Sahin; Department of Family and Community Services - [2001] AATA 732

DECISION AND REASONS FOR DECISION [2001] AATA 732

ADMINISTRATIVE APPEALS TRIBUNAL )

) No V2001/205

GENERAL ADMINISTRATIVE DIVISION       )
           Re      SECRETARY, DEPARTMENT OF FAMILY & COMMUNITY SERVICES
  Applicant
           And    METIN SAHIN
  Respondent

DECISION

Tribunal Mr J. Handley, Senior Member

Date3 August 2001
PlaceMelbourne

Decision      The decision under review is affirmed.
  ..........Sgd. Mr J. Handley.............
  Senior Member
CATCHWORDS
Social Security - Respondent owner of 26 acre grape block - committed to it full time for 3-4 weeks during harvest - whether qualified for New Start Allowance - whether 'unemployed' - decision affirmed.
Re Howie & Secretary, Department of Social Security 1986 8 ALD N174
Hope and Secretary, Department of Social Security 1997 47 ALD 343
Re Sullivan & Secretary, Department of Social Security 1990 21 ALD 404
Re Vavaris and Secretary, Department of Social Security 1984 5 ALD N16
Director General of Social Services v Thompson 1982 38 ALR 624
Worthington and Secretary, Department of Social Security 1993 31 ALD 764

