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Wood and Anor and Secretary, Department of Education, Employment and Workplace Relations and Anor [2010] AATA 179 (17 March 2010)

Last Updated: 17 March 2010

Administrative Appeals Tribunal

DECISION AND REASONS FOR DECISION [2010] AATA 179

ADMINISTRATIVE APPEALS TRIBUNAL )

) No 2008/6168

) No 2008/6174

GENERAL ADMINISTRATIVE DIVISION
)

Re
JEFFREY WOOD

ALEXANDRA GIORGI

Applicants
And
SECRETARY, DEPARTMENT OF EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS
SECRETARY, DEPARTMENT OF FAMILIES, HOUSING, COMMUNITY SERVICES AND INDIGENOUS AFFAIRS

Respondents

DECISION

Tribunal
Mr P W Taylor SC, Senior Member
Ms J Redfern, Senior Member

Date 17 March 2010

Place Sydney

Decision
The decision under review in respect of Mr Wood’s newstart allowance application is set aside and remitted to the Secretary for further determination in accordance with these Reasons for Decision.
The decision under review in respect of Ms Giorgi’s parenting payment and disability support pension applications are affirmed.

...................[Sgd]...................
Mr P W Taylor SC
Senior Member
for self and Ms J Redfern, Senior Member

CATCHWORDS

SOCIAL SECURITY – whether member of a couple – whether marriage-like relationship – whether living separately and apart on permanent or indefinite basis – assets value limit – decision under review in respect of Mr Wood’s newstart application set aside – decision under review in respect of Ms Giorgi’s disability support pension and parenting payment applications affirmed.


Social Security Act 1991 ss 4(1), 4(2), 4(3), 4(3A), 4(11), 500Q(3), 500S(2), 611, 612, 1064, 1064-G3, 1121(1)


Duncan v Equity Trustees Executors & Agency Co Ltd [1958] HCA 36; (1958) 99 CLR 513

Lynam v Director-General of Social Security (1983) 52 ALR 128

Pelka v Secretary, Department of Family and Community Services (2006) [2006] FCA 735; 151 FCR 546

Pelka v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2008) 102 ALD 22

Re Bernard and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 577

Re Fawthrop and Repatriation Commission [1993] AATA 359; (1993) 36 ALD 140

Re Ford and Secretary, Department of Family and Community Services [2003] AATA 7; (2003) 72 ALD 718

Re Ivovic and Director General of Social Security (1984) 6 ALN 293

Re Moffatt and Secretary, Department of Family and Community Services (2003) [2003] AATA 1259; 76 ALD 767

Re Nock and Another and Secretary, Department of Family and Community Services (2003) 77 ALD 172

Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295

Re Spencer and Secretary, Department of Social Security (1987) 13 ALD 497

Sibbles v Highfern Pty Ltd [1987] HCA 66; (1987) 164 CLR 214

Squire v Rogers (1979) 27 ALR 330

Staunton-Smith v Secretary, Department of Social Security [1991] FCA 513; (1991) 25 ALD 27


REASONS FOR DECISION


17 March 2010
Mr P W Taylor SC, Senior Member
Ms J Redfern, Senior Member

  1. The Secretary considers Ms Giorgi and Mr Wood are “partnered” for the purpose of determining their social security entitlements. This resulted in three decisions:
  2. On 25 November 2008, after unsuccessful internal reviews, the SSAT affirmed the Secretary’s 7 June 2007 and 16 April 2008 decisions.
  3. Ms Giorgi and Mr Wood deny they are partnered. They contend the Secretary is wrong in disputing their entitlement to the respective social security benefits they have claimed.

Criteria for characterising “member(s) of a couple”


  1. The decisions under review were made on the basis of the definitions of “partnered” and "member of a couple" contained in ss 4(1)-(3A) and (4(11) of the Act. Subsection 4(2) of the Act was amended, with effect from 1 July 2009, by the Same-Sex Relationships (Equal Treatment in Commonwealth Laws—General Law Reform) Act 2008. The most noticeable, presently relevant, amendment was the substitution, in s 4(2)(b)(iii), of the term “marriage-like” for the term “de facto”. However the Explanatory Memorandum to the amending legislation explained that the purpose of the amendments was to extend the concept of a couple to same-sex relationships. It was not intended to change the treatment of “married or opposite-sex de facto couples”: Explanatory Memorandum paragraph 409. On that basis, the July 2009 amendments are not material to the decisions under review. For the sake of simplicity and convenience we will refer to the form of the legislation at the time of those decisions, as if it had continued to apply for the whole of the period up to the present time.
  2. In Mr Wood and Ms Giorgi’s particular circumstances, the determinative matters are whether they were (and are) in a “marriage-like relationship” and not living “separately and apart” on a permanent or indefinite basis: see s 4(2)(b)(iii) and 4(3A) of the Act. Those two concepts are conceptually distinct. But they are also closely related where, as in the present case, the members of the putative “couple” cohabit. The characterisation of a relationship for the purpose of applying these concepts is ultimately a matter of impressionistic opinion. There is neither a legislative, nor a generally accepted, set of criteria to determine the relevant indicia of marriage, where the spouses contend they are living separately and apart. Still less are there precise criteria for determining when a relationship is “marriage-like”. Implicitly recognising the difficulty of the required assessment, s 4(3) of the Act requires the decision maker to have regard to all of the circumstances of the relationship. Particular consideration is required of the criteria specified in s 4(3)(a)-(e). These involve 5 aspects of the relationship, and can be summarised as:
  3. The considerations mandated in s 4(3) are not accorded any relative priority. A notable feature of the required considerations is the reference to “legal obligations”, “responsibilities” and “commitment” (ss 4(3)(a)(iii), 4(3)(b)(i)&(iii) and 4(3)(e)). However, the considerations mandated also recognise the importance of “social” and “emotional” connections (ss 4(3)(c), 4(3)(d) and 4(3)(e)(ii)). These features suggest that parties’ subjective acceptance of indefinite mutual commitment and responsibility, based on emotional and social connections, may be a telling feature in favour of “de facto” characterisation of the relationship. This may be so even when there is no sexual relationship between the parties at the time of the assessment. On the other hand, because the characterisation ultimately depends on the totality of the relationship, none of its aspects, and certainly not an overt denial of marriage commitment, is necessarily a determinative consideration.

The nature, length, and intended duration of the parties’ relationship and commitment


