Prescott; Secretary, Deaprtment of Employment and Workplace Relations and

[2007] AATA 1332

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1332

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W200600249

GENERAL ADMINISTRATION  DIVISION		)
Re		SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Applicant

And AMANDA PRESCOTT

Respondent

DECISION

Tribunal Mr A Sweidan, Senior Member  

Date17 May 2007

PlacePerth

Decision The Tribunal affirms the Social Security Appeals Tribunal decision under review.  

..........(Sgd. Mr A Sweidan).................

Senior Member

CATCHWORDS

Social Security – “marriage-like relationship” – waiver of debt – special circumstances

LEGISLATION

Social Security Act 1991 s 4(2) and 1237AAD

CASES

Clifford and June Callaghan v Secretary Department of Social Security Q96/163 AAT [11404]

Van Dusen v Kritz [1963] 2KB 176

REASONS FOR DECISION

17 May 2007 Mr A Sweidan, Senior Member    

BACKGROUND

Decision under Review

1.      The applicant, Secretary, Department of Employment and Workplace Relations, seeks a review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 7 July 2006, pursuant to which the SSAT set aside a decision of Centrelink and in substitution decided that:

2.      The respondent, Mrs Prescott, was a member of a couple with Mr Gugiatti in the period 8 December 2003 to 28 April 2004;

3.      Mrs Prescott was overpaid newstart allowance in the period 8 December 2003 to 28 April 2004, the amount of which is to be calculated by Centrelink;

4. The amount overpaid is a debt due to the Commonwealth that is to be waived under section 1237AAD of the Social Security Act 1991 (the Act) and all monies recovered from Mrs Prescott are to be refunded to her; and

5.      Mrs Prescott was not a member of a couple with Mr Gugiatti prior to 8 December 2003 and in the period 29 April 2004 to 8 December 2004 and accordingly there was no overpayment or debt for those periods.

Issues

6.      The issues before the Tribunal identified in the applicant’s Statement of Facts and Contentions are as follows:

7.      Whether Mrs Prescott and Mr Gugiatti have been in a marriage like relationship (MLR), and in particular whether Mrs Prescott has been a ‘member of a couple’ as defined by section 4(2) of the Act and if so for what period or periods?

8.      If Mrs Prescott was a member of a couple for the purpose of the Act, has she received any overpayments of social security during the relevant period/s that are recoverable as a debt to the Commonwealth?

9.      Did any of the overpayments received by Mrs Prescott arise wholly or partly as a consequence of her having knowingly made false representations?

10. If Mrs Prescott did not knowingly make false representations, did her circumstances at the time constitute "special circumstances" within the meaning of s1237AAD of the Act?

Facts as alleged by the Applicant

11.     On 26 May 2003 Mrs Prescott lodged a completed and signed Centrelink customer declaration form, claiming newstart allowance and was granted that allowance on the basis that she was not a member of a couple.

12.     On 23 December 2003 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 11 December 2003 until 24 December 2003.  That form had printed at the top ‘Mrs Amanda J Prescott 36 Camberwarra Dr, Craigie WA 6026’.  In answer to question number 2 on that form ‘Are you married or de facto and living with your partner?’ Mrs Prescott ticked the box marked ‘Yes’.

13.     On 6 January 2004 Mr Gugiatti lodged a completed and signed Centrelink claim form for ‘Payments for people with disabilities, illness or injuries’.  On that form Mr Gugiatti listed his permanent home address as 36 Camberwarra Dr Craigie, WA 6026, wrote that he had been at that address for 2 months, wrote Amanda Prescott as his partner’s name and indicated that his marital situation was living de facto.  Entered in the space next to the question ‘Date you started living de facto’ is ‘?/11/03’ and then next to the space provided is another notation ‘8/12/03’.

14.     Prior to, during and subsequent to January 2004 Mr Gugiatti was earning wages from Aquila Earthmoving.

15.     On 7 January 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 25 December 2003 until 7 January 2004.  In answer to question number 2 on that form, which was ‘Are you married or de facto and living with your partner?’ Mrs Prescott ticked the box marked ‘Yes’.

16.     On 22 January 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 8 January 2004 until 21 January 2004.  In answer to question number 2 on that form, which was ‘Are you married or de facto and living with your partner?’ Mrs Prescott ticked the box marked ‘Yes’.

