Ducker v Smith

[2010] NSWSC 462

CITATION:	Ducker v Smith [2010] NSWSC 462
HEARING DATE(S):	12 - 15 April 2010
JUDGMENT DATE :	14 May 2010
JURISDICTION:	Equity
JUDGMENT OF:	Tamberlin AJ
DECISION:	Plaintiff’s interests in jointly held home known as “March Rising” to be transferred to defendant upon payment of $200,000 by defendant to plaintiff, or alternatively for property to be sold, with the proceeds of sale being divided between the parties so that the defendant will receive 75 percent and the plaintiff the balance.
CATCHWORDS:	DE FACTO RELATIONSHIPS – Application for division of property interests under s20 of the Property (Relationships) Act 1984 (NSW) – Adjustment of property interests – Evaluation of contributions of parties over 13 year period of cohabitation.
LEGISLATION CITED:	Property (Relationships) Act 1984 s 20
CATEGORY:	Principal judgment
CASES CITED:	Baker v Towle [2008] NSWCA 73 Bilous v Mudaliar; Mudaliar v Bilous (2005) 65 NSWLR 615 Manns v Kennedy [2007] NSWCA 217
PARTIES:	Alan Graham Ducker (P) Janet Adele Smith (D)
FILE NUMBER(S):	SC 2009/287699
COUNSEL:	A Haughton (P) D G Reid (D)
SOLICITORS:	Irene E Pickel (P) Bowral Legal (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

TAMBERLIN AJ

FRIDAY, 14 MAY 2010

2009/287699 ALAN GRAHAM DUCKER v JANET ADELE SMITH

JUDGMENT

1 HIS HONOUR : This is an application by Mr Ducker, the plaintiff, for orders pursuant to s 20 of the Property (Relationships) Act 1984 (“the Act”) that the property known as “March Rising” at Alpine in the State of New South Wales, be sold and the net proceeds be shared between Mr Ducker and Ms Smith, the defendant, in the proportion of eighty percent to twenty percent respectively, together with consequential and other orders as to the division and/or retention of property including artworks, antiques, bank accounts, insurance policies, and superannuation.

2 The relevant provision of the Act concerned with the adjustment of interests with respect to property of parties to a domestic relationship is s 20 which provides:


“ Application for adjustment

20(1) 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) …

(2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property.”


3 The application is opposed by Ms Smith who now seeks orders that the property of the parties be adjusted so that each party should receive 50% of the value of the property as at the date of the hearing.

4 The relevant assets of the parties as at the date of separation had a value of about $1.8 million. The property “March Rising” is agreed to have a present market value (in early 2010) of $830,000 and some of the other assets including the house contents located at “March Rising”, jewellery in the possession of Ms Smith, the contents of Ms Smith’s shop located at Mittagong Antique Centre and jewellery in the possession of Mr Ducker, have been recently valued at a figure accepted by both parties in an amount of $126,365. In addition there is a dispute as to entitlement to other property including the superannuation of Mr Ducker which as at the date of separation was estimated as $723,000 which was converted into superannuation and which he presently estimates having a value of $478,000. There is also a valuation in evidence which indicates that the value of “March Rising” registered in joint names as tenants in common as at the date of separation on 25 February 2007, was $1,075,000.

The Issue

5 The question for decision is what, if any, order should be made for adjustment of the interests of the parties with respect to the property of the parties having regard to the matters set out in s 20 of the Act.

Background

Mr Ducker, who is aged 77 years, has known Ms Smith, who is now 66, since 1978. Both parties have been married on two previous occasions. Mr Ducker has an adult son (Jeremy) and an adult daughter. Ms Smith has no children from either marriage. They have known each other from the time when Ms Smith worked as an interior decorator in Double Bay in the nineteen seventies. For about 12 years prior to meeting Mr Ducker she had an interior decorating business in Double Bay and at the time of swearing her affidavit in October 2009 she carried on an interior decorating business and had an antique shop at the Mittagong Antiques Centre. She was previously married to Graham Smith and in 1992 she separated after 10 years of marriage.

