Hong Lu and Sec, Dept. of Families, Housing, Community Services & Indigenous Affairs
[2010] AATA 867
•5 November 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 867
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2009/5590
GENERAL ADMINISTRATIVE DIVISION ) Re Hong Lu Applicant
And
Sec, Dept. of Families, Housing, Community Services & Indigenous Affairs
Respondent
DECISION
Tribunal M D Allen, Senior Member Date5 November 2010
PlaceSydney
Decision The decision under review is SET ASIDE and the Tribunal substitutes its decision, namely that any debt by the Applicant to the Respondent is waived.
..................[sgd].......................
M D Allen, Senior Member
CATCHWORDS
SOCIAL SECURITY – Assurance of Support debt. Whether special circumstances existed justifying waiver. Failure of Centrelink to investigate evidence of fraud by Assuree. Insufficiency of translation and lack of independent advice. Special circumstances exist.
LEGISLATION
Social Security Act (1991) sections 1061ZZGG, 1236, 1237A, 1237AAD, 1237 AAE
CASES
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
REASONS FOR DECISION
5 November 2010 M D Allen, Senior Member 1. By Application made 24 November 2009, the Applicant sought review of a decision by the Social Security Appeals Tribunal (“SSAT”) made 15 October 2009 affirming a prior determination to recover an Assurance of Support (“AoS”) debt incurred in relation to Ms Jing Wang.
2. On 19 December 2006 the Applicant applied to the Centrelink office at Haymarket Sydney to provide an AoS regarding Ms Jing Wang. At that time Ms Wang was a resident of China but had married the Applicant’s cousin, Mr David Zhang.
3. Prior to the Department of Immigration granting a spouse visa to Ms Jing Wang, she was obliged to obtain an AoS. As explained to Ms Wang in a letter dated 27 November 2006 from the Australian Consulate in Shanghai:
“An AoS is a legal commitment made by an assurer or assurers to repay any social security payments paid by the Australian Government to you or members of your family during your first two years in Australia”.
4. In this matter the AoS was provided by the Applicant as Ms Jing Wang’s husband, Mr David Zhang was in receipt of a Social Security benefit, namely, a disability support pension.
5. Section 1061ZZGG of the Social Security Act 1991 (“SSA”) provides:
“(1) This section has effect if:
(a) a person (the assurer ) has given an assurance of support that has been accepted under this Chapter; and
(b) a social security payment is received, by another person who is identified in the assurance, in respect of all or part of the period for which the assurance is in force in respect of the other person; and
(c) the social security payment is specified for the purposes of this section in a determination in force under section 1061ZZGH when the payment is received.
(2) The assurer is liable to pay the Commonwealth the amount of the social security payment.
(3) If the assurance was given by more than one person, all of the persons who gave it are jointly and severally liable to pay the Commonwealth the amount of the social security payment. “
6. Ms Jing Wang entered Australia on 20 March 2007. After six months Ms Jing Wang left the marriage and on 11 January 2008 claimed a Special Benefit from Centrelink.
7. By letter dated 14 April 2008, the Applicant was informed by Centrelink that Ms Jing Wang had claimed and been granted a Special Benefit, which was a recoverable payment under the AoS entered into by him.
8. That letter also informed the Applicant that the sum of $2,885.99 had been paid to Ms Jing Wang. The letter also stated “You must tell us if you are able to support Jing Wang either in full or in part during the Assurance of Support period…”.
9. The Applicant replied to the letter from Centrelink pointing out that Ms Jing Wang had withdrawn cash from the term deposit she had with the ANZ Bank.
10. Centrelink wrote to the Applicant on 15 April 2009 stating that Ms Jing Wang had been paid a total of $15,515.42 during the AoS period and that this amount was due to be repaid to Centrelink by the Applicant by 14 May 2009.
11. In these proceedings the Applicant claimed relief from payment of the debt (which has in fact been paid) on the following grounds, namely:
(a)At the time of applying for Special Benefit, Ms Jing Wang had in her possession the sum of approximately $20,000.
(b)Ms Jing Wang did not leave home because of domestic violence as alleged by her but because she had entered into a new relationship.
(c)Centrelink had failed to contact the Applicant at the time the Special Benefit was granted to Ms Jing Wang so he was unable to state why he would not support her.
