Begum v Loft
[2009] TASSC 17
•20 March 2009
[2009] TASSC 17
CITATION: Begum v Loft [2009] TASSC 17
PARTIES: BEGUM, Naseem
v
LOFT, George Skip
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M262/2006
DELIVERED ON: 20 March 2009
DELIVERED AT: Hobart
HEARING DATES: 11 and 12 March 2009
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Family Law & Child Welfare – De facto relationships – Adjustment of property interests – Relevant considerations – Just and equitable.
Aust Dig Family Law & Child Welfare [496]
REPRESENTATION:
Counsel:
Applicant: Mr G J Faulds
Respondent: No appearance
Solicitors:
Applicant: Faulds & Associates
Respondent: Steven Chopping LLB
Judgment Number: [2009] TASSC 17
Number of paragraphs: 23
Serial No 17/2009
File No M262/2006
NASEEM BEGUM v GEORGE SKIP LOFT
REASONS FOR JUDGMENT HOLT AsJ
24 March 2009
The application and some matters of approach
The applicant was in a personal relationship with the respondent for about seven years ending in May 2005. She has applied for an adjustive property order.
Jurisdiction arises by virtue of the Relationships Act 2003, s40, which is as follows:
"(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) a 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.
(2) A court may make an order in respect of property whether or not it has declared the title or rights of a partner in respect of the property."
As s40(1)(e) incorporates any relevant matter mentioned in s47 I set out below the relevant parts of the section.
"(2) … 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) …
(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) …
(j) the extent to which the partner … has contributed to the income, earning capacity, property and financial resources of the other partner;
(k) …
(l) the extent to which the personal relationship has affected the earning capacity of the partner …;
(m) any other fact or circumstances the court considers relevant."
The starting point is the identification and valuation of the property of the partners held either individually or jointly. Secondly, the contributions and resources of the parties as referred to in s40 must be identified and considered. At the same time the nature and duration of the relationship and any other relevant matters are to be taken into account. Thirdly, and lastly, there is to be a determination based on the relevant considerations of what, if any, orders are just and equitable.
The approach to be taken in determining what is just and equitable was explained by Campbell JA, with whom Santow JA and Bryson AJA agreed in Manns v Kennedy (2007) NSWCA 217. In speaking of the New South Wales equivalent of s40, his Honour said at pars62 – 65:
"McLelland J said in Davey v Lee (1990) 13 Fam LR 688 at 689; (1990) DFC ¶95-084 at 76,146, that under section 20 'the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind'. That statement was approved in this Court in Ross v Elderfield [2006] NSWCA 192 at 35 and in Kardos v Sarbutt [2006] NSWCA 11 at 36; (2006) 34 Fam LR 550 at 561; (2006) DFC ¶95-332 at 78,542.
The Full Court of the Family Court of Australia (Fogarty, Murray and Baker JJ) in Ferraro v Ferraro (1993) FLC 92-335 at 79,578 approved the statement in In the Marriage of Harris (1991) 15 Fam LR 26 at 31; [1991] FLC 92,254 at 78,705 concerning section 79 Family Law Act 1975 that the task it calls for 'is not akin to an accounting exercise'. The same applies to section 20.
However, the 'holistic value judgment' is the final step in the process of arriving at an order, namely deciding what adjustment of property seems just and equitable having regard to the contributions identified in paragraphs (a) and (b). Carrying out the task that section 20 sets requires, before that final step is carried out, an identification and (so far as possible) valuation of the contributions that are being taken into account and an identification and (so far as possible) valuation of the property concerning which it is open to the court to make an adjustment: Howlett v Neilson [2005] NSWCA 149 at 25; (2005) 33 Fam LR 402 at 407; Saric v Steward [2006] NSWCA 260 at 61; (2007) DFC ¶95,401 at 78,713; Chanter v Catts [2005] NSWCA 411 at 22; [2005] NSWCA 411; (2005) 64 NSWLR 360 at 366.
Further, even in carrying out that final step, 'there is no warrant for ignoring the rigour that mathematics can provide': Ross v Elderfield (at [49] per Handley JA (with whom McColl JA and Hislop J agreed)). As Hodgson JA said in Howlett v Neilson (at [39]; 411):
'... while I do not think that these matters can be determined on such mathematical calculations, I think mathematical calculations are of some use in guiding and testing conclusions about what is just and equitable, and also in promoting transparency and consistency in decision-making.'"
