Condie and Quirke
[2014] FamCA 567
•25 July 2014
FAMILY COURT OF AUSTRALIA
| CONDIE & QUIRKE | [2014] FamCA 567 |
| FAMILY LAW – PROPERTY – De Facto – final orders – whether de factor relationship existed - parties dispute date of commencement of de facto relationship – difference of approximately eight years – while parties were in a close personal relationship between 2000 and 2010 a de facto relationship did not commence until November 2008 – assets owned at the commencement of the de facto relationship – where husband made significant financial contribution to acquisition, conservation and improvement of assets |
| Family Law Act 1975 (Cth) s 4AA, 90SM, 90SF |
Commonwealth Powers (De Facto Relationships) Act 2009 (SA)
Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth)
| APPLICANT: | Mr Condie |
| RESPONDENT: | Ms Quirke |
| FILE NUMBER: | ADC | 388 | of | 2011 |
| DATE DELIVERED: | 25 July 2014 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Justice Dawe |
| HEARING DATE: | 25-28 Feb 2013; 1 March 2013; 11-14 June 2013; 5-6 Sept 2013; 8 Oct 2013 & 11 Oct 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McGinn |
| SOLICITOR FOR THE APPLICANT: | Angela Ferdinandy |
| COUNSEL FOR THE RESPONDENT: | Mr Jordan |
| SOLICITOR FOR THE RESPONDENT: | Diane Myers Pty Ltd |
Orders
Pursuant to Section 91RD (1) it is declared that a de facto relationship existed between the applicant de facto husband Mr Condie and the respondent de facto wife Ms Quirke between November 2008 and December 2010.
In full and final settlement of all claims that either party may have against the other whether by way of property settlement or alteration of interest in property whether past, present or future:
(2.1)within sixty [60] days from the date of this Order the applicant de facto husband pay to the respondent de facto wife the sum of TWO HUNDRED AND SIXTY THREE THOUSAND DOLLARS [$263,000.00];
(2.2)within sixty [60] days from the date of this Order the applicant de facto husband take all steps necessary to ensure that the respondent de facto wife retains as her sole property and transfer to the respondent de facto wife the 395 Westpac shares and the …motor vehicle Registration No ...
Upon completion of paragraphs (2.1) and (2.2) hereof and contemporaneously therewith the respondent de facto wife do transfer to the applicant de facto husband (or on his nomination E Pty Ltd) the whole of her estate and interest both at law and in equity in the property situate at C Street, Suburb D in the State of South Australia being the whole of the land comprised in Certificate of Title Register Book Volume … Folio … UPON CONDITION THAT contemporaneously with the said transfer the applicant de facto husband do discharge Memorandum of Mortgage number … to St George Bank and thereafter the applicant de facto husband indemnify the respondent de facto wife in respect of any liability for the said mortgage or debts owing in relation to the said property.
The applicant de facto husband shall retain as his sole property any interest in the following:
(4.1) his savings and investments;
(4.2) his motor vehicles;
(4.3) his furniture and household effects;
(4.4)any life insurance and superannuation entitlements, including his entitlements in the Condie Superannuation Fund;
(4.5)his interest in E Pty Ltd as trustee for the Condie Settlement Fund;
(4.6)any interest in Condie Pty Ltd as trustee for the Condie Family Trust;
(4.7)any other real or personal property of the applicant in the applicant’s possession not otherwise specified herein.
The applicant de facto husband is hereafter responsible for payment of any outstanding rates, taxes and other outgoings in relation to the Suburb D property and do hereafter indemnify and keep the respondent de facto wife indemnified in relation to the same.
Upon compliance by the applicant de facto husband with paragraphs (2.1) and (2.2) hereof the respondent de facto wife do remove the caveat registered on the whole of the land comprised in Certificate of Title Register Book Volume … Folios … and … in relation to F Street, Suburb H in the State of South Australia.
The respondent de facto wife shall retain as her sole property and interest in the in the following:
(7.1) her savings and investments;
(7.2) her furniture and household contents;
(7.3)any life insurance and superannuation entitlements of the respondent de facto wife;
(7.4)her property at I Street, Suburb J in the State of South Australia;
(7.5)any other real or personal property in her possession not otherwise specified herein.
The question of costs of the application is reserved to a date to be fixed if not agreed by the parties.
All applications are dismissed and removed from the active pending list.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Condie & Quirke has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 388 of 2011
| Mr Condie |
Applicant
And
| Ms Quirke |
Respondent
REASONS FOR JUDGMENT
Introduction
The applicant, Mr Condie, seeks final orders by way of property settlement. The respondent, Ms Quirke, seeks other orders by way of property settlement.
The parties lived in a de facto relationship. The length of the relationship was one of the matters in dispute.
For convenience the parties are hereafter referred to as the husband and the wife.
