Geroulis and Secretary, Department of Family and Community Servic Es

[2004] AATA 230

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 230

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2003/1233

GENERAL ADMINISTRATIVE DIVISION		)
Re		George GEROULIS

Applicant

And Secretary, Department of Family and Community Services

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date5 March 2004

PlaceSydney

Decision The Administrative Appeals Tribunal affirms the decision under review.

[Sgd] Ms N. Isenberg, Member

CATCHWORDS

SOCIAL SECURITY – assurance of support – debt arising from assuree receiving special benefit – assuror cannot transfer debt to assuree – decision affirmed.

LEGISLATION

Social Security Act 1991 sections 1236, 1237A, 1237AAD

CASE LAW

Gallie v Lee [1969] 2 Ch 17 at 36-7

REASONS FOR DECISION

5 March 2004	Ms N Isenberg, Member
DECISION UNDER REVIEW

1.The decision under review before the Administrative Appeals Tribunal (‘the Tribunal”) was the decision of the Social Security Appeals Tribunal (“the SSAT”) dated 11 July 2003, reviewing a decision made by Centrelink on 2 January 2003 and affirmed by the Authorised Review Officer (“the ARO”) on 4 June 2003 to raise and recover an assurance support debt of $5,951.01 from Mr Geroulis incurred during the period 20 February 2001 to 22 October 2001.

BACKGROUND

2.On 12 October 2000 Mr Geroulis signed an assurance of support for Ms Afroditi Psarianou for the period 17 December 2000 to 17 December 2002. Ms Psarianou was the wife of Mr Kotsiopoulos, a friend of Mr Geroulis. Both were moving from Greece to Australia and anticipated staying with Mr Geroulis on arrival.

3. On 20 February 2001 Ms Psarianou lodged a claim for special benefit which was subsequently granted (T3). On her claim form she failed to declare that she had arrived in Australia under an assurance of support from Mr Geroulis (T3/19).

4. Centrelink conducted a data match exercise in mid 2001 and discovered that Ms Psarianou was in receipt of the special benefit allowance as well as being the subject of an assurance of support. On 25 July 2001 Centrelink advised Mr Geroulis that he was accruing a debt as a result of Mrs Psarianou being paid the special benefit allowance (T5).

5.        On 22 October 2001 special benefit ceased to be payable to Mrs Psarianou.

6. On 30 October 2001 Centrelink notified Mr Geroulis that he owed an assurance of support debt of $5951.01 to the Commonwealth (T7).

7.On 22 November 2001 Mrs Psarianou, Mr Kotsiopoulos and Mr Geroulis attended the Centrelink office in Strathfield. At that meeting Mr Kotsiopoulos and Mrs Psarianou prepared and signed statements to the effect that they accepted full responsibility for Mr Geroulis’ debt to Centrelink, and that Mr Kotsiopoulos would repay the debt at the rate of $40 per fortnight with money taken from his pension (T9-10). Mr Geroulis signed a statement admitting that he had provided the assurance of support for Mrs Psarianou and acknowledging that Mr Kotsiopoulos had agreed to pay the debt amount (T11).

8. On 2 January 2003 Centrelink wrote to Mr Geroulis regarding the outstanding balance of the debt (T12), confirming that he was still responsible for the debt. 

9.On 17 March 2003 Mr Geroulis requested a review of the decision to raise and recover the assurance of support debt (T14). The original decision maker affirmed the decision and the matter was referred to an ARO.

10.On 4 June 2003 the ARO affirmed the original decision (T18). On 26 June 2003 Mr Geroulis lodged an appeal with the SSAT (T2). On 11 July 2003 the SSAT affirmed the decision. On 29 July 2003 Mr Geroulis appealed to this Tribunal.

ISSUES BEFORE THE TRIBUNAL

11.      The issues before the Tribunal were:

(a) Whether Mr Geroulis has an assurance of support debt to the Commonwealth in the amount of $5,951.01 and if so

(b) Whether there are any grounds not to recover the amount.

DOCUMENTARY EVIDENCE

12.The Tribunal had before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (the “T-documents”), which it took into evidence. The parties provided other documents and these were attached to the Tribunal’s file.

CONSIDERATION OF THE EVIDENCE AND FINDINGS

13. At the hearing, Mr Geroulis was represented by his daughter, Ms Elizabeth Geroulis, and the Respondent by Mr. George Lozynsky. Mr Geroulis spoke with the aid of an interpreter, Ms Panayota Algerinos, a NAATI accredited interpreter in the Greek language.

