Susan U'Brien and Secretary, Department of Social Services
[2014] AATA 761
•22 October 2014
[2014] AATA 761
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/2626
Re
Susan U'Brien
APPLICANT
And
Secretary, Department of Social Services
RESPONDENT
DECISION
Tribunal Senior Member A K Britton
Date 22 October 2014 Place Sydney
The decision under review is set aside and in substitution of that decision I decide:
Pursuant to s 24(2) of the Social Security Act 1991 (Cth), Ms U’Brien is not to be treated as a member of a couple for the period, 2 October 2007 to 2 October 2010.
The power to waive the debt raised in relation to the period 21 July 1999 to 1 October 2007 under s 1237AAD of the Social Security Act 1991, cannot be exercised.
....................[SGD]....................................................
Senior Member A K Britton
CATCHWORDS
SOCIAL SECURITY — Overpayments and debt recovery — Member of a couple — Whether there is a special reason the applicant should not be treated as being a member of a couple — Whether that discretion should be exercised — Whether the debt should be waived—Whether special circumstances exist — Whether the applicant knowingly made a false statement or representation to Centrelink — Meaning of “knowingly” — Whether the applicant acted under duress — Whether duress is a factor that can be taken into account in determining whether to waive a debt
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) – s27;
Family Law Act 1975 (Cth)Social Security Act 1991 (Cth) – ss 24; 1237AAD
CASES
Boscolo v Secretary, Department of Social Security [1999] FCA 106 xxxxx
Crescendo Management Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40
DPP for Northern Ireland v Lynch [1975] AC 653; R v Abusafiah (1991) 24 NSWLR 531
Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60
Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084
Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435
Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143
Seear v Cohen (1881) 45 LT 589
U’Brien & Tattis Unreported, Federal Circuit Court of Australia, Myers J, 30 January 2014SECONDARY MATERIALS
Guide to Social Security Law, 2014
REASONS FOR DECISION
Senior Member A K Britton
22 October 2014
Between July 1999 and October 2010 (the relevant period) Ms Susan U’Brien received the disability support pension (DSP), calculated at the “single rate”. Following an investigation, in 2012 Centrelink concluded that Ms U’Brien was a “member of a couple” with Mr Con Tattis and throughout the relevant period her rate of DSP should have been calculated at the lesser, partnered rate. The Secretary subsequently decided to raise and recover a debt in the amount of the overpayment; approximately $81,000. That amount includes a component for “rent assistance” paid to Ms U’Brien. Ms U’Brien unsuccessfully challenged that decision in the Social Security Appeals Tribunal (SSAT) and now seeks review by the Administrative Appeals Tribunal.
The parties agree that throughout the relevant period Ms U’Brien was “a member of a couple” with Mr Tattis. Whether the decision to raise and recover from Ms U’Brien a debt of $81,000, is the correct and preferable decision, turns on:
(a)Whether the discretion conferred by s 24 of the Social Security Act 1991 (Cth) (the Act) to not treat Ms U’Brien as a member of a couple can and should be exercised
(b)If not, whether special circumstances exist that make it desirable to exercise the discretion to waive the debt pursuant to s 1237AAD of the Act.
Background
Ms U’Brien was granted DSP at the single rate in September 1997. In 1999 she met Mr Tattis. At that time Ms U’Brien was living with her mother in Heckenberg, Sydney across the road from Mr Tattis. In an affidavit prepared for proceedings in the (then) Federal Magistrates Court (FMC) dated 22 February 2011 Ms U’Brien wrote that she commenced living with Mr Tattis as his de facto in July 1999. In these proceedings she claimed that she could not recall when she commenced living with Mr Tattis and “it happened slowly”.
