Patrick Peter Casey and Secretary, Department of Social Services

[1986] AATA 120

[2014] AATA  690

Division	GENERAL ADMINISTRATIVE DIVISION
File Number	2012/3165
Re	Patrick Peter Casey
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Ms G Ettinger, Senior Member
Date	22 September 2014
Place	Sydney

The Tribunal affirms the decision under review.

........................[SGD]................................................

Ms G Ettinger, Senior Member

Catchwords

Social security – overpayment of pension – Applicant did not disclose purchase of land in Queensland to the Respondent – Applicant claims he bought it for his son - he did not tell his son about it – Tribunal finds that the Applicant has used the names Patrick Peter Casey and Peter Patrick Casey interchangeably for most of his life – decision under review affirmed.

Legislation

Social Security Act 1991 ss 55, 631, 1064, 1118, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act 1999 s 80

Cases

Re Reynolds and Secretary to the Department of Social Security [1986] AATA 120

Re Stubbs and Secretary Department of Families and Community Services [2003] AATA 729

Beadle and Director- General of Social Security (1984) 6 ALD 1

Groth and Secretary Department of Social Security (1995) FCA 1708

Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25

REASONS FOR DECISION

Ms G Ettinger, Senior Member

22 September 2014

SUMMARY

1. Mr Patrick Peter Casey, also known as Peter Patrick Casey or Pete, who is 82 years old, had his age pension cancelled in November 2010. Centrelink found that he had been overpaid age pension for the period 1 January 2004 to 9 November 2010 amounting to $23,046.21 due to his assets exceeding the threshold limit. Centrelink and the Social Security Appeals Tribunal (SSAT) held that Mr Casey had not disclosed his ownership of land he purchased in Queensland for $55,000 in 1992, and that by 2004, the value, held to be $175,000, exceeded the permitted threshold value of $149,500 referable to his entitlement to the age pension. Mr Casey has appealed the decision of the SSAT to this Tribunal.

2. Mr Casey’s evidence was that he disclosed the purchase of the land in Queensland to Centrelink at Windsor when he returned from Queensland in 1992. Mr Casey agreed he had not mentioned it to Centrelink since, because he does not read letters he receives, and because most recently, he cannot see well to read. Mr Casey also said that at the time of the purchase in 1992, the value of the land in Queensland did not put him above the permissible threshold for receiving a pension. He also mentioned that his education and ability to read, were limited.  I noted also that he is quite deaf, and has difficulty hearing conversations or questions put to him.

3. Mr Casey who was accompanied to the hearing, and assisted by his step daughter Ms Jennifer Bryant, argued that he bought the land in Queensland in the name of Peter Patrick Casey, as it was intended for his son. He said that he did not inform his son of the purchase because at the time his son was under bad influences, and drank alcohol, and took drugs. He also said that he bought the land in his son’s name so that he would not have to pay transfer fees.

4. There is no corroborating evidence in regard to Mr Casey’s purported 1992 report of the purchase of land to Centrelink, and I prefer the evidence that he did not in fact disclose it.

5. I find from the evidence which is discussed in the paragraphs below, that Mr Casey has used the name Patrick Peter Casey and Peter Patrick Casey interchangeably for most of his life. I am also satisfied from the evidence that he is the legal owner of the land in Queensland.

6. Accordingly Mr Casey’s appeal is unsuccessful, and the decision of the Social Security Appeals Tribunal must be affirmed. My reasons follow.

   ISSUES BEFORE THE TRIBUNAL

7. The issues before the Tribunal are:

   ·The level of the Applicant’s assets for the purpose of calculating his age pension entitlement;

   ·Whether the Applicant was overpaid age pension between 1 January 2004 and 9 November 2010; and if so,

   ·Whether the overpayment is a debt due to the Commonwealth; and if so,

   ·Whether there are grounds for not recovering some or all of the debt.

   RELEVANT LEGISLATION

8. The relevant legislation is the Social Security Act 1991 (the Act) and the Social Security (Administration) Act 1999 (Administration Act).

9. Section 55 of the Act provides that a person's age pension rate is to be worked out using the Pension Rate Calculator in section 1064.

10. Module G of section 1064 sets out how to work out the effect of a person's assets on the person's maximum payment rate (the asset test). Asset is defined in section 11 to mean property or money.

11. Section 1118 of the Act provides that the value of a person's principal home is disregarded in the calculation of a person's assessable assets.

