Zegarac v Tomasevic [2003] VSC 150

Supreme Court of Victoria|2003-05-16|Before: BONGIORNO J

PROPERTY - De Facto relationship - Characteristics - Adjustment of property rights - Property Law Act 1958, Pt. IX.

By a writ filed 5 July 2001 and an amended statement of claim filed 20 February 2002 the plaintiff seeks orders under of the adjusting property rights as between her and the defendant. Although the plaintiff's statement of claim seeks a wide range of relief it became apparent during the trial that the only asset which could relevantly be the subject of an order under the Act was a house and land at 6 Wadham Road, Ivanhoe, registered in the defendant's name which was purchased by him in 1993 and in which the parties had lived with their children, whilst they co-habited. The property is subject to a mortgage to the Bank of Melbourne Limited.

Neither party in this case was legally represented at trial, although the plaintiff had solicitors acting for her at the time of the issue of the proceeding. This created immense difficulties, not only for the parties themselves but also for the Court. Many issues which might have been live issues on the pleadings were not the subject of evidence and both parties resorted to unsubstantiated assertions in putting their respective cases. The evidence which was led was confined to the viva voce evidence of the plaintiff and the defendant, several affidavits tendered by the parties and subpoenaed documents which related to the defendant's property and financial resources.

Having regard to the guidelines expressed in Re F[1] in relation to the conduct of proceedings involving litigants in person, during the course of the trial I took steps to ensure that the parties were aware of the manner in which the trial would proceed, and provided some guidance as to the law which would be applied to the case and the evidence which would generally be admissible. Further, I sought to clarify the submissions of the litigants and the orders which they sought. This process was extremely difficult and made no easier by the open hostility displayed by each of the parties to the other, particularly during cross examination, a forensic process of doubtful value in the hands of unskilled and untrained people. In such circumstances it provides little more than an opportunity for further verbal assault by one party against the other. There are well understood limits to the assistance which can be provided by a Judge in such circumstances in order to preserve the neutrality and impartiality of the Court and, ultimately, "the parties retain the primary responsibility for defining the issues in the case and presenting/advancing the relevant legal argument"[2].

The parties commenced their relationship in what was then Yugoslavia in 1985. There are two children of the relationship born in the former Yugoslavia who are now aged 16 and 17. In 1987, in separate months, first the defendant and then the plaintiff and the children migrated to Australia. The parties lived together in Australia from that time until 20 November 1999 when they finally separated although there were occasions when, it is agreed, cohabitation ceased as referred to hereunder.

The date on which the de facto relationship (if it existed) ceased was in dispute between the parties. The plaintiff claims the relationship ceased on 6 July 1999, however she continued to live with the defendant until 20 November 1999 when she left the house in Ivanhoe and did not return.

The tortured and confused history of this proceeding made it difficult to identify the defendant's position as to whether he had a de facto relationship with the plaintiff and, if so, when it ceased. By his Defence to the plaintiff's Amended Statement of Claim dated 20 May 2002, the defendant purports to "disagree partially" with the pleading of the de facto relationship from May 1985 to 6 July 1999 and "agree, partially" with the pleading that plaintiff and he lived together in a de facto relationship for at least 2 years. No particulars are provided which might identify what parts of those allegation are in issue. In earlier documents filed with the Court, and tendered in evidence at trial[3], the defendant denied that he lived in a de facto relationship with the plaintiff as she had stated. In a later affidavit affirmed 10 January 2002 the defendant asserted that while he and the plaintiff had lived in a de facto relationship, that relationship ceased in January 1993.

It was common ground between the parties that there were two occasions on which the plaintiff had left the defendant. They were for a period of some days in 1992 and for a longer period in 1993. In evidence at the trial, resiling from the position that no defacto relationship ever existed, the defendant asserted that the relationship ceased upon the separation in 1993. While he admitted the plaintiff returned to live at the Ivanhoe house, he denied that they were in a de facto relationship at that point, but rather "living together in the interests of the children" as he put it.

