Caughey & Peckham (No 4)
[2024] FedCFamC1F 197
•25 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Caughey & Peckham (No 4) [2024] FedCFamC1F 197
File number: SYC 3782 of 2019 Judgment of: CHRISTIE J Date of judgment: 25 March 2024 Catchwords: FAMILY LAW – EVIDENCE – Application to adduce adversarial expert evidence as to value of real property – Where there is a $600,000 differential between the value opined by the single expert and the adversarial expert – Where the difference in opinion is drawn from different use of comparable properties – Where the application is made orally on the first day and would require the matter being adjourned – Application dismissed.
FAMILY LAW – FINAL PROPERTY ORDERS – Short de facto relationship – Where the parties have one joint real property that has increased in value since the breakdown of the de facto relationship – Where the respondent’s financial contributions significantly exceed the applicant’s– Where significant weight cannot be given to the applicant’s non-financial contributions due to their scope being incredibly time limited – Order for the applicant to receive an adjustment to recognise her contribution to the acquisition of the joint property and otherwise – Adjustment in favour of the applicant to recognise the need for a standard of living that is in all the circumstances reasonable.
Legislation: Family Law Act 1975 (Cth) ss 79, 90SF, 90SM
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 7.08
Cases cited: Bevan & Bevan (2013) FLC 93-545
Calverley v Green (1984) 155 CLR 242
Caughey & Peckham (No 2) [2022] FedCFamC1F 670
Cook & Langford (2008) FLC 93-374
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Stanford & Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 73 Date of hearing: 18-19 March 2024 Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Apex Legal Counsel for the Respondent: Mr Livingstone Solicitor for the Respondent: Holmes Donnelly & Co Solicitors ORDERS
SYC 3782 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CAUGHEY
Applicant
AND: MR PECKHAM
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
25 MARCH 2024
THE COURT ORDERS THAT:
1.By way of final alteration of property interests pursuant to section 90SM of the Family Law Act 1975 (Cth) ("the Act") and simultaneously, within 42 days:
(a)the Respondent pay to the Applicant the total of $345,000.00;
(b)the Applicant attend to removal of the caveat registered on title of the property located at M Street, Town L ("Town L property”);
(c)the Applicant transfer to the Respondent the whole of her right, title and interest in the Town L property; and
(d)the Respondent do all things necessary to discharge the mortgage registered to National Australia Bank secured over the Town L property and refinance any and all liabilities secured over the Town L property into his sole name.
2.As between the Applicant and the Respondent, and subject to the above Order, the parties shall each respectively retain all interest in and entitlement to:
(a)all personal property, including choses-in-action, in his or her name respectively or jointly held with a third party;
(b)all shares, ventures, units in unit trusts, bank building society, credit union accounts standing in his or her sole name or in joint names with third parties respectively; and
(c)all interests in insurance policies and all superannuation funds standing in his or her name respectively.
3.The Applicant and Respondent hereby release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of in respect of any act, cause, matter or thing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Caughey & Peckham has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This is an application for adjustment of interests in property following the conclusion of the de facto relationship of the applicant and respondent.
The parties’ relationship was short. I found in Caughey & Peckhham (No 2) [2022] FedCFamC1F 670 that it commenced in 2016 and concluded in January 2019.
In any de facto relationship (long or short) the court is empowered to make orders which have the effect of altering the parties’ legal interests in property provided that such orders are just and equitable.
The nature of the jurisdiction is remedial. The Family Law Act 1975 (Cth) (“the Act”) permits interference with the legal rights and entitlements of the former spouses where necessary having regard to their contributions or matters in s 90SF(3) of the Act which considerations are not adequately addressed by the existing legal entitlements.
This is not a case where there is much which is relevantly the subject of dispute.
The parties own a property at M Street, Town L (“the Town L property”) which was purchased in 2018 as tenants in common in equal shares.
The purchase price was over $1,700,000. In addition, stamp duty of $61,000 was payable on the transaction. The applicant contributed the sum of $86,250. The respondent contributed the sum of $400,000. The parties obtained a loan for the remainder of the purchase price in the sum of $1,300,000. The loan repayments (which are in the sum of $1,950 per week at present) have been met by the respondent alone.
