Shires and Secretary, Department of Employment and Workplace Relations

[2007] AATA 1080

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2007] AATA 1080

ADMINISTRATIVE APPEALS TRIBUNAL      )

)       No Q2005/709

GENERAL ADMINISTRATIVE DIVISION		)
Re		MAUREEN  SHIRES

Applicant

And SECRETARY, DEPARTMENT
OF EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Mr RG Kenny, Member

Date22 February 2007  

PlaceBrisbane

Decision The Tribunal affirms the decision under review.

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

RG Kenny
  Member

CATCHWORDS

SOCIAL SECURITY – benefits and entitlements - parenting payment – payments made at single rate – marriage-like relationship – member of a couple at the relevant time – overpayment a debt due to the Commonwealth - no basis for writing off or waiver of debt.

Administrative Appeals Tribunal Act 1975 (Cth) s 37
Social Security Act 1991(Cth) ss 4, 1223, 1236, 1237A, 1237AAD

Social Security (Administration) Act (Cth) 1999 s 68

Re Secretary, Department of Family and Community Services and Bell [2000] AATA 252
Beadle v Director-General of Social Security (1985) 7 ALD 670
Re Beadle and Director-General of Social Security (1984) 6 ALD 1
Groth v Secretary, Department of Social Security (1995) 40 ALD 541

REASONS FOR DECISION

22 February 2007   Mr RG Kenny, Member      

Background

1.      Maureen Shires (the applicant) received social security payments in the form of parenting payment in accordance with the Social Security Act 1991 (the Act).  The payments were made on the basis that she was not a member of a couple.  On 13 May 2005, an officer of Centrelink, for the Secretary, Department of Employment and Workplace Relations (the respondent), determined that she had been living with David Solinas in a marriage-like relationship during the period from 25 September 2002 until 5 April 2005 (the relevant period).  Accordingly, the rate of payment was reduced.  The decision-maker also determined that, during the relevant period, she had been overpaid an amount of $30,410.93 which was a debt due by her to the Commonwealth.  That decision was affirmed by an authorised review officer on 4 August 2005 and, in turn, by the Social Security Appeals Tribunal on 10 October 2005.  On 7 November 2005, Ms Shires applied for review of that decision by the Administrative Appeals Tribunal (the Tribunal).

Hearing

2.      Ms Shires attended the hearing.  She was represented by Ms T M Westman.  The respondent was represented by Mr R McQuinlan, departmental advocate.

3. The material taken into evidence included the documents prepared in accordance with section 37 of the Administrative Appeals Tribunal Act 1975.

Issues and Legislation

4.      It is not disputed that Ms Shires met the qualifying criteria during the relevant period for parenting payment.  The rate of that payment to a person is reduced while the person is living as a member of a couple as regard must be had to the earnings of the person’s partner.  Ms Shires and Mr Solinas are not married to each other and, in that case, the criteria for determining the nature of their relationship are set out in paragraph 4(2)(b) of the Act.  The only aspect of that provision which is in dispute is whether, in accordance with subsection 4(3) of the Act, Ms Shires and Mr Solinas were in a marriage-like relationship during the relevant period.  That provision, in so far as relevant,  reads:

“4(3)In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:

(a)       the financial aspects of the relationship, including:

(i) any joint ownership of real estate or other major assets and any joint liabilities; and

(ii) any significant pooling of financial resources especially in relation to major financial commitments; and

(iii) any legal obligations owed by one person in respect of the other person; and

(iv) the basis of any sharing of day-to-day household expenses;

(b)       the nature of the household, including:

(i)any joint responsibility for providing care or support of children; and

(ii)       the living arrangements of the people; and

(iii)      the basis on which responsibility for housework is distributed;

(c)       the social aspects of the relationship, including:

(i)whether the people hold themselves out as married to each other; and

(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and

(iii) the basis on which the people make plans for, or engage in, joint social activities;

(d)       any sexual relationship between the people;

(e)       the nature of the people's commitment to each other, including:

(i)        the length of the relationship; and

(ii) the nature of any companionship and emotional support that the people provide to each other; and

(iii) whether the people consider that the relationship is likely to continue indefinitely; and

(iv) whether the people see their relationship as a marriage-like relationship.”

