Ristic v Maroti (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2013 04246

STEVE RISTIC	Plaintiff
v
VALERIA MAROTI	Defendant

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JUDGE:	Lansdowne AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	13 March 2014 and 29 April 2014
DATE OF JUDGMENT:	24 October 2014
CASE MAY BE CITED AS:	Ristic v Maroti (No 2)
MEDIUM NEUTRAL CITATION:	[2014] VSC 540

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FUNDS IN COURT –Balance proceeds from sale of land paid into Court by stakeholder– s 69 Trustee Act 1958 (Vic) - Application by registered proprietor for payment out – Competing application by person claiming to be former de facto partner – Constructive trust – Disputes as to the length and nature of the relationship – Concurrent applications under the Family Law Act 1975 (Cth) and under the Relationships Act 2008 (Vic) – Alleged contributions by advances to and for the registered proprietor and by way of driving his company car and so allowing him to retain employment – Contributions not proved save for admission as to a debt – Not unconscionable for registered proprietor to claim the whole subject to limited repayment to defendant – Payment out accordingly.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	In person
For the Defendant	Mr J McIntyre (13 March 2014) Mr R Moore (29 April 2014)	Goodman Group Lawyers

TABLE OF CONTENTS

Introduction and summary............................................................................................................... 2

History of the dispute........................................................................................................................ 3

Relevant legal principles.................................................................................................................. 6

Findings of facts............................................................................................................................... 11

14 Waranga Road, Bayswater.................................................................................................... 11
Period of cohabitation................................................................................................................ 13
Nature of the relationship.......................................................................................................... 19
Social occasions and trips................................................................................................. 20
Emotional engagement..................................................................................................... 21
Findings as to the length of the relationship................................................................. 25
Presentation to the outside world................................................................................... 26
Not sexually exclusive...................................................................................................... 27
Financial arrangements..................................................................................................... 28
Conclusion as to shared life............................................................................................. 29

Contributions by the defendant................................................................................................ 29
Driving assistance.............................................................................................................. 30
Financial assistance........................................................................................................... 31

Conclusion on contribution........................................................................................................... 35

Admission as to a debt.................................................................................................................... 36

Orders................................................................................................................................................. 38

HER HONOUR:

Introduction and summary

This proceeding concerns the entitlement to a sum of money deposited into the Court on 20 December 2012. The sum paid in, $136,141.92, was the balance proceeds of sale of a property registered in the sole name of the plaintiff at the time of the sale, 14 Waranga Road, Bayswater. The plaintiff claims the whole of the funds that remain. In the course of these proceedings I have ordered three payments by way of interim distribution to the plaintiff, to be taken into account on final orders in the proceeding. As a result of those interim distributions, the payment of interest and deduction of tax on interest, the sum remaining as at 24 October 2014 is the sum of $112,641.14. On payment out any additional interest will be added, and a sum retained for anticipated tax liability on interest.

The defendant seeks payment out to her of one half of the sum paid in, being $68,070.96. She claims that she and the plaintiff were in a de facto relationship from 2006 until May 2011 and that by virtue of financial and non-financial contributions she made to that relationship the plaintiff should be found to hold one half of the balance of the proceeds of sale on constructive trust for her.

For the reasons I now set out, I find that the parties only cohabited for two periods- a period of five months between July and November 2006 and then again for three weeks in February/March 2008. The defendant contends that they also lived together for a longer period prior to March 2008 and for a further two short periods thereafter, the last ending on 12 May 2011. The plaintiff disputes this, and I do not consider that the defendant has proved it. The plaintiff sought to describe their relationship after November 2006 as being mere acquaintances. I do not consider this an accurate description. I find that a relationship that was probably an intimate romantic relationship continued between them on at least an intermittent basis until December 2010, and a cordial friendship at least until April 2011. The relationship was a volatile one, marked by drama and high emotion. It was not exclusive, at least as far as the defendant was concerned. She had other romantic relationships, although short-lived, during that time. The plaintiff also commenced another relationship, with his current partner, after October 2010.

I do not consider it proved that the parties presented themselves in any substantial way as a couple to the outside world at any period in their relationship, including in the longer period they lived together. I think it possible that, as she contends, the defendant gave money to the plaintiff on occasion, and met the household expenses during the period that they lived together. Equally, it is possible that, as the plaintiff contends, the defendant was responsible for the loss of large sums of his money on gambling. Due to the way the parties have conducted their respective cases, it is not possible to reach firm conclusions as to whether this occurred, and, if so, how much money each advanced to, or for the benefit of the other. The defendant bears the onus of proof on this issue of contribution, and she has failed to discharge it. Further, while it is clear that the defendant suffered financial losses during the period of the relationship with the plaintiff, I do not consider it proved that the plaintiff was responsible for those losses.

Critically for this application, I am not satisfied that the defendant made financial or non-financial contributions (whether direct or indirect) to the property of the plaintiff such that the plaintiff should be held to hold the balance of the funds after sale of his home on constructive trust for her, with the exception of the sum of $3000 he admitted that he owed her early in the dispute. Accordingly, I will otherwise dismiss the defendant’s application and order the payment out to the plaintiff of the remaining funds in Court, less $3000.

History of the dispute

The dispute has had a long and somewhat complicated history. On the defendant’s account, the parties separated for the last time in mid May 2011. Shortly thereafter the defendant placed a caveat on 14 Waranga Road, Bayswater. The plaintiff had already flagged an intention to sell it. The caveat claims that the defendant holds an equitable interest in the property by way of resulting, constructive or implied trust, but only constructive trust is now pressed.

The sale of the property finalised on 9 September 2011. The parties could not agree about the distribution of funds and accordingly arranged for another firm of solicitors to hold the balance funds as stakeholder. Negotiations continued for some time but the parties remained unable to agree as to distribution. The stakeholder solicitor paid the funds into Court on 20 December 2012.

This proceeding commenced by originating motion filed by Mr Ristic on 16 August 2013. He has been self-represented throughout. I joined the defendant, Ms Maroti, on 17 September 2013 and the proceeding was subsequently listed for one day trial on 13 March 2014. She has been represented by the same firm of solicitors throughout, but her trial advocate changed after the first day of trial.

On 17 September 2013 the defendant flagged a proposed application to the Family Court for alteration of property interests under the Family Law Act1975 (Cth) (‘Family Law Act’). The defendant made such an application on 27 November 2013. In her application, the defendant seeks a declaration that a de facto relationship existed between her and the plaintiff from 2006 to 12 May 2011 and consequential orders for alteration of property interests.[1] On 17 December 2013 the defendant sought to stay Mr Ristic’s application until the hearing of her application in the Family Court. Her solicitor in the course of his submissions also made reference to a possible application in this Court for alteration of property interests under the Relationships Act 2008 (Vic) (‘Relationships Act’). No such application had been made to that date, and even on her account as to when the relationship had ended was already out of time.[2]
[1]Exhibit JEM-1 to the affidavit of James Edward McIntyre sworn 8 January 2014.
[2]By s 43 of the Relationships Act, an application for alteration of property interests arising from a domestic relationship must be made within two years after the end of the relationship.

I refused the defendant’s application for a stay of the application for payment out pending determination of her Family Court proceeding. I also observed that it was my intention to approach the application for payment out on the basis that the defendant would need to show an existing equitable interest in the funds, and that I would not entertain any submissions for an alteration of property interests so as to create an entitlement to the fund unless and until an application was made in this Court under the Relationships Act.[3]
[3]Transcript of 17 December 2013 at T14 lines 20-27 and T 15 lines 9-11.

Ms Maroti then sought transfer of Mr Ristic’s application to the Family Court. That application was refused by Justice Rush on 12 February 2014. In his reasons for judgment, Rush J noted that there was no material before him to explain why an application under the Relationships Act had not been issued and pursued given that such an application would allow for adjustment of property interests if the defendant’s evidence as to the length of the relationship was not accepted, and the Family Court would accordingly lack jurisdiction.[4] No such application was made by the defendant prior to the listed date of the trial of Mr Ristic’s application for payment out, which proceeded on 13 March 2014. The trial was part-heard on that day and was adjourned, initially to July which date was subsequently brought forward to 29 April 2014. By agreement between the parties, the defendant’s case was heard in its entirety on 13 March 2014 but the plaintiff’s case was adjourned after the evidence of the plaintiff and Ms Korondy, his current partner, for cross examination of other witnesses on the adjourned date.
[4]Ristic v Maroti, [2014] VSC 29 [21], [30]-[31].

