Dalli v Dragovic

[2004] NSWSC 1033

Reported Decision: (2004) DFC 95-301

Supreme Court

CITATION:	Dalli v Dragovic [2004] NSWSC 1033
HEARING DATE(S):	15, 16 and 17 March, 9, 10 and 11 August 2004
JUDGMENT DATE:	5 November 2004
JURISDICTION:	Equity Division
JUDGMENT OF:	Master McLaughlin at 1
DECISION:	(1). I order that the suit be dismissed. (2). I order that the cross-claim be dismissed. (3). I make no order as to costs, to the intent that each party will bear her or his own costs of the proceedings. (4). The exhibits may be returned.
CATCHWORDS:	Family Law. - De facto relationship. - Disputed date of commencement and disputed date of termination of de facto relationship. - Adjustment of interests of parties in property. Respective contributions of parties. - Defendant during relationship acquired substantial assets by inheritance. - Effect of those assets upon claim by Plaintiff. - Caution should be exercised in applying to a claim by a de facto partner under section 20 of the Property (Relationships) Act 1984 (New South Wales) the principles which the Family Court of Australia applies to applications under section 79 of the Family Law Act 1975 (Commonwealth). - The Property (Relationships) Act looks to past contributions whereas the Family Law Act looks also to present and future needs. - In exercising its discretion under section 20(1) of the Property (Relationships) Act the Court should not be diverted from the clear words of the statute.
LEGISLATION CITED:	Family Law Act 1975 (Commonwealth) Property (Relationships) Act 1984 (New South Wales).
CASES CITED:	Black v Black (1991) 15 FamLR 109 Davey v Lee (1990) 13 FamLR 688 Ngyuen v Schieff (2002) 29 FamLR 177 Parker v Parker (1993) 16 FamLR 863 Powell v Supresencia (2003) 30 FamLR 463 Evans v Marmont (1997) 42 NSWLR 70 Green v Robertson (1995) 36 NSWLR 96 Jones v Grech [2001] NSWCA 208 Mathieson v Wallis [2001] NSWSC 931 Roy v Sturgeon (1986) 11 NSWLR 454 Sullman v Sullman [2002] NSWSC 169 Wallace v Stanford (1995) 37 NSWLR 1 Wallis v Mathieson [2002] NSWCA 350
PARTIES :	Constance Therese Dalli (Plaintiff) Joseph Rudolph Dragovic (Defendant)
FILE NUMBER(S):	SC 2896 of 2001
COUNSEL:	Mr. T. Hodgson (Plaintiff) Mr. P. Friedlander (Defendant)
SOLICITORS:	Edgington & Alfonso (Plaintiff) Wight & Strickland (Defendant)

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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER McLAUGHLIN

Friday, 5 November 2004

2896/01 CONSTANCE THERESE DALLI -v- JOSEPH RUDOLPH DRAGOVIC

JUDGMENT

1 MASTER: These are proceedings under the Property (Relationships) Act 1984.

2 By statement of claim filed on 1 June 2001, the Plaintiff, Constance Therese Dalli, claims a declaration that a de facto relationship existed between herself and the Defendant, Joseph Rudolph Dragovic; an order pursuant to section 20 of the Property (Relationships) Act that the Defendant within a specified period pay to the Plaintiff the sum of $1,000,000; and consequential relief.

3 A defence to that statement of claim was filed by the Defendant on 20 September 2001. By that defence, the Defendant does not oppose the making of a declaration of the nature claimed by the Plaintiff, but opposes the other items of relief claimed by her. By a cross-claim, also filed by the Defendant on 20 September 2001, the Defendant claims a declaration that a de facto relationship existed between the parties; an order pursuant to section 20 of the Property (Relationships) Act that within a specified period the Plaintiff pay to the Defendant the sum of $80,000; and consequential relief.

4 It should here be recorded that, despite the claim by the Plaintiff for payment of $1,000,000 in her statement of claim, and the claim by the Defendant for the payment of $80,000 in his cross-claim, neither party at the conclusion of the hearing sought relief of the nature claimed by that party in the pleadings as filed.

5 Although each party is desirous that the Court should make a declaration that a de facto relationship existed between them, there was considerable dispute as to the date of the commencement and the date of the termination of that relationship. The Plaintiff said that it commenced in or about 1987, whilst the Defendant said that it did not commence until July 1991. Further, it was the assertion of the Plaintiff that the relationship terminated on 24 July 1999, whilst the Defendant said that the relationship terminated on or about 4 November 1998. That is, it is the case for the Plaintiff that the relationship obtained for about twelve years, whilst it is the case for the Defendant that the relationship obtained for only a little more than seven years. It will be necessary in due course to resolve that issue between the parties.

6 The Plaintiff was born on 31 January 1951 and is presently aged 53 years, whilst the Defendant was born on 15 March 1946 and is presently aged 58 years. According to the Plaintiff, the parties met in 1987. She said that at the time when she met the Defendant she was married to, but estranged from, her husband, although they were still living under the same roof. It was the Defendant’s evidence that the parties met at a singles function on 8 November 1986, at which time the Plaintiff was still living with her husband and their two children in their matrimonial home at Coolangatta Avenue, Elanora Heights. By her marriage, the Plaintiff had two children, being Adam (born on 31 March 1971) and Monique (born on 20 July 1983). It is more likely that the Defendant is correct in ascribing a date in 1986 to the first meeting of the parties, since the Plaintiff and her husband divorced in January 1987.

7 In June of that year the Plaintiff acquired a house property at 4 Mactier Street, Narrabeen, in which she then commenced to reside with her two children. The purchase of that property was financed by way of a home loan from the Commonwealth Bank of $41,000 and a personal loan from the Commonwealth Bank of $18,300. The Defendant described the Narrabeen property as being “an old weekend property, being a run down house on a block of land at Narrabeen”.

