Jubb and Department of Family and Community Services
[2001] AATA 239
•27 March 2001
DECISION AND REASONS FOR DECISION [2001] AATA 239
ADMINISTRATIVE APPEALS TRIBUNAL)
Nº V00/804
GENERAL ADMINISTRATIVE DIVISION)
Re: JOAN JUBB
Applicant
And: SECRETARY TO THE
DEPARTMENT OF FAMILY AND
COMMUNITY SERVICES
Respondent
DECISION
Tribunal: Mrs H.E. Hallowes, Senior Member
Date: 27 March 2001
Place: Melbourne
Decision:The decision under review is affirmed.
(sgd) H.E. Hallowes
Senior Member
SOCIAL SECURITY — age pension — assets — disposal of assets — value of freehold land and lease, Bass Strait island — part owner of freehold land — whether to value island as a whole — value of unit — value of motor vehicle
Social Security Act 1991 (Cth) ss.11, 55, 164A, 1123, 1124, 1124A, 1125
Land Valuation Act 1971 (Tas)
Spencer v Commonwealth of Australia (1907) 5 CLR 418
Re Secretary, Department of Social Security and Langton and Another (1993) 31 ALD 579
REASONS FOR DECISION
27 March 2001 Mrs H.E. Hallowes, Senior Member
Mrs Jubb seeks review of a decision of the Social Security Appeals Tribunal ("SSAT") made on 29 May 2000, which affirmed a decision of a delegate of the Secretary to the Department of Family and Community Services ("the department") made on 2 August 1999, rejecting her claim for age pension, lodged on 1 December 1998, for which she was qualified, age pension not being payable due to her assets which included assets she had disposed of. Mrs Jubb told the Tribunal that she had originally been paid supporting parent benefit in 1985, but her later entitlement to age pension was cancelled on 7 April 1998 because of the value the Secretary placed on her assets.
The Tribunal had before it the documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 ("the documents") and other material lodged with the Tribunal by Mrs Jubb, who represented herself at the hearing, and by Ms R. Bradley, who represented the Secretary. When Mrs Jubb lodged her claim for age pension on 1 December 1998 the asset limit above which she would not be entitled, as a single homeowner, to be paid pension, or part thereof, was $246,750.
The SSAT found that Mrs Jubb owned assets, subject to the assets test under the Social Security Act 1991 ("the Act"), valued at $281,657. This sum did not include any value for her household contents and personal effects or her motor vehicle. As Mrs Jubb's assets include both assets in her name and assets which she has disposed of, and which may fall under provisions with respect to the disposal of assets (sections 1123 to 1127 inclusive), the Tribunal, for convenience, will set out Ms Bradley's contentions with respect to the value of Mrs Jubb's assets, which the Tribunal should take into account in determining Mrs Jubb's entitlement to age pension, while noting that Mrs Jubb disputes some of the valuations. Ms Bradley contended:
10.5It is accepted that Applicant's Unit at 10 Penang Street McKinnon is valued at $150,000 in accordance with the valuation of the Australian Valuation Office. T43 page 121, T49 pages 141-149; T66 pages 206-207
10.6It is noted that the Applicant has advised that the property at 10 Penang Street McKinnon is subject to a $50,000 mortgage. It is submitted that the Applicant should provide documentary proof as to the outstanding balance of such mortgage at date of claim to establish the actual net value of such property at date of claim. [existing references and emphasis]
As Mrs Jubb provided documentary evidence to Ms Bradley and the Tribunal after the hearing with respect to the balance of the outstanding loan concerning her unit which satisfied Ms Bradley that the net value of her property at the date she lodged her claim for age pension was $100,000, there was no dispute between the parties with respect to the value of the unit at 10 Penang Street and the Tribunal so finds on the basis of the evidence before it.
