The decisions under review, as varied pursuant to s 180 of the Social Security (Administration) Act 1999, are affirmed.

SOCIAL SECURITY - overpayment - Newstart, mature-age and carer allowance - value of assets - whether loan amounts in beneficiaries' loan account are assets - whether applicants have debts based on value of assets - consideration of age of loans, value of loans, and whether assets were book entries - amounts in the account found to be assets - applicants have debts owing to Centrelink -- applicants knowingly made false statements by failing to disclose existence of company and Trust on application forms - no features of special circumstance - no waiver under s1237AAD - decisions, as varied by Centrelink, affirmed

Social Security Act 1991 - ss 11, 611(1), 660YCJ(1), 1064, 1122, 1224(1), 1237AAD(1)(a)

Social Security (Administration) Act 1999 - s180

Re Taylor and Secretary, Department of Employment and Workplace Relations [2005] AATA 1064

Re King and Repatriation Commission [1990] AATA 273; (1990) 12 AAR 375

Re Hughes and Secretary, Department of Social Security [1992] AATA 52; (1992) 25 ALD 754

Re O'Brien and Secretary, Department of Families and Community Services (2002) 70 ALD 552

In re Harmony and Montague Tin and Copper Mining Co (Spargo's Case) (1873) 8 Ch App 407

Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2005) 218 CLR 471

Re Callaghan and Secretary, Department of Social Security [1996] AATA 413; (1996) 45 ALD 435

Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541

1. These are applications by Mr Robert Taylor (the applicant in matter Q2005/471) and Mrs Valerie Taylor (the applicant in matter Q2005/472) to review decisions made by Centrelink on behalf of the respondent Secretaries to raise and recover debts said to be owed by Mr and Mrs Taylor. Those debts arose, it is said, because Mr Taylor was paid Newstart allowance and mature age allowance, and Mrs Taylor was paid Newstart allowance and carer payment, in excess of the amounts to which they were entitled, having regard to the value of their assets at the times of payment.
2. The particular issue is whether amounts shown as loans by beneficiaries in the books of account of a discretionary trust controlled by Mr and Mrs Taylor are to be regarded as assets for the purposes of the Social Security Act 1991 ("the Act").

