Lipkin and Secretary, Department of Family and Community Services

[2004] AATA 1420

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 1420

ADMINISTRATIVE APPEALS TRIBUNAL               Nº V2004/1033

GENERAL  ADMINISTRATIVE DIVISION

Re:            NATALYA LIPKIN

Applicant

And:SECRETARY,

DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal:       Mr B.H. Pascoe, Senior Member

Date:             22 December 2004

Place:            Melbourne

Decision:For reasons given orally at the hearing, the Tribunal sets aside the decision under review and in its stead, finds that the assets of the applicant and her partner in the period 1 January 1998 and 26 March 1998 did not exceed $406,000 so that Family allowance was properly payable in that period.

(sgd) B.H. Pascoe

Senior Member

SOCIAL SECURITY – family payment –- whether company has assets - value of assets in relevant period – overpayment debt to Commonwealth – debt recoverable

Administrative Appeals Tribunal Act 1975 ss 37, 42A(1B)

Social Security Act 1991

REASONS FOR DECISION

22 December 2004  Mr B.H. Pascoe, Senior Member

1. This is an application to review a decision of the Social Security Appeals Tribunal (SSAT) dated 9 August 2004 which affirmed a decision of an authorised review officer (ARO) of the Secretary to the Department of Family and Community Services (the respondent) made on 6 April 2004, to raise and recover a debt of $1426.60 in respect of family payment for the period 1 January 1998 to 26 March 1998 (the relevant period).   

2. At the hearing the applicant, Mrs Natalya Lipkin, was represented by her husband Dr Arkady Lipkin, and the respondent was represented by Mr W. Zita, an advocate with Centrelink. Dr Lipkin gave evidence. The Tribunal had before it the documents lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (the AAT Act).

3. This matter has had a long history which is set out in detail in the reasons for decision of the SSAT. In brief, Mrs Lipkin claimed and was paid family payment from 6 April 1994 and parenting allowance from 26 September 1996. On 30 November 1998, a decision was made by a Centrelink officer to raise and recover a debt of $14,805.20 in respect of family allowance and $6060.00 in respect of parenting allowance paid to 11 September 1997. The decision was made on the basis of financial statements of a company, Holographic Non‑Destructive Testing and Lipkin International Quality Control Pty Ltd ("HNDT") in which Dr and Mrs Lipkin were the sole shareholders. These statements showed a loan of $12,657,559 to HNDT from Dr Lipkin as at 30 June 1996 and, as a consequence, the decision to raise and recover the debt was on the basis that the combined assets exceeded the asset limit for payment of parenting allowance and family payment. This decision of a Centrelink officer was affirmed by the SSAT on 27 March 2000. An application to review this decision was made to this Tribunal but then withdrawn. Pursuant to s 42A(1B) of the AAT Act, the application was taken to have been dismissed and the Tribunal has no further power in relation to that application.

4. A further decision was made by a Centrelink officer on 30 November 1998 to raise and recover a debt of $1426.60 in respect of family allowance, paid to Mrs Lipkin for the period 1 January 1998 to 26 March 1998.  In August 2003 action was taken by Centrelink to recover part of the debts by garnishee order against amounts due from the Australian Taxation Office.  On 17 February 2004 Mrs Lipkin lodged an application to the SSAT for review of this decision.  The SSAT recognised that the decision relating to the debt of $1426.60 had not been reviewed by an ARO.  The decision was reviewed and affirmed by an ARO on 6 April 2004 and affirmed by the SSAT on 9 August 2004.  Consequently, it is this decision relating to the debt of $1426.60 only which is before this Tribunal.

5. As indicated earlier, the decision to raise the overpayment was based on the financial statements of HNDT which, at 30 June 1996, showed an asset of plant and machinery at a written down value of $8,825,632, intangible assets of $8,440,100 and a debt to Dr Lipkin of $12,657,559.  However, in a balance sheet as at 30 June 1997, plant and machinery and intangible assets were showing a nil value, and the loan from Dr Lipkin had disappeared and was shown as nil.  Unfortunately, only the first page of the balance sheet is available so that the complete picture of the company's then financial position cannot be determined.

6. Against the formal financial statements of HNDT, prepared by a reputable firm of chartered accountants, was the oral evidence of Dr Lipkin that HNDT had never owned any of the equipment shown in the balance sheets of the company.  He maintained that the equipment had been owned by its Russian manufacturers and had been sent to Australia solely for exhibition purposes.  He said that all equipment had left Australia and returned to Russia prior to 30 June 1997.  He maintained that the company had no assets and the shares were of no value.

7. As this hearing was concerned solely with the alleged overpayment of family payment in the period 1 January 1998 to 26 March 1998, it is the value of the assets in that period only which is in issue.  On balance, based on the sworn evidence of Dr Lipkin and information from the partial balance sheet as at 30 June 1997, I am prepared to accept that, in the relevant period, the company had no assets of value and no debt owing to Dr Lipkin.  Consequently, the shareholding of Dr and Mrs Lipkin had little or no value.  As a result, I am satisfied that their combined assets during the relevant period did not exceed $406,000 and family allowance was properly payable in that period so that no overpayment arose.  Consequently, the decision under review should be set aside.

8. It should be stressed that this decision is concerned solely with the period 1 January 1998 to 26 March 1998.  The question of any prior period is not before the Tribunal and the evidence, particularly in relation to an apparent contradiction between the financial statements prior to 30 June 1997 and the evidence of Dr Lipkin, would not allow any expression of view as to the value of the combined assets of Dr and Mrs Lipkin in that prior period.  This is particularly so if it is assumed that the accountants produced financial statements on the basis of information from Dr Lipkin.

I certify that the eight [8] preceding paragraphs are a true copy of the reasons for the decision herein of

Mr B.H. Pascoe, Senior Member

(sgd)       Catherine Thomas

Clerk

Date of Hearing:  22 December 2004

Date of Decision:  22 December 2004
Advocate for the applicant:          Dr A. Lipkin

Advocate for the respondent:       Mr W. Zita, Centrelink