7 The parties commenced a de facto relationship in the first half of 1994 when Mr Ducker moved into the home then rented by Ms Smith at Suffolk Street, Paddington. They lived at that home until February 1999 when they moved into the property at Bowral known as “March Rising”. The cohabitation continued until 25 February 2007 when Mr Ducker ceased to live with Ms Smith at “March Rising”. That property was bought in joint names as tenants in common in February 1999 for a total price of $455,000 which was paid for in full by Mr Ducker with the proceeds of sale from a property owned by him at Wylde Street, Potts Point.

8 Ms Smith has also been engaged in the antiques market. She has also been involved in home renovations and in the period 1993 through 1999 in addition to those activities she made substantial capital gains by buying, renovating and selling three properties in Paddington, New South Wales.

9 Prior to the cohabitation with Ms Smith in 1994 Mr Ducker was working as a trader and sub-underwriter on his own account and dealt with broking firms on the Sydney Stock Exchange. He had an office at 86 Pitt Street, Sydney and a local seat at the Sydney Futures Exchange, and also worked from a home office. From 1979 to the present time he has traded on his own account by sub-underwriting equity issues and by financial tradings on the Stock Exchange. He was a member of the Australian Securities Institute until the late 1980s. In 1980 he bought a seat on the Sydney Futures Exchange for $7,500 and paid an annual fee for it. His evidence is that he made a profit each year and kept the seat as an investment and selling it in 1997 for $90,000.

10 In the mid–1980s Mr Ducker bought the unit property at 17 Wylde Street, Potts Point in the name of his company Salitre Holding Pty Ltd (“Salitre”). He also had a company called Monsoon Pty Ltd (“Monsoon”), which was an investment company, and he was the controlling shareholder of that entity. That company was deregistered on 24 March 2005. In addition, he had another company known as Manwar Nominees Pty Ltd (“Manwar”), also incorporated in 1969, which was deregistered on 9 June 2002. Mr Ducker says he derived a modest income from that company.

11 When cohabitation began Mr Ducker says he had approximately $84,000 in Salitre, $170,000 in short-term deposits with Advance Bank, and approximately $200,000 worth of shares in the form of trading stock which were held in his own name, or in the name of Salitre. He says in his affidavit that Salitre had also $151,683 in an MLC Cash Management Trust and that it owed him approximately $174,000 as at 30 June 1993. At the beginning of his relationship with Ms Smith, in early 1994, he says that he had no liabilities.

12 In summary Mr Ducker’s claim is that as at the date of commencement of cohabitation, in early 1994, the respective assets of Mr Ducker and Ms Smith in the relationship were as follows:

“CONTRIBUTIONS	Mr Ducker	Ms Smith
Salitre Pty Ltd 1994	83,479
Shares	200,000
Advance Bank	170,000
Wylde Street (sold 1999)	500,000
Seat on Futures Exchange (sold 1997)	90,000
Artworks sold in 1998	55,000
Saab – value not known at cohab	N/K
Artwork still retained by Mr Ducker	Still retained
3 statues retained by Ms Smith – current value	$56,500
Artwork sold by the defendant	$4,035
Cash Property settlement less legal cost (converted by time of cohab)	$170,000
Car and chattels from Family Court settlement	$17,000
Mother’s estate	$107,719
TOTAL CONTRIBUTIONS	$1,159,014	$294,719”


13 As noted above, the property at Wylde Street was sold in 1999 for an amount of $490,000 and funds from this sale were used to purchase the property “March Rising”. All the moneys used in the purchase came from Mr Ducker. Ms Smith made no financial contribution to the purchase price.