8 At the time when they met the Defendant was residing in a house property situate at and known as 196A Garden Street, Warriewood (which he had purchased from his father in 1978). At that time the Plaintiff was employed as a machinist by Sports Magic at Manly Vale, working four and half days a week. In addition, she was receiving child support of $50 a week from her husband until each of her children attained the age of sixteen years. According to the Defendant, he was at that time, employed as a casual contract tiler by Upton Constructions, averaging four days a week and earning about $600 a week. The Defendant’s father had died in 1981, leaving a life interest in a number of pieces of real estate to the Defendant’s mother, with the interest in remainder to the Defendant.

9 Throughout the period from their first meeting (in 1986 or 1987) until at least the second half of 1990 the Plaintiff and the Defendant each maintained their separate residences, the Plaintiff at 4 Mactier Street, Narrabeen, and the Defendant at 196A Garden Street, Warriewood.

10 In support of her assertion that the de facto relationship commenced in 1987, before she moved into residence with the Defendant at Garden Street, Warriewood (and, indeed, in support of her assertion that the parties on or about 14 August 1987 engaged to marry), the Plaintiff relied upon a notice published in the Manly Daily on 14 August 1987. The circumstances concerning the publication of that notice were somewhat obscure. Although the Plaintiff asserted that that was an engagement notice placed by her for publication in the Manly Daily, the notice appears under the heading “Congratulations” and not under the separate heading “Engagements”. The notice is in the following terms

CONNIE & JOSEPH – Congratulations for August 14, 1987. Happiness for the future from the gang at work.

11 The Plaintiff offered an explanation concerning that notice, which, so far as I could gather, was that, essentially, the notice was published in order to steer off a former girlfriend of the Defendant, who was alleging that the Defendant was the father of her child. The Defendant himself denied that the notice had been published with his authority. The notice is not, neither does it purport to be, an engagement notice. The significance of the date 14 August 1987 does not emerge from the evidence. The notice certainly does not persuade me that the parties, either in August 1987 or at any other time, engaged to marry.

12 Since the parties were at the time residing in different residences, although each appears to have had what might be described as visiting rights to the residence of the other (the Defendant, however, denied the Plaintiff’s assertion that each had keys to the other’s residence), I am not persuaded that the notice published in the Manly Daily supports in any way the Plaintiff’s contention that the de facto relationship commenced before she and Monique moved into residence with the Defendant at his Warriewood home.

13 The Plaintiff fell pregnant to the Defendant in the latter part of 1988. In January 1989, the Plaintiff (according to her, at the request of the Defendant) underwent an abortion at Delmar Hospital. She suffered serious physical complications consequent upon that procedure, and on the following day the Plaintiff was admitted to the Mona Vale Hospital, where she underwent further procedures to rectify those complications.

14 According to the Plaintiff, the Defendant told her in late 1989, that he wanted to have children. In 1990, the Plaintiff again became pregnant to the Defendant. It was the evidence of the Plaintiff that from that time the Plaintiff and her daughter Monique resided on a full-time basis at the Defendant’s Warriewood property. The Defendant did not dispute that the de facto relationship between himself and the Plaintiff commenced at the time when the Plaintiff and Monique moved into residence with him at the Warriewood property. However, it was the assertion of the Defendant in both his defence and his cross-claim that the relationship commenced in July 1991. Nevertheless, in his affidavit evidence the Defendant said that it was whilst the Plaintiff was in her late pregnancy, carrying Nikala, that she and Monique came to reside with the Defendant at the Garden Street residence. Since Nikala was born on 24 January 1991, the foregoing evidence of the Defendant would place the commencement of the de facto relationship in the second half of 1990, probably towards the end of 1990. The Plaintiff retained ownership of the Narrabeen property at Mactier Street, which subsequently was rented from her by her son Adam and a friend of his.

15 In determining the date of the commencement of the de facto relationship between the parties, it is relevant that from the time when they first met, probably in late 1996, until the Plaintiff and Monique moved into the Defendant’s residence on a full-time basis in the second half of 1990, the parties were not conducting an exclusive relationship. The Plaintiff was seeing several other gentlemen throughout that period, whilst the Defendant was seeing a number of lady friends.

16 As I have already observed, the Defendant disputed that the de facto relationship commenced in 1987, and asserted that it commenced only in mid-1991 (although, the Defendant’s own evidence suggested that the Plaintiff moved into residence at the Defendant’s Warriewood property in the second half of 1990, probably in late 1990).

17 Not only in respect to the financial arrangements between the parties during the period after the household was established at the Warriewood property, but also in respect to the date of commencement of the relationship, reliance was placed by the Defendant upon evidence given by the Plaintiff in proceedings at the Manly Local Court on 26 May 1992 in support of the Plaintiff’s application for an increase in the maintenance which her former husband was paying for their child Monique. A transcript of the evidence in that application was admitted into evidence in the present proceedings as Exhibit 6. In the course of her evidence before the Local Court the Plaintiff said that she had been living at Mactier Street for three years “prior to the relationship with Mr. Dragovic”. That would place the commencement of the relationship in the second half of 1990 (that date being consistent with the Plaintiff’s evidence that she and Monique moved into the Defendant’s residence at the time when in about mid-1990 she informed the Defendant that she was pregnant). It was the evidence of Monique that Nikala was born soon after she and the Plaintiff moved into the Defendant’s residence.

18 Upon the balance of probabilities I am satisfied that the de facto relationship between the parties commenced when the Plaintiff, together with her daughter, moved into the Defendant’s residence on a full-time basis, and that that event took place in the second half of 1990, probably towards the end of 1990.