10.7It is submitted that the market value of the freehold land on Long Island at date of claim was $160,000, in accordance with the valuation prepared by Mr Chris Tuttle, Valuer with the Australian Valuation Office. T86 page 263; T87 page 268
10.8It is further submitted that at the date of claim the Applicant had disposed of 66% of her interest in the freehold land on Long Island to her children under a terms contract of sale set out in a written agreement dated the 1st day of July 1997. T24 pages 44-48 That in accordance with the terms contract of sale the total sale price was $66,000, and the contract required that a total of $12,000 be paid by 1 December 1998. Accordingly it is submitted that $54,000 was outstanding under the terms contract as at 1 December 1998 and should be included as an asset. T104 pages 314-315
10.9It is further submitted that the Applicant's 34% interest in the freehold land on Long Island was valued at $54,400 at date of claim, based on the valuation of the Australian Valuation Office of $160,000 for the whole of the freehold portion. T104 page 263; T87 page 268
10.10It is submitted that the leasehold land on Long Island was valued at $40,000 at date of claim in accordance with the revised Valuation of Mr Chris Tuttle, Valuer, Australian Valuation Office. Letter dated 12 October 2000
10.11It is further submitted that the Applicant disposed of 66% of her interest in the lease of Long Island, for no consideration, when she entered in [sic] the Agreement with her children, Kelley Basley and Thomas Jubb, on 1 July 1997. The agreement was conditional upon the Applicant arranging for the lease to be put into the names of the Applicant and her children in the same proportions as the freehold.
10.12In accordance with the revised Australian Valuation Office of $40,000 for the leasehold on Long Island it is submitted that the Applicant disposed of 66% of an asset valued at $40,000, being $26,400 on 1 July 1997
. . .
10.14In accordance with Section 1124A of the Act the disposal of the Applicant's 66% interest in the leasehold on Long Island, valued at $26,400, is subject to the deprivation provisions for a period of 5 years that starts on the day on which the disposition took place, being 1 July 1997. The Act provides for a disposal limit of up to $10,000 being allowed in each pre-pension year, but amounts in excess of such disposal limit must be maintained as an asset for a period 5 years [sic] from the day on which the disposition took place. Accordingly it is submitted that an amount of $16,400 should be maintained as an asset of the Applicant for 5 years from 1 July 1997 in respect of the disposition of 66% of the Long Island leasehold.
10.14 [sic]It is further submitted that the Applicant disposed of her remaining 34% interest in the Long Island leasehold, valued at $13,600, on 24 July 1998 when the Applicant signed a Transfer of the Long Island Lease to Kelly Basley and Thomas Jubb. Copy Transfer document. The transfer was registered by the Tasmanian Department of Environment & Land Management on 22 September 1998. T52 page 152 and T53 pages 153-157 As this disposal occurred more than 12 months after the first disposal Section 1124A of the Act allows for a $10,000 deduction from the gross amount and accordingly it is submitted that an amount of $3,600 should be maintained as an asset of the Applicant for 5 years from 24 July 1998 in respect of the disposition of 34% of the Long Island leasehold. [existing references and emphasis]
Mrs Jubb disputes the valuation placed on both the freehold land and lease of Long Island by Mr C. Tuttle, valuer, Australian Valuation Office ("the AVO").
10.15It is accepted that the Applicant had savings of $3,257 as at 1 December 1998.
This figure was agreed between the parties and the Tribunal so finds.
10.16It is noted that the Applicant's [sic] considered that the net market value of her household contents and personal effects was $1,000. T95 page 278
10.17Section 1118(3) of the Act provides that the value of household contents and other personal effects is taken to be $10,000 unless the Secretary is satisfied they are worth less. The Secretary submits that the Applicant's household contents and personal effects should be value at $10,000 in accordance with s 1118(3). [existing references and emphasis]
Mrs Jubb gave evidence that a value of $2000 had been placed on her household contents and personal effects at the time of Family Court proceedings in 1986. She said that her possessions remained the same. She described her furniture to the Tribunal, and Ms Bradley accepted the figure of $2000 as the value of her possessions on behalf of the Secretary and the Tribunal so finds.
10.18It is submitted that market value of the Applicant's car as at date of claim should be determined. The applicant has advised that she owns a 1995 Ford Mondeo and that there is no amount owing in respect of the car.
The value of Mrs Jubb's motor vehicle for assets test purposes remained in issue between the parties, Ms Bradley noting that the motor vehicle was insured for $18,000 at the date Mrs Jubb lodged her claim. Mrs Jubb did not dispute that valuation and the Tribunal, having considered the prices for Mondeos, as advertised on the Internet, which Ms Bradley placed before it, so finds. Ms Bradley went on to note:
10.20The Australian Valuation Office has recently revised its valuation of the leasehold land on Long Island from $90,000 to $40,000 and accordingly it is submitted the asset value of the Applicant should be reduced by $50,000.
