SCHMIDT and SECRETARY, DEPT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

[2010] AATA 644

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 644

ADMINISTRATIVE APPEALS TRIBUNAL      )

)           No 2010/0713

GENERAL ADMINISTRATIVE DIVISION		)
Re		RONALD SCHMIDT

Applicant

And SECRETARY, DEPT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal Ms N Isenberg, Senior Member

Date26 August 2010

PlaceCoffs Harbour

Decision The decision under review is affirmed.

......................[sgd]........................

Ms N Isenberg

Senior Member

CATCHWORDS

SOCIAL SECURITY – age pension – disability support pension - use of more than one name – Debt owed to the Commonwealth –- Whether debt should be waived – administrative error -  “special circumstances” .

Legislation

Social Security Act 1991, ss 1223, 1237A and 1237AAD.

Cases

Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996)

Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787

REASONS FOR DECISION

26 August 2010 Ms Naida Isenberg, Senior Member

DECISION UNDER REVIEW

1.       The decision of a Centrelink Authorised Review Officer made on 8 June 2006, and subsequently affirmed by the Social Security Appeals Tribunal (SSAT) on 13 January 2010, to raise and recover, from Mr Schmidt, an age pension debt in the amount of $85,780.90 for the period 4 February 1999 to 30 May 2006.

BACKGROUND

2.       On 16 May 1998, Mr Barry Mervyn Ronald Wiseman applied for disability support pension.  In the form he wrote that he was also known as Ronald Barry Schmidt.  The earliest available evidence indicates that pension was paid to Mr Wiseman from at least 20 October 1998.  For reasons which are unclear, on 26 November 1998, Mr Wiseman made a further application for disability support pension. 

3.       On 29 January 1999 Mr Ronald Barry Schmidt lodged an application for age pension and was paid pension from 4 February 1999.

4.       In June 2006, Centrelink cancelled Mr Schmidt's age pension on the basis that he had been receiving an additional age pension in the name of Barry Wiseman, and because Mr Schmidt and Mr Wiseman were one and the same person.

ISSUES BEFORE THE TRIBUNAL

5.The Tribunal must consider the following questions:

·Whether Mr Wiseman and Mr Schmidt are the same person.

·If so, whether Mr Schmidt was overpaid age pension in the amount of $85,780.90 for the period from 4 February 1999 to 30 May 2006.

·If so, whether there are any reasons why the debt should not be recovered in full.

LEGISLATION

6.       The relevant legislation in this matter is the Social Security Act 1991 (“the Act”), in particular sections 1223, 1237A and 1237AAD.

THE HEARING

7.       I had before me documents lodged pursuant to s 37 of the Administrative Appeals Tribunals Act 1975 ("the T documents"), which were taken into evidence.

8.       At the outset of the hearing Mr Schmidt tendered some medical and psychological assessments as to his ‘ability to plead’.  I took this to mean that Mr Schmidt was contending that he was not mentally ill.  A letter from Dr Peck, Senior Psychiatry Registrar of the North Coast Area Health Service, dated 17 February 2009, referred to Mr Schmidt, while the remainder referred to Barry Wiseman.  I pointed out to Mr Schmidt that there was some difficulty with the reports in circumstances where Mr Schmidt was adamant that he was not the ‘Barry Wiseman’ who had received Centrelink benefits (albeit via the Office of the Protective Commission), which had found their way into an account operated by him in that name.

9.       Mr Schmidt gave evidence at the hearing and was cross-examined on behalf of Centrelink.  I also asked him questions.

CONSIDERATION OF EVIDENCE AND FINDINGS

Are Mr Wiseman and Mr Schmidt the same person?

10.     During cross-examination, the Respondent referred Mr Schmidt to a document entitled “Instrument Evidencing Change of Name”, dated 25 October 1988, in which he elected to no longer be known as Barry Ronald Blackman, and instead to be known as Barry Mervyn Ronald Wiseman.  He said the name Blackman had not been used since 1967 and that the change of name was a ruse to defeat his foster father’s creditors.

11.     On 24 August 1995, on the application of his daughter, Joanne Shepherd, an interim financial management order was made, which appointed the Office of the Protective Commissioner (OPC) as Mr Wiseman's manager for a period of six months.  Mr Schmidt agreed in cross-examination that Joanne Shepherd was his daughter.  He later queried whether she was in fact his daughter. 

12.     On 21 February 1996, when the interim financial management order was extended, Mr Wiseman was noted to have aliases of Barry Ronald Blackman, Adam Newman and Melchizedek.  Mr Schmidt said in cross-examination that the OPC was never dealing with him, only his brother or some other Barry Ronald Blackman.  He said ‘Adam Newman’ was a religious title.

