NEAL and SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS - [2011] AATA 434

Administrative Appeals Tribunal
DECISION AND REASONS FOR DECISION [2011] AATA 434
ADMINISTRATIVE APPEALS TRIBUNAL )
) No 2010/5553

GENERAL ADMINISTRATIVEDIVISION )

Re JOHN ROGER NEAL

Applicant

And

SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS

Respondent

DECISION

Tribunal Deputy President P E Hack SC
Date23 June 2011
PlaceBrisbane (heard in Cairns)

Decision The decision under review is set aside and a decision substituted that the applicant was not, at any time material to these proceedings, in a marriage-like relationship or a de facto relationship.
...............Signed...............
Deputy President

CATCHWORDS
SOCIAL SECURITY – member of a couple - disability support pension – nature of relationship – relationship of convenience not commitment – decision under review set aside
Social Security Act 1991 (Cth) s 4(3)
REASONS FOR DECISION

23 June 2011 Deputy President P E Hack SC

Introduction

For the past 17 years the applicant, Mr John Neal, has had a relationship with Ms Barbra Burton. The nature of that relationship, particularly over the past three years, is the focus of these proceedings. The respondent, the Secretary to the Department of Education, Employment and Workplace Relations, contends that the relationship is one that the Social Security Act 1991 (Cth) at one time described as a “marriage-like relationship” but which is now called a “de facto relationship”.
Mr Neal (and Ms Burton) contend to the contrary. Their relationship, they say, is one of longstanding friendship.
Background
The proceedings arise from a decision made by Centrelink on 21 July 2008 by which it was determined, in the context of an application by Ms Burton, that Mr Neal was in a marriage-like relationship with Ms Burton. It is not clear whether Mr Neal was ever informed of that decision; it appears unlikely since he was not then receiving any payments under the Social Security Act. The decision first affected him in December 2008 when he applied for sickness benefits and later Newstart allowance. He was paid at the “partnered” rate but made no complaint about that until late August 2010. At that time his payment of benefits was significantly reduced because income received by Ms Burton from employment was taken into account in determining his payment rate.
In September 2010 each of Mr Neal and Ms Burton completed and signed a Centrelink questionnaire designed to elicit details of their relationship. On 21 September 2010 Centrelink made a decision that Mr Neal was a member of a couple not a single person. That decision was affirmed on internal review on 29 October 2010 and by the Social Security Tribunal on 30 November 2010. These proceedings were commenced thereafter.
The legislation
It is a sufficient explanation of the provisions of the Social Security Act regarding the rates of payment of benefits to say that the question whether a recipient is a “member of a couple” is of critical importance. That determines whether the recipient is paid at the single or partnered rate. And, if partnered, the partner’s assets and income are considered in determining the rate of payment.
Section 4(2) of the Act determines when a person is a member of a couple So far as is presently relevant, a person is a member of a couple for the purposes of the Act if:
“(b)all of the following conditions are met:
(i)the person has a relationship with another person, whether of the same sex or a different 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 de facto 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.”
The sub-section directs attention to ss 4(3) and (3A) of the Act. They provide,
“(3)In forming an opinion about the relationship between 2 people for the purposes of …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, or in a de facto relationship with, 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 or a de facto relationship.
(3A)The Secretary must not form the opinion that the relationship between a person and his or her partner is a de facto relationship if the person is living separately and apart from the person on a permanent or indefinite basis.”
There being no doubt that the matters in ss 4(2)(b) (i), (ii), (iv) and (v) of the Act are made out the issue is whether the relationship between Mr Neal and Ms Burton was a de facto relationship. That question is to be considered having regard to all the circumstances of the relationship including, in particular, the matters nominated in paragraphs (a) to (e) above. Those matters, whilst neither conclusive nor exclusive, provide a convenient starting point for an examination of the relationship. First though, I want to set out some further background matters taken, in the main, from the evidence of Mr Neal and Ms Burton. I should say immediately that, by and large, I accept their evidence. There are some matters where Mr Hamilton, who appeared for the Secretary, criticised Mr Neal’s evidence. And it seems fair to say that Mr Neal did not hide his frustration with the decision made by Centrelink and the manner in which it was made. I will deal with the criticisms of Mr Neal as I discuss the evidence. I regard Ms Burton as a particularly impressive witness. She struck me as quite thoughtful and as a more objective witness than Mr Neal.
