Fitzgibbon and Secretary, Department of Social Services (Social services second review) [2018] AATA 2385 (23 July 2018)

Social Security Act 1991

Social Security (Administration) Act 1999

1. Between 1999 and 2009 Mr Fitzgibbon was the recipient of social security benefits (including parenting payments, Newstart allowance and carer payments). In September 2009 the Department of Human Services ("Centrelink") determined that Mr Fitzgibbon had been overpaid in excess of $90,000 and sought to recover the overpayments as debts owing to the Commonwealth. Mr Fitzgibbon sought a review of that decision and ultimately filed an appeal in this Tribunal.
2. The hearing of Mr Fitzgibbon's application was listed to be heard on 21 May 2018.
3. Mr Fitzgibbon was advised of the hearing date by email on 31 January 2018. On 4 May 2018 Mr Fitzgibbon emailed further material for his application to the Tribunal.
4. On 8 May 2018 the Tribunal asked Mr Fitzgibbon to confirm that he wished to proceed with his hearing. There was no response from Mr Fitzgibbon. The Tribunal sent Mr Fitzgibbon a further reminder notice on 17 May 2018, which stated that as a formal request for adjournment had not been received, the hearing would proceed on 21 May 2018, and advised of the time and the place in which the hearing would be held.
5. Mr Fitzgibbon failed to appear at the hearing and as a result, his application was dismissed pursuant to section 42A(2)(a) of the Administrative Appeals Tribunal Act 1975 ("AAT Act") which provides:

(2) If a party to a proceeding before the Tribunal in respect of an application for the review of a decision (not being the person who made the decision) fails either to appear in person or to appear by a representative at a directions hearing, or an alternative dispute resolution process under Division 3, held in relation to the application, or at the hearing of the proceeding, the Tribunal may:

(a) if the person who failed to appear is the applicant--dismiss the application without proceeding to review the decision;

1. On 9 June 2018 Mr Fitzgibbon applied to have his application reinstated pursuant to sections 42A(8A) and 42A(8B) of the AAT Act.

1. The Tribunal has the power to reinstate an application under section 42A(9) of the AAT Act if it considers it to be appropriate to do so.
2. The followings matters are relevant to whether the Tribunal should reinstate a matter:-[1]
   • (a) Whether there is any prejudice to the Respondent;
   • (b) The reason why the Applicant failed to appear;
   • (c) The merits of the substantive application; and
   • (d) Whether it is appropriate, given the public interest, to reinstate the matter in all the circumstances.

1. The Respondent concedes that, although public funds have been spent both on the preparation for the application and in relation to this reinstatement application, there is no legal prejudice to it if the matter were to be reinstated.

1. At the re-instatement hearing, Mr Fitzgibbon told the Tribunal:
   • (a) he did not appear at the hearing because he was "overcome with stress" and had a mental breakdown;
   • (b) his breakdown resulted in him withdrawing and ceasing contact with everyone, including the Tribunal;
   • (c) he has post-traumatic stress disorder; and
   • (d) he did not respond to the Tribunal's emails because he was not looking at emails.
2. Mr Fitzgibbon was aware of the date and time of the hearing as is evidenced by his emails to the Tribunal after receiving the listing notice. Mr Fitzgibbon did not assert that he was unaware of the hearing date.
3. In relation to his mental health conditions, there is no medical evidence before the Tribunal which corroborates Mr Fitzgibbon's claims. There is also no evidence to corroborate his explanation that mental health issues prevented him from appearing at the hearing.
4. Mr Fitzgibbon said he did not realise he had to provide that evidence, but he clearly turned his mind to it because he provided the Tribunal with copies of medical reports from a psychiatrist, Dr Martin, in support of this application. Mr Fitzgibbon acknowledged that he had no other medical evidence to support his claim.
5. The reports of Dr Martin do not substantiate Mr Fitzgibbon's explanation because:
   • (a) the reports were written 21 years earlier,
   • (b) they have no bearing on Mr Fitzgibbon's present health issues;
   • (c) they contain next to no details other than to confirm that Mr Fitzgibbon was going through a stressful time in 1997 because of the custody battle he was in with his ex-wife; and
   • (d) the psychiatrist was clearly engaged to provide an independent expert report to the Court about Mr Fitzgibbon and his wife, and was not Mr Fitzgibbon's treating doctor.
6. There is a complete lack of corroborating evidence to support Mr Fitzgibbon's explanation for his failure to appear. The Tribunal is not satisfied with the explanation given by Mr Fitzgibbon for the reasons for his lack of appearance.

