Sparkes and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

[2008] AATA 476

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2008] AATA 476

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No 2007/4396

GENERAL ADMINISTRATIVE DIVISION		)
Re		JOAN SPARKES

Applicant

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

Respondent

DECISION

Tribunal Dr K S Levy RFD, Senior Member

Date6 June 2008

PlaceBrisbane

Decision

1.     The decision under review is set aside.

2.      The Tribunal determines that the “principal home” did not change throughout the debt period and therefore, no debt arises for the period under review. 

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

Senior Member

CATCHWORDS

SOCIAL SECURITY – Pensions, Benefits and Allowances – aged pension – non-exempt value – definition of ‘principal home’ – applicant owns two houses  – applicant suffered from elder abuse  – principal home did not change – no debt incurred – decision under review set aside.   

Social Security Act 1991 ss 11(1), 11A, 1064(1), 1118(1)(a)

Social Security (Administration) Act 1999 ss100(1)

Re Shashikant Chowhan and the Secretary, Department of Family and Community Services [2004] AATA 1236

Re  Kirkman and Secretary, Department of Social Security (1996) 20 ALD 400

Re  Clark and Secretary, Department of Social Security (AAT 2968, 4 November 1986)

Hafza v Director General Social Security (1985) 60 ALR 674

Re Samek and Secretary, Department of Social Security(1998) 16 ALD 295

REASONS FOR DECISION

6 June 2008 Dr K S Levy RFD, Senior Member           

INTRODUCTION

1.      The applicant, Joan Sparkes, owns two houses, one of which had been her principal residence for almost 50 years.  One property is in Everton Park in suburban Brisbane and a second property is in Wallaville, in central Queensland.  From the years 2000 to 2006, the applicant spent considerable time at the central Queensland property, to the extent that Centrelink deemed her second and smaller property in Central Queensland to be her “principal home”, thereby altering the non-exempt asset value which was used for determining her eligibility for age pension.

2.        Centrelink determined on 10 August 2006 that her property in central Queensland was her “principal home” thereby resulting in a pension debt $55,759.02 for the period 25 October 2000 to 5 September 2006. That decision was affirmed on review by an authorised review officer on 25 August 2006. As a result, Centrelink then formally raised a pension debt of $55,759.02 on 22 March 2007. The original decision was affirmed by an authorised review officer on 11 April 2007 and again on 26 April 2007. The applicant then appealed to the Social Security Appeals Tribunal which, on 9 August 2007, also upheld the original decision. The applicant has now appealed to this Tribunal on 11 September 2007 under s37 of the Administrative Appeals Tribunal Act 1975.

3.      Mrs Sparkes was represented by Ms C. Heyworth-Smith.  The respondent was represented by Mr R. McQuinlan, advocate for Centrelink.

ISSUES

4.      The Tribunal is asked to determine the following questions:

Question 1: Has the applicant’s “principal home” changed for the period 25 October 2000 to 5 September 2006?

If the answer to question 1 is yes, then three consequential further questions arise:

Question 2:  Has the applicant an age pension debt owing to the commonwealth?

Question 3:   If the answer to question 2 is yes, should the debt be recovered?

Question 4:   Even if the answer to question 3 is yes, are there “Special circumstances” as a matter of law which would justify waiving or writing off the whole or a part of the debt raised?

EVIDENCE

5.      The applicant gave evidence in person and was cross examined by the respondent’s advocate.  Essentially, Mrs Sparkes and her husband owned and lived in a property at Everton Park in Brisbane since they were married in approximately 1959.  Some critical events occurred between 1998 and 2006 which altered the life circumstances of the applicant.

6.      In 1989, the applicant’s eldest son became the father of a child and by 1991, he and the mother of this child were separated.  The mother lived near Bundaberg in Queensland and access issues arose.  Also in 1991, Mrs Sparkes and her late husband purchased a property in Wallaville, just outside of Bundaberg, in order to enable their son to have access to his daughter.  The purpose of purchasing this property was for their son’s benefit, and not for personal use.  In April 1993, the eldest son then became the father of another daughter, but the mother of this child was not the same person as the mother of his first daughter.

