Eather v Schmohl

No judgment structure available for this case.

IN THE COUNTY COURT OF VICTORIA

Revised

Not Restricted

AT MELBOURNE
CIVIL DIVISION

APPLICATIONS

Case No. CI-08-02214

BARRY MAXWELL EATHER	Plaintiff
v
SANDY PEG SCHMOHL	Defendant

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JUDGE:	HIS HONOUR JUDGE MISSO
WHERE HELD:	Melbourne
DATE OF HEARING:	19 and 31 March 2009
DATE OF RULING:	2 April 2009
CASE MAY BE CITED AS:	Eather v Schmohl
MEDIUM NEUTRAL CITATION:	[2009] VCC 0298

RULING

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Catchwords: PROPERTY LAW – Part IX of the Property Law Act 1958 – judgment entered in default of an appearance - application to set aside the judgment - relevant considerations – Kostokanellis v Allen [1974] VR 596 – whether defendant had a prima facie defence on the merits - what is a prima facie defence on the merits in the context of the discretion to make an order for alteration of interests in property which seems just and equitable relevant to the considerations in section 285 (1) (a)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Pascoe	White Cleland
For the Defendant	Ms C Jenkins	David Gibbs & Associates
HIS HONOUR:

The Principal Proceeding
1 The plaintiff filed a Writ on 5 June 2008 seeking orders for adjustment of property interests pursuant to section 285(1)(a) of Part IX Property Law Act 1958 ("the Act").
2          The defendant did not file an Appearance which resulted in the plaintiff applying for judgment pursuant to Order 21.01 (2).
3          The proceeding came on before me on 19 February 2009. Mr Pascoe of counsel appeared for the plaintiff.
4          Mr Pascoe referred me to:

• an Affidavit of Service of Theodore Cedric Pryor, process server sworn 17 February 2009; and
• an affidavit of the plaintiff sworn 13 November 2008.
5          After reading those affidavits I was satisfied that the plaintiff had been properly served with the Writ by Mr Pryor.
6          I was also satisfied that judgment could be entered or given for the plaintiff by production of a notice to the registrar that a search had been conducted for an Appearance by the defendant as required by Order 21 (3) (a) and that the affidavits of Mr Pryor in the affidavit of the plaintiff sworn 13 November 2008 proved service of the Writ on the defendant as required by Order 21 (3) (b).

The Undefended Hearing
7 Mr Pascoe tendered an affidavit sworn by the plaintiff on 12 February 2009 in which the plaintiff deposed to the commencement of a domestic relationship in January 1994 which concluded in late October 2007, and the direct financial and non-financial contributions that both he and the defendant made to the acquisition, conservation and improvement of a number of properties.
8 After reading the affidavit and hearing submissions made by Mr Pascoe, I was satisfied that the plaintiff had made direct financial and non-financial contributions to the acquisition, conservation and improvement of those properties and I made an order adjusting the interests in property of the plaintiff and the defendant, pursuant to section 285 (1) (a), which I considered to be just and equitable, amounting to an adjustment in favour of the plaintiff of $200,000.

The Defendant's Application
9          The defendant filed a Summons on 4 March 2009 returnable on 19 March 2009 supported by an affidavit sworn by the defendant on 3 March 2009.
10        On the return of the Summons, Ms Jenkins appeared for the applicant/defendant and Mr Pascoe appeared for the respondent/plaintiff.
11        Part of the way through the hearing of the application Ms Jenkins applied for an adjournment in order to allow the defendant to consider the matters deposed to in the affidavit sworn by the plaintiff on 12 February 2009. I granted the adjournment. The application was adjourned, part heard, to 1 April 2009.
12        On 1 April 2009, Mr Pascoe tendered the following evidence in the application:

• the affidavit of the plaintiff sworn the 12 February 2009: Exhibit A
• the affidavit of the plaintiff sworn 30 March 2009: Exhibit B
• the affidavit of the plaintiff sworn 17 March 2009: Exhibit C
• the affidavit of Mr Pryor sworn 17 February 2009: Exhibit D
• the affidavit of the plaintiff sworn 13 November 2008: Exhibit E
13        Ms Jenkins tendered the following evidence in the application:

• the affidavit of the defendant sworn 3 March 2009: Exhibit 1
• the affidavit of the defendant sworn 26 March 2009: Exhibit 2
14        Neither the plaintiff nor the defendant were required for cross-examination. Mr Pascoe and Ms Jenkins were content to tender the affidavits and to make oral submissions.

