Zaronias v Constantine [2004] NSWSC 774

New South Wales Supreme Court

CITATION : Zaronias v Constantine [2004] NSWSC 774 HEARING DATE(S) : 9, 10, 11 August 2004 JUDGMENT DATE : 26 August 2004 JURISDICTION: Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Plaintiff's proceedings dismissed with costs.

CATCHWORDS : FAMILY LAW [105] De facto relationship- Wealthy man- Woman working in man's business- Sexual relationship- Whether de facto wife. LEGISLATION CITED : Property (Relationships) Act 1984, ss 4, 5, 20 CASES CITED : Sim v Powell (1997) 22 Fam LR 243 Weston v Public Trustee (1986) 4 NSWLR 407 PARTIES : Susan Zaronias (P) Con Constantine (D) FILE NUMBER(S) : SC 3170/02 COUNSEL : V R W Gray (P) R D Wilson and A J Tibbey (D) SOLICITORS : Mackintoshs (P) Mullane & Lindsay (D)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

YOUNG CJ in EQ

Thursday 26 August 2004

3170/02 – ZARONIAS v CONSTANTINE JUDGMENT 1 HIS HONOUR: The plaintiff, a woman, seeks orders against the defendant, a man, under the Property (Relationships) Act 1984 adjusting the interests of the parties in the property owned by them. 2 The plaintiff in her statement of claim says that the parties lived together on a bona fide domestic basis, although not married to each other, between 8 November 1995 and 1 July 2001. 3 The plaintiff's pleading alleges that during the period I have mentioned, the plaintiff fulfilled the role of the defendant's wife as well as she acted as the defendant's personal assistant and later manager of a business owned by the defendant at Newcastle known as "The Store". 4 The defendant denies virtually every allegation the plaintiff makes. In particular, he denies that the relationship between him and the plaintiff was more than an employer/employee relationship plus a casual sexual relationship. 5 The decision I have to make turns on questions of fact, but it is first necessary to map out the relevant provisions of the legislation. 6 Section 20 of the Act provides that on an application by party to a domestic relationship a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to the matters set out in the section. 7 "Domestic relationship" is defined by s 5 as "a de facto relationship" or "a close personal relationship (other than a marriage or a de facto relationship)" where certain conditions apply. At the commencement of the proceedings, counsel for the plaintiff, Mr V R W Gray, sought to amend the claim by adding a claim that the parties were not in a de facto relationship but rather in a close personal relationship. This was opposed by Mr R D Wilson and Ms A J Tibbey for the defendant. After hearing submissions I gave some indication as to the way I was then feeling about the application and at request of counsel, gave a short adjournment. When I returned I was informed that the case would proceed on the pleadings as filed. 8 Section 4 of the Act defines a de facto relationship as a relationship between two adult persons who live together as a couple and who are not married to one another or related by family. The second part of that definition causes no problems: the question is in this case whether the parties lived together as a couple. On this, the evidence of the two parties differed greatly. 9 I heard this case on 9, 10 and 11 August and then reserved my decision. The major reason for reserving the decision was that I wished to spend time considering the transcript of evidence in order to ensure as much as possible that I fully appreciated all the nuances of the evidence. 10 The plaintiff swore five affidavits on which she was cross examined for about two and three-quarter hours. Supporting affidavits were read from six other people, five of whom were cross examined. The five that were cross examined were Mr and Mrs Tony and Helen Gregoriou, the plaintiff's 16 year old son, Themi, an adult son of the plaintiff, Johnnie Kosmidis and the plaintiff's mother, Eve Kosmidis. 11 The defendant swore seven affidavits. He was cross examined for about an hour and twenty minutes. He called, in support, his current wife Anastasia, his daughter Nicky, his cleaner Anne Rughetta and a key employee, Phillip Ceccato. All these deponents were cross examined. There were also read in the defendant's case the affidavits of V Matouk and L R L Hay. 12 It is common ground that the defendant is a very wealthy man and his wealth principally manifests itself in the ownership and control of some weekend markets at Parklea and in The Store at Newcastle to a lesser extent. 13 The plaintiff says she first met the defendant in 1989-1990, when her former husband Terry and herself operated a stall in the Parklea Markets. She and her then husband attended the defendant's 50th birthday party in July 1994. An incident occurred which further soured the relationship between the plaintiff and her husband and this continued to deteriorate. 14 The plaintiff says that her relationship with the defendant commenced in September 1994; they met regularly thereafter and at Christmas 1994 the defendant gave her an expensive watch. 