On 10 April 2014, the defendant commenced a proceeding in this court by originating motion pursuant to the Relationships Act by which she seeks:

(a) leave to bring her proceeding out of time;

(b) a declaration pursuant to s 40 of that Act that she has an interest in the funds in Court; and

(c) the consequential adjustment in respect of the funds in her favour.

By oral application made on 29 April 2014, the defendant sought that her application under the Relationships Act (just filed) be heard and determined in conjunction with the balance of the plaintiff’s application. There were some advantages to the parties in that course, given the amount in issue and the prospect of now three sets of proceedings. However, the defendant’s application for alteration of property interests was made not only very late in the course of the dispute between the parties, but after the close of the defendant’s case. The plaintiff had cross examined the defendant on the basis that she was required to prove an equitable interest in the funds in Court, when had the relevant application been one for alteration of property interests other issues would also have been relevant. Further, the defendant’s application for alteration of property interests was substantially out of time, and the plaintiff opposed it on that basis alone. Ordinarily, that issue would have been determined before the substantive proceeding was allowed to continue. In the event, I refused the defendant’s application that her application for alteration of property interests be heard in conjunction with the balance of the application for payment out.[5]
[5]T 187-190.

Relevant legal principles

Thus it can be observed that in respect of the relatively modest sum of $136,000 in round terms, three distinct proceedings have now been commenced. I do not know the current state of play of the Family Court proceeding but the proceeding in this court under the Relationships Act has not progressed. It may be that in respect of both of those applications, the defendant is awaiting the outcome of this proceeding. Factual findings made in this proceeding may bind the parties in the other proceedings, although the legal principles to be applied are different. I will now set out the legal principles that I will apply to the determination of the competing applications for payment out, and briefly touch on how they differ from the legal principles that apply to the other proceedings. It is important to note that this brief discussion of the law that will apply to the proceedings for alteration of property interests is not intended to bind the judicial officer or officers who hear those proceedings if one or both continue.

Funds may be paid into Court by a mortgagee following mortgagee sale, where the persons claiming an interest in the balance funds do not agree as to their distribution, pursuant to s 77 of the Transfer of Land Act 1958 (Vic), or by a trustee pursuant to s 69 of the Trustee Act 1958 (Vic) (‘Trustee Act’). Here the funds were paid in by a stakeholder, and so s 69 of the Trustee Act applies. That section is a machinery provision, and does not in terms set out who may claim an interest in funds so paid in. According to basic principle, only a person who had an interest in the property which was the source of the funds may claim an interest in the funds. Thus, this proceeding concerns only existing legal and equitable interests in 14 Waranga Road, Bayswater at the time of its sale. The plaintiff was the sole registered proprietor of that property, which when sold generated these balance funds. He has the sole legal interest in the funds, and, subject to any equitable interests claimed, the whole of the equitable interest. The defendant was not a registered proprietor of the real estate. Accordingly, to claim any amount of the funds in Court, she must prove an equitable interest to that extent.

The legal representatives for the defendant accepted that this was the appropriate legal principle to apply. In their submissions, the defendant by virtue of her contributions to the relationship acquired an equitable interest in the property and thus in the funds in Court. I will discuss these principles further shortly.

Proceedings for alteration of property interest under either the Family Law Act or the Relationships Act are in a different category. In proceedings of that type, the applicant is not limited to existing property interests but can submit that existing property interests should be altered. Historically, application could only be made under the Family Law Act for alteration of property interests where the parties were or had been married. Principles were developed by case law to remedy what was perceived as injustice to a de facto partner who had made contributions to the property of the other partner, but was unable to claim an appropriate division of that property if not the legal owner of it. Later, provision was made in state legislation, initially in Victoria by Part IX of the Property Law Act 1958 (Vic), and subsequently in the Relationships Act, for an application for alteration of property interests in respect of domestic relationships where the parties had not been married.

In 2009, amendments commenced to the Family Law Act by virtue of which de facto property claims could be made in the Family Court. That Court acquired exclusive jurisdiction over such claims if certain preconditions were met. One of those preconditions is that application may only be made for alteration of property interests in respect of a de facto relationship under the Family Law Act where the relationship ended on or after 1 March 2009. If the relationship ended before that time, the Supreme Court retains jurisdiction under the Relationships Act.

Key matters in dispute between the parties in the proceeding before me are the periods of cohabitation and proper characterisation of their relationship. They agree that they lived together for a period of five months between July and November 2006, and three weeks in February/March 2008. The plaintiff contends that they were not in a de facto relationship for any period, even during that time. The defendant contends that they were de facto partners, and that relationship continued until May 2011. Even if cohabitation is not a necessary prerequisite to a determination under the Family Law Act that persons are in a de facto relationship,[6] it is an important indicator.[7] If Mr Ristic is correct as to the date of last cohabitation, then it would appear likely that Ms Maroti’s application in the Family Court will fail and any application for alteration of property interests must be heard in this Court. If Ms Maroti is correct, then any application for alteration of property interests must be heard under the Family Law Act.
[6]Counsel for the defendant contends that a shared residence is not essential.
[7]See the definition of ‘de facto relationship’ in s 4AA of the Family Law Act.

In at least one further respect, facts found in this proceeding may have relevance to the proceedings commenced for alteration of property interests by the defendant in the Family Court and in this Court. Under both the Family Law Act and the Relationships Act, an order for alteration of property interests on the basis of contribution is normally dependent on the relationship having lasted at least two years.[8] In this proceeding the parties disagree as to the length of their relationship. As indicated, the defendant contends it did not end until May 2011 whereas the plaintiff contends that it ended in 2006.
[8]Family Law Act s 90FB; Relationships Act s 42(2)(c).

The defendant relies on the principles of constructive trust applicable to the breakdown of de facto relationships as established by the High Court in Muschinski v Dodds[9] and Baumgartner v Baumgartner[10] (‘Baumgartner’) and applied in subsequent cases. In particular, the defendant relies on Parij v Parij[11] (‘Parij’) a decision of the Full Supreme Court of South Australia. Muschinski v Dodds concerned the division of land between de facto partners on the breakdown of their relationship in circumstances where the land had been acquired both for commercial purposes and for the purpose of a joint home. The Court was divided in the approach it took, but the approach of Deane J was subsequently adopted in Baumgartner. Deane J held in Muschinski v Dodds that a constructive trust may arise irrespective of intention, and is a remedial institution ‘to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle.’[12] Deane J applied the equitable principle that restores to a party contributions to a joint endeavour which has failed. He held that the underlying principle was that a party should not be permitted to retain the benefit of the property to the extent that it would be unconscionable for him to do so.[13]
[9](1985) 160 CLR 583.
[10](1987) 164 CLR 137.
[11](1997) 72 SASR 153
[12]Muschinski v Dodds (1985) 160 CLR 583 per Deane J at 614.
[13]Ibid, at 620.

In Baumgarnter, the majority (Mason CJ, Wilson and Deane JJ) applied the reasoning of Deane J to the division of property on the breakdown of a de facto relationship of four years. The Court held that when determining the respective contributions of the parties, regard should be had to both direct financial contribution and to indirect contributions.

In Parij, Debelle J, with whom Cox and Millhouse JJ agreed, held (in relation to Muschinski v Dodds and Baumgartner) that:

These decisions establish in unambiguous terms that, when determining whether it is unconscionable for one party to a de facto relationship to retain the sole beneficial ownership of property acquired in the course of the relationship, regard will be had to the manner in which the parties have conducted their relationship and the contributions each have made. When assessing their respective contributions, regard will be had to non-financial contributions as well as to financial contributions. The latter proposition is clear from the references to the "practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, homemaking and family care" in Muschinski v Dodds at 622 and in the reference to "contributions either financially or in kind" in Baumgartner at 150.[14]

[14](1997) 72 SASR 153, at 163.

In the immediately following portion of his judgment, Debelle J referred to the significance of non-financial contributions in the alternation of property interests pursuant to s 79 of the Family Law Act, as identified in the High Court decision Mallet v Mallet[15]. Section 79 of course expressly requires such contributions to be taken into account. Debelle J then noted the approval given to the significance of non-financial contributions in the subsequent High Court decision of Singer v Berghouse [No 2],[16] which concerned testator’s family maintenance. Debelle J reasoned that the reference to ‘marriage like relationships’ in Singer v Berghouse, in approving Mallet v Mallet, affirmed that non-financial contributions, such as by way of homemaking or parenting, could be taken into account in the determination of property interests following the breakdown of a de facto relationship as well.
[15](1984) 156 CLR 605 at 623 per Mason J and the cases there cited.
[16]1994) 181 CLR 201 at 212-213.

