Marshall, Cairns and Department of Family and Community Services - [2002] AATA 352

DECISION AND REASONS FOR DECISION [2002] AATA 352

ADMINISTRATIVE APPEALS TRIBUNAL )

) Q2001/957, 963

GENERAL ADMINISTRATIVE DIVISION       )
           Re      RONALD MARSHALL
  Applicant
   Re  PATRICIA CAIRNS
  Second Applicant

And SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
Respondent
DECISION

Tribunal       Dr E K Christie, Member
Date              3 May 2002
Place             Brisbane

Decision The Tribunal varies the decisions under review and decides: (a) that the overpayments of age pension paid to Ronald Marshall over the period 7 September 1995 to 24 August 2000 remain as a debt due to the Commonwealth to be recovered; and (b) that the overpayments of partner allowance paid to Patricia Cairns over the period 3 August 1995 to 30 June 2000 be waived in full under the "special circumstances" provisions of the Social Security Act1991.

..................(Sgnd)..................
DR E K CHRISTIE
MEMBER
CATCHWORDS
SOCIAL SECURITY – Age Pension – Partner Allowance - overpayment - whether waiver for "special circumstances" applies

Social Security Act 1991 s 1237AAD

Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435
Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152

ORAL REASONS FOR DECISION

3 May 2002 Dr E K Christie, Member

Ronald Marshall and Patricia Cairns sought a review of the following decisions made by the Social Security Appeals Tribunal ("the SSAT") on 30 April 2001:
(a)to raise and to recover overpayments of age pension made to Ronald Marshall for the period 7 September 1995 to 24 August 2000; and
(b)to raise and to recover overpayments of partner allowance made to Patricia Cairns (Mr Marshall's partner) for the period 3 August 1995 to 30 June 2000.
The Tribunal had in evidence before it documents lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 – the T documents (Exhibit 1) and the following exhibits:

Exhibit 2 - Supplementary T Documents
Exhibit 3 - Witness Statement, Douglas Park (22 March 2002)
Exhibit 4 - Witness statement, Craig Bryce (21 March 2002)

The applicants were represented at the hearing by Mr M Brough and the Department of Family and Community Services ("the Department") was represented by Mr P Kanowski, a Departmental Advocate.
Issues to be Decided
At the commencement of the hearing the parties acknowledged that the issues for the Tribunal to decide were:
(a)Whether the overpayment of age pension to Mr Marshall could be waived under the "special circumstances" or "administrative error" provisions of the Social Security Act 1991 (the Act).
(b)Whether the overpayment of partner allowance to Ms Cairns could be waived under the "special circumstances" or "administrative error" provisions of the Act – or alternatively, "written off" under the Act.
Prior to the final addresses, Mr Brough conceded that Mr Marshall's overpayment was a debt due to the Commonwealth that should be recovered. Mr Brough also acknowledged that Mr Marshall had repaid the overpayment in full.
However, Mr Brough advised that the sole issue for the Tribunal to decide was whether the overpayment of partner allowance to Ms Cairns should be waived because of "special circumstances", given that her debt had arisen from a totally different set of facts to that for Mr Marshall.
Mr Kanowski also acknowledged that the Department had essentially "written off" Ms Cairns' debt, until such time that she qualified for the age pension.
Based on these submissions, the Tribunal has proceeded to restrict its summary of evidence and related analysis of facts and law to the one issue: whether Ms Cairns' overpayment of partner allowance should be waived under the "special circumstances" provisions of the Act.
Facts
Based on the evidence before it, the SSAT made the following findings of fact:

"Ms Patricia Cairns received partner's allowance in respect of Mr Marshall's age pension commencing 3 August 1995.
On 3 August 1995, Ms Cairns signed an income and asset form that made no reference to her partner's ongoing interest in a taxi service licence.
She was sent periodic notices from Centrelink requiring her to advise of changes in her or her partner's circumstances that might impact on her rate of payment.
Ms Cairns was aware that her partner had the interest in the taxi service licence at all material times; and in the residential realty at 46 Crusader Way, Nerang, from no later than 10 July 1996 (the date of final Council building inspection)."
(T2B, folios 25, 26)

