Lynwood and Secretary, Department of Education, Employment and Workplace Relations
[2011] AATA 213
•30 March 2011
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 213
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/5756
GENERAL ADMINISTRATIVE DIVISION ) Re Brenda Lynwood Applicant
And
Secretary, Department of Education, Employment and Workplace Relations
First Respondent
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
Second Respondent
DECISION
Tribunal Senior Member A K Britton Date30 March 2011
PlaceCoffs Harbour
Decision The Secretary’s decision that Ms Lynwood was “a member of a couple” throughout the periods, 18 May 1998 to 1 May 2000 and 20 July 2001 to 10 December 2007, and to raise and recover a debt in respect of overpayment to Ms Lynwood of parenting payments and family tax benefits, is affirmed.
The Secretary’s decision not to waive the debt under s 1237AAD of the Act is set aside and in substitution of that decision, it is decided to waive half of the debt, calculated as at the date of this decision. The amount of the outstanding debt is remitted to the Secretary for calculation in accordance with these Reasons for Decision.
..........................[sgd]........................
Senior Member A K Britton
CATCHWORDS
SOCIAL SECURITY – debt – alleged overpayment of parenting payment and family tax benefit – whether applicant member of a couple – whether “special reasons” exist under s 24 of the Social Security Act 1991 – whether the debt should be waived under s 1237 AAD of the 1237AAD of the Social Security Act 1991
A New Tax System (Family Assistance) Act 1999 (Cth) – s 3(1)
Social Security Act 1991 (Cth) – ss 4, 4(3), 24, 1237AAD, 1236(1A) and 1236(1C)
McDonald v Director-General of Social Security (1984) 1 FCR 354
Re Hodgson and Wright and Secretary, Department of Social Security (1988) 15 ALD 99
Boscolo v Secretary, Department of Social Security [1999] FCA 106
Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143
Beadle v Director-General of Social Security (1985) 60 ALD 225
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary Department of Social Security v Hodgson (1992) 37 FCR 32
Fischer v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 441
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
REASONS FOR DECISION
Senior Member A K Britton
1. Brenda Lynwood seeks review of a decision made by the respondent Secretary and affirmed by the Social Security Appeals Tribunal (SSAT), to raise and recover a debt that arose as a result of the alleged overpayment of parenting payments and family tax benefits. The debt now stands at just over $50,000.
2. Up until May 1998, Ms Lynwood was paid parenting and family tax benefits calculated at the rate payable to a couple. In May 1998, after notifying Centrelink that she had separated from her husband, Mr Eric Lockwood, Ms Lynwood received benefits calculated at the higher single rate. In May 2008, after investigation following a “tip off”, a Centrelink Authorised Review Officer decided that Ms Lynnwood and Mr Lockwood had been “members of a couple” throughout the periods 18 May 1998 to 1 May 2000 and 20 July 2001 to 10 December 2007 (the subject period), and therefore Ms Lynwood was not entitled to receive parenting payment or family tax benefit calculated at the higher “single rate” throughout that period. The decision-maker also decided that as a consequence, Ms Lynwood owed a debt to the Commonwealth. On review that decision was affirmed by the SSAT.
Statutory framework
3. The rate of family tax benefit and parenting payment is calculated according to formulae set out in the A New Tax System (Family Assistance) Act 1999 (Cth) (FA Act) and the Social Security Act 1991 (Cth) (the Act), respectively. The rate payable in respect of each benefit is determined by, among other things, whether the claimant is a “member of a couple”. A single person receives a higher rate than a person who is a “member of a couple”.
4. A common definition of the term “member of a couple” is applied to the family tax benefit and parenting payment: s 3(1) of the FA Act. The phrase “member of a couple” is defined by s 4 of the Act to mean:
4(1) In this Act, unless the contrary intention appears:
...
member of a couple has the meaning given by subsections (2), (3), (3A), (6) and (6A);
...
Member of a couple—general
4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or
...
Member of a couple—criteria for forming opinion about relationship
4(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) ... the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects 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 the 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.”
The issues
5. Ms Lynwood and Mr Lockwood married in 1985 and are not divorced. Accordingly, the issues to be determined are:
1. Was Ms Lynwood living separately and apart from Mr Lockwood on a permanent or indefinite basis having regard to the factors listed in s 4(3) of the Act for some or all of the subject period?
