Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
[2012] AATA 699
•11 October 2012
[2012] AATA 699
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/2686
Re
Andy Soames
APPLICANT
And
Secretary, Department of Families, Housing, Community Services and Indigenous Affairs
RESPONDENT
DECISION
Tribunal Ms N Bell, Senior Member
Date 11 October 2012 Place Sydney The Tribunal affirms the decision under review.
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Ms N Bell, Senior Member
CATCHWORDS
SOCIAL SECURITY – disability support pension – DSP – asset test – disposition of assets – whether money held on trust for wife – whether hardship provisions apply to Applicant – decision under review affirmed
LEGISLATION
Social Security Act 1991 (Cth) ss 1129, 1130, 1130(3)
Social Security (Administration) Act 1999 (Cth) s 68
CASES
Administration of the Territory of Papua New Guinea v Daera Guba (1973)130 CLR 353
Bogaards v McMahon (1988) 15 ALD 313
Comcare v Grimes (1994) 50 FCR 60
Marchlewski v Secretary, Department of Family and Community Services [2004] AATA 1027
Re Hospital Benefit Fund of Western Australia Inc and Department of Health Housing and Community Service (No1)(1992) 28 ALD 25
Re Mulheron and Australian Telecommunications Corporation (1991) 23 ALD 309
Re Quinn v Australian Postal Commission (1992) 15 AAR 519
Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 107REASONS FOR DECISION
Ms N Bell, Senior Member
11 October 2012
This application has a significant history.
It concerns a claim for disability support pension made by Andy Soames on 9 February 2012. The claim was rejected because of the value of Mr Soames’ assets. The Social Security Appeals Tribunal affirmed the Secretary’s decision to reject the claim and Mr Soames now seeks review of the SSAT’s decision.
However, the matter began some time before that. The issue of the correct calculation of Mr Soames’ assets was before this Tribunal as recently as December 2011 and a decision was published by the Tribunal in February of this year. That decision followed a day of hearing and the later submission of written arguments about whether Mr Soames’ disability support pension had been correctly cancelled.
The central question in that application was whether Mr Soames had disposed of more than $1,000,000 in the space of four months and whether any funds disposed of should be included in the calculation of his assets for five years in accordance with the provisions of the Social Security Act 1991. The Tribunal found that Mr Soames had disposed of $950,000.
The identical issue arises here.
Mr Soames wants to “appeal” from the Tribunal’s February decision. He is unhappy with the decision and critical of the process by which it was made. He has been advised by Tribunal Registry officers, conference registrars and by me that, to appeal a decision of this Tribunal, he must go to the Federal Court. He has not done so and instead has persisted with his request that this Tribunal “correct” its own decision.
For reasons that are set out below, I have not revisited the question of Mr Soames’ disposition of his assets. Rather, I have adopted the Tribunal’s findings and decision on that question in Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 107. I took that course after making directions that Mr Soames file and serve the “new evidence” he insisted he had. In response to that direction Mr Soames simply wrote that he is “… relying on all materials that have previously been filed on my behalf at AAT. …on all materials that have been previously supplied to Centrelink on my behalf. … on all materials and evidence that have been previously supplied to Social Security Tribunal.” No new evidence relevant to the question of the disposition of his assets was filed or served by Mr Soames.
There are, however, two new questions that have been raised by Mr Soames in this application. The first is whether he held money in trust for his wife and whether any money held on that basis should not be taken into account in the calculation of his assets. The second question is whether, now, disability support pension is payable to Mr Soames under the hardship provisions of the Act. I have confined my inquiry and consideration to these issues.
BACKGROUND
The background to this application can be summarised as follows.
From 2003 Mr Soames and his wife, Hiam Soames, ran a small business, which was sold in May 2009. Mr Soames advised Centrelink that $600,000 from the proceeds of sale was placed in a superannuation fund and the remaining $40,000 was spent on miscellaneous expenses.
In July 2010 the property that housed the business was sold.
On 2 August 2010 Mr Soames left Australia. Centrelink issued a notice under section 68 of the Social Security (Administration) Act 1999 outlining his notification obligations – including notification of changes to his or his partner's assets and requiring him to advise if he bought or sold a property or gave away property. On 2 November 2010 Mr Soames' disability was suspended after he had been absent from Australia for more than three months.
On 21 December 2010 Mr Soames informed Centrelink of his return to Australia and his payments recommenced.