These principles have also been applied or referred to in Victorian cases. In Read v Nicholls[17] Nettle J expressly approved Parij. He applied the principles originating in Muschinski v Dodds and Baumgarnter and further developed in Parij to hold that a de facto partner of many years standing should be held to have an interest in the property of her now deceased partner entirely on the basis of non-financial contributions of support and homemaking.[18] The Victorian Court of Appeal in National Australia Bank Ltd v Maher and anor[19]has also noted the Muschinski v Dodds and Baumgartner principles, although they were held not to apply on the facts of that case, as the relationship had not broken down.
[17][2004] VSC 66
[18]Ibid, at [60]-[63].
[19][1995] 1 VR 318,

In this case, the defendant did not make any financial contribution to the acquisition of the property in question, 14 Waranga Road, Bayswater. The plaintiff and his former wife had purchased the property as an investment property some years before. Nor does she assert any direct financial contribution to the payment of the mortgage over the property or otherwise to its maintenance. She asserts that she made financial and non-financial contributions to the relationship as a whole, by virtue of which the plaintiff was able to retain his employment and so assisted in paying the mortgage and thereby retaining the property.[20] The particular contributions on which she relies, in addition to housekeeping, are payments of cash to the plaintiff totalling about $14,000, and driving the plaintiff, who was employed as a travelling salesman, after he lost his licence at Easter 2009 until when she contends the relationship ended in May 2011.[21]
[20]T 9 line 29 – T 10 line 15.
[21]T 201-202.

I will now apply these principles to the facts as I find them to be on the evidence.

Findings of facts

There are three critical elements to the defendant’s case that the plaintiff should be found to hold 50% of the balance of the sale proceeds on constructive trust for her: the period of time for which the parties cohabited; the nature of the relationship; and the contributions the defendant claims she made to that relationship. The parties are in dispute in relation to each of these matters. I will deal with them in turn, after first setting out the relevant facts in relation to the subject property, 14 Waranga Road, Bayswater.

14 Waranga Road, Bayswater

The historical title search[22] shows that this property was first acquired in 1999 by the plaintiff and his then wife, as joint proprietors. It was an investment property in addition to their matrimonial home. They acquired it subject to a mortgage to the Commonwealth Bank. There is no evidence of its value in 1999, or the extent of their equity in it. In January 2005 it was transferred into the sole name of the plaintiff’s then wife, Matilda Ristic, still subject to a mortgage to the Commonwealth Bank. There is no evidence as to the reasons for this transfer. On 3 July 2006 it was transferred from Matilda Ristic to the plaintiff, subject to a mortgage to the Commonwealth Bank. A subsequent second mortgage to GE Personal Finance Pty Ltd (‘GE’) was registered on 10 September 2007. There were no other encumbrances on the title other than the caveat lodged by the defendant on 19 May 2011 at the time of its eventual sale in September 2011.
[22]Exhibit A.

Ms Ristic’s evidence, which I accept, is that the mortgage at the time of the separation between her and the plaintiff was about $230,000.[23] As a result of the property settlement between them their matrimonial home at Ferntree Gully was transferred to her, and the investment property at 14 Waranga Road, Bayswater to the plaintiff, together with the sum of $160,000 which she paid to him. The only evidence as to the value of 14 Waranga Road at that time is a rates notice[24], which shows its capital improved value as at 1 July 2006 as $257,000. The combination of all this evidence would suggest that at the time of the separation of the plaintiff and his wife, and commencement of the cohabitation of the plaintiff and defendant, the plaintiff had the equivalent by way of equity in the property and the cash transfer of $187,000.
[23]T 162, 165.
[24]Exhibit 6.

The only evidence from the plaintiff in relation to the property is in his first affidavit. He exhibits the settlement statement from the sale, showing that the payout figure to the Commonwealth Bank was $209,964.96, and to GE $24,306.16. The sale price in 2011 was $387,000. If the market value in 2006 was the capital improved value of $257,000, then the property had improved substantially in value, but the plaintiff had taken out a second mortgage and notwithstanding the increase in value of the property, the remaining equity was only $137,338.88 i.e. substantially less than his assets at the start of the relationship with the defendant.

The difficulty with drawing any conclusions from this analysis is that all the evidence as to the plaintiff’s financial situation arising from the property settlement with his wife was adduced in cross examination of her, and none of it had been put to the plaintiff himself in cross examination. At least in so far as the amount owing on the Commonwealth Bank mortgage at the time of the separation, it conflicts with his evidence in chief that the mortgage was then only $135,000. No questions at all were put to the plaintiff in cross examination concerning his equity in the property. I refused an application to recall him for further cross examination and to allow tender of further evidence in relation to the value of the property.[25]
[25]T 177-178.

Period of cohabitation

The parties agree that they commenced their relationship as an affair, while each was married. Mr Ristic in his own evidence denied that the affair started in 2005[26], as Ms Maroti contends, but I find that it did so on the basis of the evidence of the plaintiff’s former wife, Ms Matilda Ristic. She confirms the account given in a police report that she and the plaintiff had an argument on 21 December 2005 about the affair which resulted in her calling the police. She subsequently dropped all charges.[27] Ms Ristic’s evidence is that she and the plaintiff separated under the one roof on 5 February 2006 and, after they arrived at a property settlement, the plaintiff moved out of the former matrimonial home at the end of July 2006.[28] The effect of the property settlement was that she retained the matrimonial home, and the plaintiff their former investment property 14 Waranga Road, Bayswater. She also paid the plaintiff the sum of $160,000.[29]
[26]T 34.
[27]T 158-T 159, and Exhibit 4.
[28]T 160-161.
[29]T 162, 165.

The plaintiff and defendant agree that after he left his former matrimonial home, the plaintiff moved into Ms Maroti’s home at 12 Orlando Drive, Roxburgh Park and they lived there together from July to November 2006, a period of five months. They also agree that the plaintiff moved out of the defendant’s home at Roxburgh Park in November 2006 to a property he rented at Scoresby. The defendant contends that she and the plaintiff lived together again on three further occasions- from October/November 2007 to 3 March 2008 at the Roxburgh Park address; for a period in 2009 at the defendant’s then home in Rye; and for a period in 2010 to 12 May 2011 at the defendant’s then home at Kealba. The plaintiff denies this, save for a period of three weeks in February/March 2008 when he agrees that he moved back into the defendant’s Roxburgh Park home.

The plaintiff’s evidence is that he lived at the rented Scoresby address until that second brief period of cohabitation, and then, after moving out again from Roxburgh Park, moved into the home of his sister Ruzica Mate at Knoxfield for a few months. In June 2008 he moved into 14 Waranga Road, Bayswater (the subject property) which until that time had been rented out. He continued living there until August 2011 when he moved in with his current partner, Ms Margaret Korondy, in a rented property at Narre Warren. He agreed in cross examination that he spent time at the Roxburgh Park house in 2007 after moving out in November 2006, but says that he did not live there in that year.[30] He agreed that he and the defendant went on holidays together to Sorrento in 2007, that they went to Albury together on occasion, and that they both attended various social functions until 30 April 2011, but was adamant that they did not live together again as a de facto couple.
[30]T 36 line 9-T 37 line 23.

For the following reasons, I accept the plaintiff’s evidence. I do not consider that the defendant has proved that she and the plaintiff lived together as a couple after November 2006, with the exception of a further three weeks in February/March 2008. I find that the parties continued a personal relationship when not cohabiting, which included spending time at each other’s houses, but they retained separate residences. The evidence does not allow me to determine how much time they spent at each other’s homes together, as opposed to separately from each other at his or her own home. I also find that they shared accommodation on a holiday to Sorrento in 2007 and on brief trips to Albury, the last documented one of which was 16 December 2010. The last occasion which they spent overnight together at the same home that is clearly established on the evidence was 30 April 2011, when the defendant stayed at the plaintiff’s home with her daughter following a family event.

The first difficulty with the defendant’s case that she and the plaintiff lived together on three subsequent occasions after November 2006 is that her own evidence on the issue is very vague and general, and although not agreed by the plaintiff was not all put to him squarely in cross examination. The defendant’s evidence is principally to be found in her first affidavit, sworn 16 October 2013. She deposes that the plaintiff moved back into her Roxburgh Park home ‘sometime during October or November 2007’ and stayed there until 3 March 2008.[31] She gives a precise date and an account as to why he moved out in March 2008, but not the date or circumstances of his moving in in October or November 2007.
[31]Affidavit of Valeria Maroti sworn 16 October 2013 [25].

