Zafiratos, Spiros v Department of Social Security

[1998] FCA 1125

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW – whether applicant given a fair and proper hearing – whether Administrative Appeals Tribunal biased or approached the matter with a preconception of guilt

Social Security Act 1991 (Cth) s 1224(1), (2)

Spiros Zafiratos v Department of Social Security
QG 204 of 1997

Kiefel J
Brisbane

9 September 1998

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 204 of 1997

ON APPEAL FROM THE A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	SPIROS ZAFIRATOS APPLICANT
AND:	DEPARTMENT OF SOCIAL SECURITY RESPONDENT
JUDGE:		KIEFEL J
DATE OF ORDER:		9 SEPTEMBER 1998
WHERE MADE:		BRISBANE

THE COURT ORDERS THAT:

1. The appeal is dismissed.

2. The applicant pay the respondent’s costs of the proceedings including any reserved costs.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QG 204 of 1997

ON APPEAL FROM THE A DECISION OF THE ADMINISTRATIVE APPEALS TRIBUNAL

BETWEEN:	SPIROS ZAFIRATOS APPLICANT
AND:	DEPARTMENT OF SOCIAL SECURITY RESPONDENT

JUDGE:	KIEFEL J
DATE:	9 SEPTEMBER 1998
PLACE:	BRISBANE

REASONS FOR JUDGMENT

Mr Zafiratos seeks review of the decision of the Administrative Appeals Tribunal which set aside a decision of the Social Security Appeals Tribunal (“SSAT”). The SSAT had found that there had been overpayments of various benefits, of sums totalling $62,199.22, but considered that s 1224(1) of the Social Security Act 1991 (Cth) did not apply.

Background to Decision
Three claims lodged by Mr Zafiratos were relevant to the decision in question.  The first was one for unemployment benefits, dated 1 February 1987, which included details of a bank account in the name of “S & A Zafiratos” to which benefits were to be paid.  The names were those of Mr Zafiratos’ wife and her father.  These details were confirmed in a review form completed on 12 April 1988.  The second claim was for sickness benefits dated 23 November 1989, in respect of which the account details just referred to were provided in a later review form.  The third was for an invalid pension and was made on 18 October 1991.  The benefits were calculated and paid at the married rate on the basis that Mrs Zafiratos was not in receipt of any income from employment.  In fact however she had been.  The other fact relevant to the calculation of overpayment was rent allowance, which ought not to have been paid because the house occupied by Mr and Mrs Zafiratos had been transferred into her name alone.

Mrs Zafiratos subsequently pleaded guilty to charges of defrauding the Commonwealth.  Mr Zafiratos was charged on one count but acquitted of it in October 1995.  In October 1996 the SSAT determined in favour of Mr Zafiratos, on the review of the decision to raise an overpayment against him as a debt due to the Commonwealth. 

Statutory Provisions
Section 1224(1) of the Social Security Act 1991 provides, with respect to overpayments:

“If:

(a)      an amount has been paid to a recipient by way of pension, benefit or allowance under this Act;  and

(b)      the amount was paid because the recipient or another person:

(i)        made a false statement or a false representation;  or

(ii)       failed or omitted to comply with the provision of this Act;  and

(c)       the amount has not been deducted from the recipient’s pension, benefit or allowance under section 1223;

the amount so paid is a debt due by the recipient to the Commonwealth.”

Section 1224(2) allows for recovery of the debt by deductions from benefit.

The Tribunal’s Determination
Mr Zafiratos’ case was that, although he resided in the same house as his wife, he was estranged from her and he was not a party to the fraud.  In particular he contended that all documents relating to the overpayments were completed by his wife and such documents as were translated to him were done so incorrectly.  This is a common theme in Mr Zafiratos’ argument.  He said that he merely signed the forms without understanding them.  He also submitted that the record of interview by the Australian Federal Police, to which I shall shortly refer and which was tendered against him, should not be taken into account as his answers were poorly interpreted and he did not fully understand the questions.  Further, the bank account into which the benefits were paid was not one to which he had access and was in the name of his wife and father-in-law and he did not therefore receive the sums. 