It is clear on the evidence that the parties lived together as if they were husband and wife, although not married, for more than two years. They thus fall within the definition of de facto partners under s 275 of the Act. The defendant's assertion that the relationship ended in 1993 is, however, relevant to the question as to whether the plaintiff instituted this proceeding within the time prescribed by s 282(1) of the Act.

While the defendant has not pleaded that the plaintiff's claim is barred by s 282(1), in so far as it is necessary for me to do so, I find that the de facto relationship subsisted up until 6 July 1999. The proceeding was, accordingly, therefore, brought within time. I make this finding for the reasons set out below.

The nature of human relationships outside those confined by a legally subsisting marriage is such that they do not easily lend themselves to legal definition. A de facto relationship is defined in s 275 of the Act as being:-

"the relationship between de facto partners of living or having lived together as if they were husband and wife although not married to each other".

The use of marriage as a reference point in such a definition tends to beg the question. Marriage is defined in law by the taking of procedural steps in compliance with a statute. Once the legal status is obtained, the state of marriage subsists without further requirement. As has been previously observed:

"The relationship of marriage, being based in law, continues notwithstanding that all of the things for which it was created have ceased. Parties will live in the relationship of marriage notwithstanding that they are separated, without children, and without the exchange of the incidents which the relationship normally involves."[4]

There is therefore nothing in the law of marriage which allows content to be given to the phrase "as if husband and wife", and nothing to assist a determination of when such a relationship has ceased.

Secondly, outside legal definition, while there may exist various beliefs and attitudes as to how married people should behave, the idea that there is a definitive mode of living together as husband and wife or as if husband and wife is insupportable. It probably always was. It certainly is in current Western society.

Nevertheless the legislation must be construed so as to give it meaning. This has been done in previous cases through the use of a number of factors or indicia which may be applied to a factual situation to determine whether a de facto relationship exists. They may be enumerated as:

* the degree of financial interdependence, and any arrangement for support between or by the parties;

* the degree of mutual commitment and mutual support;

* reputation and 'public' aspects of the relationship[5]

The relationship between the parties to this case was a long term one in which they lived together under the same roof for all but brief periods until 20 November 1999. A sexual relationship existed between the parties and they had children. No evidence of the cessation of that sexual relationship was adduced. The parties cared for and supported the children of the relationship. The defendant admitted in his evidence that he and the plaintiff were publicly regarded as a de facto couple during that period during which he admits they were living together but claims they were no longer in a de facto relationship.

The evidence before me and the conduct of the trial revealed that the relationship was not a happy one. There is nothing, either in law or common experience, which could support the contention that a relationship does not subsist simply because the parties are unhappy.

There was evidence here that the parties did not combine their financial resources, but that they both contributed portions of their income to everyday living expenses and the care of the children. Certainly they each contributed, in one way or another, to household expenses and the care of the children.

In support of his contention that the relationship ended in 1993 the defendant tendered in evidence two forms dated 18 February 1993 and 3 August 1999 submitted by the plaintiff to the Department of Social Security. In both documents the plaintiff denies that she and the defendant are in a de facto relationship. The plaintiff claims the first document was completed around the time of the 1993 separation and the second document around the time of the final separation in 1999 and that the assertion that there was no longer a defacto relationship related to the immediate circumstances of the separations. Any alleged admission contained in those documents must be seen in light of their purpose and the circumstances in which the plaintiff then saw herself as being. It would be simplistic to regard such alleged admissions, even if accepted, as precluding the finding of a subsisting de facto relationship. I decline to do so.

Weighing the totality of the factors to which I have referred and in respect of which I have evidence I find that the de facto relationship continued up until 6 July 1999. Thus, no question of whether this proceeding was commenced within time can be raised. It survives any such potential bar by one day.

"A court may make an order adjusting the interests of the de facto partners in the property of one or both of them that seems just and equitable to it having regard to-

(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the de facto partners to the acquisition, conservation or improvement of any of the property or the financial resources of one or both of the partners; and

(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the de facto partners to the welfare of the other de facto partner or to the welfare of the family constituted by the partners and one or more of the following:

Implementation of the section involves a necessarily imprecise exercise guided by an overriding discretion to determine what is "just and equitable". However, the plaintiff still bears the onus of putting before the Court evidence upon which findings can be made as to the contributions she claims to have made and the resulting interest which she seeks. In this sense, at least, she carries the risk of non-persuasion.