Evidence

Ms Shires

5.               Ms Shires gave the following account of her dealings with Mr Solinas.  They met in 1998 and, after socializing together for a few months, they began a sexual relationship which lasted for about two years.  She ended it because he was "not pulling his weight to support the children", because he was “drinking too much alcohol” and because she felt the relationship was "going nowhere”.  Since then, they have remained good friends.  In 1999, Mr Solinas purchased a house at 25A West Street, Toowoomba.  Ms Shires assisted him in making the purchase by lending him $4,000 and she lived there as a rent-paying tenant.  He repaid those monies to her over the next couple of years.  In 2002, she invited him to move to that address and to occupy a caravan which was at the rear of the house.  She did so because of security concerns for herself and her children and also because she was aware that he was in some financial difficulty.  Prior to this, he had lived at various addresses in Toowoomba including a property at 8C West Street which he owned but was forced to sell to ease his financial problems.  In September 2002, Ms Shires contacted Centrelink and enquired whether such a move would impact on her parenting payment.  Mr Solinas then moved into the caravan where he was self-contained in relation to preparing meals and shopping but he used the laundry and bathroom facilities in the house. 

6.      At 25A West Street, in addition to the house and caravan, there was a detached garage.  Mr Solinas decided to convert this into an independent unit (granny flat) for his use.  He sought approval from the Toowoomba City Council to make the alterations.  While Ms Shires was renting the house, these were completed to the extent then permitted by the council but this did not include bathing, toilet or laundry facilities.  After moving into the granny flat, Mr Solinas continued to share those facilities in the house.  He also used the cooking facilities in the house from time to time and was able to come and go from the house as he pleased.  Ms Shires said that she had moved out of the house after the relevant overpayment period, that Mr Solinas had continued to seek approval for the granny flat to be an independent dwelling, and that this outcome had now been achieved. 

7.      Ms Shires said that, while she and Mr Solinas were residing at 25A West Street, there was no sexual relationship between them; that they did not dine together; that they did not allocate household chores because each of them cleaned and tidied common areas after use; that she did his washing because it was convenient to do so along with that of the rest of her family; that Mr Solinas was responsible for the maintenance of the grounds; that she was able to negotiate a reduction in her rent payments because of the arrangements; and that they shared no joint social activities as partners or de-factos.

Mr Solinas

8.      Despite Ms Shires’ descriptions of Mr Solinas as a close friend, he did not give evidence at the hearing.  Nevertheless, in evidence was a record of a telephone conversation on 3 August 2005 between a Centrelink officer and Mr Solinas.  He said that, while at 25A West Street, he had stayed in the granny flat at the side of the house.  He did not mention that he had lived in a caravan.  He said that the flat was only a bedroom; that he “showered at a mate’s place”; that he had dinner at the pub and breakfast at work; that he did his washing at a laundromat; that he took Ms Shires to one work function only; that there was no other social life between them; that any attendance at a hotel involved them arriving and leaving separately; and that he and Ms Shires had never been "boyfriend and girlfriend”.  He conceded that he provided assistance at the school for her son and that this was only on one occasion when she had not been available.

9.      In response to a request from Centrelink, Mr Solinas advised, on 15 March 2005, that he had been residing at 1/9 Bullock Street since approximately July 2004.  A Centrelink officer who processed that letter completed a memo in which the opinion was expressed that the signature on the letter did not match the signature of Mr Solinas as it appeared on various rent certificates.  Attached to the document provided by Mr Solinas was a note, apparently from the owner of the Bullock Street premises, to confirm that arrangement.  The signature was indecipherable.  However, in a second note, dated 9 September 2005 and apparently from the same person, the writer identified himself as Shane Hughes.  It again stated that Mr Solinas had lived at Bullock Street but had used 25A West Street as his postal address.  