REASONS FOR DECISION

3 August 2001 Mr J. Handley, Senior Member

The applicant department applies to review a decision of the Social Security Appeals Tribunal ("SSAT") made on 15 January 2001.
The applicant had previously determined that the respondent was not entitled to Newstart Allowance from 11 October 2000. It did so on the basis that the respondent was regarded as being self employed and not unemployed. Because it was decided that he was not unemployed, it followed that he was not entitled to Newstart Allowance (T-51, p.126).
The SSAT decided that the respondent was "available for work" and in those circumstances qualified for Newstart Allowance. (More precisely in its reasons for decision, the Tribunal decided that Mr Sahin "demonstrated that he is willing and available to seek full time employment for 11 months of the year and as such satisfies the activity test required by s.593") (T-3, p.14).
The hearing of the appeal was convened in Mildura. Ms King appeared on behalf of the applicant Department. Mr Meehan of Counsel appeared on behalf of Mr Sahin.
A number of documents were received into evidence and will be referred to in these reasons.
Metin Sahin
Mr Sahin said that he and his wife are the joint owners of 26 acres of real estate in Mildura. The property was previously owned by his mother from whom he purchased it in late 1997 or early 1998. Prior to that time he worked on the property and received a salary from his mother. Locally, properties of this type and size are known as "blocks". The block comprises 14 acres of sultanas and 4 acres of waltham cross grapes. 10 acres of the property comprise 80 year old sultana vines the remaining 4 acres are of vines planted approximately 8 years ago. The sultanas when picked are eventually dried and sold as dried fruit. The 4 acres of waltham cross grapes are produced and sold to wine makers for the production of white wine. A domestic dwelling is located on the remaining vacant land.
With respect to the operation of the block, Mr Sahin said that he did intend to operate it as a serious economic enterprise. He has sought and obtained contract employment elsewhere and said that apart from a three or four-week period when grapes are picked, he is available for work and he will work if he can locate it. He has secured some jobs pruning for other growers and remains registered with Centrelink as unemployed.
Mr Sahin borrowed monies to purchase the property and to purchase a tractor. In the first income year after purchase a small profit was realised but in all subsequent years the respondent said that he has operated at a loss. An examination of his tax returns and profit and loss statements confirms this.
Mr Sahin said that he is in a desperate economic situation. He has been refused credit by local merchants and is at risk of the bank taking possession of the property pursuant to the mortgage. He has recently placed it on the real estate market and a negotiable price of $215,000 has been set. His debts and loans presently exceed $120,000. The respondent now realises that having regard to the size of his property and competition by imported dried fruit (being sold at a price lower than that which can be achieved by Mildura growers) the applicant has no chance of earning an income from the block sufficient to meet his debts and provide a profit. Additionally, the applicant said that he could not afford to buy and plant additional waltham cross vines, in order to produce more grapes, which could be sold to wineries. The respondent is reluctant to sell his block, but will do so in order to reduce his debts and meet the demands of creditors. Any monies remaining will be divided with his wife from whom he has recently separated.
In cross-examination from Ms King, Mr Sahin explained that he suffered a considerable loss in the 1999/2000 year of income because of increased water rates, compounding bank interests and reduced dried fruit prices.
With respect to the day to day management of the property, he said that he mainly uses contractors. He relies on their expertise and their machinery, which he does not own. Contractors are engaged for ploughing, spraying, fertilising, cultivating and rotary howing. These tasks are undertaken throughout the year at various times. Having regard to the size of his block and by reason of the machinery used by contractors, these tasks can be carried out within a matter of hours. They can be undertaken either when he is not on the property or (in the case of spraying for pests) it can be undertaken at night, which apparently is the preferred time of day for this activity.
Mr Sahin said that he is engaged full time on the property only during the picking season which he estimated ran for three or four weeks of each year. At that time he engages six contract pickers and rents a number of caravans being accommodation for the pickers.
He completes his own pruning but said there is no time constraint on him to do so. This is done between July and September on Saturdays or Sundays.
He supervisors watering of the block between November and February and - because the property is irrigated - it requires him to do no more than open valves and check irrigation gates for a few minutes each day morning and night.
Mr Sahin said that the effect of the above was to permit him to be available for full-time work elsewhere throughout the year except during the picking season. Most of the jobs undertaken by him can be completed either at night time or on weekends or early in the morning. He said the maintenance of his block has not interfered with his ability to work elsewhere or be available to work elsewhere.
The Documents
The various documents submitted during the pre-hearing stage of this application and on the day of hearing confirm that Mr Sahin has engaged a number of contractors in the district for the supply and provision of services over his block. There are also documents to confirm that he has secured employment with other growers and has been paid wages. A number of documents from his bank and from packing sheds confirm that he is seriously in debt and the debt is increasing.
The Legislation
Section 593 of the Social Security Act 1991 relevantly provides as follows-
"593(1) Subject to sections 596, 596A, 597 and 598, a person is qualified for a newstart allowance in respect of a period if:
(a) the person satisfies the Secretary that:
(i) throughout the period the person is unemployed; or
(ii) the person is a CDEP Scheme participant in respect of the period; and
Note : For CDEP Scheme participant see section 1188B.
(b)in the case of a person to whom subparagraph (a)(i) applies - throughout the period, or for each period within the period, the person:
(i) satisfies the activity test; or
(ii)   is not required to satisfy the activity test; and
(c)if subsection 604(1) applies to the person, at all times (if any) during the period when the person is not a party to a Newstart Activity Agreement, the person is prepared to enter into another such an agreement; and
(d)if subsection 604(1) applies to the person, at all times during the period when the person is a party to a Newstart Activity Agreement, the person is prepared to enter into another such agreement instead of the existing agreement; and
(e)if the person is required by the Secretary to enter into a Newstart Activity Agreement in relation to the period, the person enters into that agreement; and
(f)while the agreement is in force, the person satisfies the Secretary that the person is taking reasonable steps to comply with the terms of the agreement; and
Note: See subsection (2A) on taking reasonable steps.
(g)throughout the period the person:
(i)    subject to subsection (2B), is at least 21 years of age and has not reached the pension age; and
(ii)   is an Australian resident or is exempt from the residence requirement within the meaning of subsection 7(7); and
(i) the person was not in receipt of a youth allowance during the period."
For the purposes of this application the provisions of section 596, 596A, 597 and 598 do not apply. Additionally, the applicant is not a "CDEP Scheme participant".
Conclusion & Reasons For Decision
The applicant department asserts by its Statement of Facts and Contentions that-
"(i) Mr Sahin operates the fruit block as a serious economic enterprise and it is economically viable.
(ii) Mr Sahin is self employed and not unemployed.
(iii) He operates the block with a view to making a profit.
(iv) A profit was earnt in the first year of operation and whilst losses have been suffered in subsequent years, losses are not unexpected in the first few years of a business venture particularly when improvements are being made.
(v) The amounts of capital and money invested into the block tend to indicate that the applicant views the property with long term objectives.
(vi) The respondent chooses to be engaged in a limited basis and also chooses to engage contractors. He is not unemployed but rather he is under employed.
