Hajjar and Secretary, Department of Social Services (Social services second review) - [2020] AATA 2476

Hajjar and Secretary, Department of Social Services (Social services second review) [2020] AATA 2476 (16 July 2020)
Division:GENERAL DIVISION
File Number: 2019/6748
Re:Hala Hajjar
APPLICANT

AndSecretary, Department of Social Services
RESPONDENT

DECISION
Tribunal:Chris Puplick AM, Senior Member
Date:16 July 2020
Place:Sydney

The decision under review is set aside and the matter remitted to the Secretary with a direction that the Applicant is entitled to Newstart Allowance (and any successor payment) in accordance with the findings of the Tribunal.
.....[sgd]...................................................................
Chris Puplick AM, Senior Member
CATCHWORDS
SOCIAL SECURITY – Newstart allowance – whether the Applicant’s assets exceed the assets value limit – intra-familial financial transactions – whether the transfer of $400,000 was a loan or a gift – bank loan – gift certificate – credibility – decision under review set aside and remitted.
LEGISLATION
Social Security Act 1991 (Cth)
CASES
Armagas Ltd v Mundogas S.A. (The Ocean Frost) [1985] 1 Lloyd’s Rep 1
Bysouth and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 59
Darcy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 562
Fox v Percy [2003] HCA 22
Gestmin SGPS S.A. and Credit Suisse (UK) Limited [2013] EWHC 3560
Katholos and Secretary, Department of Social Services (Social services second review) [2017] AATA 1293
Kligerman v Secretary Department of Social Security [1996] AATA 687
Nominal Defendant v Cordin [2017] NSWCA 6
Re Georges and Minister for Immigration and Ethnic Affairs [1978] AATA 63
Wings and Secretary, Department of Education, Employment and Workplace Relations [2009] AATA 322
SECONDARY MATERIALS
A Guide to Australian Government Payments
Guide to Social Security Law
REASONS FOR DECISION
Chris Puplick AM, Senior Member
16 July 2020
The application

