BRADY & HARRIS
[2012] FamCA 420
•6 June 2012
FAMILY COURT OF AUSTRALIA
| BRADY & HARRIS | [2012] FamCA 420 |
| FAMILY LAW - PROPERTY – Application brought under the Domestic Relationships Act 1994 (ACT) for an adjustment of property interests on the basis of cross-vested jurisdiction – determination of preliminary issues FAMILY LAW - JURISDICTION – Whether the Family Court of Australia has jurisdiction to make orders in relation to property under the Domestic Relationships Act 1994 (ACT) where some of that property is outside of the Australian Capital Territory – the Court is not able to make orders in rem – the Court may make orders in personam directed towards the parties – in what way can orders in personam be enforced FAMILY LAW - PROPERTY – Length of the domestic relationship – where property in the parties’ joint names was transferred to the respondent’s sole name – where no consideration was paid to the applicant for the transfer – parties slept in the same bed – where applicant may have paid board to the respondent – where applicant declared himself to be single in his application for social security benefits – consideration of personal or financial commitment and support – finding that the domestic relationship ended in 2008 FAMILY LAW - PRACTICE AND PROCEDURE – Whether applicant should be granted leave to commence proceedings where application was filed out of time – where application was filed a matter of months out of time – where the applicant has a case to be argued – hardship suffered by the respondent can be remedied by an order for costs – finding that the applicant did not deliberately or recklessly commence proceedings out of time – finding that hardship to the applicant in refusing leave is greater than the hardship to the respondent in granting leave |
| Domestic Relationships Act 1994 (Cth), ss 3, 11, 12, 13 and Dictionary Family Law Act 1975 (Cth), ss 109A and 112AP Family Law Rules 2004, Ch 20 |
| Aldridge & Mazzoti [2009] FamCA 1048 Bullivant & Holt [2012] FamCA 134 Docklands & Marshman [2011] FamCA 144 Ferris v Winslade [1998] ACTSC 172 SJS v MLS [2010] QSC 263 Re Wakim; Ex parte McNally (1999) 198 CLR 571 |
| APPLICANT: | Mr Brady |
| RESPONDENT: | Ms Harris |
| FILE NUMBER: | CAC | 1889 | of | 2010 |
| DATE DELIVERED: | 6 June 2012 |
| PLACE DELIVERED: | Canberra |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Faulks DCJ |
| HEARING DATE: | 6 April 2011, written submissions filed on 27 April 2011, 3 May 2011 and 20 May 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr G Howard |
| SOLICITOR FOR THE APPLICANT: | Farrar Gesini & Dunn |
| COUNSEL FOR THE RESPONDENT: | Ms A Tonkin |
| SOLICITOR FOR THE RESPONDENT: | Strong Law Pty Ltd |
Orders
The applicant, Mr Brady (born … June 1948), and the respondent, Ms Harris (born … February 1951), were in a domestic relationship in accordance with s 3 of the Domestic Relationships Act 1994 (ACT) from 1988 until on or about May 2008.
Leave pursuant to s 13 of the Domestic Relationships Act 1994 (ACT) to commence proceedings for an adjustment of property interests is granted nunc pro tunc to permit the filing of the application of the applicant on 1 December 2010.
Any further affidavit about matters relevant to the application of ss 15 and 19(2) of the Domestic Relationships Act 1994 (ACT) sought to be relied upon by either party must be filed on or before 4:00pm on 6 July 2012.
Each party will exchange with the other a written offer to settle the dispute on or before 11 July 2012.
The matter is otherwise adjourned to 9:00am on 13 July 2012 to make such further orders and directions as may be necessary to allow this matter to proceed finally to trial.
Notation:
(A)If the parties should reach agreement about final orders prior to 13 July 2012, I shall make such orders in chambers.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Brady & Harris has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT CANBERRA |
FILE NUMBER: CAC 1889 of 2010
| Mr Brady |
Applicant
And
| Ms Harris |
Respondent
REASONS FOR JUDGMENT
Preamble
These proceedings were brought under the Domestic Relationships Act 1994 (ACT) (“the DRA”) and concerns three distinct issues. First, whether this Court, in the exercise of the cross-vested jurisdiction of the Supreme Court of the Australian Capital Territory, has jurisdiction to make orders under s 15 of the DRA adjusting the interests in the property of either or both of the parties if some or all of such property is outside the Australian Capital Territory. Second, if this Court has such jurisdiction, to determine the date of separation of the parties. Third, if the date of separation of the parties is determined to be a date more than two years prior to the commencement of proceedings, whether leave ought to be granted for the applicant to commence proceedings for the adjustment of property interests.
Jurisdiction
Mr Brady, (“the applicant”) brought an application for an adjustment in property interests of the parties under the DRA. The properties of the parties to the proceedings are located in the ACT, NSW and Queensland. Only one of the properties is located in the ACT.[1]
[1] Financial Statement of the Applicant filed 1 December 2010 and the Financial Statement of the Respondent filed 8 December 2010.
This Court has jurisdiction to deal with proceedings brought under the DRA by virtue of the provisions in Jurisdiction of Courts (Cross-Vesting) Act1987 (Cth) and the Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT).
Sections 11 and 12 of the DRA set out the pre-requisites for seeking relief under the DRA. They are that the parties must have a proper nexus with the ACT[2] and that the parties’ relationship endured for at least two years.[3] No-one contended that the parties did not satisfy those requirements.
[2] Domestic Relationships Act 1994 (Cth), s 11.
[3] Domestic Relationships Act 1994 (Cth), s 12.
The question that arises is whether this Court has jurisdiction to make orders under the DRA adjusting the property interests of either or both of the parties if some or all of such property is outside the ACT. The situation is parallel to the consideration of whether the Family Court of Australia has power to effect a division under the Family Law Act 1975 (Cth) of such property of the parties as is outside Australia.
In the DRA, “ ‘property’, in relation to either or both of the parties to a domestic relationship, means real or personal property in any form to which either is, or both are, entitled.”[4] As counsel for the applicant correctly pointed out, “property” in this definition is not limited by reference to geography.[5]
[4] Domestic Relationships Act 1994 (Cth), Dictionary.
[5] Written submissions by the applicant, filed on 27 April 2011, [15].
