Fawzi Masri and Secretary, Department of Social Services Sarab Aoudeh OTHER PARTY

[2015] AATA 241

[2015] AATA  241

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2014/2559
Re	Fawzi Masri
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT
And	Sarab Aoudeh
OTHER PARTY

Decision

Tribunal	Mr P W Taylor SC, Senior Member
Date	23 April 2015
Place	Sydney

The decision under review is affirmed.

........................[sgd]................................................

Mr P W Taylor SC, Senior Member

Catchwords

SOCIAL SECURITY – Family Tax Benefit – whether there has been a change to care percentages such that earlier percentages should be revoked and new percentages determined – whether Applicant satisfies 35 percent care threshold to satisfy FTB child criterion – whether Applicant had nil percentage of care for children from 22 April 2012 – whether Applicant overpaid FTB – repayment of FTB debt – no special circumstances exist – decision affirmed

Legislation

A New Tax System (Family Assistance) Act 1999; ss 22, 25, 35J, 35P

A New Tax System (Family Assistance) Administration Act 1999 ss 71, 95, 96

REASONS FOR DECISION

Mr P W Taylor SC, Senior Member

23 April 2015

1. According to Centrelink’s records Mr Masri and Ms Aoudeh have lived at separate addresses since mid-November 2010.  Their two children, aged 13 and 11, have lived with Ms Aoudeh.  But in an April 2011 letter to Centrelink, she acknowledged an arrangement under which Mr Masri had the care of the children on Friday and Saturday nights, and up until about 6:00 pm on Sunday.

2. Mr Masri was absent overseas between April and July 2012.  On 26 July 2012, after his return, Mr Masri claimed family tax benefit (“FTB”).  His claim form asserted that he had a 40% care responsibility for the children.  The application itself, and Centrelink’s internal records, indicate that the principal basis for his claim was the care arrangement described in Ms Aoudeh’s April 2011 letter.

3. The care arrangements described in Ms Aoudeh’s letter can be analysed to produce two different care percentages - depending upon whether or not the calculation takes into account the actual hours, the number of days, or the number of nights, involved. These different percentages, and the data underlying them, are apparent from the following table.

Total	Claimed Care (days per week)					Care %
Days pw	Mon-Thurs	Friday	Saturday	Sunday	Total	Days	Nights
7	0	1	1	1	3	42.86%	28.57%
Hours pw	Claimed Care (hours per week)					All hours
168	0	6	24	18	48	28.57%	na

1. The April 2011 care arrangement, when properly analysed by taking into account only the time when the children were supposed to be in Mr Masri’s care, demonstrated that Mr Masri’s care percentage was less than the 35% threshold required to satisfy the “FTB child” criterion in A New Tax System (Family Assistance) Act 1999 ss 22(7) and 25. Centrelink formed that view and, in September 2012, rejected Mr Masri’s claim. .

2. On 4 October 2012 Mr Masri responded to the initial rejection by providing Centrelink with various annotated calendars (for the years 2010, 2011 and 2012).  Mr Masri marked the 2012 calendar with the dates he said he had the children in his care.  Marked in this way, the calendar suggested that he had care of the children for 3 days a week (or 40% of the time).  However the annotations did not take into account the real details of the 2011 care arrangement.

3. Centrelink sought Ms Aoudeh’s comments on Mr Masri’s claim.  She did not respond, perhaps because of her limited facility with written and spoken English.  In the absence of a response from her, on 28 November 2012 Centrelink accepted Mr Masri’s FTB claim, with effect from 27 July 2012.  Centrelink’s records suggest that, at the same time, it cancelled Ms Aoudeh’s FTB payment, because of her failure to reply to its correspondence.

4. Centrelink’s acceptance of Mr Masri’s claim on 28 November 2012 stirred Ms Aoudeh into action.  That action appears to have involved objection to Mr Masri having any access to the children.  (That appearance derives from (i) correspondence dated 6 December 2012 recording that Mr Masri had been granted Legal Aid in relation to a family dispute; and (ii) Centrelink’s 5 and 17 December 2012 records of complaints by Mr Masri about harassment from Ms Aoudeh about her FTB payments having been stopped.) 

