KENNETH LIDDELL and SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
[2012] AATA 193
•4 April 2012
[2012] AATA 193
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2009/5945
Re
KENNETH LIDDELL
APPLICANT
And
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENT
DECISION
Tribunal Dr P McDermott, RFD, Senior Member
Date 4 April 2012 Place Brisbane Decision Summary
The Tribunal affirms the decision under review
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Dr P McDermott, RFD, Senior Member
CATCHWORDS
SOCIAL SECURITY – Pensions, benefits and allowances – Disability support pension – Age pension – Payment of benefit at single rate – Assets test for payment of age pension – Factors for consideration as to whether person is a member of a couple – member of a couple – Decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 4, 11, 1236, 1237AAD, 1604
Social Security (Administration) Act 1999 (Cth) s 80
CASES
In the Marriage of Todd (No 2) (1976) 9 ALR 401
Main v Main (1949) 78 CLR 636
Pelka v Secretary, Department of family and Community Services (2006) 151 FCR 546
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Saunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495Re Secretary, Department of Family and Community Services and VBH and VBG [2006] AATA 1
REASONS FOR DECISION
Dr P McDermott, RFD, Senior Member
4 April 2012
INTRODUCTION
Mr Kenneth Liddell (the applicant) seeks review of a decision by Centrelink that he and Mrs Margaret Liddell, his wife, have been members of a couple for the purposes of social security law since 1 March 1997. This decision has a number of consequences for the applicant. It has been decided that he has been overpaid disability support pension (DSP) and that he is not entitled to an age pension as the combined assets of the applicant and his wife exceed the asset threshold under social security law. Essentially it is contended by the applicant that since 1 March 1997 he and his wife have not been members of a couple.
REVIEWABLE DECISION
The applicant seeks review of a decision by the Social Security Appeals Tribunal (SSAT) made on 6 November 2009. That Tribunal, in varying an earlier decision of Centrelink, decided that the applicant and his wife were members of a couple on and from 1 March 1997. That decision also resulted in a recalculation of the applicant’s debt for overpayment of DSP. In following the reasons of the SSAT decision, Centrelink decided, on 17 December 2009, that a debt of $75,624.78 existed for the overpayment of DSP for the period 1 March 1997 to 7 March 2005. The reviewable decision also had the consequence that the entitlement of the applicant to aged pension should be cancelled on the basis that the combined assets of the applicant and his wife exceeded the applicable asset threshold. In particular the applicant and his wife jointly own a property at Kingston Road, Woodridge which was, at the relevant time, valued at $1,110,000.00. The decision also had the consequence that a debt of $55,621.33 existed for overpayment of age pension from 8 March 2005 to 31 March 2009. It was also decided that the debt should be recovered in full. The relevant period under review is 1 March 1997 to 31 March 2009 (“the relevant period”). That part of the reviewable decision concerning the claim for a Seniors Health Care Card is not before this Tribunal.
RELEVANT LEGISLATION
The rate at which DSP and aged pension is paid to the applicant is dependent on whether or not he is a "member of a couple": see s 1604 of the Social Security Act 1991 (Cth) (the Act).
At all relevant times the applicant was legally married to Mrs Liddell. Section 4(2)(a) provides that the applicant will be a "member of a couple" for the purposes of the Act if:
[T]he person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in sub-section (3)), living separately and apart from the other person on a permanent or indefinite basis; or
…
Section 4(3) of the Act provides that, in forming an opinion about the relationship between two people for the purposes of s 4(2)(a), the decision maker “is to have regard to all the circumstances of the relationship including, in particular, the following matters”:
(a) the financial aspects of the relationship;
…
(b) the nature of the household;
…
(c) the social aspect of the relationship, including:
(i)whether the people hold themselves out as married to … each other; and
(ii)the assessment of friends and regular associates of people about the nature of their relationship; and
(iii)the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people's commitment to each other, including:
(i)the length of the relationship; and
(ii)the nature of any companionship and emotional support that the people provide to each other; and
(iii)whether the people consider that the relationship is likely to continue indefinitely; and
(iv)whether the people see their relationship as a marriage like relationship …
Section 4(3) of the Act provides for a number of factors to be considered when determining whether two persons are living separately and apart from each other on a permanent or indefinite basis. This Tribunal is bound by a judgment of the Federal Court of Australia in Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 in which the court ruled that in considering the factors listed in s 4(3) of the Act this Tribunal is required to consider the totality of the relationship between the applicant and his wife. In making this assessment no one factor will be determinative of whether they are living separately and apart on a permanent and indefinite basis: see Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546 at 555 per French J.
