2. There was no dispute between the parties as to the facts which appear in the T documents. Based on those documents I find the following facts. Mr Kirkman, a medical practitioner, was born in Australia on 21 June, 1924. He married his wife, Marie Evelyn Kirkman on 18 May, 1972. He lived with his wife and daughter at 101 Stoneham Road, Attadale, Western Australia ("the house") until 1 November, 1985 when he and his wife separated. He had not lived there for over 4 years. He purchased a unit at 31 Wellington Street, Mossman Park ("the unit"), Western Australia as a very temporary measure for "somewhere to live". He then chose to live permanently with his son at Noosaville (T16, page 53). He and his wife are still legally married although living separately and apart.

3. Mr Kirkman's property consists of the house, the unit, 1,458 shares in Australian Sands Limited, 231 shares in Pioneer Concrete Limited and a motor vehicle valued at approximately $7,000. He previously owned an AMP Life Insurance Policy valued at $26,550 but he has since assigned that to his son in satisfaction of a debt which he owed to him (T21 and the applicant's statement at the hearing). Mr Kirkman said that he wanted to finalise the property settlement and had tried to transfer his interest in the house to his wife but she would not proceed.

4. Mrs Kirkman has lodged a caveat on the titles of both the house and the unit. She lodged it on 5 May, 1983 claiming that she is the equitable owner of one individual, undivided half share of the property by virtue of an implied trust. She lodged a caveat on the unit on 13 August, 1987, claiming a one half interest as an equitable tenant in common.

5. The grant of an invalid pension is subject to an assets test set out in section 8 of the Social Security Act 1947 ("the Act"). Section 8 provides, in effect, that a "pension reduction amount" is applicable when a person is otherwise qualified to receive certain pensions but where the value of his "property" exceeds a certain amount. Section 4 sets out the manner in which the value of the property is to be calculated. Paragraphs 4(1)(a)(i) and 4(1)(a)(ii) provide

"4(1) In calculating the value of the property of a person

for the purposes of this Act (other than section 6) -

(a) there shall be disregarded -

(i) if the person is an unmarried person - the value

of any right or interest of the person in

relation to the principal home of the person (not

being a right or interest of the kind referred to

in sub-paragraph (v));

(ii) if the person is a married person - the value of

any right or interest of the person in relation

to one residence that is the principal home of

the person, of the person's spouse or of both of

them (not being a right or interest of the kind

referred to in subparagraph (v);

...

(v) if the residence that is the principal home of

the person is a private residence and the person

has acquired for valuable consideration, or has

retained, a right to accommodation for life in,

or a life interest in, that residence - the value

of that right or interest."

6. The basis for paragraph (b) of the decision under review, (set out in paragraph 1 above), is that the applicant was not a "married person". Sub-section 3(1) of the Act, which defines "married person", excludes from the definition of that term "a legally married person (not being a de facto spouse) who is living separately and apart from the spouse of the person on a permanent basis". That sub-section also defines an "unmaried person" as "a person who is not a married person". As Mr Kirkman is separated from his wife and no longer resides with her, he is not a "married person" within the meaning of sub-section 3(1). Consequently, even though in ordinary language, Mr Kirkman is a married man, he cannot be regarded as a married person for the purposes of paragraph 4(1)(a)(ii) and that sub-paragraph 4(1)(a)(ii) has no operation in this case.

7. Mr Kirkman, then, comes within sub-paragraph 4(1)(a)(i) as an "unmarried person" and is entitled to have the value of his "principal home" disregarded in calculating the value of his property. The respondent decided that the house occupied by his wife was included in his property and that the unit should be disregarded. Whether or not this is the correct approach is dependant upon whether the house or the unit or either of them is his "principal home". There was no suggestion or evidence at the hearing that Mr Kirkman came within sub-paragraph 4(1)(v) and I am of the view that he does not.

