O'Meara v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs

Federal Court of Australia|2010-03-25|Before: Ms P, Ryan J

REASONS FOR JUDGMENT 1 On 11 December 2009, there was before the Court an application for an extension of time in which to appeal from a decision of the Administrative Appeals Tribunal ("the AAT"), O'Meara and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2008] AATA 1083, delivered 4 December 2008 ("the AAT decision"). During the hearing before me, Mr O'Meara made submissions supplementing the various materials he had filed in support of his application, and tendered some medical certificates. A representative of the Secretary also made oral submissions opposing the grant of an extension of time. Given the complexity of the matters canvassed in the AAT decision and the relevance to the exercise of the Court's discretion to grant an extension of time of the applicant's prospects of success on the presumptive appeal, I reserved judgment on the interlocutory application. 2 An "appeal" from a decision of the AAT, which is an application in the original jurisdiction of this Court, lies pursuant to s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). Sub-sections 44(1) and 44(2A) of that Act provide: 44(1) A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding. … 44(2A)An appeal by a person under subsection (1) or (2) shall be instituted:

(a) the nature of the case; (b) the questions involved; and (c) the reason why an extension of time should be given. In the time during which the discretion conferred by s 44(2A) of the AAT Act has been available, a large body of authority has been developed indicating various factors which may be taken into account in exercising the discretion: see, for example, Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 and Peczalski v Comcare (1999) 58 ALD 697. 4 Those authorities, however, do no more than explain approaches taken to the exercise of the discretion in various circumstances which have been considered by the Court in the past. They do not fetter the discretion, or exhaust the factors relevant to its exercise. The power conferred by O 53 r 7 fundamentally turns on the facts of each case, and not on the closeness of any analogy with what has been said regarding the exercise of the discretion in earlier cases. Even so, it is clear that the Court will not extend time if the appeal is bound to fail. The first question to be answered upon Mr O'Meara's application, then, goes to the strength of the case which he would advance were the appeal allowed to be instituted. Central to that question is whether any question of law within the meaning of s 44 as explained, for instance, in Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 and Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321, can be discerned to arise from the facts of the instant case; see Kapeen-Gangitano v Centrelink [2003] FCA 1549, per Branson J.

The background to the AAT decision 5 That AAT decision was given on an appeal from the Social Security Appeals Tribunal ("the SSAT"). At its core, the question to be resolved at each level concerned the nature and extent of an interest held by Mrs O'Meara, the applicant's wife, in the Power Class Trust ("the Trust"). On the resolution of that question depended the obligations of Centrelink to pay various pensions to Mr and Mrs O'Meara and, Centrelink's consequent entitlement, if any, to recover any overpayment. 6 The decision under review, as Senior Member Handley noted in his decision, affirmed Centrelink's decision that, between 8 March 2002 and 20 July 2007, a pension to Mrs O'Meara had been overpaid by $53,688.65 and that to Mr O'Meara by $52,220.49. The circumstances leading to the presumed overpayment were described by the Senior Member as follows: [7] On 8 November 1982, the Power Class Trust (the Trust) was established. The Trustee was Fifth Fumid Pty Ltd which had previously been incorporated but changed its name on 12 November 1982 to Power Robb Estates Pty Ltd (the Trustee Company). Mrs O'Meara and Terrence Power, her brother, have been Directors of the Trustee Company since the commencement of the operation of the Trust. They are also beneficiaries of the Trust together with three other siblings. At 8 March 2002 the assets of the Trust were $1,371,242. Mrs O'Meara declared to Centrelink that the gross value of the assets of the Trust at 21 July 2007 were $3,483,767 but which should be reduced by regard to sundry creditors of $80,754 and five beneficiary loan accounts having a total of $389,478. The beneficiary loan account attributable to Mrs O'Meara was $81,602. [8] The applicant and his wife did not declare their interest in the Trust to Centrelink during the relevant years. By reason of the applicant being a member of a couple with Mrs O'Meara, he was obliged to make a similar declaration and is also subject to the attribution of assets and income, to her, from the Trust. It appears that, on 20 July 2007, Centrelink attributed 20% of the assets of the Trust to Mrs O'Meara from 8 March 2002. That attribution was made pursuant to s 1207X of the Social Security Act 1991 (Cth) ("the SSA") which provides, so far as is relevant; (2) For the purposes of this Part, if:

(a) a trust is a controlled private trust in relation to an individual; and (b) the trust is not a concessional primary production trust in relation to the individual (see section 1208U); then: (c) the individual is an attributable stakeholder of the trust unless the Secretary otherwise determines; and (d) if the individual is an attributable stakeholder of the trust - the individual's asset attribution percentage in relation to the trust is: (i) 100%; or (ii) if the Secretary determines a lower percentage in relation to the individual and the trust - that lower percentage; and (e) if the individual is an attributable stakeholder of the trust - the individual's income attribution percentage in relation to the trust is: (i) 100%; or (ii) if the Secretary determines a lower percentage in relation to the individual and the trust - that lower percentage. … …

(3) A determination under this section is to be in writing.

