Chanter v Catts
[2004] NSWSC 1025
•19 November 2004
Reported Decision:
(2004) DFC 95-303
Supreme Court
CITATION: Chanter v Catts [2004] NSWSC 1025 HEARING DATE(S): 08/09/04 and 09/09/04 JUDGMENT DATE:
19 November 2004JURISDICTION:
Equity DivisionJUDGMENT OF: Master Macready at 1 DECISION: Paragraph 142 CATCHWORDS: Family Law. Application under Property (Relationships) Act for adjustment of property interests. Earlier separation agreement set aside. Consideration of post separation contributions and superannuation. PARTIES :
Maree Eve Chanter v Peter Frederick Catts FILE NUMBER(S): SC 3690/2002 COUNSEL: Mr C. Simpson for plaintiff
Mr M. Broun QC with Mr B. Odling for defendantSOLICITORS: Adrian Twigg & Co for plaintiff
Stuart Fowler & Partners for defendant
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
Master Macready
Friday 19 November 2004
3690/2002 Maree Eve Chanter v Peter Frederick Catts
JUDGMENT
1 Master: This is the hearing of proceedings for the adjustment of the parties’ property interests pursuant to s 20 of the Property (Relationships) Act 1984 (NSW) (the Act). The parties lived together in an admitted de facto relationship between 22 March 1984 and late April 1997. There were three children from the relationship. Both parties are medical practitioners, the plaintiff being a psychiatrist and the defendant a general surgeon.
2 When the parties separated in April 1997 they entered into a separation agreement, which governed their financial relationships until the present time. In these proceedings the plaintiff sought to set aside the separation agreement. Shortly before the hearing, the parties agreed that the separation agreement would be set aside by consent and that the court would deal with a matter under s 20 of the Act. Though the present application is brought substantially out of time, the defendant does not oppose any necessary extension of time for the commencement of proceedings. Having regard to the circumstances and in particular the agreement to set aside the separation agreement, I am satisfied that greater hardship would be caused to the plaintiff if leave were not granted than would be caused to the defendant if that leave were granted and accordingly I would propose to extend the time for the commencement of the proceedings.
3 Since the separation of the parties, the plaintiff has had the substantial care of the three children. She puts her case for adjustment based in large part upon her efforts in this regard since separation. For this reason it is necessary to deal with the history of the parties somewhat more fully than is normal for such proceedings.
Chronology
4 The defendant was born on 12 April 1940 and is now aged 64. The plaintiff was born on 24 July 1954 and is now aged 50. The defendant had three children by his first marriage. Those children range in age from 32 to 36.
5 The plaintiff says she first met the defendant in 1983 when she was a final year medical student and the defendant was her Surgical Tutor. In early 1984 the plaintiff says the parties discussed living together. She says that in anticipation of parties commencing to live together, she borrowed $10,000.00, which was applied towards the purchase of a second-hand Holden Gemini motor vehicle and furnishings, whitegoods and Manchester for the parties.
6 On 1 March 1984 the plaintiff moved from her resident’s quarters into the defendant’s unit at 9/5 Hampstead Road, Homebush West.
7 On 22 March 1984 the defendant commenced to live with plaintiff at Homebush West. The plaintiff was then a Medical Practitioner working as an intern at Concord Hospital earning approximately $40,000.00 per annum. The defendant was a General Surgeon in private practice.
8 The plaintiff says that thereafter she generally undertook domestic duties. The defendant says that he employed a cleaner and that an external contractor did the ironing. The plaintiff says that she employed the cleaner commencing mid 1984 when she became pregnant. Shortly thereafter she had a termination.
9 In approximately May 1984 the plaintiff says that she began to assist the defendant when she was not working a 9 to 5 shift by acting as his surgical assistant from time to time.
10 In mid 1985 the defendant became the NSW President of the Australian Association of Surgeons. In the same year the defendant’s first marriage was dissolved.
11 On 27 July 1985 the parties had a reception at Jonah’s Restaurant, Whale Beach for friends and family in celebration of their relationship. The parties thereafter holidayed in New Zealand for one week.
12 On 13 August 1985 the parties entered into their first Cohabitation Agreement at the defendant’s request. Under the agreement each of the parties agreed that they would make no claim under the De facto Relationships Act 1984 (NSW). The agreement however did not comply with the requirements of s 47 of the Act.
13 In late June 1986 the plaintiff left her employment due to the impending birth of her first child. On 12 July 1986 Alexander (now aged 18) was born. The plaintiff says she continued to undertake four hours of domestic work a week assisted by a cleaner whom she paid.
14 In approximately early 1987 the plaintiff returned to part time work as a medical practitioner working from 12.30pm to 6pm on Wednesday and Thursday afternoons and on Saturdays between 9am and 1pm. The plaintiff says that on the days she worked her mother generally looked after Alexander. The plaintiff says she also worked as a surgical assistant for the Defendant in his practice. According to the plaintiff, the defendant gave her a sum of money on a weekly basis to assist with household expenses and she applied her earnings towards general domestic expenditures for herself, Alexander and the household.
15 In January 1987, the plaintiff says that the defendant took over the remaining balance of her $10,000.00 debt. It was in 1987 that the defendant’s Family Law proceedings were resolved. This led to the defendant selling a number of his assets in order to complying with his obligations under the settlement with his former wife.
16 In mid 1987 the plaintiff commenced part-time employment at the Forest Lodge Child Health Centre and the Royal Alexandra Hospital for Children.
17 In approximately November 1987 the defendant purchased a house at 24 Coventry Road, Strathfield West for $250,000.00. The plaintiff says that prior to the parties moving into the property some renovations were carried out comprising of stripping wallpapers in all rooms, pulling up old linoleum and repainting rooms. The plaintiff says the defendant’s son, David and one of his friends assisted her.