17.     On an unknown date Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 22 January 2004 until 4 February 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 22 January 2004 to Wednesday 4 February 2004?’ Mrs Prescott ticked the box marked ‘No’.

18.     On 18 February 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form which appears to relate to the period 5 February to 18 February 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 22 January 2004 to Wednesday, 4 February 2004?’ Mrs Prescott ticked the box marked ‘No’.

19.     On or around 23 February 2004 Aquila Earthmoving began deducting child support payments from Mr Gugiatti’s wages.

20.     On 3 March 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form, relating to the period 19 February 2004 until 3 March 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 19 February 2004 to Wednesday 3 March 2004?’ Mrs Prescott ticked the box marked ‘No’.

21.     On 26 March 2004 Mrs Prescott and Mr Gugiatti signed a standard application and offer of option to lease residential premises describing themselves as co-tenants located at 101 Coldstream Place Merriwa, WA, 6030.

22.     On an unknown date Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 18 March 2004 until 31 March 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 18 March 2004 to Wednesday 31 March 2004?’ Mrs Prescott ticked the box marked ‘Yes’ and recorded her partner’s before tax earnings as $568.00. (

23.     On 7 April 2004 Mr Gugiatti received an electronic funds transfer of $508.00 from Aquila Earthmoving, which was the net amount from a gross pay of $1063.50.

24.     On 14 April 2004 Aquila Earthmoving issued cheque no. 4219 to Mr Gugiatti for $645.20 which was the net amount from a gross pay of $1090.50.

25.     The total gross pay that Mr Gugiatti had earned in relation to the net payments he received on 7 April 2004 and 14 April 2004 was $2154.00

26.     On 14 April 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 1 April 2004 until 14 April 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 1 April 2004 to Wednesday 14 April 2004?’ Mrs Prescott has ticked the box marked ‘No’, had crossed out that tick, ticked the box marked ‘Yes’ and recorded her partner’s before tax earnings as $2,154.00.

27.     On 14 April 2004 Mrs Prescott telephoned Centrelink and was advised that she would not be entitled to Centrelink benefits due to her partner’s income.  During this telephone call Mrs Prescott advised that her partner had to pay child support and that she and her partner would lose their house if she did not get paid.

28.     On a date not known Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 15 April 2004 until 28 April 2004.  In answer to question number 2 on that form ‘Did your partner do any work in the period Thursday 15 April 2004 to Wednesday 28 April 2004?’ Mrs Prescott ticked the box marked ‘No’.

29.     On 12 May 2004 Mrs Prescott lodged a completed and signed Centrelink Application for Payment Form relating to the period 29 April 2004 until 12 May 2004.  In answer to question number 2 on that form, which was ‘Did your partner do any work in the period Thursday 29 April 2004 until Wednesday 12 May 2004?’ Mrs Prescott ticked the box marked ‘No’, also ticked the box marked ‘other’ and wrote ‘do not have one’.

30.     On 20 August 2006 Mrs Prescott and Mr Gugiatti signed a standard residential property lease schedule for the lease of premises located at 101 Coldstream Place, Merriwa, WA, 6030.

31. On 25 October 2006 Centrelink sent to Peard & Associates a notice issued under section 196 of the Social Security Act 1991 requiring the provision of information about Amanda Prescott and Steven Gugiatti.

32.     On 1 November 2006 Sharon Kretschmer representing Peard & Associates, provided to Centrelink the information required under the Centrelink notice of 25 October 2006.

33.     In response to the question ‘It is understood that Peard handle the leasing for property at 101 Coldstream Cct Merriwa in the names of Mr Gugiatti and Mrs Prescott.  Please advise the date from which the lease was taken’, Peard & Associates wrote ‘Initial lease commenced 16.4.2004 current lease commenced 20.9.06 expires on 19.3.2007’.

34.     In response to the question ‘Please advise if there have been any changes to the lease since commencement’, Peard & Associates wrote ‘only rent increases’.

Applicant’s Contentions

35.     Mr Gugiatti's employer, Aquila Earthmoving, paid him full-time wages from the week ending 9 July 2003 to 25 September 2003 and from 26 November 2003 to 15 December 2004.  During these periods, the respondent made several representations to Centrelink that he was not working, in circumstances in which the applicant contends that it was likely that she knew that he was in employment.  Furthermore, the applicant contends that Mr Gugiatti's spending patterns as evidenced by his bank statements, did not significantly alter during his periods of employment, even though at various stages during these periods, the respondent informed Centrelink that Mr Gugiatti had either moved out of the house, or that she and he were separated under the one roof.