Brief summary of procedural history
The applicant husband filed the Initiating Application on 3 February 2011 with a supporting affidavit and a Statement of Financial Circumstances. The respondent filed a Response to the Initiating Application on 29 March 2011, together with supporting affidavit and Statement of Financial Circumstances. Thereafter both parties filed various applications and affidavits of themselves and proposed witnesses.
The proceedings which were initially commenced in the Federal Magistrates Court (as it then was) were transferred to the Family Court of Australia in June 2011.
Following directions made to prepare the matter for trial the final hearing was listed initially for five days commencing on 25 February 2013. The matter was adjourned part-heard and resumed on 11 June 2013, when it was again adjourned part-heard to 5 and 6 September 2013. The matter was again adjourned part-heard to 8 October 2013. Closing submissions were concluded on 11 October 2013 when judgment was reserved.
At the trial the applicant husband was represented by Mr McGinn of Counsel, the wife by Mr Jordan of Counsel.
Orders sought
When the trial commenced in February 2013, the husband sought by way of an Amended Case Outline, orders which included a declaration that the de facto relationship existed between the husband and wife between November 2008 and December 2010. The final property settlement orders sought provided for the wife to transfer to the husband (or E Pty Ltd) any of her interest in the property at C Street, Suburb D on the basis that the applicant husband would discharge the mortgage and release the wife from any liability. It was proposed that he otherwise retain all his real and personal property and that the wife retain all her other property, including her interest in the property at I Street, Suburb J.
Orders were sought for adjustment of costs. The proposed division was calculated to be an adjustment on the basis of overall 70 per cent to the husband and 30 per cent to the wife, with the husband retaining all of the superannuation assets.
At the conclusion of the trial a division on the 70 / 30 basis for the non-superannuation assets and 100 per cent of the superannuation assets in favour of the husband was maintained.
At the commencement of the trial in February 2013 the orders sought by the respondent wife provided for the husband to pay the wife a settlement sum of $737,145, that the wife to transfer the property at C Street, Suburb D to the husband, the husband release the Suburb J property from collateral security and guarantee and transfer to the wife the Westpac shares and the motor vehicle.
The respondent wife included in the assets the substantial superannuation held by the husband and thereafter sought an overall division of 45 per cent to the wife and 55 per cent to the husband.
The Law
Part VIIIAB sets out the sections of the Family Law Act 1975 (Cth) (“the Act”) in relation to financial matters for de facto relationships.
The most relevant of the sections of the Act are as follows:
Section 90RD
Declarations about existence of de facto relationships
(1)If:
(a)an application is made for an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL; and
(b)a claim is made, in support of the application, that a de facto relationship existed between the applicant and another person;
the court may, for the purposes of those proceedings (the primary proceedings ), declare that a de facto relationship existed, or never existed, between those 2 persons.
(2)A declaration under subsection (1) of the existence of a de facto relationship may also declare any or all of the following:
(a)the period, or periods, of the de facto relationship for the purposes of paragraph 90SB(a);
(b)whether there is a child of the de facto relationship;
(c)whether one of the parties to the de facto relationship made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
(d)when the de facto relationship ended;
(e)where each of the parties to the de facto relationship was ordinarily resident during the de facto relationship.
Note: For child of a de facto relationship , see section 90RB.
Section 90SB
When this Division applies--length of relationship etc.
A court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b)that there is a child of the de facto relationship; or
(c)that:
(i) the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii) a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
Section 90SM
Alteration of property interests
(1)In property settlement proceedings after the breakdown of a de facto relationship, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the de facto relationship or either of them--altering the interests of the parties to the de facto relationship in the property; or
(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the de facto relationship--altering the interests of the bankruptcy trustee in the vested bankruptcy property;
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the de facto relationship; or
(ii) the relevant bankruptcy trustee (if any);
to make, for the benefit of either or both of the parties to the de facto relationship or a child of the de facto relationship, such settlement or transfer of property as the court determines.
Note 1: The geographical requirement in section 90SK must be satisfied.
Note 2: The court must be satisfied of at least one of the matters in section 90SB.
Note 3: For child of a de facto relationship , see section 90RB.
(2)If a party to the de facto relationship dies after the breakdown of the de facto relationship, an order made under subsection (1) in property settlement proceedings may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(3)The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(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 children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
(5)Without limiting the power of any court to grant an adjournment in proceedings under this Act, if, in property settlement proceedings in relation to the parties to a de facto relationship, a court is of the opinion:
(a)that there is likely to be a significant change in the financial circumstances of the parties to the de facto relationship or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b)that an order that the court could make with respect to:
(i) the property of the parties to the de facto relationship or either of them; or
(ii) the vested bankruptcy property in relation to a bankrupt de facto party to the de facto relationship;
if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the de facto relationship than an order that the court could make immediately with respect to:
(iii) the property of the parties to the de facto relationship or either of them; or
(iv) the vested bankruptcy property in relation to a bankrupt party to the de facto relationship;
the court may, if so requested by either party to the de facto relationship or the relevant bankruptcy trustee (if any), adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the de facto relationship or the relevant bankruptcy trustee, as the case may be, applies for the proceedings to be determined, but nothing in this subsection requires the court to adjourn any proceedings in any particular circumstances.