5. Ms Aoudeh also asked Centrelink to review its decision in favour of Mr Masri.  In February 2014, in response to her review application, a Centrelink review officer rejected Mr Masri’s FTB application.  Centrelink also determined that he should repay $1,858.02 − the FTB amount he had been paid for the period from 27 July 2012 until 9 January 2013.  In April 2014 the Social Security Appeals Tribunal (the “SSAT”) affirmed the review officer’s decision.

   The dispute about weekend care

6. A significant factual dispute between Mr Masri and Ms Aoudeh is whether or not he had weekend care of the children at any time, either in 2011 or, more relevantly, between July and December 2012.  Ms Aoudeh said he did not.  She said that prior to April 2012 Mr Masri had been living at Liverpool and merely used to visit the children.  She insisted that after July 20012 she never allowed the children to stay with him on weekends, because she said he was unwell and prone to falling asleep whilst sitting down smoking.  She said she thought it was unsafe to allow the children to stay with him.  In relation to the July to December 2012 period she also provided statutory declarations from a neighbour, and two friends.  Those declarations emphatically asserted that the children did not spend their weekends with Mr Masri.

7. Mr Masri sought to support his weekend care claim with a considerable number of photographs.  He also provided letters and statements from family members, doctors, a neighbour and from the principal of the children’s school. 

8. Most of the photographs Mr Masri provided were of no assistance in resolving the factual dispute about his care claims.  However some of the photographs did show the children at his residence, typically displaying fondness towards, and familiarity with, Mr Masri.  Other photographs also showed the children in a bedroom that Mr Masri had fitted out for their use.  These photographs were at least consistent with, although not probative of, the details of his weekend care claim.

9. Many of the witness statements Mr Masri provided are also of limited assistance in resolving the factual dispute.  This is because they are somewhat formulaic, and general in their observations of the children whilst in Mr Masri’s care.  In addition, many of the statements are inaccurate in referring to the children visiting Mr Masri at his home between 27 July and the end of August 2012.  Those references are inaccurate because Mr Masri did not move into his own residence until 31 August 2012.

10. However two witnesses, Mr Masri’s adult daughter and his niece, gave oral evidence in elaboration of their written letters.  Mr Masri’s daughter gave evidence that he stayed at her house after his return from overseas in July 2012, and until he moved to his new residence at the end of August.  She said the children had stayed at her house, with Mr Masri, every weekend in that period.  Later, after her father moved to his new residence, she visited him there.  On those occasions she observed that the children seemed to use the bedroom set up there in a proprietary and familiar way.  They had various belongings there, including clothes on hangers, brushes, toys and little gifts she had given them. 

11. Mr Masri’s daughter was a careful and impressive witness.  Her evidence was consistent with the photographs to which I have referred.  It was also consistent with the evidence of Mr Masri’s niece.

12. Mr Masri’s niece gave evidence of telephone conversations with Mr Masri’s daughter, during which she heard the daughter address Mr Masri’s children, and she could also hear them talking in the background.  She was quite sure that these conversations occurred after July 2012, when Mr Masri was living with his daughter.  Later in 2012 she sometimes visited Mr Masri on weekends, typically on either a Friday or Saturday evening.  On those occasions the children were present, and appeared to be spending the night with him.  The children, and Mr Masri, were also regular weekend visitors to her house – sometimes on a Saturday and sometimes on Sunday.  On occasions the children brought their schoolbags with them, and they were helped with their homework.

13. Mr Masri’s niece was also a careful and impressive witness.  Her evidence was consistent with the photographs, with Mr Masri’s evidence and with the evidence of Mr Masri’s daughter.

14. Ms Aoudeh did not significantly, or effectively, challenge the evidence of Mr Masri’s daughter and niece.  No doubt she was at a disadvantage in attempting to do so, both because of the complications of language translation and her unfamiliarity with the process of cross-examination.  Moreover, I accept that it would be difficult for anyone to effectively discredit or undermine such definite witnesses.  Nevertheless, I found it surprising that Ms Aoudeh, whose essential claim was that the children spent every night at her house, questioned Mr Masri’s daughter only on the discrepancy which I noted in paragraph 12 above. That discrepancy was insubstantial, in view of the daughter’s emphatic, and essentially unchallenged, evidence that the children had stayed overnight at her house on each of the weekends that Mr Masri lived with her after his return from overseas. 