Mrs Hohnke

10.     Mr Solinas is a butcher by trade and, during the relevant period, was employed by the "Mad Butcher" in Toowoomba. The principal of that business was Leanne Hohnke.  She gave oral evidence and, on 25 October 2003 and 10 March 2005, she completed questionnaires which were sent to her by Centrelink and which requested information about Mr Solinas’ employment and living arrangements.  She advised that Mr Solinas had been employed by her from June 1998 until the business stopped trading in February 2005.  In both documents and in evidence, she said that she believed that he was living in a de facto relationship with Ms Shires.  For employment records, he had nominated Ms Shires as his next of kin and as the person to contact in an emergency. 

11.     Mrs Hohnke described Mr Solinas as a friend and said that he and Ms Shires would visit her and her husband at their home from time to time and share a drink with them.  She and her husband would visit 25A West Street on 3 or 4 occasions per year.  This was sometimes in relation to the business vehicle, which Mr Solinas parked at that address, and other times it was a social visit.  They would go into the house and usually have a drink with Mr Solinas and Ms Shires.  Mrs Hohnke was aware of the granny flat project and said that she and her husband had donated a sliding door, residual to renovations in their own home, which had been incorporated into the construction.  She also said that her impression was that Mr Solinas lived in the house at 25A West Street.  When she and her husband visited, he always invited them into the house.  She said that he told her that the granny flat was to be used as “a place for the kids to play”.

12.     Mrs Hohnke said that, from time to time, she would also see Ms Shires and Mr Solinas having a drink at the local Gowrie Road Hotel and that they always presented as a couple.  She said that they also attended work-related parties and Christmas functions at her home.  She said that the invitations for these were made to "staff and family" and that there was no invitation to friends.  She said that she observed them from time to time at those functions and considered that they joined in and did so together, and presented themselves as a couple.  She said that they talked during the evening together and were attentive to each other. She said that she was aware that Mr Solinas was a consumer of alcohol but that she had never observed him in a drunken state.

13.     Mrs Hohnke said that, from time to time, Mr Salinas would drop into her house to borrow tools or to take some of the plants that were being removed from her garden.  She said that, on all of those occasions, Ms Shires was accompanying him.

14.     Mrs Hohnke recalled a time when Ms Shires needed assistance when recuperating from procedures related to varicose veins treatment.  At that time, Mr Solinas requested a change to his roster to enable him to provide assistance to her and her children.  They arranged a later commencement time which enabled him to take the children to school.  She also recalled 2 or 3 occasions when the school made telephone calls to the butcher shop to speak to Mr Solinas.  She said that he would then take time off and told her that he was going to the school in relation to a concern with the children.  She also said that she recalled occasions when he took time off to take the children to Brisbane to assist them in their travel to New Zealand to see their father.  Mrs Hohnke said that she clearly recalled completing a letter to support a loan application which Mr Solinas was making and which, he told her, was for the purpose of purchasing a motor vehicle for Ms Shires’ daughter.

15.     Mrs Hohnke recalled an occasion when Mr Solinas expressed concern that his working clothes did not present as well as those of Mr Hohnke.  She said that she confided in him the particular method that she used in washing them and he said that he would tell Ms Shires so that she could implement changes in her washing regimen.

16.     Mrs Hohnke said that she had been aware that Mr Solinas was seeking to purchase a home and she and her husband had provided some guidance by inspecting some of the prospective premises.  She said that Ms Shires had been present and references to what Mr Solinas intended were phrased in terms of "we this; we that!” which suggested that he and Ms Shires were acting jointly.

Observations on the evidence

17.     I do not accept as truthful the statements of Mr Solinas.  He did not give evidence and, clearly, was not available for cross-examination.  His version of events, summarised in paragraphs 8 and 9 above, are contradicted by that of Ms Shires but, more importantly, by that of Mrs Hohnke.  In particular, that relates to his references to the use of showering, eating and washing facilities; to social activities; the extent that he gave assistance to Ms Shires’ children; the existence of an intimate relationship with Ms Shires; and to his change of address to Bullock Street towards the end of the relevant overpayment period.

