Hamid and Secretary, Department of Social Services (Social services second review)
[2019] AATA 676
•12 April 2019
Hamid and Secretary, Department of Social Services (Social services second review) [2019] AATA 676 (12 April 2019)
Division: GENERAL DIVISION
File Number(s): 2018/1754
Re: Jamal HAMID
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
File Number(s): 2018/1757
Re: Lozana HAMID
APPLICANT
AndSecretary, Department of Social Services
RESPONDENT
DECISION
Tribunal:Dr I Alexander, Senior Member
Date:12 April 2019
Place:Sydney
2018/1754
The decision under review is set aside and remitted to the Department of Social Security (Centrelink) for reconsideration in accordance with the reasons set out above and the following direction:
Mr Hamid’s entitlements to NSA payments at the relevant times are to be recalculated on the basis that:
(i) Mr Hamid’s undeclared income for the period 1 May 2012 and 31 December 2014 was $5430.00, and
(ii) Mr Hamid’s legal title in the one-half share of the Yarram Street property was not an asset for the purposes of the asset test in the Social Security Act 1991 (Cth).
2018/1757
The decision under review is set aside and remitted to the Department of Social Security (Centrelink) for reconsideration in accordance with the reasons set out above and the following direction:
Mrs Hamid’s entitlements to Carer Payment are to be recalculated in accordance with the direction in decision 2018/1754.
...........................[sgd].............................
Dr I Alexander, Senior Member
CATCHWORDS
SOCIAL SECURITY – Newstart Allowance – Carer Payment – undeclared income – unexplained cash deposits – assets test – whether legal interest in title of property is an asset for the purposes of assets test – constructive trust – no beneficial interest – decision set aside and remitted
LEGISLATION
Social Security Act 1991 (Cth) ss 8, 611, 643, 1068, 1068-G1
Social Security Administration Act 1999 (Cth) ss 63
CASES
Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Kidner v Secretary, Department of Social Security [1993] FCA 587; (1993) 31 ALD 63
Kintominas v Secretary, Department of Social Services [1991] FCA 342; (1991) 30 FCR 475
Kyrgios and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 907
Martin v Martin [1959] HCA 62; (1959) 110 CLR 297
Muschinski v Dodds [1985] HCA 78; 160 CLR 583
Secretary, Department of Social Services v James [1990] FCA 150; 95 ALR 615
SECONDARY MATERIALS
Social Security Guide (SSG) parts 4.2, 4.3
REASONS FOR DECISION
Dr I Alexander, Senior Member
12 April 2019
Background
The Tribunal has been asked to review the applications of Mr Jamal Hamid and Mrs Lozana Hamid with respect to the cancellation of their social security payments and recoverable debts.
Mr and Mrs Hamid have, at all relevant times, been members of a couple for the purposes of the Social Security Act 1991 (Cth) (the Act).
The essential evidence which applies to both applications involves an examination of Mr Hamid’s income and assets at the relevant times.
MR HAMID
Mr Hamid had been receiving Newstart Allowance since May 2012.
On 21 February 2018, the Social Services & Child Support Division of the Administrative Appeals Tribunal (AAT1) affirmed the decision of an Authorised Review Officer (ARO) dated 2 June 2017 which stated as follows:
(a)To affirm an original decision made on 3 May 2017 to cancel Mr Hamid’s Newstart Allowance (NSA) with effect on 1 January 2015;
(b)That Mr Hamid has recoverable NSA debts of:
(i)$12,027.03 for the period 1 May 2012 to 31 December 2014; and
(ii)$19,728.00 for the period 1 January 2015 to 15 November 2016.
The Respondent contends that:
(a)The debt of $12,027.03 for the period 1 May 2012 to 31 December 2014 arose because Mr Hamid had not declared amounts deposited into his bank account during that period (1st debt period),
(b)The debt of $19,728.00 for the period 1 January 2015 to 15 November 2016 arose because Mr Hamid had not declared his 50% interest in the title of a property at Yarram Street, Lidcombe in NSW (Yarram St Property) during that period (2nd debt period),
(c)Mr Hamid’s NSA debt was correctly cancelled on 3 May 2017 because the value of his assets from 1 January 2015 was above the assets value limit for NSA to be paid.
I note at this point, an issue that appears to have been overlooked in the course of the hearing with respect to the 1st debt period.
The Statements of Facts, Issues and Contentions (SOFIC) of both Respondent and Applicant clearly state that the debt is recoverable for the period 1 May 2012 to 31 December 2014.
