Gilson; Secretary, Department of Employment and Workplace Relations and

[2007] AATA 1361

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1361

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No N2006/431

GENERAL ADMINISTRATIVE   DIVISION		)
Re		SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And JANE GILSON

Respondent

DECISION

Tribunal The Hon RNJ Purvis AM, QC, Deputy President

Date25 May 2007

PlaceSydney

Decision The decision under review is set aside.

[sgd]

The Hon RNJ Purvis AM, QC                Deputy President

CATCHWORDS

SOCIAL SECURITY - Entitlement - Married person "living separately and apart" from spouse - Cohabitation under one roof - Factors relevant to assessment of marriage like relationship - Financial arrangements – Nature of the household – Social aspect of the relationship - No sexual relationship – Nature of the commitment – Decision under review set aside.

LEGISLATION

Social Security Act 1991- sections 4(2), 4(3) and 1237AAD

Social Security (Administration Act) 1999 - sections 118(1), 118(8), 118(9) and 118(13)

CASELAW

Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164

Lynam v Director-General of Social Security (1983) 52 ALR 128

Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546

Re Tang and Director-General of Social Services (1981) 3 ALN N49

Re Pearce and Director-General of Social Security (1983) 5 ALN N104

REASONS FOR DECISION

25 May 2007 The Hon RNJ Purvis AM, QC, Deputy President          

THE APPLICATIONS

1.      The applications now before the Tribunal relate to parenting payments made to Mrs Jane Gilson pursuant to the Social Security Act 1991 from 29 November 2002 to 16 November 2004. A Delegate of the Secretary, Department of Employment and Workplace Relations (“the Secretary”) maintained that Mrs Gilson was not, during the above relevant period, living separately and apart on a permanent or indefinite basis from her husband Mr Donald Gilson (“the separation finding”), and that she had been paid an amount of $19,705.54 to which she was not entitled. Further, that she made false statements or misrepresentations within the meaning of section 118 of the Social Security (Administration) Act 1999, as a consequence of which the social security payments were higher than they should otherwise have been. The adverse determination was backdated to 29 November 2002.

2.      Mrs Gilson appealed to the Social Security Appeals Tribunal (“the SSAT”) against the determination. The SSAT upheld the separation finding of the Secretary, but determined that the cancellation determination should have effect on and from the date on which the determination was made. In effect, the SSAT found that no retrospective determination could be made to cancel the parenting payment of Mrs Gilson from 29 November 2002. The Secretary appealed to this Tribunal the latter decision of the SSAT. Mrs Gilson appealed against the separation finding.

3. Mrs Gilson also maintains that if an adverse determination is made as to separation and the effective date of the cancellation, that the then debt should be waived pursuant to section 1237AAD of the Social Security Act 1991.

RELEVANT LEGISLATIVE PROVISIONS

4. Section 4 of the Social Security Act 1991 (“the Act”) provides:

“Member of a couple—general

4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:

(a) the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;…

Member of a couple—criteria for forming opinion about relationship

4(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:

(a) the financial aspects of the relationship, including:

(i)any joint ownership of real estate or other major assets and any joint liabilities; and

(ii) any significant pooling of financial resources especially in relation to major financial commitments; and

(iii)any legal obligations owed by one person in respect of the other person; and

(iv)the basis of any sharing of day‑to‑day household expenses;

(b) the nature of the household, including:

(i)any joint responsibility for providing care or support of children; and

(ii) the living arrangements of the people; and

(iii)the basis on which responsibility for housework is distributed;

(c) the social aspects of the relationship, including:

(i) whether the people hold themselves out as married to each other; and

(ii)the assessment of friends and regular associates of the people about the nature of their relationship; and

(iii)the basis on which the people make plans for, or engage in, joint social activities;

(d) any sexual relationship between the people;

(e) the nature of the people’s commitment to each other, including:

(i) the length of the relationship; and

(ii)the nature of any companionship and emotional support that the people provide to each other; and

(iii) whether the people consider that the relationship is likely to continue indefinitely; and

(iv) whether the people see their relationship as a marriage-like relationship.”