14 The claim of Ms Smith is that in April 1994, at or about the time of commencement of cohabitation, she found the property at Suffolk Street, Paddington, and took out a lease in her name. She paid a security deposit on it. The rent was $2,187 per month, some of which she paid by direct deposit to the agent’s bank account. She lived there together with Mr Ducker for five years and furnished the premises with her antiques and other furniture until early 1999 when they moved to the “March Rising” property. For a time since 1992 Ms Smith had been employed as a manager of an antique shop in Glebe, known as “Frasers Antique”, where she earned $700 per week in salary in the course of which she sold some of her own stock from time to time. She remained with Frasers until late 1996 when the shop closed. She estimates that from 1992 to 1996 she earned about $59,460 selling antiques at Frasers and she built up a stock of antiques. She sets out in her affidavit of October 2009, details as to her trading activities whilst employed at Frasers. She says that at commencement of cohabitation she owned trading stock to a value of $100,000. In early 1994 her mother died and she inherited cash, furniture, jewellery and a house. She sold the house and received $148,000 from the estate. In cross-examination she gave evidence that she had, in addition, received property in the nature of chattels from the estate in an amount of approximately $65,000. At about this time she claims she received about $200,000 and chattels in a divorce settlement with her then husband Graham Smith, comprised of two payments of $50,000 and a later payment of $100,000. She also bought an Audi car for an amount of $30,000 and Mr Ducker, on the same day, purchased a Saab.

15 As at the commencement of cohabitation Ms Smith claims that she had the following assets:

Settlement with her husband $200,000 together with chattels;
Proceeds from her mother’s estate: $148,000 together with chattels;
Proceeds from the sale of antiques: $59,000;
Trading stock of antiques: $100,000; and
Personal antique items, some of which were inherited, some of which were from the Family Court settlement and some of which were acquired with moneys from the sale of chattels in an amount of $100,000.
In total she claims that her assets at that time were in the order of $600,000.


16 During the period 1993 to 1999, prior to the purchase of “March Rising” Ms Smith indicates in her affidavit that she built up substantial financial resources. From 1993 onwards Ms Smith purchased three properties in Paddington which she renovated and sold. These comprised properties at 24 Stewart Street, 22 Liverpool Street and 31 Renny Street, Paddington. She sold the Stewart Street property on 29 June 1995, making a profit of about $81,000. She bought the 22 Liverpool Street property on 21 June 1995, and, after repaying expenses, broke even on the sale. In April 1996 she bought the Renny Street property, making a profit of about $88,000. Mr Ducker made no contribution in relation to those transactions. During their cohabitation at Stewart Street the parties shared expenses on that property.

17 Ms Smith says that she estimated that she earned $241,240 in taxable income between 1992 and 1996, but did not have copies of income tax returns. She further says she contributed her income to living expenses.

18 Mr Ducker paid rent on Suffolk Street, but was not consistent in making those payments according to Ms Smith. She says that she paid the majority of living expenses in the period from 1994 onwards.

19 She says that during that period Mr Ducker did not work from Suffolk Street, but rented an office in the city to carry on his share trading activities. During the whole 13 year period of cohabitation the evidence was that Mr Ducker was engaged, on a regular basis, in share trading and that he spent a great deal of time on the computer in relation to such transactions.

20 He claims to have earned substantial income during that period by way of share trading, and to some extent this is supported by taxation returns, but his records have substantial gaps.

21 Ms Smith says that she derived a substantial income from trading in antiques and from home renovation activities, during the period of the cohabitation.

Principles

22 The approach to be taken in relation to the adjustment of property interests of the parties under the Act was summarised by the Court of Appeal (Basten JA, with whom Beazley JA and Mathews AJ agreed) in Baker v Towle [2008] NSWCA 73 at [42] – [43] in these terms:


“ Legal principles

42 These proceedings were brought under s 20(1) of the Act, which has three operative effects. The first is to grant a right to a party to a domestic relationship to seek an order adjusting property interests of the parties to the relationship; the second is to empower the Court to make such an order ‘as to it seems just and equitable’ and the third is to identify the factors to which the Court must have regard in determining the application. …

43 It has been said in a number of cases that the application of s 20 involves three steps … in the following terms …:


“(1) identification and valuation of the property of the parties;

(2) identification and valuation of the respective contributions of the parties, of the types referred to in s 20;

(3) determination of what if any order is just and equitable having regard to these contributions.”