(4) A determination under this section has effect accordingly.

(5) In making a determination under this section, the Secretary must comply with any relevant decision making principles. [original emphasis] 7 The SSAT concluded that Mrs O'Meara was an "attributable stakeholder". It considered that, having regard to the circumstances of the relationship between her and the corporate trustee of the Trust, there was no reason to decide that she was not an attributable stakeholder. The SSAT reached that conclusion notwithstanding an argument advanced on behalf of the applicant and Mrs O'Meara which the SSAT restated at [62] of its reasons in these terms; The Tribunal noted that it was argued that Mrs O'Meara had a minority interest in the trust and that she had no attributable interest in the trust as it was set up for the benefit of the next generation of her and her siblings' children. However, it is clear that Mrs O'Meara has a legal interest in the trust, and she is a beneficiary of the trust. As noted earlier, Mrs O'Meara has derived direct benefit from the distributions of the trust, and she has a beneficiary loan to the trust of $82,602 to which she is legally entitled and certainly the trust is in the financial position to meet this loan repayment. 8 The question with which the AAT, in reviewing the decision of the SSAT, was concerned centred on control of the Trust. That was relevant because of s 1207V of the SSA, which enshrines a "control test" governing whether a trust is a "controlled private trust". The section is in these terms: 1207VControlled private trusts

(1) For the purposes of this Part, a trust is a controlled private trust in relation to an individual if the trust is a designated private trust and: (a) the individual passes the control test set out in subsection (2); or (b) the individual passes the source test set out in subsection (3). Control test

(2) For the purposes of this section, the individual passes the control test in relation to a trust if: (a) the individual, or an associate of the individual (other than an associate covered by paragraph 1207C(1)(j)), is the trustee, or any of the trustees, of the trust; or (b) a group in relation to the individual was able to remove or appoint the trustee, or any of the trustees, of the trust; or (c) a group in relation to the individual was able to vary the trust deed or to veto the decisions of the trustee; or (d) the aggregate of: (i) the beneficial interests in the corpus or income of the trust held by the individual (whether directly or indirectly); and (ii) the beneficial interests in the corpus or income of the trust held by associates of the individual (whether directly or indirectly); is 50% or more; or (e) a group in relation to the individual had the power (by means of the exercise by the group of any power of appointment or revocation or otherwise) to obtain, with or without the consent of any other entity, the beneficial enjoyment of the corpus or income of the trust; or (f) a group in relation to the individual was able in any manner whatsoever, whether directly or indirectly, to control the application of the corpus or income of the trust; or (g) a group in relation to the individual was capable under a scheme of gaining the enjoyment or the control referred to in paragraph (e) or (f); or (h) a trustee of the trust was accustomed or under an obligation (whether formally or informally) or might reasonably be expected to act in accordance with the directions, instructions or wishes of a group in relation to the individual. An "associate", for the purposes of s 1207V, includes a relative of the individual: s 1207C(1)(e). 9 Having helpfully reviewed the authorities in point, Kenny J explained in Elliott v Secretary, Department of Education, Employment and Workplace Relations (2008) 249 ALR 182 at 197 the operation of s 1207V(2) as follows. (Her Honour's reasoning was upheld by a Full Court of this Court (sub nom. Secretary, Department of Housing, Community Services and Indigenous Affairs v Elliott (2008) 174 FCR 387)); [48] Section 1207V(2) is intended to ensure that those assets that an individual can control and therefore utilise are taken into account in assessing whether that individual qualifies for a benefit under the Social Security Act. Section 1207V(2), therefore, provides for the "control test" to be satisfied by reference to criteria for control set out in sub-ss (a)-(h). As noted above, if a trust satisfies any of these criteria, then it is a "controlled private trust" for the purposes of the Part (s 1207V(1)) and the income or assets of the trust are attributable to the individual. [49] The criteria in sub-ss (a)-(h) of s 1207V(2) mean that the control test can be passed in various ways. The criteria all reflect a requirement that the individual, or his or her associate, or a "group" in relation to the individual (being either the individual, or an individual's associates, acting either as a group or alone (s 1207V(4)), exercise some legal or practical control over the trust, whether because the individual or an associate is the trustee (s 1207V(2)(a)); or can remove or appoint the trustee (s 1207V(2)(b)); or can vary the trust deed or veto the decisions of the trustee (s 1207V(2)(c)); or possesses the power to obtain the beneficial enjoyment of the corpus or income of the trust (s 1207V(2)(e)); or can control the application of the corpus or income of the trust (s 1207V(2)(f)); or has the power to gain that control (s 1207V(2)(g)). The control test may also be passed where the trustee of the trust was accustomed or under an obligation, or might reasonably be expected to act in accordance with the instructions or wishes of a group in relation to the individual: s 1207V(2)(h). Subsection (d) of s 1207V(2) must be construed in this statutory context. This subsection sets out a standard, which, if satisfied, supports the conclusion that the individual (alone or with his or her associates) has some practical control over the corpus or income of the trust. In summary, the expression "beneficial interests in the corpus or income of the trust" in s 1207V(2)(d) signifies interests that, when taken together, would, practically speaking, permit the individual (acting alone or through his or her associates) to control the disposition of trust capital and income in some way, so that the individual (acting alone or with his or her associates) can enjoy the economic benefit of the trust.