In the present case most of the asset pool was derived from the pre-relationship property of the respondent. Speaking of pre-marital property, inheritance and gifts Baroness Hale said in Miller v Miller (2006) 2 AC 618 at par152:
"The source of the assets may be taken into account but its importance will diminish over time. Put the other way round, the court is expressly required to take into account the duration of the marriage …"
Here the couple's home is solely in the name of the respondent and it has increased significantly in value since its acquisition. As to increases in the value of property owned by one of the partners Ipp JA, with whom Giles JA and McColl JA agreed said in Bilous v Mudaliar (2006) 65 NSWLR 615 at par63:
"Determinations as to what orders should be made under s20 are to be made solely on the grounds of the justice and equity of the case. The justice and equity of the case may derive from the fact that the party who owns the family home or other property was able to retain that property, while the market value increased, because 'of joint efforts of wage earning, homemaking and parenting, and mutual support'. In some instances the non-financial contributions of one party may result in property of the kind in question not having to be sold. In other instances, the non-financial contributions of one partner may allow the other to advance his or her career and earn a high income that enables the property in question to be maintained and retained. Thus, an increment in capital value may well result, indirectly, from 'joint efforts of wage earning, homemaking and parenting, and mutual support'".
The facts
The facts were not in controversy. The only affidavit filed by the respondent was his affidavit verifying his financial statement given in the form specified by the Family Law Rules. On the day of the hearing he appeared by his solicitor and applied for an adjournment. The application was refused. There was no request to have the matter stood down to enable the respondent to travel to court. The solicitor withdrew and the hearing proceeded in the absence of the respondent.
I accept all of the evidence of the applicant. I have no reason to do otherwise. It is unnecessary for me to recite the evidence in detail. In broad summary it is as follows.
At the commencement of the relationship in 1998 the applicant was aged 35 and the respondent 62. There were and are no dependents. The applicant had steady employment which she had held for several years earning about $350 per week after tax. She had no assets of significance. The respondent was a disability pensioner. He owned a house in Sydney.
The Sydney house was sold in late 2001 and the couple moved to Tasmania. They lived in a motorhome for several months. In June 2002 the respondent purchased a house near Hobart. The purchase price was $220,000 and the house was unencumbered. The respondent in his financial statement assigns a value of $447,000 to the house. Counsel for the applicant informed me that the applicant accepts this figure as representing the current value of the house The respondent continues to reside in the house and the applicant has taken up rented accommodation.
The applicant has furniture, personal effects and a 1990 Holden motor vehicle. As at the middle of 2008 her superannuation savings were worth about $30,000. She has steady employment producing an after tax weekly income of a little over $500. Besides the house, the respondent at the time of his financial statement in mid-2008 owned two motor vehicles having a combined value of about $22,000. He had $23,000 in the bank and shares worth $820. Although not mentioned in his financial statement obviously the respondent has furniture and personal effects. He has no superannuation savings. At the time of his statement he was in receipt of a pension of $221 per week and interest of $45 per week earned on the money he has in the bank.
At the commencement of the relationship the respondent kept control of her finances. She shared household expenses with the respondent. In April 2000 the respondent changed employment and her income increased. Her take home pay was about $2,000 per month and from August 2000 part of her pay was directly deposited into the respondent's account. Between August and November 2000 the sum of $1,000 per month was deposited into the respondent's account. In December 2000 it was $1,500. In January 2001 it was $1,700. Thereafter it was almost the entirety of her pay which was deposited into the respondent's account until she ceased employment in October 2001. The total paid into the respondent's account between August 2000 and the couple moving to Tasmania in about October 2001 was $24,258.37. In addition to these payments in 1999 the applicant had paid to the respondent $10,000 which she received as a lump sum at the conclusion of a period of employment.