In addition, the respondent says he has expended funds on improvements and maintenance and has met the outgoings. He provides an estimate of those expenses in the sum of $812,500.
The Respondent wishes to retain the property and to that end seeks orders that the applicant transfer to him her interest in the Town L property.
The property is currently valued by the single expert at $3,600,000 and is subject to a mortgage in the sum of $1,299,858.
The equity in the Town L property is $2,300,142.
There was an oral application on the first day of the trial to adduce adversarial valuation evidence and I indicated, following submissions, that I would not permit the applicant to rely on an adversarial expert but would permit counsel to renew the application following cross‑examination of the single expert if the evidence of the single expert had been undermined by the cross-examination. The application was renewed and I dismissed it and give short reasons here.
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provide for appointment of another expert witness in respect of the same subject matter only with the court’s permission: r 7.08 of the Rules.
The applicant did not formally rely on the proposed additional expert’s report in support of the application for leave but I was informed that it had used different comparables and reached a conclusion some $600,000 above that of the opinion of the single expert.
The single expert was cross-examined about two comparables which did not appear in his report. In respect of one sale, he said he would have included it if it had been available to him but it made no difference to his conclusion and in respect of the other, he said he would not have used it as a comparable.
I was satisfied at the conclusion of the cross examination of the single expert that there was no “substantial body of opinion contrary to any opinion given by the single expert”. In addition, I was comfortably satisfied that there were no matters not known to the single expert necessary to determine the issue.
The admissibility or otherwise of an additional expert report then fell to be determined if I was satisfied that there was another “special reason for adducing evidence from another expert”. Counsel for the applicant developed a submission to the effect that lifestyle properties varied in their nature and character, in their size, amenity, improvements and the use to which the potential purchaser may put the property. The single expert agreed. It was argued that rural property used for agriculture may be more easily valued depending on soil quality on a per acre basis, while urban residential properties may be easier to value because they are sold in higher volume and are more uniform in nature. I accept those submissions. However, the mere fact that two qualified people have reached a different conclusion on the topic does not, in my view amount to a special reason. Valuers will approach the assessment of views (which featured strongly in this evidence) and aspect and location differently but what was plain from the single expert’s evidence was that, in his view, the market for lifestyle properties is affected by the useable acreage of the property. That evidence was convincing and I declined to grant what would have been an adjournment of the case to permit the filing of an additional report in circumstances where the parties had had the single expert report since 13 February 2024 (more than a month earlier) and no application had been made until the oral application on the first day of trial.
I accept that the Rules which are designed to limit evidence ought not be used to engender injustice but I must weigh all of the competing interests in this case. I am of the view that it would not be in the interests of the case to grant an adjournment to permit further adversarial expert evidence based solely on a difference in the conclusions drawn from the comparables. It follows that I accept the opinion of the single expert as to the value of the Town L property.