The AAT decision 10 After reviewing the evidence before it, the AAT concluded that Mrs O'Meara passed the control test because she satisfied the criteria in s 1207V(2)(d)(ii). In reaching that conclusion, the AAT rejected an argument advanced on behalf of the applicant that control of the Trust was exercised by his mother-in-law, Mrs Marjorie Jean Power. In respect of that argument, the AAT observed, at [35] of its reasons: The case for the applicant was of his mother-in-law that is, the mother of his wife, being a person who exhibited or exercised control over trust funds. The evidence heard in these proceedings clearly established: (i) The Trust was established by funds provided by the grandmother of Mrs O'Meara; (ii) None of the Trust funds upon it being created were provided by his mother-in law; and (iii) His mother-in-law has not ever been a beneficiary, Class Guardian, Class Appointor or Director of the Trust company. (iv) The reference by the SSAT in its amended decision (following a correction) to the applicant's mother-in-law having inherited shares from her mother and those shares being the capital base of the Trust is not supported by the evidence heard in this review and is inconsistent with the evidence of Mr Power, as recorded in the 2nd dot point at paragraph 25 of its decision. 11 In concluding that the applicant's argument was wholly misconceived, the AAT pointed out that the applicant's mother-in-law had no beneficial interest, in the sense used in s 1207V(2)(d), in the Trust assets or income. It then identified the relevant issue as whether the applicant's wife, Mrs O'Meara, passed the control test in relation to the trust and continued, at [37]-[39] of its reasons: [37] … For the purposes of the analysis that follows I am satisfied that she is the individual as that expression is used in s 1207V and for the purposes of sub-section (2)(d)(i) and (ii) her beneficial interest in the corpus or income and the beneficial interest in the capital or income held by her associates (refer s 1207C) being her siblings does amount to 50 percent or more. [38] Contrary to the submission of the applicant (paragraph 27 earlier), both parts of s 1207V(2)(d) must be read together. Part (ii) has no relevance if read alone. An associate of the individual, Mrs O'Meara, could be her mother (a relative - refer s 1207C(1)(e)) but only if she has a beneficial interest in the corpus or income of the Trust. As discussed, she has no such beneficial interest. The only associates are the siblings being the other four beneficiaries. [39] Being satisfied that the Trust is a controlled private trust and being satisfied that Mrs O'Meara is the individual, she is deemed pursuant to s 1207X(2) to be an attributable stakeholder (unless otherwise determined) and is also deemed to have an asset and income attribution percentage in relation to the Trust of 100 percent. That deemed finding may be reduced to a lower percentage in relation to Mrs O'Meara by application of the decision-making principles found in the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 being Legislative Instrument F 2007 B00425. Compliance with these Principles must occur if a determination is made pursuant to s 1207X of a specified percentage of attribution lower than 100 percent with respect to the assets and income of a trust attributable to an individual (the attributable stakeholder). [original emphasis] 12 The AAT went on to note that Mrs O'Meara had "virtually no involvement in the Trust": [42], which was effectively managed by her brother, Mr Power: [43]; but she held a loan account with the Trust, and had benefited by the Trust making payment to Centrelink of the amount calculated as overpaid to her between 2002 and 2007. 13 The circumstances of the management of the Trust, apparently drawn from Mr Power's evidence and set out at [44] of the AAT decision, allowed the AAT to apply a legislative instrument, the Social Security (Attributable Stakeholders and Attribution Percentages) Principles 2000 (Cth), and to attribute to Mrs O'Meara and each of her four siblings a 20% beneficial interest in the Trust: see at [46]-[53]. In that connection, the AAT said, at [52], that: [52] Acting alone, Mrs O'Meara is in a minority position but she has no greater power than any other individual beneficiary who alone is also in a minority position. The power that each of the five siblings has can be exercised only by a resolution of a majority. Whilst Mr Power undertakes most of the administrative work on behalf of the Trust, he does so without reward and I am not satisfied that he holds any greater power over the operation of the Trust than the other four siblings. 14 Attribution to Mrs O'Meara of a 20% beneficial interest in the Trust had the consequence that each of Mr and Mrs O'Meara was liable to make repayments to Centrelink for the reasons explained as follows at [57]-[59] of the AAT decision; [57] With respect to s 1237AAD it was submitted that the applicant does possess special circumstances which should permit waiver of the debt. This provision is strictly not relevant because it need only be considered under this section if the debt did not result wholly or partly from the debtor (the applicant) knowingly making a false statement or false representation. Even if the applicant could satisfy that Part, and I doubt that he could, his circumstances are not special. Whilst he is an age pensioner and is now subject to a considerable debt, he and his wife do own considerable assets being their matrimonial home and another home in Rosebud. He has also had the benefit of Commonwealth funds to which he was not entitled. I am not satisfied that the requirement to repay those monies is unfair, unintended or unjust or that there is some feature out of the ordinary which would permit a finding that the circumstances of the applicant are special (refer Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541; Secretary, Department of Family and Community Services v Chamberlain [2002] FCA 67. [58] There was no challenge here or at the SSAT of the nett value of the Trust at relevant times, nor of the quantum of the overpayment as calculated by Centrelink. [59] Further purposes of this decision I am satisfied that the 20 percent attribution of Mrs O'Meara should be calculated against the nett value of trust assets at the dates and in the documents below, as found by the SSAT and conceded by the respondent (refer paragraph 72 of Respondent's Statement of Facts and Contentions). [original emphasis]