However, in paragraph 5(b) of the Respondent’s SOFIC it is stated that amounts deposited in Mr Hamid’s accounts during the period 23 May 2011 to 12 December 2014 “were properly taken into account under the income test”.
Centrelink sent Mr Hamid two accounts payable for:
·8 June 2017 - investments from Bank accounts for the period 31 Aug 2013 to 1 Jan 2015: $65.97
·12 June 2017 - unexplained bank deposits for the period 1 May 2012 to 31 Dec 2014: $11,974.66
In accordance with the Centrelink documents I am satisfied that, for present purposes, the correct 1st debt period is 1 May 2012 to 31 December 2014.
1st Debt Period - 1 May 2012 to 31 December 2014
The payment of NSA is subject to an income test and assets test.[1]
[1] Social Security Guide (SSG) – 42 Means Tests & Limits
Section 643 of the Act provides that a person’s NSA rate is to be worked out using Benefit Rate Calculator B at the end of section 1068.
The method of calculation includes the income test as set out in section 1068-G1 of the Act. The first step in the calculation is to determine the person’s ordinary income on a fortnightly basis.
In section 8 of the Act income is defined as:
(a)an income amount earned, derived or received by the person for the person’s own use or benefit; or
(b)a periodical payment by way of gift or allowance; or
(c)a periodical benefit by way of gift or allowance;
but does not include an amount that is excluded under subsection (4), (5) or (8).
During the first debt period Mr Hamid held several Commonwealth Bank accounts including one CBA Streamline-Complete Access account (CBA account), two Mastercard accounts and one loan account.
On 18 April 2017, Centrelink sent a letter to Mr Hamid pursuant to section 63 of the Social Security Administration Act1999 (Cth) (the Administration Act), asking him to complete, by 2 May 2017, an enclosed deposits explanation table and include evidence to support his responses.
The table included deposits in Mr Hamid’s various accounts from 26 March 2010 to 25 January 2015.
In his written statement dated 20 July 2018 Mr Hamid claimed that he had answered the Centrelink questionnaire “as much as I could” and had mailed the documents. However, for reasons that are unclear, Centrelink did not receive the documents.
In annexure C to his written statement, Mr Hamid provided an explanation for some of the unexplained account deposits.
On 16 November 2018 Mr Hamid’s solicitor provided the Tribunal with a single page spreadsheet comparing deposits in Mr Hamid’s CBA account and Mrs Hamid’s withdrawals from her CBA savings account for the period 27 January 2011 to 11 February 2016.
The issue before Tribunal is whether, during the 1st debt period, some or all of the unexplained deposits into Mr Hamid’s accounts should be considered to be income for the purpose of calculating his entitlement to NSA payments for that period.
In his evidence, at the hearing, Mr Hamid explained that he would pay most of the family’s bills and expenses from his bank account or credit card accounts and that Mrs Hamid would often transfer moneys from her own bank account to supplement his accounts when bills were due to be paid.
In her evidence, at the hearing, Mrs Hamid, confirmed that she would regularly transfer moneys into Mr Hamid’s CBA account and other accounts when bills were due to be paid. She explained that usually she would debit her own CBA bank account but conceded that, when needed, she would sometimes take money out of her daughter’s loan account or her mother-in-law’s bank account.
The Respondent concedes that all the withdrawals from Mrs Hamid’s bank account listed on the spreadsheet were from her Centrelink payments.
After close examination of the provided spreadsheet and Mr and Mrs Hamid’s bank statements I am satisfied that during the 1st debt period the majority of credits in Mr Hamid’s CBA account were in in fact transfers from Mrs Hamid’s CBA bank account and that there was a consistent correlation with the payment of family bills and expenses.
After having considered each transaction in Centrelink’s deposits explanation table I am satisfied that, during the 1st debt period, a sum of approximately $10,900.00 was deposited into Mr Hamid’s CBA Streamline account which was transferred from Mrs Hamid’s CBA account.
Section 8(8)(s) provides a payment provided to a person is not income for the purposes of the Act if the person:
(i) Is a member of a couple; and
(ii) Is receiving a social security benefit either directly or indirectly from his or her partner
Therefore, I am satisfied that the $10,900.00 deposited into Mr Hamid’s CBA account which was transferred from Mrs Hamid’s CBA account, during the 1st debt period, was not income for the purposes of the Act.
On 8 July 2013 $20,700 was deposited into Mr Hamid’s CBA account.
