King and Secretary to the Department of Family and Community Serv Ices
[2003] AATA 863
•4 September 2003
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DECISION AND REASONS FOR DECISION [2003] AATA 863
ADMINISTRATIVE APPEALS TRIBUNAL Nº V2002/967
GENERAL ADMINISTRATIVE DIVISION
Re: PHILIP KEITH KING
Applicant
And: SECRETARY TO THE
DEPARTMENT OF FAMILY ANDCOMMUNITY SERVICES
Respondent
DECISION
Tribunal: Mr W.G. McLean, Member
Date: 4 September 2003
Place: Melbourne
Decision:The Tribunal affirms the decision under review.
(sgd) W.G. McLean
Member
SOCIAL SECURITY - farm household support - application for farm help - definition of farmer - qualification for farm help income support - eligibility for Farm Help Re‑establishment Grant - decision affirmed
Farm Household Support Act 1992 ss.3(2), 8B
REASONS FOR DECISION
4 September 2003 Mr W.G. McLean, Member
The Tribunal considered an application from Mr Philip Keith King (the applicant) for the review of a decision made by a Centrelink delegate of the Secretary to the Department of Family and Community Services (the respondent) to reject his claim for farm help. The original decision made on 18 February 2002 was initially affirmed by an authorised review officer (ARO) of Centrelink on 20 May 2002 and subsequently affirmed by the Social Security Appeals Tribunal (SSAT) on 7 August 2002.
The applicant was represented by Mr E. McDonald, a senior financial counsellor from South West Financial Counselling Service Inc. The respondent was represented by Mr R. Huttner and Ms R. Bradley, Centrelink advocates. The applicant and his father, Mr Wilton Keith King, gave sworn oral evidence.
The Tribunal received into evidence the documents (the T documents) lodged pursuant to s37 of the Administrative Appeals Tribunal Act1975.
On 22 January 2002, the applicant lodged a claim for farm help at the Warrnambool Office of Centrelink. The claim was lodged under cover of a letter of the same date, written by Mr Evan McDonald, a rural financial counsellor employed by South West Queensland Resource Centre (SWQRC). The applicant’s claim elects to take up a "Farm Help Re‑establishment Grant ONLY" (T8 p.25).
Entitlement to Re—Establishment Grant is to be determined in accordance with the provisions of the Restart Re—establishment Grant Scheme 1997 (the Scheme), formulated by the Minister for Primary Industries and Energy under s52A(1) of the Farm Household Support Act 1992 (the Act). Clause 2.1 of the Scheme pertaining to eligibility states:
…
A person is eligible to apply for a re‑establishment grant only if he or she is qualified for restart income support under Division 1B of Part 2 of the Act.
Section 3(2) of the Act provides the following definition of farmer:
…
farmer means a person who:
(a)has a right or interest in the land used for the purposes of a farm enterprise; and
(b)contributes a significant part of his or her labour and capital to the farm enterprise; and
(c)derives a significant part of his or her income from the farm enterprise.
The respondent concedes that the applicant meets paragraph (a) of the definition of farmer but contends that the applicant does not meet paragraph (b) and (c) of the definition.
Section 8B of Division 1B of the Act provides the following:
…
Subject to this Division, a person is qualified for farm help income support in respect of a period if:
(a)the period begins on or after the farm help scheme payment commencement day; and
(b)throughout the period, the person:
(i)is a farmer; and
(ii)is at least 18; and
(iii)is an Australian resident; and
(iv)is in Australia; and
(c)the person has been a farmer for a continuous period of at least 2 years immediately before the period; and
(d)a certificate of inability to obtain finance issued in respect of the person has effect throughout the period.
The respondent contends that the applicant fails to meet the above‑mentioned definition of farmer and furthermore that he has not been a farmer for a continuous period of at least two years immediately before the date of his claim on 22 January 2002, pursuant to subsection 8B(c) of the Act.
On 18 February 2002, a delegate of the respondent decided that the applicant was not qualified for farm help and he was advised by letters dated 1 May 2002 of the following reasons for the rejection of his claim:
… "because you are not considered to be a farmer as defined in section 8(B) [sic] of the Farm Household Support Act 1992. This is because Division 1B (8B)(c) [sic] states that a person is qualified for Re‑start Income Support in respect of a period if the person has been a farmer for a continuous period of at least two years immediately before claiming. Our records indicate that you have been on Newstart for the period 30/04/01 to 21/01/02. You have therefore declared that you were unemployed and thus we could not consider you to be a farmer for that time."