The Application
15 The application made by Summons is made pursuant to Order 21.07 which provides me with a discretion to set aside a judgment entered or given in the accordance with Order 21.
16 The considerations which apply to the exercise of the discretion to set aside a judgment entered or given regularly was dealt with in Kostokanellis v Allen[1] in which Harris J, in giving the judgment of the Full Court, said:
“… what the judge is required to do is to determine what, in his opinion, is the just way in which the court's discretion should be exercised. To do this must involve weighing up the extent to which the defendant is prejudiced by allowing the order and judgment to stand and the prejudice to the plaintiff in setting them aside. In many cases the situation will be that the plaintiff will not suffer any prejudice that cannot be remedied by an appropriate order as to costs. … if the defendant does show on affidavit a prima facie defence on the merits it would seem that usually he will be seriously prejudiced if he is debarred from being able to present his defence at a trial of the action. One cannot tell until this has been done whether or not the defendant will succeed in such a defence. While it is undoubtedly relevant to the judge to consider what explanation the defendant has for not appearing on the return of the summons of final judgment, the weight to be attached to his explanation will depend upon the circumstances. Thus, for example, where the explanation shows that his non-appearance was due to some mistake or to his being misled, this may well assist the court in deciding to exercise its discretion in his favour. Again, the explanation given may reflect on the question whether the defendant has made out a prima facie defence on the merits. However, it does not necessarily follow that if the explanation does not amount to something which can be categorized as a ‘sufficient reason’ the defendant's application should fail. It must all depend on the circumstances. … .”
[1] [1974] VR 596

The Evidence
17        In her first affidavit sworn 3 March 2009, the defendant said that the plaintiff represented to her after she was served with the Writ that he did not intend doing anything with the proceeding.
18        The plaintiff said little about any defence, only saying that she believed she had a good, justifiable defence.
19        In order to make sense of what the plaintiff said in her second affidavit sworn 26 March 2009, it is necessary to set out how the plaintiff put his case in his affidavit sworn 12 February 2009.
20        The plaintiff outlined the financial relationship of the defendant himself as follows:

(a)

He received a windfall of $160,000 from clients. The defendant admits that the plaintiff received a lump sum, but says that it was nowhere near as significant as $160,000. She does not say why she believed it was nowhere near as significant, nor does she say why it is that she does not believe the plaintiff can prove that he received that sum of money and that it was a gift.

(b)

The defendant owned a property at 80 Windsor Crescent, Mont Albert ("the Mont Albert property") before they commenced their domestic relationship. She sold the two-lot plan of subdivision of that property for a total of $375,000 in early 1994.

(c)

The defendant purchased the property at 46 Second Street, Black Rock ("the Black Rock property") for $194,000 in February 1994.

(d)

He loaned the defendant $150,000 toward the purchase of the Black Rock property. The defendant denies that the plaintiff loaned her $150,000, saying that it was her recollection that he loaned her $100,000 and that when the Black Rock property was sold he was repaid all but $10,000.

(e)

Renovations were undertaken on the Black Rock property of about $45,000 paid from the joint funds.

(f)

In September 1994, the defendant completed a two-lot plan of subdivision of the Black Rock property. The defendant built a rear unit for $150,000 using funds from the sale of the Mont Albert property.

(g)

In September 1996, the defendant sold the front renovated house on the Black Rock property for $2000 and after it was removed she built a unit on the land at a cost of between $200,000 and $225,000.

(h)

In April 1997, the rear unit at the Black Rock property was sold for $300,000.
(i)       In May 1997, the defendant repaid the plaintiff $140,000. It was less $10,000 of the original sum of $150,000 which the defendant had loaned the plaintiff to pay some of his debts.[2]
[2]             This is the same transaction referred to in sub paragraph d)

(j)

In June 1997, the front unit of the Black Rock property was sold for $330,000.

(k)

In May 1997, the plaintiff purchased 130 Kearney Drive, Aspendale Gardens ("the Aspendale Gardens property") for $165,000. He paid $95,000 from his savings and borrowed $70,000 by way of mortgage finance and then undertook renovations at a cost of $20,000. The plaintiff and the defendant commenced living at the Aspendale Gardens property in mid-1997.