In his written statement Mr Hamid stated that, “in 2013”, his mother had loaned him the money to purchase a new motor vehicle, a 2010 model Ford Mondeo. The vehicle, while still under warranty, had “significant mechanical problems” and, although the vehicle was eventually fixed, Mr Hamid felt “so discouraged that he didn’t want to drive it” and sold it for $20,700 dollars.[2]
[2] Annexure B – Contract for sale of used car, Ford Mondeo 2010 model, dated 8/7/13 $20,700
Mr Hamid also stated that he returned the funds to his mother and bought another vehicle for $5000 which he continues to own and drive.
In response to a question from the Tribunal Mr Hamid emphatically asserted that he borrowed the money from his mother and purchased the car in 2010.
Notwithstanding some apparent discrepancy in the evidence, I am satisfied that there is sufficient evidence to support Mr Hamid’s assertion that the vehicle was purchased in 2010.
Section 8(8)(zb) provides that “a domestic payment” is not income for the purposes of the Act.
Section 8(1) provides that a payment received by a person is a domestic payment for the purposes of the Act if:
(a)The person receives on the disposal of an asset of the person; and
(b)the asset was used immediately before the disposal, by the person or the person’s partner for private or domestic purposes; and
(c)the asset was used by the person or the person’s partner for those purposes for;
(i) a period of 12 months before the disposal; or
(ii) if the Secretary considers it appropriate – a period of less than 12 months before the disposal
On the available evidence I am satisfied that the $20,700 deposited in Mr Hamid’s CBA account was a domestic payment and, therefore, not income for the purposes of the Act.
On 13 March 2013, $1000 dollars was deposited in Mr Hamid’s CBA account.
At the hearing Mr Hamid confirmed that, when his father died in 2013, he was responsible for arranging the funeral and that the $1000 was a contribution, by one of his brothers, to the funeral expenses.
I am satisfied that Mr Hamid did not gain additional benefit from this deposit and that it can be considered to be a payment to cover out of pocket expenses and, therefore, was not income for the purposes of the Act.[3]
[3] P 43210 Social Security Guide
On 23 May 2011, $7000 was deposited into Mr Hamid’s CBA Gold Awards Mastercard account (Gold card account).
At the hearing Mr Hamid stated that his father, prior to his death, distributed sums of money to all his sons and that the $7000 was part of this distribution.
Section 8(8)(z) provides that, if a person receives a payment that is “a periodical payment by way of gift or allowance, or a periodical benefit by way of gift or allowance, from a parent, child bother or sister of the person” this payment is not income for the purposes of the Act.
The Act does not provide a definition of “periodical” which is defined in the Oxford Dictionary as “occurring or appearing at intervals; occasionally”.
I am satisfied that the sum of $7000 can be considered to be a “periodical payment by way of gift…from a parent” and therefore not income for the purposes of the Act.
On 30 April 2012 Mr Hamid’s daughter, Ms A. Hamid opened a CBA Smart Access account (Access account).
In June 2012 Ms Hamid took out a personal loan, and on 6 June 2012, $25,000 of “Loan Funding” was transferred in to the Access account.
On 7 June 2012, $10,100 dollars was withdrawn from the Access account. On the same day $5000 was deposited into Mr Hamid’s CBA Platinum Awards Mastercard account (Platinum card account).
On 27 July 2012, $6,922.40 was withdrawn from the account. On the same day $3,922.40 was deposited into Mr Hamid’s CBA Personal Loan account which was in fact the final payment to close the account.
In annexure C of Mr Hamid’s written statement, it is noted that the money deposited into Mr Hamid’s two accounts was provided by his daughter who had taken out the personal loan.
At the hearing Mr Hamid confirmed that both the payments were a draw-down from the personal loan that his daughter had obtained in order to assist the family with money.
In her written statement dated 19 July 2018 Mrs Hamid stated, inter alia, as follows:
In 2012 Jamal’s back and neck condition worsened and as a result he was unable to work. He applied to obtain Centrelink assistance…. Unfortunately running a household with children still studying required additional funds. My daughter Ahlam joined the workforce which eased the financial burden a little.
My daughter gave me her ATM card and since I had my in-laws card, whenever we had a bill I used to make a withdrawal from either account and deposit it in my husband account so bills could be paid.”
In her evidence, at the hearing, Mrs Hamid confirmed that her daughter gave her the CBA card so that should could withdraw money from her account, whenever needed, to pay bills.
In her written statement dated 19 July 2018 Ms A. Hamid stated, inter alia, as follows:
In 2012 I took out a loan from the Commonwealth Bank of Australia in the sum of $25,000.00. I took that loan so that I could assist my parents as my father could no work full-time due to neck and back injuries.
