Barkworth; Secretary, Department of Family and Community Services

[2004] AATA 209

Administrative

Appeals

Tribunal

 

DECISION AND REASONS FOR DECISION [2004] AATA 209

ADMINISTRATIVE APPEALS TRIBUNAL      )

)          No   N2003/1264

GENERAL ADMINISTRATIVE  DIVISION		)
Re		Secretary, Department of Family and Community Services

Applicant

And Catherine Barkworth

Respondent

DECISION

Tribunal Mr RP Handley, Deputy President

Date1 March 2004

PlaceSydney

Decision The Tribunal affirms the decision under review.

...............................................

RP Handley
  Deputy President 

CATCHWORDS

SOCIAL SECURITY – age pension – whether the Respondent is living in a marriage-like relationship – whether decision of Social Security Appeals Tribunal correct – examination of the Respondent’s living and financial arrangements – examination of the Respondent’s reasons for present living arrangements – held the Respondent is not living in a marriage-like relationship – decision under review is affirmed.

Social Security Act 1991 ss 4(2), 4(3), 4(3A)

Re Needer and Secretary, Department of Social Security (AAT No, )

REASONS FOR DECISION

1 March 2004	Mr RP Handley, Deputy President
Summary

1.      The Respondent, Mrs Catherine Barkworth, was found by Centrelink and an Authorised Review Officer of Centrelink to be living in a marriage-like relationship with Mr Douglas James and, as a result,  reduced the rate of age pension payable to her.  She appealed this decision and on 30 June 2003, the Social Security Appeals Tribunal (“SSAT”) set it aside, finding that she was not living in a marriage-like relationship and, therefore, was not a member of a couple, and that her age pension should be assessed on this basis.  This is the decision to be reviewed by the Tribunal.

Background

2.      Mrs Barkworth was born in Gateshead, England, on 9 July 1940 and is aged 63.  She arrived in Australia on 16 October 1954.  On 25 February 1961, she married Brian Barkworth. They were divorced on 1 March (T p28). Mrs Barkworth has two children from that marriage.  In 1985, Mrs Barkworth and Mr James purchased a house together at Austinmer as tenants in common at a time when they were in an intimate relationship.  That relationship ended in approximately 1994 but they continued to live together in the same house as friends.  In 2001, they sold the house in Austinmer and purchased a larger house in Shell Cove, again as tenants in common1982.  On 6 December 2002, Ms Barkworth lodged a claim for age pension (T9).

3.      On 3 January 2003, Mrs Barkworth completed an Assessment of Living Arrangements form (T12).  On that form (T12 p47), she disclosed that she was living in shared accommodation with Mr James at Shell Cove in a property which they had purchased as tenants in common in equal shares (T35 p129).    She also stated on the form that she had previously lived with Mr James from 1986 until 2001 in a property at Austinmer which they had owned as tenants in common.

4.      On 20 January 2003, Centrelink determined that Mrs Barkworth was living in a marriage-like relationship with Mr James.  On that date, Centrelink wrote to Mrs Barkworth stating that her claim for age pension had been rejected because the value of her and Mr James’ assets was above the allowable limit (T18).  Mrs Barkworth was subsequently granted a pension but at a very low rate as a result taking of into account Mr James’ assets (T22).  On 16 April 2003, the decision was affirmed by an Authorised Review Officer.

5.      Mrs Barkworth appealed this decision and, on 30 June 2003, the SSAT determined that Mrs Barkworth was not living in a marriage-like relationship with Mr James.  It found that whilst they were long-term friends, they did not share bank accounts, they had their own separate living and sleeping areas, they did their own washing and ironing, they rarely socialised together, did not have a sexual relationship, and had separate wills in which the other was not a beneficiary (T2 pp5-6).  The SSAT therefore held that Mrs Barkworth should be assessed as a single person and not as a member of a couple in calculating the rate of pension payable.  On 1 August 2003, the Applicant lodged an application for a review of this decision by the Tribunal.

