Scott-Brydges and Secretary, Department of Family and Community Services

DECISION AND REASONS FOR DECISION [2002] AATA 1287

ADMINISTRATIVE APPEALS TRIBUNAL )

) No Q2002/23

GENERAL ADMINISTRATIVE DIVISION       )
           Re      GARRY SCOTT-BRYDGES
  Applicant
           And    SECRETARY, DEPARTMENT OF FAMILY AND COMMUNITY SERVICES
  Respondent

DECISION

Tribunal Mr O Rinaudo, Member

Date13 December 2002
PlaceBrisbane

Decision The Tribunal varies the decision under review and determines that there is a debt due to the Commonwealth, for the period 23 May 1990 to 22 March 1993, in the amount of $15,352.06.

.................(Sgd)........................
Mr O Rinaudo
Member
CATCHWORDS
SOCIAL SECURITY – unemployment benefits - overpayment – whether debt properly raised – waiver - whether applicant knowingly failed to comply with his obligations under the Act
Social Security Act 1991

REASONS FOR DECISION

13 December 2002 Mr O Rinaudo, Member

Decision under review

Mr Scott-Brydges appeals against a decision of the Social Security Appeals tribunal of 10 December 2001, which affirmed a decision of Centrelink made 7 July 1999 to raise and recover an amount of $12,664.39 for the period 23 May 1990 to 22 February 1993.
The debt relating to Mr Scott-Brydges' unemployment benefit was raised by Centrelink because they say he was only entitled to the married rate of benefit and during the relevant period he failed to declare his employment and income commencing from June 1991.
Evidence
Mr Scott-Brydges and Mrs Scott-Brydges attended the hearing. They both gave evidence. Evidence was also take from Mr Robert John Hains, former owner, during the relevant period, of the business Games R Us and Mrs Sarah Catherine Henderson formally Mrs Sarah Catherine Hains. The exhibits produced at the hearing were:

Exhibit 1.T Documents (lodged pursuant to s 37 of the Administrative Appeals Tribunal Act 1975);
Exhibit 2.Supplementary T Documents;
Exhibit 3.Witness Statement of Robert John Hains;
Exhibit 4.Witness statement of Sarah Catherine Henderson;
Exhibit 5.Photos;
Exhibit 6.Slip of Paper;
Exhibit 7.Financial records of Carolyn Scott-Brydges (8 pages); and
Exhibit 8.Video.