On 22 March 2011 Mr Soames contacted Centrelink to request that his disability support pension be adjusted because he no longer had the money from the proceeds of sale of the property. Centrelink obtained from Mr Soames evidence of withdrawal of over $1,000,000 from his bank account prior to departing Australia on 3 August 2010. On the same day Mr Soames' disability support pension was cancelled due to his assets, assessed at $997,250 being above the allowable limits. This decision was affirmed by the Social Security Appeals Tribunal.
On 23 February 2012 this Tribunal affirmed the decision to cancel Mr Soames' DSP from 29 July 2010 on the basis that his assets exceeded the assets value limit. The Tribunal found:
·Mr Soames travelled to Syria with $1,080,000 in August 2010 and returned in December 2010 with $40,000.
·The Tribunal did not accept Mr Soames spent over $1,040,000 overseas in less than five months.
·Expenditure for travel in Syria may have been as high as $90,000.
·In relation to the claim the funds were spent on supporting family members, the Tribunal considered these amounts were gifts, constituting a disposal within the meaning of section 1123 of the Act.
·Mr Soames, on his own evidence, had at his disposal $120,000 in cash in Syria and some $64,000 in a superannuation account.
·The total value of Mr Soames’ disposed assets was $990,000.
Mr Soames did not appeal this Tribunal’s decision to the Federal Court. On 9 February 2012 he made a new claim for disability support pension.
On 28 February 2012 this was rejected because the value of his assets exceeded the asset value limit at which disability support pension ceases to be payable. Mr Soames requested further review, and made a claim for consideration under the hardship provisions of the assets test. This claim was rejected on the grounds that the rate payable under the hardship provisions was nil. In making this assessment, Mr Soames’ property in Syria was accepted as an unrealisable asset but no other asset was disregarded.
On 29 March 2012 a Centrelink authorised review officer affirmed both the decision to reject the claim for DSP and the decision to reject the claim for consideration under hardship.
Mr Soames then appealed to the SSAT. The SSAT noted Mr Soames appeared to be seeking to have "the AAT's decision revisited in the present application," and the SSAT "advised him it did not intend to review the AAT's decision and that it had no power to do so."
The SSAT declined to reconsider this Tribunal’s determination regarding disposal of assets, noting "Mr Soames did not appeal against the AAT's decision and the Tribunal considers it is bound by the AAT's findings and in particular by its decision that Mr Soames had disposed of an amount of $990,000 for no consideration."
The SSAT did consider Mr Soames' submissions in regard to some of the assets being held on trust for his wife prior to the disposition and whether the hardship provisions of the assets test apply to Mr Soames. The SSAT found against Mr Soames in these respects. The SSAT considered the value of assets at 9 February 2012 to be:
·Property in Syria $350,000
·Disposed assets $950,000*
·Household/personal effects $2,000
·Two cars $9,000
·Savings/financial assets Unknown
·Shares $1,241
* $990,000 minus $40,000 ("reasonable travel expenses")
The SSAT found the sum of these amounts, omitting any amount for savings/financial assets due to uncertainty, was $1,312,241 and rejected Mr Soames’ claim for disability support pension.
The SSAT also considered the hardship provisions of the asset test, and found the property in Syria was an unrealizable asset, and therefore deducted $350,000 from the asset pool of $1,312,241. The resulting rate of disability support pension payable under the hardship provisions was nil and so the decision to reject the claim for pension was affirmed
Mr Soames lodged an application for review by this Tribunal in June 2012.
SHOULD THE TRIBUNAL REVISIT THE ISSUE OF MR SOAMES’ DISPOSITION OF ASSETS?
The issue of Mr Soames’ disposition of assets was considered and decided on in Soames v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2012] AATA 107. While this application and the application in [2012] AATA 107 concern different decisions made at different times, that is, the first was a decision to cancel pension and the second was a decision to refuse to grant it, they each turn on the same issue of disposition of assets at a time that predates both decisions. When given the opportunity to do so, Mr Soames produced no new evidence in addition to that before the Tribunal in [2012] AATA 107. The issue in that application was identical to the disposal of assets issue in this application and as was the evidence on which it was decided.
In Marchlewski v Secretary, Department of Family and Community Services [2004] AATA 1027, I said:
9. There is authority for the proposition that the Tribunal is estopped from entertaining further applications for review of a decision, where an earlier application for review of the same decision has been disposed of. In Administration of the Territory of Papua New Guinea v Daera Guba (1973)130 CLR 353, Gibbs J held that the doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties. This was followed by the then President of the Tribunal, O’Connor J, in Re Mulheron and Australian Telecommunications Corporation (1991) 23 ALD 309 in which the decision of Pincus J in Bogaards v McMahon (1988) 15 ALD 313 was also cited.
