Ezekiel and Anor; Secretary, Department of Employment and Workplace Relations and Anor and
[2007] AATA 1486
•29 June 2007
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2007] AATA 1486
ADMINISTRATIVE APPEALS TRIBUNAL ) N2006/1591
) N2006/1648
GENERAL ADMINISTRATIVE DIVISION )
Re
SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Applicant
And
MORRIS EZEKIEL
Respondent
AND
ReMORRIS EZEKIEL
Applicant
AndSECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms G Ettinger - Senior Member Date29 June 2007
PlaceSydney
Decision The Tribunal sets aside the decision of the Social Security Appeals Tribunal and in substitution finds that:
· Mr Ezekiel is not separated from his wife, and remains a member of a couple.
· Mr Ezekiel’s principal residence is the Melbourne property.
· Because Mr Ezekiel’s principal residence is the Melbourne property that is an exempt asset.
· Mr Ezekiel inherited a half share of the Sydney property on 14 February 2006, the value being $1,400,000. Mr Ezekiel’s share is $700,000.
· As Mr Ezekiel’s assets exceeded levels for receipt of DSP, he incurred a debt as calculated by the Secretary, being for the period 14 February 2006 to 6 July 2006 to the value of $3,462.32.
· No special circumstances or other reasons for either write off or waiving the debt in full or in part are found, and the debt must be repaid in full.
………………(Sgd)……………
Ms G Ettinger
Senior Member
CATCHWORDS
Overpayment – Applicant claims to be separated – Mr Ezekiel remains a member of a couple – principal home is matrimonial home - DSP debt – no special circumstances – decision of the SSAT set aside.
Social Security Act 1991 ss 1223, 1236A, 1237A, 1237AAD
Social Security (Administration) Act 1999
Pelka v Secretary, Department of Family & Community Services (2006) 151 FCR 546
Re Samek and Secretary Department of Social Security (1988) 16 ALD 295
Beadle v Director-General of Social Security (1985) 60 ALR 225Secretary, Department of Social Security v Hulls (1991) 22 ALD 570
Secretary, Department of Social Security v Banks (1990) 20 ALD 19
Secretary, Department of Social Security v Ellis (1997) 24 AAR 535
Re Beadle and Director General of Social Security (1984) 6 ALD 1
Cullinane v Secretary, Department of Family and Community Services [2004] AATA 789REASONS FOR DECISION
29 June 2007 Ms G Ettinger - Senior Member
BACKGROUND
1. Mr Ezekiel came to Australia from India with his parents when he was a teenager, and has worked over the years as a trader, selling watches and other merchandise. He has been in receipt of Disability Support Pension (DSP) since 2002. Over a period of years he has moved between the family home in Melbourne where he has resided with his wife and four children, and the Bondi, Sydney home of his parents (now deceased).
2. Mr Ezekiel told me about how difficult his relationship with his wife has been over the years, particularly since he developed prostrate cancer and underwent surgery for it in 1996. He told me that he married in 1981, and remains loyal to his wife and four children (born 1981, 1983, 1985 and 1987), stating that he would assist his wife if she were in trouble, but claiming at the same time to have been separated from her since 2005, or indeed before that date. Mr Ezekiel says he is able to date the separation specifically from 2005 when he transferred his share of the Melbourne family home to his wife for no consideration.
3. In the alternative Mr Ezekiel conceded, as the Social Security Appeals Tribunal (SSAT), found, that the Tribunal might find him to have been separated from his wife since 14 February 2006, which was when he inherited a half share of his parents’ house in Bondi.
4. The Secretary, Department of Employment and Workplace Relations (the Secretary) held on 11 July 2006 that Mr Ezekiel was a member of a couple, and that on the basis of that finding, his assets exceeded the limit for the receipt of DSP. The DSP payments were ceased, and Mr Ezekiel was accordingly found to have an overpayment of DSP for the period 14 February 2006 to 6 July 2006.
5. On his appeal to the SSAT, that Tribunal held that Mr Ezekiel had separated from his wife from 14 February 2006. The SSAT ordered that accurate details of Mr Ezekiel’s assets be obtained, and the debt recalculated.
6. The first appeal before me was by the Secretary against the decision of the SSAT which held that Mr Ezekiel has been separated from his wife with effect from 14 February 2006, and that he is therefore not a member of a couple.
7. In a second appeal, Mr Ezekiel contested the findings of the SSAT in regard to items 1(c) and 2 of its decision which follow:
Item 1(c): “On 22 January 2005 Mr Ezekiel transferred his 50% share of the property in Caulfield to his wife for no financial consideration, and as such the gifting provisions should be applied to this transfer for a period of five years from 2005. As the Caulfield property was Mr Ezekiel’s principal home and he was not separated from his wife at the time of the transfer in 200 (sic 2000), it should be regarded as an exempt asset from this time until it ceased being Mr Ezekiel’s principal home and he separated from his wife in February 2006.”
Item 2: “That Mr Ezekiel’s debt resulting from an overpayment of disability support pension for the period 14 February 2006 to 6 July 2006 be recalculated in light of any reassessment of his entitlement to the pension, and that the balance of any debt be recovered.”
