Gelberg and Repatriation Commission (Veterans' entitlements)

Gelberg and Repatriation Commission (Veterans' entitlements) [2023] AATA 2231 (27 July 2023)
Division:VETERANS' APPEALS DIVISION
File Number(s): 2020/5455
Re:Arthur Gelberg
APPLICANT

AndRepatriation Commission
RESPONDENT

DECISION
Tribunal:Senior Member B J Illingworth and Member D Cox
Date:27 July 2023
Place:Adelaide

The decision under review is varied, only to the extent that the Applicant’s Depressive Disorder is defence-caused but is otherwise affirmed.
.........................[Sgnd].......................................
Senior Member B J Illingworth and Member D Cox
Catchwords
VETERANS' AND MILITARY COMPENSATION–Veterans’ Entitlement Act–Veterans’ Review Board decisions–VRB–disability pension–attendant allowance
Legislation
Veterans’ Entitlement Act 1986
Cases
Repatriation Commission v Richmond [2014] FCAFC 124
Banovich v Repatriation Commission (1986) 69 ALR 395
Weeks v Repatriation Commission [2019] AATA 4421
Secondary Materials
General Retail Industry Award 2020
REASONS FOR DECISION
Senior Member B J Illingworth and Member D Cox
27 July 2023
INTRODUCTION

