Zhang and Secretary, Department of Education, Employment and Workplace Relations

[2009] AATA 937

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 937

ADMINISTRATIVE APPEALS TRIBUNAL      )   

)    No: 2009/2256

GENERAL ADMINISTRATIVE DIVISION        )   

ReRui ZHANG

Applicant

AndSecretary, Department of Education, Employment and Workplace Relations

Respondent

DECISION

TribunalThe Hon B J M Tamberlin QC, Deputy President

Date4 December 2009

PlaceSydney

DecisionThe decision under review is affirmed.

..................[sgd]..........................

The Hon B Tamberlin QC
  Deputy President

CATCHWORDS

SOCIAL SECURITY LAW – Newstart Allowance – non declaration of income and assets by Applicant – overpayment to Applicant – assets exceeded allowable limit – debt accrued by Applicant – debt payable to Centrelink – real property considered to be part of Applicant’s assets – no special circumstances to waive debt – decision under review affirmed

…

RELEVANT ACT/S

Social Security Act 1991 – sections 8, 1073, 611(1), 9(4), 1223, 1236 and 1237A

…

CASE LAW

Beadle and Director-General of Social Security (1984) 6 ALD 1

REASONS FOR DECISION

4 December 2009 The Hon B Tamberlin QC, Deputy President

1. This is an appeal from a decision of the Social Security Appeals Tribunal

   
   

   (“the SSAT”) made on 23 April 2009 affirming decisions made by Centrelink to cancel the Newstart Allowance of Ms Zhang with effect from 18 March 2008, and raise and recover a debt of $18,847.23 for the period 18 December 2001 until 17 April 2008.  This figure was later revised to $40,921.95, as there had been a miscalculation.  Ms Zhang was given an opportunity to address this revised amount.

issues

1. The first questions are:

   (a)whether Ms Zhang’s assets exceeded the allowable limit in the relevant period; and, if so,

   (b)whether the decision to cancel her Newstart Allowance was correct.

2. The second question is:

   (a)whether Ms Zhang has a debt due to the Commonwealth and, if so, its amount; and

   (b)whether the debt should be recovered.

background

1. Ms Zhang was granted and paid Newstart Allowance from 24 October 2000.  Since then, she has travelled to China on at least nine occasions.  In addition, she has opened various bank accounts, made a number of term deposits and moneys been deposited from time to time into these accounts. She has been involved in several property dealings. 

2. Ms Zhang married in August 2005 and divorced in December 2006.  Her husband has never lived with her in Australia.

3. In 2007, Centrelink investigated the financial affairs of Ms Zhang and concluded that she had not notified the receipt of amounts of money deposited into various bank accounts held in her name, nor had she disclosed the purchase of a rental property in Parramatta among her assets.

4. Centrelink decided that in the relevant period, the value of her assessable assets exceeded the cut off limit for the payment of Newstart Allowance.

5. Her rental property in Parramatta was considered an assessable asset.  Ms Zhang asserted that its value should be reduced by moneys said to be owed to her by family members in relation to the purchase of that property.  Centrelink refused to accept this assertion and cancelled her Newstart Allowance with effect from 18 March 2008.

6. Centrelink decided that as a result of the various failures to notify of her changes in circumstances, Ms Zhang had incurred a debt for overpaid Newstart Allowance.  She requested a review of this decision and, after further consideration by an authorised review officer (“the ARO”), the decision to raise the debt was varied.  Ms Zhang requested a further review of the debt and cancellation of the decisions; however, the ARO affirmed the decision to cancel the allowance and affirmed the debt in an amount of $18,847.23.  An appeal was lodged to the SSAT on 3 March 2009, and on 23 April 2009 it affirmed the decision under appeal.

7. Ms Zhang subsequently applied to this Tribunal for a review of the decision of the SSAT on 19 May 2009.

8. In this Tribunal on Friday, 6 October 2009, the matter was adjourned part heard to the following Monday.  On that day, Centrelink informed the Tribunal that the amount of the debt had been recalculated as a consequence of a mistaken calculation. The Tribunal was informed that the amount had been revised to the figure presently sought, $40,921.95.  On being informed of this increase, I granted an adjournment to Ms Zhang to enable her to make any further submissions.  The matter resumed before this Tribunal on Monday, 26 October 2009 whereby the hearing concluded.  The only oral evidence was that of Ms Zhang who was cross-examined.

history

1. Since 2000, Ms Zhang has made a number of declarations to Centrelink and  has made statements as to her financial position, including assertions as to her income and assets from time to time.  She had been informed of the need to declare to Centrelink any increase in her income or assets.  In a number of respects, her statements and declarations were false because she failed to make required disclosures.