…
"as you have received newstart allowance you do not meet the criteria of being a farmer".
On 7 August 2002, the SSAT decided to affirm the decision made by the delegate of the respondent on 18 February 2002. The SSAT made the following findings of fact:
…
FINDINGS OF FACT
11.On the basis of the evidence before it, the Tribunal made the following findings:
· Mr King was the owner of "Alpha Station" at Wyandra from 1994 until its sale on 22 January 2002;
· Mr King moved to Shepparton in December 1999 for the purpose of obtaining off‑farm income to support the property and repay loans;
· From December 1999 to August 2000 Mr King worked for SPC, earning $31036 to 30 June 2000;
· Mr King travelled to his property approximately once per month during this period to check his fences;
· The property "Alpha Station" made a loss of $26460 in the 1999‑2000 financial year;
· Most of Mr King's earnings from employment and all of his capital were put towards the farm and repayment of loans taken out with respect to the farm;
· Mr King claimed a farm help scheme re‑establishment grant on 22 January 2002.
Mr McDonald of SWQRC represented the applicant at the hearing and provided the following written submission embracing certain facts and contentions relied upon by the applicant:
1. This is an application for review of the decision of the Social Security Appeals Tribunal where it was decided that Mr Philip King, (the applicant), did not satisfy the statutory definition of a farmer under the Farm Household Support Act 1992 (the Act) and thus was not qualified for the benefit from the Farm Help Re-establishment Scheme (FHRS).
2. The initiative known as the Farm Help Program, (which includes the FHRS) became operative in December 1999, subsequent to the previous initiative called the Farm Family Restart Scheme, which had been in effect for two years to that date. The intention of both the previous program and the current FHRS, was to provide a welfare safety net for Iow income farmers who were experiencing financial hardship who were unable to borrow further against assets and/or were not ready to make a decision to place farming assets on the market and access welfare support under social security hardship the provisions. It was also designed as an incentive for marginal farmers to leave their respective industry before their assets were further severely depleted. There are two parts of Farm Help initiative, the first providing income support during the period leading up to disposal of the Farm enterprise and, the second, a re-establishment grant of up to $45000 upon the sale of the enterprise. Although the initiative was a part of a range of welfare at rural adjustment measures in the Department of Agriculture, Fisheries and Forestry (AFFA) portfolio, Centrelink is responsible for its administration.
3. The applicant lodged his claim for a re-establishment grant on the 22nd January 2002 immediately prior to the sale of the property "Alpha", located in the Paroo Shire, Western Queensland. This claim was forwarded to the Warrnambool Centrelink Office, the National Headquarters for the Rural Processing Unit (RPU), the Assessment Team responsible for assessing all Farm Help Claims across Australia.
4. On first of May 2002 an officer from the RPU Warnambool, decided that Mr King was not qualified for the FHRS grant. Mr King was subsequently advised by letter that his claim had been rejected on the grounds that Mr King was a recipient of then Newstart allowance, therefore not meeting the criteria of being a farmer.
5. Rural Financial Counsellor Evan McDonald, requested on Mr King's behalf that the matter be referred to an Authorised Review Officer (ARO) for further consideration. An ARO of Centrelink did reassess the claim and affirmed the decision. This officer notified Mr King by letter dated 20th may 2002, indicating that he had only been working on the farm for three months in a two-year period prior to lodgement of the claim. As he had not been a farmer in relation to his farm enterprise for a continuous period of two years prior to the claim, he was not qualified for assistance from the FHRS, specifically the grant.
6. On the 19th June 2002 Mr King applied to be Social Security Appeals Tribunal (SSAT) for independent review of the decision by the ARO of Centrelink.
7. Rural Financial Counsellor Evan McDonald provided the SSAT with documentation outlining the chronology of Mr King's situation, commencing with his purchase of the property in 1994. In relation to the two-year period ending in early 2002 (when the property was sold), a multitude of documents were tended as evidence supporting the active role of Mr King in the farming operations at the the property "Alpha" over this two year period 1999 - 2001.
