Baker v Blundstone
[2010] TASSC 58
•9 December 2010
[2010] TASSC 58
COURT: SUPREME COURT OF TASMANIA
CITATION: Baker v Blundstone [2010] TASSC 58
PARTIES: BAKER, Kathleen Mary
v
BLUNDSTONE, John Maxwell
FILE NO/S: 663/2008
DELIVERED ON: 9 December 2010
DELIVERED AT: Hobart
HEARING DATES: 23 June and 26 November 2010
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Family law and child welfare – De facto relationships – Adjustment of property interests – Relevant considerations – Just and equitable.
Aust Dig Family Law and Child Welfare [496]
REPRESENTATION:
Counsel:
Applicant: R J Brown
Respondent: A Trezise
Solicitors:
Applicant: Legal Solutions
Respondent: Andrea Trezise
Judgment Number: [2010] TASSC 58
Number of paragraphs: 26
Serial No 58/2010
File No 663/2008
KATHLEEN MARY BAKER v JOHN MAXWELL BLUNDSTONE
REASONS FOR JUDGMENT HOLT AsJ
9 December 2010
The applicant has applied for an adjustive property order under the Relationships Act 2003.
The major asset, the subject of the application, is a house at Dilston in the name of the respondent. It was acquired in late 2000, about a year after the couple became engaged to be married. The purchase price was $97,500. The applicant said in her affidavit that she put $16,000 into the acquisition of the house and the respondent contributed $7,000, being a first home buyer's grant. The applicant had previously owned a property and it was common ground that if her name went onto the purchase contract or the title the respondent would not be eligible for the $7,000 grant. The respondent in his answering affidavit said that the applicant had contributed nothing and that he had funded the purchase by adding $13,000 of his own money to the first home buyer's grant of $7,000 and a mortgage loan of $80,000. There was hot dispute about the matter when the hearing commenced in June 2010. The hearing was adjourned on the application of the applicant, so that she could adduce further evidence. When the hearing resumed in November the respondent conceded that the applicant had paid $16,879 towards the purchase price and the acquisition of white goods and furniture to set up the house.
At the time of the purchase the applicant lived with her parents and her two children then aged about 14 and 15. The children continued to live with the applicant's parents and the applicant split her time between the new house and her parents' house. She slept at the Dilston house 3 or 4 nights per week. By mid-2003 the applicant's elder child had moved away from home. The applicant moved into the Dilston house full-time whilst her younger child remained with the applicant's parents. The respondent had a child, but the child did not reside with him. In about July 2006 the relationship ended and the applicant moved out.
During the relationship, except for the applicant paying money into the respondent's bank account to fund the purchase of the Dilston house, the couple kept their finances separate. The mortgage payments of $155 per week were met by the respondent. The mortgage had a redraw facility. In 2002 the mortgage debt was increased from $76,445.77 to $87,645.44 to fund renovations. The weekly mortgage payments remained at $155, but the term of the loan was extended. In 2004 the mortgage debt was increased from $83,742.55 to $110,531.97 to fund the purchase by the respondent of a Nissan GTR Skyline motor vehicle. The weekly repayments changed from $155 to $201. In 2009 the heat pump in the house had to be replaced at a cost of $8,600. The necessary funds came from the couple's equity in the house. The respondent increased the mortgage loan from $100,996.89 to $112,619.37 at the time of replacement. The current balance of the mortgage loan is about $110,000. The agreed value of the house is $247,500.
The other assets and liabilities are as follows. The applicant has a 2001 Toyota motor vehicle purchased for $9,000 in 2008. She borrowed $9,000 to fund the purchase and has not repaid any part of this debt. She has furniture worth about $3,000. She has no savings or other assets. The respondent still has the Nissan Skyline, now worth $13,400. He has a 1991 Toyota Camry worth about $800. He has furniture which he estimates to be worth $5,000. He has no savings. Besides the mortgage debt he has a personal loan of $585 to repay. Both parties have resources in the form of superannuation investments, however, neither party has asked me to take superannuation into account in deciding what property adjustment order is just and equitable.
I turn to the legislation.
