Hicks and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 939 (7 December 2009)

Last Updated: 7 December 2009

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2009] AATA 939

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/0412

GENERAL ADMINISTRATIVE DIVISION		)
	Re		SUZANNE HICKS

Applicant

And

SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondent

DECISION

Tribunal

Ms Regina Perton, Member

Date 7 December 2009

Place Melbourne

Decision

The Tribunal affirms the decision under review.

(sgd) Regina Perton
Member

SOCIAL SECURITY - parenting payment (single) - whether member of a couple - debt to Commonwealth - decision affirmed.

Social Security Act 1991 ss 4(2), 4(3), 1223(1)

Lynam v Director-General of Social Security (1983) 52 ALR 128

Pelka v Secretary, Department of Family and Community Services [2006] FCA 735; (2006) 151 FCR 546

Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92

Staunton-Smith v Secretary, Department of Social Security [1991] FCA 513; (1991) 32 FCR 164

REASONS FOR DECISION

7 December 2009

Ms Regina Perton, Member

1. Suzanne Hicks married Michael Hicks in 1987. They separated in 1991 but they have never divorced. Ms Hicks received social security payments from late 1991 because she was a single parent to two children. In 1998, a third child was born to Ms Hicks. Mr Hicks is the father of all three children.
2. For most of the time since 1991 Ms Hicks has lived in properties rented or owned by Mr Hicks. He has occupied either a caravan or a refitted shed on the properties, while she and the children lived in the house. The properties have been rented or bought in Mr Hicks’ name alone. Their financial arrangement was that Ms Hicks’ rental for the house would be offset against part of Mr Hicks’ child support payments.
3. In July 2007 Centrelink cancelled Ms Hicks’ parenting payment (single) on the basis that she and Mr Hicks had been in a marriage-like relationship since at least October 1994. Centrelink determined that it had overpaid Ms Hicks’ more than $130,000 between October 1994 and May 2007 and that the overpayment constituted a debt to the Commonwealth. Ms Hicks disputes Centrelink’s finding that she was a member of a couple during that period.
4. The issues before the Tribunal are:
   • Was Ms Hicks a member of a couple during the relevant period?
   • If so, was Ms Hicks paid social security benefits to which she was not entitled?
   • If so, are the overpayments a debt to the Commonwealth?

WAS MS HICKS A MEMBER OF A COUPLE DURING THE RELEVANT PERIOD?

5. Section 4 of the Social Security Act 1991 (the Act) sets out the criteria for deciding whether a person is a member of a couple:

4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis;...
...
4(3) In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a),..., the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:
(a) the financial aspects of the relationship, including:
(i) any joint ownership of real estate or other major assets and any joint liabilities; and
(ii) any significant pooling of financial resources especially in relation to major financial commitments; and
(iii) any legal obligations owed by one person in respect of the other person; and
(iv) the basis of any sharing of day-to-day household expenses;
(b) the nature of the household, including:
(i) any joint responsibility for providing care or support of children; and
(ii) the living arrangements of the people; and
(iii) the basis on which responsibility for housework is distributed;
(c) the social aspects of the relationship, including:
(i) whether the people hold themselves out as married to,..., each other; and
(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and
(iii) the basis on which the people make plans for, or engage in, joint social activities;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other, including:
(i) the length of the relationship; and
(ii) the nature of any companionship and emotional support that the people provide to each other; and
(iii) whether the people consider that the relationship is likely to continue indefinitely; and
(iv) whether the people see their relationship as a marriage-like relationship...
...

6. In determining whether two people are living in a marriage-like relationship under the Act, O’Loughlin J, in Staunton-Smith v Secretary, Department of Social Security [1991] FCA 513; (1991) 32 FCR 164 at 170, referred to the list of circumstances in s 4(3) of the Act:

It is not suggested that this list is exhaustive nor will each of these subjects fall to be considered in every case. It must also be emphasised that a particular answer to a single subject will rarely, if ever, supply a final solution. The responsibility of the fact-finding Tribunal is to have regard to all the material facts of each case, treating the matters listed above only as indicators. The Tribunal will make its determination whether a particular man and woman are or are not living separately and apart only after assessing the totality of the evidence and other material that is before it.