(l)

In late 1997, defendant purchased a block of land at Pelican Waters, Caloundra in Queensland ("the Pelican Waters property"). The funds for the purchase and the building of a house on the land came from the sale of the Black Rock property. There was a separation in about July 1998 when the defendant moved to Queensland.[3]

(m)

The plaintiff provided the defendant with money to live on while she was in Queensland and paid the telephone and electricity bills from time to time. He also purchased a black pearl necklace and ring valued at over $3000 for the defendant. The defendant denies that the plaintiff gave her money or paid any bills. She admitted receiving the jewellery and added that she purchased a gold watch and ring for the plaintiff valued at $3000.

(n)

In December 1999, the defendant purchased land at 17 Rockleigh Drive, Mount Martha ("the Rockleigh Drive property") for $192,500. The defendant said that she built a house on the land for $248,600 in 2003. It was financed by $90,000 from an annuity in her name and $136,373.11 borrowed by way of mortgage finance and with $172,000 from the sale of a property at 33 Caversham Drive, Mornington ("the Caversham Drive property").

(o)

The plaintiff sold the Pelican Waters property in June 2000 for $230,000. She returned to live with the plaintiff at the Aspendale Garden property. She lent the plaintiff $30,000 to pay out a credit card debt.

(p)

The plaintiff sold the Aspendale Gardens property for $219,500 and after discharge of the mortgage and payment of sale expenses, he received a net sum of $141,972.

(q)

The plaintiff and the defendant lived in rental premises in Mornington. The plaintiff paid the rent of $960 per month, for utilities and household expenses. The defendant was not working, nor had she during their relationship.

(r)

In February 2001, the plaintiff and the defendant purchased the Caversham Drive property for $58,500. It was funded by a deposit of $5,800 paid by the plaintiff. The balance of the purchase moneys were paid by the plaintiff from the investment in the AMP managed funds referred to in sub-paragraph (s) below. The plaintiff and the defendant borrowed $132,000 to build a house on the Caversham Drive property. He says that the defendant was put on the title to credit her for the $30,000 she loaned him to pay his credit card debt. The plaintiff said that he paid the instalments under the mortgage, insurances and rates on that property. The defendant said that property was sold for $172,000 and it was a property which they owned equally.

(s)

In March 2001, the plaintiff invested $127,400 from the proceeds of sale the Aspendale Garden properties into an AMP managed fund investment.

(t)

In May 2002, the plaintiff and the defendant purchased 15 Cassandra Drive, Mount Martha ("the Cassandra Drive property") for $95,500 which was wholly funded by borrowings.

(u)

In November 2002, the plaintiff and the defendant contracted to build a house on the Cassandra Drive property, borrowing $250,000 to build it. It was completed in late 2003. They moved into that property in December 2003. In August 2005, the Cassandra Drive property was transferred into the plaintiff's name.
[3] The defendant has not said anything in her affidavits sworn 26 March 2009 to contradict the summary of the plaintiff’s affidavit sworn 12 February 2009 set out in sub paragraphs b) - l)
(v) In February 2003, the plaintiff and the defendant deposited $133,000 into a bank account. $42,655 came from the plaintiff and $90,000 from the defendant. The proceeds of the sale of the Caversham Road property were deposited into that banking account.

(w)

In October or November 2004 the defendant contracted to build a house on the Rockleigh Drive property at a cost of $425,000. It was funded by the plaintiff contributing $42,655; the plaintiff and the defendant contributing their half share of the proceeds of sale of the Caversham Road property and $85,000 obtained by way of mortgage finance.
(x) The plaintiff sold the Cassandra Drive property for $308,000 and received a net sum of $39,251. The plaintiff and the defendant then moved from the Cassandra Drive property to the Rockleigh Drive property.