Consideration of the applicant's submissions in this Court 15 As well as his oral submissions, Mr O'Meara made what amounted to written submissions in a document styled "Annexure A" to his application for an extension of time. The primary submission, written and oral, was that, although his wife, Mrs O'Meara, passed the control test, it would never have been possible, in a practical sense, for her to have exercised that control. The point is put in this way in Annexure A: … it is submitted that the mother of the 5 directors [being Mrs O'Meara and her siblings] also passes the control test in relation to [the trust] because it is sufficiently influenced by her within the meaning of section 1207V(2)(h). It is not unreasonable to expect that the 5 children as directors… would be reasonably expected to act in accordance with the mother of the 5 director's wishes.

Control is defined in section 1207A of the Act as "includes control as a result of, or by any means of, trusts, agreements, arrangements, understandings and practice, whether or not having legal or equitable force and whether or not based on legal or equitable rights.

Perhaps we can summarise as saying that the opportunity for control by the mother of the 5 directors of the Trust exists and has been exercised in practice. In this regard it is highly unlikely that the siblings would ever act in concert with Mrs O'Meara to allow her access to Trust funds.

16 Section 1207A of the SSA, to which Mr O'Meara there refers, is a definitional section. The definition of "control" in that section is; control includes control as a result of, or by means of, trusts, agreements, arrangements, understandings and practices, whether or not having legal or equitable force and whether or not based on legal or equitable rights. 17 Taken at its highest, then, the submission is that the AAT erred in failing to have regard to the applicant's mother-in-law's role in practically controlling, apparently by informal means, the administration of the Trust. A similar submission appears to have been made to the AAT, which dealt with it, at [36] of its decision, in these terms: [36] … The applicant's mother-in-law has never had any control over the Trust. Whilst it would appear that there was a belief held by the applicant that the Trust funds were provided upon establishment by his mother-in-law, the Trust Deed and other like material contained within the T documents make no reference to her at all. Whilst s 1207V(2)(d) refers to beneficial interests, that expression is not defined but the expression would clearly refer to the interest of a person who is entitled by the Trust to a benefit. The applicant's mother -in-law has no entitlement to a benefit by the Trust. Monies were advanced to her by the Trust to meet the cost in part of a unit where she resides but that sum is described in the Trust document as a loan. It is no coincidence that that person is the mother of all five beneficiaries named in the Trust documents. But that does not amount to her having an entitlement, by the Trust, to a benefit. In this Court, Mr O'Meara has persisted in his submission that Mrs O'Meara's mother exercises, in a practical sense, a controlling influence over the administration of the Trust. 18 As I followed his oral submissions, Mr O'Meara referred first to the deed governing the Trust, which defines "beneficiary" as follows: (b) "beneficiary" shall mean each of the General Beneficiaries He then made reference to that part of the definition of "General Beneficiaries" in the deed, which recites; (i) the "General Beneficiaries" of each class shall mean and include: the Specified Beneficiary or the Specified Beneficiaries (as the case may be) of that class; the grandparents mother father brothers sisters spouses widows widowers children and grandchildren of the Specified Beneficiary or Specified Beneficiaries of that class and the brother sisters spouses widows widowers children and grandchildren of such grandparents mother father brothers and sisters spouses children and grandchildren;… 19 Mr O'Meara next took issue with the AAT's remark, in the course of [36] of its reasons for decision (set out at [17] above), that in the Trust Deed there was "no reference at all" to his mother-in-law: she is mentioned, he said, in the vesting clause. That clause says this: VESTING DAY: The date of the second anniversary of the death of MARJORIE JEAN POWER of 6/249 Burke Road, Malvern, or such earlier or later date (being within the Perpetuity Period) as the Trustee (with the consent of such Class Guardians are alive) at any time may appoint. On its face, the AAT's statement that in the Trust Deed there is "no reference at all" to Mr O'Meara's mother-in-law is incorrect. But if [36] of its reasons is read, as I think it must be, to mean that there is no express reference to her as a beneficiary, trustee, class guardian or class appointor, then the AAT is correct. 