15 She says that on Melbourne Cup Day 1995 the parties met at the Penrith Panthers Motel, but a private detective engaged by the plaintiff's husband surprised them and reported to both their spouses. The plaintiff says that the same day the defendant's wife left him and she moved into his home in Sunnyholt Road Parklea. 16 The defendant says that he was born on 1 July 1944 and came to Australia in 1954. He married Mary Constantine on 1 September 1965 and separated from her on 7 November 1995. 17 He says that prior to 1996 Terry Zaronias and the plaintiff operated a store known as "Terry's Seafoods Frozen Foods" at Parklea Markets and he met the plaintiff while she was operating that store. He says the plaintiff separated from her husband in 1996. It would appear that the business Terry's Seafoods Frozen Foods was abandoned by the plaintiff's husband but she continued to work for three days in the successor operated by the defendant during 1996. 18 The defendant says that in 1997 the plaintiff asked him for work as a driver. She said she had been receiving $70 a day as a part time courier. The defendant says that from 1997 until June 2001 he employed the plaintiff as his personal assistant, he paid her $100 a day, but because the plaintiff said to him "I do not want you to pay me a wage or disclose my earnings to Terry because I want to claim maintenance for the children from Terry" there was no official recording in the defendant's wages book. The defendant said that he gave the plaintiff, accordingly, lump sums of $1,000 or $3,000 rather than just giving her a daily sum. In addition he paid for her costs while the plaintiff was in Newcastle including accommodation and food. He says he also paid the clothes that she purchased that were necessary for work. 19 The defendant says that a sexual relationship developed between the plaintiff and himself in 1997 and continued until 2001. He also says that he made her gifts of money from time to time and assisted with paying off her mortgage. He says that there were occasions when he and the plaintiff went out socially, but rarely only the two of them. He says he never introduced the plaintiff to anyone otherwise than as Sue Kosmidis or Susan Kosmidis. He never made any commitments to the plaintiff and she was simply an employee. The defendant says that in the period from late 1997 until mid-2001 the plaintiff did stay from time to time at his residence at 601 Sunnyholt Road, usually these were evenings after they had been working in Newcastle, but on each morning the plaintiff returned to her own residence at Wentworthville. He admits that when she did stay in his home she slept in his bedroom and used his en suite. He says, however, the plaintiff did not have a key to his house or the remote control to his garage and did not stop in the house when he was not there. 20 He pointed out that the plaintiff never made any contribution to the choice of any item of furniture in his home and that photos of his former wife Mary remained in his bedroom until he married his later wife, Anastasia, in 2002. 21 He says that the plaintiff became very moody during 2001, was unsatisfactory at work because she was abusing customers and others and he terminated the relationship. He formed the relationship with his new wife at the beginning of 2002. They now have two children. 22 The defendant also admits that in mid-2002 he arranged to purchase a car for the plaintiff. He purchased the car, it would seem, for $22,000 through a car dealer which was a sponsor of a soccer team with which he was associated. He considered that that was a loan. 23 Affidavits came in waves. The plaintiff says that at the defendant's 50th birthday the defendant came over to her and said to her "I'd like to fuck you", a statement which he repeated the following day when she was working at Parklea Markets. She said that after continued approaches from the defendant, a sexual relationship commenced about October 1994. She says that she separated from her husband in 1995, not 1996. She says that she never had any discussion about $100 a day, or that the defendant would keep the money and give it to her in lump sums; indeed, he said "I don't want you to work I just want you to look after me". Furthermore, he paid all the legal bills except for one for the plaintiff's divorce. He bought jewellery, including some expensive jewellery, took her on trips to Hong Kong and China, the Gold Coast and in 2000 they went together to both the Opening and Closing Ceremonies of the Olympic Games. He frequently gave her money, a lot of which she used to make payments on her mortgage. 24 The plaintiff agreed that she did not have a key to the Parklea home of the defendant, saying "It was not necessary as I was nearly always with Con. If I needed access without him I used to operate the remote control to the garage where Con would have arranged to leave a key to the front door." She said that she cleaned, cooked, slept with, and cared for the defendant, for a six year period, and was not just his employee or assistant. She admits that the defendant never called her his wife but sometimes called her "my better half" or "my baby" or "my woman". 