Berick v Evans

[2011] VCC 1430

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
CIVIL DIVISION
DAMAGES AND COMPENSATION

FAMILY PROPERTY DIVISION

Case No. CI-08-03706

DALE KATHLEEN BERICK	Plaintiff
v
GAI LORRAINE EVANS	Defendant
(also known as GAI LORRAINE HOVEY)

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	28 November 2011
DATE OF JUDGMENT:	7 December 2011
CASE MAY BE CITED AS:	Berick v Evans
MEDIUM NEUTRAL CITATION:	[2011] VCC 1430

REASONS FOR JUDGMENT

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SUBJECT – PROPERTY LAW
CATCHWORDS – domestic partnership – direct and indirect contributions to the production
of an asset pool – unequal contributions – direct financial contributions – 26-year
relationship – global approach more appropriate in determining just and equitable
adjustment of the of the domestic partners – inheritance received by one domestic partner –
whether to form part of the asset pool
LEGISLATION – Property Law Act 1958, s285(1)
CASES CITED – Kardos v Sarbutt (2006) 34 Fam LR 550; Conn v Martusevicius (1991) 14
Fam LR 751; Robertson v Austin [2003] VSC 80; Findlay v Besley [2003] VSC 247; Giller v
Procopets [2008] VSCA 236; Kalenik v Apostolidis [2009] VSC 208

JUDGMENT – Orders for adjustment.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M O’Connor	Richmond & Bennison
For the Defendant	Mr P Testart	Cinque Oakley Senior
HIS HONOUR:

Introduction

1          Before the Court is a proceeding brought by the plaintiff by Writ filed 5 September 2008 seeking an alteration of property interests pursuant to PART IX of the Property Law Act 1958.

2          The defendant, by her Defence filed 17 October 2008, has joined issue with the plaintiff, but also seeks an alteration of property interests.

3          Mr M O'Connor of Counsel appeared for the plaintiff and Mr P Testart of Counsel appeared for the defendant.

4          Mr O'Connor provided me with a chronology and a statement of issues which was of great assistance. Firstly, it provided a skeletal outline of the financial and non-financial contributions made by the plaintiff and the defendant to the acquisition of the asset pool in contest between them; and, secondly, it allowed Mr Testart to consider where the real contest lay on the facts.

5          Following an informative opening made by Mr O'Connor, I asked Mr Testart to indicate what of the matters which were opened were in serious contest. Mr Testart informed me that the lump sums which came into the possession of both the plaintiff and the defendant during their domestic relationship were essentially not contested, but the manner in which the plaintiff applied the lump sums which came into her possession were contested to some degree.

6          The early exchange created a very different setting within which the proceeding was tried from the way in which the pleadings were cast. It was my intention, through the relevant practice note, to encourage parties to commence such a proceeding by Originating Motion supported by affidavit material as a far more appropriate means of presenting a domestic partnership dispute. The production of the chronology and statement of issues permitted both Mr O'Connor and Mr Testart to define the real issues in dispute, which demonstrates that the parties would have been better served had they commenced the proceeding by Originating Motion.

The Background Facts

7          The plaintiff was born on 29 February 1944. She is now sixty-seven years of age. The defendant was born on 26 October 1954. She is now fifty-seven years of age. They met in about February 1981 and commenced cohabitation as domestic partners in about April 1981.

8          At the commencement of the domestic partnership, neither the plaintiff nor the defendant was possessed of any real property or chattels of any real worth. The plaintiff was a recently discharged bankrupt. She was working as a prison officer at Fairlea Women's Prison. She later worked at Turana, which is a youth prison. She owned some furniture and a car. The defendant was in a similar position. She was working as a delivery driver for Girlock Industries. She owned a block of land at Haig Street, Macedon (“Haig Street”), a Mazda van and some furniture.

9          The plaintiff said that she was in receipt of about $525 per week from her work as a prison officer. The defendant was in receipt of about $191 per week from her work as a delivery driver. The plaintiff and the defendant lived in rented premises in Parkville and elsewhere as domestic partners.

10        The defendant was involved in a serious transport accident on 21 June 1982. She suffered multiple injuries. The major injury she suffered was to her left knee. She was initially treated at the Footscray Hospital as an inpatient for about two weeks. Subsequently, she underwent rehabilitation over a period of four to five years, during which she had surgery on four or five occasions.