The respondent submitted that for the applicant and his wife to be living separately and apart, there must be a physical separation as well as a breakdown of the consortium vitae or matrimonial relationship. Reference was made to the decision of the High Court of Australia in Main v Main (1949) 78 CLR 636 in which the court (at 642) found that although the existence of a matrimonial relationship is usually demonstrated by the sharing of a common home it is not inconsistent for spouses to be absent from one another even for long periods of time. The real test is whether a mutual recognition of a relationship continues to subsist and there is a definite intention to resume a close association of a common life as soon as the interruption has passed. What comprises a marital relationship will vary for each couple. In determining whether there has been a separation between the applicant and Mrs Liddell it is necessary to examine and contrast the state of the marital relationship before and after the alleged separation. In another marriage case it has been held that whether there has been a separation is a question of fact to be determined on the evidence in each case: see In the Marriage of Todd (No. 2) (1976) 9 ALR 401 at 403 per Watson J. The terms of s 4(3) of the Act do not exclude such general law considerations but what is important is to have regard to the factors that are set out in that provision. While the view of the applicant as to the nature of his relationship is important, the Tribunal must take account of that subjective belief in light of objective indicia that the relationship exhibits; see Re Secretary, Department of Family and Community Services and VBH and VBG [2006] AATA 1 at [94].
NATURE OF THE RELATIONSHIP
At the outset of the hearing the applicant advised that his wife would not be called as a witness. While I accept that his wife has recently had medical treatment, I am not satisfied that she was unable to give evidence. This is because the applicant advised me that his wife is still in part-time employment. I advised the applicant that his failure to call his wife as a witness would not assist his case. I also told the applicant that I may not give any weight to any statement of his wife that is in evidence[1] as she would not be available for cross-examination.
[1] See for example Exhibit A, T-document 33, p. 561.
In considering the state of the marital relationship of the applicant and his wife I have considered that the following evidence is relevant:
·On 31 July 1965, the applicant and his wife were married.[2] They are still married;
·On 9 May 1977, the applicant and Mrs Liddell purchased property at Blackwood Road, Woodridge.[3] This property was later sold in 2002;
·On 15 November 1982, the applicant and his wife purchased a property at Kingston Road, Woodridge.[4] This property is still currently owned by the applicant and his wife;[5] and
·On 11 June 1986, the property at Tradewinds Avenue, Paradise Point was transferred into the name of Mrs Liddell only.[6]
[2] Exhibit A, T-document 28 (Vol. 2, p. 551).
[3] Exhibit A, T-documents 45, 63 and 65 (Vol. 2, pp.601, 671-672 and 674-675).
[4] Exhibit A, T-document 41 (Vol. 2 p. 590).
[5] Exhibit A, T-documents 198 and 199 (Vol. 3, pp. 1195-1198 and 1199-1201).
[6] Exhibit A, T-documents 42, 196 and 197 (Vol. 2 pp. 591-593 and Vol. 3 pp. 1189-1191 and 1192-1194).
It is the case of the applicant that he separated from his wife on 1 March 1987; this is some 10 years before the period under review. The applicant stated that he and his wife always took separate holidays and that this was the case even before they separated in 1987. I do not regard the fact that the applicant and his wife take separate holidays to be significant, particularly as they did so when he asserts that they were members of a couple.
The applicant stated that he resided at the Tradewinds Avenue property before the alleged separation in 1987. He also asserts that the fact that the property at Tradewinds Avenue is in the name of his wife is evidence that he and his wife have separate residences. The property was transferred into the sole name of his wife in 1986, which is some time prior to when the applicant states that he separated from her. I do not regard this transfer of property to be relevant to my consideration of whether the parties are members of a couple as the transfer occurred before to the time of the alleged separation. There are many reasons why such a transfer would have occurred.
In considering the relationship of the parties following their alleged separation in 1987 and in the relevant period under review, that being from March 1997 to March 2009, it is important to have regard to the factors in s 4(3) of the Act.
FINANCIAL ASPECTS OF THE RELATIONSHIP
The applicant and his wife still jointly own a property at Kingston Road, Woodridge. At the time of the relevant decision this property was valued at $1,110,000.[7] The applicant accepted that if rental income was being received for the property at Kingston Road, then his wife would be entitled to part of that income. The applicant agreed that both he and his wife had a joint financial interest in that property.
