Sparrow and Secretary, Department of Social Services (Social services second review)

[2015] AATA 586

Sparrow and Secretary, Department of Social Services (Social services second review) [2015] AATA 586  (16 July 2015)

Division	GENERAL DIVISION
File Number	2014/5078
Re	David Sparrow
APPLICANT
And	Secretary, Department of Social Services
RESPONDENT

DECISION

Tribunal	Senior Member N A Manetta
Date	16 July 2015
Date of written reasons	12 August 2015
Place	Adelaide

For the reasons given orally at the conclusion of the hearing of this matter, the Tribunal sets aside the decision of the Social Security Appeals Tribunal dated 19 June 2014 and substitutes a decision that the applicant was residing in Australia when his age pension application was received by Centrelink on 2 April 2013.

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

Senior Member N A Manetta

CATCHWORDS

SOCIAL SECURITY – pensions, benefits and allowances – age pension – whether the applicant was an Australian resident when he made a claim for age pension – applicant is an Australian citizen – nature and extent of family relationships in Australia – nature and extent of assets in Australia  – decision set aside

LEGISLATION

Social Security Act 1991 (Cth), s 7(3)

CASES

Gauthiez v. Minister for Immigration and Ethnic Affairs (1994) 53 FCR 512

Taslim v. Secretary, Department of Family and Community Services [2004] FCA 789; (2004) 138 FCR 70

Hafza v. Director-General of Social Security (1985) 6 FCR 444

Secretary, Department of Families and Community Services and Indigenous Affairs v. Baccon [2006] FCA 773; (2006) 90 ALD 557

Drake v. Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60

SECONDARY MATERIALS

Sutherland P and Anforth A, Social Security and Family Assistance Law (3^rd ed, The Federation Press, 2013)

REASONS FOR DECISION

Senior Member N A Manetta

12 August 2015

1. After the delivery of my oral decision and reasons, I received requests for written reasons, which I now publish. 

2. This is an application by Mr David Sparrow seeking review of a decision of the Social Security Appeals Tribunal (SSAT) dated 19 June 2014.  The SSAT confirmed an earlier decision taken in the respondent’s department to refuse Mr Sparrow’s application for an age pension, which had been lodged in a Centrelink office on 2 April 2013.  The departmental review officer (ARO) had refused the application for one reason only; namely, that Mr Sparrow was not resident in Australia at the time the application was lodged.  I note by way of background that Mr Sparrow lodged a further application for age pension in 2014, and this latter application was successful. 

   BACKGROUND FACTS

3. Mr Sparrow, who was born in March 1948 and who, therefore, qualified for the pension at age 65 in 2013, has been a long-time resident of South Australia.  As an Australian citizen, he worked and lived the vast majority of his life in South Australia.  He worked in the State public sector (in the DFEEST department) from 1997 to 2011 at which time he retired.  He was employed with TAFE SA for the final eight years of his working life, as a so-called “settlement officer” assisting newly arrived migrants and refugees. 

4. He gave evidence of a forty-eight-year work history.  He married in 1974, but the relationship ended in divorce in 1988 or 1989.  Two children resulted from the marriage, one of whom, a daughter, is 39, and the second, a son, 36.  He has grandchildren.  He lived in his own home until 2009, at which time he moved into an investment property at Pooraka he had earlier acquired in 2006. 

5. In May 2011, at the age of 63, he retired from the Australian workforce, as I have said.  At that time he decided to purchase and run a guest-house in Phnom Penh in Cambodia, a country he had first visited in 2006 and subsequently in 2007 and 2009.  He acquired a seven-year lease over a 13-roomed mansion in Phnom Penh that was already operating as a guest-house.  He gave evidence that he wanted to help under-privileged locals by training them in proper hotel practices.  This evidence was not challenged in cross-examination.  He said he had had this plan since 2009. 

6. He gave evidence that he borrowed some $150,000 to purchase the business and lease associated with the Phnom Penh guest-house and mortgaged his Pooraka property to secure the loan.  He considered the guest-house a worthwhile investment and left Australia in mid-2011.  The Pooraka property was let to his daughter until February 2012.  He engaged a real estate agent to find tenants and to manage the letting of the property after her departure. 

7. Mr Sparrow ran the guest-house and lived there from 2011 onwards.  The following absences from Australia are agreed in this regard:

   (a)19 June 2011 to 29 October 2011; he then returned to Australia for 15 days and departed again on 13 November 2011;

   (b)13 November 2011 to 9 March 2012; he then returned to Australia for 13 days and departed again on 21 March 2012;

   (c)21 March 2012 to 14 July 2012; he then returned to Australia for 9 days and departed again on 22 July 2012;

   (d)22 July 2012 to 7 September 2012; he then returned to Australia for 10 days and departed again on 17 September 2012;

   (e)17 September 2012 to 26 March 2013; he then returned to Australia for 10 days and departed again on 4 April 2013;

   (f)4 April 2013 to 6 August 2013; he then returned to Australia for 14 days and departed again on 19 August 2013;

   (g)19 August 2013 to 10 March; he then returned to Australia for 4 days and departed again on 13 March 2014;

   (h)13 March 2014 to 25 May 2014.