This is an application by Mrs Hala Hajjar (the Applicant) for a review of a decision by the Social Services and Child Support Division of this Tribunal (AAT1) affirming a decision of an Authorised Review Officer (ARO) of the Department (the Respondent) to refuse the Applicant’s application for Newstart Allowance (NSA).[1]
[1] On 20 March 2020, Newstart Allowance (NSA) was replaced by JobSeeker Allowance as part of the Australian Government’s response to the Covid19 pandemic. However, the Tribunal will continue to refer to NSA as this was the payment in question at the time of application and AAT1 decision.
Mrs Hajjar made two applications for NSA on 28 June 2018 and 7 December 2018. On 22 August 2018 and 10 December 2018 respectively, these applications were refused. The refusal decisions were reviewed by the ARO and affirmed on 21 June 2019. The Applicant then appealed this decision to the AAT1 which further affirmed the decision on 13 September 2019.
On 20 October 2019, the Applicant sought a review of that decision in this Tribunal and the matter was heard on 12 June 2020. At the conclusion of those proceedings the Tribunal asked the Applicant to provide further written material and this was supplied by her husband, Mr George Hajjar on her behalf. A further hearing was held on 26 June 2020 for the purpose of considering that material and taking final oral submissions from the parties.
As a result of Covid19 precautions, the hearing was conducted with the Applicant, her husband (who represented her) and the Tribunal using the Microsoft Teams platform and with the Respondent and witnesses appearing via telephone. It is unhelpful that the Respondent Department, apparently for policy reasons, declines to participate by use of video facilities and that witnesses cannot be seen directly by the Tribunal, especially where matters of personal credibility are raised. Nevertheless, the Tribunal is satisfied that all parties were accorded procedural fairness through the proceedings.
The sole issue
The basis for both rejection decisions was that the Applicant was not eligible for NSA because her assets, calculated at a member of a couple – with her husband (George Hajjar) – rate, exceeded the assets value limit imposed by the Social Security Act 1991 (Cth) (the Act).
From consideration of all the evidence, there is, in essence, only one issue before the Tribunal.
That issue is simply: was the sum of $400,000, which was transferred from Mr George Hajjar to the couple’s son Mr Fadi Hajjar in 2010, a loan (which was repayable) or a gift (which was not repayable)?
On this turns the question of whether Mrs Hala Hajjar is eligible for payment of NSA. If the transaction was a repayable loan, then Mrs Hajjar is not eligible for NSA because her assets, as part of a couple with Mr Hajjar, include the value of the loan and hence exceed the assets test prescribed in legislation. If the transaction was a gift, then she otherwise qualifies for the allowance.
As this point is agreed by the Respondent, it is not necessary for the Tribunal to embark on any examination of the Applicant’s assets apart from its consideration of the status of the financial transaction involving the $400,000.[2]
[2] Transcript of Hearing, 12 June 2020, page 4 lines [1 to 14].
Legislative framework
The eligibility question derives from the provision in section 1122 of the Act which provides:[3]
If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan.
[3] Notes omitted.
Hence, any money loaned by Mr Hajjar but not repaid, would constitute part of his assets and hence part of the Applicant’s assets as a member of a couple.
Subsection 9(1) of the Act provides that a “financial asset” includes a “financial investment” and in turn, a “financial investment” includes “a loan that has not been repaid in full”.
There is no definition of the term “loan” to be found in the Act itself. However, for social security purposes, a definition is provided in the Guide to Social Security Law[4] at 1.1.L65:
[4] Version 1.269 Issued 2 June 2020. be a loan there MUST be:
·an actual lending of money or an asset (1.1.A.290) of a particular value, AND
·a clear intention to repay.
A loan is:
·an advance of money, or
·the payment of an amount for, on account of, on behalf of or at the request of a person where there is an obligation, whether expressed or implied, to repay the amount.
In some respects, this adds a level of confusion in that, to be a loan, there must be a clear intention to repay; yet at the same time, that intention may be only implied rather than explicit.
The Tribunal in Kligerman v Secretary Department of Social Security drew specific attention to the lack of a statutory definition of the term “loan” within its social security context, relying rather on the characterisation of the transaction as being more akin to a contract:
I am satisfied that the advance of monies by the applicant’s to the builder was a loan because it was in the nature of a contract, there was agreement to lend monies in consideration of an express promise and it was agreed that repayment would be made at a fixed or future time yet conditionally upon some other event occurring.[5]
[5] [1996] AATA 687 at [14].
In Wings and Secretary, Department of Education, Employment and Workplace Relations, the Tribunal considered a situation analogous to this, whereby the issue was where:
an intra-familial transfer of money occurred, the consideration for which was the love and affection of the applicants to their son, along with a desire to assist him to succeed in establishing and operating a business.[6]
[6] [2009] AATA 322 at [8].
The Applicants in that case claimed:
The fact that there was no documentation evidencing the transactions, that no interest was payable and that there was no set term for repayment all evidence there being a non commercial domestic family arrangement which could not be characterised in any sense as a ‘financial investment’ or ‘financial asset’.[7]
[7] Idem.
In response, the Respondent asserted:
while agreeing that the transaction is intra-familial in nature, submits the loan is caught by the definition. It submits that consistent with previous Tribunal determinations and Federal Court decisions the definition should be given a broad interpretation unencumbered by notions associated with common law contractual provisions. The respondent submitted that the purpose of the Act must be considered and while there was no suggestion that the applicants were anything other than honest in their intentions and actions, the Act was not designed to assist those who owned assets as defined.[8]
[8] Ibid 9.
The Tribunal eventually found that the particular circumstances of the transaction in question meant that it had to be taken as a “loan” but thereafter concluded:
The case is unfortunate because the applicants, who the Tribunal is satisfied are honest in their intentions and actions, did not, as at the date of application, qualify to receive a benefit to which, had the money not been legitimately lost, they may otherwise have had entitlement. It could be prognosticated that in its attempt to stop people purposely disposing of assets in order to gain a benefit, those who genuinely lost money in a genuine attempt to help a family member have been unduly disadvantaged.[9]
[9] Ibid 15.
In Katholos and Secretary, Department of Social Services[10] Deputy President Constance dealt with a matter in which, after an intra-familial transaction had occurred, the relevant parties (parents and sons) had a falling out. The Deputy President summarised the matters as follows:
[10] (Social Services Second Review) [2017] AATA 1293. Citations omitted.
[49] For the purposes of these applications I agree with the following propositions put forward on behalf of the Secretary:
A loan, for the purpose of deciding the value of Mr and Mrs Katholos’ assets under the Social Security Act, is a contractual agreement governed by the common law of contract and any express agreement between the parties.
………
The legal requirements for the formation of a contract apply to contracts of all types, including a loan contract. The four principal requirements are:
(a) agreement (express or implied);
(b) consideration;
(c) an intention to create legal relations (the most important element); and
(d) certainty of terms.
...a contract should not lightly be implied. Moreover, no contract can be inferred from conduct in a case where the third essential element of intention is not satisfied.
Transactions between family members are often not characterised by the courts as loans because of the informal nature of the arrangement and the propensity of family members to forgive the liabilities of other family members to whom money is given. This is indicative of an absence of intention to create legal relations between close family members, at the time.