36.     The applicant contends that Mrs Prescott was for the purposes of the Act, in a marriage like relationship and therefore a member of a couple, as defined by section 4 of the Act, with Mr Gugiatti.  It is contended that the period of that marriage like relationship was:

(a)8 December 2003 until at least 20 August 2006; or in the alternate

(b)8 December 2003 until 4 December 2004; or in the alternate

(c)8 December 2003 until 28 April 2004.

37.     The applicant contends that the amount of newstart allowance paid to Mrs Prescott whilst she was in a marriage like relationship was is in excess of what she was entitled to receive and what she would have received during that period, had she accurately and fully informed Centrelink of Mr Gugiatti’s income.

38.     The applicant contends that the resulting amount of New Start Allowance that Mrs Prescott received in excess of what she was entitled to receive (‘the over-payment’) is a debt due to the Commonwealth in accordance with section 1223 of the Act.

39. The applicant contends that the discretion established by section 1237AAD of the Act, allowing for the waiver of the right to recover all or part of a debt owed to the Commonwealth in prescribed special circumstances, is not available to the Secretary in Mrs Prescott’s circumstances on the basis that the over-payment resulted wholly or at least partly as a result of Mrs Prescott ‘knowingly’ making a false statement or representation, or failing or omitting to comply with the provisions of the Act.

40. The applicant contends that the term ‘knowingly’ as it is used in section 1237AAD of the Act, is intended to mean that the making of a statement or a representation, or the failing or omitting to comply with the Act, is done with actual knowledge. This contention it is contended is supported by the Administrative Appeals Tribunal’s decision of Clifford and June Callaghan v Secretary Department of social Security No. Q96/163 AAT No. 11404 – 1996 where Deputy President Forgie stated at paragraph 46, 

“that the word ‘knowingly’ is, unless the legislation specifies otherwise, understood to mean actual knowledge”

and then at paragraph 48, that.

“There is nothing in section 1237AAD which suggests that the word “knowingly” should be given any other meaning than the person has actual knowledge”.

41.     With regard to the process of inferring or attributing actual knowledge at paragraph 47, Deputy President Forgie cited the judgement in Van Dusen v Kritz [1963] 2 KB 176, which at page 126 states:

“… the court is not concerned with the knowledge of a reasonable man but is concerned with the inferences to be drawn from a concrete situation as disclosed in the evidence as it affects the particular person whose knowledge in issue”.

42.     The applicant contends that the Tribunal should adopt the approach referred to and used by Deputy President Forgie in Clifford and June Callaghan v Secretary Department of Social Security, when inferring or attributing Mrs Prescott with actual knowledge of Mr Gugiatti’s income.

43.     The applicant contends that the evidence supports a finding that Mrs Prescott had knowledge of Mr Gugiatti's income.  That evidence includes the following:

(a)On the 14 April 2004 Mrs Prescott recorded an amount of $2154.00 as her partner’s gross income, which corresponds exactly with the total gross amount of income that Mr Gugiatti received from Aquila Earthmoving for 7 April and 14 April 2004;  and

(b)Only a short time after Aquila Earthmoving began deducting child support from Mr Gugiatti’s wages, Mrs Prescott referred to this fact in a phone call she made to a Centrelink officer on 14 April 2004.

(c)Mrs Prescott and Mr Gugiatti were sharing household expenses.

44.     The applicant contends that the over-payments paid to Mrs Prescott during the relevant period were a result of Mrs Prescott either:

(a)knowingly making a false statement or representation to Centrelink about Mr Gugiatti’s income on the Centrelink Application for Payment Forms she submitted to Centrelink during the relevant period, or

(b)knowingly failing or omitting to comply with the provisions of the Act with regard to declaring Mr Gugiatti’s income during the relevant period, or

(c)claiming that she and Mr Gugiatti had separated knowing that this was false,

and as such the debt that arises as a result of the over-payment cannot be waived under section 1237AAD of the Act.

