Nguyen and Secretary, Department of Employment and Workplace Relations
[2006] AATA 1106
•21 December 2006
Administrative
Appeals
Tribunal
DECISION AND REASONS FOR DECISION [2006] AATA 1106
ADMINISTRATIVE APPEALS TRIBUNAL )
) No D2006/12
GENERAL ADMINISTRATIVE DIVISION ) Re PHUNG PHI NGUYEN Applicant
And
SECRETARY, DEPARTMENT OF EMPLOYMENT & WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Deputy President P E Hack SC Date21 December 2006
PlaceBrisbane (heard in Darwin)
Decision The Tribunal:
(a) sets aside the decision of 16 May 2003 (as varied by the authorised review officer’s decision) to regard the applicant as having been a member of a couple since 2 January 1996,
(b) sets aside the decision of 4 July 2003 to cancel the applicant’s parenting payment single,
(c) sets aside the two decisions of 24 October 2003 to raise debts for overpayments of Newstart allowance and parenting payment single,
(d) sets aside the decision of 21 May 2004 to reject the applicant’s claim (lodged on 2 April 2004) for parenting payment single,
(e) remits the matter to the respondent,
(i) for the purposes of recalculating the applicant’s debt in accordance with these reasons,
(ii) for the purposes of obtaining a valuation of the Lambells Lagoon property as at May 2004.
..............Signed.................
Deputy President
CATCHWORDS
SOCIAL SECURITY – Newstart allowance – parenting payment single - marriage-like relationship – living at different times separately under the one roof – no financial support – no emotional bond – common commitment towards the children – consideration of total picture of the relationship – Tribunal sets aside the decision under review
SOCIAL SECURITY – Newstart allowance – parenting payment single – asset value – borrowing of money from family to purchase property – no legal obligation to repay therefore no liability created – value of property calculated without reduction of liability – Tribunal remits the matter for recalculation
Social Security Act 1991 (Cth) s 4(2)(b), 4(3), 4(3A), 1121A, 1130A, 1237AAD
Family Law Act 1975 (Cth)
Pelka v Secretary, Department of Family and Community Services (2006) 151 FCR 546
Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164
Groth v Secretary, Department of Social Security (1996) 40 ALD 541
REASONS FOR DECISION
21 December 2006 Deputy President P E Hack SC Introduction
1.The applicant, Phung Phi Nguyen,[1] received Newstart allowance and subsequently parenting payment between February 1996 and April 2003. During all of that period her benefits were calculated on the basis that she was single. The respondent, the Secretary of the Department of Employment and Workplace Relations, says that throughout that period the applicant was a member of a couple.
[1]In some of the documents before me e.g. tax returns and a passport, the applicant’s name is shown as Phi Phung Nguyen, however I shall use the name in which this application was filed.
2.Moreover, contends the respondent, the applicant’s assets during the period were such that she was not entitled to receive all the benefits that were paid to her.
3.In consequence of these matters it is said that the applicant has a debt to the Commonwealth in the order of $60,000.00.
4.In April 2004 the applicant made a fresh claim for parenting payment (at the single rate) which was rejected on the grounds that her assets exceeded the allowable limit.
5.The applicant, for her part, contends that the value of her assets ought to be determined by reference to certain borrowings from family members.
The issues
6.The issues for determination, broadly stated, are these:
(1)was the applicant a member of a couple in the period between September 1997 and April 2003;
(2)what was the value of the applicant’s assets at material times.
7.I did not understand Ms Davies, the solicitor who appeared for the applicant, to put in issue the calculation of the debt (assuming the correctness of the factual conclusions reached by the respondent) nor to suggest that this was a case where the discretion to waive payment of any resulting debt ought be exercised.
Background
8.I start by recording some matters that seem not to be in issue.
9.The applicant was born in Vietnam in January 1958. Whilst there she met, and commenced a relationship with Van Thanh Bui in 1980. It appears that they never underwent any ceremony of marriage although, at various times, the applicant has described herself as being married to Mr Bui.
10.A son Thanh Duy was born in October 1981.
11.In 1986 the family came to this country although many of the applicant’s close relatives remain in Vietnam.
12.Another son, John, was born in April 1990. During that year the family rented a house at Karama from the Housing Commission. In 1992 they purchased the house by borrowing $84,550.00 from the Housing Commission.
13.During 1992 Mr Bui became involved in a business that ended disastrously. It lead to him becoming a bankrupt on 25 October 1995 and it created great tension within the relationship with the applicant.
14.That tension lead to a separation, said to have occurred in January 1996, although Mr Bui continued living in the same house.
15.In February 1996 the applicant made a claim for Newstart allowance on the basis of having separated from Mr Bui. She received Newstart allowance at the single rate from 5 February 1996 to 17 September 1998. At a later time in 1996[2] Mr Bui moved out of the Karama house.
[2]It is not clear when this occurred however Mr Bui was still living in the same house as at 28 October 1996.
16.There was a brief reconciliation around Christmas 1996 but that lasted only for a short period and in early 1997 Mr Bui again left and took up residence with his relatives. During this period of reconciliation a third child, a daughter born in September 1997, was conceived.
17.On 14 October 1997 the applicant purchased a 15.35 hectare rural property at 290 Wanderrie Road, Lambells Lagoon for $118,950.00. $60,000.00 of the purchase price was borrowed from Advance Bank Australia Ltd and secured by a registered first mortgage. There is controversy regarding the source of funds for the balance purchase price which I deal with below.