8. It was during his stay in Australia from 26 March to 4 April 2013 that he lodged an application for an age pension.  Over the course of less than two years, from 19 June 2011 to 4 April 2013, he returned to Australia five times.  Whilst away, he stored his personal possessions at the Pooraka premises with the exception of a car which he had sold. 

9. Mr Sparrow gave evidence that he decided in February 2013 to commence the process of selling the guest-house business in Phnom Penh.  He gave evidence that it took more than 12 months, but he was ultimately successful in finding a buyer. He returned to Australia on 25 May 2014.  The department reconsidered his situation on his return and granted him an age pension from 5 June 2014. 

10. The respondent’s contention is that Mr Sparrow was not an Australian resident in April 2013, but was an Australian resident on his return in May 2014.  The distinguishing feature was that Mr Sparrow had sold his business in Cambodia by May 2014 and no longer lived there.  From the department’s point of view, Mr Sparrow had resumed residence in Australia in 2014. 

11. I would add here that Mr Sparrow gave evidence, which was not challenged, that he has no command of the Khmer language apart from a few basic phrases and, whilst there, he communicated mainly in English.  No intimate relationship to tie him to Cambodia was suggested on the evidence. 

    ISSUE FOR DETERMINATION

12. The sole issue for determination in these proceedings is whether Mr Sparrow was a resident of Australia as at the time of his application, a question which largely depends on matters of fact and degree.[1]  I have no doubt that Mr Sparrow, at the date of his application for a pension, resided in Cambodia; but it is clear from the decisional law that that finding of itself does not conclude the matter adversely to Mr Sparrow.  That is, he might have been a resident of Cambodia and a resident of Australia at the same time.[2] 

    [1] See, for example, Gauthiez v. Minister for Immigration and Ethnic Affairs (1994) 53 FCR 512 at 519; Taslim v. Secretary, Department of Family and Community Services [2004] FCA 789; (2004) 138 FCR 70 at [26] and [43] .

    [2] See, for example, Hafza v. Director-General of Social Security (1985) 6 FCR 444 at 449-450; Secretary, Department of Families and Community Services and Indigenous Affairs v. Baccon [2006] FCA 773; 90 ALD 557 at [8] – [10].

13. Under s 7(3) of the Social Security Act 1991, I must have regard to a number of mandatory considerations in determining whether Mr Sparrow was residing in Australia at the time he lodged his age pension application.  I now turn to these.

    SECTION 7(3) FACTORS

14. First, I must have regard to the accommodation used by Mr Sparrow in Australia.  Mr Sparrow stayed with family on his return trips to Australia.  The Pooraka property was let to his daughter until February 2012.  It is not clear to me whether he spent any of his first return trip to Australia in the Pooraka property, but the remaining trips were spent with family outside the Pooraka property.  I accept, therefore, that Mr Sparrow did not live in his own home on his return trips; but, on the other hand, I accept that he did live with close relatives. It made good financial sense to keep the Pooraka property tenanted and returning an income rather than vacant for his personal use on his return trips to Australia.  I would add in this connection that he used the Pooraka property for the storage of his personal possessions at the relevant time. 

15. The second factor involves the nature and extent of his family relationships.  Mr Visser, appearing for the respondent, accepted that Mr Sparrow maintained close relationships with his children and grandchildren.  Apart from the relatively frequent visits he made to Australia over the two years prior to the lodgement of his age pension application, Mr Sparrow gave evidence, which was not challenged in cross-examination and which I accept, that he rang Australia at least once a fortnight and “skyped” or “face-timed” with family members.  He would also send postcards from Cambodia to Australia. 

16. The third factor I must take into account is the nature and extent of Mr Sparrow’s employment, business or financial ties with Australia.  Apart from the Pooraka property, which I consider in connection with the fourth factor, these were negligible. 

17. The fourth factor is the nature and extent of Mr Sparrow’s assets located in Australia. Mr Sparrow maintained the Pooraka property and serviced a mortgage taken out over it from rent to support his Cambodian business venture.  It is a substantial asset when Mr Sparrow’s overall financial circumstances are considered.