As per the joint balance sheet filed in these proceedings, the applicant owns (excluding the Town L property and associated mortgage):
Description Applicant’s value Respondent’s value ASSETS 1 MM Street, Town NN $1,000,000 $1,295,000 2 CBA Bank Account ending #...34 E$1.90 E$1.90 3 CBA Bank Account #[blank] E$92.28 E$92.28 4 CBA Bank Account #...14 E$102.64 E$102.64 5 Westpac Bank Account #...86 E$87.35 E$87.35 6 Westpac Bank Account #...55 E$169.16 E$169.16 7 Westpac Bank Account #...11 E$956.06 E$956.06 8 Westpac Bank Account #...85 E$1,194.53 E$1,194.53 9 Westpac Bank Account #...94 E$9 E$9 10 Westpac Bank Account #...85 E$23.80 E$23.80 11 Westpac Bank Account #...57 (as at 17.11.2023) $1,169.90 12 Motor Vehicle 1 E$30,000 E$30,000 13 Household contents E$3,000 $50,000 14 Recreational Vehicle 1 E$80,000 $150,000 15 Recreational Vehicle 2 – Interest in Syndicate E$37,500 E$50,000 16 Share in storage facility Nominal E$150,000 17 Artwork Nominal E$50,000 18 Jewellery E$22,000 $100,000 Total assets $1,175,137 $1,878,807 LIABILITIES 19 Credit Card Nominal Nominal 20 Westpac Mastercard $489 $489 21 CBA Mastercard Nominal Nominal Total liabilities $489 $489 SUPERANNUATION Name of fund Type of interest 22 Caughey Self-Managed Super $356,087 $513,532 23 Superannuation Fund 1 $1,310 Total superannuation $357,397 $513,532 Assets less liabilities plus super $1,532,045 $2,391,670
The respondent owns (excluding the Town L property and associated mortgage) as per the joint balance sheet:
Description Applicant’s value Respondent’s value ASSETS 1 1 B Street, Suburb D $7,500,000 $7,500,000 2 2 B Street, Suburb D $2,450,000 $2,450,000 3 1 & 2 PP Street, Suburb QQ (33.33% share as partner of AD Partnership) $2,333,333 $2,333,333 4 RR Street, Suburb D $1,500,000 NIL 5 SS Street, Suburb TT (25% owned as partner of AE Partnership) $3,000,000 $2,850,000 6 UU Street, Suburb D (owned 33.33% as partner of AE Partnership) E$4,558,333 $3,800,000 7 VV Street, Suburb P $1,830,000 NIL 8 WW Street, City XX, Country YY $2,200,000 NIL 9 ZZ Street, City XX, Country YY $2,500,000 NIL 10 NAB Account #...85 $-91,000 $-95,000 11 AB Bank Debit Card $1,328 $1,328 12 AC Finance Debit Card $207 $207 13 NAB Term Deposit $312,500 NIL 14 Share Portfolio $4,711,594 $4,665,752 15 Shares $800 NIL 16 Shares $481 NIL 17 Motor Vehicle 2 $25,000 $10,000 18 Interest in Sole Tradership as professional (address of business AF Street, Sydney) $200,000 $200,000 19 NAB Trade Account #...61 $1,503 20 Household contents NIL $50,000 21 Recreational Vehicle 3 (50% interest) $425,000 $270,000 22 Farm equipment $5,000 $5,000 Total assets $33,462,576 $24,042,123 LIABILITIES 23 NAB Mortgage 1 B Street, Suburb D $629,766 $629,766 24 2 B Street, Suburb D $1,961,959 $1,961,959 25 PP Street, Suburb QQ (33.33% share) $1,000,000 $1,000,000 26 RR Street, Suburb D (25% share) $1,259,750 $1,259,750 27 SS Street, Suburb TT (25% share) $1,257,000 $1,257,000 28 UU Street, Suburb D (33.33% share) $2,258,333 $2,258,333 29 VV Street, Suburb P $724,000 NIL 30 WW Street, City XX, Country YY $766,000 NIL 31 ZZ Street, City XX, Country YY $438,552 NIL 32 Personal Loan (Mr AG) $215,000 $65,000 33 NAB Visa Card $17,348 $17,348 34 Unpaid contractor WW Street $85,000 35 NAB overdraft #...85 $90,221 E$95,000 36 NAB Line of Credit $61,524 $120,000 Total liabilities $10,679,453 $8,749,156 SUPERANNUATION Name of fund Type of interest 37 Superannuation Fund 2 Accumulation $738,064 $738,064 Total superannuation $738,064 $738,064 Assets less liabilities plus super $23,521,187 $16,031,031 FINANCIAL RESOURCES 38 Remaining estate of respondent’s late mother $250,000 NIL 39 Rental bond $65,000 $65,000 40 Sale of Recreational Vehicle 4 $160,000 NIL Total financial resources $475,000 $65,000
In most cases it may be necessary to resolve disputes about the value to be attached to assets (where the parties disagree). In this case both parties approached the case on the basis that there should be a dollar adjustment to the applicant (as opposed to a percentage adjustment) and accordingly resolving minor factual differences in the Balance Sheet is unnecessary.
Both parties are seeking an adjustment of their interests in property. Both parties seek that the applicant transfer her interest in the Town L property to the respondent.