(d)At the time he applied to give the AoS he did not fully understand the requirements and obligations due to the failure of the interpreter used.
12. Dealing with the submissions of the Applicant seriatim:
Funds available to Assuree
13. The Applicant notified Centrelink as early as April 2008 that Ms Jing Wang had access to funds. This information was initially acted upon by Centrelink.
14. On 6 November 2008 a notice pursuant to section 192 of the Social Security (Administration) Act 1999 was sent by the ANZ Bank to Centrelink. That notice revealed that on 3 December 2007 Ms Jing Wang had withdrawn an amount of $20,531.75 from a term deposit at that bank. Exhibit A2 also refers to that withdrawal nominating the Bankstown Branch of the ANZ Bank as the branch where the term deposit was held.
15. On 16 September 2008 an Authorised Review Officer (“ARO”) of Centrelink made a referral of this matter to Centrelink’s Serious Fraud Section. In that memorandum the ARO states:
“The assurer alleges she had much more money than she told Centrelink about when she claimed Spec Benefit. The ANZ Statement for account (of which I have a copy!) in the assuree’s name, shows that $20,500 was withdrawn a month before she claimed Special Benefit, and casts doubt on the hardship grounds on which her Special Benefit claim was granted. If we’d know (sic) about this, then she wouldn’t have been eligible under the Long Term Funds test for SpB. If she is the sole signatory for this account and she is the person who withdrew the funds – then the AoS debt would be “transferred” from the assurer to Ms Wang.”
16. A Mr Kevin Bola closed the investigation on 28 July 2009 stating:
“I have not been able to identify a ‘paper trail’ providing evidence of an undisclosed income or undisclosed assets. While allegations may be true there is no evidence to support the allegations at this stage”.
17. The above statement is totally absurd and indefensible. Centrelink had clear documentation from the ANZ Bank Ltd of Ms Jing Wang withdrawing the sum of $20,531.75. In its amended Statement of Facts and Contentions, the Respondent acknowledges that at no time has Ms Jing Wang been interviewed regarding the ANZ Bank term deposit or regarding any other income obtained by her.
18. As to the reference of a “paper trail” I do not understand what is meant by this. If monies were withdrawn from an account they could have been kept anywhere, but certainly there existed the notice from the ANZ Bank Ltd as to the withdrawal.
19. I regard the failure of Centrelink to investigate this matter properly as amounting to misfeasance.
20. Whereas I accept the submission by the Respondent that the primary liability pursuant to the AoS still lies with the Applicant and he would be released from that liability only if recovery of some or all of the Special Benefit improperly paid was obtained from Ms Jing Wang, I regard it as incumbent upon Centrelink when evidence of fraud is presented to it to take all necessary steps to investigate that fraud and ensure that liability for monies improperly received is vested in the person responsible and not merely to rely upon an assurer to meet the debt. The actions of Centrelink are akin to a creditor seeking to realise against a guarantor without first making a demand upon the principal debtor.
False Allegations of Domestic Violence
21. At the time the assuree made a claim for Special Benefits her claims of domestic violence were supported by a social worker. I note however that two applications for an Apprehended Violence Order (“AVO”) were refused by a Local Court Magistrate. A third application was apparently granted which allowed the assuree to make a claim to the Department of Immigration and Ethnic Affairs that her spouse visa should not be cancelled. Although the Applicant stated that this third AVO had been rescinded the assuree’s visa remains extant.
22. In my opinion officers of Centrelink are not required to conduct investigations and decide competing claims as to whether domestic violence took place or not. In the absence of competing evidence Centrelink is entitled to act on the material placed before it in support of an application. In this matter the report of a social worker was obtained by Centrelink, which report supported the assuree’s claims. It was entirely proper for Centrelink to act on that material.
Failure to Contact the Applicant
23. I am confused as to the facts in relation to this claim by the Applicant.
24. Annexure I to Exhibit R3, the Respondent’s Further Statement of Facts and Contentions, is a Centrelink Social Work Report. In that report it is stated:
“From my observation and assessment, I recommend contact with the Assurers of Support be delayed for 3 months allowing Mrs (sic) Wang time to come to terms with the separation and her fears of repercussion from Mr Zhang or other family or friends that could result in with the Assurers of Support being contacted…”
25. The above report is dated 22 January 2008. T9 in the documents prepared for the Tribunal pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 is a copy of a letter dated 29 January 2008 addressed to the Applicant. There is no evidence that that letter was ever sent to the Applicant. The Applicant’s letter of 25 April 2008 to Centrelink indicates that the first notification which he received of the grant of Special Benefit was by Centrelink’s letter of 14 April 2008. This date is consistent with the recommendation by the social worker that the Applicant not be notified of the grant of Special Benefits until three months had elapsed.
