Killick and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2010] AATA 1059 (23 December 2010)

Last Updated: 27 January 2011

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 1059

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2009/5970

GENERAL ADMINISTRATIVE DIVISION

)

Re

Giles Killick

Applicant

And

Secretary, Dept of Families, Housing, Community Services and Indigenous Affairs

Respondent

DECISION

Tribunal

Senior Member Jill Toohey

Date 23 December 2010

Place Sydney

Decision

The decision under review is affirmed.

.................[sgd].............................
Senior Member

CATCHWORDS
SOCIAL SECURITY – age pension – whether applicant residing in Australia at the relevant time – relevant considerations – applicant had sold property in Sydney and bought property in France – majority of time spent in France – whether move to France temporary – Tribunal not satisfied on balance of all considerations that applicant resided in Australia at relevant time – decision under review affirmed

Social Security Act 1991, ss 7, 43
Social Security (Administration) Act 1991, s 29

Re Clifopoulos and Secretary, Department of Social Security [1994] AATA 282; (1995) 36 ALD 745
Hafza v Director-General of Social Security [1985] FCA 164; (1985) 6 FCR 444
Koitaki Para Rubber Estates Ltd v Commissioner of Taxation (Cth) [1941] HCA 13; (1941) 64 CLR 241
Re Secretary, Department of Social Security and Mosca [1998] AATA 586
Re Wybrow and Secretary, Department of Social Security [1992] AATA 315

REASONS FOR DECISION

21 December 2010	Senior Member Jill Toohey
Background

1. Mr Giles Killick was born in India and grew up there and in New Zealand. He came to Australia with his mother and brother in 1955, when he was twelve. In 1967, he married an Australian citizen. He and his wife have two daughters, both of whom live in London. In May 1987, he became an Australian citizen.
2. From 1987 to 1997, Mr Killick and his family lived in the Netherlands, the United States and the United Kingdom. Up until 1995, he worked for Singapore Airlines. In 1995, he started work with a Californian software developer. In 1997, the company offered him a position in Sydney and he and his wife returned here. In 1998, the company declared bankruptcy and Mr Killick lost his position. He and his wife continued to live in Sydney.
3. In 1999, Mr Killick went into partnership in a business which went into liquidation in 2001. He and his wife then took on a franchise which was unsuccessful. In 2005, they had to sell their Sydney home to pay their creditors. They bought a house in France and, since then, have spent most of their time in France and England.
4. On 19 August 2008, Mr Killick turned 65. On 4 November 2008, he applied for an age pension. Centrelink rejected his application and, on 11 November 2009, the Social Security Appeals Tribunal (SSAT) affirmed that decision. In both cases, the decision was on the basis that Mr Killick did not satisfy the residency requirement in the Social Security Act 1991 (the Act).
5. The Secretary contends that Mr Killick ceased to be a resident of Australia in 2005 when he and his wife decided to base themselves in France in order to be closer to their daughters.
6. Mr Killick contends that he did not cease to be an Australian resident merely by moving to France. He says the move to France was always intended to be temporary, that Australia has always been his home, and that he and his wife have always intended to return here to live.

The legislation

7. Section 43(1) of the Act provides that a person who has reached pension age is qualified for an age pension if any of the following applies:

(a) the person has 10 years qualifying Australian residence;

(b) the person has a qualifying residence exemption for an age pension;

(c) the person was receiving a widow B pension, a widow allowance, a mature age allowance or a partner allowance, immediately before reaching that age;

(d) if the person reached pension age before 20 March 1997--the person was receiving a widow B pension, a widow allowance or a partner allowance, immediately before 20 March 1997.

8. Section s 7(5) of the Act provides that a person has 10 years qualifying Australian residence only if:

(a) the person has, at any time, been an Australian resident for a continuous period of not less than 10 years; or
                     (b) the person has been an Australian resident during more than one period and:
                              (i)  at least one of those periods is 5 years or more; and

                             (ii)  the aggregate of those periods exceeds 10 years.

9. Subject to some exceptions, none of which applies to Mr Killick, s 29 of the Social Security (Administration) Act 1991 (the Administration Act) provides that a claim for a social security payment may only be made by a person who is:
   • (a) an Australian resident; and
   • (b) is in Australia.
10. By s 7(2) of the Act, an Australian resident is someone who

                  (a) resides in Australia; and
                     (b)  is one of the following:
                              (i)  an Australian citizen;
                             (ii)  the holder of a permanent visa;

                            (iii)  a special category visa holder who is a protected SCV holder.