45. The applicant contends that Mrs Prescott’s circumstances are not special as required by section 1237AAD of the Act.

Respondent’s Statement of alleged Facts and Respondent’s Contentions

46.     The respondent’s Statement of Facts and Contentions reads, relevantly, as follows: 

47.     The respondent refers to the Secretary’s Statement of Facts and Contentions. The respondent does not dispute the facts contained in Paragraphs 1 to 3.24.  However such facts have to be read subject to the following additional facts.

48.     3.25 is incorrect.  It would appear from the documents at T39 pp136-137, that Mr Gugiatti worked just one week in the 10 week period between 10 December and 18 February 2004 worked for 1 day in the week ending 19 March 2004 and worked less than full time on other occasions.

49.     The respondent informed Centrelink that she was in a de-facto relationship in the form lodged 23 December 2003.  At this time she was living at 36 Camberwarra Drive, Craigie (the Craigie property)

50.     On the form signed on 3 March 2004 the respondent informed Centrelink that she was no longer in a relationship.

51.     On the form lodged on 31 March 2004 the respondent informed Centrelink that she was again in a relationship (the date mentioned of 23 April 2004 is obviously incorrect). 

52.     On the form lodged on 12 May 2004 the respondent informed Centrelink that she no longer had a partner.  Thereafter, when the respondent filled in forms and ticked “No” to partner’s income, she was intending to confirm that she did not have a partner and therefore no income from a partner.

53.     On 21 July 2004 the respondent lodged a further form which confirmed that the date of separation was 28 April 2004.

54.     On 10 September 2004 the respondent again contacted Centrelink and disputed that she was in a relationship.

55.     The lease to the premises at 101 Coldstream Place, Merriwa (the Merriwa Property) was taken in joint names because the respondent could not lease premises in her own name and Steve Gugiatti agreed to go on the Lease and was signed on 26 March 2004.  At this time the respondent and Steve had broken up.    The lease ran from 16 April 2004

56.     The respondent’s current recollection is that the relationship did not resume in any meaningful sense as a couple from when it broke up in early March 2004.  Steve did not move into Merriwa Property with her but moved his belongings from the Craigie Property to his grandmother’s property.

57.     The respondent’s current recollection is that Steve did not live at the Merriwa property and did not share expenses at that property.  He did come to stay at the Merriwa property to look after the animals when the respondent was not there, to look after the respondent when she came out of a de-tox programme and on other occasions when she was hopelessly drunk and or suicidal and needed to be looked after.  He therefore stayed part of his time at the property.  Over time he kept some belongings there. He slept in a spare bedroom.  The respondent and Steve were not a couple, were not boyfriend girlfriend and did not have a sexual relationship at this time or at any time whilst the respondent was living in the Merriwa property in 2004.

58.     Steve grew tired of looking after the respondent and responding to her calls for help and moved his remaining belongings out of the Merriwa Property in late November or in December 2004.  All contact ceased.

59.     Contact and the friendship between the respondent and Steve was gradually restored.  In September 2006 Steve agreed to move back in and to resume a de-facto relationship with the respondent providing she made a commitment to resolve her alcohol problem.  The respondent gave that commitment and the de-facto relationship resumed.  Centrelink was informed.

60.     During the relevant period the respondent was an alcoholic, was drinking drastically to excess and was taking other drugs.  She was not in a fit state to properly and accurately complete Centrelink forms or to accurately inform Centrelink as to her status.  She was drinking up to 8 litres of wine per day. Her regular blood alcohol level varied between 0.2 in the morning and 0.4 later in the day.  She made several suicide attempts.

61.     As a result of Steve’s ultimatums and her own efforts as well as medical assistance the respondent has made very considerable efforts to curb her alcohol addiction and to very substantially reduce her alcohol intake.  She is looking for employment and hopes to start work very shortly She remains in a very fragile physical and psychological state.

Respondent’s Contentions

62.     The respondent and Steve ceased their relationship on or about 3 March 2004 and thereafter were not members of a couple until September 2006.

63.     Steve was not working for the majority of their relationship from December 2003 until he returned to work on or shortly before 18 February 2004.  Within about 2 weeks thereafter he realised that he could not cope with the relationship and work and the relationship was brought to an end.

64.     To the extent that the respondent failed to declare Steve’s earnings during the relationship this was inadvertent and as result of her lack of knowledge and or her alcoholic state.

65.     To the extent that the respondent made statements after the 3 March 2004 which suggested that she was in a relationship these were incorrect and should be disregarded.

