Joss; Secretary, Department of Employment and Workplace Relations
[2006] AATA 24
•13 January 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 24
ADMINISTRATIVE APPEALS TRIBUNAL )
) N2004/121
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS Applicant
And
GRANT FLETCHER JOSS
Respondent
DECISION
Tribunal Ms Robin Hunt, Senior Member Date13 January 2006
PlaceSydney
Decision The Tribunal affirms the decision under review.
[Sgd] Ms Robin Hunt, Senior Member
catchwords
SOCIAL SECURITY - Secretary claiming overpayment - Newstart allowance – allowance continuing throughout part time occupation on boat – received reimbursement for expenses connected with boat – meaning of “unemployed” – effect of financial settlement reached with boat owner – insufficient evidence of settlement compensating for employment occurring during period of receipt of allowance - decision affirmed
Social Security Act 1991, ss 8 and 593
Re Howie and Secretary, Department of Social Security (1985) 8 ALN 174
Re Secretary, Department of Family & Community Services and Metin Sahin [2001] AATA 732
McAuliffe v Secretary, Department of Social Security (1991) 23 ALD 284
Re Te Velde and Director-General of Social Services (1981) 3 ALN 111
Re Brabenec and Director-General of Social Services (1981) 3 ALN N63
Clear v Smith [1981] 1 WLR 399
Re McKenna and Director-General of Social Services (1981) 3 ALD 219
Director-General of Social Services v Thomson (1981) 38 ALR 624
Re Malaj and Secretary, Department of Social Security (1988) 15 ALD 333
Re Vavaris and Director-General of Social Security (1982) 5 ALN N16
REASONS FOR DECISION
13 January 2006 Robin Hunt, Senior Member summary
1. The Secretary of the Department of Workplace and Community Services (“the Secretary”) is seeking review by this Tribunal of a decision of the Social Security Appeals Tribunal (“SSAT”) that Mr Joss owes no debt for overpayment of Newstart allowance from 24 July 1997 to 22 January 1998.
2. Mr Joss commenced receiving Jobsearch allowance, a precursor to Newstart allowance, on 12 November 1993. He then went on to receive Newstart allowance from 5 December 1995. Because of health problems and physical disabilities, Mr Joss was entitled to income support provided he was unemployed. He was not required to look for work because of his disabilities. In the meantime, Mr Joss undertook certain activities which gave rise to the present dispute.
3. It was not until 30 May 2001 that Centrelink decided that Mr Joss had been overpaid the allowance and hence owed a recoverable debt. The SSAT reviewed this decision and overturned, finding in Mr Joss’s favour. The SSAT accepted his evidence that he had been unemployed throughout the period. Mr Joss admits he travelled interstate to help select a boat for purchase by the person who paid his expenses. He also admits he spent some time organising repairs to the boat and received some repayment of expenses in connection with these activities. I have found there is insufficient evidence before me to conclude that Mr Joss was not unemployed when the applicant alleges. It follows that I have affirmed the decision of the Social Security Appeals Tribunal. My reasons are set out below.
issue
4. The issue for the Tribunal is whether Mr Joss owes a debt of $5278.80 for the period 24 July 1997 to 27 January 1998. In order to decide this, the Tribunal must determine whether or not Mr Joss was unemployed during the relevant period. If he was employed, he will have a debt to the Commonwealth for overpayment of the Newstart allowance. If a debt is owed, the Tribunal will consider any grounds why the debt should not be recovered.
secretary’s submissions
5. The Secretary submits that the decision under review should be set aside and a decision substituted that:
·Mr Joss was not unemployed after mid-September 1997;
·Mr Joss ceased to qualify for Newstart allowance from that time;
·Mr Joss incurred a debt of $2,636.30 to the Commonwealth in respect of Newstart allowance paid to him for the period 1 October 1997 to 22 January 1998;
·There are no special circumstances in which the debt should be waived; and
·The debt may be recovered by withholdings or instalments at rates commensurate with Mr Joss’s circumstances from time to time.
background and analysis of evidence
6. Section 593 of the Social Security Act 1991 (the Act) requires that, for a person to qualify for Newstart allowance, he must satisfy the Secretary that he is unemployed for the period. Mr Joss denies that he was productively employed during the relevant period as he was incapable of much activity. He had numerous health issues. He says he was on crutches and was awaiting hip replacement surgery. The Secretary does not dispute that Mr Joss suffered health problems; this was why Mr Joss was granted the allowance in the first place. There is also no dispute that Mr Joss underwent surgery. He told the Tribunal that he spent much time away in surgery and in getting treatment and was unable to work during these times as well as being generally restricted by his condition.