23 A helpful guide to the adjustment exercise is also found in the Court of Appeal judgment of Ipp JA (with whom Giles and McColl JJA agreed) in Bilous v Mudaliar; Mudaliar v Bilous (2005) 65 NSWLR 615 where his Honour said at [40] – [43]:


“ [40] Before dealing with the facts of the case in detail, it is necessary to make some general observations relevant to important decisions of principle that the primary judge made. I turn, firstly, to the general approach that may be adopted when evaluating contributions for the purposes of s 20.

[41] In Davey v Lee (1990) 13 Fam LR 688 at 689, McLelland J said:

‘… [T]he court is not required under s 20 to undertake a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time-consuming and expensive of litigious exercises) by examining every alleged “contribution” of the kinds described in the section with a view to putting a monetary value on it in order to reach an accounting balance one way or the other, which is to be then eliminated by the requisite financial adjustment. Rather the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind.’


I would endorse this approach as well as his Honour’s further observation that, while the parties may value non-material contributions to the welfare of the family more highly than material contributions, these are not matters that lend themselves to detailed examination and analysis by a court.

[42] Generally, the Court has a broad discretion in determining the approach to adopt in considering what order to make under s 20(1). As Brereton J (with whom Basten JA and Hunt A-JA agreed) said in Kardos v Sarbutt (2006) 34 Fam LR 550 at 564 [51] (relying on Norbis v Norbis (1986) 161 CLR 513): ‘Although in the majority of cases, the global approach is likely to be more convenient than an asset-by-asset approach, the application of the asset-by-asset approach does not of itself amount to an error of law’. Brereton J (at 565 [54]) observed that:

‘[54] … As Lenehan [In the Marriage of v Lenehan (1987) 11 Fam LR 615] shows, the principal indicator for an asset-by-asset analysis is discrepant identifiable contributions of the parties to different assets: in that case, the proportionate contribution of the parties to the acquisition, conservation and improvement of the matrimonial home on the one hand, and to the business assets on the other, were quite different. Such an approach will often be contra-indicated where, as here, there has been a pooling of income.’

[43] If a global approach is adopted, regard must still be had to the origin and nature of the different assets. If an asset-by-asset approach is adopted, care must be taken to avoid the risk of undervaluing domestic and non-financial contributions and regard must be had to the overall result: Kardos v Sarbutt (at 563 [51], 564 [54]). Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets.”


24 A further useful comprehensive statement of the approach which should be taken to the evaluative exercise under s 20 is set out in the judgment of Campbell JA in Manns v Kennedy [2007] NSWCA 217 at [61] - [65] and there is no need to repeat that summary in these reasons.

Credit

25 Counsel for Ms Smith referred to evidence of Mr Ducker as to his long-standing relationship with a female friend of Ms Smith and submits that his responses to questions concerning this relationship reflect adversely on his credibility. While I do not find it necessary to make any finding on the matter raised, I have reached the conclusion that he was not frank and open in his evidence with respect to the closeness of this relationship. By way of example, on one occasion he drafted a letter from the friend to Ms Smith denying any impropriety in the relationship and the friend then wrote the letter in her own hand to Ms Smith.

26 Counsel for Ms Smith also referred to the inadequate responses made on behalf of Mr Ducker to two Notices to produce business papers or financial documents insofar as they were not produced until shortly before the hearing. I have taken this into account in my determination as to relative credibility.

27 Counsel also points to a discrepancy in the affidavit evidence of Mr Ducker in relation to the number of antiques owned by Ms Smith. In an earlier affidavit he referred only to three items, whereas in a later affidavit he referred to substantially more. In cross-examination he said that this was due to an oversight. Again, I do not think this inconsistency is of any great relevance on the question of credibility.

