Pang and Hong and Department of Family and Community Services - [2000] AATA 1088

DECISION AND REASONS FOR DECISION [2000] AATA 1088

ADMINISTRATIVE APPEALS TRIBUNAL )

) No. V2000/476

GENERAL ADMINISTRATIVE DIVISION ) and No. V2000/477
Re BING JUN PANG

And BI HUA HONG
  Applicant
           And    DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent
DECISION

Tribunal Mr J. Handley, Senior Member

Date8 December 2000
PlaceMelbourne

Decision      The decisions under review are affirmed.
  .....……………..…....
  Senior Member

SOCIAL SECURITY: Age Pension; eligibility; residency requirements; Schedule 4 of SocialSecurityAct 1991; Agreement between Australia and New Zealand; ordinarily resident; mandatory or discretionary requirement; decisions affirmed.

Decision 33/95 [1995] NZAR 462
Carmichael v Director-General of Social Welfare 3 NZAR 477
Wilson v Social Security Commission (1988) 1 NZSC 40, 146
Social Security Act 1991 s.43(1); s.7(5); Schedule 4, Article 8(1); Schedule 4, Article 1(k)
Social Security Act 1964 (New Zealand) s.3(1)

REASONS FOR DECISION

8 December 2000 Mr J. Handley, Senior Member

The applicants, Mr Pang and Mrs Hong, husband and wife, seek review of a decision made by the respondent on 8 November 1999 and affirmed by the Social Security Appeals Tribunal ("SSAT") on 24 March 2000 that determined that claims for Aged Pension ("AP") be rejected on the grounds that they did not satisfy the residential qualification for the benefit.
The applicants were represented by their solicitor, Mr Kelvin Legg at the hearing and a departmental advocate, Mr. Michael Todd appeared on behalf of the respondent. The Tribunal had a number of documents before it with respect to the application. This included documents provided by the respondent pursuant to s37 of the Administrative Appeals Act 1975 ("T-Documents"), Statements of Facts and Contentions filed by both parties prior to the hearing and documents received into evidence as exhibits during the hearing.
RELEVANT LEGISLATION
Section 43(1) of the Social Security Act 1991 ("the Act") refers to the residential qualifications for AP. It states:
"S43(1) A person is qualified for an age pension if the person has reached pension age and any of the following applies:
(a) the person has 10 years qualifying Australian residence;
(b) the person has a qualifying residence exemption for an age pension".
The term "qualifying Australian residence" is defined pursuant to subsection 7(5) of the Act:
"7(5) A person has 10 years qualifying Australian residence if and only if:
(a) the person has, at any time, been an Australian resident for a continuous period of not less than 10 years; or
(b) the person has been an Australian resident during more than one period and:
(i) at least one of those periods is five years or more; and
(ii) the aggregate of those periods exceeds 10 years."
The term "qualifying residence exemption" is defined in subsection 7(6) of the Act. It states, inter alia, that the provision applies only to a refugee or former refugee.
Schedule 4 of the Act refers to the agreement between the Australian and New Zealand governments with respect to a means of fulfilling the residential qualification for age pension. Article 8(1) of Schedule 4 of the Act details the eligibility for Australian benefits and states:
"A person who does not meet the residence criteria for an age pension but who would otherwise be eligible for that benefit under the legislation of Australia shall be eligible for an age pension if that person:
(a) has reached the age of eligibility under the legislation of Australia or under the legislation of New Zealand, for a corresponding benefit, whichever is the later age;
(b) is one of the following:
(i) an Australian resident;
(ii)in Australia and has the intention of remaining in Australia for at least one year; or
(iii)in Australia and has been in Australia for one year at the date of grant of that benefit;
(c) either:
(i)was ordinarily resident in New Zealand immediately before arriving in Australia; or
(ii) was, on entry into Australia, a New Zealand citizen; and
(d) had been ordinarily resident in New Zealand for a period of not less than 10 years, or an aggregate of 10 years, after age 16."

Article 1(k) of Schedule 4 defines the term "ordinarily resident" in the following terms:
"(k) 'ordinarily resident' has, in relation to New Zealand, the meaning and
interpretation given to it under the laws of New Zealand;"
Sub-Section 3(1) of the Social Security Act 1964 of New Zealand defines the term "ordinarily resident" as follows:
"3(1) 'ordinarily resident', in relation to any person, does not include being
unlawfully resident in New Zealand".