8. I was concerned about the inconsistencies in Mr Ezekiel’s oral evidence, as compared to the documentary evidence. I noted that whilst Mr Ezekiel insisted that he was separated from his wife, either by 2005 or 2006, bank account statements, bills for the utilities in the Melbourne house, and certain other documents were still either in the joint names of Mr Ezekiel and his wife, or indeed in Mr Ezekiel’s name showing his address as the Melbourne address. A statement of Mr Ezekiel’s medical conditions and medication dated 31 August 2006 showed his home address as the Melbourne address. An Energy Australia account dated 27 February 2007 for the Sydney property of which Mr Ezekiel is co-owner and where he states that he lives, only shows his brother Albert as the account holder.
9. Mr Ezekiel attributes many of those inconsistencies to the fact he suffers depression and hearing loss. He claims that due to his hearing loss he did not always understand what Centrelink staff told him, but acknowledges he failed to inform Centrelink of his change of residence to Sydney. He maintains that the use of the Melbourne address with the Melbourne bank for example, was simply that the account was opened in Melbourne, so he and his wife held the account jointly in Melbourne.
10. I am not satisfied that Mr Ezekiel is not a witness of truth. However, I am unable in the circumstances to find that he is not a member of a couple. My reasons follow.
ISSUES TO BE DETERMINED
11.The issues to be determined in this matter are:
·Whether Mr Ezekiel’s principal home is in Melbourne or Sydney;
·Whether Mr Ezekiel is a member of a couple for purposes of the social security law, and if not, when he ceased to be such;
·What is the value of Mr Ezekiel’s assets to be taken into account in assessing his rate of DSP;
·Whether Mr Ezekiel has incurred a debt of DSP (section 1223(1) of the Social Security Act 1991, (the Act));
·If so, whether the debt should be recovered;
·Whether section 1236 of the Act applies to write off the debt
·Whether there is sole administrative error as envisaged in section 1237A(1) of the Act so that the debt can be waived; or
·Whether there are special circumstances pursuant to section 1237AAD of the Act in order that the debt might be waived in whole or in part.
12. Mr Ezekiel was represented by his accountant, Mr A Samuel of Choice Business Management Pty Ltd, and the Secretary, by its advocate, Mr G Richardson.
RELEVANT LEGISLATION
13. The relevant legislation in this matter is the Social Security Act 1991, in particular sections 1223, 1236A, 1237A, 1237AAD and the Social Security (Administration) Act 1999.
“How to work out a person’s age pension rate
A person’s age pension rate is worked out:
(a) if the person is not permanently blind-using Pension Rate Calculator A at the end of section 1064 (see Part 3.2); or
(b) …
Members of a couple
1064‑A2 Where 2 people are members of a couple, they will be treated as pooling their resources (income and assets) and sharing them on a 50/50 basis (see points 1064‑E2, 1064‑F2 and 1064‑G2 below). They will also be treated as sharing expenses (e.g. for rent) on a 50/50 basis (see section 1070V).
1118 Certain assets to be disregarded in calculating the value of a person’s assets
1118(1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 198H, 198HA, 198HB, 198J, 198JA, 198JB, 198K and 198L, subparagraph 501E(1)(d)(iv), Division 1B of Part 3.10 and sections 1125, 1126, 1133 and 1135A), disregard the following:
(a) …
(b) if the person is a member of a couple-the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;”
DOCUMENTS
14. I had before me:
·Documents lodged pursuant to the Administrative Appeals Tribunal Act 1975, the T-Documents as Exhibit R1
·Report of Australian Valuation Office dated 14 February 2007, as Exhibit R2
·Historical title search of the Melbourne property as Exhibit R3
·Document evidencing the transfer of the Melbourne property dated 22 January 2005 as Exhibit R4
·Commonwealth bank account statements as Exhibit R5
·Statement of Pamela Ezekiel dated 12 February 2007 as Exhibit A1
·Letter of Rudstein Kron Lawyers dated 7 May 2007 as Exhibit A2
·Summary of Mr Ezekiel’s medical history dated 31 August 2006 showing his address as the Melbourne house, Exhibit A3
15. Mr Ezekiel undertook to supply certain other documents within seven days of the hearing. Within the prescribed time, the Tribunal was served with photocopies of bills for utilities, and other such documents. Copies were forwarded by the Tribunal to Mr Richardson.
WHETHER MR EZEKIEL’S PRINCIPAL HOME IS IN MELBOURNE OR IN SYDNEY
16. It was undisputed, and I accept that at the time of the grant of DSP in 2002, Mr Ezekiel was living in Melbourne with his wife and four children, and owned a 50 per cent share of their residence there.
17. Mr Ezekiel told me that from 1985 until January 2005, he and his wife were joint owners of the Melbourne property which was purchased in 1987. Mr Ezekiel said that in 2005 he decided to transfer his 50 per cent share of the Melbourne property to his wife, as their relationship had deteriorated, and he had the opportunity of moving to Sydney, knowing he and his brother would eventually inherit their parents’ house. He said he did not discuss the issue with his wife as he did not want her to have a claim on the Sydney house, but wanted to safeguard her and the children.
18. Mrs Pamela Ezekiel gave oral evidence by telephone from Melbourne. She said that her relationship with her husband was strained, and said that they had been living separately long before the transfer of the house, and for most of their married lives. She corroborated her husband’s evidence that the transfer of the house was to secure her position and that of her children. She also corroborated her husband’s evidence that the whole family joined in to pay the mortgage on the Melbourne house.