Mr Arthur Gelberg (“the Applicant”) has applied to the Administrative Appeals Tribunal (“the Tribunal”) for review of decision by the Veterans’ Review Board (“the Board”), dated 28 August 2020, which affirmed a determination of the Department of Veteran’s Affairs, (“the Department”) dated 2 October 2019, to deny the Applicant’s claim for increase of disability pension under s 15 of the Veterans’ Entitlement Act 1986 (“the Act”).[1]
[1] “Special Rate of Pension” under s 24 of the Act.
The Parties agree the Applicant has a degree of incapacity from his defence-caused injury or disease, or both, of at least 70 per cent, and the Applicant was rendered incapable of working for more than eight hours per week on 2 June 2020, due to his defence-caused incapacity alone. The Parties also agree the Applicant first satisfied s 24(1)(b) of the Act on 2 June 2020, but no date prior. The Tribunal notes the Applicant is in receipt of 100 per cent of the General Rate of Pension.
The Applicant was represented by Bruce Turner of RSL State Branch Victoria (“Applicant’s Advocate”), and the Respondent was represented by Emma Gorman of Australian Government Solicitor (“Respondent’s Counsel”). The Tribunal received into evidence the documents listed in the exhibit list, held on the Tribunal file.
AGREED FACTS AND ISSUES FOR THE TRIBUNAL
The following facts were agreed between the parties:
(a)the Applicant made an application under s 15 of the Act for an increase in pension on 13 December 2018 before he attained the age of 65 years, as required by ss 23 and 24 of the Act;
(b)the Applicant has a degree of incapacity from defence-caused injury or diseases, or both, of at least 70 per cent;
(c)the Applicant is in receipt of 100 per cent of the general rate of pension;
(d)the Applicant was rendered incapable of working for more than eight hours per week on 2 June 2020 due to defence-caused incapacity alone, and therefore did not satisfy section 24(1)(b) of the Act prior to 2 June 2020;[2]
(e)the Applicant was prevented from continuing to undertake his remunerative work during the assessment period from his defence-caused incapacity alone, and therefore satisfies the first limb of the test in ss 24(1)(c) and 23(1)(c) of the Act;
(f)the various medical reports are unchallenged and insofar as is necessary the Tribunal can rely on those reports. No medical practitioner was to be called to give evidence.
[2] Exhibit R1, T20 p 144.
The sole issue in dispute is whether the Applicant satisfies the second limb of the test in ss 24(1)(c) and 23(1)(c) of the Act, namely:
(a)whether the Applicant suffered any loss of salary or wages, or earnings on his own account, that he would not be suffering if he were free of that incapacity; and
(b)whether the Applicant ceased to engage in remunerative work for reasons other than his incapacity from his defence-caused conditions alone.
LEGISLATION
Sections 23(1)(c) and 24(1)(c) are in same terms and both provide that each section applies if the Applicant is, by reason of incapacity from defence‑caused injury or disease, or both, alone, prevented from continuing to undertake remunerative work the Applicant was already undertaking, and is, by reason thereof, suffering a loss of salary, wages, or earnings on his or her own account the Applicant would not be suffering if the Applicant were free from that incapacity.
ACCEPTED MEDICAL CONDITIONS
The reviewable decision of the Board, dated 28 August 2020,[3] affirmed the decision of the Department,[4] which concluded the Applicant’s Depressive Disorder is not defence-caused.
[3] Exhibit R1, T1.1.
[4] Exhibit R1, T8.
However, in the decision, dated 4 December 2019,[5] the delegate of the Department found the Applicant's Depressive Disorder was accepted as defence-caused, and on 16 January 2020,[6] the delegate determined the Applicant’s pension was to continue at 100 per cent of the general rate, with effect from 13 September 2018.
[5] Exhibit R1, T12.
[6] Exhibit R1, T17.
The Department submits the Tribunal should vary the reviewable decision, only to accept the Applicant's Depressive Disorder was defence-caused, but otherwise affirm the decision under review. The Tribunal is satisfied the variation of the decision is appropriate.
Hence, the Applicant has, together with the accepted Depressive Disorder, the following defence-caused conditions:[7]
(a)Post-Traumatic Stress Disorder (“PTSD”) (date of effect: 13 September 2018);
(b)hearing loss and tinnitus (date of effect: 13 September 2018);
(c)osteoarthritis of the left hip (date of effect: 13 September 2018);
(d)lumbar spondylosis (date of effect: 13 September 2018);
(e)left Achilles’ tendonitis (date of effect: 22 September 2018);[8] and
(f)osteoarthritis of the right knee (date of effect: 13 May 2014).[9]
[7] Exhibit R1, T7.
[8] Exhibit R2, ST1.1.
[9] Exhibit R2, ST2.
THE APPLICANT
The Applicant was born on 10 January 1958 and is 65 years old. He left school in Year 10, when he was 15 years old.[10] After leaving school, he worked in panel beating, and in a bakery for about three years. On 10 March 1976, the Applicant enlisted in the Australian Army and was discharged on 1 December 1983, having attained the rank of Corporal. Post discharge, the Applicant was unemployed for a period, and subsequently worked in security before he opened a clothing business. That business was first called Italian Apparel Pty Ltd in Melbourne, and when he moved to Adelaide it was Adelaide Suits Direct Pty Ltd, and later became Designer Suits Direct Pty Ltd (“the Business”). He imported and sold clothing.[11] A large volume of his imports were from China.
[10] Exhibit R1, T6 p 47 [18].
[11] Ibid.
The Applicant ran the Business for 25 years. He had three shops in Adelaide, but he had to close two of them due to his health issues and the impact of the COVID–19 pandemic. He said he stepped down from the Business and it was taken over by his son, Ashley Gelberg (“Mr AG”), on 21 September 2018.[12] The Applicant was subsequently refused permission to be on the Business site, effective 6 January 2020, because of his deteriorating health.[13]
[12] Exhibit R1, T13 p 114; Exhibit A5.
[13] Exhibit R1, T16.
The Business was always run under a Family Trust (“the Trust”) and the Applicant was the Director running the Business, until Mr AG took over. He said the Businesses finances were complex, and his accountant would explain when he gave evidence. The Applicant was paid by cash cheque. He would go to his bank, cash the cheque, and pay his credit card account.
When working in the Business, the Applicant had the use of the company car which was used for approximately 30 percent business and 70 percent private use. The Business paid the registration, insurance, and petrol expenses.
His position, as the Director of the Business, ended because of his mental and physical conditions. He used to get agitated and “quite aggro”.[14] He was not concentrating. He also had other medical conditions which impacted upon him mentally and physically, and it was “time to step down”. Mr AG and the other beneficiaries of the Trust said it was time for him to resign.
[14] TX11, [17] (Transcript).
The Applicant currently receives a Department Pension and Disability Support Pension (“DSP”).
Cross-examination
In cross-examination, the Applicant said he was both the Secretary and the Director for the Business, prior to his resignation in 2018. Mr Moleta has been his accountant for years (“the Accountant”).
The Business involved the wholesale importation and retail sale of men’s clothing. The Applicant ran a significant portion of the Business. When they had more than one shop, both his sons were involved. The two sons ran the other two shops. But, the Applicant said he performed the majority of the work including the clerical work, contacting Chinese suppliers and dealing with the customs agents, custom duty and finances, amongst other things. He also had interstate clients.
Mrs Gelberg would assist. She was a casual employee and was a beneficiary under the Trust. He also had an employee for two years who was not a beneficiary under the Trust. She helped with the clerical duties involving China as she was Chinese. He said the Accountant would have the records of her employment. There was no one else who worked in the Business.
The Applicant said he was in charge of all imports. He initially imported from Italy, but when the Italians transferred the work to China, he had, over the years, made multiple visits to China. He described a successful business, but when his leases ended and the COVID–19 pandemic began it was the right time to close the other two shops.
When asked how long his sons were involved in the Business, he could not accurately recall and suggested the Accountant would know. It was well over seven to eight years. They became involved when they opened the additional two shops.
The Applicant said there were stairs at his shop. A lot of stock was kept upstairs which impacted upon him, and on one occasion he fell down the stairs and suffered a hernia.
Mr AG completed an employer’s questionnaire, dated 19 December 2019.[15] In that document, the Applicant’s duties were described as heavy/skilled. When asked to explain what that work involved, the Applicant referred to containers being delivered which had to be unloaded in the presence of customs and “ATO”.[16] There was a bit of labour involved walking up and downstairs, carrying suits and boxes of shirts that might weigh 10 to 15 kilos, it could be 50 to 60 boxes. It was repetitive work walking up and down stairs.