FACTS NOT IN CONTENTION

The parties reached consensus with respect to the facts that were outlined in the respondent's Statement of Facts and Contentions. This chronology was adopted by the parties at the hearing with an addition and can be briefly summarised as follows:
(i)The applicants first arrived in New Zealand on a visitor's visa in February 1988;
(ii)The applicants became permanent residents of New Zealand on 9 October 1989 (refer T14, p77 of the documents);
(iii)Mr Pang was employed by the University of Auckland until 20 October 1995;
(iv)Mr Pang moved to Hong Kong on 28 October 1995 (refer T14, p86 of the documents);
(v)Prior to moving to Hong Kong the applicants sold their residence in New Zealand (refer T2, p7 of the documents);
(vi)The applicants maintained New Zealand bank accounts (refer T2 p7 of the documents);
(vii)Mr Pang ceased employment with the Hong Kong Polytechnic University on 30 June 1997;
(viii)Mr Pang departed Hong Kong on 28 June 1997 (refer T14, p87 of the documents);
(ix)Mr Pang arrived in Australia on 29 June 1997 (refer T14, p91 of the documents);
(x)Mrs Hong arrived in Australia on 29 June 1997 (refer T14, p89 of the documents);
(xi)Mr Pang deposited $50,000 with the Bank of Melbourne on 6 July 1997;
(xii)Mr Pang deposited $100,000 into an ANZ Investment Account on 7 July 1997;
(xiii)The applicants lodged a claim for AP on 1 August 1997 (refer T3, pp 12 to 19 and T5, pp 26 to 31 of the documents);
(xiv)The applicants indicated that they both intended to stay permanently in Australia (refer T3, p13 of the documents);
(xv)The applicants purchased parking spots as an investment on 14 October 1998;
(xvi)The applicants lodged new claims for AP on 8 November 1999 (refer T9, pp 42 to 50 and T11, pp 57 to 65 of the documents);
(xvii)The applicants jointly purchased the residence they were living in some time prior to lodging their second claims for AP (refer T11, p63 of the documents);
(xviii)The applicants advised that they did not claim payments from New Zealand because they did not qualify (refer T10, p52 and T12, P67 of the documents).

SUBMISSIONS

The applicants' submissions were confined to their eligibility for the benefit pursuant to the reciprocal agreement set out in Article 8(1) of Schedule 4 of the Act. No submissions were provided with respect to any potential eligibility pursuant to s43(1) of the Act as there were no evident facts supporting the applicants having achieving 10 years of qualifying Australian residence. At the outset of the hearing the applicants conceded that they failed the 10 year test set out in Article 8(1)(d) of Schedule 4 of the Act. Instead, the applicants referred to a decision made by the New Zealand Social Security Appeal Authority, Decision 33/95 [1995] NZAR 462 ("Decision 33/95"), as authority that permitted the Tribunal to exercise a discretion in particular circumstances to find the applicants' eligibility for AP in the absence of the applicants having satisfied the "ordinarily resident" criteria. Specifically, the applicants pointed to four criteria set out in the Decision 33/95 which persuaded the New Zealand Social Security Appeals Authority to exercise a discretion in favour of the applicants in that decision.
The first criteria could be regarded as "misinformation". The applicants in Decision 33/95 sought advice from the Department with respect to their entitlement to benefits should they reside in Australia for the purposes of medical treatment. They were incorrectly advised that their entitlements would be retained if they returned to New Zealand every 26 weeks. As a consequence, they were regarded as not "ordinarily resident". The applicants submitted that this criteria is applicable to their circumstances. Mr Pang and Mrs Hong sought advice with respect to their entitlements on at least two occasions. The first being from officers of the respondent employed at the Centrelink Office in Knox and the second being from the Australian Consulate – General in Auckland.
It was submitted that the Centrelink officer did not sufficiently clarify the applicants' entitlements. The applicants' representative pointed to Clause 2.111 of the reciprocal agreement which refers to the entitlement:
"if a person had resided in New Zealand for a total of 10 years since they turned 20 and for a total of five years since they turned 50".

Apparently, the applicants based their application on only being required to fulfil the requirement of having resided in New Zealand for a total of five years since they turned 50 years of age. That is, they erroneously substituted the word "or" for the word "and". Their confusion is demonstrated at T7, page 37 of the documents where a Centrelink officer documents:

"the applicant was under the impression that only five years residence in New Zealand was required to be granted age pension in Australia."