18.By reference to depreciation schedules forming part of her income tax return I infer that the applicant immediately set about working this property. The 1998
depreciation schedule shows that $17,750 was spent acquiring a tractor (said to be on 1 July 1997), $620 was spent in acquiring grafted mangoes in November 1997 and $800 was spent in acquiring a demountable shed in January 1998.
19.On 21 September 1998 the applicant lodged a claim for parenting payment single with Centrelink. The applicant ticked the “No” box in answer to the questions “Do you … own … real estate other than the home in which you live?” and “Do you … have an interest in a farm?” The claim was granted from that date.
20.In October 1998 the applicant purchased from the Official Trustee in Bankruptcy Mr Bui’s interest in the Karama property for a price of $27,500.00.
21.It is not clear from the material before me how the applicant financed this purchase.
22.Some few days later on 19 October 1998 the applicant lodged an application for child support assessment with Centrelink. She gave Mr Bui’s address as 122 Vanderlin Drive Wulagi which is the address of his sister. Curiously, she gave 5 December 1997 as the date on which she separated from Mr Bui and 28 January 1997 as the date on which they started living together again.
23.It is next material to note that in March and April 1999 the applicant and Mr Bui entered into two joint borrowings. The first, an amount of $10,000 from NT Finance in March 1999, was said to be to provide funds for the applicant to develop the Lambells Lagoon property although there is nothing shown by way of capital acquisitions in the 1999 depreciation schedule.
24.In the following month an amount of $29,532.00 was jointly borrowed from Esanda to enable Mr Bui to purchase a taxi. The applicant said, and it accords with common sense, that his earlier bankruptcy[3] meant that financiers would not lend to him solely. Mr Bui however has been, in fact, solely responsible for the repayments on this loan.
[3]He was discharged from bankruptcy by the effluxion of time in October 1998.
25.The depreciation schedule for the 2000 income tax year suggests considerable capital expenditure on the Lambells Lagoon property in 1999 and 2000 as follows:
· July 1999 – connection of power - $3890.00
· November 1999 – bore drilling - $14,366.00
· January 2000 – irrigation - $22,845.00
· February 2000 – pump motor - $1695.00
26.On 23 January 2001 the applicant and Mr Bui together with the three children travelled to Vietnam together although the unchallenged evidence before me is that once there they went their separate ways and stayed with their own relatives. There was a later trip, under similar conditions, in January 2003.
27.The applicant provided a written statement to Centrelink regarding her relationship with Mr Bui in November 2002. He was, at that time staying with his sister but visited 3 to 4 times per week, and sometimes stayed overnight, to see the children. On the occasions he stayed overnight he stayed in a separate bedroom. I will examine below other aspects of the applicant’s evidence contained in this statement.
28.During March and April 2003 Centrelink arranged for surveillance to be undertaken of the Karama property. That demonstrated a pattern where Mr Bui’s taxi was parked at the property early in the morning, taken away by a person thought to be the relief-driver and returned later in the day when Mr Bui, it was to be inferred, commenced a night shift.
29.This led to Centrelink suspending parenting payment single to the applicant on 8 April 2003. Payment was cancelled shortly thereafter. Eventually on 16 May 2003 a decision was made that the applicant had been living in a relationship “similar to that of a married couple” with Mr Bui since 11 September 1997.
30.As a consequence of these dealings Centrelink came to know of the applicant’s interest in the Lambells Lagoon property. So far as I can tell from the vast quantity of documents put before me the applicant first declared her interest in it to Centrelink in August 2003. It seems right to assume that throughout this period the applicant was reminded by correspondence from Centrelink of the need to advise of changes to her position such as the acquisition of real property.
31.In October 2003 a debt of $9,970.52 was raised for the period 4 September 1997 to 16 September 1998 (in relation to Newstart allowance) and a further debt of $50,327.98 for the period 1 October 1998 to 4 April 2003 (in relation to parenting payment single).
32.In the meantime and, on the applicant’s case, as a consequence of the cancellation of payments to her, Mr Bui moved back to the Karama property in September 2003. It is said that the applicant and Mr Bui were, nonetheless, living separate and apart.
33.On 2 April 2004 the applicant lodged a claim for parenting payment single. It was refused on 21 May 2004 on the basis that the applicant’s assets were above the allowable limit. That decision was reviewed by an authorised review officer, and affirmed, on 24 January 2005.
34.On 15 December 2005 the earlier decisions that the applicant was a member of a couple and to raise and recover debts were considered, and modified, by an authorised review officer. That officer took the view that the applicant had been a member of a couple with Mr Bui throughout the period from 2 January 1996. The matter was sent back for a further calculation of the debts.
35.The applicant sought a review of all of these decisions in the Social Security Appeals Tribunal.
36.The decisions in issue before that Tribunal were:
(1) the decision of 16 May 2003 (as varied by the authorised review officer’s decision) to regard the applicant as having been a member of a couple since 2 January 1996,
(2) the decision of 4 July 2003 to cancel the applicant’s parenting payment single,
(3) the two decisions of 24 October 2003 to raise debts for overpayments of Newstart allowance and parenting payment single,
(4) the decision of 21 May 2004 to reject the applicant’s claim (lodged on 2 April 2004) for parenting payment single,
(5) the decision of 26 August 2004 to reject the applicant’s request for parenting payment single to be paid to her under the assets hardship test.
37.The Social Security Appeals Tribunal affirmed each of those decisions except that relating to the rejection of the claim for parenting payment single. In that instance it substituted a decision that as at the time of the application and its rejection the applicant was a member of a couple and her claim and assets should have been assessed on that basis.