18 In December 1987 the parties left the unit at Homebush West and commenced to reside in the Strathfield West property. The plaintiff says she was solely responsible for arranging removalists and undertaking the unpacking and preparation of the home. After the move the plaintiff says she employed a cleaner for five hours a week on one day per week. A lawn-mowing contractor was employed to do the lawns and the defendant attended to the swimming pool. The plaintiff says she attended to the garden.
19 The plaintiff says that by this time the defendant in addition to his involvement in other organisations became an officeholder in the Australian Small Business Association and became the President of the NSW Branch of that Association. Additionally, the defendant also became involved in a national campaign in support of Mr. Joh Bjelke Petersen.
20 In January 1988 the defendant sold a property at 24 Llandilo Avenue, Strathfield (in which he held a ½ interest) for $420,000.00. On 28 January 1988 the defendant sold 53 Shortland Avenue, Strathfield West for $200,000.00.
21 In early 1988 the plaintiff says that the defendant discussed doing some further renovations to the house at Strathfield with her. The plaintiff says she thereafter obtained several quotations regarding landscaping the garden and re-surfacing the existing swimming pool.
22 In early 1988 the plaintiff commenced employment with Parramatta Hospital working 2½ days per week.
23 On 4 February 1988 the defendant sold 46 Llandilo Avenue, Strathfield for $677,000.00 and applied the funds on account of the property settlement with first wife.
24 In April 1988 the plaintiff became pregnant with their second child, Nicola. In May 1988 the plaintiff commenced working 2 days a week at Marrickville Child Health Centre and half day at Parramatta Hospital. In late July 1988 the plaintiff commenced to work two days only per week until the birth of Nicola.
25 On 17 August 1988 the defendant and Dragiga Popovic sold their property at 40 Ollier Crescent, Prospect for $124,900.00. It was subject to a mortgage, which was discharged.
26 On 23 December 1988 the plaintiff left her employment due to the impending birth of the parties’ second child. On 25 December 1988 Nicola (now aged 15) was born with a condition that resulted in an insufficient flow of oxygen to the body and brain. She had to be ventilated and remained in hospital for nine days. Nicola thereafter had medical reviews monthly.
27 In early 1989 the defendant’s youngest son, Michael, then aged 17, from his former marriage commenced to live with the parties whilst completing his HSC. In 1989 the defendant became Vice-President of the Australian Association of Surgeons. The defendant was appointed a Founding Member of The Australian Doctor’s Fund.
28 In approximately February 1989 the plaintiff returned to limited part-time employment at Marrickville Community Health Centre working 2 days per week. The plaintiff says she also worked as a surgical assistant for the defendant in his practice. The plaintiff’s mother looked after the children whilst she was working.
29 In late November 1989 the defendant’s son, Michael, completed his HSC and returned to live at his mother’s home. In 1990 the parties’ son, Alexander, commenced attending pre-school three days a week.
30 In May 1990 the plaintiff left the Marrickville Community Health Centre and took a similar position at Ryde working 2½ days a week. In mid 1990 discussions took place between the parties regarding moving. The plaintiff thereafter began to look for houses. The plaintiff says she drew to Defendant’s attention a home at 63 Llewellyn Street, Rhodes.
31 In 1990 the defendant’s mother passed away and he received an inheritance exceeding $120,000.00. These monies were applied to general living expenses.
32 On 20 August 1990 the defendant purchased 63 Llewellyn Street, Rhodes for $600,000.00. The parties then commenced to live in the Rhodes property.
33 In October 1990 the defendant attended the Annual Conference of Australian Association of Surgeons in Alice Springs.
34 In December 1990 the parties’ former residence at 24 Coventry Road, Strathfield West was sold.
35 In 1992 the parties’ son, Alexander, commenced school at Trinity Preparatory School, Strathfield. The parties’ daughter, Nicola, commenced attending pre-school.
36 In November 1993 the defendant arranged finance for a building developer named Fairbrother by providing $200,000.00 and bringing together a syndicate of family investors who provided $1.2M to Fairbrother for the purpose of a development.
37 In late 1993 the plaintiff’s mother became ill. She died in November 1994.
38 In 1994 the parties’ daughter, Nicola, completed pre-school and began attending PLC Croydon.
39 In 1995 the plaintiff received an inheritance from her late mother’s estate of approximately $200,000.00, which was initially invested in an interest bearing account. The plaintiff says she used a portion of the inheritance to support the family during her absence from work by virtue of maternity leave.
40 In March 1995 the plaintiff left employment prior to the birth of the parties’ third child, Lucas. On 6 April 1995 Lucas (now aged 9) was born. The plaintiff took 12 months off work to care for Lucas.
41 In May 1995 the parties’ son Alexander (then aged 8) ran away from home and the plaintiff organised a police search for Alexander whilst the defendant was in Perth.
42 In June 1995 the developer Fairbrother went into liquidation leaving the defendant as an unsecured creditor.
43 On 4 August 1995 at the defendant’s request the plaintiff invested $120,000.00 of her inheritance in the development of Holroyd Hospital in which the defendant was involved. This money was advanced to Kaizen Hospital which was a company involved in the development.
44 In 1995 the defendant took the children, Nicola and Alexander on a four-week trip without the plaintiff. The plaintiff stayed at home caring for Lucas.
45 In 1996 the defendant sold a ½ share 40 Ollier Crescent, Prospect for $124,900.00 less the mortgage debt then due.
46 In 1996 the plaintiff at the defendant’s request provided $46,000.00 from her inheritance towards the purchase of a Range Rover motor vehicle for the defendant. The defendant says it was a Land Rover.
47 In March 1996 the plaintiff returned to part-time work working 2½ days a week.
48 In June 1996 the defendant and his secretary Robyn Dawson holidayed together for one week.
49 In June and July 1996 the plaintiff and the children took a five-week overseas trip, which she says was paid for from her mother’s inheritance.
50 On 27 July 1996 the plaintiff says that the defendant informed her that he had recommenced a sexual relationship with his secretary, Robyn. The plaintiff says that the defendant informed her that they were going to buy a home five doors away in Llewellyn Street. The plaintiff says that the defendant suggested that they go to Vanuatu for a few days, which they did.
