Gledich; Secretary, Department of Family and Community Services

[2005] AATA 598

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2005] AATA 598

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   W2004/417

GENERAL ADMINISTRATIVE DIVISION		)
Re		Secretary, Department of Family and Community Services

Applicant

And Maryanne Gledich

Respondent

DECISION

Tribunal Ms L Savage Davis

Date23 June 2005

PlacePerth

Decision  The decision under review is affirmed.

[sgd Linda Savage Davis]

Member

CATCHWORDS

SOCIAL SECURITY – parenting allowance – parenting payment – assets test – meaning of principal home – campervan as principal home

Social Security Act 1991 s11 (5), (6) and (7)

Re Kirkman and Secretary, Department of Social Security (1990) 20 ALD 400

Secretary, Department of Family and Community Services and Kulshrestha [2003] AATA 227

Re Samek and Secretary, Department of Social Security (1998) ALD 295

REASONS FOR DECISION

23 June 2005 Ms L Savage Davis

1.      This is an application by the Secretary, Department of Family and Community Services (“the applicant”) for a review of the decision of the Social Security Appeals Tribunal (“SSAT”) on 11 October 2004 (T2). In that decision dated 11 October 2004 the SSAT set aside the original decision and sent the matter back for reconsideration in accordance with the following directions:

(1) the debt must be recalculated based on the fact that 75 Grove Road, Kenwick was Mrs Gledich’s (“the respondent”) principal home for the period 6 July 1995 to 31 March 2001; and

(2)the value of the Grove Road property must be reassessed for the period July 1995 to March 2001 by independent valuers or actuaries to assess the value of the area exceeding 2 hectares plus the area previously leased out by Mrs Gledich’s husband and the value of that land is to be included as an asset for the purposes of the Social Security Act 1991.

2. The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 (T1 to T80/ 1-366), as well as the applicant’s Statement of Facts and Contentions filed on 3 March 2005. The applicant was represented by Mr Paul Maishman of the Legal Services Branch. The respondent, who gave oral evidence, represented herself.

3.      It was agreed by the applicant and the respondent that the issue in question for the purpose of this application was whether the Grove Road, Kenwick property (Grove Road) was the principal residence of the respondent from 6 July 1995 to 31 March 2001.

Mrs Gledich’s Evidence

4.      In her evidence Mrs Gledich confirmed that her husband Arthur Gledich was the owner of Grove Road which was registered in the name of Dasi Gledich.  She told the Tribunal she had three children.  Only Simon was still living with them.  The older two had stayed at the Grove Road property on and off until late 2000.  She said that the company Art Gledich and Associates was established in 1969.  Initially her husband and P. Stewart were the directors.  She took over from P. Stewart in 1972.  Her husband owned 4000 shares and she owned one share.  The activities of Art Gledich and Associates (the company) were in mining and prospecting.  Last year for the first time the company had bought some shares.  An accounting firm, Kensington Partners, handled the paperwork for the company.  She said she and her husband and son spend much of their time in the Meekatharra/Murchison area prospecting. She said she helps her husband a little.  Most of her time is spent with her son who does correspondence. She does some paperwork to help them comply with things such as the Mining Act.  The company owns 4 prospecting licenses at present.  It has owned more at other times.  They usually involve a four-year lease.

5.      Mrs Gledich said she had told the SSAT that their lifestyle is like most people working in mining.  She described it as three weeks on and one week off.  She said these were approximates as she had never had any reason to keep records.  They spent about 3 weeks in the Meekatharra/Murchison area and then returned to their home in Grove Road.  She also said that they spent most of the school holidays at Grove Road.  She agreed that the majority of their time whether it was 7 or 8 months per year was spent living in a campervan on one of the various leases they have in the Murchison/Meekatharra area.  Her son Simon does all his schooling by correspondence with her assistance in the campervan.  Simon, who is now sixteen, has always done school with her via distance education.  She initially attempted to enrol him via Perth but was told it had to be done via the Meekatharra office.  As they don’t have radio facilities it is all done by correspondence.  He does not go to school in Perth when they are in Perth. 

6.      Mrs Gledich said she went into Meekatharra about once a week to collect mail and get water and fresh vegetables.  This was most weeks but not every week.  Their living conditions are very primitive.  They have no water, they have no toilet, and they use a generator to create a limited power source.  They use the bush for the toilet and she saves the washing to do when they come back to Grove Road.  She said she washes essentials, and the other clothes last them for the period that they are away.  Although she has a small stove it is smoky within the small campervan and they normally cook out on an open fire. 

