Paule-Font and Secretary, Department of Education, Employment and Workplace Relations
[2008] AATA 1129
•18 December 2008
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2008] AATA 1129
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2008/3328
GENERAL ADMINISTRATIVE DIVISION ) Re JUAN PAULE-FONT Applicant
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
Respondent
DECISION
Tribunal Ms N Isenberg, Senior Member Date18 December 2008
PlaceCoffs Harbour
Decision The decision under review is affirmed. ....................[Sgd].......................
Ms N Isenberg
Senior Member
CATCHWORDS
SOCIAL SECURITY – newstart allowance – allowable assets threshold – valuation of property – valuation of shares – decision under review affirmed
Social Security Act 1991 – sections 611, 1084A, 1118
Re Demovich and Secretary, Department of Family and Community Services [2004] AATA 647
Re Eskelinen and Secretary, Department of Social Security (AAT 8742, 28 May 1993)
Re Evans and Secretary, Department of Social Security (AAT 8710, 18 May 1993)
Re Kirkovski v Secretary, Department of Family and Community Services [2004] FCA 790
Re Reid and Secretary, Department of Family and Community Services [2002] AATA 652
Re Torv and Secretary, Department of Social Security (AAT 8025, 18 June 1992)
REASONS FOR DECISION
18 December 2008 Ms N Isenberg, Senior Member BACKGROUND
1. In March 2008, Mr Paule-Font claimed newstart allowance. At the time of claim, in addition to his home, he owned real estate at Lanitza (“the Lanitza property”) that he had valued at $85,000 as at 23 November 2005. He had other assets, mainly shares, which Centrelink valued at about $156,000. Centrelink records in respect of Mr Paule-Font’s partner, Ms Fennell showed that she had assets of about $1500. The value of Mr Paule-Font’s assets exceeded the allowable threshold for a partnered homeowner. As a result, his claim for newstart allowance was rejected.
2. As the value of Mr Paule-Font and Ms Fennell’s assets was within $10,000.00 of the allowable assets threshold, Centrelink requested the Australian Valuation Office (“the AVO”) to do a valuation of the Lanitza property. It was valued at $125,000 using first, a roadside inspection as the valuation method, and supported by sales evidence, and later, a full inspection. Mr Paule-Font takes issue with that valuation, and provided information from the Department of Land in respect of 5 other properties at Lanitza, none of which exceeds $81,000. In addition, he contended that his shares had also been overvalued by Centrelink.
ISSUE
3. The issue before the Tribunal is whether, at the date Mr Paule-Font contacted Centrelink about making a claim (11 March 2008), the value of Mr Paule-Font and Ms Fennell’s assets exceeded the allowable assets threshold of $236,500. This issue turns on the valuation of the Lanitza property and Mr Paule-Font’s shares. There is no dispute about the value of their other assets.
LEGISLATION
4. Newstart allowance is not payable if the value of the person’s assets is more than a particular limit, which depends on whether a person is a homeowner and whether a person is partnered: section 611 of the Social Security Act 1991 (“the Act”). As at 11 March 2008, the limit for a partnered homeowner was $236,500.
5. A person’s principal home is treated as an exempt asset: subsection 1118(1).
CONSIDERATION OF THE EVIDENCE
6. In assessing the value of the Lanitza property at $125,000, Centrelink relied on a valuation by Mr Stephen Greenhalgh of the AVO dated 4 April 2008. I accept that Mr Greenhalgh is an experienced valuer of property for the purposes of the application of the social security assets test: Re Evans and Secretary, Department of Social Security (AAT 8710, 18 May 1993); Re Reid and Secretary, Department of Family and Community Services [2002] AATA 652.
7. Mr Greenhalgh gave evidence that in valuing Mr Paule-Font’s property he had taken into account access, drainage, soil type, noxious weeds and the availability of electricity, as well as the likelihood that the property could be improved: Re Torv and Secretary, Department of Social Security (AAT 8025, 18 June 1992). He looked at comparable sales and interviewed people associated with those sales. In particular, he noted a similar block which has been sold in October 2007 for $170,000 (lot 112). Mr Paule-Font said that lot 112 had a transformer, whereas his lot does not. Mr Greenhalgh stated that that property is currently on the market for $220,000, but Mr Paule-Font noted that it had a shed, which he thought would have cost $50,000. Mr Greenhalgh said that had been placed on the property after the valuation. Mr Paule-Font suggested the property was over priced, but Mr Greenhalgh noted that the parties were both willing to contract at that price.
8. Mr Paule-Font agreed that, following the sale of lot 112 he had put his property on the marked for $170,000 late last year or early this year, in the hope that he, too, might “get lucky”. It has subsequently been withdrawn from sale, as he decided to keep it for his son. In the several months it was on the market he did not have anyone seriously interested. He said he would have accepted $155,000.
9. Mr Greenhalgh noted that another block (lot 73) sold for $135,000 in December 2007. Another property (lot 109), which included a one bedroom cabin, sold privately for $120,000 in September 2007 at a time when the owner was in financial distress.