1. The Respondent submits that Mr Fitzgibbon's application for review has little merit. The Respondent submits that:
   • (a) Mr Fitzgibbon incurred significant debts resulting from overpayments of social security benefits over a period 10 years (1999-2009); and
   • (b) the debts arose because of Mr Fitzgibbon's failure to disclose:
     • (i) his ownership or interest in numerous properties and their value; and
     • (ii) income he derived from his property development business.
2. The issues which would require determination if the matter were reinstated are, whether:
   • (a) Mr Fitzgibbon has been overpaid entitlements; and, if yes
   • (b) those overpaid entitlements are recoverable; and
   • (c) any debt should be waived due to administrative error pursuant to section 1237A of the Social Security Act 1991 (Cth) ("the Act"); or
   • (d) "special circumstances" exist such that the Debt should be waived pursuant to s 1237AAD of the Act.
3. If a person is not entitled to the social security benefit they have obtained, the amount of the payment is a debt due to the Commonwealth by the person and the debt is taken to arise when the person obtains the benefit of the payment: section 1223(1) of the Act.
4. Mr Fitzgibbon argued that:
   • (a) he has never sub-divided property;
   • (b) the properties Centrelink says should have been disclosed to it either belonged to someone else or had no value or were his principal home; and
   • (c) one of the properties was subdivided by his ex-wife (separate titles had not been created at that time), and the money from the sales went straight to the mortgagee (who was owed approximately $1,000,000) and was never received by Mr Fitzgibbon.
5. The material lodged with the Tribunal for the purpose of Mr Fitzgibbon's application is voluminous. It is not the role of this Tribunal, in this application for reinstatement, to assess in detail the substance of Mr Fitzgibbon's claim.
6. However, the evidence indicates that throughout the period 1999 to 2009 (when the debts are said to have arisen) Mr Fitzgibbon purchased and sold a number of properties, using a number of aliases.
7. Mr Fitzgibbon told the Tribunal that he does not agree that he owned the assets and that the properties were either his mother's home, or were his principal homes and that Centrelink did not take into account the mortgages attached to those properties. When Mr Fitzgibbon was asked what evidence he had to confirm that he notified Centrelink about the properties, he said it was in the documents provided by the Respondent for the purpose of the hearing.
8. However, the weight of the evidence supports a conclusion that:
   • (a) Mr Fitzgibbon had not informed the Respondent of the purchase of these properties;
   • (b) Mr Fitzgibbon had not informed the Respondent that he had changed his name nor that he was earning an income; and
   • (c) there is no evidence regarding what was done with the sale proceeds from the properties.
9. The evidence also indicates that throughout the relevant period, Mr Fitzgibbon was sent numerous notices outlining the benefits he was receiving, the income and assets on which Centrelink was calculating the payments, and informing him that he had an obligation to notify Centrelink if the circumstances change (in particular if he earned any income) or if any of the information that Centrelink was relying on was incorrect.
10. It is as a result of his failing to declare these assets and his income that the Secretary contends Mr Fitzgibbon was overpaid.
11. There is also evidence that Mr Fitzgibbon applied for a RAMS home loan on 1 April 2005, and in support of his application he indicated that:
    • (a) he was self-employed with a taxable income of $200,000; and
    • (b) he jointly owned real estate worth $550,000.
12. There is no evidence that this information was ever disclosed to Centrelink. Mr Fitzgibbon acknowledges this was not disclosed, but says it is because the information is not true and that the RAMS application was not completed by him and was fraudulently lodged by an unscrupulous agent. It seems implausible and there is no corroborating evidence to support this claim.
13. There is also evidence that Mr Fitzgibbon's credibility has been called into serious question by others. For example, in a court proceeding brought against him by his siblings for family maintenance following his mother's death, Gzell J of the New South Wales Supreme Court said:[2]