38.Despite the variety of decisions the matter, as it was argued before me, raises for determination the two issues earlier identified,
(1) was the applicant a member of a couple
(2) what was the value of the applicant’s assets.
Was the applicant a member of a couple
39.In the context of the Social Security Act1991 (Cth) the issue of whether a recipient of benefits is single or a member of a couple is of some importance. A recipient who is a member of a couple receives benefits at a lower rate and the assets and income of the other member of the couple are taken into account when determining entitlement to benefits.
40.Where, as seems now to be accepted, the person is not legally married the person is a member of a couple for the purposes of the Social Security Act by virtue of s 4(2)(b) of that Act where all of the following conditions are met:
“(i) the person has a relationship with a person of the opposite sex (in this paragraph called the partner);
(ii)the person is not legally married to the partner;
(iii)the relationship between the person and the partner is, in the Secretary’s opinion (formed as mentioned in subsections (3) and (3A)), a marriage‑like relationship;
(iv)both the person and the partner are over the age of consent applicable in the State or Territory in which they live;
(v)the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.”
41.Section 4(3) of the Act is in these terms:
“In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), 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.”
42.It is also necessary to notice that s 4(3A) prevents the opinion of a marriage-like relationship from being formed if the person is living separately and apart from the partner on a permanent or indefinite basis.
43.Useful guidance in the application of these provisions is to be found in the decision of French J in Pelka v Secretary, Department of Family and Community Services[4] where his Honour said:[5]
[4] (2006) 151 FCR 546
[5] Id. pp 555-6, par. [46]
“Having regard to the current provisions of s 4(3) and the approaches discussed in the earlier authorities mentioned, a decision-maker concerned with whether an unmarried person is in a marriage-like relationship with another person of the opposite sex:
1.Must have regard to their interpersonal relationship as a whole not limited by the factors listed in s 4(3).
2.Must have regard to each of:
(a) the financial aspects of the relationship;
(b) the nature of the household;
(c) the social aspects of the relationship;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other.
3.In having regard to the preceding five matters, must have regard to all factors relevant to each and, in particular, must have regard to the factors listed under each heading in s 4(3).
4.Must specifically consider the total picture of the relationship created by all of these factors bearing in mind that consideration must be given to those which weigh against a marriage-like relationship and those that weigh in favour of it.
5.Must undertake the preceding consideration bearing in mind that a marriage-like relationship is not disclosed solely by any one of the following matters:
(a) financial cooperation;
(b) cohabitation;
(c) a sexual relationship;
(d) cooperative household arrangements;
(e) mutual commitment.”
44.Recognizing that an overall assessment must be made it is, nonetheless, useful to consider the relationship between the applicant and Mr Bui by reference to the separate matters identified in s 4(3). Before doing so I should make reference to the witnesses who gave evidence before me – the applicant, her elder son Thanh, and Mr Bui.
45.Both the applicant and Mr Bui had the disadvantage of giving evidence in a language that was not their first language. But despite that barrier, which lead to occasional difficulties in comprehension (of both questions and answers) I regard them both as truthful and accurate witnesses. I note, in that regard, that the Social Security Appeals Tribunal was somewhat critical of the evidence of the applicant, describing two major inconsistencies that caused the members of that Tribunal “considerable concern about the accuracy of [the applicant’s] account.”
46.I am not, of course, directly concerned with the correctness of that Tribunal’s conclusions however because I reach an opposite conclusion on an issue of credibility I consider that I should have regard to the matters that caused that Tribunal to have doubts about the applicant’s credibility to ensure that I have not overlooked any matter of importance.
47.I recognize the force of the criticisms of the applicant made by the Social Security Appeals Tribunal[6] but in my view the matters identified as causing concern are explicable on the basis of a lack of comprehension of English, particularly written English, and the passage of time.
[6] Set out in paragraph 37 and following of that Tribunal’s reasons.
48.But ultimately, as it seems to me, I must reach the conclusion about the existence of a marriage-like relationship not on the basis of belief, or disbelief, of the applicant’s denial that she was in such a relationship. That conclusion is to be reached having regard to the matters set out in the statute. The part that credibility plays, in my view, is in relation to explanations given for conduct that was consistent with the existence of a marriage-like relationship.
49.I was also most impressed by the applicant’s son Thanh Bui. He was 15 when the relationship between his parents soured and he gave me a valuable insight into that relationship over the critical period.
50.The discussion of the evidence that follows is, to some extent, informed by my favourable impressions of the applicant, and Mr Bui and, in particular, Thanh Bui.
Financial aspects of the relationship
51.There are, so far as I can tell, no joint assets and there have not been since Mr Bui’s bankruptcy when his interest in the jointly owned property vested in his trustee in bankruptcy by operation of law. All of the bank statements before me show that the applicant holds accounts in her name alone. The two pieces of real property are held in the name of the applicant or the applicant and her son Thanh (as to a 2/100 share).
52.The applicant and Mr Bui borrowed jointly on two occasions in 1999 but their evidence, which was not challenged, was that, despite the joint obligation in law to the lender, the loans were for the individual purposes of them as separate persons and repayments were made only with respect to each individual’s loan.
53.I should, in this context mention two aspects of the Secretary’s submissions. First, it is said that:
“shortly prior to Mr Bui’s bankruptcy, property was transferred from Mr Bui to the applicant at substantially less than market value.”
