QX02/2 and Secretary, Department of Family and Community Services - [2002] AATA 220

DECISION AND REASONS FOR DECISION [2002] AATA 220

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2001/681

GENERAL ADMINISTRATIVE DIVISION          )
           Re      QX02/2
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr B J McCabe

Date5 April 2002
PlaceBrisbane

Decision      The Tribunal sets aside the decision under review.
  ..................(Sgnd).................
  Mr B J McCabe
  Member
CATCHWORDS
SOCIAL SECURITY – overpayment of social security benefits – whether applicant living in a marriage-like relationship – criteria for determining whether applicant is part of a couple – whether "special reasons" exist for waiver of debt

Social Security Act 1991

Jones v Dunkel (1959) 101 CLR 298
Secretary, Department of Social Security v Le-Huray (1996) 138 ALR 533
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re SRL and Secretary, Department of Social Security (AAT 12875, 11 May 1998)
Re Secretary, Department of Social Security and Porter (AAT 11804, 24 April 1997)

REASONS FOR DECISION

5 April 2002 Mr B J McCabe

Introduction

The applicant ("QX02/2") is a mother of seven children. Between January 1997 and June 2000, she received Commonwealth social security benefits. Her entitlement was calculated on the basis of her income details provided to the Secretary. She did not provide details of her husband's income; she says she did not know he was employed. When the respondent became aware of the husband's income as a result of data-matching with Tax Office records sometime in 2000, the respondent recalculated Mrs QX02/2's entitlement to benefits in the period as if Mr and Mrs QX02/2 were a couple. The respondent concluded that Mrs QX02/2 had been overpaid $63,004.02, and a debt was raised under s 1224 of the Social Security Act 1991 (the Act).
Mrs QX02/2 denies she was overpaid. She says she and her husband should not have had their income assessed as a couple as they did not satisfy the definition of "couple" in s 4(2). Even if Mr and Mrs QX02/2 did satisfy the statutory definition of a couple, it was argued that the special circumstances of this case were such as to justify the Secretary deeming them not to be a couple under s 24 of the Act. Finally, it was argued that if a debt was properly raised, it should be waived pursuant to s 1237AAD.
The Social Security Appeals Tribunal (the SSAT) affirmed the Secretary's decision to recover the debt. It did so without addressing the question of whether or not Mr and Mrs QX02/2 were a couple for the purposes of the Act.
The Background Facts
Mrs QX02/2 married Mr QX02/2 in March 1988. She had two daughters from a previous relationship. She was to have another five daughters during the course of the marriage by Mr QX02/2. Mr and Mrs QX02/2 met in 1984. He ran his own electrical contracting business, and owned a home when he married the applicant. Mrs QX02/2 gave evidence that her first years of marriage to Mr QX02/2 were "uneventful". He was the provider and controlled the family finances.
All that was to change in 1992 when officers from the state Department of Family Services contacted the applicant. She was told that her husband had sexually abused her eldest daughter. Mrs QX02/2 left the matrimonial home with her children for a refuge until her husband was convicted and sent to prison. He was sentenced to four years in jail.
The applicant returned to the matrimonial home in the absence of her husband. She gave evidence that she was given authority to operate her husband's business account and sign cheques. But the business soon ran into difficulty without her husband. The applicant said her father-in-law eventually took over responsibility for the business and apparently wound it up.
Mr QX02/2 was released from jail in 1993. He returned to the matrimonial home and asked his wife to take him back. He said he had changed. He received counselling. They also went for joint counselling at Centacare. The applicant said in evidence that he was very convincing, and she agreed to give him another chance. Mr QX02/2 moved into a room downstairs.
For a while after his return, Mr QX02/2 was depressed – like a "zombie", the applicant said in evidence. He slept all day or played on the computer. By 1994, Mr QX02/2's demeanour began to improve. He was leaving the house and – Mrs QX02/2 thought – going to TAFE where he was undertaking some sort of computer studies. The applicant said he was distant and she did not see him much. She said it was not really much of a relationship by that point, in the sense that there was little communication passing between the two of them. Their last child (Mrs QX02/2's seventh) was born on 20 August 1996.