25 Furthermore, she says that the car was a gift, that the defendant said to her in May 2002 "I paid $29,000 for it. I am giving it to you." The actual purchase price would appear to be $22,000. The car has now been sold. 26 The defendant then said in his next affidavit that he was not aware that the plaintiff's husband hired a private investigator, the plaintiff did not move into his home in November 1995 and that his former wife retained her key and remote control, and was often in the home until the divorce was finalised in 1997. He said the plaintiff resided in her own home in Burra Street Wentworthville. He denied that the plaintiff frequently cooked meals for him or that she offered any domestic support. He further says that in the months following his separation from his ex-wife, his family, including his former wife, were in the home at Parklea on a daily basis leading up to the wedding of his daughter Daisy. 27 On 29 June 2004, the plaintiff made a further affidavit. She said in this that she was born in Greece in 1957 and came to Australia in 1970. In this affidavit she said that the sexual relationship with the defendant commenced at Christmas 1994 until they were discovered together at a motel on Melbourne Cup Day 1995. She again detailed many expensive gifts that she said the defendant gave her, that he provided her with his Jaguar motor vehicle for her own use and she accompanied the defendant on holidays and business trips. 28 In her final affidavit the plaintiff gave further details of their first permanent sexual relationship and their being discovered on Melbourne Cup Day 1995. 29 As to the former, she said "Our sexual relationship commenced at a motel in Bronte just before Christmas 1994. We drove together in Con's daughter's Nicki's car to Bronte". As to the latter, she says that by pre-arrangement she met the defendant at the Penrith Panthers Motel at midday on Melbourne Cup Day 1995. The defendant obtained a key to a room and she went up to that room where sexual relations occurred. Later in the afternoon her husband Terry arrived at the motel and there was a scene. Terry drove her home in her car and in the car Terry rang the defendant's wife and told her what he had discovered. 30 The plaintiff then said that after the 1995 incident she slept nearly every night at Parklea, only sleeping at Wentworthville five or six nights a year. She progressively moved her clothes to the defendant's home, cooked evening meals and tidied the house. She described the domestic life at night from the time the defendant came home, had some drinks and fell asleep in his chair watching television, and insisted that she was permanently living at Parklea. 31 It was common ground that the plaintiff and the defendant would stay in the same room at hotels in Newcastle on Thursday nights. The plaintiff said more than once that there were a number of occasions where they stayed for far longer than Thursday nights. This was disputed by the defendant and he said this was incompatible with him having a hands-on approach to the Parklea Markets which traded all Saturday and Sunday. However he admitted to some Friday nights. 32 Johnnie Kosmidis swore that from about late 1995 his mother started not staying home at night. She would come to see the family most nights but always leave about 9 pm. He remembers many occasions where he went to the defendant's home at Parklea and his mother cooked a meal. Eve Kosmidis, who still lives at 20 Burra Street Wentworthville, swore that about the middle of 1995 the plaintiff moved nearly all her clothes out of the house. The children stayed because she (Eve) looked after them. She swore that the plaintiff rarely stayed overnight at Wentworthville. 33 Helen Gregoriou deposed that almost every time she saw the defendant the plaintiff was with him and he showed open affection towards her unless they had too much drink in which case they would fight. She often heard the defendant call the plaintiff "my woman". 34 Tony Gregoriou said that he was introduced to the plaintiff by Luke Hay the then manager of the store in Newcastle as "Sue, Con's girlfriend". He said that every Thursday night for the next three years the plaintiff, the defendant and himself would have dinner together at the Radisson Hotel in Newcastle where the plaintiff and the defendant were staying. He also deposed to open affection between the plaintiff and the defendant. 35 Themi Zaronias gave evidence that his mother stopped coming home regularly during the week in about 1995, but would bring a man called "Con" over with her on Sundays for lunch and then they would leave together. He said sometimes he stayed overnight in the defendant's house. The defendant denies this. 36 For the defendant, Mr Ceccato said that he made frequent visits to the defendant's home from 1989 and only ever saw the plaintiff at the home on one or two occasions. He also swore that the plaintiff was not always invited to functions at which the defendant attended. 