(6)If a court proposes to adjourn proceedings as provided by subsection (5), the court may, before so adjourning the proceedings, make such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to:
(a)any of the property of the parties to the de facto relationship or of either of them; or
(b)any of the vested bankruptcy property in relation to a bankrupt party to the de facto relationship.
(7)The court may, in forming an opinion for the purposes of subsection (5) as to whether there is likely to be a significant change in the financial circumstances of either or both of the parties to the de facto relationship, have regard to any change in the financial circumstances of a party to the de facto relationship that may occur by reason that the party to the de facto relationship:
(a)is a contributor to a superannuation fund or scheme, or participates in any scheme or arrangement that is in the nature of a superannuation scheme; or
(b)may become entitled to property as the result of the exercise in his or her favour, by the trustee of a discretionary trust, of a power to distribute trust property;
but nothing in this subsection limits the circumstances in which the court may form the opinion that there is likely to be a significant change in the financial circumstances of a party to the de facto relationship.
(8)If a party to the de facto relationship dies after the breakdown of the de facto relationship, but before property settlement proceedings are completed:
(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable Rules of Court may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and
(b)if the court is of the opinion:
(i) that it would have made an order with respect to property if the deceased party had not died; and
(ii) that it is still appropriate to make an order with respect to property;
the court may make such order as it considers appropriate with respect to:
(iii) any of the property of the parties to the de facto relationship or either of them; or
(iv) any of the vested bankruptcy property in relation to a bankrupt de facto party to the de facto relationship; and
(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.
(9)The Family Court must not make an order under this section in property settlement proceedings (other than an order until further order or an order made with the consent of all the parties to the proceedings) unless:
(a)the parties to the proceedings have attended a conference in relation to the matter to which the proceedings relate with a Registrar or Deputy Registrar of the Family Court; or
(b)the court is satisfied that, having regard to the need to make an order urgently, or to any other special circumstance, it is appropriate to make the order notwithstanding that the parties to the proceedings have not attended a conference as mentioned in paragraph (a); or
(c)the court is satisfied that it is not practicable to require the parties to the proceedings to attend a conference as mentioned in paragraph (a).
(10)The following are entitled to become a party to proceedings in which an application is made for an order under this section by a party to a de facto relationship (the subject de facto relationship ):
(a)a creditor of a party to the proceedings if the creditor may not be able to recover his or her debt if the order were made;
(b)a person:
(i) who is a party to a de facto relationship (the other de facto relationship ) with a party to the subject de facto relationship; and
(ii) who could apply, or has an application pending, for an order under section 90SM, or a declaration under section 90SL, in relation to the other de facto relationship;
(c)a person who is a party to a Part VIIIAB financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(d)a person:
(i) who is a party to a marriage with a party to the subject de facto relationship; and
(ii) who could apply, or has an application pending, for an order under section 79, or a declaration under section 78, in relation to the marriage (or void marriage);
(e)a person who is a party to a financial agreement (that is binding on the person) with a party to the subject de facto relationship;
(f)any other person whose interests would be affected by the making of the order.
(11)Subsection (10) does not apply to a creditor of a party to the proceedings:
(a)if the party is a bankrupt--to the extent to which the debt is a provable debt (within the meaning of the Bankruptcy Act 1966 ); or
(b)if the party is a debtor subject to a personal insolvency agreement--to the extent to which the debt is covered by the personal insolvency agreement.
(12)If a person becomes a party to proceedings under this section because of paragraph (10)(b), the person may, in the proceedings, apply for:
(a)an order under section 90SM; or
(b)a declaration under section 90SL;
in relation to the other de facto relationship described in that paragraph.
(13)If a person becomes a party to proceedings under this section because of paragraph (10)(d), the person may, in the proceedings, apply for:
(a)an order under section 79; or
(b)a declaration under section 78;
in relation to the marriage (or void marriage) described in that paragraph.
(14)If:
(a)an application is made for an order under this section in proceedings between the parties to a de facto relationship with respect to the property of the parties to the de facto relationship or either of them; and
(b)either of the following subparagraphs apply to a party to the de facto relationship:
(i) when the application was made, the party was a bankrupt;
(ii) after the application was made but before it is finally determined, the party became a bankrupt; and
(c)the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the bankrupt's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the bankruptcy trustee as a party to the proceedings.
(15)If a bankruptcy trustee is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the bankrupt party to the de facto relationship is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.
(16)The court must not grant leave under subsection (15) unless the court is satisfied that there are exceptional circumstances.
