Reissis and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1421

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1421

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No Q200600463

GENERAL ADMINISTRATIVE  DIVISION		)
Re		SAKELARIOS REISSIS

Applicant

And SECRETARY, DEPARTMENT OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Dr KS Levy RFD, Senior Member

Date8 June 2007

PlaceBrisbane

Decision The Tribunal affirms the decision under review.  

................[Sgd]..............................

Senior Member

CATCHWORDS

SOCIAL SECURITY – Disability Support Pension – Centrelink raised debt – applicant failed to advise Centrelink of change in circumstances – applicant worked as a painter – consideration of whether debt does exist – whether debt is due to the Commonwealth – whether debt may be written off or waived – administrative error – special circumstances – decision affirmed

Administrative Appeals Tribunal Act 1975 (Cth) ss 29, 35, 37
Social Security (Administration) Act 1999 (Cth) ss 68, 94

Social Security Act 1991 (Cth) ss 94, 1223, 1236, 1237A, 1237AAD

Dingli and Secretary, Department of Social Security (AAT 11436, 28 November 1996)
Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126
Cymerman and Secretary, Department of Family and Community Services (2003) 78 ALD 584
Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186
Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 (unreported)
Dranichnikov v Centrelink (2003) 75 ALD 134
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

8 June 2007   Dr KS Levy, Senior Member RFD   

Introduction

1. This is an application by Sakelarios Reissis for review of the decision of the Secretary, Department of Employment and Workplace Relations. This application is made under s 29(1) of the Administrative Appeals Tribunal Act 1975.

2.      Centrelink made a decision to cancel payment of Disability Support Pension to the applicant on 14 January 2005.  On the same date, Centrelink determined to raise and recover a Disability Support Pension debt from the applicant of $45,240.04 for the period 8 March 2001 to 5 January 2005.  The applicant wrote to the Department seeking review of the decision on 24 March 2005.  The decision was reviewed by the original decision-maker on 11 April 2005 and the original decision was affirmed.  The applicant then requested the debt be recalculated on 21 December 2005 (by telephone) and on 13 January 2006 (by fax).  The latter request required translation into English.  As a result of those requests, it was determined that the debt owing should be increased by $22.45 to $45,262.49.  The applicant was advised of this on 16 January 2006. 

3.      A request for review was then made on 17 February 2006.  An Authorised Review Officer (ARO) reviewed the decision and affirmed the original decision on 14 March 2006.  It was subsequently reviewed by the Social Security Appeals Tribunal (SSAT) and affirmed on 21 June 2006.  The applicant then appealed to this Tribunal on 7 July 2006. 

4.      The hearing of this matter was undertaken on 9 March 2007 by way of open hearing, with the applicant providing evidence by telephone from Greece. This hearing and two previous directions hearings of this matter were facilitated by an interpreter. The applicant indicated in a directions hearing that he wished to attend in person but would not do so without an undertaking that he would not be arrested by the Australian Federal Police.  As a result, the applicant did not attend in person.

Issues

5.The issues in this matter for determination by the Tribunal are as follows:

(i)Was the applicant’s Disability Support Pension justifiably cancelled by the respondent?

(ii)If the answer to (i) is yes, is there a Disability Support Pension debt?

(iii)If the answer to (ii) is yes, should all or part of that debt be written off or waived (due to administrative error or special circumstances)?

Evidence

6.The following documentary evidence was admitted:

Exhibit 1 – the T documents, lodged under s 37 of the Administrative Appeals Tribunal Act 1975

Exhibit 2 – Statement by Graham Richmond Vonhoff dated 22 December 2005

Exhibit 3 – Statement by the applicant dated 23 November 2006 and attached documents

Exhibit 4 – Statement by the applicant dated 1 August 2006 and attached documents

Exhibit 5 – Correspondence from the applicant under covering letter dated 15 February 2007

Exhibit 6 – Copies of wages reports in respect of the applicant and his father under covering letter of 8 March 2007 by Graham Vonhoff

7.      From the documentary evidence submitted, it is clear that the applicant was granted Disability Support Pension on 13 February 2001 (T38, Folio 126) and was in receipt of this pension at all times during the debt period ie 8 March 2001 to 5 January 2005.  On 19 April 2001 also, the applicant was advised by Centrelink that he was obliged to inform Centrelink, and specifically if there was a change in his circumstances: 

“….If your income, not including financial investments or maintenance, increases;
If you start work or recommence work;
If you start any form of profession, trade, business or self employment…”

8.      Centrelink conducted periodic reviews and in December 2004, it became aware that the applicant was undertaking work as a painter (T10, folio 31).  Centrelink then sought information from the applicant’s employer, Deraview Pty Ltd trading as Mt Isa Painting Contractors, and it was revealed that the applicant worked as a sub-contractor to that company (T9, folios 29 to 30; T13, folios 34 to 42).  It was also determined by the respondent that the applicant worked on a subcontract basis and was paid in terms of “hours” worked.  The pay records relating to the applicant also covered the hours worked by the applicant and his father (T13 folios 34 to 42).