11        The defendant was unable to work in a full-time job following the transport accident. She obtained some work. She worked for Diners Club for a few weeks. She worked for Earth Garden magazine for up to 4 hours, one day per week, over a two-year period. She was paid about $6 per hour. Otherwise, the plaintiff qualified for and received social security benefits. She received those benefits not long after the occurrence of the transport accident and continues to receive those benefits.

12        The defendant received no fault benefits as a result of making a claim on the Transport Accident Commission. She received payments for impairment of earning capacity, and a lump sum impairment benefit of $35,000 in about 1986.

13        In about February 1986, the defendant purchased a block of land of some 10 acres on the Falls Road, Trentham (“Falls Road”). The purchase price was $31,500. She used the balance of the lump sum to purchase a motor vehicle. She sold the Mazda van.

14        At the end of 1986, the plaintiff and the defendant moved to an area known as Fern Hill, which is near Trentham. They lived there for about seven years in rented accommodation. In about 1992, the plaintiff and the defendant decided to build a two-bedroom brick veneer home at Falls Road.

The Parties’ Source of Funds

15        The plaintiff suffered a Post-Traumatic Stress Disorder as a result of an incident at her workplace. She was working as a prison officer at Turana at the time. She continued working in that capacity at Turana until 1987 when the Post-Traumatic Stress Disorder incapacitated her for work. She lodged a Claim for Compensation, which was admitted, which led to her receiving weekly payments of compensation pursuant to the Accident Compensation Act 1985. The plaintiff estimates that she received $600 net per week by way of weekly payments.

16        The plaintiff resumed work in about March 1992 with Brosnan Youth Services. The Post-Traumatic Stress Disorder from which she continued to suffer was aggravated by a further work incident four months after she commenced work. She lodged a further Claim for Compensation, which was admitted, which led to her receiving weekly payment of compensation.

17        The plaintiff received a number of lump sums during the domestic relationship. It is convenient to summarise those at this point:

• November 1991 – the plaintiff received a termination payment relevant to her employment with Turana of $51,050;

• 21 February 1992 – the plaintiff surrendered a portion of her superannuation entitlements of $20,457;

• October 1995 – the plaintiff received $119,980 by way of lump-sum compensation relevant to her employment with both Turana and Brosnan Youth Services;

• December 1997 – the plaintiff surrendered a further portion of her superannuation entitlements of $15,000;

• 1999 – the plaintiff was paid $50,000, which was paid to her when her entitlement to weekly payments of compensation was recalculated;

• 10 December 2001 – the plaintiff surrendered a further portion of her superannuation entitlements of $6,762.

18        The only lump sum which came into the possession of the defendant was the sum of $17,000, which was the net proceeds of sale of her property at Haig Street. She sold the property in about September 2001.

19        The plaintiff was in receipt of compensation payments until she turned sixty- five years of age on 29 February 2009. The only reliable evidence of the quantum of those payments came from Ms Sanders, accountant. She has been the plaintiff's accountant for many years. She produced documents from her file which demonstrate that for the year ending 30 June 2007, the plaintiff received compensation payments of $40,674 gross, and for the year ending 30 June 2008, $42,024. Whilst no net amount was calculated, it seemed to me that a relevant tax rate would probably produce a net weekly sum of about $600. No effort was made by the plaintiff to provide calculations of any great particularity, but in any event, Mr Testart did not contest any of the foregoing. It seemed to me that by looking at the amount of the plaintiff's compensation payments in those years, that I could infer that she received significant sums of compensation in the preceding years, consistent with sums which were increased by the Consumer Price Index from the first year she received compensation payments, until the financial year ending 30 June 2008. Mr Testart did not suggest that such an approach was not a legitimate one.

20        The defendant prepared a handwritten schedule of her receipt of Social Security payments commencing in June 1995 and concluding in December 2009.[1] Between June 1995 and December 2000, her payments vary between $331.30 up to $399.70. Between June 2001 and June 2006, her payments vary between $407.80 up to $505.50, and as at December 2009, she was in receipt of $671.90. She received those payments on a fortnightly basis.

[1]             Exhibit C

21        Despite what appeared initially to be a contest on nearly every issue, the plaintiff and the defendant agreed that the foregoing represents the direct financial contributions to the domestic partnership. Where they parted company was the application of the monies, and the whereabouts of some of the monies.

