Hart and Department of Family and Community Services - [2001] AATA 210

DECISION AND REASONS FOR DECISION [2001] AATA 210

ADMINISTRATIVE APPEALS TRIBUNAL )

) No N2000/251

GENERAL ADMINISTRATIVE DIVISION       )
           Re      Cyril Victor Hart
  Applicant
           And    Secretary, Department of Family and Community Services
  Respondent

DECISION

Tribunal Ms SM Bullock, Senior Member

Date20 March 2001
PlaceSydney

Decision      The decision under review is set aside and in substitution therefor, the Tribunal decides that a debt of $16,198.50 owed by Mr Hart to the Commonwealth be written off pursuant to section 1236 of the Social Security Act 1991.
  .................[sgnd].......................
  Ms SM Bullock
   Senior Member
Catchwords
AGE PENSION – Overpayment Debt – Debt Recovery – Waiver – Write Off – Administrative Error – Special Circumstances

Legislation
Social Security Act 1991, ss 68, 1224, 1236, 1237A, 1237 AAD, 1302A
Acts Interpretation Act 1901, ss 28A, 29
Evidence Act 1995, ss 160, 163

Authorities
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186
Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287
Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484
Re Secretary, Department of Family and Community Services and Butt [2000] AATA 623
Re Vitalone and Secretary, Department of Social Security (1995) 38 ALD 169
Re Secretary, Department of Social Security and Saracik (1993) 30 ALD 567
Re Secretary, Department of Social Security and McAvoy (1996) 44 ALD 721
Re Nehma and Secretary, Department of Family and Community Services (1999) 3(9) SSR 132
Riddell v Secretary, Department of Social Security (1993) 30 ALD 31
Secretary, Department of Social Security v Hales (1998) 51 ALD 695
Lee v Secretary, Department of Social Security (1996) 68 FCR 491
Fancourt and Mercantile Credits Ltd (1983) 154 CLR 87
McAuliffe v Secretary, Department of Social Security (1992) 28 ALD 609
Secretary, Department of Social Security v Greenwood (1992) 26 ALD 554
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Green and Secretary, Department of Social Security (1990) 21 ALD 772

REASONS FOR DECISION

SM Bullock Senior Member

This is an application by Mr Cyril Victor Hart, for a review of the decision of the Social Security Appeals Tribunal (the "SSAT"), made on 19 January 2000, which affirmed the original decision that Mr Hart has a debt owing to the Commonwealth in the sum of $16,198.50, being moneys he received for an Age Pension to which he was not entitled.
At the hearing before the Administrative Appeals Tribunal ("the Tribunal") on 9 January 2001, Mr Hart was represented by Ms S Clark, Solicitor from the Welfare Rights Centre, Sydney. The Secretary, the Department of Family and Community Services ("the Department") is the Respondent in this matter; the Respondent was represented by Mr Slattery, Departmental Advocate. No witnesses were called.
At the hearing the Tribunal took into evidence documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("T Documents" T1 – T24) in addition to the following exhibits:
Exhibit          Description Date
A1      Applicant's Statement of Facts and Contentions          12 October 2000
A2      Statement of Mr C Hart     11 December 2000
A3 Applicant's Reply to section 68 Contentions 9 January 2001
R1      Respondent's Statement of Facts and Contentions     5 January 2001
R2      Letter from Centrelink to the Department of Corrective Services, plus attachment 16 November 2000
R3      Letter from Centrelink to Mr Hart   15 September 1995
T1 Section 37 Documents (T1 – T24)

Issues

The issues to be determined by the Tribunal are whether Mr Hart has incurred a debt of $16,198.50 owed to the Commonwealth, resulting from his wife's income earned in the period of 20 March 1997 to 8 July 1999 and, if so, whether there is any basis for non-recovery.
A further issue for determination is whether Mr Hart received a letter from the Department dated 4 March 1997, notifying him that he had to inform the Department whether the amounts shown on the letter, in relation to his and his wife's combined income, were correct. There is no dispute that the figures contained within that letter were clearly incorrect, however, Mr Hart never responded to the Department's request because he states the he never received the relevant letter.
Legislation
The relevant legislation in this matter is primarily the SocialSecurityAct 1991 ("the Act").
Section 68 of the Act deals with the authority to issue notices and as relevant states:
"Secretary may require notice of the happening of an event or a
change in circumstances
68(1) The Secretary may give a person to whom an age pension is being paid a notice that requires the person to inform the Department if:
(a) a specified event or change of circumstances occurs; or
(b) the person becomes aware that a specified event or change of circumstances is likely to occur.
…
68(5) A person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice.
Penalty: Imprisonment for 6 months.
Note: Subsection 4B(2) of the Crimes Act 1914 allows a court that convicts an individual of an offence to impose a fine instead of, or in addition to, a term of imprisonment. The maximum fine that a court can impose on the individual is worked out by multiplying the maximum term of imprisonment (in months) by 5, and then multiplying the resulting number by the amount of a penalty unit. The amount of a penalty unit is stated in section 4AA of that Act.
…"

Section 1302A of the Act as relevant at the time provided:
"Notice of decisions under this Act
1302A(1) If notice of a decision under this Act is:
(a) delivered to a person personally; or
(b) left at the address of the place of residence or business of the person last known to the Secretary; or
(c) sent by pre-paid post to the postal address of the person last known to the Secretary;
notice of the decision is taken, for the purposes of this Act, to have been given to the person.
Note 1: compare section 28A of the Acts Interpretation Act 1901.
Note 2: Notice of a decision is taken to have been given to a person even if the Secretary is satisfied that the person did not actually receive the notice (see subsection 23(12)).
1302A(2) Notice of a decision under this Act may be given to a person by properly addressing, prepaying and posting the document as a letter.
Note: compare the first limb of section 29 of the Acts Interpretation Act 1901.
1302A(3) If notice of a decision under this Act is given in accordance with subsection (2), notice of the decision is taken to have been given to the person at the time at which the letter would be delivered in the ordinary course of the post unless the contrary is proved.
Note: compare the second limb of section 29 of the Acts Interpretation Act 1901.
1302A(4) This section only applies to notices of decisions and nothing in this section affects the operation of sections 28A and 29 of the Acts Interpretation Act 1901 in relation to other notices under this Act (for example, a notice that requires a person to inform the Department about some matter or a notice that requires a person to give the Secretary a statement about some matter).
…"

Section 1224 of the Act deals with debts arising out of a recipient's contravention of the Act and as relevant states:
"Debts arising from recipient's contravention of Act
1224(1) If:
(a) an amount has been paid to a recipient by way of social security payment; and
(b) the amount was paid because the recipient or another person:
(i) made a false statement or a false representation; or
(ii) failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due by the recipient to the Commonwealth.
Note: If the person does not pay the debt or enter into an agreement to pay the debt within a certain time, interest may become payable on the debt (see section 1229). If the person enters into an agreement to pay the debt and breaches the agreement, interest may become payable on the debt (see section 1229A)."

