Begum v Loft (No 2)
[2013] TASSC 2
•15 February 2013
[2013] TASSC 2
COURT: SUPREME COURT OF TASMANIA
CITATION: BEGUM v LOFT (No 2) [2013] TASSC 2
PARTIES: BEGUM, Naseem
v
LOFT, George Skip
FILE NO: M262/2006
DELIVERED ON: 15 February 2013
DELIVERED AT: Hobart
HEARING DATES: 14 and 16 November 2012 and 7 February 2013
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Family law and child welfare – De facto relationships – Adjustment of property interests – Relevant considerations – Just and equitable.
Relationships Act 2003 (Tas), s40.
Aust Dig Family Law and Child Welfare [496]
REPRESENTATION:
Counsel:
Applicant: G J Faulds
Respondent: J Walker
Solicitors:
Applicant: Faulds & Associates
Respondent: Walker's
Judgment Number: [2013] TASSC 2
Number of paragraphs: 29
Serial No 2/2013
File No M262/2006
NASEEM BEGUM v GEORGE SKIP LOFT
REASONS FOR JUDGMENT HOLT AsJ
15 February 2013
Introduction
The applicant filed her application for an adjustive property order pursuant to the Relationships Act 2003 in September 2006.
The application was heard and determined by me in March 2009 in the absence of the respondent. The judgment was later set aside under the Act, s57, on the principles applicable to cases where a party’s failure to appear at the trial is subsequently adequately explained. The re-hearing has been greatly delayed by circumstances arising from the respondent’s ill health.
On the re-hearing detailed evidence was presented by both parties in affidavits and supplementary evidence given orally. The applicant did not pursue her claim for the return of her personal effects. Matters of general substance were mostly uncontested on the rehearing.
The relationship commenced shortly after the couple first met in mid-1998 with the applicant moving into the respondent’s Sydney house. At the commencement of the relationship the applicant was aged 35 years and the respondent aged 62 years. The applicant owned nothing of substance. She had some personal effects and furniture. The respondent owned the Sydney house. The applicant was employed as an administration assistant earning approximately $350 per week. The respondent was a disability pensioner.
In late 2001 the respondent sold his house resulting in him having about $750,000 in the bank. A motor home was purchased and the couple travelled to Tasmania in November 2001. They lived in the motor home until June 2002 when the respondent purchased a house at South Arm for $220,000. The parties lived in that house until the applicant moved out in May 2005.
Initially the parties kept their finances separate. The applicant, however, spent much of her pay on the day-to-day living expenses of the couple. Commencing in August 2000 the applicant began paying about 75% of her net pay into the respondent’s account. Each had a credit card giving access to that account. The account was used to pay day-to-day living expenses. The applicant used the balance of her earnings to cover her personal expenses.
When the Sydney house was sold the applicant resigned from her employment and commenced to receive Commonwealth government funded carer’s payments commencing at the rate of $250 per week. She was able to earn income from time-to-time and this affected her carer's payments. The carer's payments and the income were paid into the applicant’s account and the respondent had access to that account.
In short, from August 2000 the income of the parties was pooled and used for ordinary living expenses.
The applicant’s current financial position, excluding any debts which she may have for legal costs in connection with this litigation, is as follows. She owns a car worth about $5,000, household contents worth about $2,000 and shares worth about $1,000. She has debts of about $13,000 comprising a personal loan currently having a debit balance of about $8,000 and a credit card debt of about $5,000. She has superannuation investments having a value of about $46,000. She is in full-time employment earning about $750 per week after tax.
The respondent still owns the house at South Arm, the agreed value of which is $447,000. His evidence was that his household furniture includes valuable antiques and he estimates the furniture to be currently worth about $120,000. He owns a motor vehicle having a value of about $8,000. He described the other vehicle, being the motor home, as “rusting in a shed”. He has shares worth about $100. He has credit card debts of about $20,000. He has no superannuation investments. His sole source of income is pension income of about $370 per week.