While that is so, if some or all of the parties’ property is situated outside the ACT, I do not accept that there is any power (whether by way of accrued jurisdiction or otherwise) to make orders in relation to such property in rem. For example, this Court (possibly aliter the Supreme Court of the Australian Capital Territory under cross-vesting legislation with the Supreme Court of a state[6]) would have no power to order the Registrar-General of the relevant Land Titles Office to effect a transfer of land.
[6] See Re Wakim; Ex parte McNally (1999) 198 CLR 511.
This view was expressed by me in Docklands & Marshman[7]:
75. In this matter, there are two pieces of real property which belong to the parties and are, at least potentially, the subject of adjustment. I received no submissions from counsel for the respondent… as to how I might make an order in rem about the property [in NSW].
76. In my opinion, I am unable to make an order directly affecting that property, but I am entitled to take it into account as a financial resource… in the hands of the applicant. What I am able to do is to adjust the property of the parties in the ACT, taking into account the property owned by the applicant in NSW. [footnotes omitted]
[7] [2011] FamCA 144, [75] and [76].
That view was also expressed by me in Aldridge & Mazzotti[8]
44.I have no power to deal with the NSW farm property primarily as it cannot come within the purview of jurisdiction of the Domestic Relationships Act 1994 (ACT). Nevertheless, it is appropriate to include “external” property notionally in the pool because it would be artificial and contrived not to do so.
[8] [2009] FamCA 1048, [44].
Although I am of the opinion that I cannot make orders in rem about property located outside the ACT, I accept counsel for the applicant’s submission that I am able to make orders in personam “directed to one or both of the parties requiring certain things to be done”. “If this is to require the transfer of property in another jurisdiction then the order is still within the jurisdiction of the court because it has jurisdiction over the parties.”[9]
[9] Written submissions by the applicant, filed on 27 April 2011, [18]; see the cases referred to by counsel for the applicant: Ferris v Winslade [1998] ACTSC 172 and SJS v MLS [2010] QSC 263.
To obviate any ambiguity which may have arisen in previous decisions by me, I am satisfied that this extends to the Court having jurisdiction to make an order in personam between the parties dividing property (or interests in property) which is outside the ACT.
If an order in personam is made by this Court and not complied with there are a number of ways in which the order may be enforced. The first is the procedures in s 26 of the DRA. Second, the beneficiary of the order may register the judgment in the state in which the property is situated and take enforcement action in the appropriate court of that state. A further remedy may perhaps exist by seeking that the alleged defaulter be dealt with for contempt of court. The “convenient” suite of orders for contravention of an order under the Family Law Act 1975[10] (short of s 112AP contempt proceedings[11]) would not be available.
[10] Family Law Act 1975 (Cth), s 109A; Family Law Rules 2004, Ch 20;
[11] Family Law Act 1975 (Cth), s 112AP.
Moreover, enforcement proceedings, (allowing that there are procedures for registration and enforcement of “foreign” judgments/orders) would not, in my opinion, invest this Court with accrued (State) jurisdiction to make orders in rem. Enforcement would (again in my opinion) constitute a separate matter and should not be regarded as part of a “single justiciable dispute” so as to attract the accrued jurisdiction of this Court.
The Domestic Relationship
The parties disputed the date on which their domestic relationship ended. The applicant contends that the parties’ relationship terminated in February 2009 when the respondent and M (the respondent’s adopted child) left what was then the house in which both the parties had been living.[12] The respondent contends that the relationship ended in 2001.[13]
[12] Applicant’s affidavit, filed on 1 December 2010, [2]; Transcript of proceedings on 6 April 2011, 12.
[13] Respondent’s affidavit, filed on 8 December 2010, [4].
The DRA provides that:[14]
(1)An application for an order under this part by a party to a domestic relationship that has ended shall not be made more than 2 years after the day on which the relationship ended.
(2)A court may grant leave to a person to apply for an order under this part after the end of the period referred to in subsection (1) if it is satisfied that greater hardship would be caused to the applicant if leave were refused than would be caused to the respondent if leave were granted.
[14] Domestic Relationships Act 1994 (Cth), s 13(1).
The issue for determination by me at this point in the proceedings is whether or not a domestic relationship existed between the parties and, if so, when such a relationship ended.
If I find that the relationship ended, as the applicant argues it did, in February 2009, it will not be necessary to consider the question of leave because the applicant commenced proceedings on 1 December 2010. However, if I find that the relationship of the parties ended prior to 1 December 2008, then the question of leave must be considered.
Brief Background
The parties commenced living together in December 1988.[15]
[15] Applicant’s affidavit, filed on 1 December 2010, [2]; Respondent’s affidavit, [4].
In 1995, the respondent’s daughter gave birth to a child, M, and the respondent subsequently became M’s guardian. M started living with the parties when he was a baby.[16] In the same year, the parties amended their wills so that each was a beneficiary of the other’s. [17]
[16] Applicant’s affidavit, filed on 1 December 2010, [5].
[17] Applicant’s affidavit, filed on 31 March 2011, [19].
The parties also jointly purchased an investment property on the Gold Coast in 1995 (“the Gold Coast property”), and that property was registered in both parties’ names.[18]
[18] Applicant’s affidavit, filed on 1 December 2010, [18(g)].
The respondent contends that the parties’ de facto relationship terminated in 2001, but they continued to live under the same roof.[19] In about May of the same year, the respondent acquired the applicant’s interest in the Gold Coast property and re-financed the mortgage so that it was in her sole name.[20] The parties’ versions of why the respondent acquired the applicant’s share in this property differ, and I will explore that issue in more detail later in these Reasons. The respondent states that from 2001 the applicant paid board on a periodic basis and he also agreed to pay for home contents insurance.[21] The parties continued to share the same bedroom, and even the same bed, after 2001[22], but their accounts about their sexual relationship differ. The respondent’s evidence was that there was no sexual relationship since 2001, while the applicant’s evidence was that the parties occasionally had intercourse although the frequency diminished prior to 2009.[23]
[19] Respondent’s affidavit, [4].
[20] Applicant’s affidavit, filed on 31 March 2011, [20]; Respondent’s affidavit, [8].
[21] Respondent’s affidavit, [5].
