Lucey and Secretary, Department of Education, Employment and Workplace Relations

[2010] AATA 485

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 485

ADMINISTRATIVE APPEALS TRIBUNAL                 )

)No: 2009/5872

General Administrative Division           )

Re: Suzanne Lucey
Applicant

And: Secretary, Department of Education, Employment and Workplace Relations
Respondent

DECISION

Tribunal  Senior Member Bernard J McCabe

Date 24 June 2010

Place Brisbane (heard in Townsville)

Decision

The decision under review is set aside pursuant to s 43 of the Administrative Appeals Tribunal Act 1975 (Cth). The decision is remitted to the respondent for reconsideration on the basis that:

(a)   so much of the debt that is attributable to the applicant’s failure to accurately  inform Centrelink of her husband’s earnings from his employment should not be waived;

(b) special circumstances exist justifying the waiver of the balance of the debt pursuant to s 1237AAD of the Social Security Act 1991.

......................[Sgd]........................

Senior Member

CATCHWORDS

SOCIAL SECURITY – overpayment and debt recovery – parenting payment – involved in cattle partnership – whether special circumstances justify a waiver – mistaken assumption that accountants were supplying the relevant information – relied on husband’s paperwork – applicant isolated – decision set aside and remitted to Centrelink for reconsideration.

Administrative Appeals Tribunal Act 1975 (Cth), s 43

Social Security Act 1991 (Cth), s 1237AAD

REASONS FOR DECISION

30 June 2010  Senior Member Bernard J McCabe        

1.      I delivered a decision with oral reasons at the conclusion of the hearing in this matter in Townsville. The respondent has asked for written reasons. These reasons are based on my written notes from the hearing.

2.      The applicant is Mrs Suzanne Lucey. Mrs Lucey is a married woman with two school-aged children. She lives with her family on a farming property near Mt Garnet in North Queensland. The children both attend boarding school because there are no schools nearby. The family property is owned by the applicant’s mother-in-law. Mr Lucey works on the property. He is paid a monthly wage for his work. He has some hope of obtaining an interest in the property in due course but it is not clear whether that will occur, or when.

3.      Mr and Mrs Lucey also run their own cattle on the property in partnership. Mr Lucey originally acquired cattle as part payment for his contribution to the larger family farming enterprise. He bought the cattle which all bear his registered brand into the partnership. They have added to the herd over time through breeding, although it is now significantly diminished. The partnership was established in 2002 on the advice of their then accountant. The partnership did not make a profit until 2005. It is not making a profit now.

4.      Mrs Lucey says she instructed her accountants to deal with Centrelink and provide any information about the family’s financial affairs that was required in order to qualify for parenting payment. There is a statement of account from the original firm of accountants that notes those instructions in Exhibit One. The applicant says she and her husband subsequently became dissatisfied with the way in which that firm was handling their affairs. They decided to deal with new accountants sometime after 2002. She says she does not recall whether she specifically instructed the new accountants to supply information on the family’s behalf to Centrelink. She says her husband handled most of the dealings with the accountants by that point. But she says in her statement that she assumed the new accountants continued to do the same work that the old accountants were supposed to do, which included dealing with Centrelink. She should not have made that assumption, but there it is.

5.      As it happens, the old accountants did not provide Centrelink with the information they had been instructed to provide. That did not matter while the partnership made losses. But the new accountants did not provide that information either. That became a problem after the partnership made profits in 2005. The accountants’ failure to provide the information was probably fair enough if they were not formally instructed to do so. The applicant should have given those instructions explicitly, but she cannot recall doing so. Perhaps she would have been more diligent in giving instructions if she were the one dealing with the accountants instead of her husband, or if she visited the accountants more than once a year during one of her trips to town. The miscommunication between the applicant, the accountant and Centrelink did not come to light until some time later when data matching within Centrelink and the Australian Tax Office revealed the true picture of the applicant’s finances.

6.      The applicant said she found it difficult to deal with Centrelink. She could not readily access a Centrelink office because of the family’s remote location. She did not deny that she was able to access Centrelink’s services by phone, and she was asked on occasion to fax documents to Centrelink offices. She complained that she tended to be given inconsistent advice by different officers and she would be passed around from one officer to another. She also complained that documents would often be lost or misdirected. It seems that some of these communication difficulties occurred in the period following the overpayment. They were not necessarily a cause of what occurred. She also acknowledged she was not in the habit of reading letters from Centrelink closely. If she had been more diligent in doing so, she would have detected the problems earlier and saved herself from the current mess.