    PATRICK PETER CASEY OR PETER PATRICK CASEY

12. Mr Casey informed Centrelink that his birth name was Patrick Peter Casey, that he had a sister, Patricia, and that his mother had called him Pete. He also told me that he had a heating business at one time, and called it Pete for Heat. Mr Casey pointed to a number of documents which showed his name as Patrick Peter Casey, and to others where he was referred to as Peter Patrick Casey.

13. I am satisfied that the Applicant was born Patrick Peter Casey, but has also been known as Peter Patrick Casey. Documents in his birth name of Patrick Peter Casey were, amongst others, an affidavit filed with the Family Court of Australia, ANZ bank account records, and a Medicare card.  Official use of the name Peter Patrick Casey was amongst others, for his Centrelink pension, his principal place of residence in Windsor, and his entry at the electoral office.

14. Mr Dean, an Australian Government Solicitor who represented the Secretary, Department of Social Services, the Respondent in this matter, submitted that the two versions of Mr Casey’s name had been used interchangeably during his life. The evidence satisfied me of that, and I accepted it. 

15. For the sake of completeness I note that the Legal Services Division of Centrelink wrote to Mr Casey’s daughter in relation to his application, in February 2013. The suggestion was made that, given the situation, Mr Casey’s son be joined as a party to the application, and/or that he be available to give evidence at the hearing.

16. In June 2014, Mr Dean also wrote to Mr Casey, advising that it would be in his interest, and would be of assistance to the Tribunal if Mr Casey’s son were to give evidence at the hearing (Exhibit R3). He also provided property title searches in relation to the Queensland property.

17. Mr Casey’s evidence was that he was unable to contact his son, and Ms Bryant said that he could not afford to attend the hearing as he is in Cairns and has no work.

    THE LEVEL OF THE APPLICANT’S ASSETS FOR THE PURPOSES OF CALCULATING AGE PENSION ENTITLEMENT

    Ownership of assets

18. Mr Casey is 82 years old, and has been in receipt of Age Pension since July 1995. He lives in a house, classified as heritage, which he owns in Windsor. The evidence indicates it has been in a state of disrepair for a long time. As that is Mr Casey’s principal place of residence, it is disregarded in the calculation of his assessable assets. I noted that he also owns a cemetery plot in St Marys.

19. The Applicant was granted the invalid pension in January 1983 in the name Peter Patrick Casey. In November 1991 he was transferred to the disability support pension (DSP). In late 2010, Centrelink suspended the Applicant's payments for non-compliance with notices under section 80 of the Administration Act, and section 631 of the Act.

20. It is not in dispute that in October 1992 Mr Casey purchased 14.18 hectares of land at Coran, Queensland for $55,000 in the name Peter Patrick Casey.  Mr Casey told me that he borrowed money from the Bank of Queensland to do so, and did not realize the property was an asset. He said that he saw it more as a liability because he had to make payments, and pay the rates and taxes on it. He said that he has now paid it off using his pension and assistance from a close friend.

21. Mr Casey told me that he had taken his son Peter Patrick Casey up to Queensland to console him after the death of his mother, and had bought the land for him without telling him about it. The reason for not telling his son about it, according to Mr Casey, varied. At one point he said that it was because his son was too young to understand. Then, when it was pointed out that his son was 20 years old at the time of the purchase, he indicated that due to drug and alcohol problems, his son’s brain was immature. Mr Casey also told me that he bought the property for his son because it was a particular shape which would lend itself to being a dog run. He said his son loved nature and animals, and he hoped his son could have dogs on the property. At one point he also said that putting his son’s name on title would mean the transfer to him would be easier and cost less.

22. In that regard I had a statement of Ms N Ober OAM, (Exhibit A2), who indicated that she had known Mr Casey for 55 years, and attested to his good character. She stated that he bought the land in Queensland for his son in 1994 when he thought he was dying of cancer so that the boy would have a place to call home.

23. I noted from the evidence that in August 2010, Centrelink conducted a real estate review. Records provided by the Queensland Land Titles Office showed the Applicant had an interest in a property in Queensland.  A Centrelink record of a conversation with Mr Casey on 3 August 2010 states that Mr Casey claimed to be unsure who owned the land in Queensland; that he said he had bought it for his son, but his son would not own the land until he died as it was written in his will.  In evidence is a copy of Mr Casey’s hand written will affirmed on 1 March 2001 (the first Will) by which Mr Casey’s son is entitled to a fifty percent share of any property held in my name in the state of Queensland upon his death.   