7.      In 1995, Mrs Sparkes first became eligible for the age pension.  At this time, her principal home was at Everton Park.  She and her husband were also concurrently the owners of the modest house in Wallaville.  In 1998, the relationship between Mrs Sparkes’ eldest son and the mother of his second daughter resulted in Family Court proceedings and various orders were made.  These orders included that the second daughter was required to live with the applicant, Mrs Sparkes, or at least that she was to be present for the care and management of the child on a day-to-day basis. She was also to be responsible for that child’s welfare and development, in conjunction with her eldest son, Steven.  In addition, the Court ordered that the child’s mother and maternal grandmother should also have contact overnight on weekends each fortnight and also for half of school holiday periods.  The second daughter of Steven initially attended a kindergarten at Everton Park until the end of 1998.  From the commencement of 1999 however, the child’s mother and maternal grandmother had moved to Central Queensland and in order to facilitate access to the mother and maternal grandmother, the child was enrolled in a primary school in Wallaville.  The applicant and her husband then spent time in Wallaville and away from Everton Park in order to oversee the transition of the child into school in that location. 

8.      Shortly after the commencement of the school year in 1999, the applicant’s husband was diagnosed with cancer.  Mrs Sparkes and her husband then returned to Brisbane where he was treated at The Prince Charles Hospital.  They remained in Brisbane until 23 July 1999 when Mr Sparkes died.  By November of 1999 however, Mr Sparkes had returned to Wallaville intending to be there only while the child was there.  Her house at Everton Park remained unoccupied and was not rented.  While she stayed at Wallaville in the house which she owned and was ordinarily occupied by her eldest son, she only ever took a minimum of clothing and shoes while she stayed there.  The evidence showed she slept in the living room and on a second-hand bed which her son had purchased for her from the Salvation Army.  The majority of her personal possessions remained at Everton Park during all of her time at Wallaville.

9.      Mrs Sparkes returned to Brisbane from time to time.  In February 2000, she returned to have an annual mammogram, which the records showed that she did every year in February from 2000 to 2006.  In 2000, the child’s mother moved to Brisbane and as a result, Mrs Sparkes travelled to Brisbane and Beaudesert with her son and granddaughter for contact visits with the child’s mother.  She would stay for one or two nights as required at Everton Park before returning the child to Wallaville to attend school.  In 2000, the evidence was that she stayed at Everton Park during the school holiday contact periods.

10.     At other times throughout the years 2000 and 2001, Mrs Sparkes also had to attend the Family Court in Brisbane for other court proceedings involving her son’s first daughter.  There were numerous appointments with Court Counsellors and Psychologists and she spent considerable time attending Court.  In July 2001, the Family Court proceedings were finalised with the Court making certain orders that overnight, weekend and school holiday contact with her son’s first daughter was to be arranged in Brisbane or on the Sunshine Coast with that child’s mother.  Those arrangements ceased when she turned 15 in April 2004.

11.     In 2004, the applicant suffered a number of health problems.  She was hospitalised at Gin Gin for a short period where she was diagnosed with Menière’s disease.  She was unconscious on a number of occasions and had problems with balance.  Her sense of security was undermined as a result of this illness.  She did return to Everton Park in September 2004 following that illness in order for her to see a solicitor in Brisbane.  But at the end of that year, in December 2004, the youngest granddaughter spent time with her mother, after which the mother did not return the child to the applicant and her eldest son after a contact visit. 

12.     In late 2004, the second daughter of Mrs Sparkes’ eldest son remained with her mother, who had made certain complaints or allegations about the child’s father.  As a result, Mrs Sparkes spent most of 2005 in Wallaville in support of her son who was defending certain allegations made by the child’s mother and grandmother.  These related to the child’s safety, clothing and social life.  However, during this period also, her eldest son increased his use of alcohol and Mrs Sparkes stayed with him in Wallaville.  While it appears that this was the overriding concern and the reason for Mrs Sparkes to remain there for that period, the evidence showed that she also was still suffering health problems of her own.  In addition, while she retained her husband’s car after his death, she did not drive herself.  The car was used by other people, when available, to drive her to Wallaville or to return to Brisbane.   She indicated alternative methods of transport by either bus or train were not possible for her, owing to problems of balance and other issues concerned with her medical condition.  During that year also, she had a further collapse and was again admitted to Gin Gin Hospital for a brief period.