Mrs Jubb submitted that Mr Tuttle's opinion should not be relied on as he had revised his opinion with respect to the valuation of the lease of Long Island, reducing his original valuation from $90,000 to $40,000. It was Mrs Jubb's contention that the value of the lease was nil and she provided a copy of a letter from the Department of Lands (Tasmania) dated 28 April 1987 to her solicitors, which advised in part:
. . . the Department is under no obligation to automatically renew your client's lease; one of the options being that the Department could offer the island for lease by public tender. (exh A)
Mrs Jubb contended that other leases Mr Tuttle had considered when forming his opinion with respect to the value of the lease could not be compared to the situation on Long Island. Mrs Jubb also disputed Mr Tuttle's valuation of the freehold land. She described the relevant land and buildings to the Tribunal and provided the Tribunal with photographs of Long Island, together with copies of advertisements with respect to another island in the Furneaux Group, which, she said, described islands "in a very romantic way". She noted that the land on Flinders Island, which Mr Tuttle had referred to, is situated on an island with all facilities including an all-weather strip, whereas the strip on Long Island is no more than cut ferns and tussocks. She said that no aeroplane can land on Long Island until the family cuts the strip for that purpose. In Mrs Jubb's opinion Mr Tuttle had discredited himself because he had backtracked on his original valuation whereas Ms Bradley submitted that Mr Tuttle was an experienced valuer with the AVO, whose expert opinion should be accepted.
Mr Tuttle gave oral evidence to the Tribunal by telephone. The Tribunal had before it Mr Tuttle's Asset Value Assessment with respect to Long Island, dated 20 March 1998 (T35). Mr Tuttle had valued the "whole property" at $250,000 without visiting it, compared to Mrs Jubb's assessment of $65,000. The Tribunal also had before it a copy of Mr Tuttle's Valuation Report with respect to Long Island dated 20 April 1998 (T39), the date on which he inspected Long Island. The island consists of 16.19 hectares freehold land and 279.4 hectares lease. It is approximately 1 kilometre off the north west coast of Cape Barren Island (T39). It takes approximately 1 hour by boat to reach commercial centres on Flinders Island. Mr Tuttle noted that the dwelling on Long Island was in very poor condition with external cladding falling off and, roof and spouting rusted out. There is also a bunkhouse and shearing shed. He valued the island by referring to sales of other islands around Tasmania. A proposed change in leases of Bass Strait islands, from a maximum of 15 years to a maximum of 10 years, was noted. By facsimile dated 19 July 1999, Mr Tuttle apportioned $160,000 of his valuation of $250,000 to the freehold land and $90,000 to the lease. By letter to Ms Bradley dated 14 August 2000 (exh 1), Mr Tuttle noted valuations of Long Island undertaken pursuant to the Land Valuation Act 1971 (Tas) as at 1 August 1998, the "capital value" with respect to the freehold land of Long Island, which had the house on it, being $85,000. Mr Tuttle advised in his letter that this additional information did not alter his opinion with respect to the valuation he had previously provided. He noted a similar valuation of Puncheon Island in August 1998 of $80,000 and he reported that Puncheon Island had sold in November 1998 for $375,000. He went on to state:
No matter which way we look at this property it is still an island, and islands throughout the world are keenly sought after by an international market. . . . .
In October 2000 Mr Tuttle was invited by the Secretary to again consider the value of the lease of Long Island following Mrs Jubb's contentions that the valuation he had provided was excessive as the lease had less than 2½ years to run and that the value of the lease should therefore be discounted; that the lease would not automatically be renewed; that other islands in the Furneaux Group were not suitable for comparison with respect to valuation, and that a valuer in the course of Family Court proceedings in 1986 had valued the freehold land on Long Island at $27,000 and the lease, then having approximately 15 years to run, at $30,000. By letter dated 12 October 2000 (exh 5), Mr Tuttle, having considered the further information put to him, agreed that his initial assessment with respect to the lease had been too high and he revised the valuation of the lease to $40,000.