7. French J in Pelka v Secretary, Department of Family and Community Services [2006] FCA 735; (2006) 151 FCR 546 dealt with ss 4(2) and 4(3) of the Act in the context of an application for a carer payment. He referred to the decision in Staunton-Smith and to the decision of Fitzgerald J in Lynam v Director-General of Social Security (1983) 52 ALR 128. He stated that in determining whether a marriage-like relationship exists under the Act, the nature of the exercise is much the same as that required under the statutory formula used in Lynam and Staunton-Smith. In Lynam, Fitzgerald J said, at 131:

Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.

8. The Full Federal Court, in Pelka v Secretary, Department of Families, Housing, Community Services & Indigenous Affairs [2008] FCAFC 92 (Pelka No. 2) (which followed a rehearing by a differently constituted Tribunal following the 2006 Pelka decision by French J) stated (at paragraph 24):

There is nothing in s 4(3) that requires the relevant decision maker to make a finding of fact as to any of the matters specified in that provision. Rather, the decision maker is required to have regard to all the circumstances of the relationship, including the specified matters, in forming an opinion about the relationship between two people. Having regard to a matter does not require making a finding of fact about that matter...

9. At paragraph 30 of the 2008 Pelka decision, the Court stated:

The matter to which s 4(3) of the Social Security Act requires a relevant decision maker to have regard is the nature of the commitment of two people to each other. That regard is to include, in particular, four specific matters. Clearly, the Tribunal had regard to those four specific matters in terms. The essential requirement of the provision, however, is that the decision maker must have regard to the nature of the commitment of two people to each other. It is clearly relevant to that matter to have regard to the fact that a commitment that each of those persons has to each other is different from the commitment that each person has to any other person...

10. Ms Hicks, Mr Hicks and Garry Hicks, a brother of Mr Hicks, provided oral and written evidence. The Tribunal also took evidence from Ernest Wieske, a Centrelink officer who interviewed Ms Hicks in 2007.

Financial aspects of the relationship

11. Ms Hicks and Mr Hicks have held separate bank accounts before, during and after the relevant period. They have never operated a joint bank account.
12. During the relevant period Ms Hicks lived in properties purchased in Mr Hicks’ name alone. Ms Hicks does not own any property. Ms Hicks stated that she paid rent to Mr Hicks, although not as a direct payment to either Mr Hicks or an agent. Mr Hicks and Ms Hicks gave evidence that an agreed amount of rental was deducted from the child support moneys that he had agreed to pay her. The child support payments were made directly without involvement from the Child Support Agency until late in the relevant period. Mr Hicks did not pay the child support moneys into Ms Hicks’ bank account. Ms Hicks and Mr Hicks gave evidence that sometimes he paid her entirely in cash. At other times, Mr Hicks would pay some of her bills, rather than give her cash after deducting the rent.
13. Mr Hicks paid the mortgage, rates and building and contents insurance of the various properties. He paid landline telephone and internet accounts. He stated that while the landline and computer were used by the children, he also used them. Ms Hicks said that it has only been in recent times that she has used the computer. Mr Hicks paid some of Ms Hicks’ mobile telephone bills for the account in her name. Mr Hicks also paid ambulance subscription fees for the entire family including Ms Hicks, who is recorded as being his spouse.
14. A number of large supermarket purchases were identified in Mr Hicks’ credit card records. Mr Hicks stated that they were not purchases for the family but rather for a club to which he belonged, as well as to reimburse his brother for staying with him when working nearby. Mr Hicks also stated that he kept snacks and drinks for the children when they spent time in his accommodation and the supermarket purchases may well have been for that purpose. Mr Knowles, counsel for the respondent, submitted that Ms Hicks’ bank records indicated that she had not purchased groceries at that time and that the Tribunal should conclude that the purchases were for the family.
15. Between 1994 and 1999 Mr Hicks claimed Ms Hicks as his spouse in his income-tax returns. He did not declare any rental income from his property.
16. Ms Hicks has remained as the beneficiary for Mr Hicks’ superannuation. Questioned about this, Mr Hicks said that he saw no reason to change.