7.      Mrs Gledich said that the Grove Road property was transferred to her husband in about 1981.  She said her husband’s parents had died in 1982 and they had decided before that time to divide the property they had between her husband and his other siblings.  She said they have nine acres which consists of a timber and asbestos house with three bedrooms and a sleepout. 

8.      Mrs Gledich said her husband also owns a piece of vacant land, which has been recently sold, at Cleaver Terrace in Rivervale.  This block was on about a quarter of an acre and they received $412,000 when it was sold because it had been recently rezoned for units.  Mrs Gledich believed that she had notified the Department that they owned this property in response to question 19 of the Parenting Allowance Abridged Claim form (T6/42).  She said her answer to the question “do you or your partner own or have an interest in any real estate/farm apart the home you live” to which she had answered ‘no’ for herself and ‘yes’ for her husband, reflected the fact that he had an interest and owned the Cleaver Road property.  She did not own it and it was not in her name.  She also explained why in response to question 21, “do you own your own home but live elsewhere” she had answered ‘no’ for herself.  She said she did this because although she considered Grove Road her home it was owned by her husband.  She said that she believed that she was saying that she owned her own home but lived elsewhere and that in any event she had said yes to the fact that her husband had owned his own home and lived elsewhere.  She conceded that it may have been confusing to those reading the forms but that the questions were not clear.

9.      Mrs Gledich was referred to T5/36, the profit and loss account for the company for the year ending 30 June 1994.  She said the $3150 recorded as rents received was rent received from that part of the Grove Road property that was rented out for the grazing of horses.  She said the house had not at any time until April 2001 been rented.  She said the item recording $6896.43 in rates and land taxes was in regard to costs associating with the prospecting licenses.  Mrs Gledich was referred to T7/47 which she confirmed she had completed and which indicated that she owned 50% of the Dodge campervan which had a total market value of $3300.  She conceded that at T6/44 the Dodge campervan was in her husband’s name although it had been listed as an asset of the company.  Mrs Gledich was referred to T9/52.  She said she was not sure who completed it but she had signed it and she agreed the description of the house was correct but disputed the response to question 5, “Do you receive income from your company?”  This was ticked yes. She said the sum of $150 gross weekly was incorrect.  Mrs Gledich said that she had no idea how assets affected payments from Centrelink.

10.     Mrs Gledich was referred to T20 which agreed she had completed and signed. In response to question 5 she answered no to the question “do you or your partner own more than one property, apart from the home you live in”.  She explained that she understood it to mean that apart from the home you own (Grove Road), did you own more than one other property.  She understood that to mean that unless she owned two more properties she would be correct in answering no.  She explained that she had valued Cleaver Terrace at $40,000 based on her best understanding of the value at that time although excepts now that it was an undervaluation.  Mrs Gledich was also referred to T21/83 and confirmed that rent received was in relation to horses and rental of the house and the rates and land taxes were related to mining leases rates.  She explained that the increased amount was due to the fact that the prospecting licenses were due to expire and it was necessary to peg them prior to this happening and this resulted in greater costs.  She said when referred to T26/110 that this reflected the same situation.  Mrs Gledich was also referred to T31/199, a Parenting Payment (Partnered) Review Form dated as received by Centrelink Geraldton on 5 February 2001.  She agreed she completed it and said that her valuation of Cleaver Terrace at $117,200 was based on what she believed was its value.  She had worked it out by looking at other properties in the area.

11.     Mrs Gledich agreed that on numerous occasions she listed her residential or principal address as Prospecting License 51-1779 Quinns. This included correspondence with the Department of Employment, Education and Training, when applying for Assistance for Isolated Children (T75).  She also agreed she used the PO Box 269 Meekatharra address in all her dealings with Centrelink.  Mrs Gledich confirmed that they had since April 2001 rented out Grove Road and they no longer rented out any area for horses because her husband had found this to be too much trouble.  Mrs Gledich said that they moved between mining leases.  She had not used the mining lease or the PO Box address to mislead.  She used these addresses because it was convenient.  They had their mail sent to the Meekatharra address so that she could respond within a timely manner.  She continued to use the one licensing number because it was less confusing.  She said at the time she was not thinking of it in terms of a definition of “principal home”.  Since the Grove Road property has been rented out they have been staying in a caravan park while in Perth.  She said she does not consider this a home.  They do not have a permanent caravan site. 