20 Mr O'Meara went on to make a related submission that his mother-in-law, even if not a specified beneficiary, is a general beneficiary. As Mr O'Meara said during the hearing, the class of general beneficiaries of the Trust includes "quite a few people", among whom, undoubtedly, is his mother-in-law. That status, however, does not confer on her any beneficial interest for the purposes of s 1207V of the SSA. "Beneficial interest", as Kenny J noted in Elliott, supra, at 189 [25] is not defined in the SSA. The AAT, at [36] of its reasons for decision, set out above, considered that that expression "would clearly refer to the interest of a person who is entitled by the Trust to a benefit". Such a construction accords with principle. Mr O'Meara's mother-in-law is, at most, a member of a class of discretionary beneficiaries, who have no interest beyond the right to be "considered as a potential recipient of benefit by the trustees" (and, of course, a right to have that primary interest protected): see Gartside v Commissioners of Inland Revenue [1968] AC 553, per Lord Wilberforce, at 617, Walter v Registrar of Titles [2003] VSCA 122 at [15], per Chernov JA, with whom Ormiston JA and Ashley AJA agreed, and both Kenny J's and the Full Court's reasons in the Elliott cases, (supra). 21 The AAT decision to which Mr O'Meara drew my attention in support of his submission, Re Secretary, Department of Family and Community Services and Linton [2006] AATA 98, does not uphold his contention, but it does illustrate the point. There, the attribution of private trust assets, in the context of a decision to cancel Mr Linton's pension, was at issue, so the factual similarity with Mr O'Meara's situation may readily be appreciated. However, the issue there arose from the attribution to Mr Linton of 100% of the assets in a trust whereas, the AAT found, control in the relevant sense was exercisable by several others: see at [15]-[17] of that decision. The decision of the AAT there was that the matter be remitted to the Secretary of the Department of Family and Community Services for reconsideration according to the principles stated in the Social Security (Attributable Shareholders and Attribution Percentages) Principles 2000; see at [18] and [20] of that decision. In Linton, the other persons said to be able to exercise control in the relevant sense held beneficial interests in the Trust. 22 For the reasons I have endeavoured to explain, it is not, in my view, open to contend that Mrs Power, Mr O'Meara's mother-in-law, passed the control test by the operation of s 1207V(2)(d) of the SSA. I therefore reject Mr O'Meara's argument on this point. 23 It also seems that the AAT erred in concluding that Mr O'Meara's wife, Greta Mary O'Meara, passed the control test by virtue of paragraph (d) of s 1207V(2). That conclusion is indicated at [37] of the AAT's reasons, reproduced at [11] above, where the AAT observed that "for the purposes of sub-section (2)(d)(i) and (ii) [Mrs O'Meara's] beneficial interest in the capital or income held by her associates (refer s 1207C) being her siblings does amount to 50 percent or more." A similar mistaken view is expressed at [38] of the AAT's reasons where it is suggested that Mrs O'Meara and her four siblings are the only "associates" having beneficial interests in the corpus or income of the Trust. 24 Nevertheless, for the reasons explained at [20] above and in the authorities there cited, Mrs O'Meara did not, merely by force of the terms of the Trust deed, obtain any beneficial interest in the corpus or income of the Trust. She was only one of a wide class of discretionary beneficiaries and obtained no beneficial interest in the Trust fund until the trustee exercised its discretion in her favour, as it apparently did when it made a distribution to her to enable her to pay her debt to Centrelink. A similar discretion may have been exercised to confer a further beneficial interest on Mrs O'Meara when her loan account in the books of the Trust was credited with an amount of $81,602. However, the creation of a beneficial interest in that amount is less clear than the unequivocal exercise of the trustee's discretion in respect of the $53,688.65 which Centrelink claimed to have overpaid to Mrs O'Meara. 25 Mr O'Meara's next argument, as appears from the portion of his Annexure A set out above at [15], is that his mother-in-law exercises a degree of informal control over the administration of the Trust sufficient to enable her to pass the control test erected by s 1207V(2)(h) of the SSA, which is set out at [8] above. By the definitions provided in s 1207A, "group" in par 120V(2)(h), includes an individual. 26 In support of this submission, Mr O'Meara, as again appears from his Annexure A, does no more than assert that "the opportunity for control by the mother of the 5 directors of the Trust exists and has been exercised in practice". It does not appear that any evidence was led before the AAT in support of that contention; indeed, it is far from clear whether the contention was even advanced to the AAT as it relies on a different paragraph of s 1207V(2) from paragraph (d) which has primarily been at issue. After reviewing the evidence before it as to the administration of the Trust, the AAT found; [43] Mr Power effectively manages the Trust by him calling meetings, preparing paperwork and lodging returns at appropriate statutory agencies. He confirmed that some monies have been paid to beneficiaries in the vicinity of approximately $5000.00 and a payment of approximately $60,000 was paid to one of the beneficiaries to meet the cost of private school fees for that beneficiary's child. He also confirmed that monies had been paid by the Trust to his mother, being the mother also of the other four beneficiaries, to meet the balance of purchase price for a unit in which she resides.