THE LAW
Whether the Court is hearing and determining an application for adjustment of interests in property following breakdown of a marriage or a de facto relationship, the orthodox approach, referred to as a “four step process”, was discussed by the Full Court in Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, as consisting of the following:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d), (e), (f) and (g), … including, because of s. 79(4)(e), the matters referred to in s. 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
(Citations omitted)
The High Court of Australian in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) said at [37] that it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73] has held that the decision in Stanford has not overruled the four step approach.
The decision in Stanford made clear that the requirement pursuant to s 79(2) of the Act that it would be “just and equitable” to make orders altering property should not be conflated with the requirements of s 79(4) of the Act. The principles are of equal application to consideration of ss 90SM(3) and 90SM(4) of the Act. The Full Court in Bevan emphasised that, although the pre-condition to making any order for property adjustment is a finding that it is just and equitable to do so, in accordance with s 79(2) of the Act, such a finding is not a threshold issue, nor must the considerations in s 79 of the Act be approached in a particular order. And this is equally true in respect of the operation of s 90SM of the Act.
Finally, the very fact of separation may lead to the ready satisfaction of just and equitable requirement: Stanford at [41]–[42].
While both parties to this application seek an adjustment it would appear that the parties in this case are approaching the facts (or application of the law to the facts) in a manner which is divergent.
CONSIDERATION
In a short relationship there is less opportunity for a myriad of contributions.
Financial contributions
I accept that each party made financial contributions to the best of his or her respective capabilities and that the financial contributions of the respondent well exceeded those of the applicant.
I propose to set out the findings from Caughey & Peckham (No 2) [2022] FedCFamC1F 670 that relate to the applicant’s receipt of funds from the respondent:
69. [In mid] 2017 the applicant commenced to receive $1,000 per week from the respondent. I note that the applicant’s evidence about when these payments commenced was internally inconsistent in so far as she gave conflicting dates for both the commencement and conclusion of the payments in her sworn affidavit evidence. There was no resolution of this inconsistency via cross‑examination and so, doing the best I can, I formed the view that the payments commenced in [mid] 2017 (as both parties had sworn) and concluded in [mid] 2019 (as both parties had sworn) and disregarded the other dates the applicant included in her evidence as being likely in error.
70. On both parties’ cases this amount was linked to work undertaken by the applicant for the respondent in his [office] (referrable to his work […] and his investments). In cross-examination the respondent elaborated the $1,000 per week was a product of the applicant’s work in [the office] and also for his daughter to use the applicant’s car space in the city. The applicant pointed to text message communication between them as indicative of the fact that the respondent also expected her to use those funds to purchase items for the household. In the parties’ text message communication [in early] 2018 the respondent said:
Just so you have in writing, I intend to pay for our joint living expense and your enjoyment, I for example dd $1,000 pw to your account, sometime if there’s a problem in a particular week it may not go through but overwhelmingly it does and if you tell me it didn’t go through one week it will next week. Just say.
And later the same day:
As to the cards, I have provided cards in the past and have given you, if we are at a show together I pay, as I pay for all expenses when we go anywhere. I pay all utilities and put diesel in your car, and will pay anything else you want.
The applicant responded:
I do not agree with everything you have written… there are many things I pay for out of my money and out of the $1000 per week… this is all because I wanted you to give me a credit card for groceries household items… are we going to break up over groceries… omg!
The respondent replied:
Neither do I predictive spelling is crap. I do [not] want power over you with money and have not sought it, please park the allegation with whoever it belongs with but its not me. I have given you cards and pins in the past when we are out I pay for everything. If you pay for things you can ask for reimbursement its normal and was I not trying to do just that when you got all antsy a moment ago. Break up over groceries if you want as stupid pretexts go its as good as any other, you have been weird since Monday night when you accosted me in the shower.