Around Christmas of 1999, Ms U’Brien inherited a suitcase of cash from her brother, totalling around $47,000. According to Ms U’Brien she intended to use this money to buy a small house in the country “to set herself up”. It was her understanding that because she was an undischarged bankrupt, she was prevented from purchasing a property in her own name. For that reason at his suggestion, she gave Mr Tattis her inheritance to purchase a property in Taree (the Page St property) and consented to the deeds to the property being placed in his name. She claimed that she was given an assured that once the mortgage was repaid he would transfer the property into her name. The purchase was made in May 2000. Mr Tattis took out a mortgage, “a flexi loan” for the balance of the purchase price, about $4000. Mr Tattis and Ms U’Brien then moved from Sydney to the Page St property.
In November 2002, Mr Tattis purchased another property in Taree, in Kurrajong Crescent (the Kurrajong Cres property) using funds from the sale of a house he owned in Sydney.
Mr Tattis and Ms U’Brien remained in the Page St property while undertaking renovations at the Kurrajong Cres property and moved to Kurrajong Cres sometime in 2003. There is some evidence to suggest that from time to time, Ms U’Brien returned to live at the Page St property for short periods.
In December 2004, both Ms U’Brien and Mr Tattis made wills, in which they named each other their sole beneficiary.
According to Ms U’Brien throughout the relationship Mr Tattis was abusive and violent towards her, increasingly so in the latter years. In October 2010 Mr Tattis announced he was ending the relationship and according to Ms U’Brien, gave her 10 minutes to collect her belongings and leave. Ms U’Brien returned to the Page St property where she continues to reside. Mr Tattis remained living at the Kurrajong Cres property.
In March 2011 Ms U’Brien was granted a 24 month apprehended violence order against Mr Tattis. That order was discharged by the District Court in NSW May 2012.
In March 2011 Ms U’Brien commenced property settlement proceedings under the Family Law Act 1975 (Cth) in the FMC. A key issue in those proceedings was whether as claimed by Ms U’Brien, and disputed by Mr Tattis, the Page St property was largely financed from the proceeds of her inheritance. The Court accepted Ms U’Brien’s account and ordered, among other things, that the Page St property be transferred into her name.
Financial and domestic arrangements between Ms U’Brien and Mr Tattis
In an affidavit filed in the proceedings in the FMC, Ms U’Brien deposed:
throughout the relationship with Mr Tattis she undertook all domestic duties
after going on the DSP [in May 2003] Mr Tattis grew to be morbidly obese, increasingly disabled and she took on the role of his carer
throughout the relationship he subjected her to physical and verbal abuse
Mr Tattis owned a gun and had served a custodial sentence for “bashing a man over the head with a crow bar”
she gave Mr Tattis between $150 to $200 in cash each fortnight and, in addition, purchased “all the food” (about $150), Mr Tattis’s prescription medication and treats for their pets
Mr Tattis was an “EBay addict” and without her consent drew down from the mortgage over the Page St property to fund those purchases. She made all repayments on the mortgage
Mr Tattis regularly used her credit card without her consent
she was responsible for all repayments on her credit card
in addition to the mortgage repayments (initially about $5000), she was responsible for the payment of insurance and all utilities on the Page St property.
In a statement prepared for these proceedings, Ms U’Brien elaborated on these claims stating that she:
had between $5 and $20 per fortnight to spend on herself
had no money to buy “good” food for herself and only purchased second hand clothes
was not permitted to bring “any of her food” to the Kurrajong Cres property or eat any of the food she was required to purchase for Mr Tattis
was not permitted to, among other things, iron her clothes, use a hairdryer or wash her car while at the Kurrajong Cres property
required permission from Mr Tattis to make phone calls, use water or electricity, use the washing machine, take a bath and use the toilet at the Kurrajong Cres property
had little contact with the outside world: Mr Tattis refused to allow her to make or receive phone calls (except from her mother, and then only once a week), leave the property without permission or socialise with others
acted as Mr Tattis’s “slave/carer” and attended to all domestic tasks and a number of demeaning tasks relating to his personal hygiene
was subject to repeated threats by Mr Tattis. Among other things he threatened to smash her teeth down her throat – a reference to an incident involving a former violent partner – and to kill her and her dogs if she left the relationship.