15. Ms Aoudeh’s questions of Mr Masri’s niece were essentially limited to asking her whether she was “sure” she saw the children every weekend, and to disputing that the children ever had any homework.  Mr Masri’s niece rebuffed both of those questions confidently and definitely.  I accept her evidence as accurate and reliable.

16. I do not accept the evidence Ms Aoudeh proffered as undermining the reliability of the evidence of Mr Masri’s daughter and niece.  One of the statutory declarations Ms Aoudeh proffered was from a friend who emphatically denied that the children spent three days a week with Mr Masri.  This statement was inherently ambiguous and lacked any detail to establish the factual basis for the denial.  I place no weight on it.  Ms Aoudeh’s neighbour, whose statutory declaration was absolutely emphatic that the children spent every weekend with Ms Aoudeh, did not adhere to that certainty when she was cross-examined – and retreated to the weightless observation that the children were present “as far as I know”.  The third witness was a friend of Ms Aoudeh’s.  This witness’s statutory declaration, and oral evidence, were almost equally emphatic in support of Ms Aoudeh.  But the witness was rather surprised to learn that there was photographic evidence of the children at Mr Masri’s residence.  He was unable to reconcile this information with his belief that the children had never even visited Mr Masri at his residence, and that their only contact with him had been incidental meetings when Ms Aoudeh took them to Mr Masri’s adult son’s house.

17. I am unable to accept that the evidence of Ms Aoudeh’s friend adequately contradicts, to the extent of undermining, the reliability of the evidence of Mr Masri’s daughter and niece.  In his oral evidence the friend demonstrated a marked hostility towards Mr Masri, and a strong desire to assist Ms Aoudeh.  I am satisfied that those motivations led him into a vehemence that was not justified, and clouded the reliability of his asserted recollection of the detail of the timing, regularity and nature of the children’s weekend visits to Mr Masri.

18. In these circumstances I accept the generality of Mr Masri’s evidence that, for most of the period from 27 July 2012 to Christmas 2012 he had the weekend care of the two children.  This was essentially as he claimed, and it was likely pursuant to the care arrangement acknowledged in Ms Aoudeh’s April 2012 letter. 

    Mr Masri’s care percentage

19. The Secretary contended however, that any such weekend care was unlikely to have continued much into December 2012.  Correspondence from Legal Aid NSW records that by 6 December 2012 Mr Masri had been granted legal aid in connection with a family dispute.  That dispute apparently related to the children, and was perhaps triggered by Centrelink’s 28 November 2012 decision(s).  In addition, SMS messages from Ms Aoudeh’s phone, apparently dated Friday 14 December 2012, complain both about Mr Masri being responsible for money being taken away from Ms Aoudeh, and also about Mr Masri taking family court proceedings.  They indicate the children’s unwillingness to go to Mr Masri’s house “because there is no one to have fun with”. 

20. Mr Masri agreed that the children’s visits stopped around Christmas time 2012.  But he thought that they did visit, as usual, after the 14 December 2012 messages.  His recollection was that it was not until Christmas itself, when he was expecting them to come to his house, that their visits stopped.  Ms Aoudeh whilst not sure, also said she thought the children visited Mr Masri after the 14 December SMS messages − although, of course, she adhered to her recollection that there were no overnight stays.  In the light of this evidence I accept Mr Masri’s evidence that his weekend care continued up until Christmas in 2012. 

21. As I indicated earlier, Mr Masri’s 4 October 2012 annotated calendar, when understood against the detail of the April 2011 care arrangement, simply does not permit a conclusion that his care percentage satisfies the 35% threshold requirement.  That calendar was marked to indicate that the two children had stayed with him for about 36 days between Friday 27 July and Wednesday 3 October 2012.  Of those marked days, ten were Sundays, six were weekdays (other than Friday) and five of those six were in the September / October school holidays.