I have always been willing to support my family and continued to do so by giving my mother my Commonwealth Bank card so that she could withdraw money from my earnings as she saw fit to support the family. I am unsure of the amount she withdrew as I did not monitor the withdrawals. My mother had my authority to take as much money from my account as she needed. I have never questioned it.
In her evidence, at the hearing, Ms A. Hamid conceded the she relied on her mother to manage her Access account and did not monitor the transactions.
The issue for the Tribunal is whether the two deposits, noted above, were income for the purposes of the Act.
It is clear that Ms A. Hamid established the CBA personal loan, with the money being deposited into her own Access account, in order to assist with the payment family expenses. Although, she allowed her mother to manage the account and make periodic withdrawals from the account, I am satisfied that the money in the account was hers alone and that she, at all times, was ultimately accountable for the repayment of the debt.
The fact that Ms A. Hamid allowed her mother to manage the account does not, in my view, prevent a withdrawal from the account to be considered as a “periodical payment by way of gift…from a…child” and, therefore, not income for the purposes of the Act.
Therefore, during the 1st debt period, in accordance with section 8(8)(z) I am satisfied that the two payments into Mr Hamid’s accounts were not income for the purposes of the Act.
On 24 September 2012 $6000.00 was withdrawn from Ms A. Hamid’s Access account. There is no evidence to indicate how this money was used and no evidence to support a contention that this was likely to be Mr Hamid’s income for the purposes of the Act.
Finally, on my calculation, the remaining unexplained deposits into Mr Hamid’s CBA account, amount to a sum of $5430.00.
Therefore, I am satisfied that, during the 1st debt period, Mr Hamid received an undeclared amount of $5430.00 which was income for the purposes of the Act.
2nd Debt period – period 1 January 2015 to 15 November 2016
On 17 December 1980, Mr Hamid acquired an interest in the Yarram St property………as follows:
ALAN HAMID Labourer and NADIA HAMID, his wife as joint tenants as to one undivided one-half share; AND JAMAL HAMID Labourer, proprietor as to the remaining undivided one-half share, all of …. Yarram Street, Lidcombe as Tenants in Common
The purchase price of the property was $54,000.00. The sum of $46,000.00 was paid towards the purchase price by St George Building Society pursuant to a loan by St George Building Society to Mr Hamid and his brother Alan Hamid.
In his written statement dated 14 June 2018 Mr Alan Hamid stated inter alia as follows:
In 1980 my wife and wished to buy our first home…
I located a property at .. Yarram Street in Lidcombe. I agreed on the purchase price of $54,000.00…
I was seeking a loan of $46,000.00…. My application for a home loan was declined …on the ground that my wife and I had insufficient income.
…I approached my younger brother Jamal and asked him…[to] help me get the loan…
Jamal agreed…. In the second loan application Jamal was named as a party to the purchase and party to the loan agreement.
The second loan application was approved…
…I paid that deposit from my own money. Jamal did not contribute anything to the payment of that deposit
Jamal did not contribute a single cent to the property.
On or about 17 December 1908 my wife, three children and I moved into the property. I resided in that property until 2008 when my wife and I separated. My wife continues to reside in the house with one of our children. Each of my children has grown up in that house.
…Jamal had never contributed any money to the payment of the mortgage. It was always our agreement that Jamal was placed on the title to satisfy the bank so that I could obtain the loan…
I believe I paid back the entire loan to St George in 2002. Since repaying the original loan I have obtained two further loans from St George that were secured against the property. Jamal did not receive anything from those other loans. The other loans were for the benefit of youngest child….
The first of two loans obtained since 2002 was to cover legal fees…The court case cost about $90,000.00…
Jamal has never received a benefit from the property in any means. He has never contributed to the mortgage repayments, the maintenance and upkeep of the property
In November 2016 my wife and I instructed a solicitor…to remove Jamal’s name from the title of the property.
…On 13 June 2017 Jamal’s name was removed from the title. …I paid the stamp duty to affect that transfer.
In his written statement Mr Hamid stated, inter alia the following:
In 1980, my brother Alan, …told me he was unable to get a loan to purchase a home for his family.
…He wanted me to apply for the loan with him and his wife, Nadia, as partner in purchasing the property. I understood that I only needed to say I was purchasing the property with him and his wife. I was not required to contribute any money to the purchase and I would not be responsible to make payments on the loan as Alan was going to cover all the payments.