14.In coming to the correct and preferable decision, I took into account all the evidence, written submissions, case law and relevant legislation.

(a)      Did Mr Geroulis validly execute the assurance of support?

15. Mr Geroulis stated that he didn’t know in detail what it was he was signing, only that he was asked by his friend, Mr Kotsiopoulos, to sign it in order to help himself and his wife to come to Australia. He also said that had he known the effect of what he was signing, he would never have signed the document.

16.Ms Geroulis is a Justice of the Peace, and acted as a witness to her father’s application for the assurance of support. At the hearing she frankly conceded that her father “signed something that he shouldn’t have” in her presence. She expressed great remorse, and repeatedly said that had she known what her father was committing himself to she would never have let him sign the assurance of support application.

17.The evidence of Mr Geroulis and his daughter, which I accept, is that neither of them read the form properly or sought proper legal advice and, acting with the best of intentions, respectively signed and witnessed the assurance of support application.  As such, Mr Geroulis remains bound by the obligations contained in the assurance of support document.

(b) Does Mr Geroulis owe Centrelink a debt?

18.Mr Kotsiopoulos and Ms Psarianou stayed with Mr Geroulis for 4 months. On 20 February 2001, apparently at the behest of Mr Kotsiopoulos, Mr Geroulis drove them to Strathfield Centrelink where Ms Psarianou applied for special benefit. Mr Geroulis gave evidence that he did not know what she was doing, only that she was “fixing some paperwork”. On her application form, in the section entitled “Residency Details” Ms Psarianou stated that she did not arrive in Australia under an assurance of support. Her application was successful and payments of special benefit commenced.

19.Some 2-4 weeks after her application was lodged, Mr Geroulis found out about Ms Psarianou’s special benefit payments. A cheque arrived at Mr Geroulis’ address for Ms Psarianou from Centrelink. When she opened it, she said to the Applicant “I’m getting paid” to which he responded “Good luck to you”.

20.On the final page of the application for assurance of support is the following section:

·     “I undertake to repay to the Commonwealth the funds paid where any Special Benefit…is paid under the Social Security Act 1991 to a person covered by this assurance during the period for which the assurance of support is given;

·     I understand that Centrelink on behalf of the Department of Family and Community Services may use its debt recovery powers under the Social Security Act 1991 or that action may be taken in a court to recover from me such funds as a debt due pursuant to the Migration Regulations (T15/51).”

21.The general principle is that whenever persons of full age and understanding, who can read and write, sign documents which, it is apparent on their face are intended to have legal consequences, but who, relying on the word of another as to the character or contents or effect of the documents, sign a document which they do not take the trouble to read, they cannot be heard to say that it is not their document, since by their conduct in signing they have represented, to all those into whose hands any such document may come, that it is their document. (Gallie v Lee [1969] 2 Ch 17 at 36-7, per Lord Denning MR)

22.In these circumstances it is clear that Mr Geroulis owes Centrelink the assurance of support debt.

(b) Are there are any grounds upon which the Secretary can not recover the amount?

Writing Off

23. Section 1236 of the Social Security Act 1991 (“the Act”) provides:

(1) Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a) the debt is irrecoverable at law; or

(b) the debtor has no capacity to repay the debt; or

(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

(d) it is not cost effective for the Commonwealth to take action to recover the debt.

24.Subsections (a), (c) and (d) are clearly satisfied in this case. The only one of these subsections that might apply to Mr Geroulis is (b), in that he asserts he has no capacity to repay the debt.

25.Mr Geroulis gave evidence at the hearing that he owns his house outright, has no other debts, that his only income is his age pension, and that he has approximately $16,000 in a bank account with his wife.

26.I am unable to give any great weight to that evidence. By comparison with many that come before the Tribunal it has to be said that Mr Geroulis is in a much better position to repay the debt than most. The balance of the debt is now between $4,000 and $5,000, some repayments having already been made by Ms Psarianou. If the debt were taken from his bank account, he and his wife still have over $10,000 in cash and an unencumbered home. I find that he has capacity to repay the debt and hence the debt cannot be written off.

Waiver of the debt: administrative error

27.Section 1237A(1) of the Act provides that a debt must be waived if it is attributable solely to an administrative error made by the Commonwealth, which the debtor received in good faith. There was no contention that the overpayments occurred in circumstances of bad faith on the part of Mr Geroulis.

28.Ms Geroulis contended that there was an administrative error made on the part of Centrelink. This contention must be looked at in respect of two periods, firstly prior to the letter of 25 July 2001 and afterwards.