1. At the outset I should say that the hearing of this matter was conducted in two sessions. It commenced in March 2007 when Mr Taylor and Mrs Taylor gave their evidence and was then adjourned until July 2007 to enable further attempts to be made to locate financial records. Due to the lengthy period between the two sessions of the hearing the observations that follow regarding my impressions of the reliability of the evidence of Mr and Mrs Taylor were recorded at the conclusion of the first session of the hearing.
2. My conclusion is that I am unable to regard either Mr Taylor or Mrs Taylor as particularly reliable. I do not suggest that they were being deliberately untruthful but, as it seems to me, much of their evidence was based on ex post facto reconstruction. Moreover, despite what appears in their statements, the oral evidence of Mr and Mrs Taylor demonstrated that they had limited understanding of the legal and accounting concepts that underpin this case.
3. So far as the history of relevant events is concerned I will recount that from the documents available, supplemented by the applicants' evidence on aspects of the history that are uncontroversial. I will deal below with the disputed issues of fact.
4. Mr Taylor is a carpenter by trade. He married Mrs Taylor in 1964. Thereafter, he formed a business partnership with Mrs Taylor. After a few years pursuing his trade he set up a timber and hardware business. This business was originally operated by Mr and Mrs Taylor as a partnership.
5. In 1976, and on the advice of their accountants, Mr and Mrs Taylor effected the incorporation of a company to operate the timber and hardware business as the trustee of a discretionary Trust. That company was Merritt Timber & Hardware Pty Ltd**[1]** ("Merritt"). The Taylor Family Trust ("the Trust") was created by deed dated 1 March 1976. Mr and Mrs Taylor and their children were beneficiaries of the Trust.
6. In 1977 Merritt entered into a contract to sell the goodwill and stock-in-trade of the timber and hardware business to a company controlled by a Mr Ginsberg, Merritt Timber and Hardware (Vic) Pty Ltd ("Merritt (Vic)"). That company was let into possession of the premises but seemingly, within a short space of time, defaulted on its obligation to pay rent and the balance of the purchase price to Merritt. In 1979 Merritt (Vic) commenced proceedings against Merritt in the Supreme Court of Victoria alleging, according to Mr Taylor, misleading and deceptive conduct in the sale of the business. Merritt counterclaimed for the balance owed to it and on 15 January 1993 obtained judgement on its counterclaim for $108,447.15 and interest of $165,681.96 Merritt (Vic) was deregistered in March 1993. The judgement debt was not satisfied, either wholly or in part.
7. Mr and Mrs Taylor moved to Queensland in 1981. They initially rented residential premises. Mr Taylor worked as a carpenter.
8. Mr Bruce Reid was, at relevant times, married to the sister of Mrs Taylor. Mr Reid was a financial planner. In 1987 Mr Reid was contemplating the acquisition of a tourist resort at Hervey Bay called the Colonial Log Cabin Resort. Mr Reid was then living in Victoria and asked Mr and Mrs Taylor whether they were interested in employment as on-site managers at the resort. The arrangements for this were structured, presumably for tax purposes, in a way that Merritt was engaged to provide the services rather than Mr and Mrs Taylor. Merritt was engaged by a company now described as RFM Pty Ltd**[2]** ("RFM").
9. Mr Taylor was a director of RFM from 1 July 1988 to 16 May 1997. He was also a director of another of Mr Reid's corporate entities, Bruce Reid Investment Services Pty Ltd**[3]**, between 23 November 1988 (the date of its incorporation) and 24 June 1996.
10. The position is not entirely clear from the evidence however it seems likely that RFM was the trustee, at relevant times, of the Colonial Growth Fund Unit Trust ("the Colonial Unit Trust").
11. In the year ending 30 June 1986 Merritt became the holder of 85,000 $1 units in the Colonial Unit Trust. The circumstances under which these units were allocated to Merritt are unclear; certainly Mr Taylor's explanation about providing timber to an equal value was unconvincing. But ultimately, the circumstances of the unit allocation seem not to matter.
12. Merritt, by Mr and Mrs Taylor, continued in this role until early 1996, although it is evident that RFM was not a good payer. Minutes of a meeting of directors of RFM from January 1994 show that at that stage Merritt was owed approximately $100,000 by RFM, representing management fees for 22 months. The debt recorded in Merritt's 1995 account was $141,564. In those accounts Merritt was shown as the holder of 328,942 $1 units in the Colonial Unit Trust. Again, the circumstances of that acquisition are not clear.
13. In April 1993 Merritt acquired real property comprising land and a dwelling at 1 Washington Drive, Torquay at a price of $215,000. That purchase was undertaken by Merritt borrowing $193,000 from the ANZ Bank. The accounts for Merritt show income by way of rent for each of the 1994, 1995, 1996, 1997, 1998 and 1999 years. Mr and Mrs Taylor said that they knew nothing of the source of this rental income. It seems likely that the recording of income in this way was merely a stratagem to enable Merritt to deduct interest payments.
14. Whilst Mr and Mrs Taylor were involved in the management of the Colonial Log Cabin Resort they were provided with accommodation at the resort. That came to an end in early January 1996. A secured creditor of RFM appointed receivers and managers to the land and business comprising the Colonial Log Cabin Resort on 3 January 1996. Mr and Mrs Taylor left the resort shortly after that appointment and moved into the house at 1 Washington Drive, Torquay.
15. On 15 January 1996 each of Mr and Mrs Taylor made application for Newstart allowance. They say that Mr Reid completed the application forms on their behalf. That may be the case; however there is some information provided on the forms that I assume must have come directly from Mr and Mrs Taylor, e.g. the full names of their parents.
16. The application form required information regarding income and assets, including whether Mr and Mrs Taylor were beneficiaries of a trust, shareholders or directors of a company, or had any other investments. Examples of other investments were given, including unit trusts and private trusts and money owing from a person or organisation. All of these questions were answered by a tick in the "no" box. A similar answer was given by both Mr and Mrs Taylor to a question regarding money owed by their employer.
17. Mr and Mrs Taylor were each granted Newstart allowance with effect from 15 January 1996. That continued in the case of Mr Taylor until 1 September 2000 when he was granted mature age allowance. Mrs Taylor continued to receive Newstart allowance until 13 March 2001 when she was granted a carer's pension. The mature age allowance and the carer's pension ceased on 31 December 2001 following an investigation by Centrelink.
18. On 10 July 2002, a Centrelink official determined that Mr Taylor had been paid:
    • Newstart allowance in the sum of $42,067.15 for the period 15 January 1996 to 30 June 2001; and
    • mature age allowance in the sum of $349.75 for the period 1 July 2001 to 31 December 2001,

to which he was not entitled. On the same day a determination was made that Mrs Taylor had been paid:

• Newstart allowance in the sum of $42,197.80 for the period 15 January 1996 to 13 March 2001; and
• carer's payment in the sum of $98.95 in the period 14 March 2001 to 31 December 2001,

1. The decision to raise and recover those debts was affirmed on internal review on 9 September 2002 and by the Social Security Appeals Tribunal on 16 December 2002.
2. On 25 October 2005 Mr and Mrs Taylor were granted an extension of time**[4]** within which to seek a review of the respondents' decisions.
3. Since then, Centrelink has recalculated the debts and varied the decisions pursuant to the power contained in s 180 of the Social Security (Administration) Act 1999. The varied decisions, which are the subject matter of these proceedings, are to raise and recover the following debts:

(a) Newstart allowance debt in the amount of $35,291.44 from Mr Taylor for the period 15 January 1996 to 1 September 2000;

(b) mature age allowance debt in the amount of $7,385.81 from Mr Taylor for the period 2 September 2000 to 31 December 2001;

(c) Newstart allowance debt in the amount of $39,646.43 from Mrs Taylor for the period 15 January 1996 to 13 March 2001; and

(d) carer's payment debt in the amount of $1,199.56 from Mrs Taylor for the period 14 March 2001 to 31 December 2001.

1. It is not disputed that Mr and Mrs Taylor were qualified for the various benefits paid to them. The issue in this case is whether those benefits were payable, given the level of assets that they had. They were not entitled to be paid Newstart allowance**[5]** or mature age allowance**[6]** if the value of their assets exceeded the "asset value limit" in force during the period in issue. That limit varied according to whether or not they were homeowners as that term is defined in s 11(4)(b) of the Act. It is accepted by Mr Clutterbuck of counsel for Mr and Mrs Taylor that, at all relevant times, they were homeowners. In the case of carer payments there was a different mechanism for determining entitlements, set out in s 1064 of the Act, but in all cases it is necessary to determine the value of the assets of Mr and Mrs Taylor.
2. The asset in issue in this case is the beneficiaries' loan accounts shown in the books of account of Merritt. The Secretaries contend that the amounts standing to the credit of Mr and Mrs Taylor are to be treated as loans by them to Merritt and thus assets. The term "asset" is defined in s 11 of the Act as meaning "property or money". It is not in dispute that a loan comes within that definition; the contention of Mr and Mrs Taylor is that the amounts credited to their loan accounts were not, in fact, loans and thus not assets.
3. The value of loan is to be determined by reference to s 1122 of the Act. It is in these terms:

"If a person lends an amount after 27 October 1986, the value of the assets of the person for the purposes of this Act includes so much of that amount as remains unpaid but does not include any amount payable by way of interest under the loan."

1. The annual accounts for Merritt for each of the years ending 1981 to 1986 and 1995 to 2002 are in evidence before me**[7]**. By reference to those accounts, the loan account balances of Mr and Mrs Taylor were as follows:

On 28 June 2002, and presumably as a consequence of the interest shown by Centrelink in the loan accounts, Mr and Mrs Taylor made a gift of the then outstanding balances - $81,091 in the case of Mr Taylor and $74,684 in the case of Mrs Taylor - to the Trust. On 30 June 2002 the Trust vested pursuant to a deed dated 28 June 2002. By that deed Merritt as trustee determined to distribute the capital to the children of Mr and Mrs Taylor absolutely.