18.     The evidence of Ms Shires contains many inconsistencies and I do not accept her as a witness of truth.  On the other hand, Mrs Hohnke gave her evidence in a forthright and convincing manner and, to the extent that differences arise in the evidence that they gave, I accept as correct that of Mrs Hohnke.

19.     It was noted above that Ms Shires sought information from Centrelink about Mr Solinas moving to 25A West Street.  A record of conversations was kept on her file.  In an interview on 11 September 2002, Ms Shires raised the prospect of Mr Solinas moving into the caravan on the property and sharing the cooking and washing facilities in the house whilst he was renovating the granny flat.  The Centrelink officer advised that this would be appropriate if it was temporary and there was no relationship between them.  At that stage, Ms Shires referred to the granny flat as being self-contained.  In a follow-up by Centrelink on 25 March 2003, Ms Shires again advised that the granny flat was self-contained and that there would be no sharing of any common areas of the house.  While Centrelink gave approval to the new arrangements, it was on the basis that it would be temporary and would lead to the completion of a separate and independent dwelling.  Clearly, this did not happen during the relevant period as, on Ms Shires’ evidence, the sharing of facilities continued throughout that period.

20.     Ms Shires was interviewed by a Centrelink officer on 24 February 2005.  The officer recorded Ms Shires as having provided the following information.  She described Mr Solinas as a "binge drinker" with whom she did not want to be involved and who was sleeping with her daughter.  She said that she had discussed having a child with him, had attended his aunt's funeral and subsequent reading of her will and had accompanied him to Christmas functions with his family.   She said that he was nominated as the contact at the children's school in the event of any problems arising in that context.  She also said that he had been called in to the school to discuss problems with her son.

Factors in subsection 4(3) of the Act

Financial aspects of the relationship

21.     Ms Westman submitted that the financial dealings between Ms Shires and Mr Solinas did not support a marriage-like relationship and that it was merely the relationship of a landlord and tenant.  I do not accept that submission.  While there is no evidence of any joint ownership of assets by Ms Shires and Mr Solinas, it is significant that, though the loan may have been repaid, she was willing to lend money to him to assist in the purchase of the house in West Street. 

22.     Documents in evidence indicate that Ms Shires maintained independent vehicle registration and animal registration as well as individual responsibility for the payment of utilities to 25A West Street and the provision of certain services such as storage of furniture.  Nevertheless, there was at least one occasion where there was an assumption of an obligation by Mr Solinas in relation to a loan for a household appliance.

23.     In September 2004, a vacuum cleaner was purchased on the basis of a loan which was taken with International Acceptance.  In a record of loan transactions, Mr Solinas is recorded as a “Co-Borrower with spouse (including de facto)" in the amount of $3380.  A letter to Mr Solinas, dated 15 September 2004 from International Acceptance, informed him that his application for finance had been accepted.  A copy of the agreement was also in evidence and it nominates both Ms Shires and Mr Solinas as debtors and their address as 25A West Street.  Documentation from the appliance company describes them as “Mr and Mrs”.  Ms Shires said that this was not information that had been provided but had been entered by the vacuum cleaner salesperson.  Nevertheless, no correction of that entry had been prompted by her. Ms Shires said that she had full responsibility for the purchase and had made all of the repayments herself.  She said that Mr Solinas believed that he was witnessing the contract rather than assuming responsibility for the debt.  However, the documentation made it clear that he was assuming responsibility for the debt.

24.     Periodically, rent certificates were provided to Centrelink by Ms Shires.  In evidence were such documents completed in November 2003 and June 2004.  Therein, she advised that she was living at 25A West Street with her three children and that she was paying rent to Mr Solinas in the amount of $145 per week.  That document also bears the signature of Mr Solinas as landlord and he gave his address as 8C West Street at those times.  In the interview on 24 February 2005, reference was made to Mr Solinas’ address of 8C West Street in the rent certificates of 2003 and 2004 and she explained this in her evidence by saying that he lived there at times.  She agreed that Mr Solinas had sold that property in 2002 and said that he must have been confused when he completed the certificates and that this might have been due to excessive alcohol intake.  I do not accept that explanation and note that the certificates spanned a period of some 8 months.  I also note the apparent differences in the signatures of Mr Solinas as they appear on those rent certificates and in the letter he wrote to Centrelink on 15 March 2005 (see para 9 above).