5. Section 118 of the Social Security (Administration) Act 1999 (“the Administration Act”) provides:

“118 Date of effect of adverse determinations—general rules

(1) The day on which an adverse determination takes effect in relation to   a social security payment is worked out:

(b) in the case of carer payment – in accordance with this section and section 120;

(c) in the case of any other social security payment – in accordance with this section.

…

(8) If:

(a)  a person has made a false statement or misrepresentation; and

(b) because of the false statement or misrepresentation, a social security payment has been paid to a person when it should have been cancelled or suspended;

the adverse determination takes effect on such day (which may be earlier than the day on which the determination is made) as is specified in the determination.

(9) If:

(a)  a person has made a false statement or misrepresentation; and

(b) because of the false statement or misrepresentation, the rate at which a social security payment was paid to a person was higher than it should have been;

the adverse determination takes effect on such day (which may be earlier than the day on which the determination is made) as is specified in the determination.

(13) In any other case, an adverse determination takes effect:

(a)  on the day on which it is made; or

(b)  if a later day is specified in the determination, on that day.”

6. Section 1237AAD of the Act provides:

“Waiver in special circumstances

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 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.”

THE ISSUES

7.        The issues therefore before this Tribunal for determination are:

(1) Whether Mrs Gilson was living separately and apart on a permanent or indefinite basis from her husband, Mr Donald Gilson, from 29 November 2002 to 16 November 2004.

(2) If the answer to issue one above is in the negative, then whether there is a debt  of parenting payment single of $19,705.54 owing to the Secretary.

(3) If the answer to issue two above is in the affirmative, then whether that debt should be recovered from Mrs Gilson.

8.        It is to be noted that if the answer to issue one above is in the affirmative, then issues 2 and 3 do not arise.

RELEVANT FACTUAL SITUATION AND FINDINGS OF FACT

9.        As has been previously stated in these reasons, the threshold question that needs to be asked and answered is whether during the period 29 November 2002 to 16 November 2004 Mrs Gilson was living separately and apart on a permanent or indefinite basis from her husband.

10.      Mr and Mrs Gilson were married to one another on 5 March 1994. Mr Gilson had been married previously, and from that marriage had two children, twin boys, Thomas and Donald. Mr Gilson also had another child of a previous relationship.

11.      At the time of their marriage, both Mr and Mrs Gilson had an association with the Army; Mrs Gilson as a Cadet, and Mr Gilson as a Member of the Army Reserve. Mr Gilson has retained his connection with the Army, and is at this time a Warrant Officer Class 2. Mrs Gilson ceased her involvement with the Army at or about the time she had her first child, Joshua, in September 1994. A second child, Jessica, was born on 14 April 1996.

12.      Consequential on Jessica’s birth, Mrs Gilson experienced post natal depression, this exacerbated by Mr Gilson’s family who, as he put it in his evidence, were “nasty people, probably the cause of the breakdown of our marriage”. Mr Gilson’s former wife, the mother of the twin boys, also added to Mrs Gilson’s anguish, and made her ill feeling towards Mrs Gilson well known to her. She frequently telephoned Mrs Gilson to tell her of alleged misconduct and cruelty of Mr Gilson towards her. Mr Gilson stated that the earlier separation had been “nasty” to the extent that access change over of the boys had to occur at a police station.

13.      The above circumstances all contributed to a growing apart of Mr and Mrs Gilson. Mrs Gilson was experiencing a continuance of her depressive state. One of the twins, Donald, expressed a preference for living in his father’s household. Mrs Gilson therefore had the care and responsibility for three young children. Mr Gilson was working and Mrs Gilson felt that she was left to do everything for the infants. Jessica in particular was a difficult child and demanded much attention. The depression worsened.

