Mantzios and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2009] AATA 183

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 183

ADMINISTRATIVE APPEALS TRIBUNAL      )         No.  2007/2989

)

GENERAL ADMINISTRATIVE DIVISION		)
Re		EVANGELIA AND DEMITRIOS MANTZIOS

Applicant

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

  Respondent

DECISION

Tribunal: G.D. Friedman, Senior Member

Date:4 March 2009

Place:Melbourne

Decision: For reasons given orally at the hearing the Tribunal sets aside the decision under review and substitutes a decision that Mr Mantzios’ and Mrs Mantzios’ debt of $35,871.74 each is waived in part so that each debt is reduced to $10,000.00.

…………………………………………………………………

Senior Member

TRANSCRIPT OF PROCEEDINGS

ADMINISTRATIVE APPEALS

TRIBUNAL

MR G.D. FRIEDMAN, Senior Member

No V2007/2989

MANTZIOS and ANOTHER

and

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

MELBOURNE

WENDESDAY, 4 MARCH 2009

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

EXTRACT OF TRANSCRIPT OF PROCEEDINGS

MR FRIEDMAN:   The only issues I have to deal with are whether sections 1236 and 1237AAD of the Social Security Act apply.  I am not going to go over the facts of this case as they are well and truly known to the parties.  In respect of section 1236, which enables the Tribunal to decide to write off a debt if the four conditions contained in that section apply, it is my view that section 1236 is not appropriate in this case.  It has been submitted that I agree that there may be an entitlement by Mr Mantzios for a Greek pension and also under the agreement between the Australian and the Greek governments he may be entitled to obtain an Australian Age Pension whilst still residing in Greece.

I have been told that he has not yet applied for either of those for reasons that don’t reflect badly on him but it’s quite clear that applications of this nature to foreign governments and also to the Australian government while in Greece may well take some considerable time.  In my view, while there is an entitlement or a possibility of entitlement in the near future, then section 1236 of the Act is not appropriate for the debt to be written off.  Similarly, Mrs Mantzios may have an entitlement to a Disability Support Pension if she chooses to return to Australia and in any event, in 2010, which is next year, she has an entitlement to Age Pension, presumably whether she is living in Greece or Australia.  So for those reasons I am not going to write off the debt.

That leaves section 1237AAD of the Act.  Subsection (a) enables me to waive the debt or part of the debt if I am satisfied that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement, false representation or failing or omitting to comply with the provisions of the Act.  The principles of this subsection are set out in the decision of Re Callaghan, which has been referred to by counsel.  Centrelink sent a letter to Mr Mantzios shortly after his departure in September 2006.  They referred to a number of things that he had to do if his circumstances changed and it listed all those circumstances, or a number of the circumstances. 

I am satisfied that Mr Mantzios was unable to read or write English and that he may well have made arrangements with his son in Australia to forward mail to him in Greece.  It’s possible, given that the letter was sent a day or so after his departure for Greece, that he either didn’t receive it, didn’t understand it or inadequate provision was made for the whole document to be translated into Greek.  At that stage, Mr Chris Mantzios, the son, was still in Australia and I don’t know what arrangements were made at the very early stages for translation of English language documents.  Having heard evidence from Mr Mantzios and taking into account his language difficulties, I am satisfied that he did not clearly understand the impact that might occur after he left Australia for 12 months and in any event I am not satisfied that he was aware of the consequences of the deeming provisions that later resulted in the debt or an increase in the debt.  For those reasons, I am satisfied that neither Mr or Mrs Mantzios knowingly made a false statement, false representations or failed or omitted to comply with a provision of the Act.  I find that they satisfy subsection (a) of Section 1237AAD.

In relation to subsection (b), there are special circumstances other than financial hardship alone that make it desirable to waive.  I have noted that the principles were set out in Angelakos and submissions were made by Ms Porter to the effect that in that decision the court referred to a number of authorities such as Hales, Groth and Beagle, who refer to the remarks of Kiefel J in Groth, where she said:

It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred there must be some feature out of the ordinary.

I accept in this case that Mr and Mrs Mantzios were unable to speak or write in English.  Certainly, they weren’t able to understand English.  I accept that they have been in Greece since September 2000.  Initially, they went over there for what they thought was going to be a year or so while the subdivision of their property was undertaken by their son.  They expected to come home to their own new home.  In fact, they didn’t come home at all because the home that they thought was going to be there has had to be sold to pay for the costs.  Similarly, the other two homes on the subdivision had to be sold in an effort to meet the costs and, as I understand it, the whole project was a disaster financially.  I think that Mr Chris Mantzios’s father-in-law in fact had to paint the new houses because they had run out of money to engage a painter, as I recall from the earlier evidence.

