SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS and KAISERINA IVA
[2010] AATA 466
•8 June 2010
Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2010] AATA 466
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/1300
GENERAL ADMINISTRATIVE DIVISION ) Re SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES & INDIGENOUS AFFAIRS Applicant
And
KAISERINA IVA
Respondent
DECISION
Tribunal Deputy President P E Hack SC Date8 June 2010
PlaceBrisbane
Decision The decision is affirmed.
.............Signed.................
Deputy President
CATCHWORDS
SOCIAL WELFARE – overpayments and debt recovery – family tax benefit – rent assistance – applicant not an “ineligible homeowner” – security of tenure not a consequence of interest in land – decision under review affirmed
WORDS & PHRASES – “reasonable security of tenure”
A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), s 101, Sch 1, cl 13
Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (Cth), Sch 1, cl 38C
Social Security Act 1991 (Cth), ss 11(4)(b), 11A(10), 13
Calverley v Green (1984) 155 CLR 242
Groth v Secretary, Department of Social Security (1995) 40 ALD 541
Secretary, Department of Employment and Workplace Relations v Vanderpluym [2007] FCA 876; 161 FCR 388
REASONS FOR DECISION
8 June 2010 Deputy President P E Hack SC Introduction
Mr Francis Iva and Mrs Kaiserina Iva are husband and wife. Between April 2007 and October 2009 Mrs Iva received family tax benefit, including an amount of rent assistance. Rent assistance is payable only if the recipient is not “an ineligible homeowner”.
In late 2009 Centrelink took the view that Mrs Iva had not been eligible to receive rent assistance between April 2007 and October 2009 because she had been an ineligible homeowner during that period. That was so, according to Centrelink, as a consequence of an interest that Mr Francis Iva had in real property. A decision was made on 30 October 2009 to raise and recover an alleged overpayment of rent assistance of $8,578.62 from Mrs Iva. The decision was affirmed on internal review.
Mrs Iva applied to the Social Security Appeals Tribunal for a review of the decision. On 9 March 2010, that Tribunal set aside the decision and determined that there had been no overpayment and therefore no debt to raise and recover. The members of that tribunal took the view that Mrs Iva was not an ineligible homeowner at any stage.
The Secretary of the Department of Families, Housing, Community Services & Indigenous Affairs now seeks a review of the decision of the Social Security Appeals Tribunal.
The legislation
Subject to some irrelevant exceptions, the rate of family tax benefit payable to an individual is to be calculated in accordance with the rate calculator in Schedule 1 of the A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) (the Family Assistance Act). At the time when Mrs Iva was first granted family tax benefit, rent assistance was payable if “the individual is not an ineligible homeowner”[1]. As a consequence of amendments made by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (Cth)[2], and with effect from 1 July 2008, that qualification is now found in identical terms in Clause 38C of Schedule 1.
[1] Clause 13 of Schedule 1.
[2] No 146 of 2006.
The expression “ineligible homeowner” is given the same meaning as in the Social Security Act 1991 (Cth)[3]. So far as is presently relevant, s 13 of the Social Security Act defines an ineligible homeowner in this way:
[3] See s 3(1), Family Assistance Act.
“ineligible homeowner means a homeowner other than:
(a)a person who is a homeowner by virtue of paragraph 11(4)(c); or
(b)a person who:
(i) is absent from the person’s principal home, in relation to which the person is a homeowner; and
(ii) is personally providing a substantial level of care in another private residence for another person who needs, or in the Secretary’s opinion is likely to need, that level of care in a private residence for at least 14 consecutive days; and
(iii) has been absent from the principal home for less than 2 years while providing care as described in subparagraph (ii); or
(c)a person who is in a care situation but is not residing in a retirement village; or
(d)a person who pays amounts for the use of a site for a caravan or other vehicle, or a structure, that is the person’s principal home; or
(e)a person who pays amounts for the right to moor a vessel that is the person’s principal home.”
The term “homeowner” is defined by s 11(4)(b) of the Social Security Act in the case of a member of a couple (as Mrs Iva is and was) in this way:
“(4)For the purposes of this Act:
(a)…
(b)a person who is a member of a couple is a homeowner if:
(i)the person, or the person’s partner, has a right or interest in one residence that is:
(A)the person’s principal home; or
(B)the partner’s principal home; or
(C)the principal home of both of them; and
(ii)the person’s right or interest, or the partner’s right or interest, in the home gives the person, or the person’s partner, reasonable security of tenure in the home; and
(c)…”
The meaning of “reasonable security of tenure” is given by s 11A(10) of the Social Security Act in these terms:
“(10)If a person has a right or interest in the person’s principal home, the person is to be taken to have a right or interest that gives the person reasonable security of tenure in the home unless the Secretary is satisfied that the right or interest does not give the person reasonable security of tenure in the home.”