14.      Mr Gilson was very conscious of the effect that his first wife’s behaviour, the acrimony between the two of them, had had on his sons. He did not want this to happen to Joshua and Jessica.

15.      During 1996 communication between Mr and Mrs Gilson deteriorated; they frequently argued, and the depression worsened. She found difficulty in coping with the marriage.

16.      In February 1997, Mr and Mrs Gilson separated. Mrs Gilson stayed at the former matrimonial home with her two children. Mr Gilson and Donald spent time living with a friend. Mrs Gilson opened a bank account in her own name (a previous joint account was closed), applied for a child support assessment and a sole parent pension. She was unsure as to her future. She said in her evidence that at that time she had to get away from her husband; she “was a mess, depressed and scared” at the prospect of being alone with two young children. Whilst the pair of them were on speaking terms, this was generally more in the interests of their children than as to a reconciliation. Indeed, Mr and Mrs Gilson deny that either of them genuinely considered that they would resume cohabitation.

17.      Between 1997 and 2002 Mrs Gilson lived with her children at four different locations, the last three on the Central Coast. Mr Gilson was unable, on account of his work, to effectively look after Donald, who then began to live with Mrs Gilson. There was not any difficulty in Mr Gilson having contact with the children, and he exercised this contact on a regular basis.

18.      As he lived and worked in Sydney Mr Gilson, on some occasions, would “sleep over” at Mrs Gilson’s residence. There was not a resumption of cohabitation.

19.      Meanwhile Jessica’s stability and development was noticeably lacking. The absence of her father was distressing to her. This situation deteriorated when she began school. She was a shy girl, teary and emotional, clingy and experienced learning difficulties. When later she returned to Sydney it was necessary for her to repeat first grade. Mrs Gilson “tried everything”. Mother and daughter became frustrated and angry. The amount of money provided by Mr Gilson was not sufficient for Mrs Gilson to support the children and pay rent. Mr Gilson also had his son Thomas, and another child to support. Mrs Gilson became more distressed.

20.      Possibly on account of both parents demonstrating concern for the welfare of the children, they were able to apply their minds to their immediate problems. Mrs Gilson’s depression was apparent to Mr Gilson. Jessica missed her father and was experiencing distress on this account.

21.      In late 2002, Mr Gilson approached Defence Housing and was able to organise a rent allowance such as enabled him to lease a four bedroom house at Cherrybrook. Apart from the four bedrooms upstairs, there was a family room downstairs. He suggested to Mrs Gilson that she move into the house with the children. However, she and Mr Gilson would remain living apart from each other there. Not only would this arrangement be in the better interests of the children, but it would also reduce the costs that Mrs Gilson had to bear. To that time, she was barely able to financially maintain herself. It was, she said, “a struggle day in and day out”. She was not able to work. If she accepted the proposal, Mr Gilson would pay the rent; she would pay for her food and her telephone usage. Mr Gilson would pay child support.

22.      Mr and Mrs Gilson decided that Mrs Gilson would leave the Central Coast, return to Sydney with the three children and relocate to the house at Cherrybrook. Mrs Gilson and the children were to live upstairs and the family room would be converted into a bedroom for Mrs Gilson. There was not any discussion as to a reconciliation.

23.      The two adults and three children remained living in the one house until November 2004, when on receiving word from the Secretary that her situation was of concern as to whether or not she was living separately from Mr Gilson, she left the Cherrybrook house with the children.

24.      Mr and Mrs Gilson never shared a bedroom. They did not ever have sexual intercourse. They did each use the same kitchen and the same laundry. Mr Gilson cooked his own, and sometimes Donald’s, meals. If Mrs Gilson paid for any of Donald’s meals it was reimbursed to her. Their food was kept separately. Mr Gilson washed his own clothes. He cleaned his own room and his common areas. He watched television in his own area, be it that occasionally Mrs Gilson joined him to watch Foxtel, her television set not having cable TV. They had no holidays together. The lease of the house was in Mr Gilson’s name, probably by reason of his having obtained rent assistance.