1. The approach taken by Centrelink in calculating whether there was an overpayment to Mr and Mrs Taylor (and maintained before me) was to treat their beneficiaries' loan accounts as assets and to value them at face value. There is, as I understand it, no dispute that if this is the correct approach, Mr and Mrs Taylor have been overpaid in the sums set out in paragraph 23 above. There is no dispute that if that is so there are debts due in those amounts by operation of s 1224(1) of the Act.
2. For their part Mr and Mrs Taylor contend that is not the correct approach. They contend is wrong to treat the loan accounts as assets to the value shown in the accounts. That contention is based on three arguments:
   • (a) that some of the amounts in the loan accounts are loans that predate 28 October 1986;
   • (b) that, to the extent that the loan accounts represent pre 28 October 1986 debts, they ought be valued by reference to their objective worth i.e. the extent to which they were recoverable having regard to the assets of the Trust;
   • (c) that the loan accounts ought not be treated as assets of Mr and Mrs Taylor because no money was received and the entries in question were merely "book entries".
3. For the reasons that follow I do not accept any of these arguments.

1. The first argument relies upon a line of authority in the Tribunal**[8]** that amounts lent on or earlier than 27 October 1986 (the date referred to in s 1122 of the Act) ought to be valued in accordance with the "real value", which involves making an assessment of the likelihood of repayment and the ability of the debtor to repay. The Secretaries submit it is no longer appropriate, more than 20 years after the introduction of s 1122 of the Act, to draw distinctions about the age of loans and that as a matter of policy it is preferable to have a unified approach to the assessment of the value of the loans.
2. I do not find it necessary to determine that particular issue here because the argument for Mr and Mrs Taylor fails on the facts; that is, there is no evidence from which I could conclude that any part of the balances from 1996 onwards. Indeed it seems to me, having regard to the evidence of Mr Taylor of regular weekly drawings of cash being made over the years, such evidence as there is points to the opposite conclusion.
3. The beneficiaries' loan accounts were the subject of a detailed analysis by Mr David Williams, a chartered accountant. Necessarily, Mr Williams could not analyse movements in the loan accounts during the years where the annual accounts are not available. Even on the basis of the figures available, Mr Williams' analysis points to the absurdity of the notion that in 1996 there were amounts in the accounts that had been advanced earlier than 28 October 1986. The balance in Mr Taylor's account as at 30 June 1986 was $93,847 (it is notable that it had reduced from $185,225 the preceding year). In the 1996, 1997, and 1998 years Mr Taylor had drawings totalling $22,386. Nothing is known about the movements in the loan accounts in the 1987 to

1992 years, other than that as at 1 June 1993 the balance of Mr Taylor's loan account was $59,039. Let it be assumed that the whole of that sum represented loans made by Mr Taylor to Merritt prior to October 1986 (and I emphasise that there is no evidence to support that assumption). Even on that assumption, almost half of the loan was repaid by drawings in the years that are missing if the drawings were taken at the rate spoken of by Mr Taylor in his evidence.

1. In the result, I am not satisfied that by January 1996, when Mr and Mrs Taylor were initially paid Newstart allowance, that any part of the beneficiaries' loan accounts' balances represented advances made prior to October 1986. But even were I to conclude that it was possible that some part of the accounts' balances answered that description, I am at a loss to understand how I could determine the amount that represented "old" loans. The Tribunal's processes, whilst encouraging the absence of formality and technicality, do not permit guesswork.

1. The argument that the value of the loans should be discounted focussed, in a way never made clear to me, upon the items in the balance sheet of Merritt (as trustee). As at 30 June 1995, 7 months before the applications for Newstart allowance, Merritt had trust funds of $229,473. It had total assets of $624,257. Of those assets, three need be noted - the land and buildings at 1 Washington Drive valued at $220,241, a loan to RFM**[9]** valued at $141,564, and units in the Colonial Unit Trust valued at $328,942. Merritt had liabilities of $394,784 comprising, in the main, the beneficiaries' loan accounts totalling $267,005 and a debt of $193,000 to the ANZ Bank, secured against the Washington Drive property.
2. The loan to RFM remained in the balance sheet, gradually decreasing**[10]** until it was discharged at some stage in the year ending 30 June 2002, and prior to the Trust vesting. The Colonial Unit Trust units remained in the balance sheet until 1997. At some stage in the following financial year, the units were dealt with in a way that is not recalled by any of Mr or Mrs Taylor or Mr West, their accountant from that time. Neither of the accountants who have examined the accounts, Mr Wearing-Smith and Mr Williams, is able to discern from the accounts the precise treatment of the units, other than stating that the investment was written-off in the 1998 year.
3. The case for Mr and Mrs Taylor was that the loan to RFM and the units in the Colonial Unit Trust ought not to have been valued at the figures shown in the balance sheet and that, in consequence and disregarding these assets, Merritt lacked the assets to meet its obligations to the beneficiaries and hence, the beneficiaries' loans ought be regarded as worthless.
4. The case for Mr and Mrs Taylor fails on a number of levels.
5. First, Mr and Mrs Taylor were the directors of Merritt. They instructed accountants to prepare the company accounts and presumably complied with their statutory requirements as directors to cause to be prepared a balance sheet that gave a true and fair view of the company's state of affairs**[11]** and to certify that the accounts give such a view**[12]. Moreover, the directors were required[13]** to take reasonable steps to cause known bad debts to be written-off and to make adequate provision for doubtful debts. The argument for Mr and Mrs Taylor seeks to create a state of affairs that appears contrary to the contemporaneous view taken by Mr and Mrs Taylor and those who advised them at the time.
6. Then, in the case of the RFM loan, the loan was repaid in full even after