24. Mr Casey told me that when he was very ill in hospital in 2001, he could not remember whether he had bought the land in Queensland in his son’s name, so he made a will leaving it to him.   

25. In his statement, prepared by Ms Bryant, (Exhibit A1), Mr Casey stated that when he realized he had bought the land in his son’s name, he made another will in 2010 (the second Will), putting the land in trust for his son. In his oral evidence, he said that that was on the recommendation of his solicitor.

26. I have taken into account Mr Casey’s various versions regarding the purchase of the land in Queensland, and note the Respondent’s contention that as the second Will was made outside of the debt period, and after the commencement of the investigation into the ownership of the Queensland property, it is not relevant, and should be given no weight. I accept that submission, and am able to put aside the second Will as it is outside the time frame for me to consider it.

27. I accept that on the basis of Mr Casey’s evidence noted above, the fact he signed the purchase documents, including the mortgage, and that he paid the rates and outgoings on the property, that he is the owner of the property in Queensland. Mr Casey also told me about moneys owing to him in another context, but that was not relevant to this matter. 

    Notification of ownership of assets

28. Mr Dean submitted that the two versions of Mr Casey’s name had been used interchangeably during his life. I am satisfied that Mr Casey had not called himself Patrick Peter or Peter Patrick for any fraudulent purposes, although he admitted he thought he could save on transfers and stamp duty if he bought the Queensland property in the name of his son, Peter Patrick Casey. 

29. I noted that Mr Casey’s signature, P P Casey appears on all the documents related to the purchase of the land. However, notwithstanding he said that he informed Centrelink of the purchase when he returned to Windsor in 1992, there is no record of him doing so. I am satisfied that if Mr Casey had informed Centrelink of the purchase of his land in 1992, it is likely that the Agency would have made a record of it.

30. However that is not conclusive, but I do note that Mr Casey did not disclose the purchase to Centrelink on any of the other occasions between 1995 and 2010 when he was asked by Centrelink to advise whether his assets exceeded a certain given value, as indicated on its forms from time to time.  I am satisfied that it is more likely than not that Mr Casey did not report the purchase of the land to Centrelink at Windsor in 1992, or at any time at all. 

    Value of Queensland property

31. Centrelink made a decision that Mr Casey owned the land in Queensland rather than his son, and as part of its investigation, valuations of the property were obtained by the Australian Valuation Office (AVO).

32. In November 2010 the AVO provided historical valuations for the Queensland property as at 1 January in the following years. The asset threshold for single home owners at 1 January 2004, was $149,500. As can be seen from the figures reproduced below, Mr Casey’s Queensland property was valued at $175,000 at that date.

2000	$60,000
2002	$75,000
2004	$175,000
2006	$210,000
2008	$225,000
2010	$240,000

1. Because Centrelink held that Mr Casey’s asset values exceeded the threshold, on 23 November 2010, Centrelink raised a debt of $23,046.21 for the period 1 January 2004 to 9 November 2010. This was affirmed by an Authorised Review Officer (ARO), and the SSAT. I noted that the ARO pointed out the Applicant may be eligible for a higher rate of pension under the assets hardship provisions.

2. Mr Casey provided a property appraisal prepared by Raine & Horne real estate agents dated 6 May 2014.No other valuations were provided, and I rely on the AVO’s valuations. Accordingly I find that Mr Casey’s assets exceeded the threshold as found by Centrelink.

   WAS THE APPLICANT WAS OVERPAID AGE PENSION BETWEEN 1 JANUARY 2004 AND 9 NOVEMBER 2010?

3. I am satisfied that Mr Casey did not disclose his ownership of the Queensland property to Centrelink when he bought it in 1992, or at all over the years when Centrelink asked for information about his holdings from time to time.  By 1 January 2004, the value of the Queensland property, which the AVO assessed as $175,000, and had to be included in the calculation of Mr Casey’s assets, exceeded the threshold value of $149,500 for a single home owner.

4. Accordingly his age pension was overpaid for the period 1 January 2004 to 9 November 2010, as calculated by Centrelink, totalling $23,046.21. Pursuant to section 1223 of the Act, that is a debt due to the Commonwealth.

   SHOULD THE DEBT BE RECOVERED?

5. A debt to the Commonwealth must be repaid unless there are reasons to write it off (section 1236 of the Act), or waive all or part of it (section 1237AAD of the Act). Centrelink argued that none of the conditions apply for either write-off or waiver, neither in respect of sole administrative error, nor special circumstances.