The respondent gave evidence that he has already paid a significant sum to lawyers in connection with this litigation. If this is so, there needs to be an account of how much has been paid because the legal costs should not be regarded as a liability for the purpose of assigning a net value to the asset pool. Costs orders are separate from adjustive property orders. Counsel for the respondent informed me in closing submissions that the significant costs incurred by the respondent, especially as a result of an order made that the respondent pay the applicant's costs of the set aside application and the wasted hearing culminating in the decision of March 2009 which was set aside, remained wholly or largely unpaid. This assertion by counsel is consistent with the overall evidence of the respondent's financial position. Counsel for the applicant did not suggest that I should act on the respondent's evidence that he has paid a substantial amount already in respect of legal costs. In the circumstances, I shall proceed on the basis that the asset pool has not been significantly diminished by the payment by the respondent of legal costs. Accordingly, no adjustment to the figures referred to in the preceding paragraph needs to be made.
The law
The Act, s36 provides that a “partner” may apply for an adjustive property order. Section 37 confers upon the court jurisdiction to make such an order in specified circumstances including where the parties have been in a “personal relationship” for a continuous period of not less than two years. Section 6 defines a personal relationship as a “significant relationship” or a “caring relationship”. Section 3 defines “partner” as being a person who has been in a personal relationship. Section 4 defines a significant relationship and in summary is a marriage like relationship between two adult persons who are not married to each other. Section 5 defines a caring relationship as a relationship, other than a significant relationship, between two adult persons not married to each other wherein one provides the other with domestic support and personal care without payment other than a Commonwealth carer’s allowance or payment.
In the latter years during which the parties lived together sexual relations were infrequent, but the respondent was in substantial ill health and the applicant provided him with domestic support and personal care. She was continually in receipt of Commonwealth carer’s payments from late 2001 until she moved out of the South Arm house in May 2005. It may be that the relationship changed from being a significant relationship to a caring relationship during the latter years, but it makes no difference so far as the jurisdiction to make an adjustive property order is concerned as either way the couple were partners within the meaning of the Act.
The Act, s40 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.”
Section 40(1)(a) – The contributions made to the acquisition, conservation or improvement of the property
The South Arm house was purchased using part of the proceeds from the sale of the respondent’s Sydney house. The applicant did not directly contribute to the acquisition of the house. She gave evidence that in mid-1999 she received a lump sum payment from her employer of about $10,000 and gave the money received to the respondent. On its face this contributed to the pool of funds available to the respondent for the purchase of the house. However, the respondent said that early in the relationship he paid to the applicant $17,000 to enable her to clear her debts. The applicant disputes the amount, but says a payment of about $7,000 to $8,000 was made to her by the respondent to clear her debts. There is insufficient documentary evidence for me to resolve the dispute, but resolution is unnecessary. Whatever the applicant paid by way of lump sum was roughly set-off by the respondent paying the debts. However, the applicant contributed substantially to the day-to-day living expenses of the couple whilst they lived in Sydney and this would have assisted the respondent in preserving his asset pool. I conclude that the applicant made a small contribution to the respondent being left with about $750,000 in cash upon the sale of the Sydney house. The South Arm house was purchased from this cash and so in this respect the applicant made a small indirect contribution to the acquisition of the house.
The only evidence which the applicant gave in relation to the conservation and improvement of the South Arm house was that she always mowed the lawns and undertook “all the chores around our house and land as well as undertake [sic] the normal household duties”. No further detail was given as to what chores were undertaken or the extent to which they may have contributed to the conservation or improvement of the house.
The only other asset of significance is the furniture, including antiques, which the respondent owns and says is worth about $120,000. There is no evidence from the applicant to show that she contributed to the acquisition, conservation or improvement of the furniture.
Section 40(1)(b) – The financial resources of the partners
The applicant is currently in full-time employment earning about $750 per week after tax. She has about $46,000 in superannuation investments. The respondent receives pension payments of about $370 per week and has no superannuation.
Section 40(1)(c) – Contributions as homemaker and contributions made to the welfare of the other partner
Whilst the couple lived in Sydney the applicant was in full-time employment, but still undertook many of the household duties. In the latter years of the relationship the applicant’s evidence is that she was undertaking all of the household chores and duties and caring for the respondent. The respondent gave no evidence of him undertaking household tasks or doing other work which benefited the applicant or the couple.