(17)If:
(a)an application is made for an order under this section in proceedings between the parties to a de facto relationship with respect to the property of the parties to the de facto relationship or either of them; and
(b)either of the following subparagraphs apply to a party to the de facto relationship (the debtor party ):
(i) when the application was made, the party was a debtor subject to a personal insolvency agreement;
(ii) after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and
(c)the trustee of the agreement applies to the court to be joined as a party to the proceedings; and
(d)the court is satisfied that the interests of the debtor party's creditors may be affected by the making of an order under this section in the proceedings;
the court must join the trustee of the agreement as a party to the proceedings.
(18)If the trustee of a personal insolvency agreement is a party to property settlement proceedings in relation to the parties to a de facto relationship, then, except with the leave of the court, the party to the de facto relationship who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.
(19)The court must not grant leave under subsection (18) unless the court is satisfied that there are exceptional circumstances.
(20)For the purposes of subsections (14) and (17), an application for an order under this section is taken to be finally determined when:
(a)the application is withdrawn or dismissed; or
(b)an order (other than an interim order) is made as a result of the application.
Section 90SS
General powers of court
General powers
(1)The court, in exercising its powers under this Division, may do any or all of the following:
(a)order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
(c)order that a specified transfer or settlement of property be made by way of maintenance for a party to a de facto relationship;
(d)order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;
(e)order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(f)appoint or remove trustees;
(g)order that payments be made direct to a party to the de facto relationship, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the de facto relationship;
(h)make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;
(i)impose terms and conditions;
(j)make an order by consent;
(k)make any other order, or grant any other injunction, (whether or not of the same nature as those mentioned in the preceding paragraphs of this section) which it thinks it is necessary to make to do justice;
(l)subject to this Act and the applicable Rules of Court, make an order under this Division at any time before or after the making of a decree under another provision of this Act.
Note: The court also has specific powers in relation to third parties (see Division 3 of Part VIIIAA (as that Division has effect because of section 90TA)).
Limitation for orders or injunctions covered by section 90AF
(2)Subsection (1) has effect subject to subsection 90AF(3) (as that subsection has effect because of section 90TA).
Note: An order or injunction made or granted under subsection (1) that is of a kind covered by subsection 90AF(1) or (2) can only be made or granted in accordance with subsection 90AF(3).
Maintenance orders
(3)The making of an order of a kind referred to in paragraph (1)(c), or of any other order under this Division, in relation to the maintenance of a party to a de facto relationship does not prevent a court from making a subsequent order in relation to the maintenance of the party.
(4)The applicable Rules of Court may make provision with respect to the making of orders under this Division in relation to the maintenance of parties to de facto relationships (whether as to their form or otherwise) for the purpose of facilitating their enforcement and the collection of maintenance payable under them.
Injunctions
(5)Without limiting paragraph (1)(k), the court may:
(a)grant:
(i) an interlocutory injunction; or
(ii) an injunction in aid of the enforcement of a decree;
in any case in which it appears to the court to be just or convenient to do so; and
(b)grant an injunction either unconditionally or upon such terms and conditions as the court considers appropriate.
Bankruptcy and insolvency
(6)If a bankruptcy trustee is a party to a proceeding before the court, the court may make an order under paragraph (1)(e) directed to the bankrupt.
(7)If the trustee of a personal insolvency agreement is a party to a proceeding before the court, the court may make an order under paragraph (1)(e) directed to the debtor subject to the agreement.
(8)Subsections (6) and (7) do not limit paragraph (1)(e).
(9)If a party to a de facto relationship is a bankrupt, a court may, on the application of the other party to the de facto relationship, by interlocutory order, grant an injunction under subsection (1) restraining the bankruptcy trustee from declaring and distributing dividends amongst the bankrupt's creditors.
(10)If a party to a de facto relationship is a debtor subject to a personal insolvency agreement, a court may, on the application of the other party to the de facto relationship, by interlocutory order, grant an injunction under subsection (1) restraining the trustee of the agreement from disposing of (whether by sale, gift or otherwise) property subject to the agreement.
(11)Subsections (9) and (10) do not limit subsections (1) and (5).
Section 90ST
Duty of court to end financial relations
In proceedings under this Division, other than proceedings under section 90SL, the court must, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the de facto relationship and avoid further proceedings between them.
Section 90SM is similar to the provisions of s 79 of the Act which deals with the alteration of property interests of persons who have been married.
Due to the similarity of s 90SM and s 79 the principles of the High Court decision of Stanford v Stanford (2012) 247 CLR 108 are applicable. It is therefore evidence “identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property” (paragraph 37) and in accordance with the provisions of s 90SM(4) determine whether it is just and equitable to make property adjustment orders at all. If so, then it is necessary to consider the adjustments to be made following the provisions of s 90SM(4), (including the consideration of the contributions made by the parties, the effect of any order on the earning capacity of the parties and consideration of the matters in s 90SF(3)).