[7] Exhibit A, T-document 248 (Vol. 4 pp. 1449-1479, especially at p. 1457).
During the relevant period, the applicant and his wife also jointly owned a property at Blackwood Road, Woodridge: this property was purchased on 9 May 1997 and later sold in 2002. The applicant, in a statement to Centrelink dated 12 August 2000, advised that this property was vacant land. The fact that the applicant and his wife jointly acquired the Blackwood Road property on 9 May 1997 is not, in my view, consistent with his contention that since 1 March 1997 he and his wife have not been members of a couple. As I have stated above, the wife of the applicant was not available for cross-examination and, as such, could not be questioned about this transaction.
During the relevant period the applicant and his wife held joint bank accounts. The applicant contended that he and his wife had made a conscious decision to keep joint bank accounts because if one of them died it was easier for the other person to access the finances.
The applicant also has a bank account in his own name. He stated that the only reason he opened a bank account in his own name was because he was informed by Centrelink that benefits must be paid into a bank account that was solely in his name.
The applicant confirmed in his evidence that both he and his wife still jointly own Telstra shares. He advised that the shares were purchased by his daughter under the Employee Share Option Scheme in the joint name of himself and his wife. A number of documents which are in evidence before me refer to the interest of both the applicant and his wife in these shares.[8]
[8] Exhibit A, T-documents 103 (Vol.2 p. 767), 106 (Vol. 2 p. 786), 108 (Vol.2 788), 111 (Vol. 2 p. 792), 117 (Vol. 2 p. 799), 121-124 (Vol. 2 pp. 804-807), 131 (Vol. 2 p 821), 134 (Vol. 2 p. 826), 137 (Vol. 2 p. 829), 138 (Vol. 2 p. 830) and 144 (Vol. 2 p. 848).
The applicant and his wife were initially both directors as well as shareholders of Lochinvar Holdings Pty Ltd. This company was established to operate a number of businesses run by the applicant. The applicant stated that the company had traded as an aboveground swimming pool company as well as conducting a real estate business. The applicant asserted that he ceased being a director in 1996 because of his ill health and mood swings.
From 2007 the company traded as Logan Tanks. The applicant contends that he had no involvement in the day to day running of the Logan Tanks business, which he stated was set up by his son. The applicant accepted that he was a signatory on bank accounts in the name of Lochinvar Holdings;[9] that he was also authorised to sign a credit application in May 2007 on behalf of Lochinbar Holdings;[10] and that he also used funds from the account of Lochinvar Holdings, trading as Logan Tanks, to pay for the service of his Pontiac Firebird vehicle, registration 667-OIM.[11] He also took out business insurance for Logan Tanks on 4 April 2007.[12] This indicates that the applicant could access the monies held in the Lochinvar Holdings bank accounts whenever he wanted. He asserts that this was for a matter of convenience.
[9] Exhibit A, T-document 183 (Vol. 3 pp. 1043-1058 especially at p. 1048).
[10] Exhibit A, T-document 149 (Vol. 2 p. 869-872).
[11] Exhibit A, T-document 150 (Vol. 2 p. 876).
[12] Exhibit A, T-document 146 (Vol. 2 pp. 855-859) and T-document 165 (Vol. 3 pp. 982-992).
NATURE OF THE HOUSEHOLD
It is important for me to give consideration to the nature of the household. The respondent submitted that at all material times the principal place of residence of the applicant was in Tradewinds Avenue, Paradise Point. The applicant confirmed that he used the Tradewinds Avenue property as his postal address.
The property at Kingston Road is an industrial property. The applicant provided evidence that he applied for the property to be rezoned from residential to special facility. The applicant himself stated that the location was 'beneficial for business'. This would certainly be the case as the property is located on a major road.
The respondent submitted that the applicant intended to use the property for business purposes. The property was in fact used for business purposes, including:
·for the Logan Tanks business; and
·storing shipping containers (containing goods) for other people.
The applicant also remarked that various other people could “access the property whenever they wanted”.
The respondent also pointed out that the applicant confirmed that the local council had attended the property to inspect whether he was in fact living there. This may indicate that no one was living at the property (correspondence provided in the applicant's bundle of material).
The applicant confirmed in cross examination that Bluecare never attended the property at Kingston Road to offer him assistance.
The respondent has submitted that the photos of the interior of the house on the Kingston Road property[13] are of an industrial property that is not used for residential purposes.
