Tsoulis and Secretary, Department of Family and Community Services

[2004] AATA 732

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 732

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No W2004/57,58

GENERAL ADMINISTRATIVE DIVISION		)
Re		Mr Nicholas TSOULIS Mrs Elli TSOULIS

Applicant

And SECRETARY,DEPARTMENT OF FAMILY AND COMMUNITY SERVICES

Respondent

DECISION

Tribunal Ms Linda Savage Davis, Member

Date9 July 2004

PlacePerth

Decision The decision under review is affirmed.  

..............(sgd L Savage Davis)..............

Member

CATCHWORDS

SOCIAL SECURITY – reduction of rate of age pension – assets test – applicants owner of two adjacent properties – principal home – adjacent property considered by applicants to be part of principal home – whether private land adjacent to dwelling- house is primarily for private or domestic purposes in association with that dwelling-house

Social Security Act 1991 ss 11(5), 11(6)

Earlam and Department of Social Security (1991) 24 ALD 606

Ghata and Repatriation Commission (AAT 5673, 9 February 1990)

Demovich v Secretary, Department of Family and Community Services [2004] AATA 647

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

REASONS FOR DECISION

9 July 2004  Ms L Savage Davis, Member

1.      This is an application by Mr Nicholas and Mrs Elli Tsoulis (the applicants) for a review of a decision made by a Centrelink delegate on 9 October 2003 to pay less than the maximum rate of Age Pension (AP) and Wife’s Pension (WP) respectively due to the value of their assets. These decisions were reviewed and affirmed by an Authorised Review Officer (ARO) on 17 December 2003 and subsequently by the Social Security Appeals Tribunal (SSAT) on 29 January 2004.

2. At the hearing the applicants were represented by their son Mr Andrew Tsoulis. Mr Aaron Holt, an advocate with the Centrelink Service Recovery Team represented the Secretary, Department of Family and Community Services (the respondent). The Tribunal had before it the documents lodged pursuant to s37 of the Administrative Appeals Tribunal Act 1975 (the T-documents). The respondent and applicants filed their statements of Facts and Contentions on 26 May 2004 and 9 June 2004 respectively. Mr Nicholas Tsoulis and his son Mr David Tsoulis gave evidence at the hearing.

BACKGROUND

3.      Mr and Mrs Tsoulis own 24 and 26 Hayes Avenue, Yokine. They live at 24 Hayes Avenue. Their son, Mr David Tsoulis (David) and his family live at 26 Hayes Avenue. The issue before the Tribunal is whether all or part of the property at 26 Hayes Avenue, Yokine occupied by David and his family should be treated as part of the principal home of the applicants for the purposes of the social security law.

EVIDENCE OF MR NICHOLAS TSOULIS

4.      Mr Tsoulis told the Tribunal he bought 24 Hayes Avenue 33 years ago and 26 Hayes Avenue about 27 years ago. 26 Hayes Avenue has at times been rented out although he said it has been difficult to find reliable tenants. His son David, who married some 14 years ago, has lived there on and off for a total of about 6 to 7 years. Mr Tsoulis said that what he described as his extended family, that is David, David’s wife and their  two children aged 10 and 7 had lived at 26 Hayes Avenue, rent free since about June 2003. His wife, who is not well and had breast cancer, likes to spend as much time as possible with her grandchildren at 26 Hayes Avenue. She sleeps on a folder bed in the children’s’ room sometimes and they stay at their grandparent’s home. The families help each other out. David and his family live rent free because David is on a low income. Mr Tsoulis said he has found things difficult financially since his pension was reduced and has had to borrow from relatives.

5.      Mr Tsoulis said that if 26 Hayes Avenue was rented out or used for business purposes he would accept it had to part of his assets. It was however used for private purposes. The house on 26 Hayes Avenue was more a cottage than a house. It had only two bedrooms, a tiny kitchen, lounge room and veranda. His own home at 24 Hayes Avenue, although on a smaller block than 26 Hayes Avenue, had a tiny shed and a home with 4 bedrooms, one quite large, the other three only nine feet square. 26 Hayes Avenue has a shed that he stores his tools and other things in. He said the shed needs to be replaced however because the back wall made of wood has been damaged by white ants.

6.      Mr Tsoulis told the Tribunal two pine trees and one oak tree were removed last year at a cost of $1700 form 26 Hayes Avenue. This was done just around the time David and his family moved back in. He was able to save the money it would have  cost removing the trees from the property by having the tree removals done to coincide with a council collection. To properly clear and level the area he said he would have to hire a bobcat. It is his intention to build a new shed and put in a vegetable garden at 26 Hayes Avenue. The shed would be used by himself and his son David. These plans have been put on hold since his pension had been reduced.

7.      Mr Tsoulis said David pays all the rates and all costs such as power and water for 26 Hayes Avenue. He and his wife pay all the costs for 24 Hayes Avenue. Each property has it own power and sewerage. David mows the lawn and maintains 26 Hayes Avenue. There is an asbestos fence between the two properties that he would like to remove part of to allow easy access between the properties.