Mr Tuttle told the Tribunal that he is the regional manager, Tasmanian office, AVO. He is a Fellow of the Australian Property Institute and he holds diplomas in Land Valuation and, Evaluation of Plant and Equipment. Mr Tuttle conceded that, when he originally provided a valuation with respect to Mrs Jubb's assets, he had not visited Long Island. He said however that he had knowledge of Bass Strait islands, having carried out valuations on Cape Barren Island in the late 1970s. He spent 2 years working as a valuer in Fiji where he saw "islands purchased by actors and actresses out of the Hollywood sort of fame and the prices paid were absolutely astronomical . . . which is one of the things . . . that still sort of leads to the strong value that they have shown over the last 15, 20 years". When referring to Swan Island Mr Tuttle noted that, following purchase of that island by a company in 1996 a number of blocks with water frontage had been advertised on the Internet and they had been bought, principally by German buyers, for approximately $100,000 each, site unseen. He told the Tribunal that this indicated to him that an international market exists for properties with water frontage, clear blue waters and white sands. He noted the sale of bush blocks in Tasmania to buyers from Central Europe, who, in his opinion, because they see their own forests dying, and with the value of the Australian dollar, make an investment in Tasmania. He noted the sale of Swan Island in 1987 for $307,000. It was sold in 1990 for $600,000 and he understands that it is now on the market for about $900,000.
In forming his opinion Mr Tuttle said he took into consideration the island's location, its size and access arrangements. He said that he had spoken to the officer responsible for Crown leases in Tasmania before forming his opinion with respect to the valuation and it had been indicated to him that, if there were no adverse reports with respect to the operation of the lease, renewal of the lease was likely, particularly if the person seeking the renewal owned the freehold land on the island. Mr Tuttle went on to say that his original apportionment of $90,000 for the lease and $160,000 for the freehold land of the $250,000 valuation was ". . . largely an arbitrary apportionment". He said, with hindsight, the figure of $90,000 was possibly too high and the freehold figure, possibly too low. When asked by the Tribunal to value the lease with the remaining 2½ years to run, that is, the price a desirous buyer would pay to a willing but not anxious seller, Mr Tuttle said, "You wouldn't pay very much for it. You wouldn't pay 90,000. . . ." if you did not own the freehold land. He said that the person who owned the freehold land would have preference over you with respect to the renewal of the lease and, because of an owner's greater certainty of lease renewal, the price would be higher for that owner. If you did not own the freehold land, Mr Tuttle said that he would place a value of between $5000 to $10,000 on the remaining term of the lease. Mrs Jubb told the Tribunal that she was not seeking renewal of the lease, rather, renewal of the lease was being sought by her children to whom she has sold part of her interest in the freehold land.
When asked to comment on the reason he had amended his valuation of the lease from $90,000 down to $40,000, Mr Tuttle said that he had taken into account a change in attitude by the officer-in-charge of Crown Lands who administers leases in north east Tasmania. When Mr Tuttle originally carried out his valuation in 1998 a lease for 21 years had recently been granted for Clarke Island, but since then policy within the Department of Lands has changed and the periods of leases are being shortened to 10 years to give the department greater control, as Tasmanian National Parks and Wildlife increases its presence in the Furneaux Group. Conditions are also being imposed on leases. Mr Tuttle has also been led to believe that the nexus between freeholders and leaseholders may be broken.
Mr Tuttle placed value on Mrs Jubb's exclusive use of Long Island; her ability to exclude other people, and the "romance" of having full control of an island, although he accepted that, from an economic point of view, operating costs would outweigh any income the island may generate. Mr Tuttle said that, although Mrs Jubb has sold part of her interest in the freehold land and given away her interest in the lease to family members, he continued to place value on the exclusivity of the family's rights. In conceding that apportionment of value between lease and freehold land, is ". . . something of an arbitrary exercise" Mr Tuttle said, "We have no precedent and no real evidence to assist". Ms Bradley asked Mr Tuttle to comment on the value placed on the freehold land on Long Island by the Department of Lands on 1 August 1998, $85,000. It was his evidence that the valuation was conservative and he noted that it had been done for different purposes, for assessing rates, land tax and for the Commonwealth Grants Commission.