[15] Exhibit R1, T13–14.
[16] TX15, [25] (Transcript).
From about 2016, the Applicant started to reduce his work due to the impact of his various medical conditions. He was referred to a form titled “Claim for Disability Pension and/or Application for Increase in Disability Pension”, dated 7 December 2016.[17] In that document, he said he was self-employed working “0” hours per week, and he was currently unfit.[18] He wrote, “currently unable to work and unfit for work–uncertain if able to resume full time work and uncertain when deemed able to return working reduced hours.”[19]
[17] Exhibit R2, ST4.
[18] Exhibit R2, ST4 p 29.
[19] Exhibit R2, ST4 p 30.
The Applicant said this document was a claim for loss of income, which he submitted to the Department. He agreed the disabilities he there referred to were left Achilles and right knee.
The Applicant was referred to a report of Dr Dobson, dated 15 March 2017.[20] Dr Dobson reported the Applicant said he was mainly working in an administrative role because he could not walk up and down the stairs. In that report, Dr Dobson opined the Applicant was capable of working full-time hours. The Applicant said that was the doctor's opinion, but the doctor didn't know how his body felt. His Achilles was very painful. The Applicant could not say what work he was performing at that time, but he was doing some work. When later questioned about this report, he said he could not recall if he was working full-time hours at that time, but said he just soldiered on.
[20] Exhibit R2, ST7; TX16, (Transcript).
On 30 November 2018, after the Business had been handed over to Mr AG, the Applicant completed a defence-caused claim form,[21] in which he referred to a number of his disabilities. In relation to the impact the disabilities have had on him, he wrote “I am in trouble at work due to my medical and mental problems”.[22] When asked to explain that answer, he said he was probably referring to his inability to perform his duties; he would probably have been distressed because he could not perform those duties and he used the term “in trouble”.
[21] Exhibit R1, T5.
[22] Exhibit R1, T5 p 36.
The Respondent’s Counsel referred to an earlier report of Dr Ewer, dated 8 February 2019,[23] in which Dr Ewer opined the Applicant was capable of working 30 hours per week. The Applicant reported he was working six to eight hours in the store. The Applicant explained, in evidence, he was performing light duties and he “couldn't walk out on the boys”.[24] He said they had no contacts in China and had no idea what was going on. They did not know how the bank organised his telegraphic transfers to China.[25] When later questioned about this report, he said Dr Ewer told him it was up to the individual whether he can handle 30 hours, it was his opinion.
[23] Exhibit R1, T6.
[24] TX17, [44–5] (Transcript).
[25] TX17 (Transcript).
On 30 April 2019, the Applicant had a consultation with clinical psychologist, Dr Kemp. Dr Kemp produced a report, dated 30 May 2019.[26] The Applicant reported he was working two days per week, on Saturdays and Sundays.[27] When questioned about his work hours, the Applicant gave a lengthy response and said, “you have to look at the hours”. He said the shop was only open three to four hours a week, so, he “went to the shop on Saturday and Sunday for well under eight hours”. He said if you look at the trading hours on their website, they were only open 12 hours a week, Friday, Saturday, and Sunday between 11:00AM and 3:00PM.[28]
[26] Exhibit R17, p 43–4.
[27] Exhibit R17, p 4.
[28] TX18, [11–14] (Transcript).
The Applicant could not give a clear indication of his working hours. He said they were scaling down, he had no records, but he would probably go into the shop if needed for a couple of hours to make sure everything was functional. He then said the hours would vary, would definitely not be over eight hours because they were trading between 11:00AM and 3:00PM. He then said if it had to be eight hours he would be there, if he had to, but obviously there was no need.
The Applicant agreed he ceased work on 21 September 2018. It was forced retirement, due to his disabilities. He said he decided to retire because he couldn't handle the pressure, both physically and mentally. Mr AG would have been his main influencer and talking to the other beneficiaries of the Trust and Mrs Gelberg, he made the decision. The Applicant said he could get violent, and at one stage he became abusive towards a customer and was swearing in front of other customers and Mrs Gelberg. He was embarrassed about the way he reacted.
The Applicant was asked if he agreed he first consulted psychiatrist, Dr Ewer, on 30 November 2018, after he retired. The Applicant gave a long, disjointed explanation and did not answer the question. He referred to seeing a number of “advocates” and being referred to Dr Ford before Dr Ewer. When it was put to him that his first appointment with Dr Ford was on 11 September 2018, he did not give a clear response.
The Applicant was asked if he agreed he did not retire based on medical advice. Again, he did not clearly answer the question. He said he spoke to his doctors and explained the symptoms, but he said at the end of the day he was not going to be influenced by what a doctor said to him.
The Tribunal asked the Applicant if he remembered the incident where he was violent towards a customer. He went into a lengthy explanation, predominantly unrelated to the question asked. He did say the incident was well before he stepped down and then referred to ex-military people, and his military service. His answer was of no assistance to the Tribunal. After the lengthy response, he finally said “it just happened”.
The Respondent’s Counsel referred the Applicant to his statement, dated 6 January 2021, in which he said:
“My reason for ceasing work came as a result of my psychiatric condition (PTSD) deteriorating. This was noticed by my family who noted my inability to deal with customers or handle the ongoing business pressure. My son (Ashley Gelberg) noted the problems I was causing and also stopped me from attending work as a result. I advised my doctor of this at the time as I had become a liability to the Business, I worked with my son to step away from the Business complete.”[29]
The Applicant agreed the symptoms pre-dated his September 2018 resignation. He detailed pressures he was having prior to retirement but his biggest problem was his physical condition. He said he was in a lot of pain then and a lot of pain now. He again referred to the knee pain going up and down stairs.
[29] Exhibit A3.
The Applicant agreed that he was living in a two-storey house where he remained for two years after his retirement. He said he moved to a unit, in May 2020, but said,
“Being in a double storey house, it's not that I said I was invalid one hundred percent. I could go up and down. But once you get up, and you go downstairs, it's not that you're repeatedly walking up and down every day… It wasn't the type of staircase we're talking about at the shop”.[30]
[30] TX25, [5–9] (Transcript).
The Applicant could not confirm the date he was refused permission to attend the shop. He said he became a liability, as the Business could be sued as he had assaulted a customer. The Tribunal reminded the Applicant of his evidence this incident with the customer occurred some considerable time before he stepped down. The Applicant said it was before he stepped down but was the lead up to his deterioration in mental health. The Applicant then continued to give a long answer, which did not assist the Tribunal. When further asked by the Tribunal about when this incident with the customer occurred, he said it could have been 2015, or 2016, and then said 2017.
The Applicant denied he stopped work due to the Business being in financial difficulty. The Applicant said it had nothing to do with money, and more to do with his physical and mental issues. The Business was never insolvent.
When asked if he received a salary before 21 September 2018, the Applicant said he received a cheque which was a distribution of funds, which the Accountant could explain. He would then pay his credit card account. The Applicant agreed he did not provide any credit card statements after 2018. He then gave a lengthy explanation about his credit cards being paid off following an insurance claim. He no longer had that credit card. He later explained his credit cards had an insurance cover so that if he became incapacitated for work the debts would be paid out. That is what happened.
The Applicant’s evidence was that the only monies he received from the Business was prior to 21 September 2018. He received a distribution of funds by cheque, which he said was not an income. He also had access to the company car before 21 September 2018. Mr AG now has the car. He could not accurately recall when he received a dividend from the Business, or its amount.
On 16 June 2020, the Applicant completed handwritten answers to a questionnaire from Dr Ewer.[31] The Applicant wrote he was working zero to eight hours per week.[32] In evidence, he also said he was currently working zero to eight hours per week.
[31] Exhibit R15.
[32] Exhibit R15, p 61.