In their evidence, Mr and Mrs Scott-Brydges described a work relationship with the business Games R Us which was located next to their business Rosewood Cottage in the Myer Centre. Under this arrangement Mr Scott-Brydges did work for the Games R Us store as a security officer and, in return, the owner of that business paid Mrs Scott-Brydges' business, Rosewood Cottage, a weekly sum. Mr and Mrs Scott-Brydges were adamant that because the monies were received by the business Rosewood Cottage and not by either of them, and in particular Mr Scott-Brydges, they did not have to declare the income to Centrelink. Mr Scott-Brydges said that he had considered that as the money was not being paid to him he had not been earning an income.
Mr Scott-Brydges was adamant that he had no idea what the slip of paper (Exhibit 6) was. He said that he did not go under the name Garry Brydges. He had not provided the paper to Mr Hains as alleged and did not know what the reference to FAI and the number meant.
Mr Scott-Brydges said that he had pleaded guilty in the criminal proceedings because he had been told to.
Under cross-examination Mr Scott-Brydges denied that he had given Exhibit 6 to Mr Hains as alleged by Mr Hains in his affidavit (par 10). Mr Scott-Brydges stated that Mr Hains' daughter in law, Ms Henderson, had been employed in the Rosewood Cottage to relieve when Mrs Scott-Brydges was away or during busy periods. The business could not afford to pay Ms Henderson as there was not enough turn-over. The Rosewood Cottage had moved into the Myer Centre in 1991. Ms Henderson had been working for the business between June 1991 and November 1991.
Rosewood Cottage was out of business by Christmas of 1991.
Mr Scott-Brydges said that he did not deny that he worked for Games R Us but that he never received any money for the work. Mr Scott-Brydges did not declare that he was in employment until 1993.
Mr Scott-Brydges stated that there were reasons that he had lied on claim forms about his living arrangements and previous names. He provided an explanation that Mrs Scott-Brydges had been involved with a criminal who had threatened them with harm.
This was why they had moved from Canberra to Queensland. Their daughter had died of AIDS in 1989. This had been a source of great stress in the relationship and they had lived apart for a period. This was supported by a hand written note from their son at page 199 of the T documents.
Mr Hains gave clear and largely uncontested evidence to the Tribunal. He said that Mr Garry Scott-Brydges had been employed by him in a part-time capacity from June 1991 up until December 1991 when he commenced full time employment.
Mr Hains said that he had employed Mr Scott-Brydges as a consultant, even though he had not been happy about this, until February 1993 when he had been employed for wages and shown on the books. Mr Hains confirmed that he had been given the slip of paper Exhibit 6 after requesting Mr Scott-Brydges confirm he had separate workers compensation.
Mr Hains told the Tribunal that in late 1991 he was aware that the Rosewood Cottage business was not financially strong and, wanting to expand his business, he offered Mrs Scott-Brydges $6,000.000 for the business to enable her to pay out her debts and agreed to employ Mr Scott-Brydges on a full time basis.
Mr Hains had video and still photos of Mr Scott-Brydges working in his store and of both of them working on the renovations.
Mr Hains stated that he was aware that his former daughter-in-law had done some part time work for the Rosewood Cottage on only three or four occasions on a Friday evening. Mr Hains confirmed that the payments made to Rosewood Cottage were made solely in respect of the work undertaken by Mr Scott-Brydges for his business Games R Us. Mr Hains also provided a list of payments made to Mr Scott-Brydges and to Rosewood Cottage which are at page 139 of the T Documents.
Mr Hains said that he had the greatest of respect for Mr Scott-Brydges as he had looked after his back. He said that he trusted Mr Scott-Brydges. He said that although they did not socialise at each other's house all that much they had been out together and he regarded them as husband and wife and living at the address given to him.
Ms Henderson gave short evidence that she had worked for Rosewood Cottage on a causal part time basis in about Christmas 1991/1992. She said that to the best of her recollection she had received no more than $1,000.00 for this work.
She says that she does not now recall how she was paid but says she was definitely paid for the work she did. She said that she did not know of any special arrangements between her father-in-law and the Scott-Brydges for her pay.
During the period she knew the Scott-Brydges, from early 1991 to late 1992, Ms Henderson regarded them as a married couple. She said that although she did not socialise with them all that much she had been to their home and could recall on one occasion going out with Mrs Scott-Brydges to a workshop.
Discussion of the Evidence
There are two elements to this appeal. Firstly with respect to the issue of whether Mr Scott-Brydges was living in a marriage like relationship with Mrs Scott-Brydges during the relevant period. Centrelink argue that they were. However, this is disputed, with Mr and Mrs Scott-Brydges describing strange and improbable living arrangements. More about this issue shortly.
Secondly, with respect to the issue of employment Mr Scott-Brydges admits that he was working for Games R Us during the relevant period. He says that he was not required to advise Centrelink about this as he was not being paid. He says that the payments were going to Rosewood Cottage to help pay wages and debts and he saw none of the money. Accordingly he says that he did not get paid therefore he did not have to declare it and therefore there is not debt. It is easy to deal with this issue first.
Simply put Mr Scott-Brydges' view of his employment status is simply wrong. Even with the payment going to Rosewood Cottage the payment was made as a result of his labour. If he had not worked for Games R Us the owner of that business would not have paid Rosewood Cottage any money. Therefore the payment to Rosewood Cottage was the wages earned by Mr Scott-Brydges. It seems clear that Mr Scott-Brydges is simply being obtuse about this issue. It is clear that he worked and that work was rewarded. It matters not who the monies were paid to.
The Tribunal is satisfied that Mr And Mrs Scott-Brydges were patently aware of what they were doing in setting up this payment arrangement. Mr Hains in his evidence says that he was not comfortable with the arrangement but from his point of view he there was no issue. He was getting the labour he needed and was paying for it.
Accordingly the Tribunal has no choice but to find that Mr Scott-Brydges was employed, earned income and did not declare it to Centrelink. The Tribunal finds the arrangement put in place was a deliberate attempt by them to hide the income form Centrelink.
In so far as the living arrangements of Mr and Mrs Scott-Brydges are concerned the explanations given for the many incorrect statements and notifications made by them and given to Centrelink are beyond belief. The Tribunal does of course have the greatest sympathy for them over the death of their daughter from AIDS. The Tribunal is satisfied that this must have been an extremely stressful and sad period for them.
However there is simply no credible evidence that supports their contention that they were not living together in a marriage like relationship during the relevant times. The claim forms and notices, which they have provided to Centrelink are deliberately vague and clearly misrepresentative of the facts. The Tribunal finds that this has been done deliberately to maximise the payments being paid to them.
By way of example, on one occasion Mr Scott-Brydges provided false and misleading information to Centrelink in January 1998 that June O'Brien was his sister-in-law when in fact she is one and the same person as Mrs Scott-Brydges. In May 1990, Mr Scott-Brydges advised Centrelink that he was living in a premises at East Brisbane. Mrs Scott-Brydges was also shown living at the same address but neither had said that they were living with the other. When questioned about this they blamed the form for being ambiguous.
The story, as that it the only way to describe it, told by Mr Scott-Brydges about why he had lied on numerous occasions was simply fantastic and unbelievable. This story involved gangsters, threats of death and other life threatening experiences. Mr Scott-Brydges admitted he had lied on the documents about his not having a previous name and about his living arrangements, but attempted to explain it away as described.
It was difficult to believe anything he said in the witness box and the Tribunal does not accept his evidence as truthful.
On 10 December 1999, Mr Scott-Brydges pleaded guilty to fraud in the amount of $24,076.03 and was convicted. A reparation order under section 21B of the Crimes Act 1914 was made in the amount of $12,664.39.
The debt has since been recalculated by Centrelink and currently stands at $12,581.74 for the period 23 May 1990 to 22 March 1993.
It is clear that Mr Scott-Brydges supplied false and misleading information as to his real name, marital status and income. His real name is Daryl Bickley.
Legislation
The Social Security Act 1991 came into force in 1991. Section 1224 of the Act, as it existed in April 1999 says:
"1224(1) If:
(a)an amount has been paid to a recipient by way of social security payment; and
(b)the amount was paid because the recipient or another person;
(i) made a false statement or a false representation; or
(ii) failed or omitted to comply with a provision of this Act or the 1947 Act;
the amount so paid is a debt due the recipient to the Commonwealth."