9.      Documentary evidence obtained by Centrelink showed that the applicant was employed consistently by Deraview Pty Ltd for the period 22 March 2001 through until 21 June 2004 (T9 folio 29 to 30; T13 folios 34 to 42).  Cross-checking with the Commonwealth Bank, revealed that the bank statements for the applicant’s bank account were consistent with the accounts of Deraview Pty Ltd (T13, folios 34-42; T19, folios 51-83).  As a result, the respondent cancelled the applicant’s Disability Support Pension on 14 January 2005. 

Sakelarios Reissis

10.     The applicant made a statement to the Tribunal in addition to his documentary evidence.  He stated that this situation had arisen because of his ignorance.  He emphasised also that he had been sick for the last 20 years and took a variety of medications.  He stated that he “may have done something stupid” but that he wanted a “peaceful life”.  His evidence was that he had lived in Australia for 37 years.  He referred to correspondence by Centrelink with some apparent inconsistent information.  He informed the Tribunal that he had applied for an Australian business number (ABN) for his father and his brother to work until they got their own ABN.  He again pleaded in terms of his medical condition.

11.     In cross-examination, despite having an interpreter translate for the applicant, he agreed that he was literate in English.  Indeed, he had grown up and spent a very long time in Australia.  When asked initially whether he spoke English fluently, he responded that it was a bad communication line. 

12.     He was asked whether Mr Vonhoff made contact with him as an intermediary between Mr Vonhoff and his father.  He denied this and that he did paperwork to get paid on behalf of himself and his father. He denied that he worked as a painter.  He was given the opportunity to question Mr Vonhoff.  He also agreed that the Commonwealth Bank Account to which he was referred was his account and that deposits of Centrelink pension were credited to his account.  When asked whether he agreed that deposits from Deraview Pty Ltd were also made to his account, he said he could not answer because he was not well.

13.     The applicant also denied that he was withdrawing money from his account but said instead, that it was his sister who made the withdrawals.

14.     The applicant was specifically referred to the pay records of Deraview Pty Ltd.  In one transaction, it was apparent that Deraview Pty Ltd deposited money to the applicant’s account on behalf of the applicant and his father, for a week involving 120 hours of work.  The applicant was also referred to the T documents, where, on 12 December 2001, it is shown that the applicant worked 147 hours for the week (T13, folio 34).  When asked whether one person could work this number of hours, the applicant merely responded that it was for his father and his brother.  This was the applicant’s response, notwithstanding that the respondent’s advocate raised with him that Mr Vonhoff had given evidence that the payment to his brother was made separately and therefore the 147 hours referred to above was alleged to refer to the applicant and his father. 

15.     The Tribunal asked the applicant whether his family were very close.  He responded that they were. Having given evidence that he knew of his father’s working arrangements because his father had confided in him, the applicant was asked in relation to T13, folio 34 (which suggests these were the hours and income for two people working for Deraview Pty Ltd, allegedly the applicant’s father and himself), who were the people referred to in that report. The applicant did not deny his father was employed there and included with the name of “Reissis, Charlie S”, but was evasive beyond that statement and referred again to the fact that he had three cousins with the same Christian name and same surname as himself, although their fathers were different.

Graham Richmond Vonhoff

16.     Graham Vonhoff gave evidence and took an affirmation.  The witness stated that his company employed 16 tradesmen and that his company did commercial and domestic painting.  His employees were all full time tradesmen painters and they worked either for wages or as subcontractors. 

17.     Sakelarios Reissis was known also as Charlie Reissis.  Deraview Pty Ltd employed Charlie Reissis and his father and brother in 2001.  They were all employed as tradesmen painters and all three were subcontractors.  They generally did the painting of Housing Commission houses.