8. The SSAT compiled tis documentation into "T" documents. It is respectfully suggested that some of the comments included in the SSAT "Reasons for Decision" have been contextualised and can be regarded as ambiguous towards the findings of that tribunal. From this perspective page "T2", point six, bulet point 2, refers to Mr King's relocation to Shepparton due to his parents living in that area. This statement is not entirely accurate, as new that he could readily obtain work at the SPC Cannery as Mr King had formerly worked at that enterprise. Also, Mr King was a relative newcomer to the South West area of Queensland (and in particular the town of Wyandra), which, due to he is newly arrived status, is a disadvantage for knowing of and seeking alternative off farm employment to meet the urgency of his own mortgage payments.
9. In considering the supportive documents, that SSAT found that Mr King did not satisfy the criteria of being a farmer because he not contribut significant labour to the operation. Therefore re-establishment grant benefit from the FHRS could not be paid to Mr King.
10. Mr King then directed the Rural Financial Counsellor to appeal this decision via the Administrative Appeals Tribunal. Prior to the setting of a hearing date, there has been 2 Conferences between representatives of both Centrelink and the respondent in an attempt to clarify and resolv the matter before such a hearing. These discussions were without prejudice but did identify that Mr King satisfies criteria for the FHRS except one, that being Division 1B, Section 8B, subsection 3 (2)c of the Act:
"contributes a significant part of his or her labour and capital to the Farm enterprise".
It was agreed by both parties that the word "significant" has become a pivotal in the determination of whether Mr King satisfies the criteria and thus receives payment of the FHRS, re-establishment grant.
11. The word "significant" is defined in various dictionaries. Two such dictionaries define "significant" as: "having or expressing a meaning, likely to have a major effect, important, fairly large in amount of quantities and a systematic relationship". (The American heritage Dictionary of the English language), and "significant" as: "having a meaning, indicative, noteworthy and important", (Shorter Oxford Dictionary). "Significant" was defined in ACI PET Operations v Comptroller General of Customs as a meaning "sufficiently large to be important".
12. Such definitions were applied in the case of Department of Family and Community Services (DFCS) v Wallace FCA 784 (2002), such that it was concluded that although the respondent was absent from the property for four months, the respondent did satisfy the test requirement that he had been a farmer for a continuous period of at least two years immediately before the period because:
· various farm-related Labour activities continued over the entire year
· prior to the display transferred crops were planted, livestock grazed for the purpose of sale later in the year; and
· that Foster had returned to the farm on a number of occasions.
In this instance to the Tribunal concluded that during the period interstate the respondent maintained a degree of control over his Farm enterprise by remaining "connected" to the enterprise. It was not the case that all links with farm enterprise were non-existent over this period.
13. The circumstances of both Wallace and King are remarkably similar. Both respondents were absent from their respective properties for periods of time yet both respondents remained connected to their properties by frequent visits and the completeion of administrative tasks when off-farm. In the case of DFCS v Wallace, the Honourable Judge Dowsett concluded that "It is not necessary, in order to satisfy the definition, that the claimant work on the farm for every minute or even every day". The Court found in favour of the claimant, and dismissed the appeal by the Department of Family and Community Services.
14. Further consideration of significant labour contribution would include reference to the decision by the AAT in the matter Summers v. AFFA No S2000/136 (2002). This particular tribunal considered the question "who is a farmer?…" (Section 33 of the Tribunal Decision). The tribunal considered that "a person must meet all requirements and that one should not only take into account the persons current situation. A farmer may only be working off farm during a period of time to provide income to support the Farm enterprise which is experiencing financial difficulty". The decision went on to consider that "a farmer does not have to live on‑farm but is required to contribute labour and capital"……"Iabour……is not limited to milking cows or driving the tractor. It also includes farm management and bookkeeping but does not include domestic duties", and "consideration should be given to the persons historical involvement in the Farm enterprise. Involvement in another business may only be to support the Farm while it is experiencing a downturn." Such consideration must be applied to this matter of Mr King and his labour contribution to his farming enterprise.
15. Careful dissection of appropriate documentation, namely purchase receipts, it is determined that Mr King in spent considerable time on the property "Alpha". That he could be away when it was urgently warranted is due to the natural fodder found on the property and improvements made to the property. The property "Alpha" is essentially a wilderness grazing area and does not have any cultivation undertaken on the property. Thereby all livestock pastured on the property are reliant on naturally grown grass and mulga fodder. Pasture growth records taken from the Queensland Department Primary Industries (QDPI), indicate that for period October 1997 to September 2001, average and above-average posture growth were experienced relative to historical records. Throughout the Centrelink Decision review and subsequent SSAT review, Mr King has consistently claimed that the provision of fodder was ultimately a matter of livestock "self-grazing", requiring little/or no effort by the grazier to provide fodder in relatively good years. In the layman's terms, the livestock were allowed to graze freely in whichever paddock they were confined. Mr King did not have to be physically present to ensure adequate feed for his livestock. Copies of these Pasture Growth Maps are included with this submission, with the location of "Alpha" superimposed.