18. The fifth factor is the frequency and duration of Mr Sparrow’s travel outside Australia.  I accept that Mr Sparrow spent the vast majority of his time from mid-2011 to April 2013 in Cambodia managing his guest-house.  Importantly, however, Mr Visser, accepted the receipt by the Tribunal of a statement from Mr Sparrow’s son.  Mr Sparrow’s son had been reassured by Mr Sparrow that his time in Cambodia would be limited to two to three years.  The statement records that this was repeated to the son on several occasions.  The statement further records that Mr Sparrow returned to Adelaide for key family events. 

19. The son was not called for cross examination by Mr Visser.  The son’s evidence confirms the sworn evidence given by Mr Sparrow.  In the circumstances, I think it is appropriate to accept the son’s tendered statement as unchallenged evidence that the applicant’s intention to stay in Cambodia was clearly delimited from the time of his departure in 2011. 

20. In this connection, Mr Visser pressed me with certain answers that Mr Sparrow had given on his application form.  Question 51, “Do you own a home but live elsewhere?”, was accurately answered “yes”.  The reason Mr Sparrow gave on the form for living away from home was that he had “retired to live in Cambodia”.  He also described the country of residence as Cambodia.  He answered “no” to the question, “Are you living in Australia permanently?”.  Permanently was defined to mean: “you normally live in Australia on a long term basis.  Holidays or short trips outside Australia would not affect this”.

21. The answer to this question is not particularly useful in my opinion in shedding light on the issue before the Tribunal because the question called for a “yes” or “no” answer.  It did not indicate clearly that a person could be normally living in Australia whilst simultaneously living overseas. 

22. In all the circumstances, I conclude – on the basis of Mr Sparrow’s sworn evidence, supported by the unchallenged statement of his son and supported also by what actually ended up being the case – that Mr Sparrow intended from the outset to remain in Cambodia for two to three years only.  In reaching this conclusion, I have taken account of Mr Visser’s point that Mr Sparrow purchased the guest-house business with a seven-year lease and not a three-year lease.  I accept, however, Mr Sparrow’s explanation; namely, that it would have made no business sense to seek to negotiate the transfer of a shorter lease to match the maximum three-year time line he had set himself since he would have had no, or limited, tenure to transfer to a purchaser at the end of his venture.

23. I am also required under s 7(3) to have regard to other factors. I would point out here that I should have regard, in my opinion, to the fact that Mr Sparrow did invest a substantial amount of money in a business venture in Cambodia. Although, as I have said, the fact that Mr Sparrow resided in Cambodia does not exclude a conclusion that he was also residing in Australia, the strength of his ties to Cambodia will militate against a finding that he was also residing in Australia. In this connection, it is a significant factor in my opinion that Mr Sparrow made a decision to invest a substantial sum in a guest-house business in Phnom Penh. It is a factor to which I should have regard.

    DECISION

24. Each case must turn on its own facts, and the question of residence is one of degree as I have said.  It is relevant to this application to note that a lengthy period of living outside Australia is not necessarily fatal to a claim of residence,[3] although it will be a highly relevant factor and will require explanation in my opinion. 

    [3] See the cases collected in Sutherland P and Anforth A, Social Security and Family Assistance Law (3^rd ed, The Federation Press, 2013 at [7.02].

25. In this case, I accept that the venture was limited to two to three years and that Mr Sparrow, whilst living in Cambodia for the vast majority of that time, never intended his stay to be permanent or indefinitely long.  I accept that during this time he maintained very strong personal ties with his family, with whom he lived on his relatively frequent returns to Australia.  He maintained ownership of what was for him a significant financial asset, his Pooraka house, and kept his personal belongings there.  I accept the length of the venture, at three years, is significant and does count against his submission.  Had Mr Sparrow’s intention been to stay in Cambodia to pursue his guest-house venture for an indeterminate period, I would have been far more likely to view his situation as one where he had decided to leave Australia indefinitely with only a possible or uncertain intention of resuming his life here.  In those circumstances, it would have been difficult to view him as a continuing resident of Australia. 

26. Although the position is finely balanced, I conclude that this is the case where, after a lifetime in Australia, an Australian citizen had decided at a relatively late age to interrupt, but not discontinue indefinitely, his life in Australia by a confined venture overseas the maximum time frame for which was predetermined and fixed at the outset of his departure in 2011 at no more than three years.  During that time his strong family ties were maintained as well as a significant property interest in Australia.  These factors support a conclusion, in my opinion, of ongoing residence in Australia notwithstanding his undoubted residence in Cambodia during that time. 

27. I do not reach this conclusion easily I must say.  I accept that Mr Sparrow lived away for some three years, a not inconsiderable period, and that he made a significant financial investment in a business in Cambodia.  These are factors that have caused me to consider the question very carefully.  Nevertheless, a finding that Mr Sparrow was residing in Australia in April 2013, at the time of lodgement of his application for an age pension, is, on balance, the preferable decision on the evidence before me.[4]  I shall make orders accordingly.

    [4] cf Drake v. Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60.