Zabel and Zabel
[2018] FCCA 115
•30 January 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZABEL & ZABEL | [2018] FCCA 115 |
| Catchwords: FAMILY LAW – Application for declaration of a de facto relationship dismissed – application for leave to bring proceedings out of time for property settlement pursuant to s.44(3) granted. |
| Legislation: Family Law Act 1975, ss.4AA, 44(3), 79, 90RD(1) |
| Cases cited: Jonah & White [2011] FAMCA 221 |
| Applicant: | MS ZABEL |
| Respondent: | MR ZABEL |
| File Number: | HBC 693 of 2009 |
| Judgment of: | Judge McGuire |
| Hearing date: | 12 December 2017 |
| Date of Last Submission: | 12 December 2017 |
| Delivered at: | Launceston |
| Delivered on: | 30 January 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Verney |
| Solicitors for the Applicant: | Matthew Verney Lawyers |
| Counsel for the Respondent: | Ms K Mooney |
| Solicitors for the Respondent: | Websters Lawyers |
ORDERS
That the application by MS ZABEL for a declaration of a de facto relationship with MR ZABEL be dismissed.
That pursuant to section 44(3) of the Family Law Act1975 the applicant have leave to bring application for property settlement under s.79 of the Act out of time.
IT IS NOTED that publication of this judgment under the pseudonym Zabel & Zabel is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT LAUNCESTON |
HBC 693 of 2009
| MS ZABEL |
Applicant
And
| MR ZABEL |
Respondent
REASONS FOR JUDGMENT
Ms Zabel is the applicant in alternative applications heard as preliminary issues to an anticipated property settlement application. Firstly, she seeks a declaration that the parties were in a de facto relationship between the date of their divorce on 25 September 2009 until 1 July 2016. If the Court is against the applicant in this respect then she asks for an order pursuant to s.44(3) of the Family Law Act 1975 (“the Act”) giving leave for her to bring proceedings for alteration of property interests pursuant to s.79 of the act out of time.
Both applications are opposed by Mr Zabel.
Background
The applicant is from the (country omitted) and is 58 years old. The husband is originally from (country omitted) and is 78 years of age. He has lived in Australia since 1962. Ms Zabel is the respondent’s fifth wife. He has a son, X, by his fourth marriage and who lived variously with the parties.
The parties commenced a relationship in (omitted) 2005 and were married in the (country omitted) on (omitted) 2005.
The applicant came to Australia in (omitted) 2006 when the parties effectively commenced cohabitation.
In 2006 the respondent purchased a property in the (country omitted) for the applicant. She retains that property where members of her family apparently live.
It is generally agreed that there were two periods of separation during the marriage when the wife took alternative accommodation in a women's refuge. Mutual police family violence orders were issued in respect of the parties during one of these periods of short separation.
The respondent claims that the parties separated under the one roof in about July 2008. In August 2008 the respondent completed a very detailed document with Centrelink asserting separation under the one roof and the applicant then received single person Centrelink benefit.
The applicant received permanent residency in Australia in (omitted) 2008 and became an Australian citizen on (omitted) 2011.
The respondent filed an application for divorce on 10 August 2009 again asserting separation under the one roof from 1 July 2008. No Response or challenge was taken with this application.
On 14 August 2009 the then wife signed an acknowledgement of service of the divorce application.
The application for divorce was heard on 25 September 2009 without challenge and the Decree Absolute granted one month thereafter.
The parties remained living under the one roof. It is generally agreed that they had separate bedrooms. It is agreed that the respondent placed a lock on his bedroom door. It is agreed that a sexual relationship of some sort continued between the applicant and the respondent. They disagree as to the regularity and/or frequency of that relationship.
The applicant worked part time from at least 2009 and full-time from 2010. It is agreed that she did not note the respondent as either married or de facto spouse on her tax returns in the financial years ending July 2009, 2010, 2011, 2012 and 2013.
In 2013 the parties purchased a Ford (omitted) motor vehicle. The vehicle was registered in the respondent's name. It is generally agreed that it was the applicant’s vehicle for her sole use. The respondent assisted with payment for the vehicle. The applicant subsequently took a personal loan and repaid the respondent.
It is agreed that the applicant paid rent to the respondent following the divorce. There is no agreement as to when this arrangement commenced.
The parties ceased living under the one roof in about July 2016. The respondent has since sold the house and now lives in South Australia.
The applicant continues to live in (omitted). She has entered into a relationship with a friend of the husband, “Mr J”.
The applicant remains in employment as a (occupation omitted) with an annual income of approximately $51,000. The respondent is retired and receives both (country omitted) and Australian pensions.