2. If so, was the decision to raise and recover parenting payment and family tax benefit debts the correct decision?
3. If so, does the Tribunal have power to write off the debt?
4. If not, does the Tribunal have power to waive the debt and should that power be exercised?
Background
6. There is no dispute that Ms Lynwood lived at Wills Street, Coffs Harbour from May 1998 to July 2001; and, apart from a brief period in 2004, from July 2001 at Manns Close, Coffs Harbour. The critical issue in dispute is whether Mr Lockwood also resided at those addresses throughout the corresponding periods.
7. Ms Lynwood married Mr Lockwood shortly after the birth of their second child. She was aged 18. In November 1994 the family moved to a NSW Housing Commission property in Wills Street, Coffs Harbour.
8. According to Ms Lynwood, from the early days of their marriage Mr Lockwood drank heavily and was often violent towards her. She recalls that he often left her with their children and without money. She claims that she made a number of unsuccessful attempts to end the relationship but he always managed to “talk his way back”. She said by May 1998 she had had enough and “finally stood up” to Mr Lockwood and insisted that he leave. Each testified that after the separation Mr Lockwood went to live in his parents’ property in Ulong – about 45 minutes drive from Coffs Harbour. At the time of the purported separation, Ms Lynwood was seven months pregnant with the couple’s eighth child. Neither could recall what, if any, event triggered the separation.
9. Ms Lynwood is the biological mother of 11 children. She claims that Mr Lockwood is the father of all but two of those children, namely those children born in 2005 and 2009. According to Mr Lockwood, Ms Lynwood told him that he is the father of the child born in November 1999, 18 months after their purported separation.
10. According to Ms Lynwood, after Mr Lockwood moved to Ulong, he continued to play an active role in the lives of their children and would stay over a couple of nights each week. She claimed that he came solely to see the children and that they had little interaction and did not socialise. She also claimed that when he stayed over he slept on a mattress in the lounge room with their sons. In oral evidence she claimed that after he attacked her with a knife in February 2004, Mr Lockwood visited maybe once a week and did not stay long.
11. Both testified that they continued to have sex occasionally for several years after they separated. Ms Lynwood claimed that it was non-consensual. Neither could recall precisely when they last had sex.
12. According to Ms Lynwood, after Mr Lockwood left, the third and fourth child of the marriage would cry for him and he eventually took them to live with him at Ulong. According to Mr Lockwood, the children stayed with him in a caravan on a property owned by his parents. Centrelink records reveal that from 10 January 2000 to 20 November 2003, Mr Lockwood received parenting payments (single) in respect of the two children and, from 10 January 2000, family tax benefit until each child claimed benefits in their own right – the eldest child from September 2005 and the youngest child from April 2007.
13. Ms Lynwood and Mr Lockwood claim that after the move to Ulong, the children continued to attend school in Coffs Harbour and were driven to and from school by Mr Lockwood. Ms Lynwood claimed that the children would walk to her home after school and wait to be picked up by their father. She said they sometimes took the school bus. Mr Lockwood claims that he transported the children using a vehicle supplied by his employer – the Galambila Health Service, where he has been employed as a transport officer since August 2001. It is unclear what vehicle Mr Lockwood used to transport the children before he commenced employment with Galambila (10 January 2000 to August 2001).
14. In answer to a request for information made by Centrelink, the Department of Housing stated that its records revealed that Mr Lockwood left the Wills Street property on 14 May 2000. No further information was provided.
15. There is no evidence that Mr Lockwood made regular child support payments to Ms Lynwood. Both testified that he made no regular contributions to the expenses of the Wills Street or Mann Close households and that his contribution was limited to meeting one off requests made by the children for clothes, entertainment and the like.
16. According to Ms Lynwood in about 2001 one of her daughters fell into a bad crowd. She claimed that around this time she often called on Mr Lockwood to help her deal with their daughter who was sometimes physically and/or verbally violent.
Move to Joyce St, Coffs Harbour
17. According to Mr Lockwood, after his mother moved to Joyce Street, Coffs Harbour he stayed on for about a year at the Ulong property in a caravan. In evidence he said he was unsure when his mother moved to Joyce Street but thought it might been about a year after his father’s death in 1998. Centrelink records show that Mr Lockwood’s mother gave Joyce Street as her address from December 2005.