12.     Mrs Gledich agreed that they did spend the majority of their time in the campervan and at various sites in Meekatharra and the Murchison.  The licenses that they own, for example License 51-1779, mean that other people cannot go to this land.  She described being in the campervan on the tenements as being in the desert.  They cannot wash or shower in the normal way, there is no power, she does not have the normal home duties she would if she was running a household.  She said they always spend Christmas at home and the school holidays.  Photos for example are kept at Grove Road.  She said that they would not consider entertaining at the campervan as it was too isolated.

13.     Mrs Gledich explained that $2900 of the debt had been recovered but subsequent to the SSAT decision $900 had been returned.  The amount recovered had been done by withholdings from Family Tax Benefits.  She explained their current assets as the Grove Road property which is in her husband’s name.  The proceeds from the Cleaver Terrace sale have been invested in shares in the name of the company.  She receives family tax payment of $120 per fortnight, rent of $85 per week which she receives from Grove Road and she will receive approximately $2800 this year for Simon from the Assistance for Isolated Children payments.  She said that they spend about $250 a week on groceries and have the normal household expenses but their income from mining was not high.  She did not think there was any other income and she could not identify any special circumstances particular to their situation.

14.     Final submissions were made on behalf of the applicant as contained in the applicant’s Statement of Facts and Contentions which were before the Tribunal.

15.     Mrs Gledich made a brief submission to the Tribunal as follows:

I.    She reiterated that she believed that in her response to questions 21 and 22 of the Parenting Allowance Abridged Claim Form (T6/42) she had alerted the Department to the fact that she owned a home, but lived elsewhere and also that her partner owned additional real estate.

II.    She reiterated again that in response to question 5 (T20/74) she understood it to mean that it was only necessary to answer yes if she or her husband had owned more than one property, that is a property apart from their own home and the Cleaver Terrace property.

III.Mrs Gledich said that she always put the Prospecting License address on forms or the PO Box Meekatharra address because she thought that it was already understood that she had a home at Grove Road.

IV.Mrs Gledich submitted that the full form at T9 containing real estate details although signed by herself, had not been completed by her or her husband.

V.Mrs Gledich confirmed that she stood by her evidence that she spent approximately 3 weeks at Meekatharra/Murchison and a week at home.  She said for that reason the mail was sent their on a regular basis although she considered Grove Road to be her home.

Consideration and Decision

16. In reaching its decision the Tribunal has considered the oral and documented evidence and the relevant legislation and case law. The issue in this case is whether the Grove Road property was Mrs Gledich’s principal home and therefore whether its value is to be disregarded under s118(1) of the Social Security Act 1991 (the Act). The term (principal home) is referred to in s11(5) and s11(6) of the Act as follows:

Principal home

11.(5)  A reference in this Act to the principal home of a person includes a reference to:

(a)      if the principal home is a dwelling-house—the private land adjacent to the dwelling-house to the extent that the private land, together with the area of the ground floor of the dwelling-house, does not exceed 2 hectares; or

(b)      if the principal home is a flat or home unit—a garage or storeroom that is used primarily for private or domestic purposes in association with the flat or home unit.

11.(6)  A reference in subsection (5) to private land adjacent to a dwelling-house is a reference to land that is adjacent to the dwelling-house and that is used primarily for private or domestic purposes in association with that dwelling-house.

11.(6A)  A residence of a person is taken to be the person’s principal home during:

(a)      if the Secretary is satisfied that the residence was previously the person’s principal home but that the person left it for the purpose of going into a care situation—any period during which:

(i) the person is accruing a liability to pay an accommodation charge (or would be accruing such a liability, assuming that no sanctions under Part 4.4 of the Aged Care Act 1997 were currently being imposed on the provider of the care concerned); and

(ii)       the person, or the person’s partner, is earning, deriving or receiving rent for the residence from another person; and

11.(7)  A residence of a person is to be taken to continue to be the person's principal home during:

(a)      any period (not exceeding 12 months) during which the person is temporarily absent from the residence; … “

17.     In Re Kirkman and Secretary, Department of Social Security (1990) 20 ALD 400, Deputy President Forgie considered the following cases which had considered the meaning of " principal home ”:

“The term ‘principal home’ has been considered by this Tribunal in Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295 and Re Dickeson and Secretary, Department of Social Security (1989) 18 ALD 58. In Re Clark and Secretary, Department of Social Security (Mr McMahon (then Senior Member), 4 November 1986, No 2968, unreported) it was said that: ‘A characteristic of a person’s home is that he usually resides there.  It is by no means necessary, however, that both go hand in hand.’”