19 In consequence of the death of the Defendant’s mother in October 1990, the Defendant became the owner of a number of pieces of real property and also received a cash amount (asserted by the Plaintiff to have been $142,500, but stated by the Defendant to have been only $88,416). In addition, the Defendant acquired from his mother’s estate a one quarter interest in a property situate at and known as 8/40 Boronia Street, Dee Why, and he later acquired from his three sisters their respective shares in that property, with the result that he became the sole owner of that property. Thereafter, a number of those properties were developed by the Defendant.

20 Subsequently a number of those properties were sold, those being the properties at Cavill Street, Harbord; Hawkesbury Avenue, Dee Why; Kempsey Close, Dee Why; Bonner Avenue, Manly; and Boronia Street, Dee Why. (For completeness, it should also be recorded that after the termination of the relationship the Defendant in 2001 acquired a one-half interest in a property at 16 Walana Crescent, Warriewood, of which the agreed value of the Defendant’s interest at the time of its acquisition was $475,000, and of which the agreed current value is $537,500.)

21 There was considerable dispute between the parties concerning the extent of the Plaintiff’s participation and involvement in those development projects. It was the case for the Plaintiff that she extensively participated in and was closely involved in those projects. The Defendant denied that assertion, it being the Defendant’s evidence that the Plaintiff’s participation or involvement therein was either non-existent or, at most, minimal.

22 A number of the properties were rented out by the Defendant. The Plaintiff asserts that she carried out work in relation to the Defendant’s property management and development business, which included banking, administration, bookkeeping, collecting and delivering keys, and liaising with property managers in relation to maintenance and rental issues. The foregoing involvement of the Plaintiff and the extent of her participation in such activities were disputed by the Defendant.

23 In October 1993, the parties acquired a shelf company, Halfilm Pty Limited, of which they became equal shareholders and directors. The purpose of the acquisition of that company was to facilitate the property development activities in which they were participating. For example, in December 1993 the company purchased a one-third interest in a property situate at 22 Edward Street, Narraweena. The parties, through that company, were involved in the subdivision and subsequent development of that property. According to the Plaintiff, not only did she, together with the Defendant, act as guarantor for funds borrowed to acquire the company’s share in that venture but the Plaintiff also selected the project home which was built on one of the lots into which the site was subdivided, and selected all interior and exterior finishes. The extent of that asserted involvement of the Plaintiff in that project was disputed by the Defendant.

24 In the following year the company purchased a property a 7 Undercliff Road, Harbord. Again the Plaintiff was a party (I gather as a guarantor) to the provision of the finance necessary for the development of that site. Again the Plaintiff asserted a close and significant involvement in that development, the extent of which was also disputed by the Defendant.

25 Halfilm Pty Limited was deregistered on 28 June 2000, after the termination of the de facto relationship between the parties.

26 On 24 January 1991, there was born to the Plaintiff and the Defendant a daughter Nikala Marie (who is presently aged 13). Following that birth the Plaintiff suffered complications for which she was on three occasions hospitalised during 1991.

27 It was the evidence of the Plaintiff that at the time of the commencement of the de facto relationship (which, according to her, commenced in 1987) her assets and liabilities were as follows.

28 The Plaintiff was the owner of a house property situate at and known as 4 Mactier Street, Narrabeen, a Bluebird motor vehicle (to which she ascribed a value of $10,000) and household furniture (to which she ascribed a value of $4,000). She also had an interest in a registered business known as Mega Sports (to which she ascribed a value of $1,500). It was the evidence of the Plaintiff that the Mactier Street property (which she had acquired in mid-1987) had at that time a value of $97,000. It was subject to a mortgage to the Commonwealth Bank in an amount of $40,000. In consequence, the Plaintiff’s equity in that property was about $57,000.

29 At the time of the commencement of cohabitation (which, it will be appreciated, was some three years after the date upon which the Plaintiff asserts the de fact relationship commenced) the Defendant owned a one-half interest in the house property situate at and known as 196A Garden Street, Warriewood (he having sold the other one half interest in that property to his sister and brother-in-law in December 1987 for $120,000, whilst retaining a right of occupancy in that residence). The Defendant also owned a Holden Calais motor car, a truck, a tractor, a crawler loader (also referred to as a bulldozer) and assorted tools.

30 It will be appreciated that during the period between 1987 and late 1990, there was a significant alteration in the assets of the Defendant, consequent upon his interest in remainder in the estate of his late father taking effect upon the death of the Defendant’s mother in October 1990.

31 In consequence, the Defendant became the owner of the following properties:

35-37 Neutral Street, North Sydney
Lot 2, Elimatta Road, Monavale
11/36 Cavill Street, Harbord
5/1 Hawkesbury Avenue, Dee Why
8/1 Hawkesbury Avenue, Dee Why
2/6 Kempsey Close, Dee Why
3/15 Bonner Avenue, Manly

32 I have already recorded the circumstances in which the Defendant, by arrangement with his sisters, acquired 8/40 Boronia Street, Dee Why, which had been part of their mother’s estate.

33 During the course of the relationship there were also significant changes to the financial and material circumstances of the Plaintiff.

34 In about January 1991 she was awarded damages of about $50,000 in litigation in which she had been involved. She received part of that amount, $25,000, in 1991 and the balance, by way of multiple payments, in the following year. According to the Plaintiff, she expended about $16,000 of the amount which she received in 1991 upon the erection of a verandah and car port at the Defendant’s residence at Garden Street, Warriewood. It was the Plaintiff’s evidence, that since the Defendant was then out of work and receiving no income, the balance of that first amount of $25,000 was used towards living expenses of the Plaintiff and the Defendant and (after her birth) Nikala.

35 In 1992 the Plaintiff arranged for the demolition of the house standing on her property at 4 Mactier Street, Narabeen. Two new dwellings were then constructed on that site and the property was subdivided. The front dwelling was sold in 1997 for $299,000, whilst the Plaintiff retained ownership of the dwelling at the rear of the property (which dwelling thereafter became known as 4A Mactier Street).