Not surprisingly, amounts of family tax benefit paid to a person who is not entitled to be paid that amount are debts due to the Commonwealth[4]. The A New Tax System (Family Assistance) (Administration) Act 1999 (Cth) allows for the waiver of the right to recover in some circumstances. The only provision having relevance here is s 101 of that Act. It provides:
[4] A New Tax System (Family Assistance) (Administration) Act 1999 (Cth), s 71.
“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 the family assistance law; 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.”
Factual background
There is no dispute about the facts. In late 2005, before Mr and Mrs Iva married, Mr Iva’s parents, Mr Falaniko Iva and Mrs Sese Iva, lived in premises at Pauline Street and owned a rental property at Serissa Street. They were looking to acquire another property that could also be rented out. They decided to purchase a house and land package, that is, vacant land with a contract to erect a dwelling house, at Monivae Circuit, Eagleby. They approached a finance broker to assist with obtaining a loan but were told that their income was insufficient to satisfy the proposed lender. Mr Francis Iva was asked, and agreed, to become a joint borrower so that his income could be included for the purposes of the loan application. The loan was approved. The purchase, and then the construction of the house went ahead.
Unbeknownst to Mr Francis Iva, when the land purchase was completed on 1 September 2005, he became a registered proprietor of a 1/10th interest as a tenant in common with Mr Falaniko Iva (4/5th) and Mrs Sese Iva (1/10th). His interest was subject to a registered mortgage in favour of the lender. Mr Iva says, and I accept, that he was unaware until about October 2009 that he was a co-owner of the house at Monivae Circuit.
In the meantime Mr and Mrs Iva married in September 2005. They commenced living together with Mr Iva’s parents at Pauline Street. After staying there for three weeks or so they moved into the rental property at Serissa Street as tenants. They paid rent of $250 per week.
The construction of the house at Monivae Circuit was completed in about April 2006. Mr and Mrs Iva then occupied that house, as tenants, from early May 2006, together with a sister of Mr Iva and her husband. They paid $200 of the weekly rental of $400. The sister and her husband paid the balance. The sister and her husband left the house in August 2008 and Mr and Mrs Iva have been solely responsible for the rent since then. The rent is now $360 per week.
Mr Francis Iva has never made loan repayments nor has he paid rates or insurance or other outgoings on the house. Mr Iva no longer has an interest in the land. His 1/10th interest was transferred to his father on 23 April 2010 for no consideration.
I add, for completeness, that the Social Security Appeals Tribunal satisfied itself that the rent paid by Mr and Mrs Iva accorded with rental payable for comparable houses in the area. The Secretary does not contend to the contrary.
An inelegible homeowner
Mrs Iva does not satisfy any of the exceptions in the definition of ineligible homeowner and thus will be an ineligible homeowner if she is a homeowner as defined. That definition, in s 11(4)(b) of the Social Security Act, applied to Mrs Iva’s particular situation, requires that three elements be satisfied:
(a)that Mrs Iva or Mr Iva have a right or interest in a residence;
(b)that the residence be the principal home of both of them; and
(c)that the right or interest gives Mr Iva reasonable security of tenure.
There is no doubt that the residence at Monivae Circuit is, and has been since early May 2006, the principal home of Mr and Mrs Iva. The answers to the other two questions are not so clear.
A right or interest in the residence
It seems plain enough that at all material times Mr Iva had a legal interest in the land at Monivae Circuit. He was the registered proprietor, as tenant in common, of a 1/10th interest in the land. But I would have thought that on ordinary principles Mr Iva held his legal interest on a resulting trust for his co-owners, they being the persons who provided the purchase price, the loan repayments and all the outgoings on the residence. The rule was expressed in this way by Gibbs CJ in Calverley v Green[5]:
“Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser.”
The relationship between Mr Francis Iva and his father is one where, traditionally, there has been a presumption of advancement but that presumption is rebuttable. The evidence here is that Mr Falaniko Iva and Mrs Sese Iva did not intend that Mr Francis Iva would benefit from his legal interest. His involvement was merely for the purpose of demonstrating to the lender a capacity to repay and to provide a further source of repayment in case of need. It may then be readily concluded that the presumption of advancement is rebutted.
[5] (1984) 155 CLR 242, 246.
In these circumstances I am satisfied that Mr Iva held his legal interest on a resulting trust for Mr Falaniko Iva and Mrs Sese Iva. But that conclusion does not detract from the indisputable fact that Mr Iva had an interest in the land. It does however go to the other question whether that interest gave him or Mrs Iva reasonable security of tenure in the home.