18.     The Tribunal was referred by the applicant to Secretary, Department of Family and Community Services and Kulshrestha [2003] AATA 227 where DP Forgie concluded that the principal home is the place where a person usually resides and “where he cooks, eats, sleeps, washes himself and his clothes and generally lives.”

19.     The Tribunal was also referred to Re Samek and Secretary, Department of Social Security (1998) ALD 295 which noted that a person could have more than one home.

“The concept of “the principal home” assumes, however, that there is more than one property which is used as a home.  If one moves from home to home, then the home in which one spends most time would, logically, the be the principal home.  But in the context in which it appears, to talk of one home being a principal home, and another being a secondary home, the respective “homes” must be “property” which can be valued for the purposes of the Act.  Thus, as between the city house and the holiday house owned by a retired couple in my earlier example, the city house would remain their principal home for as long as they spent the bulk of their time there.  But once they spent the bulk of their time in their holiday house, it would become their principal home.

A person who owns a residential property in the city and who is in the habit of living there, but who spends the bulk of his or her time travelling around the country, living in hotels, and pursuing business or recreational interests from those hotels, can still be regarded as retaining the city property as his or her principal home.  While the person spends more time each year in hotels than at home, he or she has no proprietary interest in the hotel room and so cannot be regraded as setting up a home which can be regarded as such as to make the city home a secondary one. … In the absence of some property in which they had a legal interest which could be regarded as their principal home, the one property in which they were continuing to make some kind of home, albeit for limited periods during the year, became their “principal” home.  (at 16 ALD 296-297)”.

20.     Insight and guidance is found in the principles in the cases referred to and the Tribunal must decide on the basis of what it understands to be a generally understood meaning of the expression, “principal home”.  What then was Mrs Gledich’s principal home between July 1995 to March 2001?  The applicant believes it to be the Dodge campervan, which although mobile is where the family spends the majority of its time and from where Mrs Gledich’s son is schooled.  In addition, the applicant said that the use of both a Meekatharra address for all mail and use of Prospecting Licence to describe her son’s principal home in claim forms for Assistance for Isolated Children (“AIC”) supported this conclusion.

21.     There is no evidence before the Tribunal to contradict Mrs Gledich’s evidence that until April 2001 the Grove Road home was used by herself, husband and son whilst in Perth and her older children.  Whilst some parts of the 3 hectare property was at times rented to graze horses the Tribunal accepts that at all times prior to April 2001 it was the home base Mrs Gledich returned to when not prospecting.  The use of the Meekatharra address to collect mail is not reflective of where Mrs Gledich’s principal home was, as it was a post office box.  Meekatharra was the place she went into every week or two to collect mail, water and fresh vegetables.  Although the Prospecting Licence 51-1779 Quinns was used to describe her son’s principal home on the AIC, this itself was also not a permanent address as Mrs Gledich’s evidence was that they moved between their mining leases.  Presumably if Grove Road had been listed Simon would not have been considered isolated.  I also accept Mrs Gledich’s evidence that at the period in question she considered Grove Road to be her home.  The Tribunal, after careful consideration, cannot equate a campervan with no toilet facilities, very limited cooking or washing facilities without access to water or electricity as Mrs Gledich’s principal home.  In regard to the forms there is no doubt Mrs Gledich has at times completed them incorrectly (T20/74 Q5) however, forms sent to Mrs Gledich partially completed by the Department have added to the confusion (T9).  Circumventing this confusion may be possible by the addition of a question that asks that interests in all properties, whether owned by the person or their partner individually or together, be listed.

22.     The Tribunal therefore finds that 75 Grove Road, Kenwick was Mrs Gledich’s principal home for the period 6 July 1995 to 31 March 2001 and affirms the decision under review.

I certify that the 22 preceding paragraphs are a true copy of the reasons for the decision herein of Ms L Savage Davis

Signed:     [sgd June Rainey]
  Associate

Date of Hearing  23 May 2005
Date of Decision  23 June 2005
Advocate for the Applicant       Paul Maishman   
Solicitor for the Respondent     Self represented