11. Section 7(3) of the Act provides that, in deciding whether or not a person is residing in Australia, regard must be had to the following:

(a) the nature of the accommodation used by the person in Australia; and

(b) the nature and extent of the family relationships the person has in Australia; and

(c) the nature and extent of the person's employment, business or financial ties with Australia; and

(d) the nature and extent of the person's assets located in Australia; and

(e) the frequency and duration of the person's travel outside Australia; and

(f) any other matter relevant to determining whether the person intends to remain permanently in Australia.
The issue

12. Centrelink originally rejected Mr Killick’s claim on the basis that he was not in Australia on the day he lodged his claim for the age pension. This was apparently because he left the country later the same day. The Secretary concedes that, insofar as it rested on that premise, the decision was not correct.
13. There is no dispute that Mr Killick had reached pension age at the time he lodged his application and was in Australia at the time. The issue to be determined is whether, at the relevant time, he resided in Australia.

The relevant period

14. If a person is not qualified on the day on which a claim is made, but becomes qualified within the period of 13 weeks after the day on which the claim is made, then the claim is taken to be made on the first day on which the person is qualified for the social security payment: the Administration Act sch 2, cl 4 (1)
15. The relevant period is, therefore, from 4 November 2008, when Mr Killick lodged his application, to 3 February 2009. Evidence of events and circumstances before and after those dates may be relevant to deciding whether or not he was residing in Australia during that period.

Principles

16. Residence comprises essentially two elements: physical presence and the intention to treat a place as home, at least for the time being, although not necessarily forever: Hafza v Director-General of Social Security [1985] FCA 164; (1985) 6 FCR 444, per Wilcox J at 449-450; and see Koitaki Para Rubber Estates Ltd v Commissioner of Taxation (Cth) [1941] HCA 13; (1941) 64 CLR 241.
17. In Hafza, Wilcox J said:

Physical presence and intention will co-incide for most of the time. But few people are always at home. Once a person has established a home in a particular place -- even involuntarily : see Commissioners of Inland Revenue v. Lysaght (1928) AC 234 a p 248 and Keil v Keil (1947) VR 383 -- a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place -- Levene v. Inland Revenue Commissioners [1928] UKHL 1; (1928) AC 217 at p 225 and Judd v. Judd (1957) 75 WN (N.S.W.) 147 at p 149 -- together with an intention to return to that place and an attitude that that place remains "home" -- see Norman v Norman (1969) 16 F.L.R. 231 at p.236 It is important to observe firstly, that a person may simultaneously be a resident in more than one place -- see the facts of Lysaght and the reference by Williams J. to "a home or homes" -- and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But, where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as "home", a change of intention may be decisive of the question whether residence in a particular place has been maintained.

18. In Re Clifopoulos and Secretary, Department of Social Security [1994] AATA 282; (1995) 36 ALD 745 at 747, the Tribunal described its task in applying s 7(3) as follows:

The principles set out above codify the criteria that have traditionally been regarded by the courts as relevant in deciding whether or not a person is a resident. The criteria should not, however, be applied in a mechanical way in order to reach a determination. The relevance and importance of the factors that constitute the criteria will vary in each case. In the end, as is apparent from the wording in section 7(3),(f), the criteria are there to guide the decision-maker in determining the person’s intention as to the place of residence. As was submitted by [the Department], when considering the criteria, the decision-maker is also entitled to consider the converse of each factor. For example, when section 7(3) of the Act refers to “the nature of accommodation in Australia”, the Tribunal would be entitled to consider the mature of the applicant’s accommodation outside Australia.

19. The considerations in s 7(3) are there to guide the decision-maker in assessing the totality of an applicant’s circumstances; the determination will depend on the facts as found in relation to each individual applicant. No one factor on its own is likely to be determinative.
20. So, for example, in Re Wybrow and Secretary, Department of Social Security [1992] AATA 315, an absence from Australia for eight years except for one brief period did not preclude a finding that the applicant remained resident in Australia; the Tribunal was satisfied that the applicant had retained his connections to Australia and had only ephemeral connections to Japan.
21. An applicant’s intention is an important consideration in determining his or her residence. The Tribunal has found that, where a person intends to be absent for a limited time and for a “singular passing purpose”, an absence of seven years is not necessarily incompatible with residence: Re Secretary, Department of Social Security and Mosca [1998] AATA 586.
22. However, a mere statement of intention is not sufficient. It needs to be assessed in light of all the evidence about the applicant’s circumstances in order to determine what weight it should be given.