The principal property in question in this case is the Ivanhoe house of which the defendant is the sole registered proprietor. The plaintiff seeks a half share in that property. There are further claims made by the plaintiff in relation to chattels in the house and the defendant's superannuation entitlement.

The Ivanhoe property was purchased in September 1993 at a cost of $78,000. The bulk of the purchase price was financed with a loan from the Bank of Melbourne, a smaller loan from the defendant's sister and a government grant.

The plaintiff made no direct financial contribution to the acquisition of the house and was not a party to the decision to purchase the property. She claims to have made direct financial contributions to the improvement of the property by way of the purchase of materials for renovations such as carpet and tiles and payments made to various tradespeople. She also claims to have made indirect financial contributions to the conservation of the property by the use of her wage to pay for household items and expenses, allowing the defendant to apply his wage to mortgage repayments. The plaintiff tendered taxation returns for the years ending 30 June 1992 to 30 June 1998 inclusive which reveal she had a total taxable income of $123,784 during that time.

The plaintiff claims to have made non-financial contributions to the improvement of the property in applying her labour to cleaning the house and creating a garden. She also seeks consideration of the contributions she has made in the capacity as a homemaker through the performance of household tasks such as shopping, ironing and cleaning and as a parent to the welfare of the family, including care for the defendant's mother.

The defendant disputed the extent of the contributions made by the plaintiff.

The defendant disputed the plaintiff's claim to an interest in the house, although the basis for this was misconceived. The defendant appeared to contend that the plaintiff should not be entitled to an interest in the house because she was opposed to its purchase in 1993. The plaintiff did not dispute that she had no involvement in the purchase of the property, nor that she was opposed to it at the time. These matters are considerations relevant to the exercise which I must perform.

The defendant might also have been construed as submitting that the plaintiff was not entitled to an interest in the house as it was acquired after the de facto relationship had ended. Even without a finding that the relationship subsisted until 1999 there is nothing in the Act which limits the assets under consideration to those acquired during the de facto relationship. Further, there is authority for the proposition that regard may be had to contributions made by a party before, during and after the relationship[6].

I accept the plaintiff's evidence that she made both financial and non financial contributions to the preservation and maintenance of the Wadham Road property and that she has made contributions in her capacity as homemaker and parent to the welfare of the family. The order the Court will make will reflect her contribution in the ways I have found.

The only evidence before the Court as to the value of the Ivanhoe property is a valuation as at 1 January 2000 on the Banyule City Council Rate Notice of $163,000 (Capital Improved Value). The defendant produced evidence that the amount owing to the Bank of Melbourne in relation to the mortgage was $45,437 as at 11 December 2002. He has not made any mortgage repayments since that time so the amount currently owing is likely to be increased by interest. The municipal valuation (and vociferous assertions by the plaintiff that it was worth $300,000) does not enable the Court to place a value upon the property upon which any reliance can be placed. Accordingly it will be necessary for a valuation to be obtained.

There is virtually no evidence placed before the Court concerning the chattels in the Wadham Road property. This did not prevent the plaintiff claiming in her submissions that she wanted half those chattels or $15,000. In the circumstances there is no basis for the Court making any order in respect of any chattels that might be at the Wadham Road property.

The plaintiff also makes a claim for one half of the defendant's superannuation entitlements. Although there is evidence before the Court that the plaintiff is a member of the State Superannuation Fund (New Scheme) and that he had made payments of some $8,000 to that Fund up to February 2002, his interest in that Fund is not property for the purposes of the Act. Rather, it is a financial resource. The evidence does not enable me to reach any conclusion as to the real value of that financial resource and, more particularly, as to whether the plaintiff made any contribution, directly or indirectly, to its acquisition by the defendant. Inasmuch as she contributed, as I have found, to general household expenses and made non-financial contributions as a homemaker and parent she inevitably permitted the defendant to work outside the home and thus indirectly acquire the financial resource represented by his interest in the State Superannuation Fund. In all the circumstances I shall take that financial resource into account in reaching the order which I make in respect of the Wadham Road property.