Section 1236 of the Act deals with write off and as relevant provides:
"Secretary may write off debt
1236(1)Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.
1236(1A) The Secretary may decide to write off a debt under subsection (1) if, and only if:
(a)        the debt is irrecoverable at law; or
(b)      the debtor has no capacity to repay the debt; or
(c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or
(d) the debtor is not receiving a social security payment under this Act and it is not cost effective for the Commonwealth to take action to recover the debt.
1236(1B) For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:
(a)the debt cannot be recovered by means of deductions from a person's youth training allowance, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or
(b) there is no proof of the debt capable of sustaining legal proceedings for its recovery; or
(c) the debtor is discharged from bankruptcy and the debt was incurred before the discharge and was not incurred by fraud; or
(d) the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.
1236(1C) For the purposes of paragraph (1A)(b), if a debt is recoverable by means of deductions from a person's social security payment, the person is taken to have a capacity to repay the debt unless recovery by those means would cause the person severe financial hardship.
1236(2)         A decision made under subsection (1) takes effect:
(a) if no day is specified in the decision—on the day on which the decision is made; or
(b) if a day is specified in the decision—on the day so specified (whether that day is before, after or on the day on which the decision is made).
1236(3) Nothing in this section prevents anything being done at any time to recover a debt that has been written off under this section."

Section 1237A of the Act deals with waiver of a debt arising from sole administrative error and as relevant states:
"Waiver of debt arising from error
Administrative error
1237A(1)Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.
Note: Subsection (1) does not allow waiver of a part of a debt that was caused partly by administrative error and partly by one or more other factors (such as error by the debtor).
1237A(1A) Subsection (1) only applies if:
(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or
(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;
whichever is the later.
…"

Section 1237 AAD deals with waiver of a debt in special circumstances and as relevant states:
"Waiver in special circumstances
1237AAD The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
Note: Section 1236 allows the Secretary to write off a debt on behalf of the Commonwealth."

In reviewing the issue of whether Mr Hart received certain letters, specifically a notice sent to him by the Department on 4 March 1997 (T13), the Tribunal is also assisted by provisions of the Acts Interpretation Act 1901. Sections 28A and 29 of the Acts Interpretation Act 1901 state:
"28A   Service of documents
(1) For the purposes of any Act that requires or permits a document to be served on a person, whether the expression "serve", "give" or "send" or any other expression is used, then, unless the contrary intention appears, the document may be served:
(a)      on a natural person:
(i)       by delivering it to the person personally; or
(ii) by leaving it at, or by sending it by pre-paid post to, the address of the place of residence or business of the person last known to the person serving the document; or
(b) on a body corporate—by leaving it at, or sending it by pre-paid post to, the head office, a registered office or a principal office of the body corporate.
(2)      Nothing in subsection (1):
(a) affects the operation of any other law of the Commonwealth, or any law of a State or Territory, that authorizes the service of a document otherwise than as provided in that subsection; or
(b) affects the power of a court to authorize service of a document otherwise than as provided in that subsection.
29       Meaning of service by post
(1) Where an Act authorizes or requires any document to be served by post, whether the expression "serve" or the expression "give" or "send" or any other expression is used, then unless the contrary intention appears the service shall be deemed to be effected by properly addressing prepaying and posting the document as a letter, and unless the contrary is proved to have been effected at the time at which the letter would be delivered in the ordinary course of post.
(2)This section does not affect the operation of section 160 of the Evidence Act 1995."

Section 163 of the Evidence Act 1995 deals with "proof of letters having been sent by Commonwealth Agencies " and as relevant states:
"Proof of letters having been sent by Commonwealth
agencies
(1) A letter from a Commonwealth agency addressed to a person at a specified address is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) to have been sent by prepaid post to that address on the fifth business day after the date (if any) that, because of its placement on the letter or otherwise, purports to be the date on which the letter was prepared.
(2) In this section:
business day means a day that is not:
(a) a Saturday or a Sunday; or
(b) a public holiday or bank holiday in the place in which the letter was prepared.
letter means any form of written communication that is directed to a particular person or address, and includes:
(a) any standard postal article within the meaning of the Australian Postal Corporation Act 1989; and
(b) any envelope, packet, parcel, container or wrapper containing such a communication; and
(c) any unenclosed written communication that is directed to a particular person or address.
Note 1: The NSW Act has no equivalent provision for section 163.
Note 2: Section 5 extends the operation of this section to proceedings in all Australian courts. "

Section 160 of the Evidence Act 1995 deals with postal articles and as relevant states:
"Postal articles
(1)It is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address in Australia or in an external Territory was received at that address on the fourth working day after having been posted.
(2)      This section does not apply if:
(a)      the proceeding relates to a contract; and
(b)      all the parties to the proceeding are parties to the contract; and
(c)      subsection (1) is inconsistent with a term of the contract.
(3)      In this section:
working day means a day that is not:
(a)      a Saturday or a Sunday; or
(b) a public holiday or a bank holiday in the place to which the postal article was addressed.
Note: Section 182 gives this section a wider application in relation to postal articles sent by a Commonwealth agency."

Background

The following facts are provided by way of background and are not in dispute.

Mr Hart was born in Australia on 10 November 1929. Mr Hart is thus 71 years old (T5).
Mr Hart is married to Anne Margaret Hart who is aged 61. Mrs Hart is employed in an administrative position at the Department of Corrective Services.
Mr and Mrs Hart own their own home in Maroubra; however, there is a mortgage on this home.
Prior to receiving the Age Pension in 1995, Mr Hart owned and operated a drycleaning business in Maroubra for 22 years. He closed the business in 1995. At that time he was in ill health and his drycleaning business was struggling. There was a downturn in customers and the drycleaning equipment had worn out and needed replacing. Mr Hart could not afford to replace his equipment. Mr Hart thus closed down his business.
On 15 June 1995, Mr Hart lodged a claim for the Age Pension (T5). Mr Hart was granted the Age Pension commencing on this date at the rate of $236.90 per fortnight (T9).
Mr Hart had never dealt with the then Department of Social Security prior to his application for the Age Pension.
When he applied for the Age Pension, Mr Hart provided the Department with details of his wife's earnings, which then stood at $567.34 gross per week (T8). Mr Hart also provided information that his earnings at the time amounted to $150.00 gross per week.
The Department assessed Mr Hart's claim and an error was made in that whilst Mr Hart's earnings were calculated, on the information provided by him, at the rate of $7,800 per annum (T9), his wife's earnings were not assessed at all by the Department.
In 1999, Mr Hart was requested to again provide the Department with his documentation, the error was discovered and Mr Hart's Age Pension was cancelled. By letter of 9 July 1999, Mr Hart was informed of the decision to cancel his pension (T17).
A decision was then made by a Centrelink officer that Mr Hart had incurred a debt to the Commonwealth in the amount of $27,163.42, which was the total he had received since his grant of Age Pension in 1995 (T19).
Mr Hart then exercised his right to review (T20, 21). Accordingly, an Authorised Review Officer ("ARO") reviewed Mr Hart's circumstances and varied the original decision by determining that only amounts paid to Mr Hart after 20 March 1997, namely $16,198.50 constituted a debt owed to the Commonwealth (T23). This is because the letters sent to Mr Hart prior to 1997 contained a 'defect' in wording, which is discussed in further detail below.
Mr Hart then sought that a further review be conducted by the SSAT, however, that tribunal, on 13 January 2000, affirmed the ARO's decision.
On 16 February 2000, Mr Hart sought a review of the SSAT's decision in this Tribunal.
At issue between Mr Hart and the Respondent is whether Mr Hart in fact received a letter dated 4 March 1997, by which he was obligated to tell the Department whether the figure used to calculate his pension, namely $7,800 per annum, was incorrect.
The Respondent concedes that although Mr Hart should have never been granted the Pension in the first place, the amounts granted to him prior to the March 1997 notice are not recoverable – they resulted solely from administrative error and following the decision in ReVitalone and Secretary, Department of Social Security (1995) 38 ALD 169 and the precedent set thereafter, Mr Hart did not incur a debt to the Government for those amounts because the particular wording used in those letters is considered insufficient to raise liability.