[50] It is clear that none of the parties intended to create a legal relationship of lender and borrower when the properties were transferred in 1998. The transfers disclosed the consideration as “natural love and affection”. There was no monetary consideration shown which could have formed the basis of a loan agreement. The transactions were the result of family relationships and gave effect to the long-held intentions of both Mr and Mrs Katholos that their sons would be the ultimate beneficiaries of the properties.
…….
[64] Even if the conduct of Mr and Mrs Katholos in 2014 and 2015 was evidence of an intention to enter into loan agreements (which I have found it was not), there is no evidence that either son ever regarded his transaction as an agreement for loan. In fact the evidence strongly supports the conclusion that they were of the view that neither of them ever entered an agreement for loan with their parents.
The Deputy President concluded that there was no loan entered into within the meaning of the social security law.
The Respondent urges upon the Tribunal that it should distinguish Katholos from this application because Mr and Mrs Hajjar advanced the money to Fadi because “they were motivated by making a profit.”[11]
[11] Respondent’s Statement of Facts, Issues and Contentions (SFIC) at [7.16].
The Tribunal cannot find any evidence before it to support this profit-making assertion in relation to either the Applicant or Mr George Hajjar. Rather, what appears from the evidence is that:
(a)Mr and Mrs Hajjar wanted their three children (and their families) to live in close physical proximity to them (the purchased property being adjacent to the family home); and
(b)they hoped that their children might make some profit out of the development.
All three sons now live in the same building complex,[12] but it is unclear whether anyone has made a profit out of the development.
[12] Transcript of Hearing, 12 June 2020, page 33 lines [31 to 36].
However, the Tribunal does agree with the Respondent that:
… any transaction which has every appearance of a loan, but which is claimed to be a gift, should be examined closely to determine its true nature. There needs to be compelling evidence to treat it as anything other than what it appears to be.[13]
[13] Darcy and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 562 at [44].
Similarly, it notes the Tribunal’s findings in Bysouth and Secretary, Department of Education, Employment and Workplace Relations[14] to the effect that:
[27] The term "loan" is not defined in the Act. The Tribunal was referred to the Social Security Guide where "loan" is defined at clause 1.1.L.65 for the purposes of the assets test as an actual lending of money or an asset of a particular value with a clear intention to repay. A loan is stated to be an advance of money or the payment of an amount with an obligation whether expressed or implied to repay the amount. It was Mr Bysouth's contention that there is no evidence to suggest that the loan was repayable to him by the Unit Trust.
…
[32]…Mr Bysouth disputes that the monies advanced by him constituted a loan but were instead a gift. There is however no evidence other than Mr Bysouth's statement to this Tribunal that the monies constituted a gift. Although there is no evidence of any specific arrangement for repayment of the monies, the absence of this evidence does not persuade the Tribunal that the monies could not be repaid to Mr Bysouth …
…
[34] The authorities make it clear the issue of recoverability is not determinative of the characterisation of funds as a loan or a gift. The Tribunal adopts the view expressed in Boyd and Secretary, Department of Social Security ([1994] AATA 580) which said that a reference in financial records to a sum as a loan represents a strong indication it was a loan and that such references suggest expectations of eventual repayment.
[14] [2010] AATA 59.
In this respect, the documentation which, prima facie suggests that Fadi was making payments into his father’s account designated as “Fadi loan repayment” must be considered carefully.
Agreed facts
Apart from matters related to this sum of money, there is no dispute between the parties as to the assets held by the couple and hence referrable to calculations of NSA eligibility.[15]
[15] Section 37 Tribunal Documents (T Docs), page 7. AAT1 decision at paragraphs [5] and [6].
Nor is there any dispute that Mrs Hala Hajjar and Mr George Hajjar are members of a couple who were married in May 1974. The couple also have joint bank accounts with the National Australia Bank (NAB), being accounts xxxxxx130 and xxxxxx787.
The couple have three adult sons, one of whom is Fadi Hajjar. The other sons are Jack and Sami.
Newstart Allowance (subsequently JobSeeker allowance)
NSA is a form of unemployment benefit paid to persons who are deemed eligible under the Act. Part of the eligibility criteria relates to the assets of an individual, either on their own or when taken as a member of a couple. NSA is means tested according to the applicant’s assets.
The rate of NSA is set out in the regularly updated publication A Guide to Australian Government Payments.
As noted, NSA is means-tested. Subsection 611(1) of the Act provides:
Subject to section 654, a jobseeker payment is not payable to a person if the value of the person's assets is more than the person's assets value limit.
Subsection 611(2) of the Act defines, according to a Table, what the assets value is, and that assets value is subject to CPI indexation.
Using that Table, the Respondent calculated that on 7 December 2018, the assets value limit for the Hajjar’s as a couple was $387,500. If their combined assets exceeded that amount, neither of them was eligible for NSA.
In calculating the assets value limit, the principal home of any NSA claimant is exempted, regardless of whether the home is owned jointly by them or simply by one member of the couple; but it serves as the family home for both.
1118 Certain assets to be disregarded in calculating the value of a person’s assets
(1)In calculating the value of a person‘s assets for the purposes of this Act ... disregard the following:
(a) …
(b) if the person is a member of a couple—the value of any right or interest of the person in one residence that is the principal home of the person, of the person‘s partner or of both of them that is a right or interest that gives the person or the person‘s partner reasonable security of tenure in the home;
The Applicant, at all material times, lived with her husband at their principal home in Bankstown, NSW.
Three financial transactions
(a)Mr Fadi Hajjar was involved in the purchase of a property at Bankstown, NSW which abuts the premises where his parents live. It was intended the site be redeveloped and five townhouses be built which would be occupied by Fadi and his two brothers, Jack and Sami. In order to make the purchase valued at $1 million, Fadi secured a loan from the St George Bank in the amount of $600,000.
(b)At some time in 2010, Mr and Mrs Hajjar took out a loan with the NAB for a sum of $400,000 which they raised as a mortgage against their family home.[16]
(c)In October 2010, they apparently transferred $400,008 to their son Fadi. Bank records show a cash withdrawal of $100,008 on 22 October 2010 and a cheque payment of $300,000 on 26 October 2010.[17] Fadi Hajjar attests that he received the sum of $400,000 from his parents for the purpose of purchasing and redeveloping the property at Bankstown, NSW.[18]
Status of the third transaction – a loan or a gift?
Prior to the Hearing
[16] T Docs, pages 120, 162 and 164.
[17] Applicant’s material at Tab [3g]: Appendix 5 to Applicant’s Response Letter dated 24 March 2020.
[18] Applicant’s material at Tab [2]: Statement of Fadi Hajjar dated 12 December 2019.
Written Statements of Mr and Mrs Hajjar
There are two documents signed by Mrs Hajjar, both are headed “To whom it may concern” and both are undated.[19] The documents state, inter alia:
2- $400,000 were borrowed from the National Bank in 2010 against the property we live in…. The amount was in a line of credit account and was used by my children to buy a property to build on and would be paid back to the bank when the buildings are finished. So it is a debt not an asset and when paid back by my children, hopefully soon, will be paid back into the house account to close up that debt.
3- I would agree to consider it an asset if when it will be paid back it will be extra money we will have. As proved by the bank statement this amount is a liability and not an asset and as soon as it is paid back it will be immediately deposited in the home loan of my house account to reduce the debt owing on our only house.[20]
[19] Although undated, they were filed with the Department on 16 September 2018 (T Docs, page 120) and 11 December 2018 (T Docs, page 162) respectively; Respondent’s SFIC at [2.17] and [2.21].
[20] T Docs, pages 120 and 162.