2. When investigated by Centrelink, Ms Zhang asserted that certain of the funds paid into and held in her bank accounts were held on behalf of other persons and , alternatively, that she did not have any significant beneficial interest in those assets and funds.  She asserted that she had told Centrelink about changes in her circumstances and that if she had omitted to do so, it was because no questions were asked by Centrelink.  She asserted that there were miscommunications between herself and Centrelink due to her poor English.  She also asserted that Centrelink staff indicated that money used to purchase a property at Parramatta was not relevant.  She asserted that she informed Centrelink of some payments and that she assumed everything was in order because payments continued to be made by Centrelink thereafter.

Putland Street, St Marys

1. Centrelink has taken into account the existence of funds from the sale of the Putland Street property in calculating the entitlement of Ms Zhang to Newstart Allowance.  Ms Zhang contends that she had no beneficial interest in this property and that the net proceeds of sale were distributed for the benefit of her brother or her mother.  She gave two quite inconsistent versions of what happened to the net proceeds but she did maintain that funds from this property did not go to her.

2. The title transfer documents appearing at T106b of the documents prepared pursuant to section 37 of the Administrative Appeals Tribunal Act 1975 record that Ms Zhang was the sole proprietor of this property. However, Ms Zhang says that she purchased the property on behalf of a brother and that she gave him the proceeds of the property once it was sold. She has also contended that the proceeds from the sale were paid towards a mortgage on her mother’s property at Sainsbury Street, St Marys, and for other costs relating to that purchase.

3. There is no documentary evidence presented by Ms Zhang to support these assertions.  In any event, there is no satisfactory evidence to show that she received any consideration for her disposal of the net proceeds from this property.  In view of the inconsistency in her evidence and the lack of any satisfactory documentary support, I find that Centrelink was entitled to take into account the proceeds from the sale of the St Marys property when calculating her deemed income and I do not accept Ms Zhang’s assertions at this point.

Receipt of Payments into Ms Zhang’s Bank Accounts

1. During the period 18 December 2001 to 17 April 2008, the following amounts were received by Ms Zhang into various bank accounts and were considered by Centrelink to be “income” within the meaning of section 8 of the Social Security Act 1991 (“the Act”) and assessed by Centrelink over 12 months from the date of receipt in accordance with section 1073 of the Act:

Date	Amount
18/12/2001	$	500.00
21/12/2001	$	12,363.03
24/05/2002	$	4,593.84
17/01/2003	$	21,704.63
08/02/2005	$	25,000.00
14/04/2005	$	5,000.00
01/07/2005	$	46,000.00
04/07/2005	$	60,018.00
10/01/2007	$	1,000.00
11/01/2007	$	33,500.00
05/02/2007	$	1,000.00
09/03/2007	$	1,000.00
28/03/2007	$	3,000.00
01/06/2007	$	3,016.00
11/07/2007	$	25,710.03

1. Ms Zhang stated that some of the money transferred into her account came from her ex-husband who sent it from China via Hong Kong for the purpose of purchasing a property. Ms Zhang was briefly married to a Chinese national, who never came to live in  Australia, and that this marriage was in place between 12 August 2005 to 19 December 2006.  At all other relevant times, she was single.  Ms Zhang did not inform Centrelink of her marriage until late November 2006.

Charles Street , Parramatta

1. Ms Zhang is the sole registered owner of a presently unencumbered property at 502/22 Charles Street, Parramatta, She entered into a contract to purchase that property off the plan on 15 May 2006, before construction of the building, for $290,000.  Construction of this property was completed on 22 February 2008. The property was subsequently rented to a tenant who vacated the property this year.  This property has been valued by the Australian Valuation Office at $340,000 as at April 2008 and there is no evidence to the contrary as to its value, I accept that valuation.

2. While Ms Zhang asserts that she has borrowed a total of $282,000 from her ex-husband in relation to this property, there is no documentary evidence in support of the existence of any legal or equitable mortgage over the property.

Bank Accounts

1. In addition, a number of very substantial deposits have been made into Ms Zhang’s accounts with the Bank of China and HSBC over the relevant period.  These accounts were solely in her name.  There is no documentary or satisfactory evidence of any legal restrictions as to her use of the funds.  Ms Zhang told Centrelink that there were restrictions on transferring money directly form China and for this reason it was sourced through Hong Kong however this assertion does not materially support her case.