Mr Tuttle agreed with Mrs Jubb that there was "no guarantee of leasehold at any stage". Mrs Jubb raised the sale of Preservation Island in approximately 1985 with Mr Tuttle but he was unaware of that sale. It was her understanding that the lease of Preservation Island had been transferred at no cost. Mrs Jubb put to the Tribunal that the increase in the sale price of Swan Island had been as a result of improvements carried out by the owners, improvements which have not been carried out on Long Island. Mr Tuttle concluded his evidence by saying that he now considers that the value of the freehold land on Long Island is closer to $200,000 and the value of the lease is $50,000.
Mrs Jubb told the Tribunal that she also disputes the balance of purchase price the Secretary contends is owing to her following the sale of part of her interest in the freehold land on Long Island. She said that, by agreement dated 1 July 1997 (T24), 66 per cent of her freehold interest was sold to her children for $66,000 and that, by the time she claimed age pension in December 1998, the children had paid her $29,000. She provided the Tribunal with a document summarising payments made to her by her children (exh H). The Tribunal notes that a number of payments there recorded were made before the date of the agreement. The document records some payments as having been paid by Visa card, none of which were discrete payments of $6000 at six monthly intervals as provided under the agreement. The Secretary contends that $54,000 of the contract price remains outstanding if a deposit of $6000 had been paid and a further payment of $6000 had been made during the following year pursuant to the agreement. No receipts with respect to any payment were placed before the Tribunal and Mrs Jubb said that "A lot of times it didn't go into the bank account, it just came to me in cash and I spent it . . .". Mrs Jubb also said that she did not have the money to pay for maintenance on Long Island or on her home. Her children have had to pay her rent for Long Island and for blinds, water and other expenses. In her opinion those payments are moneys paid to her under the agreement. The Tribunal finds that this is not so. The Tribunal notes that, in providing details of assets to Centrelink in August 1999, Mrs Jubb stated that her children had paid her $32,400 in respect of their purchase of 66 per cent of the freehold land before September 1998, a sum of $12,000 at the end of 1998 and a further sum of $6000 in August 1999. The Tribunal is concerned about the discrepancies in Mrs Jubb's figures and the lack of formal documentation with respect to moneys paid under the agreement by her children.
Turning to the remaining interest Mrs Jubb has in the freehold land on Long Island, Ms Bradley said the Secretary contended that the full value of the freehold land was $160,000, although the Tribunal notes that in oral evidence Mr Tuttle adjusted this figure to $200,000 following his revision of the relevant figure with respect to the lease as at 1 December 1998, the date Mrs Jubb lodged her claim for age pension. Ms Bradley put to the Tribunal that Mrs Jubb's remaining one-third interest in the freehold land should be valued at $54,400 for the purpose of the assets test. The Secretary did not contend however that Mrs Jubb had disposed of assets in entering into the agreement for the sale of two-thirds of the freehold land on Long Island to her children for the sum of $66,000, which may appear, in light of Mr Tuttle's evidence, to be below market value. However, as the family agreement with respect to the sale was signed on 1 July 1997, this may account for the Secretary making no such submission.
Turning to the value of Mrs Jubb's interest in the lease of Long Island, Mr Tuttle had originally valued the remaining 2½ years of the lease at $90,000, although he dropped that figure to $40,000 in his letter to Ms Bradley dated 12 October 2000, raising it to $50,000 when giving oral evidence to the Tribunal, referring at all times to the valuation at the date Mrs Jubb lodged her claim for age pension. At the same time he increased his valuation of the freehold land to $200,000. Mrs Jubb had provided the Secretary with a letter from Mr C.D. Wilson of Roberts Real Estate, dated 18 August 1998 (T51), but Mr Wilson went no further than stating in his letter that the value of the lease of Long Island would be very difficult to estimate. Mrs Jubb provided the Tribunal with an example of a lease which was apparently transferred for no consideration other than the value of infrastructure and stock. The transfer of the lease to Mrs Jubb's children was approved by the property manager of the Crown Lands Services, Department of Environment and Land Management, Tasmania on 22 September 1998 (exh 3), consideration being "natural love and affection". Mrs Jubb transferred her lease to her children in two stages. Clause 5 of the agreement, signed by Mrs Jubb and her children on 1 July 1997, provides:
5.The Vendor will forthwith upon execution of this Agreement make application to the Minister administering the Crown Lands Act for the State of Tasmania for a consent from the Minister to the Purchasers becoming Lessees with her in the proportions hereinbefore set out in this Agreement. In the event that the Minister refuses such assignment then the Agreement shall be null and void and all monies paid as deposit to the Vendor by the Purchasers shall be returned to the Purchasers. (T24)
that is, Mrs Jubb agreed that 66 per cent of her interest in her lease of Long Island be transferred to her children, although it appears from the transfer (exh 3) that Mrs Jubb transferred all her interest in the lease to her children before the date she claimed age pension, regardless of what was in the written agreement. Ms Bradley addressed this point in her written submission (paragraph 3, 10.14 above).