(As per the original)
71. The explanation that the $1,000 was for work undertaken by the applicant cannot be the whole explanation in circumstances where the payments did not cease until [mid] 2019 and it is not suggested any significant work was undertaken by the applicant for the respondent in the periods March to May 2019. It is also unlikely to be explained by the respondent’s contention that it was in part payment for the car space owned by the applicant in the building next to the [F Building]. The applicant relied on text messages where I accept the respondent appears to say that it is reasonable for the applicant to be applying some of the $1,000 to household expenses. I accept that the payment by respondent to applicant may appropriately be characterised as an allowance which came with an expectation that the applicant may provide some assistance in return. (As per the original)
While the applicant applied the funds she received from the respondent to her own and the parties’ joint expenses, it has to be acknowledged that the respondent was the source of these funds.
For the period of the relationship the respondent met the costs of the parties’ accommodation. I accept that the applicant contributed to some of the parties’ shared expenses but, commensurate with the disparity in the parties’ incomes, the respondent’s contributions were substantially greater.
The respondent also gave uncontested evidence that he met the following expenses of the applicant: fuel and tolls, accountancy fees for the applicant’s superannuation fund.
The respondent provided the applicant with a credit card for payment of household expenses which he paid for monthly.
In late 2017 the applicant added the respondent as a nominated beneficiary of her staff travel entitlements. The evidence is not entirely clear but from that point until separation this allowed the respondent the benefit of discounted travel and upgrades which were of value (particularly given the extent of the parties’ travel).
In respect of the parties’ travel there was a dispute in so far as the applicant says she paid for some of the aeroplane tickets while the respondent says he paid for them. The fact that the respondent wrote to the applicant on 30 May 2018 noting that she had paid for his fare on her MasterCard and indicating he owed her $7,000 speaks to the fact that, in the main the respondent, met all his own travel costs which were from time to time substantially discounted by use of the applicant’s staff travel entitlements.
It was no part of the applicant’s case that she had indirectly contributed to the assets of the respondent and vice versa.
There was a commercial nature to some of the transactions between the parties during their short relationship. On 28 February 2017 the respondent wrote acknowledging an advance of $250,000 to him to buy a recreational vehicle. The money was explicitly characterised as a loan and was documented in writing, it was said to be repayable on demand and the respondent offered a charge. The interest was described as a simple interest of 10 per cent.
At the threshold hearing I found that “[o]n 3 March 2017 the applicant provided the respondent with a cheque in the sum of $250,000 which he used to purchase a [recreational vehicle]. On 31 May 2017 the respondent transferred to the applicant $253,860 in repayment of the monies which she had loaned him for the purchase of the [recreational vehicle] plus interest.”
The applicant says that during the period when the respondent had the benefit of her $250,000 she lost the opportunity to acquire a property. On 24 April 2017 the applicant transferred $79,500 to a real estate agent on account of AH Street, Suburb AJ – a property she and the respondent had discussed via text message on 18 April 2017. On 26 April 2017 those monies were refunded to her.
The applicant readily conceded that she was not arguing that the respondent (or the Court) should compensate her for the lost opportunity as she acknowledged that the respondent was financially stressed at the time and, she understood this as a normal part of any relationship, i.e. the parties are obliged to deal with the situation in which they find themselves from time to time and that might mean that particular transactions proceed or do not proceed.
The evidence did not permit a conclusion that the applicant had raised with the respondent the return of the borrowed funds to facilitate the purchase and I accept that the applicant chose (for whatever reason) not to pursue the purchase.
The respondent did proceed to buy the recreational vehicle for which the funds were provided and subsequently sold the vehicle for $290,000. I accept that the respondent’s purchase was enabled by the advance from the applicant and that it is properly regarded as a contribution albeit that she received interest and was without the funds for a short period.
I found at [73] of my earlier judgment that “[i]n May of 2018 the applicant paid $7,000 for the respondent’s airfares from Sydney to [Country Q] and [City R] to [Country Q] with her credit card. On 27 June 2018 the respondent paid the applicant for those airfares.”
I am obliged to weigh these two contributions by the applicant against those of the respondent (as opposed to considering them in isolation) and consider that the respondent made – during the parties’ short relationship – direct financial contributions to the applicant or for her benefit for which he did not seek reimbursement. The net result is that the respondent’s financial contributions significantly exceeded those of the applicant.