The applicant says that the party's tangible property has net value of $599,887. The applicant says that the value of the party's net tangible assets is $255,913 of which she holds only approximately 9%.
This application was filed on 6 April 2017.
The applicant sought legal advice in respect of these issues in about November 2016.
The applicant seeks 40% of the property pool. The respondent seeks dismissal of the application and it is implicit in the respondent’s material that he argues that it is not just and equitable for the Court to further alter the property interests of those parties.
Relevant Law
Section 90RD(1) of the Act provides that the Court can make a declaration as to the existence of a de facto relationship.
Section 4AA of the Act provides as follows:
De Facto Relationships
Meaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a)the persons are not legally married to each other; and
(b)the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship they have a relationship as a couple living together on a genuine domestic basis.
(c)has effect subject to subsection (5).
Working out if persons have a relationship as a couple.
(2)Those circumstances may include any or all of the following:
(a)the duration of a relationship;
(b) the nature and extent of their common residence;
(c)whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence and any arrangements for financial support, between them;
(e)the ownership, use and acquisition of that property;
(f)the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h)the care and support of children; and
(i)the reputation and public aspects of the relationship.
(3)No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A Court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the Court in the circumstances of the case.
(5) For the purposes of this Act:
(a) a de facto relationship can exist between two persons of different sexes and between two persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
It is generally accepted that an applicant in asserting a de facto relationship carries an onus of establishing that de facto relationship and that it existed for the requisite period including an onus to prove the qualitative factors of the relationship. A party denying the relationship carries no onus to prove the negative.
The Applicant’s Case
The applicant says that the parties’ relationship remained effectively unchanged following the divorce. They continued to live in the same residence. They continued a sexual relationship. They continued to socialise together with public acknowledgement of their relationship. The applicant says that she assisted with the care of the respondent’s son. She says that their financial situation remained unchanged from the divorce in that they had never shared a bank account but there was some mutual financial assistance given. She says that the parties shared household duties.
The Respondent’s Case
The respondent says that the divorce evidenced their separation and was unchallenged. He says that the parties’ relationships subsequent to the divorce took on a different nature. He said that the parties’ sexual relationship was intermittent. He says that they had separate bedrooms. He says that the applicant did not acknowledge a de facto relationship on her tax returns. He says that the applicant accepted the single persons Centrelink benefit and did not challenge his declaration of separation under the one roof to Centrelink. He says that joint public exposure was rare and circumstantial rather than evidence of any continuing relationship. He says that finances were kept separate and any contribution by him was only on account of his altruism.
The Evidence
Both parties were represented and provided affidavits in support of their positions. Both gave evidence and were cross-examined.
My observations of the parties left me with the impression that they were both being essentially witnesses of the truth. Each was able to make admissions against their interest where appropriate or when challenged in cross-examination. Effectively, there was much agreement between the parties as to isolated facts but with each keen to emphasise their interpretation or understanding of the nature of their relationship.
The applicant adduced evidence from Ms L. Ms L is a friend of the applicant. Her late husband had been a friend of the respondent. Ms L’s evidence was hindered by her language difficulties. Her evidence and recollection at times was at odds with that of the applicant herself and generally Ms L’s evidence added little to the applicant's case by way of corroboration.
Consideration
Not unusually in these matters, there are factors which argue either for or against the existence of a de facto relationship. Further, the understanding and recollection of each of the parties to their particular living circumstances and arrangements might vary without either being palpably dishonest as Murphy J in Jonah & White[1] observed:
The issue here is, in my view, not so much the veracity or reliability of the parties’ accounts of events, but rather, the picture presented by the totality of them and the conclusions resulting there from.
[1] Jonah &White [2011] FAMCA 221
…
I consider that the evidence of each of the parties was affected significantly by the fact that their recollections now, in respect of events past, was refracted through the prism of their own perceptions of the relationship and of the varying degrees of disappointment felt by each at its demise…
Further in Jonah & White (supra) at [60] Murphy J opined:
In my opinion, the key to that definition (de facto relationship) is the manifestation of a relationship where the parties have so merged their lives that they were, for all practical purposes, “living together” as a couple on a genuine domestic basis. It is the manifestation of “coupledom”, which involves the merger of two lives just described, that is the core of a de facto relationship as defined and to which each of the statutory factors (and others that might apply to a particular relationship) are directed.
The Full Court in Sinclair v Whittaker[2] noted:
Given the nature of the definition of a de facto relationship in the Act, the ultimate decision is as to whether there is a de facto relationship at any given time is a matter for the Court and not a matter for the parties. Although their perception of the nature of the relationship is a relevant matter, it is not determinative.