The applicant was in full-time employment at the commencement of the relationship and almost immediately upon separation returned to full-time employment. For most of the time the parties were together the applicant only had part-time work and was dependent upon receipt of a carer’s pension. The contributions which she has made as homemaker and to the welfare of the respondent have accordingly come at considerable financial cost to her. Not only was she left in a position where she was unable to develop her own asset base, but also her years absent from the full-time work force would have affected her employment advancement opportunities and also had an adverse impact on the accumulation of her superannuation investments.
Section 40(1)(d) – The nature and duration of the relationship
The parties lived under the one roof for about seven years. Although the respondent contested that it was a marriage-like relationship in later years, he did not assert that there was no caring relationship. Neither party made submissions that there was a need to make findings classifying the relationship at some point as having moved from a significant relationship to a caring relationship. There was no submission that such a distinction would make any difference to the disposition of the claim.
Section 40(1)(e) – Any relevant matter mentioned in s47
Section 47 lists a number of matters including:
·the income, property and financial resources of each partner and the capacity of each partner for gainful employment;
·the financial needs and obligations of each partner;
·the age and state of health of each partner;
·the standard of living that is reasonable for each partner in all the circumstances;
·the extent to which the relationship has affected the earning capacity of a partner; and
·any other fact or circumstance the Court considers relevant.
The applicant has the better income and financial resources, but the respondent has almost the entirety of the asset pool. The respondent’s financial needs equal or exceed his income. The applicant does not assert that she is in poor health. She might remain full-time in the work force for many years. The respondent is nearing the end of his life and is in very poor health. No distinction is to be drawn between the standards of living which are reasonable for each of the parties. The applicant’s ability to get ahead financially in her life has been significantly adversely affected by the relationship.
The respondent has asked me to take into account that in January 2007, almost two years after the couple separated that he paid a vet's bill of $2,891.05 to have a dog, which the applicant had acquired prior to the commencement of the relationship, treated for a snake bite. The dog had been left in the care of the respondent since shortly after separation as the applicant's accommodation was not suitable for pets. The dog had been left with the respondent at his suggestion and there was no evidence that the applicant had ever sought to have it returned. There was no evidence that the applicant had been consulted about whether the dog should be treated for the snake bite or put down. The position appears to be that the dog had become solely the respondent's pet. The cost of treating the dog has already, to some degree, been taken into account in that the net asset pool has been diminished by the cost of the treatment. I am not persuaded that any special adjustment is called for in respect of the dog.
The ultimate question – What is just and equitable?
The court “is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind”. Davey v Lee (1990) 13 FAMLR 688 at 689. The task “is not akin to an accounting exercise”. Ferraro v Ferraro (1993) FLC 92 – 335 at 79,578.
In assessing what is just and equitable I attach little weight to the fact that the applicant has about $46,000 in superannuation investments. The respondent has done nothing to contribute to the accumulation of this fund and, as I said earlier, it is likely that the resource would have been greater had the applicant remained full-time in the work force rather than devoting a significant amount of her time to caring for the respondent. The applicant has made significant contributions as homemaker and carer over a period of about seven years. Her current position is that her liabilities exceed her assets. She is a moderate income earner. The respondent throughout the relationship provided a roof over the applicant’s head but otherwise, the major contribution to the relationship came from the applicant. The respondent is in poor health with no income earning potential and unless assets are sold he is entirely dependent upon a small pension for the payment of his expenses.
The only assets of significance are the respondent’s house having an agreed value of $447,000 and his furniture and antiques having an estimated value of $120,000. Leaving aside amounts which the respondent is liable to pay to his solicitors in connection with this litigation he has debts totalling about $20,000. The net is about $550,000.
Having weighed the factors specified in the legislation and referred to in these reasons I conclude that there should be an adjustive property order in favour of the applicant requiring the respondent to pay to her 20% of his net assets, not taking into account his legal costs. The respondent’s net assets have a value of about $550,000. The amount which the respondent will be required to pay to the applicant is $110,000.
Disposition
I will hear counsel as to the appropriate form of orders to give effect to my decision.
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