I agreed to help Alan and Nadia…
I was never concerned about the potential exposure to liability on the loan…as I trusted Alan would service the loan and never expose me to risk. Alan did pay off the loan…
It has always been my clear and unquestioned understanding that the Lidcombe property belonged to Alan and Nadia and I merely facilitated the success of the loan application.
Alan managed to pay off the loan on his own…
I have never contributed any payment towards the Lidcombe property…
I have never deposited or withdrawn money from the St George Loan account…
…approximately 10 years ago I discussed with Alan the removal of my name from the property …. Alan said to me words to the effect that he would remove my name as soon as he had enough money to pay the stamp duty on the transfer.
…In 2017 my name was removed from the title of the Lidcombe property.
St George Bank loan
On 6 February 2006, Mr Hamid and his brother, Alan Hamid established a Portfolio loan-cheque account St George Bank which was secured by a mortgage on the Yarram St property. Mr Hamid and Alan Hamid were joint parties and signatories to the loan. This loan was still active on 31 January 2017 with a closing balance of $48,589.99 and an approved credit limit of $99,500.
CBA loan
On the 1 April 2008 Mr Hamid opened Variable Rate Personal Loan with the Commonwealth Bank of Australia (CBA) for a principal amount of $20,000.
On the application form for the CBA loan Mr Hamid relevantly declared that:
(a)he was a home owner
(b)he had been working fulltime for more than 2 years for Amalgamated Trades Pty Ltd having commenced in March 2003
(c)the purpose for the loan was “home improvement”
(d)he owned a property valued at $225,000
(e)his monthly income was $6240
At the hearing Mr Hamid stated that his claim to be a home owner was a “mistake” and that he was not refering to the Yarram St property. He admitted that the “the whole application” was not true, that only purpose was to “acquire the loan” and that he was lying about owning a house valued at $225,000.
Mr Hamid acknowledged that he was prepared to lie to get a financial benefit but that he “did no harm” and did not “steal” because the “the bank got the money back”.
NSA Application
In his NSA application, dated 25 May 2012, Mr Hamid stated that he was a non-homeowner and lived in his parent’s home rent free. He also stated that he had no other assets and no trust or real estate interests.
At the hearing Mr Hamid was asked why he had stated that he had no trust or real estate interests when he is now claiming that his half interest in the Yarram St property was being held in trust. He stated that in legal terms he did not know what “it really means” but that because his brother had paid all the repayment, that he considered that he “did not contribute to the property at all” and that his name was “just there for his own grant of the loan”.
ANZ Bank loan
In April 2015 Mr Hamid applied for a personal loan with the Australia and New Zealand Banking Group Ltd (ANZ Bank). The loan for a principal amount of $40,000 to be paid back over a period of 7 years.
In a Statement of Financial Position dated 24 April 2015 Mr Hamid declared that:
(a)his total property assets were valued at $1,200,000
(b)he owned a motor vehicle valued at $20,000
(c)he owned other assets valued at $70,000
(d)his gross salary was $6302
(e)he had a loan with another financial institution owing $98,000
On 24 May 2017 in a record of discussion the ARO noted that Mr Hamid stated that the ANZ loan was “not secured” and that he told the bank that “he wanted to buy a car and a boat” but used the money to pay bills. In a subsequent discussion on 1 June 2017 Mr Hamid told the ARO that the ANZ loan was “was secured against…Yarram Street”.
At the hearing, in his evidence in chief and in cross examination Mr Hamid asserted that the two personal loans were not secured against the Yarram St property.
When questioned about the Statement of Financial Position for the ANZ loan, Mr Hamid explained that the answers on the application were “all false” as the intention was to ensure the approval of the loan.
Mr Hamid told the Tribunal that when he told the broker, who was assisting with the claim, that his name was on the title of the Yarram St property, the broker suggested that the $1,200,000 be added as a property asset. When asked whether he was happy with this suggestion Mr Hamid said “Well, I needed the loan, this was the only way to get it”.
Mr Hamid went on to say that the broker “did the whole application himself” but conceded that “I signed the form at the end, it’s my responsibility”.
CONSIDERATION
There is no dispute that Mr Hamid was the legal owner of a one-half share in the Yarram St property from 1980 until 13 June 2017.
The question for the Tribunal is whether the one-half share in the Yarram St property was an asset for the purposes of the asset test in the Act.
The Respondent contends that, when he applied for NSA, Mr Hamid should have informed Centrelink that he owned a property asset so that it could be included in the calculation of his entitlement for NSA payments.
Section 611(1) of the Act provides that NSA not payable to a person if the value of the person’s assets is more than the person’s assets value limit.