28 Of more significance on the question of credit is the conflict of evidence between Mr and Mrs Stead who had worked at “March Rising” and that of Mr Ducker in relation to payment of cleaning costs. Mr Stead, whose evidence I accept without reservation, said that Ms Smith paid for the cleaners while Mr Ducker strongly maintained that he had paid for them. Both Mr and Mrs Stead are independent witnesses and they directly contradict Mr Ducker on this point. There is also a significant discrepancy between the evidence of Mr Harvey and Mr Ducker in relation to the nature and amount of work which Mr Ducker claims to have done on “March Rising”. Mr Harvey, who lives in a cottage on the property gave evidence that almost all the time Mr Ducker was inside the house he appeared to be working on his computer. The evidence of Mr Harvey was, in my view, objective and independent and is consistent with the extensive concern Mr Ducker had in this period with his investments and with the evidence of Ms Smith in this respect.

29 Also of importance were acknowledged errors which he made in his affidavit, his lack of recall of some instances, his lack of records, and a conscious attempt to play down the extent of the contribution made by Ms Smith in relation to both the financial and non-financial contributions of the parties.

30 Mr Ducker’s evidence was inconsistent regarding a dishonoured cheque for $25,000 in that he at first denied it without reservation, and, later, admitted the dishonour of the cheque when confronted with a copy.

31 The recollection and evidence of Ms Smith also had defects in that she did not have available a number of records to substantiate her claims. She initially understated the substantial amounts in relation to the mortgages on the various properties (which made her earnings look greater), and also there was some inconsistency in her evidence concerning the amount she received under the will, although this was later clarified. I have taken these errors into account and have based my decision on the mortgage figures as corrected. The credibility of Ms Smith was strongly criticised by counsel for Mr Ducker on the basis of her exercise concerning material in some notes (Exhibit W) which she gave to her lawyers that were not, as had been indicated at one stage, records from the relevant period. I have taken these submissions into account and this has led me to also consider her evidence with some caution.

32 I do not consider that either of the witnesses set out to mislead the court and it is understandable that after such a long lapse of time between the hearing and the critical events, in the order of more than 13 years, memories have faded and important documentary records to substantiate their positions have disappeared.

33 In general, however, I prefer the evidence of Ms Smith where it is inconsistent with the evidence of Mr Ducker. In particular, she has kept, over certain periods, detailed records and her recollection on important issues was clearer and more consistent that Mr Ducker’s. For these reasons I have approached the evidence of both parties having regard to its consistency with objective facts and any relevant documentary material where available.

Findings as to Contributions as at Commencement of Cohabitation

34 The parties began to cohabit in 1994 and this continued until late February 2007. It is convenient to consider the contributions of the parties in two periods, namely the initial period from 1994 to early February 1999, when “March Rising” was purchased, and the period 1999 to 2007 when they separated. This is because a number of sales and purchases took place in the initial period which crystallised, to some extent, the value of the assets.

35 The major financial assets claimed by Mr Ducker as at commencement of cohabitation in 1994 were shares in a private company, Salitre Holdings Pty Ltd, which, according to the 30 June 1994 balance sheet had $441,546 in total assets primarily made up of cash of $47,891 and an unencumbered unit in Wylde Street, Potts Point shown as having a value of $353,938. It had very substantial outstanding intercompany loans. In addition, Mr Ducker claims he had a portfolio of shares which he traded worth $200,000 and moneys placed at Advance Bank in an amount of $170,000. In addition he also claims he had a seat on the Sydney Futures Exchange, bought in 1980 for $7,500 and sold in 1997 or 1998 for $90,000. There are other items of property of lesser value which I will refer to later.

36 In relation to Salitre, the 1994 balance sheet shows the total shareholder’s equity as $147,642. That balance sheet also refers to liabilities and provisions a total amount of $277,000.

