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Social Security Reporter |
Carer payment: marriage-like relationship; whether pooling of resources; error of law
(Federal Court of Australia)
Decided: 14th June 2006 by French J.
Pelka was in receipt of carer payment (CP) under the Social Security Act 1991 (the Act) between 11 July 2000 and 24 March 2003 at the rate fixed for a single person. She was caring for a friend, Whittaker. The Department decided in March 2003 that for the whole of the period that she had been receiving the payments she had been living in a marriage-like relationship with a man (Kuhl) with whom she shared her apartment. By reason of Kuhl’s income, she was not entitled to receive any CP during that period. A debt of $29,411.14 was raised. The decision was affirmed by an authorised review officer (ARO) on 14 May 2003 and by the SSAT on 8 October 2003. On 4 November 2003 Pelka lodged an application with the AAT for a review of the SSAT decision. On 8 February 2005 the AAT affirmed the decision under review.
On 4 March 2005 Pelka filed a notice of appeal in the Federal Court against the decision of the AAT.
The appellant alleged that the AAT had made a number of errors of law:
1. Finding that the applicant was in a marriage-like relationship within the meaning of s.4(3) of the Act when such a finding was not supported by the evidence and was contrary to the weight of the evidence;
2. Failing to give reasons for not accepting the evidence of the applicant, Kuhl and Whittaker;
3. Failing to consider whether there were special circumstances pursuant to s.1237AAD of the Act which might warrant the waiver of any debt owed to the Commonwealth;
4. Failing to find that the debt was caused solely by administrative error made by the Commonwealth and that the carer payments were received in good faith.
5. Failing to provide adequate reasons for concluding there was no evidence of special circumstances pursuant to s.1237AAD of the Act.
The term ‘member of a couple’ is defined in s.4(2) of the Act which provides, inter alia:
Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:
...
(b) all of the following conditions are met:
(i) the person has a relationship with a person of the opposite sex (in this paragraph called the partner);
(ii) the person is not legally married to the partner;
(iii) the relationship between the person and the partner is, in the Secretary’s opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;
(iv)both the person and the partner are over the age of consent applicable in the State or Territory in which they live;
(v) the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.
Section 4(3) provides relevantly:
In forming an opinion about a relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), 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.
Marriage-like relationships
The Court noted that social security legislation had historically differentiated the rate of benefits payable to those who are single from those who are in marriage or like relationships.
It referred to the decision of the Full Federal Court in Lambe v Director-General of Social Services [1981] FCA 171; (1981) 57 FLR 262 where the Court held that it was necessary to take into account a variety of factors and that all facets of the interpersonal relationship of the two persons had to be taken into account.
The Court considered the decision of Fitzgerald J in Lynam v Director-General of Social Security (1983) 52 ALR 128 where he applied Lambe and said, inter alia (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.
The Court also referred to the decision of O’Loughlin J in Staunton-Smith v Secretary, Department of Social Security [1991] FCA 513; (1991) 32 FCR 164. He said (at 173):
... it is not sufficient to merely note that a couple are sharing accommodation, nor is it sufficient to note that one is financially dependent on the other; it is necessary to delve deeper to find the reasons for those arrangements. Those reasons will be better indicators in determining the correct nature of their relationship.
The Court then stated that a decision-maker concerned with whether an unmarried person is in a marriage-like relationship with another person of the opposite sex:
1. Must have regard to their interpersonal relationship as a whole not limited by the factors listed in s 4(3).
2. Must have regard to each of:
(a) the financial aspects of the relationship;
(b) the nature of the household;
(c) the social aspects of the relationship;
(d) any sexual relationship between the people;
(e) the nature of the people’s commitment to each other.
3. In having regard to the preceding five matters, must have regard to all factors relevant to each and, in particular, must have regard to the factors listed under each heading in s 4(3).
4. Must specifically consider the total picture of the relationship created by all of these factors bearing in mind that consideration must be given to those which weigh against a marriage-like relationship and those which weigh in favour of it.