Mr Neal is now aged 59 years. He first met Ms Burton in 1994. Mr Neal was then married with a young family. He was then, and was for many years afterwards, engaged in a business of selling massage therapy equipment directly to the public. Ms Burton answered an advertisement in the local newspaper by Mr Neal seeking a person to act as a canvasser, in effect, a person to go door to door espousing the worth of Mr Neal’s massage therapy devices. Mr Neal employed Ms Burton who was then aged about 19 years. Mr Neal conducted his business from a campervan and travelled throughout Queensland and northern New South Wales. He made a reasonable living and paid Ms Burton on the basis of a commission. Mr Hamilton submitted that I ought to be sceptical of the evidence of an employment relationship between Mr Neal and Ms Burton: it had not previously been raised, he submitted. That, in fact, is not correct. There is, in the material[1], what I take to be a note made by the Centrelink authorised review officer of a conversation with Mr Neal on 22 October 2010. The note reads, in part,
“…Barbara’s [sic] dad was one of his mates and he employed her. They have been off and on (employer/employee basis) doing the show circuits.”
[1] Exhibit 1, page 90.
Mr Neal’s marriage broke down shortly after meeting Ms Burton although Ms Burton was not the cause of the breakup. Mr Neal says that he was on the verge of ending the marriage when Ms Burton arrived on the scene. For the ensuing years Mr Neal and Ms Burton travelled together in a campervan, with an annex and tent and fitted with two single beds although there were occasions when, because of adverse weather, they slept in the bed together. Mr Neal says that for a period of about seven to ten days, not long after they first met, they had a sexual relationship but that, with one exception, the sexual relationship did not continue. There was a further instance in 2008 when, according to Mr Neal, he and Ms Burton “got drunk and ended up in bed together”. I accept that evidence. Mr Neal’s account of the extent of the sexual relationship struck me as genuine and truthful.
In 2000, for a number of months, Mr Neal and Ms Burton shared a flat in Brisbane (with another person) during the Olympics because Mr Neal was interested in the football. Mr Neal made a reasonable living from his business. It continued until late 2008 when Mr Neal’s health prevented him from continuing in his employment. Despite that Mr Neal’s relationship with Ms Burton continued and they continued to live in the campervan. By this stage it appears that Ms Burton was studying. In mid-2008 it became material for Centrelink to consider Ms Burton’s relationship status. She and Mr Neal completed a “Relationship Details” questionnaire. At the time that these forms were completed Mr Neal and Ms Burton were residing at a caravan park in Innisfail. They later came to Cairns and stayed in a caravan park in that city. They appear to have stayed in North Queensland during the winter of 2008 and returned to Brisbane in late 2008.
In July 2009 Mr Neal and Ms Burton returned to Cairns. They initially rented a single bedroom apartment at a resort called “Palm Royale”. The attraction, according to Mr Neal, was that accommodation was inexpensive yet the resort had swimming pools, television and air conditioning, features not available in a caravan park. The apartment had a king size bed however it was configured by joining two single beds together. Mr Neal and Ms Burton separated the single beds and slept separately. By this time Ms Burton was employed and frequently worked a night shift. She made other friends. In March 2010 a two bedroom apartment became available at the resort. Mr Neal and Ms Burton moved into it. They continue to reside in it. Mr Neal produced photographs which depict quite separate living and sleeping areas for the two of them.
In the initial stages Mr Neal and Ms Burton contributed equally to the payment of rent by paying the rent on alternate weeks however when Mr Neal’s Newstart allowance was cut in September 2010, following the determination by Centrelink that he was “partnered”, he became less able to meet his share. From time to time, Ms Burton has paid the rent for him. Mr Neal and Ms Burton continue to reside in this apartment.
I turn then to a consideration of the particular matters referred to in s 4(3) of the Act. I will do so by reference to the period from July 2009 onwards i.e. from the time that Mr Neal and Ms Burton moved to the Palm Royale Resort in Cairns. I need not consider the relationship that existed prior to that to the same extent as that which existed from that time although the earlier relationship is, of course, material to a consideration of what existed thereafter. But in the observations that follow I will speak about the position as I find it established in the period from July 2009 onwards except where I otherwise draw a distinction.

Financial aspects

There are very few financial ties between Mr Neal and Ms Burton. They each have their own separate bank accounts and credit cards, there are no joint assets and no joint liabilities. In about 2004, when Mr Neal was still operating his business, he opened an account accessible by debit card. Ms Burton had, and continues to have, access to that account with her own card. The account, Mr Neal explained, was used to make purchases online and it was then convenient for Ms Burton to undertake that task. Ms Burton has not used the card for her private purposes except, on recent occasions when she has deposited money into Mr Neal’s account to assist him when Centrelink made the decision that resulted in his Newstart allowance being reduced significantly. Mr Neal regards himself as bound to pay these amount to Ms Burton although he considered that she would not regard him as obliged to do so.
Generally speaking Mr Neal and Ms Burton buy their groceries separately, particularly in the past two years where Ms Burton has been on a diet that required the purchase of particular foods. Prior to that, and when they were travelling together, it was more common to undertake joint shopping. Now, Ms Burton said, they do not generally shop together.