37 In relation to the property at Wylde Street, Potts Point, shown in the balance sheet of Salitre for the 1994 financial year as having a value of $354,000 approximately, Mr Ducker says this is the historical cost as at the date of purchase in the 1980’s and was not the market value at 1994. He refers to the fact that the property was sold in 1999 for approximately $500,000. Having regard to his financial statements I accept that the balance sheet figure was historical, but there is no specific evidence as to the value of the property five years earlier as at early 1994. I consider it appropriate to make some substantial discount on the 1999 figure of $500,000 as the evidence indicates that properties were appreciating substantially in the period 1994 – 1999. Doing the best I can I think a figure of $410,000 is appropriate to indicate the value of that asset as at the commencement of cohabitation. I have proceeded on the basis that as at 1999 the property had the market value of $500,000 and that substantially all the proceeds were paid by Mr Ducker in the purchase of “March Rising”.

38 In relation to the share portfolio of $200,000 claimed by Mr Ducker as at early 1994, there is no independent evidence to substantiate this figure. Counsel for Mr Ducker seeks to argue from income tax returns that, having regard to earnings on shares, there must have been a substantial portfolio. I accept there was a portfolio of some substance, but the extent of it is speculative and in the absence of evidence, and, doing the best I can, a figure of $100,000 is in my view a proper figure to be allowed in respect of the share portfolio.

39 In relation to the claim that Mr Ducker had $170,000 invested with Advance Bank as at early 1994, there is no specific direct evidence on this point. Counsel submits that because his personal income tax returns showed interest earned in an amount of $9,500 from Advance Bank, at that time the capital sum would have been in the order of $170,000. She refers to the fact that in the following year there was an amount of $15,000 interest from Advance Bank disclosed.

40 There was some evidence filed in relation to interest rates on mortgages around the relevant time which indicated that the standard variable interest rate in March 1999 was about 9 per cent. Taking into account the potential for variations in interest rates and the uncertainties regarding this amount, I consider a figure in the order of $120,000 is appropriate to allow in respect of this asset.

41 With respect to the seat on the Futures Exchange, for which a claim is made in the sum of $90,000, being the price for which it was sold in 1999, there is no satisfactory evidence as to the value of this asset as at 1994, so again, it is difficult to assign a value, but it seems to me that the seat did have some value at the relevant time and a fair allowance would be an amount of $65,000.

42 In addition, Mr Ducker says that he had artworks which were sold in 1998 for $55,000 but again there is no evidence of the value of those artworks as at 1994. I think some allowance must be made for variation in price and accordingly a figure in the order of $40,000 would be appropriate. There were three statues retained by the defendant. It is not possible to give any significant value to this figure as a contribution to the joint property as at 1994, and, accordingly I do not assign any value to this. There is also a reference in the figures given on behalf of Mr Ducker to artworks sold by him in an amount of $4,000. There is no evidence to substantiate this amount and therefore I do not make any allowance for it in the evaluative exercise.

43 Having regard to the foregoing, and taking into account the uncertainties, contingencies and adjustments necessary, my finding is that at the date when cohabitation commenced in early 1994, the financial assets brought to the relationship by Mr Ducker had a value of approximately $820,000 including the net worth of Salitre.

44 I now turn to the financial contribution of Ms Smith as at the date of cohabitation in early 1994.

45 I accept her evidence that in late 1992 early 1993 she received in the order of $200,000 cash by way of divorce settlement from her former husband. She asserts in her affidavit that with that money she purchased the property at Stewart Street, Paddington in July 1993 at a total cost of $244,000. She carried out renovation works in the order of $54,620 making a total figure of $298,620. She received rent of $12,000. She borrowed money from Westpac, an amount of $190,000. The property sold in June 1995 for $368,000, which, after paying out the borrowings, left her with a profit of about $81,000. She purchased and sold two other properties. The first was at Liverpool Street, Paddington in respect of which she broke even. She also bought Renny Street, Paddington on which she made a profit of about $88,000. I am satisfied that between 1992 and 1996 she had accumulated profits from sales of about $59,000 from her earnings and transactions from her antique and renovation businesses. She had built up her assets by 1999 very substantially and this included an inheritance which totalled about $210,000 including chattels. Some allowance must also be made for interest on her assets over that period.