7. The dispute arose when the Secretary learned Mr Joss had commenced proceedings in the Industrial Relations Commission of NSW against Hirena Pty Limited and Mr Gerhart Steenbuck for relief under section 106 of the Industrial Relations Act 1996 (NSW). Copies of Mr Joss’s applications to the court and affidavits by the parties are before the Tribunal. These show that Mr Joss sought a declaration or order that the contract entered into between him and the defendants on or about December 1996 was an unfair contract. Mr Joss, among various claims, sought an order that he be paid an hourly rate of $40 per hour for the number of hours he had worked under the contract between 1 December 1996 and 2 January 1999. Alternatively, Mr Joss sought an order that the contract or arrangement be varied to issue him 50 per cent share in the ownership of the vessel known as the “MV Zane Grey” (the boat). Another option which Mr Joss sought was that he be paid a salary of $2,000 per week from 14 August 1997 to 2 January 1999.
8. The Secretary argued that the claims made in the court proceedings indicated Mr Joss had not been unemployed since 1 December 1996. The Secretary originally contended that Mr Joss was not unemployed as he was accruing a legal entitlement to monies or income. However, the Secretary withdrew that claim and persisted only with the claim that Mr Joss was not entitled to payment of the allowance while he was not “unemployed”.
9. Mr Joss admitted he spent a lot of time on the Zane Grey preparing it for survey. He said he had marine qualifications which equipped him to do this and he went to the boat every day over a lengthy period working out what was needed to prepare the boat for survey. He said he spent time in the boat’s office ringing people to discuss getting things fixed. He denied receiving any wages for this activity but gave evidence that he had received money for expenses. He incurred expenses by making many telephone calls from his mobile phone from the boat. He also needed petrol money for driving his vehicle to and from the boat.
10. Mr Joss said he had a contractual arrangement with a Mr Steenbuck concerning the boat. His understanding was that Mr Steenbuck would supply funds and Mr Joss would get the boat ready for survey. They would then share the boat in partnership. Mr Joss said he did nothing until around the middle of April when he spoke to Mr Steenbuck in hospital. Mr Steenbuck had asked him to look at boats as not all were suitable for their plans. They went to Hamilton Island and also to Western Australia where they saw the boat that Mr Steenbuck, or his company, purchased. They then arranged to bring it back to Sydney. Mr Joss said he was not paid anything over that period and did not expect to be paid, at least not there and then. Somewhere down the line, he expected to receive 50 per cent.
11. The boat came to Sydney by road and was damaged on the way. Mr Joss looked at the boat and listed the damage. He also had observed some things that needed attention when he saw the boat in W.A. He had already discussed with a broker certain repairs to be done before the boat came to Sydney. These repairs included fixing a leaking exhaust system. The leak was fixed but other repairs had not been attended to before reaching Sydney. Mr Joss said he arranged for repairs in Sydney sometime around the middle of August. He then worked on the boat or in the office on board the boat sourcing equipment, except when he had his hernia and hip operations.
12. Mr Joss told the Tribunal that he did receive a large sum of money in settlement of his claim before the Industrial Relations Commission of NSW. At the time of the SSAT decision, he had not yet received any payment. He agreed that he had instituted his claim on 2 January 1999 when he and Mr Steenbuck had parted company. He had contacted his solicitor and asked him to commence action. He had amended the summons in 2004. The arrangement with Mr Steenbuck had operated from 1996 and finished in December 1998. However, he had officially started to receive wages on 28 January 1998. He had advised Centrelink around that time that he was no longer entitled to disability support pension. Mr Joss said he believed he was entitled to the allowance until he had recovered and was able to work properly in early 1998.
13. Mr Steenbuck was summonsed by the Secretary and gave evidence concerning the arrangements with Mr Joss. Mr Steenbuck told the Tribunal that he was the manager of a small charter boat company and had employed Mr Joss towards the end of 1996. He said that his employment became a major job in 1997 when they purchased the boat and it was damaged in an accident. He gave evidence that “Jimmy Appleton” won the repair contract and Mr Joss started to “work for Mr Appleton” in 1997 before he started as his employee later in 1997. He referred in evidence to Mr Appleton’s involvement early in 1997. He told the Tribunal that he had also given Mr Joss previous work doing minor things “in the factory”. Several years before, he said they had salvaged another vessel’s keel in Watson’s Bay. Mr Steenbuck could not recall the exact date when the keel needed to have work done on it. He also was not able to be precise about when Mr Joss started to work on the boat as his employee. Mr Steenbuck could not recall how long the boat was with Appleton Marine. He thought it was approximately six weeks and that Mr Joss started to work on the boat after that period.