10. In Bogaards, Pincus J held that a consent decision of the Tribunal can support a plea of res judicata and a decision of the Tribunal may create an estoppel. His Honour concluded that the Tribunal cannot review a determination when it has already dealt with that precise dispute.
11. There is also, however, authority against the proposition that a decision by the Tribunal can create estoppel. In Comcare v Grimes (1994) 50 FCR 60, Wilcox J held that the doctrine of cause estoppel does not apply to a Tribunal’s decisions. However, His Honour also referred to the decision of O’Connor J in Re Quinn v Australian Postal Commission (1992) 15 AAR 519, where Her Honour noted the Tribunal’s power to determine and control its process under s.33 of the Act and the inappropriateness of re-litigation without reason of the same issues before the Tribunal.
12. The view expressed by O’Connor J in Quinn was confirmed by Her Honour in Re Hospital Benefit Fund of Western Australia Inc and Department of Health Housing and Community Service (No1)(1992) 28 ALD 25.
I adopt the same view here. The dispute about Mr Soames’ disposition of over $1,000,000 in less than five months has already been dealt with by the Tribunal. Mr Soames wishes to agitate it again because he is critical of the Tribunal’s decision. He has not appealed the decision to the Federal Court. The same evidence and law would be examined by the Tribunal were it to revisit the issue. There have been no new developments and no new evidence has been presented. For these reasons I adopt the conclusions of the Tribunal in [2012] AATA 107 in respect of Mr Soames’ disposition of assets. Section 33 of the Administrative Appeals Tribunal Act empowers me to so determine the process of the Tribunal.
I turn now to the new issues raised by Mr Soames’ application.
DID MR SOAMES HOLD ASSETS IN TRUST FOR HIS WIFE?
Mr Soames relied on a letter prepared by the Welfare Rights Centre and provided to the SSAT at his last hearing with that tribunal. In summary, the letter briefly refers to a 2007 partnership agreement between Mr Soames and his wife; a 2009 contract for sale of business by Mr Soames’ wife as vendor; and a 2007 General Power of Attorney from Mr Soames’ wife to Mr Soames and asserts that these documents raise the question of whether Mr Soames held some assets on trust or constructive trust for his wife.
Mr Soames claimed his wife had had “80% of the benefit of the money.” No oral evidence was given by Mrs Soames. Mr Soames explained that his wife was not giving evidence because she trusts him to handle her affairs.
Mr Soames said that the property that housed the business was purchased with the proceeds of Mrs Soames’ victims compensation claim in 2001. He said the property was purchased in Mrs Soames’ name and in 2008 or 2009 she transferred the property to him.
His wife commenced a business at those premises, producing dips. He said that, because of her heart condition and panic attacks, he “took over” the business after two or three years. However, he also said “the business was solely in her name; it was her business.” He said he was helping his wife, as were their two children and occasional part-time help. He said Mrs Soames had “transferred” the business to him in about 2006 or 2007.
Mr Soames said that he understood that the money in his bank account was “our money – 50/50.” He said he was managing Mrs Soames’ money for her. He said he had “sent her overseas many times;” renovated her house; and managed her car for her. He said his wife is on disability support pension and pays her own rent. He said he meets her household expenses, car expenses and moving expenses. This suggests that, contrary to a document discussed below, Mr and Mrs Soames do not live together.
Mr Soames said he took all of the money to Syria with him because he was managing it for Mrs Soames.
No documentary evidence was provided by Mrs Soames, except for a document purported to be signed by her on 4 December 2011 that says she has always lived with her husband but has been “separated financially” from Mr Soames since January 2011; that Mr Soames sent her $20,000 for her own use when he was “overseas;” that he spent a “lot of money” on her when she was “overseas;” that he covered her expenses on a trip to Syria in 2010; and that he bought “us” furniture and household items.
According to Mr Soames’ evidence, all substantial property held by Mrs Soames had been transferred by her to Mr Soames by 2009. It is difficult to understand any continuing point of the Power of Attorney in those circumstances. I have no evidence of the use to which it was put.
I note that the partnership agreement conflicts with the contract for sale of business, dated two years after the partnership agreement, and names Mrs Soames as the sole vendor of the business.