46 The evidence satisfies me that as at April 1994 and in the period up to 1999 Ms Smith had acquired substantial funds and assets comprising moneys from her marriage settlement; chattels and cash from her mother’s estate; accumulated earnings from her antiques business and stock in trade of about $150,000, which totalled in the order of at least $580,000.

Contributions During Cohabitation

47 The relationship lasted a period of 13 years approximately, during which time both parties earned substantial income. The evidence is that they lived to a high standard, mixed socially during most of that period and took trips overseas. The evidence discloses that Mr Ducker earned a sizeable income from trading in shares and futures on the Sydney Stock Exchange. Ms Smith worked extensive hours during most of that 13 year period in the antique and renovation business and I am satisfied that she earned substantial income. During that period the parties appear to have enjoyed a relatively close personal relationship and I am satisfied that in addition to her non-financial contributions to the relationship and the property very substantial funds, in excess of $450,000, were paid in the renovation and improvement of the property “March Rising” by Ms Smith over the period 1999 - 2007, and due allowance should be made for this in determining the nature and extent of the interests of the parties in “March Rising”.

48 In particular, I accept that while Mr Ducker carried out or arranged some minor work, Ms Smith took on responsibility for the management of the property “March Rising” from 1999 to the present and also for the day to day running of the property. She has remained in occupation since separation in February 2007. Mr Ducker, contrary to his assertions as to the extent of his involvement, does not appear to have taken a very active part in relation to the management, renovation or improvements of the property or the arrangements for renovation over this period. It is not possible to be exact as to the amounts of input by either party during the period, but I accept the large contribution claimed by Ms Smith and I think that a very substantial adjustment should be made to the property of the parties to reflect this contribution.

49 It is common ground that Ms Smith did not contribute to the purchase price of “March Rising”, and that all the moneys for the purchase came from the sale of the Wylde Street property previously owned by Mr Ducker.

50 I have taken into account that during the period 1994 – 1999 the rental on the rented Suffolk Street property was about $25,000 a year, and that this was shared between them. He also, during this period, continued to trade shares and build up his investments to a stage where by the time of separation in February 2007 he had an investment portfolio comprising shares, cash and management funds of about $723,000.

51 I think it is significant that “March Rising” was purchased in the name of both parties. Ms Smith claims that after inspecting the property, and shortly before purchase, Mr Ducker made a statement to her to the effect:

“I will purchase March Rising with the proceeds from Potts Point (Wylde Street) and gift half the property to you if you will extend, renovate and decorate the property as well as doing the garden. It will use up your savings but I will do the share trading and save for our old age.”


Ms Smith’s evidence, which I accept, is that she accepted this proposition and that she proceeded to expend funds on the renovation, improvement and management of the property.

52 The making of any statement to this effect is denied by Mr Ducker, but, having regard to the close relationship between the parties at that time; the fact that the title is in both names; the acknowledged run-down nature of “March Rising” at purchase; the activities and conduct of the parties after the purchase; and also taking into account my views as to the relative credibility of the parties, I accept that Mr Ducker made that statement shortly before the purchase of “March Rising” and that the parties thereafter proceeded on the basis that it accurately characterised the nature of their respective contributions and interests in relation to that property.

53 The significance of the conversation is not that it is to be treated as any form of enforceable agreement between the parties, but rather it provides a context within which to consider the likelihood of whether Ms Smith, having regard to her long experience in renovation and design, would expend her substantial resources carefully accumulated up to 1999 on the improvement of “March Rising”, and whether I should accept her testimony in that respect. I find that her conduct was consistent with this statement having been made, and this lends support to my acceptance that she spent very substantial resources in excess of $450,000 on the improvement of “March Rising”.

54 The evidence indicates that, in addition to other financial and non-financial contributions, she made far greater contributions to management and administration of the property “March Rising” over the period 1999 – 2007 than were made by Mr Ducker. I am satisfied that this must be taken into account.