26. The delay of three months is consistent with the extract from the Online Social Security Guide tendered by the Applicant. That document reads in part:
“In cases where advising the assurer could have a negative impact on the assuree, the Centrelink customer service adviser must liaise closely with Centrelink social workers to ensure that the assuree is not put at risk. Example: The Centrelink social worker considers that contacting the assurer in a domestic violence case will place the assuree at significant risk of harm, Centrelink may defer contacting the assurer until the social worker assesses that the risk of harm is sufficiently diminished. This would generally be no longer than 3 months after recoverable social security payments are granted. The assurer remains liable to repay any AoS debt accrued during this time.”
27. I am therefore satisfied that the Applicant did not know of Ms Jing Wang’s application for Special Benefits until notified by letter dated 14 April 2008.
28. Notwithstanding the late notification to the Applicant, I cannot see how that fact in any way altered his liability under the AoS.
Applicant’s understanding of his liability
29. When the Applicant applied to be accepted to give an AoS in respect of Ms Jing Wang, he was not accompanied by a qualified interpreter.
30. In a form which is reproduced at Document T5 the Applicant has placed a tick in the “yes” box to the question “Do you need an interpreter when dealing with Centrelink?” He disclosed that his preferred language was Mandarin.
31. The document goes on to state that Mr David Zhang, that is to say Ms Jing Wang’s husband, helped him complete the form.
32. As I understand the evidence, the Applicant was interviewed at Centrelink and Mr David Zhang acted as the interpreter. A declaration by Mr David Zhang states that he has fully explained the obligations required to the Applicant and that he fully understood his responsibility and potential liability. More importantly Mr Zhang stated that he had explained to the Applicant that the AoS could not be cancelled or withdrawn at any time during the two year AoS period.
33. Having heard Mr Zhang make submissions to me through an interpreter I am satisfied that his grasp of English is rudimentary at best. I have grave doubts regarding his ability to fully explain to the Applicant the total extent of his liabilities under the AoS.
34. The Centrelink document signed by the Applicant, and allegedly explained to him by Mr Zhang, reads:
“I understand that:
§I am required to provide sufficient direct or indirect financial assistance to the person(s) listed in the Application to provide an Assurance of Support that I have signed to ensure that they will not rely on Centrelink payments.
§I am required to repay to the Australian Government the full amount of any Centrelink payments that are affected by an Assurance of Support paid to any person(s) listed in the Application to provide an Assurance of Support that I have signed.
§New payments may be included on the list of Assurance of Support affected payments at any time and that I may also be required to repay any amounts of these made to the person(s) listed in the Application to provide an Assurance of Support
§Centrelink may use its debt recovery powers under the Social Security Act 1991, including action that may be taken against me in a court, to recover from me any debt to the Australian Government that arises as a result of me giving this Assurance of Support.
§The Assurance of Support remains in force for a period of 2 years for all visa subclasses, except subclasses 143 and 864, for which the period is 10 years. This period begins on the day the person(s) for whom I have given the Assurance of Support arrive(s) in Australia or is granted the visa for which the Assurance of Support was required, whichever happens later.
§Once the person(s) for whom I have given an Assurance of Support is/are granted the visa to which the Assurance of Support applies, the Assurance of Support cannot be withdrawn or cancelled; and that my responsibilities as an Assurer will remain in place for the full period of the Assurance of Support, regardless of any changes in circumstances, including my death, or a breakdown in the relationship between myself and any persons(s) for whom I have given an Assurance of Support.”
35. As stated I have grave doubts as to Mr Zhang’s ability to fully explain the concepts detailed above to the Applicant.
36. Cross examined in these proceedings the Applicant did state that he understood that if Ms Jing Wang had no food or money he had to support her. This understanding is not commensurate with an understanding that if the assuree sought a social security benefit from the Commonwealth he would be liable for the cost of that benefit.