Address given by Mr Lockwood
18. There is no evidence of Mr Lockwood giving Ulong as his address to any organisation, apart from the Child Support Agency, the Australian Taxation Office (in respect of the 2002 and 2003 financial years) and Centrelink. A significant number of documents record Mr Lockwood as having the same address as Ms Lynwood, throughout the subject period. These include:
Leases entered into with the Coffs Harbour and District Local Aboriginal Land Council for the Mann Close property in July 2001 and March 2003. Each recorded Mr Lockwood and Ms Lynwood as joint tenants. Mr Lockwood’s signature appears on the 2003 lease. Only part of the 2001 lease was provided and it does not include the signatures of the parties to the lease. Mr Lockwood was unable to offer an explanation for his name appearing on the lease. When questioned about Mr Lockwood’s name appearing on the lease, Ms Lynwood said she and her husband had put their name on the Land Council’s waiting list, some years before they separated. She also claimed that they had decided that it would be prudent if he was recorded as a joint tenant so that the property stayed in the family in the event she decided to move on. She claims that she told the Lands Council’s tenancy manager that Mr Lockwood was not living at the property and was told not to worry.
Records held by the Department of Fair Trading showing the rental bond for the Mann Close property being held in the name of “Eric and Brenda Lockwood”. Ms Lynwood said she was sure that she had paid the bond not her husband. Mr Lockwood had no recollection of paying the bond.
Records held by the Road Traffic Authority which record Mr Lockwood’s address as Wills Street from 22 February 1994 and Manns Close from 25 March 2002.
Applications made by Mr Lockwood to various credit and service providers in 2006 for which he gave his address as Mann Close.
A number of COPS (Computer Operational Policing System - the system used by the NSW police service to record, among other things, incidents of domestic violence) records made throughout the subject period.
Records held by Country Energy which record the electricity account for Wills Street being in the name of Mr Lockwood until 24 July 2001 and for Mann Close from February 2003. Ms Lynwood claims that she unsuccessfully attempted on a number of occasions to have the account changed over to her name.
A report prepared by an officer of Galambila Aboriginal Health Service which states that its records show Mr Lockwood’s address as being Mann Close, his marital status as “married” and next-of-kin “Brenda Lockwood?”.
19. In cross-examination Mr Lockwood initially stated that he was unsure why he gave Mann Close as his address when he had never lived there. Later he said he thought it might have been because his daughters looked after his mail. He also later suggested that it was because mail in Ulong was delivered to the local shop.
Mr Lockwood’s Employment
20. Mr Lockwood has been employed by Galambila Aboriginal Health Service as a driver since August 2001 and remains in the employ of the Service. Prior to that he was employed by the Yarrawarra Aboriginal Corporation. Yarrawarra was an employment agency and is no longer operational. It is unclear what work Mr Lockwood did with Yarrawarra.
Other relationships
21. According to Ms Lynwood, sometime after separating from Mr Lockwood she commenced a relationship with a man which continued until his death in May 2007. Because of the obvious sensitivities I will refer to the person as “the Companion”. She was unsure when the relationship commenced but thought it was probably sometime between 2002 and 2004.
22. According to Ms Lynwood, at the commencement of their relationship the Companion lived in Grafton and from 2004, in Taree. She said that they never lived together but she would visit the Companion sometimes for a week at a time. She said he would also visit her in Coffs Harbour. On her account, because of family pressures they did not stay together overnight.
23. Ms Lynwood claims that the Companion is the father of her son who was born in May 2005. A funeral notice lists the child by his first name as one of the Companion’s children. The child’s birth has not been registered. In an Assessment of Living form completed in by Ms Lynwood at the request of Centrelink in June 2007, she stated that Mr Lockwood was the father of the child.
Move to Grafton
24. Ms Lynwood testified that in August 2004 she felt that she needed to get away from the pressures of family life and went to live with her sister in Grafton, the town where the Companion was then living. On her account while in Grafton she tried to find accommodation so that she and the Companion could start a new life together. She returned after a month when it became apparent that she would not be able to obtain accommodation for her large family.
25. While Ms Lynwood was away, Mr Lockwood advised Centrelink that he was in hardship “caring for an extra five kids”. Ms Lynwood’s family tax benefit and parenting payment was suspended for about a month and Mr Lockwood was paid family tax benefits throughout that period. On her return to Coffs Harbour Ms Lynwood’s benefits were reinstated.
COPS records
26. Tendered in these proceedings were a number of COPS reports made in relation to some 17 incidents involving Ms Lynwood and Mr Lockwood between 2000 and 2007. As pointed out by Counsel for Ms Lynwood, the NSW Police resisted the summons in its original terms and after discussion agreed to produce only those records that refer to both Ms Lynwood and Mr Lockwood.
27. A number of entries appear to be consistent with Mr Lockwood using Mann Close as his primary residence. These include 19/3/2002, 6/7/2002, 5/11/2002, 10/5/2004, 26/11/2004, 14/11/2005, 13/5/2006 23/8/2006 and 28/6/2007. See for example the report of the informant’s “neighbours”, Mr Lockwood and Ms Lynwood, being involved in an ongoing dispute; altercation after Ms Lynwood criticised Mr Lockwood for arriving “home” late; Mr Lockwood leaving Manns Close after packing an overnight bag; Mr Lockwood returning “home” drunk.