37 Mr Hay said that there were problems with the plaintiff's work at The Store in Newcastle. He found her often to be a person who was hard to get along with and he had only ever observed the defendant introduce her to others as "Sue". 38 Mr Matouk gave evidence that he ran a leather goods stall at The Store and described how the plaintiff came to him to buy two coats. She said "I want to purchase one for myself and for my son but I have to be paid before I can purchase them." Mr Matouk said the defendant came over and the plaintiff said to him "Can I have my pay?" and the defendant gave her a pile of $50 notes, some of which the plaintiff used to purchase the coats. He also remembered the defendant saying "You should be using your pay towards paying your home loan. You should try and get to the bank before it closes." Mr Matouk was not cross examined. However, there was a general agreement between counsel that no-one would rely on the rule in Brown v Dunn if the affidavits had shown that the parties were at issue. 39 Anne Rughetta said that she was working as a cleaner for the defendant cleaning his home at Parklea once a week. She never saw the plaintiff at the defendant's home. The witness said her job was to clean the home and do all the washing and ironing, change the bedding and do the shopping and she never saw any evidence that anybody else had done it. 40 Nicki Constantine denied the plaintiff's assertion that she had taken clothes and personal effects to the Parklea home on 8 November 1995. She said that she often visited the home to which she had a key and did so without prior warning and never ever saw the plaintiff there apart from one occasion. She said at Christmas and Easter when the family got together with the defendant the plaintiff was never present. 41 Anastasia Constantine gave evidence that she was never introduced to the plaintiff before she (Anastasia) became intimate with the defendant other than as Sue. She never heard her referred to as "Con's girlfriend". When she moved into the defendant's home in January 2002, she was given a key and remote controls and came and went as she pleased. She noticed that all the children's bedrooms still had their belongings in them. There were photographs of the defendant's former wife all through the house, but she never found one photograph of the plaintiff, nor any of the plaintiff's possessions. 42 I now turn to the cross examination. It was put to the plaintiff that on 28 August 2002, she had an interview with a Mr Borenstein, a clinical psychologist, and told Mr Borenstein a different story to what she told me. The plaintiff suggested that Mr Borenstein must have misunderstood. His report was not tendered. 43 She was cross examined about the discrepancy between her account that sexual relations had started in October 1994 and her later affidavit that they had commenced at Bronte, near Christmas. She attempted to reconcile these by saying that October is near Christmas. She was asked whether she acted as Mr Constantine's chauffeur in 1997 ad said she didn't. She also denied that she acted as his personal assistant in 1997. 44 It was then put to her that in the statement of claim which had been duly verified, she had said for approximately two years that the plaintiff acted as the defendant's chauffeur. Her answer to this was "I drove him sometimes". She was then asked: "You also said in your statement of claim paragraph 5D that between June 1997 and October 1999 you acted as the defendant's personal assistant that is correct isn't it? A. No." 45 The cross examination at T30 continued: "Q. Alright. Can I suggest to you Mrs Zaronias that in the period 1997 until the end of 2000 the most nights in any one week you spent with Mr Constantine was one night at the Madison Hotel on a Thursday if he was staying up there; correct? A. No, we spent about three nights up there. Q. Can I suggest to you that you only ever spent, in the period 1997 to the end of 2000, one night at the Madison on a Thursday night? A. No, we spent Thursday, Friday and Saturdays, and sometimes on a different date." 46 Mr Wilson then put to the plaintiff that as the Parklea Market opened on Saturdays and Sundays and the defendant was a hands-on operator, that was just wrong, the most the plaintiff would go was to say that it wasn't regular, but it was quite often. She also denied that she stayed in the Madison or the Radisson Hotels by herself on Friday and Saturday nights. However, later in the cross examination it seems to be put that the defendant stayed with the plaintiff some Friday nights every second week to which she merely answered "Whenever he was up there, I was with him". 47 The plaintiff further said that she continued to have sexual relations with the defendant right up until June 2002, but only about half a dozen times in those last twelve months. 