16. When Mr King had purchased the property in 1994, one of the attractions to the property in was the fact that every paddock was well watered, a feature that all prospective graziers would pursue vigorously. Such waters were provided primarily from open artesin bore drains, (an open ditch about 1.5 m wide) following the natural contours of the property from the bore head to the end of the drain. To highlight the the extent of such a watering system a map of the property indicating the location of these drains are included with this submission.
17. Mr King has consistently claimed that he has travelled from Victoria to the Queensland property to undertake assessment of farming needs and to ensure the welfare of his stock. During August 2001 Mr King attended the property for several weeks to undertake shearing, and to evaluate his future on the property. Other receipts show very clearly that Mr King attended the properties on a number of weekends when he purchased personal footwear from a retailer at Cunnamulla and indeed fuel, grocery and general repair requirements necessary to ensure all the efficient operation of the property. Duties undertaken by Mr King during his visits included delving of the bore drains, fence repairs due to damage by feral and native animals, and the relocation of livestock from one paddock to another. With the machinery owned and operated by Mr King, these tasks could be undertaken on a monthly rotation thus maintaining the property adequately until a subsequent visit. From the documentation is evident, Mr King was on the property on average once a month for duration not less than four days up to 14 days, yet in addition to this hands‑on involvement, Mr King undertook administration of the property whilst employed at Shepparton, Victoria.
18. The Centrelink ARO and indeed the SSAT have erred in concluding the that the respondent had returned to the farm "whenerver he could" or at "long weekends", as this attendance has been construed in to be an ad hoc approach to livestock management, when in reality, the readily available surface water and above average feed availability enabled a planned absence to earn income to meet commitments.
19. The tribunal should also consider the financial facts contributing to the necessity of Mr King obtaining off farm employment. It should be noted that for the previous eight years to 1999, the wool industry was in a state of collapse following the withdrawal of the floor price system, whereby conventional supply and demand pressures then determined to price of wool. During the entire time that Mr King operated the property, the selling price of each wool bale remained steady at between $500 and $600 per bale. In comparison current prices have risen appreciably over the past 12 months, (also in response to conventional supply and demaned), where the current price is now approximately $1200 per bale or more. Thus the dependency on wool in a below commodity market created hardship for Mr King and ultimately contributed to his decision to sell the property and commence another career.
20. The FHRS grant was designed as incentive for marginal farmers to Exit their industry. The level of debt and the constant need to seek further collateral finance indicats that the degree of financial marginalisation by Mr King increased with each successive year. Not withstanding this, Mr King has displayed incredible courage, not only seek off farm income during a time when he would prefer to be on-farm, but also during the period of assessment that enabled him to make the decision to sell property and commence a new career. It should be noted that there was no surplus from the sale of the property, and indeed there is still an approximate $15,000 Loan being repaid by Mr King as a residual debt from the entire operation fo "Alpha".
Mr McDonald said that, during the period of the applicant’s absence from his farm between December 1999 and June 2000, he returned to his farm property to complete specific operations that were required on the property at that time. He said:
…
So he left Shepparton in Victoria, travelled to the property, Alpha, in South West Queensland, to undertake specific duties. It was not undertaken as an ad hoc journey, hoping that there may be some work, or as the case may be no work, to complete his duties as a farmer.
…I have dissected the record available which were also given to the SSAT and they are handed in evidence here today, that from the receipts that we were able to salvage from the records where I was able to determine that Mr King has spent 176 hours equivalent per annum working on the property Alpha. So in the two year period I can document that he has been there for 258 hours - 258 days, I beg your pardon.
258 days, and 176 days per annum. When one considers that one would have to define what is a day and how much operation would be undertaken in a given day, I have sat with Mr King and discussed the type of operations that occur on the property Alpha and, given that it is a natural grazing property, it does not have cultivation, it does not have an intensive feed lot programme, it is commonly referred to as an open range grazing operation where the livestock that are pastured on the property do graze openly and freely in the paddocks in which they are contained. Therefore, the duties of a grazier come down to, indeed, controlling where those stock move and, indeed, checking on their welfare which will include water supply, the availability of feed and, indeed, other hazards such as the native predators that may also live on the property.