36 According to the Plaintiff the redevelopment of Mactier Street property was funded by way of $100,000 borrowed by her and $100,000 borrowed by the Defendant, who subsequently applied a further amount of $70,000 towards the development.

37 According to the Defendant, he made significant contributions by way of his physical labour, towards the redevelopment of the Plaintiff’s Mactier Street property. The Defendant calculated that, at an hourly rate of $35, his contributions from March 1995 until February 1996 would have had a total monetary value of almost $39,000.

38 It was the Plaintiff’s evidence that from the proceeds of the sale of the front residence at Mactier Street in June 1997 for almost $300,000 she repaid the two loans which had been received by herself and the Defendant from the Commonwealth Bank. In addition, the Plaintiff said that she repaid to the Defendant the foregoing sum of $70,000 (which he had advanced to her in 1992), plus $10,000 by way of interest associated with that loan. The Plaintiff was left then (according to her evidence) with a balance of $10,000, together with the residence at 4A Mactier Street, which was unencumbered. It was the Plaintiff’s evidence that the sale of the front residence at Mactier Street was more or less forced upon her by the Defendant, who, according to the Plaintiff, on account of financial exigencies, was placing pressure upon the Plaintiff for repayment of the advance of $70,000 which he had made to her some five years earlier, to assist her in the redevelopment of the Mactier Street site.

39 Valuations of a number of the items of real estate were agreed upon between the parties. The agreed values of the respective residences of the Plaintiff and the Defendant in 1997 were as follows:

4A Mactier Street, Narrabeen - $97,000
196A Garden Street, Warriewood (Defendant’s one-half interest) - $360,000

40 The following valuations at the time when the Defendant became the owner of the properties which passed to him from the estate of his father, were agreed between the parties:

35 Neutral Street, North Sydney - $137,500
37 Neutral Street, North Sydney - $137,500
87 and 87A Elimatta Road, Mona Vale - $176,000

41 The following valuations for 1998 (when, according to the Defendant, the de facto relationship came to and end) were agreed between the parties:

4A Mactier Street, Narrabeen - $295,000
35 Neutral Street, North Sydney - $490,000
37 Neutral Street, North Sydney - $490,000
87 and 87A Elimatta Road, Mona Vale - $660,000

42 There was no agreement as to the valuation in 1998 of the Defendant’s one-half interest in 196A Garden Street, Warriewood (although it was submitted on behalf of the Defendant that the appropriate valuation was $382,500, that being based upon the evidence of Colin Ernest Barry, real estate valuer (exhibit F to his affidavit of 24 May 2004)).

43 The following valuations for mid-1999 (at the time when, according to the Plaintiff, the de facto relationship came to an end) were agreed between the parties:

4A Mactier Street, Narrabeen - $350,000

196A Garden Street, Warriewood (Defendant’s one-half interest) - $390,000

35 Neutral Street, North Sydney - $530,000

37 Neutral Street, North Sydney - $530,000

87 and 87A Elimatta Road, Mona Vale - $710,000

44 There was also agreement concerning the valuations of the foregoing properties both in 2001, at the time of the commencement of the proceedings, and in 2004, at the time of the hearing.

45 I have also observed that there is a dispute as to whether the relationship terminated on or about 4 November 1998 (as asserted by the Defendant) or on 24 July 1999 (as asserted by the Plaintiff). The latter date was the date upon which the Plaintiff and Nikala, the daughter of the parties, departed the Defendant’s Warriewood property. However, according to the Defendant, for the preceding eight months, the parties, although living under the same roof, were no longer living in a de facto relationship.

46 It was the evidence of the Defendant that when in October 1998 he departed for a short holiday to Thailand the relationship between himself and the Plaintiff was “under severe strain”. He asserted that on his return neither he nor the Plaintiff wished to relinquish what had formerly been their matrimonial bed and so they slept “back to back” in the same bed until the Plaintiff and Nikala left the Warriewood property in July 1999. The evidence of the Defendant was unclear, to say the least, as to the date of the termination of the relationship. He said that when the Plaintiff, at the time of separation, told him that she was pregnant, he did not see how she could have been pregnant. He stated, “She certainly wasn’t pregnant to me”. When asked whether sexual relations ceased in 1998 the Defendant was anything but precise, saying, “Well, I can’t remember having sex with her as far as my memory serves me”.

47 It will be appreciated that the existence of a sexual relationship is only one of nine matters (such of which “as may be relevant in a particular case”) which the Court is enjoined by section 4(2) of the Act to take into account when taking into account all the circumstances of the relationship in order to establish whether the parties were in a de facto relationship.

48 I am not persuaded that the fact from November 1998 until July 1999 the parties may not have maintained a sexual relationship necessarily constituted a termination of the de facto relationship which admittedly had obtained until November 1998. The Defendant conceded that throughout that period of eight months the Plaintiff did cook some meals for the household.

49 It is appropriate that I make a finding as to the date of termination of the de facto relationship. I am satisfied on the balance of probabilities that the relationship terminated on 24 July 1999, when the Plaintiff and Nikala departed the Warriewood residence. However, there was little material alteration to the assets and liabilities of the parties during the preceding period of about eight months.

50 At the time when the Plaintiff and Nikala departed the Warriewood property, the Plaintiff was the owner of the property a 4A Mactier Street, Narrabeen, which at that time had an agreed value of $350,000.

51 It would appear that at the time of the termination of the relationship the Plaintiff owned, as well as the Mactier Street property, a Honda Civic motor vehicle (to which she ascribes a current value of $10,000) and jewellery (to which she ascribes a current value of $4,000). Presumably the Plaintiff also owned the furnishings and contents of the Narrabeen residence, although no estimation of their value at the termination of the relationship has been placed before the Court. It will be recalled, however, that the Plaintiff ascribed to her household furniture at the commencement of the relationship a value of $4,000.