19. Mr Ezekiel said that from 2000, he was spending a lot of time in Sydney and travelling from Melbourne to Sydney four to five times a year, spending a period of three to eight weeks at a time in Sydney. He agreed the airfare was approximately $200 each time, and could not explain how he managed to pay that from his DSP. He said that when the opportunity arose to move to Sydney in 2004, he took it. In considering the documentary evidence, I noted however that on his newly opened pensioner security account dated 8 April 2005 (Exhibit R5), Mr Ezekiel gave his Melbourne address as his residential address. Mr Ezekiel’s explanation for that was that after 2004 his principal home was in Sydney, but because he was opening the account in Melbourne, he gave the Melbourne address. In the bundle of documents provided by Mr Ezekiel after the hearing, bills for utilities in 2004 showed Mrs L Ezekiel, Mr Ezekiel’s mother as the account holder. This was later changed to Mr A Ezekiel, the Applicant’s brother, including on the most recent bill provided which was dated 27 February 2007. Most of the bills before me which related to the Melbourne house showed Mr Ezekiel as the account holder, with the home address of the Melbourne house, while Mrs P Ezekiel was shown as the account holder for a Telstra account in January 2005.
20. Mr Ezekiel also submitted a copy of a tax return for 2004/5 which showed his address as the Melbourne address. I cannot say whether this was lodged because it was not signed or dated. He also sent me a photocopy of the first two pages of what purported to be a 2005/6 tax return into which a Sydney address has been entered, which has not been completed, and is of no assistance to me.
21. Mr Ezekiel explained that his father moved to a nursing home in 1998, and died in 2000, and he had struggled to maintain the marriage until 2005 when his youngest child finished school. Mr Ezekiel said that his brother Albert had heart surgery and a back operation in 2002/3, and that he had looked after him in Sydney as well as caring for his mother who entered a nursing home in Sydney in January 2005. Mr Ezekiel said that the brothers were extremely close to their parents and looked after them both financially and spiritually, and insisted that he moved to Sydney in 2004, but that the move took place latest in January 2005. He also acknowledged 14 February 2006 as an alternative date for the move to Sydney because probate was granted on that date, and he became the owner of a half share of his parents’ house in Sydney.
22. Mr Ezekiel told me that he was estranged from his sister in Sydney, that he had to be in Sydney because his parents’ will was being contested, and that he told the children he wanted to be buried in Sydney.
23. I was mindful of the Secretary’s argument that Mr Ezekiel continued to live in Melbourne. I was mindful of the summary of his medical history dated 31 August 2006 which shows his address as the Melbourne address (Exhibit A3), and the other documents, such as bank accounts and utilities showing his address as the Melbourne address. As recently as 2007, Mr A Ezekiel, the Applicant’s brother is shown as the sole account holder for an Energy Australia electricity account for the Sydney house.
24. Mr Ezekiel gave evidence about the addresses he has provided with regard to his driving licence. He said that he changed the address to his Sydney address when his licence had to be renewed in 2006, but that his Victorian licence showed his Melbourne address. He said that he changed his Medicare card to his Sydney address last year, and gave as his explanation for the tardy change, the fact that he is lazy and somewhat forgetful. None of the above mentioned documents were tendered.
25. Mr Ezekiel said that notwithstanding the separation, he visited his family in Melbourne for a week at Passover in 2007, and for five weeks over Christmas 2006. Mr Ezekiel was either unwilling to tell me, or did not remember details of visits in the previous years.
26. I was able to conclude from the evidence that Mr Ezekiel moved around Australia while he was in business, and from Melbourne to Sydney while his parents were alive. I accepted that he and his brother were devoted to their parents and that he did that in order to care for them. I accepted that when Mr Ezekiel realised that with the death of his parents he would, in the not too distant future, inherit 50 per cent of the Bondi property, and be subject to litigation from other family members, he decided to protect his family’s interests as well as his own, and transferred his half share of the Melbourne property to his wife for no consideration in early 2005.
27. I was mindful that when the appeal against the decision to cancel his DSP was on foot, a note made in connection with the reconsideration of the cancellation which was affirmed, (T17), noted that “Customer stated that the marital home located in Caulfield is the principal home”.
28. I was concerned that Mr Ezekiel still has most of the documents associated with utilities and banks with his Melbourne address, and that he did not inform Centrelink of any change of address until Centrelink wrote to him in mid 2006 asking him certain questions as a result of a tip-off.
29. The term “principal home” is not exhaustively defined in the legislation but has been considered a number of times. I am mindful that the Tribunal in Re Samek and Secretary Department of Social Security (1988) 16 ALD 295 stated:
“Typically, the principal home will be the family home, in the sense of being the home in which the couple whose assets are to be assessed have lived for most of their married lives while they have raised their children and in which, at the time of the assessment, they continue to live. …”
30. I am mindful, having heard Mr Ezekiel’s rambling and garrulous evidence, that Mr Ezekiel may not be a very organised person, am however satisfied that if he had indeed moved on a permanent basis to Sydney, he would have seen to detail such as the changes of address over a period of time, as required.
31. Accordingly I am not satisfied that Mr Ezekiel moved to Sydney on a permanent basis in 2005, neither when he inherited his half share of the Bondi property after probate was granted on 14 February 2006. I accept that Mr Ezekiel has stayed in Sydney for extended periods over time, noting that previously it was in connection with caring for his parents, and that now it is in relation to the litigation about the house. I find that notwithstanding his transfer of his half share of the Melbourne property to his wife in 2005, Mr Ezekiel’s his principal residence remains Melbourne.