51 On 28 July 1996 the parties flew to Vanuatu. The plaintiff says that the defendant said to her that he was going to stay with her and the children.
52 On 31 July 1996 the defendant informed the plaintiff on the flight home that he had married Robyn when the plaintiff and the children were overseas.
53 In August 1996 the defendant took the child, Alexander, on a 5 or 6-week trip to Western Australia and the Northern Territory without the plaintiff. The plaintiff remained at home caring for Nicola and Lucas.
54 On 5 September 1996 the defendant and Robyn Dawson jointly purchased 51 Llewellyn Street, Rhodes for $465,000.00. Robyn Dawson and her daughter, Kate, moved into the property.
55 In late 1996 the plaintiff began suffering from depression and consulted Dr. Warwick Williams (Psychiatrist) who prescribed Aropax.
56 In 1997 the McIlwraith Unit Trust in which the defendant was involved purchased a property at 50-52 McIlwraith Street, Townsville from the Receiver.
57 In January 1997 the defendant considered separation to have taken place. The defendant began to spend time away from the home and estimates he spent about one night per week at the residence occupied by the plaintiff.
58 In January 1997 the parties’ child, Alexander, commenced to reside primarily at the residence of the defendant and Robyn Dawson.
59 By April 1997 the plaintiff was suffering from severe depression and general anxiety.
60 On 18 April 1997 a second Cohabitation Agreement between parties was signed. In late April 1997 the parties were separated. In broad terms that agreement provided for the parties to join in the purchase a new home, which was to be occupied by the plaintiff and the children. There was provision that the defendant could use the home as security for loans to himself not exceeding 80 percent of the value of the home. The parties made various agreements concerning their wills and leaving their share of the property to the parties’ children. There were provisions made for maintenance of the children by the defendant until such time as the plaintiff married or commenced a domestic relationship with another person for not less than six months. The defendant was to pay various other expenses in connection with the home and make other provisions such as a new motor vehicle each six years.
61 On 14 May 1997 the defendant sold 9/5 Hampstead Road, Homebush West for $140,000.00. In 1997 the Peter Catts Family Trust sold 69 Park Road, Auburn for $180,400.00. On 18 June 1997 the defendant sold the property at 63 Llewellyn Street, Rhodes for $980,000.00.
62 On 25 July 1997 the parties purchased a property at 3 Foss Street, Hunters Hill as joint tenants with the assistance of funds received from sale of the 63 Llewellyn Street, Rhodes property. The purchase price was $575,000.00 and the property was subject to a mortgage of $460,000.00. In July 1997 the plaintiff and the children, Nicola and Lucas, moved in to the Hunters Hill property.
63 In July 1997 the plaintiff began working full-time as a Registrar in Psychiatry at Nepean Hospital. In January 1998 she ceased working at Nepean Hospital and commenced working at North Ryde. In July 1998 she ceased working at North Ryde and commenced working at Greenwich.
64 In September 1998 Alexander ceased living with the defendant and resumed living with the Plaintiff.
65 In 1999 the plaintiff commenced work at Royal North Shore Hospital.
66 In March and April 1999 Alexander, resided with the defendant. In May 1999, Alexander (then aged 12) resumed living with the plaintiff.
67 In early 2000 the plaintiff ceased work at Royal North Shore Hospital and commenced to work at Chatswood for six months.
68 In late January 2000 the parties’ son, Alexander, broke his hip and initially returned to live with the defendant for four weeks as his residence was closer to his school. In February 2000 Alexander, returned to plaintiff’s home for a period. In the year 2000 Alexander took an overdose and the plaintiff and defendant accompanied him to hospital.
69 In July 2000 the plaintiff ceased working at Chatswood and commenced at North Ryde. In 2001 Alexander took an overdose. He was hospitalised and later that day on discharge he kicked the front windscreen of the car in which he was travelling in whilst the plaintiff was driving him home. He ran away and was ultimately scheduled to Macquarie Psychiatric Hospital. The plaintiff contacted the defendant for assistance but he was unable to help as he was on holiday. In May 2001 Alexander (then aged 15) returned to live with the defendant for about a month. In June 2001 Alexander, stopped living with the defendant and returned to live with the plaintiff.
70 In the first half 2002 the plaintiff trialled an alternative anti-depressant Efexor which substantially restored her wellbeing. She has remained on that medication to the present time.
71 On 19 January 2002 the plaintiff married Matthew Noone.
72 In May 2002 the defendant and Robyn Dawson sold the property at 51 Llewellyn Street, Rhodes realising $785,000.00 less agent’s commission and legal costs. The defendant applied the net proceeds to pay a $600,000.00 debt, which the defendant had accumulated between 1997 and 2002.
73 In October 2002 the plaintiff was asked to withdraw the child, Nicola, from boarding school due to her bad behaviour.
74 In December 2002 the plaintiff contracted Hepatitis E. On 17 January 2003 she commenced long service leave. In February 2003 the plaintiff was a victim of an armed home invasion. The plaintiff developed symptoms of acute viral hepatitis and subsequently an antibiotic associated hepatitis. The plaintiff says that because of absence of support from the defendant she was forced to work although extremely unwell.
75 In January 2004 the defendant had a 2-week holiday with the children, Lucas and Nicola.
76 In order to properly consider the present matter is necessary to identify the assets of the parties at various times during their relationship.
The property of the parties at the commencement of the relationship in 1984
77 At the commencement of the relationship the plaintiff had a bank account, some household items, white goods and a car, which he had purchased second-hand for $6,000.00. She had a loan from Westpac of $10,000.00, which she used to purchase those assets.
78 The defendant had the following assets:
- 1. 1/3 interest in a property situated at and known as 24 Llandilo Avenue, Strathfield that was unencumbered. This property was subsequently sold in 1987 for $410,000.00.