Having worked backwards in a mathematical sense, we contend that on a normal annual basis that there would be something in the order of 4117 hours of work to undertake as a grazier on that property and Mr King through these records, was actually able to be there working on the property 1408 hours. Added to that he has spent an additional 1730 hours undertaking bookkeeping and administrative duties which can be done off the property…which comes down to, in the percentage terms Mr King has spent in the order of 76 per cent of what would be regarded as normal working hours on the property in Alpha, even though he was travelling to and from Shepparton in Victoria.
The applicant gave evidence that Alpha Station had an overdraft limit with the National Australia Bank (NAB) of $40,000. The balance sheet of Alpha Station at 30 June 2000 records that at that date he had an overdraft balance of $41,829 and at 30 June 1990 an overdraft balance of $48,183. In addition to the bank overdraft, Alpha had loans at 30 June 2000 of $81,000 from NAB and $79,095 from the applicant's parents and a hire purchase debt of $4535 to the NAB on a motorcycle. Alpha made a net loss of $36,004 for the year ended 30 June 1999 and a net loss of $26,459 for the year ended 30 June 2000 after earning total income, largely from the sale of wool, of $29,084 for 1999 and $28,117 for 2000. Alpha Station had a sheep stock of 4150 at 1 July 1999 reduced, by deaths of 450 sheep, to a sheep stock of 3700 at 30 June 2000.
Mr King gave the following evidence concerning his farming background:
…
I suppose it made me angry when they say I am not a farmer. It is more of an insult than something because I have been a farmer all my life. I ran a piggery for - my own piggery for seven years and I worked on Dad's dairy farm for a long time when I left school.
During the period that the applicant was absent from his farm property working in Shepparton, he had a friend named Wally who lived in Wyandra, which is the Queensland country town nearest Alpha Station. Wally visited the farm on his motor bike three or four days each week and the applicant would speak to him from Shepparton regularly on the telephone when Wally would report any problems such as dingoes, lice and sheep, etc.
The applicant said that his drive to Alpha Station in Queensland from Shepparton took approximately 12 hours. He said that the farm was approximately 50,000 acres with two stock routes and had about 170 kilometres of fencing. He used his motorcycle to inspect and repair fencing, inspect the sheep for lice etc. and look for dingo tracks and feral pigs. The farm has an artesian bore of about 2000 feet deep and a six‑inch bore casting. The bore drains run approximately 60‑70 kilometres through the farm paddocks and the bore produces about 50,000 gallons of water per day. The applicant said that …It runs all of the time, so with stock, as long as you have got water and there you are reasonably right if the feed is sort of going all right".
The applicant also used his motorcycle to muster sheep for shearing and drenching and he said:
…
And it would take you about - to must that place reasonably well, it would take you about 5 weeks to do it…But then it would take me another week to get the sheep into the sheds. So a lot of hours on the motor bike. I might start at half past four in the morning and knock off at 9 o'clock sometimes.
He said that he had a couple of friends who came from Victoria and assisted him with drenching and that contractors completed the sheep shearing. Fortunately, Mr King was not confronted by a major emergency situation such as a bush fire during his absence in Victoria.
The applicant estimated that his longest period of absence from Alpha Station might have been around two months and, prior to the sale of his property on 25 January 2002, he was at the property working and preparing the property for sale.
The applicant gave evidence that he moved to Shepparton in December 1999. His income tax return for the year ended 30 June 2000 records that he earned a gross income of $31,036 from SPC Limited (SPC) and received newstart allowance (NSA) payments from Centrelink totalling $2286 during the 2000 tax year. A statement of earnings from SPC indicates that the applicant’s gross earnings of $31,036 was paid to Mr King during the 2000 tax year and a group certificate from Centrelink indicates that the $2286 NSA was paid between 9 November 1999 to 1 February 2000.
On 30 April 2001, the applicant claimed NSA at the Shepparton Branch of Centrelink and on 8 May 2001 NSA was granted under s593 of the Act. Centrelink's computer statement (T7) records that Mr King worked at SPC until February 2001 and then went to Queensland to work on his father's sheep farm until 15 April 2001. The note records the following comment:
…Cust [customer] was not paid by father for his work due to farm nearly bankrupt. No change in any other circs and have explained rights and obligations to cust [customer] and issued future directions magazine.