2. Ms Zhang has never informed Centrelink that she had opened accounts with these banks received funds into them or paid moneys from them at any time during the relevant period.  Her communications with Centrelink related mainly to matters such as her travel concession card, rent assistance, Newstart Allowance, activity test requirements and overseas travel.

3. Ms Zhang asserts that substantial deposits into the bank accounts were made by her ex-husband for the purposes of purchasing property in Australia and that she did not declare these amounts as she understood she did not have to declare any foreign income or property.  In June 2007, Centrelink contacted Ms Zhang requesting an explanation of the 28 separate deposits into the bank account between 22 May 2002 and 28 March 2007, which in total amounted to $560,722.60. No satisfactory exaplanation or documentation was furnished to the Tribunal.

4. Ms Zhang asserts that after her divorce, she still owes her husband a large amount of money for the purchase of the Parramatta property. There is, however, no documentary record or other satisfactory evidence to support this assertion.

5. In relation to the other large sums paid into the accounts, Ms Zhang contends that these were paid to her by relatives of her husband for the use of two Chinese students in relation to their studies in Australia. She contends that she has no beneficial interest in these funds.  Ms Zhang has provided statutory declarations from two persons in relation to these moneys which states that they had been withdrawn from accounts in the name of their Aunt, Rui Zhang, for study and living expenses and for emergencies or contingencies.  However, these declarations are silent as to the particulars of any specific terms, trusts, payments or documentary evidence in respect of such arrangements.  They are simply generalised assertions.  I do not accept that the payments referred to in these declarations should be treated as other than monies beneficially owned by Ms Zhang without any restriction on them or encumbrance as to withdrawals or expenditure.

6. There are a number of extremely unsatisfactory aspects in relation to the evidence of Ms Zhang that lead me to the conclusion that the proper course is to rely on contemporaneous documentary records rather than on her oral testimony in the cases of conflict.  Ms Zhang has not been frank, careful or reasoned in relation to the explanations or disclosure of changes in her assets, financial position or bank accounts.  She has given contradictory evidence in relation to the disposal of proceeds from the St Marys property and she has failed to give information to Centrelink as to the existence of the deposited monies in her bank accounts.  Her evidence in relation to the question of whether her husband was working in China was contradictory.  As a witness, she consistently refused to answer the questions asked of her and raised arguments and made accusations against Centrelink staff without any evidence to sustain or support the allegations.  She made assertions as to discussions with Centrelink staff, which were inconsistent with documentary records.  Although I can well appreciate and have made due allowance for her greatly distressed emotional state while she gave her evidence, her difficulty in giving evidence and to the fact that she had to use an interpreter without legal representation, I do not consider that she made any real attempt to respond properly to questioning.  Rather she gave a series of emotional speeches designed to impose her assertions on the advocate for Centrelink.

7. In relation to the Charles Street, Parramatta property, I am not persuaded, in the absence of any documentary or satisfactory evidence, as to any encumbrance, that there exists any legal or equitable debt or obligation that should be taken into account in valuing the property in an amount less than that placed on it by the Australian Valuation Office.  I do not accept on the balance of probability that Ms Zhang has shown that there is any outstanding enforceable debt to her ex-husband or any other person in respect of this property.  Furthermore, the material before me does not satisfy me that any amounts paid into her bank account were subject to any restriction whereby the payments were not for her benefit but were for the direct or indirect benefit of some other person.

Cancellation

1. In relation to the cancellation of Ms Zhang’s Newstart Allowance, I therefore affirm the decision below.

2. I am satisfied that under subsection 611(1) of the Act, a Newstart Allowance is not payable to Ms Zhang because the value of assets at the relevant times was more than the assets value limit. At the cancellation date, Ms Zhang was the registered owner of the Charles Street, Parramatta property, which, on the evidence, has a value of $340,000. I do not accept her unsubstantiated assertion that she owes a total of $282,000 or any amount against that property to any person or corporation. There is no evidence of any registered mortgage over the property, nor is there any evidence that the amount she claims to be owing constitutes an encumbrance.