22        The only other relevant lump sum which is in issue is the receipt by the defendant of $150,000 from the estate of her mother who died in 2005. The defendant received that sum in 2009. She gave no evidence to explain why there was a delay between the expected time when probate would have been granted to the executor of her mother's estate and the delay in her receipt of that lump sum. The lump sum sits in a bank account. The investment in the bank account is operated by a firm of solicitors. It has a present balance of $160,000.

23        In about October 1999, the plaintiff purchased a shop and dwelling at 24 High Street, Trentham (“High Street”) for $93,000. She financed the purchase with a loan from the Bendigo Bank of $71,500. The difference between the purchase price and the loan was made up from the lump sums which she had received by that time.

24        In about March 2008, High Street was sold for $357,000. After the discharge of the mortgage over the property, the plaintiff and the defendant obtained a net sum of $222,586. By agreement between the plaintiff and the defendant, they each obtained a sum of $30,000. The balance of $162,586 was placed in a solicitor's trust account. It was later paid to the plaintiff, presumably through an agreement with the defendant.

The Building at Falls Road

25        The plaintiff and the defendant commenced building a two-bedroom brick veneer home at Falls Road in 1991. It would appear that working drawings were prepared by Black Forest Drafting Service in November 1991. It rendered an invoice for the drawings on 22 November 1991.[2]

[2]             PCB 73

26        The Plaintiff's Court Book (“PCB”) contains invoices, statements and quotations for the supply of materials and for the undertaking of work by tradesmen from about 22 February 1992 to about 12 September 1993.[3] It is of interest that some of the invoices, statements and quotations have endorsed on them payment by cheque; for example, for the purchase of materials from Fowles Auction Group on 5 November 1992.[4] However, neither the plaintiff nor the defendant produced any banking and finance records to demonstrate the accounts which each of them operated individually and jointly, nor the accounts from which monies were withdrawn to pay accounts in cash, nor the account from which cheques were drawn.

[3]             PCB 73-116

[4]             PCB 86

27        The plaintiff said that the funds used to purchase materials and pay tradesmen was derived from the $51,050 she received by way of a termination payment in November 1991. That would appear to be correct. The defendant said that she thought that the materials and tradesmen were paid from a loan obtained from a bank in the sum of $64,000. That is not correct, because the loan she referred to was not obtained from the bank until about May 1993, evidenced by the bank statements produced by the plaintiff.[5]

[5]             PCB 117-118. The bank statements are incomplete. The first page chronologically commences in October 1993

28        Subsequently, the plaintiff said that the lump sums she received were used to purchase materials and pay tradesmen for the purpose of building the house, and were also used for living expenses. The plaintiff said that the arrangement she had with the defendant was that they would pool their monies and pay instalments under the mortgage and their daily living expenses from the pool of resources. The defendant essentially agreed with the plaintiff's evidence.

29        The next property transaction was the purchase by the plaintiff of the shop and dwelling at High Street, which I have already referred to above. It was rented. The plaintiff gave very little evidence of the quantum of the rent nor whether there were excess monies over and above the instalments on the mortgage, and if there was, how those excess monies were applied.

30        The plaintiff gave evidence that she was principally involved in cleaning up High Street and undertaking physical work to renovate it and to bring it up to a standard so that it could be rented. Some of the work, and it was my impression work which required building expertise, was undertaken by the tradesmen engaged by the plaintiff. The plaintiff said that the defendant did very little if any work at all on High Street. The defendant said that she did some work on High Street on about three or four occasions, limited to cleaning up and preparing the property in between tenants. It did not impress me as amounting to a great deal, and the probability is that the major work was undertaken by the plaintiff in relation to work not performed by the tradesman.

31        The next property transaction was the sale by the defendant of Haig Street. the net proceeds of sale of $17,000 were applied by the defendant on the purchase of a Mitsubishi motor vehicle which both she and the plaintiff used. She paid for part of the purchase price of a ride-on mower which was used by the plaintiff and the defendant to mow the lawns at Falls Road. Part of the money was used by the defendant to go on a holiday with her mother.

32        The last property transaction was the sale of High Street in March 2008 which I have dealt with in sufficient detail above not to need repetition at this point.