(y) The plaintiff paid the lease payments on a 2004 BMW motor vehicle and paid out the residual on the lease of $40,350 which came from the proceeds of sale of the Cassandra Drive property. The defendant is in possession of that motor vehicle.
(z) The defendant sold the Rockleigh Drive property for $795,000 after which the plaintiff and the defendant rented a townhouse at Safety Beach. The defendant said that she obtained a net sum of $710,607.06 from the sale of that property.
(aa) After an attempt to purchase another property the defendant effectively had sufficient moneys to purchase a property at 291 Dunns Road, Mornington ("the Dunns Road property") for the all up cost of $373,354.50. She admits to having $210,000 in one National Bank account and $100,000 in another National Bank account.
21        What is clear enough from the principal affidavits sworn by the plaintiff and the defendant is that at the commencement of their domestic relationship in January 1994, the plaintiff had a sum of money which he says amounted to $160,000 and which the plaintiff says was more like $100,000, and that the defendant had the Mont Albert property which she sold for $375,000.
22        It was from those moneys that successful investments were made which has materialised as the Dunns Road property and the cash savings which the defendant has in two banking accounts.
23        Mr Pascoe submitted that the defendant also has the BMW motor vehicle in her possession which has the notional value of the amount the plaintiff paid out on the residual of the lease.
24        Furthermore, what must also be brought into play is the $20,000 which the defendant paid the plaintiff after they had separated.
25        The defendant admits that she owes the plaintiff $59,000 based upon the sale of the Caversham Drive property which realised $172,000 for which she admits that she and the plaintiff are entitled to a half share amounting to $86,000. After deducting $20,000 which she paid the plaintiff on separation, and a further sum of $7,000 which she says he owes her, she has arrived at the sum of $59,000.

My Findings of Fact
26        I reject the defendant’s evidence that she was told by the plaintiff that he did not intend to do anything with the proceeding. I accept the plaintiff’s evidence that he did not have such a conversation with the defendant.
27        In his affidavit sworn 17 March 2009, the plaintiff said that on 14 June 2008 he was confronted at his home by a man named Mr Hodson, who was in the company of the defendant's niece, and again on the weekend of 25 and 26 October 2008. On the latter occasion, Mr Hodson gave the plaintiff a Withdrawal of Caveat to sign so that the defendant could sell the Dunns Road property and travel to Queensland.
28        The defendant has not chosen to answer those allegations. It seems very odd to me that if the defendant did have a conversation with the plaintiff during which the plaintiff is said to have represented he would be doing nothing with the proceeding, that she engaged someone to confront the plaintiff not long after the Writ had been filed.
29        In any event, I do not consider that the failure of the plaintiff to provide a plausible explanation for not filing an Appearance is critical to her application to set aside the judgment.
30        There has been no material delay on the defendant’s part in bringing this application to set aside the judgment.
31        I find that the plaintiff and the defendant commenced a domestic relationship in January 1994 which ceased in October 2007. Ms Jenkins obtained instructions from the plaintiff during her submissions regarding the length of the domestic relationship. Ms Jenkins informed me that the plaintiff's instructions were that the domestic relationship was of the length alleged by the plaintiff.
32        I find that the plaintiff had a lump sum of money in his possession around the time when a domestic relationship commenced. I consider that it is more likely than not that the lump sum was $160,000 and not the $100,000 referred to by the defendant. Firstly, the plaintiff is unequivocal in saying that he had that sum of money and confirmed that in his affidavit sworn 31 March 2009. Secondly, the defendant qualifies what she says about the quantum of that lump sum by firstly saying that he did not believe that the lump sum was anywhere near as significant as $160,000. I am not satisfied that she is really able to say whether the quantum of that lump sum was $100,000 or $160,000.
33        However, I will assume that the defendant is correct and that the lump sum was in the vicinity of $100,000 and not $160,000.
34        What is clear to me from the plaintiff's summary of the purchase and sale of properties and the turnover of those properties is that there is not much disparity between what the plaintiff has said in his affidavit sworn 12 February 2009 and what the defendant says in her affidavit sworn 26 March 2009, and indeed, the defendant has not sought to traverse all of the allegations made by the plaintiff and where she has not done so I see no reason why I should not accept the plaintiff’s evidence.
35        The real issue raised by the defendant is that their domestic relationship had all the hallmarks of a domestic relationship, that is, they were living together sharing in a domestic, social and recreational routine as if man and wife, but not when it came to buying and selling properties and investing money.
36        Ms Jenkins submitted that essentially the way in which the plaintiff described the purchase and sale of properties and the investment of moneys of itself gave the impression that there was more of a commercial relationship between the plaintiff and the defendant which was characterised by keeping their investments and monies separate.

37 However, what is clear to me is that the plaintiff invested at least $100,000 in the buying and selling of properties and the turnover of those properties which, according to the plaintiff, was paid back to him, but in turn it was reinvested by the plaintiff in properties and turned over many times ultimately realising moneys sufficient to put the defendant in the financial position that she is now in.
38 The foregoing is partly recognized by the defendant in her admission that she owes the plaintiff $59,000.
39 However, the defendant does not contest that she has the BMW motor vehicle and that the residual on the lease was paid out by the plaintiff. The amount he payed out was $40,350, and when added to the $100,000 which she says he contributed to the domestic relationship when it began, and which I find was reinvested in the course of the turnover of the properties, amounts to $140,350 before taking into account the relevant considerations which govern the basis for making an order for adjustment of interests in property pursuant to section 285(1)(a) of the Act.