In November 1997 Mr Pang was apparently shown a document at the Australian Consulate-General which stated that an aggregate of periods of residence in New Zealand with periods of residence in Australia would qualify him for the benefit. It was submitted that this further erroneous information formed the basis for Mr Pang's subsequent 1999 application and his confusion is again documented within the documents (refer T18 page 103) where a Centrelink officer notes:
"He claims he was advised by DSS staff in 1997 that he and his wife would qualify for age pension after a ten years combined residence in Australia and New Zealand."

The effect of these two events, it was submitted, was that the applicants were not directed adequately as to their true eligibility for the benefit. Further, pursuant to the first criterion the applicant's actively sought information about any proposed variations to their entitlements.
The second criterion relates to the issue of whether the applicants' altered their position to their detriment in reliance upon the erroneous advice. Mr Legg submitted that it was clear on the facts that the applicants had indeed altered their position and the consequence was a detriment born out by their failure to satisfy the 10 year test. The applicants were submitted to have been within a period of mere months of satisfying the 10 year requirement and found themselves in such a precarious position because of the incorrect advice that they had acted upon.
The third criterion related to the ignorance on the part of the applicants of correct procedure. Mr Legg submitted that the applicants have no knowledge of the intricacies of the Social Security Legislation that operates in Australia.
Finally, the fourth criterion which is submitted to apply to this application is that there was no deliberate attempt to mislead the Department. The applicants submitted that they had been forthright and that full disclosure and significant detail had been provided to the respondent. Further, all documentation requested by the respondent had been made available and it was clear that there had been no intention to mislead the respondent.
On the face, therefore, it was submitted that the applicants satisfied all of the requisite criteria and that a discretion should be exercised in their favour and in accordance with Decision 33/95.
The applicants' representative (in response to a question from the Tribunal) was unable to identify a discretion within the Australian legislation. Instead, the applicants' representative referred to Decision 33/95 (at 464) and emphasised that this decision referred to s74A of the Social Security Act of New Zealand. The applicants' representative was also unable to provide any precedent to support a submission that the Tribunal apply New Zealand legislation instead of Australian legislation and conceded that his presumption that Decision 33/95 was relevant may have been an error on his part.
The respondent submitted that no discretion exists within the Australian Social Security legislation to permit the Tribunal to find that the applicants were eligible for the benefit in the absence of having satisfied the 10 year test. It was submitted that even if an applicant was one day short of fulfilling this 10 year test they would still be regarded as being ineligible. Simply, 10 years of being ordinarily resident must be fulfilled as a mandatory requirement. The issue of whether the applicants were victims of defective advice was submitted to be matters that could be addressed by the ombudsman and the respondent.
Whilst the applicants acknowledged that they had failed to achieve 10 years of ordinarily resident status, submissions were provided which addressed this issue. The applicants referred to the SSAT decision which found that a date within the period that the applicants were in Hong Kong should be regarded as the date when their intentions to return to New Zealand changed. The applicants submitted that a later date should be accepted as the appropriate recognition of when the applicants' intentions changed. Two documents were tendered to support this submission. The first correspondence was a letter from Mr Duncan Campbell, Head of the Department of Asian Languages of the Victoria University of Wellington in New Zealand addressed to the applicants' representative, ("exhibit 1"). This letter referred to discussions held between Mr Campbell and Mr Pang with respect to Mr Pang returning to the University following the expiration of his contract in Hong Kong to relieve Mr Campbell's teaching duties. Mr Pang was described as "enthusiastic" towards this offer.
The second letter was from Ms Brigette Holland, a Director of B and T Holland Publications (NZ) Limited to the applicants' representative, ("exhibit 2"). Ms Holland confirmed that she had invited Mr Pang, while he was working in Hong Kong, to contribute to the production of an English language magazine on his return to New Zealand. Ms Holland indicated that Mr Pang had "promised" to assist with this project when he returned.