At some point during the latter part of 1996 the relationship – such as it was - began to deteriorate. The applicant gave evidence that Mr QX02/2 spent less and less time at home, and that he would sometimes be gone for days at a time. He came and went at odd hours, and never explained his movements. He did not participate in any sort of normal family life after this point: he did not dine with the family (although the applicant said she sometimes cooked enough for him to eat on his own if he were present in the house) and he did not look after the children, in part because the applicant did not trust him to remain alone with them. The applicant occasionally did some of his washing. She took care of all the housework. She said he made little or no contribution towards the family's food bill. She conceded he paid for some utilities, like the phone bill – although he routinely removed the phone handset so that it was impossible to make calls. She also acknowledged that she remained in the matrimonial home and drove a car that he had acquired early in the marriage. Mr and Mrs QX02/2 did not go anywhere as a couple or with the family, and they had no friends in common.
While Mr QX02/2 did not participate in family life in the normal sense, he certainly disrupted it when he was present in the house. The applicant said Mr QX02/2's behaviour became increasingly erratic and threatening. He routinely engaged in sexually inappropriate behaviour in front of his children: he would walk around the house in the nude and leave pornographic images displayed on the computer screen. He also spied on his daughters through the window of the bathroom. She said he was controlling and manipulative, and he removed the locks on the doors. He was verbally abusive and would make obscene and offensive remarks about the applicant in front of the children.
Mrs QX02/2 also said her husband pressured her to have sex whenever he felt like it. She said she did not participate willingly but feared that if she did not satisfy his demands he might pursue one of her daughters.
The applicant says she was depressed throughout this period. She felt powerless to change her situation. She says she consulted a free legal advice organisation in Southport about her situation, but claims she was told she could not have her husband removed unless she could prove physical abuse. She also approached Centrelink. A Centrelink officer gave her a form to fill out reporting that she and her husband were living separately under the same roof. She says the Centrelink officer effectively discouraged her from completing the form because she was told Centrelink would make spot checks that might disrupt the children. The applicant says she contemplated moving out to a refuge – she did so once after the arrest in 1992 – but felt it was not an option because she had seven children.
This desperate state of affairs persisted until the applicant's doctor told her that she must move out for the sake of her children. She says that the doctor's stern words of advice shook her out of her state of depression and left her with the resolve to break away from her disastrous relationship with Mr QX02/2. She finally moved out of the house with the children in 2000 at around the time that Centrelink were beginning to question Mr QX02/2's income.
Mr QX02/2 commenced full-time employment on 20 January 1997. He typically worked four 12-hour shifts in a row, followed by four days off. Payroll records indicate he earned $198,068.04 up until 16 June, the period in question. Mr QX02/2 said his wife knew what he earned. He added in a statement to investigators that his wife would wash his uniforms. The applicant says she did not even know that her husband had a job, and claims he did not share his income with the family. She assumed he survived on some form of benefits. She referred to a vague assumption that he was continuing studies at TAFE.
At first glance, the applicant's claim that she was unaware of her husband's full time employment for over three years seems incredible. But after listening to the applicant's uncontradicted account of her husband's erratic behaviour, his frequent absences and the extent of their estrangement from each other, I am satisfied that she is telling the truth. Her lack of interest in his affairs is consistent with the state of their relationship. The husband's evidence about his uniform being washed at home is also open to serious question after his employer wrote to the Welfare Rights Centre, Inc (who acted on behalf of the applicant) on 30 April 2001 saying that the employer ordinarily laundered employees' uniforms.