The Statutory Scheme
40 In order to adjust interests in the properties, the plaintiff bears the onus to prove the following under the Act:

•

That he and the defendant were in a domestic relationship: Section 275(1)

•

That he and the defendant were domestic partners and lived in a domestic relationship for a period of at least two years, although the Court may make an order, where the relationship lasted less than two years, if there was a child of the domestic partners, or a failure to make the order would be a serious injustice because the plaintiff has made substantial contributions within the meaning of section 285(1)(a) or (b) or has had the care and control of the child of the other partner: Section 281

•

That he or the defendant lived in Victoria on the day the application was made: Section 280(a)

•

That he and the defendant have lived in Victoria for at least one third of their domestic relationship: Section 280(b)(i), or under Section 280 (b)(ii), the plaintiff has made a substantial contribution within the meaning of Section 285(1)(a) or (b).

•

That where the domestic relationship has ceased, the proceeding was commenced within two years after the date the relationship ended: Section 282(1). A court may grant leave to bring the proceeding out of time: Section 282(2).

•

That it is just and equitable to adjust the interests of the plaintiff and the defendant, or either of them, in real property because of the financial, non-financial, home-making and/or parenting contributions made by the plaintiff, or both of them, or any written agreement entered into by them: Section 285 (1) (a)-(c).