13.     She did return to Everton Park for about a week in November of 2005 but again it appears she returned to Wallaville.  The evidence showed that her son’s condition also had clearly not improved and that by June of 2006, he had been drinking heavily and, on some occasions, assaulted Mrs Sparkes and used obscenities in his verbal abuse of her. That made a significant impact upon her.  On one occasion, it seems that her son had an iron bar and there was concern by a neighbour that he may seriously harm Mrs Sparkes.  The police were called and the son was detained.  The police then initiated a Domestic Violence Order against him.  The seriousness of the circumstances surrounding that application were available to the Tribunal[1].

[1] T 93. Folio 367.

14.     On 10 August 2006, Centrelink made a decision to treat Wallaville as Mrs Sparkes’ principal home.  She then resumed living full time at Everton Park from September 2006.

15.     In cross-examination, Mrs Sparkes stated that her son was in a parental role full time for much of the debt period.  While he did pursue work on one occasion, this did not eventuate.  She indicated that the circumstances about her son and his second daughter became more complex when that child’s mother had another baby and that the mother and grandmother of the second child were sometimes living in a strained relationship.

16.     In relation to Mrs Sparkes’ income and capacity to repay the debt, she told the Tribunal that her eldest son did not pay rent for the Wallaville property.  He himself is on Social Security benefits and Mrs Sparkes appears to have also paid for food and other essential items for the eldest son while she stayed in Wallaville.  She said that he paid for essential maintenance to the property.  She has a younger son and he lives with her at Everton Park.  He pays some amounts to assist in part of the upkeep of that property.

CONSIDERATION

17.     All of the evidence received, both oral and written, has been taken into consideration in determining this matter.  In addition, all the statutory and case law has also been taken into account as far as it is relevant.  I found the applicant, Mrs Sparkes to be a witness of truth. 

18.     As a result of the evidence, I have made the following findings of fact:

(a)The applicant is a widow who is 74 years of age.  She was in receipt of an age pension from 1995.

(b)She owns a house in Wallaville which she and her former husband purchased in 1991 to support their son’s access to his oldest daughter.

(c)The Family Court has made certain Orders which, with her agreement, involved Mrs Sparkes in having responsibility, concurrently with her son, for the child’s day-to-day care.

(d)Mrs Sparkes spent considerable time in Wallaville due to –

·Family Court Orders and the interest of her grandchildren;

·Difficulties with the mother of both of her eldest son’s children until 2004.

·Her own health problems.

·Problems of her son’s alcoholism and difficulty in supporting him when the mother of her son’s youngest daughter made complaints about him.

·Inability to drive a car and had some limitations on travelling by public transport.

·Mrs Sparkes was given notice by the Department under s68(2) of the Social Security Administration Act 1999 (The Administration Act) to advise the Department if she left her principal home for a period longer than 12 months (letter of 23 October 2000). 

19.     The relevant legislation provides as follows:

Social Security (Administration) Act 1999 (The Administration Act)

s100(1) of that Act provides for an adjustment to be made to a person’s Social Security entitlements where they have been given notice to inform the Department under s68(2) and a change of circumstances subsequently occurred but the recipient of the Social Security benefits did not advise the Department accordingly.

Social Security Act 1991 (the Act)

s1064(1) of the Act provides that the rate of age pension is to be calculated in accordance with the rate calculator at the end of that section. In the applicant’s case, module G is the relevant rate calculator and deals with the “assets test”.

s1118(1)(a) prescribes that when calculating the value of a person’s assets, any value in the person’s “principal home”, which is a right or interest which gives the person a reasonable security of tenure in that home, should be disregarded in calculating the person’s asset value.