I accept that Mr and Mrs Mantzios are relying on the support and charity of family members in Greece.  They have no real means of support.  I have already referred to the fact that, at this stage at least, they have been unable to obtain any financial benefit by way of pension, either Greek pension or Australian pension.  I accept that there are significant health issues for both Mr and Mrs Mantzios and it is unrealistic to expect either of them to engage in meaningful employment at their age and in their circumstances.  In Angelakos it was made clear that flexibility is needed in interpreting subsection (b) of section 1237AAD.  I find, and it is not really in dispute, that the result of the joint venture with the son was not the fault of Mr and Mrs Mantzios.  Indeed, they had no idea really what was happening and relied totally on their son, who was a barber, and his foray into the property development business was totally unsuccessful.

I accept that though a large overpayment was made to Mr and Mrs Mantzios they in fact did not derive a benefit, given that the result of the venture left them without any assets, without a home and that is why they had to go to Greece, for somewhere to live.  It was suggested by Mr Noonan that Mr and Mrs Mantzios should have taken legal action against their son to seek compensation if it was his fault that the property development was not successful.  If this was a commercial transaction that might have been feasible, although Mr and Mrs Mantzios don’t have any money and any legal action they took would seem to not be practical.  Furthermore, this is a filial family relationship and I am satisfied that the son acted in good faith originally by trying to provide his parents with somewhere to live. 

The fact that it didn’t work out doesn’t mean that the family relationship has been destroyed.  To the contrary, Mr Mantzios Junior – Chris Mantzios – has moved to Greece in an effort to provide some measure of support to his parents.  I don’t accept that there is any possibility of suing Chris Mantzios.  In any event, he had no money either so that wouldn’t have done any good. 

It was put to me that there was failure by Centrelink to warn Mr and Mrs Mantzios about the consequences of failing to inform them if they remained out of Australia for more than 12 months.  I agree with Mr Noonan that Centrelink doesn’t have an obligation to do that, although I take into account that there was a failure to warn them and that was a contributing factor to the debt and the size of the debt.  I also take into account that the family is in limbo and that it may take some time for them to obtain their pension in Australia or Greece.  The future for them looks rather bleak.  In all the circumstances, I am satisfied that the particulars of this case do take the matter out of the ordinary and I find that Mr and Mrs Mantzios satisfy subsection (b) and that there are special circumstances other than financial hardship alone that make it desirable to waive.

In relation to subsection (c), I have already referred to writing off the debt or part of the debt and I believe it is more appropriate to waive than to write off the debt or part of the debt, so Mr and Mrs Mantzios satisfy subsection (c).  The only remaining matter is the waiver itself and the amount of the waiver.  Mr Noonan submitted that, in effect, public policy that a person who receives money to which he or she is not entitled, then that money should be repaid and I agree with that.  Otherwise, people who receive money they don’t have any entitlement to would be able or might be able to just rely on the tax basis for them.  Now, in this case, clearly the debt arose to a large extent because of the failing by Mr Chris Mantzios to develop the subdivision in a cost effective and proper way.

To waive the whole of the debt would in effect to make up, really, for the failings of what was a business venture conducted by someone who had no experience and no real expertise in that area.  It’s my view that the debt should not be waived in full for the reasons that I have just mentioned.  In my view, Mr and Mrs Mantzios should be required to make a contribution to the debt.  I take into account their age, their circumstances and the future prospects of obtaining the Social Security entitlement in Australia and the likelihood that Chris Mantzios will not be able to make significant repayment to them for the amounts that they have lost through his shortcomings as a developer.

In all the circumstances, I believe that the debt should be reduced to the amount of $10,000 for each of Mr and Mrs Mantzios.  I realise that for people in their situation this may be a fairly large debt but in reaching that figure I take into account the original debt was $35,871.74.  What I am doing, in my view, is reducing the debt considerably but to a level where I believe it is appropriate that they can demonstrate that they have a requirement to make a contribution so the taxpayer does not make all the payments, or make all the overpayments, that Mr and Mrs Mantzios were found to have incurred in this matter.  The decision is that the decision under review be set aside and it will be substituted by a decision that the debt for each of Mr and Mrs Mantzios will be waived in part, from $35,871.74 to $10,000.

That is my decision.  Thank you both for your attendance.

END OF EXTRACT