[22] Respondent’s affidavit, [12]; Transcript of proceedings on 6 April 2011, 71.
[23] Transcript of proceedings on 6 April 2011, 34.
In July 2001, the applicant became unemployed.[24]
[24] Transcript of proceedings on 6 April 2011, 26.
Contrary to what the respondent alleges, the applicant disagrees that the parties’ domestic relationship ended in 2001 and maintains that it continued until February 2009.[25]
[25] Applicant’s affidavit, filed on 1 December 2010, [2].
The parties holidayed together in 2004 and 2005, and I will discuss this in more detail later in these Reasons.
Sometime in 2008, but prior to May of that year, the respondent alleges that she asked the applicant to leave the home because “his presence was negatively impacting on [M].” This, however, is denied by the applicant whose evidence was that he did not recall the respondent asking him to leave the home.[26]
[26] Respondent’s affidavit, [12]; Transcript of proceedings on 6 April 2011, 50.
In May 2008, the respondent changed her will so that the applicant was no longer a beneficiary.[27]
[27] Transcript of proceedings on 6 April 2011, 95.
Sometime, in 2008, the respondent moved out of the parties’ joint bedroom and into the lounge room. However, at about the same time, the applicant commenced working night shifts and the respondent, deciding it would be “easier” to continue sleeping in the bedroom, moved back into it.[28]
[28] Respondent’s, affidavit, [12].
The respondent and M left the home in February 2009 and rented a house in a neighbouring suburb.[29] It is the applicant’s contention that this is when the parties separated.[30]
[29] Applicant’s affidavit, filed on 31 March 2011, [45]; Respondent’s affidavit, [12].
[30] Applicant’s affidavit, filed on 1 December 2010, [2]; Transcript of proceedings on 6 April 2011, 12.
On 1 December 2010, the applicant commenced proceedings.
Meaning of Domestic Relationship
“Domestic relationship” is defined in the DRA:[31]
[31] Domestic Relationships Act 1994 (Cth), s 3.
(1) In this Act:
domestic relationship means a personal relationship between 2 adults in which one provides personal or financial commitment and support of a domestic nature for the material benefit of the other and includes a domestic partnership but does not include a legal marriage.
Note For the meaning of domestic partnership, see the Legislation Act, s 169. It includes a civil partnership.
(2) For subsection (1)—
(a)a personal relationship may exist between people although they are not members of the same household; and
(b)a personal relationship is not taken to exist between people only because one of them provides a service for the other—
(i)for fee or reward; or
(ii)on behalf of another person (including a government or body corporate); or
(iii)on behalf of an organisation the principal objects or purposes of which are charitable or benevolent.
It is common ground between the parties that up to the year 2001 the parties were in a relationship which might properly be characterised as a domestic relationship. The situation is, or at least was, a little confused by the fact that the parties referred to their relationship (and their lawyers referred to it as well) from time to time as a “de facto relationship”. Counsel for the applicant said:[32]
…the issue is not so much when the separation has occurred as when the domestic relationship, as defined, finished or ceased to exist. Because the de facto relationship of the parties, or the domestic partnership, to use the legislation of the Domestic Relationships Act, may have ceased prior to the domestic relationship ending. [my emphasis]
[32] Transcript of proceedings on 6 April 2011, 4.
“Domestic partnership” is a term referred to in the definition of “domestic relationship”, but it is clear that a domestic relationship is a wider term than either a domestic partnership or a de facto relationship.
My obligation in these proceedings is to determine whether there was a domestic relationship in accordance with the DRA and when that relationship ended.
Events in 2001
I will first consider whether the domestic relationship ended in 2001 as the respondent asserts it did. There are a number of things that happened in 2001 which bear upon this contention.
The respondent also alleges that in 2001, the applicant told her “he did not wish to be touched and was no longer interested in having a physical relationship.”[33] The respondent interpreted this as meaning the applicant no longer wanted a sexual relationship with her.[34] The applicant denies that he said this to the respondent.[35] I am unable to make a finding at this point whether such a statement was made.
[33] Respondent’s affidavit, [28].
[34] Respondent’s affidavit, [12].
[35] Transcript of proceedings on 6 April 2011, 34.
I will consider other significant events in 2001 which have a bearing on whether the domestic relationship ended that year.
The applicant’s redundancy
The applicant was made redundant and this affected the financial arrangements between the parties if in no other way then because the applicant’s ability to contribute was seriously diminished.
Transfer of the Gold Coast property
The second matter of significance was the transfer of the Gold Coast property from joint names to the sole name of the respondent.[36] The respondent asserted that this represented the realisation of the termination of their relationship. The applicant asserted that the sale of the Gold Coast property had only occurred because it was convenient for tax purposes for the property to be in the respondent’s name:[37]
… A short time before I was made redundant and in anticipation for that event, [the respondent] and I decided that it would be more beneficial for [her] to hold the [Gold Coast] property in her name and obtain the tax benefits. As I understood this also meant that [the respondent] could borrow more money to acquire further property if she held the [Gold Coast] property in her name solely.
[36] Applicant’s affidavit, filed on 31 March 2011, [20]; Respondent’s affidavit, [37].
[37] Applicant’s affidavit, filed on 31 March 2011, [20].
In cross-examination, the applicant asserted that the transfer of the Gold Coast property occurred for three reasons:[38]
… the first reason, of course, was that I was on a lower income now [having been made redundant] so it would be more difficult for me to support [the Gold Coast property mortgage]. The second one was that, as [the respondent] was on a much higher income, she would be able to claim the tax deductions on the property if it was in her name.
… And the third one was that there was a problem with the bank in that we had previously been to the bank to try and borrow some more money to do some more investment, but they took the view that each of us owned the entire debt on [the Gold Coast property], but only half the equity each. So that was in case one of us defaulted, but the person that defaulted could claim half the equity. So they weren’t going to lend us any money. So it was better to have the property in a single name for future investment.
[38] Transcript of proceedings on 6 April 2011, 52-53
While the first two reasons provided by the applicant are reasonably straightforward, the third one is less so. As I understand it, the third reason for the transfer was because the current mortgage arrangement meant that the respondent’s future ability to invest was affected. The Gold Coast property was in the names of both of the parties, and for some reason (logically inexplicable) the bank regarded the debt as being jointly and severally owed by each of the parties, but regarded the security for the debt (being the Gold Coast property) as being only half owned by each. This, the applicant asserted, meant that the bank would regard each of the parties as having one half of the value of the collateral but the full liability for the debt. The transfer of the property to the respondent, he asserted, put the parties in a better position to invest in the future.
