Fortescue and Secretary, Department of Social Services (Social services second review)

[2015] AATA 970

Fortescue and Secretary, Department of Social Services (Social services second review) [2015] AATA 970 (8 December 2015)

Division	GENERAL DIVISION
File Number(s)	2015/1722
Re	Robert Fortescue
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member McCabe
Date	8 December 2015
Date of written reasons	16 December 2015
Place	Brisbane

The decision under review is varied so that the amounts of $68,870.60 and $69,322.15 may be recovered from the applicant as debts due to the Commonwealth.

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Senior Member McCabe

Catchwords

SOCIAL SECURITY – wife pension payment – debt raised – whether debt recoverable from person who obtained the benefit – debts due to the Commonwealth – decision under review varied

Legislation

Social Security Act 1947 (Cth) (superseded) ss 31, 161, 135TE, 246

Social Security Act 1991 (Cth) ss 1223(1AA), 1237A

REASONS FOR DECISION

Senior Member McCabe

16 December 2015

1. The applicant commenced proceedings in this Tribunal which concluded with a hearing on 8 December 2015. A decision was made and oral reasons were provided at the end of that hearing. The reasons below were distilled from the transcript.

2. This application for review was lodged by Mr Robert Fortescue on 7 April 2015. It is an application for review of a decision to recover two different debts in respect of a wife pension payment. The original decision was made by the predecessor of the Secretary to the Department of Social Services on 6 August 2004. The debts were raised in respect of payments made on a wife pension paid in respect of Ms Lynette O’Rafferty. The amounts are $68,870.60, incurred in the period from 31 May 1984 to 4 April 1996, and a further amount of $69,322.15 incurred between 18 April 1996 and 24 February 2004.

3. The applicant was contacted on a number of occasions after he lodged his application for review. He has been elusive. There is a suggestion he suffers from ill-health. In any event, we have been unable to find him. Attempts have been made to schedule hearings that accommodate his needs but ultimately I decided to list the matter for hearing. Mr Fortescue was informed of the hearing by listing notice dated 11 November 2015. He has not presented himself or made contact with the Tribunal. We attempted to call him at the commencement of the hearing without success.

4. Rather than simply dismissing the matter for non-appearance or granting another adjournment, or, indeed, dismissing the matter for failing to proceed, I decided I would consider the claim and make a decision in his absence. That is what I have done.

   Background facts

5. The applicant was in receipt of the invalidity pension in the late 1970s. In 1979 he obtained for his partner a wife pension pursuant to section 31 of the Social Security Act1947 (Cth) (the 1947 Act). By the authority of his then wife, Marilyn Fortescue, the payments were made into a bank account opened in the applicant’s name.

6. The applicant separated from Marilyn Fortescue in 1980. He thereafter commenced a new relationship with a woman named Ms Lynette O’Rafferty. Ms O’Rafferty sometimes went by the name Ms Lynette Fortescue and was paid the wife pension from 30 July 1980 by virtue of her relationship with Mr Fortescue. Ms O’Rafferty directed that the payments be made into the applicant’s own account on 11 January 1984: exhibit 1 p 6. It seems the relationship ended in May 1984; that information was provided by Ms O’Rafferty herself in a statement dated 19 October 2004: exhibit 1 p 5. 

7. The applicant said he commenced another relationship, effectively immediately, upon the end of his earlier relationship with Ms O’Rafferty. The new relationship was with another woman named Lynette, this time Ms Lynette O’Brien, and he says that the relationship lasted for 20 years - from 1984 through to 2004 (exhibit 1 p 87). That covers the period in which overpayments were alleged to have been received. There is no evidence of any application for the wife pension being made by Ms Lynette O’Brien. There have been some questions raised as to whether Lynette O’Brien actually existed although I note there are two statements provided by the applicant’s family members that refer to Lynette O’Brien as a partner of the applicant during at least part of the period under review: exhibit 1 pp 7, 8.