25.      Other domestic obligations were generally assumed by Mrs Gilson. After all, Mr Gilson was then a full time soldier. They had little social involvement with one another. When they did engage in such activities at the same time, at a park or having a barbeque, they both said it was “for the children”. Other social occasions such as a few dinners at Victoria Barracks were for company, and on two such occasions Mrs Gilson had with her a lady friend. They were each a member of a local club but rarely attended at the one time. They generally shopped independently.

26.      Mr and Mrs Gilson lived their own lives. When Mr Gilson “went out” he did not tell Mrs Gilson where he was going. Sometimes, when he would stay away over night, he would telephone to ensure that Donald was cared for, but not for any other purpose. He had, to the knowledge of Mrs Gilson, female relationships at this time, one lasting longer than the other. The latter female began a practice of telephoning the house and abusing Mrs Gilson. It was on this account that she did request that Mr Gilson not bring his female friend into contact with the children.

27.      It is fair to note, as Mr and Mrs Gilson confirmed, that they did, over time, become friends. But no more. Finances were still tight. When Mrs Gilson was able, on account of the children, she started to do part-time work at a local medical centre. She gave to her employer her marital status as separated, and nominated her mother as next of kin. Joshua and Jessica were nominated by her as beneficiaries for superannuation purposes. She said that working “opened another door”. If she could become financially able she would, she said, “move out”.

28.      Mrs Gilson had opened her own bank account at the time she and Mr Gilson separated into which her social security payments, and more latterly her part-time salary, was deposited. She was also withdrawing a reduced child support from Mr Gilson’s account by means of his key-card, which he handed to her when needed for this purpose. A schedule of withdrawals (Exhibit A) shows that Mrs Gilson generally withdrew money from her own account at the same time as she obtained the child support money. Mr and Mrs Gilson did not have a joint bank account. The child support monies were for the benefit of Joshua and Jessica, not Donald.

29.      Mrs Gilson did not use any of the money that she withdrew from Mr Gilson’s account for her own purposes. Mr Gilson did not have access to the account of Mrs Gilson.

30.      As I have mentioned, over time Mr and Mrs Gilson “became quite good friends”.  A friend of Mrs Gilson, Mrs Katherine Edwards, said in her evidence that “they did not act like a happy couple, they did not hold hands or kiss but they acted as friends to each other”. I accept this to have been so. There were fruitful discussions about the children. According to Mrs Gilson, Jessica “did settle down a bit. She loves her dad”. Jessica continued to fret and become distressed when her father left the house.

31.      After the initial separation in 1997, Mr Gilson had guaranteed a loan granted to Mrs Gilson when she acquired a motor vehicle. He had also supported her when she bought a computer. This assistance was provided by him before the move to Cherrybrook. The guarantee was not withdrawn during the time that they were living in the same house, even be it Mrs Gilson maintained the payments.

32.      Mrs Gilson contends that she has at all times been truthful with Centrelink and the Secretary. She has been factual and accurate in statements made by her. To the extent that it is necessary for the purpose of these reasons, I accept these protestations of Mrs Gilson to have been so.

DISCUSSION AND DECISION ON SEPARATION ISSUE

Separation Issue and Principles to be Applied

33.      The issue here is whether Mrs Gilson was living separately and apart on a permanent or indefinite basis from Mr Donald Gilson for the period 29 November 2002 to 16 November 2004. That is, whether or not she was a “member of a couple” within the meaning of section 4 of the Act.

34. As has been earlier noted, a number of factors (see section 4(3) of the Act) are to be taken into account in determining whether a person is a member of a couple. The list in section 4(3) of the Act is not, however, exhaustive and no one of the factors is determinative of the relationship. As was noted in Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164 at 173:

“…it is not sufficient to merely note that a couple are sharing accommodation, nor is it sufficient to note that one is financially dependent on the other; it is necessary to delve deeper to find the reasons for those arrangements. Those reasons will be better indicators in determining the correct nature of their relationship.”