[44] Mr Power said that should an issue emerge between the beneficiaries, a decision will be made either unanimously or by majority vote. He agreed that the Trust Deed permitted a distribution from the income and the capital of the Trust to any of the beneficiaries (Clause 10). Whilst the Trust had not ever resolved that each of the five siblings have a 20 percent interest in the Trust, there was a common understanding between all of those persons that the extent of their interest was confined to that percentage. He agreed that all of the Trust assets and income could be distributed to Mrs O'Meara if there was majority agreement amongst the beneficiaries but in his view that would not occur. That is to say, the theoretical possibility which he was asked to consider was, for practical purposes, virtually impossible, because a majority of the beneficiaries would not allow it to occur.

[51] I am satisfied that the possibility of a 100 percent distribution of trust assets and income to Mrs O'Meara, although supported legally by the Trust Deed, must give way to the practical reality of the manner in which the Trust has been administered to date. From the evidence of Mr Power, decisions have been made in early years to distribute income from investments but in recent years to apply that income to loan accounts. Some modest distributions have been made and the only amounts of significance that have been paid were the monies advanced to meet the Centrelink debt on behalf of Mrs O'Meara and school fees on behalf of one of her sisters. It is not known whether those payments were made from the loan accounts of those persons or from the capital. The only other payment of significance that was learnt from these proceedings was the advance to Mrs O'Meara's mother but that payment was not made to her as a beneficiary. That payment advanced is recorded in the books of the Trust as a loan.

27 The AAT's reasons for decision are silent, however, as to the role, if any, played by Mrs Power, Mr O'Meara's mother-in-law. During the examination before the AAT of Mr Power, who is Mrs O'Meara's brother, the following exchange took place: What role did your mother have in relation to the trust? --- My mother had no involvement - nothing to do with the trust, would not know what was there, what wasn't there, had no - in terms of any decision to make a distribution, create loan accounts - just had no involvement. Absolutely zero.

Right. What about her wishes in respect of her grandchildren? Were they ever mentioned? --- No, these were the wishes of my grandmother, not my mother.

All right? --- All my mother has been concerned about is that her children have an enjoyable, healthy life, and that their grandchildren are provided for with whatever money her father, where the money originally came from…

Later, the cross-examination of Mr Power included this exchange; Your mother is still alive? --- Yes.

And she has never had a role in the trust, you stated? --- Absolutely no.

Absolutely no role whatsoever. So insofar - I'm just confirming this. Insofar as the wishes went, the wishes were the wishes of the grandmother known to you before she died? --- Yes.