  1. Mr Wood and Ms Giorgi have had a long association. For some years before April 1999 their relationship was sexually intimate. In April 1999 they began to live together in her house in Napier Street, Paddington. They claim he did so under the terms of a lease agreement. Their cryptically informal agreement was recorded in a partially handwritten, single page document. It purported to be an agreement for rental of part of the house, but it gave Mr Wood general “property access” including a “bedroom and storeroom”. This right had no time limit, other than Ms Giorgi’s unilateral ability to terminate it on two weeks’ notice. In exchange he was supposedly required to pay $120 per week as “rent”.
  2. Mr Wood said he moved into Ms Giorgi’s house to provide her with companionship and assurance – because she feared violence, or at least annoyance, from a former admirer. The terms of the agreement were supposedly intended to reflect the commercial nature of their arrangement and make clear that he had no claim on her ownership of the house.
  3. Despite what Mr Wood says, and despite the emphasis he and Ms Giorgi tried to place on their informal 1999 agreement, their relationship did not start as one of landlord and tenant. Neither has it become one of that kind. Even though Mr Wood was then himself married (and did not formally divorce until 2004), their relationship started with intentional intimacy and subsequent cohabitation. When they contemplated Mr Wood moving in to the Paddington house, they apprehended their intimate cohabitation could give rise to inferences of shared property interests or expectations of property claims. It was that apprehension, and Ms Giorgi’s determination not to compromise her ownership of the property, that really prompted their 1999 agreement. Their informal written agreement was a deliberate attempt to diminish the scope for any such inferences or expectations, but it did not reflect the reality of their true relationship.
  4. For some time after April 1999 the reality of Mr Wood and Ms Giorgi’s relationship matched their original contemplation. Their intimacy continued. If Mr Wood ever in fact paid any rent, he certainly did not do so for any substantial period. This is so despite the various claims each of them made. Mr Wood said that up until sometime in 2000 his supposed rent liability was adjusted for in various ways, including the use of his car and carrying out repairs at the Napier Street house. Ms Giorgi said that Mr Wood did pay rent for a time, and she produced an inconclusive list of payments, none of which recorded amounts of $120 per week, or even multiples of it. Even Ms Giorgi agreed that Mr Wood stopped paying rent. She said the reason he stopped was that she became ill. She was unable to do much for herself and he looked after her, adopting a role as carer. She did not see why Mr Wood should be paying rent when he was looking after her. That was many years ago, presumably around the time Ms Giorgi had a laminectomy operation in about May 2000. Mr Wood has certainly never subsequently paid any rent. In that regard we note that Ms Giorgi reported to Centrelink in October 2000 that she was not using the house to generate income, and that Mr Wood was not contributing financially. Neither did Ms Giorgi support Mr Wood’s claim that they had substituted a formal bartering arrangement for his supposed rental obligation. She said the first she heard of that suggestion was in the course of Mr Wood’s evidence to the Tribunal.
  5. Whilst their cohabitation at Napier Street began with an intimate relationship, Ms Giorgi and Mr Wood appear to have different views, and there are some inconsistent statements, about the period over which their relationship retained its original intimacy. Mr Wood said that by some time in 2001 he was planning to move out. The significance of this is doubtful – partly because it may have coincided with a period when Ms Giorgi had an extended holiday overseas, and partly because of what happened when she returned in about September 2001. She remembered the timing partly because it was after Mr Wood suffered a workplace back injury, and partly because of the notorious terrorist attacks in that year. She denies they resumed their previous intimate relationship, but admits that she was very happy to see Mr Wood when she returned. The reality is that Mr Wood remained living with her at the Napier Street house and sometime shortly afterwards she fell pregnant. Their daughter Cecilia was born in June 2002.
  6. Ms Giorgi downplays the circumstances that led to Cecilia’s birth, and disavows it as indicating the resumption of their intimate relationship. We are very sceptical of the accuracy of her recollection. We note, for example, that in May 2006 (in circumstances to which we will later refer) Ms Giorgi reported to Centrelink that she and her partner were now separated and that he had moved into a spare room since January 2006.
  7. Mr Wood’s evidence conveyed that he was of a quite different impression to Ms Giorgi about the nature of their relationship after her return from overseas in 2001. This emerged from his evidence about Ms Giorgi’s alteration to Cecilia’s birth registration. She added a third, perhaps unusual, given name to Cecilia’s birth register. Mr Wood said this occurred without his knowledge. He regarded the episode as involving a deep breach of trust. He thought it was inconsistent with any characterisation of their relationship as that of de facto spouses. He claims that he never thereafter regarded Ms Giorgi as his partner.
  8. We accept that Ms Giorgi’s secret addition to Cecilia’s name disappointed Mr Wood. We doubt however, that his disappointment was as profound as he claimed. The name addition was objectively minor and, of itself, seems not to have been a matter of continuing tension between them. Furthermore, we are alert to Mr Wood’s capacity for self-interested interpretation of events (for example in relation to his “rent” payment claim). But the important point to note for present purposes is that in making his claim to profound disappointment about the addition to Cecilia's name, Mr Wood conveys a view of his relationship with Ms Giorgi which, at least up to that time, merited its description as a partnership requiring deep trust and commitment. It was that view that gave rise to Mr Wood’s claimed sense of disappointment over the circumstances of Cecilia’s name change.
  9. Despite his avowed disappointment, Mr Wood remained with Ms Giorgi at the Napier Street house and has participated dutifully in Cecilia’s upbringing. He says he did so because of his “duty of care”. He described this as a moral obligation that transcended mere friendship, but did not derive from any “marriage-like” view of his relationship with Ms Giorgi. It derived partly from what he regarded as his promises to Ms Giorgi, partly out of a claimed desire to protect Ms Giorgi against the risk of the return of her former unwanted admirer, and partly out of commitment to his daughter. He said that he had been able to come to an intellectual arrangement with Ms Giorgi in the best interests of their daughter. As a result of that arrangement they had been able to achieve a degree of stability that was similar to, or even better than, what he had seen in other family relationships.
  10. Mr Wood says that his relationship with Ms Giorgi is a “pragmatic” relationship that does not go beyond the necessities dictated by their circumstances. Ms Giorgi makes substantially the same claim, particularly in the context of minimising the significance of their financial co-operation (a matter we will address later.) Mr Wood does concede, nevertheless, that his relationship with Ms Giorgi could be perceived as going beyond one of mere friendship. And he acknowledges that in the past, and particularly in information they have provided to Centrelink, they have described themselves as partners or de facto spouses. But he downplays the significance of those descriptions. He complains that there is no definition of such a relationship, and that Centrelink’s information does not convey clearly what either of those terms mean.
  11. Later in these reasons we will more specifically comment on Mr Wood and Ms Giorgi’s past self-descriptions as partners or de facto spouses. It is sufficient for present purposes to say that we do not accept that the use of those terms requires either definition or precise understanding. They are terms in everyday use. Whatever they precisely convey, or are intended to convey, they connote a relationship that is more than mere friendship or pragmatic convenience. We consider that Mr Wood and Ms Giorgi’s past willingness to use, or at least to acquiesce in the use of, such descriptions reinforces our view that their relationship was and is more than a matter of pragmatic convenience. On Mr Wood’s own evidence, their relationship involves at least the commitment of the “duty of care” to which he referred. It has endured, despite sometimes difficult personal and financial circumstances. It has the significant feature of mutual, close and practical devotion to a much loved little daughter. We reject Mr Wood and Ms Giorgi’s claim that their relationship is, to any real extent, either a business arrangement or one of mere pragmatic and practical convenience. The better view is that their relationship involves a degree of commitment to each other’s personal well-being, as well as to that of their daughter. It also involves, despite the evident tensions between them, a degree of personal support, respect and affection.

