Nguyen and Repatriation Commission (Veterans' entitlements)

[2020] AATA 2445

Nguyen and Repatriation Commission (Veterans' entitlements) [2020] AATA 2445 (23 July 2020)

Division:VETERANS' APPEALS DIVISION

File Number(s):      2019/2014

Re:Anh Nguyen

APPLICANT

AndRepatriation Commission

RESPONDENT

DECISION

Tribunal:Member Andrew George

Date:23 July 2020

Place:Darwin

The decision of the delegate of the Repatriation Commission dated 14 February 2019 is set aside and remitted for reconsideration.

........................[sgnd]................................................

Member Andrew George

CATCHWORDS

VETERANS’ ENTITLEMENTS – age service pension – is an asset value to be correctly recorded in the applicant’s service pension assessment? – is the net assessable amount to be correctly held as a deprived asset in the applicant’s service pension assessment? –  decision under review is set aside and remitted for reconsideration

LEGISLATION

Veterans Entitlement Act 1986 (Cth)

REASONS FOR DECISION

Member Andrew George

23 July 2020

BACKGROUND

1. Mr Anh Nguyen (“the Applicant”) served as a Commissioned Officer in the Army of the Republic of Vietnam. He was captured and sentenced to re-education, being released after 13 years on probation in 1988.[1] The Applicant arrived in Australia on 18 September 1992 and was naturalised as an Australian citizen on 26 October 1994.[2] He is an allied veteran under s 5C of the Veterans Entitlement Act 1986 (Cth) and has rendered qualifying service under s 7A of that Act.[3] The Applicant and his late wife, Mrs Quy Tran (also known as Mrs Qui Thi Tran), were granted an age service pension with effect from 7 December 2016.[4]

   [1] T3/127.

   [2] T12/225.

   [3] T4/135.

   [4] T21/294.

2. The Applicant and Mrs Tran were joint tenants of a horticultural property at 175 Alphatonia Road, Lambells Lagoon, described as Section 1609 Hundred of Guy from Survey Plan S95/155, (“the property”).[5] Mrs Tran died intestate on 12 March 2017 and letters of administration were granted on 4 April 2018 in the Supreme Court of the Northern Territory.[6] As joint owners of the property, the Applicant then became the sole registered owner of the property through survivorship.[7] On 12 September 2018, the Applicant transferred a one-half share of the property with a value of $315,000 to several relatives as tenants-in-common for nil consideration.[8]

   [5] T36/367.

   [6] T1/17; Exhibit A2.

   [7] T1/43-48.

   [8] T30/330-331.

3. It is not necessary to repeat the full history of his matter, suffice to note that in the current proceedings the Applicant seeks a review of the decision of the delegate of the Repatriation Commission (“the Respondent”) dated 14 February 2019. Materially, that decision determined:[9]

   A net assessable amount of $340,000.00 is to be held as a deprived asset in Mr Nguyen’s service pension assessment with effect from 12 September 2018.

   An asset value of $350,000.00 for the property situated at 175 Alphatonia Road, Lambells Lagoon is to be recorded in Mr Nguyen’s service pension assessment with effect from 12 September 2018.

   [9] T1/91.

4. On 23 April 2019, the Applicant  lodged an application for review of the Respondent’s decision dated 14 February 2019.[10] The matter was listed for hearing on 5 December 2019. The Respondent was represented by Mr Ashley Burgess of Sparke Helmore, who relied upon a Statement of Facts, Issues and Contentions (“SFIC”) lodged on 8 October 2019.

   [10] T1/3-89.

5. The Applicant appeared in person and was unrepresented. He was assisted by an interpreter of the English and Vietnamese languages. The Applicant and his son, Mr Damien Nguyen, gave oral evidence. The Applicant relied upon a SFIC lodged on 12 November 2019, which resembled a witness statement by Mr Damien Nguyen. It was exhibited as Exhibit A1 accordingly.