28. The reports record Mr Lockwood’s address as Manns Close. Senior Constable Philip Jacobsen, the NSW Police Service domestic liaison officer based in Coffs Harbour, testified that the addresses recorded on COPS records are not necessarily accurate. He explained that it was not uncommon for officers attending a domestic violence incident to not verify the address of parties when making a COPS report, but to use the address automatically generated by COPS (the last known address of the person).
Evidence given by friends and associates
29. Ms Jennie Davies, Area Manager of Nortec Employment and Training, testified that she had been friendly with Ms Lynwood since she came to see her in 1998 in her role as a counsellor. On Ms Davies’ account, in about 2003 she heard on the “gossip vine“ that Ms Lynwood was having an affair and sometime later Ms Lynwood confided in her that she was very much in love with the Companion . According to Ms Davies, Ms Lynwood did not “advertise” her separation from Mr Lockwood and, furthermore, that she understood that she was one of the few people she had confided to about her affair with the Companion. According to Ms Davies, based on her association with the Aboriginal community, the separation of couples is considered to be a very private matter and kept within the family.
30. Ms Davies claimed that throughout the subject period she often saw Mr Lockwood at his children’s sporting events but never in the company of Ms Lynwood. She said that she probably had visited Ms Lynwood at home about twice a year since they met and had never seen Mr Lockwood during those visits.
31. Senior Constable Jacobsen said he was aware through conversations with Ms Lynwood over the past 20 years that she and Mr Lockwood had separated or were having “dramas”. He denied a statement attributed to him by a Centrelink officer to the effect that he felt that Mr Lockwood and Ms Lynwood had never permanently separated. He testified that had no direct knowledge of whether the couple had permanently separated or the period or length of any separation.
32. Mr Jim Hurley, a work colleague of Mr Lockwood’s, wrote in a letter to Centrelink dated 7 March 2008 that Ms Lynwood and Mr Lockwood had been “living separate lives” for as long as he had known them (since 1998) and Mr Lockwood had been residing at Ulong and Joyce Street.
33. Family friend Sarah Ferguson, in a statement dated 30 April 2008, stated that Mr Lockwood and Ms Lynwood had been “separated for at least 10yrs or more”.
Evidence given by Dr Dianna Eades
34. Socio-linguist Dr Dianna Eades prepared a written report for the purpose of these proceedings and also gave oral evidence.
35. Dr Eades concluded after a review of various documents before the Tribunal that Ms Lynwood was immersed in the Aboriginal community and not “bi-cultural”. Dr Eades used the term “bi-cultural” to mean a person who was exposed to and involved with both Aboriginal and mainstream Australian societies. She pointed out that Ms Lynwood had not completed high school, had little, if any, employment outside the home and socialised largely, if not exclusively, within the Aboriginal community. She believed this relevant for the following reasons. First, it would explain the apparent inconsistencies in some of the information provided by Ms Lynwood to Centrelink, for example completing a “Becoming Partnered” form in April 2008 and days later, its “No longer partnered” equivalent. Dr Eades pointed out that given Ms Lynwood’s limited education together with the length and complexity of many of the Centrelink forms she was required to complete, the potential for “cultural mismatch” and confusion on Ms Lynwood’s part was significant. Second, it would explain Ms Lynwood’s stated reluctance to disclose her failed marriage. According to Dr Eades “shame” is a central concept in Aboriginal societies throughout Australia with no direct equivalent in mainstream Australian culture. This, according to Dr Eades, could explain Ms Lynwood’s apparent reluctance to disclose the status of her relationship with Mr Lockwood to Centrelink and within her own community.
36. Dr Eades was of the opinion that there was a “fundamental cultural mismatch” between Aboriginal and mainstream culture around the notion of a person’s home address. She argued that the practice of government agencies and institutions to require a person to supply a “home address” was based on the Western cultural assumption that people spend most of their time at one particular address. She said that it was common for Aboriginal people to move between different family members to access different resources as needed. In her opinion, Mr Lockwood’s claim of sleeping over at Wills Street and Manns Close a couple of nights a week after the purported separation, and Ms Lynwood’s claim of visiting the Companion sometimes for a week at a time was entirely unremarkable.