Evidence Of Mr Hart

Mr Hart related to the Tribunal that towards the end of his working days, his drycleaning business was in 'dire straits'. His machines were worn out to the extent that he had to arrange for another drycleaner to clean the garments for him and then he would take the garments back to his premises and do the finishing work himself. Once the garment-pressing machine also broke down, Mr Hart decided that he could not afford to keep the business going and so he shut it down.
Unfortunately, Mr Hart still had 15 months remaining on the lease for the premises and so he used his superannuation funds to pay the amount owing on the lease.
Mr Hart also had a debt, which he incurred to the drycleaner to whom he was out-sourcing his work, and he arranged to repay this debt by working at the drycleaner's business for eight dollars per hour.
Mr Hart said that when he applied for the Age Pension, he "didn't have a clue" what would happen, noting :
"People said why don't you apply for the pension, you are over 65 and you have been working all your life. I just went down and they told me what documents to return with and I gave my wife's payslip, taxation and everything and I left them with them. I just said, well I might get it and I might not, so when they approved it I said OK and that's it" (taken from the hearing Transcript at page 9).
In relation to whether Mr Hart received letters sent to him by the Department on 20 June 1995, 4 July 1995 and 4 March 1997, Mr Hart agreed that he had received the first two letters, however, he maintained that he never received the letter dated 4 March 1997.
In a written statement to the Tribunal (Exhibit A2), Mr Hart states:
"I got two letters from Centrelink after I applied for the pension. I kept the letters, they were dated 30th June 1995 and 4th July 1995. I had never had social security before and I was not familiar with how they do things. I never noticed the part on the back of the letters that said my combined income was $7,800 or that I should tell them if my combined weekly income became more than $135 per week. I thought the letters were just to tell me that everything was OK with my pension. I knew that I had given Centrelink all of the information they wanted.
I did not get a letter from Centrelink dated 4th March 1997. I do not know why I did not get it. If I did get that letter I would have contacted Centrelink about it".
In his oral evidence to the Tribunal, however, Mr Hart did agree that he noticed, on the letters sent in 1995, that the figure indicating his and his wife's combined income was incorrect but he simply thought that since he had only recently provided the Department with all the correct information which they needed, it was simply a mistake made by the Department.
He also indicated that he was unsure what the amount of "$7,800" was in reference to and that he did not really understand what the letter was saying or what that figure of $7,800 was about. Mr Hart stated to the Tribunal that he did not understand that that amount was related to the amount of pension he was receiving.
Mr Hart also provided evidence by way of letter to the Tribunal, which is included as T1 of the section 37 documents. In that letter Mr Hart states:
"The Issue to be decided in the application:
I am unable to repay the amount of $16,198.5 as my only source of income was the aged pension which has been discontinued since my wife and I completed the review sent by the Centrelink on 15 June 1999. At the age of 70 years I am unable to physically work full time as a drycleaner. Apart (sic) my half share in the family home I do not possess any other assets, nor am I in a financial position to pay.
The history of this application:
All information requested by Social Security was provided by me at the time of my application for the pension, including the fact my wife worked for the department of Corrective Services and her pay slip was provided at that time. The increase in bank interest from $182.00 per annum to $203.00 per annum was received because at that time I had received a superannuation payment of some $13,000 which was subsequently used to pay debts incurred from closing my business, and also not being released from the lease of shop premises for many months. Another error was then made by increasing, not decreasing, my pension. Because information had been supplied to Social Security a couple of weeks prior I felt it was not necessary to respond in this instance.
As previously mentioned I did not receive a letter from the Department dated 4 March 1997. The earnings in 1995 were in fact more than $7,800 because my wife was working, and continues to work full-time. I became aware, via the media, that there would be an increase in the pension.
(sic) When the Review form was sent on 15 June 1999 for completion by my wife and self, it was completed fully and honestly and returned promptly to Centrelink, Maroubra. I was not expecting to lose all my pension entitlements, nor incur any debt. It was requested that my wife provide ATO Assessment Notices for the years 1994-99 which I had delivered to Centrelink. Why a Review Form, or similar document was not sent over the four year period, I fail to understand. I feel better monitoring is needed by Centrelink in relation to all pensions.
Centrelink regretted they granted the age pension in the first instance and I am understandably distressed at now having been asked to pay an amount of $16,198.50 which money I do not possess, nor have access to. I received the first two notices, but not one in March 1997. The first two notices were received straight after I had given the Department all the information they had requested.
As mentioned previously all relevant documents had been given to the Department for their assessment just a couple of week prior to receiving those two notices. I did not make the mistake, nor was I aware of the conditions for obtaining an aged pension. It was for the Department to do the calculations.
The letter sent to me on 4 March 1997 was not received. Why didn't the Department follow this up to ensure a response was forthcoming? It may show on a computer that a letter was written, but is that proof it was posted and actually received?
What happened at the hearing:
It is correct that I had no idea as the whether I qualified for the pension or part pension. I was hospitalised twice at the end of 1996 and prior to that as well. I still believe it was the Department's fault I was granted and continued to receive the pension.]
As I told the tribunal I would have known if the letter sent in March 1997 showed incorrect information and would have responded accordingly to correct any obvious errors. However, as I did not receive that particular notification I was unable to respond.
…" (T1, pp1,2).