52 According to the Defendant, he provided the Plaintiff with a Laser Liata motor vehicle, a new washing machine and dryer (those goods being provided at her request) at the termination of the relationship. Further, it was the Defendant’s evidence that when the Plaintiff departed the Defendant’s residence she took with her most of the contents, including all items which had been purchased by the parties during the course of the relationship, as well as a number of personal items and effects belonging to the Defendant, which he said, despite requests to her, she has not returned.

53 For completeness, it should also be recorded that the Defendant maintains regular contact with Nikala and pays to the Plaintiff child support in the amount stipulated by the Child Support Agency.

54 It should also here be recorded, that the Garden Street, Warriewood property was sold in mid-2001, the Defendant’s one half interest being then worth $472,477.50. (I assume that the sale price was twice that amount, being $944,955.)

55 In July 1999 the Defendant was the owner of the following pieces of real estate having the following agreed values;

One-half interest in 196A Garden Street, Warriewood - $390,000
35 Neutral Street, North Sydney - $530,000
37 Neutral Street, North Sydney - $530,000
87 and 87A Elimatta Road, Mona Vale - $710,000

56 Presumably, the Defendant also owned the furnishings and contents of the Warriewood residence, although no estimation of their value at the termination of the relationship has been placed before the Court.

57 Neither party appears to have had any significant liabilities at the termination of the relationship.

58 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff and the cross-claim of the Defendant.

59 I have had the benefit of receiving written outlines of submissions from Counsel for the respective parties, as well as a chronology on behalf of the Plaintiff. Those documents will be retained in the Court file.

60 Section 20 (1) of the Property (Relationships) Act provides, relevantly,

On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:

(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:
(i) a child of the parties,
(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.

61 The phrase “domestic relationship” is, by section 5(1) of the Act, defined to include a de facto relationship.

62 Since many of the allegations of the Plaintiff concerning the respective dates of commencement and termination of the de facto relationship and concerning contributions of the nature described in section 20(1) of the Act were totally and absolutely denied by the Defendant, and since in many instances the evidence concerning such disputed matters consisted solely of the uncorroborated evidence of the Plaintiff on the one hand and of the Defendant on the other, it is appropriate that I should express my views concerning the credibility of each of those persons and the reliance which the Court should place upon the uncorroborated testimony of each.

63 I regarded neither party as being a totally (or even substantially) reliable or credible witness.

64 The Plaintiff was receiving a single parent benefit until 22 February 1991. It was her assertion that from late 1987 she was in a de facto relationship with the Defendant. It follows, therefore, either that she was falsely misleading the social security authorities by claiming and receiving a single parent benefit whilst she was living in a de facto relationship for a period of more than three years (and thus committing a criminal offence), or that the de facto relationship did not commence until after 22 February 1991.

65 If the relationship did commence in the latter part of 1987, as asserted by the Plaintiff, then her fraudulent conduct in receiving the single parent benefits throughout the first three years or so of that relationship reflects very poorly upon the credit of the Plaintiff and constitutes an act of criminality.

66 In any event, it will be appreciated that the de facto relationship between the parties had, at its very latest, commenced before the birth of Nikala on 24 January 1991. That means that for at least four weeks the Plaintiff was receiving a single parent benefit to which she was not entitled.

67 The Plaintiff in her responses under cross-examination was not prepared to admit anything in the Defendant’s favour and was totally unwilling to admit that the Defendant had made any contributions whatsoever to household expenses and outgoings or as a homemaker or parent, especially in regard to either his own child Nikala or the Plaintiff’s daughter Monique. That refusal on the part of the Plaintiff to admit contributions which clearly were made (although the extent of such contributions was certainly in issue) reflects upon the credit of the Plaintiff.

68 The Defendant was a very voluble and effusive witness. I regarded him as an unreliable witness. I am uncertain, however, whether he was as unreliable a witness as was the Plaintiff. It is difficult to make a choice between them. It is possible that the Defendant was not deliberately attempting to mislead the Court. However, at times I considered that the Plaintiff was deliberately attempting to do so. I did not regard either the Plaintiff or the Defendant as being a witness whose uncorroborated evidence the Court should accept in circumstances where an assertion by the one was met with a flat denial by the other. At times, the purported explanations by the Defendant were incomprehensible (for example, concerning the sale by the Defendant of land which was the same size as that owned by his sister Diana, where the Defendant sold his block of land for a price which was only one-third of that obtained by his sister at the same time).

69 On occasion, the Court can derive some assistance in assessing the credibility of witnesses, where there is independent evidence or evidence from another witness upon the same topic. For example, in the instant case, the Plaintiff asserted, in effect, that the Defendant played no role whatsoever in the upbringing of the Plaintiff’s daughter Monique from the time when the Plaintiff and Monique moved into the Defendant’s residence in late 1990. Nevertheless, Monique herself gave evidence concerning the role and conduct of the Defendant as homemaker and in the capacity of surrogate parent to Monique throughout the period from at least 1990 until Monique departed the family home in about 1998, when she was aged about fourteen or fifteen (consequent upon an incident when she was struck by the Defendant). Monique’s evidence clearly establishes that the evidence of the Plaintiff in this regard should not be accepted.

70 Under cross-examination Monique said that the Defendant treated her as if she were his own daughter. Monique gave evidence concerning the Defendant’s activities regarding Nikala. She told how the Defendant took the family out for meals two or three times a week and that he “always looked after us very well”. Monique said that the Defendant did a lot of cleaning around the house and that he was a very tidy person. Further, that the Defendant was very supportive of Monique.