The Plaintiff and the Defendant's Use of Their Monies

33        It became abundantly clear during the trial that the plaintiff and the defendant are very polarised in their views of their domestic relationship and the part they each played in it.

34        What is beyond doubt is that from the time when the plaintiff and the defendant commenced the domestic relationship they behaved toward one another in a fashion consistent with a well-established domestic relationship on every level. There is a strong inference from the length of the relationship that neither placed any particular emphasis on the disparity in the capital sums they brought into the relationship nor the disparity in their income.

35        It was not until some time after 2001 that their relationship began to change. The plaintiff said that the defendant's attitude changed around 2001, which coincided with her father passing away. It was then that she said that the defendant only contributed her monies to payment of the instalments under the mortgage and the payment of services, leaving the purchase of groceries and the like to the plaintiff.

36        The defendant denied that she limited the use of her monies in that way. She said that she applied her monies to paying the instalments under the mortgage and the payment of services. She said that the instalments under the mortgage were $653 per month. It is plainly obvious that both the plaintiff and the defendant agreed that the defendant used her monies in the way just described, and that must mean that she would have exhausted almost the entirety of her monies on paying the instalments under the mortgage and paying services when regard is had to her social security payments. Also for the plaintiff to allege that the defendant was not pulling her weight by meeting their joint expenses really has no merit.

37        The defendant made criticism of the plaintiff and her use of her monies. She described her as “extravagant”. She said that if she saw something she wanted she would buy it. She referred to the plaintiff buying ornaments and expensive foodstuffs; however, when it came to substantiating that criticism, she gave vague and general answers which left me with the impression that the criticism had little merit.

38        What struck me, however, as extraordinary was that from some time early in 2008, the defendant was in receipt of $192,586. She was also in receipt of about $600 net per week by way of compensation payments until she turned sixty-five years of age in February 2009. If I assume that four years has gone by since 2008, then the sum of $192,586 represents $48,146.50 annually. At least for the period from early in 2008 to early 2009, she had an additional sum of $600 per week, or about $30,000. Despite having a lump sum and income, the plaintiff said that she has no money nor any resources, and when I asked her what cash she has to hand, she said about $11.

39        Mr Testart cross-examined the plaintiff at some length regarding her use of a lump sum and her income. The plaintiff was able to account for all but above $80,000 of the lump sum, but said that she used the money to re-establish herself and otherwise for general living expenses. Among other things, she described spending the following: payment out of a personal loan of $12,000; $26,000 to purchase a car; $17,000 to pay out a credit card; $5,000 towards household expenses; $2,000 on clothing; $5,000 in travelling and accommodation expenses travelling to West Wyalong and Wagga from Batemans Bay; payment of legal fees, and payment of $17,000 to the defendant.[6]

[6]             I did not obtain a full note of all of the evidence of the plaintiff regarding her expenditure, but I accept her estimation that she was able to account for all the $80,000 of the lump sum

40        One matter where the plaintiff and the defendant were completely at odds was the plaintiff's evidence that the defendant asked her for $5,000 to replace a stove and a hot water service, and $12,000 for the defendant to pay her legal fees. The plaintiff said she went to her bank and withdrew the monies by separate withdrawals in cash. She then placed the cash in a secure envelope and mailed it to the defendant. The defendant denied making any request for those sums of money, and ever having received any lump sums from the plaintiff.

41        Mr O'Connor submitted that I should accept the plaintiff's evidence that she sent those two lump sums to the defendant. Mr Testart submitted that it was incredible that someone would, in this day and age, withdraw cash from a bank and send it to someone else in an envelope when she could have obtained a bank cheque or organised for a transfer of those monies in a more secure and currently acceptable fashion. He submitted I should reject the plaintiff's evidence.

42        The plaintiff produced some banking records while she was giving evidence. The records had not previously been discovered. They did evidence cash withdrawals post separation, and one was as much as $10,000. The plaintiff candidly said that she withdrew lump sums and kept them in her home, and presumably those lump sums were used to pay her various expenses. My impression of the plaintiff was that she was someone who used cash rather than negotiable instruments or electronic means of payment. To some degree that is supported by the purchase of materials and the payment of tradesmen for the purpose of building the house at Falls Road. In the absence of a reference to payment by cheque, it is probable that the plaintiff paid by cash.

