Bilous v Mudaliar

This matter concerned an appeal from a decision of White J in the Supreme Court of New South Wales, brought by the appellant, Mr. Bilous, against the respondent, Ms. Mudaliar. The dispute arose from an application made under section 20 of the *Property (Relationships) Act 1984* (NSW) for an adjustment of property interests following the breakdown of a de facto relationship that had lasted for approximately 11 years. During this period, there was a substantial increase in the parties' assets, with the respondent being the primary income earner.

The central legal issues before the Court of Appeal were whether the trial judge had erred in adopting an "asset-by-asset" approach to the property division, whether the "erosion principle" was applicable in proceedings under the *Property (Relationships) Act*, the relevance of initial contributions to the acquisition of assets, the evaluation of non-financial contributions made by the parties, and whether a deduction for notional rent should be made in circumstances where the parties had occupied the family home rent-free.

The Court of Appeal, comprising Giles, Ipp and McColl JJA, found that the trial judge had erred in his approach to the property adjustment. The Court held that an asset-by-asset approach was not appropriate and that the "erosion principle," which considers the depletion of assets due to the actions of one party, should be applied in cases under the *Property (Relationships) Act*. The Court also considered the significance of initial contributions and the value of non-financial contributions, including those made by the appellant. Furthermore, the Court determined that a deduction for notional rent was not warranted in this case.

Consequently, the Court of Appeal upheld the appeal, setting aside the orders made by White J. The first respondent was ordered to pay the appellant $228,000.00 and $87,163.00 to the trustee of the appellant's superannuation fund. The first respondent was also ordered to pay the costs of the cross-appeal and was granted a certificate under the *Suitors' Fund Act 1951* (NSW) if otherwise qualified.