In an affidavit prepared for the FMC, Among other things Mr Tattis denied:
being morbidly obese and, as claimed by Ms U’Brien, having undergone multiple surgical procedures throughout the relevant period
being physically violent toward Ms U’Brien
being an EBay addict. He claimed Ms U’Brien spent “hours and hours on E-BAY”. (In oral evidence he claimed that Ms U’Brien was constantly purchasing Chanel perfume and other luxury items on EBay)
making purchases using Ms U’Brien’s credit card
not doing any domestic work or work in the garden of the Kurrajong Cres property
being given $150 to $200 in cash per fortnight by Ms U’Brien. He conceded she might have “put $100 into the tin” being rent assistance she received from Centrelink
In that affidavit he also claimed that he used his own funds to purchase the Page St property.
Findings of fact
Determining where the truth lies about the nature of the relationship and in particular, the financial arrangements between Mr Tattis and Ms U’Brien, is difficult given their conflicting evidence and the limited corroborative evidence.
Mr Tattis did not impress me as a truthful witness. His evidence was entirely unsupported and marred by internal inconsistencies. For example, his denial in oral evidence of receiving “rent” from Ms U’Brien or having any knowledge of the “tin” into which those payments were allegedly made, directly contradicts statements contained in his affidavit prepared for the FMC proceedings. In addition, a number of the claims he made in oral evidence, such as Ms U’Brien being a spendthrift and using EBay to purchase luxury items, were at best fanciful. It was apparent from his evidence that he was extremely bitter about Ms U’Brien’s actions in commencing property settlement proceedings in the FMC.
Ms U’Brien’s evidence is not without its shortcomings. She was a poor historian and had difficulties identifying when many of the alleged incidents she described occurred. I was left with the impression that she had conflated her recollection of the earlier and latter parts of the relationship. In addition, some of her evidence was internally inconsistent. For example, in these proceedings and those before the SSAT, she claimed that she did not move in with, or regard herself as being the partner of, Mr Tattis, until some years after they met. In contrast, her affidavit prepared for the FMC proceedings she deposed that she moved in with Mr Tattis in mid-1999 and, throughout the relationship he introduced her as his partner. Her explanation for that (and other) discrepancies — that she did not read the affidavit or give her solicitor that history — is unconvincing.
Given these shortcomings I have taken a cautious approach to the claims made by Ms U’Brien. As the Secretary points out, there is no contemporaneous medical evidence to support Ms U’Brien’s claim of being routinely subjected to domestic violence and sustaining physical injuries. Nonetheless there is some evidence to support the claim that, particularly in the latter years of the relationship, Ms U’Brien was subjected to physical and verbal abuse. This includes the evidence given in these proceedings by her mother, friends and former neighbours. Her mother and friends (since 2006/2007) testified that they witnessed Mr Tattis being verbally abusive to Ms U’Brien and observed bruising and finger marks on her body. They also corroborated her claim that her movements outside the home and social contact were restricted and strictly monitored by Mr Tattis. Former neighbours stated they often heard Mr Tattis shouting at, and abusing, Ms U’Brien in a demeaning and derogatory manner. One stated that during Mr Tattis’ tirades she would her call her children inside the house so they would not be exposed to the violent language he used. The neighbours also stated that they felt intimidated by Mr Tattis. In his reasons for decision Myers J commented (U’Brien & Tattis Unreported, Federal Circuit Court of Australia, Myers J, 30 January 2014 at [52]):
During the course of the hearing particularly during cross examination of the respondent, the court observed the respondent continually stare at the applicant in a menacing way, become aggressive and speak about the applicant in a derogatory tone and manner.
On balance I think it more probable than not that despite the absence of any contemporaneous medical evidence, Ms U’Brien was subjected to physical and verbal violence throughout, and especially in the later years of, her relationship with Mr Tattis.