The Tribunal referred the Applicant to the various reports of Dr Ewer. In Dr Ewer’s report, dated 16 June 2020,[33] Dr Ewer reported the Applicant worked infrequently, less than eight hours per week. Under heading History Since Last Report Dr Ewer wrote:
“Mr Gelberg told me that he was working 24–45 hours per week loading and unloading clothing.”[34]
The Applicant could not explain those reported working hours. He said that was before he retired.
[33] Exhibit R1, T20.
[34] Exhibit R1, T20 p 137 [8].
The Tribunal referred the Applicant to Dr Ewer’s reports, dated 8 February 2019,[35] and 23 October 2019,[36] in which the Applicant reported he worked six to eight per week. When asked to comment on the reports, the Applicant initially did not answer the question but then said, “I was contributing six to eight hours.” He said, “It’s not physical work…well doing the Business Activity Statement (BAS) reports and maybe do a TT (which the Tribunal understands is a telegraphic transfer) overseas”.[37] He referred to his contacts in China, and said the boys were still learning. He repeated, “but I didn’t do 25 to 40 hours in 2020, otherwise I would still be working today”.[38]
[35] Exhibit R1, T6.
[36] Exhibit R1, T9.
[37] TX34, [7–8] (Transcript).
[38] TX34, [10–11] (Transcript).
The Applicant, subsequently, agreed he worked up to eight hours per week, from time to time, but usually less. He said that was the correct position up to the time of Dr Ewer’s report, dated 16 June 2020.
He said he received no distribution of funds for that work and had not done so since September 2018. He gave guidance in running the Trust. He remained the Secretary as of 16 June 2020. At that stage, he would assist in clerical work preparing the BAS and helping with payments to China. On advice from the Accountant, he was still the Appointor to protect his loans to the Business.[39]
[39] TX38, [45]; TX39, [1–18] (Transcript).
The Applicant was asked if he received money for payment of loans he made to the Business. He did not answer the question but said “there was a line of credit, and every company has a line of credit or overdraft, it’s a proper way of running a business”. He then agreed he set up a line of credit and his house was mortgaged, and the money was used to keep the Business going. That was the money they used to buy stock. He said it was quite big dollars and the cash cheques were monies received in the manner of drawings and expenses paid by the Business.
The Applicant was asked if he agreed he had not disclosed any income in any of his tax returns. He said, “the Accountant did what he had to do. I gave the Accountant all my paperwork and, as I said before he'd mentioned every cheque, cash cheque that registered, or noted there, on a cheque book and the bank statement”.[40]
[40] TX30, [34–38] (Transcript).
The Applicant was referred to his Statement of Facts, Issues and Contentions and could not explain why in that document he said the Business drawings ceased in February 2018. He maintained his income ceased at the time he stopped work in September 2018.
The Tribunal received into evidence Designer Suits Direct Pty Ltd Financial Records for the financial year ending 20 June 2018 (but not after that date),[41] together with Westpac Bank Records.[42] The Applicant was asked about a series of transactions in May and June of 2018. The Financial Records show no draws from the Business, only draws from a ‘Sundry Loans’ account. There appears to be corresponding deposits into the Applicant’s Westpac account. Hence:
·     On 3 May 2018, a Westpac deposit of $2,000.00 cash was made. It was not a cheque deposit which was the manner by which the Applicant said he was paid.[43]
The Applicant could not explain that financial transaction satisfactorily. He could not say the $2,000.00 came from the Business or was just accumulated cash he deposited.
·     In June 2018, there was a deduction described as “wpc cc” of $1,000.00, withdrawn from the ‘Sundry Loans’ account.
The Applicant said “wpc cc” was a Westpac Credit Card.
·     On 4 June 2018, the Business Records show a cheque deposit into the Applicant’s Westpac account which the Applicant agreed that was a payment to him from the Business.[44]
·     In June 2018, there was additionally a transaction described as ‘draw’ from the ‘Sundry Loans’ account in the sum of $1,000.00. The deposit was a cash deposit, not a cheque.
The Applicant said the transaction was a ‘draw’ cheque from the Business and he used that money to pay his credit card.
[41] Exhibit A8.
[42] Exhibit R4.
[43] Exhibit A8 p 16; Exhibit R4, p 203; TX40, [20–25]; TX41, [42–46]; TX42, [1–2] (Transcript).
[44] Exhibit R4, p 16.
The Respondent’s Counsel suggested these monetary transactions were not included in the Applicant’s Tax Return records. The Applicant could not answer the question. He said he provided the Business Financial Records to the Accountant and who prepared his tax returns.
The Applicant confirmed he was entitled to 30 per cent of the dividends from the Business,[45] but there was no dividend in 2018. He said the Business was running at a loss and the Accountant could verify this.
[45] Exhibit R1, T31 p 220.
The Applicant was referred to his earlier evidence that he received a dividend payment of over $5,000.00 for the financial year, ending 30 June 2018. He then responded there was a profit for that financial year. He said he cannot speculate and give the right answers because he did not know what the Accountant did. He could not recall if the Business made a gross profit prior to September 2018 but rejected the proposition the Business was not profitable in the years leading to him ceasing work. When asked to explain that statement about the Business, given he had no memory, he said:
“Well its still here, its existed. I’m still running it or the boys are running it. The Business was funded by a line of credit like a lot of businesses are run on overdraft facilities and there’s time when you’re on a down, there’s times when you’re on the up. Like the stock market, I suppose, same with the shares, they’re up and down.”[46]
[46] TX46, [26–31] (Transcript).
The Applicant agreed he told Dr Kemp in April 2020 the Business was facing financial pressure.[47] He said, “there was always financial pressure, there’s pressure in every business”.
[47] Exhibit R17, p 22.
When the Respondent’s Counsel suggested when the Applicant ceased work, in September 2018, he did not suffer financial loss because the Business was not earning any money, he said the Business always gave him a distribution fee even when running at a loss. He said the Accountant would explain. There was always money in the account to pay the Applicant, and “the boys got their cheques”. The Applicant said he got his cheque regardless of the losses. They had an overdraft facility or line of credit.
Post 21 September 2018, he said he worked on a voluntary basis to support his sons and make sure they were “doing the right stuff”.[48] The Applicant did the BAS reports every 30 days and supplied the Accountant with the “tax returns for the financial year”.[49] But he could not give an estimate of how much time he spent in the Business per month.
[48] TX47, [13] (Transcript).
[49] TX47, [17] (Transcript).
The Applicant was asked why Mr AG wrote a letter, dated 5 January 2020,[50] advising the Applicant he was no longer permitted at the shop. His answer was vague. He said Mr AG probably didn’t want any dramas knowing the previous incidents and how he behaved, but he could not give any specific reason. He suggested his advocate requested a letter and that is what Mr AG sent. He said he was told to stay at home, which he did. He did not need to be in the shop to perform his work on the Business.
[50] Exhibit R1, T16.
When further pressed about the advocate sending a letter, he could not confirm that occurred. He conceded he still goes to the shop. He has his own car but will swap cars if they need a car that has a baby seat for the grandchild.
The Applicant, again, confirmed he received no payment after he resigned, on 21 September 2018. He was referred to his Westpac Bank records. A deposit of $2,000.00 cash went into his account, on 3 October 2019, which he said was probably an overlap and paid to him by the Business.[51]
[51] Exhibit R4, p 218.
On 1 November 2018, a cash deposit of $1,000.00 was recorded in the Westpac Bank records. He agreed to was from the Business, and probably a reimbursement of monies he previously spent on the Business using his credit card.[52]
[52] Exhibit R4, p 221.
On 30 November 2018, a cash deposit of $1,000.00 was recorded.[53] When asked to explain the transaction, he said his credit card was mainly personal but had a few business transactions. He agreed the payment was from the Business.
[53] Exhibit R4, p 223.
On 2 January 2019, a cash deposit of $500.00 was recorded followed by a debit of $595.00 to the Business.[54] He could not recall the transaction. He did say that he would have business expenses on his credit card, such as for imports and custom agents as he used his credit card.
[54] Exhibit R4, p 225.
On 4 February 2019, a cash deposit of $1,000.00 was recorded.[55] The Applicant now said, “that’s cash, not a cash cheque”, but that does not explain where the money came from because it was cash. He could have had $1,000.00 cash on him which he paid into the account. He then said in reference to the previous cash payment since September 2018, the monies could have come from anywhere.
[55] Exhibit R4, p 227.
The Applicant was then referred to regular cash deposits, on 7 March 2019 of $500.00, 1 April 2019 of $1,500.00, 2 May 2019 of $500.00, 3 June 2019 and 1 July 2019 of $1,000.00, and similar deposits over the balance of 2019, and finally 5 March 2020 of $1,000.00. When asked to explain, the Applicant said the cash payments do not represent money from the Business. This was his cash. The two cheque deposits referred to were reimbursement by the Business. He said, in respect of the cash deposits, “how do you know if the money is coming from the Business, where's the record it's a cash payment”. He maintained all cash deposits referred to, was his own personal money, unrelated to the Business. When asked where he received the cash, he said it was his own money that he'd saved over the years, but his father gave him some money and he drew out his “super money”.[56]