- 2. 46 Llandilo Avenue, Strathfield, which was unencumbered and was subsequently sold in 1988 for $670,000.00 and the funds were subject to a family law settlement with his first wife, Laurel Catts.
- 3. 53 Shortland Avenue, Strathfield West which was unencumbered. The property was sold in 1987 for $200,000.
- 4. 9/5 Hampstead Road, Homebush West which was unencumbered and was sold in 1996 for $140,000.
- 5. Half share of 40 Ollier Crescent, Prospect sold in 1988 for $124,900. This property was subject to a mortgage.
6. A 1/6 share in Staver Nominees which was the trustee of a Family Trust established by his parents.
7. A company Pecat Pty Ltd which was established by the defendant as a vehicle for holding certain shares and property.
8. Staver Pty Ltd the defendant’s parent’s family company which held shares and other assets. The defendant owned a 1/6 share of the company.
9. 1983 Ford Fairlane (blue) and 1976 Ford Fairlane (green).
11. Shares at cost price10. Furniture & chattels including various antiques at 46 Llandilo Avenue, Strathfield, 28 Mary Street, Auburn and 9/5 Hampstead Road, Homebush West.
- BHP 2214 shares $10,830
CSR 1800 shares $ 7,179
Dunlop 4500 shares $ 3,243
Gollin 30,000 shares $ 3,705
Caltex 200 shares $ 400
79 The defendant was also the trustee of the Peter Catts Family Trust which owned the following properties:-
- 1. 28 Mary Street, Auburn which was unencumbered was sold in 1998 for $450,000.
- 2. A 1/6 interest in 88 Northumberland Road, Auburn sold in 1987 for $320,000. This property was subject to a modest mortgage.
- 3. A 1/6 interest in 86 Northumberland Road, Auburn which was sold in 1998-1999 for $520,000 subject to a modest Westpac bank mortgage. The mortgage was repaid in 1987.
- 4. A 1/6 interest in 34 Macquarie Road, Auburn which was unencumbered. The property was subsequently sold in 1999 for $533,000.
- 5. 69 Park Road, Auburn which was unencumbered. The property was sold in 1997 for $180,400.
80 In 1987 a portion of the assets of the Peter Catts Family Trust were disbursed pursuant to orders made by consent in the Family Court of Australia in relation to the breakdown of the defendant’s marriage to his first wife.
81 The assets of the defendant seem quite substantial particularly when one contrasts them with those of the plaintiff. However it will be recalled that after he commenced his relationship with the plaintiff, the defendant was divorced from his wife and was involved in litigation to resolve the property affairs of himself and his wife. In consequence of that resolution he had to sell a number of properties and generally reorganise his affairs. In addition, between March 1984 and 1987 he had to maintain a household for his former wife and two children.
82 In these circumstances it is probably preferable to consider the assets the defendant had in 1988 after he had resolved all these matters connected with his first wife. The reality is that it is the assets which remained in 1988 that are relevant when considering the present application.
The defendant's assets in 1988
83 The effect of the various sales is that in 1988 the property of the Defendant comprised the following:
1. The superannuation he held at the commencement of the relationship amounting to $93,351.85.
3. 9/5 Hampstead Road, Homebush West.2. 24 Coventry Road, Strathfield purchased in 1987 for $250,000.00.
84 The defendant’s liabilities were $186,923.00 as at 30 June 1984. His evidence was they were discharged over time to 1997 and I would thus infer that there was still some indebtedness in 1988.
85 The property at 9/5 Hampstead Road, Homebush West was ultimately sold eight years later for $140,000.00.
86 Although the evidence did not specifically deal with the plaintiff's asset situation in 1988 it would be similar to the situation at the commencement of relationship in 1984.
The property of the parties in April 1997
87 The parties annexed to the 1997 agreement, Family Law Act form 17 setting out their respective financial positions. Subject to some adjustments these disclose the following position of the parties in 1997.
88 As at the date of the 1997 Cohabitation Agreement and excluding items of personalty and legal expenses, the property and resources of the Plaintiff were as follows:-
PROPERTY Westpac Classic A/c Cash Kaizen Hospitals Holroyd Private Hospital Debt due by defendant TOTAL PROPERTY
LIABILITIES Credit cards Property Superannuation Less Liabilities TOTAL PROPERTY & RESOURCES
89 The defendant’s financial position as at 1997 omitting the life assurance policy which appears at Item 4 and the items of personalty which appear at Item 11, consisted of the following property:
| 63 Llewellyn Street, Rhodes | $950,000.00 |
| 5/15 Parnell Street, Strathfield | $250,000.00 |
| 51 Llewellyn Street, Rhodes (50%) | $250,000.00 |
| 6,000 shares in Southern Resources | $0.00 |
| 60 shares in Kaizen Hospitals | $60.00 |
| Holroyd Private Hospital | $460,000.00 |
| Staver Nominees | $5,000.00 |
| 1996 Land Rover Discovery | $50,000.00 |
| 1996 Land Rover Discovery | $52,000.00 |
| 1991 Mitsubishi Nimbus | $15,000.00 |
| Loan – Paul Catts | $5,000.00 |
| Practice Plant, Equipment, etc. | $30,000.00 |
| Expectation of contribution from present wife | $250,000.00 |
| Total | $2,317,060.00 |
90 This needs to be adjusted to take account of the fact that 63 Llewellyn Street, Rhodes was sold for $980,000.00 ($30,000.00 more than the estimate). No value was ascribed to the interest in the McIlwraith Unit Trust although it was apparent from the fact that it was included as a contingent liability that the project had commenced;
91 The defendant’s liabilities omitting in the plaintiff’s submissions provisional tax as being in the nature of a recurrent expense and the items at 12 relating to Family Law expenses and the item at 13 being the monies owed in respect of the Fairbrother loss, were:
| Westpac mortgage over 63 Llewellyn Street, Rhodes | $600,000.00 |
| Westpac mortgage over 51 Llewellyn Street, Rhodes. | $500,000.00 |
| Westpac overdraft | $46,000.00 |
| Westpac Mastercard | $1,000.00 |
| Loan owing to Cheval | $17,700.00 |
| Loan owing to Hopson | $42,000.00 |
| Loan owing to Robyn Catts | $50,000.00 |
| Debt to the plaintiff | $1,000.00 |
| $1,257,700.00 |
92 The Defendant additionally disclosed at superannuation entitlements of $700,000.00.
93 The amount which was claimed to be owing to the Catts Superannuation Fund in respect of the Fairbrother’s loss, was $375,000.00. There does not seem to be a reason why this liability should be excluded. This would make the total liabilities $1,632,700.00.