   ISSUES

6. The Applicant’s application to the Tribunal lacks particularity in its reasons for the application.[11] However, this is remedied by a statement provided by the Applicant to the Tribunal dated 11 April 2019 that contained headings in bold typeface stating two reasons for review, or “Appeal”.[12] The first reason for review is:[13]

   Appeal against the determination to set aside the decision to record a net assessable amount of $305,000.00 as a deprived asset effective from 12 September 2018.

   [11] T1/6.

   [12] Exhibit A3: noting that copies of this statement appear several times throughout the exhibits.

   [13] Ibid 1.

7. The substance of the Applicant’s argument with respect to this reason for review is that:[14]

   The delegate should obtain an updated valuation which will show the deteriorating economic conditions and plummeting rural property priced in the interests of fairness.

   [14] Ibid 1.

8. The second reason for review is:[15]

   Appeal against the determination that the net assessable amount of $340,000.00 is to be held as a deprived asset in my service pension assessment from 12 September 2018 and the determination that an asset value of $350,000.00 for the property at 175 Alphatonia Road, Lambells Lagoon is to be recorded in my service pension assessment with effect from 12 September 2018.

   [15] Ibid 2.

9. The substance of the Applicant’s argument with respect to this reason for review is that:[16]

   … the transfer [of the property] was a distribution of a trust asset which vested in the beneficiaries in accordance with trust laws.

   [16] Ibid 2.

10. In paragraph [2.1] of its SFIC, the Respondent regards the issues in this matter as follows:

    (a)What is the value of the property situated at 175 Alphatonia Road, Lambells Lagoon (the mango farm)?

    (b)Did the applicant dispose of an asset, being a 50% share of the mango farm?

    (i)Following the applicant’s wife’s death, did the applicant hold 50% of the mango farm on trust for his children?

    (c)What is the value of the disposition?

    (d)What is the date of the disposition?

    (e)Is the disposal an assessable deprivation of assets, such that the amount of the disposal should be assessed as a deprived asset in his service pension assessment for a period of five years from the date of disposal?

    (f)What is the total value of the applicant’s assets?

11. The Tribunal notes that the Applicant’s SFIC repeats the Respondent’s issues, but neither expressly adopts them nor refutes them as reasons for review.[17] The Tribunal also notes that this document resembles a witness statement from Mr Damien Nguyen, not the Applicant. This is material as the Applicant was unrepresented and relied upon an interpreter for the hearing, placing him at a disadvantage to the Respondent.

    [17] Exhibit A1.

12. Balancing the material before the Tribunal,[18] and placing greatest weight on the statement of the Applicant dated 11 April 2019,[19] the Tribunal determines that the issues for its consideration are as follows:

    (a)Is an asset value of $350,000 for the property to be correctly recorded in the Applicant’s service pension assessment with effect from 12 September 2018?

    (b)Is the net assessable amount of $340,000 to be correctly held as a deprived asset in the Applicant’s service pension assessment with effect from 12 September 2018?

    [18] In particular, but not limited to: T1/91; Exhibit A3; and the Respondent’s SFIC.

    [19] Administrative Appeals Tribunal Act 1975 (Cth) ss 29(c), 29AB.

    EVIDENCE

13. The Respondent relied upon the T-Documents, which became Exhibit R1, and its SFIC. No oral evidence was led.

14. The Applicant relied upon the following exhibits:

    (a)Exhibit A1: SFIC lodged on 12 November 2019;

    (b)Exhibit A2: Bundle of documents constituting an application to the Tribunal, which is also contained in the T-Documents at T1; and

    (c)Exhibit A3: Statement of the Applicant dated 11 April 2019, which is also contained in the T-Documents at T1 pages10 to 13 and pages 52 to 55 and Exhibit A1.

15. The Applicant and Mr Damien Nguyen gave oral evidence.

    Is an asset value of $350,000 for the property to be correctly recorded in the Applicant’s service pension assessment with effect from 12 September 2018?