The nature of the household

The nature of the present household, in what is a two bedroom apartment, is well illustrated in a series of photographs produced by Mr Neal. It is unfortunate that they were not provided to Centrelink in advance of the hearing however despite that and Mr Hamilton’s criticism of them I do regard them as depicting accurately the present, separated, living conditions of Mr Neal and Ms Burton. Each has a bed, a television set and a refrigerator. There are common cooking facilities and occasionally they share meals. Ms Burton, whose evidence I accept without question, thought that meals would be shared only once or twice per week.
Ms Burton does her own laundry and cooking, she makes her own bed and cleans the bathroom. She accepted that tasks of this nature were done together more when they were travelling. Mr Neal does his own laundry and, generally, cooking. And undertakes some of the cleaning.
The picture presented is one of separate households with commonality only where it is essential.

Social aspects of the relationship

Mr Neal and Ms Burton do not hold themselves out as married or in a de facto relationship. The case for the Secretary placed some reliance on a caravan park receipt from June 2008 addressed to “John & Barbara Neal”. I need not have regard to the “statement” obtained by Mr Neal to accept, as Mr Neal said, that that description is a consequence of the author of the document being unconcerned with names and relationships rather than a choice by Mr Neal and Ms Burton to describe themselves in this way.
The relationship between Mr Neal and Ms Burton is a longstanding one. They travelled together for in excess of ten years and now share accommodation. It is, it must be said, a somewhat unconventional relationship. There is some limited evidence of the perception of others of the relationship contained in letters obtained by Mr Neal from friends and family. It is again unfortunate that the letters were not provided to Centrelink in advance of the hearing and, given that Centrelink has been denied the opportunity of testing the evidence contained in the letters I shall give them little weight. But there is no evidence to the contrary. Ms Sonsri, the assistant manager of Palm Royale, believed them to be a couple but that conclusion was informed only by the fact of them presenting together when they initially arrived and sharing an apartment. Ms Sonsri did not suggest any other basis for that conclusion.
Mr Neal and Ms Burton have a limited social life together going occasionally to a local licensed club for a drink. Ms Burton has a circle of friends from her work with whom she socialises without Mr Neal.

Sexual relationship

The extent of sexual intimacy has already been noted. But beyond purely sexual matters there is no evidence of the type of romantic affection that might be expected from a couple in a de facto relationship. Ms Burton, albeit in answering to a leading question from Mr Neal, said that they did not greet or farewell each other in romantic or affectionate terms.

The nature of the commitment to one another

Some evidence of commitment can be derived from the length of the relationship. Additionally, both Mr Neal and Ms Burton answered Centrelink’s questionnaire to the effect that they would assist the other in emergency circumstances.
The evidence they gave about the future is of more assistance. Ms Burton’s present employment is not secure. She said that if it came to an end she would likely return to live with her mother in New South Wales and that that would be her choice, not one she would make with the assistance of Mr Neal. Mr Neal said that if Ms Burton went elsewhere then he would stay in Cairns. He could not live in colder climates. This evidence is, as Mr Hamilton submitted, a prediction as to what might happen in the future but it provides insight into present thinking of Mr Neal and Ms Burton. That present thinking does not demonstrate any level of commitment.
The evidence of both Mr Neal and Ms Burton is that they regard their relationship as one of friendship. There is no evidence that they regard it as anything else. I was particularly taken by the apparent genuineness of Ms Burton’s response to the question of how she would characterise the relationship.
The nature of the relationship
The Secretary’s Statement of Facts and Contentions poses the rhetorical question “supportive friends or de facto partners?” That, as it seems to me, is the choice. Having regard to what is known of the relationship I am satisfied that it is the former and not the latter. The relationship is one of convenience not commitment. Having travelled and lived together as friends and as employer and employee they have chosen to continue with the same living arrangements as it suits each of their lifestyles. There are, and have been in the past, aspects of the relationship that point to a de facto (or marriage like) relationship but I consider that on balance the evidence points more to the relationship of friendship, albeit an unconventional friendship.
I would then set aside the decision under review and substitute a decision that Mr Neal was not, at any time material to these proceedings, in a marriage-like relationship or a de facto relationship.
I certify that the 27 preceding paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC
Signed:         ..........Signed.........................................................
  Associate
Date of Hearing  8 June 2011
Date of Decision  23 June 2011
Applicant  Self represented
Respondent  Departmental Advocate