18.     The witness stated that Charlie, his father (Gerry) and his brother (Nikitas) all worked together (Exhibit 2).  Mr Vonhoff said that he had observed Charlie working on the worksite personally and that he, his father and his brother were all good workers and were reliable.  They were a good team.  When he visited the worksites, he saw Charlie doing repainting work.  He said they had completed at least 100 houses for Deraview Pty Ltd.  They all worked together and if the father was sick and did not come to work, Charlie also did not come to work.  When they did work, he said he had observed Charlie doing both brush and roller painting.  The evidence also revealed that Charlie did not drive a car as he did not have a driver’s licence.  His father drove them but Charlie did the organising and communication between them and Mr Vonhoff.  Charlie, the applicant in these proceedings, had very good English and Mr Vonhoff could not understand why the applicant required an interpreter.

19.     Mr Vonhoff said that Charlie did all the “book work” and presented the invoice each week for the work they each did.  Mr Vonhoff said he did not verify their hours as he trusted them.  They were non-drinkers and reliable.

20.     Mr Vonhoff referred to the applicant’s brother (Nikitas) and he said that he was paid separately.  The invoices were paid and credited to a Commonwealth Bank account which was written on Charlie’s invoice. 

21.     The applicant, his father and his brother all left to see the Olympic Games in Greece in 2005.  Mr Vonhoff said they left quickly and there was some ill-feeling as it was difficult to replace the applicant, his father and his brother.

Submissions

22.     The applicant said that his sister accessed his bank account.  He also submitted that he took out the ABN number sometime before commencing work with Deraview Pty Ltd. 

23.     The respondent referred to the evidence that the applicant was engaged in full time work and that Mr Vonhoff dealt with Charlie.  It was submitted that Mr Vonhoff’s evidence was overwhelming and that there was no reason why he might give false evidence.  It was submitted that the evidence implicated the applicant and contradicted the evidence which he provided.

24. Subsequently, the Tribunal received on 24 April 2007, written submissions on behalf of the Secretary, Department of Employment and Workplace Relations, to substantiate the previous evidence and to counter assertions made by Mr Reissis, the applicant. A Confidentiality Order under section 35(2)(c) of the Administrative Appeals Tribunal Act 1975 was sought and granted. This “Further Evidence and Submissions” dated 24 April 2007 contained documents provided by Westpac Bank and related to the income of the applicant’s brother. The applicant denied at the hearing that the evidence of income from Mt Isa Painting Contractors related to himself but suggested it may relate to earnings by his brother. The evidence in these supplementary submissions revealed Sakelarios Reissis and his father submitted joint invoices and that his brother, Nikitas Reissis, submitted separate invoices for his payments.

Findings Of Fact

25.The Tribunal has made the following findings of fact:

(i)The applicant’s evidence was inconsistent and contradictory and he was generally not accepted as a witness who provided truthful evidence;

(ii)The applicant’s employer, Mr Vonhoff, was regarded as a witness of truth;

(iii)The applicant worked for Deraview Pty Ltd during the period of the debt (8 March 2001 to 5 January 2005) and he provided invoices on behalf of himself and his father.  No other explanation is available for the hours worked and paid and there is no other evidence of any other person by that name being involved in this painting work;

(iv)The applicant’s brother Nikitas Reissis issued separate invoices for payment (that is, separate from those relating to Sakelarios Reissis and his father);

(v)It is accepted that the applicant has some disability, but not sufficient to have prevented him from working, as disclosed by the evidence; and

(vi)Payments were made to the bank account of the applicant’s brother after 30 August 2002.

Consideration

26.     I have carefully considered all of the documentary and oral evidence and the relevant law applying to this matter. 

27.     Based on assessing the evidence of the applicant and that of Mr Vonhoff, the Tribunal has noted the various amounts paid by Deraview Pty Ltd and corresponding amounts paid into the applicant’s bank account to verify a pattern of coinciding payments. There is more than adequate evidence of the hours worked and corresponding payments to the applicant’s bank account. 

28. It is also apparent that the applicant was advised of his reporting obligations under s 68(2) of the Social Security (Administration) Act 1999 and has not informed Centrelink of his change in circumstances. Under s 94(1) of that Act, the social security payment is cancelled by operation of law. On that basis, the applicant is not entitled to Disability Support Pension for the period in question.

29.     In addition or in the alternative, the respondent argues that the applicant did not have a “continuing inability to work” as set out in s 94(1)(c)(i) and s 94(2) of the Social Security Act 1991 (“the Act”). 