As it was Mrs Jubb's contention that her interest in the lease was of no value, she suggested that, if she had disposed of any assets through her sale of two-thirds of her interest in the freehold land on Long Island, that the sum of $10,000 should be deducted from the sale price under the relevant provisions with respect to the disposal of assets in pre-pension years for individuals (section 1124A), rather than the Secretary deducting the sum of $10,000 with respect to any deprivation said to have occurred with respect to the transfer of her lease. Ms Bradley put to the Tribunal that it was in Mrs Jubb's interests for the Tribunal to find that there had been two dispositions with respect to the lease if it found that there was value in the lease, the first disposition being two-thirds of the value of the lease pursuant to the agreement dated 1 July 1997, and the second disposition being under the transfer which was registered by the Crown Lands Services, Department of Environment and Land Management Tasmania on 23 September 1998 (exh 3).
In a closing submission to the Tribunal Ms Bradley said that, if the Tribunal accepted the second valuation of $40,000 by Mr Tuttle of the lease, 66 per cent of that value under the agreement between Mrs Jubb and her children was $26,400, from which she would be entitled to have $10,000 deducted under section 1124A of the Act and section 1125 which provide the disposal limit of $10,000. This would leave a sum of $16,400 to be maintained as an asset for five years from 1 July 1997, the date of the agreement. Ms Bradley further put to the Tribunal that the remaining third of the $40,000 valuation for the lease, $13,600, which was transferred to the children on 24 July 1998 less the $10,000 allowable, would mean a sum of $3600 should be maintained as an asset from that date.
Mrs Jubb disclosed to the Tribunal that she has some jewellery and that she now owns some shares but it was her evidence that she was not the owner of these assets at the time she lodged her claim for age pension. It appears from the evidence that Mrs Jubb's assets at the date she lodged her claim for age pension in December 1998 were—
a unit at Penang Street — less any amount of money owing
a 34 per cent interest in the freehold land, Long Island
moneys due to her under the family agreement with respect to 66 per cent of the freehold land on Long Island
the value of her 66 per cent interest in the lease of Long Island, disposed of on 1 July 1997 — less $10,000
the value of her 34 per cent interest in the lease of Long Island, disposed of on 22 September 1998 — less $10,000
a 1995 Ford Mondeo motor vehicle
household contents and personal effects, and
her savings
Turning first to the value of Mrs Jubb's unit at 10 Penang Street, McKinnon, as already indicated (paragraph 3 above), the Tribunal has found that the value of Mrs Jubb's interest in the unit is $100,000 — being the net value of her interest after deducting the loan taken out from a bank in respect of that property. As it was not in dispute that Mrs Jubb had savings of $3257 at the date of her claim, the Tribunal has so found. Similarly, the Tribunal has found that her household contents and personal effects have a value of $2000. Having considered the prices at which Ford Mondeos are advertised on the Internet and the value of Mrs Jubb's motor vehicle for insurance purposes, the Tribunal has found that it had a value of $18,000 in December 1988.
Mrs Jubb's remaining interests on Long Island are more difficult to determine. The transcript of proceedings in the Family Court on 21 October 1986 and 22 October 1986, which was before the Tribunal, does not assist in determining what value should be placed on Mrs Jubb's freehold land and lease interests, and the interests she has disposed of over 10 years later. On 19 July 1999 Mr Tuttle provided valuations with respect to the freehold land on Long Island of $160,000 (T86) and of "closer to 200,000" when giving his oral evidence to the Tribunal. In the normal course of events his expert evidence would be accepted. Mrs Jubb estimated the value of the whole island at $80,000 in September 1984 and $65,000 in March 1998. The value for rates purposes in June 1999 was $85,000. For the purpose of the family agreement in July 1997, a value of $100,000 was placed on the freehold land. A file note dated 22 November 1995 records her ownership of 40 acres on Long Island, then accepted by the Secretary as valued at $65,000 (T14).