48 It was put to the plaintiff T57: "Q. … Can I suggest to you that you knew in your own mind that you were an employee of Mr Constantine and no more than a girlfriend for as long as it lasted? A. I was never an employee." 49 However, the main thrust of the cross examination was to put to the plaintiff a series of documents in which over the period 1997 to 2002 she had provided persons in authority with her address and without exception the address she provided was 20 Burra Street Wentworthville. The documents were tendered and it was quite clear that she told the police on more than one occasion when she reported a domestic disturbance with her husband after 1997 that her address was 20 Burra Street Wentworthville. 50 She also gave the police that address when they were investigating some malicious damage attacks on the windows of The Store at Newcastle. She put that address in her divorce papers when she was fighting her husband Terry with respect to access rights. She also admitted that no mail of her's went to Parklea because it went to the office. Her driver's licence showed her address as 20 Burra Street Wentworthville; all council correspondence came to her at that address and the letters from her solicitor, Julie Greenwood, came to her at that address. 51 Mrs Gregoriou confirmed that her knowledge was really only definite about the plaintiff staying at the Madison Hotel with the defendant on Thursdays and that Friday was perhaps a bit of a speculation. Mr Gregoriou repeated that he had seen the plaintiff at the defendant's home on many occasions. 52 It was put to Mrs Gregoriou and also to her husband that the reason why they were giving evidence for the plaintiff was because the defendant had sacked Tony Gregoriou and the parties' son. They denied this. 53 Mr Gregoriou was strongly cross examined as to the difference between his draft affidavits prepared when he was working for Mr Constantine on the one hand, and his affidavit after he was sacked on the other. He said that the affidavits presented by the defendant to him were given to him under at least a veiled threat that it was to his own interest that he sign them in that form. 54 This disturbed me quite considerably because it was clear from the evidence that Mr Constantine was a person of influence and did not like being crossed and if ever I was convinced that there was a prima facie case that a person had threatened an employee, even had made a veiled threat against an employee to make that employee give false evidence to this Court, I would refer the papers to the Attorney General. I do not, however, think that the evidence is sufficiently strong to make out a prima facie case in the present matter. 55 Mrs Gregoriou's evidence is of little use of itself. I would discount Mr Gregoriou's evidence because of the probability of bias after his sacking and the change of his evidence. 56 Johnnie Kosmidis tended to agree with counsel's suggestion that after 1997 the plaintiff may have spent one or two nights at Mr Constantine's home and the balance at Burra Street. Themi Zaronias' evidence in cross examination was quite unimpressive; he seemed to be very vague without much recollection of what happened. The plaintiff's mother was cross examined and denied that her daughter was in a mere casual relationship with the defendant. 57 The defendant was cross examined. The cross examination focussed on the purchase of the car in mid-2002 and the defendant's company's practice of paying wages in cash. He said the first time the plaintiff slept overnight at his Parklea home was 1997 and that was the year he bought clothes for her. She would have cooked his dinner about five times in the period 1997 to 2001, usually when she said she did not want to go out to a restaurant. He was cross examined about the calls shown on his mobile phone records from Telstra and it was suggested that these were calls he made to the plaintiff. I must confess that despite the explanatory memorandum, PX23, I was unable to work out what the Telstra records, Exhibit PX21, really meant, and, as the defendant says it does seem odd that someone would ring one's own phone number from one's own phone. 58 There was nothing memorable in Mr Ceccato's cross examination. Nicki Constantine said she always regarded the plaintiff as a guest in the home and nothing more. Anastasia Constantine's cross examination was of no great significance. Mrs Rughetta said she had a fair idea that the plaintiff had a relationship with the defendant but she had never seen anything herself. She was relying on what she had heard. 59 In case in reply, the plaintiff produced photographs of a little yellow suitcase which she said was under the seat when the defendant took her to the Opening Ceremony of the Olympic Games in 2000. He also took her to the Closing Ceremony. The photograph PX24 would seem to suggest it was issued at the Closing Ceremony rather than the Opening Ceremony and it was not actually put to the defendant that he took the plaintiff to the Closing Ceremony though it was put to him that he took her to the Opening Ceremony which he denied. 