The plaintiff agrees that he moved back into Roxburgh Park, but says that it was only for three weeks and was in February 2008.[32] In other words, he agrees with the end date she gives, but not the start.
[32]Affidavit of Steve Ristic In Response to Defendants Affidavit sworn 29 October 2013 [25].

The only corroboration of this period of living together is to be found in the affidavit of her daughter, Eszter Maroti, who deposes that ‘I remember living in the house in Orlando Drive, Roxburgh Park with both my mother and the Plaintiff when I was in Grade 6’.[33] It is to be observed that Eszter does not there say what year this was, but by comparison with paragraph two of her affidavit it was 2007, because in that paragraph she says she was in Grade 5 in 2006. However, paragraph two itself does not sit with the other evidence, because Eszter there says that when she first learnt about her mother’s relationship with the plaintiff she was living with her mother and her father, and she says this was late 2006. The defendant’s husband or former husband, Michael Maroti, deposes that he and the defendant separated in 2005 and this was not the subject of any cross examination or dispute.[34] Further, it is agreed that the defendant was no longer living with her husband by July 2006 at the latest, because she was living with the plaintiff between July and November 2006. Accordingly, the date given in paragraph two of Eszter’s affidavit must be wrong. It follows that although the plaintiff did not put this to Eszter in cross examination, there must be some doubt about whether or not Ezster was referring to the agreed period of cohabitation in 2006, or a later period in 2007, particularly as she does not refer to two periods.
[33]Affidavit of Eszter Maroti sworn 24 February 2014, [4].
[34]Affidavit of Michael Maroti sworn 8 November 2013 [2].

Nor did the defendant’s then legal representative Mr McIntyre put clearly to the plaintiff in cross examination the contention that he lived with the defendant again in 2007 to March 2008. When Mr McIntyre first put this to the plaintiff, it was unclear whether or not he was referring to 2006 or 2007, although the plaintiff probably understood it as 2007, because he said he spent time there, but was not living there.[35] When Mr McIntyre next put this to the plaintiff, his question was whether or not the plaintiff moved out of, not into, Roxburgh Park in October or November 2007. In any event, the plaintiff denied it.[36]
[35]T 36.
[36]T 47.

For these reasons, I find that the parties lived together again at Roxburgh Park, but only for three weeks in February/March 2008.

The defendant’s case is that the plaintiff next moved back into her house, then at Rye, at an unspecified time. She says that he moved out again ‘during mid to late 2009’.[37] She entirely fails to say when he moved in, even as to year, although the time sequence in the affidavit suggests that it was after Easter 2009. Counsel for the defendant in closing submissions conceded that the defendant’s evidence in this regard was less than perfect, but invited me to infer that the plaintiff moved into the defendant’s then home at Rye sometime after Easter 2009 when he agrees[38] he lost his licence after refusing a breath test when the parties were on a trip to Cobram.
[37]Affidavit of Valeria Maroti sworn 16 October 2013 at [31].
[38]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [30].

The defendant’s contention that the plaintiff lived with her at Rye after Easter 2009 for a period was not put to the plaintiff in cross examination, although it is inconsistent with the plaintiff’s evidence in his affidavit in reply.[39] Ordinarily, this would mean that I could not consider the defendant’s contention proved because the plaintiff had not had an opportunity to comment on it. On the other hand, it is supported to some degree by the evidence from Eszter that the plaintiff spent time at the house in Rye in 2009 and she also stayed in that year (presumably with her mother) at his house in Bayswater.[40] It is also supported by the evidence of the defendant’s son, Gabor Maroti, that he would see different cars at the Rye house and that sometime in 2009, he says probably March, he drove to the Rye house to pick up Eszter and found the plaintiff there.[41] The plaintiff did not dispute the correctness of Eszter’s evidence in this regard in his cross examination of her, and did not seek to cross examine Gabor at all.
[39]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [31].
[40]Affidavit of Eszter Maroti sworn 24 February 2014 [5].
[41]Affidavit of Gabor Maroti sworn 24 February 2014 [3]-[6]. I do not rely on the hearsay evidence as to what the defendant told Gabor about the cars.

The fourth occasion on which the defendant contends that she and the plaintiff lived together is for a period in 2010 until around 12 May 2011.[42] Again, she does not give the date on which he is said to have moved in, only that it was shortly after he was caught drink driving again for a second time without a licence. The defendant was living at Kealba at this time. The defendant’s contention was put to the plaintiff in cross examination and he denied it.[43] He had also denied it in his affidavit in reply.[44] It is, however, supported to some degree by Eszter’s evidence. In her affidavit, she deposes that she lived with both the plaintiff and her mother at Kealba. She qualifies this by saying that the plaintiff had his own house, but ‘stayed at our house almost every day’ and that if he was not at her mother’s house, they stayed with him at his house.[45] The plaintiff did not dispute the accuracy of this evidence in cross examination of Eszter, and accordingly I accept it.
[42]Affidavit of Valeria Maroti sworn 16 October 2013 [34]-[35].
[43]T 50-51.
[44]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 at [34]-[35].
[45]Affidavit of Eszter Maroti sworn 24 February 2014 at [5].

The plaintiff’s account, that he moved into his own rented home at Scoresby and lived there until he moved back briefly into the defendant’s Roxburgh Park home, thence into the home of his sister Ruzica in March 2008 and thereafter into Waranga Road, is corroborated by his two sisters Ruzica Mate and Vera Zdimirovic[46] and by a water bill directed to him at the Scoresby address dated 15 January 2007. In particular, Ms Zdimirovic volunteered in cross examination that she and her sister would on occasion visit the plaintiff without notice at both his rented property and Waranga Road and found him there. This evidence of course is not necessarily inconsistent with the plaintiff also spending time at the defendant’s homes.
[46]Affidavit of Ruzica Mate sworn 14 August 2013 and cross examination at T 134-136 and affidavit of Vera Zdimirovic sworn 13 August 2013 and cross examination at T 141-142 (clarified in re-examination at T 145) and T 144, T 146-147.

The plaintiff’s case is also supported in respect of the period after October 2010 by Ms Korondy, his current partner. She deposes that she first started communicating with the plaintiff in October 2010 and thereafter she visited him at his home in Bayswater at least once a week and would ‘often stay a night or two’.[47] It was not put to her in cross examination that this was incorrect.
[47]Affidavit of Margaret Korondy sworn 11 March 2014 [3].

The defendant’s case that she and the plaintiff lived together for periods in 2009 and 2010 is linked to her evidence that she would drive him around after he lost his licence. The plaintiff concedes that the defendant drove his company car on some trips to Albury on which she accompanied him, but says he principally managed without a licence by limiting his driving, driving himself unlicensed, or being driven by his singer when going to gigs (the plaintiff is also a musician).

There is some inferential support for the plaintiff’s account in the evidence of Joseph Toth, to the effect that he has been a long-time friend of the plaintiff, would see the plaintiff and his former wife socially, and now sees the plaintiff and his current partner socially, but did not see the plaintiff and the defendant socialising together.[48] Further, Mr Toth agreed that he was aware that the plaintiff had lost his driving licence, but said in re-examination that he had not seen the defendant driving the plaintiff to gigs or anywhere, but had seen the plaintiff’s singer Agnes drive him to gigs.[49] The defendant also obtained an affidavit from a friend, Eliane Sordi, but that affidavit is principally hearsay evidence as to what she was told by the defendant. I disregard that hearsay evidence. Ms Sordi gives no direct evidence on the issue as to whether or not the parties were living together.
[48]Affidavit of Joseph Toth sworn 3 March 2014 and cross examination T 152-154.
[49]T 156-157.

Having regard to the whole of the evidence, I conclude that the only times the parties lived together in the one home, without retaining separate homes, was July to November 2006 and for three weeks in February/March 2008.

I find on the basis of his own evidence that the plaintiff spent time at the defendant’s home at Roxburgh Park in 2007, in between the two periods of cohabitation. Further, I find that the plaintiff did spend time at the defendant’s Rye house, and the defendant at his house in Bayswater, in 2009, but they retained separate residences. I cannot on the evidence make any finding as to how much time they spent at each other’s houses in 2009, nor when this period began.