During his evidence Mr Hart was also led to T18, which is a letter written by Mr Hart to Centrelink and dated 11 August 1999. That letter states:
"How can you justify such a sudden decision without at least giving me the chance to point out I had done nothing wrong" (T18, p58).
Mr Hart maintained in his oral evidence to the Tribunal that he was never contacted by the Department until 1999, when he was requested by letter to bring all his documents to the Department. Mr Hart was then informed that a mistake had been made, he was not entitled to receive the Age Pension in light of his wife's income, and his Age Pension was cancelled accordingly (T17).
Mr Hart also tendered a written statement to this effect wherein he states:
"8. I got a review form dated 15th June 1999. My wife and I filled it in and returned it. We answered the questions carefully and honestly. After we put the form in a woman asked me to bring in my wife's tax notices from 1995 to 1998. When I took them in a lady said "a mistake has been made". This was the first time that I knew that there was anything wrong with my pension…"
When giving his oral evidence at the hearing, Mr Hart displayed a certain degree of naivety about his Age Pension, when asked whether, prior to 1999, he ever suspected that there might have been a mistake in his pension, Mr Hart replied:
"No. And of course I had no idea of pensions what they were like (sic). And I just accept it and said, okay well that's it, I wouldn't know (sic). I didn't even know what a pension was" (at page 17 of the Transcript).
Mr Hart stated that when he was informed that his pension would be immediately cancelled because "a mistake had been made", he could not understand what happened. However, he believes that the mistake is not his, as the information he gave the Department in 1999, was the same information which he had given in 1995.
Mr Hart informed the Tribunal that he had used his Age Pension to buy food and to pay for household expenses such as electricity bills. Mr Hart stated that he was not able to save any money from his Age Pension.
Mr Hart further explained that during the time between 1995 and 1999, he was still working for the drycleaners to whom he owed money, in order to work off his debt to them.
Mr Hart also stated that in respect of the mortgage owing on their home in Maroubra, it is his wife who makes the required repayments. Mr Hart stated that his wife is presently 61 years old and there is a chance that she may be forced soon to take early retirement as "they are reducing staff in the audit office where she works …[and] they are asking certain people to take retirement".
Mr Hart said that Mrs Hart is in generally good health, however she suffers from osteoporosis and she has suffered a fall at work whereby she received injuries to her hip and she spent three to four months off work. Mrs Hart is currently in the process of pursuing workers' compensation for this incident. Mrs Hart has also experienced lung problems as a result of smoking.
In relation to his own health, Mr Hart stated that he has had stomach ulcers and also experienced kidney failure. Mr Hart explained to the Tribunal that as a result of his many years of work in the drycleaning industry where he was exposed to toxic fumes and chemicals from the cleaning fluid, paint remover and spotting equipment, his health has suffered.
Mr Hart related to the Tribunal that approximately two years ago he was blacking out a number of times and that he had not been eating properly for a long time before that. Mr Hart stated that he had been finding it difficult to digest his food, which he thought was related to his stomach ulcers but it was actually attributable to his kidneys. Mr Hart could not remember the medical term for his kidney problems.
Mr Hart stated that he had previously been hospitalised for two weeks due to kidney failure.
Mr Hart indicated to the Tribunal that earlier in his life he "led a pretty fast life", which involved a lot of drinking, which he believes is partly related to his current health problems, particularly in respect of his kidneys. Mr Hart also stated that the failure of his business put him under a lot of stress, which in turn has contributed to his ill health, including the stomach ulcers. He also has low blood pressure.
Fortunately, at present his condition is stable and he has been able to stop taking medication for the moment. Although Mr Hart was put on medication and a special diet, which involved cutting down on fatty foods and his alcohol intake, he is now back on to a normal diet but is careful to eat properly and to do as the doctors advise. Mr Hart sees his local general practitioner approximately every month and also attends the Prince of Wales Hospital for check-ups.
Mr Hart said that he does a lot of walking in order to increase his health. He does not play much sport although he does play bowls occasionally as it is not a strenuous game and is also inexpensive. Mr Hart further stated that his doctors have told him that exercise would improve his health.
Mr Hart said that he would like to be able to return to work if he can, however, he thinks his chances are limited by virtue of his limited experiences. Mr Hart related to the Tribunal that within the drycleaning industry itself, work is currently difficult to obtain as many of the local drycleaners in the Eastern Suburbs are experiencing business difficulties and many have had to stop operating for lack of business. Mr Hart indicated to the Tribunal that there is a slim chance that he may be able to obtain work with a drycleaner on the North Shore sometime after Easter 2001. He said that he could do pressing work at the drycleaners but not the actual drycleaning, on account of his health.
Mr Hart has no outstanding debts.
Mr Hart said that he would like to return to work because it is "Boring at home. Even my dog is tired of me" (at page 20 of the Transcript).
During questioning by Mr Slattery, Mr Hart reiterated that before he applied for the Age Pension, he knew nothing about pensions, the Department or how things worked at the departmental level.
Mr Hart said that he did think that with his wife working he would not get a full Age Pension but he also did not know what a full pension constituted in monetary terms so he just filled in the forms and brought the documentation which the Department asked him to bring.
Mr Hart said that he did not speak to anyone at the counter of the Department of Social Security, as it then was, because "I didn't know what to talk about anyway. I just said I am applying for the pension. Tell me what to do and they told me what to do and I did as they asked and I just went up and they said, yes, well we will process it all and you will hear from us. Very simple" (at page 20 of the Transcript).
Mr Hart stated that the first actual interview he had with the Department in relation to his pension was in 1999, when his Pension was reviewed and consequently cancelled.
Mr Hart never made any inquiries as to what rate of pension he would be receiving although he did speak to some other people who he knew who were also receiving the pension. He told the Tribunal that he never asked at Social Security because he thought he would just "leave it up to them".
When Mr Slattery led Mr Hart through the various documents and letters which were sent to him, Mr Hart replied to most of Mr Slattery's queries with the response that he either did not really understand what the information in the respective letters meant and/or that he did not comprehend their significance in terms of his pension. Mr Hart said " I couldn't see the point of the whole thing … I just thought, combined income, what do they mean by that but I didn't think that it was anything important". However, he did acknowledge that the figure of $7,800 contained in the letters was incorrect. He thought though, that the Department must also know that that figure was wrong, since Mr Hart had taken his wife's pay slip to the Department and it clearly showed that at that time she was earning $27,000. Mr Hart therefore thought that the Department would "rectify it themselves", and he "didn't bother about it".
Mr Hart said that whilst he understood that a person's income could affect their entitlement to the pension, he thought that it only applied to wealthy people and not to people such as himself. He related to the Tribunal that in his understanding, people who had for example, $100,000 in the bank, were not entitled to the Age Pension because "the pension isn't for people with money like that" (at page 23 of the Transcript) but he did not think that this applied to him "because I've got nothing in the bank".
Lastly, Mr Hart confided in the Tribunal that he and his wife are effectively separated but living under the same roof. Mr Hart did not believe that he would receive any financial assistance from Mrs Hart if this Tribunal finds that Mr Hart owes a debt to the Commonwealth.
Submissions
In her submissions to the Tribunal on behalf of Mr Hart, Ms Clark summarised the Applicant's case as follows: he is a 71 year old man who never had any previous contact with the then Department of Social Security. In his Age Pension application, Mr Hart gave the Department all of the material they requested including details of his wife's income and his income, he also provided the Department with a recent pay slip from his wife's employer (T4).
When Mr Hart received the two letters in 1995, (after being granted the pension in June of that year), and having never dealt with the Department before, he did not take great notice nor understand the significance of the incorrect amount detailed as his and his wife's combined income on those letters. Mr Hart believed that he had answered all of the Department's questions accurately when he put in his application and he therefore did not think that he needed to contact them about the letters.
In Ms Clark's contention, the overpayment therefore arose because the Department failed to act on the information provided by Mr Hart regarding his wife's income.
Further, the letters sent in 1995, were affected, in Ms Clark's submission by the "Vitalone" (supra) defect. A contention which is not disputed by the respondent. Indeed, it is this "defect", which has resulted in Mr Hart's debt being reduced by $10,964.92.
In the Applicant's contention, he simply never received a letter from the Department dated 4 March 1997.
In written submissions, which the Tribunal has taken into evidence as Exhibit A1, Ms Clark urged the Tribunal to accept that:
"Mr Hart has a history of responding to pension letters promptly and honestly. He says that he would have responded to the letter of 4th March 1997 if he had received it. Mr Hart believes he kept all letters from 1995 and produced them to the SSAT together with a bundle of other papers. There was no letter from the Department dated 4th March 1997 in that bundle of papers."
In the written submissions Ms Clark also sets out the following contentions, which constitute the factual and legal parameters of the Applicant's case:
"It is accepted that Mr Hart received Age Pension between 15th June 1995 and 8 July 1999.