The applicant gave evidence that after SPC finished its seasonal fruit cannery operations he was laid off. He said that he visited the Shepparton Branch of Centrelink and said to them:
…I told them I was a farmer. I told them I had an overdraft and I told them I had a stock mortgage. I told them exactly what I had been doing and I said, "Is there anything I could get till I find another job or, you know, get back up there an straighten things out?" And they said I could get Newstart, and as I understand it, what they were supposed to do was put me on the Farm Help programme which is exactly the same money as the - yes, the Newstart and Farm Help, same money, but instead of going on Farm Help - for some reason I don't know whether the fellow understood me or I misunderstood him, but I ended up with Newstart for a while and that seemed to be a big problem with sorting this mess out because I was on that and I didn't mean to do anything wrong by anybody, but that is what happened and that was a big hiccup in this whole thing.
The applicant said that he was thinking about selling Alpha Station in 1999 when he came to Shepparton to work at SPC. He expected that it would take about a year and a half to sell the property. The Alpha Station property was sold on 25 January 2002. Morrissy and Dean, barristers and solicitors, acted for the applicant and his father Mr W.K. King in respect of the sale. The settlement statement, attached to Morrissy and Dean's letter dated 7 February 2002 (T20), shows the vendors of the property as the applicant and Mr Wilton Keith King and that the net proceeds from the sale of the property, after adjustments, of $251,010.45 were distributed as follows:
To be paid by bank cheques:
Trevor Watt and Associates (Agents) 570.00
Paroo Shire Council 1135.60
P.K. King and W.K. King
(ANZ Account 511603831) 145,108.58
NAB CR P.K. King and W.K. King
(to discharge mortgage liability) 104,196.27__________
$251,010.45
__________
The respondent asked the applicant if he knew what NSA essentially was when he applied for social security payment at Shepparton on 30 April 2001 and the applicant replied:
…
Not really, I told the bloke at Shepparton when he said about the - I will put you on Newstart, he said to me that if your farm is not making a profit that you were eligible for it. And I did sign a green bit of paper there somewhere saying what was what, and of course that had not turned up anywhere, but that is what I did, yes.
Well as far as Newstart application form in some ways I was unemployed because I got laid off the cannery and the fruit picking finished and I haven't told any lies to anyone. I told the social security in Shepparton what I was doing and in some aspects I would be unemployed because the farm wasn't making a profit…
Well, I was - yes I was unemployed at Shepparton and I knew I had to deal with getting the farm sold or getting another job at that period of time, yes.
The applicant was referred to the fact that the respondent had previously paid him NSA from 9 November 1999 to 1 February 2000 amounting to $2286 (T9 p.44). The applicant agreed that he had received notices from the respondent at fortnightly intervals during the NSA payment period from November 1999 to February 2000. He was unable or unwilling to explain why he had previously given sworn evidence that he did not really know what NSA essentially was when he reapplied to Centrelink at Shepparton on 30 April 2001 for a social security payment. The Tribunal rejects the veracity of this evidence.
The applicant was employed by SPC from December 1999 to August 2000 and his income tax return for the year ended 30 June 2000 (T9 p.31) records that during that tax year he was paid a gross salary of $31,036 by SPC. The applicant acknowledged that his 2000 income tax return did not report to the Australian Taxation Office his earnings received from casual fruit picking during the 2000 tax year. Mr King could not explain how he had been entitled to receive from the respondent NSA between December 1999 and February 2000 when he was apparently receiving remuneration from SPC and probably from his casual fruit picking employment at the same time.
The applicant’s income tax return for 30 June 2000 attaches copies of the financial statement of Alpha Station for the years ended 30 June 1999 and 2000. Mr King gave evidence that the farm property was owned jointly with his father and the NAB mortgage was in respect of the bank loan made jointly to the applicant and his father. This is confirmed by the Alpha Station statement of sale prepared by Morrissy and Dean, which records that $104,196.27 was paid to the NAB CR P.K. King and W.K. King to discharge the mortgage liability. The applicant said that his father retained the entire amount of $145,108.58 from the sale of Alpha Station, which is said, by Morrissy and Dean, to have been paid to P.K. King and W.K. King ANZ account 511603831. Notwithstanding Mr W.K. King's financial involvement in the original acquisition of Alpha Station, the applicant’s income tax return for 30 June 2000 is prepared on the basis that the applicant was the sole proprietor of the Alpha Station farm business.