Moving out intention


  1. Notwithstanding Mr Wood’s view that he owed Ms Giorgi a duty of care and that he was concerned to provide with her, a proper environment for their daughter Cecilia’s upbringing, he said he did not intend to live with Ms Giorgi either permanently or even indefinitely. He claimed he intended to move out some time during 2010.
  2. Mr Wood’s professed reasons for his intention to leave the Napier Street property are not persuasive. Part of them was that Ms Giorgi has never regarded their relationship as a marriage and never wanted it to be presented in that way. This is true, in the sense that Ms Giorgi has eschewed the formality of marriage. But it is somewhat inconsistent with their use of the “partner” and ”de facto” descriptions in the information they provided to Centrelink (and as we will later note, in some other contexts). Neither is it entirely consistent with Mr Wood’s subjective recognition of what he called his “duty of care” to Ms Giorgi. We consider that if Mr Wood ever resented Ms Giorgi’s preference for the informal status of their relationship, he reconciled himself to acceptance of it long ago. We do not accept that Ms Giorgi’s preference to avoid a marriage relationship is a material consideration that is likely to lead to Mr Wood moving out of the Napier Street house.
  3. Another part of Mr Wood’s reasons for his intention to move out was, he said, growing tension between himself and Ms Giorgi. The problem had been going on for some time and, in his mind, had been detrimental to what he called “the perceived family structure”. He expressed a concern that if the level of discord between them grew, it might have an adverse impact on Cecilia. He thought that his moving out would improve her happiness. And it was her welfare that was his primary motivation, and indeed the basis of his decision making.
  4. Mr Wood attributed this tension partly to lack of common interests with Ms Giorgi. But this must have always been a feature of their relationship and it is difficult to accept that it should now become a determinative consideration. More significantly, he thought that financial pressures provided much of the reason for the friction between them. In that context he alluded to what he called a sense of shame about his own position and a number of personal issues. Mr Wood did not explain what he meant by the latter of these matters. The former we understood to refer to Mr Wood’s self-perception that he had not done as much as he might have, to contribute to their financial resources. But we do not see that this perception, if it is a source of current friction in the relationship, meaningfully informs its characterisation when assessed against Mr Wood’s professed “duty of care” and the actual unlikelihood that he will move out as he claims.
  5. Mr Wood identified financial pressures as providing him with the impetus to move out, and the possibility of their alleviation as giving him the means to do so. So far as financial pressures are concerned, they must have been much greater in the period before February 2008, when Mr Wood was not being paid his workers’ compensation entitlements. So far as financial prospects are concerned, Mr Wood spoke of a broadening of his artistic activities. He has begun to present some of his work at Sunday markets, and achieved a measure of modest commercial encouragement. He hopes to be able to generate an income from developing his skill base and formulating a business plan. These are laudable ambitions, which we do not mean to minimise. But we also observe that if Mr Wood’s aspirations are fulfilled that will itself substantially alleviate the financial pressures to which he attributes the current tension in his relationship with Ms Giorgi. He asserted nevertheless that he would still intend to move out even if his financial situation did markedly improve. He said this was because it was time that he moved on. But both his real inclination, and his ability, to do so are very doubtful. His inclination is doubtful because it would deprive him of the close daily contact with his daughter – contact he clearly highly values. It would also leave Ms Giorgi to deal with the anxieties and apprehensions to which we will shortly refer. Mr Wood’s ability to leave the Napier Street house is also doubtful because his only identified strategy was the uncertain prospect of some temporary shared accommodation with friends in a unit at Brighton Le Sands. We regard that possibility as quite unpersuasive.
  6. A more realistic assessment emerges from Mr Wood’s concession that he did not really know what he would do if his income substantially increased. If he became more active with his artistic work, that would inevitably reduce the amount of time he could spend with his daughter Cecilia. That prospect concerned him. He also acknowledged that it would in fact be very difficult for him to move out. One of the things that influences him greatly is his perception of his duty of care to Ms Giorgi and Cecilia. He is concerned about her welfare and, in particular, her ability to function without his regular and supportive physical presence.
  7. Ms Giorgi shared that concern. She has a long history of depressive and anxiety disorders, which date back to a traumatic incident involving a former boyfriend in 1994 and injuries she suffered as a pedestrian in an accident in 1996. Those disorders, and chronic leg and back pain caused by her 1996 injuries, are the reasons she was granted DSP. Ms Giorgi very much doubts her ability to function without Mr Wood’s physical presence and re-assurance. Indeed, she said she did not think she could really cope on her own. She realised that she was actually rather emotionally frail and lacked the resilience to be able to cope either with day-to-day exigencies or some ordinary activities. If her routines were disrupted, or she was exposed to stress, she did not function well. She does not like to go to the cinema or theatre, or other dark venues. She can get anxious about traffic and crossing the road. This awareness of her limitations was compounded by a self-consciousness that she would be perceived as a comparatively elderly mother (she is 49 years of age). She confessed to an anxiety, that if she did not have someone else in the house supporting her, there was a risk that her care of Cecilia might be found wanting and result in Cecilia being taken away. Ms Giorgi acknowledged that this anxiety probably sounded somewhat irrational. But it was very real to her, and it had some basis given her concessions about her difficulty in coping with situations she finds stressful. However slight the risk might be, she obviously so highly values her daughter that it is a risk she is unlikely to want to confront.
  8. More significantly, Ms Giorgi said that she did not consider having someone other than Mr Wood living with her and Cecilia was likely to be an acceptable solution. She did not want to have a stranger in the house. It was far more appropriate for Cecilia to have both her parents there to look after her. Her overriding view was that, having gone through all the difficulties she and Mr Wood had endured for the purpose of Cecilia’s well-being, she could not really contemplate them being separated. It was, she said, Mr Wood’s proposal to move out that had led to several arguments between them.
  9. There is some degree of tension in the current relationship between Mr Wood and Ms Giorgi. Part of this is likely to result from their financial circumstances, where neither currently has a comfortable income. But their financial circumstances would appear to be much better now than they were in 2007 when Mr Wood made his newstart application, and in January 2008, when Ms Giorgi renewed her application for DSP – because Ms Giorgi’s application was successful and Mr Wood’s workers’ compensation payments were reinstated in February 2008. Ms Giorgi attaches high importance to Mr Wood’s paternal involvement with Cecilia. She is also reliant on Mr Wood for the assurance and support she feels she needs to function effectively. This high regard and reliance cannot realistically exist without considerable personal affection. In Mr Wood’s case, his references to his “duty of care” strongly suggest a reciprocal respect, affection and commitment to Ms Giorgi.
  10. We consider it proper to assess Mr Wood and Ms Giorgi’s relationship on that basis. Mr Wood is committed to Ms Giorgi’s welfare and that of Cecilia. We are also of the opinion that Ms Giorgi lacks the confidence, and perhaps even the ability given her anxiety, depressive illness and chronic pain, to live in the Napier Street house without Mr Wood. We consider the far most likely scenario is that they will continue, for the indefinite future, to live together in their current fashion, as dutiful and supportive parents of their daughter Cecilia, at the Napier Street house.

The social character of the relationship


  1. Mr Wood and Ms Giorgi assert that they do not socialise as a couple. Ms Giorgi said she could not remember going out with Mr Wood. A more detailed explanation of their activities suggests, however, a significant degree of social interaction. Mr Wood said that they would sometimes shop together and sometimes go out together to eat – the latter situations being necessarily limited by their financial circumstances. Together they would attend parent teacher meetings and school activities. They would occasionally go to the park together. They spent some time together on Christmas Day and on Easter Sunday – exchanging presents and doing an egg hunt. There are a large number of children in the street where they live, and they mingle with their neighbours and their children. They have children and friends visit them at home.
  2. These social activities are, it is fair to say, less extensive than one might find in some marriage-like relationships. And Mr Wood and Ms Giorgi emphasise that they have different interests and, at least in Ms Giorgi’s case, groups of friends. But differences of these kinds are common in any relationship. In addition, Mr Wood and Ms Giorgi’s opportunities for joint social outings are likely to be limited, to some extent, by their financial means and by her apprehensions about cinemas, theatres and other dark venues.
  3. Mr Wood said that he and Ms Giorgi sometimes take holidays together with their daughter Cecilia and his son Alex. He characterised these as holidays in which they participate jointly primarily for the sake of the two children. He pointed out that they also went away separately. Sometimes Ms Giorgi would go down the coast, or visit her cousin in Canberra, without him. He also had his own occasional holidays in Victoria.
  4. There is no evidence from Mr Wood and Ms Giorgi’s friends and associates about their characterisation of the relationship. At a very late stage of the hearing Ms Giorgi sought to adduce written evidence to that effect, but in view of its lateness, the unavailability of the persons concerned and the Secretary’s objection, it was rejected. There is therefore no evidence that Mr Wood and Ms Giorgi’s friends or regular associates view their relationship as “marriage-like” or “de facto”.

Mr Wood and Ms Giorgi’s self-characterisation as de facto partners


  1. There are many examples, over a considerable period of time, where each of Ms Giorgi and Mr Wood has characterised their relationship as that of de facto partners. These include the following:

Mr Wood and Ms Giorgi’s equivocations about the nature of their relationship


  1. Despite the frequent descriptions of their status as “partners” or “de facto”, there are other instances where Ms Giorgi’s characterisation of their relationship was more equivocal:

The disavowal of de facto partner status


  1. It was not until the assessment of Mr Wood’s 2007 newstart application that he and Ms Giorgi became insistent that their relationship was not “marriage-like” and not “de facto”. They both signed a 24 December 2007 “Assessment of Living Arrangements” form, although most of the information contained in it appears to have been written by Ms Giorgi.
  2. In the 24 December 2007 document, Ms Giorgi wrote that they had separate bedrooms, but otherwise shared use of the living and utility areas of the house. They also shared the use of household goods and furniture, even though most of them were actually owned by Ms Giorgi. They shared household tasks although Ms Giorgi tended to do most of the domestic ones and Mr Wood the handyman type activities. In recent times they had not shared payment of bills. But this was substantially attributed to Mr Wood's financial circumstances (his workers’ compensation payments had been stopped). Ms Giorgi added that Mr Wood would always attempt to pay half when he was able to do so, and had made arrangements to borrow money from his parents for that purpose. She said they were not invited out as a couple, except to things "like Christmas" when they did go with the children. They took the children on holidays at Christmas and also went to stay at the Burrill Lake properties with them. She said they shared lots of activities that are good for the children. In response to a question about the extent she would expect Mr Wood to provide care, support or help in circumstances of illness, personal crisis, family disputes or money matters, Ms Giorgi described Mr Wood as having always been very "caring and supportive of me and I of him. We were lovers – we are now good friends and co-parents of our 5 1/2-year-old Cecilia and his son Alex who is 12." In response to the question whether any of their relatives or friends did not believe they were separated, Ms Giorgi said this was not relevant. They were never married or a "formal couple", so it was irrelevant to ask when they had "separated". Centrelink were the only people who have ever claimed they were "married/de facto". In response to the question how long they intended to share accommodation, Ms Giorgi wrote "we are not married but we are definitely a family so who knows". In response to a question whether she thought it was likely they would reconcile or commence a live-in relationship similar to that of husband and wife, Ms Giorgi answered that the question was "not really relevant". She said "we remain very fond of each other and we love our children and are committed to looking after them properly. However we both suffer from chronic pain and other complaints so who knows" but added “and we are not married or de facto”. In another part of the Living Arrangements information submitted at that time, but in this instance signed only by Ms Giorgi, she wrote that she was unsure how long they intended to continue sharing accommodation. She wrote that Mr Wood was Cecilia's father and was also sick. She concluded "he may well stay here indefinitely."
  3. Ms Giorgi’s original DSP entitlement had been cancelled (incorrectly, as the Secretary later determined) in August 2006. She renewed her DSP application on 15 January 2008. In the application she nominated Mr Wood as her former partner, but said they were separated.
  4. On 7 February 2008 Ms Giorgi wrote to Centrelink. She said she was not married, and never had been. She said her original agreement with Mr Wood had been made in April 1999, before he moved in, and itself demonstrated that they had no mutual financial responsibilities. She said that the agreement had been varied to deal with changing circumstances, including in 2003 a reduction of the original area leased. But their intention had always been to achieve financial separation and to “protect my principal asset”. She said their relationship was a friendship. We interpolate that whilst it is easy to accept that the purpose of the April 1999 agreement was to protect Ms Giorgi’s interest in her house, the relationship was not one of mere friendship. Ms Giorgi’s claim to that effect is contradicted by the reality and by what she had said in her 6 September 2002 family tax benefit claim – that she had begun living in a de facto relationship with Mr Wood in 1999.

The significance of Mr Wood and Ms Giorgi’s variable self-characterisations


  1. Ms Giorgi refutes the various references in the Centrelink documents to her relationship with Mr Wood as either “partner” or “de facto”. She says that the term “de facto” is not one she would use without prompting. She would more likely have described Mr Wood as a “boyfriend”. Ms Giorgi claimed, in effect, that the Centrelink references were more the result of Centrelink staff having suggested the characterisation to her, than her own description.
  2. Mr Wood also sought to deflect the significance of the many references in the Centrelink documents to a “partner” or “de facto” relationship with Ms Giorgi. Part of his complaint was that the characterisation had no precise meaning, and its particular significance had never been explained to him. He particularly objected to the “de facto” characterisation being used where its consequence was to take Ms Giorgi’s assets into account in the assessment of his own benefit entitlements. This was because, right from the commencement of their relationship, Mr Wood had explicitly disavowed any claim on Ms Giorgi’s assets. And during their cohabitation that position had never changed.
  3. We have some sympathy for Ms Giorgi and Mr Wood’s complaints about the imprecision of the “de facto” and “partner” characterisations. But we do not accept that they were ever under any significant misapprehension about the purpose of Centrelink’s “partner” enquiries or about the nature of the relationship that was relevant to those enquiries. We are particularly impressed by Ms Giorgi’s answers in her 6 September 2002 family tax benefit claim. That was but a few months after Cecilia was born, and at a time when Mr Wood said their trust had been broken by the name change incident. In that document, Ms Giorgi and Mr Wood’s responses are in their own hand. They identified Mr Wood as her “partner” and she indicated that the de facto relationship with Mr Wood started in April 1999. That was the fact. We are also impressed by Ms Giorgi’s disclosure to Centrelink in May 2006 that she and Mr Wood were attempting reconciliation, after he had moved into a spare room and she had sought to be classified as living separately and apart. That disclosure is, in our opinion, inconsistent with their current claim that their relationship had by then become just a matter of pragmatic necessity or merely an intellectual arrangement. The more accurate information is provided in the 24 December 2007 document to which we have referred. In that document Mr Wood and Ms Giorgi described their sharing of household tasks and described themselves as definitely a family.
  4. There are, in our opinion, five important matters to note. The first is Mr Wood and Ms Giorgi’s original agreement that their cohabitation was not intended to jeopardise Ms Giorgi’s assets in any way. This was, and remains, a very important matter for Ms Giorgi, and one Mr Wood has always respected. It is likely to have been a feature of their relationship that was evident to others. It is a relevant consideration, and one that may have influenced both their own subjective assessment of the proper characterisation of their relationship, and any assessment made by their friends and associates. However, the second matter is that Mr Wood and Ms Giorgi have a long relationship. Mr Wood’s role in that relationship cannot ever have been accurately described as that of a mere boyfriend, despite Ms Giorgi’s current claim to the contrary. The third important matter is that, whatever the precise stimulus for the use of the terms “partner” and “de facto” in the various Centrelink documents to which we have referred, Mr Wood and Ms Giorgi were prepared to accept them. We consider that acceptance is quite inconsistent with them ever either understanding their relationship, or presenting it to others, as involving merely a commercial arrangement, a pragmatic arrangement of circumstantial necessity, or a relationship in which they were in reality “separated under one roof”. The fourth important matter is that whilst Mr Wood and Ms Giorgi’s relationship does retain elements of determined independence in relation to her real property assets (those apparently being the only substantial assets either of them possess), it is also characterised by a degree of commitment. That is evident partly in Ms Giorgi’s determination to secure Mr Wood’s continued active involvement in Cecilia’s upbringing, partly in Mr Wood’s perception of having a duty of care to both Ms Giorgi and Cecilia, and partly in their actual devotion to, and approximately equal participation in, Cecilia’s upbringing. Finally, we cannot discount a degree of scepticism about the extent of separation they now say characterises their relationship. Partly our scepticism is fuelled by what we regard as their essentially disingenuous reliance on the April 1999 agreement, as if it was, in reality, intended to serve a genuine commercial purpose consistent with its terms. Partly also, we are conscious of the apparent inconsistencies between their various characterisations of their relationship over time. (We refer here to the matters on which we have specifically commented above.) We do not intend to convey by this scepticism a positive belief that either Mr Wood or Ms Giorgi has been deliberately untruthful in their evidence. But their current subjective perceptions of their relationship are highly coloured by self-interest, coloured also by resentment at dismissal of the significance of their informal April 1999 agreement, and not in fact consistent with information they have repeatedly provided in the past. Consequently their currently stated views are not persuasive in influencing the characterisation it is proper to make.

Household living arrangements and responsibilities


  1. Ms Giorgi’s Napier Street house has a ground floor patio kitchen, with a living area apparently comprising a dining room and a spare room. Upstairs there are three bedrooms. She and Mr Wood have separate bedrooms. Despite their separate bedrooms, neither Mr Wood nor Ms Giorgi is otherwise limited in the extent to which they use and share the rest of the house. They share the bathroom and kitchen facilities. The downstairs living area is another shared space. It is equipped with a TV and games console, as well as audio equipment belonging to Mr Wood. Mr Wood claimed that he did not use any other room in the house. But this is an overstatement. So far as Mr Wood requires his own separate space to pursue his artistic activities, he has that space in the separate studio/workshop premises he leases elsewhere.
  2. Ms Giorgi described their day-to-day activities as similar to that of ordinary flatmates. They contribute money for household groceries, although they sometimes buy separate grocery items for their own personal use. Mr Wood said that although Ms Giorgi is the better cook, they do cook for each other and share meals with Cecilia. It is difficult to determine precisely how regular an occurrence this is. Mr Wood said that on a normal day he would get his own breakfast and Ms Giorgi would have breakfast in her room with Cecilia. She would take Cecilia to school. He would often go to his studio during the day. Sometimes he would stay there until 9 or 10 o’clock at night. He said Ms Giorgi normally gets Cecilia’s dinner, although he had done so at times. Often they would look after themselves independently for evening meals.
  3. Mr Wood and Ms Giorgi share Cecilia’s care roughly equally, according to their skills and abilities. Ms Giorgi said that she looked after washing Cecilia’s clothes and tidying her room. She would take her on outings and to visit friends. But Mr Wood also shared in these activities. Together they very often help Cecilia with her homework. Very often he reads to her aloud at night. He is helping her become computer literate – a matter in which Ms Giorgi is comparatively unskilled. Mr Wood takes Cecilia to the movies and to her tae kwan do lessons. He does Cecilia’s hair and nit treatments, when they are required. In detailing the extent of Mr Wood’s involvement, Ms Giorgi explained that Cecilia was a somewhat defiant and argumentative little girl. This prompted their joint, and in particular Mr Wood’s, involvement. She said that their intention was to distribute equally their respective contributions to Cecilia’s upbringing and that they both had a great deal of input into her daily well-being.
  4. We observe that in Ms Giorgi and Mr Wood’s accounts there is perhaps some tension between the appearances that they only sometimes share evening meals together, but that Mr Wood usually helped with Cecilia’s homework and often read to her at night. We would infer that the better view is that Mr Wood is a regular, indeed typical participant in the family’s evening ritual, and that it is in reality a commonly shared activity.