6. Write-off of a debt may occur pursuant to section 1236 of the Act. That means the recovery is delayed for various reasons. Write-off may occur if:

   a)   the debt is irrecoverable at law; or

   b)   the debtor has no capacity to repay the debt; or

   c)   the debtor's whereabouts are unknown after all reasonable efforts have been made to locate the debtor; or

   d)     it is not cost effective for the Commonwealth to take action to recover the debt.

7. If a debt is recoverable by means of deductions from the debtor’s social security payment the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship.

8. I have noted that the term severe financial hardship is not defined in the legislation. However, it has been considered by the Tribunal in several cases, including Re Reynolds and Secretary to the Department of Social Security [1986] AATA 120, where Deputy President Jennings QC said (at [30]):

   ...in the ordinary case 'severe financial hardship' is a condition that is more likely to be demonstrated by a person whose income is materially less than the current maximum pension…

9. More recently, in Re Stubbs and Secretary Department of Families and Community Services [2003] AATA 729, the Tribunal stated (at [20]):

   Severe financial hardship, while not implying destitution, goes beyond straitened financial circumstances and imports a need for the particular case of a person to include financial suffering of a severe or extreme nature.

10. The Secretary contended that the Applicant has the capacity to repay the age pension debt via ongoing withholding from his fortnightly Centrelink payments, and that this is not causing him severe financial hardship. The Respondent also argued that in any event, the rate of withholding is subject to negotiation.

11. I have noted that Mr Casey has lived in a property which requires substantial maintenance which he says he cannot afford to have done. I understand also that it would be possible for the Applicant to realise the Queensland property. Accordingly, I cannot find that Mr Casey experiences severe financial hardship as considered by the Tribunal in other cases.

12. I am satisfied from the evidence that none of the conditions in section 1236 of the 1991 Act apply in Mr Casey’s situation, and that accordingly the debt cannot be written off

    Waiver for administrative error under section 1237A of the Act

13. Section 1237A of the Act relevantly provides, in summary, that, (subject to section (1A) which has no application in this case), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received the payment or payments that gave rise to that proportion of the debt in good faith.

14. The evidence before me does not indicate that any part of the debt was caused by administrative error. Consequently, the debt cannot be waived pursuant to section 1237A of the Act.

    Waiver for special circumstances pursuant to section 1237AAD of the Act

15. Section 1237AAD of the Act gives the Tribunal a wide discretion to waive debts where there are special circumstances. The term special circumstances is not defined in the legislation.  However, it has been extensively considered in case law.

16. In Beadle and Director- General of Social Security (1984) 6 ALD 1 the Court stated as follows:

    ... An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special...

17. In Groth and Secretary Department of Social Security (1995) FCA 1708, the Federal Court stated as follows:

    ...The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss...it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. The enquiry I have referred to would involve considering what would be the effect, if the provision in question or the principle of liability it creates, is applied...

18. More recently in Angelakos and Secretary Department of Employment and Workplace Relations [2007] FCA 25, the Federal Court stated as follows:

    ... There is less overstatement if the words ‘unusual’ or ‘uncommon’ are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case...

1. Centrelink submitted that it accepts the Applicant lives in a very old, heritage listed house which is poorly maintained and in need of work. It noted further however, as also stated by the SSAT, that the Applicant has chosen to live in this manner for a long time, and that realizing the Queensland property would have provided funds to repair the home or change Mr Casey’s living circumstances. Accordingly, the Respondent contended that the Applicant's circumstances were not sufficiently special to warrant the exercising of the discretion to waive all or part of the debt under section 1237AAD of the Act.

2. I am mindful of Mr Casey’s evidence regarding hearing loss and some ill health which can constitute special circumstances, and his resolve not to sell the property because he bought it for his son. In coming to a decision, I am mindful of the case law and the Respondent’s submissions with regard to the exercise of the discretion in section 1237AAD, which I accept. On the evidence before me, I cannot find special circumstances, and I am accordingly not able to exercise the discretion in Mr Casey’s favour to waive part or all of the debt.

   DECISION

3. The decision under review is affirmed.

54.       I certify that the preceding 53 (fifty-three) paragraphs are a true copy of the reasons for the decision herein of Senior Member Ms Geri Ettinger.

..........[SGD]...................................

Associate

Dated  22 September 2014

Date of hearing

23 June 2014

Applicant

Solicitor for the Respondent

Self represented; assisted by Ms J Bryant

Bradley Dean, Australian Government Solicitor