There was some dispute about whether the applicant had received any consideration for transferring his interest in the Gold Coast property to the respondent.
Initially, it was suggested by the respondent that she had paid $70,000 to the applicant in consideration for the transfer of his share in the Gold Coast property to her.[39] Indeed, the transfer document itself notes that consideration of $62,500 had been paid.[40] However, the applicant denied that he had ever received any money from the respondent for transferring his interest in the Gold Coast property to her[41] and in cross-examination, the respondent conceded that there had not, in fact, been any payment to the applicant in this regard.[42]
[39] Respondent’s affidavit, [37].
[40] Applicant’s affidavit, filed on 31 March 2011, annexure ‘BB’.
[41] Applicant’s affidavit, filed on 31 March 2011, [20].
[42] Transcript of proceedings on 6 April 2011, 61.
The question then arises as to why the transfer document records consideration paid for the transfer when, in fact, no payment had ever been made by the respondent to the applicant.
It seems that what was originally a transfer for no nominated consideration was altered to provide for a consideration on the advice of solicitors and accountants to minimise the effect of Capital Gains Tax. The following are excerpts from itemised entries on a tax invoice prepared by the conveying solicitors:[43]
15/05/2001… letter to Short Punch & Greatorix enclosing cheque for stamp duty professional fees and registration fees et al, informing that no consideration payable for this transfer
…
31/05/2001… re [the respondent], rang Short Punch & Greatorix – they can’t stamp transfer because zero consideration would mean massive capital gain later – must contact [the respondent]
…
01/06/2002…Spoke to [the respondent] – she’ll ask accountant about what best to put on transfer and then get back to me
[my emphasis]
[43] Applicant’s affidavit, filed on 31 March 2011, [21] and annexure ‘CC’.
An email from the respondent’s accountants indicate that the respondent had contacted them “in regards to a querie [sic] she has concerning the capital gains tax if you merge into one name.”[44]
[44] Exhibit GPB 1.
I find on the basis of this evidence that the Gold Coast property was originally to be transferred with no consideration to be paid. But, after receiving advice from her solicitors and accountants about the tax consequences of such a transfer, the transfer document was altered to provide for consideration in order to minimise the capital gains tax liability.
That same email from the respondent’s accountant also records the following in the form of handwritten notes, which suggests that the applicant transferred his interest in the Gold Coast property to the respondent because of his redundancy:
Gold Coast property – Joint names cost $155,000
[The applicant] taking a redundancy
Want to transfer mortgage to [the respondent]
That was accepted by the respondent in cross-examination:[45]
Now I suggest when you spoke to your solicitors… that you spoke to them about the transfer on the basis that, because [the applicant] was being made redundant, that you therefore needed to transfer the property? --- I can’t recall the actual discussion, but that would have been one of the components.
[45] Transcript of proceedings on 6 April 2011, 60.
I accept that one of the reasons why the Gold Coast property was transferred to the respondent was because the applicant had been made redundant. I am unclear on this evidence alone if the transfer was connected to the separation of the parties’ property following separation. That may have been but was not necessarily, the case
Paying board
It was suggested to the respondent that in 2001, the applicant commenced paying board to the respondent. This was disputed by the applicant, who categorised his regular payments to the respondent as “contributing to household expenses”.[46]
[46] Transcript of proceedings on 6 April 2011, 24.
Even if I were to find that such regular payments by the applicant were “board” payments, the significance of it is somewhat diminished by the admission from the respondent during cross-examination that she regarded the applicant as having paid “board” before 2001.[47] However, the respondent did not declare that board paid by the applicant in tax returns prior to 2001.[48] The earliest tax return tendered by the respondent which records board paid by the applicant as rental income is the respondent’s tax return of 2003.[49]
[47] Transcript of proceedings on 6 April 2011, 63 and 66.
[48] Transcript of proceedings on 6 April 2011, 64.
[49] Transcript of proceedings on 6 April 2011, 55; Exhibit ‘EAH3’.
Financial affairs
Both parties agreed that they kept their finances separate, but for the Gold Coast property.[50]
[50] Transcript of proceedings on 6 April 2011, 22; Respondent’s affidavit, [7] and [9].
Analysis of the events in 2001
Because I am unable to make a proper determination about whether the parties agreed that the relationship was finished, I am driven to look at the other events during that year to see whether they unequivocally indicated the termination of the relationship.
The events set out above, from one perspective, are consistent with the relationship coming to an end. The transfer of jointly owned property to only one party, the continued separation of the parties’ financial affairs, the applicant’s (possibly) paying board and the respondent declaring it as income are all factors which would suggest the relationship had come to an end.
However, taken in the context of the applicant’s redundancy, and given the evidence that consideration for the transfer of the Gold Coast property was recorded as being paid simply to limit the respondent’s CGT liability, but that no consideration was actually paid, the applicant’s reasons for transfer of the Gold Coast property has at least an arguable plausibility.
Equally, although the payment of board is consistent with a commercial as opposed to a personal relationship, if in fact it was the parties’ arrangement that the applicant paid board even prior to 2001, and the parties acknowledged that they were in a domestic relationship prior to 2001, then paying board is not significant and must not have been regarded by them as being determinative of the end of their relationship.
For all of these reasons, I am not satisfied that the domestic relationship between the parties ended in 2001 as the respondent asserts.
Events after 2001
Personal relationship
If there were to be a domestic relationship after 2001, there must first and foremost have been a personal relationship.[51] I turn now to consider the matters which bear upon the question of whether a personal relationship existed.
Holidays
[51] Domestic Relationships Act 1994 (Cth), s 3.
The parties went on holidays together and I set out below the details of those holidays.
In April 2004, the parties and M went to Queensland. They stayed at a resort and the applicant alleges they also slept in the same bed.[52] During that trip, the parties visited the applicant’s friends who live near the farm owned by the respondent. According to the applicant, the parties stayed in the same room.[53]
[52] Applicant’s affidavit, filed on 31 March 2011, [2].