There is also a document headed “Statutory Declaration” which is signed by Mrs Hajjar and dated 10 January 2019. It is not a statutory declaration as it is not in the proper form and is not witnessed. The relevant parts are ambiguous in their meaning, viz:
…. So the help we decided to grant my children through the mortgage of the property we live in has been done long ago. Hence the situation should not have any effect on approving my benefit claim.
Accordingly and according to the bank statements since 2010 there are two scenarios only:
Firstly my children pay back those $400,000. This will reduce the mortgage we have against the home we live in and clearly and logically that is definitely not an investment we have done from which we might be benefiting.
The second scenario is that due to the present very difficult and troubled housing industry, our children are unable to pay us back that amount, then our situation is crystal clear. We are a family residing in a house that is mortgaged to the bank.[21] (emphasis in original)
[21] T Docs, page 164.
A further document, headed “Statutory Declaration” (but which again is not, being in improper form and unwitnessed) dated 19 July 2018, bears the signatures of both Mr and Mrs Hajjar. It reads, inter alia:
The regular weekly amounts of $400 are transferred from my son’s Fadi George Hajjar from his St George Account as contributions towards the interest charged to my NAB account monthly since 2010 when I heed my three boys to buy the property … so that they build dwellings for them on it and invest what they can for their future. The amount is not from an account that I hold in South Australia. I am ready to include a sheet showing their contributions to my account since then into my account. Those amounts reconcile completely with my bank statements. My children are now working on refinancing their building loan to home and investment loans as their buildings are ready to pay me back my debt to them which was withdrawn from my overdraft account for that purpose.[22]
[22] T Docs, page 81.
On 7 December 2018, Mrs Hajjar completed an on-line claim for NSA. Where she had to fill in the details of “Money loaned to” she wrote: “NAB H/L FOR LOAN TO SONS”[23]
[23] T Docs, page 141.
Finally, on 20 June 2019, there is a record of a discussion between Mr Hajjar and a departmental officer which records:
... The partner stated he has lodged a statutory declaration and explained the two options about how the $400,000 loan to his sons should be assessed. He advised that in 2010 his sons bought a property.
The partner stated that the value of houses has gone down dramatically, and the banks will not refinance so he can get his loaned funds back ...
The partner stated that his mortgage is now approximately $450,000, and if his son’s house is refinanced, he would receive the money and pay off his own mortgage, which would then have a balance of approximately $50,000.
The partner stated ... he didn’t understand the implications at the time and expected the money to be repaid to him by now.[24]
At the hearing –
(A) Oral testimonies
[24] T Docs, page 166.
Mr George Hajjar
As was to be expected, much of the oral hearing in this matter was concerned with the status of the $400,000 payment from Mr Hajjar to his son Fadi. Mr Hajjar stated in evidence:
MR HAJJAR: Well I think that was a gift because I (indistinct) sign for a paper at the – when we wanted to buy the property. I signed that paper (indistinct) that I signed such a paper with the bank to get the loan in, and it was proven – it was proved by the experts of the bank that it wouldn’t have been a gift signed by me as a gift, the loan would not have been approved and the purchase wouldn’t have been done at that point. So that’s really a fact. So I don’t see – I don’t see any elements and nobody would be able to see any elements that would form a loan out of those $400,000, which for 10 years I did not get a penny back out of that, so I (indistinct) a loan, (indistinct) a loan. That’s what I’m (indistinct) on and (indistinct) for that. (Indistinct) that this is not a loan because I didn’t get any payments back. I will never get any payments back after course of 10 years, I wouldn’t – I don’t intend, or 20 or 30 years, I don’t know how much (indistinct). But it doesn’t have any elements which consists to make it a loan, to form it a loan. That’s what I’m really sort of arguing about.[25]
[25] Transcript of Hearing, 12 June 2020, page 4 lines [21 to 36].
When asked by the Tribunal to explain an entry on his bank statement, which read “Fadi loan”, Mr Hajjar replied:
SENIOR MEMBER: And it says there “Fadi loan repaymen” (sic). So what do you say these payments were all about?
MR HAJJAR: Well to be honest with you, as I – as I also explained, those days we didn’t think of anything which is legal or illegal. We just wanted to make it clear that it was paid back or paid in for the expenses that we were going to get. So it’s (indistinct) sort of the terminology of it wasn’t explained as we would have thought to be sitting right now and explaining that. We could have just said it’s an expenses payment on account let’s say. Payment on account for expenses but we just said loan repayment, it isn’t the terminology of it (indistinct), and (indistinct) papers and the paperwork and statements that we have. We don’t have anything else, it’s clear, crystal clear in front of us that I did not get one penny out of that project and I will never get it, it’s for my own kids, that’s all. I tried to help them, that’s all.[26]
[26] Transcript of Hearing, 12 June 2020, page 8 lines [26 to 39].
Mr Fadi Hajjar
Fadi Hajjar gave sworn evidence as follows:
There was never any question of dad’s sort of $400,000 being returned to him because he was – that was a gift and – a gift – an amount that he gave so that we can all get up on our feet and it’s – we’re hugely indebted to him for that and he did that (indistinct). ?---Mum and dad have worked hard their whole lives. They’re honest hardworking citizens. So (indistinct) ethics and we’re all trying to get ahead but this is the way it played out. Now, I understand the descriptions on the contributions – and I would write Fadi loan repayment and I’d pay $400 a week (indistinct) Senior Member that from those funds there were multiple times where dad contributed to – let’s say council fees or architect fees or he’d draw sums of money – I think there’s one of $13,000 odd, one of $16,000. Now, they were withdrawn to pay the $600,000 loan. So I was putting in that small amount each week just so that dad could oversea the project and distribute the funds for that because Jack was working overseas at the time, I was working and looking at getting married and it was an easy way to do it. To put aside a little bit of money and then he could allocate those funds to where they needed to go but they were never to repay the $400,000.[27]
[27] Transcript of Hearing, 12 June 2020, page 30 lines [18 to 36].
It appears that there was some arrangement that the repayment of at least some part of Fadi’s own $600,000 loan was to be managed through his parent’s account. Mr Fadi Hajjar’s testimony was to the effect that the principal was being repaid by him from an account of his own but that the interest payments were made out of his parents’ joint account.
In oral evidence, Mr George Hajjar appeared to confirm this by stating:
MR GEORGE HAJJAR: Let me clarify this please, Dr Thompson[28]. The St George amount of $600,000 that Fadi has taken, we used to pay it out also from – through me. So they didn’t have – they had to throw in money so that I can at least (indistinct) St George interest on the $600,000. Do you know what I mean? So the $600,000 that Fadi has taken, I was also – they were throwing in here and then we were paying to St George (indistinct) because they didn’t have the time to do anything – those people. I was managing all of this. So they were paying me – I was transferring or going to St George and paying that – those loans. This interest – – –
[28] Solicitor for Respondent.
DR THOMPSON: Why was Fadi so busy that he didn’t have the time to pay his own interest rates to St George in 2011?
MR HAJJAR: Because – – –
DR THOMPSON: What was he doing?
MR HAJJAR: Because he was a high school teacher and he was stuck at school from early morning and sometimes he used to come back very late.
DR THOMPSON: So you paid out of your joint account interest payments to St George did you?
MR HAJJAR: Yes, we were paying – I was paying, yes. I was trying to cover St George’s interest payments for the $600,000.
DR THOMPSON: Out of your own joint account?
MR HAJJAR: That’s why – that’s why they were pouring in the money.
DR THOMPSON: So then Fadi found the time despite his teaching duties at high school to pay $400 a week to pay you and Mrs Hajjar back. Is that the case in 2011?
MR HAJJAR: He was transferring it to me. As you can see, you can see those statements – they were transferring to me so that we won’t get – they won’t get uncovered at St George.
DR THOMPSON: Mr Hajjar, I don’t understand. If Fadi had the time to pay $400 a week to you and Mrs Hajjar, why didn’t he simply pay St George bank the interest that he owed them?
MR HAJJAR: Because it wasn’t only $400. That would not cover $600,000 interest. It would be because Sami was also transferring so they don’t want everybody to go St George and to make the transfer to St George. They put it into my account and I used to pay. That’s it.
DR THOMPSON: When you say your account you mean your joint account with Mrs Hajjar at the NAB?
MR HAJJAR: (Indistinct). That’s the only one we can talk about. That’s the active account that I have. I don’t have any other active account really as such to use.
DR THOMPSON: So you’re saying that in 2011 you and Mrs Hajjar paid St George bank out of your joint NAB account, is that the case?
MR HAJJAR: Well we paid a lot of those, yes. I don’t remember all the details because that already nine years ago but I can see my account right now in front of me – my statement and they showed that they put in because we were paying – I know that we were paying the interest for the St George to cover the $600,000 that Fadi had taken to buy the property.[29]