30.     The applicant asked the Tribunal to accept that he did not work, that he did not know that the payments made by Deraview Pty Ltd were paid into his account (where his disability support pension was also credited), that his sister accessed his account and that the income payments from Deraview Pty Ltd were, after 30 August 2002, paid into his brother’s account. I reject the version of events that he did not work and did not know of the payments to his bank account, and determine that the applicant’s evidence is unreliable and not truthful in respect of those assertions. In any event, what is relevant is that payments were made by Deraview and that the applicant (and his father and his brother) were employed full time as painters and the applicant is the person who received the payments which are the subject of the debt under review in this case. That fact is critical to determining the entitlement of Sakelarios Reissis to Disability Support Pension.

31.     The Secretary has submitted that notwithstanding any disability claimed by the applicant, he has worked for 63 hours in the first week of the debt period and continued to work in excess of 30 hours per week for the majority of the remainder of the debt period.  The Tribunal has accepted the evidence of Mr Vonhoff, the applicant’s former employer, and determines that the evidence shows that Mr Reissis, in fact, worked essentially on a full-time basis for the period of the debt raised. Therefore, he did not have a “continuing inability to work” and was as a result, disqualified from receiving the Disability Support Pension for that period.  Therefore, the respondent’s cancellation of his Disability Support Pension is correct. 

Is there a disability support pension debt?

32. As the applicant was not entitled to Disability Support Pension for the debt period mentioned, it follows as a consequence that he has a debt due to the Commonwealth. The relevant statutory provision of the Act is s 1223(1) of the Social Security Act 1991 which relevantly provides:

“Debts arising from lack of qualification, overpayment etc.

1223(1)  Subject to this section, if:
   (a)  a social security payment is made; and

(b)  a person who obtains the benefit of the payment was not entitled for any reason to obtain that benefit;

the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment.”

33.     Given the strict wording of this section, the Tribunal accepts that the debt raised is a debt due to the Commonwealth.

Should all or part of the debt due to the commonwealth be recovered?

34.     This issue requires the Tribunal to examine whether there is any statutory provision which entitles the applicant to have the debt written off, waived because of administrative error, or waived because of special circumstances.

Write off

35. The statutory authority required to answer this question is contained in s 1236 of the Act. This provision, so far as it is relevant, is as follows:

“Secretary may write off debt

1236(1)  Subject to subsection (1A), the Secretary may, on behalf of the Commonwealth, decide to write off a debt, for a stated period or otherwise.

1236(1A)  The Secretary may decide to write off a debt under subsection (1) if, and only if:

(a)  the debt is irrecoverable at law; or

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

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

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

1236(1B)  For the purposes of paragraph (1A)(a), a debt is taken to be irrecoverable at law if, and only if:

(a)  the debt cannot be recovered by means of deductions, or legal proceedings, or garnishee notice, because the relevant 6 year period mentioned in section 1231, 1232 or 1233 has elapsed; or

(aa)  the debt cannot be recovered by means of deductions or setting off because the relevant 6 year period mentioned in section 86 of the A New Tax System (Family Assistance) (Administration) Act 1999 has elapsed; or

(b)  there is no proof of the debt capable of sustaining legal proceedings for its recovery; or

(c)  the debtor is discharged from bankruptcy and the debt was incurred before the debtor became bankrupt and was not incurred by fraud; or

(d)  the debtor has died leaving no estate or insufficient funds in the debtor's estate to repay the debt.

1236(1C)  For the purposes of paragraph (1A)(b), if a debt is recoverable by means of:

(a)  deductions from the debtor's social security payment; or

(b) deductions under section 84 of the A New Tax System (Family Assistance) (Administration) Act 1999; or

(c)  setting off under section 84A of that Act;

the debtor is taken to have a capacity to repay the debt unless recovery by those means would result in the debtor being in severe financial hardship”.

36. Section 1236 is applicable in very limited circumstances. It can apply only where the debt is not recoverable at law, where the debtor is impecunious or has no capacity to repay the debt; where the debtor’s whereabouts are unknown; or where it is not cost effective for the Commonwealth to recover the debt.

37.     The applicant provided no evidence which would justify the Tribunal making a finding in reliance on this section.  Therefore, write-off would not be an appropriate response. 

Waiver

38.     There are two grounds upon which to consider whether this option is applicable.  These are waiver due to administrative error (s 1237A(1));  and waiver due to special circumstances (s 1237AAD).

39.     In respect of waiver due to administrative error, s 1237A(1) provides as follows:

“Waiver of debt arising from error

Administrative error

1237A(1)  Subject to subsection (1A), the Secretary must waive the right to recover the proportion of a debt that is attributable solely to an administrative error made by the Commonwealth if the debtor received in good faith the payment or payments that gave rise to that proportion of the debt.