Although the plaintiff made various assertions concerning other property, including property in Yugoslavia, which she claimed the defendant owned, there is no basis for any finding as to whether any such property exists and, if it does, whether it is owned by the defendant. Accordingly, it cannot be the subject of any order under the Act.

Labouring under the disadvantages to which I have referred, brought about largely by the inadequate way in which the case on behalf of each of these parties was presented, and doing the best I can on the evidence which was placed before the Court, I consider that it is just and equitable that all financial matters between these parties be resolved by a declaration that the plaintiff is entitled to a 50 percent interest in the Wadham Road property subject to the amount owing to the Bank of Melbourne under the mortgage (to which I have referred) as at the date of trial, namely 3 February 2003. As the defendant currently resides in that house as his residence the orders which I will make will give him the option of purchasing the plaintiff's share of the property at an independent valuation. In default of his doing so the plaintiff will be entitled to sell the property. She must divide the net proceeds in the proportions which I have indicated.

Save for the declaration and orders which the Court will now make, all questions of ownership of property currently in the possession of each of the parties to this proceeding is resolved such that neither party can, in the future, make any claim against the other in respect of any such property. All other claims made by the plaintiff are dismissed.

The Court makes the following declaration and orders:

1. That the plaintiff is entitled to a 50 percent interest in the property known as 6 Wadham Road, Ivanhoe being the whole of the land in Certificate of Title Volume 8543 Folio 115 subject only to 50 percent of the amount which was owing to the Bank of Melbourne Ltd on 3 February 2003 and which was secured by registered mortgage No. S863317K over the said property.

2. That on or before 5 June 2003 the said property be valued by a valuer to be agreed between the parties or, in default of agreement, by a valuer appointed by the President for the time being of the Real Estate Institute of Victoria; the costs of such valuation to be met by the defendant.

3. That within 60 days of such valuation being made available to the parties the defendant be entitled to purchase the plaintiff's declared interest in the said property by paying to her a sum equal to 50 percent of the value of the said property as assessed by the said valuer less 50% of the amount which was owing to the Bank of Melbourne Ltd on 3 February 2003 as referred to in the declaration contained in paragraph 1.

(a) fail to pay the cost of the valuation referred to in paragraph 2; or

(b) fail to pay the amount referred to in paragraph 3 within the time specified (or such further time as is allowed by the plaintiff or the Court);

the plaintiff be entitled to sell the said property as if she were a mortgagee in possession.

5. That upon such sale the plaintiff disburse the net proceeds of sale (being the amount of the sale price less the reasonable and actual expenses of sale, including agent's commission and legal expenses) as follows:

(a) by paying out the full amount owing to the Bank of Melbourne Ltd in respect of the mortgage referred to in paragraph 1;

(b) by retaining 50 percent of the net proceeds of sale less 50 percent of the amount which was owing in respect of the mortgage referred to in paragraph 1 on 3 February 2003; and

6. That pending the said sale referred to in paragraph 4 the defendant be entitled to retain possession of the property.

7. That pending the sale the defendant make all payments due and payable to the Bank of Melbourne Ltd pursuant to the mortgage as and when they fall due.

8. That all other claims made by the plaintiff in this proceeding be dismissed.

9. That there be liberty to each party to apply to the Court on notice to the other.

10. That the defendant pay the plaintiff's costs of this proceeding to be taxed.

[2] Re F [2001] FamCA 348, para 220

[3] Affidavits of Milan Tomasevic affirmed 5 December 2001 tendered as Exhibit 4

[4] Hibberson v George (1989) 12 Fam LR 725 at 740

[5] D v McA (1986) 11 Fam LR 214; Roy v Sturgeon (1986) 11 NSWLR 454

[6] Jones v Grech [2001] NSWCA 208; (2001) 27 Fam LR 711; McDonald v Stelzer (200) [2000] NSWCA 302; 27 Fam LR 304; Fuller v Taaffe (1997) 23 Fam LR 702

(1989) 12 Fam LR 725

(1986) 11 Fam LR 214

(2001) 27 Fam LR 711

(1997) 23 Fam LR 702

At a glance

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