13.     On 26 November 1998, when Mr Wiseman made an application for disability support pension, he listed previous names as "Mechi-zedekia" and "Blackman".  Attached to that application were a number of documents evidencing ATM cards in the name of Wiseman, a cash receipt for rent, a passport in the name of Barry Mervyn Ronald Wiseman and an interim statement of account from the ANZ bank. 

14.     On 29 January 1999, when Mr Schmidt lodged the application for age pension, he wrote that other names he had previously been known by were ‘Schmitzy’, Santa Claus and Noah.  He said he had done that for ‘comic relief’.

15.     On 11 October 1999 Mr Wiseman executed a statutory declaration stating that he was born on 15 January 1934, in accordance with the attached birth certificate, but that he was fostered to a family who called him Barry Ronald Blackman. 

16.     On 27 February 2003, Centrelink sent Mr Schmidt an income and assets form to complete, but the form was returned to Centrelink with a note stating that Mr Schmidt's affairs were in the hands of OPC but under a completely different name. 

17.     On 29 April 2005 the NSW Office of Births Deaths and Marriages conducted a search for any name change to Ronald Barry Schmidt between 1 April 1996 and 25 April 2005 but no record was found. 

18.     Records obtained from the Department of Immigration and Citizenship on 20 April 2006 indicated that both Ronald Mervyn Wiseman and Ronald Barry Schmidt had the same person ID number, the same number of movements and identical records in relation to their movement into and out of Australia.

19.     On 1 June 2006, Centrelink fraud officers attended Mr Schmidt's address, questioned him and also seized some of his property.  A number of identity cards were seized including ATM cards and pension cards in the name of both Barry Wiseman and Ronald Schmidt.  Also seized was a document titled 'Certificate of a Death Abroad’ indicating Barry Ronald Blackman (aka Jesus D Kim) had died on 6 December 1995.  The person furnishing the particulars was recorded as Adam Newman.  In cross-examination, Mr Schmidt said he had just delivered it and that was what ‘furnishing’ meant in this context.

20.     On 13 June 2006, a Department of Foreign Affairs and Trade official prepared a statement attaching passport applications for Mr Wiseman.  The passport application for Mr Wiseman dated 7 November 1989 gave the name Ronald Barry Schmidt as the name appearing on his full birth certificate.  Additionally, on 30 March 1998, an Australian passport application was lodged at the Australian Embassy in Manila in the name of Barry Wiseman, and indicating the name on the full birth certificate was Ronald Barry Schmidt.

21.     On 19 September 2006, Centrelink received a note from Mr Schmidt requesting a replacement set of ID cards.  Attached to this document was a birth certificate in the name of Ronald Barry Schmidt, with a note at the bottom of the document stating that ‘the registered person was previously known a Ronald Barry Wiseman, formerly known as Barry Ronald Wiseman, formerly known as Barry M Wiseman.’

22.     Mr Schmidt gave very lengthy and convoluted evidence about his family background which, to some extent, accounted for the names Wiseman and Blackman as well as Schmidt. 

23.     He said he has a half brother named Barry Wiseman who had lived nearly all his life in the Philippines.  He agreed that he had been known by that name too, as has his son and ‘many other people’.  He could offer no plausible explanation of why his half brother, who reportedly died in the Philippines 1995, applied for pension in 1998 and continued to receive pension until 2006. 

24.     He also had no plausible explanation as to why Dr de Saxe, psychiatrist, would have been able to assess ‘Mr Wiseman’ in 1997 for the purposes of an assessment for the OPC, and in 1998 for the purposes of supporting Mr Wiseman’s Centrelink claim by way of a treating doctor’s report.  He agreed he had seen Dr de Saxe but he was ‘following the orders’ of a Legal Aid lawyer and that at the time he was ‘operating as Wiseman’.  He said that while people say he is eccentric, he does not have the conditions Dr de Saxe said he has (ie bipolar disorder with chronic grandiose delusional symptoms). 

25.     In cross-examination, Mr Schmidt was referred to a driver’s licence in the name of Barry Mervyn Wiseman and bearing his photograph.  He considered this unremarkable as it was ‘only a renewal’.  Similarly, a Medicare card found at his home in the name Barry H Wiseman and valid till August 2012 had been re-issued in that name.  He said he was entitled to use this because he ‘only had one’.

26.     Mr Wiseman’s letter to Centrelink received on 22 October 2001 appears to be in Mr Schmidt’s distinctive writing.

27.     As to a NAB bank account in the name of Wiseman, he said the account was to have ‘become redundant’, but he had to leave it open because church members wanted to deposit money into it.  He thought deposits could have been from church members.  Although, the NAB identified Mr Wiseman as the sole operator of the account, Mr Schmidt said that relatives in the Philippines had access to the account.  One explanation was that he withdrew money from the account to help his brother and his brother’s family in the Philippines.