[13] Exhibit G; Exhibit A, T-document 248 (Vol. 4 p. 1469).
The respondent submits that the photographs taken of the interior of the property by the Australian Federal Police on 1 April 2009[14] are of a residence that has not been lived in for a significant period of time. The photographs do not show any personal objects or clothing. The photographs do not show any bedding, sheets or general day to day living necessities for a person if they had been residing at the premises. The applicant asserted that there were some renovations being conducted at the time, while he was in hospital. In later submissions he claimed that his personal effects were located in a four drawer filing cabinet, located in the bedroom, which is not depicted in the photographs. I do not give much weight to this assertion; it was not made by the applicant at the hearing. If this was indeed the case he could have mentioned it when he was being questioned about the photographs.
[14] Exhibit A, T-document 209 (Vol. 3 pp. 1257-1260).
What is significant is that a specialist, in a letter dictated on 27 March 1997,[15] advised a hospital that the applicant currently had two residences and intended to make the Gold Coast residence permanent. At the time the letter was written the applicant only had two properties at which he could reside, those being the properties at Kingston Rd, Woodridge and Tradewinds Avenue, Gold Coast. This statement to the hospital on 27 March 1997 is inconsistent with his assertion that after 1 March 1997 he was no longer a member of a couple. The letter of 27 March 1997, in which the applicant states that he had been residing at the Gold Coast residence and intended to make it his permanent residence, is one reason why I do not accept that there was any separation on 1 March 1997.
[15] Exhibit A, T-document 69 (Vol. 2 p. 681).
There is further evidence on which I have relied to find that the principal place of residence of the applicant was at the Tradewinds Avenue address during the relevant period. The photographs which were taken by the Australian Federal Police at the Tradewinds Avenue property on 1 April 2009 include a photograph of the Velocity card of the applicant in the bedroom.[16] I do not give weight to the assertion of the applicant that he knew nothing about this card. There are also other items which were seized by the Australian Federal Police which indicate that the applicant used the Tradewinds Avenue property as his address.[17] On 8 October 2002 the applicant signed a car sale invoice which indicated his address as the Tradewinds Avenue property:[18] I regard this document as being inconsistent with the assertion of the applicant that his address was not Tradewinds Avenue. The fact that on 13 September 2000 the applicant himself answered the telephone at the Tradewinds Avenue property is evidence upon which I also rely to find that he lived there as his permanent residence.[19]
[16] Exhibit A, T-document 209 (Vol. 3 pp. 1252 and 1254).
[17] Respondent's Statement of Facts and Contentions at paragraph 43.
[18] Exhibit A, T-document 116 (Vol. 2 p. 798).
[19] Exhibit A, T-document 99 (Vol. 2 p.760).
The respondent submits that the only evidence before the Tribunal that the applicant was residing at Kingston Road, Woodridge is his own evidence and his advising of that address to various third parties. The applicant admits that he resided at the Tradewinds Avenue property for long periods following his hospital admission as well as using it as his mailing address. This is despite the fact that the applicant confirmed to me during the hearing that mail can be delivered to his Kingston Road, Woodridge address.
The applicant admitted to the use of the Tradewinds Avenue address for mailing purposes. The material before me contains documents from many sources which were sent to him at the Tradewinds Avenue address. These include correspondence from RACQ, TAB Limited, Jupiters Limited, Qantas, Commonwealth Bank of Australia, Commsec, Waterhouse Investor Services, Adelaide Bank and Security Transfer Registrars. What is significant is that correspondence that relates to the Kingston Road property (including notices from the Department of Natural Resources, a rates notice, an energy account and a plumbing invoice) were addressed to the Tradewinds Avenue property. Centrelink is the only entity with whom the applicant has consistently used the Kingston Road address for mailing purposes.
I consider that the applicant's principal place of residence, during the relevant period, was at the Tradewinds Avenue property.
SOCIAL ASPECTS OF THE RELATIONSHIP
The applicant and his wife presented themselves as a couple to third party financial institutions as well as to family and friends, as depicted in photos and representations made in family cards. In hospital records he referred to his wife as his partner. The photographs in evidence[20] and the purchase of shares in joint names some 20 years after the couple have said to have separated demonstrates that the relationship between the applicant and his wife had not deteriorated such that they should be regarded as living separately and apart.
[20] Exhibit A, T-documents 14 and 15 (Vol.1 pp. 45-47).