25.     A series of rent receipts for the period from 21 September 2003 to 13 February 2004 was provided by Ms Shires.  In the main, these were dated on a weekly basis and there were also several undated receipts.  None of the receipts indicate the period of time to which the payment relates and each of them was in the amount of $135 rather than the amount noted in the rent certificates. 

26.     Although she was the tenant, Ms Shires made rate payments to the Toowoomba City Council in relation to the property at 25A West Street.  Bank account withdrawals show that these were in the amounts of $50 per week from 2 July 2004 to 10 September 2004 and, from 17 September 2004 to 29 October 2004, at $25 per week. A letter from the council, dated 18 July 2005, advises that direct debits from her bank account were authorised by Ms Shires.  Ms Shires agreed she had paid these amounts and said that she did so because she was aware that Mr Solinas was experiencing financial difficulty and was falling into arrears in his rate payments.  She also said that her rent payments were reduced by the amounts that she paid to the Council. She agreed that this was not reflected in the rent receipts that were in evidence. She said that this was because the amount of rent was reduced by the amount of the rate payment but that the receipt was still made out for the full amount. Mr Solinas was engaged in stable employment throughout the period when Ms Shires made rate payments on Mr Solinas’ property.  No reference was made to any reason why direct debits could not be made from his wages to meet that commitment.  Nevertheless, for present purposes, Mr Solinas and Ms Shires must have shared the information about his capacity to make rate payments and for her to do so on his behalf.  That interest in his financial affairs was also evident at the commencement of his period of time at 25A West Street as Ms Shires said that he was in financial difficulty at that time.  I am satisfied that those matters take the relationship beyond that which one would expect between a mere landlord and tenant.

Nature of the household

27.     In evidence was a copy of a school record in which Mr Salinas is nominated as the emergency contact for Ms Shires’ children.  There, he is described as a "good friend” to the children.  Ms Shires agreed that she had nominated him as a contact and said that this was because she did not have a lot of family living nearby.  She said that he had only attended the school on one occasion and that he did not attend school events and did not help the children with homework. That does not accord with the evidence of Mrs Hohnke who recalled 2 or 3 occasions when the school made telephone calls to the shop to speak to Mr Solinas.  Her evidence also was that Mr Salinas’ working hours were adjusted whilst Ms Shires was incapacitated and this was done to enable him to take the children to school.  This interaction indicates both willingness of Ms Shires to place reliance upon and trust in Mr Solinas and his willingness to accept the associated responsibility.

28.     Differing versions have been given on living arrangements in the house.  I am satisfied that Mr Solinas did utilise the facilities of the house during the relevant period and that he spent at least a significant part of his time there.  In particular, I note the evidence of Mrs Hohnke that he would invite them into the house on the occasions of their visitations and her perception of him in that role.

29.     Also in evidence was a quotation from O'Brien Glass for the replacement of a window at 25A West Street.  This was directed to Ms Shires rather than to Mr Solinas, the owner of the premises.  Ms Shires said that Mr Solinas was often busy and away from West Street and so there were times when she was involved in organising alterations on his behalf.  Whilst that may explain the role played by a tenant in giving access to a tradesperson so that a quotation for work can be made, it doesn't explain why a quotation would be directed other than to the owner of the premises.

Social aspects of the relationship

30.     Mr Solinas, Ms Shires and Mrs Hohnke gave differing versions of the nature of the social relationship in this matter.  Ms Shires said that she had been to functions at Mrs Hohnke’s house on three occasions with Mr Solinas.  She said that the reason for this was that he would consume alcohol and she merely attended so that she could drive him home safely.  She said that they did not attend as partners and that he had no involvement with her at those functions. As an example, she said that he did not approach her to offer her coffee or other drink.  Mrs Hohnke’s evidence was in stark contrast to that version.  I accept her evidence of the frequency of visits by Mr Solinas and Ms Shires to her home both for organized functions and for occasional visitations.  As noted above, Mrs Hohnke’s observations of them at functions and their social interaction was consistent with them being members of a couple. 