[2] Sinclair v Whittaker [2013] FAMCAFC 129
These parties commenced living together in Australia in (omitted) 2006. The applicant left the respondent's home some 10 years later in 2016. The only recognisable gaps in that residential relationship were for two short periods of the marital disharmony during the course of the marriage. Certainly, the living arrangements of these parties were not disturbed by the divorce.
It seems clear, however, on the evidence that the nature of their common residence changed at around the time of the divorce in 2009. They occupied separate bedrooms. The respondent placed a lock on his bedroom door. The parties agree that the respondent at times asked the applicant to leave. The respondent imposed a rental obligation on the applicant.
The parties agree that a sexual relationship continued post the divorce. They disagree as to the frequency of that relationship. They disagree as to whether the relationship was a monogamous one following the divorce. Each gave some vague evidence, although evidence which I generally accept, that each at times encouraged the other to pursue new relationships.
There was never any high degree of financial interdependence of these parties. They maintained separate bank accounts both before and after the divorce. There was some assistance by the respondent in the applicant purchasing a motor vehicle post the divorce. She did, however, repay the respondent. It is of some significance that the applicant commenced work on a full-time basis as from 2010 and perhaps part-time prior to that. She completed tax returns which did not note the respondent as her de facto partner. Whilst the applicant's affidavit at [54-55] notes this omission and references an accountant doing her tax returns and not advising her, it is evidence of a representation made by her over some years of tax returns inconsistent with a de facto relationship and enlivens what is colloquially known as “the Elias principle”.[3] Although this consideration no longer carries the status of “principle”[4], it remains relevant for a Court’s consideration and determination of issues of fact, where a party has made a prior representation, perhaps to receive a benefit, such as is inconsistent with the fact being asserted in Court. A factual platform consistent to that now before this Court arose in Benedict v Peake[5] where a de facto wife who have previously asserted to Centrelink and the ATO that she was not in a de facto relationship now sought to lead evidence that a de facto a relationship had, in fact, existed for some 17 years. The Court considered the various authorities set out above and found in respect of the “principle”:
1.In considering whether to apply the principle the Court must take the wife's case at its highest;
2.The wife's case taken at its highest was that the husband had full knowledge of the false statements made to Centrelink and the ATO and that the wife's evidence would show the existence of a de facto relationship of some 17 years.
[3] Elias & Elias (1977) FLC90-267
[4] Jordan & Jordan [1996] FAMCA 15
[5] Benedict v Peake [2013] FCCA 332
In the matter before me, the applicant does not assert the husband to have knowledge of or be a party to what to is effectively a false statement of fact to the ATO. She does assert a lack of proper advice from her accountant. She does not, however, bring that accountant to Court to confirm or corroborate her evidence and this in turn might raise considerations under the principle in Jones v Dunkel[6] which leaves open to the Court an unfavourable inference that this evidence would not have assisted the applicant. Certainly, there is no explanation for the applicant's failure to call the accountant.
[6] Jones v Dunkel (1959) 101 CLR 298
There is a second piece of evidence which also enlivens consideration of “the Elias principle”. The respondent himself lodged a detailed document with Centrelink following the divorce in which he asserted the party's separation but living together under the same roof independently and not in a de facto relationship. That document resulted in the applicant herself receiving benefits from Centrelink at a single person’s rate. This document was lodged with Centrelink in August 2008 consistent with the date of separation noted on the divorce application. There is no evidence before me that either the applicant or the respondent or them jointly have ever retracted or amended the assertions in that document.
Still further, is the divorce application itself. The applicant here asserts a continuing relationship undisturbed in its nature or form by the divorce application lodged in August 2009 and asserting separation in August 2008. The wife herself signed an acknowledgement for that divorce. She did not file a “response” disputing any part of the application. The application proceeded to a Decree Absolute without challenge. I accept that the wife is of (omitted) religion and embarrassed by the notion of divorce. This in itself, however, does little to mitigate from of the evidentiary force of the divorce application which is unchallenged as to its assertion as to a separation consistent with the respondent's evidence in the matter before me and contrary to the applicant's case.
There is no persuasive evidence of jointly owned real property although it is clear that in or about 2012 the parties each contributed $2,500 towards the purchase of property in the (country omitted). I accept the respondent's evidence that this property is registered in the applicant's name.
There are no children of this relationship. There is dispute between the parties as to the level of commitment of the applicant to the acceptance and care of the respondent’s son X in their household. I accept, however, the applicant's evidence that there were some mutually enjoyed activities with X such as (hobby omitted).