The nature of the household

17. Ms Hicks and Mr Hicks stated that Ms Hicks and the children lived in the house, while he slept in either a caravan or a converted shed on the properties that were in his name. They indicated that they shared meals together as a family from time to time but each gave slightly differing estimates of their regularity. They stated that they had entered into the arrangement of living separately on the one property for the sake of the children. It enabled both parents to maintain regular contact. Mr Hicks stated that on working days, he would regularly stay with his brother, Garry Hicks, whose home was closer to Mr Hicks’ workplace.
18. Mr Hicks and Ms Hicks stated that Ms Hicks undertook most of the care of the children and the related household tasks. Mr Hicks arranged his own meals and did his own laundry. Mr Hicks indicated that as the landlord, he took responsibility for the general maintenance of the buildings and land.

The social aspects of the relationship

19. Mr Hicks and Ms Hicks married in 1987 after living together. Despite their separation in 1991, neither Ms Hicks nor Mr Hicks has sought dissolution of the marriage. Ms Hicks stated that she had not seen the need to divorce. She said that there were no religious or cultural reasons behind that decision. Mr Hicks initially stated that he had not been in any meaningful relationship although he indicated that he had a relationship with another woman for a while. He declined to give her name or any detail on the basis that it might affect her social security benefits. However, apart from that relatively brief relationship, he said that he had not had any serious relationship and saw no need to divorce. Neither of them has sought legal advice about a divorce.
20. Mr Hicks and Ms Hicks remained on the same Medicare card following their separation. It was a similar situation in relation to the family’s ambulance subscription. Mr Hicks declared Ms Hicks to be his spouse on his tax returns between 1994 and 1999. Mr Hicks laid the blame for that on his accountant.
21. In 1995, when Mr Hicks started working for a particular company, he gave Ms Hicks name as his emergency contact and next of kin. Mr Hicks did not change this over the years he worked for that employer. In February 2007 Ms Hicks gave Mr Hicks as her next of kin to an employer. She told the Tribunal that this was because, in an emergency, she would not want her eldest child to be the contact, given his age. Moreover, it would also alert Mr Hicks to the need to care for the children because of the emergency.
22. Mr Hicks described himself as married in an application for a bank loan in late 2003. He also described his marital status as married in applications for credit with other financial institutions in April 2002 and November 2004.
23. Mr Hicks’ and Ms Hicks’ bank records show that there were many occasions over the years where they accessed banks or used credit cards in the same location on the same day. Ms Hicks stated that on some occasions this was because they were shopping for Christmas or birthday presents for the children. Mr Hicks needed guidance in buying something the children would like. Mr Knowles pointed to a number of occasions and locations that were not linked to celebratory occasions. He also highlighted records that showed that Mr Hicks and Ms Hicks were both in a seaside area where Garry Hicks had a house at around the same time in mid-2003.
24. There was only one witness who gave evidence about the nature of the relationship. Garry Hicks stated that his brother had told him of the separation.
25. In relation to social activities, Ms Hicks said that they did not go to the same functions unless it was a special event for the children. Mr Knowles highlighted a trip to Newcastle where Ms Hicks accompanied Mr Hicks and their younger son. Evidence from Mr Hicks and Ms Hicks indicated that Ms Hicks had accompanied Mr Hicks as he was involved in activities in Newcastle that would have led to a lack of supervision of their son. She went along so that this would not occur.

Any sexual relationship between the people

26. Mr Hicks is the father of Ms Hicks’ three children. Two were born before their parents’ separation. The youngest was born about six and a half years later. Mr Hicks and Ms Hicks gave evidence that apart from the night of their third child’s conception, they have not had a sexual relationship. Ms Hicks said that the short resumption of their sexual relationship occurred in the context of emotional upheaval concerning her father’s death. The Tribunal is not in the position to query the evidence given about the sexual relationship between Ms Hicks and Mr Hicks beyond finding that there had been a brief resumption of that relationship during 1997.