Evidence of Patricia Cairns

Ms Cairns said that she had attended the Centrelink office with Mr Marshall, her partner, when he queried whether he was entitled to receive the age pension. It was at this time she was advised that she would also be entitled to partner allowance. Up to this stage she was completely unaware that she would be eligible for any social security entitlements. Ms Cairns said that she had attended the first interview, in August 1995, at Centrelink, with Mr Marshall where Mr Marshall answered questions and completed various forms.
Ms Cairns' evidence to the Tribunal can be summarised as follows:
(a)That she had no involvement in the circumstances that led to overpayment of age pension to Mr Marshall and in turn, overpayment of partner allowance to herself;
(b)At all times she had insufficient knowledge of, or understanding of, the actual financial status of her partner's business enterprises (taxi cab licence, taxi lease) and his financial investments. She said that Ronald Marshall had always made it quite clear to her that the taxi enterprise assets "were his, not their (combined) assets";
(c)Moreover, for any query she made to Mr Marshall on his business enterprise and financial investments he had responded that they "were none of her business". In addition, Mr Marshall had always told her, in relation to her queries about the Centrelink review forms and her partner allowance entitlement, that "Centrelink had all the relevant forms and information"; and
(d)That at all times, she had no input or control whatsoever in the financial affairs, business and investment assets of Ronald Marshall – and nor would he divulge this information to her.
The implications of the above situation for her were that she was unaware of the value of Mr Marshall's taxi licence as well as being unaware of the amount of income he derived from his taxi lease.
Ms Cairns referred to a series of "administrative errors" caused by Centrelink that led to the overpayment of social security entitlements:
(a)That she was present when their current claim applications (T6A) were being completed by the Centrelink office. Ms Cairns stated that Mr Marshall had declared his ownership in the taxi licence and other investments; and
(b)That she confirmed she was close by the telephone when the Centrelink officer rang, about 12 months after the above interview (T15 Folio 176; 2 August 1996). She had heard the conversation wherein Mr Marshall informed the caller that he had a taxi licence. Ms Cairns stated that if Centrelink had acted on this information, given that the call arose as a result of a "DSS/ATO Taxi Matching Program", the whole question of overpayment would have ended there and then – yet it continued.

Evidence of Ronald Marshall

Mr Marshall's evidence, as far as it related to the issue to be decided, can be summarised as follows:
(a)That he had informed Centrelink of his business investments, and his ownership of a taxi licence, at the first interview (T6A Folio 6c; 3 August 1995). He said that he told the Centrelink officer that "he had sold the cab in 1993 but still owned the taxi licence and it is leased to Yellow Cabs in Brisbane". He said that the Interviewing Officer did not write this information down.
(b)Furthermore, he said that he had once again informed Centrelink that he owned a taxi licence when they telephoned him about 12 months later following the results of a "DSS/ATO Taxi Matching Program" (T15, 2 August 1996);
(c)Because he had provided them with the information on his taxi licence (and investments) he did not read the Centrelink notification notices "thoroughly". That is, because he believed he had provided Centrelink with the information on two occasions. In addition, as his business investments and taxi licence had not changed he believed that each notification notice had the "same information as the last one" and that the notice was "a standard letter". Consequently, he genuinely believed he did not have any reason to think there may have been a mistake on the notification notice and so he believed that he had no reason to notify Centrelink of a change in his circumstances.