WHETHER MR EZEKIEL IS A MEMBER OF A COUPLE FOR PURPOSES OF THE SOCIAL SECURITY LAW, AND IF NOT, WHEN HE CEASED TO BE SUCH.
32. In making a decision about whether Mr Ezekiel is a member of a couple for purposes of the social security law, I have considered section 4 of the Act. As relevant it follows.
“Member of a couple—general
4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) 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; or
….”
33. It is not in dispute that Mr and Mrs Ezekiel have been legally married since 1981. However Mr Ezekiel is claiming to be living separately and apart from his wife on a permanent or indefinite basis. Mr Ezekiel claims before this Tribunal that he is not a member of a couple, that he lives in Sydney in the house he and his brother inherited from his parents, and that his wife lives in the family home in Melbourne.
34. Mr Ezekiel told me that his wife was a “good lady”, a good wife and mother and that the problem was not with her, but with him, in that he could not make her happy. He said that there was no violence, but they did not share the same views, and had drifted apart even before his prostate cancer in 1996. He said that from 1996 he sometimes shared a bed with his wife, and continued to have his clothes hanging in their bedroom wardrobe. At other times he would sleep in a separate bedroom, but added that he had been sexually dysfunctional since the illness in 1996, and had not attempted to remedy that. Besides he said he had no money to buy Viagra.
35. Mr Ezekiel said that his father moved to a nursing home in 1998, and died in 2000, and he had struggled to maintain the marriage until 2005 when his youngest child finished school. Mr Ezekiel said that the brothers were extremely close to their parents and looked after them both financially and spiritually, and insisted that he moved to Sydney in 2004, but that it was latest in January 2005. He submitted that in the alternative,14 February 2006 was a relevant date as probate was granted on that date, and he became the owner of a half share of his parents’ house in Sydney.
36. I was satisfied that Mr Ezekiel did not inform Centrelink of any separation until April 2004 when investigations regarding Mrs Ezekiel’s income had been commenced due to a data match with the ATO.
37. I have found however that Mr Ezekiel’s principal residence is in Melbourne, and that he has been in Sydney over the years to care for his brother and his parents, and now to be available in connection with the litigation over his parents’ will.
38. However, I still have to consider whether he is a member of a couple.
39. In deciding whether Mr Ezekiel is a member of a couple for purposes of the Act, I have taken into account all the circumstances of the relationship including, but not exclusively relying on the various criteria listed in section 4(3) of the Act (Pelka v Secretary, Department of Family & Community Services). As relevant section 4(3) of the Act follows:
Member of a couple—criteria for forming opinion about relationship
4(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(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.
4(3A) The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage‑like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.
The Financial Aspects of the Relationship
40. In assessing the financial aspects of the relationship between Mr and Mrs Ezekiel, I have considered their ownership of real estate, or other major assets, joint liabilities, significant pooling of financial resources, legal obligations owed by one person in respect of the other person, and the basis of any sharing of day‑to‑day household expenses.
41. As already stated above, Mr Ezekiel transferred his 50 per cent share of the Melbourne house which he had shared with his wife since 1985, to her for no value in early 2005 in anticipation of inheriting a half share of the Bondi house. The value of a person’s principal home can, pursuant to section 1118(1) of the Act be disregarded for the purposes of the assets test. I am satisfied that Mr Ezekiel’s principal home at the time of the transfer was in Melbourne. Mr Ezekiel did not notify Centrelink of the transfer, or of his change of address to Sydney until Centrelink wrote to him as a result of a tip-off.
42. Mr Ezekiel said he obtained legal advice about the ownership of the house, but did not discuss the transfer of the house with his wife as he did not want her to a have a claim on the Sydney house, but wanted to safeguard her and the children. Mr Ezekiel said that the transfer was completed on 8 December 2004 (Exhibit R4). When asked why he had told the SSAT that he had transferred the house to his wife because of his gambling habits, M Ezekiel said that he had to “say something”, and then added that his wife did not know his habits.
43. Mrs Pamela Ezekiel gave oral evidence by telephone from Melbourne. She said that her relationship with her husband was strained, and they had been living separately long before the transfer of the house. She corroborated her husband’s evidence that the transfer of the house was to secure her position and that of her children. She also corroborated her husband’s evidence that the whole family joined in to pay the mortgage on the Melbourne house.
44. Evidence about the furniture was that it was old and jointly owned.
45. Notwithstanding Mr Ezekiel’s claim that he moved to Sydney, he has given his address as the Melbourne address to his bank, the account being a joint account between the couple (T6). The Centrelink payments for Mr Ezekiel (while they were being made), and youth allowance payments for his sons continued to be paid into the Elsternwick, Victoria, Commonwealth Bank Streamline account, and the evidence of both Mr and Mrs Ezekiel was that the money was available for Mrs Ezekiel for housekeeping. He said that he himself lived from borrowings, assistance from his relatives in Sydney, and the sale of watches as a hawker. Mrs Ezekiel said that as far as she was concerned the names in which the utilities were registered were not important. She also said that even if she was divorced, she would retain her married name.
46. I noted however for example that on his newly opened pensioner security account dated 8 April 2005 (Exhibit R5), Mr Ezekiel gave his Melbourne address as his residential address. Mr Ezekiel’s explanation for that was that notwithstanding after 2004 his principal home was in Sydney, but because he was opening the account in Melbourne, he gave the Melbourne address.