The Tribunal did not accept Mr Zafiratos as a witness of truth.  It did so in strong terms, observing that Mr Zafiratos deliberately prevaricated in his evidence as to his alleged separation from his wife.  As part of its reasons in this connexion the Tribunal did not accept Mr Zafiratos’ assertion as to his inability with the English language.  Determining whether language is a barrier to another person is difficult and caution is necessary.  Here however there was some compelling evidence, and the finding was open to the Tribunal.  Although not strictly relevant to the process of review, I add that I have also observed Mr Zafiratos during the hearings, including directions hearings, and I similarly came to the view that he is well able to understand spoken English.

I do not propose to detail the Tribunal’s findings on facts.  The respondent’s summary of the factors which appear to have been most pertinent to the determination appear correct.  They were as follows:

• The respondent had contended that he was unable to leave his wife because he was financially dependent on her and unable to work.  This was not accepted.  The Tribunal preferred the statement made by him to the Australian Federal Police in mid-1994 at which time he gave no indication that he and his wife were separated and showed an apparent knowledge and understanding of her proposed business venture.

• Mr Zafiratos had contended that he was unaware that his wife worked full time in the relevant period.  The Tribunal however found that he regularly drove his wife to her place of employment and that he was well aware of her hours of employment.

• Mr Zafiratos contended that he had been to the department on five or six occasions only and always in the company of his wife who translated for him.  The evidence in this connexion I have outlined above as to his alleged inability to understand the forms signed by him.  This was not accepted.

• Consistent with that evidence, Mr Zafiratos contended before the Tribunal that his wife attended to all the banking and only gave him money for personal expenditure, opened the mail and paid the household accounts whereas at other points he said that he had done so.  The evidence pointed to many contradictions.  In particular, documentary evidence disclosed that he had entered into a loan agreement with a finance corporation himself and also that he had then falsely stated that he was “self employed” to obtain finance.

• As to Mr Zafiratos’ claims that he had no access to the bank account in the name of his wife and father-in-law, this was rejected.  In this respect there was evidence from Mr Zafiratos himself of his withdrawal of funds, although the means by which that was undertaken was unclear. 

• Mr Zafiratos travelled to Greece in September 1994 but said that his wife had purchased the ticket for him because he was unable to make travel arrangements himself and that the money was provided by his brothers.  He had contended that it was a mere coincidence that his then estranged wife happened to be travelling on the same flight.  His explanations were rejected and the evidence was taken by the Tribunal towards proof that he and his wife travelled as a married couple.

• The Tribunal then concluded:

  “19.     I have examined the whole of the evidence carefully and in detail and I have taken into account the parties’ submissions.  I am satisfied on the evidence that the respondent and the wife were living as a married couple at all times between February 1988 and October 1994.  It was not until the respondent realised the seriousness of his situation that in January 1995 he asserted that he had separated in December 1994.  In May 1995, as a result of a Freedom of Information application, he obtained copies of all statements had had made to the Department over the years and thereafter asserted that the separation occurred in 1987.  I consider that he has tailored his evidence since 1995 in an attempt to distance himself from the activities of the wife and to create a false impression that he and the wife had been separated since 1987.

  20.      I am satisfied on the evidence, and find as a fact, that during the relevant period the respondent was a member of a couple, a married person, and having regard to all the circumstances of the relationship as required by section 4(3) of the Act, not living separately and apart from the other person on a permanent or indefinite basis.  I am satisfied on the evidence, also, and find as a fact, that the respondent was the recipient of Social Security payments and that in accordance win s 1224(1) of the Act he made a false statement and as a result of that statement moneys were paid to him and the amount so paid is a debt due to the Commonwealth.  As to the question of waiver of debt in accordance with section 1237 of the Act, the debt arose as a result of the respondent’s false statement and section 1237AAD does not apply in all the circumstances.”

The essential findings of the Tribunal were that Mr Zafiratos and his wife’s relationship was that of husband and wife;  that he had knowledge of the extent of her employment;  and that he had paid to him and did receive the overpayment of benefits.