A person’s assets value limit is worked out using the table in section 611(2) of the Act. A person’s assets value limit depends on whether the person is a member of a couple and whether they are a homeowner.
On 12 April 2017 a Licensed Valuer provided Centrelink with a valuation of the Yarram St property as follows:
10/04/2017: $1,300,000
01/01/2017: $1,300,000
01/01/2015: $1,050,000
01/01/2013: $700,000
01/01/2011: $650,000
01/10/2009: $500,000
01/01/2007: $350,000
The assets value limit for a partnered person who is a non-homeowner was set at $433,000 from 1 January 2015 and then $575,000 from 1 January 2017.
Therefore, as at 1 January 2015 Mr Hamid’s half share of $525000 would have been above the assets value limit as was the half share of $650,000 at 1 January 2017.
It follows that, prima facie, NSA was not payable from 1 January 2015 and as Mr Hamid continued to receive NSA payments, until 15 November 2016, he owed a debt to the Commonwealth.
However, Mr Hamid seeks a declaration of a constructive trust, in that, he claims he did not have a beneficial interest in the Yarram Street property, but held the property on trust for his brother and sister -in-law and, therefore, he did not own an asset for the purposes of calculating NSA.
It is agreed that the Tribunal has the power to determine and give effect to constructive trusts [4] and to recognise equitable interests for the purposes of the asset test in the Social Security Act.[5]
[4] Kintominas v Secretary, Department of Social Services [1991] FCA 342; (1991) 30 FCR 475
[5] Secretary, Department of Social Services v James [1990] FCA 150; (1990) 95 ALR 615
The Respondent submits that “the arrangement or understanding propounded by Mr Hamid, between himself on the one hand and Alan Hamid and Nadia Hamid on the other hand, with respect to the Yarram Street property on 17 December 1980, cannot be a constructive trust.[6]
[6] Statement of Fact and Contentions (SOFC) p113
The Respondent contends that Mr Hamid’s “50% interest” in the Yarram Street property was held by him “absolutely, that is, the legal and beneficial interests as an investment property”.
The beneficial interest, on which the Respondent relies, is the fact, that in 2006 and 2015, when Mr Hamid was successful in securing two personal loans, he had made representations to the banks that that he was a “homeowner” and that in 2015 the Yarram Street property was used as security for the loan.
Submissions on behalf of Mr Hamid are as follows:
It is my submission to you that the uncontested evidence, or the evidence that really isn’t challenged with any contrary evidence, is at the time that property was purchased in 1980, the intention of the parties purchasing it was that Alan Hamid and his wife, Nadia Hamid, would be the beneficial owners of the property. An explanation is given through the evidence as to why Jamal Hamid is recorded as having a half share in the property but that was for a purpose other than giving him a true beneficial interest in the property, the purpose being to secure the loan.
The unchallenged evidence, and the conduct of the parties from the time of 1980 right up until the property was transferred out of Jamal Hamid’s name is that Alan Hamid, or his wife and their children, occupied the premises as their home the entire time. The mortgage was paid and satisfied, that is, the original mortgage with St George at the time of purchase, was paid off by 2002, possibly 2003, without a single dollar contribution from Jamal Hamid. Now, at that point, that is the point that the mortgage has been paid off in 2002 or 2003, had Jamal Hamid sought to take his half share, it is almost certainly, in my respectful submission, that the Supreme Court Equity Division would have estopped from that assertion and said, you made no financial contribution, and it would be unconscionable for you now to take 50 per cent of that house when you haven’t contributed a dollar to it where, in fact, your brother and his wife, your sister-in-law, the other registered proprietors, have made all the contributions.
Now, the High Court in Muschinski v Dodds[7] … the leading authority on constructive trusts and resulting trusts from circumstances where parties purchase a property together, they are recorded as having a half share but at the time the property is to be disposed of, it becomes clear on the evidence there has been an unequal contribution to the asset…. In about the middle of paragraph 7, there appears these words:
“There does not need to have been a curial declaration or order before equity will recognise the prior existence of a constructive trust.”
And that is important, because in this case, there isn’t a declaration from the court that the construction trust exists, but it is in the facts of this case, on the property at Yarram Street, in my respectful submission, no doubt that Jamal Hamid did not have a beneficial right to that half share. It was not his to do with as he pleased. Alan Hamid and Nadia Hamid would have been completely entitled and almost certainly victorious in a claim to say, “We have done everything to pay off this property. The value of the property is ours. He holds it on trust.”