47. A summary of Mr Ezekiel’s medical history dated 31 August 2006 and showing his address as Melbourne, was tendered, and is Exhibit A3. Documents sent to the Tribunal and the Department to complete Mr Ezekiel’s case, indicate that utilities accounts for the Bondi house (the most recent dated 27 February 2007), show Mr Ezekiel’s brother as the account holder who took over from his mother after hear death. The unsigned, undated, 2004/5 tax return shows Mr Ezekiel’s address as the Melbourne house. I am disappointed that Mr Ezekiel would submit two pages of a purported 2005/6 tax return with his Sydney address inserted, which more likely than not had, at the time of sending it, had neither been completed nor lodged. I place no weight on either tax return.
48. When asked what the arrangements were for buying food in Melbourne, Mr Ezekiel said that he gave his pension to his wife to use for food and bills, adding that the children assisted. Mrs Ezekiel corroborated this evidence, saying that she used the pension for housekeeping and paying bills, even in her husband’s absence. She said that he has access to the money if he wanted it, but that she needed it so he left it to her.
49. The feelings expressed by Mr Ezekiel were that he would care for his family at all times, and the joint bank accounts with even the children’s benefits being paid into them, attest to this. The evidence from Mr Ezekiel was resources were pooled to pay the mortgage for the Melbourne house.
50. Mr Ezekiel said that his business was not successful, and he had to borrow money, and utilise suppliers’ goods. Mr Ezekiel did not participate in looking after the house. He said that he never has, and that he is not at all domesticated.
51. When Mr Richardson put to Mr Ezekiel that the evidence of his involvement with his wife and their financial affairs indicated the relationship was not over, he said that notwithstanding their separation, communications and contact are never over, because she is the mother of his children. He said that if necessary, given his moral obligation, and his honour, and the status of a man, he would give her assistance even to the extent of selling his mother’s house. He said that his wife would reciprocate similarly. Mrs Ezekiel agreed that her husband would help her with money for the children if the situation arose.
52. Mr Ezekiel was referred to T11, a document prepared for Supreme Court proceedings in which he was involved. In paragraph 104, Mr Ezekiel had written “I do not have any superannuation and I have a motor vehicle worth approximately $3,000.” However, he disclosed that in approximately September 2006, he organised a line of credit to the value of $150,000 with repayments of $375 per month for his car on the security of the Bondi property. I noted that Mr Ezekiel told the SSAT that he could not borrow money because he had no income. The evidence to the SSAT appears to have been inaccurate.
53. As to debts; Mr Ezekiel said that he had used $90,000, he has personal debts in the thousands, including $20,000 to suppliers (incurred in early 2000), and three or four thousand dollars for giftware. He said that he has credit card debts and referred specifically to living expenses, his mother’s funeral and consecration costs, and legal and accounting costs. He said that his brother helps with the electricity and gas and he (Mr Ezekiel) utilises the credit line.
54. He also said in reply to questions regarding paragraph 113 where he deposed that he was selling watches on the street, that he was selling other goods as well, and living on that income so that his pension still went to his wife. When asked about the Commonwealth Bank pensioner security account (Exhibit R5), Mr Ezekiel acknowledged it was current with both his and his wife’s signatures so they could both access the pension if it was required. Statements for 2006 still showed Mr Ezekiel’s address as Melbourne.
55. I find from the situation regarding the bank accounts and the access by Mrs Ezekiel to her husband’s pension that there was not only a sharing, but a pooling of expenses for the family and for the Melbourne household which is Mr Ezekiel’s principal home.
56. Mr Ezekiel said that although he approached his solicitors about the transfer of the Melbourne property in 2004, he did not consider divorce because of the stigma, adding that if his wife wanted a divorce he would not oppose it. He referred me to Exhibit A2, a letter dated 7 May 2007 from Rudstein Kron Lawyers in Victoria, who wrote a “To whom it may concern” letter as follows:
“We confirm that we have been instructed by Morris Ezekiel to prepare Minutes of Consent Orders to be submitted to the Family Court which will give effect to the transfer of all his right, title and interest in the property located at 16 Gardenvale Road, South Caulfield to his estranged wife, Pamela Ezekiel.”
57. The above quoted letter dated 7 May 2007 appears to have been prepared in anticipation of the hearing on 10 May 2007, but does not assist me as the Melbourne property was transferred to Mrs Ezekiel by her husband in late 2004.
58. I concluded that notwithstanding Mr Ezekiel’s transfer of his half of the Melbourne house to his wife, and the move to Sydney to deal with litigation, the couple’s financial arrangements are very linked and pooled. They share bank accounts, Mrs Ezekiel is entitled to use any pension her husband receives, and the family join in to help pay the mortgage.
59. Clearly financial affairs are not the only indicia, but on the evidence I have about their financial affairs, I find that Mr Ezekiel is a member of a couple.
The Nature of the Household
60. In considering this aspect of the relationship, I must consider, among other things, any joint responsibility for providing care or support of children, the living arrangements of the people, and the basis on which responsibility for housework is distributed. I was satisfied from the evidence that little has changed over the years in respect of the nature of the Ezekiel household. Both Mr and Mrs Ezekiel told me the relationship was not a happy one, and the evidence before me is that Mr Ezekiel has been living both in Sydney and Melbourne as previously. He also told me that he has lived everywhere in Australia.