6. At the hearing, the Applicant was represented by Cheryl Collis, Advocate of Centrelink, and Mrs Barkworth was represented by Karyn Bartholomew, Solicitor, of the Illawarra Legal Centre. The evidence before the Tribunal comprised the documents produced pursuant to s 37 of the Administrative Appeals Tribunal Act 1975 (“the T Documents”) together with evidence tendered by the Applicant at the hearing. Mrs Barkworth and Mr James gave evidence in person.

Applicable Legislation

7. Section 4(2) of the Social Security Act 1991 (“the Act”) sets out the circumstances in which a person will be treated as being a member of a couple:

4(2) Subject to subsection (3), a person is a member of a couple for the purposes of this Act if:

(a) the person is legally married to another person and is not, in the Secretary's opinion (formed as mentioned in subsection (3)), living separately and apart from the other person on a permanent or indefinite basis; or

(b)      all of the following conditions are met:

(i) the person has a relationship with a person of the opposite sex (in this paragraph called the partner );

(ii) the person is not legally married to the partner;

(iii) the relationship between the person and the partner is, in the Secretary's opinion (formed as mentioned in subsections (3) and (3A)), a marriage-like relationship;

(iv) both the person and the partner are over the age of consent applicable in the State or Territory in which they live;

(v) the person and the partner are not within a prohibited relationship for the purposes of section 23B of the Marriage Act 1961.

8. In determining whether a relationship is marriage-like, s 4(3) of the Act provides that the following factors must be considered:

4(3)In forming an opinion about the relationship between 2 people for the purposes of paragraph (2)(a) or subparagraph (2)(b)(iii), the Secretary is to have regard to all the circumstances of the relationship including, in particular, the following matters:

(a)      the financial aspects of the relationship, including:

(i) any joint ownership of real estate or other major assets and any joint liabilities; and

(ii) any significant pooling of financial resources especially in relation to major financial commitments; and

(iii) any legal obligations owed by one person in respect of the other person; and

(iv) the basis of any sharing of day-to-day household expenses;

(b)      the nature of the household, including:

(i) any joint responsibility for providing care or support of children; and

(ii) the living arrangements of the people; and

(iii) the basis on which responsibility for housework is distributed;

(c)      the social aspects of the relationship, including:

(i) whether the people hold themselves out as married to each other; and

(ii) the assessment of friends and regular associates of the people about the nature of their relationship; and

(iii) the basis on which the people make plans for, or engage in, joint social activities;

(d)      any sexual relationship between the people;

(e)      the nature of the people's commitment to each other, including:

(i) the length of the relationship; and

(ii) the nature of any companionship and emotional support that the people provide to each other; and

(iii) whether the people consider that the relationship is likely to continue indefinitely; and

(iv) whether the people see their relationship as a marriage-like relationship.

Section 4(3A) provides:

The Secretary must not form the opinion that the relationship between a person and his or her partner is a marriage-like relationship if the person is living separately and apart from the partner on a permanent or indefinite basis.

Evidence

9.      Mrs Barkworth and Mr James purchased their Austinmer property as tenants in common to ensure that each of their respective shares would be inherited by their children.  In the early part of their relationship, they had a common interest arising from them both working for the Post Office/Australia Post.  They used to attend work-related social functions together and at weekends they would often go up to Sydney, for example to visit the markets or Chinatown.  They also used to entertain their respective families at home on Boxing Day and generally do things together as a couple.

10.     Mr James retired in 1992.  He was at home for least 12 months until Mrs Barkworth retired in 1994.  They no longer had a common interest in work.  Mr James purchased his first Harley Davidson motorbike in 1992 although he had had other motorbikes before.  Mrs Barkworth’s grand-daughter was born in 1994 and became the focus of much of her attention, often staying with them at the weekend and sometimes during the week.  Initially, Mr James resented this.  Gradually, a series of things led them to conclude that their intimate relationship was over.  However, because they are both private people and dislike “fights”, they discussed their relationship calmly and decided to remain living together in the same house but to pursue their separate lives.  They each recognised the other as a trusted friend.  Both Mr James and Mrs Barkworth had lived alone after the breakdown of their respective marriages and had not enjoyed this. 