Note:    Subsection (1) does not allow waiver of a part of a debt that was   caused partly by administrative error and partly by one or more other   factors (such as error by the debtor).”

40.     This provision applies only where an administrative error can be said to be due “solely” to the administrative error of the Department.  (Dingli and Secretary, Department of Social Security (AAT 11436, 28 November 1996); Sekhon v Secretary, Department of Family and Community Services (2003) 132 FCR 126.

41.     There was no submission made by the applicant that there was administrative error, be it a sole administrative error or otherwise.  There is no evidence that the Tribunal could conclude that this section is relevant.  Therefore, the Tribunal finds that waiver due to an administrative error which is attributable solely to the Commonwealth, is also inappropriate.

42.     The Tribunal has considered Cymerman and Secretary, Department of Family and Community Services (2003) 78 ALD 584, and specifically, paragraph 28 of that decision, in connection with the statutory requirements under s 1237A(1). Also, the Tribunal has been mindful of Secretary, Department of Education, Employment, Training and Youth Affairs v Prince (1997) 50 ALD 186 where it was said “….. if that person knows or has reason to know that he or she is not entitled to a payment received – ie is not entitled to use the moneys received as his or her own – that person does not receive the payment in good faith” (at 189).

43.     The Tribunal is also conscious of the notion that the applicant was devoid of merit in any application of this section as he turned a ‘blind eye’ to circumstances which would have alerted him to the possibility that he was being overpaid (Jazazievska v Secretary, Department of Family and Community Services (2000) 65 ALD 424).

Waiver due to special circumstances

44.Section 1237AAD of the Social Security Act 1991 provides:

“Waiver in special circumstances

The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:

(a)  the debt did not result wholly or partly from the debtor or another person knowingly:

(i)  making a false statement or a false representation; or

(ii)  failing or omitting to comply with a provision of this Act or the 1947 Act; and

(b)  there are special circumstances (other than financial hardship alone) that make it desirable to waive; and

(c)  it is more appropriate to waive than to write off the debt or part of the debt.

Note 1:     Section 1236 allows the Secretary to write off a debt on   behalf of the Commonwealth.

Note 2:    This section has effect subject to section 1237AAE in relation   to an assurance of support debt.”

45. The Secretary has submitted that as the applicant has breached the Act, then this ground should not apply to waive all or part of the applicant’s debt. The Tribunal agrees with that submission.

46.     In Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at page 3, the Tribunal determined that:

“An expression such as ‘special circumstances’ is by its very nature incapable of precise or exhaustive definition. ……This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special.”

47.     Also, the respondent referred the Tribunal to Ryde v Secretary, Department of Family and Community Services [2005] FCA 866 (unreported) which has been considered. The Tribunal considers that the comments by the Tribunal in Dranichnikov v Centrelink (2003) 75 ALD 134 at 148 are also relevant: “[t]o some extent the question whether there were special circumstances must depend on how it came about that the error occurred”.  There, the Tribunal said that the circumstances involved must be such that they are peculiar or exceptional in amount, degree of intensity etc.  Those circumstances may be personal circumstances, health issues, financial hardship or other difficulties.  They are also intended to avoid unfairness (Groth v Department of Social Security (1995) 40 ALD 541 at 545). In the present case, the circumstances might be regarded as unusual but there are few redeeming features in favour of the applicant. The evidence shows that there was a clear intention to earn income over an extended period whilst concurrently claiming Disability Support Pension. In addition, the applicant’s evidence was obviously less than candid.

48. Given the findings of fact made by the Tribunal, the Tribunal finds that the applicant has made false statements or false representations and has failed to satisfy s 1237AAD(a) of the Act. On this basis, this section also cannot apply. It is therefore unnecessary to consider whether special circumstances under s 1237AAD(b) and (c) apply.

49.     In the circumstances, none of the grounds to either write off or waive the debt, because of either administrative error or special circumstances, can be found to exist. Therefore, the Tribunal must affirm the decision under review.

I certify that the 49 preceding paragraphs are a true copy of the reasons for the decision herein of Dr KS Levy RFD, Senior Member

Signed:         .....................................................................................
  F. Kamst Legal Research Officer

Date/s of Hearing  9 March 2007
Date of Decision  8 June 2007
The applicant himself, by telephone 
Respondent  Mr R McQuinlan, departmental advocate