43        In the absence of the plaintiff pointing directly to a withdrawal of $5,000 and then a withdrawal of $12,000 from a banking account, and in the face of the emphatic denials by the defendant that she ever received those sums, I do not accept that the plaintiff sent those sums to the defendant. The surrounding circumstances also militate against such a finding in favour of the plaintiff. At the stage when the defendant allegedly requested those sums, she and the plaintiff were estranged in circumstances where there was a level of animosity between them.

44        The level of animosity went to the extent of allegations by the plaintiff that the defendant assaulted her, and the plaintiff made the same allegations against the defendant. Neither the plaintiff nor the defendant sought to ventilate those allegations in any significant way during the trial.

45        Furthermore, and around the time when the plaintiff and the defendant finally separated, the plaintiff said that the defendant locked her out of Falls Road by changing the lock on the gate and the locks on the house. The defendant admitted that she changed the locks, but not for the purpose of locking the defendant out. She said that the defendant left Falls Road and did not return, so she assumed that she had no intention of returning.

46        Lastly, the plaintiff alleged that she was unable to retrieve clothing, personal items and documents because of the conduct of the defendant in locking her out of Falls Road. The defendant said that the plaintiff took most of her clothing, personal items and documents, and she knew that, because she looked in the room formerly occupied by the plaintiff and observed that she had taken most of her belongings.

47        The time of separation could hardly be described as cordial, but rather one which was tainted with anger, violence and certainly animosity. These circumstances make it difficult for me to accept that the plaintiff would have been so generous as to comply with a request by the defendant to send her two lump sums of $5,000 for a stove and hot water service, let alone $12,000 to pay the defendant’s legal fees.

The Asset Pool

48        It is convenient to turn to the approach which I am obliged to take in determining the financial and non-financial contributions made by the plaintiff and the defendant to the asset pool, and an adjustment of their interests with respect to the asset pool which seems just and equitable.

49        In Kardos v Sarbutt,[7] Brereton J set out the three-step process as follows:

“…The first is the identification and valuation of the property of the parties, which determines the ‘divisible pool of property’ — that is, ‘the property of the parties to the relationship or either of them’ … which may be the subject of an adjustive property order … . The second is the evaluation and balancing of the respective contributions of the parties of the types referred to in s 20, and typically though not invariably results in an apportionment between the parties on a percentage basis of the overall contributions of the types referred to in … [the legislation] of each of them, made to the date of hearing. The third is the determination of what order is required sufficiently to recognise and compensate the applicant’s contributions, and typically results in an order which leaves the applicant with that percentage identified in the second step of the divisible property identified in the first step. …. . [8]

[7] (2006) 34 Fam LR 550

[8]             at 558

50        In the seminal decision of Giller v Procopets,[9] the Court of Appeal cited the observations of Brereton J with approval and endorsed the three-step process which must be applied in proceedings brought under PART IX of the Property Law Act 1958.

[9] [2008] VSCA 236

51        This proceeding presents no difficulty in the identification of some aspects of the asset pool. It comprises Falls Road, which has an agreed value of $475,000, and the net proceeds of sale of High Street of $222,586.

52        The contentious issues are, firstly, whether the plaintiff has misused the monies distributed to her from the sale of High Street, thereby depriving herself of savings which she could have made which would have created a resource on which she could call; and secondly, whether the receipt by the defendant of the sum of $150,000 from her mother's estate should form part of the asset pool.

53        Whilst the plaintiff's use of the monies which came into possession might be described as careless, I am not prepared to take the next step and find that she should have been more diligent in her spending and should have created a resource.

54        Inherent in the submissions made by Mr Testart was whether the plaintiff was telling the truth that she has no money save for about $11. Whilst there is some merit in the submissions made by Mr Testart that the plaintiff has not made proper discovery of banking accounts, and has not accounted for her spending, I am not prepared to infer that she has monies secreted somewhere and has engaged in a deliberate exercise of misleading the Court regarding her financial position. However, I do harbour some suspicions that the plaintiff has not been entirely frank about her financial position.

55        Mr O'Connor referred to cases in the Family Court and the experience in that jurisdiction relevant to the way in which windfalls have been treated in the context of a matrimonial breakdown. He submitted that I should regard the $160,000 which the plaintiff has invested as part of the asset pool, but I should then give consideration as to whether it is to be treated as an asset on the defendant’s side of the ledger or some account of that sum ought to be adjusted in favour of the plaintiff.