22. During the SSAT hearing, and again in the present proceedings, Mr Masri endeavoured to support his care claim, to the extent that it involved midweek stays by the children, by asserting that, until his overseas trip in April 2012, he had actually continued to live at Ms Aoudeh’s address.  He said that the April 2011 letter understated the extent of his care for the children, essentially because he had spent most of his time with them.  He claimed that the April 2011 letter was essentially a stratagem he had employed to aid his application for a public housing allocation.  It would appear that, by emphasising the extent of his past involvement with the children, he was endeavouring to enhance the credibility of his claim and to justify extending it to include some midweek and school holiday period stays.

23. I am not prepared to accept Mr Masri’s claim that the April 2011 letter understated the extent of his care responsibility in 2011.  That claim is inconsistent with the assertion in his 26 July 2012 application, and in the records of his related dealings with Centrelink, that his FTB claim was based on the “weekend” care arrangement described in the April 2011 letter.  In addition, a 30 March 2011 Centrelink record attributes to Mr Masri a statement that he was indeed residing separately from Ms Aoudeh, although regularly visiting her and the children.

24. After the SSAT hearing, and probably around June 2014, Mr Masri prepared an updated version of the annotated calendar he had first provided in October 2012.  This version covered the whole period from 26 July 2012 to the end of the year.   Mr Masri filled it out by relying on his memory and working from a copy of the first calendar.  This updated version of the calendar included annotations in the period after 4 October 2012.  In relation to the period before 4 October 2012 it differed from the previous calendar, by including six additional weekdays, three of them in the September / October 2012 school holiday period.

25. The effect of Mr Masri’s calendar annotations, including the changes he later made to the 4 October 2012 version, is set out in the following table.  The table includes various alternative calculations of the relevant care percentage.  Those calculations assume (in accordance with the finding I have made above) that Mr Masri last had the children for an overnight stay on the weekend of Friday 21 and Saturday 22 December 2012.

26. The shaded rows in the Table indicate the school holiday period.  The two different date periods for those calculations take into account the fact that Mr Masri submitted his first calendar on 4 October 2012 − and this was before the holiday period had ended.  The three rows in each shaded grouping reflect different calculations that sequentially exclude Sunday nights, and then both Sunday nights and midweek stays.

27. The table indicates that the only period when Mr Masri could possibly demonstrate a care percentage of at least 35% is in the September / October 2012 school holiday period.  Even then, he could only do so by including, as overnight stays, the various “Monday to Thursday” dates marked on the annotated calendar version he marked up in about June 2014.  I am not prepared to make a positive finding that any of those midweek stays should be included in the care percentage assessment. 

28. Mr Masri made very little attempt to substantiate this aspect of his care claim.  Such evidence as he did provide about midweek stays was of a most unpersuasive kind.  He sought to substantiate a claim about two Tuesdays he had marked on the calendar − albeit not in the September / October school holiday period.  He attributed to his niece a recollection that she had visited him on those days and noticed that the children had slept over.  Mr Masri’s niece gave evidence of one weekday visit when the children were present.  But that evidence was far too imprecise to offer any meaningful corroboration of Mr Masri’s claim.

29. In relation to the September / October school holiday period Mr Masri gave very little evidence beyond the updated markings on the revised calendar.  He provided some shopping dockets to show expenditure on the children.  But only one of these is dated in the school holiday period, and it is not one of the dates that Mr Masri “annotated” on the calendar version he submitted on 4 October 2012.   None of the other witnesses provided specific evidence of midweek overnight stays by the children in the September / October 2012 school holiday period.  And given the fact that the April 2011 letter arrangement reflects an agreed position that acknowledged Ms Aoudeh as the primary carer for the children, I think it is unlikely that the children did in fact live with him for any significant midweek period in the September / October 2012 school holidays.

30. In these circumstances, Mr Masri has not established that his care percentage for the children satisfies the 35% care threshold FTB eligibility requirement in A New Tax System (Family Assistance) Act 1999 ss 22(7) & 25. Consequently Mr Masri has failed to establish that either of the children was an “FTB child” for the purposes of those provisions.