It is not immediately apparent to me how that allegation, even if true, could impact upon the existence (or otherwise) of a marriage–like relationship some months after the transfer was effected. But, more fundamentally, it seems to me that the allegation is simply not made good on the evidence. There is a letter from the Northern Territory Department of Business, Industry and Resource Development that suggests that on 25 September 1995 a boat known as the “Gladiator” was transferred by Mr Bui to the applicant.
54.So far as I can tell the allegation is based upon a gross misreading of the questions asked of the Department of Business, Industry and Resource Development and that Department’s answers.
55.The questions, and answers, were as follows:
·“could you please advise who owned the boat the Gladiator before Mrs Phi-Phung Nguyen - - Tranh Van Bui
·could you please advise the date Mrs Phi-Phung Nguyen had the Gladiator transferred to her name - - 25 September 1995
·could you please advise if there was [sic] any transfer fees involved - - $100
·do you hold any information regarding purchase price involved for Mrs Nguyen and the previous owner of the boat - - No.”
56.I am not aware of any evidence, and certainly none was pointed out to me, of the value of the vessel. It does rather look as though the author of the Secretary’s submission has taken the figure of $100 given as the amount of transfer fees and treated that as being the consideration for the transfer.
57.An allegation of fraudulent (and probably criminal) conduct ought not be made on such a flawed basis.
58.The other matter that warrants a comment is this contention, put in the context of Mr Bui’s bankruptcy:
“In the circumstances, it is contended that the bankruptcy of Mr Bui has coloured the financial aspects of the relationship between the applicant and Mr Bui. Both the applicant and Mr Bui clearly have a degree of sophistication in their dealings, and property has been dealt with in a manner which appears largely directed towards minimising the financial detriment to family overall. This is supported by the fact that Mr Bui has been willing to move back into the applicant’s residence during periods of financial instability to either of them.”
59.My impression is certainly that Mr Bui’s bankruptcy has coloured the financial aspects of the relationship. That much I accept. But I do not accept that it has coloured the relationship in the way contended; rather my impression is that the bankruptcy was the impetus to the applicant seeking and maintaining a financial independence from Mr Bui. The sole exception to that in all the years in issue seems to be the joint borrowing to enable Mr Bui to acquire a taxi. But that too, on analysis, demonstrates the applicant seeking financial independence.
60.The reality of Mr Bui’s position was that, as a person very recently discharged from bankruptcy, he was not an attractive proposition to financiers. The addition of the applicant as a joint borrower enabled the finance application to proceed and that enabled him to acquire a taxi. The obvious benefit for the applicant was the potential for Mr Bui to achieve sufficient financial independence to be able to provide maintenance for the children of the relationship. The payment of maintenance for the children would plainly assist the applicant in achieving her own financial independence.
61.I am also unable to agree with the contention that the applicant and Mr Bui had a degree of sophistication in their dealings. My impression certainly of the applicant, is quite to the contrary.
62.The contention about Mr Bui’s willingness to move back in “during periods of financial instability to either of them” rather overstates the evidence. That occurred, so far as I am able to tell, on one occasion, in about September or October 2003 following the respondent’s decision to cancel the applicant’s benefits.
63.In an appeal from this Tribunal in a similar case in Staunton-Smith v Secretary, Department of Social Security,[7] O’Loughlin J said this:
“The loss of her pension created the need for Mr Staunton-Smith to give her financial assistance; his concern for Philip explained why he was prepared to meet that need. The Tribunal did not consider whether, and to what extent, Mr Staunton-Smith would have cared for her or assisted her financially if she had continued to receive her pension.”
[7] (1991) 32 FCR 164 at p. 169
64.So too, it seems to me necessary to consider what prompted Mr Bui’s return to the house and what inferences can be drawn from it. On the unchallenged evidence of the applicant, which I accept, Mr Bui is living as a lodger and paying board of $100 per week every week. This is to be contrasted with his payments of child support which are paid on a much more irregular basis.
65.My conclusion, on the evidence before me, is that Mr Bui’s return to the house in September or October 2003 was prompted by the applicant’s financial circumstances once her benefits had been cancelled and that the arrangement from that point on was entirely commercial. It is, in that regard, no different to the relationship that existed between the applicant and Ms Schwartz who has also resided at the house at Karama as a boarder from 2003 onwards.
66.It seems to me pertinent to remark that there is surprisingly little evidence that the applicant and Mr Bui are financially “connected” one with the other. On the Secretary’s case they are, and have been since January 1996, a period in excess of 10 years, in a marriage-like relationship. Yet the sum total of the evidence of any financial connection between them is the two joint loans in 1999. The bank accounts and other financial records[8] that are before me are in the name of the applicant only or Mr Bui only.
[8] For example, the various utilities, boat and motor vehicle registration.
67.It is, as well, of some significance that the tax returns of the applicant have been prepared and lodged on the basis that she did not have a spouse or de-facto spouse and that Mr Bui’s evidence to similar effect was not challenged although his tax returns show his residential address as being the Karama address.
Nature of the household
68.The applicant and Mr Bui are the parents of three children. All of the children continue to live at home and two are quite young. Consequently there is a bond between the applicant and Mr Bui in relation to the children. Indeed recent amendments to the Family Law Act 1975 (Cth), as I understand their import, are designed to emphasise the shared responsibilities of parents even when divorced or separated.
69.It is in relation to this aspect of the relationship that I have found the evidence of Thanh Bui of much assistance. He spoke of the differences in family life before and after his parents broke up. He was, after separation, in charge of house maintenance; he became the link between the parents and the family’s social life changed.