Evidence of Douglas Park

Mr Park was the Financial Information Service Officer based at the Nambour office of the Department of Social Security in August 1995. Mr Park's statement acknowledged that he assisted the applicant in completing application forms (T6A, T6B) including ticks answering the various questions. He described his usual practice in completing such forms and the recording of their answers. In addition, he referred to the standard practices to ensure taxi licence details, current licence market value and any income derived from the licence was recorded by Centrelink.
Mr Park could not recall any specific details of his interview with the applicants.
Evidence of Craig Bryce
Mr Bryce worked as a compliance investigations officer based at the Maroochydore office of the DSS in August 1996. He was involved in the "DSS/ATO Taxi Matching Program." As part of this program he had contacted Ronald Marshall (T15 Folio 176, 2/8/91). Mr Bryce described the usual practices associated with actions taken under the program to verify whether a taxi licence existed.
Mr Bryce said in his statement that he could not recall his exact conversation with Mr Marshall or what Mr Marshall had said to him. However, he said that for him not to have taken any further action following his conversation with Mr Marshall he would have had to have been told by Mr Marshall that he had no involvement with a taxi, for some time, prior to claiming a Social Security pension.
Contentions and Submissions of the Parties
Mr Brough submitted that the problem with overpayments arose from the time Mr Marshall completed his Age Pension Claim Form (T6A). He submitted that M Marshall had disclosed, orally, that he had owned a taxi licence, but not a taxi cab, at this first interview. He contended that a failure by Centrelink to effectively transfer information provided to them at the first interview from questions Mr Marshall had answered on this form, on to the Assets Form (T6C), had created the overpayment problems. He further submitted that there may have been some uncertainty in distinguishing between ownership of a taxi cab licence and a taxicab.
Mr Brough submitted that there was no basis to support any assertion that Ms Cairns had "knowingly" made a false statement in order to receive social security entitlements from Centrelink. He submitted that Mr Marshall did not share any information with Ms Cairns with the result that she would be unaware of the financial value of his taxi licence or of his business investments. Furthermore, Mr Brough contended that Ms Cairns had been "vicariously involved" as all of the financial information details had been provided to Centrelink by Mr Marshall. Mr Marshall owned all of the assets and financial investments, upon which her entitlements were calculated.
Mr Brough submitted that Ms Cairns had no involvement in the factual situation that had led to the overpayments being made. Moreover, that Ms Cairns had little knowledge or understanding of Mr Marshall's financial assets and investments.
Mr Brough referred to the current status of Ms Cairns' relationship with Mr Marshall. He said that Ms Cairns was totally dependent on Mr Marshall financially. She received $50 per week from Mr Marshall and had no other source of income. Ms Cairns would be entitled to an aged pension in two years time.
Mr Brough concluded that it would be appropriate to waive – rather than to write off, the overpayment. A future for Ms Cairns where she would have overpayments recovered from her aged pension entitlement would lead to financial instability and uncertainty with respect to her ongoing health problems, as well problems with her emotional state.
Mr Kanowski submitted that the debt to Ms Cairns should not be waived because Ms Cairns had "knowingly" made false statements that resulted in the overpayment. He contended that the debt for Ms Cairns resulted partly from false statements by Mr Marshall.
Mr Kanowski submitted that there were no "special circumstances" to justify waiver of the debt. He acknowledged that whilst Ms Cairns may have no assets of her own, she has had a long-standing domestic relationship with Mr Marshall and they were a couple with considerable means. Accordingly, it was his contention that as a member of a couple she had the capacity to repay the debt. Furthermore, she had the capacity to repay the debt when she qualified for age pension.
Mr Kanowski concluded that waiver for "special circumstances" was not appropriate because, regardless of how the debt arose, Ms Cairns had received a substantial sum of monies that she should not have been paid in the first place.
Consideration of Issues
The objective of the Tribunal is to review administrative decisions, not only on their merits, but in accordance with the law at all times. The relevant legislation is the Social Security Act 1991 (the Act).
Section 1237 of the Act provides for circumstances where a debt due by a recipient of social security to the Commonwealth, may be waived:
SECTION 1237AAD – WAIVER IN SPECIAL CIRCUMSTANCES
1237AAD The Secretary may waiver 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 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."