94 The total of the defendant’s assets and resources less liabilities and subject to the matters referred to above was therefore:
| Assets | $2,317,060 Including sum of $250,000.00 payable by Defendant’s wife. |
| Resources | $ 700,000 |
| $3,017,060 | |
| Less Liabilities | $1,632,700 |
| NET ASSETS & RESOURCES | $1,484,360 |
95 The total of the parties combined property and resources amounted to a net figure of $1,642,525.00. Excluding superannuation, the property of the parties amounted to $919,258.00.
The property of the parties at the date of hearing
96 The plaintiff's assets at the date of hearing consisted of the following:
1. One half interest in Foss Street Hunters Hill $500,000.00
2. Household effects $30,000.00
Total $548,000.003. Car $18,000.00
97 The plaintiff's present superannuation entitlements are as follows:
2. P F Catts superannuation fund $119,244.001. State super $96,005.00
- Total $215,249.00
98 The plaintiff's present liabilities are as follows:
1. Loan from her father $45,000.00
2. Legal fees $33,000.00
3. Learn from her husband $31,850.00
4. Overdraft $7,000.00
Total $120,350.005. Credit card $3,500.00
99 This makes the net assets of the plaintiff, excluding superannuation, an amount of $427,650.00.
100 The present assets of the defendant are as follows:
1. Half interest Foss Street, Hunters Hill $500,000.00
2. Household effects $10,000.00
3. Paintings and watch $5,000.00
4. Practice plant and equipment $5,000.00
5. Units in the McIlwraith unit trust $255,156.00
Total $793,156.006. Land Rover $18,000.00
101 In addition, the defendant has his interest in the superannuation fund, which amounted to $940,486.00.
102 The defendant's present liabilities are as follows:
1. Westpac overdraft $43,925.00
Total $545,458.002. Westpac loans secured over Foss Street $501,533.00
103 The net property assets of the defendant are thus $247,698.00.
Contributions of the parties
104 It is probably appropriate to look at the contributions in two different periods. The first is from 1984 until separation in 1997. The second is the period from that date until the hearing. The defendant submits that I should not take into account contributions after separation.
105 In the period up until 1997 both parties contributed their incomes to the relationship. In the first three years or so the defendant had to support his former wife and the children of his former marriage. Details of his income that were contributed to the relationship are not available, but plainly his income would be substantially greater than that of the plaintiff. This flows from the fact that he was a surgeon and that the plaintiff had time off when the children were born and that she often worked on a part-time basis.
106 The defendant’s evidence, which I accept, was that over the years between 1984 and 1990 his mother gave him cash sums that totalled $200,000.00. He also received an inheritance from his aunt amounting to $26,000.00 and distribution from his mother's estate in the order of $120,000.00. I accept his evidence that he applied these funds to the relationship.
107 The plaintiff for her part also received an inheritance and spent a sum of $46,000.00 for the purchase of a car for the defendant.
108 So far as non-financial contributions are concerned it is plain that the greater burden of those fell upon plaintiff. She had time at home when she was the principal carer for the children. The defendant was often away as a result of his many positions. As a result of the pressures of raising the family and the defendant's very busy schedule the plaintiff says that she put off study to qualify as a psychiatrist. Since the separation she has substantially completed that training but her inability to do it earlier has meant that she has had 14 and half years when she worked simply as a career medical officer rather than as a psychiatrist. Her current salary is about $82,000.00 gross per annum and as a specialist she would normally expect to receive a salary of at least $150,000.00 per annum.
109 Interestingly the submissions of the plaintiff suggested that an appropriate adjustment would be one which the plaintiff should receive an adjustment equivalent to 40 percent of the property and resources of the parties. The defendant’s submission was that at the date of separation the appropriate division would be that the plaintiff should receive 40 percent of only the property of the parties. The defendant took a different philosophical approach the question of the treatment of superannuation.
110 As I have mentioned it was the plaintiff's submission that I should take into account post separation contributions. These contributions related to her preponderant responsibility for the care of the children in the period from separation up until hearing. In Foster v Evans (1997) DFC 95-193 Bryson J (as he then was) at 77,68 said the following
- “In my respectful view para 20(1)(b) does not contain within its own terms a limitation to the period during which there was a de facto relationship as the period during which any contributions to the welfare of a family might have been made. ‘Family’ is a word of very wide meaning and connotes many kinds of connections among persons, and many of these connections are irrespective of whether they form one household. It is inherently unlikely but it is not impossible that contributions of kinds referred to in paras (a) and (b) might be made to the property financial resources or welfare of another de facto partner after the relationship ended: people sometimes care for former partners. The possibility of a contribution to the welfare of a family including a child of the partners after the de facto relationship itself has ended can be clearly seen. I do not see what purpose would be served by limiting the contributions to family welfare which may be considered so as to exclude contributions made after a separation. There is to my reading no expression in subs 20(1) of an intention to limit the time at which contributions are to be made. Subsection 20(1) is unlike ss 15 and 17 in that subs 20(1) does not expressly direct attention to the period the parties have lived together. In my opinion a family there referred to could be a group of persons who do not live in the same household. Roy v. Sturgeon was not a case where the partners and their children formed a family; their children (of other relationships) seem to have been no more than visitors to their household; see DFC p 75,365-75,366; NSWLR p 460. Counsel also referred to Lipman v. Lipman (1989) DFC ¶95-068; (1989) 13 Fam.LR 1 at 24, in which I find no assistance. I respectfully differ from Powell J’s obiter dictum about the meaning of para 20(1)(b). In my opinion it is not required that a contribution under para 20(1)(b) be made during the relationship.
