Dimopoulos and Secretary, Department of Family and Community Services

[2004] AATA 1061

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1061

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No V04/628

GENERAL ADMINISTRATIVE  DIVISION		)
Re		ANTONIOS DIMOPOULOS

Applicant

AndMONIKA DIMOPOULOS

Party Joined

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Mr John Handley, Senior Member

Date12 October 2004

PlaceMelbourne

Decision The Tribunal affirms the decision under review.

(Sgd)  John Handley

Senior Member

SOCIAL SECURITY – assets test – applicants own their principle home and four other residential properties in Cranbourne – value of Cranbourne properties exceed assets test limit – intention of applicants to pass all five properties to their five children – whether properties held on trust – decision affirmed

REASONS FOR DECISION

12 October 2004 Mr John Handley, Senior Member           

1.      The applicants applied to review a decision made by the Social Security Appeals Tribunal (“SSAT”) on 1 April 2004.  The SSAT then decided to affirm decisions made by an officer of Centrelink on 28 August 2003 to cancel Disability Support Pension (“DSP”) and Wife Pension (“WP”) respectively.

2.      The hearing proceeded on 4 October 2004.  Mr and Mrs Dimopoulos appeared without representation and gave evidence.  Ms Navarro represented the respondent.  All parties gave their evidence by telephone.

3.      The background to this dispute may be briefly summarised as follows.

4.      Mr and Mrs Dimopoulos either jointly or individually own real estate at four different locations in Cranbourne in Victoria being 30 Bourke Road, 8 Bruce Street, 72 Circle Drive North and 8 Arnold Street.  All properties are residential.  They also own property at Points Road, Kalimina near Bairnsdale which is their principal address and where they reside.  The four properties at Cranbourne were valued by the Australian Value Office (“AVO”) in July 2003 at $580,000.  Further valuations over the same properties occurred by the AVO on 27 October 2003 and the valuations then made over the four properties was $595,000.

5.      At all relevant times the Assets Test Limit (excluding principal home) was $459,500.

6.      By reason of the properties in Cranbourne being in excess of the asset cut-off limit, pensions being paid to both applicants were cancelled.

7.      Mr and Mrs Dimopoulos are the parents of five children presently aged 31, 23, 22, 21 and 17.  They said in evidence that two of the four properties at Cranbourne were purchased from moneys received by inheritance.  They said that it was their intention always to acquire five properties which would ultimately pass to their children (1 property each) but they had been advised by their lawyers not to establish a Trust.  They said that they had been advised that the cost of establishing a Trust would be prohibitive.  Additionally they said it was their intention to pass the properties to their children when they became of a “more mature age” which they expected would be achieved when they had both reached the age of 65.

8.      In answer to questions from Ms Navarro, Mrs Dimopoulos said that the property at 8 Bruce Street, Cranbourne had initially been owned jointly between she and her husband and her husband’s mother but upon her demise the property became registered jointly in the applicants’ names only.  She said that it was the intention always of Mr Dimopoulos’ mother that the property be kept for the benefit of their children but she also agreed that no Trust had ever been established.

9.      Mrs Dimopoulos said that presently she and her husband receive approximately $2,500 per month in gross rental income from all four properties.  She said that they could barely survive as a family with that income because there were numerous costs associated with the maintenance of the four properties together with other statutory charges.  She said that it was not an option to gift the properties to their children because they would continue to be denied pension under the gifting provisions under the social security legislation.  Additionally she said that it was not an option to sell one or more of the properties, invest the net proceeds of sale and have income from interest because it was anticipated that the value of the properties would increase at a rate greater than the value of moneys invested.

10.     Mrs Dimopoulos said that approximately five or six years ago she and her husband approached a solicitor to have their Wills drawn.  She said that in their Wills the properties at Bourke Road and Circle Drive North in Cranbourne were devised (upon their death) to their sons presently aged 22 and 21.  They were again advised by their lawyer that to establish a Trust with respect to all of the properties, reciting all of the children as beneficiaries, would expose them to costs which would be prohibitive.

11.     It was also learnt at the hearing that one of their daughters, who is presently aged 32 and married with children had invested moneys of her own in the property at Bruce Street in Cranbourne when it was acquired.  My note of the evidence at the hearing records “daughter needs income but we can’t give it to her because we need it”.  I understood, then, that this was referable to a request for rental income from that property, such request being denied.  On reflection, it may be that the daughter requested that the property be transferred to her so that she may have a source of income and that request, if made, was denied.  Mrs Dimopoulos and her husband have not transferred the property and have denied their daughter income from that property “because we need it”.  As a result of that decision Mrs Dimopoulos said that their daughter no longer communicates with them.