(vii) If the property were sold it would not be at a substantial loss and he is not required to work it to prevent sale at a loss".
This application causes enquiry into whether the applicant is at all relevant times 'unemployed'. There would not appear to be any dispute between the parties as to sub-sections (b) - (g) of s.593(1).
In Re Howie & Secretary, Department of Social Security 1986 8 ALD N174, the Tribunal heard an appeal concerning an applicant for unemployment benefits who had previously intended to be self employed growing and selling strawberries. The Tribunal found that the 'enterprise' was never capable of being described as a 'serious business undertaking' and distinguished the circumstances of that application from other applications involving "more substantial long term enterprise(s) which (are) unproductive in its early years". Coincidently, the Tribunal found that the "time required to operate the strawberry venture was minimal except at the harvest time". The Tribunal found that the applicant was making enquiries concerning available paid work elsewhere and had been registered with the Commonwealth Employment Service. Having found that the applicant was fit for work and that except during the harvest, the applicant was available for work elsewhere, it decided that he was at relevant times "unemployed". The circumstances of that application are similar, in my view, to the present application. Similarly the factors recorded at N175-N176, being relevant to determine eligibility for unemployment benefits for persons engaged in rural ventures are useful.
In Hope and Secretary, Department of Social Security 1997 47 ALD 343 Deputy President Forgie examined a number of decisions of the Tribunal and of the Federal Court concerning the meaning of "unemployed". The application involved a person who had previously been involved in self employment and whether a person could be deemed to be "unemployed" during periods other than when the person was "under employed" whilst "self employed". The Tribunal was satisfied that a person was not unemployed, when 'under employed'.
In Re Sullivan & Secretary, Department of Social Security 1990 21 ALD 404, it was found that an applicant who was engaged for 42 hours per week in self employment, but who did not earn sufficient to meet day to day costs, was not to be regarded as "unemployed". In that circumstance the Tribunal found that the applicant was "under employed" and it likened the circumstance to a person who had commenced a business by opening "a small shop and waits for customers, is occupied, and is under employed, not unemployed..."
In Re Vavaris and Secretary, Department of Social Security 1984 5 ALD N16, the Tribunal found that a person who had acquired a property with an intention of establishing a vineyard and who was occupied on it each weekend and for two days each week and for three weeks full time at harvest, was not unemployed. It was found that the person was "running a business" and could not make himself available for full-time work for another employer.
In Director General of Social Services v Thompson 1982 38 ALR 624 a Full Federal Court considered whether a student enrolled "full-time" at a college was "unemployed". Whilst the decision did not involve a person who was engaged in employment the observations by the court as to the meaning of "unemployed" are no less relevant. At page 626-627 the court said-
"The concept of "paid work" provides a useful starting point. At its broadest the description "unemployed" encompasses those who are without paid work. We appreciate that the statute itself, for example s 107(3), admits some limited extension of this but, subject to that qualification, the notion of "paid work" as the antithesis of "unemployment" seems to accord with common sense and with the statutory context. Other provisions to which our attention was directed were ss 107(4) and (7), 124(1)(b)(c) and 130A. None of these is of particular assistance."
Further, at pages 628 - 629 the court also decided-
"Miss Thomson, he submits, affords one example of a person who was not unemployed because she had a full-time occupation, although it was not paid work. Other examples of persons not unemployed, according to the Director-General, although unsuccessfully seeking a job would be perhaps the young person who for the time being returns to school, the housewife who continues to care for her home and family, and the person who undertakes full-time charity work, for example, helping out the local kindergarten or school. All of these may be contrasted at least to an extent with the person who, whilst seeking a job, pursues such activities only from time to time, or indulges only in leisure or indolence. The latter, alone, are, according to the Director-General, "unemployed".
The lack of appeal in this approach is obvious. We see no reason why Parliament should have intended such a result, unless the reason lay in apprehended difficulties in processing claims for benefit, or perceived risks of potential abuse. But it must be kept in mind that the material part of the legislation treats questions such as the present as matters of fact and degree. Terms are undefined and detailed tests are not prescribed. Matters are left to the decision of the Director-General, subject to review by the Tribunal. Such a legislative scheme seems to us to accept the operational burden of numerous individual decisions, and at the same time to provide by way of safeguard a need for the applicant for benefit to satisfy those administering the scheme that he or she qualifies for entitlement.
For all that, the possibility must be recognised that activities being pursued by a person without paid work may be so fundamentally incompatible with the person's being regarded as unemployed that no further inquiry is necessary. However, we anticipate that such a case would be exceptional. In the usual case, of which we think this is an example, the solution will be arrived at by reference to all the circumstances, of which the activities being pursued for the time being by the applicant for benefit will be one."
In the present application I am satisfied that Mr Sahin is a witness of truth. I am satisfied that he did initially intend by purchasing the property to develop it into a full time income producing enterprise. It has become apparent however, with the passage of time that his intention will never be realised. Because the property does not occupy him on a full time basis, he is free and able to seek employment elsewhere. I am satisfied and find as a fact that except for the harvest period of about 3 or 4 weeks within the period between January and March of each year, the applicant is not engaged in a full time basis on his block and is available for work elsewhere. Maintenance of the property other than during this period can be completed by contractors or by the respondent early in the morning or in the evening or on weekends.
As a matter of "fact and degree" (refer Thompson above and Harradine & Secretary, Department of Social Security 1989 87 ALR 305) the applicant is not under employed, but rather he is unemployed. His situation is distinguished from that of a shop proprietor waiting for customers, or a person engaged in an enterprise where attempts are being made to be exposed to, or infiltrate a market. As a fact, the busiest period in each year is during the harvest, where Mr Sahin acknowledges that he would not be able to satisfy the qualifying provisions for Newstart Allowance. He is otherwise "unemployed" and able to satisfy s.593. It is remarkable that so little time is occupied by him, in fact or by need, other than at harvest. Work which is required to be undertaken by him is completed at times which would not interfere with his ability to work elsewhere. He has sought and obtained work elsewhere. There is nothing about his ownership of the block, which prohibits him being available for and actually working for other persons. These are the circumstances of a person who is unemployed.
Consistent with the above decision in Howie & Hope and a decision of the Tribunal in Re Worthington and Secretary, Department of Social Security 1993 31 ALD 764, the respondent has an entitlement to Newstart Allowance because he is, other than during harvest, to be regarded as being unemployed.
It follows therefore that the decision of the Social Security Appeals Tribunal under review in these proceedings must be affirmed.
I certify that the 30 preceding paragraphs are a true copy of the reasons for the decision herein of Mr J. Handley, Senior Member.
Signed:         ..C. Irons......................................................
  Secretary
Date/s of Hearing  17 July 2001
Date of Decision  3 August 2001
Counsel for the Applicant        Elizabeth King
Solicitor for the Applicant
Counsel for the Respondent    Mr Meehan
Solicitor for the Respondent