71 In summary, therefore, I am confronted by two extremely unreliable witnesses, each of whom now intensely dislikes the other. The unreliability of the Plaintiff’s evidence may have been based upon deliberate conduct of the Plaintiff in refusing to acknowledge, even when there existed overwhelming independent evidence, and inferences available to be drawn from such evidence, to the contrary. The unreliability with which I regarded the Defendant’s evidence may not have been a result of deliberate conduct on the part of the Defendant. As I have already described, his evidence, especially his responses under cross-examination, was verbose, prolix and discursive in the extreme, and at times, quite incomprehensible.

72 Instances of the unreliability of the Plaintiff’s evidence included the following. Under cross-examination the Plaintiff asserted that she did not ever see the letter which is annexure B to her affidavit of 26 February 2003. Further, the Plaintiff absolutely denied any personal involvement whatsoever on the part of the Defendant in the upbringing and care of Nikala. The Plaintiff also denied that the Defendant had had any role in relation to her daughter Monique. Those denials on the part of the Plaintiff concerning the relationship of the Defendant with his own daughter, Nikala, and the Plaintiff’s daughter, Monique, were shown to be quite false by the evidence of Monique herself. The Plaintiff later reluctantly conceded that the Defendant did pay some school fees for Monique.

73 Similarly, in respect to moneys advanced by the Defendant to the Plaintiff and her son to meet the settlement of civil proceedings brought against them, the Plaintiff asserted that the entirety of that advance was paid back by her son. However, when Mr. Adam Dalli gave evidence it emerged that he had paid to the Defendant only one-half of that advance. The Plaintiff herself never repaid any part of the balance of that advance. Another instance of the Plaintiff altering her evidence under cross-examination was when she at first asserted that she was present at the Mactier Street site at all times during the construction of the new residences thereon. She then sought to qualify that assertion.

74 The absolute refusal and unwillingness of the Plaintiff to admit anything whatsoever in the Defendant’s favour, especially in the capacity of homemaker or parent, even in circumstances where it was abundantly apparent, either from the Plaintiff’s own evidence, or from some other evidence (such as that of Monique, whose affidavit was filed on behalf of the Plaintiff), that the Defendant had made some contributions (even if the extent of those contributions was properly in issue) reflects poorly upon the reliability of the Plaintiff herself as a witness and the credibility to be placed upon her evidence.

75 An instance of the total unreliability to be placed upon the evidence of the Defendant occurred when under cross-examination on Tuesday, 10 August 2004 he was asked whether he had been working during the preceding week, in particular, on the preceding Wednesday (that is, Wednesday, 4 August 2004). The Defendant’s response was that without looking at his diary he could not say whether he had been working in that week or, in particular, on the preceding Wednesday.

76 Where the evidence concerning any matter in issue between the parties consisted solely of an assertion by one of the parties and a denial by the other party, I am not prepared to accept the uncorroborated assertion.

77 A great deal of the evidence was directed to the respective contributions of the parties to the development, restoration and refurbishment of the various pieces of real estate owned by the parties, especially by the Defendant, throughout the relationship.

78 It is unnecessary for me to deal with each individual assertion and counter-assertion of the parties in respect to those contributions. In approaching a claim for the adjustment of interests of parties in property pursuant to section 20(1) Property (Relationships) Act, the Court should make a wholistic judgment, and should not attempt to evaluate the respective contributions of the parties as if it were undertaking a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time consuming and expensive of litigious exercises). (See Davey v Lee (1990) 13 FamLR 688.)

79 In the instant case, suffice it to say that I am satisfied that the contributions of the Plaintiff were far less than asserted by her in her statement of claim and in her various affidavits.

80 Similarly, a great deal of evidence was directed to the respective contributions of the parties as homemaker and parent (especially as parent to Nikala, as well as parent to Monique). That evidence included such matters as, for example, the ownership and use of various motor cars (including a Mercedes motor car purchased by the Defendant during the course of the relationship). Again, it is unnecessary for me to deal with each individual assertion of the parties in regard to those contributions. I am satisfied that the contributions of the Plaintiff in this regard were greater than those of the Defendant. Nevertheless, I do not accept the assertions of the Plaintiff that the Defendant made no contributions whatsoever in the capacity of homemaker or parent (although the Plaintiff conceded that the Defendant was “obsessive” in regard to such housekeeping activities as scrubbing and vacuuming). I am satisfied that the Defendant, although his contributions in such capacities were less than those of the Plaintiff, did make significant contributions as homemaker and parent, at least in his capacity as parent of Nikala.

81 A great deal of evidence was presented (in large measure elicited in cross-examination) concerning the financial and material circumstances of the parties (in particular of the Defendant) since the date of the termination of the de facto relationship (whether that termination took place in November 1998 or in July 1999).

82 It should be recognised that the purpose of the Property (Relationships) Act is remedial (see New South Wales Law Reform Commission Report on De Facto Relationships, quoted by Gleeson CJ and McLelland CJ in Eq in Evans v Marmont (1997) 42 NSWLR 70 at 80-81; Jones v Grech [2001] NSWCA 208 per Ipp AJA at 76). The discretion vested in the Court by section 20(1) of the Act is to be exercised “having regard to” the contributions of the nature described in paragraphs (a) and (b) of that subsection.

83 In Roy v Sturgeon (1986) 11 NSWLR 454 Powell J (as he then was) said, at 464,

The fact that it is not the policy of the Act to elevate the status of a “de facto partner” to that of a party to a marriage, would, in my view, be enough to caution one against too readily embracing the decisions of the Family Court of Australia as to the matters to which that Court might legitimately have regard when dealing with applications under section 79 of the Family Law Act 1975 (Commonwealth). That caution is, however, reinforced by the fact that there are differences between the language of section 20 of the Act on the one hand, and of section 75(2) and section 79(4) of the Family Law Act 1975 (Commonwealth) on the other, which differences are, in my view, significant.