In addition, there is some evidence to support Ms U’Brien’s account of the financial arrangements between herself and Mr Tattis and her claim of having little, if any, discretionary income. This includes the evidence given by her mother and friends to the effect that Ms U’Brien never appeared to have any money to spend on herself and purchased only second-hand clothes. Ms U’Brien’s account also finds some support in the affidavit prepared by Mr Tattis and filed in the FMC. In that affidavit he denied receiving $200 per fortnight, but acknowledged that Ms U’Brien paid into the tin fortnightly cash payments of $100, which he kept for his personal use.
While as discussed I have concerns about parts of Ms U’Brien’s evidence, I am satisfied on the balance of probabilities that at least in the final three years of the relationship, she paid into “the tin” $200 per fortnight, purchased all food for the household and Mr Tattis’s prescription medication. I also find that she had restricted use of the resources and facilities at the Kurrajong property and in effect acted as Mr Tattiss’ carer and housekeeper. While possible that Mr Tattis used Ms U’Brien’s credit card and the mortgage on the Page St property to purchase items and did not reimburse Ms U’Brien for those payments, on the available evidence I could not be satisfied that that occurred. Given that on her account she had almost no discretionary income after paying for board, groceries and other items including expenses associated with the Page St property, it is difficult to see how she would have able to make those payments. In addition I find that from day one, Ms U’Brien paid all expenses associated with the Page St property.
It is not in dispute that throughout the relationship, Mr Tattis kept his finances separate to Ms U’Brien’s and she was ignorant of the details of his income and assets.
Is there a special reason Ms U’Brien should not be treated as a member of couple?
Ms U’Brien submits that the discretion conferred by s 24 of the Act can and should be exercised. The Secretary disagrees.
Section 24(2) provides:
(2)Where:
(a)a person has a relationship with another person, whether of the same sex or a different sex (the partner ); and
(b)the person is not legally married to the partner; and
(c)the relationship between the person and the partner is a de facto relationship; and
(d)the Secretary is satisfied that the person should, for a special reason in the particular case, not be treated as a member of a couple; [emphasis added]
the Secretary may determine, in writing, that the person is not to be treated as a member of a couple for the purposes of this Act.
In Boscolo v Secretary, Department of Social Security (1999) 90 FCR 531; (1999) 53 ALD 2; [1999] FCA 106, French J examined s 24(1) of the Act and observed that the word “special” was “in essence instrumental, a direction to the decision maker that the discretion it constrains is not likely to be enlivened”. His Honour stated, at [18]:
The core of the requirement for “special circumstances” or “special reasons” is that there be something unusual or different to take the matter the subject of the discretion out of the ordinary course. But that does not require that the case be extremely unusual, uncommon or exceptional [authorities omitted]
Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] FCA 1084 at [37] agreed with that analysis. His Honour also agreed with the observations made by Senior Member Creyke in Re Holt and Secretary, Department of Education, Employment and Workplace Relations [2010] AATA 143 about the operation of the discretion (at [38]):
[The Senior Member] emphasised that the expression must be interpreted in context consistent with the scope and purpose of the Act and in that regard referred to the statement made in the Explanatory Memorandum to the Social Security Legislation Amendment Bill (No 4) 1991 which states (at 17):
[t]here is justification in paying a higher rate to an unpartnered person than to a member of a couple if both members of the couple are living together. This justification is based on the premise that the unpartnered person does not enjoy the same economies of shared living costs as does the member of a couple in those circumstances. If the economies of scale are not available to the member of the couple because he or she is living apart from his or her partner because, for example, of the illness of one or both members of the couple, then each would face similar living costs as an unpartnered person.
Barker J went on to state (at [44] and [45]):
[t]here is a particular focus under the Act on the practical ability of the resources of the partner being available for pooling with the resources of the person holding the pension. …
It stands to reason that if for some legal or other practical reason the partner member of the couple cannot be treated as sharing income and assets then there is a ground for exercising the discretion under s 24 so as not to treat the holder of the pension as a member of a couple who are capable of sharing resources.