the amount outstanding increased in the year ending 30 June 1999. It is not relevant to infer, as does Mr Wearing-Smith, that the loan was repaid because Mr Reid felt a "moral obligation" as Mrs Taylor's brother-in-law to repay the loan. I do not regard the existence of such a "moral obligation" to be an inference open on the evidence, the more so when Mr Reid was not called. But in any event, the existence of a moral obligation does not affect the legal obligation to repay a debt. The legal obligation remained and it remained enforceable.

1. On the material before me there is no reason to suppose that at any time material to these proceedings a view might have been taken that RFM was unable to pay the loan from Merritt a fortiori where the directors did not take that view at the time and the debt was in fact fully repaid. I reject the view of Mr Wearing-Smith that the loan ought to have been written-off in the year ending 30 June 1996. That opinion is unsupported by any evidence and flies in the face of the undoubted fact that in that year alone the loan was reduced by $25,900.
2. That leaves for consideration the value of the units in the Colonial Unit Trust. As I have said, the annual accounts show that this asset was removed from the balance sheet in the year ending 30 June 1998. It is not clear whether the units were sold or written-off. It appears from the balance sheet detail for that year that, on their disposal, a capital loss of $226,850 was recorded. That suggests that there was an amount realised on the disposal, perhaps as much as $102,092, this being the difference between the recorded value and the capital loss. But neither Mr and Mrs Taylor nor Mr West could clarify these transactions. Moreover, there is, in that same year, an unexplained increase in the RFM debt of $76,857. It is possible, I suppose, to infer that there was an agreement between Mr Reid and Mr and Mrs Taylor to the effect that the RFM debt would be increased in order to compensate for that capital loss, either in whole or in part, but the picture presented by the evidence is unclear and I am unprepared to draw that inference.
3. The evidence does not satisfy me that at any time material to the proceedings the units in the Colonial Unit Trust ought to have been regarded as being worthless. I do not accept the evidence of Mr Wearing-Smith that suggests this asset ought to have been written-off in the year ending 30 June 1996. There is no factual foundation for that opinion and it is not supported by any orthodox view of accounting practices.
4. It follows that I am far from satisfied that the assets shown on the balance sheet of Merritt ought to be discounted in such a way as to call into question the value or recoverability of the beneficiaries' loan accounts shown as liabilities on that balance sheet.

1. There is a degree of irony in the fact that Mr and Mrs Taylor, having incorporated Merritt and established the Trust for tax and asset protection benefits, should now assert that they received none of the sums attributed to them and that the entries made in the accounts ought not to be given effect according to their tenor.
2. The legal contention is somewhat more subtle, but it too cannot be accepted. The argument advanced by counsel on behalf of Mr and Mrs Taylor was that the beneficiaries' loan accounts did not represent "loans" to the extent that it represented entitlements. It was said there was no lending involved in a transaction where the trustee had determined to make a distribution of profit but had not actually paid the sum of that distribution to the beneficiaries, instead crediting those sums to the beneficiaries' loan accounts.
3. The well-settled view of the law is to the contrary and has been for a very considerable period of time. In In re Harmony and Montague Tin and Copper Mining Co (Spargo's Case)[14], Sir George Mellish said this:

"Indeed, it is a general rule of law, that in every case where a transaction resolves itself into paying money by A. to B., and then handing it back again by B. to A., if the partiers meet together and agree to set one demand against the other, they need not go through the form and ceremony of handing the money backwards and forwards."