[56] TX53, [18] (Transcript).
When referred to his earlier evidence, that some cash payments probably came from the Business, he then maintained all cash deposits were his own money unrelated to the Business.
The Applicant said the Business provided a line of credit, and still owed him $330,000.00, but he could not satisfactorily explain whether cash cheques he received from the Business were for the Business expenses, or repayment of the ‘Sundry Loans’. When further pressed, he said the cash cheques were not for the repayment of his $330,000.00 loan to the Business. He said he was not receiving payments from the Business, but his father passed away and his mother made him an interest free loan, which money he uses.
The Applicant said he had an expectation the Business would repay his loan. He was not going to pull the pin on his sons, but he confirmed he was not receiving dividends, because he had resigned, and was not a beneficiary. He remained as an Appointor. The Respondent’s Counsel put to the Applicant that his tax return, for the year ending 30 June 2019,[57] listed him as a beneficiary entitled to 30 per cent distribution of net income.[58] He said he was not aware of that and suggested the Tribunal should ask the Accountant.
[57] Exhibit R1, T31.
[58] Exhibit R1, T31 p 220.
Further, the Respondent’s Counsel put to the Applicant that the employment questionnaire, dated 23 December 2019, recorded the Applicant continued to maintain an interest in the Business as a Trust beneficiary. The Applicant explanation was “probably till I stepped down.” He then said it appeared he ceased work in September 2018, it was a process of him stepping down and it didn't happen overnight. He said he remained the Business Director until he stepped down, but he wasn't receiving an income, “it wasn't fair to get an income or draw funds” if he was not working. It was further put to the Applicant they completed this questionnaire more than a year after Mr AG became the Business Secretary. The Applicant said to ask the Accountant.
The Applicant was asked about his tax return for the year ending 30 June 2021.[59] The Applicant could not explain the contents of the tax return. He provided all of the documents to the Accountant who could explain the content. He said he transitioned from a Job Seeker Payment to a DSP about three months ago.
[59] Exhibit A10.
Mr Ashley Gelberg (“Mr AG”) Applicant’s son
Mr AG is 36-year-old. He is the son of the Applicant and has been involved in the Business for 15 to 20 years.
He described the meeting in late 2018, with the beneficiaries of the Trust, with respect to the Applicant. There were ongoing issues with the Applicant, and it was no longer suitable for him to be at work at certain times. Those issues included walking up and downstairs regularly which became difficult due to knee and Achilles’ tendon issues. It was decided he would step down from the Business and, from about that time in 2018, he ceased receiving a financial benefit.
The Applicant returned the Business car, albeit he may use that car if he's looking after grandchildren because it has a baby seat in the back.
In cross examination, Mr AG did not recall an occasion when the Applicant assaulted a customer at work. He said his manner was not what was required in a service industry, which was a big decision in stepping him down. He did have a dispute with the customer. He had verbal issues, which was why the beneficiaries had the discussion and came to the decision that he should step down.
Mr AG is now the Director and Secretary of the Business. He has been involved for approximately 20 years as a storeman, store attendant and serving customers. He did not know if he was entitled to dividends but said “we were paid a wage".[60]
[60] TX70, [3] (Transcript).
Mr AG said all of his family, namely his brother and Mrs Gelberg (and himself) received a wage. The Applicant did, prior to his resignation, receive a wage, but no longer does because he does not work.
Mr AG had no understanding whether dividends have been paid in previous years since he took over as the Director and had no idea of what percentage entitlements each beneficiary is entitled to. He said he was originally working with the Applicant as part of the Business and later took over the Director role.
Mr AG said the Applicant started working at reduced hours, prior to that meeting, because he was having difficulty/struggling to walk up and down the stairs. They realised when he was working alone and going up and down stairs repeatedly, his health was declining.
Mr AG said the reason for the Applicant’s resignation was because of his physical issues, and because of mental health issues dealing with customers. Further, they had three stores at the time which added to the daily pressures.
Mr AG agreed the Applicant was stopped from attending work. Given the occupational health and safety issues with the stairs, and on advice from the Accountant, it was decided it was better he not be on the premises. He confirmed the Applicant’s statement that his PTSD was deteriorating.[61] The beneficiaries made the decision that it was best for him to step aside.
[61] TX72, [1] (Transcript).
Mr AG said the Applicant’s involvement in the Business never stopped. He would talk to the Applicant daily about the Business. His involvement was minimal, but he had experience dealing with China and fabrics. Mr AG would ask the Applicant questions, seek some input and guidance with regards the Business.
The letter from Mr AG to the Applicant, dated 5 January 2020, advising the Applicant was no longer permitted on site, arose when the Applicant had difficulties with the stairs. Mrs Gelberg spoke with Mr AG, and they came to the decision and decided to put their foot down and be firm with the Applicant. He said the Applicant was gradually getting worse to the point that it was no longer suitable for him to walk up and down the stairs. They didn't want him to have a fall, particularly if nobody else was at the premises.
In terms of the financial structure of the Business, Mr AG had very little understanding. He did not know if the Applicant remained a beneficiary of the trust; he did not know the Applicant was entitled to 30 per cent of the Businesses net income at any time, including currently; he did not know if the Business owed the Applicant any money; he knew the Applicant was receiving cash drawings from the Business, which he said was effectively a wage. He said it was a cash cheque. He was not aware if the Business continued to pay the Applicant cash cheques after he stepped down and did not know if the Business still owed the Applicant money. These, he said, are questions to ask the Accountant. He said he signed the papers that were provided to him to sign.
Mr AG was referred to the tax return, for year ending 30 June 2021,[62] which he signed. He did not understand and could not explain the contents of that document including the Designer Suits Direct Trust Records;[63] the “Current Liabilities”, the “Loan Promissory note for E Gelberg”, the “Loan Westpac” and ‘Sundry Loans’ tax records.
[62] Exhibit A11.
[63] Exhibit A11, p 11.
Further, he was unable to say when he took the Business over in September 2018, whether or not it was a profitable business. He said he didn't know. There were potentially previous losses from years before, but he was not sure whether the Business was deemed as profitable because of those previous losses. He also did not know if the Business had been profitable since September 2018. The COVID-19 pandemic had occurred in the following years, so he was not sure. These he said are questions for the Accountant, including entitlements to dividends and the contents of the tax returns.
Mr Moleta (“the Accountant”)
The Accountant was working in Victoria. His relationship with the Applicant and his Business had been ongoing for approximately 20 years, including for the last 10 years with the Business and the Trust.
In Evidence in Chief, he said he was not aware of any disability suffered by the Applicant, due to his military service. He was asked when the Applicant was replaced as the Director of the Business and if he suffered a reduction in the remuneration he received as the Director of the Business. He said he did not have that information.
In response to the Tribunal, the Accountant said he had information about the financial distributions of the Business before and after the Applicant ceased to operate in the Business. He had before him numerous tax returns and financial statements. The tax returns dated from 2010 to 2021. He also received the Tribunal book, copies of tax returns of the Business, and personal tax returns of the Applicant. He agreed he was the Accountant for the Business, the Trust and the Gelberg family.
When asked to explain the Gelberg family members, and their relationship to the Business, he said:
“Well, they're not employees. From a tax point of view their taxable income is based on distributions, if any, and the drawdowns are their sources of cash flow which is funded by the Business structure. But while there are losses, in the years that there are losses, there is no taxable income distribution. Any drawdowns that they have, as far as the accounting records are concerned, are recorded in Sundry Loans”.[64]
[64] TX85 [34–40] (Transcript).
The Accountant explained the source of cash flow available to the Business, apart from profit, can be borrowings from banks, or from the family members. It was possible for the family members to have formal salaries, but they never did.