In October 2001, coinciding with the sale of the Sydney house and the couple moving to Tasmania, the applicant became the recipient of a carer's pension. This was supplemented by a small income obtained from part-time work. For the financial years ending 30 June 2003, 2004 and 2005, the applicant received pension payments of $11,354, $7,298 and $6,419 respectively. For the same years her earnings were $4,516, $10,346 and $17,578. During the period in which the couple cohabitated in Tasmania the respondent had access to the applicant's bank accounts and frequently made withdrawals. Besides her superannuation the applicant accumulated no savings or assets.
The Hobart house was on a rural residential block. The applicant ran chickens, ducks and geese and made a small income from selling eggs. She mowed the lawns and stacked the wood. She did all of the housework and all of the cooking.
What is the justice and equity of the case?
In her application the applicant seeks an order that the house be sold with 30% of the net proceeds to go to her. She also seeks an order compelling the return of some specified personal items.
I do not consider it to be just and equitable that the applicant should have 30% of the value of the house. It was acquired mostly from the pre-relationship property of the respondent. The duration of the relationship, being seven years, was not great. There is no evidence that the applicant undertook any improvements to the property. It is not a case where the applicant's contributions allowed the respondent to pursue a career. Throughout the relationship he was a pensioner.
I do consider, however, that it is just and equitable for the applicant to receive a substantial lump sum payment from the respondent.
In 1999 the applicant paid to the respondent $10,000. Between August 2000 and October 2001 the applicant paid to the respondent further sums of money totalling a little over $24,000. Prior to August 2000 she had been paying her share of the couple's living expenses. The applicant's financial contribution would have improved the respondent's asset base from which the Hobart house was purchased. Thereafter the applicant's financial contributions assisted the respondent in conserving the house because many, if not most, of the household expenses appear to have come from the applicant's funds. But for the relationship, the respondent's assets would have been eroded by a need to apply capital to the payment of living expenses. This is demonstrated by the respondent's financial statement which shows a weekly income of $266 and weekly expenses of $337. His expenses are likely to be higher than stated because the respondent's list does not include, for example, house and contents insurance, rates and car insurance. But for the relationship the respondent would be significantly worse off financially.
In assessing what is just and equitable I take into account the applicant's significant contributions as homemaker. I attach little weight to the fact that the applicant has some superannuation savings. The respondent has done nothing to aid the accumulation of this fund and it is likely that the resource would have been greater had the applicant remained full-time in the workforce rather than receiving a carer's pension. However, I also take into account, as conceded by the applicant's counsel, that the respondent is in poor health. He appears to have no income earning potential. He has no superannuation. He is dependent upon a pension which is insufficient to meet his living expenses. On the other hand, the applicant has full-time employment and according to her counsel is in good health.
The major asset is the Hobart house. The applicant should have a lump sum payment reflecting her financial contribution to its acquisition and conservation. I consider that she should have 20% of its value. Using the value of $447,000 supplied by the respondent and accepted by the applicant the figure produced is $89,400. This should be rounded up to give recognition to the applicant's contributions as homemaker balanced against the other factors, which favour the respondent, which I have mentioned.
The orders
Subject to any submissions as to form, these will be the orders:
(1)The respondent is to pay to the applicant the sum of $100,000 within six weeks of the personal service of this order upon him.
(2)In the event that the sum of $100,000 is not paid to the applicant within six weeks, then, at the election of the applicant, the house at 106A Blessington Street, South Arm, is to be sold with the applicant to receive 20% of the gross sale proceeds plus the sum of $10,600.
(3)The parties have liberty to apply for such orders or directions as may be necessary or convenient to effect the sale of the property including an order requiring the respondent to give vacant possession during the marketing process.
(4)Within seven days of the personal service of this order upon him the respondent is to make available for collection by the applicant such of her personal effects as are in his possession including:
(a)The applicant's photographs and personal papers including her passport.
(b)The Royal Doulton English Roses dinner setting for eight.
(c)The Stanley Rogers silver cutlery setting for eight.
(d)The Lladro/Nao, Royal Doulton and royal Albert figurines.
(e)The Waterford crystal flower vases.
(f)The china cabinet with three glass shelves with mirror back which has two side glass panels and a glass door.
(g)The applicant's perfumes, makeup, swimsuit and jewellery.
(h)The applicant's CD's, piano music books and Metronome.
(5)Except as otherwise specified in these orders any interest which a party has in property in the possession of the other party is extinguished.
I will hear the parties as to costs.
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