The respondent referred to a series of Centrelink Application for Payment of Newstart Allowance forms signed by the applicant. The form included a question in the following form:
"Are you married and living with your partner, or living with someone as if married?"
In each case, the applicant answered "yes". Mr McQuinlan for the respondent suggested the applicant's answers were inconsistent with her claims before the Tribunal, but I disagree. She answered the question accurately: she was married, and she was living with (in the sense of being under the same roof as) her husband. The question does not appear to have been designed to elicit all the information required for the purposes of determining whether two individuals were a couple for the purposes of the Act, and I am certain the applicant did not have the statutory definition in mind when she answered the question to the best of her ability.
I note that the Social Security Appeals Tribunal reached the same conclusion about the applicant's ignorance of her husband's employment.
I was provided with copies of bank statements for three accounts: an account in the applicant's name that was her operating account, an account in joint names and an account in Mr QX02/2's name. There was some attempt made to analyse the spending patterns evident from each account. The applicant's account appeared to exhibit the spending pattern one might expect from a mother of a large family, with EFTPOS transactions for relatively large amounts at grocery stores. Mr QX02/2's account had some grocery transactions, but included transactions at hotels and taverns, hardware stores and outlets selling auto accessories. The transactions on the joint account, into which some of the benefits were paid, were more difficult to characterise. Mr QX02/2 apparently claimed his wife had access to this account. She says that he controlled the account because he had the only keycard.
There was no evidence from the bank about how many keycards it had issued on the account, or to whom they were issued. An analysis of the pattern of EFTPOS expenditures does not offer a clear impression of who might have been making the purchases. In the absence of contradictory evidence from Mr QX02/2, I am content to rely on the evidence of the applicant. That approach accords with the rule in Jones v Dunkel (1959) 101 CLR 298. In that case, Kitto J explained (at 308):
"... any inference favourable to the plaintiff for which there was ground in the evidence might be more confidently drawn when a person presumably able to put the true complexion on the facts relied on as the ground for the inference has not been called as a witness by the defendant and the evidence provides no sufficient explanation of his absence."
Mr McQuinlan for the respondent said Mr QX02/2 was unwilling to appear, but – as counsel for the applicant, Ms Heyworth-Smith suggested – he could have been issued with a summons to give evidence under s 40 of the Administrative Appeals Tribunal Act 1975. I would have thought it was important to hear from Mr QX02/2 given the respondent's suggestion that Mrs QX02/2 was seeking to avoid responsibility for a debt (and perhaps a criminal prosecution) by shifting the blame to her husband. He had claimed to investigators that he was completely innocent of any wrongdoing, yet I did not have the benefit of his sworn evidence – only his records of interview. The applicant's evidence is clearly preferable, and she was unshaken in her cross-examination.
The applicant's financial circumstances are now desperate. The respondent is already recovering an amount from her regular benefits in respect of the debt the Secretary claims she owes. That leaves the applicant and her family dependent on charity.
The Relevant Law
When assessing a person's entitlement to benefits, the Social Security Act 1991 provides for an income test which includes the income of both members of a couple. The expression "couple" is defined in s 4. Persons married to each other are presumed to be a couple under s 4(2), but the presumption is subject to s 4(3). Section 4(3) requires the Secretary to have regard to all the circumstances when forming an opinion about whether or not two people form a couple. The sub-section goes on to enumerate a range of factors that must be the subject of particular consideration. I will take each factor referred to in the legislation in turn.
(a) the financial aspects of the relationship