66.     If the Tribunal should find that the respondent and Steve were members of a couple for any period that Steve’s earnings have not been correctly disclosed, the Tribunal should find that the respondent did not knowingly make a false statement or representation.

67.     Further the Tribunal should exercise its discretion and waive any over payment found to be due by reason of the Tribunal’s finding by reason of the respondent’s very severe alcoholism, her fragile psychological state and her inability to cope with the repayment of a debt to Centrelink.

EVIDENCE

68.     The documentary evidence before the Tribunal consisted of the “T” documents and other documents, including medical records of the respondent.  Oral evidence was given by the respondent, her former husband, Philip Prescott, and Steve Gugiatti.  Evidence was also given by Sharon Krestchmer, a real estate letting agent of the firm, Peard & Associates.  Further reference to the evidence appears below.

TRIBUNAL’S FINDINGS

69.     As noted above, this appeal concerns an appeal by the Secretary from the decision of the SSAT to set aside the decisions made by Secretary’s authorised review officer on 1 December 2004 and 13 June 2006 which determined that the respondent was in a de-facto relationship with Steve Gugiatti (Steve) for the period from 8 December 2003 to 8 December 2004 and raised an overpayment in respect of the newstart allowance paid to the respondent during this period.

70.     The SSAT having set aside the above Centrelink decisions determined that the respondent was a member of a couple with Steve for the period from 8 December 2003 to 28 April 2004 but not for the period from 29 April 2004 to 8 December 2004.  The SSAT waived the debt arising for the overpayment of Newstart allowance for the period from 8 December 2003 to 28 April 2004.

71.     The Tribunal agrees with the respondent’s contention that evidence of any relationship between the respondent and Steve after December 2004 is only relevant to the extent to which it might assist the Tribunal in making a determination in relation to the matters subject to this appeal and that if the applicant wishes to make a fresh determination about any other period then that may be the subject of separate proceedings.

72.     The Tribunal also agrees with the respondent’s assertions that the essential facts in this dispute are very simple – were the respondent and Steve members of a couple, i.e. living in a de facto relationship during the period in dispute.  As pointed out by the respondent however the facts are complicated by the fact that the respondent is an alcoholic for whom it appears, the stress of the hearing and being required to give evidence, caused her to relapse and drink heavily during the course of the hearing and this continued until she was unable to continue her evidence.  In the circumstances the Tribunal is unable to place a great deal of reliance on the respondent’s evidence.  However, the Tribunal does have the evidence of Steve who gave his evidence clearly and consistently and was essentially unshaken, notwithstanding being subjected to searching cross-examination.   Steve in the past has also, by his own admission, been a heavy drinker and drug user and while his memory of dates was uncertain, the Tribunal accepted the substance of his evidence.

73.     The Tribunal also accepts the assertions of Counsel for the respondent that the essence of a being a member of a couple when de facto is that the person and the partner are in a marriage like relationship.  As asserted by Counsel such a relationship can be clearly distinguished from a boyfriend and girlfriend, who live apart, and from other close relationships.  It usually involves a sexual relationship and often sharing the same bed, it almost inevitably involves sharing the same household.  Boyfriends and girlfriends, who have a sexual relationship and who sleep over at one or other’s house a few nights a week, are not usually regarded as being in a marriage like relationship.  Equally, people, who share a house, who do not have a commitment to each other and who have other sexual partners and particularly when, in addition, they do not have a sexual relationship with each other, are unlikely to be in a de-facto relationship.  The fact that one friend pays another’s bills to alleviate hardship does not make a marriage relationship.  The use of words such as “a friend”, “a boyfriend” or even “a partner” are not particularly helpful, because all these words have a range of meanings and are used to describe those relationships which do come within meaning of de facto relationship as well as those that do not.  Whilst Centrelink uses partner in the de facto sense, the Tribunal agrees that that is not the test.  In contrast if the other person is referred to as the husband or wife then this is relevant.  These words have a much more clearly defined meaning and are unlikely to be used outside a committed or legally married relationship.