Findings and conclusions
37. There is little independent evidence to support Ms Lynwood’s claim that she and Mr Lockwood separated in 1998 and then lived apart. On the other hand, the Secretary’s contention that that claim cannot be accepted is based largely on circumstantial evidence. Determining where the truth lies in these circumstances is not an easy task.
38. While there is much conflicting evidence the following claims made by Ms Lynwood in my opinion can be safely accepted:
· that she was the victim of violence by Mr Lockwood over an extended period
· that by at least February 2004 she had commenced an intimate relationship with the Companion and that relationship continued until his death
· that she moved to Grafton for a month in August 2004 with the intention of finding a new home for her and her children
39. However there is a paucity of evidence to support the claim that Mr Lockwood lived at his parents’ property in Ulong, and later at his mother’s home in Coffs Harbour, after separating from Ms Lynwood in May 1998.
40. There is no independent evidence to support the claim that Mr Lockwood drove his two children most school days to and from Coffs Harbour — a daily round trip of one and a half hours — over five years. Ms Lynwood’s claim that after the February 2004 knife incident he visited less frequently — once a week and then only for a brief visit — is inconsistent with the claim that after school the children would wait at Manns Close for their father to finish work. In my opinion the account of a five year commute is implausible.
41. As noted, there is a wealth of documentary evidence to indicate that throughout the subject period Mr Lockwood notified a large number of organisations including his employer, credit and service providers that he was living at the same address as his wife. While plausible that he might not have got around to changing his address from Wills Street to Ulong (May 1998 to July 2001), that does not explain why after Ms Lynwood moved to Manns Close in July 2001, he gave a number of organisations that address. His explanation — because his daughters looked after his mail and because mail in Ulong had to be collected from a local shop — sits uncomfortably with his actions in supplying Centrelink, the Child Support Agency and the Australian Taxation Office with his “correct” address. That he supplied Centrelink with the Manns Close address when he had concerns about the reliability of receiving mail in Ulong is somewhat perplexing, given that he had much to lose if mail went astray.
42. While I accept Dr Eades’ evidence that it is unremarkable for an Aboriginal person to spend time at more than one address, the evidence given in these proceedings was that after May 1998 Mr Lockwood spent most of his time at Ulong and later Jacob Street.
43. I agree with the submission made by counsel for Ms Lynwood that care should be taken in placing undue reliance on the address recorded on official records and the reason for the creation of the record needs to be taken into account. While Mr Lockwood’s explanation for providing various credit and service providers with Manns Close as his address — to improve his chances of being granted credit or the subject service — is plausible, the same can not be said for Mr Lockwood’s name being on the lease agreement and bond for the Manns Close property. He could not offer any explanation for his name appearing on those documents. Ms Lynwood’s explanation — because they were still a couple when they put their names on the Land Council’s housing waiting list — might explain why the Land Council offered the lease to both parties but it does not explain why Mr Lockwood signed leases issued in 2001 and 2003. Ms Lynwood’s alternative explanation — so the property would remain in the family in the event she moved on — was not offered by Mr Lockwood.
44. The COPS records in my opinion shed further doubt on the veracity of the claim that Mr Lockwood made Ulong and later Jacob Street his primary address after separating from his wife. While I accept Senior Constable Jacobsen’s evidence that the addresses recorded on COPS records are not necessarily accurate, the flavour of many of the accounts recorded in those reports is inconsistent with Mr Lockwood’s claim that he did not reside in Manns Close. See for example the reports that the informant’s “neighbours” (Mr Lockwood and Ms Lynwood) were involved in an ongoing dispute and an altercation after Mr Lockwood arrived “home” late.
45. When the evidence is weighed, it suggests that it is more likely than not that Mr Lockwood did not, as claimed, make Ulong and later Jacobs Street, his primary place of residence after the purported separation from Ms Lynwood. While the relationship between the two was plainly dysfunctional I could not be satisfied that in May 1998 Mr Lockwood moved to Ulong and later Jacob Street, as claimed. In reaching that conclusion I accept that Ms Lynwood and the Companion had a discreet relationship from at least 2004. I also accept Dr Eades’s opinion if as claimed Mr Lockwood’s did stay over at Ms Lynwood’s home from time to time that would be unremarkable. Nonetheless, the several strands of prima facie evidence, especially the evidence that after the purported separation Mr Lockwood signed two rental agreements for the Manns Close premises and paid a bond, repeatedly gave Manns Close as his address, together with the implausibly of him driving two children to and from school for over five years, when bound together strongly implies that Mr Lockwood did not as claimed reside primarily in Ulong and later Jacobs Street. That evidence is not substantially weakened or outweighed by his assertions to the contrary which, for the reasons I have given above, I find inherently implausible. Because of their apparent unreliability, that evidence is effectively strengthened when the contrast is made.