Sexual relationship: s 4(3)(d)


  1. Cecilia’s birth in 2002 evidences that Mr Wood and Ms Giorgi’s relationship was once intimate. They say it is no longer, nor has it been for many years. We have already observed that this latter aspect of their evidence merits scepticism (we refer to the reference in the May 2006 updated medical particulars to Mr Wood having moved into a separate room in January 2006, and an attempt at reconciliation). But there is no specific evidentiary basis to justify a positive finding that they currently have an ongoing sexual relationship.
  2. It is however proper to note that, as far back as April 1999, Ms Giorgi had reported to an interviewing psychiatrist that her 1996 accident injuries, and her subsequent depressive illness and anxiety, has diminished her libido and had a dramatic and adverse effect on her sexual activity. In her evidence to the Tribunal Ms Giorgi conceded that Mr Wood had at times a different preference to hers about their sexual abstinence.

Financial assets, resources, obligations and expenses: s 4(3)(a)(i)-(iv)


  1. Ms Giorgi owns the Napier Street, Paddington house where they live. She also owns, with her aunt, two modest residential properties at 33 and 35-37 Kendall Crescent, Burrill Lake. Mr Wood disavows any claim to any of these properties. Mr Wood does not own any real property, or indeed any significant property. Since 2001 he has rented a small craftsman or artist’s workshop. He meets the rent himself.
  2. Mr Wood and Ms Giorgi have separate bank accounts. They do not share ownership of any significant assets. Indeed, as their initial 1999 informal agreement suggests, they have taken care to separate their assets.
  3. Mr Wood and Ms Giorgi’s income is modest. Ms Giorgi’s only income has been from social security benefits – currently her DSP. From 2002 until January 2006, and since February 2008 when they were reinstated, Mr Wood has been receiving workers’ compensation payments for partial incapacity arising from workplace injuries he suffered in 2001. The current rate is approximately $735 per fortnight. Presumably that income is supplemented by his artistic activities. Nevertheless their respective incomes are modest. That modesty, their cohabitation, and their mutual concern with their daughter’s welfare, suggest the practical desirability of the co-operative contributions to their common expenses. Their principal financial obligations and expenses involve meeting the ordinary needs of daily living as well as the care, support and education of their daughter Cecilia. They do contribute more or less equally to household expenses, according to need and ability. They do not have any formal arrangement for Mr Wood to contribute to Cecilia’s support.

Characterisation of the relationship


  1. Earlier in these Reasons for Decision we referred to the potential difficulty involved in applying the “marriage-like” criterion to any particular relationship. The difficulty has long been acknowledged. In Re Spencer and Secretary, Department of Social Security (1987) 13 ALD 497, the Tribunal was concerned with the similar difficulty of applying the definition of a “de facto spouse" under the Social Security Act 1947. The essential criterion in that definition was whether or not a person was living with another "as the spouse of that person on a bona fide domestic basis" although not legally married to the person. The Tribunal said:
Given two people .... living together under the one roof, one must then ask the question why they have chosen to do this. People will, of course, have many mixed motives for pursuing a particular course of conduct, particularly in their relationships with others. The predominant motive of each party might, however, be to secure the emotional gratification to be derived from the incidence of an on-going personal relationship with the other; this might be sought on a permanent basis (at least, for the foreseeable future); and their presence under the one roof might be explicable predominantly by pursuit of the emotional gain from their relationship. If so, the relationship does have a special quality which would set it apart from relationships with others, and make it a de facto relationship within the statutory definition.

  1. Spencer involved a man and a woman, who had grown children from their separate marriages, but who had operated a retail business in partnership. They sold the business, retired and purchased a house they occupied together. They held title to the house as joint tenants, although they said they had really intended to do so as tenants in common. They had separate bedrooms in the house, but otherwise shared it and contributed, approximately equally, to the payment of all household accounts. They shared a common social life, but did not present themselves as a married couple. The man was in poor health and the woman provided him with virtually continuous care and attention. Each of them could have lived with their respective children but they preferred the comparative independence, and social interaction, of their cohabitation arrangements.
  2. In the particular circumstances in Spencer, the Tribunal considered the relationship, involving the woman’s evident degree of commitment and care, “were either a prelude to, or a consequence of, what must be a strong bond between two people based upon mutual respect, affection, loyalty, and trust.” While the Tribunal acknowledged that none of those factors would alone be sufficient to indicate a marriage-like relationship, they did so "in combination with" the Tribunal's overall assessment.
  3. Clearly the Tribunal found it difficult in Spencer to articulate the precise quality that differentiated the relationship to the extent that merited its characterisation as "marriage-like" and constituted each of the persons as a "de facto spouse". Earlier, after acknowledging the relevance of the factors that are now mandatory considerations under s 4(3) of the Act, the Tribunal said:
It would obviously be unsatisfactory to perform the task of categorising a relationship by reference to a “tick-off list”, with a particular points tally in mind. For in essence, the adumbrated factors are signposts to a goal for which the decision-maker is searching. That goal is the isolation of some exquisite quality in a relationship between two people which distinguishes it from the others built up in the course of their lives.

  1. The decision in Staunton-Smith v Secretary, Department of Social Security [1991] FCA 513; (1991) 25 ALD 27 concerned a couple who were formally married but had separated. The wife had a disabled child from a previous marriage. She also suffered from a disease that limited her capacity to look after the child. Because of these combined difficulties, some eight years after they had separated, the wife and the disabled child returned to live with the husband. They did not however have any social or sexual relationship. The wife made no meaningful contribution to the household expenses. The husband's evidence was that the arrangement was essentially one to provide for the child’s welfare and to support the wife with her health problems.
  2. In setting aside the Tribunal's decision, and remitting it for further consideration, O’Loughlin J cautioned that cohabitation adopted because of financial circumstances, physical dependence or even friendship was not sufficient, of itself, to justify characterisation of a relationship as relevantly marriage-like. There is a distinction between such a relationship and a mere "housekeeper arrangement" - however impressionistic, and difficult that distinction might be to draw. A factor that might determine the appropriate categorisation of a relationship was cohabitation continued, without sexual union and notwithstanding the parties’ subjective appreciation of themselves as living separate lives, in the interests of a child: [1991] FCA 513; 25 ALD 27 at 36 – citing Re Ivovic and Director General of Social Security (1984) 6 ALN 293.
  3. In Re Ford and Secretary, Department of Family and Community Services [2003] AATA 7; (2003) 72 ALD 718, the putative members of a couple had both been previously married. They had started their relationship as landlady and lodger. It had developed into a friendship involving shared ownership of the house where they lived and an investment property. They had a common credit card in relation to their shared household expenses and their investment property. But the man continued to pay board. He occupied a “granny flat” part of the house where they lived, but they did share some living areas in the house. The couple socialised together, to a degree that involved occasional dinner outings and holidays. But they did not present themselves as a couple and had never had any sexual relationship. This relationship had endured for more than 10 years. The Tribunal considered it evidenced a strong mutual preference and commitment, evidenced by the woman’s financial support during a period when the man had been unemployed. The Tribunal said at [2003] AATA 7; 72 ALD 718 at 725-726:
While ... they do not have the level of emotional commitment found in some marriages, they have a degree of emotional attachment which transcends mere friendship. The household is not only structured in the manner that it is because of convenience, practicality and/or economy. It is structured in that manner because they have a strong bond based upon mutual respect, affection, loyalty and trust. While these factors on their own would not be sufficient to indicate a marriage-like relationship, it is their reliance and dependence on each other and their resolve that it should continue indefinitely, which leads ... to the conclusion that, in law, Mr Ford is living in a de facto relationship ...