8.      Mr Tsoulis said he believed David and his family would now stay permanently at 26 Hayes Avenue unless something unforseen arose. In that event he would immediately notify Centrelink as he accepted that then the property  should not be exempt. Mr Tsoulis said he purchased 26 Hayes Avenue to have something for his family. As well as David and his family, his daughter lived in the property for about 2 months prior to finding somewhere to rent. If his pension is reinstated he intends to put up a shed which he and David would share and put in a vegetable garden and trees that he and David would jointly maintain. Mr Tsoulis said he believed that because 26 Hayes Avenue was for private use it should be part of his principal home.

EVIDENCE OF MR DAVID TSOULIS

9.      Mr David Tsoulis (David) told the Tribunal he and his family moved into 26 Hayes Avenue in June 2003. He estimated he would have lived there for about 6 years in total since marrying. David said he paid for the rates and all other costs associated with 26 Hayes Avenue. He said it suited him financially to live there and his family loved being next to their grandparents. He said they were there for the long haul now, particularly as he is starting a new business and his parent’s assistance was very helpful. David said his mother stays over occasionally and his children are regularly with their grandparents at 24 Hayes Avenue. He does not pay rent and was not sure if he had ever done so in the past. He was sure he had not done so the last two times he had lived there. He said his parents had also helped him financially with the deposit on his first house and had given other assistance over the years totalling approximately $40,000.

10.     David confirmed two pine trees had been cut down around the time he and his family moved in last year. He said he had lots of plans for 26 Hayes Avenue. Currently the outside of the house was being rendered. He and his father wanted to get a new shed built which they would share as well as plant more fruit trees. They also wanted to take out part of the fence to make it easier for the children to go back and forth between the houses. David said he and his father have property in the shed at 26 Hayes Avenue.

FINAL SUBMISSIONS

11.     On behalf of the applicants it was submitted that;

.           26 Hayes Avenue was used for private or domestic purposes, that is, by the extended family who could be described as near relatives. David and his family pay no rent to live at 26 Hayes Avenue and have received approximately $40,000 in assistance from the applicants.

.          Mrs Ellie Tsoulis stays overnight occasionally at 26 Hayes Avenue because David’s wife suffers migraines about once a fortnight and David works at night. She also assists with cooking and cleaning.

.          The shed at 26 Hayes Avenue is used by the applicants for storage.

.          The removal of three trees at a cost of $1700 is evidence the applicants intend to develop a joint garden which will be maintained by Mr Tsoulis and David. This has not gone ahead because of lack of funds due to the reduction in pension.

.          26 Hayes Avenue has a larger driveway than 24 Hayes Avenue and is therefore used by the applicants.

.          The Tribunal was referred to the decision of Earlam and Department of Social Security (1991) 24 ALD 606. Whilst the applicants had not as yet built a pool, tennis court or garden as referred to in that decision there was evidence that they were making progress towards this by removing the trees. In regard to the decision of Ghata and Repatriation Commission (AAT 5673, 9 February 1990) it was submitted that the intention to proceed with the garden and shed had ceased only because the applicants pensions had been reduced. The Guide to the Social Security Law stated that a separate dwelling can be part of the principal home and it was submitted 26 Hayes Avenue was part of the principal home.

.          In conclusion it was submitted that the applicants had met the criteria that would allow 26 Hayes Avenue in its entirety, or at least in part to be regarded as part of the principal home and so be exempt from the assets test. This was because it was extended family that lived at 26 Hayes Avenue, there was constant movement between the properties, there was shared domestic responsibilities and shared use of the shed on 26 Hayes Avenue.

12.     On behalf of the respondent it was submitted;

.          The decision of Demovich v Secretary, Department of Family and Community Services [2004] AATA 647 at paragraph 33 notes that once the title to a parcel of land has been identified as having a property upon it which is the principal home of the social security beneficiary, then that home, however it is used is an exempt asset. The applicants have lived at 24 Hayes Avenue continuously for approximately 33 years and this it was submitted was their principal home. Their possessions, except for some tools stored in the shed at 26 Hayes Avenue are at 24 Hayes Avenue.

.          The word “private “in s 11(6) of the Social Security Act 1991 refers it was submitted to use by the applicants, not by their son David.

.          The Guide to the Social Security Law at 4.6.3.30 provides that if a person or their partner have more than one home, the home they spend the greatest amount of time in is taken to be their principal home and the other property is to be taken  as an asset “even when the customer or their partner are living in the property”.

.          24 and 26 Hayes Avenue are on separate titles and there is a fence between the properties. David it was submitted maintains the property at 26 Hayes Avenue and pays all costs associated with it although he pays no rent. The applicants maintain and pay all costs associated with 24 Hayes Avenue.

.          The movement of family members between the properties including Mrs Tsoulis staying overnight at 26 Hayes Avenue about once a fortnight was natural it was submitted and to be expected between family members.

.          Although three trees had been removed from 26 Hayes Avenue nothing else had been done to progress the intention to build a shed or garden on that property.