31.     Ms Shires’ description of the nature of the visits to 25A West Street by Mr and Mrs Hohnke was at odds with the description provided by Mrs Hohnke.  Ms Shires agreed that there were occasions when Mrs Hohnke and her husband would come to the house but she said that this was not for any social purpose.  Rather, the van belonging to the butcher shop was kept at that address to avoid being vandalized on weekends.  She said that any visitations made by the Hohnkes’ were solely to collect the vehicle and she denied any socializing or that any drinks had been taken by them on those occasions.  I reject her account of those occasions and accept that of Mrs Hohnke.

32.     Descriptions of attendances at the local hotel also differ.  Ms Shires said that there were no planned attendances together by her and Mr Solinas at the local hotel and that, on occasion, they might go there with a group of others or independently and see each other there.  That was not consistent with the evidence of Mrs Hohnke.  Further, Centrelink officers conducted interviews with the manager and staff of the Gowrie Road Hotel in Toowoomba and were advised that Ms Shires and Mr Salinas attended the hotel together regularly.  Again, I accept the evidence of Mrs Hohnke.

Sexual aspects

33.     There were inconsistencies in the evidence relating to the sexual relationship between Ms Shires and Mr Solinas.  Ms Shires conceded that this did exist before but not after she occupied 25A West Street.  Mr Solinas, in his statement, denied that they had ever been in a “girlfriend/boyfriend” relationship.  This would seem to deny that any sexual relationship ever existed.  I have noted that, at the interview on 24 February 2005, the Centrelink officer recorded Ms Shires as having said that she had discussed having a child with Mr Solinas.  While this points to a level of intimacy between them, the evidence on this matter is such that no finding can be made.  However, it is but one of the various matters which must be taken into account.

Nature of commitment

34.     Ms Shires and Mr Solinas have known each other over a long period of time.  It was her evidence that concerns about security for herself and the children was one of the reasons for inviting him to live at 25A West Street.  On Ms Shires’ evidence, they continue to be good friends.  In that context, it is surprising that Mr Solinas did not give evidence in support of the various contentions that she has raised. 

35.     A general tenancy agreement, dated 11 May 2005, between Mr Solinas and a real estate firm in Toowoomba records that Mr Solinas agreed to rent other premises from 12 May 2005 for a period of six months. Also, a statement from his current employer, in response to a Centrelink request, advised that Mr Salinas had, for employment purposes, described himself as a single man and his next of kin and the name of a person to contact in the case of emergency as a person other than Ms Shires.  Those changes do not necessarily reflect any change in the relationship between Ms Shires and Mr Solinas and I am satisfied, particularly from the timing of those changes, that they were made because of the decision of the respondent concerning Ms Shires’ overpayments. 

Consideration

36.     Sub-section 4(3) of the Act requires that regard be had to all of the circumstances of the relationship between Ms Shires and Mr Solinas. In Re Secretary, Department of Family and Community Services and Bell [2000] AATA 252 at [24], it was stated that the Tribunal is:

“to give regard to the specified criteria in a real sense, i.e. to ensure sufficient and adequate regard is given to all the specified criteria; and to take the criteria specified by the statute into account and to give weight to them as a fundamental element in the decision-making process.”

37. Having regard to the factors in sub-section 4(3) of the Act, I am satisfied that Ms Shires and Mr Solinas were in a marriage-like relationship throughout the relevant period. Accordingly, this means that they were members of a couple at the time of the decision under review for the purposes of subsection 4(2) of the Act. On various occasions, including 4 December 2001, Ms Shires was sent a notice by the respondent in accordance with section 68 of the Social Security (Administration) Act 1999.  This notice required her to advise Centrelink if any one of a range of things occurred and for her to do so within 14 days.  One of these was whether or not she started living with someone of the opposite sex.  On the basis of the finding above, Ms Shires was in such a relationship and failed to advise Centrelink.  Ms Shires was overpaid during the relevant period and I am satisfied that this overpayment was correctly calculated by the respondent at $30,410.93.  In accordance with subsection 1223 (1) of the Act, this is a debt due by her to the Commonwealth.