I find on the basis of Eszter’s evidence that for a period of unknown commencement and duration in 2010 the plaintiff and defendant spent most of their time living at one another’s home, but retained separate residences. I do not, however, accept the defendant’s evidence that this continued until May 2011 because Eszter’s evidence is limited to 2010. Further, on the basis of the evidence of Margaret Korondy, I find that it is more probable than not that the plaintiff did not spend most of his time with the defendant at her home, or she at his, from October 2010. Nevertheless, I find that the plaintiff and defendant remained at least friends until 30 April 2011 because they agree that on that date the defendant and her daughter went to the 60^th birthday party of Ruzica at a hall in Wantirna South, and the defendant and her daughter stayed at the plaintiff’s home that night.[50]
[50]Affidavit of Eszter Maroti sworn 24 February 2014 [7], accepted as correct by the plaintiff at T 60, by Ruzica at T 138 and by Vera at T 143.

Nature of the relationship

The plaintiff has sought to describe his relationship with the defendant after November 2006 as being that of mere acquaintances.[51] I do not accept this description and consider that it minimises the significance of the relationship for both parties. My reasons are as follows.
[51]T 51 lines 28-29.

Social occasions and trips

First, the plaintiff agrees that he and Ms Maroti continued to socialise together at least on some occasions, the last of which established in the evidence is the birthday party identified above on 30 April 2011. In addition to that party, the plaintiff agreed in cross examination that he invited the defendant to his 50^th birthday party on 1 January 2007[52], they went on holidays together to Sorrento in 2007[53], the photographs of them together in affectionate poses that the defendant exhibited to her affidavit of 16 October 2013 were taken in 2009[54], and they travelled to Cobram or Albury together on occasion, including the occasion in 2009 when he lost his licence for refusing a random breath test.[55]
[52]T 38.
[53]T 37.
[54]T 50.
[55]T 48- 49.

Further, the defendant has exhibited to her affidavit of 16 October 2013 a number of hotel receipts for overnight accommodation in Albury in support of her contention that she drove the plaintiff in his work car there. The dates of these are 13 March 2009 (for two nights, and in the name of the defendant); and 18 June 2009, 29 July 2010 and 16 December 2010 (each of which are for one night and in the name of the plaintiff and his employer). The plaintiff agrees that the defendant often accompanied him on his regular work trips to Albury. He did not dispute the veracity of these receipts, although he queried how the defendant obtained those in his name.[56] He did not, however, suggest to the defendant in his cross examination that she did not accompany him on any of these trips, or seek any explanation for her being able to obtain the receipts other than that they had travelled together and stayed the night together on these occasions. I find that they did so.
[56]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [32].

Emotional engagement

Secondly, the relationship, on the evidence, involved intense emotion and volatility. The defendant says that they would often argue, because she felt that the plaintiff was trying to keep their relationship a secret.[57] This is consistent with the plaintiff’s case that they did not appear in public as a couple. I will return to this issue later. Ms Maroti’s evidence is that Mr Ristic was on occasion violent to her.[58] The plaintiff denied these allegations in his affidavit in reply, saying that any violence was instigated by the defendant and he only defended himself.[59] He did not, however, directly put his denials to the defendant in cross examination of her. Nor were all of the defendant’s allegations of violence put to the plaintiff in cross examination, although the plaintiff did deny those that were. [60]
[57]Affidavit of Valeria Maroti sworn 16 October 201 [9]
[58]Ibid, at [14], [21], [24], [26].
[59]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [14], [21], [24] and [26].
[60]T 47.

Allegations of physical violence are serious, but they were not fully tested by cross examination. Accordingly, I consider that the safer approach is to find proved only those allegations that are supported by other evidence. Neither party has called any medical evidence to support their allegations. Both have relied on police reports to some extent. Both have adduced evidence from friends and family members in relation to the nature of their relationship, but that evidence is limited in relation to direct observation of physical interactions between them. I will now consider that corroborative evidence.

The plaintiff’s account is that it was the defendant who on occasion caused property damage and acted violently towards him. He has direct corroborative evidence of physical confrontations between them from a friend, Ms Katherine Osmond[61], and from his sister, Ms Mate. Ms Osmond’s evidence relates to an incident which the defendant also recounts.[62] Ms Osmond dates the incident as March 2007 but conceded in cross examination that it could have been late 2006, as it was dated by the defendant, and I consider that to be more likely. Ms Osmond’s evidence, maintained in cross examination, is that on this occasion she was at the plaintiff’s home at Scoresby in the evening when the defendant suddenly appeared, having broken in through the laundry door. Ms Osmond says there was a heated exchange of words between the plaintiff and the defendant, and she (Ms Osmond) left. She heard shouting, glass being broken and the breaking of a window. She then called the police. The defendant deposes that the plaintiff assaulted her in this incident[63]. Ms Osmond was not asked if this occurred in her presence, and nor was it put to the plaintiff in cross examination. If an assault occurred, I find that it was in response to an emotional scene generated by the defendant.
[61]Affidavit of Katharine Osmond, sworn 14 August 2013 and cross examination at T 128-130.
[62]Affidavit of Valeria Maroti sworn 16 October 2013 [18]-[19].
[63]Affidavit of Valeria Maroti sworn 16 October 2013 [18].

Ms Mate’s evidence relates to a visit by the defendant to her home while the plaintiff was living there in March – June 2008. Again, the defendant also recounts this incident. The defendant deposes that the plaintiff became aggressive in a conversation in his room, spat in her eyes and pushed her out of his room.[64] This incident was put to the plaintiff in cross examination and he said that it was only true in that the defendant ‘gatecrashed a dinner party at my sister’s place and physically attacked me. The rest is all lies.’[65] Ms Mate’s evidence, tested under cross-examination, is that she saw the plaintiff push the defendant out of his room, but this was because the defendant did not want to leave. She did not see the plaintiff spit at the defendant. She deposes in her affidavit, and affirmed under cross examination, that the defendant was ‘kicking and screaming’, ‘had to be restrained’ and was ‘physically removed’ from the house by her son.[66]
[64]Ibid, [26].
[65]T 47 lines 15-20.
[66]Affidavit of Ruzica Mate sworn 14 August 2013 [4] and cross examination T 136-137.

On the basis of this corroborative evidence, I find that it was the defendant who instigated these two incidents, and occasioned such upset in the late 2006 incident that the police were called, and in the 2008 incident that her son had to physically remove her.

The defendant has not adduced any direct corroborative evidence of physical violence directed to her by the plaintiff. Her friend, Eliane Sordi, deposes that on one occasion in April or May 2009 she went to visit the defendant at Rye and the plaintiff was also there, and he called the defendant derogatory names. Ms Sordi says he had been drinking.[67] The plaintiff did not cross examine Ms Sordi and so I find this evidence proved. The defendant’s her former husband, Michael Maroti, deposes that he saw bruises on the defendant’s arms and body on occasions.[68] There is, however, no other evidence to link these bruises to violence by the plaintiff other than the general statements by the defendant, and there was no exploration of this evidence in cross examination. Accordingly, while I accept that the defendant was bruised, I cannot find that the plaintiff caused it. The defendant’s son, Gabor, deposes that in March 2009 he went to Rye to collect his sister, the plaintiff was there, in a rage and intoxicated, and there was a violent incident between them.[69] Again, the plaintiff did not cross examine Gabor and so I find this evidence proved. There is other evidence from persons other than the parties that the plaintiff on occasion drank to excess, in particular the evidence of his former wife in relation to their argument in December 2005 about his affair with the defendant, and the admitted fact of his refusing a breath test. None of this evidence, however, corroborates from direct observation the defendant’s case that the plaintiff assaulted her. For those reasons, I do not find that proved, except in relation and to the extent set out above in relation to the late 2006 incident at Scoresby and the incident at Ruzica’s home in 2008.
[67]Affidavit of Eliane Sordi sworn 25 February 2014 [15].
[68]Affidavit of Michael Maroti sworn 8 November 2013 [8].
[69]Affidavit of Gabor Maroti sworn 24 February 2014 [6].