61. Mr Ezekiel gave evidence that he had to be in Sydney at attend to court proceedings. He said that he shared the same room as his wife when he was in Melbourne, and his clothes were in the bedroom wardrobe. He has taken no responsibility for housework either before or after the so-called separation. That is not unusual, and nothing has changed in that regard.
62. The feelings expressed by Mr Ezekiel were that he would care for his family at all times, and the joint bank accounts with even the children’s benefits being paid into them, attest to this. The evidence from Mr Ezekiel was resources were pooled to pay the mortgage for the Melbourne house.
63. Mrs Ezekiel referred to her husband’s difficult mental state, saying that it was difficult to live with five people with bi-polar illness. She explained that her children were difficult, and suffered the illness too. She said that her youngest child informed her he would never speak to her again if she divorced.
64. I am not satisfied that Mr and Mrs Ezekiel’s living arrangements have changed to the extent that I could find Mr Ezekiel not to be a member of a couple in regard to the household arrangements. Mrs Ezekiel said that they lived separate lives for most of their married life, which indicates to me that not much has changed, and they remain a couple. I am not able to be satisfied on the basis of the nature of the household that the couple are separated.
The Social Aspects of the Relationship
65. Assessing the social aspects of the relationship includes a consideration of whether the people hold themselves out as married to each other, the assessment of friends and regular associates of the people about the nature of their relationship, and the basis on which the people make plans for, or engage in, joint social activities.
66. When asked if Mr Ezekiel and his wife attended social events in Melbourne, he answered in the affirmative saying that they went to dinners and weddings and held themselves out as a couple. He said that he would have been too ashamed to tell people they were separated although he told his brother. He said that he made a big mistake in not telling Centrelink that he was separated. Mrs Ezekiel told me that she did not go into detail about the separation, but that her family had known for a long time. She said both in her statement (Exhibit A1) and in her oral evidence that her husband moved between his Sydney and Melbourne homes. She said that she understood her husband would inherit the Sydney property on his parents’ death and that she would have the Melbourne house. Mrs Ezekiel said that the separation had to happen, there were more than 30 arguments, and her husband had to decide what he wanted to do. She said that there was not one decisive event, but that they had separated long before the transfer of the house in 2005. She said that they lived separate lives for most of their married life, which indicates to me that not much has changed, and they remain a couple.
67. I was not able to conclude from this evidence therefore that there had been a separation. The evidence of both Mr and Mrs Ezekiel was that he travelled a lot, and was away from home, and moved between Sydney and Melbourne frequently. Even though the couple’s evidence is that they do not live together harmoniously, I am unable to find on the basis of the social aspects of the relationship that Mr Ezekiel is not a member of a couple.
Sexual Relationships
68. Mr Ezekiel told me that he has had no sexual relations since his prostate cancer operation in 1996, and that he has not made any efforts to remedy that situation, in part because he cannot afford the relevant drugs. I was able to conclude from the evidence of both Mr and Mrs Ezekiel that the marriage has not been happy for many years, and that since 1996 sexual relations have not been possible. Sexual relations are often an important factor to consider in deciding whether persons who come to this Tribunal are members of a couple. This aspect of people’s lives varies greatly however, and in the Ezekiel marriage the weight given to the sexual relationship in the decision making is not great. I accept the evidence that Mr Ezekiel has given in this regard, but find that not much has changed for him in this aspect of his relationship for many years, and that he remains a member of a couple regardless of the lack of sexual relationship with his wife.
The Nature of the People’s Commitment to Each Other
69. Consideration of the nature of the couple’s commitment to each other includes considering the length of the relationship, the nature of any companionship and emotional support that the couple provide to each other, whether the people consider that the relationship is likely to continue indefinitely, and whether the couple see their relationship as a marriage‑like relationship.
70. I have noted above that the couple married in 1981, and that they have four children. Mr Ezekiel told me that he remains loyal to his wife and the children, stating that he would assist his wife if she were in trouble, but claiming at the same time to have been separated from her since 2005 or indeed before that date. Mr Ezekiel is able to date the separation specifically from 2005 when he transferred his share of the Melbourne family home to his wife for no consideration.
71. I did not find from the evidence that this couple have given companionship or emotional support to each other over many years, although the stated commitment of Mr Ezekiel to care for Mrs Ezekiel was enunciated. The lack of companionship is likely to be because Mr Ezekiel has been away from home doing business for so many years.
72. I noted that both Mr and Mrs Ezekiel told me they considered they were separated, but that neither prefers to divorce. I am satisfied that Mr Ezekiel, through his joint bank account and leaving his pension payments to his wife for her use, is committed to her. He indicated in his oral evidence that he would always look after her.
73. Mr Ezekiel told me that he made his will in 1996, and that his wife and children are the beneficiaries under it. He said that it was with his solicitor in Melbourne.
74. Mr Ezekiel said that although he approached his solicitors about the transfer of the Melbourne property in 2004, he did not consider divorce because of the stigma, adding that if his wife wanted a divorce he would not oppose it.
75. Mrs Ezekiel told me that it would be wrong of her to apply for dissolution of the marriage, and it would be up to her husband if he wanted it.