5. Must undertake the preceding consideration bearing in mind that a marriage-like relationship is not disclosed solely by any one of the following matters:
(a) financial cooperation;
(b) cohabitation;
(c) a sexual relationship;
(d) cooperative household arrangements;
(e) mutual commitment.
The Court noted that the judgment to be made is difficult and in many cases will be attended by a degree of uncertainty. The Court then considered each of the grounds of appeal.
First ground – whether the Tribunal’s findings were supported by the evidence
The Court noted that the first substantive ground of appeal attacked the principal findings made by the AAT as unsupported by the evidence. It stated that the AAT’s decision could only be challenged for error of law and not for ‘mere errors of fact arising out of faulty reasoning from the evidence’.
The principal challenge concerned the findings about the financial relationship.
The Court noted that on the financial aspect of their relationship, the AAT considered the matters set out in s.4(3)(a) of the Act and had made the following findings:
(i) There was no joint ownership of real estate or bank accounts or other assets and no joint liabilities.
(ii) There was significant pooling of financial resources.
(iii) No finding was made that Pelka or Kuhl owed any legal obligations to each other.
(iv) Kuhl paid gas, electricity and the telephone account and had recently begun to pay a moderate rental of $55. Pelka paid the rates.
The Court noted that the AAT did not rely upon any other matters except for its reference to the existence of a ‘barter system’ between Pelka and Kuhl whereby rent had been foregone by Pelka for an annual overseas holiday.
The Court considered the meaning of the term ‘pooling of financial resources’ in s.4(3)(a)(ii). It set out the definition of the word ‘pool’ in the New Shorter Oxford English Dictionary:
Put resources into a common stock or fund; share in common, combine for the common benefit.
It was of the view that this was the sense in which the noun ‘pooling’ is used in s.4(3)(a)(ii). The Court held that it involves something more than financial cooperation or separate contributions to different elements of household expense. It decided that the ‘barter system’ did not constitute a pooling of financial resources any more than Kuhl’s payment of rent would be. The Court found that as there was no evidence of pooling identified by the AAT in its findings therefore the finding that there was pooling was an error of law as it was a misconstruction of s.4(3)(a)(ii).
The AAT had referred to the relationship as being characterised by cooperation and mutual benefit. The Court considered that cooperation of itself did not take a relationship very far down the path towards being ‘marriage-like’ as it is ‘an indispensable feature of human society and of a multiplicity of different kinds of relationships within human society including the purely commercial.’ It noted that ‘mutual benefit ... attaches to a large range of arrangements between people’.
The Court noted the AAT’s findings on the nature of the household arrangements between Pelka and Kuhl:
(i) There was no question of any joint responsibility for providing care or support of children.
(ii) The living arrangements involved separate bedrooms and a common kitchen, lounge and bathroom. Pelka and Kuhl each owned their own bedroom furniture and Kuhl supplied most of the lounge room furniture.
(iii) Pelka did more housework than Kuhl and they occasionally ate together when she cooked more than she needed for herself.
The findings were not disputed. Pelka submitted that they were not consistent with a ‘marriage-like relationship’ and did not support the AAT’s overall conclusion. The Court agreed but did not find that the AAT made an error in that regard as it had not, on the face of its reasons, made any finding that the household arrangements were indicative of a marriage-like relationship.
The Court noted the AAT’s reference to the evidence as highlighting ‘the marked contrast in the relationship between the applicant and Mr Kuhl at home and overseas’. The Court then stated that if, by contrasting this evidence, the AAT was intending to cast doubt upon the evidence of the household arrangements at home, it should have said so and made an appropriate finding. The reasons given indicated acceptance of the evidence from Pelka and Kuhl and given that acceptance, the Court noted it was hard to see the household arrangements as anything less than a major factor against the AAT’s ultimate conclusion. There was no error of law disclosed in this aspect of the AAT’s reasoning.
The Court noted the AAT’s findings on the question of the social relationship:
(i) Pelka did not hold herself out as married to Kuhl or as his partner or de facto wife. He had described her as his de facto and partner on particular occasions without her knowledge. A unilateral declaration of that kind might be evidence relevant to the question whether the people held themselves out as married to each other, but in this case the Court considered that the answer was ‘no’ as the AAT had accepted Pelka’s evidence.