Town L Property
I have set out the history in respect of this property acquisition above and those facts were not in contest.
One of the matters I am considering is the contribution the applicant made as a joint mortgagee. In Calverley v Green (1984) 155 CLR 242 the High Court was considering whether a case where both parties had been joint mortgagees but only one party had paid from their own funds towards the purchase led to a situation where the party who had made no direct financial contributions held the property on resulting trust for the party who had made direct financial contributions. The situation in this case is different in so far as the applicant did make a contribution to the purchase price and both parties acknowledge that I am not dealing with a situation of resulting trust but rather one where I am obliged to assess the parties’ actual financial and non-financial contributions in the context of a de facto relationship.
Nonetheless it remains the case that one of the contributions I am considering is the applicant being a joint mortgagee. The bank provided the funds on the basis that both parties were liable at law for the repayment of principle and interest in accordance with the terms of the mortgage. The applicant has remained liable from the time of the mortgage to the time of trial. Against that the respondent has had an identical responsibility and in addition has met all mortgage payments, leading to the inevitable conclusion that his contributions have been substantially greater both because of the initial disparity in the contributions to the purchase price and because of the repayments made subsequently, accepting that the mortgage balance remains at about the same amount as it was when the loan was first advanced.
Somewhat more controversial was the weight to be attached to the funds which the respondent has spent on improvements to the property. There is no question that the parties intended to undertake work on the property after acquisition. The relationship broke down about the time of separation and accordingly the parties were not able to put those plans into effect together.
The respondent’s affidavit estimates the value of that work at $812,500. The applicant was critical of the lack of supporting documentation. I accept that all work which has been undertaken has been undertaken at the respondent’s expense. I accept the respondent’s evidence that the payment for work undertaken has come from his bank account which was discovered (albeit belatedly). Against that the applicant applied funds from her mother to some outside gardening tasks and the installation of a security system.
There is no evidence by which I could be satisfied that any increase in value is attributable to work undertaken as opposed to the effluxion of time and movement of the market. Accordingly, while I regard the work paid for by the respondent as a post-separation contribution, I am unable to make any finding as to whether it has contributed to an increase in the value of the Town L property. For this reason while I acknowledge that the applicant experienced frustration arising from the lateness of the discovery and disclosure I am not of the view that it is material to the ultimate outcome.
Non-financial contributions
The applicant contended that her non-financial contributions exceeded those of the respondent. I have little hesitation in accepting that for the short period of time the parties were together, she undertook the tasks set out in her material and did so diligently.
While the respondent had work commitments, the applicant assisted him with day to day tasks which ranged from liaising with tradesmen, dog trainers/boarders, transport staff or repairpersons and from time to time administrative tasks associated with his business or his investments. The care which the applicant provided to the respondent’s dogs assumed significant attention at trial. I accept she assisted in their care.
After the Town L purchase the applicant undertook some work at the property.
The length of the parties’ de facto relationship axiomatically effects the extent to which one or other of them may be considered to have made non-financial contributions such as would result in an adjustment of property interests.
During the two years and three months of the relationship the parties also spent time apart. They travelled separately. In addition, during some of their periods of travel together the day to day tasks of maintaining a household would not have been required.
The Act says that in considering what order (if any) should be made under s 90SM in property settlement proceedings, the court must take into account under s 90SM(4):
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any of the children of the de facto relationship, including any contribution made in the capacity of homemaker or parent
The de facto husband’s adult children are not children of the de facto relationship. In order for me to take the evidence which the applicant relied upon into account (concerning tasks undertaken for the benefit of the respondent’s adult children), I would have to be satisfied that those contributions, while not falling within the definition of a contribution to the welfare of the family were nonetheless significant and relevant. I cannot, on the evidence before the Court, attach any significant weight to the tasks undertaken by the applicant given that their scope was incredibly time limited.
Travel
The parties travelled extensively during their short relationship.
In 2017 the applicant gave evidence the parties travelled to Town AA, Town AK, Town AL, City XX (Country YY) and participated in a long distance sporting event.
The applicant prepared a list of 21 flights (Exhibit 9) taken in 2018 alone which had the parties or one of them travelling.