The family members were remunerated by way of drawings. Any drawdowns from the Business are non-taxable and recorded as repayment of the ‘Sundry Loans’ balance. In this case, drawings were paid to the Applicant who previously lent money to the Business. There is no tax payable on that payment.
The Accountant also explained that a person can be remunerated by way of a dividend if the Trust is a trading company. In the case of the Trust, it was not a trading company. It is a trust. If there is a distribution to the members of the Trust, which related to profit, then it was taxable.
The Accountant was referred to his statement in which he said the Gelberg family do not receive a taxable wage as employees.[65] He explained they are paid drawdowns on the Business bank account. They’ve never been on a taxed wage.
[65] Exhibit A6, p 2.
In response to the Tribunal, he explained there had been profitable patches for the Business but if there was a profit it was distributed to the ‘Sundry Loans’ balance. The Gelberg family are not paid a salary. The Applicant has never received a salary and the only time a salary was paid was to a salaried employee for about two years.
The Accountant said there was one year when the Applicant received a distribution of profit. That was in the tax year ending 30 June 2018, and the taxable profit was $18,103.00. The Applicant would have received around $5,000.00. He has never recorded receiving a salary in any tax return.
In referring to the evidence of Mr AG that he received the wage, the Accountant said that was not correct. It was a drawdown and any payment made to the sons were part of the ‘Sundry Loans’ drawdown. Even now, the electronic transfers are still classified as drawdowns and not as a wage.
The Accountant also explained that any profit component from the Business goes to the ‘Sundry Loans’ balance and then further borrowings can be a source of cash flow to fund drawdowns. Hence, the Gelberg family were funded by Business profits and Business debt. In the case of the Applicant, he was paid in cash cheques. That was not an income, but a distribution of funds.
The Accountant was referred to his statement, in which he said:
“[The Trust] has a Sundry Loans Balance of $143,408 as at 30.06.2020, owing mainly to A and M Gelberg for part-funding of business assets.”[66]
He explained that ‘Sundry Loans’ is funded mainly by a line of credit in a personal name, and it is a liability of the Trust. The ‘Sundry Loans’ is money owing to the Applicant and Mrs Gelberg for monies they invested into the Business. The source of cash flow has principally been the Applicant and Mrs Gelberg.
[66] Exhibit A6, p 2 [8].
The Accountant also said in his statement:
“This balance [of the ‘Sundry Loans’] has been built up over past years by bank borrowing, personal advances and retained income.”[67]
He explained those were three sources of funding for the Business which are classified as ‘Sundry Loans’. It could include a profit distribution which occurred occasionally such as that in 2018. Any profit made over the years have been allocated to ‘Sundry Loans’.
[67] Ibid.
The Accountant was referred to the tax return, for the year ending 30 June 2021.[68] He prepared that document. He explained the various loans referred to.[69] He explained the first loan is an advance by the Applicant’s sister, being the sum of $130,575.00. The second and third were loans from the Westpac Bank, being the sums of $152,000.00 and $38,111.00.[70] The Applicant and Mrs Gelberg were owed $87,229.00, not $330,000.00, as suggested by the Applicant in evidence.[71]
[68] Exhibit A11.
[69] Exhibit A11, p 11–12.
[70] TX90, [9–13] (Transcript).
[71] TX90, [15–24] (Transcript).
The Applicant and Mrs Gelberg will be repaid their loan when the Business makes enough money or borrows further funds to clear the debt. It is up to the Director. The Applicant has received repayment of the ‘Sundry Loans’ out of drawdowns, which are cash cheques allocated to the family in general. The Accountant made no attempt to allocate those monies between individuals. He said there is no taxable distribution, so it doesn't rate a mention on the tax returns for the individuals.
The Accountant was referred to the Business spreadsheet that he prepared or were prepared at his direction.[72] Cash cheques are recorded as ‘draw’ and classified as ‘Sundry Loans’ repaid. He agreed this meant that cash cheques were paid to the Applicant or Mrs Gelberg for money they had previously loaned to the Business. He was asked “did these cash payments, cash cheques continue after 2018” He answered “yes, most certainly. They have been going all the way through”.[73]
[72] TX92, [14–18] (Transcript).
[73] TX92, [41–42] (Transcript).
The Accountant was not aware of the Applicant’s Westpac credit card account and the deposits that continued from 2018 but said he thought that would have been the destination of his cash cheques. He did not have the information to clarify where the cash cheques ended up. Nor could he determine how the drawings were allocated between different family members.
He agreed it was right for the Tribunal to assume when the Applicant talked about receiving remunerative income through drawings that was from the cash cheques from ‘Sundry Loans’. He also understood the Applicant remained a beneficiary of the Trust after the Business transferred to Mr AG in 2018. The current Minute from the Directors, for the 2021 financial year, provides if there is a taxable profit it is distributed zero percent to the Applicant and Mrs Gelberg, and 50 per cent to each to Mr AG and his brother.[74] The Director who made that decision was Mr AG. That was the same arrangement for the 2020 financial year.
[74] TX93, [42–47]; TX94, [2–4] (Transcript).
The Accountant confirmed he was not aware of any taxable earning the Applicant received from the Business. He did not know about non-taxable earnings and said it required analysis of the cash drawings and where they ended up.
The Applicant’s entitlement to taxable earnings is determined by the Director’s Minute, and non-taxable earnings are for the Director to determine with regards the drawdowns. The Applicant’s entitlement to dividends is based purely on the Director’s Minute.
The Respondent’s Counsel referred to the financial year ending 30 June 2019, which records the Applicant is listed as a beneficiary and entitled to 30 per cent distribution of the net income.[75] The Accountant agreed that was correct, but there was zero profit. The Applicant remained a beneficiary because the Trust Deed had not been changed. The Accountant said there had only been one year where there was a distribution, which would have ended up on the Applicant’s personal tax return.
[75] Exhibit R1, T31 p 220.
In referring to the earlier financial year tax returns, in 2015 the loss was $43,525.00.[76] The 2016 financial year loss was $32,482.00.[77] In relation to the latter, it records under heading Deficiency in Trust Funds an accumulated loss of $27,399.00.[78]
[76] Exhibit R1, T32 p 223; TX96, [1–2] (Transcript).
[77] Exhibit R1, T32 p 223; TX96, [4–5] (Transcript).
[78] TX96, [45–47] (Transcript).
The Accountant agreed there may be “tax reasons” for why the Business has recorded a gross profit, but that tax return might show a net loss.[79] The Accountant agreed the best source for information would be in the financial statements. Hence, looking at the statement, it shows a gross profit for 2016 of $331,183.00.[80] After various expenses are recorded, there is a profit of $32,482.00, but the carried forward losses of $60,000.00 meant the profit is not sufficient to absorb past losses, which reflects a deficiency.
[79] TX97, [7–21] (Transcript).
[80] Exhibit R1, T32 p 225.
To determine if the Business was profitable, the Accountant said there was a deficiency in the Trust. Hence, in 2016, the deficiency in the Trust was $27,399.00.[81] That is the unrecouped losses at that point in time. He said that means the Business has not been profitable. While there is still unrecouped losses, it had not achieved profitability.
[81] TX98, [34–36].
The Accountant said, apart from 2018, and the distribution of $18,103.00, thereafter the Business has made losses.[82] The 2020 financial year resulted in a loss of $87,000.00 which boosted the past losses to $116,830.00. The 2021 financial year profit of $40,000.00 reduced the past losses to $76,987.00.
[82] TX99, [28].
The Accountant agreed with Mr AG that the Business was not earning much money prior to 2018, and apart from the 2018 profit it has continued to make a loss.
When the Accountant was asked if after ceasing work in 2018 the Applicant was not suffering any financial loss, he said that is hard to answer and was a matter of his domestic expenses and whether his cashflow was impeded; in other words, if his drawdowns had been impeded, he suffered a financial loss. The Accountant could not say whether his drawdowns had been impeded. This required analysis of the ‘Sundry Loans’ balance, and he didn’t have access to that information.
When the Accountant was asked what he understood the Applicant’s role was in the Business, post 2018, the Accountant said, he supplied income and expenses figures for each GST monthly report, and information for the annual tax returns. To that extent, at least, he was working in the Business supplying information to do the tax returns, financial statements and BAS forms. He did not know if the Applicant was getting paid which was determined by the ‘Sundry Loans’ drawdowns allocated to each individual. The Applicant continues to provide those documents to the Accountant, but other than that he cannot speak about the Applicant’s drawdowns. He only dealt with the Applicant and not Mr AG.