35.      The earlier decision in Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131 details the appropriate approach to a determination of the issue as:

“Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.”

36. In Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 at 557 it was said:

“Cooperation is not identified as a specific factor in s 4(3) of the Act. That is not to say cooperative behaviour may not be taken into account for the matters listed in s 4(3) are not exhaustive. But cooperation of itself does not take a relationship very far down the path towards characterisation as "marriage-like". Cooperation is an indispensable feature of human society and of a multiplicity of different kinds of relationships within human society including the purely commercial. The same may be said of "mutual benefit" which attaches to a large range of arrangements between people.”

37.      Thus all facets of the interpersonal relationship between two persons are to be considered. The parties’ subjective perceptions of themselves and their relationship will not be a determining factor. In each case the actual objective circumstances are to be looked at: see Re Tang and Director-General of Social Services (1981) 3 ALN N49; Re Pearce and Director-General of Social Security (1983) 5 ALN N104.

The Relevant Factors

The Financial Aspects of the Relationship

38.      There was not on the basis of the factual situation above detailed, a pooling or sharing of financial resources and/or obligations between Mr and Mrs Gilson. It is true to say that after 1997 and prior to November 2002, Mr Gilson had supported Mrs Gilson in her obtaining loan monies for use in acquiring a car and computer. There was not any evidence of this activity occurring in the relevant period. The giving to Mrs Gilson of the bank key card when requested was in order for her to access child support monies, and not for her own use. Mr Gilson did not have access to Mrs Gilson’s account. It was convenient for the children’s money to be obtained in this way. There was not at any relevant time a joint account.

39.      The expenses associated with the rented property at Cherrybrook and the costs of maintaining the occupants, was clearly defined and segregated. Mrs Gilson was responsible for her own needs. She paid for the telephone and all of her own expenses. She obtained child support for Joshua and Jessica, and otherwise relied upon her monies derived from her sole parent pension and her employment. Mr Gilson did financially support himself and Donald, including Donald’s school and clothing expenses. The rent, electricity and water rates were paid.

40.      Financially Mr and Mrs Gilson operated mainly as two households, with a minimal intermingling of their finances. There was not, other than in respect of the children, a common use of funds. There was not a joint ownership of any assets or any joint liability.  There was not a pooling of financial resources. The only legal obligation owed was child support. Day-to-day household expenses were not shared and indeed they were carefully segregated.

Nature of the Household

41.      The circumstances that led to Mr and Mrs Gilson coming to their agreement to share with the children an accommodation at Cherrybrook, have earlier been identified. Prime amongst those reasons was the emotional disturbance being experienced by Jessica and Mrs Gilson’s distress and inability to manage her household situation. She was in receipt of insufficient funds to meet her commitments. The arrangement proposed would eliminate her rent commitment - a substantial saving. Mr Gilson could obtain rent assistance from the Army. He would move from the quarters he had been occupying at HMAS Penguin.

42.      The one thing that was certain was that the arrangement was not intended to be a reconciliation in any sense. It was not to be a matter of either person living with the other. They established within the one house separate and distinct living quarters and divisions of care and responsibility.

43.      The Secretary relies in part upon a form or forms completed in November 2002, in which Mr Gilson is shown as being a “member with dependants” (“MWD”) instead of a “member with dependants-separated” (“MWDS”), when he was seeking rent assistance to enable him to enter into a lease of the Cherrybrook house. Assuming that Mr Gilson was aware of the meaning of the status of MWD and MWDS, it was more likely than not that the MWD box was ticked to assure the availability of the rent assistance.

44.      The social activities in which Mr and Mrs Gilson engaged were usually separate and apart. Any occasion when they were present at the same location at the same time was, other then the few Victoria Barracks occasions, not by design. They were for convenience or by chance.  Otherwise it was in the interests of the children that they were both present.