The Tribunal must consider the price a desirous buyer would pay a willing but not anxious seller, rather than considering Mrs Jubb's personal circumstances. The value of the property to Mrs Jubb is not what is in issue, but rather the value of her asset which she could sell but which clearly, from the evidence before the Tribunal, she has no desire to part with other than to her children. Accepting Mr Tuttle's evidence, if both the freehold land and lease were sold together, that is the island as a whole, would be greater than the value of the freehold land and lease offered separately. By the time Mrs Jubb claimed age pension, which is the date at which the Tribunal must consider the matter, Mrs Jubb had disposed of all her interest in the lease and she only retained a one-third interest in the freehold land.
Subsection 11(2) of the Act provides:
11(2) A reference in this Act to the value of a particular asset of a person is, if the asset is owned by the person jointly or in common with another person or persons, a reference to the value of the person's interest in the asset.
In Re Secretary, Department of Social Security and Langton and Another (1993) 31 ALD 579 the Tribunal considered the respondent's assets in order to determine whether jobsearch allowance was payable to her under the Act. The respondent owned property as a tenant in common with others and the property had been valued by the AVO. The Tribunal followed what was said by the High Court in Spencer v Commonwealth of Australia (1907) 5 CLR 418, and determined the market value of the property as a whole before apportioning the respondent her share.
Although varying the value he would place upon the lease, Mr Tuttle maintained his opinion with respect to the value of the island as a whole and the Tribunal accepts Mr Tuttle's valuation of the island of $250,000 at the date Mrs Jubb lodged her claim for age pension. The evidence before the Tribunal satisfies it that there has been an increase in interest in the ownership of islands since 1986 when evidence was given to the Family Court with respect to the value of Long Island and that property values have increased since then. Mr Tuttle's evidence was the only expert evidence before the Tribunal and it should be given weight although it is open to a claimant to demonstrate that there are reasons expert evidence should not be accepted. The Tribunal is satisfied that the value of the freehold land on Long Island is $210,000 even though Mrs Jubb was prepared to sell 66 per cent of her interest in the freehold land to her children for only $66,000 in July 1997. The Tribunal is further satisfied that the valuation of $90,000 for the lease, originally made by Mr Tuttle, was too high and that Mr Tuttle's value of $40,000 is the value which should be placed on the lease. It rejects Mrs Jubb's submission that the lease has no value in light of the family's control of all of Long Island. The holder of the lease has an advantage over others in obtaining a further lease and the Tribunal is considering the circumstances at December 1998, before consideration was given to shortening the length of leases with respect to islands in Bass Strait and the desire by the relevant department to exercise greater control. Mrs Jubb's remaining 34 per cent interest in the freehold land has a value of $71,400.
Turning next to Mrs Jubb's disposition of 66 per cent of her interest in the freehold land and accepting the terms of the agreement, without considering whether Mrs Jubb disposed of an asset for less than its true value, the Tribunal finds that she had an asset of $54,000 under the terms of the agreement when she claimed age pension. It would be harsh to find that no payments had been made by her children pursuant to the agreement, but the Tribunal is satisfied that it should not find that payments have been made by the children over and above those due under the agreement.
Following the disposition by Mrs Jubb of her interest in the lease of Long Island, the Tribunal accepts Ms Bradley's contentions with respect to the two dispositions made by Mrs Jubb to her children and thus, under the provisions with respect to the disposition of assets, the sums of $16,400 and $3600 should also be included in Mrs Jubb's assets at the date she claimed age pension.
As the total of Mrs Jubb's assets exceeds the value of assets which would entitle her to payment of part age pension, $246,750, the Tribunal will affirm the decision under review. Even were the Tribunal to accept Ms Bradley's submission (10.7 paragraph 3 above), Mrs Jubb's assets would still preclude age pension being paid to her.
I certify that the twenty-six [26] preceding paragraphs are a true copy of the reasons for the decision herein of
Mrs H.E. Hallowes, Senior Member(sgd) Catherine Thomas
Personal AssistantDate of Hearing: 11.12.00
Date of Decision: 27.03.01
Solicitor for the Applicant: NIL — IN PERSON
Solicitor for the Respondent: Ms R. Bradley, Advocate with Centrelink
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