The respondent suggests through its cross-examining of Mr Jamal Hamid and also through its submissions, that because he referred to the property in the ANZ application by address and by value in the CBA loan in 2010, that that was him exercising his beneficial interest in the property, but neither of the loans were mortgaged against the property. So, they were not secured loans by a mortgage on the property. He might have used the information to increase his chance of getting the loan, but the property was not used as security. So, the property did not provide the loan. The information did, but not the property itself and that is an important distinction, because had he had the ability to sign mortgage documents again and draw against the value of the property to get the loan, there may be a different argument there…
In my respectful submission, on the evidence, there is only one finding that can be made and that is that Jamal Hamid did not have a beneficial interest in the property. His name being on title records, in law, that he held on trust, for the benefit of Nadia and Alan Hamid, that interest - that 50 per cent interest - for them and that is precisely what happened, he held it for them, they paid it off and once they could pay the stamp duty, that they have taken it and their names now solely rest on that property.
[7] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 613-614
At hearing, Mr Hamid denied that the Yarram Street property had been used as security for the 2015 ANZ personal loan. Also, there is no documentary evidence to support the contention that the property was used as security for the loan.
In his oral evidence Mr Alan Hamid stated that he knew nothing about either of the two personal loans.
There is no evidence that Mr Hamid obtained any other benefit from the more than 35 years of legal ownership of the Yarram Street property and certainly no financial benefit consistent with an “investment property”.
Furthermore, he received no benefit from the significant increase in the capital value of the property by the time his name was removed from the title.
Therefore, I am not persuaded that there is sufficient evidence to support a conclusion that Mr Hamid had any meaningful beneficial interest in the Yarram Street property.
For the purposes of the asset test, it is accepted that it is appropriate to exclude a person’s property if the property is held only as a trustee.[8] This requires an examination of the intention of the parties, at the date of purchase.
[8] Kintominas ibid at 6
The High Court said in Martin v Martin[9] ‘The attention must be kept steadily fixed on the fact in issue – What was is it at time the intention of the purchaser or transferor?’
[9] Martin v Martin [1959] HCA 62; (1959) 110 CLR 297 at 305
The principle was confirmed by the High Court in Calverley v Green[10] when Gibbs CJ said
When a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser
[10] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at 261
The evidence in this matter, in my view, suggests that, the intention all the parties involved in the purchase of the property was that Allan Hamid and his wife, Nadia Hamid, would be the beneficial owners of the property and that Mr Hamid would not acquire a beneficial interest in the property. Mr Hamid’s role was to assist in the arrangement in the provision of finance for purchase and that when possible his legal would be transferred to Alan and Nadia.
Mr Hamid made no contribution to the payment of the deposit or legal expenses for the purchase of the property, no contribution to any mortgage repayments and no contribution to any expenses with respect to the upkeep and maintenance of the property.
Whether the evidence before the Tribunal is sufficient to accept that the intention of the parties, at the time of purchase of the Yarram St property, that Mr Hamid did or did not acquire a beneficial in the property and simply held the legal entitlement in trust, is arguable.
However, recognising the difficulties in the assessment of intention, particularly in family situations is the reason that courts often impose an objective test for determining intention.[11]
[11] Kyrgios and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 907 at p32
In Muschinski v Dodds[12] Deane J. stated, inter alia as follows:
Like express and implied trusts, the constructive trust developed as a remedial relationship superimposed upon common law rights by the order of the Chancery Court. It differs from those other forms of trust, however, in that it arises regardless of intention, whereas the rationale of the institutions of express and implied trusts is now essentially identified with reference to intention, the rationale of the constructive trust must still be found essentially in its remedial function which it has predominantly retained…
The old maxim that equity regards as done that which ought to be done is as applicable to enforce equitable obligations as it is to create them, and notwithstanding that the constructive trust is remedial in both origin and nature, there does not need to have been curial declaration or order before equity will recognize the prior existence of a constructive trust…
Viewed in the modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention would be contrary to equitable principle
[12] Ibid 7
The Tribunal in Kyrgios[13] adopted the analysis of the High Court in Baumgartner v Baumgartner[14] and stated that “The constructive trust is a remedy only. It operates only where it would be unconscionable for the person to assert the beneficial as well as the legal ownership of certain property. The effect of finding that a constructive trust existed would be to impose on the legal owner…an obligation not to act in a manner which would be unconscionable in the circumstances.”
[13] Ibid at 12
[14] Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
The Tribunal noted that the “finding that there is a constructive trust” was problematic as there “was no apparent need for equitable assistance”. The parties had resolved the contested issues without dispute so that there no need to assert that the claimed “beneficial interest” would be protected by equity.