60 It does seem to me that the photographs are corroboration of the plaintiff's evidence that she was taken by the defendant to at least the Closing Ceremony of the Sydney Olympics, and in that respect, I would accept her and not the defendant. 61 Generally speaking, the case was odd in that there would have seemed to be some corroboration available for many of the disputed meetings, yet this did not come forward from either side. It would have been simple for instance for some corroborative evidence to have been produced by either party as to what did or did not occur on Melbourne Cup Day 1995, but none was forthcoming. 62 It should also have been relatively simple to have provided me with better evidence as to the money that the plaintiff received from the defendant. However, it would seem that the records of the defendant's business as to whom he employed were either non-existent or in a parlous state. He claimed that the plaintiff was an employee, yet no wage records were produced at all to show that she received $100 a day. The defendant said that he helped prepare the plaintiff's income tax returns, but none of these were produced. The defendant declined to answer the question as to whether he paid group tax. He also seems entirely to have employed casual workers and to have paid them in cash. 63 Accordingly, putting out of the question what taxation problems might lie in store for the defendant, it is difficult to choose between the scenario that the defendant was running a cash economy and the plaintiff was paid as an employee in cash, or whether she was "his woman" and he was giving her money. It is, however, clear that from at least 1997 until 2001 whenever the plaintiff asked for money she received it in abundance. 64 The case is also strange in that the plaintiff is not able to produce much by way of photographic evidence of the two people together. One expects from experience in this sort of case to have photographs of the couple at various holiday occasions or social events. It is rare, for instance, for people to go for a Hong Kong trip together and not be able to produce one snap of them on the Peak tram or the Star ferry or whatever. However, in the instant case the plaintiff was only able to produce a limited number of photographs, mostly taken at various parties. 65 It is also the usual evidence in this sort of case that close friends have called at the parties' homes and put their coats and purses on the bed in the main bedroom and who can swear that there was a double bed in the room or that there were both parties' clothes in the one room. There is nothing like that in the instant case. 66 Of course, every case is different and every set of relationships is different, but one does concern oneself as a tribunal of fact when the course of the evidence deviates from the standard. 67 In each of the closing addresses of Mr Gray and Mr Wilson, valid criticism was made of the acceptability of the other party's evidence. Mr Wilson said that the defendant accepts that a relationship existed between him and the plaintiff from 1997 until July 2001. However, that relationship did not constitute a de facto relationship, but rather involved a more casual relationship, whilst the parties maintained separate residences but spent three or sometimes four nights a week together. He puts that this contrasts with the plaintiff's position that there was a de facto relationship for five and a half years. 68 Mr Wilson submits that the evidence shows that the parties spent the night together at either the Madison or the Radisson Hotel in Newcastle on Thursday night and that for the rest of the week the plaintiff may have spent possibly one or two nights with the defendant at his home at Parklea on Sunday, Monday or Tuesday night. He says that the defendant's account is corroborated and consistent with objective circumstances, particularly the requirement of the defendant to attend the Parklea Market at the weekend. The defendant went to church meetings on Tuesday nights and council meetings on Wednesday nights, and was at Parklea Saturdays and Sundays. 69 Mr Wilson submitted that the plaintiff was not a general witness of truth. He focuses on three matters: (a) the plaintiff's consistent provision of the address at 20 Burra street Wentworthville as her residence, which if her evidence in the present proceedings is correct, was giving a false address; (b) her conduct was consistent with the conviction she had in 1984 for giving a false name and address to the police after a traffic offence; and (c) that the plaintiff's demeanour did not present as a frank and forthright witness. 70 I give little, if any, weight to the 1984 conviction. I agree that I could not accept everything that the plaintiff said, but I should also note that it would seem to me that she is not any the less acceptable as a person of truth as the defendant, not that I am for a moment saying that I was completely happy with the defendant's demeanour. 71 The most significant matters in assessing the plaintiff's evidence seem to me to be: