centrelink.  Centrelink however did not act upon this advice.

   8.The matter then came back to the authorised review officer who had affirmed the decision that Mrs Daaboul was to be taken to have gifted her interest in Osborne Street without valuable consideration.  After considering the issues further, the authorised review officer decided, on 23 December 2002, that consideration for the transfer of 7 March 2000 had been provided on 6 September 2002 by way of the transfer to Mrs Daaboul of Elias' share of Walter Street.  The authorised review officer accepted that the value of the consideration for the transfer of Mrs Daaboul's share of Osborne Street was $162,000.  This amount was determined by apportioning the value of Walter Street (650,000) between the 4 tenants in common, each share therefore being valued at $162,000.  The authorised review officer then decided that he should make a new decision to the effect that the value of the "deprived" asset should no longer be held against Mrs Daaboul.  As Mrs Daaboul had advised of the transfer on 1 October 2002, that day was determined to be the date of effect of the new decision.

   9.The authorised review officer's decision was however not implemented, apparently because a Centrelink complex assessment officer decided that it was an incorrect decision.

   10.Centrelink's decision to raise and recover an overpayment of parenting payment single in the amount of $2,225.29 was reconsidered by an authorised review officer on 24 April 2002, and the original decision as to the overpayment was affirmed.

4. The evidence of Mrs Daaboul was that 61 Osborne Street was purchased in 1977 or 1978, some two years after she and her husband arrived in Australia.  This house was in the names of her husband and herself.  She was unsure of the date of purchase of 10 Walter Street, although Elias thought it was in the mid‑1980s.  A new house was erected on this block as a residence for the whole family other than John.  It was said that John, a builder, performed or arranged the bulk of the building work on the new residence.  It would seem that, after its completion, John and his family remained in occupation of 61 Osborne Street and completed some repairs and renovation to that property.  For reasons which neither witness could properly explain, the title to 10 Walter Street was in the name of Mrs Daaboul's husband, George, and the three sons, John, Talal and Elias, as tenants in common in equal shares.  Mrs Daaboul thought that this ownership was because they all worked on it..  There is a further block of land at 8 Walter Street, registered in the name of George Daaboul, which is treated as part of the land surrounding 10 Walter Street.  Mrs Daaboul said that there was a mortgage over 10 Walter Street but she was unable to say how much, nor was she able to give any indication of the monetary contribution by any family members.  However, in a statement given to Centrelink on 23 January 2002, she stated that …Hana Daaboul built the house and contributed ≈ [approximately] $400,000 (T9).  In a later statement on 28 February 2002, she stated …My son Hana invested money into 10 Walter St approx $250,000 to $200,000 [sic] with other relatives (T17).

5. Mrs Daaboul said that she and her husband transferred 61 Osborne Street to John in March 2000 on the basis that John gave us Walter Street and we gave him Osborne Street..  The consideration for her husband, George, who remained with a 25 per cent interest in 10 Walter Street, was said to have been the greater monetary contribution to the new house by John.  The consideration for Mrs Daaboul was said to be the transfer by John to her of a 25 per cent interest in 10 Walter Street.  However, she said that, as Elias had been supported by John through his university education and Elias had no money with which to repay John or to contribute toward the cost of the new house, he agreed to transfer his 25 per cent interest to John.  To avoid double stamp duty, this was accomplished by a transfer from Elias to Mrs Daaboul.

6. Elias said that he lived away from home in rented premises during his three years at university in the mid‑1980s.  As he had no money, John provided money to him which he estimated to have totalled $20,000‑$30,000.  He said that he expected to be able to contribute to the family home and repay John after completion of his degree and commencing work.  Unfortunately, he had been unable to find a job and so had no money to meet such commitments.  Consequently, he felt it appropriate to transfer his 25 per cent interest in 10 Walter Street to John.  He was unable to provide any information on the cost of the house or any family members' contribution to the cost.  He acknowledged that there was no specific agreement entered into with John for repayment of money provided to him or to transfer his share of 10 Walter Street.  On 27 November 2002, Elias provided a statement to Centrelink (T32) where he said:

   …The reason John remained part owner rather than me is because of the financial relationship between John and I, whereby I owed him for financial support he had provided me over a number of years and also because he was a much larger contributor than me to the initial purchase and paying off of 10 Walter St.

It is, perhaps, relevant to note that this statement also noted that neither 61 Osborne Street nor 10 Walter Street was subject to a mortgage.  In the statutory declaration of 22 July 2003, prepared for these proceedings, Elias stated that:

…I have transferred the property to Charlotte Daaboul, as they have contributed to the expense of my education to university level and without their financial support I would not have accomplished my education.

When asked who he meant by they, Elias said that he received some support from the whole family, more moral than financial, with the majority of the financial support from John.

1. The statutory declaration of John dated 25 August 2003 states:

   The ¼ share of 10 Walter Street, Williamstown is under my name.  Elias' share was transferred to his mother because Elias did not contribute any money to his share.  I paid for Elias' education, therefore Elias gave his share to his mother. 

   Instead Elias to John and John to his mother to decrease stamp duty cost.