8. The respondent has concluded that the house is not Mr Kirkman's "principal home". Although not defined in the Act, the term has been considered by this Tribunal in Samek and Secretary to the Department of Social Security (Dr Hayes, Senior Member, unreported, 14 October, 1988 , Decision No.4681, N88/474) and Dickeson and Secretary to Department of Social Security (unreported, 16 August, 1989, Decision No.5312, Mr Handley, Senior Member). In Clark and Secretary to the Department of Social Security (Mr McMahon, then Senior Member, 4 November, 1986, Decision No.2968, N86/400) it was said that

"A characteristic of a person's home is that he usually

resides there. It is by no means necessary, however, that

both go hand in hand."

In support, he referred to the judgment of Wilcox J. in Hafza v. Director-General of Social Security [1985] FCA 164; (1985) 60 ALR 674 at pp 680-681 when, in considering what is meant by "a person's usual place of residence" said

"Physical presence and intention will coincide for most of

the time. But few people are always at home ... The test

is whether the person has .... a continuity of association

with the place ... together with an intention to return to

that place and on attitude that that place remains "home"

see Norman v. Norman (1969) 16 FLR 231 at 236."

Without setting them out, I note that similar views have been expressed by Lord Denning M.R. in Herbert v. Byrne (1964) 1 All ER 802 by the Court of Appeal in Beck v. Scholz (1953) 1 All ER 814 and the High Court of Australia in Koitaki Para Rubber Estates Limited v. Commissioner of Taxation (Cwth) [1941] HCA 13; (1941) 64 CLR 241 at 249.

9. On the evidence before me, I am satisfied, at this time, that not only does Mr Kirkman not reside physically at either the house or the unit but that he does not regard either as his home. Consequently, on the approach adopted in the cases to which I have referred, neither can be considered as his "home" let alone his "principal home". It follows that the value of Mr Kirkman's interest in the house or unit cannot be disregarded by virtue of paragraph 4(1)(a)(i) of the Act.

10. Mr Kirkman has argued that the house and unit cannot be regarded as "assets" and refers to the definition of that term in the Oxford Dictionary. In the Shorter Oxford Dictionary, Third edition, 1964 it is defined as

"Effects of an insolvent or bankrupt, applicable to the

payment of his debts; and by extension: All the property of

a person or company which may be made liable for his or

their debts."

The house and the unit remain in his name and, although they are subject to caveats which may restrict his dealings with them nevertheless he continues to have an interest in them on the evidence before me. Although commonly referred to as an assets test the Act is actually concerned with "property". The term "property" is defined in section 3 as "including property situated outside Australia". That term has been considered to have a very wide meaning (Cowling and Department of Social Security S86/149) and certainly an interest in real property, whether or not subject to a caveat, would, in my view, be "property" within its meaning. Turning now to the manner in which the house and the unit are valued, Mr Kirkman argued that the caveats lodged in respect of those properties should be recognised as reducing the value of his property. Sub-paragraph 4(1)(b) provides that:

"where a charge or encumbrance, not being an excluded

security, exists on particular property of a person, not

being property the value of which is disregarded under

paragraph (a), the value of that property shall be reduced

by the value of that charge or encumbrance."

11. While referring to particular instances of its use in English legislation, the term "charge" is not defined in the Transfer of Land Act 1893 (as amended) (WA) but is defined in Stroud's Judicial Dictionary, 4th edition, in part, in the following terms

"(1) The word 'charge' has a wider meaning than the words

'mortgage' or 'lien' ... To 'charge' property you must

bind it, therefore, a mere receivership (at the instance of

a judgment creditor) of goods or a chose in action, does

not create a 'charge' ... But, 'encumbrance' is wider

enough to include 'charge and lien'."

12. In the case of Tancred and Ors v. Delagoa Bay and East Africa Railway Co (1889) 23 QBD 239 the Court (Denman J. and Charles J.) considered whether a mortgage of debts due to the mortgagor, made with a proviso for redemption and reconveyance upon repayment to the mortgagee, is an "absolute assignment" and not purporting to be by way of charge only. In drawing a distinction between an "absolute assignment in which property passes" and a "charge" in which property does not pass, Denman J. said a charge is "a document which only gives a right to payment out of a particular fund or particular property" (page 242).