[53] Applicant’s affidavit, filed on 31 March 2011, [3].
In July 2004, the parties went on a hiking holiday in Queensland and, again, visited the applicant’s friends.[54]
[54] Applicant’s affidavit, filed on 31 March 2011, [4] and [5].
In January 2005, the parties again went to Queensland for a holiday.[55]
[55] Applicant’s affidavit, filed on 31 March 2011, [6].
When the applicant graduated from university in March 2005, the respondent and M flew to Melbourne for the graduation ceremony, after which they all attended a dinner that had been arranged for the graduating class. The parties and M stayed overnight in a hotel, and the parties shared a room while M slept in a separate room.[56] On the day following the graduation ceremony, the parties and M visited the applicant’s friends.[57]
[56] Applicant’s affidavit, filed on 31 March 2011, [7].
[57] Applicant’s affidavit, filed on 31 March 2011, [8].
In April 2005, the parties and M all visited the applicant’s mother for her 80th birthday party.[58]
[58] Applicant’s affidavit, filed on 31 March 2011, [9].
Later, in October 2005, the parties holidayed again in Queensland and spent time with the respondent’s sister and brother-in-law. On the same trip, the parties attended the farm property owned by the respondent in Queensland to meet with surveyors who were installing fences on the property.[59] On the way home, they visited an observatory.[60]
[59] Applicant’s affidavit, filed on 31 March 2011, [12].
[60] Applicant’s affidavit filed on 31 March 2011, [13].
The respondent’s and M’s attendance at the applicant’s graduation in Melbourne is indicative of a personal association as opposed to a landlord and tenant arrangement. It is not, however, decisive one way or the other as to whether there was a personal relationship.
The respondent seems to dispute that the parties went on holidays together. Her evidence was that although they travelled annually to Queensland together, this was done as an arrangement of mutual convenience, whereby the respondent paid the applicant to drive because problems with her wrist prevented her from doing so.[61]
[61] Respondent’s affidavit, [15] and [44].
However, in cross-examination, the respondent concedes that the parties slept in the same bed during their “holidays”. Sleeping in the same bed is more indicative of a personal relationship. Indeed, the parties not only shared the same bed on holidays, they did so in their home up until February 2009 when the respondent left the home (except for one occasion, when the respondent moved into the lounge room but subsequently returned to the bedroom).[62]
Sharing one bed and sexual relations
[62] Transcript of proceedings on 6 April 2011, 71.
I found this particular non-controversial evidence (i.e. that the parties shared a bed) difficult to assimilate. Whether or not the parties had engaged in sexual intercourse after 2001, the degree of intimacy as suggested by their sharing the same bed is, in my opinion, strongly persuasive of there being a personal relationship between the parties. This would be strengthened if I accepted the evidence of the applicant that they frequently discussed matters, (I am asked to infer at least of a personal nature) when in bed at night.[63] The respondent denied that such discussions in bed occurred regularly, but agreed they happened occasionally,[64] and, on balance, I found her evidence about this matter more convincing than that of the applicant.
[63] Transcript of proceedings on 6 April 2011, 72.
[64] Transcript of proceedings on 6 April 2011, 72.
The respondent asserted that from 2001 onwards the applicant had told her not to touch him (in a sexual way) and that they had ceased to have any sexual relations. The applicant denied making such a statement and asserted that while sex had been rare it was not totally absent between 2001 and 2008. In my opinion, perhaps in contrast with the parties’ sharing the same bed, occasional acts of sexual intercourse over a period of seven years (and the applicant does not assert it was frequent) are not of any particular significance in determining whether there was a domestic relationship. If either party had had sex on an occasional or casual basis with any person other than the other party, I would not have regarded this as being critical to a determination of whether or not the applicant and respondent were in a domestic relationship either.
Public outings as a couple
It appears that the parties did little as a couple, apart from going on holidays together. The applicant’s evidence was that the respondent and he “had a practice of meeting for lunch on a regular basis almost every day. This practice continued up until about 12 months prior to [their] final separation in 2009. During 2008, [they] met for lunch less frequently perhaps twice per week.”[65] The respondent agreed the parties had lunch together, but qualified this by saying it only occurred when she was working in Suburb B and, although it started as a regular engagement, it “tailed off.”[66]
[65] Applicant’s affidavit, filed on 31 March 2011, [22].
[66] Transcript of proceedings on 6 April 2011, 72.
The applicant also asserted that he drove the respondent to work regularly. The frequency of this was significantly disputed by the respondent[67] and, overall, I am more inclined to accept her evidence about these matters than the applicant’s.
[67] Transcript of proceedings on 6 April 2011, 74.
I formed the impression from the applicant’s evidence that he was endeavouring to put his best foot forward, so to speak, and to colour what might have otherwise been regarded as actions of a friendly nature or even what an acquaintance might do for somebody else as a favour, as having a more profound consequence and bringing about the relationship for which he contended.
Gifts
The parties agreed that they bought each other gifts each Christmas up until Christmas 2008. While the applicant alleges that they bought each other gifts for birthdays, this is disputed by the respondent, who says she did not remember the applicant’s birthday.[68]
Paying board
[68] Applicant’s affidavit, filed on 31 March 2011, [40]; Transcript of proceedings on 6 April 2011, 72.
The respondent declared the applicant’s regular payments to her account (possibly being board) as rental income on her income tax return. She did not need to do this unless the payments made by the respondent were genuinely income to her. I have discussed the significance of such income above at paragraph 51 and have nothing further to add.
False declaration to Centrelink
Long and detailed cross-examination was undertaken of both parties, but particularly the applicant, in relation to his failure to declare his de facto status (or domestic relationship status) in his dealings with Centrelink. The applicant’s case before this Court is that he and the respondent were in a de facto beyond 2001.[69] However, it was revealed during cross-examination that he had declared himself to be “single” in his applications for Centrelink benefits. The applicant admits that he declared himself to be “single” at a time when he (asserts to this Court) that he had a partner:[70]
… you declared yourself as single at this time? --- I did, and I failed to declare that I had a partner.
You did. Thank you. You did not declare that you had a partner at this time, in January 2003? --- That’s correct.
And you were aware that that partner included a de facto partner, and you did not declare that you had a de facto partner in January 2003? --- That’s correct.