The profit and loss statement of Alpha Station for the years ended 30 June 1999 and 2000 reports a net loss of $36,004.88 for 1999 and $26,459.43 for 2000 and the applicant’s income tax return claims the entire $26,460 loss as a deduction from the applicant’s income earnings of $31,036 from SPC and $2286 from NSA payments. The tax return also deducts carry forward tax losses from primary production from prior tax years of $43,229. The balance sheet of Alpha Station at 30 June 2000 reports that the applicant made drawings of $10,036.17 in 1999 from a deficit capital account of $33,201.91 at 1 July 1998, and drawings of $7927.39 in the 2000 year from a deficit capital account of $70,452.96 at 1 July 1999. It is contended that the applicant earned $6800 from SPC during the year ended 30 June 2001. He also earned $4189 from Allstaff Industrial Pty Ltd and $1234 from ING Brown Shepherd and Sons during the 2001 income tax year. The respondent has paid the applicant NSA from 30 April 2001. There is no evidence before the Tribunal that the applicant derived a significant part of his income from the farm enterprise from 1 July 1998 until the property was sold on 25 January 2002.
The applicant’s father, Mr Wilton Keith King (WKK) gave sworn oral evidence that he is a retired farmer residing at Pine Lodge North, near Shepparton in Victoria. WKK owned and operated a dairy farm until it was sold in 1993. Also, WKK and his wife and the applicant also owned a piggery until 1993. WKK has been receiving the aged pension from 26 December 1996. He said:
…The idea was that Philip [the applicant] was going to take over up there [Alpha Station] and my other son was to take over the piggery. The reason the dairy farm was sold the other son is 25 per cent incapacitated and he couldn't do the dairy job so we restructured our operation actually.
WKK said that Alpha Station was purchased in 1993 for $180,000 and that the property was jointly owned by the applicant and himself. The applicant owned and operated the Alpha Station farming business, which was principally funded by loans from WKK and his wife and a stock mortgage of $90,000 from NAB. Alpha Station also had a $40,000 bank overdraft.
WKK said that he played a very insignificant role in the management of Alpha Station and would only visit the property for a holiday at shearing time. The applicant regarded Alpha Station as his home and was solely responsible for the overall management and control of the farming operations of Alpha Station.
In February 2000, WKK received advice from Mr Bruce Osbourne, a rural counsellor, to sell Alpha Station. WKK said:
…
I went up there because things weren't very good and Phillip, I think, might have been working down here at the time but I am not sure about that, but I went to - I wanted to restructure the finance in the property but Dalgety didn't want to refinance to give us longer time and if - if I had - if what I had suggested had been done it would have carried us on until wool and mutton prices rose enough to carry on the place and on 2 February 2000 I had been to see the Rural Counsellor, Bruce Osborne, and he wrote a letter and he had the - all Phillip's liabilities and that and he said - he advised to sell the place and I told Phillip that fact and he said "Oh, but it is my home".
People came to put stock on agistment on the property - they actually wanted to buy the property and just at that particular time, Phillip had had a bit of an operation and he was a bit down and that is when we like decided, yes, there is somebody wants to buy it. It was never advertised and it was never put in an agent's hand, it was just that these people came and wanted to buy it so he thought well, if he didn't take the offer and things were bad, like he would think what a mistake he made when somebody wanted to actually buy it.
The respondent contends that the applicant was in receipt of NSA for the following periods:
27 October 1999 to 2 February 2000 - cancelled - following return to work
21 August 2000 to 22 December 2000 - cancelled - when did not lodge form30 April 2001 to ongoing
The applicant is the son of a farmer who was engaged in dairy farming and a piggery. The piggery was jointly owned by the applicant and his father and his mother. In 1993, his father, Mr W.K. King, decided to retire from farming and to sell his dairy farm and to dispose of the piggery to his other son. Proceeds resulting from the restructure were used in conjunction with bank loans to acquire Alpha Station as follows:
Purchase Price 180,000
________
Funded by:
Bank loans:
Stock mortgage 90,000
Overdraft 40,000
Loan from W.K. and H.J. King 50,000
________
$180,000
________
Mr W.K. King regarded the Alpha Station business to be owned and operated by the applicant however, Mr King maintained an ongoing interest in the financial viability of the farm business and the associated worth of the property which he jointly owned with the applicant. The balance sheet of Alpha Station as at 30 June 2000 records that the loan from W.K. and H.J. King had increased to $79,095.47 and that the capital account had deteriorated to a negative balance of $91,509.78.