28.     Mr Schmidt agreed in cross-examination that he had brought proceedings in the Land and Environment Court in 1994 in the name of Barry Ronald Blackman.  He said the council had levied rates against him in that name and he ‘went along with the charade’.  The judgment records that the applicant there was also known as Melchizedek, Adam Newman and Barry Wiseman.  Mr Schmidt agreed he ‘could be Barry Ronald Blackman’.  He said the use of Melchizedek would be sacrilegious and that the judge had ‘put it there’.  He said that the name Wiseman only came to light when he sought to register his ark with Waterways.

29.     The evidence appears to me to be clear.  Mr Schmidt has used a variety of names for some years.  I do not accept his evidence that Barry Wiseman is his half-brother and that ‘Mr Wiseman’, who allegedly died in 1995, nonetheless, in 1998 applied for pension and was examined by Dr de Saxe, and attended various medical practitioners in recent times.  Nor do I accept that Barry Wiseman is a common name, that it belongs to someone else and that it is co-incidental that Mr Schmidt has various ID documents in that name.  His explanation is flawed on many levels and difficult to accept.

Is there a recoverable debt?

30.     Centrelink contended that an overpayment of $85,780.90 arose because Mr Schmidt received age pension while already receiving age pension in the name of Barry Wiseman.  I have found that Mr Schmidt and Mr Wiseman are one and the same.

“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.”

31.     For some time Centrelink benefits paid to Mr Wiseman were formally paid to the OPC as the financial manager of his affairs.  The OPC paid Mr Wiseman an allowance and the balance was retained for his benefit.  I find that Mr Schmidt received the benefit of those payments.  I also find that when Mr Schmidt was paid pension from 4 February 1999 to 30 May 2006, he received the benefit of those payments.

32.     I therefore find that there is a recoverable debt.

Should the debt be recovered?

33. The Act includes provisions for debts not to be recovered in limited circumstances:

Waiver of debt arising from 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.”

34. For a debt to be waived under s 1237A, two conditions must be met, namely that the debt arose solely because of administrative error and the debtor received the payments in good faith.

Was the debt solely attributable to an administrative error by Centrelink?

35.     In May 1998 ‘Mr Wiseman’ applied for disability support pension.  In the form he wrote that ‘Mr Wiseman’ was also known as Ronald Barry Schmidt.  More careful data matching may have identified this doubling up when Mr Schmidt applied for age pension in January 1999 as Ronald Barry Schmidt.

36.     However, I have come to the view that the administrative error was not solely attributable to Centrelink.

37.     The word “sole” should be given its ordinary meaning.  In the Concise Oxford dictionary, “sole” is defined as “one and only, exclusive, alone, unaccompanied”.  This approach was used by the Tribunal in Re Gerhardt and Department of Employment, Education and Training (AAT 10941, 17 May 1996) paragraph 40.

38.     This decision was referred to with approval in Re De Neumann and Secretary, Department of Social Security (1996) 45 ALD 787 paragraph 19. The Tribunal stated that “solely” should be given its ordinary meaning (“only” or “to the exclusion of all else”).

39.     It remains that Mr Schmidt applied in that name and made no effort whatsoever to inform Centrelink that he had previously applied for, and was receiving, pension in the name of Wiseman.  He has been, and continues to be, evasive as to the name and names he has used.

40.     Having come to the view that the debt did not arise solely from an administrative error by Centrelink, it is not necessary for me to examine the issue of Mr Schmidt’s good faith.

Are there special circumstances why the debt should be waived?

41. A further provision of the Act allows for waiver of debts if there are “special circumstances”:

“1237AADThe 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 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.”

42.     As I have found above, I am satisfied that the debt arose because Mr Schmidt knowingly made a false statement or false representation to Centrelink, in that he was already receiving pension in the name of Wiseman when he applied for pension in the name of Schmidt.  For some years he perpetuated this deception.

43. Even if it could be said that his psychiatric condition makes such a conscious act unlikely, I do not accept that anything about Mr Schmidt’s circumstances are sufficiently special to attract the waiver provision of s 1237AAD. He should repay the debt in its entirety.

DECISION

44.     The decision under review is affirmed.

I certify that the 44 preceding paragraphs are a true copy of the reasons for the decision herein of Ms N Isenberg, Senior Member.

Signed: .....................................................................................
           Associate: B.Dhanasar.

Date/s of Hearing  4 August 2010
Date of Decision  26 August 2010
Representative for the Applicant        Mr Schmidt (Self represented)  
Counsel for the Respondent              Ms S Sirtes
Solicitor for the Respondent              Ms M Palmer