37. Another matter which concerns me is that Mr Zhang was permitted to act as the translator for the Applicant. It is quite obvious that Mr Zhang had a real interest in the Applicant being accepted as the assurer. He may have translated the document to the best of his ability or he could have simply spoken in generalised concepts without the Applicant being fully aware of his liabilities.
38. The obligations accepted by the assurer under AoS are onerous and there have been many cases before the Tribunal where assurers have sought to be relieved of their obligations. Notwithstanding the serious commitment entered into by assurers, Centrelink does not require them to obtain independent legal advice.
39. The present case is a perfect illustration of why independent advice is necessary. The Applicant is not literate in the English language. The documents were allegedly interpreted to him by a person with poor English skills but more importantly, who had a specific interest in the Applicant being accepted as a person who had given an AoS.
40. The attitude taken by Centrelink is in direct contrast to more recent attitudes not only by the Courts but also by State legislatures as to guarantees (of which the AoS is a species). For example, section 9 of the Contracts Review Act 1980 (NSW) reads inter alia:
“(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of:
(a) compliance with any or all of the provisions of the contract, or
(b) non-compliance with, or contravention of, any or all of the provisions of the contract.
(2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following:
…(h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,
(i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect, …”
It would seem that if the Contracts Review Act were applied to the current matter, the Applicant’s AoS would be regarded as unjust and suitable relief given.
41. The above discussion is unfortunately academic as Ss 1237AAE(2) SSA reads:
“The Secretary may waive under section 1237AAD the right to recover all or part of the debt only if the Secretary is satisfied that the waiver is justified on grounds other than one or more of the assurers being unaware of the effect of section 1061ZZGG, or of regulations made under the Migration Act 1958 , in connection with the assurance.”
42. Although Ss 1237AAE(2) refers to the provisions of section 1061ZZGG SSA, it does not refer to provisions such as the inability of the assurer to cancel or withdraw the AoS, nor does it refer to the full provisions of the undertaking given by the assurer as set out in document T5. Similarly it is silent as to the effect of inadequate translation.
Relief Available
43. As the Applicant has paid the sum of $15,515.42 to Centrelink there is no basis upon which to write off the debt pursuant to section 1236 SSA.
44. Section 1237A SSA refers to waiver of a debt due to administrative error. There is no evidence before me of administrative error as opposed to negligence in failing to investigate.
45. Section 1237AAD SSA states:
“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, the Administration 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.”
46. Presently, although there is evidence that Ms Jing Wang withdrew some $20,531.75 from a fixed deposit shortly before applying for Special Benefits there is no conclusive evidence of fraud in the absence of her being interviewed or some other evidence adduced. Even if it were proved she had acted fraudulently it would not assist the Applicant as section 1237AAD SSA states waiver is not possible if “(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;…” (tribunals emphasis).
As commented upon in previous matters before this Tribunal, the wording of s1237AAD SSA paragraph (a) can have unfortunate consequences for innocent victims of fraud, a situation obviously not contemplated by the legislature.
47. The test of what constitutes special circumstances has been set out in many cases before both the Federal Court and this Tribunal. Suffice it to say that for special circumstances to exist there must be something that takes this case out of the ordinary or usual. As pointed out in Groth v Secretary, Department of Social Security (1995) 40 ALD 541,
“It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
48. In my view special circumstance do exist in this matter. Firstly, although I accept the Applicant knew that he had to support Ms Jing Wang if she had no food or money, I am satisfied he did not understand the full extent of his obligations and that the agreement he entered into was not necessarily translated accurately to him, nor did he have independent advice in circumstances where the would-be interpreter was the direct beneficiary of the AoS.
49. Furthermore, I regard the actions of Centrelink in not investigating the withdrawal by Ms Jing Wang of the sum of $20,531.75 immediately prior to applying for Special Benefits to be unfair and unjust as regards the Applicant. It may well be that following proper investigation all or part of the benefit paid could have been recovered from the assuree.
50. As stated, I believe that special circumstances do exist and the decision under review is therefore set aside and the Tribunal substitutes its decision, namely that any debt by the Applicant to the Respondent is waived.
I certify that the 50 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member M D Allen.
Signed: ............[sgd]...........................
K. Lynch, AssociateDates of Hearing 2 June 2010 & 21 October 2010
Date of Decision 5 November 2010
Representative for the Applicant Self
Solicitor for the Respondent Australian Government Solicitor.
4
0
0