The evidence

23. There is no dispute of any substance as to the facts. The matters on which Mr Killick relies are set out in detail in the decision of the SSAT. He does not take issue with the how the SSAT recorded his claims or with its findings of fact.
24. The background to Mr Killick’s application is as follows.
25. From 1968 to 1987, Mr Killick lived and worked in Sydney. From 1987 to 1997, he was employed overseas. There is no suggestion that his absence from Australia during this period is a relevant consideration in these proceedings.
26. From about 1997 and into the early 2000s, Mr Killick owned and operated two small businesses, both of which were unsuccessful. In 2005, he and his wife had to sell assets, including their house in Sydney, to pay their creditors, and were left with limited funds. They considered buying a cheaper house in Sydney but found prices too high. They considered their daughters’ offer to live with them in London but decided against that idea. They considered buying a property in London but that was too expensive and, in the end, they decided on a property in France where prices were cheaper. They have lived at the property in France since, except when they rent it out in summer and live with their daughters in London, and when they return to Australia from time to time.
27. Mr Killick says he and his wife always intended the move to France in 2005 to be for two or three years only. He says they still consider Australia to be their home and would have returned sooner if they could have afforded to. He says he applied for the age pension in 2008 expecting it would be granted but has since been seeking review of that decision and could not afford to return in the meantime.
28. I will now consider the evidence in more detail as it relates to each of the factors in s 7(3).

The nature of the accommodation used by the person in Australia

29. As already noted, Mr Killick no longer owns a home in Sydney. When he and his wife are here, they stay with his wife’s sister and her partner in their home. They have an agreement that Mr and Mrs Killick can stay rent-free for as long as they wish and, in return, his sister-in-law and her partner can spend holidays in the house in France.
30. Until recently, Mr Killick and his sister-in-law did not have any formal agreement about this arrangement. However, after the SSAT asked about the arrangement, Mr Killick’s legal representative at the time suggested that they have a tenancy agreement drawn up. In January 2010, they signed a standard residential tenancy agreement by which Mr Killick and his wife agreed to pay his sister-in-law $200 per month from 1 February 2010. A copy is before the Tribunal. Mr Killick says his sister-in-law feels embarrassed about this formal agreement. There is no evidence that Mr Killick in fact pays money to his sister-in-law but nothing turns on this. More recently, he says, his brother, who lives in Sydney, has offered him and his wife a room at his home whenever they need one. I accept that this is so.
31. The Secretary submits that the arrangement with Mr Killick’s sister-in-law is temporary only; that her circumstances could change and she could withdraw her offer accommodation at any time. He makes the same submission in respect of the offer from Mr Killick’s brother.
32. In response, Mr Killick submits that ownership of a home in Sydney is not a requisite for residency and nor should paying rent be. He submits that numerous Australian pensioners and others live with their relatives. In any event, he says, the relevant consideration is that he and his wife have access to permanent accommodation in Australia at all times.
33. Mr Killick says he and his wife originally planned to spend half of each year in Sydney, and half in France and England with their daughters. However, their plans changed when the property in France needed more renovations than expected and the high cost of tradespersons meant they had to do much of the work themselves.
34. Now, when the house is let, Mr and Mrs Killick generally live in the UK with their daughters, or stay locally in France. He says this is a matter of necessity rather than preference; during the summer, the property is let out in one- or two-week periods and there is an enormous amount of work to be done at the changeover; he and his wife stay nearby and do the work themselves because the costs of engaging others to do the work would eat into the rent and make it not worthwhile.
35. Mr Killick says that, if he could get the age pension, it would be viable for him to manage the French property from Australia, and that would be his preference. He says he could bear the additional cost that would come with managing the property from a distance if he was receiving the age pension here. He says any inference that he and his wife would prefer to stay in Europe rather than come home to Australia is inaccurate and unfair.

The nature and extent of the family relationships the person has in Australia

36. In addition to his wife’s sister, with whom they stay when they are here, a number of members of Mr Killick’s extended family live in Australia: his mother lives in a nursing home in Sydney and he has a brother, sister-in-law, step sister, three nephews and ten cousins residing in Australia.
37. The Secretary contends, and Mr Killick does not dispute, that his closest emotional ties are to his wife and daughters, to whom they have chosen to be near.
38. I am not sure that the family relationships can be weighed in quite the way contended for by the Secretary. Expatriates commonly have their most immediate family with them while retaining a strong and continuing association with members of the extended family. However, by his own evidence, Mr and Mrs Killick’s decision to move to France was strongly influenced by the fact that their daughters lived close by, and they continue to spend most of their time with their daughters when not in France.