76. Mr Ezekiel referred me to Exhibit A2, a letter dated 7 May 2007 from Rudstein Kron Lawyers in Victoria, who wrote a “To whom it may concern” letter as follows:
“We confirm that we have been instructed by Morris Ezekiel to prepare Minutes of Consent Orders to be submitted to the Family Court which will give effect to the transfer of all his right, title and interest in the property located at 16 Gardenvale Road, South Caulfield to his estranged wife, Pamela Ezekiel.”
77. I was mindful that Mr Ezekiel had actually transferred his share of the house in Melbourne to his wife in December 2004 (Exhibit R4).
78. Commitment takes many forms, and I am satisfied that Mr Ezekiel is committed to his wife even though he moves around Australia, because he is a member of a couple. I cannot find much has changed in that regard over the years.
Conclusions regarding whether Mr Ezekiel is a member of a couple
79. In coming to a conclusion I am guided by the various decided cases in this area including Pelka. I am mindful of section 4(3A) of the Act which follows:
4(3A) The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage‑like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.
80. I am not satisfied from the evidence, including the documentary evidence, that Mr Ezekiel is living separately and apart from his wife on a permanent or indefinite basis. I have noted for example a letter of 19 July 2006 from Mr Ezekiel to Centrelink in which he states in connection with the estate of his mother and the litigation which has ensued within the family:
“Since receiving confirmation of the will contestation I have resided at … Bondi, NSW 2026 which is currently my principal place of residence and will remain as such until at least the earliest conclusion date to the Will contestation. The aforesaid property is not a ‘business asset’ nor is the property income producing …”
(the emphasis is Mr Ezekiel’s)
81. Mr Ezekiel’s emphasis was that he was in Sydney for purposes of the litigation regarding the will, but not that he had moved to Sydney on a permanent or indefinite basis.
82. I have found in the paragraphs above that Mr Ezekiel’s principal home is in Melbourne, and have taken into account the tests in section 4(3) of the Act. I have noted from Pelka, which is a case about a marriage-like relationship between two people, rather than the present case which is whether the Respondent is a member of a couple, that French J stated:
“A decision-maker in applying the matters set out s4(3) should acknowledge that they are non-exhaustive and at least indicate that consideration has been given to whether there might be any other factors relevant to the difficult judgment of whether a ‘marriage-like’ relationship exists. Each of the individual matters listed in s4(3) is accompanied by a non-exhaustive list of factors …”
83. I am satisfied that considering the relationship within the terms of the legislation, and taking into account the factors listed in section 4(3) of the Act as well as all the other circumstances surrounding this man and his family, that Mr Ezekiel remains a member of a couple. As Senior Member McCabe said in Cullinane v Secretary, Department of Family and Community Services [2004] AATA 789, “Not all relationships are happy, and they do not always conform to the stereotypes of family life.”
WHAT IS THE VALUE OF MR EZEKIEL’S ASSETS TO BE TAKEN INTO ACCOUNT IN ASSESSING HIS RATE OF DSP
84. I have accepted for the reasons given above, that notwithstanding the transfer of his half share of the Melbourne house to his wife, Mr Ezekiel’s principal residence continues to be in Melbourne. As I have found that Mr Ezekiel is a member of a couple, then he and wife are treated as pooling their assets and sharing them equally. Thus Mrs Ezekiel’s sole ownership of the Melbourne house does not prevent it from being taken into account for the purpose of considering the Respondent’s pension entitlements. Section 1064 of the Act, Module A, contains the provisions for working out the effect of income on a person’s rate of DSP.
85. The value of the principal home is disregarded for the purposes of the assets test. (section 1118(1) of the Act).
“1118(1) In calculating the value of a person’s assets for the purposes of this Act (other than sections 198H, 198HA, 198HB, 198J, 198JA, 198JB, 198K and 198L, subparagraph 501E(1)(d)(iv), Division 1B of Part 3.10 and sections 1125, 1126, 1133 and 1135A), disregard the following:
(a) …
(b) if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person’s partner or of both of them that is a right or interest that gives the person or the person’s partner reasonable security of tenure in the home;”
86. However, the value of Mr Ezekiel’s share of the Sydney house must be taken into account from the date of his acquisition of it through the estate of his mother which is 14 February 2006.
87. The valuation by the AVO of the Sydney house at 11 July 2006 which is at T15, was $1,400,000. Since 14 February 2006, Mr Ezekiel has owned a half share of the house, which can be taken to be $700,000. As I have found that Mr Ezekiel is a member of a couple, his share of the value of the house must be taken into account in calculating his DSP entitlements. As a married homeowner, his assets are in excess of the limit for the receipt of DSP. Mr Ezekiel was notified of this by the Secretary on 19 July 2006.
WHETHER MR EZEKIEL HAS INCURRED A DEBT OF DSP AND IF SO, WHETHER THERE ARE CIRCUMSTANCES IN WHICH IT MAY BE WAIVED IN FULL OR IN PART
88. I have to consider whether Mr Ezekiel has incurred a debt pursuant to section 1223(1) of the Act, in that he obtained DSP for a period when he was not entitled to.
“1223(1) Subject to this section, if:
(a) a social security payment is made; and
(b) a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;
the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”
89. I am satisfied that Mr Ezekiel has incurred a debt for the period 14 February 2006 to 6 July 2006 because I have found in the paragraphs above that he is a member of a couple, and that his principal residence is in Melbourne. That means that, taking into account Mr Ezekiel’s share of the value of the Sydney house, his assets exceeded the level for payment of DSP. I find that Mr Ezekiel incurred a debt for the period as raised by the Secretary.