7.      I was told the applicant and her husband are in difficult financial circumstances. What remains of their cattle herd is worth around $26,000. They are liquidating that asset over time to pay expenses. That is a difficult task because the cattle can only be sold at particular times of the year. The drought has made the Lucey family’s financial position much harder. They do not own the property on which they live and Mr Lucey works; the applicant says she has no idea whether her husband will ultimately become entitled to a share in the property. Some money that was held in trust for the children has been spent on paying schools fees. I was told the applicant and her husband have trouble paying the bills and they have debts on credit cards. Their circumstances cannot be described as desperate, but they are clearly having a hard time.

8.      I was not told of health problems or difficulties with the children or other matters that might be relevant to my decision in relation to special circumstances.

9. The applicant has acknowledged that the overpayment occurred and that a debt has been properly raised in the amount of $16,335.87. The applicant says the debt should be waived pursuant to s 1237AAD of the Social Security Act 1991 (Cth) (“the Act”). The respondent conceded there was no issue in relation to s 1237AAD(a). The only issue for me to decide is whether the circumstances described by the applicant can properly be described as “special circumstances” within the meaning off s 1237AAD(b).

10.     There have been many cases discussing the meaning of the expression of “special circumstances”. I will not explore them all in detail here. Suffice to say it is not enough that the applicant’s circumstances be difficult or even desperate. The circumstances must be special in the sense that they are different or unusual. They must be distinguishable from those in the ordinary run of cases.

11.     The law reports are full of examples of events or factors or affairs that have been considered to be special circumstances in the context of a particular case. One must approach these reports with caution, of course: the facts of each case will be subtly different, and what may appear unremarkable in isolation might be regarded as special when viewed in conjunction with other factors, each of which might be unremarkable on their own.

12.     In this case, I am satisfied there are special circumstances comprised of the following:

·     The mistaken assumption that the accountants were supplying the information required by Centrelink – even though the applicant was not, strictly speaking, entitled to assume her accountants were doing that in circumstances where she cannot recall whether she had expressly issued such instructions to the new accountants. That misunderstanding might be seen in a more generous light given that the applicant saw the accountant infrequently.

·     The applicant was dealing with her husband’s paperwork, but he was dealing with the new accountant. She is not a sophisticated person and she clearly relied extensively on her accountant’s advice (or what she was told was her accountant’s advice). She said she had no reason to suspect the work was not being done as she had assumed it had always been done.

·     The applicant’s isolation made it harder for her to communicate effectively with Centrelink and the accountant. That is not Centrelink’s fault, of course, and the applicant should have made a more determined effort to communicate with the accountant and Centrelink in light of the correspondence she was receiving. I was left with the impression of someone who was not simply isolated in a physical sense; the applicant’s evidence, which I accept was given truthfully and without exaggeration, left the impression of a person who felt powerless and isolated within the family (I heard evidence about the relationship with the matriarch who controlled the family property and finances) and from anyone who might offer advice or assistance.

13.     The applicant and her husband do have assets but they are being consumed in order to meet expenses. I also accept those assets are difficult to realise because they can only be sold at certain times of the year, and much depends on the price of cattle and the weather.

14.     I am not satisfied that the whole of the debt should be waived. At least part of it is attributable to the applicant’s failure to properly inform Centrelink of her husband’s earnings from the family farming business controlled by her mother-in-law. The misunderstandings with the accountant cannot be blamed for that error.

Conclusion

15. The decision under review is set aside. The matter is remitted to Centrelink for reconsideration pursuant to s 43 of the Administrative Appeals Tribunal Act 1975 (Cth) on the basis that special circumstances exist which justify waiving so much of the debt as is attributable to the failure to inform Centrelink as to the earnings of the partnership. Any portion of the debt that is attributable to the applicant’s failure to apprise Centrelink of her husband’s earnings from the family farming operation should be recovered in the ordinary course.

I certify that the 15 preceding paragraphs are a true copy of the reasons for the decision herein of Senior Member Bernard J McCabe.

Signed: .............................[Sgd]..............................................
  Patrick MacDonald, Associate

Date of Hearing  24 June 2010
Date of Decision  24 June 2010
Date of Written Reasons                30 June 2010

Counsel for the Applicant              Mr D Honchin

Advocate for the Respondent        Ms J Forsyth