[69] Transcript of proceedings on 6 April 2011, 39.
[70] Transcript of proceedings on 6 April 2011, 44.
It seemed to me that the applicant’s evidence presented two possibilities. The first is that the applicant’s assertions before this Court that he and the respondent were in a de facto relationship beyond 2001 are false. The second possibility is that the applicant and respondent were in a de facto relationship but he falsely declared himself to be single to Centrelink. Neither possibility devolves significantly to his credit, but the applicant admits that his declarations to Centrelink were, in fact, false:[71]
Are you suggesting, sir, that you deliberately made a false declaration - - -? --- I think I’ve already agreed to that.
[71] Transcript of proceedings on 6 April 2011, 49.
In the end the applicant was given the assistance of a Certificate under s 128 of the Evidence Act 1995 (Cth).
On this issue, at least, the applicant’s credit is threadbare to say the least. However, for reasons that I set out hereafter that may not, in the end, make a lot of difference.
It is to be noted that prior to 2001 the respondent, I think as much to the surprise of the cross-examiner as anyone else, conceded that she regarded and declared that she was a single person in her income tax returns, notwithstanding that she conceded she was in the relationship with the applicant at that time. Why she would do this, given there was no obvious financial disadvantage to her to declare that she was in a relationship, is not known, nor did she explain, nor as I recall was she asked.
These are two intelligent people who were not naive in commercial and other matters. Although I concede that questions of relationship status, particularly in the attenuated form predicated by the DRA, are somewhat difficult to define or even to correctly identify in formal documents, in my opinion both parties’ position is that prior to 2001 they were in what they would probably have then described as a de facto relationship or at least a relationship that needed to be declared.
Moreover, if after 2001 the applicant genuinely believed he was in a de facto relationship or a domestic relationship, his responses to Centrelink were, to say the least, disingenuous and may have been fraudulent. The question, however, is not whether either party is in some way estopped from denying a relationship or the lack of it during a particular period, the relevant question is whether the relationship did in fact exist.
I am not prepared to make a general finding of credit against the applicant based on his false declarations to Centrelink. Both parties struggled to give comprehensive and consistent answers about a number of matters and I am forced in circumstances where there is conflict in evidence between them to evaluate each particular circumstance, the matters surrounding it and the inferences to be drawn from them and the intrinsic likelihood that what is said by either is, in the circumstances, correct.
Conclusion about the existence of a personal relationship
In relation to the issue of whether the applicant paid board to the respondent in and after 2001 or whether he was simply contributing to expenses, I am unable to make a finding and cannot determine whether this was indicative of the parties’ relationship being one other than a personal relationship. However, as I stated above, whether or not the applicant actually paid board in and after 2001 is not significant because the respondent concedes that she regarded the applicant as having paid board since 1999. Since the respondent also agrees that the parties were in a domestic relationship, if not a de facto relationship, up until 2001, then the applicant’s payment of board in 2001 and after (if, indeed that’s what it was) is not indicative of the relationship terminating because the respondent asserts that he did this as far back as 1999.
The applicant’s evidence that his declaration to Centrelink was false is indicative that there was a personal relationship between the parties. However, as I stated above, this issue does not reflect well on the applicant’s credit. In any event, I do not regard this as a factor significantly in favour of or against a finding that a personal relationship existed between the parties after 2001.
Two factors, however, which I do consider to be indicative of a personal relationship existing after 2001, are the parties’ holidays together and their sleeping in the same bed until February 2009. If the parties were in a purely commercial relationship after 2001, I regard it as unlikely that they would go on holidays together and visit the applicant’s friends together on those holidays. I consider it even more unlikely that the parties would have slept in the same bed if their relationship was a non-personal one.
These factors, taken in the context of the parties also buying each other Christmas gifts and meeting for lunch together, lead me to conclude that the relationship between the parties was a personal one from 2001 to some time prior to May 2008 when the respondent asked the applicant to leave.
I determine May 2008 to be the end point of their relationship because there was a “late-breaking” contention by the respondent that she asked the applicant to leave the house prior to May of that year. The applicant, however, does not recall the respondent saying this.[72] I accept that the respondent did ask the applicant to leave, and upon doing so, whatever tenuous link of material personal benefit there may have been between the parties was snapped and the domestic relationship terminated. This was cemented in May 2008 when the respondent removed the applicant as a beneficiary from her will.
[72] Transcript of proceedings on 6 April 2011, 50.
I do not accept the evidence of the applicant that he was surprised when the respondent and M moved out in February 2009. I do accept that the respondent asked or told the applicant to move out prior to May 2008, and that when he did not do so she made arrangements to move out with M.
Personal or financial commitment and support
The fact that there was a personal relationship does not end the matter of whether there was a domestic relationship. A domestic relationship in accordance with the terms of the DRA requires either or both of the parties to provide either personal or financial commitment and support of a domestic nature for the material benefit of the other.[73] In considering whether such commitment and support existed, I want first to deal with the somewhat unusual aspect of the matter.
[73] Domestic Relationships Act 1994 (Cth), s 3.
Ironically, it might be argued for the applicant that the respondent made a financial commitment or gave financial support to the applicant because, if the respondent is to be believed, what the applicant paid in board (about $300 a fortnight by February 2009[74]) was less than what he would have had to pay if he were living completely separately. However this theme, although touched on, was not developed and there was no evidence about what it would have cost the applicant to live separately. This is understandable from his point of view because it would have been at odds with his primary position that he paid his share of expenses in the household. I cannot find that any such contribution was of material benefit to the applicant.
[74] Transcript of proceedings on 6 April 2011, 25.
It was agreed by both parties that their finances were kept separate but for the purchase of the Gold Coast property. The applicant did not know how much money the respondent had, and the respondent did not know how much money the applicant had.[75] Furthermore, apart from the applicant’s payment of board or his regular contributions to household expenses (the categorisation of these payments is not significant) the applicant spent his income as he wished and that was “his own personal business.”[76] I am unconvinced on the evidence that the various payments made by the applicant (whatever their proper categorisation might be) constituted, when netted out against his benefits from the arrangements for living in the house, “commitment and support” to the respondent.
[75] Transcript of proceedings on 6 April 2011, 6.