Pursuant to the Commonwealth Powers (De Facto Relationships) Act 2009 (SA) and the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth), 10 December 2009 is the date on which the de facto legislation commenced for people residing in SA.
Relevant background
The husband was born in 1955. The wife was born in 1961. In 1985 the husband and his sister purchased a property at Suburb K for $175,000.
The parties have children from other relationships. The husband’s son, Mr L, was born in 1991, his son, Mr M was born in 1983. The wife’s son, Mr N was born in 1985. The husband’s daughter, Ms O, was born in 1987.
In 1998 the wife commenced work at the gym centre. The wife maintains that after meeting in 1998, the parties commenced a relationship. The husband concedes that the wife started working at P Pty Ltd part-time during or around 1998.
In 1999 the husband purchased the business of P Pty Ltd in the name of the Condie Family Trust. The husband maintains that he borrowed the money, secured on a property which was then jointly owned with his then de facto wife, Ms Q, and from an overdraft.
It is alleged by the wife that the parties commenced living together in 1999. The husband does not accept that the de facto marriage relationship began at that time.
Subsequently, both parties purchased properties and borrowed funds.
The parties also purchased together the property at I Street, Suburb J in 2005.
Over a period the wife worked part-time at the gym and also at the RSPCA.
In 2007 the wife ceased working at P Pty Ltd and commenced working for the RSPCA full-time.
The wife alleges that in February 2008 the parties separated for approximately nine months and reconciled in November 2008.
The husband alleges that the parties “parted company” for twelve months at the end of 2007.
It is conceded that by the end of 2008 the parties were living together. The husband alleges that in November 2008 the cohabitation of the parties commenced. The wife alleges that the cohabitation resumed at this time.
Towards the end of the parties’ relationship the wife underwent training and became a massage therapist. Thereafter, she worked both as a massage therapist at P Pty Ltd or at the home.
The parties agree that cohabitation ceased in December 2010, although the parties continued to reside under the same roof until the wife left the Suburb D premises in February 2011. By then the husband had commenced the proceedings.
Each of the parties rely upon a detailed history of the sale and purchase of real estate properties and businesses, together with details of the borrowings and arrangements made to fund the various purchases and enterprises.
Significant Issues
The significant issues to be determined in this matter relate to the nature of the parties’ relationship at particular times and primarily whether the de facto relationship as husband and wife existed before November 2008. There is a significant difference of approximately eight years. The date is also significant in determining the assets of the parties owned at the time of the commencement of the de facto relationship.
Assessment of evidence of parties and their witnesses
(a) The husband’s evidence
The husband relied upon his affidavit and gave oral evidence. He was cross-examined at length. The particulars of the relationship between himself and the wife were basically consistent with his affidavit. His evidence concerning particulars in the financial accounts, including significant loan accounts, was unreliable.
During cross-examination he gave evidence about paying the wife cash. He said that he did this because she was his girlfriend and was happy to help her out. He claimed that the $320 per week cash that the wife was paid was not recorded and that it “just came out of” his drawings. He claimed that he was paying her cash in this way from 2001/2002 until 2007. He conceded that he had not been paying any superannuation on behalf of the wife whilst she was an employee of his business.
Also when questioned about the property at Suburb J which in 2005 was in the joint names of the husband and wife, he claimed that he was not aware that if he had died she would have received the whole property and not form part of his estate.
In his cross-examination he explained the arrangement with Ms R on the basis that although she was only being paid $300 per week over a considerable period of time, he had “offered her a third of the business if she stayed”. He described her as a “silent-partner” and that she had been a third owner since 1999. He admitted that this had not been recorded in any shareholding and that Mr S, the valuer of the business, had not been told that the husband only owned two-thirds. His explanation was that the arrangement was not in writing so they could “leave it as it is”. He denied that he had “sold” a share of the business and claimed that it was given to her. He admitted that she was still entered as an employee in the records of the business and that to his knowledge she was not paying any tax on one-third profit. When asked who else knew about this arrangement, he said “nobody”.
He also conceded during his cross-examination that the legal costs in relation to the de facto property settlement proceedings had been debited as to 50 per cent business expenses.
The husband’s evidence about how expenses were debited to the business and how his drawings were treated confirmed that the books of accounts did not accurately set out the financial transactions. The Court is therefore unable to rely on those documents.
The husband admitted that the list of wage earners for the business disclosed Ms O (the husband’s daughter) as earning $20 per hour. When questioned about this he said “I can see that is an error”.
The husband relied upon the evidence of several witnesses.
(b) Mr T (a former neighbour);
Mr T’s evidence did not strongly support the claims of either party. His evidence was that he saw the wife’s car as often as he saw the husband’s car at the neighbouring property.