56        I am very conscious that the provisions of the Family Law Act 1975 are very extensive and are designed to ensure that all of the assets in the broader sense are brought to account. The provisions of PART IX of the Property Law Act 1958 are very limited in comparison. For example, s.285(1) seems to give the key to whether the defendant's inheritance ought to form part of the asset pool:

“(1)

… a court may make an order adjusting the interests of the domestic partners in the property of one or both of them that seems just and equitable to it having regard to—

(a)	the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to the acquisition, conservation or improvement of any of the property or to the financial resources of one or both of the partners; and
(b)	the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the domestic partners to the welfare of the other domestic partner … .”

57        Clearly subsection (1) contemplates that property which is the subject of the proceeding might be owned by one of the parties to a domestic partnership. But for there to be an adjustment of the interests in such property there needs to be evidence of contribution to the acquisition, conservation or improvement of that property by financial and non-financial contributions made directly or indirectly. The plaintiff did not make any such direct or indirect contributions to the defendant's inheritance nor to the inheritance as it constitutes a financial resource of the defendant.

58        I am not persuaded by the submissions made by Mr O'Connor that I should proceed in the way he submitted; however, I think the fact that the defendant has a significant sum invested upon which she can call is a resource which I can take into account when adjusting the interests of the plaintiff and the defendant in the property constituting the asset pool. Furthermore, windfalls comprising lottery winnings and by inheritance are common enough. It seems to me that it would be foreign to a marriage and a domestic partnership if a party to a marriage or a domestic partnership then treated lottery winnings or inheritance as his/her property because it would be the ordinary expectation of that person's marital partner or domestic partner that the very substance of what constitutes their relationship would create an expectation of sharing in the windfall or the inheritance.

59        The defendant’s mother died in 2005. The defendant must have known that she was likely to obtain an inheritance at some stage in 2005 or 2006 when she was made aware of the content of her mother's will. It was likely that she became aware of that towards the end of the domestic relationship with the plaintiff, so the expectation of the plaintiff could not be considered to be significant. It would be another matter if the plaintiff received the inheritance five or six years before the separation, because then it would be legitimate for the plaintiff to argue that she had some expectation that she would share in the inheritance to some degree as both she and the defendant had shared the monies they received during the subsistence of the domestic relationship.

Determination Background

60        There are two specific matters of law which I think are relevant to revisit in order to set the background to the final determination of this proceeding.

61        The first is that a Court should not give too restrictive a meaning to what constitutes financial and non-financial contributions made by the domestic partners. The Court must take account of the whole of the context of the domestic relationship.[10]

[10]           Conn v Martusevicius (1991) 14 Fam LR 751,754; Robertson v Austin [2003] VSC 80 at paragraph 38-40; Findlay v Besley [2003] VSC 247 at paragraph 56, which were referred to in Giller v Procopets (supra) at paragraphs 108-117 and 342-349

62        The second is whether an asset by asset approach should be taken or a global approach. Both have been approved as legitimate approaches, but which approach should be followed depends on the facts raised by the particular proceeding.[11]

[11]           Giller v Procopets (supra) at paragraphs 279-287; Conn v Martusevicius (supra) at 758, and Kalenik v Apostolidis [2009] VSC 208 at paragraph 693

63        I have reviewed a number of reported cases in New South Wales, heard under similar legislation, and from the Family Court, where there is a virtual wealth of experience regarding the approach that should be taken, and when an asset by asset approach is more appropriate as opposed to a global approach.

64        The impression I have from that review has left me with what I think is a fair summation, and that is, in a short relationship, it will be possible to identify the financial contributions made by the parties to the domestic partnership, and in most cases it will be fair to give each of the domestic partners in that situation credit for each of their financial contributions when determining what order adjusting the interests in property should be made. In a long relationship where the domestic partners’ financial affairs have become integrated it is more difficult to identify their financial contributions, and perhaps not fair to give the dominant party credit for all of that party's financial contributions when the interests of both of the domestic partners by virtue of that integration have merged. Commonly unequal contributions are not considered by domestic partners to be unequal in a long relationship.