14. Mr Steenbuck gave evidence that he paid Mr Joss a petrol allowance. Mr Steenbuck was shown documents headed “Wage Salary Sheet for each Employee”. These sheets formed part of the Tribunal documents and referred to Mr Joss. The sheets detailed payments to Mr Joss from 6 February 1998 onwards. Mr Steenbuck could not recall seeing these documents previously but told the Tribunal that they looked as though they came from his office.
15. When asked whether Mr Joss had informed him that he was no longer unfit for work and that his disability support pension had ceased on 21 January 1998, Mr Steenbuck said it was possible and that he was very surprised. When Mr Steenbuck was asked if he might be confused about receiving government assistance to employ Mr Joss, Mr Steenbuck thought that Mr Joss must have informed him that his company could get some government assistance for employing him because they were in fact getting some government assistance. When asked again if Mr Joss told him when he was no longer unfit, Mr Steenbuck said Mr Joss had received wages before the date 22 January 1998.
16. When Mr Steenbuck was asked whether his bookkeeper kept a full and accurate record of all payments made to employees, Mr Steenbuck answered to the effect that he presumed so as that was his job. When asked about the accuracy of the records before the Tribunal showing Mr Joss’s wages paid from 6 February 1998, comprising a net amount of $350 less tax of $80, Mr Steenbuck said again that he assumed this was correct as he paid an accountant to keep records. Mr Steenbuck further gave evidence that he had been in business since around 1980, had complied with tax requirements to the best of his knowledge and that he kept accurate records. He told the Tribunal he had made cash payments to Mr Joss. He said he made some extra cash payments which were about $150 per week before the boat went into survey. He had later paid outstanding tax. He said that Mr Joss had specifically asked him to pay cash as he had a problem with his need for hip replacements. The original payments were for picking up from Appleton Marine until the boat went into survey. There was a period of intense work to get the boat into survey after seven or nine months. Both the early payments of $150 and the later payments of $350 were made in cash. They had recorded the petrol payments on petty cash sheets. He paid Mr Joss $150 for petrol on top of the $350 wage payments.
consideration and findings
17. Mr Joss did receive a substantial amount of money by way of settlement through the Industrial Relations Commission NSW proceedings. This might give rise to an inference that Mr Joss was employed or self-employed as a partner in a venture in a similar way to claims made in his court pleadings. A copy of the court order before the Tribunal shows that the proceedings were dismissed with no order as to costs and that the defendants in those proceedings, Mr Steenbuck and his company, agreed to pay to Mr Joss the sum of $75,000 in two instalments. The orders do not specify how this figure was arrived at or whether it covered any particular period or any particular arrangement between Mr Joss and Mr Steenbuck and his company. The settlement terms reproduced in the orders do not disclose whether any of the claims made by Mr Joss were admitted or agreed by the defendants. The orders do not disclose any admission of liability. The orders are therefore no basis for reaching any conclusion as to the reasons why Mr Steenbuck and/or his company agreed to compensate Mr Joss. In addition, Mr Steenbuck has not given evidence to the Tribunal as to which of the claims, if any, led him to agree to the terms. He has told the Tribunal that he employed Mr Joss and paid him wages throughout the period of concern to the Secretary but has produced no substantiation of these payments occurring until after Mr Joss declared to the Secretary that he no longer qualified for assistance.
18. Mr Joss told the Tribunal that he was involved in the selection of the boat called the “Zane Grey” and in preparing the boat for survey. He denied that he was paid wages or that he was employed during the period the Secretary suspects he was overpaid Newstart allowance. Mr Joss said that he was finding something to do while he was unable to look for work due to his problems with his hips and hernia. He did not consider he was employed and had not sought wages until he was ready for real work but had received reimbursement for telephone calls made on his own phone and for petrol which he used in driving to and from the boat and activities connected with the boat project.
19. The Secretary contends that the $75,000 paid in two instalments pursuant to the settlement before the Industrial Relations Commission NSW, were amounts paid to Mr Joss for his employment or self-employment during the relevant period. The employer’s records, however, show that Mr Joss was paid wages only after the time that the Secretary claims Mr Joss was overpaid. The employer’s records show payment of wages from February 1998 only.
Did Mr Joss qualify for newstart allowance?