- In my opinion the plaintiff, the defendant and T constitute a family within the meaning of para (b) even though there has not been any time during which those three persons have lived together in one household.”
111 In Nguyen v Scheiff (2002) 29 FamLR 177 at 182, paras.104 to 109 inclusive Campbell J expressly approved by this statement.
112 Having regard to the fact that because the agreement is to be set aside there has been no determination of what is an appropriate recognition of the work already performed by the plaintiff and for the reasons expressed by Bryson J I think it is appropriate to take these contributions into account.
113 This requires a consideration of the extent of those contributions over the last seven years and must also take into account the contributions the defendant has made by way of payments to the plaintiff and to and on behalf of the children.
114 The defendant gave evidence of the amount he spent on the plaintiff, the children and for utilities in respect of the Foss Street property. Over the relevant years he paid to the plaintiff $300.00 to $400.00 per week for child support plus private school fees and other expenses for the children. The total amount paid to the plaintiff on account of these items in the period was $175,816.00. For the children he paid directly a total sum of $185,750.00 and in respect of Foss Street he paid a total of $25,212.00. These sums do not included interest on the mortgage, which he has paid out of his own resources. Since he had the benefit of the borrowings these interest payments should not be taken into account. He produced the appropriate accounting records maintained by his accountant recording these amounts and I am prepared to accept his evidence that these amounts were paid as he says. These payments were made pursuant to the terms of the 1997 separation agreement that enforced extensive obligations on the defendant in this regard.
115 The plaintiff herself provided an estimate of the costs that she has paid in relation to the children leaving aside school fees that have substantially been met by the defendant. The total amount for the period comes to $377,760.00, which is about $1,000.00 a week. When one looks at the amounts paid by the defendant one has an approximate position of each party paying half the cost of the children except for school fees which were substantially met by the defendant.
116 The plaintiff has since moving into the property, also carried out work and made a number of payments. In paragraph 136 of her affidavit she set out the following items, which she has paid for since moving into the property.
1 Extensive landscaping of front and rear gardens plus regular garden maintenance. The landscaping costs were approximately $10,000.00 with labour provided by the plaintiff, her father and Matthew Noone. A quote for this work had been for approximately $25,000.00.
2 Repainted the entire inside and outside of house at a cost of approximately $15,000.00. This cost included paying a painter to paint the entire interior of the house, purchase paint for the exterior and pay a painter to paint parts of the exterior that were difficult to access. The remainder of the exterior was painted by the plaintiff and Matthew Noone.
3 Installed air conditioning in the house at a cost of approximately $7,000.00.
4 Electrical work including new light fittings in most rooms at a cost of approximately $7,000.00.
5. Had built-in wardrobes, cupboards and shelving installed at a cost of approximately $8,000.00 with part of the labour performed by Matthew Noone. A previous quote had been for $12,000.00.
6. Shower screens installed at a cost of approximately $1,000.00.
7. Arranged for the installation of an additional phone line for Internet access, new telephone handsets and new outlets at a cost of $500.00.
9. In addition to these payments the plaintiff contributed to the maintenance of property by cleaning, gardening and household maintenance and repairs.8. Undertaken repairs including window sashes, removal of UV coating, breakages, plumbing, hot water, electrical, gyprock, fencing at a cost of approx. $3,000.00.
117 The total of the costed items is $59,500.00.
118 The plaintiff also gave evidence which I accept that she paid the following between 2002 and 2004:
SERVICE APPROX. COST a. Payment of household insurance b. Council Rates c. Gas d. Electricity e. Telstra f. Water g. Installation of, and repairs to, door locks h. Installed flyscreens, installation of double aluminium security doors to verandah of main bedroom and Nicola’s room i. Installed steel security doors on front door, door to studio (Alexander’s room) and Nicola’s room j. Installed Skylight and skytube k. Installed ventilation for the house and studio l. Purchased a new dishwasher m. Purchased and installed shade awnings n. Installed television antennas and connection to additional rooms
$600.00o. Purchased new curtains and repairs to pre-existing curtains.
$1,200.00p. Purchased household furniture including dining table, three desks, lounge suite, two new beds, bookshelves, chests of drawers, storage items and audio-visual equipment q. Purchased and repaired computing and electronic equipment.
$9,000.00r. Paid for cartage and rubbish removal s. Paid for a chimney sweep t. Installed a new clothes line u. Purchased replacement new washing machine, refrigerator, microwave oven and stove hot plate v. In the process of replacing hot water tank (which was rusted through) with new hot water system. This is currently underway and final cost is not yet known. w. Fumigation. x. Installed a bike shed in back yard y. Installed cupboards in driveway
$59,053.87
119 The plaintiff met these expenses from her earnings together with monies advanced to her by her father and her husband, Matthew Noone. There is no evidence as to what effect these improvements had on the value of the house.
120 In her main affidavit, the plaintiff gives substantial detail in relation to the care of the children in the relevant period. It is perfectly plain that she had an enormous responsibility. The son Alexander was suicidal, depressed and extremely aggressive. He is having continual treatment and is still difficult to manage. At times Alexander stayed with the defendant but that never lasted for long. Nicola was also a difficult child. She had problems with obesity, lying and stealing. She has needed particular care during her upbringing. She engages in school sport and the plaintiff has to travel substantial distances in connection with her attendance at sport.
121 During the early part of the relevant period, the plaintiff's tasks in looking after the children became more difficult for her because of her depression. Fortunately that depression is now appropriately treated. She has however had further sickness in early 2003, which has made things difficult for her.
122 She summarised the tasks she did for the children in 2003 in the following terms in paragraphs 168 to 170 of her main affidavit.