28 That evidence of Mr Power seems to contain the only discussion before the AAT of involvement in the Trust of his mother, Mrs Power. It affords no basis for a contention invoking s 1207V(2)(h), that the directors of the corporate trustee of the Trust were accustomed, or might reasonably be expected, to act in accordance with the directions, instructions or wishes of their mother, Mrs Power. It follows that Mr O'Meara's alternative attempt to demonstrate that his mother-in-law, Mrs Power, passes the control test erected by s 1207V(2)(h) also fails. It is unnecessary to consider whether Mrs Power would pass the control test by application to her of some paragraph of s 1207V(2) other than par (d) or (h). That is because the inquiry is irrelevant. The sole issue relevant to the liability of Mr O'Meara to make a repayment to Centrelink is whether Mrs O'Meara passes the control test by reason of one or other of the paragraphs of s 1207V(2). The test is to be applied to her as an individual and it is not to the point that other persons, not being relevant individuals, might also pass the control test in one or other of its applications. 29 The eight limbs of the control test erected by s 1207V(2) are independent of each other and not cumulative. It was open to the AAT on the evidence to find that Mrs O'Meara and her other siblings comprised a group in accordance with whose wishes the corporate trustee of the Trust was accustomed, or might reasonably be expected, to act. If there were evidence that the group had expressed directions, instructions or wishes that a benefit be conferred out of the Trust assets on Mrs O'Meara's mother, Mrs Power, and if the occasion had arisen to consider the Trust in relation to Mrs Power, she could well also have passed the control test in the circumstances of this case. However, that could not avail Mrs O'Meara, or through her, Mr O'Meara. 30 As I read the deed governing the Trust, it is intended to create a separate discretionary trust, primarily for the benefit of five specified classes of beneficiaries. Appropriated to each class are four portions of the Trust estate. The version of the Trust deed presently in evidence has been redacted to obliterate the names of the five children of Mrs Power who are specified as comprising the specified beneficiaries in each of Class A, Class B, Class C, Class D and Class E. However, I infer that the specified beneficiaries in Class B are the children of Greta Mary O'Meara who, by the Schedule to the deed, is appointed to be, during her lifetime, the Class Guardian and Class Appointor for Class B. The additional members constituting "additional members of the class of general beneficiaries" for each class appear to be each of Mrs O'Meara and her four siblings, their spouses, widow or widowers and their children. In that respect, Mrs O'Meara, the applicant Mr O'Meara, and their children are general beneficiaries; for example in Class A of which the specified beneficiaries are, I infer, the children of Mrs O'Meara's brother, Terrence Power. Correspondingly, Mr Power, his spouse or widow and children are general beneficiaries in Class B, the specified beneficiaries for which are the children of Mrs O'Meara. 31 In my view, the focus both before the AAT and in this Court has been on the wrong limb of the control test erected by s 1207V(2). The test most obviously applicable to Mrs O'Meara is that in s 1207V(2)(a). The corporate trustee is an associate of the individual, Mrs O'Meara, because it is "an entity who in matters relating the Trust acts … in accordance with the directions, instructions or wishes of the individual and another entity who is an associate of the individual" being Mrs O'Meara's brother and sisters who are directors with her of Power Robb Estates Pty Ltd, and each of whom is her "relative" as defined in s 1207B of the SSA and, accordingly, an "associate" of Mrs O'Meara for the purposes of s 1207C. Similar application of the relevant definitions entails that a "group in relation to the individual", Mrs O'Meara, being herself and her co-directors, "had the power … to obtain … the beneficial enjoyment of the corpus or income of the Trust." That enabled Mrs O'Meara to pass the control test directed by s 1207V(2)(c) of the SSA. Likewise, the same group in relation to Mrs O'Meara "was able … to control the application of the corpus or income of the Trust" so that she passes also the control test directed by s 1207V(2)(f). 32 The control test erected by s 1207V(2)(f) in each of its limbs is predicated on an ability of the individual, either directly or indirectly, to control the making available of benefits out of the corpus or income of a trust. It is not concerned with the actual receipt by the individual of any such benefit. However, as already noted at [24] above and [43] of the AAT's reasons quoted at [26] above, Mrs O'Meara and one of her sisters have, in fact, each received a distribution from the Trust. It may also be that Mrs O'Meara has received Trust moneys in the form of a credit to a loan account standing in her name in the books of the Trust. However, the principal demonstration of a relevant exercise of control in relation to her as an individual has been the payment to her, presumably beneficially, of an amount equal to that required to repay her debt to Centrelink. If they could be so persuaded, the directors of the corporate trustee of the Trust, who are all "relatives" as defined of Mr O'Meara, could exercise a similar discretion for his benefit.

The facility to receive further evidence 33 Although sub-ss 44(7) to 44(10) of the AAT Act contemplate the making of findings of fact by this Court and the receipt of further evidence to enable that course to be taken, Mr O'Meara has not pointed to the existence of any document which might justify an additional finding of fact to support any contention which he could properly advance in support of his substantive application for review. Moreover, although Mr O'Meara had indicated to the AAT his desire to call as a witness Mr Greenberg, an accountant who had been employed in connection with the administration of the Trust, there is nothing to suggest that Mr Greenberg could add anything to the evidence given to the AAT by Mr Power. I infer that Mr Greenberg, if called, could only corroborate the undisputed evidence of payments out of the Trust assets by way of either loans, e.g. to Mrs O'Meara's mother or distribution of benefits such as that to Mrs O'Meara herself to pay her debt to Centrelink and that to one of her sisters to defray school fees for a child. In these circumstances, there would be no point, if an extension of time were granted, in the Court's exercising its power under s 44 to receive further evidence.