  1. One can find in the reasoning in Spencer and Ford both an enquiry about the unique or distinguishing qualities of the relationship in question, and an emphasis on mutual commitment. Both matters are clearly relevant considerations. Indeed the comparative singularity of the parties’ relationship with each other, whilst it is not an explicitly mandated consideration, is a potentially important consideration: see Pelka v Secretary, Department of Families, Housing, Community Services and Indigenous Affairs (2008) 102 ALD 22 at [27] – [31]. But it is mandatory to have regard to all of the circumstances of the particular relationship. And it is difficult to comply with that mandate if the consideration is carried out with a view to according priority to any particular factors. This is because, as Fitzgerald J said in Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131:
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 ... meets the statutory test.

  1. The characterisation process requires consideration of all relevant factors, those which weigh in favour of, as well as those that point against, a marriage-like characterisation. None of the mandated considerations can be isolated as necessarily disclosing a marriage-like relationship:
[47] The judgment to be made is difficult and, once out of the range of obvious cases falling within the core concept of "marriage-like", will be attended by a degree of uncertainty. Indeed, it may be that different decision-makers on the same facts could quite reasonably come up with different answers.
[61] A decision-maker in applying the matters set out in s 4(3) should acknowledge that they are non-exhaustive and at least indicate that consideration has been given to whether there might be any other factors relevant to the difficult judgment of whether a ‘marriage-like’ relationship exists. Each of the individual matters listed in s 4(3) is accompanied by a non-exhaustive list of factors. Again, the decision-maker in each case should consider whether there are any other factors relevant to the particular matter listed ...
[62] The statutory criterion of ‘marriage-like relationship’ is no doubt intended to ensure that there is no unfair discrimination in the payment of benefits as between those who are married and those who enjoy the benefits of marriage without its formalities. The formula is likely to be productive of difficulty in application and uncertainty in result ... The real difficulty arises from the fact that, in the payment of various classes of benefit, there is a distinction drawn between married and unmarried people. So long as marriage is a basis for different levels of benefit there will be a policy imperative to apply the distinction to marriage-like relationships.
Pelka v Secretary, Department of Family and Community Services (2006) [2006] FCA 735; 151 FCR 546 at [47] & [61]-[62].

  1. One can sympathise with administrative decision makers who are confronted with the obligation to apply a statutory criterion of this kind. The goal of sound public administration must surely be that of principled and fair decision making that reaches correct and preferable decisions, and does so on a predictably consistent basis. Equally, potentially eligible citizens who seek administrative decisions should be entitled to expect that the administrative task is framed in a way that is conducive to such a result. There is considerable tension between those desiderata and the "marriage-like" relationship criterion. That criterion, as we have seen, is informed by an indeterminate range of considerations. The ultimate task of characterisation has been described as a "jury question" – a description that is perhaps somewhat unhelpful, since jury decisions are neither required to be justified by explicit reasons nor amenable to merits review. The administrative decision maker, unlike a jury, must give reasons to justify their decision. The reasons must reveal consideration of all relevant, and not just the mandated, considerations, and the reasoning process by which that consideration moves to the ultimate characterisation. Necessarily that process involves a process of discrimination that accords different comparative significance to some considerations over others: Pelka at [61]. But the decision maker is warned that no considerations are entitled to primacy, lest doing so results in error. And the decision maker and citizen alike are warned that the decision making process, no matter how diligently carried out, is so "likely to be productive of difficulty in application and uncertainty in result" that different decision makers "on the same facts could quite reasonably come up with different answers": Pelka at [47] & [62].
  2. In relation to the considerations mandated in s 4(3) of the Act, we make the following findings.
  3. Financial aspects: Mr Wood and Ms Giorgi:
  4. In addition, a significant feature of their relationship is not just the absence of any joint ownership of real estate, but that they have taken pains, from the outset of their cohabitation in 1999, to provide Ms Giorgi with re-assurance that her house and other real property are highly unlikely to be capable of any claim that might otherwise arise out of their relationship. Taken in isolation this aspect of the relationship might tend against its “marriage-like” characterisation. But it is also relevant to consider that Ms Giorgi’s ownership of the Napier Street house preceded their cohabitation by very many years, and was not funded, in any sense, by Mr Wood’s contributions. Much the same considerations apply to Ms Giorgi’s co-ownership of the Burrill Lake properties, even though she acquired her interest in them after Mr Wood moved in to live at Napier Street. It would not be at all surprising, even in a formal marriage relationship, for the parties to have agreed that properties acquired by Ms Giorgi in similar circumstances, stood entirely outside any claims that might arise from their relationship.
  5. In totality, Ms Giorgi and Mr Wood’s financial arrangements do not point clearly to any particular characterisation of their relationship. Their limited means, no doubt substantially attributable to the illnesses and incapacities affecting them, rather dictate the practical desirability of a high degree of financial co-operation, and at the same time, preclude the opportunity for substantial asset joint ownership or pooling of resources. On the other hand, they have a common interest in, and commitment to, their daughter’s welfare, and that provides a separate reason for financial co-operation. In addition, Ms Giorgi’s financial assistance to Mr Wood during at least 2006 to 2008, goes well beyond a merely commercial relationship between them.
  6. The nature of the household: Mr Wood and Ms Giorgi live in Ms Giorgi's house with their 7 year old daughter. There is no specific segregation of their use of the premises, other than that they have separate bedrooms. They share joint responsibility for the care and support of their daughter. There are no fixed arrangements in relation to housework. The generality of these arrangements is consistent with, but not probative of, a "marriage-like” relationship. However, their joint commitment to, and active involvement in their daughter's daily life, education and social activities indicates a dutiful participation in, and promotion of, family life. So understood, the nature of the household is a factor that tends to indicate a "marriage-like" relationship.
  7. Social aspects: Mr Wood and Ms Giorgi do not explicitly hold themselves out as a de facto couple. They have however, so described themselves, over a period of years, in their contact with Centrelink and with some professional consultants. There is no evidence as to how their friends and associates perceive their relationship. It is likely, given the importance Ms Giorgi attaches to her ownership of the Napier Street property, that friends and associates are aware of that matter, and it may colour their view of the relationship and regard it as not "marriage-like". Mr Wood and Ms Giorgi have limited joint social activities. They are principally confined to activities related to their daughter and include both school, family and holiday related activities. The totality of these factors point on the one hand to a degree of reluctance to accord their relationship a "marriage-like" characterisation. On the other hand it evidences a degree of past acceptance of the "de facto" characterisation and a degree of commitment to family activities which, given their financial limitations is consistent with a "marriage-like" characterisation of their relationship.
  8. Sexual relationship: Mr Wood and Ms Giorgi’s cohabitation began involving sexual intimacy. Cecilia’s birth some three years later suggests the minimum duration of a relationship of that kind, despite Ms Giorgi’s denials. The 2006 report to Centrelink that Mr Wood moved into a separate bedroom in January that year conveys a possibly longer duration of that aspect of their relationship. Nevertheless, they probably do not now have a sexual relationship. But it is unclear the extent to which the decline in their sexual activities is a matter of incapacity or disinclination related to illness, or a view that it is no longer part of their relationship for other reasons.
  9. The discontinuance of intimacy, even if it is now longstanding, we consider is potentially inconsistent with characterisation of the relationship as “marriage-like”. But its real significance is rather more equivocal in the present circumstances, partly because of the potential influence of Ms Giorgi’s illness and incapacity and partly because of the commitment evident in their relationship.
  10. Commitment: Mr Wood and Ms Giorgi began a relationship of intimate cohabitation in 1999. Despite avowedly different interests, they do provide each other with companionship and emotional support. This is particularly the case in relation to the upbringing of their daughter, and is especially significant because of Ms Giorgi's anxieties about her own parental capacities. Neither of them has any similarly close relationship. Ms Giorgi has never been married. Her previous domestic relationship ended traumatically for her. Mr Wood was married, but divorced in 2004. His son from that marriage visits, and occasionally holidays with Ms Giorgi and Mr Wood. Ms Giorgi and Mr Wood’s relationship is likely to continue indefinitely, principally because of their commitment to their daughter. But it is also likely to continue because of Mr Wood's concern for Ms Giorgi, and her reliance on him for support and re-assurance. Mr Wood and Ms Giorgi now profess disavowal of any "marriage-like" characterisation of their relationship. On the other hand they are content to regard their relationship as familial (as the 24 December 2007 Assessment of Living Arrangements document evidences), in the sense of being committed to providing Cecilia with a family environment equivalent to that of other families with married or de facto spouses. Mr Wood and Ms Giorgi are not living separately and apart.
  11. We are of the opinion that Mr Wood and Ms Giorgi's relationship is "marriage-like" for the purpose of assessing their respective benefit entitlements under the Social Security Act. The considerations that ultimately influence us to that conclusion are (i) the length of their relationship and its origin in intimate cohabitation; (ii) the relative informality and co-operation of their living arrangements; (iii) their joint social activities, even accepting that they are limited and primarily related to activities involving Cecilia; (iv) their commitment to each other – evidenced by Mr Wood's "duty of care" concept and Ms Giorgi's determination to secure Mr Wood's active involvement in their daughter's life; (v) the absence of any definite intention to cease cohabitation, and the unlikelihood of its occurrence; and (vi) their mutual commitment to providing Cecilia with a stable and supportive family environment.