It is clear that both the applicant and his father became increasingly concerned about the potential long‑term viability of Alpha Station and the continuing losses of the farm business. The reported losses for Alpha Station are $36,004 for the year ended 30 June 1999 and $26,459 for the year ended 30 June 2000. Alpha Station's bankers had expressed concern regarding their exposure to Alpha Station and in December 1999 the applicant moved to Shepparton in Victoria to live with his parents and to obtain seasonal work at the SPC fruit cannery plus casual fruit picking work in order to earn money to service Alpha Station's bank debt. He also received NSA between November 1999 and February 2000 from the respondent. In order to reduce bank loans and/or pay bank interest, the applicant decided to sell Alpha Station's sheep stock between the period June 2000 and December 2000, and to allow another farmer to agist stock on the property.
Around February 2000, Dalgety had refused a request from the applicant’s father Mr W.K. King to restructure the funding of Alpha and Mr W.K. King had obtained advice from a rural counsellor, who had reviewed the financial position of Alpha at that time, that Alpha Station should be sold.
The Tribunal accepts the evidence that lower than normal prices for Alpha Station's wool crop from 1996 produced significant negative outcomes and increasing negative capital account balances. The deteriorating financial position of Alpha Station naturally concerned the applicant and his father and also the bank that provided significant loans to Alpha Station, and the applicant decided to provide funding to the farm enterprise by obtaining non‑farming employment to partly pay Alpha's operating costs.
During the period between December 1999 and August 2000, the applicant lived with his parents and worked in Shepparton, Victoria. However, the Tribunal is satisfied that during this period he frequently returned to Alpha Station in Queensland as required to carry out the work required to maintain the farm operations, including property maintenance and to take care of the sheep stock. The applicant also regularly telephoned his friend Wally who lived in Queensland and regularly visited Alpha Station. During these conversations Wally would report to the applicant the condition of the property and the sheep stock. The Tribunal accordingly finds that the applicant contributed a significant part of his labour and capital to the farm enterprise and therefore he satisfies the definition of farmer prescribed under s3(b) of the Act.
The respondent has conceded that the applicant satisfies the definition of farmer under s3(a) of the Act. Therefore, the remaining disputed s3 matter to be determined by the Tribunal is whether or not the applicant satisfied the definition of farmer under s3(c) of the Act. As discussed earlier in these reasons for decisions, there is no evidence before the Tribunal that the applicant derived a significant part of his income from the farm enterprise and there is documentary evidence that he did not do so between 1 July 1998 and 30 June 2000. The Tribunal therefore finds that the applicant did not satisfy the definition of farmer pursuant to s3(c) of the Act, particularly for a continuous period of at least two years immediately before the date of his claim for farm help on 22 January 2002, bearing in mind that the applicant received NSA from the respondent during the period from 30 April 2001 to 21 January 2002.
As the result of the above finding that the applicant does not satisfy the definition of farmer provided under s3(c) of the Act, the applicant must fail to satisfy the qualification for farm help income support prescribed by s8B(b)(i) of the Act which provides that throughout the period the applicant is a farmer.
The Tribunal also finds that the evidence shows that the applicant does not satisfy s8B(c) of the Act. He received NSA between 30 April 2001 and 21 January 2002 which indicates that he claimed to be unemployed during this period. It is the applicant’s evidence that he sold Alpha Station's sheep stock around June to December 2000 and that the property was subsequently used by another farmer to agist stock. Also, in cognisance of the finding that the applicant did not satisfy the definition of farmer under s3 of the Act, the Tribunal is satisfied that the applicant has not been a farmer for a continuous period of at least two years immediately prior to the date of his claim for farm help on 22 January 2002.
Due to the above‑mentioned findings, the applicant fails to satisfy the qualification for farm help income support pursuant to s8B of Division 1B of the Act. As a result, the applicant is not eligible for the Restart Re‑establishment Grant claimed by him on 22 January 2002.
The Tribunal affirms the decision under review.
I certify that the thirty-six [36] preceding paragraphs are a true copy of the reasons for the decision herein of
Mr W.G. McLean, Member
(sgd) Catherine Thomas
Clerk
Date of Hearing: 18 February 2003
25 June 2003
Date of Decision: 4 September 2003
Advocate for the applicant: Mr E. McDonald
Advocate for the respondent: Mr R. Huttner and Ms R. Bradley
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