16. In arriving at an asset value of $350,000, the delegate has principally relied upon the LMW desktop valuation of the property at $700,000.[20] This valuation was apparently provided on 12 February 2018,[21] although this date is surely a typographical error and the Tribunal concludes it was provided on 12 February 2019 as the documents are marked with a copyright year of 2019. This valuation report is signed but not dated, although the valuation date is stated as 12 September 2018.[22]

    [20] T38/376-384.

    [21] T1/100.

    [22] T38/379.

17. The LMW desktop valuation report contains the following statement that forms part of its reasoning and is of concern to the Tribunal:[23]

    The property last sold in 2/10/18 for a reported $315,000 and we consider that price represents a non-arms length transaction well below market price.

    [23] T38/378.

18. This statement was relied upon by the Respondent.[24] It is erroneous. On 12 September 2018, the Applicant transferred a one-half share of the property to several relatives as tenants-in-common for nil consideration.[25] The value of the one-half share interest transferred was stated as $315,000. The Applicant retained a one-half share, being also worth $315,000, making a whole value of $630,000. Noting that no consideration passed, the Applicant did not sell the whole property for $315,000 as the LMW desktop valuation erroneously states.

    [24] T1/100.

    [25] T30/330-331.

19. The Tribunal accepts the Applicant’s evidence that he relied upon a valuation report by Colliers International dated 5 July 2018,[26] being the date of inspection, in calculating the value of the land to be transferred. This report determined the Market Value of Section 1609 (175) Alphatonia Road, Lambells Lagoon NT for Transfer & Stamp Duty purposes at $630,000 (exclusive of GST).[27] There is no evidence before the Tribunal that the Northern Territory Registrar-General or Commissioner of Territory Revenue disputed this value.

    [26] T1/52.

    [27] T1/62, 77.

20. Having considered the evidence before it, the Tribunal is satisfied that the LMW desktop valuation relied upon by the delegate was inaccurate. Furthermore, the Tribunal is satisfied that the Colliers International report dated 5 July 2018 provided an accurate value of the interest of the Applicant’s one-half share of the property as at the date of transfer on 12 September 2018. This one-half share was $315,000, being half the value of a whole share of $630,000. It follows then that an asset value of $350,000 for the property cannot correctly be recorded in the Applicant’s pension assessment with effect from 12 September 2018.

    Is the net assessable amount of $340,000.00 to be held as a deprived asset in the Applicant’s service pension assessment with effect from 12 September 2018 correct?

21. The delegate for the Respondent calculated the net assessable amount of $340,000 to be held as a deprived asset by the following means:[28]

    As the total amount involved is over the $10,000 free area then the deprivation provisions apply and $350,000.00 must be regarded as a deprived asset and the amount over $10,000.00, being $340,000.00, must be held as a financial asset in Mr Nguyen’s service pension assessment for a period of five years in accordance with subsections 52F(a) and 52JA(2)(a) of the VEA.

    [28] T1/101.

22. The delegate’s own reasoning is inconsistent with the determination that, ‘A net assessable amount of $340,000.00 is to be held as a deprived asset’.[29] Furthermore, the Tribunal notes its findings in paragraph [20] above. Accordingly, the Tribunal is satisfied that the net assessable amount of $340,000 to be held as a deprived asset in the Applicant’s service pension assessment with effect from 12 September 2018 is incorrect.

    [29] T1/91.

    CONCLUSION

23. The Tribunal notes that it has made findings in favour of the Applicant, but not for the reasons advanced by the Applicant. It remains open to the Applicant to apply to the Supreme Court of the Northern Territory to seek appropriate declaratory relief as has already been contemplated.[30]

    [30] T1/53-54.

    DECISION

24. Given these circumstances, the preferable decision is to set aside the decision of the delegate of the Repatriation Commission dated 14 February 2019 and to remit it for reconsideration.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for the decision herein of Member A George.

.......[sgnd]................................

Administrative Assistant Legal

Dated: 23 July 2020

Date of hearing:	5 December 2019
Applicant	In person
Advocate for the Respondent:	Mr Ashley Burgess, Sparke Helmore