11.     Mr Neville Walters said he became friends with Mr James in about 1993/1994 through their both attending the Illawarra Pistol Club.  Mr Walters remembered Mr James bringing Mrs Barkworth to the Club’s Christmas party at about this time when Mr Walters and his wife were present.  Mr Walters, who lives at Coledale, said he visited Mr James at his and Mrs Barkworth’s Austinmer house and not long after the Christmas party it became obvious that they were no longer together as “partners”.  The presence of Mrs Barkworth’s grand-daughter seemed to cause a rift and they lived in separate parts of the house.  On several occasions, Mr Walters asked Mr James and Mrs Barkworth out as a couple with Mr Walters and his wife, but, on each occasion, Mr James made some excuse to avoid this.  Mr James began associating more with single men in the Pistol Club.

12.     The Austinmer house had four bedrooms, two bedrooms upstairs and two downstairs.   Mrs Barkworth had the two bedrooms upstairs and Mr James the two bedrooms downstairs and they shared the kitchen.  They eventually sold the Austinmer house because it seemed a good financial decision to move to a near-new, larger and more comfortable house in good condition.   By sharing in the purchase, they had more buying power.  The Austinmer house was an old “fibro” house needing a lot of maintenance.  Being near the Illawarra escarpment, it lost the sun early in the afternoon in the winter months and was cold and damp, but, being close to the escarpment reserve, was also a bushfire risk.

13.     Mr James and Mrs Barkworth purchased the Shell Cove house in October 2001.  It is a two storey house.  There is a shared living/dining room, meals area and kitchen downstairs.  Mrs Barkworth has a living area downstairs and a bedroom and bathroom upstairs.  There is an adjacent shared bedroom where Mrs Barkworth’s grand-daughter stays and also a second shared spare bedroom.  Mr James has a living room, bedroom and bathroom upstairs and a smallish room downstairs that he refers to as his “den” which is adjacent to an outdoor area where he sometimes tinkers with his motorbike and which is the next to the three car garage.  Both Mr James and Mrs Barkworth keep a car in the garage and Mr James also has a small workshop and area where he keeps his Harley Davidson.  Mrs Barkworth has an outdoor area to the rear of the house for her use where she sometimes entertains visitors. 

14.     The furniture in the Shell Cove house is in part furniture Mr James and Mrs Barkworth brought with them from their former marital homes.  They have also purchased a few items of furniture for the shared living areas, the cost of which they have shared.  For example, if a washing machine is purchased this will be a joint decision and the cost shared.  However, if they purchase furniture for their separate living areas, each bears the cost of their respective purchases which are made without consultation.  For example, Mr James said he purchased a lounge and a cupboard for his “den” at the Shell Cove house. 

15.      Mrs Barkworth and Mr James have recently revised their wills which they signed on 5 February 2004.  The revisions were necessary in part to amend inappropriate descriptors used in their previous wills dated 7 November 2001 where Mrs Barkworth was described as Mr James’ “partner” and vice-versa.  Those wills were drafted by the solicitor, Norman Roberts, who undertook the conveyancing for the sale of their Austinmer property and the purchase of their Shell Cove property. When Mr Roberts suggested the use of the word “partner” in their wills, they went along with this even though Mrs Barkworth had initially suggested the use of the term “tenant in common”.  They trusted Mr Roberts.  Mrs Barkworth acknowledged that they may not have told him of the nature of their relationship.  They both thought the word “partner” indicated a business relationship and were not then aware of the modern usage of “partner” meaning a de facto spouse.  When they realised this, they instructed a different solicitor to prepare revised wills where each is referred to as a “co-owner” in relation to the other.  They wanted this changed to distinguish their relationship from that of a married couple.