The parties differ as to the public reputation and aspect of their relationship. They agree that they travelled and stayed together on an occasion in Melbourne and with X. They agree that the respondent and X on occasion attended the applicant’s work social functions. They enjoyed (hobby omitted) together. The respondent disputed the applicant's evidence that they would show signs of affection in public such as holding hands. Ms L gives some corroboration in this respect to the applicant's case although generally I found Ms L’s evidence to be unreliable and at times contradictory of the evidence of the applicant herself.
Conclusion
The vagaries and difficulties in determining a question of fact such as this and where subjective views of the parties might differ but without dishonesty was noted by Fitzgerald J in Lynam v DG of Social Security[7] where the Court was to determine where parties were living together on a bona fide domestic basis:
Each element of a relationship draws its colour and its significance from the other elements some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case it will be a question of fact and degree, a jury question, whether a relationship between two .unrelated persons of the opposite sex meets the statutory test.
[7] Lynam v DG of Social Security (1983) 52ALR 128
There are, of course, factors which argue both for and against a declaration of a de facto relationship. However, where the applicant carries an onus to prove her assertion and where the respondent carries no negative onus of proof, I am not satisfied on the balance of probabilities that the applicant in this matter has discharged that onus. A continuing shared residence and a sexual relationship are indicators of a de facto relationship but indicators only and not determinative per se. To the contrary, official representations have been made that there is no de facto relationship and, in particular, the Centrelink document and the applicant's own tax returns over a number of years. Similarly, the application for divorce references a separation date such that it was unchallenged by the applicant and inconsistent with her assertion of the domestic relationship continuing in all its facets. Subtle but important changes occurred within the household including the designation of separate bedrooms and the respondent placing a lock on his room. The respondent imposed a rental obligation on the applicant. Whilst some shared public appearances took place after the divorce, the respondent gives plausible explanations as he does for his occasional financial assistance of the applicant. I am satisfied on the evidence that the respondent, at least, determined to separate and communicated this mindset to the applicant and, indeed, acted upon it. Consequently, on the balance of probabilities, I am not able to make a declaration as to a de facto relationship continuing for these parties at any time following the divorce.
Application for leave to bring proceedings under section 79 of the Act out of time
Now, and in the alternative, the applicant seeks leave to bring property settlement proceedings out of time.
Section 44(3) of the Act provides a time limit of 12 months from the date of a decree absolute of divorce for the bringing of financial proceedings. These parties’ divorce was made absolute on 25 October 2009. These proceedings were not initiated until 6 April 2017 or, on my calculations, some 6 ½ years out of time.
S.44(4) provides that the court shall not grant leave under subsection (3) or (3A) unless it is satisfied that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.
The background is set out above but suffice to say that these parties were married on (omitted) 2005. They effectively cohabited from (omitted) 2006 until about July 2008 when they separated but remained living under the one roof. There are no children of this marriage although a child of the husband lived with the parties during their cohabitation and including for a period after their divorce when they continued to live under the same roof.
The Full Court, as long ago as 1979, in Whitford & Whitford[8] established guiding principles in respect to the Court’s consideration in granting leave out of time. The Full Court stated:
Thus, on an application for leave under sec 44(3), two broad questions may arise for determination. The first of these is whether the court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the court is not so satisfied, that is the end of the matter. If the court is so satisfied, the second question arises. That is whether in the exercise of its discretion the court should grant or refuse leave to institute proceedings.
[8]Whitford & Whitford (1979) FLC 90-612 at p 78,144
The implication of Ms Zabel’s application is that she would suffer financial hardship should she not be permitted to pursue her application. Counsel for the respondent explicitly argues that by reason of the extent, nature and current distribution of the property pool there could be no hardship on the applicant of the refusal to grant leave.
There is some divergence in the parties understanding of the property pool. The applicant asserts the net assets of the parties to have value of $599,887 inclusive of some small superannuation. The respondent asserts net assets of just $255,913.
It is clear that the marriage itself was a short one, although it is now some 12 years since the occasion of that marriage. There seems general agreement that the respondent made a substantially superior initial contribution to the asset pool as it currently sits.
In G & G[9] Ellis J observed:
… Proof of hardship is a necessary precondition to the exercise by the court of its discretion. The generally accepted interpretation of hardship, in the context of s.44(3) is 'substantial detriment'. The loss of the right to institute the proceedings itself, however, is not hardship within the meaning of the section.
[9] G & G [1999] FAMCA 240 at [22]
Nevertheless, it is not the task of the court at this stage to determine the actual precise entitlements under section 79. As the Full Court in Whitford (supra) observed at [78,145]:
Whatever the financial situation of an applicant may be, his or her loss of a prospective entitlement to property including money, or his or her inability to have the financial and property relations of the parties adjusted or resolved, may constitute hardship.