Asset value limits


  1. Newstart allowance and DSP are both subject to asset value limits. The limits vary according to whether or not the person is (i) a homeowner; (ii) partnered; and (iii) partnered to a person who is in receipt of a social security pension or benefit: see ss 611 and 1064-G3 of the Act. The Secretary determined that Ms Giorgi did not exceed the asset value limit in respect of her application. Consequently the Secretary submitted that in these review proceedings the only matter to determine in relation to Ms Giorgi’s application was her status as a member of a couple. We have proceeded on that basis and make no decision in relation to the question whether Ms Giorgi’s relevant personal asset value satisfies the applicable limit.
  2. Mr Wood made his newstart application on 1 May 2007. At that time, and effectively until 14 December 2007, Ms Giorgi was not in receipt of any relevant social security payment. Consequently, Mr Wood’s relevant asset value limit, indexed in accordance with the Act was $229,000, as at 1 May 2007. His compliance with that limit had to be determined after taking into account the whole of his assets and the value of Ms Giorgi’s relevant assets: see s 612(1) of the Act. The Secretary determined that his asset value exceeded the limit, principally because of the inclusion within his (otherwise modest) asset value, the value of Ms Giorgi’s interest in the two Burrill Lake properties – namely $280,000 + $150,000 = $430,000 / 2 (co-owner’s half share) = $215,000.
  3. The arrangements relating to the purchase of the Burrill Lake properties was detailed in two letters Ms Davis wrote to Centrelink on 20 November 2000 and 14 January 2008. The property at 35-37 Kendall Crescent was purchased in 1999 for a cost of $185,000.00. Ms Davis paid the deposit, part of the purchase price, and the purchase costs, totalling about $40,000, from her own funds. The balance was financed by bank loans amounting to $148,000. Ms Davis said that she and Ms Giorgi had an agreement that if the property was sold, she would be repaid her purchase costs before they divided the proceeds of sale. In 2003 the balance of the bank loan was wholly repaid, partly by Ms Davis and partly by Ms Giorgi (from compensation money she received). Ms Davis purchased the property at 33 Kendall Crescent in October 1999 for $70,000. She provided the whole of the purchase price and costs. She registered the property in joint names with Ms Giorgi, so that it would not form part of her estate when she dies. But again Ms Davis and Ms Giorgi explicitly agreed that, if they sold the property at any time, then Ms Davis would first be repaid all of her original purchase costs from the proceeds of sale. After the properties were purchased, Ms Davis and Ms Giorgi kept an account of their respective financial contributions and outlays relating to the properties. The purpose of this record was to monitor their respective contributions, and to facilitate any accounting between them that would be required in relation to any sale of the property.
  4. The possible effect of the arrangements between Ms Davis and Ms Giorgi in relation to the purchase of the Burrill Lake properties is to reduce the value of Ms Giorgi’s interest in the properties by $57,000 to $158,000 – explained as follows that:
  5. If the value of Ms Giorgi’s interest in the properties was reduced by $57,000, Mr Wood’s asset value would have complied with the relevant asset value limit as at May 2007. This is based on the Secretary’s contentions about the lowest arguable determination of the relevant asset values – as follows:
Ms Giorgi's total asset value
241,000


Mr Wood's additional asset value
16,700


Total asset value
257,700


Less amount payable to Ms Davis
57,000


Adjusted Wood asset value at May 2007
200,700


Asset value limit as at May 2007
229,000


Potential compliance margin
28,300

  1. Subsection 1121(1) of the Act provides, subject to some presently irrelevant qualifications, that the value of a “charge or encumbrance over a particular asset” is to be deducted for the purpose of assessing the value of the asset for the purposes of the Act. The Secretary contends however, that no deduction should be made to Ms Giorgi’s asset value in relation to Ms Davis’ contributions to the purchase of the properties. The Secretary contends that the arrangement evidenced by Ms Davis is simply an agreement relating to the treatment of any proceeds of sale. The Secretary contends that the liability contemplated by the agreement is wholly future and contingent. As such it does not reflect any existing liability of Ms Giorgi and does not constitute a charge or encumbrance on the property for the purpose of s 1121 of the Act. The Secretary cites a number of authorities in support of this proposition including Re Fawthrop and Repatriation Commission [1993] AATA 359; (1993) 36 ALD 140; Sibbles v Highfern Pty Ltd [1987] HCA 66; (1987) 164 CLR 214 and Re Bernard and Secretary, Department of Families, Housing, Community Services and Indigenous Affairs [2009] AATA 577.
  2. Neither of the decisions in Sibbles nor Bernard has any particular relevance to the present problem, except in providing general support for the Secretary’s contention that a liability that is wholly contingent, as to both its existence and its time for payment, cannot constitute a relevant charge or encumbrance. But apart from that generality, the disjunctive expression “charge or encumbrance over a particular asset” is one of considerable width. For example, in Fawthrop the Tribunal was concerned with the expression “charge or encumbrance” in s 52C of the Veterans’ Entitlements Act 1986. The Tribunal said:
(23) Turning to s 52C(5), we should briefly consider the meaning of the terms “charge”, “encumbrance” and “security”. Taking first the word “charge”, we note that an ordinary meaning of it is the liability to pay money but that it may also denote a particular liability to pay money when performance is secured by the creditor's right to receive payment from a specific fund or out of the proceeds of the realisation of specific property: see, for example, the consideration in Davison v Bathurst City Council  [1966] 1 NSWR 61 at 64, Re Price, Ex parte Tinning  (1931) 26 Tas L R 158 at 160 per Nicholls CJ and Davies v Littlejohn [1923] HCA 64; (1923) 34 CLR 174 per Knox CJ at pp 180-2 and 184.
(24) The word “encumbrance” may also have a wider and a narrower meaning in general language as is apparent from the case of Wallace v Love ((1922) [1922] HCA 42; 31 CLR 156 at 164) when it was said:
The word “encumbrances'’, in its ordinary connotation, means that a person or estate is burdened with debts, obligations or responsibilities. True, the word is in law especially used to indicate a burden on property, a claim, lien or liability attached to property...
...
(27) Given the context in which the word “security” is used in s 52C and particularly in the juxtaposition with the words “charge” and “encumbrance”, we have concluded that the word “security” must be understood to connote a debt or claim the payment of which is in some way secured. For the same reasons, the word “charge” must also be given its narrower meaning to denote a liability, the performance of which is secured and the word “encumbrance” to mean a claim, lien or burden attached to a property.

  1. It will be immediately apparent from the latter part of the passages extracted from Fawthrop that the expression “encumbrance” has a permissive generality. It has apparently led to the view expressed in the relevant instructions in the Guide to Social Security Law at 4.6.6.30 under the heading “Encumbrances and Loans against assets”. Unsecured loans that have been demonstrably used to acquire particular assets, may be treated as encumbrances and deducted from the relevant value: see e.g. Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295; Re Nock and Another and Secretary, Department of Family and Community Services (2003) 77 ALD 172 at [15] and Re Moffatt and Secretary, Department of Family and Community Services (2003) [2003] AATA 1259; 76 ALD 767 at [4].
  2. The Tribunal in Moffatt was concerned with whether informal loans between family members constituted a relevant charge or encumbrance over property:
(4) The value of an asset is reduced by the value of any charge or encumbrance over that asset: s 1121. A “charge” means a secured liability and an “encumbrance” means a claim, lien or burden attached to a property: see Re Fawthrop and Repatriation Commission [1993] AATA 359; (1993) 36 ALD 140. What is required in the case of an unsecured loan is evidence of the relationship between the loan and the purchase or encumbrance of the property in question: see discussion in Re Samek and Secretary, Department of Social Security (1988) 16 ALD 295; Re Radovanovic and Secretary, Department of Family and Community Services  (2000) 61 ALD 530 and Re Draper and Secretary, Department of Family and Community Services [2003] AATA 706; (2003) 37 AAR 412 at [41].