The Accountant knew of the change of Director occurred a couple of months after June 2018, about the time the change was lodged with ASIC. He understood the Applicant retired due to health reasons. He played no role in that decision, and he simply processed the decision. He did not know the mechanics of how he ran the Business. He told him to speak to his lawyer whether he should give up his position as Appointer, but the Applicant has remained Appointer. There was no change in the Trust Deed.
CONSIDERATION
The Applicant was the Director of the Business until 21 September 2018 when he resigned, and Mr AG assumed that position. The Applicant said thereafter he stopped working and he received no further payment of money from the Business. The Tribunal is not satisfied either fact is true.
Prior to 21 September 2018, the Applicant said he was reducing his work in the Business, due to his medical conditions. On 7 December 2016, he applied for DSP saying he was unable to work. However, evidence, particularly that of the medical practitioners, suggests the Applicant was able to work at least by performing administrative or clerical duties.
In Dr Dobson’s report, dated 15 March 2017, he opined the Applicant was capable of working full-time. When questioned by the Tribunal about his work capacity at that time, the Applicant’s answer was vague. He could not say how much work he was in fact performing, but said he was doing some work. This is to be contrasted with his application for DSP before the Tribunal which states, three months earlier, he said he was unable to work.
Also, contrary to the Applicant’s evidence that he ceased work following his resignation as Director, the various medical reports make it very clear the Applicant reported he was working to varying degrees in the Business, both before and after 21 September 2018. For example, in Dr Ewer’s report, dated 8 February 2019, and reports following in 2019,[83] Dr Ewer recorded the Applicant told him he was working six to eight hours per week. To Dr Ewer, in the questionnaire, dated 16 June 2020, the Applicant said for the last two and a half years he worked six to eight hours per week and currently worked zero to eight hours per week. In Dr Ewers report, dated 16 June 2020, Dr Ewer said that since his last report, the Applicant reported working 24 to 45 hours per week.
[83] Note: 28 February 2019, 4 April 2019, 8 May 2019, and 23 October 2019.
In evidence, the Applicant said before he stepped down, he would do 25, 30 or even 50 hours per week and agreed he was performing some work in the Business after 21 September 2018, but that work was of a clerical nature. He also said he worked on weekends.
Mr AG said, prior to 21 September 2018, the Applicant had difficulty with the stairs, but it was not until 5 January 2020, when the Applicant was given a letter signed by Mr AG that he was no longer permitted on site, effective from 6 January 2020.[84] This was written because Mrs Gelberg (the Applicant’s wife) spoke to Mr AG, and they decided to “put their foot down and be firm” with the Applicant. He had difficulty with the stairs, and they did not want him to have an accident.
[84] Exhibit R1, T16.
Having regard to the evidence, the Tribunal infers, to some extent, the Applicant was continuing to work in the shop at least until 5 January 2020.
The Applicant was an unreliable witness when detailing the work he performed, both before, and after, his resignation on 21 September 2018. He was inconsistent in reporting to doctors about hours worked. He was inconsistent in his evidence to the Tribunal about the hours worked, and nature of the work performed.
Having regard to the evidence, the Tribunal is satisfied the Applicant continued to work in the Business for some time post 21 September 2018. The Tribunal accepts he may not have worked the same hours he did prior to his resignation, but he still performed a role in the day-to-day operation of the Business, including clerical work.
The fact Mr AG had to write a letter to the Applicant in January 2020 “banning” him from the shop is a further indication he was spending time working, post his resignation, that was more than bookkeeping.
The Applicant has always maintained the books, and records of account, for the Business, before and post, his resignation. He had an intimate knowledge of the financial operation of the Business. This was confirmed by the Accountant for the Business, and the family members. The Accountant confirmed the financial records were provided to him by the Applicant, and that is continuing.
This explains why Mr AG had no understanding of the financial matters relating to the Business. He misunderstood the money he received was a wage, had no knowledge of the Business liabilities, including outstanding loans, and could not explain the contents of the Business tax returns, including the finances of the Trust.
Mr AG could not say whether the Business was profitable, albeit he did note the Business incurred losses in previous years. He did not know if the Business had been profitable since September 2018. These he said were questions for the Accountant.
It is the financial arrangement of the Business that is particularly relevant in determining whether the Applicant, by reason of incapacity, was prevented from continuing to undertake remunerative work, and as a result suffered a loss of salary or wages or earnings that he would have received if he was free from that incapacity, as provided by ss 23(1)(c) and 24(1)(c) of the Act.
The Business financial records of the company were incomplete and ended on 30 June 2018. Income tax returns were provided including for the financial year ending 30 June 2022. In cross examination, the Applicant was critical of the banking records and suggested they were incomplete and complete records would help understand where certain monies he received were coming from. The Respondent said they had been asking for those records. The Applicant said they were in his briefcase and could be produced immediately. The Tribunal ordered their production and adjourned the hearing. After the hearing reconvened, the Tribunal was advised the purported complete documents had not been produced and the documents in the Applicant’s possession were the same documents before the Tribunal.
The Accountant confirmed that, in respect of the current Business, from 2010 to date, the Business ran at a loss, save for the 2018 financial year when it made a small profit.
The Applicant, Mrs Gelberg, and his sons never received a wage. They were not employees. Their tax liability arose only if there was a distribution of profit through the Trust, as occurred in 2018. That year the taxable profit was $18,103.00, and the Applicant received approximately $5,000.00 being his 30 per cent profit entitlement under the terms of the Trust Deed, and it was that sum that was taxable income.
Insofar as Mr AG described a “wage” being paid to himself and his family, this was incorrect. Their payments were in fact drawdowns from the ‘Sundry Loans’ account.
The Sundry Loans account was established primarily when the Applicant and Mrs Gelberg lent the Business a large sum of money so it could continue to operate. The Applicant said it was in the nature of $330,000.00, which he described as a line of credit. The Applicant and Mrs Gelberg mortgaged their house and lent the money to the Business. The Applicant was paid in cash, and cash cheques, which were drawdowns on the loan the Business owed the Applicant and Mrs Gelberg.
The Applicant said, in evidence, he was owed $330,000.00 by the Business. That is not now correct. The Accountant, in his statement, said the ‘Sundry Loans’ balance, as at 30 June 2020, was $145,000.00, owing $87,229.00 to the Applicant and Mrs Gelberg.
The 2018 financial records demonstrate there was a regular payment to the Applicant called a ‘draw’ or ‘wp cc’ paid out of ‘Sundry Loans’, and a corresponding deposit then paid as either cash, or cash cheque, into the Applicant’s Westpac account. The Applicant said this was his credit card account.
The Applicant conceded, in evidence, that by reference to the 2018 Business records, payments into the Westpac account that were identified as cash as opposed to cash cheque were monies from the Business.
However, when he was cross-examined about similar payments that continued after 30 June 2018, and in particular after he resigned on 21 September 2018, his evidence changed. Having said he received no payment post his resignation, that was inconsistent with the Westpac bank records. There were no Business records produced post 30 June 2018, but the Westpac bank statements demonstrated similar deposits continued.
His explanation for the $2,000.00 cash deposit on 3 October 2018 was that it was probably an overlap of outstanding monies owed to him and repaid by the Business. The $1,000.00 cash deposit on 30 November 2018 he also confirmed was from the Business and probably a reimbursement of monies he previously spent on the Business. But the deposits into the Westpac account continued.
By the time he was referred to the 4 February 2019 cash deposit, he started to change his evidence. He said it could not be established where the cash came from, and it could be cash he simply had in his pocket. He then changed his earlier evidence that cash payments he admitted came from the Business, were in fact not from the Business. He said how do you know where the monies came from.
The Applicant then maintained all cash payments were unrelated to the Business and they were his own monies he had saved over the years. He then said his father gave him some money and he used money from his superannuation. He then said his mother gave him an interest free loan and he was not receiving draw down repayments in respect of his loan to the Business.
The Applicant when endeavouring to explain the cash and cash cheque deposits, before and after his resignation, gave evidence that was wholly unsatisfactory. He gave the impression that he was embellishing his answers as the questioning progressed. He was not a credible, or reliable, witness when detailing the payments he received from the Business before and after his resignation as Director of the Business.