10. Mr Greenhalgh noted that in mid-2007, local planning laws had changed, thereby allowing dwellings to be built in the area, without the previous requirement that such dwellings be associated with horticulture on the property. For that reason, he thought the value would have increased, especially as the area is within commuting distance of both Coffs Harbour and Grafton and is near the coast. Two other comparable properties (lots 78 and 143) had been sold for $110,000 and $80,000 respectively before the amendment. He also noted that those properties were in two separate parts. These factors impacted upon a sale price lower than the value of Mr Paule-Font’s property. Mr Greenhalgh agreed that lot 143 had “improvements”, but as far as he was concerned, they were “negative” improvements, that is, structures that needed to be pulled down. Similarly, lot 143 would require the removal of old crops and about 2 ha of the property was of negligible value because it was forested. It has netting, which Mr Paule-Font estimated was valued at $30,000. Mr Greenhalgh doubted that a purchaser would want the netting.
11. Mr Paule-Font pointed out that lot 73 has a dam, but Mr Greenhalgh described it as “not much of a dam” and that dams cost only $4-5,000 to put in. They disagreed about the extent to which the property was fenced.
12. In taking issue with Mr Greenhalgh’s valuation, Mr Paule-Font provided the Department of Lands’ valuation in respect of the comparable properties, the highest of which was $81,300. Mr Greenhalgh noted that the Department of Lands’ valuations were for the purposes of rating, and were not valuations: Re Demovich and Secretary, Department of Families and Community Services [2004] AATA 647.Further, Mr Paule-Font stated that the average sale price of the comparable properties was $123,000, $2,000 less than his, in circumstances where his property is unimproved. Mr Greenhalgh noted that “averaging” was not an appropriate method of valuing property. Mr Paule-Font did not provide an alternative valuation.
13. Mr Paule-Font was critical of Mr Greenhalgh’s “roadside valuation”, but in my view, that valuation was overtaken by a more detailed assessment undertaken through a full inspection.
14. Mr Paule-Font provided a letter from Crown Property Sales dated 21 November 2008 which stated that two other properties in his street are currently for sale at $85,000 and $60,000 or $125,000 together. Mr Paule-Font said that each of those properties was at least 2 ha larger than his. Mr Greenhalgh said he had spoken to the agent about those properties and there was “no chance” one could be built on and it was doubtful that the other one could be built on.
15. Mr Greenhalgh had agreed with Mr Paule-Font’s proposition that the market had softened in recent months with the economic downturn. Therefore, I did not find the letter from Crown Property Sales about current prices to be of assistance, as the relevant date is 11 March 2008. Similarly, I discounted Mr Greenhalgh’s evidence that a lot 75, a property of 26 ha, had sold in August 2008 for $185,000, notwithstanding the softened market.
16. Under the Act, there is no statutory provision specifying any method for the valuation of assets. The test which seems to have been applied by the Tribunal in a majority of cases is a net market value approach based on comparable sales and the “best use“ to which the asset could be put: Bennett J in Re Kirkovski v Secretary, Department of Family and Community Services [2004] FCA 790.
17. The Tribunal is bound to accept a valuation by a qualified valuer to that of an informed lay opinion (Re Eskelinen and Secretary, Department of Social Security (AAT 8742, 28 May 1993) at [19]), and in that respect, I prefer the evidence of Mr Greenhalgh to that of Mr Paule-Font.
18. I, therefore, find that Mr Greenhalgh’s valuation should be accepted as the best available evidence of the market value of the Lanitza property.
Valuation of the shares
19. Section 1084A of the Act provides for the valuation and revaluation of certain financial investments, including shares. The law includes a requirement that a revaluation must occur on 20 March and 20 September in each year, as well as in other circumstances.
20. The policy outlined in the T documents, lodged pursuant to section 37 of the Administrative Appeals Tribunal Act 1975, at T4/19, specifies that the asset value of shares is to be taken as the last sale price of shares. A revaluation may occur at the request of the customer.
21. Centrelink conceded that the share market value fluctuates on a daily basis. However, Centrelink contended that the share value according to the updated “Centrelink database” for 11 March 2008 was $120,484. In contrast, Mr Paule-Font provided a printout of his on-line trading account as at 11 March 2008. His share portfolio was valued at $117,063.93. His diary as to the closing figures for the day, he said, recorded $116,559, but he did not produce the diary. I prefer the online trading evidence as the most accurate available assessment of the value of his shares at the relevant date.
Value of combined assets of Mr Paule-Font and Ms Fennell
22. I, therefore, find that as at 11 March 2008, the value of Mr Paule-Font’s and Ms Fennell’s assets was as follows:
Lanitza property $125,000
Shares $117,064 (rounded)Car $19,000
Bank Accounts $2,988Home Contents $2000
23. The combined value of Mr Paule-Font’s and Ms Fennell’s assets was $266,052 which is still well over the allowable assets threshold. Mr Paule-Font is, therefore, at the relevant date, not entitled to newstart allowance.
DECISION
24. The decision under review is affirmed.
I certify that the 24 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member
Signed: ...................[Sgd].......................
Ms Radhika Prasad, AssociateDate of Hearing 27 November 2008
Date of Decision 18 December 2008
Appearance for the Applicant Self-represented
Appearance for the Respondent Ms S Mantaring, Centrelink legal services
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