(c) Ms R (Manager P Pty Ltd)
Ms R was the Manager over a considerable period of time that the wife claimed the parties were in a de facto relationship. During her evidence it became apparent that she was now claiming to have a one-third interest in the business. She claimed that this had been kept “secret”. When cross-examined about her wages and receipt of one-third of the income over a considerable period, she was very hesitant.
When Ms R was recalled and further cross-examined about tax returns and disclosure of her claim to be entitled to one-third partnership, her evidence was inconsistent with previous claims by the husband and the failure by the husband to mention the partnership relationship with Ms R.
Ms R claimed that she had had a third interest since 1999, but it was “not official” and there was no document to support it. She looked uncomfortable when giving her evidence. She also conceded that she was treated as an employee and that she had not told anyone else about her one-third interest in the business other than her husband. She also claimed to be unaware that the husband had used the business funds to purchase properties and to pay the legal fees in relation to the proceedings between the husband and wife.
Ms R was a very unreliable witness. Considering her evidence in particular the late disclosure of the alleged one-third interest in the business, her evidence could not be considered reliable.
(d) Ms U
Ms U gave evidence. She is a physiotherapist who worked occasionally at the business. Her evidence was not significantly challenged.
(e) Ms Q
Ms Q is the husband’s former de facto wife. Her evidence supported the husband’s claim that the husband and wife in these proceedings were not in a de facto relationship until they commenced living together at Suburb D.
(f) Ms O Condie
The husband relied upon the evidence of his adult daughter Ms O Condie. Her evidence supported her father’s claim concerning the relationship with the wife. During cross-examination she maintained that she carried out bookwork for the gym, but was not paid for it. She denied receiving any cash.
(g) Mr V
Another witness was Mr V, a tradesman. His evidence was not challenged to any extent in cross-examination.
(h) Mr L Condie
The husband’s son Mr L Condie also gave evidence. Again, he appeared to be a straight-forward witness who was not significantly challenged in cross-examination. His evidence should be seen in the context of him being a supporter of his father.
Mr W
Under cross-examination, Mr W was not significantly challenged. He referred to collecting the cash and providing it to others to bank.
(j) Mr X
Mr X gave evidence about the connections between the various entities of the husband. He confirmed that the legal expenses which are claimed in the accounts were “predominantly” costs in relation to these proceedings.
(a)The wife’s evidence
The wife was cross-examined in detail. Some of the inconsistencies in her evidence related to the addresses she gave as her residence to various government departments and other authorities, such as insurers and banks.
The other witnesses called to support the wife’s case were not able to give evidence that was significant in determining the nature of the relationship, or the length of the relationship, other than that to a certain extent they supported the wife’s case that the parties were in a relationship. This did not necessarily assist in determining whether it was a de facto relationship at the relevant time which falls within the necessary definition in the legislation.
Conclusions
The difficulty in this matter is that I accept the submissions on behalf of the wife that the evidence of the husband and Ms R in particular, was evidence upon which the Court can place little weight. There were significant contradictions in the evidence given by the husband and Ms R in relation to cash dealings. There were significant changes in their evidence about the business entities and how the income and expenses were recorded.
Nonetheless, there are also difficulties in accepting all of the evidence of the wife in relation to the nature of the relationship prior to November 2008. It is accepted that the wife worked at the gym and was involved in the business to a certain extent over a period of years. This does not establish however that the relationship falls within the appropriate category of a de facto partner during the whole period claimed by the wife.
On some of the matters I accept the evidence of the wife and her witnesses. In particular, I accept the evidence of Ms Y, who referred to the wife rejecting the husband’s offer of marriage.
Discussion of evidence and findings
The definition and meaning of de facto relationship is set out in s 4AA. In particular s 4AA(i)(c) which states “having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.”
Under the heading “working out if persons have a relationship as a couple” sub-section (2) states:
(2)Those circumstances may include any or all of the following:
(a)the duration of the relationship;
(b)the nature and extent of their common residence;
(c)whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e)the ownership, use and acquisition of their property;
(f)the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h)the care and support of children;
(i)the reputation and public aspects of the relationship.
(a) the duration of the relationship. The husband concedes that there was a de facto relationship from November 2008 until separation in December 2010. The dispute however relates to the period before that in which the wife claims that the parties were in a de facto relationship at least from the year 2000 until 2010.
(b) the nature and extent of their common residence. There is sufficient evidence to indicate that the parties kept separate homes and did not maintain one “common residence” throughout the period 2000 to 2010. The extent of their “common residence” was according to the wife, on a few nights each week prior to November 2008.
(c) whether a sexual relationship exists. The parties concede that a sexual relationship existed throughout the period from 2000 to 2010, save and except for the short period of separation.
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them. The wife received financial support from the husband, both by way of paid salary and further sums by way of cash. She did not receive superannuation, but did receive support from the husband in relation to purchasing properties and borrowed funds.