The records appear to suggest that the parties frequently took flights on consecutive days (as opposed to travelling on the same flight).
It is not appropriate to approach the exercise of assessment of the parties’ respective contributions as though this were an accounting exercise because to do so would almost inevitably have the effect of minimising the value to be attached to non-financial contributions. But, in a short relationship where neither party made financial contributions to the property of the other party and the scope for non-financial contributions was curtailed by the brief nature of the relationship, a number of periods of estrangement and extensive travel, an approach which concentrates on the nature of the parties’ joint endeavour – be that the acquisition of the Town L property or their shared household – is appropriate.
Both the applicant and the respondent understood at the time they exchanged contracts to purchase the Town L property that the applicant did not have the same level of income available to her to meet mortgage repayments, outgoings and improvements so it is not surprising that those expenses have been met by the respondent post-separation. They must be recognised as post-separation contributions by him. Against that the respondent has had the benefit of occupation – coming and going when he elects. He gave evidence that he had not excluded the respondent but had offered to share the premises in the post-separation period. Given the parties’ history there is an artificiality to such an offer. Ultimately, I am not concerned about whether the applicant was formally excluded or not. The breakdown of the relationship between the parties brought to an end their shared intentions regarding the property and the circumstances of the breakdown rendered shared use of the property realistically untenable. The respondent has, as a matter of fact, had the use and benefit of the property.
In strict dollar terms, the applicant’s contributions to the Town L property were approximately 5 per cent of the acquisition costs (excluding the mortgage). I accept that this would not appreciate the value of her being a joint mortgagee or the value of her various indirect financial contributions and her disparate non-financial contributions. I will assess those as against their jointly owned property – as opposed to the larger pool of assets held in their individual names and find that it would be appropriate to assess the contributions of the applicant as equivalent to 10 per cent of the net value of the Town L property.
Consistent with the dicta in Cook & Langford (2008) FLC 93-374 I find (and the parties acknowledged) it would be “inappropriate and/or artificial to attempt to evaluate the actual contributions” of the wife “as a percentage of the large pool of assets which were sourced exclusively from the” respondent’s pre-relationship “assets, maintained and improved by” him during the relationship and increased post-separation from his own efforts.
Section 90SF(3) considerations.
The applicant is 61 years of age. The respondent is 66 years of age. The respondent is self‑employed as a professional and has other income from investments. The applicant is retired and has income from rent. There is a significant disparity both in respect of the income and the property of the applicant and respondent. The significant income disparity does not arise as a consequence of the duration of the relationship. The applicant was not in paid employment at the commencement of the parties’ relationship and this remains the position at present. The relationship was not lengthy and the Act does not operate so as to redistribute income or capital unless such an approach is required having regard to the various matters set out in s 90SM and s 90SF(3) of the Act.
The income of the applicant is modest and does not presently cover her expenses. While I cannot conclude that the applicant did not re-enter the workforce because she was dissuaded from so doing by the respondent, I accept that she did not re-enter the work force. The parties’ travel would have been difficult to undertake alongside anything other than casual work.
Given the applicant’s age there are barriers to workforce participation that a younger person who has not had a significant gap in their workforce participation would not face.
I find that it is appropriate to make a further small adjustment to the contribution-based entitlements discussed above to permit the applicant a standard of living that in all the circumstances is reasonable.
The respondent’s application provided for a payment to the applicant of $200,000 and transfer of her interest in the Town L property to the respondent. The applicant sought that she be paid an amount equivalent to 35 per cent of the net equity of the Town L property and a further $200,000 on account of matters in s 90SF(3) of the Act, being a total of approximately $1,005,000.
In my view a further adjustment of 5 per cent of the net equity in the Town L property is appropriate such that the respondent should pay to the applicant the sum of $345,000 (or 15 per cent of the net equity in total) upon which the applicant should transfer her interest in the Town L property to the respondent.
The applicant’s counsel accepted that it ought be the applicant’s responsibility to do all things necessary and pay all sums necessary to secure discharge of the caveat on title of the Town L property and I will make an order to that effect.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 25 March 2024
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