84 Powell JA in Jones v Grech, at 12, quoted the foregoing passage from his judgment in Roy v Sturgeon, and emphasised that the statutory regime under the Property (Relationships) Act is different from that under the Family Law Act 1975 (Commonwealth). (See, also, Black v Black (1991) 15 FamLR 109 at 113 per Clarke JA; Wallace v Stanford (1995) 37 NSWLR 1 at 23 per Sheller JA; Evans v Marmont, supra, per Gleeson CJ and McLelland CJ in Eq.)

85 In Green v Robertson (1995) 36 NSWLR 96 Cole JA, at 115-116, was of the view that the Court should have regard to contributions made to the date of the application (in distinction to contributions made merely to the date of termination of the relationship). That was a proposition which Campbell J in Ngyuen v Schieff (2002) 29 FamLR 177 found persuasive, the reasons for so finding His Honour repeated in Sullman v Sullman [2002] NSWSC 169, Nevertheless, there is no authority in either of those decisions for the Court to have regard to the present circumstances (especially the present needs) of the parties, let alone to likely future needs of the parties.

86 In exercising the discretion vested in the Court by section 20(1) of the Property (Relationships) Act, it seems to me that, consonantly with the foregoing decisions of the Court of Appeal, the present financial and material circumstances of the Plaintiff and, in particular, her present needs, should not be taken into consideration. The Court should not be diverted from the clear words of the statute in exercising its discretion to “make such order adjusting the interests of the parties in the property as to it seems just and equitable”. The Court must have regard to the contributions of the nature then set forth in paragraphs (a) and (b) of the subsection. As I understand the foregoing decisions of the Court of Appeal, it is not legitimate for the Court to have regard to present or future needs of the parties; it should have regard only to contributions of the nature set forth in the subsection. (See Mathieson v Wallis [2001] NSWSC 931, McLaughlin M, 22 October 2001, an appeal from which was dismissed by the Court of Appeal on 11 October 2002, sub nomine, Wallis v Mathieson [2002] NSWCA 350.)

87 It is clearly necessary in this regard to exercise the caution counselled by Powell J in Roy v Sturgeon. The principles disclosed in the relevant provisions of the two statutes are that the Property (Relationships) Act looks to past contributions, whereas the Family Law Act looks also to present and future needs.

88 I propose, therefore, in considering the claim of the Plaintiff for adjustment of interests in property under section 20(1) of the Property (Relationships) Act to disregard evidence concerning her present and likely future needs.

89 Similarly, I propose also to disregard evidence concerning various financial transactions which occurred after the termination of the relationship. Nevertheless, I recognise that various assets owned by the parties, in particular, the various pieces of real estate owned by the Defendant, have increased significantly in value since the termination of the relationship. In Parker v Parker (1993) 16 FamLR 863 Young J (as he then was) held that the date at which the assets of the parties should be valued for the purposes of the Act is the date of the hearing, unless there are extraordinary factors which warrant valuation at the date of separation. It will be appreciated that if the final outcome of the proceedings is to order that one or other of the parties shall receive a percentage of an interest in assets of the other party, then there is little practical significance resulting from an increase in the valuation of that asset. If, however, the outcome of the proceedings is to award to one or other of the parties a sum of money representing a percentage of the value of the such asset or assets of the other party, then the Court must calculate that lump sum in light of the present valuation of such asset or assets.

90 It is for that reason that in the instant case the parties, in reaching agreement as to the valuations to be ascribed to various assets, have agreed as to the valuations not only at the date of termination of the relationship but also at the date of the hearing of the present proceedings.

91 In summary, it is my conclusion that during at least a significant part of the relationship the Defendant was the breadwinner and the Plaintiff was the homemaker (especially whilst she was carrying out her responsibilities in looking after Nikala).

92 I have already recorded that at the conclusion of the hearing neither party sought relief of the nature claimed by that party in the pleadings as filed. The Plaintiff reduced her original claim from $1,000,000 to about $500,000. The Defendant who, by his cross-claim had claimed $80,000, at several points in his cross-examination said that until the case had been instituted against him he did not want anything from the Plaintiff. Some of the statements volunteered by the Defendant in this regard during his cross-examination (volunteered, since they were not responsive to questions asked of him) indicated, although his thoughts on this point did not emerge with total clarity, that if the claim of the Plaintiff were to be dismissed the Defendant would not pursue any claim for money which he had made in his cross-claim.

93 Counsel for the Defendant in his closing submissions attempted to clarify this situation, after taking instructions from his client, by submitting, firstly, that the claim of the Plaintiff should be dismissed, and, secondly, that an order should be made in favour of the Defendant upon his cross-claim, but only for a nominal amount.

94 It is quite apparent that the amount of $1,000,000 claimed by the Plaintiff in the statement of claim is grossly inflated. That was conceded by her Counsel at the hearing. The approach on behalf of the Plaintiff was that there should be a division of the property of the parties by way of the Plaintiff receiving 35 percent of the total value of the pool of assets of the parties, whilst the Defendant should retain the remaining 65 percent of that pool of assets. It had been calculated on behalf of the Plaintiff that the present net value of the pool of assets was about $4,317,500. Thirty-five percent of that figure is in the vicinity of about $1,250,000. That is the amount which the Plaintiff, upon the submission of her Counsel, seeks to receive. However, she has already received an asset presently worth about $760,000, being the property in Mactier Street, Narrabeen. Thus, it was submitted on behalf of the Plaintiff that there should be an adjustment in her favour by way of an order that the Defendant pay to her an amount of about $500,000.