16.      Their wills were also redrafted to include specific reference to what was formerly a tacit agreement between them that if one died, the other could remain in the house for the immediate period, but so that within 12 months the house would be put on the market and sold, allowing the deceased person’s share to be distributed to their beneficiaries.

17.      By agreement between Mrs Barkworth and Mr James, Mr James pays household bills such as electricity and insurance by phone using his credit card.  Mrs Barkworth reimburses him for half the cost.  He trusts her to reimburse him and were she not to do so, he would not continue to pay bills in this way.  Previously, before paying such accounts by phone they would each pay their contribution in cash.  Expenditure on Mr James’ credit card earns award points which they share in respect of joint expenditure by, for example, purchasing petrol vouchers or wine.  In cross-examination, they were asked about their home building and contents insurance which was until recently in Mr James’ name.  The legal significance of this was drawn to their attention by Centrelink since the property and contents are owned by them as tenants in common.  The policies were previously in Mr James’ name because he originally obtained the quotations for the insurance cover and neither he nor Mrs Barkworth realised that the policies should be in their joint names.  This has now been changed and the new policies are in their joint names.

18.      Mrs Barkworth does most of the household shopping.  Mr James said she cooks the evening meal and knows what is required.   Occasionally, he might help, but usually she shops on her way home after going out.  They each contribute fortnightly to a kitty for this purpose but anything personal, for example food for Mr James’ dog, they pay for separately. 

19.      Mrs Barkworth and Mr James usually eat the evening meal together unless Mrs Barkworth is out when Mr James will prepare himself a light meal.  Occasionally, he cooks a barbecue but otherwise he is not interested in cooking, whereas Mrs Barkworth likes to cook.  On some days if they are both at home, they will have breakfast and/or lunch together, but often one of them is out.  For example, Mr James might be out walking his dog at breakfast time.  Mr James estimated that on a total of four days a week, he will have lunch on his own at home.  Mrs Barkworth’s estimate was one or two breakfasts and lunches together in the course of a week.

20.      Mr James said on normal days, he will spend time walking his dog, he might do some engraving, tinker with his motorbike, go out on it for a ride, do some gardening or mow the lawns.  He is also involved in Olympic style shooting, for example in Nowra on Wednesdays and Fridays.  After the evening meal, which is usually at 5.30 to 5.45pm, he will often go out to the garage to tinker, or walk the dog, or go upstairs and read technical books or use the computer which he is trying to learn about or maybe watch a movie.  Once or twice a week, he and Mrs Barkworth will watch a program on television together in which they are both interested, but this might only last an hour or so.  When their relationship was intimate, they would spend the whole evening together. 

21.      Since the end of their intimate relationship, Mr James and Mrs Barkworth have pursued their separate interests.  For example, Mrs Barkworth said she has no interest in pistol shooting or motorbike riding.  In the same way, Mr James has no interest in the line dancing which she attends twice a week.  Mrs Barkworth said she often reads and spends time typing letters to her pen friends.   Both said they do not have a great deal in common.  They each clean their separate areas of the house, do their own washing and ironing, and share the chores for the shared areas of the house.

22.      Despite the end of their intimate relationship, Mrs Barkworth and Mr James continued to take overseas holidays together.  They went to the USA in 1996 and 2002 and have been to Bali on a number of occasions.  They have been overseas three times in the last five years, the last time in 2002.  They both enjoy overseas travel and it is cheaper for them to travel together.  It avoids paying a single supplement, they can share the cost of car and travel insurance and it is safer.  Whereas previously they used to do things together, for example, go on a bus trip, they now tend to pursue their own interests separately.  For example in Bali, Mr James will hire a motorbike to ride around the island.   Mrs Barkworth might relax and read a book.  In the USA, she might be interested in looking at native American jewellery, whereas he might go the Harley Davidson shop. 

23.      Neither Mrs Barkworth nor Mr James has any real involvement in the other’s family.  Each is friendly but no more.  While they were intimate, there was much more involvement, visiting etc, including a family get-together on Boxing Day.  That no longer happens. If they are not asked out by their respective families over Christmas Day or Boxing Day, they will spend their day quietly at home.  They will wish each other Happy Christmas, but that is the extent of their togetherness.