.          The SSAT had been correct it was submitted in the conclusion it had drawn in paragraphs 18 and 19 of its decisions dated 29 January 2004 (T1/7 and T2/12). The principles in Ghata (supra) and Clark and Secretary, Department of Social Security ((1986) AAT 2968, 4 November 1986) should be applied to find that the 26 Hayes Avenue could not be considered part of the applicants’ principal home as the majority of the property was used to provide accommodation to David and his family. Whatever the intention was in regard to the back yard of 26 Hayes Avenue it was what the backyard was actually used for that was the relevant consideration.

.           In conclusion it was submitted that in Earlam (supra) when considering the meaning of the word ‘adjacent’ the Tribunal noted;

“This rule is of particular importance where a person owns two connecting blocks of land and one block contains the person’s home. It is not intended that the other block will be treated as part of the curtilage of the home.”

. The respondent submitted that the Tribunal should therefore affirm the decision of the SSAT.

CONSIDERATION OF ISSUES AND FINDINGS

13.     In reaching a decision I have taken into account all the documentary and oral evidence, submissions made at the hearing, relevant legislation and case law. Section 1118 of the Social Security 1991 (the Act) states that the value of a person’s right or interest in their principal home is to be disregarded for the purposes of the Act. It is not in dispute that the applicant’s principal home is 24 Hayes Avenue, Yokine. The issue before the Tribunal is whether their principal home can be said to include any part of, or the entirety of 26 Hayes Avenue, Yokine and therefore also be  disregarded for the purposes of the Act.

14. Sections 11(5) and 11(6) of the Act defines the principal home to include:

“Principal home

11(5) A reference in this Act to the principal home of a person includes a reference to:

(a)      if the principal home is a dwelling-house—the private land adjacent to the dwelling-house to the extent that the private land, together with the area of the ground floor of the dwelling-house, does not exceed 2 hectares; or

(b)     if the principal home is a flat or home unit—a garage or storeroom that is used primarily for private or domestic purposes in association with the flat or home unit.

11(6) A reference in subsection (5) to private land adjacent to a dwelling-house is a reference to land that is adjacent to the dwelling-house and that is used primarily for private or domestic purposes in association with that dwelling-house.”

15.     It is not in dispute that 24 and 26 Hayes Avenue are adjacent and on separate titles. The issue is whether 26 Hayes Avenue, or any part of it, can be characterized as private land adjacent to 24 Hayes Avenue that is used primarily for private or domestic purposes in association with that dwelling-house. The applicants have submitted 26 Hayes Avenue is used for private and domestic purposes both by David and his family and also by Mrs Tsoulis who occasionally stays there and likes to be there as often as possible to be with her grandchildren; and by Mr Tsoulis who stores some things in the shed, has had three trees cut down and intends to construct a shed and garden with David when funds allow. 

16.     I have been referred to the decision of Earlam (supra). In this case there were two adjacent blocks on separate titles owned by a pensioner. On one property was the dwelling-house, however unlike the current situation, the adjacent block was cleared land without any residence upon it and was “covered by grass and vegetation”. The blocks were described in evidence as “integral” to each other. The situation before me is quite different. 26 Hayes Avenue is used by David and his family for their private use. It is their home. The fact that they pay no rent is entirely a personal matter between David and his parents. Section 11(6) of the Act is concerned with whether 26 Hayes Avenue or any part of it is used by the applicants, not David and his family, primarily for private or domestic purposes in association with their dwelling house at 24 Hayes Avenue.

17. The evidence before me is not sufficient for conclude that 26 Hayes Avenue, or any part of it is used by the applicants primarily for private or domestic purposes in association with 24 Hayes Avenue. Some tools and other items are stored in a shed. Mrs Tsoulis spends as much time as possible with her grandchildren and the children spend considerable time at their grandparents home. Mrs Tsoulis stays overnight occasionally. Whilst the proximity makes contact with David and his family easier, 26 Hayes Avenue is not used primarily by the applicants for private or domestic purposes. It is used primarily for those purposes by David and his family. Storing some tools and other things in a shed that also is used by David to store things does not amount to evidence that 26 Hayes Avenue or even the area on which the shed is situated is used as required by s 11(6) of the Act.

18. I have also been urged to accept that the removal of three trees by Mr Tsoulis’s is evidence that he intends , when funds allow, to develop a joint garden with David and replace the shed. I do not accept that this intention can satisfy s 11(6) of the Act. The private land must be both adjacent and “used primarily for private or domestic purposes in association with that dwelling house”. The word “used” can I believe generally only be understood as referring to current use, or as in Ghata (supra) to mean what the private land in question was actually used for.

19.     I  therefore find that Mr and Mrs Nicholas and Elli Tsoulis’s principal home is 24 Hayes Avenue, Yokine and does not include any part of 26 Hayes Avenue, Yokine. In accordance with s 43 of the Administrative Appeals Tribunal Act 1975 I affirm the decision under review.

I certify that the 19 preceding paragraphs are a true copy of the reasons for the decision herein of Ms L Savage Davis, Member

Signed:         ................(sgd V Wong)..............................
  Associate

Date/s of Hearing  5 July 2004
Date of Decision  9 July 2004
Counsel for the Applicant         Mr A Tsoulis
Counsel for the Respondent     Mr A Holt
Solicitor for the Respondent     Service Recovery Team, Centrelink