70.He made reference to the importance of family in the Buddhist culture and how parents are committed to their children. So it is, in my view, with the applicant and Mr Bui; despite their own differences they remain devoted to their children.
71.This shared devotion will mean that Mr Bui, when not residing at the premises, will spend more time at the premises than might be expected of a separated parent. And his occupation as a self-employed taxi driver obviously enabled him to spend a good deal of his time seeing the children and choosing times, for example before and after school, when he was more likely to see the children.
72.Having made those general observations I want to look at the evidence of the household as it has evolved over time.
73.Initially after separation Mr Bui continued to reside in the same house albeit living a separate life to that of the applicant. It is not entirely clear when he, in fact, moved out and that seems to me to be understandable given the passage of time. But in her dealings with the respondent during this time the applicant made it plain that she was separated. Unless the applicant was being wicked and deceitful in her dealings with the respondent her contemporaneous records of the relationship, recorded in the respondent’s standard form, shows that the marital relationship had broken down. My view of the applicant leads me to the conclusion that rather than her being wicked and deceitful when completing these documents she was being entirely truthful.
74.The fact that there was a short but unsuccessful, attempt at reconciliation at the end of the first year of separation does not detract from the conclusion of a breakdown in the relationship. Such reconciliations are not uncommon and a human experience suggests that when the attempt at reconciliation fails the element of separation become all the more pronounced. It does however lead to the conclusion that the applicant and Mr Bui were in a marriage-like relationship during this period at least.
75.It is worthy of note that the applicant described herself as being separated at the time of birth of the youngest child.
76.It seems to me that on the evidence from the point in 1996 when Mr Bui moved out to the time in 2003 when he moved back in Mr Bui was clearly not a member of the household subject only to the question of the proper conclusion to be drawn of Mr Bui’s visits, noted in the surveillance reports.
77.There is no doubt that Mr Bui visited frequently, sometimes as frequently as three times per week. But that conduct is readily explicable when regard is had to three matters;
·the need for Mr Bui to visit his children,
·the capacity for Mr Bui, as a self-employed taxi driver, to do so,
·the particular relationship Mr Bui had with his elder son.
78.I have already remarked upon the evidence of the importance of family in Buddhist culture and the capacity that Mr Bui had to visit. The relationship that Mr Bui had with his elder son was particularly close because that son acted almost as a business manager. Once Mr Bui acquired the taxi in 1999 he used the Karama address for his business correspondence because he relied upon the elder son to read and explain official documents for him.
79.The evidence of Thanh Bui (in Exhibit 2) was not challenged and I have no hesitation in accepting it.
80.The respondent placed some reliance upon the use of Mr Bui of the Karama address as his mailing address. In the case of someone whose native language was English the reliance might be sound but it is less so here where Mr Bui’s spoken language is poor and his reading ability no doubt poorer.
81.It is the case, as the Secretary contends, that the applicant and Mr Bui kept up the appearance, so far as the two younger children were concerned, of continuing in a relationship. That might, in some circumstances, be of significant weight but it seems curious to place much weight upon something designed to avoid emotional upset to the younger children.
82.I note, in that regard, the evidence of both the applicant and her son, that, out of embarrassment, the fact of separation has not been widely circulated and that only “blood family”, as Thanh put it, were aware of the fact of separation.
Social aspects of the relationship
83.There are two aspects of the evidence that seem relevant under this heading.
84.The first is that the public social occasions when the applicant and Mr Bui are together are for significant family events such as a child’s birthday. They are, necessarily, infrequent.
85.The other is that on two occasions – in January 2001 and January 2003 the applicant, Mr Bui and the children travelled to Vietnam for periods of 4-5 weeks. The evidence is that on these occasions they went their separate ways in Vietnam and spent time separately visiting their respective families.
86.I should also refer to the respondent’s reliance upon the evidence of the applicant, given to the Social Security Appeals Tribunal, that she now has a better relationship with Mr Bui. That rather suggests to me the absence of a marriage-like relationship.
Sexual relationship
87.It is accepted by the respondent that there has been no such relationship since 1996. The material tends to support the notion that Mr Bui has another relationship.
Nature of the commitment
88.I have to say that in considering all of the evidence that I cannot discern any level of commitment between the applicant and Mr Bui except insofar as they have a common commitment to the children. I cannot identify any evidence that would suggest that they provide any companionship or emotional support to each other, indeed my impression of Mr Bui was that his feelings towards his wife were best described as indifferent.
89.Neither party in my judgement regards the relationship as being one akin to marriage. What binds them is their children.
Conclusion – 1996 to 2003
90.I am required to have regard to all the circumstances of the relationship in forming an opinion about the relationship between the applicant and Mr Bui. From the evidence I have set out above there are, it seems to me, some key features.
91.First there is no evidence, and no suggestion, that the applicant has received any financial support from Mr Bui beyond the payment of child support. With the exception of the joint loans, which are, I consider, explicable, there are no joint financial dealings; indeed the applicant seems to have been at pains to achieve financial “separation” from Mr Bui.
92.Next, there is no emotional bond beyond that which comes from the shared parenthood.
93.Then there is the fact that there has been no sexual relationship since 1996.
94.Finally, such direct contact as there is, is in my view, referable to the task of shared parenthood and, in particular, Mr Bui’s attachment to, and affection for, the three children.
95.These matters in particular, and the evidence of the relationship in general, lead me to the conclusion that I am not of the opinion that the applicant was in a marriage-like relationship with Mr Bui during this period with one, limited exception. That exception relates to the period in December 1996 when the parties resumed the relationship and when the third child was conceived. On the evidence the reconciliation lasted, at most, for some 20 days. I would propose, for the sake of simplicity in calculation, to determine that the reconciliation was for a period of 14 days.