(ii) There was no evidence from friends or acquaintances about the nature of the relationship. Whittaker said that in the eight or nine years that he had known Pelka he had never been aware that she had a boyfriend. This evidence, along with his evidence that she was always available to care for him at short notice, was said by the AAT to be largely negated by his evidence that she was secretive and did not discuss her private life. The Court commented that, taken together, Whittaker’s evidence supported the proposition that Pelka did not regard Kuhl as her (quasi) marital partner, since even a secretive person might be expected to make some reference to a husband or partner.
(iii) There was little or no evidence of any joint social activities engaged in by Pelka and Kuhl.
The AAT concluded that the relationship Pelka had with Kuhl ‘was the most significant relationship [she] appeared to have in her life involving a close bond, trust and very considerable emotional significance’. Pelka argued that this conclusion was not supported by the evidence. The Court held that the conclusion was open on the evidence and did not of itself disclose any error of law.
The Court noted that while the AAT appeared to accept that there was no sexual relationship between Pelka and Kuhl it did not appear to have weighed this in the balance against a conclusion of a marriage-like relationship.
The final factor to be considered by the AAT was the nature of the commitment of Pelka and Kuhl to each other. The Court considered that the dimensions of the term commitment in the context of s.4(3)(e) were illustrated by the matters to be considered in relation to it. The relevant findings by the AAT were:
(i) The relationship between Pelka and Kuhl dated back for 16 years.
(ii) Their commitment to each other had been long standing and close.
(iii) There was no finding made about whether they saw their relationship as continuing indefinitely.
(iv) There was no finding whether they saw their relationship as marriage-like.
The Court then noted that the AAT’s general conclusion was that:
... the weight of evidence supports the finding that at the relevant time Ms Pelka was in a marriage-like relationship....
The AAT did not arrive at this conclusion after weighing of the various factors against each other although there were matters pointing in different directions. The Court stated that a decision-maker should acknowledge that the matters set out in s.4(3) are non-exhaustive and indicate that consideration has been given to whether there are any other factors relevant to the judgment of whether a ‘marriage-like’ relationship exists.
The Court concluded that the AAT misapplied the law to the extent that it found that Pelka and Kuhl pooled their resources. The Court stated that it did not know what conclusion the AAT would have come to on a proper interpretation of the section as the question whether Pelka and Kuhl were living in a marriage-like relationship was finely balanced. The Court decided the AAT’s decision should be set aside and the matter remitted to it for reconsideration according to law.
Second ground – failure to give reasons for not accepting evidence
The Court was of the view that it was not clear that the AAT had rejected Kuhl’s evidence in any important respect. Whilst it did not agree with the approach the AAT took to the evidence of Whittaker, this did not amount to an error of law.
Third and fifth grounds - whether there were special circumstances pursuant to s.1237AAD of the Act warranting waiver of the debt
The Court noted that the AAT had found that there was no evidence of special circumstances and therefore no need for it to consider the issue of waiver further. The Court concluded that there was no error disclosed and the AAT’s reasons were not inadequate.
Fourth ground - whether the overpayment alleged was caused solely by administrative error by the Commonwealth and received in good faith
It was submitted for Pelka that there was evidence before the Tribunal that the alleged overpayment made to her was attributable solely to administrative error made by the Commonwealth because she had given some evidence that she had been misadvised by an officer of Centrelink in relation to the form she had to fill in for the carer’s payment.
The Court noted that the Tribunal found there had been no relevant administrative error and that s.1237A(1) could not apply. This did not amount to an error on the part of the Tribunal.
As the AAT had misapplied the law to the extent that it found that Pelka and Kuhl pooled their resources its decision was set aside and the matter was remitted to the AAT for reconsideration according to law. The respondent was ordered to pay the applicant’s costs of the appeal.
[C.E.]
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URL: http://www.austlii.edu.au/au/journals/SocSecRpr/2006/40.html