38.     I have given consideration to whether the debt should be written off as provided for in section 1236 of the Act or whether it should be waived as provided for in subsection 1237A(1) and section 1237AAD of the Act.  

Should the Debt be written off?

39.     Section 1236 of the Act, in part, reads:

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.

40.     The only component of that provision of potential relevance in this matter is that relating to lack of capacity to repay the debt.   Ms Shires will be required to repay the debt to the respondent through monies she earns or through deductions from her income support payments.  Clearly, the debt is large.  Nevertheless, I am satisfied that there is no lack of capacity for the debt to be repaid albeit over a long period.  In that situation, the debt should not be written off.

Waiver of Debt

41.     The matters relating to waiver of a debt due to sole administrative error by the Commonwealth and to the applicant’s special circumstances arise under subsection 1237A(1) and section 1237AAD, respectively.  In so far as relevant in this matter, they read:

1237A.(1)       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.

1237A.(1A)  Subsection (1) only applies if:

(a) the debt is not raised within a period of 6 weeks from the first payment that caused the debt; or

(b) if the debt arose because a person has complied with a notification obligation, the debt is not raised within a period of 6 weeks from the end of the notification period;

whichever is the later.

1237AAD.      Waiver in special circumstances

1237AAD.  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.

waiver under s 1237A

42.     The first element to be satisfied under sub-section 1237A(1) of the Act is that the debt must be attributable solely to an administrative error made by the Commonwealth.  I am satisfied that that was not the situation in Ms Shires’ case and that the debt can not be waived on that basis.

waiver under s 1237AAD

43.     For waiver of a debt under 1237AAD of the Act, it must be the case, amongst the other requirements of the provision, that there are special circumstances other than financial hardship alone that make it desirable to waive the debt.  The Act provides no guidance as to the meaning of the term “special circumstances” in that provision.  In Beadle v Director-General of Social Security (1985) 7 ALD 670, the Full Federal Court stated that it was not possible to lay down precise limits or precise rules for the meaning of the term. The Court indicated that this would depend upon the circumstances of each particular case but commented that, even though the term lacks precision, it was sufficiently understood “not to require judicial gloss" (at 674). There, the Court affirmed the decision of the Tribunal (Re Beadle and Director-General of Social Security(1984) 6 ALD 1) where (at 3) the Tribunal had acknowledged that the term was "incapable of precise or exhaustive definition" and that, to be special, the circumstances "must have a particular quality of unusualness that permits them to be described as special".

44.     In Groth v Secretary, Department of Social Security (1995) 40 ALD 541, Kiefel J, after referring to the Federal Court's decision in Beadle’s case, observed (at 545) that special circumstances:

“would require something to distinguish... [the].. case from others, to take it out of the usual or ordinary 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.”

45.     Ms Westman referred to the continuing responsibilities which must be undertaken by Ms Shires in relation to her children and also because she was taking medication for depressive symptoms.  Whilst I accept that the obligation to repay the debt may have a stressful effect upon her, it does not have the character of unusualness that would take her situation out of the ordinary.

46.     I am satisfied that there are no factors, either individually or taken together, in this case that enable it to be characterised as unusual or unfair and I am satisfied that there are no special circumstances in Ms Shires’ case that would justify waiver of the debt under section 1237AAD of the Act.

Decision

47.     The Tribunal affirms the decision under review.

I certify that the 47 preceding paragraphs are a true copy of the reasons for the decision herein of  

Signed:         Fiona Kamst

Legal Research Officer

Date/s of Hearing  12 January 2007
Date of Decision  22 February 2007
Representative for applicant     Ms T M Westman of MacDonald Law
Representative for respondent Mr R McQuinlan, departmental advocate