Prior to 25 July letter

29.Ms Geroulis contended firstly that Centrelink took too long to undertake the data matching exercise that resulted in the debt being discovered. It was some 6 months after Ms Psarianou successfully applied for special benefit that Mr Geroulis was advised of his debt. A delay this long must amount to an administrative error, in Ms Geroulis’ contention.

30.Centrelink was, in my view, rightly proceeding on the assumption that Ms Psarianou was not the subject of an assurance of support, relying on her application for special benefit. Centrelink were entitled to, and must, proceed on such information, even if it is later found to be erroneous. The ‘data-matching’ exercise conducted by Centrelink is conducted as a precaution; the onus is clearly on those applying for Centrelink benefits to fully disclose the extent of their existing obligations to the government. That Ms Psarianou failed to do so is not an administrative error on the part of the Commonwealth.

After 25 July letter

31.Mr Geroulis gave evidence of a visit to Strathfield Centrelink after receiving the letter of 25 July 2001, where he spoke to “an Asian bloke” at the counter. There were no details of the conversation, especially as to discussions about Ms Psarianou being in receipt of both special benefit and being the subject of an assurance of support. According to Mr Geroulis, this man opened his file on his computer, told him that he had ‘nothing to worry about’, and said that he ‘no longer owed the debt’.. Mr Geroulis left that meeting satisfied that the debt was a mistake and no longer his obligation. Ms Geroulis contended that the fact that Centrelink continued to record a debt accruing to Mr Geroulis, culminating in the issue of the letter of 30 October 2001, amounts to an administrative error on Centrelink’s part.

32.Centrelink has no record of this visit. Mr Geroulis has no document that confirms the details of this visit, or what he perceived to be the outcomes arising from this visit. Further, this matter was not raised before the SSAT, and as far as I can ascertain was first raised in the hearing before me.

33.Although overall I accept Mr Geroulis as a witness of truth, I am unable to give any weight to his account of what happened during this visit. Centrelink is an organisation that retains extensive computer records of interactions with clients, including, for example, the details of all telephone conversations. That a face to face encounter that fundamentally changed the nature of Mr Geroulis’ obligations to Centrelink is not recorded is, at least, extremely odd. It seems to me that Mr Geroulis was somewhat naïve to have been satisfied with a verbal assurance given by a Centrelink receptionist of such a change in his obligations.

34.There could be a number of reasons why Mr Geroulis failed to mention this meeting at any stage prior to the hearing before me. It is possible that he simply didn’t appreciate the significance of this encounter, or had only remembered it at this stage of the appellate process by virtue of repeatedly going over the sequence of events in question.

35.I find that the debt which continued to accrue because special benefit was paid to Ms Psarianou up to 22 October 2001, is not solely attributable to Commonwealth error.

Waiver of the debt in special circumstances

36. Section 1237AAD of the Act provides:

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a) the debt did not result wholly or partly from the debtor or another person knowingly:

(i) making a false statement or a false representation; or

(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c) it is more appropriate to waive than to write off the debt or part of the debt.

37.The debt cannot be waived under this section. Mr Geroulis gave oral evidence, unsupported by medical documents of any kind, that he has diabetes severe enough to warrant an operation to prevent the loss of his sight, and that he needs that money for his operation. I cannot give any weight to this evidence. The debt arose from Ms Psarianou making a false statement on her application for special benefit with knowledge, be it actual or constructive, that it was false.

38.There are no special circumstances applicable in this case, and it is not appropriate for the Commonwealth to write off the debt.

The effect of the transfer statements

39.While the documents signed at Centrelink’s Strathfield office on 22 November 2001 establish that Mr Kotsiopoulos and Ms Psarianou agreed to take on the debt, it does not alter Mr Geroulis’ position vis a vis Centrelink. Mr Geroulis may be able to enforce the agreement but Centrelink is not able to do so. It was not a party to the agreement, although a Centrelink officer appears to have facilitated it. It was Mr Geroulis who undertook to repay the Commonwealth in the event of any overpayments of extra benefits to someone who was, through him, the subject of an assurance of support. Such an undertaking cannot be undone by private agreement.

DECISION

40.      The decision of the Social Security Appeals Tribunal is affirmed.

I certify that the 40 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed: Guy Moloney           .......................................................................................
  Associate

Date/s of Hearing  20 February 2004
Date of Decision  5 March 2004
Counsel for the Applicant         Ms Elizabeth Geroulis
Counsel for the Respondent     Mr George Lozynsky