The evidence however is contradicted by the wife claiming Social Security benefits at times when she claimed to be in a relationship with the husband.
(e) the ownership, use and acquisition of their property. It is conceded that the parties purchased a property together and assisted each other in that way financially. That however is not sufficient on its own to establish the de facto relationship. It is unusual however that the property was purchased in joint names of the parties with survivorship to pass to the other party.
(f) the degree of mutual commitment to a shared life. There appears to be some indication that there was a shared life and certainly on some social occasions however there is little evidence to support any finding that there was a significant degree of mutual commitment to a shared life.
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship. The relationship was not registered.
(h) the care and support of children. The wife’s evidence made it clear that she took considerable effort to ensure that her son had limited contact with the husband. I accept the evidence of the husband’s children that they also had limited contact and limited care and support from the wife. I accept that the husband did provide support for Mr N financially.
(i) the reputation and public aspects of the relationship. I accept the evidence that the parties attended various social functions together. At times they were described as “boyfriend and girlfriend” and at other times described each other as “partners”.
Subsections 4AA (3) and (4) state:
(3)No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
In summary therefore I accept the evidence indicates the parties had an ongoing sexual relationship, the wife slept at the husband’s home and shared accommodation with him several nights a week over an extended period.
I accept the evidence that the wife maintained her own home at the I Street property, leaving all of her personal belongings, furniture and clothing at the I Street property until 2008 and only maintaining a limited amount of her personal possessions at the husband’s home when she slept there.
The evidence of the witnesses to a large extent indicates that the relationship between the parties was thought to be one of “boyfriend” or “girlfriend” or a close personal relationship rather than as a committed de facto partnership at the earlier dates.
In considering these dates it must be borne in mind, however, that although the parties were not in a de facto relationship at the earlier dates, they were certainly in an emotional and sexual relationship from at least 2000.
Apart from the property that was purchased jointly, there were significant efforts made to keep the financial dealings of each of the parties separate.
The separate finances maintained during the relationship was a factor which applied to the whole of the period from 2000 until the final separation in 2010 save and except for the period when the parties contributed equally to grocery expenses.
Assets and Liabilities
There was little dispute about the value of assets, or the assets to be brought into account. The list of the assets and liabilities and superannuation to be brought into account is as follows:
Husband’s Assets
| Description | $ | |
| 1 | Z Pty Ltd net proceeds | $41,646.00 |
| 2 | P Pty Ltd & Z Pty Ltd | $143,102.00 |
| 3 | Suburb D (registered in wife’s name but to be retained by husband) | $1,000,000.00 |
| 4 | 4WD motor vehicle | $15,000.00 |
| 5 | Furniture & household belongings at Suburb D | $9,115.00 |
| 6 | Westpac shares | $9,373.00 |
| Total: | $1,218,236.00 | |
| Wife’s Assets | ||
| 8 | I Street, Suburb J | $350,000.00 |
| 9 | Motor vehicle | $7,500.00 |
| 10 | BHP shares | $11,000.00 |
| 11 | Massage business | $50.00 |
| 12 | Household contents at I Street | $500.00 |
| 13 | Jewellery | $1,550.00 |
| Total: | $370,600.00 | |
| Total Assets Husband and Wife | $1,588,836.00 | |
| Liabilities | ||
| 14 | Husband Loan over Suburb D | $394,398.00 |
| 15 | Wife mortgage over I Street | $81,493.00 |
| Total | $475,891.00 | |
| Total Net non-superannuation assets | $1,112,945.00 | |
| Superannuation | ||
| 16 | Husband Condie Superannuation Fund (including F Street, Suburb H) | $1,217,560.00 |
| 17 | Wife’s AMP Superannuation | $3,801.00 |
Discussion and findings
Although the parties were in a relationship for many years the relationship did not qualify as a de facto relationship until approximately November 2008. The parties lived together as a de facto couple from November 2008 until the separation in December 2010. There was no issue taken as to the requirements of the length or geographical requirements, such that the provisions of the amendments to the Act are agreed to apply to this couple.
I accept the contention of the husband that the husband owned substantial property which he had acquired before the de facto relationship began. I also accept that the evidence indicates that the parties were in a relationship (if not a de facto relationship) for a considerable period of time commencing in about the year 2000. During the period 2000 to 2008 whilst the parties were in a relationship (but not a de facto relationship) the husband acquired substantial property. The property acquired and retained by the husband after 2008, was acquired by borrowings or from monies acquired from the sale of previously owned properties.
What is significant is that during the period of the de facto relationship the property at C Street, Suburb D was purchased in August 2009 for $1.2 M. The husband provided the initial equity and thereafter serviced the mortgage and other outgoings.
I also accept the evidence of the wife and her witnesses (rather than the evidence of the husband and his witnesses) that the wife made a valuable contribution to the businesses carried on by the husband, with very small recompense and no superannuation, whilst the husband acquired significant assets and substantial superannuation.