No recoverable overpayment for the period 21st March 1997 to 1st October 1997
It is our view that Mr Hart did not fail to comply with a provision of the Act as it stood prior to 1 October 1997. He provided accurate information to the Department about his and his wife's income and assets. The overpayment arose because the Department failed to act on the information he provided about his wife's income.
The Department sent two letters to Mr Hart shortly after he applied for the Age Pension. The letters included inaccurate information but these letters did not require Mr Hart to provide again information that he had already provided. [see Vitalone (1995) 38 ALD 169]
There is no suggestion that Mr Hart made a false statement or gave false information at any time.
4th March 1997 Letter
Mr Hart denies receiving a letter dated 4th March 1997. He kept other letters he received form the Department including letters from 1995 (which he produced at the SSAT). He does not have this letter and he does not remember getting this letter.
Mr Hart has a history of responding to requests for information promptly. It would be out of character for him to ignore the letter dated 4th March 1997. There were no surrounding circumstances that could have alerted him to the existence of the letter or the contents of the letter.
The letter date 4th March 1997 advised Mr Hart of a CPI increase. The letter contains information but it does not contain a decision. It does not attract the deemed receipt provisions that relate to notices of decisions.
In the alternative, if the letter does contain a decision then that decision is on the front of the letter. The back of the letter contains other information that is not part of the decision and should not therefore be deemed to have been received.
S1224(1) No debt arising through contravention of law
To raise a 1224 debt the Department must prove that the debt arose either because Mr Hart or some other person made a false representation or failed or omitted to comply with a provision the Act.

The Department does not allege that Mr Hart made a false representation. Mr Hart supplied accurate and truthful details of his wife's income whenever he was aware that the Department required such information.
Mr Hart did not receive the letter date 4th March 1997 so he cannot be at fault for not complying with any requirement of the Act which may have been set out in the letter.
Therefore in our view no debt arises prior to 1 October 1997.
Section 1223(1) debt owed to the Commonwealth after 1 October 1997
It is conceded that payments of Age Pension made to Mr Hart after 1 October 1997 are debts to the Commonwealth as Mr Hart was paid at an incorrect rate. However we must submit that so much of the overpayment as arises after this date should be waived under s1237A or alternatively s1237AAD of the Social Security Act 1991.
Waiver under s1237A
The debt was solely due to administrative error, that error being the Department's failure to take into account Mr Hart's wife income at the outset. In our view, if Mr Hart had received the letter date 4 March 1997, it is unknown whether the letter would have in fact apprised Mr Hart of the error. Even if this were the case Mr Hart could only have made enquires which may or may not have led to a correction of the error. The debt would remain attributable solely to administrative error.
Mr Hart received the payments in good faith, knowing that he had provided all the information sought by DSS in 1995. Mr Hart's good faith (and absence of any wilful blindness) is demonstrated by his open disclosure of his wife's income in 1995 and his prompt and accurate response to the review form he received in 1999. There were no circumstances that alerted Mr Hart that he was not receiving the correct payment. (see Hag (sic)
Waiver under s1237AAD
Should the above submissions not be accepted it is our view that any overpayment ought to be waived in the special circumstances of the case under s1237AAD. Special circumstances in this matter include:

The extent of administrative error by the department
The age and health of the applicant." (Exhibit A1)

A further written submission was also tendered and taken into evidence as Exhibit A3. In that document, Ms Clark, on behalf of the Applicant, sets out the Applicant's contentions in relation, specifically, to section 68 of the Act. Section 68, in so far as it is relevant, has been set out above. The argument put forth by Ms Clark is that whilst the Department contends that Mr Hart failed or omitted to comply with an obligation under section 68, in the Applicant's submission, no obligation arises in the circumstances of Mr Hart's case. That is because:
"The obligation under s.68 is to comply with the notice to the extent that the person is capable of complying with the notice.
68.(5) a person must not, without reasonable excuse, refuse or fail to comply with a notice under subsection (1) to the extent that the person is capable of complying with the notice
a person cannot be said to be capable o complying with a notice that they did not in fact receive. Therefore MR Hart cannot be said to have omitted to comply with s68.
The obligation to comply carries a penalty of up to six months imprisonment and therefore must be strictly construed" (Exhibit A3).

Turning to the Department's contention that it is sufficient to create an obligation under section 68 for the Secretary to have posted a letter to the Applicant, Ms Clark's response is that:
"First for the reasons stated above, s.68 does not create such an obligation. Secondly, s.1302A has no application to s.68 notices, as these are not "notices of a decision". Further the Acts Interpretation Act merely enables service by post and creates a rebuttable presumption that service has been effected with the ordinary course of the post".

