Hercules and Repatriation Commission

[2006] AATA 583

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 583

ADMINISTRATIVE APPEALS TRIBUNAL          № V2005/1048

GENERAL ADMINISTRATIVE DIVISION

Re:           RAYMOND ARTHUR HERCULES

Applicant

And:           REPATRIATION COMMISSION

Respondent

DECISION

Tribunal:       Miss E.A. Shanahan, Member

Date:23 June 2006

Place:Melbourne

Decision:The Tribunal affirms the decision under review.

(sgd) E.A. Shanahan

Member

CATCHWORDS – Veterans’ Affairs - service pension - reduction in service pension following revaluation of assets

Veteran’s Entitlement Act 1986   s 36N

REASONS FOR DECISION

23 June 2006   Miss E.A. Shanahan, Member

1.      This is an application for review of a decision of a delegate of the Repatriation Commission (the respondent) dated 9 July 2005 The respondent decided that a value of $155,000 should be attributed to that part of Mr Hercules’ property in McMahons Creek which was in excess of the house and curtilage for the purpose of the assets test and Mr Hercules’ service pension should be reduced in accordance with the valuation.  Mr Hercules objected in writing to this valuation and on the 19 September 2005 a senior delegate of the respondent set aside that decision and instead decided that a value of $145,000 should be attributed to that part of Mr Hercules’ property in excess of the house and curtilage for the purpose of the assets test.  On the 17 November 2005 Mr Hercules applied for a review to the Administrative Appeals Tribunal.

2. Mr Hercules, who is now aged 83 and severely limited in his physical abilities, was not able to attend the hearing but gave evidence by telephone. He was self‑represented. Mr Robert Douglas, an advocate with the Department of Veterans’ Affairs, represented the respondent. The Tribunal had before it the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the T documents, Exhibit R1). The Respondent tendered the following exhibits:

·Exhibit R2       Property Evaluation performed by Mr Ian Flynn, dated 20 March 2006

·Exhibit R3       Rate Calculator, Schedule 6

3.      Mr Hercules contended that a value of $101,000 should be attributed to that part of his property in excess of the house and curtilage for the purpose of the assets test, as previously valued.

BACKGROUND TO THE APPLICATION

4.      Mr Hercules has lived on the property at McMahons Creek for more than 20 years and originally farmed the 12.6 hectares.  He has not actively farmed for some years given his age and poor health.  He lives alone and has no close relatives, his wife, his mother and his only daughter having died some years previously.

5.      The property at 1780 Woods Point Road, McMahons Creek was valued by a Mr Ian Flynn, a Senior Valuer of the Australian Valuation Office (AVO), on the 2 February 2005 and is contained in a report dated 8 September 2005. Mr Flynn reviewed his valuation on the 17 November 2005 and confirmed it in a report dated 20 March 2006.  Mr Flynn’s initial valuation for the whole property was $410,000 with $265,000 for the house and curtilage.  The zoning of the property allows for the development of rural/residential, agricultural and hobby farm uses.  The minimum subdivision area in this zoning is 12 hectares. (T documents page 21).  This valuation was based on a comparison of five properties in the immediate region of McMahons Creek.  Mr Hercules had had his property on the market for a period of 12 months. On the 20 March 2006 Mr Peter Farrelly, sales representative with Bell Real Estate in Woori Yallock informed the AVO that Mr Hercules had signed a contract of sale for the entire property for $450,000, the sale being conditional upon the prospective purchaser  selling his own house.  The sale of the property had not yet been completed because of disagreement between the seller and purchaser regarding some farm equipment. However, Mr Hercules was hopeful that the sale would be completed.  Mr Hercules indicated that the farm equipment was extremely old and barely functional. For example, the tractor was 30 to 40 years old, the weed slasher 8 years old and the lawn mower was no longer working.  In the AVO valuation of the property, $1000 had been allowed for the value of the machinery. 

6.      In his evidence before the Tribunal, Mr Hercules advised that he had purchased a half share in an 8 acre property at Alexandria and intended to shift to this site once his McMahons Creek property sale was completed.  He had used his savings and a refund of $9785 from a cashed in burial fund insurance scheme to purchase the half share in the Alexandria property.

7.      Mr Douglas advised that the recent purchase of this half share of property in Alexandria was the subject of further investigation by the Repatriation Commission.

8.      The issue before the Tribunal is whether Mr Hercules’ property at 1780 Woods Point Road, McMahons Creek has been correctly valued by the respondent.

EVIDENCE BEFORE THE TRIBUNAL

9.      Mr Hercules gave evidence confirming that his property has not yet been sold, is still on the market and hopefully the original contract of sale will be completed as some areas of disagreement have been resolved.  Mr Hercules disputed that the equipment on his property was worth $1000.

DOCUMENTARY EVIDENCE BEFORE THE TRIBUNAL

VALUATION REPORT

10.     There are two valuation reports before the Tribunal prepared by Mr Flynn of the Australian Valuation Office Melbourne on behalf of the respondent.  The first one is contained in the T Documents (Exhibit R1) and dated 8 September 2005.  The second one is dated 20 March 2006 (Exhibit R2) and is an attachment to the respondents Statement of Facts and Contentions.  While the contents of the reports are detailed, the conclusions are summarised above.

RATE CALCULATOR

11.     The Tribunal was provided with the Rate Calculator contained in Schedule 6 and in accordance with s 36 of the Veterans’ Entitlement Act 1986  (the Act).  (Exhibit R3).   Based on the Rate Calculator, Mr Hercules service pension has been reduced from $189.05 to $24.05 per fortnight.  His 100% disability pension remains at $300 per fortnight.  These calculations are effective from the 19 July 2005.

LEGISLATION – SECTION 36N OF THE ACT

SUBMISSIONS

12.     Mr Douglas for the respondent submitted that the valuations of Mr Hercules’ property in McMahon Creek were accurate and were in fact less than the consideration in the contract of sale which has not yet been completed.

13.     Mr Hercules contended that the value of the land extra to his house and curtilage should remain at the $101,000 that it was valued at in June 2004. (T documents page 2)

TRIBUNAL DELIBERATIONS

14.     The Tribunal is satisfied that the valuation of $410,000 for Mr Hercules’ property at McMahons Creek is an accurate figure.  The Tribunal is also satisfied that the valuation of $145,000 for the land extra to his house and curtilage is an accurate figure based on the current prices in the area.  These valuations are more recent and carry grater authority than the valuation relied upon by Mr Hercules.  The Tribunal therefore accepts these valuations. In addition, while not yet completed, a contract of sale exists for a sum of $450,000 which Mr Hercules hopes will be finalised when some disagreements regarding machinery are resolved.

15.     The Tribunal affirms the decision under review.

I certify that the fifteen (15) preceding paragraphs are a true copy of the reasons for the decision of:  

Miss E.A. Shanahan, Member

(sgd)       Catherine Lake

Clerk

Date of Hearing:  22 May 2006

Date of Decision:  23 June 2006
Advocate for the applicant:          NIL – Self-represented
Advocate for the respondent:       Mr R. Douglass, Veterans’ Advocacy Branch