95 However, it should be recognised that the Plaintiff entered the relationship owning one property (Mactier Street), which was subject to a significant mortgage. She left the relationship owning a property (part of the original Mactier Street property) worth $760,000, which was unencumbered. I do not disregard the fact that the increase in value of the Mactier Street property may, at least in part, have resulted from inflation. But, nevertheless, the Plaintiff left the relationship in a far better position than she had entered it.

96 The considerable increase in the assets of the Defendant at the time of the termination of the relationship from his assets at the commencement of the relationship was largely due to circumstances over which neither the Defendant himself nor the Plaintiff had any control. Those circumstances were the fact that during the course of the relationship the Defendant’s mother died, thus bringing to an end the life tenancy of the Defendant’s mother in various pieces of real property, with the consequence that the Plaintiff’s interest in remainder in those properties came into effect. The fact that the parties may have been in a de facto relationship at that time does not of itself entitle the Plaintiff to receive any benefit from those properties.

97 It is only if the Plaintiff can establish that she made contributions of the nature set forth in section 20(1) of the Act that she will be entitled to an adjustment in her favour of interests in those properties.

98 Whilst the Defendant received the benefit of the interest in remainder in the properties during the course of the de facto relationship, nevertheless, many of those properties were sold during the course of the relationship. At the termination of the relationship the Defendant’s assets, although greater than they had been at the commencement, had not increased commensurately with the value of the properties which he had then received and disposed of during the course of the relationship.

99 It is my conclusion, in the light of the considerable benefit which the Plaintiff has received in the course of and as a result of her de facto relationship with the Defendant, and in the light of the contributions made by her during the course of the relationship, that she has not established that the Court in the exercise of its discretion should make an order adjusting in her favour the interests of the parties in property. In the absence of such an order, there is no practical purpose to be served by the Court making a declaration as to the existence of the de facto relationship between the parties. It follows, therefore, that the claim of the Plaintiff will be dismissed.

100 I should here observe that even if, contrary to the conclusion which I have just expressed, I were inclined to apply the formula submitted by the Plaintiff, that is, by awarding to her 35 percent of what was described as the total pool of assets, it seems to me that it is not appropriate that that total pool should include the value of properties which came to the Defendant from his father’s estate and which, in respect to the de facto relationship between the Plaintiff and the Defendant, could appropriately be characterised as a windfall. I do not consider that it is appropriate that the Plaintiff should receive a benefit from the mere fact that such a windfall has resulted in an increase in the value of the Defendant’s assets during the course of the relationship. It is only if the Plaintiff can establish that she made in respect to any of the properties comprising such windfall contributions of the nature identified in section 20(1) of the Act that those properties should be taken into consideration in the present proceedings. (See Wallace v Stanford, supra; Powell v Supresencia (2003) 30 FamLR 463.)

101 It would follow, therefore, that the properties at 35 Neutral Street, North Sydney; 37 Neutral Street, North Sydney; and 87 and 87A Elimatta Road, Mona Vale (having a total agreed present value of $3,557,500) should be removed from the pool of assets.

102 Similarly, for the reasons which I have already expressed, any properties which have been acquired by either of the parties after the termination of the relationship should be disregarded in the present proceedings. It would follow, then, that the property at 16 Walana Crescent, Warriewood (in which the Defendant holds a one-half interest and which was acquired after the termination of the relationship and which has a present agreed value of $537,500), should be removed from the total pool of assets. That would leave only the Plaintiff’s property at 4A Mactier Street (having a present agreed value of $760,000) and the Defendant’s one-half interest in 196A Garden Street, Warriewood (of which there is no present agreed value, but which interest was sold in July 2002 for $472,447.50) as constituting the pool of assets. It would follow, then, upon the approach which I have just outlined, that the total pool of assets would have a present value of $1,704,895. Thirty-five percent of that figure is $596,713, which is, of course, considerably less than the present value of 4A Mactier Street (agreed at $760,000).

103 But, for the reasons which I have already set forth, I do not consider that the calculation of the present value of the total pool of assets (whatever properties constitute that pool of assets) and the application to that value of a formula (such as 35 percent to the Plaintiff and 65 percent to the Defendant) is a proper approach to the determination of the present proceedings.

104 I have already emphasised that the Court in exercising its discretion under section 20(1) should not be diverted from the clear words of the statute. In having regard to contributions of the nature set forth in that subsection, it is quite apparent that the overwhelming part of the property and of the financial resources of the parties came to the relationship as a result of the benefits which the Defendant received from the estate of his father. It is in the context of that factual situation that the Court must proceed to exercise its discretion to “make such order adjusting the interests of the parties in the property as to it seems just and equitable”. To disregard the source of the various properties which came into the ownership of the Defendant during the course of his relationship with the Plaintiff, and in some way to equate those properties with assets which may have been acquired during the relationship either through the joint efforts of the parties to the relationship of through the direct efforts of one party alone, but supported by the other party, would be to fly in the face of the realities of the factual situation in the instant case.

105 I have earlier referred to the statements volunteered by the Defendant at various times during his cross-examination, which were sought to be clarified by his Counsel in final submissions, that, in the event that the claim of the Plaintiff were to be dismissed the Defendant himself would not pursue any claim against her, but would seek an order only for a nominal amount.

106 However, I do not consider that the Defendant has himself established an entitlement to an order, whether he chooses to pursue his cross-claim or not. In those circumstances, I consider that the cross-claim should be dismissed.

107 Since neither party has succeeded in obtaining any order against the other party, it is not appropriate that any costs order be made. Each party should bear her or his own costs of the proceedings.

108 I make the following orders;

(1). I order that the suit be dismissed.

(2). I order that the cross-claim be dismissed.

(3). I make no order as to costs, to the intent that each party will bear her or his own costs of the proceedings.

(4). The exhibits may be returned.

Last Modified: 11/09/2004