65        Mr O'Connor drafted a chronology very expertly which created the factual matrix upon which the trial was ultimately based. In addition, he provided a statement of issues in which he calculated in round figures that if one were to take all of the lump sum financial contributions made directly by the plaintiff, they total $263,000 when compared with the lump sum financial contributions made directly by the plaintiff which total $52,000. He submitted that it approximates to an 80 per cent contribution by the plaintiff and the 20 per cent contribution by the defendant.

66        Mr O'Connor submitted that the inheritance received by the defendant should be treated as part of the asset pool and should be assigned as an asset which the defendant has in her possession and for her use. In the end he submitted that what is a just and equitable adjustment is 70 per cent in favour of the plaintiff and 30 per cent in favour of the defendant. In making that submission, he allowed a 10 per cent adjustment in favour of the defendant because the relationship was a long one of some twenty-six years.

67        Mr Testart submitted that it was unrealistic to apply an asset by asset approach as Mr O'Connor had undertaken, because the affairs in all respects of the plaintiff and the defendant were so integrated and the length of the relationship brought it fairly within the range of cases where a global approach is applied.

68        Mr Testart submitted that experience demonstrates that there is commonly a dominant party who has superior financial assets and superior income in most relationships, whether bound by marriage or in a domestic partnership. In the end, he submitted that despite the polarisation in the evidence given by the plaintiff and the defendant, that it was unrealistic and a fiction to apply an asset by asset approach and to ignore the reality of what a lengthy relationship produces in the way in which the parties treat their assets.

69        One matter about which there was little controversy was the non-financial contributions made by the plaintiff and the defendant, they being, the running of the household and the maintenance and care of Falls Road. Whilst they were mildly critical of one another, in the end it seems to me that neither made any greater non-financial contributions to the domestic partnership than the other.

Disposition

70        The plaintiff and the defendant entered into a domestic partnership which subsisted for twenty-six years. It certainly deserves to be described as a very lengthy relationship.

71        I have little doubt that the plaintiff and the defendant treated what they brought into the domestic relationship as assets and income to be shared and enjoyed without either intending that what they contributed was to be counted in their favour at some stage in the future or at all.

72        I also have little doubt that the plaintiff was able to call on capital sums and income of significance throughout the domestic relationship, and that the defendant's contribution in that regard was significantly less.

73        I consider that the nature of the domestic relationship, the fact that the plaintiff and the defendant obviously integrated their financial affairs and merged them into their relationship, and the length of the relationship calls for this proceeding to be determined on a global basis, not on an asset by asset basis.

74        I do not consider that the defendant’s inheritance ought to be part of the asset pool because it was a windfall which she received after the domestic relationship ceased, and I think at best the plaintiff can argue that the defendant’s receipt of the inheritance created an expectation of some benefit which she would share. However, that occurred very near the end of the domestic relationship, and therefore, I think what allowance should be made to the benefit of the plaintiff is rather marginal. I think the proper context in which the inheritance should be seen is that it is a resource available to the defendant whereas the plaintiff has no resources.

75        I was perplexed by the evidence of both the plaintiff and the defendant regarding their inability to describe the integration of their financial affairs throughout the domestic relationship, and in particular, by producing documents to verify the receipt of income and its use. I am not prepared to find that the plaintiff has been untruthful in her evidence that she has no resources and that her savings position amounts to about $11. It is difficult to understand how it is that she managed to spend all of the lump sum, being the distribution to her of the net proceeds of the sale of High Street and her compensation payments; however, there is no evidence to suggest that she has savings or assets hidden away.

76        I find that the plaintiff is presently living in parlous circumstances. She is in receipt of an aged pension. She lives with her sister, who is psychiatrically unwell and who is in receipt of a social security benefit. They both live in rented premises in New South Wales. The rent that the plaintiff pays, together with her predictable day-to-day expenses, leads me to conclude that she has little to live on.

77        I find that the defendant is presently living at Falls Road. She is in receipt of social security benefits. The only resource she has is the $160,000 which is presently invested. She experiences ill-health. She is undergoing treatment for a cancerous disorder.

78        The difference between the plaintiff and the defendant in terms of their place of residence is that the plaintiff is living somewhere she would prefer not to be living, and as I have said, in parlous financial circumstances. The defendant, on the other hand, is living rent-free at Falls Road, although she is also in parlous circumstances, she is obviously able to meet day-to-day expenses and pay for the cost of maintaining her residence at Falls Road.