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The Guide to Social Security Law (the Guide) provides direction to decision makers on the application of the discretion. The Tribunal is not bound to apply the policy expressed in the Guide, but will usually do so unless there are cogent reasons in a particular case for not doing so (see Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60).
The Guide states (at 2.2.5.50):
Section 24 discretion exists to deal with unfair, inequitable and/or unjust anomalies.
Section 24 is intended to be the option of last resort, and should only be applied when all other reasonable means of support have been explored and exhausted.
…
It is not possible to predict all the situations where section 24 should be applied as the circumstances of each particular situation need to be considered on a case-by-case basis.
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The discretion to treat a person as NOT being a member of a couple should be exercised ONLY where a full consideration of all the circumstances relevant to the individual's case would make it unjust or unreasonable not to do so.
It is appropriate that the decision maker strike a balance between the individual circumstances of the person and the circumstances of the couple.
…
The couple's circumstances should be compared to a couple in similar circumstances but for whom the special circumstances to apply section 24 do not exist. There must be some degree to which circumstances are outside the couple's or individual's control and cannot be changed.
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Three questions that need to be considered as part of the assessment while looking at the full circumstances of the case are:
Is there a special reason to be considered in this couple's circumstances?
Is there a lack of being able to pool resources for the couple as a result of the circumstances?
Is there financial difficulty as a result of the couple's circumstances?
It is argued for Ms U’Brien that “special reasons” exist to warrant the exercise of the power not to treat her as a member of a couple throughout the relevant period. These include:
Ms U’Brien’s lack of control over her income
Ms U’Brien’s ignorance of, and lack of benefit from, Mr Tattis’s assets and income
Ms U’Brien’s failure to receive any of the benefits of living as a member of a couple, including the pooling of resources
the physical, mental and emotional violence to which she was subjected throughout the relationship.
The Secretary accepts that the relationship between Ms U’Brien and Mr Tattis was dysfunctional and characterised by violence especially in its later years. The Secretary also accepts that at least towards the end of the relationship Mr Tattis was probably abusive towards and controlling of Ms U’Brien. However the Secretary disputes the proposition that Ms U’Brien derived no financial benefit as a consequence of being a member of a couple. Further the Secretary contends that the discretion in s 24(2) should not be exercised in circumstances where Ms U’Brien knowingly held herself out to Centrelink to be a single.
Findings and conclusions
There can be no argument that, at least in its final years, the relationship between Mr Tattis and Ms U’Brien was not characterised by the equal “sharing” of the income earned and assets held by the couple. Throughout the relationship, Mr Tattis held a disproportionate share of the couple’s combined assets and income. Of itself that does not establish a “special reason” within the meaning of s 24(2)(d). It is a matter of common knowledge that financial arrangements between members of couples are infinitely variable: some couples share their income and assets equally; others keep their finances entirely separate. In many relationships the financial arrangements between the parties change throughout the course of the relationship.
In my opinion a “special reason” is not established merely because, as in this case, the subject relationship was dysfunctional; one partner was subjected to cruelty, violence or abuse; or, one member of the couple was living in straitened financial circumstances.
While the discretion in s 24(2) is expressed to be unfettered, having regard to the authorities and the Secretary’s policy, I accept that an inability to pool resources informs the exercise of that discretion and it is largely reserved for situations where “for some legal or other practical reason the partner member of the couple cannot be treated as sharing income and assets” (per Barker J in Kazmierczak v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs at [42]).
In the latter years of the relationship, Ms U’Brien paid Mr Tattis $250 per week (for board and Mr Tattis’s food etc) to live at the Kurrajong Cres property with restricted use of the property’s amenities. That was the only financial “benefit” she derived from the relationship. Under that arrangement she effectively acted as Mr Tattis’s housekeeper and personal assistant. That she acceded to that arrangement illustrates the degree of control Mr Tattis exercised over Ms U’Brien and her vulnerability, lack of insight and what her treating physiatrist identified as her significantly impaired decision-making capacity.