1. More recently in Equuscorp Pty Ltd v Glengallan Investments Pty Ltd[15] the High Court rejected a similar argument based on a claimed absence of "real money" from a "tax effective" investment.
2. I reject the distinction between loans and entitlements as drawn by Mr Wearing-Smith. The trustee by its directors, Mr and Mrs Taylor, resolved**[16]**:

"... that the income for the year ended 30th June 1995 of the Taylor Family Trust be appropriated, set aside and applied for the benefit of the beneficiaries by crediting the same to them in the books of the Trust. Such sums shall upon being so credited be held for them as separate Loan Funds pursuant to the provisions of the Trust Deed.

AND THAT the necessary book entries to give effect to the foregoing be made as soon as practicable."

In the draft minutes Mr and Mrs Taylor were shown as being present at that meeting. Their individual income tax returns were lodged on the basis that the distributions formed part of their assessable income. The tax returns of the Trust were lodged on the basis that the distributions were made. In these circumstances Mr and Mrs Taylor are shown to be parties to a loan agreement and are bound by it unless able to rely upon the doctrine of non est factum[17].

1. Accordingly, I am satisfied that the amount attributed by Centrelink from the accounts of Merritt as being assets of Mr and Mrs Taylor represented the true "value" of their assets and that there are debts in the amounts as recalculated.

1. By virtue of s 1237AAD of the Act the Secretary, and thus this Tribunal, has discretion to waive the right of the Commonwealth to recover all or part of a debt arising from an overpayment. Before doing so, the decision-maker must be satisfied, so far as is presently relevant:
   • (a) that the debt did not result wholly or partly from the debtor or another person knowingly making a false statement or representation; and
   • (b) that there are special circumstances, other than financial hardship alone, that make it desirable to waive the debt.
2. I am not satisfied of either of these matters.

1. The case propounded by Ms Brennan, counsel for the Secretaries, was that in January 1996 Mr and Mrs Taylor made a series of representations to Centrelink by completing and lodging the application forms for Newstart allowance. In each case, the form as completed represented that the applicant for benefit did not have any investments other than as disclosed, was not the beneficiary of a trust and was not a shareholder or director of a company. These representations, it is said, were false and knowingly so.
2. There can be no doubt that the various statements were objectively false. Mr and Mrs Taylor were both beneficiaries of the Trust, they were both directors and members of Merritt and they both had investment constituted by the loans to Merritt.
3. The critical element is that of "knowingly". I should note at the outset that Mr and Mrs Taylor say that they did not complete any of the answers on the forms; that task was undertaken by Mr Reid as their financial advisor. Mr and Mrs Taylor merely signed the forms after it had been completed by him. It does appear that both forms have been completed by the same person and I am prepared to assume the correctness of what Mr and Mrs Taylor say about the matter. However, having had Mr Reid complete the forms makes the matter worse for Mr and Mrs Taylor. Section 1237AAD(1)(a) refers to "the debtor or another person" knowingly making false representations. "Knowingly" in this context means actual knowledge rather than constructive knowledge**[18]**. It is inconceivable that Mr Reid did not know that Mr and Mrs Taylor were beneficiaries of the Trust and directors and members of Merritt, given the association between Mr Reid and his corporate entities. In these circumstances I readily conclude that Mr Reid made knowingly false statements by completing the forms on behalf of Mr and Mrs Taylor.
4. Had Mr and Mrs Taylor's answers been true, i.e. had they disclosed the existence of Merritt and the Trust to Centrelink, Centrelink would have been put on enquiry and would have required additional documents disclosing the details of Merritt and the Trust. The absence of affirmative answers from Mr and Mrs Taylor meant that Centrelink did not learn the true position and paid benefits in excess of that which Mr and Mrs Taylor were entitled. I conclude that the debts that arose resulted from the making of these false representations.
5. After the initial applications for Newstart allowance by Mr and Mrs Taylor there were periodic reviews by Centrelink. In November 1996,

Mr and Mrs Taylor were interviewed by a Centrelink official and their circumstances were reviewed. They did not, on that occasion, disclose their involvement in Merritt or the Trust despite being asked questions that ought to have elicited details of that involvement if answered truthfully. By answering in the way that they did they perpetuated the false representation earlier made.