[76] Respondent’s affidavit, [7].
It could not be said that the applicant provided financial commitment and support to the respondent by contributing to the financial support of M. In fact, in cross-examination, counsel for the respondent raised the issue of a statutory declaration, which the applicant believed had been prepared by court officials and “completed” by him. That document effectively declared that he did not wish to be formally recognised as a carer or guardian of M and nor did he wish to provide financial support for M.[77]
[77] Transcript of proceedings on 6 April 2011, 22-23.
On balance, it seems to me that the evidence does not establish convincingly that either party provided financial commitment and support to the other.
Furthermore, even if I found there was “financial commitment and support”, the question of whether such commitment and support was of “material benefit” to the other party remains.
I considered the meaning of “material” benefit in Bullivant & Holt:[78]
70.If there was a personal relationship between the parties which involved on the part of the applicant personal or financial commitment and support of a domestic nature, there still remains a question about whether such personal or financial commitment and support was for the material benefit of the respondent. The inclusion of the word “material” in s 3 would suggest that this is to exclude ‘random acts of kindness’ or the like.
71.The word “material” is defined in the Macquarie Dictionary only as a noun but “materially” is defined as:
1. to an important degree; considerably. 2. with reference to matter or material things; physically 3. Philosophy with regard to matter or substance as distinguished from form.
72.In the Shorter Oxford English Dictionary “material” is given an adjectival meaning. That is:
… Of much consequence; important…
73.In combination it might be suggested that “material” must mean something of consequence or something that is significant or important.
[78] [2012] FamCA 134, [70]-[75].
In my opinion, the financial arrangements between the parties fall far short of being of material benefit to one other.
Was there however personal commitment and support of a domestic nature on the part of one party for the material benefit of the other?
There are numerous ways in which the applicant may have provided personal commitment and support to the respondent.
First, the respondent alleges that he made contributions as a homemaker after he took a voluntary redundancy in 2001 by preparing meals for both the respondent and M; by caring for the respondent and M when they were ill; collecting mail from the post box, shopping and running errands during the week; doing the laundry, tidying the home, cleaning the bathroom, washing the dishes, cleaning the kitchen and performing various “handyman type tasks” such as changing light bulbs and electrical switches; undertaking “substantial” renovations on various properties over the course of the relationship, including installing skirting boards, architraves, cornices and tiling; and caring for the parties’ dog.[79]
[79] Applicant’s affidavit, filed on 1 December 2010, [30].
The respondent disputes the extent of the applicant’s contributions. She says he cooked by preparing frozen meals; did not care for either her or M when they were ill; the parties shopped for groceries together only because it was mutually convenient to do so; for the first two years at the Suburb H property, she paid for a cleaner to clean the home once per week and thereafter she did all the washing; and she categorised the installation of architraves, doors and kitchen cupboards as “minor” renovations.[80]
[80] Respondent’s affidavit, [40].
I should note here that, to the extent the applicant contends that he carried out renovation work to the Suburb A, Y Street and W Street properties, that work took place prior to 2001.[81] Therefore, any personal commitment and support that might have represented is not relevant to discussion about the domestic relationship after 2001.
[81] Applicant’s affidavit, filed on 1 December 2010l, [30(f), (g) and (h); Respondent’s affidavit, [40(f), (g) and (h)].
Second, the applicant alleges that he assisted the respondent in caring for M.
In his affidavit, the applicant contends that he had a relationship with M and had a “hands-on role” in relation to M when he was young. When M was an infant, the applicant allegedly changed his nappies, bathed him, fed him, played games with him, bought him toys, read him stories and drove him to and from day care. The applicant also took M to the airport to sit in the cockpit of an airfcraft and the applicant’s late father made M wooden toys to play with.[82] While the respondent agrees the applicant did those things, her position is that he did them infrequently.[83]
[82] Applicant’s affidavit, filed on 1 December 2010, [10].
[83] Respondent’s affidavit, [22].
The applicant contended that he drove M to school. The applicant alleges that he drove M to school until he commenced attending at G School because he was then “old enough to catch public transport.”[84] While the respondent agreed that the applicant did drive M to school, she did not agree that this occurred “more regularly than not” and asserted that the applicant had only driven M to school “on occasion”.[85]
[84] Applicant’s affidavit, filed on 31 March 2011, [44(a)].
[85] Transcript of proceedings on 6 April 2011, 73.
It is also alleged by the applicant that he drove M to day care and then took the respondent to work in the mornings. After work, the applicant reportedly picked up the respondent from her work place and together they picked up M from his day care.[86] These assertions are denied by the respondent. Her evidence is that for 13 weeks during the period that M attended day care, she had suffered from migraines and had to take leave from work. She resorted to half-pay when she no longer had any leave entitlements. Because of this, she could not afford to pay for M’s attendance at day care and M stayed home with her.[87]
[86] Applicant’s affidavit, filed on 1 December 2010, [11].
[87] Respondent’s affidavit, [23].
The respondent asserted that the relationship between the applicant and the respondent was not a good one and that that was characterised by the domineering attitude on the part of the applicant towards M. The respondent deposes in her affidavit:[88]
27.[The applicant] constantly put [M] down, including verbal and physical abuse. …By the time [M] went to high school he took the opportunity to ensure that [the applicant[ would have nothing to do with the school when he started at [G School]. …I asked [the applicant] if he would leave the house to allow [M] room to grow. [The applicant] refused saying [M] just needed a good hiding and that if I was to turf [the applicant] out he would take me for everything that I had.
28.…
29.[The applicant’s] treatment of [M] included my accidently overhearing [the applicant] telling [M] that “you are a manipulative little bastard and that he hoped he “never got anywhere in life”.
[88] Respondent’s affidavit, [27] and [29].
On the other hand, the applicant produced photographs of M and him (and the respondent) on holidays and, while it would have been unlikely that he would have produced photographs showing a distressed relationship between them, they were at least consistent with M’s having a comfortable relationship with the applicant.
I could not be certain that the evidence of either party was precisely what happened. This is not a matter where I could, in all respects, accept the evidence of one party and not the other based on some general finding as to credit.