While the arrangements heavily favoured Mr Tattis, it could not be said that Ms U’Brien was without any income for her own use. She paid for the expenses of running a car and maintaining and financing the Page Street property from her pension.
Nonetheless, at least throughout the last three years of the relevant period, any benefit Ms U’Brien derived from the pooling of resources, was negligible. In the final years of the relationship, Mr Tattis orchestrated an arrangement whereby Ms U’Brien was effectively denied any of the benefits of pooling the resources of the couple. She acquiesced to that arrangement for a combination of reasons, which include Mr Tattis’s exercise of control and use of violence and cruelty, and her impaired decision-making capacity.
For these reasons I am satisfied that there is a special reason to treat Ms U’Brien as not being a member of a couple in the last three years of the relevant period. I will return to consider whether it is appropriate in the circumstances of this case to exercise that discretion.
Can the power to waive the debt under s1237AAD be exercised?
The Secretary contends that the power to waive the debt cannot be exercised because it arose as a result of Ms U’Brien knowingly making false statements. It is submitted for Ms U’Brien that those statements were made under duress and the power to waive the debt, conferred by s 1237AAD of the Act, can and should be exercised.
Section 1237AAD of the Act states:
Waiver in special circumstances
The Secretary may waive the right to recover all or part of a debt if the Secretary is satisfied that:
(a)the debt did not result wholly or partly from the debtor or another person knowingly:
(i) making a false statement or a false representation; or
(ii) failing or omitting to comply with a provision of this Act, the Administration 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. [Emphasis added.]
Ms U’Brien’s explanation for supplying false information
Included in the documents provided to the Tribunal by the Secretary under s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act), were copies of Centrelink forms in questionnaire style, apparently submitted to Centrelink by Ms U’Brien and Mr Tattis at various times throughout the relevant period.
Those relating to Ms U’Brien and bearing her signature contain the following information, completed by hand:
She was single and not in a de facto relationship throughout the relevant period
Between March 2003 and May 2006 she resided at Kurrajong Cres and paid board in the sum of $140 per week to “Mr and Mrs Rattis”
From May 2006, to the end of the relevant period, she resided at Page St and paid rent to Mr Tattis (who resided at Kurrajong Cres), initially of $130, increasing to $140 per week in August 2006.
In these proceedings, Ms U’Brien gave a number of explanations for how the submitted forms came to contain the above information. In a statement prepared for these proceedings she wrote:
Con did all the Centrelink stuff. He would give me things to sign. I wasn’t allowed to read them. He made me just sign them.
In oral evidence she claimed that Mr Tattis never explained what was contained in the forms and said words to the effect “just sign this or you’ll get a punch”. When questioned about the apparent discrepancy between her claim of not completong the forms and the answers contained in those forms appearing to be in her hand writing, Ms U’Brien suggested that they might have completed by Mr Tattis. At one point she appeared to suggest she completed the forms by copying a duplicate form that had been prepared by Mr Tattis.
Ms U’Brien testified that when she queried Mr Tattis about whether she was on the “correct benefit” he assured her that she was. She said on one occasion when she asked whether she should be on a carer’s pension “he flew off the handle” and insisted that they were “on the right scheme”.
In 2006 Centrelink conducted an investigation into the relationship between Mr Tattis and Ms U’Brien. Ms U’Brien stated to the Tribunal that she was unaware of that investigation. She testified that she recalled attending an interview with Mr Tattis at the Taree Centrelink office and that prior to the interview Mr Tattis shouted at her, told her to say nothing and punched her in the head. In these proceedings Ms U’Brien claimed that she was unaware that the rate of DSP payable to a person who was a member of a couple was less than the rate payable to a person who was not a member of a couple. She stated that when the relationship with Mr Tattis came to an end she took steps to raise with Centrelink her concerns that she might not have been on the correct pension.
Medical opinion regarding Ms U’Brien’s decision-making capacity
Tendered in these proceedings were reports and records prepared by domestic violence workers and Ms U’Brien’s treating psychologist and psychiatrist. The histories recorded in those documents are broadly consistent with the claims made by Ms U’Brien in these proceedings about her relationship with Mr Tattis.