24.      Both said they regard the other as a trusted friend and are “comfortable” sharing a house together, but have no further emotional attachment.  Mr James distinguished their relationship from a marriage-like relationship because of the lack of any loving commitment to one another or intimacy, and because there is “no togetherness” or “fidelity”..  Mrs Barkworth thought their relationship lacked the love and care you would find in a marriage.  Since the end of their intimate relationship, both have had other relationships and Mr James said, for example, he goes out to the movies with women friends.  By tacit agreement and out of consideration for the other, they do not, however, bring their friends of the opposite sex home:  it would not be appropriate.

25.      Each would afford the other verbal support if they wanted to talk about something, for example to talk about a family problem, but said that they did not expect the other to look after him/her if they were sick beyond acting as a friend: for example, taking a cup of tea.  Neither would look after the other if he or she developed a debilitating illness.  Mr James has been diagnosed with prostate cancer and is awaiting surgery, but said he would not expect Mrs Barkworth to nurse him if he needed this.  Mr James has three children all of whom live only minutes away if he needs such assistance but he said he would, in any event, probably hire private nursing.  Mr James has on one or two occasions taken Mrs Barkworth to see her doctor when she had a sore eye and could not drive.

26.      Mr James said it is unlikely he will ever marry again because of his health.  Because he does not have medical insurance, he will probably have to pay between $13,000 and $15,000 for the surgery needed for his prostate cancer.  If his appeal to the Tribunal is unsuccessful, he will receive a pension of only $50 per week until October 2004 when his investments mature.  He could then put his investments into an annuity.  He does not want to sell the house.  By himself, all he could afford is a one or two bedroom unit.

27.      Mrs Barkworth also said it is very unlikely that she will every marry again.  If her appeal to the Tribunal is unsuccessful, she might consider selling the house and putting her money into annuities, but that would leave her short of money and she does not belong to a private health fund.

Application of the Law and Findings

28. Section 4(2) sets out the conditions under which a person will be treated as a “member of a couple” for the purposes of the Act. Where a person has a relationship with a person of the opposite sex and they are not legally married, the relationship must be “a marriage-like relationship”.. In forming an opinion about whether a relationship is “marriage-like, section 4(3) provides that regard must be had to all the circumstances of the relationship including the matters set out in paragraphs (a) to (e) of the subsection, set out above. With this in mind, and having regard to the evidence, the Tribunal makes the following findings.

29.      In October 2001, Mr James and Mrs Barkworth purchased a house together at Shell Cove as tenants in common.  They had previously co-owned a house at Austinmer where they lived from 1985.  Both houses were purchased as tenants in common to ensure that each person’s share passed to on their death the beneficiaries under the person’s will.  There was a tacit agreement that the survivor could remain in the property for up to 12 months after the death of the first person, after which the property would be sold and the deceased person’s distributed to his/her beneficiaries in accordance with the provisions of his/her will.   This tacit agreement was recently formalised in Mr James’ and Mrs Barkworth’s revised wills signed on 5 February 2004.

30.     Apart from the house at Shell Cove, the only other assets jointly owned by Mr James and Mrs Barkworth are items of furniture in the shared areas of the house such as the fridge and washing machine.  The furniture in their separate areas of the house is separately owned, and each has his/her own car.

31.     Mrs Barkworth and Mrs James contribute equally to a kitty for day to day expenditure.  They purchase personal items separately.  Household bills such as electricity and insurance are paid by Mr James on his credit card as a matter of convenience, and Mrs Barkworth reimburses him for her half share.  Each maintains their own separate bank accounts and investments and they owe no legal obligations to one another except in relation to the house, described above, and there is no other pooling of financial resources.