Existence of the Debt and Collection

1. On the evidence presented as to the crediting of her bank accounts, the question arises whether Ms Zhang has established on the balance of probabilities that property or money that appears to have been in her ownership or control, was property or money beneficially owned by someone else.  This could have been shown in a number of ways, for example, by producing records of discussions or agreements evidencing the interest of other persons whom it claimed to be the beneficial owners, or by furnishing credible oral evidence to that effect.  It is appropriate, where such assertions are made, to have some particulars or details as to the terms and conditions of such an arrangement, or as to the circumstances in which funds and property came into the name and apparent ownership of the person asserting lack of any interest or ownership in a beneficial sense.  In this case, any substantial credible satisfactory evidence to this effect is absent.  Although there have been numerous and, to a large extent, inconsistent assertions in relation to the basis on which property and money was and is held, such provisions or limitations on her ownership or interest are not in evidence despite every opportunity having been afforded to Ms Zhang to place such evidence before this Tribunal.

2. Under section 8 of the Act, “income” is very broadly defined so as to be able include the amount credited to Ms Zhang’s various bank accounts and term deposits which were held in her name during the relevant period. This is the case as such amounts fall within the definition of “income amount” as they are “monies” received by Ms Zhang for her own use and benefit. None of these moneys received have been shown to be exempt from assessment.

3. I am satisfied that the real estate at Putland Street, St Marys, was a “deprived asset” within the meaning of subsection 9(4) of the Act and that the proceeds were disposed of for no consideration after the. sale.

4. As a result of Ms Zhang’s failure to notify Centrelink, she was paid Newstart Allowance to which she was not entitled and therefore received excessive payments, which are recoverable under section 1223 of the Act as a debt.

5. This is not a case where the debt should be written off under section 1236 of the Act. The debt is not irrecoverable and Ms Zhang has the capacity to repay from rental income from the investment property owned by her. Her location is known and I am not persuaded that it is not cost-effective for the Commonwealth to take action to recover the debt.

6. Furthermore, I do not consider that the debt should be waived under section 1237A of the Act. It has not been established that the debt is attributable solely to administrative error made by the Commonwealth.  Moreover, I am satisfied, having regard to the repeated failures by Ms Zhang to make proper disclosure to Centrelink of her financial affairs and of changes to her personal circumstances, that this is not a case where it could be found that she has received the payments or any parts thereof in good faith.

7. I note that Centrelink has chosen to waive that part of Ms Zhang’s debt that arose between 18 October 2005 and 19 December 2006 due, at least in part, to the fact that Centrelink made no effort to follow up advice from Ms Zhang in October 2005 about her marriage, yet continued to pay her.

8. I am not satisfied that Ms Zhang’s debt resulted from any failure by the Department to comply with the provision of the Act.

9. Section 1237AAD of the Act provides that a part or all of the debt can be waived where, amongst other things, there are special circumstances that make it desirable to do so. The term special cirsumtances is not defined in the Act, however, as stated in Beadle and Director-General of Social Security (1984) 6 ALD 1:

   “…An expression such as “special circumstances” is by its very nature incapable of precise or exhaustive definition. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur.”

In this case, I do not consider that there are any ‘’special’’ circumstances which make it desirable to waive the debt or that it is more appropriate to waive the debt.

1. So far as hardship is concerned, Ms Zhang has asserted that she has no independent income and is being supported by her mother and that she has debts in relation to the rental property that she is unable to afford.  She says she also has financial hardship in the nature of medical prescriptions and her medical condition and treatment.  Having regard to large amounts of funds deposited in her bank accounts, I am not persuaded that she is without sufficient means and that her claimed hardship outweighs other relevant considerations.

1. I am not satisfied that Ms Zhangs hardship is a reason for her not paying the debt on all the circumstances providing her continued failure to disclose assets over many years. As the SSAT decision indicates, she has the potential to earn rental income from the property registered in her name.  In my opinion, no circumstances are present in this case that make it unfair or unreasonable for the outstanding debt to be repaid.

2. I conclude that the outstanding debt in the present case is the sum of $40,921.95.  I have reached this conclusion on the basis of the calculations and the documentation referred to in the submissions on behalf of Centrelink dated 15 October 2009.

Decision

1. The decision to cancel the Newstart Allowance as from 18 March 2008 and to collect the sum of $40,921.95 is the correct and preferable decision and the decision under review is affirmed.

I certify that the forty-two (42) preceding paragraphs are a true copy of the reasons for the decision herein of
The Hon B J M Tamberlin QC, Deputy President

Signed:   ...............................[sgd]............................................
  Associate

Date/s of Hearing:  6, 19 and 26 October 2009
Date of Decision:  4 December 2009
Appearance for the Applicant:           Self-represented
Appearance for the Respondent:      Ms H Schuster, Centrelink Legal Services