In relation to all the matters in issue in the immediately preceding paragraphs, I suspect that each party has subconsciously, or even in some cases consciously, put the best light on what each did or did not do. Accordingly, while I cannot be satisfied on the balance of probabilities that either party’s version is correct as such, given the general context and the demeanour of each of the parties and the inherent logic of the situation, I find that, on the balance of probabilities (that is, it is more likely than not) the applicant did less in each case (taking account of quantity and quality) than he suggests he did, but more than the respondent is prepared to concede.
The third way in which the parties may have provided personal commitment and support to the one another is through their discussions in bed at night. The details of this are discussed above at paragraph 69.
As I mentioned in Bullivant & Holt, while financial benefit is often able to be measured, personal benefit is more difficult to determine:[89]
74.It is perhaps easier to determine financial commitment and support as of some consequence. What is more difficult to determine is whether personal commitment and support were of a material benefit.
75.Some personal support is objectively observable, for example nursing care and support. However, in relation to support which is more intangible, for example playing computer games with the respondent’s son and viewing potential properties to purchase together, the best judge of this would probably be the recipient of such commitment and support – in this case, the respondent.
[89] Bullivant & Holt [2012] FamCA 134, [74] and [75].
I apply that reasoning to this case. Ultimately the parties must be the judge of the “materiality” of the benefit derived from commitment and support of a personal nature. The best judge of the benefit of more intangible commitment and support such as preparing meals, tidying the home and playing with M, is the respondent.
Whatever the precise nature of their relationship might have been, it persisted, as I have found, as a personal relationship for at least seven years from 2001 to 2008 after what the respondent would say was the end of their relationship. It is not uncommon for those who have been in a relationship for some time, who fall out with each other, to want to have little, if anything, to do with the other. This is so let alone live with the other person in the same house on whatever terms or go on holidays or, even more strongly, share the same bed. That the parties continued to do this indicates that each regarded the personal commitment and support provided by the other as being of sufficient benefit to them that they would remain in that relationship.
In this matter, weighing the duration of the relationship (in whatever form) after 2001 with the nature of their personal involvements including, importantly but not conclusively, sharing a bed for a substantial part of that period, I accept that it is more likely than not (that is on the balance of probabilities) that between 2001 and 2008 the personal commitment and support provided by each party was of material benefit to the other.
Leave to commence proceedings
A finding that the relationship ended in May 2008 raises the further issue of whether leave is required to commence proceedings pursuant to s 13 of the DRA, given that the application was filed on 1 December 2010, more than two years after the day on which the relationship ended.[90]
[90] Domestic Relationships Act 1994 (Cth), s 13(1).
Although a literal reading of s 13 of the DRA (set out above) would suggest that leave is required before proceedings are actually (filed) commenced, I continue to adhere to the conclusion I reached in Bullivant & Holt[91]; that being that, if proceedings are commenced and the issue of the requirement for leave is raised either from the beginning or subsequently, and if leave is granted, such leave should be granted nunc pro tunc and there should be no requirement for the applicant to begin again.
[91] [2012] FamCA 134, [132]-[134].
It is reasonably well accepted the exercise of judicial discretion is normally predicated on the applicant’s giving a reasonable explanation for the delay in commencing proceedings; demonstrating that he or she has an arguable claim; and demonstrating that there would not be such hardship to the respondent as could not be remedied with an order for costs.
Section 13(2) of the DRA states that a court may grant leave “… if it is satisfied the greater hardship would be caused to the applicant if leave were refused than would be caused to the respondent if leave were granted”. The principles outlined above, in my opinion, flesh out the succinctness of s 13(2).
I am satisfied that the applicant possibly with ostrich-like perception believed, or at least wanted to believe, that his relationship with the respondent finished in February 2009. I am satisfied the applicant thought he was within time when he filed in December 2010. This was not a case where the applicant deliberately or recklessly allowed a time limit to expire. The period by which the applicant was out of time to file without leave was seven months.
More troubling is the question of whether the applicant has a claim of substance. It follows from my analysis of the evidence that the evidence presented in the proceedings to date would not support findings of contributions of a substantial nature from the applicant in accordance with s 15(1)(b) or (c) of the DRA.
However, the proceedings, at least so far as the applicant was concerned, were conducted on the basis that only the leave issue was to be determined at this point and it follows that, if leave is granted, it would be necessary for both parties to present such further evidence as they consider to be appropriate about the matters in ss 15 and 19(2). The time for determination of whether the claim by the applicant is justified is when that additional evidence (if any) is before the Court and (if necessary) tested by cross-examination. The applicant has a case to be argued. The extent to which it may succeed is another matter.
Any granting of leave is a hardship to the respondent who must, if leave is granted, then prepare, present and argue a case. If her contentions are upheld, she may be the beneficiary of an order for costs which will, in part, at least offset that hardship.
On balance, I determine that greater hardship would be caused to the applicant if leave were refused than would be caused to the respondent if leave were granted. Accordingly, I grant leave for the applicant to make his application under the DRA.
That being said, and I will make orders accordingly, I cannot but urge the parties, in the light of my judgment above to consider very seriously whether they can now settle the applicant’s claim. The DRA unlike the Family Law Act 1975 requires a court to consider the “nature and duration” of the relationship and, by any measure, on the uncontested evidence this was a relationship in which the parties kept their finances separate and did not, with the obvious but subsequently equivocal example of the property on the Gold Coast, embark on joint financial enterprises. That is not to say that they may not have worked together (or at least collaboratively) towards some mutual goals but this was not, at least on the evidence before me so far, a relationship in which there was a formal or informal agreement of commitment to a pattern of financial enterprises and property acquisition. Their relationship fell short of a life-time commitment such as marriage.
In any event, having urged the parties to now carefully consider their positions, if they wish to further litigate, I shall accommodate them at the first opportunity. I could do no less in the light of my delay in delivering this judgment – a delay for which I sincerely apologise to the parties and their lawyers.
I would propose that any further affidavits be filed within one month and that if either party seeks to cross-examine any deponent, I shall set aside time for that purpose shortly after that period. If both parties seek to rely only on the evidence adduced so far, perhaps the most convenient courses would be either to set a timetable for written submissions or perhaps, less expensively, for the parties to set a date for oral submissions.
I certify that the preceding one hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 6 June 2012.
Legal Associate:
Date: 6 June 2012
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