12.     Mrs Dimopoulos asserted that she and her husband should be entitled to hold the four properties at Cranbourne without violating the assets test limit because it was their intention to hold the properties for their children.  It followed on this submission that they should then be entitled to a pension.

13.     Ms Navarro on behalf of the respondent submitted that no Trust existed and the decision to cancel the pensions was correctly made.

14.     It is clear from the evidence that there was no express Trust.  Other than a Will completed by each applicant five or six years ago where two of the five children are referred to as beneficiaries of two of the properties in Cranbourne, there is no other document in existence that would point to the existence of a Trust.  It is doubtful in any event that the Will in its present form could amount to a Trust.  It is capable of being altered at any time and the two beneficiaries presently cited under the Will cannot assert any equity in those properties.  The Wills were not received into evidence but assuming that they record that the legal interests in the properties at Bourke Road and Circle Drive North shall pass to the two sons upon the death of their parents it would follow therefore that the two sons could only assert an interest in the Bourke Road and Circle Drive North properties if the Wills in the present form continued to exist at the death of their parents, that the properties are then held by their parents and that they survive their parents.  They cannot in those circumstances presently assert any equity.

15.     Similarly I could not find that there is any implied Trust.  The parents continue to receive all income from the properties which is not distributed to the children.  None of the properties are registered in the names of the children nor are the properties registered in the names of Mr and Mrs Dimopoulos as Trustees for and on behalf of the children who are recorded as beneficiaries.  There is nothing about the conduct of the applicants which would imply or point to any fact or thing which would give rise to an implication of the children being the ultimate beneficiaries of the properties which of course would be a precondition to establishing any implied Trust.

16.     Finally it could not be established in my view that any constructive Trust has been established concerning the properties.  There is nothing which points to any of the children contributing in any way to the properties (save for the investment at Bruce Street by the eldest daughter).  It is worthy to note that four of the five children are adults yet none were called to give any evidence.  Their understanding or belief in the existence of a constructive Trust is therefore not known.  There is nothing that points to any agreement between Mr and Mrs Dimopoulos and their children that the properties would be held by them for the benefit of the children, indeed it could be said that any such agreement if it existed – as was asserted by Mr and Mrs Dimopoulos – is so vague and uncertain that it would be unenforceable.  For example, the applicants could not state at what age it was intended that the children would receive the legal interest in the properties under the purported Trust.  The closest an age was proffered in evidence by the applicants was when the children became “mature”.  It is worthy to note that the oldest child who is presently 32 years of age has not benefited as the beneficiary under a Trust.  Indeed when she sought financial assistance, despite having invested moneys of her own in the property, she was denied.  The reasons for her financial contribution to this property, the quantum of that contribution and her absence as a registered owner – as either a joint tenant or tenant in common are not known.  There was no evidence of any caveat lodged by her, thereby pointing to an equitable interest.  Her financial investment of itself does not amount to a relationship of trustee and beneficiary.  Mrs Dimopoulos was keen to point out that she would like to transfer the property, at least to her oldest child “tomorrow”, yet their financial position is such that they are unable to do so.  While this is a conundrum for the applicants, the fact remains that this in itself demonstrates such a lack of certainty of intention that no existence of a Trust can be found.

17.     The applicants have worked hard and been prudent in their savings and investments.  I accept that it is their intention to ultimately pass these properties to their children, who, of course, are extremely fortunate.  However, in the absence of a Trust or any other basis to exclude assets or their value, the assets of the applicants must include the Cranbourne properties and must be brought into account when calculating the value of assets, absent the principle residence.  The objective of the applicants to pass these properties to their children is inconsistent with the legislation and the policy of bringing the assets of pensioner beneficiaries into account.

18.     On balance I am not satisfied that there is any agreement existing between Mr and Mrs Dimopoulos and their children which would be legally enforceable permitting the children to demonstrate that they have any interest as beneficiaries in the properties.

19.     It would not be “unconscionable” for the applicants to deny their children an interest in the properties because I am not satisfied and find that as a fact that a Trust does not exist between them and their children.

20.     In those circumstances I am satisfied that the parents, being the applicants in these proceedings alone, have a legal interest in the properties and that no Trust of any type exists.  It follows therefore that the properties are to be assessed as their assets and whether the combined valuation be that which was found at July 2003 or October 2003, on each occasion the combined valuations of the properties exceeded the asset cut-off limit of $459,500.  It follows therefore the decision made by the SSAT on 1 April 2004 to affirm the decision previously made by Centrelink to cancel pension should also be affirmed.

I certify that the 20 preceding paragraphs are a true copy of the reasons for the decision herein of:
Mr John Handley, Senior Member

Signed:         Holly Weston
  Associate

Date of Hearing  4 October 2004
Date of Decision  12 October 2004
Solicitor for the Applicant          Self Represented
Departmental Advocate            Ms K Navarro