Factors relevant to the discretion to extend time 34 The discretion conferred by s 44(2A) of the AAT Act to allow further time after the expiration of 28 days from the date of the giving of the decision of the AAT for the institution of an appeal from such a decision is governed by principles which have been set out by Wilcox J in Hunter Valley Development Pty Ltd v Cohen (1984) 3 FCR 344, at 349. His Honour there indicated that the matters to which the Court may have regard include an acceptable explanation of the delay in seeking to institute the appeal, alternative avenues by which the applicant has sought relief in respect of the subject administrative decision, any prejudice occasioned to the respondent by reason of the delay, any disruption of established administrative practice which would occur if the appeal were successful, the merits of the subject application and considerations of fairness as between the applicant and other persons otherwise in a like position. I consider that, of the factors enumerated by Wilcox J, the only ones relevant to the discretion which I have to exercise are the explanation for the delay and the applicant's prospects of success on the merits if leave were granted.

(a) Delay 35 In his Attachment A, Mr O'Meara explains his delay in this way: It can be seen that this is a complex and convoluted matter. I am 70 years of age, in ill health (heart attack in 1987) and in a state of financial hardship. I realized that I had been unfairly and unjustly treated by the Tribunal process. I attempted to appeal within the allowable time but the task became too much for me to handle at the time. My financial situation has worsened in recent times and a successful appeal to the Federal Court should remove the $53,000 Centrelink debt and I should receive compensation for the loss of pension dues to the attribution of assets decision by Centrelink. 36 During the hearing before me, Mr O'Meara tendered letters from his cardiologist and his psychiatrist. His cardiologist, Dr Keighley, who sees Mr O'Meara as a follow-up patient suffering from high blood pressure and coronary artery disease, opined that, on the basis of the emotional distress Mr O'Meara had described to him, he would expect an increase in blood pressure and a potential increase in symptoms of the coronary complaint. Similarly, Dr Proctor, the psychiatrist, expressed, in a letter dated 18 November 2009, concerns about a "level of anxiety and stress which is of concern regarding his cardiac condition". 37 Although each doctor's opinion is vague and somewhat speculative, I accept that in all the circumstances - Mr O'Meara's age, his health, his financial situation, and his underlying medical issues - the delay, of approximately nine months, has adequately been explained. Accordingly, I do not regard this factor, either of itself or in conjunction with the other relevant factor, as militating against an extension of time.

(b) The prospects of a successful appeal if an extension of time were granted 38 I have endeavoured to explain in the preceding reasons why any attempt by Mr O'Meara to demonstrate that the Trust was not a controlled private trust in relation to the relevant individual, his wife, Mrs O'Meara, is bound to fail. That result follows notwithstanding that the AAT appears to have held, erroneously, that Mrs O'Meara, as a discretionary beneficiary has a beneficial interest in the corpus or income of the Trust within the meaning of s 1207V(2)(d) of the SSA. Despite that conclusion, this Court on appeal could not hold otherwise than that Mrs O'Meara passes the control test in relation to the Trust by reason of, at least, one or more of paragraphs (a), (c), (e) or (h) of s 1207V(2). As no ground other than Mrs O'Meara's inability to pass the control test has been advanced in support of the relief which Mr O'Meara seeks against Centrelink, it follows that an appeal to this Court from the decision of the AAT would be futile. This is not a case where the merits of the proposed appeal are merely "slender" as Finn J characterised them in Peczalski v Comcare (1999) 58 ALD 697, at 704 [34]. Rather, it is a case to which the following observations of Tamberlin J in Saddi v Secretary, Department of Social Security [1995] FCA 792 (unreported, 6 October 1995) (BC9502789) can be paraphrased to apply with equal force; … On the accepted facts, I think it is quite clear that he is not entitled to any rent assistance for the periods in respect of which he claims. This is because of the terms of the legislation. There is simply no power to award any rent assistance. I can see no arguable error of law in the decision appealed from.

Accordingly, it would be futile to grant an extension of time in this matter because the appeal cannot succeed in the light of the legislation. Cf General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 at 129-130.

See also Cooper v Comcare [2002] FCAFC 347, at [14].

Conclusion 39 For the reasons outlined above, the application for an extension of time must be refused. The parties may file and serve, within twenty-one days, any written submissions on which they wish to rely in respect of the costs of the application. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan.

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