- “During 2003 my support of Alexander has included …
· Arranging Latin dance classes;
· Providing additional study materials, engaging a ‘Life Coach’;
· Transport to sports;
· Transport to parties;
· Supported him in his role as a partner to a debutante;
· Intervening to ensure that his sport continued to be made available at his school;
· Familiarising myself with course materials including reading some of his set texts;
· I also provided emotional and moral support, organised several medical interventions and entertained friends.
- For Nicola I continued to …
· Organised her psychotherapy;
· Provided flute lessons;
· Continued to provide transport to sport, to meet friends and each Sunday evening to and from a church youth group;
· I set up a sewing circle for her and her friends which manufactured fundraising items for sale;
· Provided additional study material;
· Helped with homework, essays and projects;
· Continued to provide Maths coaching and encouraged her interest in meditation by accompanying her to a meditation centre;
· Organised medical, dental and orthodontic appointments;
· Enrolled her in a reading improvement course and holiday music camps;
· I continued to liaise with her school and provided practical and emotional support and encouragement.
- For Lucas I …
· Helped with or transported him to school reading, rugby and tennis;
· I have arranged extra home support with reading, resulting in a dramatic improvement;
· Provided guitar classes and supervision of guitar practice;
· Participation in “Nippers” in Summer;
· Contributed to school fundraising efforts and to school performances and occasions when parent attendance is desired.
123 Clearly the care that the plaintiff has extended the children is substantial and it has been made more difficult for her as a result of her illnesses and the particular problems from which the children suffer.
124 It is the contribution that the plaintiff has made in both periods by her efforts in looking after the children, which must be recognised in a substantial, and not a token way. See Black v Black (1991) 15 Fam LR 109 at 117.
Superannuation
125 The plaintiff submitted that because the defendant contributed to his own private superannuation scheme such contributions were in the nature of savings to which the plaintiff was making an indirect contribution.
126 In Green v Robinson (1995) 36 NSWLR 96 the Court, inter alia, dealt with the way superannuation should be dealt with. His Honour, President Kirby (as he then was), at p 103 had the following to say in relation to superannuation:
I shall assume that the contributions to superannuation made before the relationship commenced to be disregarded. See Lipman v Lipman (1989) 13 FAM LR 1; DFC 95-068 (SCNSW). Both parties argued the case on this basis, although it is not without controversy and contrary opinions exist. See e.g. In The Marriage of Gill (1984) 9 FAM LR 969."It is as erroneous to ascribe the superannuation payments to the separate and differentiated income of the parties as it is to ignore superannuation altogether. Despite equal pay legislation, and industrial decisions to the same end, it is well known that in Australia, female earnings are typically lower than male earnings. Inherent in the notion that each 'owns' the superannuation entitlements accumulated from his or her income, in an inescapable bias against vulnerable (usually female) members of a
marriage or marriage-like relationship. This is a bias which the Act, far from condoning, forbids. By section 3(1), the Act requires, in relation to 'de facto partners or either of them', that the financial resources, which must be taken into account under section 20(1) of the Act, are to include entitlements under a superannuation scheme. This is therefore something which, in the exercise of the section 20(1) discretion, the Court must view as belonging not to Mr Robinson separately however he actually banks or notionally receives the contingent benefit, but to the financial resources of the parties which need to be adjusted, having regard to the contributions 'made directly or indirectly' by them. Conformably with the language of the Act and applicable jurisprudence which has developed in the Family Court on analogous problems, it is my view that Ms Green made an indirect contribution to Mr Robinson's superannuation entitlements. Just as he did to hers. The only difference is that his entitlement was more substantial. This was because of its longer duration and because of his higher base income.
The funds must therefore be reduced pro rata for the contributions made before 1974. I agree generally in the approach of Cole JA to this adjustment. But, with respect, the error in his Honour's approach, is to require, in effect, proof by evidence of the direct or indirect contributions made by Ms Green to Mr Robinson's accumulating superannuation entitlements during the relationship. Such proof is not required in cases under the Family Law Act. In my view, the express mention of superannuation entitlements in section 3(1) of the De Facto Relationships Act, makes it plain that Parliament accepted that ordinarily, partners to such relationships would be making at least indirect, if not direct, contribution to the accumulation of the form of savings which superannuation constitutes. That, in my view, gave Ms Green, for the period of the relationship at least, such a stake in that aspect of the 'financial resources' of Mr Robinson, as must be reflected in a 'just and equitable order', designed to adjust the interests of the partners, as section 20(1) of the Act requires."
127 At p 110 Powell J referred to the need to establish that one of the parties had in some way contributed to the other's superannuation entitlements and that by reason of that contribution, it was "just and equitable" that some order based upon, or derived from, those entitlements should be made. Cole JA dealt with the matter on p 118 and was inclined to the view that there was no evidence in the case to suggest that the appellant had made any contribution, direct or indirect, to the respondent's present superannuation entitlement, it being a deduction from his service pay. He held that a similar situation pertained to the appellant's superannuation.
128 It is not easy to reconcile the different views but it would appear from the comments of Powell J and Cole JA that there must be some factual matter, which enables one to form the view that there had been a contribution to a spouse's superannuation entitlements. A common example of this would be a partner who stays at home to look after children thus enabling the other partner to go to work and earn a superannuation entitlement.
129 The matter was touched upon in Gazzard v Winders (1998) 23 Fam LR 716. There Beazley JA said this about superannuation in that case:
“The respondent was also entitled, upon his retirement, to the payout of his superannuation entitlement of $100,799.81. The evidence disclosed that he had two entitlements of this nature. One was a non contributory “past service benefit”; the other a “final service benefit”, a contributory scheme under the Stevedoring Employees Retirement Fund, which the respondent appears to have joined in 1967.