The nature of the people’s commitment to each other

27. Mr Hicks and Ms Hicks have an ongoing commitment to each other due to their responsibilities for the children. They both stated that they intended to maintain their living arrangements until their youngest child is an adult. Their living arrangements have been similar throughout the period of separation.
28. Mr Hicks’ and Ms Hicks’ decision to live on the same property owned by Mr Hicks is not a factor that of itself leads to a finding that they are not living separately and apart on a permanent or indefinite basis. Their choice not to divorce, of itself, also does not lead to a finding of an ongoing partnership. However, in this case, there is much more to their relationship than living on the same property or not seeking a divorce.
29. Ms Hicks and Mr Hicks have continued to describe themselves as married in financial transactions (such as the loan applications); and to employers as next of kin and for superannuation purposes. For the first five years of the relevant period, Mr Hicks claimed Ms Hicks as his spouse for tax purposes.
30. Mr Knowles suggested that much of Ms Hicks’ evidence and that of her husband should not be considered credible. The Tribunal agrees that there were some less than convincing explanations as to why Mr Hicks and Ms Hicks were in the same place on the same day as evidenced by their bank records. The Tribunal is satisfied that they shared more excursions together than they conceded in their evidence. However, their reason for doing so is not clear. There were also inconsistencies in evidence concerning how often they shared meals as a family.
31. However, the Tribunal is satisfied that Ms Hicks did not deliberately set out to create a false impression of her marital status. The Tribunal accepts that she may well have genuinely believed her circumstances could be described as those of a single parent for social security purposes. However, Mr Hicks’ actions and evidence suggest that he may well have manipulated the situation to suit his purposes. Nonetheless, regardless of who initiated their living arrangements during the relevant period and why, the Tribunal must decide on the basis of its objective analysis of their relationship.
32. Ms Hicks and Mr Hicks remained married to each other throughout the relevant period. They described their marital status as married in relation to banking and loan transactions and to their employers when nominating next of kin or superannuation beneficiaries. Mr Hicks controlled where they lived by providing Ms Hicks and the children with a house to rent at a reasonable rental through his purchases of properties. There was, at the very least, a brief resumption of their sexual relationship several years after their separation, resulting in the birth of a child. The Tribunal accepts that, in all likelihood, there was no sexual relationship before or after the brief resumption. However, it is not in a position to make a definitive finding about that aspect of the relationship.
33. Accordingly, the Tribunal finds that Ms Hicks is legally married to Mr Hicks and that she is not living separately and apart from him on a permanent or indefinite basis. The Tribunal therefore finds that Ms Hicks was a member of a couple during the relevant period.

WAS MS HICKS OVERPAID SOCIAL SECURITY PAYMENTS AND IF SO, ARE THE OVERPAYMENTS A DEBT TO THE COMMONWEALTH?

34. In view of the Tribunal’s finding that Ms Hicks was a member of a couple during the relevant period, she was not entitled to payment of a social security benefit as a single parent. Ms Hicks did not challenge the amount of the debt as calculated by Centrelink. The Tribunal is satisfied that during the relevant period Ms Hicks received $134,721.24 in benefits, to which she was not entitled. The Tribunal finds that these amounts represent a debt to the Commonwealth under s 1223(1) of the Act.

DECISION

35. The Tribunal affirms the decision under review.
    

I certify that the thirty-five [35] preceding paragraphs are a true copy of the reasons for the decision of:

Ms Regina Perton, Member

(sgd): Leah Berardi

Clerk

Dates of hearing: 15 & 16 December 2008,

1, 2 & 3 April 2009, 5 May 2009

Date of decision: 7 December 2009

Applicant’s counsel: Ms D Manova

Applicant’s solicitor: Victoria Legal Aid

Respondent’s counsel: Mr R Knowles
Respondent’s solicitor: DLA Phillips Fox