Reasonable security of tenure
Mr and Mrs Iva have, it may be inferred, reasonable security of tenure in Monivae Circuit. The question is whether it is Mr Iva’s interest in the residence that gives that security of tenure or whether it is some other relationship. A finding of the former may be made by an analysis of the proper character of the relationship or by resort to the deeming provision in s 11A(10) of the Social Security Act.
I am unable to conclude that it is Mr Iva’s interest that gives him and Mrs Iva reasonable security of tenure. There is nothing in the interest that Mr Iva holds which, of itself, gives security of tenure. His 1/10th interest could not overcome the interests of his co-owners were they to seek to resume occupation of the premises. As the holder of the bare legal title to an undivided part of the whole Mr Iva would have standing to seek the appointment of statutory trustees for sale of the land pursuant to Div 2 of Part 5 of the Property Law Act 1974 (Qld). But since he holds his interest subject to a resulting trust he would hold any benefit on the same trusts. And, were he and Mrs Iva to cease paying rent or otherwise breach the terms of the tenancy agreement his interest would not assist Mr and Mrs Iva in resisting an application for vacant possession or other claim for damages.
Mr Black of counsel, who appeared for the Secretary, submitted that Mr Iva’s interest as a co-owner permitted him a right of occupation but that right must be qualified in a case such as this by the absence of any beneficial interest in the land. The case for the Secretary was put on the footing that an “objective assessment”[6] of the relationship between Mr Iva and his parents could demonstrate the type of “symmetrical relationship” described by Greenwood J in Vanderpluym. But that case, in my view, was entirely different. The applicants there were renting from a proprietary company of which one of the applicants was the sole director and member. There was, in reality, a symmetrical relationship between landlord and tenant. It could not be reasonably expected that one applicant, qua director of the landlord company, would take steps adverse to his interests as a tenant. That is not the situation that arises here.
[6] See Secretary, Department of Employment and Workplace Relations v Vanderpluym [2007] FCA 876; 161 FCR 388 at [60].
The Secretary submitted that Mr Iva was entitled to remain in possession of the property as a co-owner. That may be right as a statement of the legal principle but given that Mr Iva was unaware of his interest it does not explain the continued occupation. Where the relationship of landlord and tenant appears genuine on its face, where the terms are demonstrably being met (by reference to the evidence of regular payment and receipt of rent at the rate specified), where the terms of the tenancy accord with the going rate for similar properties and where there is no suggestion that the tenancy is not intended to take effect according to its terms, I find it impossible to regard the present arrangement as at all similar to that under consideration in Vanderpluym. The security of tenure that Mr and Mrs Iva enjoy arises as a consequence of the tenancy, not as a consequence of Mr Iva’s legal interest in the land. Thus I am not satisfied that Mr Iva’s interest gave reasonable security of tenure.
It remains then to consider the effect of s 11A(10) of the Social Security Act. Without more that sub-section would require the conclusion that Mr Iva’s legal interest deems him to have from that interest reasonable security of tenure unless the Secretary (or the Tribunal in the stead of the Secretary) is satisfied that the interest does not give reasonable security of tenure. I am so satisfied for the reasons I have already articulated. Mr Iva’s security of tenure is a consequence of the tenancy, not his legal interest.
I would then affirm the decision under review.
I should add that had I reached a contrary conclusion, I would in any event have been satisfied that the circumstances of the present case were sufficiently “special” as to warrant waiver of the debt under s 101 of the A New Tax System (Family Assistance) (Administration) Act 1999. In that regard, I note what Kiefel J said in Groth v Secretary, Department of Social Security[7]:
[7] (1995) 40 ALD 541 at 545
“The phrase ‘special circumstances’, it has been said, although imprecise is sufficiently understood not to require judicial gloss: …and for present purposes it is sufficient to observe that it would require something to distinguish Mr Groth's case from others, to take it out of the usual or ordinary case. That was, I consider, the only enquiry to be undertaken in this case. It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary.”
The present case is, in my view, one which would produce a result that was unfair, unindented or unjust were it to have been concluded that Mr Iva did have security of tenure as a consequence of his legal interests. He gained no benefit from the arrangement, he paid, with his wife, rent at a proper rate to his parents and he is now burdened with the obligation of a borrower with his parents in a property in which he has now no interest. For those reasons I would have waived the debt had I been satisfied, as I am not, that the decision of the Social Security Appeals Tribunal was incorrect.
I certify that the 25 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed: ............Signed........................................................
AssociateDate of Hearing 8 June 2010
Date of Decision 8 June 2010
Date of written reasons 24 June 2010
Counsel for the Applicant Mr M Black
Solicitors for the Applicant Sparke Helmore
Respondent Self-represented
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