46. For these reasons I conclude that while Mr Lockwood probably left the family home on a number of occasions, he did not, as claimed, relocate to Ulong and later Jacobs Street and reside on a permanent or indefinite basis away from the family home.
Section 4(3) factors
47. Given that throughout the subject period, Ms Lynwood was legally married to Mr Lockwood, the question whether Ms Lynwood was a “member of a couple”, for the purposes of the Act, is to be answered by determining whether or not throughout that period she was “living separately and apart from” Mr Lockwood “on a permanent or indefinite basis”. In forming an opinion about the relationship between Ms Lynwood and Mr Lockwood, s 4(3) of the Act instructs that I must “have regard to all the circumstances of the relationship” including, in particular, the matters and factors referred to in paras (a)–(e) of s 4(3).
financial aspects of the relationship, including:
48. Any joint ownership of real estate or other major assets and any joint liabilities: There is no evidence of either party owning real estate or any other major asset throughout the subject period.
49. Any significant pooling of financial resources especially in relation to major financial commitments: There is no evidence of either party having any major financial commitment throughout the subject period.
50. Any legal obligations owed by one person in respect of the other person: There is no evidence of either party owing the other any legal obligation apart from their obligations to each other as joint tenants of the Mann Close property.
The basis of any sharing of day-to-day household expenses
51. Any joint responsibility for providing care or support of children: I find that throughout the subject period Ms Lynwood had primary responsibility for the care of the children of the marriage and that Mr Lockwood provided some limited support.
52. The living arrangements of the people: I find that the children of the marriage lived primarily with Ms Lynwood throughout the subject period. Mr Lockwood’s living arrangements have been discussed above.
53. The basis on which responsibility for housework is distributed: I find that responsibility for housework in the Wills Street and Manns Close households fell largely to Ms Lynwood.
Social aspects of the relationship
54. Whether the people hold themselves out as married to each other: Mr Lockwood and Ms Lynwood held themselves out as married in the leases entered into for the Mann Close property.
55. Mr Lockwood held also himself out as being married throughout the subject period to his employer and various credit and service providers. Throughout the same period Mr Lockwood held also himself out as being single to Centrelink and the Child Support Agency.
56. The assessment of friends and regular associates of the people about the nature of their relationship: There is some evidence that friends and associates of Ms Lynwood were aware, or at least suspected, that her relationship with Mr Lockwood was probably over at some point in the subject period. By her own admission Ms Lynwood did not “advertise” the purported separation. That claim is supported by the evidence given by Ms Davies.
57. The basis on which the people make plans for, or engage in, joint social activities: There is no evidence of Mr Lockwood and Ms Lynwood being involved in joint social activities outside the home apart from a number of COPS reports (see for example the COPS report dated 6 June 2002). Indeed apart from socialising with the Companion, there is no evidence of Ms Lynwood being involved in any social activities outside the home.
58. Any sexual relationship between the people: Apart from the claim made by Ms Lynwood to Centrelink in 2007 that Mr Lockwood was the father of her child born in 2005, there is no evidence to contradict the claim that their sexual relationship came to an end in or around 2002.
The nature of Mr Lockwood and Ms Lynwood’s commitment to each other, including:
59. The length of the relationship: Mr Lockwood and Ms Lynwood commenced their relationship in about 1982. I accept that the two stopped living together in or around December 2007.
60. The nature of any companionship and emotional support that the people provide to each other: The evidence given by Ms Lynwood suggests that throughout the subject period the only emotional support provided by Mr Lockwood was provided to her in her role as a parent.
61. Whether the people consider that the relationship is likely to continue indefinitely: I accept that Mr Lockwood and Ms Lynwood now see their relationship as being at an end. I also accept that at various times throughout the subject period Ms Lynwood sought unsuccessfully to bring the relationship to an end.
62. Whether the people see their relationship as a marriage-like relationship: While I accept that Ms Lynwood now does not see her relationship with Mr Lockwood as a marriage-like relationship, I am unable to determine when she came to that conclusion.
63. The financial aspects of the relationship: I accept the claim made by Ms Lynwood supported by Mr Lockwood, that she bore primary responsibility for the running of the family household throughout the subject period.