The Accountant said, in evidence, the repayment of the loan owed to the Applicant and Mrs Gelberg were “most certainly” continued after 2018 and have been going continuously”.[85] However, he did not have access to the Business records relating to the ‘Sundry Loans’ account.
[85] TX92 [41–42] (Transcript).
The Tribunal is satisfied the ongoing deposits into the Applicant’s Westpac account were ‘Sundry Loan’ repayments in respect of the outstanding loan owed by the Business to the Applicant and Mrs Gelberg. Further, the payment of monies to Mr AG, and other family members, were made from the ‘Sundry Loans’ account.
The Business was, apart from a small profit in 2018, always operating at a loss. It was not a profitable business. The Applicant never received a wage, or salary, and apart from the $5,000.00 he received in 2018, as his 30 per cent share in the distribution of the Trust monies, the Applicant’s only source of income was the repayment of the loan he and Mrs Gelberg had previously made to the Business.
The Accountant said the Applicant remained the Appointer of the Trust, even after Mr AG was made the Director. In the role as Appointer, the Applicant had ultimate control over the Trust, and could ensure that his, and Mrs Gelberg’s, loans continued to be repaid. His continuing control of the Trust’s financial affairs demonstrate that he exercised that control.
CONCLUSION
The Applicant suffered from an incapacity within the meaning of ss 23(1)(c) and 24(1)(c) of the Act, but that incapacity had no impact on his remunerative work or a salary, wage or earning on his own account. He never earnt a salary or wage or earning. The Applicant received ‘Sundry Loans’ payments in discharge of the debt the Business owed to the Applicant and Mrs Gelberg. Hence, he was not entitled to the Special Rate of Pension. He remained entitled to continue to receive those payments after he resigned as the Director, and he has continued to do so. He remains entitled to those repayments until the loan is discharged.
DECISION
The decision under review is varied, only to the extent the Applicant’s Depressive Disorder is defence-caused but is otherwise affirmed.

147.    I certify that the preceding one hundred and forty-six (146) paragraphs are a true copy of the reasons for the decision herein of Senior Member B J Illingworth and Member D Cox.

......................[Sgnd]..........................................
Associate

Date of Decision:  27 July 2023

Date of Hearing:  12 & 14 December 2022

Applicant’s Advocate:                 Bruce Turner (RSL State Branch Victoria)

Counsel for the Respondent:     Emma Gorman (Australian Government Solicitor)

[2023] AATA 2231

27 July 2023

Key Legal Topics

Areas of Law

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Remedies

Statutory Construction

Appeal