Notwithstanding that if there was any contribution by the appellant to the respondent’s contributory scheme it was only small, it is still relevant to consider the respondent’s pension and superannuation entitlements against the background of the way in which the parties dealt with their several incomes and assets, namely as available for their joint use.”Superannuation and pension entitlements are, of course, financial resources for the purposes of s 20(1)(a): see s 3(1). As such the court is required to take account of any direct or indirect contribution made by the parties to that resource. In the present case, there was no evidence that the appellant had made any contribution of either nature to either the respondent’s pension or superannuation entitlements: see Green v Robinson (1995) 36 NSWLR 96 ; 18 Fam LR 594 per Powell JA at NSWLR 108–9; Fam LR 603–5 and Cole JA at NSWLR 118; Fam LR 613 . There is perhaps one qualification to that. The superannuation scheme was contributory and to that extent the parties did not have available to them on a weekly basis the amount of the superannuation contribution. This was not, however, a large amount. However, the matter is relevant because of the invariable practice of the parties to use their incomes jointly. A proportion of the entitlements accumulated prior to the parties’ cohabitation. It is not possible to ascertain to what extent the pre-cohabitation accumulation is reflected in the fund payout figures. It may be, and is likely, that the entitlements increased with the respondent’s increase in salary. Be that as it may, there can be no doubt that a significant amount of the entitlements accumulated prior to the parties’ relationship.
Stein JA added the following:-
“I add one last observation. In the analysis of the parties’ assets I have included the superannuation moneys on both sides. Acknowledging Green v Robinson (1995) 36 NSWLR 96; 18 Fam LR 594, it is nonetheless clear that the parties (particularly the respondent) did not have available to them the superannuation contributions each had made. To this extent, superannuation contributions have a relevance because it was the practice of the parties to pool and use their incomes on a joint basis. I accept that the relevance of this factor is only marginal, but nevertheless it goes into the discretionary basket.”
130 There is little evidence in this case of such joint use of income. Each seems to have kept their own separate bank accounts and of course in the post separation period their affairs were even more separate. Recent discussions of the subject in the Family court are not of great assistance due to the quite different provisions that now apply in that legislation. See for example In the Marriage of Hickey (2003) 30 Fam LR 355.
131 In this case it would seem that there is very little evidence of contribution to superannuation by either party, except perhaps for the two years when the plaintiff was at home on a full-time basis looking after children. In these circumstances there would be a small contribution by her to the defendant’s superannuation. The defendant’s superannuation increased from $93,351.00 to $700,000.00 over the period of the relationship, which was a period of some 13 years. There was thus a contribution of about $95,000.00 to the defendant’s superannuation.
Discussion
132 In her submissions the plaintiff sought to receive a transfer of the defendant’s interest in the Foss Street property and a provision that over a period of some two years he thereafter discharge the mortgage over the property. It was submitted that he would be able to do this because by the time he was 65 he would have access to his superannuation entitlements.
133 The defendant submitted that the property should be sold and after meeting expenses of sale the proceeds should be paid as to a certain sum to the plaintiff and the balance to the defendant. The submissions on the calculation of the amount to be paid to the plaintiff were as follows:
“It is submitted that, having regard to the contributions up to the date of separation an appropriate division would be 40% to the plaintiff, 60% to the defendant.
The total assets of the parties at separation were $858,916, 40% of that is $343,566.40.
Of that total sum the Plaintiff had $136,923.
If we include the car the Plaintiff received shortly after separation which was $35,000 the total amount the Plaintiff had was $171,923. It is submitted that the car should be included.
Accordingly the amount appropriate to provide to bring the Plaintiff up to 40% was $171,643.40 (or if the car is not included $206,643).
The Plaintiff had the exclusive use of the homeIt is submitted that interest is inappropriate because:
- The defendant was contributing significantly pursuant to the agreement
The time that has passed since separation is the responsibility of the Plaintiff.
the CPI Sydney at 30 March 1997 stood at 120.6
However a CPI adjustment may be appropriate –
the CPI Sydney at 30 June 2004 stood at 145.6
- (the 2004 figure is not from the published tables but from December 03 (143.6) plus variations for the first two quarters of approximately 1 point each quarter).
Accordingly $171,643.40 (taking the car into account) becomes equivalent to present dollars $207,224.54 (or if the car is not taken into account) $206,643 becomes in present day dollars 249,479.44”
134 It can be seen that this submission focuses on the position of the parties at separation in 1997 and is based upon the supposition that there was to be no recognition of parenting contribution post 1997 and to take no account of any contribution to superannuation. I have concluded that I should take account of those parenting contributions, which raises the period from 13 to 20 years, which is a substantial increase.
135 In addition by looking after the children when they were young the plaintiff has contributed to $95,000.00 of the defendant’s superannuation.
136 The plaintiff has had the benefit of the occupation of the Foss Street property since 1997 but it should not be forgotten that it was also the home for the children who occupied it for almost the whole of the period. The property is jointly owned in partial recognition of part entitlements that gives an entitlement to occupation. I do not see this benefit as being an important one in the exercise that I have to perform.
137 Another benefit the plaintiff received shortly after separation, pursuant to the separation agreement, was a car and this should be taken into account.
138 It is to be noted that the net assets, excluding superannuation, of the parties were as follows:
- Plaintiff Defendant
139 The plaintiff’s net assets have increased as a direct result of the separation agreement. The defendant’s assets have decreased no doubt in part due to the fact that he has had two families to support.
140 A sale of Foss Street will result in the discharge of the mortgage of $501,533.00 and a final separation of the parties’ financial affairs at this time.
141 It seems to me preferable that there be a final resolution of the parties’ financial affairs and I should have regard to the present net asset pool of $675,348.00 noting that it has probably been reduced by the defendant’s support of a second family.
142 In these circumstances, taking into account all the matters to which I have referred earlier in this judgment and the evidence in the case which I have considered again, I think that an appropriate order is that the Hunters Hill property be sold and that the plaintiff receive four fifths of the net proceeds after discharge of the mortgage and that the defendant receive one fifth of such proceeds. The parties are otherwise to retain their separate property and superannuation. I direct the parties to bring in short minutes.
Last Modified: 11/29/2004
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