HAS THERE BEEN A CHANGE IN “PRINCIPAL HOME” FOR THE APPLICANT?

20.     The “principal home” essentially can continue to satisfy the definition in s11(1) where any absence from the principal home is less than 12 months. But critically, what is the “principal home”? The definition in s11(1) is not entirely helpful in answering that question in the present case. Resorting to the Department’s “Guide to Social Security Law” it reveals that when the income support recipient owns more than one home, the principal home is determined by ascertaining the home “… in which they spend the greatest amount of time …”[2].

[2] The Guide to the Social Security Law at paragraph 4.6.3.30.

21.     It was submitted that some clarification of the application of the definition can be gained from consideration of the previous decision by Dr EK Christie, Member, in Re Shashikant Chowhan and the Secretary, Department of Family and Community Services[3] where an analysis of the term “principal home” was undertaken.  There, consideration was given to Re Kirkman and Secretary, Department of Social Security[4], which itself referred to a number of cases, inter alia, Re  Clark and Secretary, Department of Social Security[5]  where (then) Senior Member McMahon said “A characteristic of a person’s home is that he usually resides there.  It is by no means necessary however that both go hand in hand”.  Reference was also made to Hafza v Director General Social Security (1985)[6] where it was said:

“The test is whether the person has … a continuity of association with the place … together with an intention to return to that place and an attitude that that place remains ‘home’….”(per Wilcox J).

[3] [2004] AATA 1236

[4] (1996) 20 ALD 400

[5] (AAT 2968, 4 November 1986)

[6] 60 ALR 674 at 680

22.     I was also referred to Re Samek and Secretary, Department of Social Security[7].  These authorities all differentiate the ordinary concept of the “principal home” from the situation where owners spend considerable time residing in hotels or holiday homes, or even homes of the applicant’s children.

[7] (1998) 16 ALD 295

23.     While the conceptual basis is helpful, the present case seems to me to be quite unusual and factually different to those precedents. The evidence shows the applicant always intended to maintain her Everton Park home as the “principal home” and was not absent from the “principal home” for recreational or other more pleasurable pursuits with family or for recreation..  Mrs Sparkes was absent from the Everton Park home, for the large part, because of the Family Court Order (to which she consented). It required her to be present for the day-to-day care of her granddaughter.

24.     Mrs Sparkes and her husband had originally purchased the Wallaville home for the purpose of assisting their eldest son to obtain access to his eldest daughter.  But when the Family Court Order was made, the demands on her increased.  To say it was only the Family Court Order which resulted in this pattern of living at Wallaville would put the position too highly.  I was struck by Mrs Sparkes as being a person whose evidence was honest and reliable and a person who had a strong maternal (and grand maternal) sense of duty.  She clearly was driven to do what was in the best interests of her granddaughter, but this became more challenging as she endeavoured to give access to the mother and maternal grandmother.  The fact that they moved to Central Queensland resulted in Mrs Sparkes travelling to Wallaville and staying there as far as practicable to accept responsibility for the child’s  welfare and development. Where access had to be given in Brisbane or on the Sunshine Coast, she travelled down from Wallaville for those purposes.

25.     It is apparent that Mrs Sparkes did not drive but retained the family car after her husband died and this was used (with the assistance of supportive people who had the time and/or desire to drive Mrs Sparkes to Brisbane and to return to Wallaville to meet the requirements of the Family Court Order.  Her absence from Everton Park was not due to some recreational activity.

26.     While the applicant stayed in Wallaville until 2004 predominantly for adherence to the Court Order, the need and availability of her son’s children dissipated in 2004. This complicates the analysis to some degree.  Based on the changing factual position, it seems that her sense of devotion to her son’s illness then assumed greater priority.  His depression and alcoholism clearly made a significant impact on her.  I accept that her sense of duty or obligation to support her son then became a priority for her as he was being investigated following complaints by his youngest daughter’s mother and grandmother. During this period, he also suffered a psychopathology which manifested itself in abuse and assault against Mrs Sparkes.  Counsel for Mrs Sparkes referred the Tribunal to the Domestic Violence Order and the deleterious effect on her about her son’s irrational behaviour and the violence and profanities which were used against her and frightened her.