13. An "encumbrance" has been defined in the Western Australian Transfer of Land Act (sub-section 4(1)) as including

"All prior estates interests rights claims and demands

which can or may be had made or set up into or upon or in

respect of land."

14. The term has been generally defined in Jowitts Dictionary of English Law, 2nd edition 1977 in these terms:

"To encumber land is to make it subject to a charge or

liability, e.g. by mortgaging it. Encumbrances include not

only mortgages and other voluntary charges, but also liens,

lites pedentes and registered judgments, etc."

So too in Stroud's Judicial Dictionary, it is defined in part as

"(1) "In Wharton's Law Lexicon, I find 'encumbrance'

defined as being, 'claim, lien, or liability, attached to

property'; and this definition is wide enough to cover the

plaintiff's claim," which was, as assignee for value of a

reversionary interest, against a person coming in under a

subsequent title (per Romer J., Jones v. Barnett (1899) 1

Ch 620).

(2) A power to charge land with a sum of money is an

"encumbrance" on the land (Evans v. Evans, 22 L.J. Ch 785)."

15. The meaning ascribed by Wharton was referred to by Higgins J. in Wallace v. Love [1922] HCA 42; (1922) 31 CLR 156 at p 172 when he said

"This definition of Wharton's is adopted by the Oxford

Dictionary, which also adds "a burden on property". In the

Standard Dictionary the meaning in law is stated as "a

paramount claim or interest resting as a charge upon land,

lessening its value to the owner or tenant; any lien or

liability attached to real property; as, a mortgage, a

registered judgment, and a right of dower are

encumbrances."

16. The term "caveat" is not defined in the Western Australian Transfer of Land Act but part V deals with the lodgement of a caveat and its effects. Section 137 provides that

"any beneficiary or other person claiming any estate or

interest in land under the operations of this Act or in any

lease, mortgage or charge under any unregistered instrument

document or writing or under any equitable mortgage or

charge by deposit without writing or by devaluation in law

or otherwise may lodge a caveat with the Registrar ..."

The Act then deals with the withdrawal of the caveat, notices to be given and the circumstances in which the caveat lapses. Sub-section 139(1) provides that

"Subject to the provisions of the next succeeding

subsection except in the cases provided by section one

hundred and forty-two so long as any caveat shall remain in

force prohibiting any registration or dealing the Registrar

shall not enter in the register book any change in the

proprietorship of or any transfer or other instrument

purporting to transfer or otherwise deal with or affect the

estate or interest in respect to which such caveat may be

lodged."

17. The provisions of the Transfer of Land Act 1915 (as amended) were considered in Butler v. Fairclough [1917] HCA 9; (1967) 23 CLR 78. They are very similar to those in the Western Australian legislation. Griffith C.J. said

"The effect of these provisions is not to enlarge or add to

the existing proprietary rights of the caveator upon which

the caveat is founded, but to protect those rights, if he

has any. In the case of a caveat lodged by a beneficiary

or equitable interest in the land without giving him an

opportunity of invoking the assistance of the Court to give

effect to that interest."

(page 84)

18. Like the Victorian Transfer of Land Act considered by the High Court, the Western Australian Transfer of Land Act provides (section 138), that in all but two specified cases

"every caveat lodged against a proprietor shall be deemed

to have lapsed as to the land affected by the transfer or

other dealing upon the expiration of fourteen days after

notice served on the caveator that such proprietor has

applied for the registration of a transfer or other dealing

unless in the meantime such application is withdrawn"

"if before the expiration of the said period of fourteen

days or such further period as shall be specified in any

order made under this section the caveator or his agent

appears before a judge and gives such undertaking or

security or lodges such sum in court as such judge may

consider sufficent to indemnify every person against any

damage that may be sustained by reason of any disposition

of the property being delayed then and in such case such

judge may direct the Registrar to delay registering any

dealing with the land lease mortgage or charge for a

further period to be specified in such order or may make

such other order as may be just."