The circumstances in this matter are similar, in that, when he had sufficient funds to pay the Stamp Duty, Alan Hamid was able to remove Mr Hamid from the title of the Yarram St property, without dispute or any consideration. There was no unconscionable conduct on the part of Mr Hamid.
However, the Tribunal stated that “These circumstances, however, do not prevent reliance on the principle” and referred to the decision of the Federal Court in Kidner v Secretary, Department of Social Security.[15]
[15] Kidner v Secretary, Department of Social Security [1993] FCA 587; (1993) 31 ALD 63
In Kidner [16] Drummond J stated, inter alia, as follows:
Before a constructive trust can arise in case in which one person has increased the value of another’s property, it is essential that the circumstances of the case must show that it would be unconscionable on the part of the legal owner to assert his legal title free of any claim by the person who has improved the property. I do not, however think that a constructive trust can only arise in such a case if the legal owner in fact asserts that his legal title is unfettered by any interest in favour of the improver. The critical thing must be that the claimant has acted in circumstances in which it would be unconscionable for the legal owner to deny that person’s claim in respect of the property, whether it be a claim to the full beneficial interest or some lesser interest in it. I see no reason why, in an appropriate case, the court would not exercise its jurisdiction to grant a declaration that a constructive trust exists even though the legal has not, in fact, denied the other’s claim in respect of the property because it would be unconscionable for him to do so, if he were so minded. [emphasis added]
[16] Ibid p75-76
On the evidence before the Tribunal, I am satisfied that Alan Hamid and/ or Nadia Hamid and their children have been the only permanent occupants of the Yarram St property from 1980 until the removal of Mr Hamid from the title in 2017.
I am satisfied that Mr Hamid made no contribution to the mortgage repayments or any other expenses that were required for the proper upkeep and maintenance of the whole property. Any improvement in the property is to be attributed to Alan and Nadia Hamid alone.
Also, I am satisfied that Alan and Nadia Hamid had a true beneficial interest in the one-half of the property owned by Mr Hamid and that it would have been unconscionable for Mr Hamid to assert his legal title free of that beneficial interest, if he had a mind to do so.
It follows, that I am satisfied that there was a constructive trust in respect of the one-half share of the Yarram St property owned by Mr Hamid, which means that it was not an asset that should have been included in the calculation of NSA.
MRS HAMID
Mrs Hamid was granted Carer Payment (CP), for her mother-in-law, on 2 November 2007.
On the 4 May 2017 Mrs Hamid’s CP was cancelled. On 2 June 2017 an Authorised Review Officer (ARO) affirmed the decision to cancel Mrs Hamid’s CP with effect from 1 January 2017.
The ARO also affirmed the decision that Mrs Hamid had recoverable CP debts of:
(iii)$6032.93 for the period 3 October 2013 to 2 May 2017 (1st debt period)
(iv)$3206.05 for the period 1 January 2015 to 2 May 2017 (2nd debt period)
The decision to cancel Mrs Hamid’s CP and the claimed recoverable debt was based on an assumption of Mr Hamid’s undeclared income and assets for the relevant debt periods.
In view of my findings above, Mrs Hamid’s entitlement to CP and any recoverable debt will need to be reviewed and recalculated.
DECISION
2018/1754
The decision under review is set aside and remitted to the Department of Social Security (Centrelink) for reconsideration in accordance with the reasons set out above and the following direction:
Mr Hamid’s entitlements to NSA payments at the relevant times are to be recalculated on the basis that:
(i)Mr Hamid’s undeclared income for the period 1 May 2012 and 31 December 2014 was $5430.00, and
(ii)Mr Hamid’s legal title in the one-half share of the Yarram Street property was not an asset for the purposes of the asset test in the Social Security Act1991 (Cth).
2018/1757
The decision under review is set aside and remitted to the Department of Social Security (Centrelink) for reconsideration in accordance with the reasons set out above and the following direction:
Mrs Hamid’s entitlements to Carer Payment are to be recalculated in accordance with the direction in decision 2018/1754.
I certify that the preceding 124 (one hundred and twenty-four) paragraphs are a true copy of the reasons for the decision herein of Dr I Alexander, Senior Member.
..........................[sgd]............................
Associate
Dated: 12 April 2019
Dates of hearing: 31 January and 14 March 2019 Advocate for the Applicant: Elie Rahme Solicitors for the Applicant: Elie Rahme and Associates Advocate for the Respondent: Dr Steven Thompson Solicitors for the Respondent: Department of Human Services
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