SEXUAL RELATIONSHIP
There is no evidence before the Tribunal of a sexual relationship between the applicant and his wife.
THE NATURE OF THE COMMITMENT
The applicant is an ill man and requires lengthy periods of convalescence. He resides with his wife who cares for him during these periods. The applicant and his wife continue to maintain a joint financial interest in a valuable property. There is no intention on the part of the applicant or his wife to obtain a divorce. The applicant and his wife have also continued to enter into joint financial arrangements since the alleged separation, such as the acquisition of Telstra shares and the Blackwood Road, Woodridge property.
MEMBER OF COUPLE
After reviewing the evidence before me I find that the applicant and his wife were members of a couple during the period 1 March 1997 to 31 March 2009. I also find that his principal place of residence for the whole of that period was the Tradewinds Avenue residence. Even though his wife is the registered owner of the Tradewinds Avenue property, the applicant himself is nevertheless a homeowner for the purposes of social security law by virtue of the operation of s 11(4)(b) of the Act. As the property at Kingston Road, Woodridge was not his principal place of residence that property must be taken into account as part of the asset test set out in module G of s 1064 of the Act.
During the relevant period the applicant and his wife jointly held property. The value of Blackwood Road, Woodridge property, was, at its sale on 8 August 2002, $200,000. The annual valuations of Blackwood Road are also in evidence.[21]
[21] Exhibit A, T-document 241 (Vol. 4 pp. 1408-1409).
The value of 61 Kingston Road, Woodridge was $1,110,000 as at 2 April 2009. The annual valuations for Kingston Road are in evidence.[22]
[22] Exhibit A, T-documents 242 and 248 (Vol. 4 pp. 1410-1411 and 1449-1470).
As the Applicant's assets exceeded the DSP asset threshold he had no entitlement to DSP from 1 March 1997 to 7 March 2005.
As the Applicant's assets exceeded the age pension asset threshold he had no entitlement to age pension for the period 8 March 2005 to 31 March 2009.
DEBT
During the period from 1 March 1997 to 7 March 2005 the applicant received disability support pension at the single rate; the payments of disability support pension during this period total $75,624.78. During the period of 8 March 2005 to 31 March 2009 he received age pension at the single rate; the payments of age pension during this period total $55,621.33. There is no issue as to the correctness of these amounts. I am satisfied that during these periods he was a member of a couple with his wife. He has been overpaid a total of $131,246.11 which is a debt due to the Commonwealth by virtue of the operation of s 1223(1) of the Act.
WRITE-OFF OF DEBT
Having regard to the significant assets of the applicant, I have decided that it is not appropriate to write-off the debt under s 1236 of the Act. The applicant has capacity to repay the debt by the sale of the assets or by installments to be negotiated.
WAIVER OF DEBT
I have decided that it is inappropriate to waive the debt under s 1237AAD of the Act. The respondent has contended that the applicant "knowingly", within the meaning of s 1237AAD of the Act, made a false representation to Centrelink about his residential address. There is Presidential authority that s 1237AAD of the Act requires an applicant to have actual rather than constructive knowledge that he or she was making a false statement or representation; such knowledge is to be ascertained by reference to the statements of the applicant as to his or her actual state of knowledge at the time and to the events surrounding the false statement or representation: see Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435 at 445 per Deputy President Forgie. The applicant informed Centrelink on numerous occasions during the relevant period that his principal place of residence was at Kingston Road, Woodridge when he in fact lived at the Tradewinds Avenue address. The applicant has tendered evidence of his previous history of providing false statements to obtain a social security benefit. It is not, in my view, necessary for me to make a finding that the applicant consciously and deliberately failed to comply with his obligations under the Act to inform Centrelink of his residence.[23] This is because I consider that there are no special circumstances which are present that would warrant waiver of the debt.
[23] ReSaunders and Secretary, Department of Family and Community Services (1999) 57 ALD 495.
CONCLUSION
For the forgoing reasons, I consider that the decision to cancel the Applicant's age pension pursuant to s 80 of the Social Security (Administration) Act 1999 (Cth) was the correct and preferable decision to make.
DECISION
I affirm the decision under review.
I certify that the preceding 44 (forty four) paragraphs are a true copy of the reasons for the decision herein of Dr P McDermott, RFD, Senior Member.
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Associate
Dated 4 April 2012
Date(s) of hearing 30 November 2011; 15 December 2011 Applicant In person Solicitors for the Respondent Australian Government Solicitor
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