Mr Soames’ evidence was that the proceeds of the sale of the business, which was the subject of the partnership agreement, were deposited in his bank account. He said he did not give his wife half of the proceeds of the sale because she was not well and that was their arrangement and what they chose to do. I have no evidence of Mrs Soames’ appreciation of this arrangement.
I am unable to conclude, on the basis of this scant and confusing evidence, that Mr Soames held the assets in trust for his wife. I have no evidence of the intention of Mrs Soames or of her understanding of what the arrangements were between her and her husband. I cannot be satisfied that she agreed or disagreed with the arrangements described by Mr Soames. Nor can I be satisfied that there is something in the nature of a constructive trust on the basis of some real or anticipated unconscionability on the part of Mr Soames and some detriment to Mrs Soames. It may equally be the case that the transfer by Mrs Soames of the business premises to Mr Soames and her entry into a partnership agreement with him simply made good a constructive trust that obligated her and was founded on his long contribution to the business in the circumstances of her ill health. This would accord with the evidence Mr Soames has given.
In any event, even if I were to find that Mr Soames held the assets in trust for Mrs Soames, he freely admits that he has asserted control over the assets in question. The provisions of Part 3.18 of the Act, concerning attribution of assets of private trusts would have the effect of attributing those assets to him for the purposes of the assets provisions of the Act. Subject to any amounts that were proven to have been credited to Mrs Soames, the assets disposed of by Mr Soames would be regarded as disposed assets and would be subject to the same provisions as are the assets that were held by him on his own account.
IS THE PENSION PAYABLE TO MR SOAMES UNDER THE HARDSHIP PROVISIONS OF THE ACT?
The value of Mr Soames’ disposed assets is, allowing generously for expenditure since the date of this Tribunal’s decision on the disposal of assets question, $950,000. To this can be added, on his evidence, the value of the house in Syria ($350,000); his shares ($1,241); his cars ($9,000); his household and personal effects ($2,000) and a small amount in the bank ($1,000). This yields a total of $1,313,241.
Section 1129 of the Act provides, in effect, for a number of prerequisites for the application of the hardship rules in section 1130. These are the provisions that apply to Mr Soames given that he is separated from his wife and therefore single. The prerequisites in section 1129 include;
·the pension is not payable to a person because of the application of the assets test; and
·the Secretary determines that the disposal of assets rules should be disregarded for the purposes of section 1129; and
·the person has an unrealiseable asset; and
·the person requests application of the hardship provisions on the appropriate form; and
·the Secretary is satisfied that the person would suffer severe financial hardship if the hardship provisions are not applied to the person.
I agree that, given the unrest in Syria, Mr Soames’ house there cannot be realised. I also agree that he is likely to suffer severe financial hardship given that he has now, according to his evidence and supported by withdrawal records, exhausted his superannuation funds and has less than $2,000.00 in his bank account. In this regard, I note also that Mr Soames says that the money he left with his sister in Syria has now been exhausted.
The Secretary considered that the prerequisites in section 1129 were satisfied and that, consequently, the hardship rules in section 1130 should be applied to Mr Soames. I agree.
In summary, the hardship rules in section 1130 apply in this way: after the deduction of the value of any unrealisable asset from the value of Mr Soames’ assets, his “adjusted annual rate of income” is to be deducted from the maximum rate of the pension. The relevant maximum rate of pension is $19,468.80. An adjusted annual rate of income that exceeds the maximum rate of pension renders the pension not payable.
Section 1130(3) provides for the method by which Mr Soames’ adjusted annual rate of income is to be calculated. For each $250 of the value of Mr Soames’ assets, excluding disregarded unrealisable assets, $9.50 is to be counted as income. The result of that calculation on the adjusted value of Mr Soames’ assets ($961,241) is $36,527,16. The deduction of this figure from the maximum rate of pension yields a negative number and, therefore, a nil rate of pension.
Even if, as Mr Soames says, the $120,000 he deposited with his sister in Syria has been exhausted and it were to be deducted from the value of his assets, the calculation would still yield an amount of adjusted annual rate of income that would exceed the maximum rate of pension.
The pension is not payable to Mr Soames under the hardship provisions.
DECISION
The Tribunal affirms the decision under review.
I certify that the preceding 48 (forty -eight) paragraphs are a true copy of the reasons for the decision herein of ..[Sgd]......................................................................
Associate
Dated 11 October 2012
Date of hearing 31 August 2012 Applicant In person Solicitors for the Respondent Ms J Maclean, Centrelink Program Litigation & Review Branch
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