The nature and extent of the person's employment, business or financial ties with Australia

39. Until recently, Mr Killick conceded that he no longer had employment, business or financial ties with Australia, other than bank accounts. As well as the rent from the house, he derived some income from doing maintenance work on nearby properties in France.
40. However, Mr Killick says his financial ties have changed since September 2010 because he is now employed by an Australian company, PCT Global Pty Ltd, which promotes a building product known as EnduroShield. He says his salary is paid in Australia and his superannuation is paid into an Australian company.
41. Following the hearing, at the Tribunal’s request, Mr Killick provided information about his employment. He says he is a full time permanent employee on a salary of $55,000. The nature of his position is “to establish EnduroShield brand in Europe and build a customer base for the full range of EnduroShield products”. In response to the Tribunal’s question about when he expected to be working in Australia, he stated this had not yet been clearly defined but it was anticipated that, in the initial stage at least, he would be spending “a lot of time in Europe”. Mr Killick has produced a pay slip to verify his claim.

The nature and extent of the person's assets located in Australia

42. Until recently, Mr Killick’s only assets in Australia (since 2005) were three bank accounts held jointly with his wife. His wife has two further accounts in her name. At the time of the SSAT decision, the total balance in the accounts was approximately $5000.
43. In late 2007, Mr and Mrs Killick withdrew their funds from their superannuation and closed their accounts. The Secretary contends that, in so doing, they demonstrated an intention to sever their ties with Australia.
44. Mr Killick says, and I accept, that, in cashing out their superannuation fund, he and his wife did the same as many superannuants who have taken advantage of the benefits of more generous tax arrangements for people over 60 years. I do not think that any particular weight can be given to this.
45. Recently, Mr Killick has acquired a life insurance policy here, and superannuation from his employment with PCT Global Pty Ltd is paid into an Australian superannuation fund.
46. However, during the relevant period and until very recently, Mr Killick’s only substantial asset was the property in France. He had no assets in Australia other than the bank accounts which, he agrees, could be operated from anywhere in the world.

The frequency and duration of the person's travel outside Australia

47. As a former employee of Singapore Airlines, Mr Killick is entitled to free international travel. The only restriction is that he might have to wait for a seat to become available.
48. Prior to 2005, Mr Killick and his wife spent the majority of his time in Australia with short trips overseas. Since buying the property in France, they have spent most of their time there or in the UK.
49. Since 2005, Mr Killick has spent the following time in Australia:
    • (i) 4.11.05 - 3.11.06: 4.10.05 - 31.10.06 (28 days)
    • (ii) 4.11.06 - 3.11.07: No time in Australia
    • (iii) 4.11.07-3.11.08: 8.11.07 - 11.12.07; 23.10.08 - 3.11.08 (46 days)
    • (iv) 4.11.08 - 3.11.09: 4.11.08; 20.2.09 - 5.4.09; 3.11.09 (46 days)

(v) 4.11.09 - 2.9.10: 3.11.09 - 1.12.09; (28 days)

50. The Secretary submits that, since November 2005, Mr Killick has spent only eight per cent of his time in Australia and that this strongly supports the conclusion that his residence is outside Australia.
51. As the SSAT noted in its decision, it is not sufficient simply to consider the percentage of time a person spends in a particular place; what it relevant is the frequency and duration of time spent. However, I accept the Secretary’s submission that it is relevant that, prior to 2005, Mr Killick spent most of his time in Australia with short trips overseas but, from 2005, the pattern has reversed and he has spent most of his time overseas with five trips here since. Mr Killick submits that this has largely been a matter of financial necessity but, as discussed below, I do not find that argument especially persuasive.

Any other matter relevant to determining whether the person intends to remain permanently in Australia

52. Mr Killick says he and his wife originally planned to spend half of each year in Sydney, and half in France and England with their daughters. He says their plans changed when the property in France needed more renovations than expected and the high cost of tradespersons meant they had to do much of the work themselves.
53. With the offer of a permanent home in Sydney from the applicant’s sister-in-law, Mr Killick says it looked feasible to spend more time in the UK with their daughters if they could find a small place there not to far from them.
54. In a statement for the SSAT in November 2009, Mr Killick stated that the renovations were nearly complete and the house could be let as a holiday rental.

“But that does not mean, necessarily, that we would not spend much less time in France and much more time in Australia. Those decisions will be based on family needs and considerations, as they should be.”

55. The Secretary further submits that, although their landing cards in October 2008 and February 2009 show that Mr and Mrs Killick respectively intended to remain in Australia for the next 12 months, they did not do so.