The first question to be considered relates to the credibility of Patricia Cairns and the veracity of her account as to her dealings with Centrelink. I accept Ms Cairns to be a witness of truth and that she had acted honestly in all her dealings with Centrelink.
The principles in Re Callaghan and Secretary, Department of Social Security (1996-1997) 45 ALD 435 are relevant with respect to the meaning of "knowingly":
"(48) There is nothing in s 1237AAD which suggests that the word 'knowingly' should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation of that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission."

The Tribunal accepts Ms Cairns' evidence;
(i)that all times she had no input or control whatsoever in Mr Marshall's financial affairs, business and investment assets (para 12);
(ii)nor would he disclose this information to her (para 11);
(iii)that she had relied on the advice to the queries about the Centrelink review forms whether her partner allowance entitlement was correct and that Centrelink had the relevant forms and information (para 11).

Accordingly, based on the principles in the Callaghan's case the Tribunal finds, on the civil standard of proof, that in failing to notify the Department in relation to their notification notices, Patricia Cairns did not "knowingly" fail to comply with a provision of the Social Security Act. The Tribunal concludes that paragraph (a) of Section 1237AAD of the Act is satisfied. In addition, for the reasons given in para 33, the Tribunal concludes that paragraph (a) of section 1237AAD of the Act is satisfied in Mr Marshall's case.
The Tribunal further finds that the explanation given by Mr Marshall for failing to inform Centrelink of a change in financial circumstances is plausible (see para 14). The Tribunal finds, according to the balance of probabilities, that Mr Marshall held an honest and genuine belief that he had provided Centrelink with information of his taxi cab licence and lease, and his financial investments, in response to Centrelink queries, and so believed he was entitled to continue to receive age pension payments.
The next issue for the Tribunal to consider is whether paragraph (b) of section 1237AAD of the Act is satisfied – that is, whether there are "special circumstances (other than financial hardship alone) that makes it desirable to waive" the right to recover all or part of the debt. The Tribunal has had to consider the meaning and application of the expression "special circumstances" on many occasions. The decision of the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 has become an oft-quoted benchmark as to the interpretation of "special circumstances". In that case the Tribunal said (at 3):
"An expression such as 'special circumstances' is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special."
The Tribunal has carefully considered all of the information and evidence before it and concludes that the following findings of fact, when considered in their context, are sufficient to justify the description of "unusual" and so come within the meaning of "special circumstances":
(a)that Ms Cairns, as Mr Marshall's partner, had no involvement in the circumstances of providing information to Centrelink in relation to Mr Marshall's taxi assets and business investments that led to the overpayment of age pension to Mr Marshall and partner allowance to herself;
(b)that Ms Cairns lacked sufficient knowledge and understanding of the business investments and the status of the taxi assets of Mr Marshall (see para 11(b));
(c)that Ms Cairns had no capital assets of her own;
(d)that Ms Cairns had no "control" into the financial affairs, business and assets of Mr Marshall; nor would Mr Marshall disclose this information to her when asked by Ms Cairns;
(e)that Mr Marshall held an honest and genuine belief that he had provided Centrelink with the necessary information on his taxi licence and lease, on two occasions, and so he proceeded on the basis that he [and Ms Cairns] were entitled to continue to receive social security entitlements (para 14);
(f)that Ms Cairns had never been given any indication by Mr Marshall that there was, or may have been, a problem with respect to the partner allowance she received based on the information Mr Marshall provided to Centrelink in relation to his taxi assets and his business investments;
(g)that in the absence of disclosure of his taxi business and investments by Mr Marshall to Ms Cairns, she was placed in a situation where she completely relied on Mr Marshall providing Centrelink with the correct information and documentation;
(h)the consequence of the omission by Mr Marshall to disclose the financial information to Ms Cairns, was that she had no basis to query whether she had been paid the correct social security entitlement.