Onus
64. Counsel for Ms Lynwood contends that the reviewable decision was in the nature of a “cancellation decision” namely a decision to cancel benefits calculated at the single rate and therefore I must be “positively satisfied” that Ms Lynwood was a member of a couple, citing in support McDonald v Director-General of Social Security (1984) 1 FCR 354 at 358. Counsel submits that if, like the tribunal in Re Hodgson and Wright and Secretary, Department of Social Security (1988) 15 ALD 99 I am unable to come to a decision on the “essential question before me” the issue must be resolved in Ms Lynwood’s favour.
65. It is uncontroversial that neither party to proceedings before the AAT bears a formal onus unless one is imposed by the relevant enactment (McDonald v Director-General of Social Security (1984) 1 FCR 354 at 366; see also 356–358). In forming an opinion as to whether or not Ms Lynwood was “living separately and apart from Mr Lockwood on a permanent or indefinite basis” throughout all or part of the subject period I am not to make any presumption as to the correctness of the decision under review (McDonald v Director-General of Social Security (1984) FCR 354 at 357).
66. In broad terms I agree with the proposition that if I find that the evidence is so closely balanced that I am unable to make a positive finding one or another, the decision under review should be set aside.
Findings and Conclusions
67. In my opinion the following factors weigh heavily in favour of a finding that Ms Lynwood was not “living separately and apart from Mr Lockwood on a permanent or indefinite basis” throughout the subject period: Mr Lockwood’s continued residence in Wills Street and Manns Close notwithstanding periods of separation and her actions in entering into a lease with Mr Lockwood on two occasions with the Lands Council for the Manns Close property. While a number of factors weigh against that finding including Ms Lynwood’s relationship with the Companion and the assessment by some friends and associates of her relationship with Mr Lockwood, on balance I am satisfied that they are outweighed by those factors which favour a finding that the two were not “living separately and apart from Mr Lockwood on a permanent or indefinite basis” throughout the subject period.
Does section 24 apply?
68. The alternative submission made for Ms Lynwood is that given the extraordinary burden placed on Ms Lynwood throughout the subject period — having to raise a large number of children without any substantive support from her husband — the Tribunal should exercise its power under s 24 not to treat her as a member of couple. Section 24 provides:
Person may be treated as not being a member of a couple (subsection 4(2))
(1) Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
69. The Secretary contends that s 24 is to be given a more limited meaning than that advanced on behalf of Ms Lynwood and is confined to situations where the relationship is intact but, for one reason or another, the couple are unable to live together.
70. The operation of s 24 was considered by French J in Boscolo v Secretary, Department of Social Security [1999] FCA 106. After reviewing those cases where the term “special circumstances" or "special reasons" had been considered, his Honour said:
The core of the requirement for "special circumstances" or "special reasons" is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course - Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307 at 324 (Burchett J). But that does not require that the case be extremely unusual, uncommon or exceptional - Secretary, Department of Social Security v Hodgson [1992] FCA 338; (1992) 108 ALR 322.
71. The operation of s 24 was given careful consideration by SM Creyke in Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143. As SM Creyke noted at [29] there has been a tendency in the cases to treat the expression ‘for a special reason in the particular case’ in s 24(1)(c) as being equivalent to the expression ‘special circumstances’ used elsewhere in the Act. The Senior Member concluded that while both expressions granted a wide discretion to the decision-maker, nonetheless, the use of a different expression indicates a legislative intention to differentiate between the two. The Senior Member reasoned that the assessment of “special reasons” ought be assessed having regard to the reasons for the partnered rate: that there are economies of scale in two people living together; and that because there has been a pooling of resources, the two persons are better off financially because they pool their joint income and assets: at [34].
72. I do not accept the submission made for the Secretary that the provision should be read down and limited to circumstances where the parties for one reason or another are unable to live together. The term “special reasons” is plainly broad in scope as French J’s analysis makes clear. Nor do I accept the submission advanced on behalf of Ms Lynwood — that having to raise and support a large number of children without any substantive support from her husband — constitutes a “special reason”. In contrast to those provisions dealing with the power to waive a debt on account of “special circumstances”, s 24 is directed at the nature of the relationship rather than “the circumstances” which might “make it desirable to waive the debt”. In my opinion one partner providing limited financial support to the household is not “something unusual or different to take the matter the subject of the discretion out of the ordinary course’”.
73. For these reasons I have decided not to exercise the power conferred by s 24 of the Act.
Should the debt be waived under s 1237AAD?
74. It is argued for Ms Lynwood that the power to waive the subject debt in part or whole, conferred by s 1237AAD of the Act should be exercised. The Secretary disagrees. Section s 1237AAD provides:
Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a) the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration Act or the 1947 Act; and
(b) there are special circumstances (other than financial hardship alone) that make it desirable to waive; and
(c) it is more appropriate to waive than to write off the debt or part of the debt.