Mr Legg also made submissions that addressed the applicants' intention to return to New Zealand during their time in Hong Kong. He submitted that that whilst the applicants did not pay taxes to the New Zealand Government while they were in Hong Kong, they paid other applicable rates and outgoings. Further that the sale of their house was not executed in anticipation of going to Hong Kong but because they sought to financially assist their daughter who resided in Australia. The applicants' scarcity of assets was ascribed to their experience of having lived in China during the office of the Mao government. That is, their family was divided pursuant to the government's directions, Mr Pang was given leave to visit his children on only one or two days per year and Mr Pang was forced to work in the countryside under a policy of agrarianism. Their familiarity therefore with having few assets, it was submitted, should not be interpreted as indicating an intention not to return to New Zealand.
Based on this explanation and the two exhibits, it was submitted by the applicants that they had maintained an intention to return to New Zealand until the latter part of 1997. Their intentions did not change, it was submitted, until they made applications in August 1997 for AP.
The respondent submitted with respect to the period of time that the applicants were in Hong Kong, that Mr Pang no longer saw himself being in a position to continue employment in New Zealand. It followed that the applicants could no longer be regarded as being ordinarily resident upon their departure from New Zealand. In the alternative, their failure to return to New Zealand by electing to move to Australia terminated their ordinarily resident status.
CONCLUSION AND REASONS FOR DECISION
The Tribunal must as a matter of law apply Australian legislation. The New Zealand Social Security Legislation should not be applied in preference to the domestic legislation. There is no authority to persuade the Tribunal otherwise. I note that the SSAT referred to Carmichael v Director General of Social Welfare 3 NZLR 477 ("Carmichael") to assist the interpretation of the New Zealand definition of "ordinarily resident" in Sub-Section 3(1) of the Social Security Act 1964. This decision was referred to presumably on the basis of the unhelpful legislative definition which provides little guidance as to what should be regarded as "ordinarily resident".
It is curious also that the Australian definition of "ordinarily resident" in Article A (1)(k) of Schedule 4 of the Act merely refers to the interpretation conferred by way of New Zealand legislation. The applicants' submission that the New Zealand legislation be applied may well have been predicated on confusion arising from reference to New Zealand case law and legislation. Either way, there appears to be no provision of a discretion within the Act to allow this Tribunal to find eligibility on the part of the applicants for AP having failed to achieve 10 years of ordinarily residence. It is therefore unnecessary for the Tribunal to consider whether the criteria delineated in Decision 33/95 can be satisfied in the present application. This aspect of the applicants' submissions must therefore fail.
The remaining issue is whether the applicants have fulfilled the requirements of the reciprocal agreement by having been ordinarily resident in New Zealand for a period of not less than 10 years.
Carmichael considered the interpretation of "ordinarily resident" by having reference to statements made by Tompkins J in Wilson v Social Security Commission (1988) 1 NZSC 40,146 at 150. The relevant extract reads as follows:
"…It will be essentially a question of fact and degree, whether in the particular instance a person who is out of New Zealand … has remained ordinarily resident of New Zealand. Although in some cases other factors may predominate, in many the most important factor will be the person's intention during the period of absence. If during that period, the person had a firm, clear intention to return to New Zealand when the purpose of the period of absence has ended or been achieved, then that person may well remain ordinarily resident in New Zealand…"

I am prepared to find as a fact that the applicants were ordinarily resident of New Zealand during the period of Mr Pang's employment in Hong Kong. I accept the applicants' submissions that they had a firm and clear intention to return to New Zealand which is supported by exhibits 1 and 2 that relate to discussions of Mr Pang's intentions to resume employment in New Zealand on completion of his Hong Kong duties. However, it is apparent that any such status was abandoned when the applicants lodged applications for AP in August 1997. It follows that even if the commencement date of ordinarily resident status was accepted as being February 1988, being the point in time when the applicants first arrived in New Zealand on a visitor's visa, as a matter of simple arithmetic the applicants fail to achieve 10 years of ordinarily resident status by some six months.

I sympathise with the applicants' circumstances, particularly in view that they appear to have acted upon misinformation to their detriment and have fallen short of 10 years of ordinarily resident status by such a nominal amount of time. However, in accordance with the relevant legislation and for the above reasons the decisions under review should be affirmed.
I certify that the thirty (30) preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member
Signed:    Linda A Nemeth ............................................
Date of Hearing  4 August 2000
Date of Decision  8 December 2000
Solicitor for the Applicant         Kelvin R Legg, Solicitor
Counsel for the Respondent    Michael Todd, Departmental Advocate