There is further credible evidence that both parties were intensely emotionally engaged in the relationship at one time, and, in the case of the defendant, may remain so. The defendant adduced a police record to the effect that police were called by a 000 call made by the plaintiff to his Scoresby home on 13 April 2007. The account given by an attending officer is that when police arrived they found the plaintiff lying on the lounge room floor crying uncontrollably and hyperventilating, saying that he wanted to kill himself. He reported that he had recently had an argument with the defendant, described in the report as ‘his partner’. He was taken by ambulance to Maroondah Psychiatric Hospital.[70] In cross-examination, the plaintiff accepted that the event had occurred, saying he was ‘going through a depression at the time’, but denied that he described the defendant as his partner.[71] Whether or not that was the precise descriptor that the plaintiff used, there is no other source suggested for reference in the police report to an argument with the defendant as being a cause of his distress. I find that it was.
[70]Exhibit 1.
[71]T 38-39.

The defendant was also admitted to hospital as a result of distress over the relationship. She says that she overdosed on her medication in March 2008, when it is agreed the plaintiff moved out of Roxburgh Park for the second time.[72] The plaintiff has denied other aspects of this part of the defendant’s evidence, but not her evidence that he moved out again, or that she was hospitalised as a result. I find it proved.
[72]Affidavit of Valeria Maroti sworn 16 October 2013 [25].

The defendant adduced a further police report dated 23 June 2011 prepared by a Senior Constable Apps relating to a complaint by the plaintiff of harassment by the defendant by way of excessive telephone calls and texting, refusing to leave his home, and noting down the registration number of his partner’s vehicle.[73] The report states that the plaintiff and defendant had been in an ‘on-off relationship…over the last few years’ and that they ‘broke up in mid-March this year’. The conduct complained of is said to have occurred in the period 16 March 2011 to 23 June 2011.
[73]Exhibit 2.

The defendant adduced this report in cross-examination of the plaintiff in relation to the length of the relationship there stated. The plaintiff also relies on it, because it corroborates his evidence that the defendant was stalking and harassing him.[74] In particular, Senior Constable Apps obtained an intervention order for the protection of the plaintiff as against the defendant on 12 July 2011.[75]
[74]Affidavit of Steve Ristic sworn 14 August 2013 [11]-[17].
[75]Ibid, [15] and Exhibit JM 14.

In my view, the police involvement in April 2007, the distress causing each party to be admitted to hospital in 2007 and 2008 respectively, and police attendance again at least in June and July 2011 confirms the other evidence that an emotional relationship continued between the parties beyond November 2006, and that the relationship was volatile and not continuous. The defendant’s case is that the relationship continued until 12 May 2011. There is no explanation in her evidence for the precision of this date. I cannot on the evidence make any exact finding as to when the relationship came to an end, save that the last occasion on which it is proved that the parties socialised together by agreement was on 30 April 2011, when the defendant and her daughter stayed at the plaintiff’s home at Bayswater following his sister’s 60^th birthday party. I infer that they were at least still on cordial terms at that time, but given that the plaintiff had commenced his current relationship with Ms Korondy in October 2010 it may be that his emotional engagement with the defendant had ended.

The final factor I take into account in concluding that the relationship was an intense emotional one was the nature of the defendant’s oral evidence. She became extremely distressed in re-examination[76] and it was clear that emotional distress arising from the relationship continues for her.
[76]T 91.

Findings as to the length of the relationship

On the basis of this evidence, I find that what started as an affair, developed to a period of five months living together in 2006 and a further short period of three weeks in 2008. The parties had separate residences in 2007 in between these two periods of cohabitation, but an emotional relationship between them continued, in which the plaintiff spent time at the defendant’s home, and they went on a holiday together. There is no evidence as to the nature of the relationship, if any, between the parties in 2008 after the incident at Ruzica’s house. Some feelings between them presumably continued, however, because in 2009 and 2010 they went on trips to Albury together and stayed at each other’s houses. Accordingly, I find that a personal relationship continued between them after March 2008, although possibly not continuously, which was at least an affectionate, and probably an intimate, friendship. This relationship continued until at least December 2010, which is the date of the last overnight stay at Albury in evidence. Cordial relations continued until 30 April 2011.

The defendant contends that the relationship ended on 12 May 2011 when the plaintiff moved out of her home. The plaintiff denies this. They agree, however, that the defendant rang the plaintiff’s employer on 30 May 2011 and had a discussion with the employer to the effect that the plaintiff, employed as a travelling salesman, had lost his licence.[77] The plaintiff was dismissed shortly thereafter. As set out earlier, he called the police in late June 2011 to complain of harassment by the defendant. I find that a consensual relationship between them ended entirely after 30 April 2011 and no later than 30 May 2011 i.e at some point in May 2011.
[77]Affidavit of Steve Ristic sworn 14 August 2013 [19] and affidavit of Valeria Maroti sworn 16 October 2013 [38].

Presentation to the outside world

There is no dispute that the plaintiff and defendant did not present themselves socially to the outside world as a couple, even during the period they lived together in 2006. They both depose to that in their affidavits, as do the plaintiff’s sisters and the defendant’s friend Eliane Sordi. The defendant says that she was upset about this, and her counsel sought to imply in cross examination of the plaintiff’s sister Ruzica that it was because the plaintiff did not want his former wife and the defendant to be in the same room.[78] Ms Mate denied that this was the reason. She said that there were occasions when the defendant was present at social events where the plaintiff was playing as a musician, but she came with her own friends and the plaintiff did not go and sit at her table when he was not playing.[79]
[78]At T 133.
[79]T 134.

I find that the plaintiff did not present the defendant to his family as his partner, and neither presented themselves to their broader community as a couple. In relation to presentation to their community, I rely in particular on the evidence of their respective friends, Eliane Sordi (in the defendant’s case)[80] and Joseph Toth (in the plaintiff’s case), to this effect. Mr Toth deposes that by contrast the plaintiff and his wife presented publicly as a couple, as do the plaintiff and his current partner Ms Korondy.[81]
[80]Affidavit of Eliane Sordi sworn 25 February 2014 [6]-[8].
[81]Affidavit of Joseph Toth sworn 3 March 2014 at [5]-[6] and cross examination at T 152,155.

The defendant exhibits a copy of a Medibank Private insurance certificate, current as at 13 July 2010, which is in her name but lists the membership type as ‘couple’ commencing 12 July 2010 and the plaintiff as the other person covered.[82] This is evidence of presentation to officialdom of the parties as a couple. The plaintiff deposes in his responsive affidavit that he had never seen the certificate before, and cannot recall such cover or making a claim on it.[83] The issue was not traversed in cross-examination of either party. The plaintiff herself says in her affidavit that ‘I named the Plaintiff as another person covered by the membership’[84] (emphasis added) and does not give any further evidence to the effect that this was a joint decision. Accordingly, I do not find that this cover represents a joint presentation of the parties as a couple, and find that it evidences only a presentation to that effect by the defendant.
[82]VM-5 to the affidavit of Valeria Maroti sworn 24 February 2014.
[83]Affidavit of Steve Ristic In Response to Submissions made by Defendant sworn 11 March 2014 at page 8, [6].
[84]Affidavit of Valeria Maroti sworn 24 February 2014 at [6].

Not sexually exclusive

The defendant agreed that she continued to correspond with other men on dating sites when she and the plaintiff were living together in the period July to November 2006, and that she had relationships with other men thereafter.[85] She said that these relationships were brief, but included staying overnight at the home of one man in late 2006/early 2007; another man Wayne staying overnight at her home in Rye during what she described as a ‘very short’ relationship; and a relationship with a third man Dominic after she moved to Kealba, which included him staying at her place overnight, and going out with his family on four occasions at the end of 2010. Eszter in cross examination confirmed that Wayne and Dominic came to the Rye and Kealba homes in 2009 and 2010 respectively.[86]
[85]T 76-78.
[86]T 93-94.

In respect of the plaintiff, I have found above that he stayed overnight with the defendant as late as December 2010 at Albury. As their relationship had commenced as a sexual one, I find that in all probability it continued to be such whenever they shared a room. Ms Korondy’s evidence is that she started to stay at the plaintiff’s home from October 2010. There is no specific evidence as to the nature of their relationship at this time, although the clear inference is that it was at least a romantic one. I find that throughout the relationship between the plaintiff and the defendant it was not sexually exclusive from the defendant’s perspective, and at least by October 2010 from the plaintiff’s.

Financial arrangements

The plaintiff says that he shared all expenses with the defendant while living with her between July –November 2006, and in addition bought furniture and a piano for the defendant’s daughter.[87] The defendant agrees that he bought one item of furniture and made a contribution towards the piano, but denies that they shared household and living expenses. She contends that she paid of all such expenses and the plaintiff borrowed money from her constantly.[88] There is also a dispute as to whether or not the plaintiff repaid an initial loan of $3000.
[87]Affidavit of Steve Ristic sworn 14 August 2013 [4].
[88]Affidavit of Valeria Maroti sworn 16 October 2013 [11].