45.      It is true that Mrs Gilson was, and still is, fond of Mr Gilson’s son Donald. He refers to her as “mum”. Her care for Donald was motivated by this affection and not because of any commitment to Mr Gilson.

46.      The use of the one kitchen and the one laundry was inevitable in a location where there was only one kitchen and one laundry. It was a use of the facility that was shared, even be it not at the same time or for the cooking or washing for the benefit of each other.

47.      There was a shared responsibility for providing care and support of the children. But the living arrangement as to Mr and Mrs Gilson was as if they were each in a separate establishment, and responsibility for housework was divided accordingly.

Social Aspect of the Relationship

48.      Mr and Mrs Gilson did each join the West Pennant Hills Sports Club. It was relatively close by to where they were living. But the evidence given before the Tribunal was to the effect that they usually attended the club on different days, and if they were there at the same time, that this was not for the purpose of their associating together. They had their own friends with whom they fraternised. If they travelled to the club together, it was by convenience, not otherwise.

49.      As already noted Mrs Gilson did, on a few occasions, attend a mess dinner. She was mostly accompanied by lady friends.

50.      I am satisfied on the basis of the evidence before the Tribunal that Mr and Mrs Gilson did not participate in social activities as a couple. They did not hold themselves out - that is go out of their way to make it known - that they were married.  They still were. But that was all. Mrs Gilson said that she did not have an association and saw no reason to apply for a divorce. If Mr Gilson had sought one there would be no difficulty. The assessment of the two lady friends of Mrs Gilson (Exhibit 1 and 2) was that Mr and Mrs Gilson lived separately and apart, without any show of a bonding or commitment to one of another. As was already mentioned, there were not any other joint activities.

Sexual Relationship

51.      There was not one.

Nature of Commitment

52.      The only shared commitment of Mr and Mrs Gilson was to the welfare of the children. It is true that over time the animosity previously existing between them, and the tendency to frequently argue, diminished and that they became friends. They became two adults happening to live in the same house and having a normal human concern, the one for the other. They each lived their own lives, Mr Gilson having a number of female relationships.

CONCLUSION

53.      I am satisfied that looking at the situation of Mr and Mrs Gilson over all, objectively, from a distance, that Mrs Gilson was not a member of couple between 29 November 2002 and 16 November 2004.

54.      In a number of respects Mrs Gilson and Mr Gilson are to be commended for arriving at a practical solution to a pressing problem situation. They each exhibited an awareness of the need to care appropriately for Jessica. Mr Gilson recognised Mrs Gilson’s financial impoverishment and the distress that she was experiencing. Even though they were no longer man and wife, they had responsibility for the children.

55.      The arrangement that Mr and Mrs Gilson entered into was one of mutual convenience, and for the housing and material and emotional welfare of the children. Whilst there was a commitment to the children, there was not a relevant commitment to one another.

56.      Being satisfied that Mrs Gilson was not a member of a couple, the decision as to separation under review, and the cancellation of the parenting payment single pension is to be set aside. The decision of the SSAT as to the existence of a debt and its effective date is not now applicable or relevant.

57.      Accordingly, for the reasons hereinbefore set forth, the Tribunal determines that Mrs Gilson was living separately and apart on a permanent or indefinite basis from Mr Donald Gilson for the period 29 November 2002 to 16 November 2004. The cancellation of the parenting payment single pension is set aside.

I certify that the 57 preceding paragraphs are a true copy of the reasons for the decision herein of The Hon RNJ Purvis AM, QC, Deputy President

Signed:         [Skye Owen]
  Associate

Dates of Hearing  9 May 2007
  10 May 2007
  11 May 2007
Date of Decision             25 May 2007
Representative for the Applicant               Ms S Burnett
Counsel for the Applicant  Ms R Francois
Representative for the Respondent          Mr B Gerogiannis
Counsel for the Respondent                     Ms K Sant