79        The claim which the plaintiff makes is partly based upon the fact that she has paid rent, whereas the defendant has lived rent-free. Mr O'Connor submitted that it amounts to about 3.6 years at a cost to the plaintiff of $220 per week for 2.5 years and $275 per week for 1.1 years, totalling $22,165. I think that claim is unrealistic. It does not take into account the fact that the plaintiff, if she had continued to reside at Falls Road, would have had to meet some expenses which come with owning and maintaining a property which are not imposed on someone who is renting.

80        I find that the asset pool comprises:

• $475,000, being the agreed valuation of Falls Road;

• $222,586, being the net proceeds of sale of High Street.

81        The asset pool, therefore, is $697,586, and in dealing with the asset pool, I will take into account the inheritance which the plaintiff has as a resource, and also the fact that the plaintiff has paid rent.

82        In applying a global approach, I nonetheless think that there must be some adjustment more favourable to the plaintiff for three reasons:

• firstly, because she contributed substantially greater lump sums and income to the relationship;

• secondly, because the defendant has a resource by way of inheritance whereas the plaintiff has no such resource; and

• thirdly, because the plaintiff has paid rent, whereas the defendant has had the benefit of occupation of Falls Road rent-free.

83        However, I do not ignore what I have said at some length, that one of the factors in ultimately arriving at an adjustment which is just and equitable is that the length of the relationship figures very prominently. In the end, I consider that Mr O'Connor’s submission of 70/30 per cent is unrealistic, as is Mr Testart’s 50/50 per cent.

84        Weighing up all of the factors which I have referred to, I think an adjustment must be made, and I think the asset pool should be adjusted 60 per cent to the plaintiff and 40 per cent to the defendant.

85        The next question is how is that to be achieved given that the plaintiff has had the benefit of $192,586 and the defendant of $30,000 from the net proceeds of sale of High Street. The total of the adjustable asset pool is $697,586. An adjustment in accordance with my conclusions means that the plaintiff must receive the equivalent of $418,551.60 and the defendant must receive $279,034.40.

86        The plaintiff has already received $192,586.00, so the sum of $418,551.60 must be reduced accordingly to $225,965.60. Likewise, the defendant has already received $30,000, so the sum of $279,034.40 must be reduced accordingly to $249,034.40.

Capital Gains Tax

87        The plaintiff has been recalcitrant in filing taxation returns. She said that she does not want to file taxation returns because of the liability she has been advised she has to the Taxation Department of $49,307.54 capital gains tax referrable to the sale of High Street. She is also liable for $15,609.80 in penalties because she failed to pay the capital gains tax when it was due.

88        Mr Testart submitted that I should not apportion responsibility for the capital gains tax as between the plaintiff and the defendant because the plaintiff has evinced an intention to avoid paying it. However, once the plaintiff files her outstanding taxation returns, she will be liable to pay capital gains tax.

89        Mr Testart also submitted that the plaintiff had the means to pay the capital gains tax when she received the two lump sums from the sale of High Street. I think the liability for the penalties is entirely that of the plaintiff. However, it seems to me that the defendant seeks to profit by the investment made in the High Street property and with the profit must come the liability which accrues upon making a profit. I think that half of the capital gains tax liability should be deducted from the adjustment in favour of the defendant and added to the adjustment in favour of the plaintiff. The deduction/addition is $24,653.77.

Orders
90	Whilst I have adjusted the interests of the plaintiff and the defendant by reference to figures calculated against the asset pool, there might be a lack of realism in defining figures because the Falls Road property may need to be sold, and if that is to occur, then the adjustment will need to be in line with the percentages, less a 50 per cent liability for capital gains tax.
91	I will now leave it to counsel to address me further regarding whether a sale is necessary, and also whether a deduction/addition of the capital gains tax is necessary or whether the defendant’s 50 per cent liability for the capital gain tax should be placed in a trust account for a period of time to be paid out upon the plaintiff being rendered a notice of assessment by the Taxation Department and then come to some arrangement to pay it to the plaintiff or to the Taxation Department on her behalf.
92	Lastly, a further adjustment will need to be made to account for the order for costs in favour of the defendant which remains unpaid.

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