74.     The evidence of the respondent in her written statement and in her oral evidence to the extent that it was directed to the point and was coherent is that she formed a relationship with Steve.  He commenced living with her at 36 Camberra Way Craigie.  He was out of work and injured his shoulder and they were both high on drugs and alcohol but when he returned to work he couldn’t cope with that lifestyle and the relationship ceased and he moved to another bedroom.  They both then had different sexual partners. There is some evidence of a brief reconciliation. This evidence was confirmed by Steve.  Whilst the respondent and Steve were unclear as to the dates, it is clear from the Centrelink records as well as Steve’s wage records and his recollection that his injury occurred at New Year, that the period that is being referred to is that between December 2003 and February 2004.  In the 10 week period from 10 December 2003 to 18 February 2004, the wage records show that Steve worked a total of only 6 days.   He then returned to regular substantially full time employment. The applicant’s statement in its submissions that Steve worked full time continuously from November 2003 is plainly wrong.

75.     The evidence of Steve and the respondent was that she was unable to continue renting the Craigie property and was unable to obtain alternative rented premises.  Steve agreed with the respondent that he would put his name on a lease for her as it was the only way she would get a place to live.  It was suggested in cross-examination by the respondent’s counsel that this was dishonest.   However the Tribunal accepts that Steve simply saw it as helping a friend in need and believed that it was not dishonest because he accepted his ultimate liability to pay the rent and always did so if the respondent was unable to do so.  The Landlord might have to wait for its rent, but it was never ultimately out of pocket.

76.     Both the respondent and Steve were adamant that Steve moved directly from the Craigie Property and went to live with his grandmother at the same time that the respondent moved from the Craigie Property to the Merriwa Property which whilst the date can not be established with certainty would appear to have been some time from mid April 2004 to late April 2004.  The document at T14 p60, due to be returned on 28 April 2004, would appear to have been the first document sent to the respondent at the Merriwa Property. 

77.     This recollection of the respondent and Steve is not inconsistent with the Centrelink documents which show that on a document lodged on 14 April 2004, the respondent declared the full amount of the Steve’s earnings.  This document would suggest that the respondent was still at the Craigie Property when it was completed and it is not inconsistent with the physical separation occurring very shortly after this document was lodged and after the phone call that apparently also took place on 14 April 2004.

78.     On 12 May 2004 the respondent informed Centrelink that she did not have a partner.  No doubt she should have done so earlier, but Centrelink was also slow with following up matters and, given her alcohol and drug affected state, the Tribunal agrees that this would seem to be reasonably prompt information.  Centrelink did nothing about this information for some months, but in July 2004 it requested that the respondent complete a separation form.  In this document the respondent places the separation as at 28 April 2004, which could have been the date she moved to the Merriwa Property, or it could have been a wrong date.  Again, given the respondent’s befuddled state, the Tribunal accepts that nothing can be read into mistakes as to the exact date of separation.

79.     Steve acknowledged that he did continue to come and stay on occasions at the Merriwa Property, in particular when the respondent was in de-tox and the animals needed looking after, or when the respondent was in a state of crisis or when she was too drunk to look after herself.  He responded to her cries for help.  But on the basis of the respondent’s evidence and more importantly the evidence of Steve, the Tribunal finds that the continuing relationship was not that of a married couple or “marriage like”, but rather of occasional carer and a good friend in need.

80.     Even when it should have been abundantly clear to the respondent, from September 2004 onwards up to December 2004 that Centrelink was claiming that the respondent and Steve were in a relationship, she continued to complete the box “No” to question 2 (did your partner work) on the standard Application for Payment Form on the basis as she testified that she did not have a partner and that this was the correct answer.  This may not be the way that Centrelink wanted its form answered, but the respondent was consistent with her answers and the Tribunal is in little doubt as to what the answer meant.

81.     The Tribunal finds that the applicant’s contention that the respondent knew that she was in a de facto relationship and was dishonestly failing to disclose Steve’s earnings is inconsistent with the facts and the other documents created at that time where the respondent persistently denied that she was in a de facto relationship and disputed the initial determination by Centrelink.

82.     In the Tribunal’s view it is clear that the relationship between Steve and the respondent had periods when they were closer than at other times. It would appear that Steve at times severed all links with the respondent and other times he responded to her cries for help.  However the Tribunal accepts that they did not resume a de facto relationship until September 2006 when as he put it “she promised to get off the alcohol” (which it appears she has largely kept, at least until the stress of the hearing got to her) and “I threw the rest of the deadbeats out of her life”.