[29] Transcript of Hearing, 12 June 2020, page 27 line [21] to page 28 line [35].
In an attempt to clarify matters, the Tribunal asked Fadi Hajjar:
SENIOR MEMBER: Let’s just go back to – let’s just go back to the interest payments. So the interest payments on the $600,000 loan, you’re telling me that those interest payments were paid by your father and you reimbursed him for that, is that correct?---That’s correct, yes.[30]
[30] Ibid page 32 lines [6 to 10].
In response to questions by Dr Thompson, Fadi Hajjar stated:
DR THOMPSON: So the interest payments were $400 a week in 2011 and 2012?---The $400 a week went towards paying the interest, but I believe there was still some sort of a FAT in there because that also went towards paying other expenses and 45 future predicted expenses of the build which were council rates and fees for architects and consultants for the proposed development. So we had worked it out at the time that if – if I were to pay $400 a week, which I was comfortable in doing on a teacher’s wage, that that will cover the 600,000 loan, plus it will go towards the future development of the project.
I see. So that’s the FAT you’re talking about, there was some FAT in the 400 5 a week that you were paying?---That’s correct, yes.[31]
[31] Ibid page 36 line [43] to page 37 line [6].
Seeking further clarification about Mr George Hajjar’s bank records which indicate regular payments by way of “Fadi loan”, Mr Fadi Hajjar was asked:
DR THOMPSON: Now, each of these payments during the six months, beginning on 17 July 2015, and the last one – these are the only documents your father sent in on 28 August 2015. You filled out “Fadi loan repayment”, do you remember writing those words when you made the payment each week?---Yes, I had it set up as an automatic – hello?
Yes, you had an automatic weekly payment, did you?---Yes, so I had – yes, I had it set up on my St George internet banking so that my – automatically my – what do you call it, scheduled payments, it was a scheduled payment, so for – yes, I had it as a scheduled payment and I had it as a loan repayment because that’s how I repaid the $600,000 loan and that’s what went into the pool of funds for the future developments.
Why did you describe the payments to your parents, their joint NAB account, as “Fadi loan repayment”, what loan were you repaying?---The $600,000 loan, and it went towards the project. I could have named it Fadi contribution or future development of whatever it was, but – – –
You described it as Fadi loan repayment. I don’t understand, Mr Hajjar?---If I knew we were having this conversation years later I would have named it something different, believe me. But I don’t – I – it literally went towards paying the $600,000 and the development of the project. So that’s why I used those terms. In retrospect I probably could have used better terms, but at the time it was – and starting out, my first serious job and full-time capacity and first time having the loan, probably a little bit of a sense of pride as well to know that I’m contributing to a loan and I’m contributing to my house, so that’s why – that’s why I used those terms. Could I have used different terms? Possibly. I transfer to my wife, each week, a sum of money now, and I describe that as, “I love you.” I hope that doesn’t come back to bite me one day. I don’t know why I used those terms 10 years ago, but that’s what it went towards. And I understand how – I understand how it could come across as ambiguous, I completely understand that, but I honestly and wholeheartedly have told you the truth of this account.[32]
[32] Ibid page 38 [line 39] to page 38 line [24].
Mr Jack Hajjar
Jack Hajjar is the eldest son of the family and was involved with his brother Fadi Hajjar in the property purchase and redevelopment. He stated in evidence:
My parents, if you look at how and what has been – with that $400,000, you will see that we haven’t paid it back over 10 years’ time. We haven’t contributed to it, and that continues to be a burden on my parents. Now, my parents since then have to sell their shares, they had to sell, you know, they had to utilise all their superannuation, right. And the time they find themselves in a particular situation where they’re in dire straits. So that gift that they have provided has actually now come back to haunt them, because they have got obviously a loan with paying it back to them. There is no obligation for us to pay it back to them, because that was given as a gift, from a legal perspective as well, and – and – and they actually – and – and you could see how their financial situation has – has gone. You can have a look at their bank accounts. I’m sure – I’m not sure if my parents have provided you how and when and whatever, if they utilised their superannuation or if they haven’t, but it is very, very clear if you look at the – all the paperwork.[33]
[33] Ibid page 52 lines [27 to 41].
Mrs Hala Hajjar
Mrs Hajjar was questioned in relation to a number of the documents before the Tribunal which she had signed. She was assisted in the proceedings by an interpreter in the Arabic language. In response to a question by Dr Thompson she replied:
INTERPRETER: When – when you see that was written as loan, that was my husband. My husband was the one who wrote that word, not me. My English is not good. I can’t even (indistinct) too well. But when he wrote that word – when he wrote that word “loan”, he was referring to our loan. He was not referring to the money that was given to the children, which was only given as a gift to help them.[34]
[34] Ibid page 66 lines [35 to 40].
The central issue before the Tribunal was articulated clearly in an exchange between Dr Thompson on behalf of the Respondent and Mr George Hajjar:
DR THOMPSON: So do you agree that you told the authorised review officer on 20 June 2019 that the $400,000 in 2010 was a loan?
MR HAJJAR: I was explaining to her – or to him – or whoever – and as I did try to – to put it in writing, that it’s not a loan, it’s – it has got – the loan that I have taken from the bank, from the bank on my – in my name, to give it to my kids as gifts so that they can build up their future. I was trying to say so, and even if they pay it back, somebody just – even after – after 20 years or 30 years, I will not be here, but they will pay – pay it back, and if they pay it back, it’s not (indistinct) money for – for (indistinct). It’s not an investment. It’s – it’s against the mortgage which I don’t – I don’t get anything out of it.[35]
[35] Ibid page 72 lines [16 to 26].
Further:
DR THOMPSON: You and Ms Hajjar consistently describe the transaction up to 8 July 2019 as a loan, and that you expected Fadi to pay you back that loan so that you could discharge your joint liability to the NAB. And then since 8 July 2018, you have been consistently describing it as a gift, and you have no expectation of it being repaid. Mr Hajjar, I put it to you that your written descriptions of the transaction up to 8 July 2019 was the correct and true description of the transaction, that it was a loan.
MR HAJJAR: So look, up till now, I’m telling you again, Dr Thompson, we are talking about figures, we are talking about facts. We are not talking about whatever I said and I try to explain. So please, you either take the – whatever I have said or whatever I try to explain and I put myself into the (indistinct) that situation (indistinct), or the facts. Or if you are taking facts, what are the facts in front of you, and if you are taking the – the – that’s the explanation that I wasn’t – I didn’t know how to explain myself in (indistinct) other way, that it doesn’t affect any course of (indistinct) that’s up to you, whatever you try to judge on.[36]
[36] Ibid page 74 line [40] to page 75 line [9].
(B) Other written evidence
At the initial hearing, the Tribunal was presented with bank statements from Mr George Hajjar covering the period between 11 July 2015 and 1 September 2015.[37] In addition there were a variety of miscellaneous bank statements and records provided in the Respondent’s Tribunal Documents.[38]
[37] Applicant’s material at Tab [3b]: Appendix 1 to Applicant’s Response Letter dated 24 March 2020.
[38] T Docs, T5, T7, T13, T16, T18.
At the conclusion of the hearing on 12 June 2020, the Applicant was asked to provide copies of his bank statements for a longer period and he willingly complied, providing bank statements covering the period 20 June 2011 to 11 January 2016.
The Tribunal has examined these statements but has great difficulty in making a clear identification of the nature of the payments between the three sons and their father.
·Sami Hajjar is recorded as making some 95 separate deposits ranging from $100 to $1000 over the period from 9 September 2011 to 8 January 2016. Most are recorded as “Sam pay”. In the period they total some $43,200.
·Jack Hajjar is recorded as making 18 deposits between 16 September 2011 and 6 December 2013 of amounts that vary from $400 to $5000. In the period they total some $31,555.
·Fadi Hajjar is recorded as making some 186 deposits of $400 each; plus 2 other larger deposits each of which is noted as “Fadi loan repaymen” (sic). They were made in the entire period from 21 November 2011 to 4 December 2015 and amount to a total of $76,200.[39]
[39] There are also several other deposits from Fadi Hajjar which are designated for specific purposes (eg Land Tax Adjustment) which total in excess of $14,000.
In addition, the statements reveal that every month there was a transfer of funds between two of the Hajjar’s joint accounts. They are recorded as “Interest charged – From A/C xxx787”. They vary in amount, but average about $2,400 per month. There is also an item variously described as “Backuploanrepaymen” (sic); “home loan repay”; “repay loan interes” (sic) which starts off at $3,700 per month and then varies from there down to $2,100 and back up again.