The parties did not cross examine each other about these competing contentions and nor did either provide any detail of their respective assertions, or any corroboration. Accordingly, I can make no findings as to who paid household expenses during this time. It is apparent from the bank statements that each has exhibited that they retained separate bank accounts, even when living together in 2006. They were each employed, the plaintiff as a travelling salesman, the defendant in her various businesses. It is the defendant who seeks to prove a de facto relationship such as to create a constructive trust in the plaintiff’s property but there is no contention in her case of pooled funds, save in respect of specific withdrawals of cash which the defendant says she made and gave to the plaintiff. I will discuss those further shortly. Given that the parties only lived together for a short period during their relationship; the dispute between them as to who paid expenses during that time cannot be resolved on the evidence; they thereafter retained separate residences; and each had their own sources of income and always had separate bank accounts I find that they did not pool their finances.

Conclusion as to shared life

Having regard to all of the above, I find that, notwithstanding that the parties continued an intimate relationship in 2009 and 2010, they did not have a shared life as a couple after March 2008, when the plaintiff moved out of the defendant’s Roxburgh Park home for the second time.

The effect of this conclusion on the facts may be that, if the defendant seeks to prosecute an application for alteration of property interests on the basis of a de facto relationship, she should do so in this Court, in her application under the Relationships Act, as the Family Law Act would not apply. That is, however, a matter for the defendant on advice. The parties should also note that, while findings of fact in this proceeding will be of relevance in the proceedings for alteration of property interests, I have not sought to express my findings of fact in the specific legislative terms in relation to either application for alteration of property interest, as those applications are not before me.

Contributions by the defendant

There are two principal forms of contribution on which the defendant relies to assert that it would be unconscionable for the plaintiff to deny her an interest in the balance of the sale proceeds of 14 Waranga Road, Bayswater. The first is the total sum of $14,000 that she alleges she gave to him in a series of cash withdrawals. The second is the assistance she alleges that she gave him from Easter 2009 (when he agrees he lost his driving licence) to May 2011 by way of driving his work car, thus allowing him to retain his job and so pay the mortgage.

Driving assistance

I will deal with the second of these first. The defendant says that from Easter 2009 ‘(r)egularly, I used to get up at 2.30am …and drive him to work (she says from Rye while he was living with her there to his workplace in Kensington) and to all his work visits in the company car.’ [89] This evidence is extremely general. The plaintiff concedes only in response that the defendant drove the company car ‘a few times’.[90] He denies that he was living with her at Rye in 2009 and I have found that they only spent time at each other’s houses in that year. The plaintiff’s evidence is that he was required to drive during the day for his work in 2009 only one day a week[91] and to Albury about every six weeks[92]. There is no evidence to the contrary, and so I accept this evidence. The plaintiff conceded in cross examination that the defendant drove the company car when she accompanied him to Albury, and on ‘rare occasions’ where he was required to visit work sites. He said that on other occasions he drove himself, although unlicensed, and for his musical gigs his singer drove him.[93] That the singer drove him to gigs was confirmed by Mr Toth.[94]
[89]Affidavit of Valeria Maroti sworn 16 October 2013 [31].
[90]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [31].
[91]T 49 lines 1-4.
[92]Affidavit of Steve Ristic In Response to Defendant’s Affidavit sworn 27 October 2013 [32].
[93]T 49-50.
[94]T 156.

I find that the defendant drove the plaintiff’s car on trips to Albury (four of which in 2009 and 2010 are proved) and on some other occasions, which may have included on occasion from Rye to Kensington, if the plaintiff had stayed with her at her house. I do not, however, find it proved that this was a routine or even regular form of assistance, and it is not proved to have made a substantial contribution to the plaintiff retaining his job given that he was only required to drive during the day for work one day a week, and he has given evidence that he drove himself unlicensed.

Financial assistance

In relation to her contention that she provided the plaintiff with $14,000 in cash over their relationship, the defendant exhibits bank accounts for the period from November 2006 to June 2008, which she has marked up to show cash withdrawals she says she made and gave to the plaintiff. It is first helpful to discuss the other evidence in relation to the parties’ respective financial positions.

Both parties had access to sources of income from employment (in the case of the plaintiff) or business (in the case of the defendant) during their relationship. The defendant became bankrupt in late 2008, but nevertheless it appears from the evidence of her accountant, Mr Frank Losonski, that she continued to be able to draw on business earnings. His evidence[95] is that he was employed as her accountant from the commencement of her business, operated through a company, in 2004, and worked for her in that capacity until the end of 2011. He confirms the defendant’s own evidence that she became bankrupt in late 2008. As a consequence, the business was transferred into the ownership of a company owned by her son, and thence to another company. He says that he began to notice ‘around early 2005’ that the business was not meeting all its liabilities, and as a result he and the defendant agreed that all revenue would be paid into an account which only he could operate, and he would place money into a separate account that the defendant could draw on for her personal needs. He says that nevertheless the defendant continued to make demands for more funds than the business could sustain.
[95]Affidavit of Frank Losonski sworn 24 February 2014

The implication of this evidence may have been intended to be that the defendant was drawing excess funds to give to the plaintiff, as she contends that she did. Mr Losonski links the start of the decline in her financial management to early 2005, which is when she deposes she began her friendship, and subsequently affair, with the plaintiff.[96] There is, however, nothing in Mr Losonki’s evidence to justify such a conclusion, and indeed the only evidence that could do so is that of the defendant herself. The plaintiff did not cross examine Mr Losonski, and for good reason. His evidence shows only that the defendant went bankrupt in late 2008 for reasons not there shown, and continued to draw what he considered excessive amounts from the business, for purposes he does not state, whether or not he knows them. Counsel for the defendant properly conceded that Mr Losonski’s evidence was of little assistance to her claim.[97]
[96]Affidavit of Valeria Maroti sworn 16 October 2013 [2].
[97]T 202, lines 5-6.

The defendant’s evidence as to payments to the plaintiff is that the highlighted payments on bank statements she exhibits are payments of cash she drew to give to the plaintiff or otherwise are amounts she paid for the plaintiff.[98] The exhibited bank statements are all in the name of her business. They are for the period 31 October 2006 (i.e. just before the end of the period of cohabitation July-November 2006) to June 2008. It seems that a separate ANZ statement downloaded from internet banking for periods in 2007 and 2008 may also have been intended to form part of that exhibit, but the statement is not complete and has no account name, and so I disregard it.
[98]Affidavit of Valeria Maroti sworn 24 February 2014 [5].

The highlighted items show cash withdrawals from a variety of ATMs, retail outlets, clubs and hotels, generally in amounts of $200 or less, with some exceptions. There are, for example, highlighted payments of $1,150 to Raine and Horne at Roxburgh Park on 7 May 2007 and 5 September 2007. On the defendant’s own account, she was living in a rented property at Roxburgh Park at this time, and the plaintiff was not living with her. I infer that these payments are for rent, but on the defendant’s own evidence they must have been paid on her account, not on account of the plaintiff. This casts some doubt on the accuracy of the defendant’s highlighting, although she was not given the opportunity of giving any explanation by the issue being put to her in cross examination.

On the other hand, the defendant in the limited cross examination on this issue was able to give more detail to payments she said she had made to, or on behalf of, the plaintiff.[99] The plaintiff did not deny that any funds were paid to him, although he did dispute the accuracy of the defendant’s account. There are also a number of entries in her bank statements relating to payments at Scoresby outlets, where of course the plaintiff was living. There is, for example, an Eftpos payment to Safeway at Scoresby shown on 16 April 2007 in the sum of $334.15. There are also Eftpos payments at Safeway at Scoresby shown on 1 May 2007, 5 July 2007, 16 July 2007, 23 July 2007, 3 September 2007 at least. A link to expenditure on the plaintiff’s account arising solely from this geographic link is, however, entirely circumstantial. There is no detailed evidence from the defendant as to how she identifies these transactions in particular as relating to the plaintiff, so many years after the event, and there would appear on the evidence to be at least one other possible explanation for expenditure of this type and for the deterioration in the defendant’s financial situation.
[99]T 79 line 18- T 80 line 12.