That is to say, the caveator must, in the words of Griffith C.J. in Butler v. Fairclough at page 84, "if he desires to do so ... take prompt action i.e., within fourteen days, or the caveat will lapse, i.e. the protection afforded by it will cease".

19. This then is the essential difference between a charge or an encumbrance and a caveat. A caveat is simply a protective device allowing the caveator an opportunity to take other action to establish his interest. It does not of itself create a "right to payment" (see paragraph 12 above) in the sense of a charge or a claim or demand in the sense of an encumbrance (see paragraphs 13-15 above) but merely holds the status quo as it were while the caveator takes, expeditiously, other steps to protect his interests.

20. Understandably, Mr Kirkman feels that his hands are tied and that he cannot dispose of his house and his unit while the caveats exist and the property settlement in the matrimonial proceedings between himself and his wife remains unresolved. Whether or not he would be able to have these caveats lifted is a matter that is outside the scope of these proceedings.

21. I am satisfied that the caveats are not a charge or encumbrance within the meaning of sub-paragraph 4(1)(b) and, therefore, that the value of the house and the unit cannot be reduced by virtue of them.

22. Finally, there remains the consideration of section 7. The respondent has decided that Mr Kirkman would not suffer severe financial hardship if section 7 did not apply. I have before me evidence from the applicant that his sole income is $20.00 per week and that his assets are as set out in paragraph 3 above. He did not list his expenses but I am satisfied that he is supported by his son. He is unable to pay the rates due on the house and unit.

23. What is meant by "severe financial hardship" has been considered in the Tribunal in a number of cases. So, for example, in Lumsden and Department of Social Security (1986) 10 ALN N225 (R D Nicholson, Deputy President, Dr N Marinovich and Major-General K J Taylor (Members) the Tribunal concluded at page N227

"The expression 'severe financial hardship' is not defined.

In its relevant sense 'severe' means 'hard to sustain or

endure; arduous' The Shorter Oxford English Dictionary

1973, pp 1957-8. 'Financial' means 'of or pertaining to

finance or money matters': ibid p 752. 'Hardship' includes

severe suffering; extreme privation: ibid p 926. 'Severe

financial hardship' is the equivalent of 'arduous financial

suffering'. The meaning of the words is not in doubt: they

are a clear direction by the legislature that the section

is only to be applicable when the requisite severity of

financial hardship is present."

24. This approach has been followed in cases such as Strange and Department of Social Security (1986) 11 ALD 202, Sattosanti and Department of Social Security (1980) 14 ALD 601 and Reynolds and Department of Social Security (1986) 10 ALN N155. Those cases also emphasise the need to examine each person's assets to consider whether he or she can use those assets to produce income to maintain them above a level where they would otherwise be in severe financial hardship. Doyle and Department of Social Security (1986) 10 ALN N193.

25. I note also in this context, the provisions of paragraph 7(1)(c) provide that

in the case of a person who is not qualified to receive an

unemployment benefit or a sickness benefit - any of the

property of the person or, if the person is a married

person, of the person and the person's spouse, is property

that -

(i) the person of the person's spouse cannot sell or

realize or could not reasonably be expected to sell or

realize; and

(ii) the person or the person's spouse cannot use as

security for borrowing or could not reasonably be

expected to use as security for borrowing."

26. In this case, Mr Kirkman has assets. Whether or not they are assets which he can realise, I am unable to determine as I have no evidence as to the state of the property settlement still to be resolved between himself and his wife. Nor is there any evidence from which I can be satisfied as to whether or not steps have been taken to remove the caveat and, if they were taken, whether Mr Kirkman's wife would take steps in the appropriate court to establish the interests she claims under the caveat.

27. Without this evidence, I cannot be satisfied whether Mr Kirkman is or is not suffering severe financial hardship within the meaning of sub-section 7(1) of the Act. Unfortunately, the fact that he is suffering severe financial hardship in his day to day living while matters between him and his wife remain unresolved is not sufficient for the purpose of the Act.

28. I affirm paragraphs (a), (b) and (c) of the respondent's decision and adjourn further consideration of paragraph (d) of the respondent's decision.