90. The Commonwealth, and accordingly the Tribunal, also has a power to waive the debt in certain circumstances. Waiver takes place pursuant to sections 1237A, 1237AA, 1237AAA, 1237AAB, 1237AAC or 1237AAD of the Act.
91. The Secretary, and this Tribunal standing in his shoes, may also, pursuant to the powers in section 1236(1) of the Act, write off the debt. Considerations pursuant to section 1236(1) of the Act include whether the debt is irrecoverable at law, whether the debtor’s whereabouts are unknown and whether the debtor has no capacity to repay the debt. In fact, none of the conditions which must be satisfied to invoke section 1236(1) of the Act apply in this case, and the debt cannot be written off.
92. Section 1237A states that the Secretary must waive the debt if it is solely attributable to administrative error. Mr Ezekiel conceded he failed to advise Centrelink of his change of status as a member of a couple, and his change of residence to Sydney. I have found that Mr Ezekiel did not change his residence or his status as a member of a couple, and I am satisfied that there has been no sole administrative error in this case. Accordingly waiver due to administrative error of the Commonwealth pursuant to section 1237A of the Act does not apply in this case.
93. The Secretary, and accordingly the Tribunal may also consider waiver due to special circumstances. Section 1237AAD applies in that regard and follows as relevant.
“The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.”
94. There are well known leading cases such as Beadle v Director-General of Social Security (1985) 60 ALR 225. I noted that in Beadle v Director-General of Social Security the Federal Court defined “special circumstances” as being those which are “unusual, uncommon or exceptional”, and that this has been reinforced in many following cases that have been decided since, including Secretary, Department of Social Security v Hulls (1991) 22 ALD 570, Secretary, Department of Social Security v Banks (1990) 20 ALD 19 and Secretary, Department of Social Security v Ellis (1997) 24 AAR 535.
95. In Beadle v Director-General of Social Security (supra), the Federal Court, in examining “special circumstances” within the terms of section 102(1) of the 1947 Act said:
“It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given.”
96. Mr Ezekiel argued that he suffers depression and hearing problems which contributed to his not fully understanding his duties of notification to Centrelink. Mr Samuel argued on his behalf that the asset transfers were not a matter of evasion of his duties, or anything sinister, but a matter of economics for Mr Ezekiel. Mr Samuel submitted that Mr Ezekiel’s statements about returning to his home in Victoria after argument about the will had been settled were misconstrued. He argued that Mr Ezekiel is not a member of a couple and that at least since the gifting of his half of the Melbourne house to his wife, his principal place of residence has been Sydney. Mr Samuels argued that Mr Ezekiel’s DSP should be reinstated.
97. Mr Richardson however, argued against the application of special circumstances to reduce or waive the debt in full in this case. He submitted, referring to section 1237AAD(a)(i) of the Act, that the debt arose because Mr Ezekiel knowingly failed to notify Centrelink of his change of circumstances, including his change of address, disposal of his share of the house in Melbourne, and his separation. Accordingly special circumstances pursuant to section 1237AAD do not apply, he submitted.
98. I was mindful that Mr Ezekiel admitted he did not notify Centrelink of changes in his circumstances as he should have. I accepted Mr Richardson’s argument that this occurred in circumstances where Mr Ezekiel knowingly failed to do so, and hence the debt was incurred in that way. Accordingly special circumstances cannot be applied in this case, but even if they could, Mr Ezekiel, whilst apparently not well off, is not in straitened circumstances. He has a line of credit and a half share of his parents’ house which he has inherited. Mr Ezekiel cited health issues as a special circumstance. Health issues can certainly form part of the consideration of whether special circumstances can be found in a particular case. I accept that Mr Ezekiel has health issues which were recognised in the grant of DSP. However there is no current medical evidence, and I have no evidence to satisfy me that his medical state has worsened. I cannot find that Mr Ezekiel’s health constitutes a special circumstance, but even if it did, in order to apply section 1237AAD, and to do so I must take a global view of all Mr Ezekiel’s circumstances. I am not satisfied that they are special circumstances in terms of the Act.
99. I cannot therefore find that special circumstances pursuant to section 1237AAD of the Act apply to either reduce the debt in whole or in part in Mr Ezekiel’s case.
DECISION
100. The Tribunal sets aside the decision of the Social Security Appeals Tribunal and in substitution finds that:
· Mr Ezekiel is not separated from his wife, and is a member of a couple.
· Mr Ezekiel’s principal residence is the Melbourne property.
· Because Mr Ezekiel’s principal residence is the Melbourne property that is an exempt asset.
· Mr Ezekiel inherited a half share of the Sydney property on 14 February 2006, the value being $1,400,000. Mr Ezekiel’s share is $700,000.
· As Mr Ezekiel’s assets exceeded levels for receipt of DSP, he incurred a debt as calculated by the Secretary, being for the period 14 February 2006 to 6 July 2006 to the value of $3,462.32.
· No special circumstances or other reasons for either write off or waiving the debt in full or in part are found and the debt must be repaid in full.
I certify that 100 preceding paragraphs are a true copy of the reasons for the decision herein of Ms G Ettinger - Senior Member
Signed: Associate
Dates of Hearing 10 May 2007
Date of Decision 29 June 2007
Mr Ezekiel’s Representative Mr A Samuel, Choice Business Management Pty Ltd
The Secretary’s Advocate Mr G Richardson
0
6
0