  1. In the present case, the critical matter to determine is whether Ms Davis’ contributions to the purchase of the properties constitutes a relevant charge or encumbrance. In answering that question, the Secretary’s submission proceeded on the basis of an implicit assumption that the only relevant consideration was whether Ms Giorgi had a liability to Ms Davis. There are, in reality two questions. The first is whether Ms Davis was entitled to a charge over the property in respect of her contributions. The second is whether any such charge or lien was a liability of Ms Giorgi’s.
  2. In the case of an ordinary purchase, one that has not been funded by borrowed funds, it would not be apt to talk of co-owners having any charge over the property in relation to their contributions to the purchase price. On the other hand, if the purchase is funded wholly by one of several co-owners (who are not spouses or parent and child) a rebuttable presumption arises that the property is held on trust for the person who provided the purchase money: see Duncan v Equity Trustees Executors & Agency Co Ltd [1958] HCA 36; (1958) 99 CLR 513. The presumption may be rebutted by evidence clearly establishing that the non-contributing co-owner was intended to take their interest in the property as a gift. But the evidence may also show that the intention in relation to any such gift was conditional upon some other obligation being recognised. Furthermore, it is open to co-owners to make a specific agreement about the terms under which they hold the property, in relation to their respective contributions to its acquisition and upkeep. Furthermore, the dealings between co-owners may give rise to a charge or lien over their respective interests in the common property, even though they do not give rise to personal payment obligations between them. Thus in Squire v Rogers (1979) 27 ALR 330 at 346 & 347, Deane J said:
As a general rule, capital expenditure upon permanent improvements to land by one joint owner without the authority of his co-owner creates a passive equity which attaches to the land. The joint owner making the improvements is not entitled to bring proceedings for contribution against his co-owner. In circumstances where his co-owner (or a successor in title of his co-owner other than a purchaser for value without notice) would otherwise unfairly benefit under an order in equity (including partition or sale of the property), he is entitled to an allowance for his expenditure on such improvements to the extent to which they result in the present enhancement of the value (or the price on sale) of the land: see, generally, Leigh v Dickeson  LR (1884) 15 QBD 60; Williams v Williams  (1899) 81 LT (NS) 163; Re Jones; Farrington v Forrester  [1892] 2 Ch 461; Brickwood v Young [1905] HCA 12; (1905) 2 CLR 387; Re Byrne  (1906) 6 SR (NSW) 532; McMahon v Public Curator of Queensland  [1952] St R Qd 197; Noack v Noack  [1959] VR 137 and D Mendes da Costa: Co-Ownership under Victorian Land Law, 3 Melbourne University Law Review 137 at 138ff. The operation of these principles, on a sale under the Partition Act, was succinctly stated by A H Simpson CJ in Eq in Boulter v Boulter  (1898) 19 LR (NSW) Eq 135 at 137 in the following passage: “Where an owner of an undivided interest in land spends money in improving the property so that on a sale under the Partition Act it fetches an enhanced price, a Court of Equity in dividing the proceeds of sale will not allow the other co-owners to take their shares of the increased price without making an allowance for what has been expended to obtain that increased value: Leigh v Dickinson [sic]. This course of action cannot inflict any injustice on the other co-owners, for it takes nothing out of their pockets, it only prevents them putting into their pockets moneys obtained by the expenditure of another person, unless they recoup him such expenditure. In no case can the co-owner who has improved the property obtain more than his outlay, though such outlay may have trebled the value of the property. And, on the other hand, the increase in the price obtained is the limit of what he can receive, though his actual outlay may be far larger.”

  1. The reference in this passage to a sale under the Partition Act should now be understood as referring to the sale procedure provided for in ss 66F & 66G of the Conveyancing Act 1919 (NSW). Under that procedure, a co-owner can apply for orders for the sale of the property. But the mechanism of sale is the appointment of trustees who are obliged to apply the net proceeds of sale in accordance with the respective rights and entitlements of the co-owners. The effect of these provisions is that either Ms Davis or Ms Giorgi could apply to effect the sale of the property, and in that event they would undoubtedly share the proceeds of sale in accordance with the agreement described by Ms Davis.
  2. Given the general principles that would ordinarily apply to Ms Davis’ contribution to the purchase price of the two properties, and the agreement she described as qualifying that general position, we do not accept the Secretary’s contention that her contributions to the purchase price do not operate as a “charge or encumbrance” on the Burrill Lake properties. It would not be correct to construe the arrangement Ms Davis describes as consistent with an intention to make an immediate and unconditional gift to Ms Giorgi of either of the two properties. Neither would it be correct to construe the arrangement as one in which Ms Giorgi incurred no obligation to repay her share of the purchase costs. We consider that the better view is that Ms Davis’ contribution of the entirety of the purchase price was made on the basis that Ms Giorgi acknowledged Ms Davis’ prior claim to the proceeds of any sale, in respect of that contribution. We also consider that Ms Giorgi gave that acknowledgment and that it operated as an acknowledgment of a subsisting liability, albeit one that she would only be called on to discharge if the property was sold. In our opinion the present matter is readily distinguishable, on both these bases, from the contingent capital gain tax liability the Tribunal considered in Bernard, on which the Secretary relied.

Decisions


  1. Mr Wood’s entitlement to newstart allowance was contested in these proceedings on the basis that the only relevant time to consider was the state of affairs as at May 2007, when he made the application. At that time Ms Giorgi was not receiving any social security benefit or pension. This consideration was highly relevant in determining what relevant asset value limit applied to his application. We note however, that both a different limit and a different asset valuation assessment procedure would have applied under ss 611 and 612 of the Act, if Ms Giorgi had been in receipt of her DSP entitlement at that time. We note also that she was granted DSP with effect from 14 December 2007. It is possible that that circumstance may bear on Mr Wood’s continuing newstart entitlement. But that was not a matter addressed in the review proceedings. We do not intend that our decision should preclude the Secretary’s subsequent determination of Mr Wood’s ongoing entitlement to newstart after 14 December 2007 – except to the extent that it depends on the characterisation of his relationship with Ms Giorgi up to the present time.
  2. In relation to Mr Wood’s newstart application we set aside the decision under review. We determine that Mr Wood was partnered, for the purpose of s 4(2) of the Act at the time of his application in May 2007, and remained partnered up to time of the review hearing in December 2009. However, Mr Wood’s relevant asset value did not exceed the applicable asset value limit provided for in ss 611 and 612 of the Act. We remit Mr Wood’s application to the Secretary for further determination in accordance with these Reasons for Decision.
  3. In relation to Ms Giorgi’s parenting payment application, we note that she was granted DSP with effect from the date of her initial attempt to claim parenting payment – 14 December 2007. The effect of that grant would appear to be that she was disentitled from also receiving parenting payment: see s 500S(2) of the Act. On that basis, we affirm the decision under review in relation to Ms Giorgi’s parenting payment application.
  4. In relation to Ms Giorgi’s DSP application, the review proceeded on the basis that Mr Wood was not receiving any social security benefit or pension at any relevant time. Our decision in relation to Mr Wood’s newstart application has a potential bearing on that position, and on the relevant asset value limits that might apply. Again that contingency was not addressed in the review proceedings. As in the case of Mr Wood’s review proceedings, we do not intend that our decision on Ms Giorgi’s application should preclude the Secretary’s subsequent determination of Ms Giorgi’s DSP entitlement after 14 December 2007, except to the extent that it depends on the characterisation of her relationship with Mr Wood up to the present time.
  5. In relation to Ms Giorgi’s DSP application we determine that Ms Giorgi was partnered as at 14 December 2007 and remained partnered up to the time of the review hearing in December 2009. We affirm the decision under review.

I certify that the 88 preceding paragraphs are a true copy of the reasons for the decision herein of Mr P W Taylor SC, Senior Member and Ms J Redfern, Senior Member


Signed: .........................[Sgd]...........................

Associate: Jennifer Wong


Dates of Hearing 26 & 27 November, 22 December 2009

Date of Decision 17 March 2010

Applicants’ Representative Self-represented

Solicitor for the Respondents Ms S Memmott, Centrelink Advocacy Branch


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