In testimony on 26 June 2020, Mr Hajjar confirmed that account xxx787 relates to the loan for $400,000 and that the other “loan repayment” entries relate to the $600,000 loan which Fadi had from St George Bank.
It was Mr Hajjar’s testimony that while Fadi had responsibility for the repayment of the principal of the $600,000 loan, payments of the interest on that loan were made out of the Hajjar’s joint account into which each of the three sons made payment. This created what was described as a “pool” to be drawn upon to make those repayments.
In the period from 20 June 2011 to 11 January 2016, as noted above, the three sons made undesignated payments into the parents’ joint account in the sum of $150,955. Payments out of the parents’ joint account to the account nominated as being related to the $400,000 loan totalled $113,507.64; and payments out of the account nominated as being related to the $600,000 loan, totalled $135,600. In both instances, the payments from the sons exceeded the payments out of the parents’ joint account.
The intermingling of monies between Mr Hajjar and his sons appears exceptionally complex. For example, Fadi Hajjar told the Tribunal:
SENIOR MEMBER: Just – the joint pool of funds, whose name was that – was there a separate account or were you just sort of talking about a joint pool that had several different accounts attached to it?---No – so even prior to this project, growing up my first job, et cetera, I would always take savings and give it to dad. I believe Jack did the same thing, Sami did the same thing. That we would take – and dad taught us to, you know, be clever with the money that we’d give him. He comes from a background where, you know, things were difficult and he always said, you know, save for a rainy day and be clever and he said – I’d be sort of your – instead of spending it – if the money is there you’re going to spend it, I’ll be sort of a trustee for those funds and so we would contribute to day’s everyday savings account and dad kept hand written records which I still have access to which I’m more than happy to provide. He kept handwritten records of what he paid and when he paid it and what it went towards. So we would come together as a family and he would say, okay, you’ve – we’re looking okay. We’ve been contributing or we’ve got something coming up, you need to keep contributing because, you know, the architect’s – the plan got rejected by council, we need to adjust it, we anticipate it’s going to cost another $20,000 odd for the architect to go back and change the plans as to how they want them. So he overlooked and managed that project. His background is in management and in financial control so he was quite good with that. I’m glad he did because I know – if I look (indistinct) 10 or so years ago, I wasn’t as clever with the funds.[40]
[40] Transcript of Hearing, 12 June 2020, page 31 lines [25 to 46].
However, it was part of Mr George Hajjar’s testimony, when asked about the statement of his wife, which implied that there was an expectation of money being repaid by the children, that:
SENIOR MEMBER: – – – it says:
So it is a debt, not an asset which when paid back by my children, hopefully soon, will be paid back into the house account to close up that debt.
So what was it that you were expecting that your children would pay back?
MR HAJJAR: Senior Member, the whole thing really I would say it was an effort from me to make it clear that even if this happened it is not an asset that’s going back to the loan that was taken out mortgaging my house. So I tried to – it was a stupid, let’s say, sorry to say that, a stupid step from me to try to explain, to make it clear that I don’t have any assets. I (indistinct) money or whatever but I don’t have it. So I tried to explain it in a different way, unfortunately it was misunderstood and that’s what brought us up to this stage. But it was never meant that it was a loan because, as I said, it doesn’t have any elements of a loan and things have gone that way since 10 years. It’s not only yesterday or today or last year that we had that project or the boys had that project for them, it’s 10 years already. And not a penny went into our account, not a penny, it’s all cleared, I have them all in front of you, Senior Member. That’s what I’m arguing about, I have been judged according to what I said or whatever, even though I’m not a solicitor or anything. But I tried to explain but that was silly of me, I understand but I’m judged according to it instead of according facts.[41] (Emphasis added)
[41] Transcript of Hearing, 12 June 2020, page 6 lines [15 to 38].
The claim that “not a penny” was received by way of any loan repayment from the children was repeated on numerous occasions, for example: “The records show that I don’t have one penny that was paid back as loan.”[42]
[42] Ibid 4 line [30]. See also page 8 lines [4 to 5]; page 68 line [43] to page 69 line [3].
The banks and the gift certificate
Mr George Hajjar claims that when Fadi first obtained the loan for $600,000 from the NAB, that bank required some evidence that he was able to raise the remaining $400,000 to complete the purchase of the property. Mr Hajjar states that he provided a “gift certificate” to indicate that he was gifting the $400,000 to Fadi, thereby assuring the bank that there were no other encumbrances relating to the property being purchased. Mr Hajjar stated that he completed this gift certificate in 2010 and that it was done at the request of the broker who was acting for Fadi.[43]
[43] Transcript of Hearing, 12 June 2020, page 16 lines [27 to 30] and page 17 lines [14 to 20].
Before the Tribunal is correspondence between Mr Hajjar and a firm of solicitors (Northington Lawyers, Ashfield) whereby Mr Hajjar wrote on 10 September 2019:
Dear Mr Sanjai
My name is George Hajjar…
We had the pleasure in 2010 to deal with you in buying the property at … Bankstown for my son Fadi Hajjar.
The tribunal has requested me to get a copy of the document I signed at the time stating that I am giving my son Fadi $400k as A GIFT.
I hope you can look into my file and get me a copy of that document to forward to the tribunal who has given me a dead line (sic) of 12/9/19 to submit before a decision is made.
I would greatly appreciate your looking into this very urgent matter and hope to hear from you as soon as possible. Many thanks and
Best regards,
George Hajjar. [44]
[44] Applicant’s material at Tab [3d]: Appendix 2 to Applicant’s Response Letter dated 24 March 2020.
Mr Hajjar received a reply on the same day as follows:
Dear George
Thank you for your email and hope you are well.
Please note that if the transaction took place in 2010 I would no longer have the file as it automatically gets shredded after 7 years. Maybe have a look in the paperwork I would have sent you at the time.
Kind regards
Sanjay.[45]
[45] Idem.
It is suggested from the evidence that the same email, or an email in similar terms may have been sent to the NAB requesting a copy of such a document. In any event there appears to have been a subsequent follow-up email from Mr Hajjar to the NAB, because on 20 February 2020, Mr Nikhil Kumar (a Business Banking Manager for NAB) wrote to Mr Hajjar:
Hi George,
This is a bit of a confusing email for me to receive. I spoke to you on the phone within 5 days of receiving your request that we won’t actually hold this document. After looking into your request I said it looks like your home loan was refinanced to NAB from another bank where it was originally issued. You confirmed this. The documents a bank needs to collect for a refinance vs documents collected for a brand new loan are different. You are correct that the gift document would have been a prerequisite for the bank issuing you the original loan to collect – However, the NAB would not have collected that for a refinance as it is not required. As it is a refinance, the loan already existed and the title was already in Fadi’s name there was no need for us to verify a gift as the previous bank would have had to confirm equity and source of funds before they ever issued the loan in the first place. ……
…. As we discussed at the time, most banks only hold copies of these documents for 7 years I believe although some may hold it for longer. I have not heard back from you since except for this e-mail. So I am confused you seem to have been waiting from September 2019 for the document from me?[46]
[46] Applicant’s material at Tab [3e]: Appendix 3 to Applicant’s Response Letter dated 24 March 2020.
The Respondent’s representative, being asked by the Tribunal to comment on this correspondence, rightly pointed out that Mr Kumar of NAB was not in a position to comment on the lending practices of the St George Bank. He also correctly noted that evidence that the $400,000 was an unsecured loan would have been just as valid for the purposes of ensuring the primacy of the St George Bank mortgage as something described as a “gift certificate”.
At the same time, Fadi Hajjar was writing to the Customer Care Centre of St George Bank at Kogarah seeking the same document from them, as the original lender. On 28 February 2020, he wrote requesting “all the documents in relation to the home loan amount for $600,000 that was opened around December 2010.”[47]
[47] Applicant’s material at Tab [3f]: Appendix 4 to Applicant’s Response Letter dated 24 March 2020.
Not having heard from the St George Bank, Fadi wrote again on 19 March 2020:
I have not yet received requested documents regarding loan of $600,000 from St George in 2010 that was used for the purchase of the property at … Bankstown.
The purchase price was $1,000,000.00, the loan to me from St George was $600,000 and the shortfall of $400,000 for the purchase was provided as a gift from my father George Hajjar. This was documented at the time and would have been collected as part of the fact find and the loan application documentation.
I have requested on several occasions all files associated with this loan as my farther George Hajjar is attending tribunal over the $400,000 gift that was granted. We urgently need your assistance as the 10 working days required since sendin (sic) you the “request for copies of Documents” form have lapsed and we still have not had any correspondence from you. Your prompt assistance in this matter would be much appreciated.[48]