[15] At the time the Wahroonga property is required, Mr Fitzgibbon was a bankrupt. He became a bankrupt in November 2001. He was discharged of his bankruptcy in May 2004. He said he informed his trusty verbally that he intended to acquire the property is in another name and the trustee consented to this course. At the time, Mr Fitzgibbon was in receipt of unemployment benefits. He said Centrelink was aware of the properties he held in various names.

[18] With respect to the Asquith property ... Mr Fitzgibbon at first said he had nothing further to do with the matter after the sale ... Later in cross examination Mr Fitzgibbon said he was paid when Ms Williams sold the property and that Centrelink was aware of how much she received.

[20] In cross examination Mr Fitzgibbon revealed that he had sold five blocks of land ... Each at about the figure for which Ms Williams sold her block [which was $233,000]

[25] I have difficulty accepting the evidence of Mr Fitzgibbon. His explanation that he informed his trustee in bankruptcy and Centrelink of his investments in other names is implausible. His assertion that agents filled in the details in finance applications does not excuse him. He signed and proffered the documents. And the suggestion that Ms Johnson made a gift of $400,000 is highly improbable.

1. The Court recorded Mr Fitzgibbon giving evidence that Anne Johnson (his former partner) had gifted him $400,000 towards the purchase of some properties. There is no record of Mr Fitzgibbon advising the Respondent about those properties or of being gifted $400,000.
2. There is also evidence that:
   • (a) check deposits of $122,279.85 and $232,894.84 were made into Mr Fitzgibbon's bank account but there is no record of the Respondent being advised about either the opening of the bank account or the funds deposited; and
   • (b) on 16 June 2006, Mr Fitzgibbon and his daughter sold the property for $500,000 and another for $353,000 but around the time of those sales, Mr Fitzgibbon informed Centrelink that he had no earnings.
3. It appears that Mr Fitzgibbon has been deriving significant funds from his property development business without declaring any of it to the Respondent.
4. There was no adequate or plausible explanation provided by Mr Fitzgibbon to explain how these various dealings and transactions do not relate to him, nor to explain why he did not keep Centrelink informed of his various aliases or sources of income. The Respondent submits that Mr Fitzgibbon knowingly made false statements and knowingly failed to comply with his obligations as a recipient of a social security payment. Such a finding, which seems open on the material, would mean that the debts could not be waived.

1. Finally, "there is no evidence that other people in a position similar to [Mr Fitzgibbon] would be prejudiced or in any way affected [if his] "application for reinstatement is ... refused".[3]

1. There appears to be no basis for the debt to be written off under section 1236 of the Act. There also appears to be no serious challenge to the calculations of the debts. The evidence points to Mr Fitzgibbon not receiving the payments in good faith, knowingly making misstatements, and to his lack of reporting and transparency to Centrelink. There is no indication of any administrative error on Centrelink's part and no conceivable special circumstances which could be raised to waive the debts.
2. Based on the material available and the findings concerning Mr Fitzgibbon's credit and implausible explanations, I find that his application has little to no prospect of success.
3. Therefore, the Tribunal refuses Mr Fitzgibbon's application for reinstatement.

I certify that the preceding 36 (thirty-six) paragraphs are a true copy of the reasons for the decision herein of Member D K Grigg

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

[1] For example, see Re Hunter Valley Developments Pty Ltd v Cohen, Minister for Home Affairs and Environment (1984) 3 FCR 344, Overton and Secretary, Department of Social Services [2015] AATA 318; Oates and Secretary, Department of Social Security [1994] AATA 252; Tighe and Secretary, Department of Social Services [2017] AATA 408.

[2] Herr v Fitzgibbon [2008] NSWSC 297.

[3] Oates and Secretary, Department of Social Security [1994] AATA 252, at [49].