The Relationships Act, s40, confers upon the Court the power to adjust the property interests of partners. A "partner" is defined in s3 as meaning a person who is or has been in a personal relationship. A "personal relationship" is defined in s6 as including a significant relationship. A "significant relationship" is defined in s4 as a relationship as a couple between persons not married. There was no dispute that such a relationship had existed and so no dispute that s40 applies.
Section 40(1) is as follows:
"Division 2 - Adjustment of interest in property 40. Order for adjustment
(1) On an application by a partner for an order for the adjustment of interests in respect of the property of either or both the partners, a court may make any order it considers just and equitable having regard to –
(a) the financial and non-financial contributions made directly or indirectly by or on behalf of either or both of the partners to the acquisition, conservation or improvement of any of the property; and
(b) the financial resources of either or both of the partners; and
(c) the contributions, including any contributions made in the capacity of homemaker or parent, made by a partner to the welfare of the other partner or to the welfare of the family constituted by the partners and one or more of –
(i) a child of the partners; or
(ii) child accepted by either or both the partners into the household of the partners, whether or not the child is a child of either of the partners; and
(d) the nature and duration of the relationship; and
(e) any relevant matter mentioned in section 47. "
Section 40(1)(e) incorporates any relevant matters mentioned in s47. Section 47(2) provides:
"(2) In determining whether to make the order and in fixing any amount to be paid under the order, a court is to have regard to the following:
(a) the income, property and financial resources of each partner (including the rate of any pension, allowance or benefit paid, payable or entitled to be paid to either partner) and the physical and mental capacity of each partner for appropriate gainful employment;
(b) the financial needs and obligations of each partner;
(c) the responsibilities of either partner to support any other person;
(d) the terms of any order made or proposed to be made under section 40;
(e) any payments provided for the maintenance of a child in the care and control of either partner;
(f) whether either partner has the care and control of a child of the partner who is under 18;
(g) the age and state of health of each partner;
(h) the standard of living that is reasonable for each partner in all the circumstances;
(i) the extent to which the payment of maintenance to the partner whose maintenance is under consideration would increase the earning capacity of the partner by enabling the partner –
(i) to undertake a course of education or training; or
(ii) to establish a business; or
(iii) otherwise to obtain adequate income;
(j) the extent to which the partner whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other partner;
(k) the length of the personal relationship;
(l) the extent to which the personal relationship has affected the earning capacity of the partner whose maintenance is under consideration;
(m) any other fact or circumstances the court considers relevant."
It is obvious that the starting point must be the identification and valuation of the property of the partners. Next, the respective contributions to the acquisition, conservation and improvement of the property are assessed and consideration is given to the other matters to which the Court is required to have regard. The final step is the determination of what is just and equitable in the circumstances.
I have identified the assets and values and now come to the financial contributions.
The contract for the purchase of the Dilston house was signed on 27 October 2000. At the time the applicant had the proceeds of the sale of her car being $16,879. The respondent had $1,149.85 in an investment account and $440.56 in a savings account. He had a debit balance of $2,195.95 in a loan account. All three of his accounts were with Heritage Isle Credit Union Limited. The contract provided for the payment of a deposit of $5,000 to the real estate agent as stakeholder upon signing. The applicant paid the whole of the deposit. The applicant then paid the balance of her available funds being $11,879 into the respondent's investment account at Heritage. The purchase was settled on 8 December 2000 with Heritage advancing by way of a mortgage loan to the respondent the sum of $82,745. On settlement day the sum of $7,000 being the respondent's first home buyer's grant was paid into his investment account. Out of that account came $14,238.70 to complete the purchase. Most of the money left in the account was then used to purchase whitegoods and furniture to set up the house. Accordingly, the applicant's contribution to the acquisition and setting up of the house was about double that of the respondent, which included his first home buyer's grant.
The weekly mortgage payments of $155 up to October 2004 and thereafter $201 have almost all been paid by the respondent.
The cost of the material and paid labour for renovation work undertaken on the Dilston house in 2002 was funded out of the couple's equity in the house by a draw down on the mortgage of about $11,000. The balance of the renovation costs has come from the respondent's wages. The respondent, however, has not said how much he spent on the renovations, nor has he provided an estimate of the amount.