The Applicant's contentions then set out the relevant legislation, namely, sections 28A and 29 of the Acts Interpretation Act; and, sections 160 and 163 of the Evidence Act 1995.
Ms Clark then concluded that:
"In this case not only does a "contrary intention" appear from s.68 but the presumption has been rebutted".
Further,
" In this case the notice at T13 [that is the letter in issue dated 4 March 1997] may in any event be defective due to the fact that it purports to require notification of neither the occurrence of an event nor a change of circumstances. In this case there had been no occurrence of an event or change of circumstances subsequent to grant".
In her oral submissions to the Tribunal, Ms Clark sought to take the Tribunal to the relevant case law, namely, Secretary, Department of Employment Education Training and Youth Affairs v Prince (1997) 50 ALD 186; Haggerty v Department of Education, Training and Youth Affairs [2000] FCA 1287; Jazazievska v Secretary, Department of Family and Community Services [2000] FCA 1484; Re Secretary, Department of Family and Community Services and Butt [2000] AATA 623; Re Vitalone and Secretary, Department of Social Security (1995) 38 ALD 169; Secretary, Department of Social Security and Saracik (1993) 30 ALD 567; Secretary, Department of Social Security and Martin McAvoy (1996) 44 ALD 721; Re Nehma and Secretary, Department of Family and Community Services (1999) 3(9) SSR 132; Riddell v Secretary, Department of Social Security (1993) 30 ALD 31; Secretary, Department of Social Security v Hales (1998) 51 ALD 695; Lee v Secretary, Department of Social Security (1996) 68 FCR 491.
With respect to "special circumstances", Ms Clark submitted that the main special circumstance which the Tribunal should take into consideration is the administrative error that caused the overpayment in the first place. Ms Clark stated "It is a significant departmental error and repayment for him after that significant error would perhaps have a devastating effect on his life and his wife's life" [at page 30 of the Transcript].
Ms Clark contended that the Tribunal should consider Mr Hart's age and health as factors in its consideration. Further, Ms Clark pointed out that the circumstances of Mr and Mrs Hart's marital relationship means that Mr Hart will have no assistance from his wife in paying off the debt. Thus, if a debt were raised against him, it could only be recovered against his house, which would have highly adverse affects on Mrs Hart who is not involved with this case. Ms Clark submitted that one could only speculate about the negative consequences that would arise for Mr and Mrs Hart and the state of their relationship, if their house were to be sold in order to repay Mr Hart's debt.
Ms Clark also sought to deal with the issues raised by the letter of 4 March 1997. Ms Clark contended that since the letter is pre 1 October 1997, which is when the legislation changed, that part of the debt that allegedly arose before 1 October 1997 can only be recovered if Mr Hart omitted to comply with the provision of the Act, namely section 68. In Ms Clark's contention, this section applies where a change of circumstances has occurred or is expected to arise. Ms Clarke stated that Mr Hart's circumstances had not changed and in fact, they continued the same way right through from 1995 to 1999.
Further, Ms Clark submitted that Mr Hart had a reasonable excuse for not complying with the notice in that he never received it and therefore could not respond to it. Ms Clark also noted that "It [that is section 68] also says that the person must respond to the extent that they're capable of complying with the notice. Again if he did not receive the notice he could not have complied with it".
Ms Clark further contended that since section 68 contains a serious penalty, it should not be construed in a way that allows the Department to say "well if the notice was sent he should have complied with it even though he didn't receive it". Ms Clark thus urged the Tribunal to strictly interpret this section.
Turning to the relevant sections in the Acts Interpretation Act 1901 and the Evidence Act 1995, Ms Clark submitted that the sum result of those sections is that there is a rebuttable presumption of service documents from the Department. Ms Clark pointed out to the Tribunal that the presumption is rebutted in this case by Mr Hart's evidence that he did not receive the letter dated 4 March 1997.
Ms Clark noted that this has been Mr Hart's evidence since the commencement of this matter. She stated: "When he wrote to the Authorised Review Officer it was clear that he had not received the letter. When he went to the Social Security Appeals Tribunal he said he had not received that letter. When he wrote to this Tribunal he said he had not received that letter".
In evidence adduced on behalf of the Respondent, Mr Slattery submitted lengthy written submissions, which have been taken into evidence as Exhibit R1. In both the written submission and in his oral submissions to the Tribunal, Mr Slattery contended that there are two primary issues before the Tribunal: firstly, is there a debt owed by Mr Hart and secondly, whether or not the debt should be recovered.
Mr Slattery contended that in the Respondent's submission, the notice of 4 March 1997, is critical to the establishment of the debt.   The Respondent accepts the reasons of the SSAT on this point at paragraphs 11 to 14 in their decision. Those paragraphs state:
"The then Department of Social Security sent Mr Hart a letter on 4 March 1997 that required him to inform within fourteen days if his stated combined income of $7,800 per annum was incorrect. It was incorrect, but Mr Hart did not notify. In the tribunal's view there is insufficient evidence to rebut the presumption that Mr Hart received the letter and that the notice was given to him.
Section 68 of the Social Security Act 1991 gives authority to issue notices. It says:
68.(1) The secretary may give a person to whom an age pension is being paid a notice that requires the person to inform the Department if:
(a)       a specified event or change of circumstances occurs; or
(b)the person becomes aware that a specified event or change in circumstances is likely to occur.
68.(2) An event or change of circumstances is not to be specified in a notice under subsection (1) unless the occurrence of the event or change of circumstances might affect the payment of pension.
68.(3) Subject to subsection (3A), a notice under subsection (1);
(a)       must be in writing; and
(b)       may be given personally or by post; and
(c)must specify how the person is to give the information to the Department; and
(d)must specify the period within which the person is to give the information to the Department; and
(e)must specify that the notice is a recipient notification notice given under the Act.
68.(3A) A notice under subsection (1) is not invalid merely because it fails to comply with paragraph (3)(c) or (e).
68.(4) Subject to subsections (4AA), (4AB), the period specified under paragraph (3)(d) must be the period of 14 days after:
(a)the day on which the event or change of circumstances occurs; or
(b)the day on which the person becomes aware that the event or change of circumstances is likely to occur.
The notice contained within the letter sent to Mr Hart on 4 March 1997 conforms with these requirements. Mr Hart was thus given a valid notice with which he was required to comply. Mr Hart had fourteen days within which to comply and, since he did not, breached his obligations on 18 March 1997.
What happens if Mr Hart fails to comply with a notice?
Section 1224.(1) of the Social Security Act 1991 says:
1224.(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient of another person:
(i)made a false statement or a false representation; or
(ii)failed or omitted to comply with a provision of this Act or the 1947 Act:
the amount so paid is a debt due by the recipient to the Commonwealth.
…"