20. Section 539 of the Act sets out requirements for a person to qualify for Newstart allowance. The section provides that a person qualifies if, among other things, he satisfies the Secretary that he is unemployed for the period. The relevant period in this matter is 24 July 1997 to 22 January 1998. On the evidence before me, which includes wage records kept by Mr Steenbuck’s bookkeeper or accountant, Mr Joss received wages only after the period in question. Other evidence that he was employed for the relevant period by the Secretary is based on statements made in connection with the claim in the Industrial Relations Commission. I note that the claims made are not proved and that the terms of settlement reached between the parties are non-specific and make no admission as to the claims made. While Mr Joss admits that he did perform some services and provide some expertise towards preparing the boat for survey, he denies that this affected his unemployment status.
21. In order to determine whether he was unemployed and continued to be entitled to his allowance, I have looked at case law on the meaning of “unemployed”. In McAuliffe v Secretary, Department of Social Security (1991) 23 ALD 284, Von Dusa J of the Federal Court considered a number of cases on the meaning of “unemployed” and stated at page 292 that the question of whether the appellant was “unemployed” during the whole or part of the period when benefit was paid was essentially a question of fact and degree. McAuliffe was a case where the person was engaged in obtaining agents’ commission in real estate. His bank records indicated he obtained funds which were declared in his tax return and revealed a profit and loss account for building and construction with an income of $78,176 and outgoings of $83,542. He claimed that he was engaging in this activity for a friend. Mr McAuliffe’s claims were not consistent with the documentary evidence and the Court found that he was not unemployed. By comparison, in the matter before me, there are no large amounts of money passing through Mr Joss’s bank account during the time he received the allowance. There are no records to show that he was paid large amounts of money during the period in question.
22. The Secretary has suggested Mr Joss may have been self-employed throughout the period. This would not prevent him from being regarded as unemployed. For example, in Re Te Velde and Director-General of Social Services (1981) 3 ALN 111, Senior Member Hall said:
“A person might be self-employed whether or not engaging in fulltime activities intended to earn him a living but which, despite his diligent efforts, failed to do so.”
23. Senior Member Hall in Re Te Velde referred to Re Brabenec and Director-General of Social Services (1981) 3 ALN N63, which involved a self-employed miner. Mr Brabenec was unsuccessfully engaged in full time prospecting for opals, but this did not prevent him from being employed. The Tribunal also referred to the case of Clear v Smith [1981] 1 WLR 399 where the court decided that activity which is ineffective in producing a livelihood might still qualify as work.
24. I think that there is a possibility that Mr Joss was self-employed if his legitimate expectation was that he would receive 50% of an enterprise connected with the boat. On the other hand, Mr Steenbuck gave conflicting evidence about the position and told the Tribunal that he employed Mr Joss in 1997 onwards and paid him wages. Mr Steenbuck did not give evidence that Mr Joss was his partner. Also, Mr Joss was not the owner of the boat that he was working on. Then again, the accounts before the Tribunal suggest that Mr Joss was not paid wages. There is stronger evidence that Mr Steenbuck reimbursed Mr Joss for expenses as both Mr Joss and Mr Steenbuck gave evidence to this effect. There is no evidence one way or the other whether Mr Joss actually achieved any income over the period in question when investigating or preparing the boat for survey. He says that he started to earn an income from these activities early in 1998 and not at the time of the alleged overpayment. Nevertheless, I take the point illustrated in Re Brabenec and in Clear v Smith that earning income is not the determining factor in employment. It is not clear that Mr Joss was either employed or self-employed. Mr Joss’s evidence suggests that he might have been self-employed whereas Mr Steenbuck says he was employed. There is before me no conclusive evidence one way or the other. The settlement orders might have resulted from either of these situations or from expectations and the work that Mr Joss admits to after he had ceased to receive the allowance.
25. I take note of cases such as Re Howie and Secretary, Department of Social Security (1985) 8 ALN 174 and Re Secretary, Department of Social Security and Metin Sahin [2001] AATA 732. In Howie, the Tribunal heard that the enterprise involved was never capable of being described as a serious business undertaking. It followed that Howie was still “unemployed” for social security purposes. In Metin Sahin, Mr Sahin still qualified for benefits as an unemployed person other than at times when he was engaged in harvesting. Senior Member J Handley saw this as consistent with earlier Tribunal cases.