    The care determination

31. In its decision the SSAT proceeded on the basis that, at some time prior to 28 November 2012 the Secretary had made a determination that Ms Aoudeh and Mr Masri had care percentages of 72% and 18% respectively in connection with the April 2011 care arrangement. The SSAT noted that under the 28 November 2012 decision the Secretary had determined that, from 27 July 2012, Ms Aoudeh had a 100% care responsibility for the two children. In the light of its finding upholding the Secretary’s 28 November 2012 decision and noting that Mr Masri had been absent overseas between April and July 2012, the SSAT regarded itself as obliged (by s 35P of the A New Tax System (Family Assistance) Act 1999) to revoke the Secretary’s earlier determination. Under that perceived obligation, the SSAT determined that Ms Aoudeh’s 100% care percentage applied from 22 April 2012 (the date of Mr Masri’s departure on his 2012 overseas absence).

1. I am unable to agree with the SSAT’s approach to the issue of determination of percentages of care. The Secretary’s obligation to determine a care percentage under s 35B of A New Tax System (Family Assistance) Act 1999 only applies where the Secretary is satisfied that a child “was or will be…an FTB child of more than one individual”. Correspondingly, the revocation obligation imposed by s 35P of the Act is confined to the revocation of a percentage of care determination that “has been made under section 35A or 35B”. Since a care percentage of 35% is a threshold requirement for classification as an “FTB child” (see s 25 of the Act), it seems to me that neither s 35B nor s 35P has an application in the present matter.

2. Nevertheless, for the sake of clarity I will state precisely what findings I make in relation to Mr Masri’s care of the two children.  I find that Mr Masri did have the weekend care of the children from 27 July 2012 until Christmas 2012, in accordance with the arrangement recorded in Ms Aoudeh’s 11 April 2011 letter.  I find that he did not have any additional midweek care of the children, and certainly no overnight midweek care.  Consistent with the general permission granted by s 35J of the Act, I am satisfied that Mr Masri’s care percentage should be based on the number of nights that he had the children’s care during the period.  As indicated by the Table I have set out earlier, when the midweek stay claims are rejected, and only Friday and Saturday night stays are taken into account, Mr Masri’s care percentage is less than 35% throughout the whole period, even during the September / October 2012 school holiday period.

   No “special circumstances” to waive the debt

3. It follows from my findings that Mr Masri has no entitlement to the $1,858.02 FTB amount he received. That amount is therefore a debt due to the Commonwealth: see s 71 of the A New Tax System (Family Assistance) Administration Act 1999.  The Commonwealth has been recovering that amount by $15 fortnightly deductions from his age pension.  As the Secretary submits, there is no basis under ss 95 and 96 of the Administration Act either to waive or to write off the outstanding balance of the debt, unless there are grounds to be satisfied that there are “special circumstances (other than financial hardship alone) that make it desirable”. 

4. The expression “special circumstances” is firmly resistant to exhaustive or prescriptive definition.  Each matter must be assessed according to its own particular circumstances, against the background of a general legislative intention that debts arising from an unentitled FTB payment should be recovered.  Necessarily the recovery of debts arising from such payments is likely to give rise to some degree of financial hardship.  In the present case that measure of hardship is small − given that Mr Masri is required only to make fortnightly repayments of $15 from his age pension (leaving him about $854 per fortnight).  There is no other evidence that was relied on for a finding that “special circumstances” exist.  Neither am I able to discern any such circumstances from the material I have considered.  It seems to me that, on the contrary, Mr Masri should have appreciated that his attempt to rely on the April 2011 care arrangement to substantiate his FTB claim was doomed from the outset − as Centrelink’s initial (September 2012) rejection of his claim made readily apparent.

   Decision

5. The decision under review is affirmed.

I certify that the preceding 39 (thirty-nine) paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member

.........................[sgd]...............................................

Associate

Dated 23 April 2015

Dates of hearing	13 October 2014 and 10 March 2015
Applicant	In person
Solicitors for the Respondent	Department of Human Services
Other Party	In person