Consideration

56. For the following reasons, I am not satisfied, taking into account all of his circumstances, that Mr Killick was a resident at the time of lodging his application for the age pension.
57. Mr Killick relies principally on the claim that he and his wife always intended to move to France temporarily and to return to Australia when they could. I accept that merely by buying property in France, and even living there for some time, he would not necessarily cease to reside in Australia. However, I am not satisfied that the move was as temporary at the time as Mr Killick claims, and events since then support this conclusion.
58. Mr and Mrs Killick have based themselves in France since 2005 and continue to do so. The fact that they choose generally to spend their time with their daughters in the UK when their house is let, rather than returning to Australia, tends to support the conclusion that France has become their home. This is especially so given that the cost of airfares home is not a factor they have to be concerned about.
59. In relation to his accommodation in Australia, I accept that Mr Killick and his wife have accommodation available to them when ever they wish. There is no evidence that he actually pays rent to his sister-in-law but nothing really turns on that. The fact remains that it is not permanent accommodation but essentially a place to stay when they are here. I agree with the SSAT’s conclusion that the timing and pattern of the travel to Australia since 2005 suggests that Mr and Mrs Killick visit here, rather than residing here.
60. I am not satisfied that remaining in France has been a matter of practical and financial necessity alone and I do not accept that Mr Killick has been effectively prevented from resuming residence in Australia for financial reasons. It is difficult to accept his claim that he would have borne the additional cost of managing the property in France from a distance, if he had been receiving the age pension here, when he has not done so. If it is true that he would have returned at any time as long as he had the pension, he could have done so; he could have lodged his claim and stayed. That he has not done so tends to undermine his claim that he is just waiting on the pension in order to return here.
61. I accept that Mr Killick has a number of close family ties in Australia. On the other hand, his closest ties, other than to his wife, are to his daughters in the UK. I do not think this factor weighs strongly one way or the other in determining whether he was resident in Australia at the relevant time.
62. Until very recently, Mr Killick had no employment, business or financial ties with Australia other than his and his wife’s bank accounts. None of them has a large balance and all could be operated from anywhere in the world. I assume, although there is no evidence of this, that Mr Killick maintains at least one other bank account overseas for funds associated with the house in France. In any event, his Australian accounts do not of themselves indicate any particular tie here.
63. Mr Killick says he is now employed full time in Australia. I have some doubts about this claim because he raised it more or less in passing at the hearing and did not produce evidence of his employment until after the hearing when it was requested by the Tribunal. Further, even though he says he has been employed on a permanent, full time basis since 27 September 2010, the terms of Mr Killick’s employment seem vague.
64. Mr Killick has produced a pay slip from is employer which I am prepared to accept is genuine, although some of the figures on it are difficult to reconcile. However, I do not think it assists other than as evidence that he has an Australian employer and funds are paid into an Australian bank account. (I note that the account is not specified on the pay slip).
65. Importantly, Mr Killick’s evidence is that his position requires him to establish his employer’s brand and build a customer base in Europe and he expects to be spending a lot of time in Europe.
66. I am not satisfied that Mr Killick’s recent employment and his resumed financial ties to Australia support the conclusion that he resided in Australia at the relevant time. I accept that he and is wife were not sure in 2005 how long they would live in France but merely having in mind to return to Australia at some point is not sufficient. If Mr Killick had returned to live in Australia by now, or had spent more time here in the meantime, or been unexpectedly detained in Europe, it would tend to support his claim that he had moved only temporarily in 2005. Similarly, had he been in France for “a singular passing purpose” (for example, when he lived overseas while employed by Singapore Airlines), he might have still resided in Australia at the relevant time. However, all of the evidence about what happened at the time and since indicates otherwise. For example, by his own evidence, even when renovations to the house were finished and that obstacle removed, Mr Killick did not necessarily intend to spend more time in Australia, and has not done so.
67. Taking all of the evidence into consideration, I find that, in 2005, Mr and Mrs Killick intended to, and did, take up residence in France. They were still residing in France between 4 November 2008 and 3 February 2009 and were not residing in Australia. It follows that he did not satisfy the residence criterion for the age pension at that time. That is not to say that Mr Kellick could become a resident again now or in the future.
68. I affirm the decision under review.

I certify that the 68 preceding paragraphs are a

true copy of the reasons for the decision

herein of Senior Member Jill Toohey

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

Diana Weston Associate

Date of Hearing 15 November 2010
Date final submissions received 16 December 2010
Date of Decision 23 December 2010

Applicant Self-represented

Representative for the Respondent: Ms Keely Horan, Centrelink Advocacy Branch