Again, the court is not required here to enter into a detailed evidentiary examination on the merits of the applicant's substantial application for alteration of property entitlements under section 79 of the Act. Rather, the applicant must only present prima facie a reasonable claim with some chances of success. In Althous & Althous[10] the Full Court opined:
In my opinion, sec 44 (3) and (4) are not intended to require a detailed hearing on the merits to determine whether the applicant's claim will succeed. The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the enquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim.
[10] Althous & Althous (1982) FLC 91-233 at 77,267
Hardship
The party's marriage was a short one. There are no children of the relationship. The value of the property pool is not substantial and it is conceded that there were significant initial contributions by the respondent. The property pool, however, is of positive value and it seems that, on either party’s material, the respondent holds at least 90% of the value. The applicant's application, perhaps optimistically, seeks 40% of the value of the property pool in her favour. She asserts contributions of both a financial and non-financial type including to the care of the applicant's son and I infer from her argument generally that she considers her contributions to be continuing and valuable until at least 2016.
I repeat that it is not the task of the court at this stage to conduct a full forensic investigation as to the merits of the applicant's claim. She need only show a prima facie case. Similarly, the value of the property pool itself should not be given determinative influence. Put simply, what might be a trivial entitlement for one person may assume real importance for another. The consideration for the court here should not be confused with or seen analogous with a consideration for summary dismissal. I am persuaded, therefore, that the applicant prima facie sets out a case and to deprive her of that right of action in the circumstances of this matter would be to potentially visit an injustice on her and a potential 'substantial detriment'.
Discretion
The respondent argues that, even if the Court finds potential hardship for the applicant, then in its discretion leave should not be granted. The Full Court in Montano & Kinross[11] commented in respect of the court's discretion:
Like many applications for indulgence, an application for leave to apply after the end of the standard application period requires the court to exercise its discretion in a manner that, ultimately, is consistent with justice being done to both parties. The potential for injustice to the applicant being unable to pursue the remedy precluded by the refusal to grant leave must be compared to the prejudice to the respondent in the granting of leave. So, too, good or legitimate reasons for failing to do that which the Act requires must be compared with a wilful blindness or recalcitrance. Equally, a desire to pursue a remedy out of time must be compared to the necessity of the parties to proceed with their post- separation lives free of the spectre of prospective litigation.
[11] Montano & Kinross [2014] FAMCAFC 231 at [14]
There is prima facie some potential prejudice to the respondent in exercising the discretion in favour of the applicant. It is now more than eight years since the granting of the divorce and the initial application was filed more than six years out of time. The respondent has sold the former matrimonial home. He has moved from Tasmania to South Australia. There is evidence prima facie that he has 'got on with his life' since the time prescribed for the bringing of section 79 proceedings expired. Similarly, the respondent is not a young man and there is already evidence that a potential witness being his friend and the late husband of Ms L has passed away. It is not unreasonable to expect that the accuracy of the recollection of potential witnesses might be impacted by the flux of time.
Nevertheless, the property pool is neither substantial in value nor complex in its contents. The nature and history of the relationship between the parties, at least until the divorce, seems substantially agreed. Many considerations such as the respondent’s superior initial contribution do not seem disputed although issue may be taken as to any weight to be attributed to that to contribution. On balance, therefore, I am not persuaded that the respondent would be substantially prejudiced in the prosecution of his own arguments under section 79.
The respondent’s delay in bringing proceedings is explained in her primary application for a declaration of a de facto relationship. She argues there that she subjectively considered the relationship with the respondent to be an ongoing one and hence had no motivation to bring an application under section 79 of the Act. Having said this, it is clear that she took some legal advice at around the time of the divorce and I might reasonably assume that she was made aware of the time limits for bringing a section 79 application. She again took legal advice in November 2016 but did not file this application until April 2017 although I do not consider this later delay in itself to be considerable or fatal to her application.
I have found against the applicant's assertion of a continuing de facto relationship in its legal definition. That finding is based on an objective consideration of the relevant indicators of whether or not there was in fact a de facto relationship at law. That is, I have not and am unable to make any findings of the applicant’s dishonesty or malifidies in her asserted subjective view as to a continuing relationship. That being the case, this would in my view, offer a reasonable explanation for the delay in bringing her application.
Consequently, I am satisfied that my discretion should be exercised in favour of the applicant being permitted to bring an application under section 79 of the Act out of time.
I certify that the preceding sixty-five (65) paragraphs are a true copy of the reasons for judgment of Judge McGuire
Date: 30 January 2018
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