Mr Slattery noted that throughout the relevant period Mr Hart was living at the same address; there is no evidence on the Department's file that the letter was returned unclaimed. Thus, in the Respondent's submission, in accordance with sections 28A and 29 of the Acts Interpretation Act 1901, the notice was given.
Mr Slattery also submitted that based on the oral evidence given by Mr Hart at the hearing, the Tribunal should find that Mr Hart had a generally indifferent recollection of the letters sent to him by the Department and what the letters contained. Thereby there is no evidence that notice was not given.
Further, Mr Slattery submitted that the test is not whether the letter of 4 March 1997, was received nor whether Mr Hart could recall receiving the letter; the test is whether notice was 'given' as required in the legislation.
With respect to the 'deemed receipt' of the 1997 notice, Mr Slattery drew the Tribunal's attention to the High Court decision in Re Fancourt and Mercantile Credits Ltd (1983) 154 CLR 87 to support the Respondent's submission that a notice is deemed to have been given if the notice was not returned undeliverable and there are no other circumstances which suggest that it did not reach its destination.
In addition, the Respondent's written submissions noted that the language of section 28A of the Acts Interpretation Act 1901 speaks of the notice being "given" to the person and not whether it was "received", which is a different concept. The Respondent submitted:
"…
If the Tribunal were to accept that a person is credible when they state they did not receive a particular notice, this is a distinct issue from whether the notice was given to the person. The Tribunal can only accept that a properly addressed and posted letter was not "given" where this has been "proved" pursuant to sub-section 1302A(3). If this cannot be proven, then receipt is deemed. Generally, the respondent submits, this must mean where there is some objective evidence that the relevant notice was not given. The applicant's claim not to have received it is self serving and in the absence of other evidence is not accepted by the respondent" (at paragraph 35 of Exhibit R1).
The Tribunal notes that although Mr Slattery set out in his written submissions the relevance and application of section 1302A of the Act to the present case, he did not seek to expand on those submissions at the hearing. The hearing before the Tribunal therefore proceeded on the basis that the letter of 4 March 1997 is a notice to Mr Hart from the Department and not a letter notifying Mr Hart of a decision of the Department. This does not limit the Tribunal, however, in coming to its own decision.
Returning to the issue of the 1997 notice, Mr Slattery further submitted that: "the respondent has significant doubt about the applicant's claim that he would have questioned the content of the notice of 4 March 1997 if he had recalled receiving it (at paragraph 36).
Mr Slattery contended that once the notice was given to Mr Hart and Mr Hart failed to respond to the notice, requiring him to inform the Department if the figure of $7,800 was incorrect, that it is at that point the debt occurred and Mr Hart thus "caused" the pension to be overpaid from that date.
Mr Slattery referred the Tribunal to the decisions in McAuliffe and Secretary of the Department of Social Security (1992) 28 ALD 609 and Secretary of the Department of Social Security and Greenwood (1992) 26 ALD 554, in order to support his submission that a false statement or a failure to comply with a notice does not need to be the sole cause of the debt in order for liability to arise.
Mr Slattery has outlined the case law on this point in the Respondent's written submissions (Exhibit R1). That document states:
"The Full Federal Court in the case of Re McAuliffe held that a false statement need only be a contributing factor in the decision to make payment of pension. It need not be the primary or dominant cause. While that case dealt with the making of "false statements", the respondent considers that the principle applies equally to establish a liability where a person fails to comply with their notification obligations. The language of section 1224 makes no distinction between the two circumstances.
The Federal Court upheld the department's appeal in the case of Re Greenwood where the court decided that the relevant notice obliged the pensioner, Ms Greenwood, to strictly comply with the requirements of a notice. While the facts of that case were somewhat different to the present matter, the court upheld the principle, established by the subsequent Full Court decision in Re McAuliffe, that the failure to comply with notification obligations need not be the sole or primary cause of the overpayment in order to establish liability. His Honour Justice French writes (at page 564 and following)
Von Doussa J, has observed in Efstratiadis v Commonwealth (1990) 22 FCR 167 at 174 that the 1985 amendment to s140(1) "eliminated the necessity for certain departmental decisions under s140 and also served to emphasise that s140(1) and (2) as amended are "self-operating" in the imposition of "liability". Nevertheless I am satisfied that on the approach taken in Hangan and Hales, which is applicable to the sub-section in its present form, a determination that the necessary conditions in s246(1) have been satisfied and that there is a debt due to the Commonwealth are decisions amenable (sic) to review by the Tribunal.
The law is also in my option (sic), clear that it is sufficient, in order to establish the causal connection posited by s246(1), that the failure or omission relied upon was a contributing cause to the overpayment alleged. In Hangan at 33, Toohey J. said of s140(1), in comments which are applicable to the section in its present form:
"The sub-section does not have two components. Rather there is a composite provision which speaks of an amount being paid in consequence of something. The words "but for" are a corollary of the words "in consequence of" and serve to explain those words."
At p.47 Fitzgerald J. said:
"The phrase introduced by the words "in consequence of" in s140(1) will usually add little, if anything, to the question whether or not the relevant payment would have been made "but for" a failure or omission to comply with a provision of the Act. If that question be answered negatively, the amount paid is not recoverable. If that question be answered affirmatively, it seems to me that it would seldom, if ever, be possible to dispute that the payment was a "consequence of" the failure or omission to comply with a provision of the Act. However, that question is by no means the same as the question whether or not the omission or failure was the cause, or the dominant or effective cause, of an overpayment."
In Director General of Social Services v Hales, Lockhart J. followed Hangan and characterised the proposition for which it is authority in the following terms at p.309:
"…on the proper construction of s140(1) it is not necessary that the failure or omission mentioned therein be the effective cause of the overpayment, that it is sufficient that the failure or omission be a contributory cause, that the relevant payment was made as a consequence of the failure of omission by the pensioner to comply with his obligations … and that the payments would not have been if there had not been such a failure."
Sheppard J. agreed at p.318
Therefore, following the court's decision in Re McAuliffe and Re Greenwood, the respondent submits that the failure of the applicant to comply with his notification obligations contained in the notice dated 4 March 1997 gives rise to a debt under section 1224.
…"
Further, Mr Slattery urged the Tribunal to accept that the issue of possible contributory error has no bearing on the creation of the debt from 4 March 1997 onwards.
Mr Slattery thus submitted that a debt has arisen in the sum of $16,198.50.
The next issue in Mr Slattery's submissions is the question of whether the debt should be recovered from Mr Hart.