55 There is no doubt that “March Rising” was greatly enhanced in value over the period of cohabitation by her expenditure and work to the extent that the market value of the property was estimated as having risen to $1.075m as at the time of separation. This was more than double the purchase price eight years earlier. This value has however fallen by the date of hearing three years later to the present agreed market value of $830,000.

56 I find that the contributions by Ms Smith in the period of cohabitation to the improvement of “March Rising” was in the order of at least $450,000 and that during that period the contributions by Mr Ducker were minimal. During this period Mr Ducker was engaged in share dealing and I accept that by February 2007 he had built up a share and cash portfolio of about $723,000 at the time of separation. This has since diminished substantially.

Assets at Time of Hearing

57 The superannuation fund and “March Rising” make up the bulk of the assets of the parties. Mr Ducker has sworn, and I accept, that the value of the superannuation fund had now declined to about $478,000 by the time of the hearing because of market factors and the world financial crisis. In addition, as at the date of hearing there were chattels including jewellery and antiques of Ms Smith amounting to $68,000 and Mr Ducker had chattels including jewellery and antiques of $52,000 approximately. He also had artworks valued at $126,000. On the basis of these figures I estimate that the value of the assets of the parties at the date of hearing, for the purpose of adjustment of interests, is in the order of $1.56 million.

58 Since separation Ms Smith has had the benefit of living in “March Rising” which has an agreed rental value of $600 per week. Mr Ducker claims that an allowance should be made for at least half the rental value. Ms Smith contends that she has paid all expenses on the property and has maintained and improved it in excellent condition and there is no significant dispute that the property has been kept and is now in excellent condition. In the circumstances I do not consider it appropriate to make any adjustment in respect of rental value in favour of Mr Ducker.

59 Counsel contends also that there should be an allowance made for the rental value of a building occupied by Mr Harvey who continued to live on the property after separation. The evidence is that he carried out work on the property in return for his occupation of the building. I do not consider this should carry any weight in the evaluative exercise.

60 It is submitted for Ms Smith that since the value of the share portfolio and cash management funds of Mr Ducker had depreciated after separation this should be somehow taken into account in her favour when adjusting the interests of the parties. I do not accept the proposition that Mr Ducker should be at any disadvantage arising from the decline of the share market which has not been shown to be the result of any fault on his part nor do I consider that Ms Smith should be disadvantaged as a consequence of the fall in the market value of “March Rising” between 2007 and 2009.

61 Bearing in mind the substantial resources which both parties brought to the relationship; the closeness and the long-term nature of the relationship over 13 years; that Mr Ducker paid for the purchase of “March Rising”; the contributions made by both parties to the resources pool, and the non-financial contributions of the parties, the just and equitable adjustment is that the relative interests of the parties in the assets of the relationship should be adjusted so that Mr Ducker transfers his interest in “March Rising” to Ms Smith on her tendering an amount of $200,000 to him for such transfer within a period of 90 days from the date of this judgment and if this is not tendered the property should be sold and the net proceeds distributed between the parties on the basis that Ms Smith receives 75 per cent and Mr Ducker receives the balance. It is noted that the three sculptures situated in the garden at “March Rising” are the property of the plaintiff, who is entitled to collect these items. Otherwise there will be no other adjustments made to the property interests of the parties.

62 The orders which I consider should be made in this matter are:


(a) upon tender by the defendant of the amount of $200,000, the plaintiff shall transfer to the defendant all his right, title and interest in the property at “March Rising”, Alpine, New South Wales;

(b) in the event that the defendant does not tender the amount specified within 90 days of the date of this judgment, the parties are to sign all documents and take all steps necessary expeditiously and in good faith to sell the property at a fair market price;

(c) in the event of such sale, the proceeds of sale, after payment of all necessary expenses, will be divided between the parties so that the defendant will receive 75 per cent and the plaintiff the balance;

(d) the plaintiff is to pay the defendant’s costs.


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