That explanation is gambling. It is made plain in the defendant’s case that she gambled. She refers to this in passing in her own evidence[100], although Ms Sordi says that the defendant did so only after she commenced her relationship with the plaintiff.[101] The defendant’s former husband agrees that the defendant did not gamble while they were married, and says that that her playing of gambling machines developed after their separation. The plaintiff did not cross examine these witnesses and so I accept their evidence. He says that the defendant gambled to excess, and that they travelled together to Albury because the defendant wanted to play the pokies there. Many of the entries in the bank accounts that the defendant exhibits (both those she identifies as relating to the plaintiff and others) are from clubs or hotels, and some expressly for Tabaret. I accept the submission of the plaintiff put in his final affidavit[102] that such withdrawals are consistent with the defendant withdrawing funds to gamble herself.
[100]T 80 line 10.
[101]Affidavit of Eliane Sordi sworn 25 February 2014 [9].
[102]Affidavit of Steve Ristic sworn 11 March 2014 [21].

Each party contends that the other gambled to a considerable degree. The plaintiff concedes that while living with the defendant at Roxburgh Park July-November 2006 he and the defendant played the poker machines at the Roxburgh Park Hotel. He exhibits his own bank statements for that period showing multiple withdrawals from ATMs at that hotel, often many on the same day. He contends that it was the defendant who was largely responsible for gambling what he totals as $52,000 over this period[103], as he was at work during the day. He did not put this to her in cross examination and so she has not had the opportunity to give any other explanation. Accordingly, I cannot find that this is what occurred, but it appears possible from the bank statements. He also in that affidavit gives further evidence about other payments he made to the defendant, but again these were not put to her and so I cannot find that they were made.
[103]Ibid, on page 10 under the heading ‘In Conclusion’.

There is some other evidence to support that the plaintiff himself gambled to a significant degree. The police report of December 2005 records an argument between he and his wife which is said to be about his gambling, as well as the affair with the defendant.[104] The plaintiff does not dispute that he borrowed money from the defendant early in their relationship to pay a gambling debt, although he contends that he paid it back. There are also suggestions in the evidence that his indebtedness in respect of 14 Waranga Road increased substantially after the separation from his wife and transfer into his sole name, but as discussed earlier these matters were not put to the plaintiff in cross examination. His evidence in chief is that he was only forced to sell the property after he lost his job[105] i.e. not because of gambling, and this was not disputed in cross examination.
[104]Exhibit 4.
[105]Affidavit of Steve Ristic sworn 14 August 2013 [9].

There was no cross examination of either party about their gambling. It is impossible to say from bank statements alone who was responsible for particular withdrawals. However, having regard to the evidence as a whole I find that both parties gambled large sums of money, and suffered financial loss as a result. I find that the time the defendant began to gamble to excess coincided with her relationship with the plaintiff, but whether the gambling was a consequence of the relationship, or a factor leading to it, or merely a coincidence, is impossible on the evidence to say.

Conclusion on contribution

It follows from all of the above that the defendant has failed to prove that she made a contribution to the plaintiff by reason of which he was able to retain the property at 14 Waranga Road, such that she should be held to have an interest in the balance of funds after its sale.

For the reasons set out above, I do not accept the submission that she made an indirect non-financial contribution by reason of driving his company car. In relation to her contention that she made an indirect financial contribution by monies she gave him, or paid on his behalf, I find that the plaintiff was able to pay the mortgage (although it may be his indebtedness had increased) until he lost his job. It follows that any payments made to him by the defendant were not material to retention of that property. It is possible on the evidence that the defendant made some payments to or for the plaintiff, but I am unable to make any finding as to how much. As against this, the plaintiff has shown that it is possible that the defendant was responsible for substantial withdrawals for gambling from his funds, and so made a negative contribution. Due largely to the failure of the parties, the plaintiff unrepresented but the defendant represented, to ensure their competing accounts were put to each other in cross examination, I cannot make any findings as to the amount of financial contribution made either way. The defendant bears the onus of proof on the issue of contribution, because it is she who seeks to establish a constructive trust, and she has failed to discharge it.

For completeness, I will make some observations on the facts of this case by comparison with those in the case principally relied upon by the defendant, Parij. In that case, the parties had lived together as de facto partners for 17 years. They began with very little in the way of assets, but accumulated a considerable asset pool, largely from the male partner’s business activities, but the female also worked throughout the period. They had a child together and the woman’s child from a previous relationship also lived with them. At trial the female partner acquired a 50% interest in the matrimonial home and contents, but no interest in other property in the man’s name. On appeal, she was held to have a 20% interest in those other assets. In other words, notwithstanding a long relationship and a child, her interest by virtue of a constructive trust was limited to 20% of the assets not clearly linked to the shared residence.

In this case, by contrast, at its highest the defendant’s case is a five year relationship in which she concedes the parties did not live together all the time. I have found an emotional relationship in which they on occasion shared accommodation or stayed overnight that did endure until at least December 2010, but that they shared a primary residence for only two periods during that time, totalling just under six months, and ending in March 2008. They had no child together, and did not represent themselves as a couple to their social community. The asset in question, 14 Waranga Road Bayswater, was acquired by the plaintiff well before their relationship commenced, they never lived there together, and the defendant made no direct or indirect contribution to its retention. Parij provides no support, in my view, for the contention that it would be unconscionable for the plaintiff not to hold some proportion of the proceeds of sale of Waranga Road in trust for the defendant, let alone 50%.

Admission as to a debt

In one of the letters exchanged between the plaintiff and the legal representatives for the parties prior to the commencement of this proceeding, the plaintiff admitted owing the defendant $3000.[106] I determined on the first day of the trial that privilege had been waived by the parties in respect of the negotiation correspondence, including this letter, that the plaintiff exhibited to his first affidavit. Plainly, by exhibiting the correspondence the plaintiff waived his privilege, and I held that the defendant had also waived hers.[107] Counsel for the defendant invited me in closing submissions to take this admission into account, and the plaintiff made no submission to the contrary.[108]
[106]JM-18 to the affidavit of Steve Ristic sworn 14 August 2013.
[107]T 30-32.
[108]T 213-215

The letter is dated 16 August 2011, and so is relatively early in the dispute between the parties. However, the lines of dispute were already clear. It is plain from the exhibited correspondence, which begins with letter dated 18 May 2011 from the defendant’s then solicitors to the plaintiff,[109] that she was aware that he was proposing the sell Waranga Road. The letter of 18 May 2011 seeks a payment to the plaintiff by way of settlement under the Family Law Act 1975 of 50% of the net proceeds after that sale. The next letter which is exhibited is a letter dated 10 June 2011 from the defendant’s solicitors to the plaintiff which refers to his letter of 31 May 2011, presumably in reply to the solicitor’s letter of 18 May 2011. The plaintiff’s letter of 31 May 2011 is not in evidence. In the letter of 10 June 2011, the solicitors for the defendant seek by way of compromise the sum of $13,600 which is described as ‘representing payment of monies provided by her to you’.[110] It may be that this sum was quantified in the same way the defendant sought in this trial to quantify her financial contribution i.e. by marking up of her bank statements, but this is speculation as the connection, if any, between this offer and her subsequent evidence was not adduced.
[109]JM-16 to the affidavit of Steve Ristic sworn 14 August 2013.
[110]Letter dated JM-

It was this letter to which the plaintiff responded by the letter now in question, dated 16 August 2011. In that letter he refers to an indication in his ‘previous letter’ (not in evidence) that he owed the defendant $3000. He makes a counter offer of slightly more, $4000, by way of settlement proposal. That offer was then refused by the next letter in the chain, dated 26 August 2011 from the solicitors for the defendant to the plaintiff.[111]
[111]JM-19 to the affidavit of Steve Ristic sworn 14 August 2013.

The admission by the plaintiff that he owed the defendant $3000 in August 2011 was unqualified. I was not taken to any evidence showing what it represented, nor to any evidence as to whether or not it was subsequently paid. I infer from the whole of the circumstances that it has not been paid. I will order that that sum be paid to the defendant from the funds in Court, because to that extent only the defendant has shown that it would be unconscionable for the plaintiff to take the whole of the proceeds of sale.

Orders

I will otherwise dismiss the defendant’s claim for payment out to her from the funds in Court and order payment out to the plaintiff of the whole less $3000 of the remaining funds.

The defendant’s claim for alteration of property interests remains. The first issue to be determined in respect of that claim, if it is pursued, is whether leave should be granted to allow it to be brought out of time. I will give the defendant the opportunity to consider these reasons and hear the parties as to what steps should then be taken in respect of that application.

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[2014] VSC 540

24 October 2014