Nasr and Secretary, Department of Employment and Workplace Relations

[2006] AATA 545

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2006] AATA 545

ADMINISTRATIVE APPEALS TRIBUNAL      )

)              N2006/403
  N2006/404

GENERAL ADMINISTRATIVE DIVISION		)
Re		ESBER NASR

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Ms N Isenberg, Member

Date23 June 2006

PlaceSydney

Decision The Tribunal decides not to exercise the discretion to grant an extension of time to the Applicant for the lodgement of an application for review of a decision of the Social Security Appeals Tribunal dated 13 February 2006.

..............................................

Ms N Isenberg, Member

CATCHWORDS

INTERLOCUTORY APPLICATION – application for extension of time to lodge application – whether it is reasonable in the circumstances to extend time – whether acceptable explanation for delay – merits of case and likelihood of success – whether payment made to son is a loan or guarantee – no reasonable likelihood of success – extension of time refused.

Administrative Appeals Tribunal Act 1975 – s 29(7)

Social Security Act 1991 – ss 11, 44, 1064 and 1118.

Kuljic v Secretary, Department of Social Security (1994)33 ALD 121

Zizza v Federal Commissioner of Taxation (1999) 55 ALD 451

Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305
Secretary, Department of Social Security and Vonhoff (1998) 54 ALD 22

REASONS FOR DECISION

23 June 2006 Ms N Isenberg, Member

1.      On 13 February 2006 the Social Security Appeals Tribunal made decisions about Mr and Mrs Nasr’s pensions.  Mr and Mrs Nasr disagreed with the decisions and decided to apply for review to this Tribunal.  Applications for review to this Tribunal must be lodged within 28 days of the decision complained of.  Mr and Mrs Nasr should have filed applications for review with this Tribunal by 28 March 2006, but the applications were not filed until 13 April 2006. 

2.      Accordingly, Mr and Mrs Nasr seek an extension of time for lodging their applications for review.  

3. Under section 29(7) of the Administrative Appeals Tribunal Act 1975 the Tribunal has the power to extend the time for filing an application for review if “it is reasonable in all the circumstances to do so”.  Generally, to extend time the Tribunal must consider that there is an acceptable explanation for the delay and it is fair and equitable in the circumstances to extend time: per Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305.

4.      In deciding if it is reasonable in all the circumstances to extend time, all factors relevant to a case have to be weighed up against one another: per Zizza v Federal Commissioner of Taxation (1999) 55 ALD 451. The relevant factors are:

• Awareness of rights
• Length of delay and whether there is an acceptable reason for the delay
• Merits of the applicant’s case and significant issue to be determined.

AWARENESS OF RIGHTS

5.      There was no dispute between the parties that the Nasrs were made aware of their rights.  Although the Nasrs have limited English, they gave the SSAT decision which set out their appeal rights to their daughter who then gave it to her husband who neglected to deal with the matter.

LENGTH OF DELAY AND WHETHER THERE IS AN ACCEPTABLE REASON FOR THE DELAY

6.      It was conceded that there was no reasonable excuse for the delay.

AWARENESS OF RIGHTS

7.      No submission was made that the Nasrs were unaware of their rights.  

WHAT ARE THE MERITS OF THE APPLICANTS’ CASE AND THE SIGNIFICANT ISSUE TO BE DETERMINED?

8.      I must consider whether the Nasrs’ case has prospects of success: per Kuljic v Secretary, Department of Social Security (1994) 33 ALD 121.

9.      The background facts of this matter are as follows: Mr Nasr receives disability support pension and Mrs Nasr receives a carer’s pension.  Last year Mr and Mrs Nasr made a payment to their son of $400,000 by taking a mortgage over their home.  This ‘loan’ was considered by Centrelink to be an ‘asset’ and accordingly their pensions were reduced.

10.     The Nasrs contend that although described as a ‘loan’ the $400,000 payment to their son (or his company) was ‘akin to a guarantee’.  The Nasrs submitted that they mortgaged their home and ‘handed over’ the money to their son and that their son has ‘total control’ over the money; he (or his company) makes the mortgage repayments directly and the Nasrs have no further contact with the lending bank.  The Nasrs apparently still have no idea when their money will be repaid, or indeed if it will be repaid at all.  In the event the company is liquidated or the son becomes bankrupt the Nasrs may be unsecured creditors, but creditors nonetheless.  In the meantime they are bankrolling their son’s business. 

11.     The significant issue to be determined is whether the $400,000 payment is properly characterised as a ‘loan’.  The Nasrs can only succeed in the substantive issue if the $400,000 payment is ‘akin to a guarantee’, as claimed 

12.     I was referred to Secretary, Department of Social Security and Vonhoff (1998) 54 ALD 22. There the Tribunal was prepared to go behind the bare financial arrangements so as to identify the true nature of the transactions between the parties. That case was considerably more complex than the present matter – involving a variety of assets and investment properties, guarantees, a commercial bill facility, mortgages over several properties, loans and mortgages by other family members, and a discretionary trust.

13.     There is a fundamental distinction between a loan and a guarantee.  A guarantee in this case would involve a promise by the Nasrs to a lending institution, that, in the event of default by their son or his company on his/its loan that they would meet the shortfall.  Instead, the Nasrs, for reasons best known to them, and apparently without appropriate security from their son (or his company), have borrowed against their home to provide finance for his business.  The funds are already committed and the evidence clearly indicates that there is no element of their ‘guaranteeing’ anything.  In the event their son ceases to make the mortgage repayments the Nasrs may risk losing their house, but that was their decision in structuring their financial arrangements in this manner. 

14.     It is unclear what evidence might be able to be called in support of the Nasrs’ contention.  Any evidence the son could give could only assist as to repayment arrangements, which is indicative of a loan.  It is difficult to imagine what other evidence could be called so as to evidence a ‘guarantee’, when there is clear evidence of a loan, or possibly a gift if there was no obligation to repay at all. 

15.     In my view, the money given to the Nasrs’ son, can only ever amount to either a loan or, alternatively, a gift.  In either case, that amount will be considered as an asset, with an impact upon the Nasrs’ pension.

16.     I find that there are not reasonable prospects of success and it would therefore be unfair to Centrelink to subject it to the cost of defending an appeal which would be pointless.

Conclusion

17.     Having regard to my findings in relation to the merits of his application for review, I have decided not to grant an extension of time.

DECISION

18.     The Administrative Appeals Tribunal decides not to exercise the discretion to grant an extension of time to the Applicant for the lodgement of an application for review of the decision of the Social Security Appeals Tribunal dated 13 February 2006.

I certify that the 18 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Member

Signed:         Associate

Date of hearing  7 June 2006
Date of Decision  23 June 2006
Representative for the Applicants             Ms F Kahill
Advocate for the Respondent                   Mr K Bullock