26. In another case, Re McKenna and Director-General of Social Services (1981) 3 ALD 219, an applicant worked eight hours a day, 5 days a week in a co-operative of several unemployed people, producing goods for sale and food. The Tribunal was not satisfied that the applicant was unemployed within the meaning of that term pursuant to section 593 of the Act. The Tribunal noted that the applicant was actively engaged in the development and running of a labour-intensive business with the object of making a living for those participating in it. On the evidence before me, I am not satisfied, on balance, that Mr Joss was actively engaged in a business in the same way as in McKenna. By comparison, the activity Mr Joss admits to was not intensive but involved a trip to Hamilton Island and to Perth where vessels for sale were investigated. Mr Joss told the Tribunal that when he was going into the office on the boat he was using crutches and was unable to perform work other than making telephone enquiries and light duties. The strongest indications are that Mr Joss received only small amounts of reimbursement for the expenses he had outlaid for telephone, petrol and the like. The money received as a result of the Industrial Relations Commission NSW case did not stipulate any specific time frame for the award which the parties settled on.
27. There are other cases which have held that a recipient who is available for work but not actively seeking it might still be employed. For example, in Re Weekes and Director-General of Social Services (1981) 3 ALN 141, the applicant set up a tannery and shop. He spent the bulk of his time on these enterprises and the Tribunal held that such activity whether profitable or not, would not leave the person unemployed within the meaning of section 593. However, these cases are tinged by reference to situations where the person is obliged to be seeking work and Mr Joss was not in this situation. There have also been cases where students attending lectures or tertiary studies full time may still have a commitment to actively seeking work. In Director-General of Social Services v Thomson (1981) 38 ALR 624, per Bowen CJ, Fisher and Fitzgerald JJ, the Federal Court held that a student attending tertiary studies full time was still actively seeking work. The intention of the person was taken into account in reaching this conclusion.
28. Mr Joss’s case is substantially different from the cases brought to my attention. For example, in Re Te Velde a female farmer’s husband committed suicide leaving her in a situation where she was working on the farm. In this case it was held that she was not available for other work during the time she had stated she was unemployed and she was found not to be so.
29. Other cases brought to my attention are Re Malaj and Secretary, Department of Social Security (1988) 15 ALD 333, where it was held that the applicant was not eligible for a social security pension or allowance. The applicant had been a partner in a business but withdrew from the business while retaining certain duties. He was supervising in some respects and paying workers as well as engaging sub-contractors; these activities made him unavailable for work elsewhere. However, there is no real evidence that Mr Joss was ever sub-contracting anyone or working as a general supervisor or that he paid workers or anyone else in the business which was occupying some of his time during the period in question. At most, he admits to contacting people about doing work on the boat. There is no suggestion he paid anyone.
30. As well, in Re Vavaris and Director-General of Social Security (1982) 5 ALN N16, a man who purchased a vineyard and worked on it part time with the intention that it should be operated as a business for profit was found unavailable for other work. In this case the applicant was not unemployed. Once again, the current case is not similar as he never purchased a business and was at all times reliant upon Mr Steenbuck for remuneration. Mr Steenbuck did not give conclusive evidence about the position. Wage records show that Mr Steenbuck paid Mr Joss wages only after the period in question. Mr Joss denies that he was employed and the circumstantial evidence from the Industrial Relations proceedings is insufficient in total to make a decision that he was employed during the period in question. It follows that, although the circumstances of arrangement with Mr Steenbuck are not clear to me, after careful consideration of the evidence before me, on balance, I am not satisfied that Mr Joss was not “unemployed”.
conclusion
31. Mr Joss qualified for the allowance initially as he had accepted disabilities while he was waiting for his hernia and hip operations. He was aware that he was not required to look for work while disabled. His explanation to the Tribunal that he was looking for something to occupy his time while he was unable to work is not unreasonable. His credibility is further enhanced by his action in informing Centrelink early in 1998 that he was now ready to work as he had recovered from his surgery. Further, his evidence is supported by the wage records commencing in February 1998. The Secretary has not put before the Tribunal sufficient evidence to substantiate its allegation that Mr Joss was not unemployed during the period for which it seeks recovery of an alleged debt. As a matter of fact and degree, the indications are that Mr Joss remained unemployed until he advised the Secretary of his commencing employment.
decision
32. The decision of the Social Security Appeals Tribunal is affirmed.
I certify that the 32 preceding paragraphs are a true copy of the reasons for the decision herein of robin hunt
Signed: Associate
Date/s of Hearing 26 September 2005
Date of Decision 13 January 2006
Advocate for the Applicant Mr A. Zhang
Solicitor for the Respondent Mr G. Cassim
2
0