The matrimonial home was owned by Mr QX02/2; he brought it with him to the marriage. He owned several other vehicles in various states of repair, and Mrs QX02/2 drove an old Toyota Tarago. The couple had few joint assets or joint liabilities. They did not pool their financial resources: they maintained separate accounts, and – as I have found – the one account that was in joint names was in fact operated by Mr QX02/2. Neither party had obligations in respect of the other, and they did not share household expenses (although the applicant did on occasions provide food for her husband, and he paid utilities – but I also accepted the applicant's evidence that he occasionally rendered the phone inoperable by removing the hand-set).
(b) the nature of the household

Mr QX02/2 played no active role in the management, discipline, care or counselling of his children. Given his record, that is unsurprising. He lived in a separate part of the house and came and went on his own timetable, and was absent for long periods (often because he was at work, the applicant now realises). He did not do any of the housework, it seems.
(c) the social aspects of the relationship

The applicant suggests – and I accept – there was no social dimension to the relationship, and they had no common friends. They rarely went out together. There is no evidence that they held themselves out as being married.

(d) any sexual relationship between the people

The applicant concedes that she occasionally had sex with her husband, but not in circumstances that could be characterised as a sexual relationship. The applicant's evidence makes it clear that her husband used her as a convenient source of sexual gratification. The reference in the Act to a "relationship" suggests that the interaction must be genuinely consensual, as opposed to conduct that might amount to a sexual assault.
(e) the nature of the people's commitment to each other

The applicant's evidence suggested that she and her husband had little or no sense of commitment to each other during the relevant period. Their marriage had already been rocked by his conviction for sexual abuse of the applicant's daughter and his prison term. The applicant's evidence of her husband's erratic and oppressive behaviour in the years that followed makes it clear that this relationship was completely dysfunctional, even though it endured for nearly 12 years. There was no companionship to speak of, and Mr QX02/2 provided no emotional support to the family or his wife. It is difficult to see how the relationship could be characterised as marriage-like.
In all the circumstances, and having particular regard to the matters referred to in s 4(3), I am satisfied that Mr and Mrs QX02/2 were not members of a couple for the purposes of the Act. It follows that Mr QX02/2's income should not have been taken into account, and that the applicant is not indebted to the respondent as alleged.
The Operation of Section 24
If the applicant was considered for technical reasons not to be living separate and apart from her husband, there remains the question of whether she and her husband should be deemed not to be a couple pursuant to s 24. Section 24(1) provides:
"Where:
(a) a person is legally married to another person; and
(b) the person is not living separately and apart from the other person on a permanent or indefinite basis; and
(c) the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple;
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act."

The leading case on the exercise of the discretion in s 24 is Secretary, Department of Social Security v Le-Huray (1996) 138 ALR 533. Jenkinson J interpreted the expression "special reason" with reference to cases including Re Beadle and Director-General of Social Security (1984) 6 ALD 1 and Beadle v Director-General of Social Security (1985) 7 ALD 670 that discuss the more common form of words "special circumstances". To be a special reason, it seems that the reason must be "unusual, uncommon or exceptional": see Re SRL and Secretary, Department of Social Security (AAT 12875, 11 May 1998).
His Honour explained in Le-Huray (at 542) that the discretion contained in the section was designed for situations where the purpose of the Act would be frustrated if discretionary relief were not available. His Honour said (at 542):
"There must be in the circumstances of the particular case some harm, or risk of harm, to the welfare of the children, or, perhaps, of the person having their care and control, attendant upon abstention from exercise of the power conferred by sub-section 24(2) before special reason can be found, in my opinion."

This approach was followed by the Tribunal in Re Secretary, Department of Social Security and Porter (AAT 11804, 24 April 1997) and Re SRL and Secretary, Department of Social Security (AAT 12875, 11 May 1998).
If the legislative intention is to promote the welfare of the relevant member of the couple and her dependants, the discretion must be exercised. Mr QX02/2 contributed to the family little of the nearly $200,000 that he earned from his work during the relevant period. It would be a perverse result if the applicant and her daughters were expected to bear the burden of repaying money they lived on during that period because he failed to discharge his obligations as a father to provide for them. That result cannot have been intended by the legislation.
This family's lot is hard enough. Mrs QX02/2 acted honestly. She put up with her husband's erratic presence throughout the relevant period because she genuinely believed she had no alternative. Mr QX02/2 provided little of the financial and emotional support one would expect in a couple. If the applicant had formally left her husband, there would not be any question about her entitlements. The discretion provided for in s 24 ought to be exercised in favour of the applicant and her family if it became necessary to do so because treating Mr and Mrs QX02/2 as a couple would work a great injustice and frustrate the objectives of the legislation.

The Tribunal sets aside the decision under review. The Tribunal finds that the applicant was not a part of a couple for the purposes of s 4 of the Social Security Act 1991, and therefore the debt should not have arisen.
I certify that the thirty-six (36) preceding paragraphs are a true copy of the reasons for the decision herein of Mr B J McCabe, Member
Signed:         .....................................................................................
  Associate
Date/s of Hearing  6 March 2002
Date of Decision  5 April 2002
Counsel for the Applicant        Ms C Heyworth-Smith
Solicitor for the Applicant         Ms G Bolton, Welfare Rights Centre
Solicitor for the Respondent    Mr R McQuinlan, Advocacy and Admin Law Team