[48] Idem.
Jack Hajjar’s testimony on this matter was as follows:
So – so at the time my brother and (indistinct) was looking at a property, which is where we’re living now… so my brother was about to get married, he had a loan from the bank for 600,000. That particular property was for a million dollars, and – but it has developmental potential, so at the time my dad decided to gift Fadi 400,000. Now, that particular property is an unsecured, I guess loan, against any other property, so there’s no mortgage against it. In – as in another property. So for the bank to do that it was the bank’s requirement as well that we – you know, that my dad had to sign a document at the time to say that this is a gift so there is no, I guess, recourse of getting that money back, this is what a gift is. So the – and that was a condition for Fadi to get the approval of the loan, and as a result that’s what happened, so they – you know, dad signed over $400,000 to Fadi to enable him to secure that property.[49]
[49] Transcript of Hearing, 12 June 2020, page 45 lines [8 to 21].
The following issues arise from this narrative:
·Were such a certificate found, it would have been conclusive proof that the nature of the transaction in question was a “gift”. There can be no criticism of either the conveyancing lawyers or the bank that they have not retained any such record as destruction of such records after 7 years is common and standard practice. It is equally unfortunate that neither George nor Fadi Hajjar retained such a record in their own papers.
·The letter from Mr Kumar at the NAB appears to confirm that requesting such an assurance (in whatever form) in relation to the status of the $400,000 balance of the $1 million purchase would have been standard bank practice. The Tribunal appreciates that this would have allowed the lending bank to be assured of its status as the primary holder of security over the loan.
·Clearly both George and Fadi Hajjar have taken steps to obtain a copy of a document which they claim existed, although they did so only in response to the status of the $400,000 transfer being raised by the Respondent and canvassed before the AAT1.
·This Tribunal notes that the AAT1 gave consideration to this very matter and concluded:
As NAB has evidently not been able to locate a statement between Mr and Mrs Hajjar and their sons regarding a gifting, my view is that the bank was probably never in possession of a document of this sort.[50]
[50] T Docs, page 9; AAT1 decision paragraph [15].
From this, the AAT1 went on the draw certain negative conclusions about the veracity of the Hajjar’s claims in this matter.[51] However, the issue is not whether the NAB has or ever had such documentation – the issue is whether the St George bank had it. The NAB matter did not relate to the balance of the $1 million purchase price, it was related to George Hajjar securing a personal loan against security of a mortgage on his home. The Respondent is right in drawing attention to the confusion which arises as a result of Mr George Hajjar’s correspondence with NAB (which would never have had such a document)[52] and Fadi Hajjar’s correspondence with St George, which might well have.
[51] Ibid at paragraph [17].
[52] Respondent’s Email to Tribunal 22 June 2020 at paragraph [13].
Resumed hearing and final submissions
Upon receipt of the extended bank records supplied by Mr Hajjar, the Tribunal reconvened to allow for further examination of that material and final submissions. The further evidence added little to the previous material before the Tribunal. Mr Hajjar continued to insist that his sons were contributing to a “pool” of money to be used to pay the interest on the $600,000 loan and that while Fadi contributed on a regular basis, because he was in constant employment, Sami paid when he could (sometimes being unemployed) and Jack paid when he could (sometimes being overseas). Fadi’s payments were always at the level of $400 whereas the other sons contributed varying amounts according to their then current circumstances.
The Respondent, forensically, drew attention to discrepancies in receipts from the sons and payments from the joint account. Neither the payments to repay the $400,000 nor the interest on the $600,000 tally with the receipts. In relation to the former, income exceeded expenditure by some $37,500 (rounded) and in relation to the latter by some $15,350 (rounded). When pressed on this, Mr Hajjar indicated that money “in the pool” as it were, was held against future expenses related to the development. There are invoices and other statements before the Tribunal which indicate some $30,500 (rounded) in development expenditure some years later in 2015.[53]
[53] Applicant’s material at Tab [3b]: Appendix 1 to Applicant’s Response Letter dated 24 March 2020.
The Respondent is equally entitled to rely upon the written documentation which precedes July 2019 in which both Mr and Mrs Hajjar refer to the $400,000 transaction as having the characteristics of a loan in that there was some apparent expectation of repayment. However, in relation to Mrs Hajjar’s evidence, the Tribunal does not believe that she was fully aware of the exact nature of all the transactions, but rather that she simply signed whatever Mr Hajjar put in front of her. Nevertheless, as the Respondent, again rightly pointed out, Mr Hajjar is a meticulous record keeper, he is highly articulate, but more to the point he is respected as a patriarch whose wife and children act in accordance with his wishes and directions when it comes to the management of their financial affairs.[54]
[54] See testimony of Jack Hajjar (Transcript of Hearing, 22 June 2020 page 31 lines [27 to 30]) Fadi Hajjar (Ibid page 52 lines [28 to 32]) and Mrs Hala Hajjar “Yes, that was true, because my husband, he was writing and I was agreeing. I did agree with all what he did.” (Ibid page 64 lines [34 to 35]).
The Tribunal’s dilemma and conclusions
Put bluntly, the Tribunal is asked to decide whether or not Mr George Hajjar and members of his family have concocted a story about internal family financial transactions in order to maximise the payments of social security benefits to himself and his wife. A concoction which arises directly as a result of the rejection of the applicant’s NSA claim in August 2018. It follows that the Tribunal is asked to find that the testimony which they gave, under oath, was misleading and untruthful. This was the conclusion of the AAT1.[55] The Respondent, in final submissions, put it at a slightly lower level using the term “mistaken perceptions” when referring to the post July 2019 evidence.
[55] T Docs, page 9: AAT1 decision at paragraph [17].
In relation to the financial transactions themselves, the question is whether “Fadi loan repayments” (and payments by Jack and Sami) are related to repayment of the $400,000 transfer made in 2010 or whether they are payments by members of the family as described by Fadi: “I made $400 weekly contributions to my father who then made the bank repayment to St George, to the – for the $600,000 loan.”[56]
[56] Transcript of Hearing, 12 June 2020, page 36 lines [39 to 41].
There are two loans – and in Mr Hajjar’s accounts there are two clearly differentiated sets of repayments but only one set of undifferentiated contributions by his sons.
On the basis of the material before the Tribunal, it is simply not possible to determine with any degree of confidence which of the two loans was being serviced by the payments from the sons. No reading of the material compels a determination one way or the other.
It thus comes to a question of the credibility of the witnesses as they appeared before the Tribunal.
The Tribunal is aware that this is an area fraught with difficulties and that establishing anything about the credibility of witnesses has nothing of an exact science about it. Moreover, while Mr George and Mrs Hala Hajjar appeared by video link, all other parties participated by telephone. There is a qualitative difference between seeing an individual in person and seeing them by remote video link and this needs to be borne in mind. The Tribunal notes that the AAT1 hearing was conducted entirely by telephone with the parties.[57]
[57] T Docs, page 7: AAT1 decision at paragraph [3].
Nevertheless, the Tribunal was impressed with the directness of Mr Hajjar’s responses to the detailed and forensic questioning of the Respondent and both Fadi and Jack gave evidence which was clear and persuasive. Both were under oath and both appeared to the Tribunal to be people of repute.
The Tribunal bears in mind the strictures of judicial authority.
On the one hand, Fisher J in Re Georges and Minister for Immigration and Ethnic Affairs observed that:
[I] had the opportunity of observing the applicant …. during the taking of evidence and this is a crucially important advantage not available to the Minister and the Secretary.[58]
[58] [1978] AATA 63.
On the other hand, there is a clear warning from the High Court that:
30. It is true, as McHugh J has pointed out, that for a very long time judges in appellate courts have given as a reason for appellate deference to the decision of a trial judge, the assessment of the appearance of witnesses as they give their testimony that is possible at trial and normally impossible in an appellate court. However, it is equally true that, for almost as long, other judges have cautioned against the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of witnesses. Thus, in 1924 Atkin LJ observed in Société d'Avances Commerciales (Société Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana"):
"... I think that an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour."
31. Further, in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events. This does not eliminate the established principles about witness credibility; but it tends to reduce the occasions where those principles are seen as critical. [59]
[59] Fox v Percy [2003] HCA 22 per Gleeson CJ, Gummow and Kirby JJ., footnotes omitted.