8. In any event, I accept no application was ever made by that individual for the payment of the wife pension. In the meantime, the Secretary continued to make payments into Mr Fortescue’s account in respect of Ms O’Rafferty pursuant to section 161 of the 1947 Act. There can be no criticism of the Secretary for following those instructions.

9. There is ample evidence that the Secretary provided notices under section 135TE of the 1947 Act to Mr Fortescue from 30 July 1985. Those notices expressly advised Mr Fortescue that if there were any change in his circumstances, including ending his relationship or commencing a new relationship, then he was required to report that fact immediately. He never did so.

10. If Ms O’Brien actually existed, and in the event she made an application, she may have ultimately been eligible to receive the wife pension. But she did not make an application. In the absence of an application, Ms O’Brien was not qualified to receive the wife pension. It follows Mr Fortescue was receiving money into his account that he was not entitled to receive.

    Legislative considerations

11. In those circumstances, the amounts paid in that period are debts due to the Commonwealth. I note the Social Security Appeals Tribunal, as it then was, questioned whether a portion of the debt was recoverable because section 1223(1AA) of the Social Security Act1991 (Cth) (the 1991 Act) says:

    If a social security payment is made to, or as directed or authorised by, the person who is entitled to obtain the benefit of the payment, subsection (1) does not apply to any other person who afterwards obtains the benefit of the payment unless the other person obtained the benefit because of a mistake made by the first person in connection with the giving of the direction or authorisation.

12. The respondent says that section does not assist the applicant. After the relationship with Ms O’Rafferty ceased, she ceased being entitled to receive the payment and thereafter no other person was entitled to that payment.

13. I am satisfied that for the entirety of the periods between 31 May 1984 to 4 April 1996 and 18 April 1996 to 24 February 2004, Mr Fortescue was receiving benefits into his account that he was not entitled to receive. It follows those amounts are debts due to the Commonwealth. The question is whether there is any basis for not recovering that money from him. I understand the money is currently being recovered, albeit at a very low rate, in the amount of $40 per fortnight. In those circumstances it is not appropriate that the debt be written off - as it is being recovered.

14. There is no evidence of an error on the part of the Secretary that would suggest the debt should be not recovered under s 1237A of the 1991 Act. The question, then, is simply whether there are any special circumstances that would suggest the debt should be waived pursuant to s 1237AAD. No special circumstances were identified - certainly not in any detail that would enable me to reach the view that the discretion to waive the debt should be exercised.

15. Ms Blackford Slack, for the respondent, pointed out there appears to have been a knowing failure to comply in the sense that the applicant did not respond to numerous notices and correspondence that referred to Ms Lynette O’Rafferty. It might be readily inferred that the applicant knowingly failed to correct the department by not informing it of the true position - which resulted in continued payments to Mr Fortescue. As it happens, I do not need to reach a concluded view on that issue given my finding there are no special circumstances that justify the exercise the discretion.

16. There is one final matter. Ms Blackford Slack properly pointed out the money was paid because Ms O’Rafferty did not inform the respondent that she had ceased her relationship with the applicant. That raises a question over whether the monies can be recovered from Mr Fortescue. I accept Mr Fortescue can be held responsible for the debt. That much appears to be clear from the decision of the Full Court in Kalwy v Secretary, Department of Social Security (1992) 38 FCR 295. Furthermore, s 246 of the 1947 Act and s 1223 of the 1991 Act permit recovery of a debt from the person to whom the money was paid. It appears in these circumstances Mr Fortescue is liable to pay the amount. There is no basis for not recovering that amount from him.

17. I would, therefore, vary the decision of the Social Security Appeals Tribunal such that the amounts of $68,870.60 and $69,322.15 are recoverable as debts due to the Commonwealth.

18.     I certify that the preceding 17 (seventeen) paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

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Associate

Dated 16 December 2015

Date of hearing

8 December 2015

Applicant

Mr R Fortescue (no appearance)

Counsel for the Respondent

Solicitors for the Respondent

Ms K Blackford Slack

Sparke Helmore