In this case there is no doubt that the payments were made to Mr Scott-Brydges because of false statements and failure on his part to comply with the Act. False statements about his true identity and living arrangements and failing to comply with the Act by failing to notify of his income from employment.
Accordingly the Tribunal accepts that there is a debt due to the Commonwealth.
Debts can be waived or written off in certain circumstances. In this context written off means not pursued for the time being. Usually this will be appropriate if the person is not currently earning income but is likely to in the future. However waiver is not appropriate where the debtor is receiving a benefit payment.
Write off in not appropriate in this case.
The debt can be waived under section 1237A of the Act if the debt arose solely as a result of a Centrelink mistake and the overpayment was received in good faith. Again this is not the case here and accordingly the debt cannot be waived under that provision.
Section 1237AAD of the Act if there are special circumstances which make it desirable to waive. However, there are preconditions which must be met before the benefit of the section can be given. The debt must not have arisen as a result of the debtor making a false statement or false representation, or failing or omitting to comply with a provision of the Act. That section says:
"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 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."

Clearly in this case, for reasons stated, the preconditions are not met. Therefore it is unnecessary to consider the balance of the section. The debt cannot be waived under this section.
In submission to the Tribunal the representative of the respondent submitted that the respondent sought to have the debt increased on the basis that as the debt had arose as a result of fraud. Any and all debt arising as a result of the fraud should be repaid. It appears that when calculating the original debt the respondent did not have evidence available to it about what the employment status of Mr Scott-Brydges was during a period between October 1992 and February 1993. Having regard to the evidence of Mr Hains it is now clear that Mr Scott-Brydges was employed during this time.
It was submitted that the debt should have been $2,770.32 greater as a result of this extra period of employment. The Tribunal accepts that it is appropriate to establish the actual amount of any overpayment. In this case that means that the debt will be increased to $15,352.06. As a general principle a debtor should be required to repay the whole of the properly calculated debt.
In this case the Tribunal accepts that the correct debt arising from the false statements and failure of Mr Scott-Brydges to comply with the Act is $15,352.06 which is required to be repaid.
Decision
In the circumstances, the Tribunal varies the decision under review and determines that there is a debt due to the Commonwealth, for the period 23 May 1990 to 22 March 1993, in the amount of $15,352.06.
I certify that the 45 preceding paragraphs are a true copy of the reasons for the decision herein of Mr O Rinaudo, Member
Signed:         Sarah Oliver
  Associate
Date of Hearing  30 August 2002
Date of Decision  13 December 2002
The Applicant Appeared in Person
Solicitor for the Respondent    Mr R McQuinlan, Departmental Advocate

[2002] AATA 1287

13 December 2002

Key Legal Topics

Areas of Law

Social Security Law

Legal Concepts

Overpayment

Unemployment Benefits

Misrepresentation

Breach of Contract

Repayment