The Tribunal is dealing with matters which occurred in 2010 and relies upon people’s recollection of what was said or agreed between family members at the time. It appreciates judicial warning about the “unreliability of human memory” or the “faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more of less slowly) over time.”[60]
[60] Gestmin SGPS S.A. and Credit Suisse (UK) Limited [2013] EWHC 3560 at [15] and [17] per Leggatt J.
Other judicial authority places a premium on contemporary records over memory:
[171] One reason that contemporaneous statements and documents are likely to be more accurate than a recollection of events is that a statement made at the time of an event, particularly when relatively spontaneous, is likely to be more accurate than a later statement made at a time when false memories can intrude. In a minority of cases the false memories are deliberately so because of the contrivance of the maker of the statement. In the majority of cases the false memories are honestly believed either for the reasons such as those outlined by Leggatt J in Gestmin SGPS S.A. v Credit Suisse (UK) Ltd [2013] EWHC 3560 (Comm) or because the person recalling the events has tried to assemble recollections logically so that what happened can have some rational explanation in the person’s mind. As Leggatt J noted at [17] memories are fluid and malleable, being constantly rewritten whenever they are retrieved.[61]
Speaking from my own experiences, I have found it essential in cases of fraud, when considering the credibility of witnesses, always to test their veracity by reference to the objective facts proved independently of their testimony, in particular by reference to the documents in the case, and also to pay particular regard to their motives and the overall probabilities. It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence…..reference to the objective facts and documents, to witnesses’ motives, and to the overall, l probabilities can be of very great assistance to a Judge in ascertaining the truth.[62]
[61] Nominal Defendant v Cordin [2017] NSWCA 6 at [171] per Davies JA.
[62]Armagas Ltd v Mundogas S.A. (The Ocean Frost) [1985] 1 Lloyd’s Rep 1, page 57 per Lord Goff.
In this instance, even reliance on the contemporaneous documents, specifically Mr Hajjar’s bank records, do not really serve to clarify matters as they can be read and interpreted in more than one way. This was evident at the resumed hearing when the meaning of the record “Fadi loan” was hotly contested by the parties, each advancing irreconcilable positions.
However, the Tribunal is required to come to a conclusion on this matter. The Tribunal has concluded that the evidence given by Mr Hajjar, his wife and his two sons, has sufficient weight and credibility as to be accepted by the Tribunal as being truthful.
All happy families may be happy the same way, but all families involved in intra-familial financial arrangements structure them differently. As noted above, this matter involves transactions guided by patriarchal authority with deference to the patriarch displayed by all other parties.
The Tribunal finds that the $400,000 transaction, involving the transfer of that sum from Mr George Hajjar to Mr Fadi Hajjar was a gift and not a loan.
It follows from that conclusion that the combined assets of Mr and Mrs Hajjar do not exceed the limits imposed by the Act. As a result, Mrs Hajjar, the Applicant in this case, is entitled to the receipt of Newstart Allowance from the date of her original application.
The matter will be remitted back to the Secretary for this entitlement to be calculated and paid in accordance with the findings of the Tribunal.
In order to avoid such troubles in the future, perhaps the last word should go to Polonius, whose advice to his son, unfortunately, was not always taken at face value: “Neither a borrower nor a lender be.”[63]
[63] William Shakespeare: Hamlet Act 1, scene 3, 75.
DECISION
The decision under review is set aside and the matter remitted to the Secretary with a direction that the Applicant is entitled to Newstart Allowance (and any successor payment) in accordance with the findings of the Tribunal.

I certify that the preceding 97 (ninety-seven) paragraphs are a true copy of the reasons for the decision herein of Chris Puplick AM, Senior Member

...........[sgd].............................................................
Associate
Dated: 16 July 2020

Date(s) of hearing:
12 June 2020 and 26 June 2020

Date final submissions received: 24 June 2020

Advocate for the Applicant: Mr George Hajjar

Solicitors for the Respondent: Dr Stephen Thompson, Services Australia

Date(s) of hearing:	12 June 2020 and 26 June 2020
Date final submissions received:	24 June 2020
Advocate for the Applicant:	Mr George Hajjar
Solicitors for the Respondent:	Dr Stephen Thompson, Services Australia