1. In September 2000 Mr Taylor applied for, and was paid, mature age allowance. He completed the application form and again failed to disclose he was involved in a company, had an interest in a trust, and had assets comprising the beneficiaries' loan accounts. I reject Mr Taylor's claim that he simply copied details from the form earlier completed by Mr Reid. Mr Taylor's statements in the application form amounted to false representations and cannot have been other than knowingly false. The payment of mature age allowance resulted from these false representations.
2. The same is true of Mrs Taylor when she completed and lodged an application for carer payment in March 2001. She was not required to complete details of her assets and income, as she told Centrelink they could rely upon the information already given. In this way the earlier false representations were continued and the payment of carer payment resulted.

1. Given that the conclusion in relation to the making of a false statement is sufficient to exclude the operation of s 1237AAD of the Act, I will deal only briefly with the question of special circumstances. It is enough for present purposes to say of the phrase "special circumstances" that it requires there be "something to distinguish [Mr and Mrs Taylor's] case from others, to take it out of the usual or ordinary case"[19]:
2. There are no features of this case that make the circumstances special or unusual. It may be accepted that Mr and Mrs Taylor worked hard in order to provide for their future and, as a consequence of making poor choices about the trustworthiness of those they have dealt with, have lost significant amounts and do not have the assets that they had hoped to have. But the social security system exists to sustain those who need support. The financial circumstances of Mr and Mrs Taylor are not different from most who seek support from the social security system; if anything they may even be better off than many.
3. It is also the case that Mr and Mrs Taylor have been prosecuted criminally and, I was informed, are at risk of being gaoled. But that does not, of itself or in combination with other circumstances, make their case "special". I would not then exercise the discretion to waive the debt under s 1237AAD of the Act.

1. It follows that I would affirm the decisions as varied pursuant to s 180 of the Social Security (Administration) Act 1999.

I certify that the 63 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC

Signed: ...............Signed.....................................................

Dates of Hearing 12 and 13 March 2007, 23 and 24 July 2007

Solicitor for the Respondent Australian Government Solicitor

[1] The company was incorporated sub nom Corrimal Nominees Pty Ltd on 20 February 1976 and changed its name to Merritt Timber & Hardware Pty Ltd on 30 March 1976.

[2] Between 27 November 1984 and 5 June 1994 the company was known as Endratron Pty Ltd, then Reid Financial Management Pty Ltd from 6 June 1994 to 20 July 2000 before changing its name to its present title on 21 July 2000.

[3] Now Clientcare Australia (Investments) Pty Ltd.

[4] See Re Taylor and Secretary, Department of Employment and Workplace Relations [2005] AATA 1064.

[7] Mr and Mrs Taylor were unable to produce the annual accounts for the 1987 to 1994 years.

[8] See e.g. Re King and Repatriation Commission [1990] AATA 273; (1990) 12 AAR 375; Re Hughes and Secretary, Department of Social Security [1992] AATA 52; (1992) 25 ALD 754; Re O'Brien and Secretary, Department of Family and Community Services (2002) 70 ALD 552.

[9] It is described throughout the accounts as a loan to Endratron Pty Ltd, as RFM was then known.

[10] The subsequent balances were - 30 June 1996 - $115,664; 1997 - $98,924; 1998 - $175,781; 1999 - $141,366; 2000 - $90,366; 2001 - $38,366 and 2002 - nil.

[11] See The Corporations Law, s 293.

[12] See The Corporations Law, s 301.

[13] See The Corporations Law, s 294.

[14] (1873) 8 Ch App 407 at 414.

[15] [2004] HCA 55; (2005) 218 CLR 471 at 485-488, paras. [43] - [51].

[16] Taken from the 1995 accounts but there seems no reason to suppose that the resolutions for other years, which are not available, were in any different terms.

[17] Equuscorp (supra) at 483, para. [33].

[18] Re Callaghan and Secretary, Department of Social Security [1996] AATA 413; (1996) 45 ALD 435 at p. 445.

[19] Groth v Secretary, Department of Social Security [1995] FCA 1708; (1995) 40 ALD 541 at p. 545 per Kiefel J.