32.     The house at Shell Cove is large and Mrs Barkworth and Mr James have their separate living areas, bedrooms and bathrooms, and they use separate outdoor living areas.  There are also shared areas, most particularly the kitchen, meals area and laundry.  The garage accommodates both their cars and there is a third garage space wher Mr James has a small workshop and also keeps his Harley Davidson motorcycle.  Each cleans and maintains their separate living areas and share the household chores in respect of the shared areas.  There are no children from the relationship.  Each has children from their former marriages.

33.     Mrs Barkworth and Mr James do not hold themselves out as married to one another.  Mr Walters, a friend of Mr James, said, having observed their relationship, that he did not regard it as marriage-like because their relationship lacks the commitment and sharing one would expect in a marriage-like relationship.  He said when he visited Mr James at home, he has observed that Mr James and Mrs Barkworth are kind to each other but they have separate living arrangements and account to each other for each cent spent on shared expenditure.  It is a “flat-mate” type situation.  Mr Walters sees Mr James about once a month at the Pistol Club and Mr James makes it quite clear that he is single. 

34.     The Tribunal noted that both Mr James and Mrs Barkworth both intensely private people and having to provide evidence of the kind necessary to support their appeals has been a significant ordeal.  While in the first phase of their relationship from about 1984 to about 1994, they were intimate and engaged in joint social activities, except those one would expect of two civilised people sharing a house.  The only significant shared activity apart from that associated with living in the same house, has been occasional overseas travel.  Their last overseas trip was in 2002 and Mr James’ evidence is that they have made three overseas trips in the last five years.   The Tribunal accepts that their motive for doing so has been that of sharing the cost and safety.  Once at their destination, they pursue their separate interests.   Their sexual relationship ended in 1994.  Since then, each has had other friends of the opposite sex.

35.     Both Mrs Barkworth and Mr James stated that they had no emotional commitment to one another.  They regard each other as trusted friends with whom they are comfortable sharing accommodation and associated expenses.  While clearly they talk to each other and are prepared to listen if the other wishes to discuss something, they would probably discuss very personal matters with their families or, in Mrs Barkworth’s case, with her friends.  Neither expected the other to look after or nurse him/her in the case of a debilitating illness but, as a friend, would perform small acts of kindness such as making a cup of tea or driving the other to a medical appointment if the other was unable to drive.

36.     Neither Mr James nor Mrs Barkworth sees the relationship as “marriage-like”..  It is a sharing arrangement with which they are comfortable after nearly ten years.  Both see the arrangement continuing indefinitely and do not anticipate any likelihood of their remarrying. 

37.     While Ms Collis, for the Respondent, submitted that a passionless but comfortable relationship is not uncommon with married people as they get older, the Tribunal is not persuaded that the relationship between Mrs Barkworth and Mr James is marriage-like.  While such sharing may be less common in older people of the opposite sex without the relationship being marriage-like, the evidence of their separate living areas, separate financial arrangements, minimal involvement with each other’s families, lack of any interest in or participation in the other’s activities, lack of shared social activity, no sexual relationship and limited commitment to one another, indicates to the Tribunal that this is not a marriage-like relationship.  They are certainly friends, considerate of each other, share some meals, and occasionally watch a television program together, but this is hardly surprising, if being retired, they spend quite a lot of time at home.  However for the most part, they are “quite independent of each other” (Re Needer and Secretary, Department of Social Security (AAT 8648, 12 March 1993)).

38. As stated, Mrs Barkworth and Mr James are civilised, mature people who share the same house as friends because of the advantages this offers. In the Tribunal’s opinion, with reference to the indicia in s 4(3), their relationship is not “marriage-like”. The Tribunal therefore affirms the SSAT decision under review.

I certify that the 38 preceding paragraphs are a true copy of the reasons for the decision herein of Mr RP Handley, Deputy President

Signed:         .......................................................................................
  Associate

Date/s of Hearing  6 February 2004
Date of Decision  1 March 2004
Representative for the Applicant               Ms C Collis, Advocate
Representative for the Respondent          Ms K Bartholomew, Solicitor