75. The Secretary concedes that on the evidence provided it would not be open to the Tribunal to find that the debt arose in whole or part from Ms Lynwood knowingly making a false statement or false representation or failing or omitting to comply with a provision of the Act.
76. Accordingly it is necessary to decide whether “there are special circumstances (other than financial hardship alone) that make it desirable to waive [the debt]” and, if so, whether it is more appropriate to waive than to write off the debt.
More appropriate to waive than to write off the debt?
77. The power to waive the debt conferred by s 1237AAD can only be exercised if I am satisfied that it is more appropriate to waive than write off the debt. A debt can be written off under s 1236 of the Act, only if (a) the debt is irrecoverable at law; or (b) the debtor has no capacity to repay the debt; or (c) the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or (d) it is not cost effective for the Commonwealth to take action to recover the debt: s 1236(1A). The debt is deemed to be recoverable for the purposes of para (1A)(b), if a debt is recoverable by means of deductions from the debtor's social security payment: s 1236(1C).
78. To date the debt has been recovered in part from deductions made from Ms Lynwood’s social security payments. As she will continue to receive social security payment she is deemed to have the capacity to repay the debt. As none of the other pre-conditions to the exercise of the power conferred by s 1237AAD are satisfied, the debt cannot be written off.
Special circumstances
79. The term “special circumstances” as used in the context of social security law has been the subject of detailed consideration by the Federal Court. The Court has declined to adopt a prescriptive formula about the meaning of the term (see, for example, Beadle v Director-General of Social Security (1985) 60 ALD 225; French J in Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531 (at 535). Nonetheless, the Court has emphasised that the term “special circumstances” denotes a requirement that there be “something which distinguishes [the claimant’s] case from others, to take it out of the usual or ordinary case”: per Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 at 545. However, as Hill J emphasised in Secretary Department of Social Security v Hodgson (1992) 37 FCR 32 (at 42) the term should not be interpreted to impose a requirement that the claimant’s circumstances be “extremely unusual, uncommon or exceptional”.
80. In Fischer v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 441, Katzmann J endorsed the following passage from the judgement of French J in Secretary, Department of Social Security v Hales (1998) 82 FCR 154 (at 155), in which His Honour commented on the tension between, on the one hand, the need for certainty in the application of the provision and on the other, the desirability for a flexible response to situations that may arise from time to time:
[T]he concept of special circumstances is broad. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special...
The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which could give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words...But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose.
81. As the Secretary properly conceded, Ms Lynwood has had the onerous responsibility for a very large family over an extended period and the calls on her meagre resources have been enormous. She has borne that responsibility from a very young age. Not only has she had primary responsibility for her own 11 children but recently has been forced to step in and taken on responsibility for various grandchildren. By a combination of circumstances, she has effectively been trapped in an unhappy and violent relationship. As Ms Davies attested, Ms Lynwood has sought out professional help to deal with her situation. She now faces repayment of an extremely large debt. Taken together these factors lead me to conclude that the applicant’s circumstances can properly be described as “special”.
82. The real issue in my opinion is whether the discretionary power to waive the debt should be exercised given that Ms Lynwood has not been entirely candid in her dealings with Centrelink. While I think that the power to waive the debt should be exercised cautiously in these circumstances, I am nonetheless persuaded that it is desirable to do so, because of the extremely trying situation Ms Lynwood has endured over the past two decades and the reality that it is her many dependents that will indirectly suffer if she were required to pay the debt in full. For these reasons I have decided to waive half the debt as it stands at the date of this decision.
Orders
83. The Secretary’s decision that Ms Lynwood was “a member of a couple” throughout the periods, 18 May 1998 to 1 May 2000 and 20 July 2001 to 10 December 2007, and to raise and recover a debt in respect of overpayment to Ms Lynwood of parenting payments and family tax benefits, is affirmed.
84. The Secretary’s decision not to waive the debt under s 1237AAD of the Act is set aside and in substitution of that decision, it is decided to waive half of the debt, calculated as at the date of this decision.
85. The amount of the outstanding debt is remitted to the Secretary for calculation in accordance with these Reasons for Decision.
I certify that the 85 preceding paragraphs are a true copy of the reasons for the decision herein of
Signed: .......................[sgd]...................................
Associate to Senior Member BrittonDate/s of Hearing 16-18 February 2011
Date of Decision 30 March 2011
Counsel for the Applicant Mr M Vincent
Solicitor for the Applicant Ms M Payne, MYP Law
Solicitor for the Respondent Mr B Slattery, Centrelink Advocacy
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