27.     Those latter circumstances are, nevertheless, largely a continuation of the scenario already established and are a result of her son’s life events.  But by that stage also, Mrs Sparkes was suffering her own health problems.  She had by then been diagnosed with Menière’s disease and had collapsed on a couple of occasions. She was hospitalised in 2004 and 2005 and this undoubtedly accentuated her anguish over a number of years which was associated with her granddaughter’s care and her son’s illness. She also experienced at that time, additional expenses for her own medication for her diagnosed conditions as well as for health issues because of advancing age.

28.     What is the correct or preferable decision for all of those circumstances? Mrs Sparkes absence from the Everton Park home, at least until 2004 when the youngest granddaughter was not returned after an access visit, can be seen to be logically related to her son’s health problems and her involvement through the order of the Family Court.  But while that might, on the face of it, be exculpation for not returning to her principal home in Brisbane, it is apparent her son’s health and hers were critical factors in her staying in Wallaville beyond 2004.  It was also aggravated by the fact that her previous driving companion was no longer available, as that person had married and relocated overseas.  The use of alternative means such as public transport to Brisbane was not suitable for Mrs Sparkes by that time because of her medical conditions.

29.     The context of the absence is important in the applicant’s pattern over the debt period.  Living in Everton Park would have been, by far, of greater comfort than the way she had to live in Wallaville.  No rational person would have sought that alternative by choice, save only for compelling circumstances.  Those circumstances related to her son and the interests of her granddaughter.

30.     The applicant in this case was shown to be a person who has outlived her husband and has become the subject of elder abuse – in this case by her alcoholic son.  She has shown a strength to compensate for the lack of strength of her son who suffered more defects in capacity than most men of his age.  Mrs Sparkes showed herself to be competent, assertive and undoubtedly, had an unbridled determination to do what she believed she had to do for her grandchildren and for her son.  Few people would be likely to demonstrate the tenacity shown by the applicant in this case.

31.     In my view, these circumstances do not fall within the strict definitional bounds of the “principal home” issues previously depicted in the reported cases.  She faced the tasks which she confronted to her own detriment and left her “principal home” for lengthy periods.  There is evidence however, she returned to Brisbane on occasions in every 12 month period, although less frequently in the period 2004 to 2006.  Accepting the evidence presented, and taking account of the reasons why she was absent from Brisbane, together with the stressful and basic existence which she had to endure while living in Wallaville, I am satisfied that the home in Everton Park was still the “principal home” for all of that period. That was her evidence and I accept her as a witness of truth. Her continuity of association with Everton Park and her attitude that that would remain her “principal home” is consistent with the principle espoused by Wilcox J in Hafza v Director General Social Security (supra).

32.     In the circumstances, I find that the Everton Park was still the applicant’s “principal home” for the whole of the debt period.  Consequently, the valuations to be applied to both her homes would result in the valuation of the Everton Park home being not assessed for her age pension purposes. Therefore no debt can arise in this case.

33.     As a result of that determination, it is unnecessary for me to deal with the remaining questions about the grounds of waiver of debt or special circumstances.  But even if I had found that the “principal home” had changed, I would have found that this would be one of the most unusual cases, that it can be distinguished from the usual line of cases and I would have found that “special circumstances” exist to waive any debt which could have arisen.

34.     I therefore determine that the “principal home” did not change throughout the debt period.  The decision under review must therefore be set aside and I determine that no debt arises for the period under review.

I certify that the 34 preceding paragraphs are a true copy of the reasons for the decision herein of Dr K S Levy RFD, Senior Member

Signed:         .....................[Sgd]...........................................................
  Jacqui Woods, Associate

Date/s of Hearing  20 May 2008
Date of Decision  6 June 2008
Counsel for the Applicant         Ms C. Heyworth-Smith
Solicitor for the Applicant          Mr P. Cranitch
Solicitor for the Respondent     Mr R. McQuinlan