Mr Slattery submitted that apart from that part of the debt already attributable to sole administrative error under section 1237A of the Act, section 1237A had no relevance to the part of the debt which arose following 4 March 1997.
Focusing on the issue of waiver in special circumstances, Mr Slattery submitted that all three paragraphs of section 1237AAD must be satisfied in order for the Tribunal to exercise its discretion under that section to waive all or part of the debt; if special circumstances were found to exist.
In relation to subsection 1237AAD(a), Mr Slattery submitted that he is not urging the proposition that Mr Hart "knowingly" failed to comply with his obligations. Mr Slattery thus sought to focus his submissions on subsection 1327AAD(b), which concerns itself with the question of 'special circumstances', which make it desirable to waive the debt.
Mr Slattery submitted that whilst the debt did not arise solely due to administrative error, he did seek to address the issue of "receipt in good faith" as part of his submissions on "special circumstances"----------------------------------------. Mr Slattery submitted that receipt of overpaid pension in good faith should not be the decisive issue. All of the circumstances of the case must be considered.
Mr Slattery submitted that the Tribunal should note that in his evidence to the Tribunal, Mr Hart stated that he did acknowledge that in the letter granting him the pension there was this figure of $7,800.00, which he knew was wrong (albeit he thought that the Department would fix it up). In Mr Slattery's submission this is evidence that Mr Hart was, at least to some extent, "wilfully blind" about the meaning of that letter and in particular in relation to the figure of $7,800.00.
Mr Slattery repeated that he was not seeking to establish that Mr Hart "knowingly" made a false representation or failed to comply with the notices, however, he did seek to question whether Mr Hart truly received the pension in good faith. Mr Slattery contended that Mr Hart was presented with a situation where "he detected there was an error and he chose to do nothing about it… that should be taken into account as putting a question mark over his good faith".
However, Mr Slattery stated that he was not calling Mr Hart's credibility into question.
A further circumstance, which Mr Slattery submitted was relevant in terms of not waiving the debt, is the fact that Mr Hart:
"…was paid $27,163.42 in excess of his entitlement even if the lesser amount of $16,198.50 is the recoverable debt. This is a relevant consideration when considering waiver. While it is accepted that the applicant may be distressed at being asked to repay $16,198.50 he should never have been granted pension in the first place. Therefore, the respondent submits that the applicant has already enjoyed a 'windfall' courtesy of administrative error by the Commonwealth of $10,964.92 to which he had no entitlement, and it is not appropriate to waive any amount of the debt in these circumstances" [at paragraph 58 of Exhibit R1].
Mr Slattery further submitted that whilst he did not wish to dispute the medical evidence which was put to the Tribunal by Mr Hart, it remains the Respondent's contention that there is nothing in that evidence which is significant enough to bear heavily on the question of special circumstances. Mr Slattery submitted that additionally, neither Mr Hart's age nor his financial circumstances amount to special circumstances for the purpose of waiving the debt.
Mr Slattery also conceded that in light of the evidence about the marital situation between Mr and Mrs Hart, recovery is very problematical. Thus, although the Respondent's written statement contended that write off was not appropriate, having heard the evidence, Mr Slattery sought to amend the Respondent's position. Mr Slattery thus submitted that it would not be unreasonable to write off recovery until Mr Hart had an income of his own and his financial position improved.
Lastly, Mr Slattery made the submission that in the alternative, if the Tribunal were to find that the 4 March 1997 notice was not given, the Respondent seeks to rely on the letters sent in 1995 and submits that Mr Hart failed to comply with his obligations under those notices to strictly advise the Department what was happening. Mr Slattery conceded that this is not a strong argument.
In response, Ms Clark reiterated that the 1995 letters have the defect outlined in Vitalone (supra) and that the Department by virtue of the decision of its ARO, has already conceded this point. Ms Clark thereby submitted that the Tribunal should accept that those 1995 letters have no effect at all in terms of Mr Hart's liability.
Ms Clark's final submission was that in the event that the Tribunal did find that Mr Hart owes a debt to the Commonwealth, and having heard his evidence at hearing, it is appropriate to write off the debt until Mr Hart had his own income.
The Tribunal notes that in her written submissions, Ms Clark urges the Tribunal to waive the debt pursuant to section 1237AAD (if a debt is found to exist). The reasons being firstly the extent of administrative error by the Department and secondly, the age and health of the Applicant.
Findings
The Tribunal has reached a decision in this matter taking into account the oral and documentary evidence, the submissions, case law and legislation.
The Tribunal accepts and determines that the Department correctly waived an amount of $10,994.92 which represented an amount of Age Pension paid to Mr Hart solely as a result of administrative error.
The first issue for the Tribunal to determine is whether or not a debt exists in the amount of $16,198.50. Fundamental to a determination in this matter is whether or not a Departmental notice of 4 March 1997, was given to Mr Hart. The Tribunal agrees with Mr Slattery's submission that the test is not whether Mr Hart received the letter but whether, as is required by section 28A of the Acts Interpretation Act 1901, the letter was served on Mr Hart. Considering the facts of this case, the legislation and case law, the Tribunal finds that the notice was served and given to Mr Hart pursuant to section 1302A of the Act. The Tribunal has no evidence that the letter was not correctly addressed nor any other objective information indicating it was not given.
Having determined that the letter of 4 March 1997 was given, the Tribunal notes that this letter required Mr Hart to inform the Department within 14 days, amongst other things, if his income of $7,800.00 was incorrect (T13). Mr Hart did not do so.
The Tribunal turns then to consider whether or not a debt is owed by Mr Hart to the Commonwealth. Section 1224 of the Act provides that an amount overpaid to a person is a debt owed to the Commonwealth in circumstances where a person either made a false representation or failed or omitted to comply with a provision of the Act. Mr Hart's income alone in the 1996/1997 financial year was $29,878.84, thus it is clear that the combined income stated in the letter of 4 March 1997 of $7,800.00 was incorrect. Mr Hart did not inform the Department of this error and hence he failed or omitted to comply with his obligations under the Act to notify the Department of an error, as he was required to do. Hence, the Tribunal determines that a debt is owed to the Commonwealth by Mr Hart pursuant to subsection 1224(1) of the Act.
The Tribunal is satisfied that the quantum of the debt is $16,198.50.
Having determined that Mr Hart owes a debt of $16,198.50 to the Commonwealth arising out of the overpayment of Age Pension paid after 18 March 1997, the Tribunal must now consider the issue of debt recovery.
The Tribunal is satisfied that following Mr Hart's failure to respond to the letter of 4 March 1997, that there was no sole administrative error and accordingly section 1237A of the Act does not apply.
The Tribunal next considers section 1236 of the Act which deals with the power to write off a debt. Mr Hart's financial circumstances are very poor and in view of his problematic marital relationship about which there is no dispute, the Tribunal does not consider that Mrs Hart will be able to assist Mr Hart in repaying the debt, further, Mrs Hart is not responsible for the debt. Write off does not expunge a debt, only defers it. In Mr Hart's circumstances he has at this point virtually no income and little prospect of financial assistance from his wife to meet his social security debt. His health is problematic and the worry of having to make repayments, at this time, is great. In such circumstances and noting Lee v Secretary, Department of Social Security (1996) 68 FCR 491, the Tribunal determines that the debt of $16,198.50 be written off under the provision of section 1236 of the Act.
The Tribunal considers that it is more appropriate to write off the debt than to waive the debt as the Tribunal does not consider that Mr Hart's circumstances are special, having regard to the legislation and case law.
Accordingly for all the reasons set out above, the Tribunal determines pursuant to section 43 of the Administrative Appeals Tribunal Act 1975 that the decision under review should be set aside and in substitution therefor decides that a debt of $16,198.50 owed by Mr Hart to the Commonwealth be written off pursuant to section 1236 of the Act.

I certify that the 111 preceding paragraphs are a true copy of the reasons for the decision herein of Ms SM Bullock,
Senior Member
Signed:         ...........[sgnd]...................................................................
  Rikka Cullen, Associate
Date of Hearing  9 January 2001
Date of Decision  20 March 2001
Representative for the Applicant              Ms S Clark, Solicitor, Welfare Rights Centre, Sydney
Representative for the Respondent        Mr B Slattery, Departmental Advocate