83.     The Tribunal finds that the witnesses called by the applicant did not further its case.  Sharon Krestchmer of Peard and Associates only had personal knowledge of the respondent after mid-2005, which is after the period which is the subject of this appeal, and she confirmed she had no knowledge prior to that date.  However the Tribunal notes that whilst she assumed that the respondent and Steve were in a relationship it appears that was substantially based on the fact that his name was on the lease and that he paid the rent when it was in arrears and he was pressed to pay.  It is clear that Steve recognised that he was legally liable to pay whether he was living in the house or not.  It appears that Ms Krestchmer in fact believed that Steve “worked away”, because as she said he was never there.  In fact Steve did not work away his work was based in Perth.  The Tribunal finds that the reason he was not there was because as he testified, he was not in fact living at the house. 

84.     The respondent’s former husband, Phillip Prescott has a long history of antagonism and conflict with the respondent and in the Tribunal’s opinion his evidence cannot be relied upon.  In cross examination he stated that he had very limited contact with and knowledge of whether Steve was living at the Merriwa Property prior to March 2006.  He retracted this statement in re-examination; however, his initial statement in this regard is more likely to have been true in the Tribunal’s view.

85.      In the end, the Tribunal has to decide whether it believes the substance of the evidence of the respondent, and especially that of Steve.  If the substance of that evidence is accepted, the relationship was not a marriage like relationship at the relevant times but rather that of a caring and generous friend (who gave of his time, money and emotional support) in relation to someone whose life was a disaster as submitted by Counsel for the respondent, and who from time to time needed that support.

86.     If on the other hand, the Tribunal rejects the truth of Steve’s evidence and finds that as contended by the applicant the respondent and Steve have lied abut the nature of the relationship from the time that the respondent moved to the Merriwa Property until 8 December 2004, then it should set aside the SSAT decision in that regard.

87.     In considering waiver the Tribunal needs to decide whether the respondent deliberately lied to Centrelink as to whether she and Steve were in a de facto relationship and whether she sought to hide this fact as well as Steve’s earnings from Centrelink.  In the Tribunal’s view the facts are much more consistent with the proposition accepted by the SSAT that the respondent except for the early period in December 2003 to February 2004 and possibly during some brief periods of reconciliation whilst still at Craigie Property in March or April 2004 did not consider that she was in a de facto relationship with Steve.  The Tribunal finds that on the balance of probabilities, the respondent’s failure to fully disclose Steve’s earnings during such periods when they were in a relationship was probably due to her disorganisation arising from her alcohol and drug dependency rather than any deliberate attempt to mislead Centrelink.

88.     The respondent’s severe illness (and in the Tribunal’s view this is what her alcoholism and depression was and is) is clearly and repeatedly documented in the Next Step and Joondalup Hospital Files.  The Tribunal does not accept the contentions by the Secretary that the respondent is no longer an alcoholic. 

89.     The Tribunal finds that the respondent clearly has no means to pay the debt if one is found to be owed.

90.     The Tribunal accepts that the respondent’s mental and physical state is extremely fragile and suicide has been a regular risk factor in the past.  In the Tribunal’s view this in itself is quite sufficient to establish a case for special circumstances and a waiver of any debt owed is clearly the correct and preferable decision.   The Tribunal upholds the decision of the SSAT in this regard.

91.     The Tribunal finds that the respondent and Mr Gugiatti were both witnesses of truth, although the respondent was clearly under the influence of alcohol and or other drugs at times during the hearing and this affected her evidence, and her behaviour before the Tribunal.  The Tribunal notes that the SSAT likewise accepted the evidence of the respondent.

92.     The Tribunal finds that the respondent did not deliberately attempt to mislead Centrelink and that her failure to correctly fill in the various forms was most likely due to her condition arising from her use of alcohol and drugs and not to any desire to mislead.

93.     Finally, the Tribunal notes the SSAT’s findings of fact in deciding in the respondent’s favour and, based on the evidence before the SSAT and the Tribunal, the Tribunal agrees with those findings.

DECISION

94.     The Tribunal affirms the decision under review.

I certify that the 94 preceding paragraphs are a true copy of the reasons for the decision herein of Mr A Sweidan, Senior Member

Signed:         ...................(Sgd. Ms R Riberi)......................
   Associate

Dates of Hearing  18 & 19 January 2007
Date of Decision  17 May 2007
Counsel for the Applicant         Ms P Giles
Solicitor for the Applicant          Sparke Helmore
Counsel for the Respondent     Mr H Christie