Adaline & Tatton
[2023] FedCFamC2F 1557
•6 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Adaline & Tatton [2023] FedCFamC2F 1557
File number: MLC 3323 of 2023 Judgment of: JUDGE GLASS Date of judgment: 6 December 2023 Catchwords: FAMILY LAW - DE FACTO RELATIONSHIP – Parties are joint proprietors of real property – What orders are just and equitable so as to sever that joint proprietorship Legislation: Family Law Act 1975 (Cth) ss 90SB, 90SF, 90SM, 90ST
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.17
Cases cited: AJO & GRO (2005) FLC 93-218
Duarte & Anor & Morse (2019) FLC 93-902
Fields & Smith (2015) FLC 93-638
Preston & Preston (2022) FLC 94-108
Stanford v Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 47 Date of last submission/s: 23 November 2023 Date of hearing: 23 November 2023 Place: Melbourne Counsel for the Applicant: Mr Mellas Solicitor for the Applicant: C & S Law Solicitor for the Respondent: Self-Represented Litigant ORDERS
MLC 3323 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS ADALINE
Applicant
AND: MS TATTON
Respondent
ORDER MADE BY:
JUDGE GLASS
DATE OF ORDER:
6 DECEMBER 2023
THE COURT ORDERS THAT:
1.Within 60 days the Respondent pay to the Applicant the sum of $203,922 (“the Payment”).
2.Contemporaneously with the Payment the Applicant transfer to the Respondent all her right. title and interest in the real property at B Street, Town C being Vol … Folio … ("the real property") and the Respondent discharge and refinance into her name the existing mortgage encumbering the property.
3.The Applicant otherwise retain:
(a)her motor vehicle;
(b)her personal bank accounts and effects;
(c)her Superannuation; and
(d)her D Company Shares.
4.The Respondent otherwise retain:
(a)her personal bank accounts and effects;
(b)her motor vehicle;
(c)Motor Vehicle 1, animals, and equipment; and
(d)her Superannuation.
5.In the event the Payment is not made to the Applicant by the due date:
(a)the property shall be listed for sale with such real estate agent as is agreed and failing agreement within 14 days of the due date, the Applicant will nominate three real estate agents and the Respondent will select one within 7 days thereafter, with the nomination and selection to be made in writing;
(b)the list price of the property shall be such amount as is agreed between the parties and failing agreement within 14 days of the due date the list price will be as nominated by the real estate agent; and
(c)the parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, always allowing inspection of the property reasonably requested by the agent, and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer.
6.The proceeds of the default sale of the property shall be paid in the following manner and priority:
(a)to discharge the mortgage encumbering the property;
(b)payment of the agent's commission and advertising or other expenses, if any, payable on the sale;
(c)payment of the legal costs relating to the sale;
(d)the sum of $203,922 to the Applicant, together with interest at the rate prescribed by rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; and
(e)the balance then remaining to the Respondent.
7.Pending the payment or completion of the default sale:
(a)the Respondent have the sole right to occupy the real property and that during such right of occupation she pay all instalments pursuant to the mortgage and all rates, taxes, outgoings of the real property as they fall due;
(b)the Respondent ensure that the property is adequately insured;
(c)the parties hold their respective interest in the real property upon trust pursuant to these Orders; and
(d)neither party encumber the real property without the consent in writing of the other party.
8.Unless specified in these Orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at the date of these Orders including any jewellery, furniture, furnishings, shares and motor vehicles;
(b)moneys standing to the credit of the parties in any bank accounts shall be the property of the party in whose name such bank account is held;
(c)each party hereby foregoes any claims they may have to any superannuation benefit owned by the other. The party in whose name any such policy of superannuation or insurance stands shall be deemed to be the owner and the beneficiary of such policy to the exclusion of the other; and
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to this Order.
9.All extant applications be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE GLASS:
Ms Adaline and Ms Tatton were in a de facto relationship. Arising for determination is Ms Adaline’s application for orders altering the parties’ interests in property.
They dispute the duration of their de facto relationship, with Ms Adaline contending it spanned more than eight years and Ms Tatton contending it spanned approximately twenty months. It is, however, uncontroversial that they cohabitated in two separate residences over a period of approximately nine years, from 2009 until September 2018. They jointly acquired a real property together, to which both made substantial financial contributions. Failing to make an order would result in substantial injustice in the sense that both would remain joint proprietors of the real property now occupied by Ms Tatton. I am satisfied that the jurisdictional prerequisites to the determination of the application are established.[1]
[1] Family Law Act 1975 (Cth), s 90SB.
Leave has been granted for the application to proceed out of time.[2] I am required to holistically assess contributions from the commencement of cohabitation until the trial.[3] In those circumstances, I consider it unnecessary to determine the precise length of the parties’ de facto relationship.
[2] Paragraph 1 of the Orders made 15 June 2023.
[3] Fields & Smith (2015) FLC 93-638 at [168] per Bryant CJ & Ainslie-Wallace J.
Ms Adaline proposes that Ms Tatton pay her a sum equal to half the equity in the jointly owned property at B Street, Town C, along with half the value of Motor Vehicle 1 and other equipment. In the event that the payment is not made, Ms Adaline proposes the sale of the Town C property and an equal distribution of the proceeds, subject to a cash adjustment to her of half the value of Motor Vehicle 1 and other equipment.
Although Ms Tatton agrees that the parties should not continue to jointly own the Town C property, she was unable to articulate any proposal for the alteration of the parties’ property interests other than to say that she seeks to retain the property. Her Amended Response seeks to particularise the relief sought at a later date. She has never done so.
Ms Tatton relied on her Outline of Case filed 23 November 2023, her Amended Response filed 6 September 2023, her Financial Statement filed 19 November 2023 and her Affidavit filed 7 June 2023. Whilst she suggested she sought to file a further Affidavit late, it was not available by the time of the final hearing, and she made no application to adjourn the trial to enable its completion.
STATUTORY FRAMEWORK
Pursuant to section 90SM of the Family Law Act 1975 (Cth), I have a discretion to make such order altering the parties’ interests in property as I consider appropriate. I am prohibited from making an order unless I am satisfied, in all the circumstances, it is just and equitable to do so.[4] If I am so satisfied, I am required to consider the matters prescribed by subsection 90SM(4) of the Act and by the device of paragraph 90SM(4)(e), relevant matters referred to in subsection 90SF(3) of the Act.
[4] Family Law Act 1975 (Cth), s 90SM(3).
PROPERTY INTERESTS
It is necessary to begin by identifying, according to common law and equitable principles, the existing legal and equitable interests of the parties in property.[5] For reasons that follow, those interests comprise the following:
[5] Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) at [37].
Asset O'ship Value B Street, Town C Jt $850,000 less E Bank Jt ($355,619) Motor Vehicle 1 Jt $46,700 Motor Vehicle 2 App $13,950 less loan to Motor Vehicle 2 App ($13,950) D Company shares App $3,472 Motor Vehicle 3 Res $25,000 Motor Vehicle 4 Res $3,000 Contents Res $20,000 Total non-superannuation interests $592,553 D Company Superannuation App $381,324 Total superannuation interests $381,324 Total property interests $973,877
Ms Adaline asserts the balance of the parties’ home loan to be $328,161. Ms Tatton deposes to the balance on 19 November 2023 being an estimated $345,000. Ms Tatton conceded in oral evidence that she had not recently checked the balance of the loan. Ms Adaline tendered into evidence current statements for the loan, revealing a balance of $355,619.
The starting point is that ordinarily the property of the parties is valued as at the date of trial.[6] Ms Adaline has made no payments towards the home loan in recent years. Ms Tatton gave evidence that she had not made home loan repayments this year because she had made a lump sum payment of approximately $50,000 to put the mortgage in surplus. I do not consider there to be any reason to depart from the usual approach of adopting its value at the date of the trial.
[6] AJO & GRO (2005) FLC 93-218 at [16] and the cases there cited.
The parties agree that Ms Adaline owns Motor Vehicle 2. Ms Adaline asserts its value to be $13,950 whilst Ms Tatton asserts its value to be $25,000. Ms Adaline deposes to the value she ascribes to the vehicle in her Financial Statement and her Trial Affidavit. No objection was taken to that evidence, nor was it challenged in cross-examination. Ms Tatton adduces no evidence in relation to its value, merely asserting in her unsworn Outline of Case that “the redbook value is $25,000”.[7] I accept Ms Adaline’s unchallenged and uncontradicted evidence as to the value of her motor vehicle.
[7] Ms Tatton’s Outline of Case filed 23 November 2023, page 12.
Ms Tatton asserts that Ms Adaline has contents worth $10,000. She adduces no evidence in support of the contention. Ms Adaline deposes to having household contents of nominal value. Ms Tatton did not challenge that evidence and I find no basis to reject it. There is no evidentiary basis for Ms Tatton’s assertion.
Ms Tatton asserts that Ms Adaline has $340,000 from the sale proceeds of a property in Suburb F. She asserts in her Outline of Case that Ms Adaline and Ms Tatton “sold their property in [Suburb F] for $600,000” in late 2022.[8] She adduces no evidence in support of the contention. She put no questions to Ms Tatton in relation to the Suburb F property. The evidence does not support a conclusion that Ms Adaline has any interest in any such sale proceeds that would be contrary to her deposition that she has no property or financial resources other than those disclosed in her Financial Statement or Affidavit.
[8] Ms Tatton’s Outline of Case filed 23 November 2023, page 7.
It is common ground that Ms Adaline has an interest in Super Fund 2. Ms Adaline deposes to its current value being $328,162. Ms Tatton asserts its current value is $381,324, relying on its balance as at 30 June 2023. Ms Tatton put the relevant document to Ms Adaline in cross‑examination, with Ms Adaline giving evidence that the document revealing that balance was accurate.[9] Consistent with that source document, I find Ms Adaline’s superannuation interest to have a value of $381,324.
[9] Exhibit R5.
Ms Tatton is in receipt of a pension from Super Fund 1. Pursuant to a request on 3 May 2022, it has a lump sum value of $562,854. Ms Adaline seeks the inclusion of that lump sum value as an asset of the parties.
Ms Tatton’s pension is “payable for life unless: a) the pensioner is found fit to resume duty and the employer finds suitable employment; or b) the pensioner becomes gainfully employed.”[10] No superannuation splitting order is sought. It is not suggested it can be commuted or alienated. I decline to treat its capitalised value as an asset given such pensions ought not be notionally identified assets.[11]
[10] Affidavit of Ms Adaline, annexure C, page 34.
[11] Preston & Preston (2022) FLC 94-108 at [11]-[13], [16]; Welch & Abney (2016) FLC 93-756 at [26], [37], [61].
The parties otherwise agree on the value and identity of their assets.
JUSTICE AND EQUITY
Given Ms Tatton seeks to retain the Town C property, both parties seek an alteration of their property interests in order to finally determine the financial relationships between them.[12] I consider it to be just and equitable to make a property settlement order because there will no longer be the common use of property by the parties.[13] I am obliged to sever joint interests in property.[14]
[12] Family Law Act 1975 (Cth), s 90ST.
[13] Stanford at [42].
[14] Duarte & Anor & Morse (2019) FLC 93-902 at [486].
CONTRIBUTIONS
I am required to take into account the parties’ financial and non-financial, direct and indirect, contributions to the acquisition, conservation or improvement of property.[15] I am also required to take into account the parties’ contributions to the welfare of the family.[16]
[15] Family Law Act 1975 (Cth), s 90SM(4)(a)-(b).
[16] Family Law Act 1975 (Cth), s 90SM(4)(c).
At the commencement of the parties’ relationship, Ms Adaline deposes to having savings of approximately $8,000, a motor vehicle worth $21,000, and superannuation worth $190,000 to $200,000. Both latter assertions were established to be false. The vehicle Ms Adaline deposes to then owning was Motor Vehicle 5. The parties commenced their relationship in late 2009 or early 2010. Ms Adaline could not then have been in possession of a motor vehicle subsequently built. Further, Ms Tatton established that on 30 June 2011, Ms Adaline’s superannuation balance was $81,463.[17]
[17] Exhibit R4.
At the commencement of the parties’ relationship, Ms Tatton owned a real property at G Street, Suburb H. Ms Adaline deposes to the property then having had nominal equity. That evidence was not challenged by Ms Tatton. Ms Tatton gave oral evidence that she had purchased the property in 1993, and it was subject to a mortgage with a balance of approximately $113,000 when the parties commenced cohabitation. She adduced no evidence of the value of the property or any equity she held in it at that time.
Ms Tatton deposes to having had a car valued at $25,000 at the commencement of the parties’ relationship and Ms Adaline then having a vehicle worth $21,000 which was subject to finance. That evidence was not challenged and I accept it.
The parties initially commenced cohabitation in the Suburb H property in 2009. Ms Adaline initially rented a room from Ms Tatton before the parties commenced their de facto relationship shortly thereafter.
Since prior to the commencement of the parties’ relationship, Ms Tatton has been unemployed. She has been in receipt of a government disability support pension and a pension from her superannuation fund. She was nevertheless solely responsible for making repayments on the home loan secured by mortgage against the Suburb H property.
Throughout the parties’ cohabitation, Ms Tatton was employed on a full-time basis. She equally contributed to the parties’ living expenses, including utility and other bills.
In 2011, the parties purchased the Town C property for $325,000. Ms Tatton paid the deposit for the property. Despite Ms Adaline’s evidence that the deposit amounted to $50,000, she did not challenge Ms Tatton’s oral evidence that the deposit was $32,500. Given the other inaccuracies in Ms Adaline’s evidence, to which I have referred, I prefer Ms Tatton’s evidence in that respect.
The remainder of the purchase price of the Town C property was financed through a home loan secured by mortgage. By agreement between the parties, Ms Adaline was solely responsible for the home loan repayments on the Town C property. Both parties depose to her having done so in full until 2016. Ms Adaline was not challenged on her evidence in that respect. I do not accept Ms Tatton’s oral evidence that she made some contributions to the home loan repayments prior to 2016, which evidence was inconsistent with her own affidavit on the topic. I find that Ms Adaline was solely responsible for servicing the home loan on the Town C property from 2011 until 2016.
From late 2015, the parties commenced renovations to the Suburb H property. It is common ground that Ms Tatton undertook the majority of those renovations herself. However, I accept Ms Adaline’s evidence that she assisted with painting the property, landscaping, and constructing decking.
Also in 2015, the parties borrowed further funds against the Town C property to build a home on that property. I also accept Ms Adaline’s evidence that both parties were involved in the works at the Town C property, including plastering, painting, tiling, and installing a kitchen and bathroom.
In 2016, Ms Tatton sold the Suburb H property, generating proceeds in 2017 of approximately $396,000. Ms Adaline deposes to Ms Tatton having gifted her the sum of $22,000 from the proceeds of sale to pay out Ms Adaline’s motor vehicle finance, albeit she signed a Statutory Declaration in early 2017 describing the sum advanced as a loan. Nothing now turns on its characterisation in circumstances where Ms Tatton acknowledged she has not taken steps to seek its repayment.
Ms Tatton retained the remaining proceeds of sale of the Suburb H property and has not accounted for their application. Nevertheless, it was not suggested that Ms Tatton now has any residual funds from those proceeds of sale. Nor was Ms Tatton’s evidence, that she applied some of the proceeds to the home on the Town C property, contradicted or challenged.
From 2016, both parties contributed equally to the mortgage repayments on the Town C property. Ms Adaline deposes to having been solely responsible for the rates on the property until 2017. She also gave unchallenged oral evidence that she continued to make mortgage payments at the rate of $650 per fortnight until approximately September 2019, before reducing it to around $150 to $200 per fortnight for a short period thereafter. I prefer that more detailed evidence to Ms Tatton’s affidavit evidence that Ms Adaline generally only paid $50 per week rather than the agreed $1,000.
In 2018, the parties drew further funds from the loan secured against the Town C property which were applied to part of the cost of an overseas holiday.
In late 2018, Ms Adaline vacated the Town C property. Since approximately 2020, Ms Tatton has been solely responsible for servicing the loan on the property. She has, however, benefited from exclusive occupation of the property since late 2018.
The Town C property now accounts for the majority of the parties’ non-superannuation wealth. Holistically taking into account all of the parties’ contributions prior to, during and subsequent to their cohabitation, I consider that Ms Tatton’s contributions to the non-superannuation assets ought be assessed as at 65% and Ms Adaline’s at 35%. In dollar terms, the differential amounts to approximately $177,800.
Neither party suggested that their indirect contributions to the other party’s superannuation ought be specifically considered by the Court. I do not conclude otherwise in the absence of any superannuation splitting orders being sought.
PARAGRAPHS 90SM(4)(D, E, F AND G) AND SUBSECTION 90SF(3) FACTORS
Ms Adaline is 47 years old. She works as a professional earning approximately $105,000 per annum. Although Ms Tatton deposes to Ms Adaline’s income being $116,000 per annum, she did not challenge Ms Adaline’s evidence of her income. I prefer Ms Adaline’s evidence of her own income.
Ms Adaline is cohabitating with her unemployed new partner in rental accommodation.
Ms Tatton is 56 years old. She is in receipt of a government pension at the rate of $545 per week and a pension from her superannuation fund at the rate of $650 per week. She accordingly receives income of approximately $62,000 per annum.
Ms Tatton deposes to having been diagnosed with a medical condition due to an injury in 1993. She also deposes to being diagnosed with depression and anxiety, for which she attends upon a psychologist. I accept her unchallenged evidence in that respect.
Ms Adaline has valuable superannuation interests, however the comparative lump sum value of Ms Tatton’s is substantially greater.
In circumstances where the contribution finding leads to Ms Tatton retaining nearly twice the value of parties’ non-superannuation assets, I am not satisfied that the relevant factors warrant any adjustment to that finding.
CONCLUSIONS
On balance, I consider it just and equitable that Ms Adaline retain 35% of the value of the parties’ non-superannuation assets, equating to $207,394. Ms Tatton will retain 65% of the value of those assets, being $385,159.
Ms Adaline currently has assets worth $3,472, with the result that she needs to receive assets worth a further $203,922. She proposes a payment be made to her within 60 days, contemporaneously with her transfer of the Town C property to Ms Tatton.
Ms Tatton gave evidence of having made no enquiries as to whether she will be able to refinance the mortgage secured against the Town C property. Although it is not clear to me that Ms Tatton will have the capacity to do so, I accept Ms Adaline’s proposal which will afford her an opportunity to do so.
Ms Tatton made no submissions with respect to the form of order sought by Ms Adaline. I find the proposed orders to be appropriate, save that I will provide for the payment of a fixed sum to Ms Adaline. I will provide for interest to accrue on that amount in accordance with the Court’s rules.[18] I will also adjust the time frames for agreement about the sale conditions to occur within 14 days of the due date for the payment to Ms Adaline.
[18] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.17.
I am otherwise satisfied that the relief sought by Ms Adaline is just and equitable, and appropriate in all of the circumstances.
I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Glass. Associate:
Dated: 6 December 2023
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