The purchase of the respondent's Nissan Skyline, as I have said, was funded entirely out of the couple's equity in the house by the respondent making a redraw on the mortgage loan. There is no evidence as to the source of the funds for the purchase by the respondent of the 1991 Toyota. The purchase by the applicant of her 2001 Toyota in 2008 was funded entirely from money which she borrowed. Finally, there is the furniture. Some of it, as I have said, was acquired out of the funds of the couple left in the respondent's investment account following the settlement of the purchase of the Dilston house. Some of the furniture had been acquired by the parties independently of each other.
Next, to be taken into account, are the non-financial contributions.
It is common ground that the house has been extensively renovated. The respondent identified a large number of specific items of work which he undertook. The applicant has not identified anything in particular which she did, although the respondent accepted that she had occasionally given a small amount of help and that she had painted one of the rooms. There is no evidence as to the extent to which the renovations have increased the value of the house.
The other matters to be considered are, so far as may be relevant, as mentioned in s40(1)(b), (c), (d) and (e) and I deal with them in order.
The applicant and the respondent are both aged in their mid-40's and have full-time employment. The applicant earns about $450 per week after tax and the respondent earns about $600 per week after tax. Both have been in employment for a long time and have superannuation savings. There was no evidence that the applicant was in poor health. In late 2009 the respondent had suffered what he called a "breakdown". He was treated with antidepressants, anti-anxiety medication and sleeping tablets. The respondent has since returned to the workforce and there is no evidence to suggest that the respondent's health will interfere with his earning capacity.
The applicant, whilst living with the respondent, made contributions as homemaker by undertaking cooking and cleaning work. She also contributed towards the costs of running the household. The respondent also made such contributions. There is no suggestion by either that they contributed to the other's parenting obligations.
The duration of the relationship was about seven years. That included about three years of full-time cohabitation.
Both the applicant and the respondent have since re-partnered. There are no children of the relationship and the relationship has had no effect on the earning capacity of the parties. Neither party has any needs, obligations or responsibilities which would affect how the property should be adjusted. Neither party has put forward any circumstances going beyond those which I have already mentioned, which might affect the adjustment.
The final step is for me to determine what order is just and equitable.
This determination is not akin to an accounting exercise, but must be made as a holistic value judgment in the exercise of a discretion of a very general kind. See Manns v Kennedy (2007) Fam L R 489 at pars62 - 65. The applicant says that she should have 50% of the equity in the property. The respondent says that he should have 70%. The equity in the Dilston house is $137,500, being the agreed value of $247,500 less about $110,000, being the mortgage debt. I have concluded that the applicant should have 50% of the equity in the house, being $68,750 and that there be no further adjustment. The considerations leading to this conclusion are as follows:
●The Dilston house was acquired as a joint asset and the only reason it was put solely into the name of the respondent was so that the couple could secure a first home buyer's grant;
●The applicant was the major financial contributor to the acquisition of the house;
●The respondent has invested time, effort and money in undertaking renovations. However, some of the expenses were paid out of the equity in the house and I have no evidence as to the amount of money spent solely by the respondent and no evidence as to the impact of the renovations on the value of the house.
●The respondent reduced the couple's equity in the house by about $30,000 to fund the purchase by him of his Nissan Skyline
●Although the respondent paid the mortgage instalments, the instalments were small, the loan balance has not been reduced and the respondent has had the benefit of occupying the house for much longer than the applicant;
●The applicant estimates the value of the furniture which she has to be $3,000. The respondent estimates the value of the furniture which he has to be about $5,000. The respondent has paid to the applicant the sum of $1,500 in respect of furniture which the applicant agreed to leave in the house.
●The applicant's motor vehicle was acquired after the parties separated and is worth less than the money which she borrowed to acquire it. The respondent's Toyota Camry has an agreed value of $800 and there is no evidence that the applicant contributed to its acquisition. No adjustment in respect of the motor vehicles is required.
These will be the orders:
(1) The respondent is to pay to the applicant the sum of $68,750.
(2)Subject to the applicant's right to enforce this payment, the parties may retain, free of any claim by the other, all property currently in their name or possession.
I will hear the parties as to the question of the costs of the proceedings.
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