96.I acknowledge that my conclusion is to the contrary of that reached by the experienced members of the Social Security Appeals Tribunal however, as French J pointed out in Pelka:[9]
“The judgement to be made is difficult and, once out of the range of obvious cases falling within the core concept of ‘marriage-like’, will be attended by a degree of uncertainty. Indeed, it may be that different decision-makers on the same facts could quite reasonably come up with different answers.”
[9] Supra at p. 556 par [47]
The position post October 2003
97.The issue of whether the applicant and Mr Bui were in a marriage-like relationship after his return to the Karama residence in October 2003 does not directly arise however it has relevance by reason of the claim for parenting payment made by the applicant on 2 April 2004.
98.In that regard I note that in supplementary submissions lodged with the Tribunal on 14 December 2006 the Secretary “takes no issue in relation to marital status after 1 April 2004”. In adopting this course the Secretary has given effect to a report and recommendation of a Centrelink social worker of 19 May 2004.
99.In my view the Secretary’s concession is amply supported by the evidence which points, plainly, to the conclusion, that from October 2003 when Mr Bui returned to the Karama property, the applicant was not in a marriage-like relationship with him.
100.In the result I conclude that the applicant was not in a marriage-like relationship in April 2004 when she made application for parenting payment and that her assets at that time ought be calculated on the single basis.
What was the value of the applicant’s assets
101.In light of my conclusion that the applicant was not a member of a couple except for a short period in December 1996 the assets and income of Mr Bui are otherwise not relevant. What is relevant is the value of the applicant’s assets between 2 January 1996 and 21 May 2004.
102.There appears to be no issue of the applicant exceeding the allowable assets limit prior to her acquisition of the Lambells Lagoon property in October 1997 at a purchase price of $118,950. As has already been noticed, the applicant funded that purchase, in part, with a loan of $60,000 which is documented and secured by a registered mortgage. The more difficult issues arise from the balance purchase price of $58,950.
103.The applicant’s case is that this balance came from two sources – the sale of assets and borrowing from family and friends. The applicant’s evidence to the Social Security Appeals Tribunal was that she raised $38,500[10] from asset sales and that the balance of approximately $20,000 was borrowed from her mother and brother in Vietnam.
[10]A boat was sold for $10,000, a 4 wheel drive vehicle for $12,500 and a car for $16,000.
104.It is relevant, at this juncture, to notice s 1121A of the Social Security Act. It provides:
“(1) For the purposes of working out the value of a person’s assets under this Act, if:
(a)the person is:
(i) a primary producer; or
(ii) a family member of a primary producer; and
(b) the person has assets (including real property) that are, in the Secretary’s opinion, used for the purposes of carrying on that primary production; and
(c) the person also has liabilities that are, in the Secretary’s opinion, related to the carrying on of the primary production;
then:
(d)section 1121 does not apply in relation to the assets referred to in paragraph (b); and
(e)those assets are taken to be a single asset (in this section called the primary production asset); and
(f)the value of that single asset is worked out under subsection (2).
(2) The value of a person’s primary production asset is worked out in the following way:
Method statement
Step 1. Add together the value of the assets referred to in paragraph (1)(b): the result is called the unencumbered value.
Step 2. Add together the value of the liabilities referred to in paragraph (1)(c): the result is called the total liability.
Step 3. Take the total liability away from the unencumbered value: the result is the value of the person’s primary production asset.
(3) If the result under Step 3 of the Method statement is less than nil, the value of the primary production asset is taken to be nil.”
105.Given that the Lambells Lagoon property was purchased for the purpose of developing a mango farm it seems to me to be proper to conclude, for the purposes of s 1121A, that the applicant was a primary producer and that the Lambells Lagoon land was used by her for the purposes of carrying on primary production.
106.The question that arises is whether the evidence demonstrates that the applicant had liabilities that are related to the carrying on of primary production.
107.It seems plain that the applicant had access to an amount of $20,000 at settlement of the purchase; without it she could not have settled. The only logical source of those funds is her family in Vietnam. The difficulty I have is in being satisfied that the funds were paid to the applicant from that source with the character of a loan rather than with the character of a gift or perhaps as a transaction not intended to create a legal obligation. I have copies of receipts written by the applicant that show that some A$6,000 and US$4,900 was “lent” to the applicant by family members in June and July 1996 but it seems to me that even if I were to accept these documents at face value they are too remote in time from the purchase date to be able to be regarded as evidencing loans in respect of the purchase price of the Lambells Lagoon property.
108.There is, as well, a handwritten note[11] dated 5 June 2005 and said to be from the applicant’s brother, which says, in part:
“The total amount of money which Mum and I have gradually lent you to spend on the farm over the years from 1996 to 2002 is AUD78,000. When things are steady and return profits, could you please repay the money to Mum and me the sooner the better.”
[11]It is written in Vietnamese but a translation has been provided.
109.The question of support from family in Vietnam also has a relevance in relation to subsequent capital acquisitions in connection with the Lambells Lagoon property. By reference to the various depreciation schedules I conclude that the following assets were acquired for the purpose of carrying on primary production:
· October 1997[12] - tractor - $17,750
· November 1997 – trees - $ 620
· January 1998 – shed - $ 800
· July 1999 – power - $ 3,890
· November 1999 – bore drilling - $14,366
· January 2000 – irrigation - $22,845
· February 2000 – bore pumps - $ 5,073
· March 2002 – desk - $ 326
[12]The depreciation schedule shows an acquisition in July 1997, some months before the purchase of the land. I have adopted October 1997 as the month of purchase, being the month in which the real property was acquired.
110.It is apparent from this list, which demonstrates expenditure in excess of $65,000 between October 1997 and March 2002, that the applicant must have continued to receive support from her family in Vietnam. The difficulty I have is not in concluding that there was such support but that the provision of the support created a liability.
111.The assets acquired are assets used for the purposes of carrying on primary production. But I am unable to be satisfied by the evidence that the amounts that I infer have been sent from Vietnam constitute liabilities. In that regard I take a liability for these purposes to be an amount paid with a common intention that it be repaid and enforceable by action. I am unable to be satisfied that the parties to the transactions in issue here intended that there be an obligation on the applicant to repay the amounts paid to her, enforceable by action, as distinct from the type of non-binding obligations that might commonly be found within the confines of a family or domestic situation.
112.In the result I am not satisfied that the monies received from Vietnam answer the description of liabilities in s 1121A and thus I propose to consider the value of the Lambells Lagoon property without reduction for any liability save that of the mortgage debt.
The applicant’s net assets
113.In September 2004, and for the purpose of considering the applicant’s asset position, a Centrelink official prepared a table setting out the assets of the applicant at various times. I reproduce it below:
Date
Personal assets
Business assets
Real estate
Total assets
Asset limit
4/10/97
Not declared
Not available
58,950
Unknown
125,750
30/6/98
Not declared
13,845
62,269
Unknown
125,750
13/11/98
12,000
13,845
62,269
88,114
125,750
30/6/99
12,000
10,117
65,588
87,705
125,750
30/6/00
12,000
53,682
65,720
134,589
125,750
1/7/00
12,000
53,682
65,720
134,589
133,250
30/6/01
12,000
50,161
50,532
112,693
133,250
1/7/01
12,000
50,161
50,532
112,693
141,000
30/6/02
12,000
49,198
72,178
133,376
141,000
1/7/02
12,000
49,198
72,178
133,376
142,250
26/11/02
10,000
49,198
73,597
132,795
142,250
30/6/03
10,000
28,764
111,633
150,397
142,250
1/7/03
10,000
28,764
111,633
150,397
149,500
28/8/03
10,000
0
156,633
166,633
149,500
114.I propose to consider this table and the correctness of the entries in it by reference to the submissions of the parties and my conclusions on the evidence.
115.No issue was taken in the hearing with the appropriateness of the figures for personal assets. There seems no reason to think that as at 4 October 1997 or 30 June 1998 the applicant’s assets had a value other than that subsequently adopted and not challenged. I would adopt the figure of $12,000 for each of those periods.
116.The tractor was purchased at a price of $17,750. Although the depreciation schedule has that purchase occurring in July 1997 I assume that it was purchased in October 1997. Even if it had not been purchased as at the date of settlement of the land the applicant obviously had funds on hand to the value of the purchase. I would regard the applicant as having had business assets to the value of $17,750 as at 4 October 1997. The figure adopted for real estate is the purchase price less the amount of the mortgage debt. That is undoubtedly a correct approach.
117.No issue is raised by the parties in relation to the assets as at 30 June 1998 and 13 November 1998. I note that the “business assets” figure has been calculated by adopting the depreciated value of chattels and the purchase price of fixtures and fittings. I am not convinced that that approach is appropriate however it is of no consequence in this year. I would adopt the Centrelink figures.
118.The real estate value calculated by Centrelink as at 30 June 1999 seems to me to be wrong. The mortgage debt as at that date was $55,858.35[13] giving a net value, calculated in accordance with s 1121A, of $63,092.
[13] See p. 686, s 37 documents
119.The proper approach to the valuation of fixtures and fittings arises in relation to the values as at 30 June and 1 July 2000. In the year ended 30 June 2000 the applicant, according to the depreciation schedules attached to her income tax return for that year, expended $46,174 in acquiring farm fixtures and fittings. In determining the value of the business assets as at 30 June 2000 Centrelink has taken the purchase price, rather than a depreciated value. This approach was said to be justified by reference to paragraph 4.7.1.30 of the Social Security Guide. It is appropriate, when considering issues such as these to have regard to a properly formulated policy guide (provided that it is always kept in mind that the words of the statute have pre-eminence) but I consider the reliance on paragraph 4.7.1.30 to be misplaced. Paragraph 4.7.1.30 is entitled “Assessment of Business Deductions & Losses for Sole Traders & Partnerships”. That is not the task that I am presently concerned with. I am concerned to determine the value of the assets owned by the applicant as at the various dates.
120.Value, in this context, means net market value which is “the amount you would expect to receive if you sold the asset on the open market”[14]. I cannot accept that the value of the fixtures and fittings acquired in the 2000 income tax year had a net market value at 30 June 2000 equal to their purchase price. Whilst the valuation of fixtures and fittings on the basis of net market value has inherent difficulties it seems to me that the depreciated amounts are likely to provide a more accurate guide to net market value. I propose to adopt the closing written down value of capital items as at 30 June 2000, the figure of $39,231.
[14]Social Security Guide, par. 4.6.6.10
121.I should add that I took this issue up with the parties in a telephone hearing on 19 December 2006 and Mr McQuinlan, who appeared for the Secretary, accepted that the calculation of business asset values by reference only to purchase price was flawed and that a more accurate estimation, in the circumstances of this case, was likely to be obtained from the depreciated values. I stress, however, that that concession was made, and accepted, in the peculiar circumstances of this case and ought not be see as having any wider ramifications.
122.For the 2001 figures the value of business assets, calculated as I have outlined, is $21,823. The 2002 business assets are $6,866.
123.The 2003 year presents some difficulties. I do not have, so far as I am aware, the applicant’s 2003 tax return and her depreciation schedules for that year and I am not aware of the precise level of the mortgage debt. There was some evidence given by the applicant to the Social Security Appeals Tribunal that the mortgage debt was in the order of $40,000 and that seems to be in line with the previous figures. The respondent has, in this year, adopted the valuation of unimproved capital value provided by the Northern Territory Valuer-General. No issue is raised in relation to this figure.
124.I propose in this year to assume that the applicant’s business assets were the same as in the previous year as there is no suggestion that they increased
the final figures concern the position as at 28 August 2003. That date has been chosen because it was the date on which the Australian Valuation Office submitted a valuation of the Lambells Lagoon property to Centrelink. That valuation was of $200,000. I have some difficulty in reconciling that valuation with that of the Valuer-General. I have even greater difficulty in understanding how the valuation has been reached since the valuation makes no reference to the processes undertaken and, in particular, is devoid of any reference to comparable sales, the feature that ordinarily provides the best measure of market value. In these circumstances I propose to remit the matter to the respondent for two purposes.
125.First, the respondent should recalculate the applicant’s debt for the period from 2 January 1996 to 4 April 2003 on the basis that:
(a)the applicant was not in a marriage-like relationship for any of that period with the exception of a period of 14 days in December 1996;
(b)the applicant’s assets during that period are to be calculated on the basis of the values set out in the table that follows. I have indicated where I have departed from the figures adopted by Centrelink in September 2004. Those values do not treat monies received by the applicant from family members as being a liability.
Date
Personal assets
Business assets
Real estate
Total assets
Asset limit
4/10/97
12,000
17,750
58,950
88,700
125,750
30/6/98
12,000
13,845
62,269
88,114
125,750
13/11/98
12,000
13,845
62,269
88,114
125,750
30/6/99
12,000
10,117
63,092
85,209
125,750
30/6/00
12,000
39,231
65,720
116,951
125,750
1/7/00
12,000
39,231
65,720
116,951
133,250
30/6/01
12,000
21,823
50,532
84,355
133,250
1/7/01
12,000
21,823
50,532
84,355
141,000
30/6/02
12,000
6,866
72,178
91,044
141,000
1/7/02
12,000
6,866
72,178
91,044
142,250
26/11/02
10,000
6,866
73,597
90,463
142,250
30/6/03
10,000
6,866
111,633
128,499
142,250
1/7/03
10,000
6,866
111,633
128,499
149,500
126.Next I consider that the respondent ought obtain a valuation of the Lambells Lagoon property as at May 2004 when the applicant applied again for parenting payment single. The evidence of valuation at those dates is not of a quality that would enable me to make a properly informed decision about the applicant’s entitlement to continue receiving parenting payment single. It may well be that the valuation of $200,000 is sustained upon a proper analysis but I do not, at present, have sufficient evidence that would enable me to undertake a valuation of the real property with any degree of confidence.
127.I deal finally (and briefly) with two final matters – the issue of the application of s 1130B of the Social Security Act and the issue of waiver.
128.The former permits the Secretary and thus the Tribunal to, in effect, ignore the assets limits in certain circumstances of hardship but only where the person has an “unrealisable asset”. That term is defined in s 11 of the Act as meaning an asset that the person could not reasonably be expected to sell or use as security. In my view neither of these matters is made out. There is no evidence that the Lambells Lagoon property could not be sold and I would not regard it as unreasonable for it to be used as security for borrowing.
129.The issue of waiver would arise under s 1237AAD of the Social Security Act would arise only if I was satisfied that the applicant’s case involved special circumstances (other than financial hardship alone). The expression “special circumstances” is not apt to be defined with any degree of precision. In Groth v Secretary, Department of Social Security[15] Kiefel J spoke of the requirement of circumstances that distinguish the particular case from others.
[15] (1996) 40 ALD 541 at p 545
130.In my view there is nothing “special” about the circumstances of this case.
131.I would, accordingly,
(a)set aside the decision of 16 May 2003 (as varied by the authorised review officer’s decision) to regard the applicant as having been a member of a couple since 2 January 1996,
(b)set aside the decision of 4 July 2003 to cancel the applicant’s parenting payment single,
(c)set aside the two decisions of 24 October 2003 to raise debts for overpayments of Newstart allowance and parenting payment single,
(d)set aside the decision of 21 May 2004 to reject the applicant’s claim (lodged on 2 April 2004) for parenting payment single,
(e)remit the matter to the respondent,
(i)for the purposes of recalculating the applicant’s debt in accordance with these reasons,
(ii)for the purposes of obtaining a valuation of the Lambells Lagoon property as at May 2004.
132.I should, finally, record my thanks to the representatives of the parties, Ms Davies for the applicant and Mr McQuinlan for the respondent, for their assistance in what was a complex and difficult hearing.
I certify that the 133 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed: ...............Signed......................................................
Leisa Pendle, AssociateDates of Hearing 23 November and 19 December 2006
Date of Decision 21 December 2006
For the Applicant Ms C Davies, Darwin Community Legal Centre For the Respondent Mr R McQuinlan, Centrelink Legal Services
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