Ms U’Brien was referred to psychiatrist Dr Esther Jesudason in April 2012. Dr Jesudason prepared a report for these proceedings and also gave oral evidence. In her opinion Ms U’Brien suffers from a major depressive disorder with features of post-traumatic stress disorder. According to Dr Jesudason, Ms U’Brien’s depressive disorder is chronic and longstanding and her current condition is now especially severe. Dr Jesudason attributes the condition to a long history of being in abusive relationships with men, dating back to her relationship with her father.
According to Dr Jesudason, throughout the relevant period, Ms U’Brien’s decision-making ability was significantly impaired as a consequence of: (i) her limited intelligence and diagnosed psychiatric disorders; and (ii) being in a long term extremely abusive relationship. In Dr Jesudason’s opinion, Ms U’Brien nonetheless had the capacity to give truthful answers to simple questions.
Ms U’Brien commenced seeing psychologist Jeanette Pheiffer in June 2010, shortly before her relationship with Mr Tattis came to an end. She remains in Ms Pheiffer’s care. In Ms Pheiffer’s opinion the relationship with Mr Tattis was “traumatic, abusive and violent” and characterised by economic abuse – “taking control of all finances, decisions, having insight or opportunity to peruse the content”.
Did Ms U’Brien knowingly make a false statement or a false representation to Centrelink?
The meaning of the word “knowingly” in s 1237AAD of the Act was considered in Re Callaghan and Secretary, Department of Social Security (1996) 45 ALD 435, in which the Tribunal observed (at [48]):
There is nothing in s 1237AAD which suggests that the word “knowingly” should be given any meaning other than that a person has actual knowledge, rather than constructive knowledge, that he or she is making a false statement or representation or that he or she is failing or omitting to comply with a provision of the Act. That actual knowledge is to be ascertained by reference to the statements of the person as to his or her actual state of knowledge at the time and to events surrounding the false statement or the act or omission.
Adopting that approach, the issue to be determined is whether Ms U’Brien had actual knowledge that she made false statements to Centrelink about, among other things, not being a member of a couple and living with Mr Tattis.
Having carefully examined the Centrelink forms referred to above it is apparent the handwriting in those submitted under Ms U’Brien’s signature is discernibly different to those bearing Mr Tattis’s signature. Ms U’Brien’s claim that she simply signed the forms and had no knowledge of their contents is implausible and inconsistent with the available documentary evidence. I think it more probable than not that she completed the forms bearing her signature. While in Dr Jesudason’s opinion Ms U’Brien’s decision-making capacity was impaired, nonetheless she was of the opinion that Ms U’Brien had the capacity to understand and give truthful answers to simple questions. My observation of Ms U’Brien giving evidence is consistent with that opinion. Many of the questions put to Ms U’Brien during the hearing were more complex than the simple ones contained in the Centrelink forms. Ms U’Brien appeared to be capable of giving responsive answers to those questions.
Counsel for Ms U’Brien, Ms Dinnen, properly conceded that the evidence indicates that Ms U’Brien probably knew she was supplying false information to Centrelink but submitted she did so under duress. She submitted that as a consequence it cannot be said that Ms U’Brien “knowingly” made false statements.
The power to waive the debt conferred by s 1237AAD can only be exercised if the subject debt did not result wholly or partly from the debtor or another person knowingly making a false statement or a false representation. The provision is not concerned with whether the debtor understood the consequences of making a false statement or a false representation, but simply whether they knowingly made a false statement or false representation.
