Re Sharlene Nicol Applicant And Secretary, Department of Education, Employment and Workplace Relations and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs Respondents
[2012] AATA 81
•14 February 2012
[2012] AATA 81
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2010/2756
Re
SHARLENE NICOL
APPLICANT
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
AND
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS
RESPONDENTS
DECISION
Tribunal The Hon R J Groom AO (Deputy President)
Date 14 February 2012 Place Hobart Decision Summary:
The decision under review is set aside and in substitution:
(1) The Tribunal decides that the applicant was not “a member of couple” from 19 March 1999 until 30 November 2003 but was “a member of a couple” from 30 November 2003 until 10 April 2004.
(2) The matter is remitted to the respondent for the purpose of assessing the applicant’s entitlement to PPS and FTB in accordance with this decision including any entitlement to a refund of repayments already made by the applicant.
[Sgd Hon R J Groom]
Deputy President
CATCHWORDS
SOCIAL SECURITY - parenting payment single - family tax benefit - whether a "member of a couple" during relevant period - whether debt should be waived under section 1237AAD of the Social Security Act 1991 or, in respect to the family tax benefit debt, under section 101 of A New Tax System (Family Assistance) (Administration) Act 1999 - decision set aside
LEGISLATION
Social Security Act 1991, ss 4(2) & (3), 24(1), 1237AAD
A New Tax System (Family Assistance) (Administration) Act 1999, s 101
CASES
Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164
Secretary, Department of Social Security v Hales (1998) 82 FCR 154
Beadle v Director-General of Social Security (1985) 7 ALD 670
REASONS FOR DECISION
The Hon R J Groom AO (Deputy President)
INTRODUCTION
This is a review of a decision of the Social Security Appeals Tribunal (“SSAT”) made on 29 June 2010.
In that decision the SSAT decided that Mrs Nicol was a “member of a couple” from 1 April 1999 to 10 April 2004 (“the relevant period”) and as a result has been overpaid both parenting payment single (“PPS”) and family tax benefit (“FTB”) during that period.
The SSAT further decided that the debt arising from the overpayment should not be waived under section 1237AAD of the Social Security Act 1991 (“the Act”) and in respect to the FTB debt under section 101 of A New Tax System (Family Assistance) (Administration) Act 1999 (“the FTB Act”).
THE ISSUES
(a) The principal issue to be determined is whether Mrs Nicol was a “member of a couple” for the whole of or during part of the relevant period within the meaning of that term in section 4(2) of the Act. (The definition of the term “member of a couple” is the same for the purposes of both PPS and FTB).
(b) If it is decided that Mrs Nicol was a member of a couple for the whole of or during part of the relevant period then whether any PPS debt should be waived under section 1237AAD of the Act or for the FTB debt under section 101 of the FTB Act.
Mr Yusaf for the applicant initially raised the possible application of section 24(1) of the Act but later in the proceedings indicated that he was not pursuing that particular contention (Transcript page 132).
It is noted that whilst it was disputed by the applicant that any overpayment had occurred and that any debts were due and owing the quantum of the debts and the manner in which they were calculated were not in issue in these proceedings.
BACKGROUND FACTS
Mrs Nicol first met her future husband, Mr David Nicol, in about 1990. They became friends. In 1995 Mr Nicol was diagnosed with lymphoma. The friendship between the two developed and on 3 December 1995 they were married. The marriage ceremony took place in the chapel at the hospital where Mr Nicol was then receiving treatment for his medical condition.
At the time of the marriage in 1995 Mrs Nicol had five children from two previous relationships and Mr Nicol had three children from a previous marriage.
Mrs Nicol has a special interest in the care and welfare of children. This interest was recognised by Mr Nicol who was concerned about the future care of his own children especially as he had been diagnosed as suffering a form of cancer which was potentially life threatening. The Tribunal was satisfied on the evidence before it that the primary motivating factor which influenced Mr Nicol to marry Mrs Nicol was his desire to provide for care of his children.
The marriage was somewhat unusual from the outset. As indicated Mr Nicol was already suffering a serious illness and receiving chemotherapy and other treatment. This obviously placed special strains on the relationship. Initially there was a sexual relationship between the two but this quickly faded and ceased in 1998.
The material before the Tribunal establishes that the marriage relationship had broken down in the course of 1998. They commenced living apart in early 1999. On 26 March 1999 Mrs Nicol notified Centrelink that she was no longer a “member of a couple”. From 1 April 1999 she began receiving increased social security payments on the basis that she was then living as a single person.
Mr Nicol executed a will on 24 August 1998. In that will he referred to Mrs Nicol as “my wife”. She was left a life interest only (to cease on remarriage) in Mr Nicol’s two real estate properties at Riverside and Scamander. Following Mrs Nicol’s remarriage or death the properties were then to be held upon trust for Mr Nicol’s children. Certain other specified items of personal property were bequeathed to his children.
In 1999 when they separated and began living apart Mr Nicol resided alone principally at his Scamander property. When his state of health declined he resumed his teaching duties from time to time. This required him to live briefly in other cities and towns in Tasmania. For example, he worked as a teacher for a brief period in Queenstown.
While Mr Nicol resided alone at Scamander Mrs Nicol continued to reside in the Riverside property with her children and also Mr Nicol’s children.
After the separation Mrs Nicol initially did not see Mr Nicol for a period of more than one year. However after that time he did periodically return to stay for short periods at Riverside. During these visits Mr Nicol slept alone in his bedroom while Mrs Nicol would sleep in a chair in the lounge room of the house.
Mrs Nicol would on occasions visit Scamander with the children so that Mr Nicol could see them and spend time with them. The relationship between Mr and Mrs Nicol was at that stage extremely strained. They did not behave as a husband and wife normally would. They slept in separate rooms. He was abusive and some incidents involving a degree of violence occurred during the visits to Scamander.
But then in November 2003 the relationship between Mr and Mrs Nicol changed significantly. The evidence suggests that he probably then realised that he was terminally ill. He returned to live his last days at the Riverside property. Mrs Nicol said:
“… he was different, he was nice. It was like, maybe he knew what was happening, really. I don’t know. It was just different”. (Transcript page 41).
The following was recorded by a Centrelink officer on 25 May 2005 (T Documents 32 page 308):
“Sharlene still maintains that she was separated from David and states she would appeal any decision prior to November 2003. She has agreed that she and David were closer from this date as he moved back home due to ill health and she looked after him”.
Mrs Nicol provided constant care and support to Mr Nicol from November 2003 until his death on 10 April 2004. When Mr Nicol was admitted to Philip Oakden House for palliative care in March and April 2004 she slept in his room overnight.
Mr Nicol had nominated Mrs Nicol as his partner in relation to admission to Philip Oakden House. Also when applying for a store credit card, on 21 February 2004, Mr Nicol stated that he was married with three dependants and residing at the family home in Riverside.
Mrs Nicol received a widow’s interim pension from the Retirement Benefits Fund (“RBF”) from 10 April 2004 until 9 July 2004. She later received a lump sum payment from RBF as Mr Nicol’s widow in the sum of $126,510.31 (T23 page 72).
Death notices inserted in the local newspaper by Mrs Nicol and the children indicated that there was then a warm and loving relationship. The notice inserted by Mrs Nicol concluded with the words “I will love you forever. Your wife Sharlene”.
Later in these reasons the Tribunal will consider in more detail the true nature of the relationship between Mr and Mrs Nicol from March 1999 until November 2003 and also from November 2003 until Mr Nicol’s death on 10 April 2004.
THE LEGISLATION
It is not in dispute that Mrs Nicol was legally married to Mr Nicol throughout the relevant period. Section 4(2) and (3) of the Act therefore apply in this case. Those subsections provide as follows:
“(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary’s opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;
…
(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a), subparagraph (2)(aa)(ii) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day‑to‑day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children;
and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to, or in a de facto relationship with, each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage‑like relationship or a de facto relationship”.
The decision maker must have regard not only to the particular matters listed in subsection 4(3) but to all the circumstances of the relationship. (See Staunton-Smith v Secretary, Department of Social Security (1991) 32 FCR 164).
It should be noted that the legislature has incorporated in the relevant FTB legislation the same definition of “member of a couple” and the other provisions in section 4(2) and (3) of the Act.
WAS THE APPLICANT “A MEMBER OF A COUPLE” DURING THE WHOLE OR PART OF THE RELEVANT PERIOD?
Mr Yusuf for the applicant questioned whether the relationship was ever a true marriage. He contended that it was simply a convenient arrangement entered into for the sake of the children. The couple did not “marry for each other” but “for the children”. He said that the “consortium vitae” had ended after a short period. Mr Yusuf submitted that when they separated in 1999 the marriage between Mr and Mrs Nicol had “irretrievably broken down”. He argued that when Mr Nicol returned to live at Riverside in November 2003 it was not a resurrection or continuation of the marriage but was simply for reasons of care and compassion.
In brief Mr Sparkes submits that Mr and Mrs Nicol continued to be members of a couple throughout the relevant period. He argues that whilst it was an unusual relationship it had in the period in question the necessary character to satisfy the definition of “member of a couple”. Mr Sparkes said it was significant that Mrs Nicol did not dispute the decision to raise the debts until some four years later. He contended that although now denied by Mrs Nicol the SSAT decision records that she told the SSAT that she and David (that is Mr Nicol) had decided not to separate “because of the stress on the children”. Mr Sparkes considered this to be a “stated intention not to separate” and that the physical separation was an arrangement entered into because of “a whole range of factors” including, in particular, Mr Nicol’s serious illness which made it difficult for the couple to live together. Mr Sparkes argued that the marital relationship did not break down to the extent that the Tribunal could be satisfied that Mr and Mrs Nicol were living separately and apart from each other on a permanent or indefinite basis.
The Tribunal will now consider evidence of the relationship between Mr and Mrs Nicol in order to determine whether they were, during the relevant periods, “living separately and apart … on a permanent or indefinite basis”.
FINANCIAL ASPECTS OF THE RELATIONSHIP
There was no joint ownership of any real estate or other property. The two real estate properties at Riverside and Scamander were in Mr Nicol’s name alone.
Mr and Mrs Nicol did not pool financial resources at any point during the relationship. Mrs Nicol relied on her social security payments and support gained from friends and sometimes from others in the wider community for the day to day living expenses of herself and the children after the separation in 1999. Apart from allowing Mrs Nicol and the children to occupy the Riverside property free of rent there was little, if any, other financial assistance provided by Mr Nicol. For example, Mrs Nicol paid the electricity and telephone accounts for the Riverside property. Those accounts were in her name.
Mrs Nicol said:
“David didn’t give out any money towards anything”. (Transcript page 17)
The Tribunal accepts that statement as truthful. She said that she received assistance from a friend who lived in Queensland, Mr David Dawtre. She said:
“… he would help me out … or I would rely on friends or somebody”. (Transcript page 17)
Later Mrs Nicol added:
“David (Nicol) didn’t discuss his finances with me. David never discussed any of his personal, to do with work, to do with his – anything to do with his finances. It was all, no, I didn’t know nothing about it”. And further: “It was not my business”. (Transcipt page 20).
During the period 1999 until November 2003 Mr Nicol cared for himself at Scamander and it can be inferred from the evidence that he paid for all his own essentials of living.
There were no particular financial obligations of a legal nature owed by Mr Nicol to Mrs Nicol apart from the provisions in his will executed in 1998. Also no such obligations were owed by Mrs Nicol.
As has been said the principal contribution by Mr Nicol was allowing Mrs Nicol and the children to occupy the house at Riverside rent free. There is no evidence that this arrangement was secured by any formal agreement.
THE NATURE OF THE HOUSEHOLD
Following the separation in 1999 Mr Nicol vacated the house at Riverside and lived most of the time thereafter until November 2003 at Scamander. During that period of separation the two lived essentially separate lives. As had been mentioned they did not see each other for more than one year after the separation. After that initial year the contact was spasmodic.
There were occasional visits to Riverside by Mr Nichols to see the children or to receive treatment in Launceston. On some occasions Mrs Nicol would take the children to Scamander. Whenever they were in the same house overnight Mr and Mrs Nicol would sleep separately. He would sleep in his bedroom and Mrs Nicol would sleep in a chair in the loungeroom.
Mrs Nicol took full responsibility for feeding, bathing and dressing the children and for taking them to school and generally caring for them. She did all of the housework at the Riverside property and it is reasonable to infer that Mr Nicol took care of the house at Scamander. There is no evidence of the sharing of responsibility for the care of the children or in undertaking household duties. Basically he looked after himself at Scamander and she cared for the children and herself at Riverside.
SOCIAL ASPECTS OF THE RELATIONSHIP
The evidence clearly establishes that Mr and Mrs Nicol did not attend social activities together.
Mrs Nicol said in evidence:
“No, David and I never went out at all together”.
And then:
“We didn’t go on holidays. We never travelled in the same vehicle. We didn’t do nothing like that”. (Transcript page 29)
Mrs Nicol said that she and Mr Nicol didn’t ever go to the movies. If there was a school function she would attend by herself.
Mrs Nicol said further:
“He didn’t buy presents and things for me like Christmas presents or anniversary presents”. (Transcript page 29)
There were no photographs taken of the couple except on their wedding day.
The Tribunal is satisfied that there was really no social aspect of any kind to the relationship and no joint involvement with other friends or associates.
SEXUAL RELATIONSHIP
The Tribunal accepts Mrs Nicol’s evidence that there was a sexual relationship for a period very early in the marriage but that it ceased some time in 1998. That matter is only one aspect of the relationship to be carefully considered. The absence of a sexual relationship is not conclusive in establishing that they are no longer members of a couple.
COMMITMENT TO EACH OTHER
Mr and Mrs Nicol were married on 3 December 1995 and remained married until Mr Nicol’s death in 2004. For much of that period the marriage was under great strain. There were long periods of separation. From quite early in the marriage they did not sleep together. Mrs Nicol was subjected to abuse and to a degree of domestic violence when weights and food and other objects were thrown at her by Mr Nicol.
The Tribunal is satisfied on the material before it that there was a very limited commitment as between Mr and Mr Nicol. The commitment central to the relationship was that Mrs Nicol would be permitted to live in the house at Riverside so that she could continue to care for both Mr Nicol’s and her own children.
CONCLUSION
It is not in dispute that at all relevant times Mr and Mrs Nicol were legally married. The issue for decision is whether at those times they were “living separately and apart … on a permanent and indefinite basis”.
The Tribunal concludes on the evidence that there are two distinct periods during which the nature of the relationship between the two was markedly different. The periods were:
(a)The period of physical separation which can be taken to be between the 19 March 1999 and 30 November 2003 (there isn’t an exact date in November provided in the evidence but it is reasonable to infer that it was probably late in November).
(b)The further period from 30 November 2003 when Mr Nicol returned to live at the Riverside property until the date of his death on 10 April 2004.
After considering all of the factors set out in section 4(3) of the Act and other relevant matters the Tribunal concludes that Mr and Mrs Nicol were living separately and apart on a permanent and indefinite basis during the period 19 March 1999 until 30 November 2003. During that period:
·They were living at different addresses for most of that time.
·There was no longer a sexual relationship.
·There is evidence of some domestic violence, abuse an disagreements on those brief occasions when they were in the same house at either Riverside or Scamander.
·On those occasions when they were in the same house overnight they slept in separate rooms.
·There was no pooling of financial resources or sharing of household duties as would normally occur between husband and wife.
·Apart from the provision of a rent free house by Mr Nicol, Mrs Nicol was left to fend for herself and the children and to manage their lives and provide for their needs.
·Mr Nicol took very little interest in Mrs Nicol. He did not act as a husband would normally act towards his wife. There was no love or concern shown. There were no gifts on special occasions and no outings together or social involvement of any kind.
It should be mentioned that the Tribunal does not consider that Mrs Nicol’s delay in agitating her appeal to be of significance in this case. She did not have full appreciation of her rights and in addition was under great stress in caring for all of the children living with her. Mrs Nicol said:
“Every day was jumbled up”.
And later:
“I wouldn’t have known what an appeal was”. (Transcript page 42)
In referring to the separation the SSAT included the following paragraph in its decision:
“22 Mrs Nicol said after David’s lymphoma recurred in 1998, he became very depressed and they were arguing a lot. She said David had discussed separating, but they decided against this because of the stress on her children. Mrs Nicol said she did not want to relocate as her children were all settled into a nearby school. David decided he would go to live at Scamander while undergoing further treatment and Mrs Nicol would stay at the Riverside address with the children”. (T2 page 9)
Mrs Nicol disputes the accuracy of that paragraph in the SSAT decision. There is no transcript available of the SSAT proceedings. Also the paragraph does not purport to be a verbatim record. None of the words are in quotes. Mrs Nicol told this Tribunal that the words used “… don’t even sound like me”.
The Tribunal accepts Mrs Nicol’s explanation that the couple did separate but they didn’t want the children to know because it would cause them to be upset. They both wanted to hide the reality of separation from their children. Mrs Nicol said:
“So we just didn’t tell them what was really going on”. (Transcript page 50)
In the income tax years 1998-1999 and 2002-2003 Mr Nicol declared Mrs Nicol to be his spouse except for the period 14 April 1999 until the end of that tax year. The Tribunal is not persuaded that Mr Nicol’s tax returns reflect the true nature of his changing relationship with Mrs Nicol.
The Tribunal is satisfied on the evidence that there was a marked change in the relationship in November 2003 when Mr Nicol returned to reside at the Riverside property with Mrs Nicol and the children. His attitude towards Mrs Nicol changed to the point where she found him to be “different” and “nice”. She cared for him as a wife would care and assist a terminally ill husband. It appears there was then a renewal of the marital relationship. He nominated her as his partner when admitted to Philip Oakden House in 2004. When applying for a store credit card in early 2004 Mr Nicol confirmed that he was married with dependent children and living at Riverside. After Mr Nicol’s death there were loving obituary notices placed in the newspaper by Mrs Nicol and the children. In addition Mrs Nicol applied for and obtained a widow’s benefit payment including quite a large lump sum payment from Mr Nicol’s superannuation fund.
In considering the nature of the relationship between Mr and Mrs Nicol after November 2003 the Tribunal considers it to be of significance that when told that Centrelink believed Mrs Nicol continued to be a member of a couple (after March 1999), Mrs Nicol said that she would appeal any such decision applying to the period prior to November 2003. (T32 page 308) This was in the Tribunal’s view an acknowledgement that there was indeed a different quality to the relationship after November 2003.
The Tribunal is satisfied that during the period November 2003 until 10 April 2004 Mr and Mrs Nicol were not then living “separately and apart from each other … on a permanent or indefinite basis”.
The Tribunal therefore finds that Mr and Mrs Nicol were living “separately and apart … on a permanent and indefinite basis” from 19 March 1999 until 30 November 2003 and Mrs Nicol was therefore not then “a member of a couple”. However it further finds that during the period from 30 November 2003 until 10 April 2004 Mrs Nicol was “a member of a couple” for the purposes of the relevant legislation.
SECTIONS 1237AAD AND 101
As was said by French J in Secretary, Department of Social Security v Hales (1998) 82 FCR 154 at 162:
“The evident purpose of s 1237AAD is to enable a flexible response to the wide range of situations which give rise to hardship or unfairness in the event of a rigid application of a requirement for recovery of debt. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words”.
In a similar vein the Full Federal Court in Beadle vi Director-General of Social Security (1985) 7 ALD 670 at 674 said:
“The phrase “special circumstances” although lacking precision, is sufficiently understood in our view not to require judicial gloss”.
After considering the evidence in its totality the Tribunal is satisfied that there are not present “special circumstances” sufficient to satisfy the requirements of section 1237AAD of the Act and section 101 of the FTB Act thereby enabling the Tribunal to consider exercising the discretion in those sections.
Each case will, of course, inevitably have its own unique circumstances but whether they are sufficient to justify enlivening the discretion in those sections of the two Acts requires careful thought.
The period in question is from 30 November 2003 until 10 April 2004. Mr and Mrs Nicol were then living together at the Riverside property. There was clearly some sharing of living costs and therefore they enjoyed the benefit of economies of scale. It is reasonable to infer from the evidence that whilst Mr and Mrs Nicol were living together at the Riverside property Mr Nicol’s made some contribution to household costs in addition to providing the accommodation.
In considering the possible application of these two sections of the Acts it is relevant that the evidence does not establish that Mrs Nicol is destitute or even in difficult financial circumstances. Upon Mr Nicol’s death Mrs Nicol benefited under his will and also received payments including a substantial lump sum payment from the RBF. There is no evidence that particular hardship or unfairness arises here.
The Tribunal concludes that the circumstances in this case are not special bearing in mind the purpose of the relevant provisions in the legislation. It finds that the discretion in either section 1237 AAD or section 101 is not available in these particular circumstances.
DECISION
The decision under review is set aside and in substitution:
(1) The Tribunal decides that the applicant was not “a member of couple” from 19 March 1999 until 30 November 2003 but was “a member of a couple” from 30 November 2003 until 10 April 2004.
(2) The matter is remitted to the respondent for the purpose of assessing the applicant’s entitlement to PPS and FTB in accordance with this decision including any entitlement to a refund of repayments already made by the applicant.
I certify that the preceding 66 (sixty six) paragraphs are a true copy of the reasons for the decision herein of The Hon R J Groom AO (Deputy President).
[Sgd R Hunt]
Administrative AssistantDated 14 February 2012
Date(s) of hearing 15 and 16 December 2011 Counsel for the Applicant Mr Irfan Yusuf Solicitors for the Applicant Launceston Community Legal Centre Counsel for the Respondent Mr Brian Sparkes Solicitors for the Respondent Centrelink - Program Litigation and Review Branch
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