The Appeal
The notice of appeal filed by Mr Zafiratos was substantially deficient and unclear.  As a result efforts were made by the Deputy Registrar, in consultation with the parties, to identify the grounds of appeal he sought to raise.  At a subsequent directions hearing Mr Zafiratos concurred in the summary of the grounds of appeal provided by the Deputy Registrar and I directed that they stand as the grounds of appeal.  On the hearing of the appeal written submissions, addressing those grounds, were provided by counsel for the respondent.  Although it was said they had been posted earlier to Mr Zafiratos, he said he had not received them.  As a result counsel was required to address them orally and her submissions as to them were interpreted for Mr Zafiratos although, as I have said, I do not think that was strictly necessary.  At his request Mr Zafiratos was give a further opportunity to provide written submissions as to them.  I shall address them in order.

a.        that the applicant was not provided with a proper interpreter
Mr Zafiratos was provided with an interpreter at the Tribunal on the first day of the hearing at about 12.30 pm.  Prior to that point it had been agreed that one of the witnesses would interpret for him.  He now contends that he was disadvantaged in the adequacy of the interpretation, although how he perceives this to be the case is not apparent.  There was, as counsel for the respondent submitted, no apparent difficulty in communication appearing on the face of the transcripts;  no complaint made of the interpreter’s performance throughout a hearing which lasted for three days;  and in circumstances where the applicant was represented throughout by a solicitor. 

b.        that the respondent received a better hearing with unlimited time
I have reviewed the transcript of the hearing.  No time constraints were placed on either party and, if anything, it seems to me some latitude was given, the hearing taking longer than one might have expected.  Neither party was cut short and it was made clear at a number of points that there was no need to rush matters and adjournments were given as needed.

c.        that the Tribunal told the applicant’s solicitor “to be short”
In his letter to the Court Mr Zafiratos said that his solicitor was often interrupted and would lose the thread of what he was saying and could not complete his submissions.  The solicitor however addressed the Tribunal for about an hour.  Not unusually, the Tribunal member at that point asked for an indication of how much longer he would be but emphasised that it was not intended to impose a limitation on time.  He was given further opportunity to add submissions in reply. 

d.        that the Tribunal did not listen properly to the applicant’s solicitor
The exchanges demonstrate clearly the degree of attention being paid to what was being said in what appears to me to a fair and proper proceeding.

e.that the Tribunal was not interested in the applicant’s case and was one-sided in favour of the respondent

This is a serious claim of bias for which there is no substance at all.  The Tribunal demonstrated an appropriate interest in Mr Zafiratos’ case, asking questions where the evidence appeared contradictory or required clarification,  and giving an opportunity for comment where it was apparently necessary.  These interruptions were helpful, not a hindrance.

f.         that the Tribunal approached the matter presuming the applicant to be guilty
There is nothing to suggest the Tribunal approached the matter with any preconception.  It seems to me that Mr Zafiratos’ contention in this respect may spring from a misunderstanding that, because he was acquitted of the charge of fraud, he ought now to be presumed to be innocent. 

g.that the Tribunal did not take account of his failure to understand the forms completed by his wife

Mr Zafiratos submitted that the Tribunal did not properly understand that some of the Department of Social Security forms had been completed by his wife and not by him and he was unable to understand them.  This is something of a false issue since it was accepted at the hearing by the respondent that Mr Zafiratos had not filled in answers to questions.  The Tribunal however indicated that that did not advance matters to any great extent since the real question was the extent of his understanding.  This largely turned upon its acceptance of his inability to use the English language.  Its conclusion of fact was one fairly open to it, having observed the applicant in the proceeding and having regard to the surrounding evidence as to the rearing of children in an English speaking system, his experiences and business dealings some of which he undertook on his own account.

h.that the Tribunal should not have admitted the record of interview with the Australian Federal Police

Again Mr Zafiratos’ point was that the interpreter was not accurate.  This is the subject of the Tribunal’s findings elsewhere.  There was ample opportunity then given for him to comment upon it and he did so.  Again there may have been some misunderstanding on Mr Zafiratos’ part as to the reception of the interview in evidence.  It was clearly admissible.  He appears to have misunderstood that it remained relevant in these proceedings regardless of the outcome in the criminal proceedings.

Conclusions and Orders
The appeal will be dismissed with costs.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel

Associate:

Dated:            9 September 1998

Applicant:	In Person
Counsel for the Respondent:	Ms C Holmes
Solicitor for the Respondent:	Australian Government Solicitor
Date of Hearing:	30 July 1998
Date of Judgment:	9 September 1998