The provisions of s 90SB have been satisfied.
The provisions of s 90SM (3) require that the Court must not make an order unless it is satisfied in all the circumstances that it is just and equitable to make the order. Applying the principles of Stanford v Stanford (Supra), I am satisfied that it is just and equitable to make an order in these proceedings, particularly because of the ownership of the Suburb D property and the understanding that this property is to pass from the wife’s name into the husband’s name.
The provisions of s 90SM (4) are taken into account as follows:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them;
I accept that the evidence indicates that the husband has made a significant financial contribution directly to the acquisition, conservation and improvement of the assets, being the property which he has retained. I also accept the evidence of the wife that she has made an indirect financial contribution to the acquisition, conservation and improvement of those assets in that she has worked in the businesses from time to time, and in particular, has assisted indirectly having the Suburb D property registered in her name.
The husband has reduced the mortgage over the Suburb D property by approximately $25,000.
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them;
The wife has made only a limited non-financial contribution to the acquisition, conservation or improvement of the assets of the property of the husband.
(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 children of the de facto relationship, including any contribution made in the capacity of homemaker or parent;
There was limited contribution made by either of the parties to the care and welfare of the children of the other party. The wife made a significant contribution to household of the parties when they were living in a de facto relationship. On previous occasions she also assisted in the capacity as homemaker. However it is the contribution made by the wife during the de facto relationship which is to be considered and not any prior contribution in any homemaker role before the de facto relationship commenced.
The other matters to be brought into account are the matters referred to in 90SF (3) so far as they are relevant.
(a)The age and state of health of the parties
The husband is aged 59 and the wife 53. Both parties have a capacity to continue employment, although the wife suffers from anxiety and depression.
(b)The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
The husband drew a regular income from the business. The wife’s income is less. The significant assets of value are held by the husband.
The husband continues to enjoy good health and has an ongoing capacity for appropriate gainful employment. As previously indicated the wife claimed to suffer from anxiety and depression. She has completed training as a massage therapist and planned to return to full-time work in the near future. The wife was receiving Newstart Allowance.
(c)Whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d)Commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
Neither party has the care or control of a child or a child to support.
The husband claimed to have significant expenses each week. The wife claimed a smaller amount. These factors are not significant in determining this matter.
(e) the responsibilities of either party to support any other person;
Neither party has any obligation to support any other person.
(f)subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
As set out above the wife was receiving the Newstart Allowance of $247 per week which would cease upon her obtaining appropriate employment.
(g)a standard of living that in all the circumstances is reasonable;
Taking into account the standard of living the parties enjoyed whilst in a de facto relationship it is clear that the wife will not be able to maintain that standard of living until she obtains further employment.
(k)the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The Court has accepted that the de facto relationship existed for a short time, being slightly more than two years. The duration of the relationship, whether it was two years, or as the wife claims longer, has not affected the earning capacity of either of the parties.
Save and except sub-section (r), the other sub-sections are not relevant in this matter.
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Although the Court has found that the de facto relationship did not formally come into existence in accordance with the provisions of the legislation until November 2008, the Court has also accepted the evidence that the parties were in a relationship since at least 2000. The parties purchased a property together in 2005. The wife worked in the husband’s business for a considerable period of time.
Summary
Taking all of the factors into account I am satisfied that it is just and equitable and appropriate to allocate to the wife 30 per cent of the net assets of non-superannuation.
It is also just and equitable to make a further adjustment of the assets based upon a figure which represents 20 per cent of the total superannuation investments of the parties. This is not to be a splitting order. The husband will retain the substantial superannuation benefits and an adjustment should be made of the other assets.
Considering all of the factors and considering the evidence and the findings in relation to all relevant factors it is just and equitable that the wife received 30 per cent of the non-superannuation assets and a further adjustment representing the equivalent figure of 20 per cent of the superannuation investments.
The net assets figure to be brought into account is $1,112,945. Thirty per cent of this is $333,883.50. The wife is to retain $311,480 which will require a further payment by the husband to her of $22,403.50. The total superannuation is $1,221,361. Twenty per cent of this is an amount of $244,272. Of this the wife already retains her superannuation of $3,801, leaving a net figure of $240,471 added to which is the $22,403.50 making a total of $262,874.50.
I therefore consider it is appropriate, just and equitable in all of the circumstances that the husband retain his assets and that the wife transfer the Suburb D property to him upon payment by him of $263,000 (rounded up). This is on the basis that each party retain the other assets in their possession and that the husband discharge the mortgage over the Suburb D property and indemnify the wife in relation to any other debts.
For the above reasons I make the orders commencing on page 2 of the judgment.
I certify that the preceding one hundred and seven (107) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 25 July 2014.
Associate:
Date: 25 July 2014
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Remedies
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Constructive Trust
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