The Department relies on inferential evidence that Centrelink practices and procedures would have prevented overpayments being made to the Applicants (see paras 15-18). However, neither Centrelink officer could recall the conversations they had with Mr Marshall.
In relation to the question of inferences, the following statement is relevant:
"There can be no inference unless there are objective facts from which to infer other facts which it is sought to establish. In some cases the other facts can be inferred with as much practical certainty as if they had actually been observed. In other cases the inference does not go beyond reasonable probability. But if there are no positive proved facts from which the inference can be made, the method of inference fails and what is left is mere speculation or conjecture." Lord Wright in Caswell v Powell Duffryn Associated Collieries Ltd [1940] AC 152 at 169.

There is divergent evidence whether Mr Marshall disclosed the existence of a taxi licence and lease at the August 1995 interview and August 1996 telephone conversations (see paras 13, 14(a) and (b), 15, 18).
There also seems to be some uncertainty, in submissions by Mr Brough, whether Centrelink staff had clearly distinguished between Mr Marshall owning ownership of a taxi cab licence, as against ownership of a taxi cab.
It was common ground that the August 1996 telephone conversation arose from the "DSS/ATO Taxi Matching Program" (para 13(b), para 17). The ATO source of information would have been Mr Marshall's Income Tax Return for 1995/96 and 1996/97. Both Tax Returns indicate that the "Main Business Activity" for Mr Marshall was "taxi cab service" and that his business income for the taxi cab service was $14,100 and $14,300 (T34A, T34B). The Tribunal concludes that given financial details of Mr Marshall's taxi cab business and investments were disclosed in both his 1995/96 and 1996/97 tax returns, on the civil standard of proof, the Tribunal is satisfied that the information that he owned a taxi licence and leased the licence would have been stated at the August 1995 interview; in addition, that Mr Marshall would have disclosed ownership of his taxi licence during the telephone call with Centrelink in August 1996.
The Tribunal concludes, based on the evidence of Mr Park and Mr Bryce that there are no objective facts – either oral or written, from which to infer other facts by which the Department may establish that their usual practices have been applied, to trigger off actions to verify whether a taxi licence existed. Instead, the Tribunal concludes that the Departmental submissions on this point are speculative. The Tribunal cannot act on speculation.
For all of the above reasons the Tribunal finds that there are "special circumstances" which led to the overpayment of partner allowance to Ms Cairns. When the Tribunal's findings of fact are considered in context, the Tribunal finds that they have a "particular quality of unusualness that permits them to be described as unusual."
The Tribunal makes the observation that, to some extent, the issues that led to the overpayments in Mr Marshall's factual situation related to his inability to fully understand the questions on the various Centrelink Social Security application forms and review forms that had to be completed. Mr Marshall's predicament is not an isolated one, from the Tribunal's experience of cases that it has heard and decided. Accordingly, the Tribunal makes the observation that Centrelink may wish to consider whether some assessment of these documents by linguistic experts or sociologists who specialise in questionnaire design is justified, in order to ensure that information for social security recipients is both accessible and understood; in particular, the question of understanding the documentation.

The Tribunal varies the decision under review and decides:
(a)that the overpayments of age pension paid to Ronald Marshall over the period 7 September 1995 to 24 August 2000 remain as a debt due to the Commonwealth to be recovered; and
(b)that the overpayment of partner allowance paid to Patricia Cairns over the period 3 August 1995 to 30 June 2000 be waived in full under the "special circumstances" provisions of the Social Security Act.
I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Dr E K Christie, Member
Signed:         .....................................................................................
  Associate
Date/s of Hearing  3 May 2002
Date of Decision  3 May 2002
Date of Written Reasons         16 May 2002
For the Applicant  Mr Brough
For the Respondent                 Mr Kanowski

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Marshall, Cairns and Department of Family and Community Services [2002] AATA 352

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