Duress is a defence to criminal conduct for which the actor would otherwise be liable because he or she both knew and intended to do something that was a criminal act due to the pressure of coercion placed upon him or her by another person or other persons. In short, it is an excuse for knowingly and intentionally committing a criminal act because the person’s will has been so overborne that the act is not, at law, considered to be voluntary: see, for example, DPP for Northern Ireland v Lynch [1975] AC 653; R v Abusafiah (1991) 24 NSWLR 531. (See also the use of the concept in common and equity, for example, Seear v Cohen (1881) 45 LT 589; CrescendoManagement Pty Ltd v Westpac Banking Corporation (1988) 19 NSWLR 40)
While I accept that Mr Tattis was extremely controlling in the relationship, the available evidence falls short of establishing that in providing false information to Centrelink Ms U’Brien acted under duress. But even if that proposition was accepted, the fact remains that Ms U’Brien knowingly made false statements to Centrelink and her debt arose at least in part as a result of those statements.
In my opinion the discretion conferred by s 1237AAD of the Act does not extend to situations where a person makes false statements or representations to Centrelink while acting under duress. It follows that the power to waive the debt cannot be exercised.
Can the debt attributable to Mr Tattis’s income protection benefits be waived?
About $24,000 of Ms U’Brien’s debt is due to Mr Tattis’s failure to disclose to Centrelink income protection benefits he received between 2004 and 2009. Ms U’Brien had no knowledge of, and derived no benefit from, that income.
The power to waive the debt conferred by s 1237AAD cannot be exercised if the debtor “or another person made a false statement or false representation”. In oral evidence Mr Tattis effectively conceded that he deliberately gave false and misleading information to Centrelink. In light of that concession and having regard to the available documentation, I have no hesitation in finding that Mr Tattis knowingly failed to disclose to Centrelink that he was in receipt of income protection benefits between 2004 and 2009, in circumstances where he understood he was required to make that disclosure.
The power to waive the debt attributable to Mr Tattis’s failure to disclose to Centrelink income protection benefits, cannot be exercised.
Should the power conferred by s 24 of the Act be exercised?
Having found that the preconditions to the exercise of the power conferred by s 24 of the Act to treat Ms U’Brien as not a member of a couple have been satisfied, the final issue to be decided is whether that power should be exercised.
The Secretary’s submission that in circumstances where Ms U’Brien knowingly made false statements, that power should not be exercised, is a powerful argument. I accept that there are strong public policy considerations for not exercising the power, in circumstances where the beneficiary of its exercise knowingly provided false information to Centrelink and obtained an advantage as a result. However the circumstances in this case are in my opinion exceptional. For an extended period Ms U’Brien was a victim of domestic violence, abuse and financial exploitation. Her decision to remain in the relationship in those circumstances was irrational and probably the result of her impaired decision-making capacity. Given the violent nature of that relationship she felt she had no option but to remain and submit to Mr Tattis’s increasingly unreasonable demands. While she knowingly made false statements to Centrelink, there is no evidence that she actively conspired with Mr Tattis to misrepresent her relationship, or fully understood the consequences of misrepresenting her position. While the considerations are finely balanced, notwithstanding Ms U’Brien’s transgressions I have decided this is an appropriate case to exercise the discretion conferred by s 24(2) to determine that she not be treated as a member of a couple for the period 2 October 2007 to 2 October 2010.
Decision
The decision under review is set aside and in substitution of that decision I decide pursuant to s 24(2) of the Act that Ms U’Brien is not to be treated a member of a couple, from 2 October 2007 to 2 October 2010.
I certify that the preceding 63 (sixty -three) paragraphs are a true copy of the reasons for the decision herein of Senior Member A K Britton .................[SGD].......................................................
Associate
Dated 22 October 2014
Date(s) of hearing 2 and 3 September 2014 Date final submissions received 11 September 2014 Counsel for the Applicant Deborah Dinnen Solicitors for the Applicant Mid North Coast Community Legal Centre Counsel for the Respondent Tim Reilly Solicitors for the Respondent Australian Government Solicitor
Key Legal Topics
Areas of Law
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Social Security Law
Legal Concepts
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Overpayments and Debt Recovery
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Discretionary Powers
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Special Circumstances
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Unconscionable Conduct
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Fiduciary Duty
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