In a letter to Centrelink of 19 April 2002 (T22), John Anile Pty, solicitors, advised that:

…Mr & Mrs Daaboul Senior transferred their interest in the property situated at 61 Osborne Street, Williamstown in March, 2000 in return for Mr John Daaboul relinquishing his interest in the property at Walter Street, Williamstown.

The letter went on to explain that this latter transfer had not been effected because of an inability to afford the stamp duty and fees.

1. It was submitted for Mrs Daaboul that the transfer of her interest in 61 Osborne Street was in consideration of the transferee, John, transferring a 25 per cent interest in 10 Walter Street to her with both interests being of similar value.  It was said that, as Elias had agreed to transfer his 25 per cent interest to John, the cost of stamp duty made it more practicable to accomplish the two transactions by a transfer from Elias to Mrs Daaboul.  It was further argued that such agreements were entered into at the same time as the transfer of 61 Osborne Street so that from that time, Mrs Daaboul had an equitable 25 per cent interest, although not formally registered until September 2002.

2. It was submitted for the respondent that the Tribunal could not be satisfied that there was any legal contractual relationship in 2000 or any other time between John, Elias and Mrs Daaboul.  It was said that there was no clear extrinsic evidence of any such relationship, no evidence of relative financial contributions by the parties and, at best, Elias may have considered he had an obligation to repay John $20,000 to $30,000 which was unlikely to have led to an agreement to transfer an interest in property valued at $162,500.  It was submitted that Mrs Daaboul had transferred, by way of gift, her interest in 61 Osborne Street, valued at $160,000, and she received no valuable consideration from the donee.

3. It is relevant to note that, fom 3 September 1988, Mrs Daaboul was accepted as being separated from her husband, although living under the same roof and was in receipt of parenting payment single.  This was cancelled from 17 February 2002 on advice that they were, again, living as a couple from 15 February 2002.  Mrs Daaboul, in her evidence, was unable to say why she was not included as a proprietor on the title to the family home initially and the fact that, in 2002, she was registered as having an equal interest with her husband in that property, leads to conjecture as to whether they were reasons for this change other than those put forward.

4. The relevant law relating to the disposal of assets without consideration and the effect on social security benefits was fully set out in the reasons for the respondent's decision and the affirmation by the SSAT and it is unnecessary to restate the position here.  It is sufficient to say that, if there is a finding that Mrs Daaboul and Mr Daaboul disposed of their interests in 61 Osborne Street without adequate consideration in money or money's worth, the decision under review must be affirmed.

5. It is accepted that it is possible that John made a contribution in money and money's worth to the cost of acquiring and erecting a residence at 10 Walter Street in excess of 25 per cent.  However, there was simply no evidence as to the actual value of that contribution, how much of the cost was financed by borrowing and the amounts of contribution by any other member of the family.  It is likely, also, that Elias made no contribution to the cost of 10 Walter Street, although registered as having a 25 per cent interest.  It is accepted that John made a financial contribution to the living expenses of Elias when at university.  Elias acknowledged that he had a Higher Education Contribution Scheme debt, which indicates that there would have been little cost incurred for his tuition.  The conflicting statements of Elias lead to some uncertainty as to whether John was the sole financial support for Elias but, even if this was accepted, the estimated amount was no more than $30,000.  Certainly there was no evidence of any contractual arrangement or even an obligation requiring Elias to repay any sum of money to John.  There was no evidence of any actual or implied contract under which Elias would transfer his interest in 10 Walter Street to John.

6. The only facts which the Tribunal has before it is that, in March 2000, Mr and Mrs Daaboul transferred their joint ownership in 61 Osborne Street to John.  On 6 September 2002, the 25 per cent interest held by Elias in 10 Walter Street was transferred to Mrs Daaboul with consideration shown as $130,000.  It is clear that this was the value for stamp duty and no actual consideration was paid.  There is no evidence of any contractual relationship to support these transfers.  At best the oral evidence from the family members was that Elias considered he had an obligation to John for financial support in the 1980s, amounting, at most, to $30,000 and that, as he had not made any financial contribution to the cost of 10 Walter Street, he considered he should not be entitled to a 25 per cent share.  Without any evidence of costs of 10 Walter Street and relative contributions by family members and borrowings, it is not possible to consider or accept that John had any entitlement in 10 Walter Street beyond his original and ongoing 25 per cent interest.

7. As a consequence, the Tribunal is left with no alternative but to find that Mrs Daaboul transferred her interest in 61 Osborne Street without consideration.  To the extent that it is necessary for the purpose of arriving at a value of joint assets of Mr and Mrs Daaboul, it is appropriate to record a finding that Mr Daaboul also transferred his interest in 61 Osborne Street without consideration.

8. Given the above finding, the decision under review must be affirmed.

I certify that the fifteen [15] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr B.H. Pascoe, Senior Member

(sgd)       Catherine Thomas

Clerk

Date of Hearing:  26 August 2003

Date of Decision:  1 September 2003
Solicitor for the applicants:          Nil — IN PERSON

Advocate for the respondent:       Mr D. Perdon, Centrelink