Conclusions
41        Ms Jenkins submitted that the defendant has a defence on the merits based upon her assessment of the plaintiff’s evidence that whilst there was a domestic relationship of just under fourteen years, the purchasing and selling the properties and the turnover of those properties was undertaken separately and that the plaintiff and the defendant behaved as if they were in more of a commercial relationship.
42        Ms Jenkins submitted, therefore, that the plaintiff is only entitled to an adjustment of interests in property consistent with his direct financial contributions, however, after some debate, she submitted that the plaintiff was entitled to an adjustment of interests in property of $100,000.
43        Ms Jenkins lastly submitted that the defence relied upon by the defendant is that the adjustment of interests in property which I made of $200,000 cannot stand when judged against what seems to be just and equitable, and that the adjustment is both unjust and inequitable.
44        Mr Pascoe did not make any submissions that if I were to set aside the judgment that an appropriate order for costs would not cover the prejudice to the plaintiff in having the judgment set aside. I would have been surprised if he made such a submission.
45        The submissions made by Ms Jenkins are in my opinion wholly unrealistic because what they seek to achieve is rather more of an accounting exercise in order to arrive at a just and equitable result as between the plaintiff and the defendant rather than giving due consideration to what my attention is directed by section 285 (1) (a).
46        What is obvious to me is that when the plaintiff and the defendant commenced their domestic relationship they both had assets which, when realised, enabled the two of them to make successive and successful investments in property and to turn those properties over, realising capital gain to the point where the defendant has the Dunns Road property for which she paid $373,354.50 (including titles office and stamp duty fees and conveyancing costs) and $310,000 in cash deposits.
47        Section 285 (1) (a) requires me to engage in more than an accounting exercise. I must consider the financial contributions made directly by the plaintiff and the defendant to the acquisition, but also the conservation and improvement of any property or financial resources of the plaintiff and the defendant.
48        It would be an error of law if I were to simply look at the contributions made by the plaintiff directly without giving due consideration to the fact that the plaintiff and the defendant made those successive and successful investments in property and turned over those properties which led to the creation of the assets presently in the possession of the plaintiff.
49        It may well be that the defendant entered the domestic relationship with a greater asset position, but it is clear to me that moneys came from the plaintiff which were invested and which led to the creation of the assets presently in the possession of the defendant. To that extent it cannot be denied by the defendant that the plaintiff contributed directly to the conservation and improvement of the successive and successful investments and the turnover of those properties, and to the financial resources of both of them.
50        The defendant also cannot deny that the plaintiff made non-financial contributions to the acquisition, conservation or improvement of the successive and successful investments in property and turnover of those properties, and the financial resources of both of them to be inferred by the very fact that they lived together in a domestic relationship.
51        The relationship must be characterised as one of a reasonably significant length of time being just under fourteen years. Although the defendant might have been the driving force in those successive and successful investments and the turnover of those properties, it was done for their mutual benefit. I think it is a fair inference to draw that while they were living in a domestic relationship and things were going well that they looked at the investments they were making as being for their joint benefit.
52        In order to determine whether the defendant has a defence based upon the adjustment of interests in property which I made is unjust and inequitable, I must consider the statutory basis upon which an adjustment of interest in property is to be made and the competing facts in this proceeding.
53        It occurs to me that if I accept the evidence more favourable to the defendant that the plaintiff contributed $100,000 at the commencement of the domestic relationship, had it repaid, but reinvested it in the purchase of properties and in the turnover of them, and paid out the residual on the lease on the BMW motor vehicle, then that represents the plaintiff's direct financial contribution without giving any consideration at all to the capital gain realised on the sale of the properties which were purchased and turned over, and an assessment of his role in the acquisition, conservation and improvement of the properties during the currency of the domestic relationship, and to the financial resources of both of them.
54 To suggest, if that is what Ms Jenkins was suggesting, that the party with the superior assets at the commencement of the domestic relationship and the superior capacity to successfully invest means that that party must be accorded all of the benefits of successful acquisition, conservation and improvement of property and financial resources runs against the grain of not only section 285(1)(a), but also a raft of decisions of single judges of the Supreme Court and the recent decision of the Court of Appeal in Giller v Procopets.[4]
[4] [2008] VSCA 236
55        In Giller v Procopets, Neave JA applied the approach in Kardos v Sarbutt [5] in which Brereton J referred to a three-step process in deciding whether to adjust the property interests of de facto partners.[6] Neave JA cited the following from the judgment of Brereton J with approval:[7]
“The first is the identification and valuation of the property of the parties, which determines ‘the divisible pool of property’ — that is ‘the property of the parties to the relationship or either of them’ … which may be the subject of an adjustive property order … The second is the evaluation and balancing of the respective contributions of the parties of the types referred to in [s 285] and typically though not invariably results in an apportionment between the parties on a percentage basis of the overall contributions of the types referred to in [the legislation] of each of them, made to the date of hearing. The third is the determination of what order is required sufficiently to recognise and compensate the applicant’s contributions, and typically results in an order which leaves the applicant with that percentage identified in the second step of the divisible property identified in the first step."[8]
[5] (2006) 34 Fam LR 550
[6]             Neave JA used the description "de facto partners" which is the expression used by the New South Wales Court of Appeal
[7]             Giller v Procopets (supra) at paragraph 314. Maxwell P agreed with the reasons given by Neave JA and Ashley JA, and Ashley JA agreed specifically with Neave JA, at paragraph 47, that the dictum of Brereton J in Kardos v Sarbutt (supra) should be applied.
[8]             at 558. Neave JA substituted references in brackets in the quote in order to make it consistent with the provisions of the Act and I have done the same.

56        The real difference between the plaintiff and the defendant is the defendant’s evidence of the direct financial contributions made by the plaintiff during the domestic relationship and the approach which Ms Jenkins submits I should take in assessing whether the adjustment of interest in property that I made is unjust and inequitable.
57 Again, to take the evidence which is more favourable to the defendant, then the direct financial contributions of the plaintiff are at least $140,350 before bringing into play all of the considerations which I am required to bring into play when exercising the discretion invested in me pursuant to section 285(1)(a) in determining what seems to be just and equitable.
58        Even giving due account to the superior position of the defendant in terms of the direct financial contributions she made during the domestic relationship and what she says was her superior capacity to buy and sell properties, turn them over and realise capital gain, it seems to me that it would be utterly unjust and utterly inequitable not to recognize the plaintiff's direct and indirect contributions as I have described them above.
59        The total asset position of the defendant is now about $683,000. $200,000 represents 29.28 per cent of the total asset position of the plaintiff and the defendant. I should add that I accept the plaintiff’s evidence that he has no assets save for a business valued at $150,000. It is a business which he conducted before the domestic relationship began and one which he has continued to conduct. I accept his evidence that the defendant did not pursue any occupation during the domestic relationship, and that evidence of the plaintiff is not disputed by the defendant.
60        A domestic partnership dispute over property is somewhat different from the subject matter dealt with by the Full Court in Kostokanellis v Allen. When the Full Court spoke of a prima facie defence on the merits, that must be given some meaning to the extent that it is an apposite description when considering an application to set aside a judgment in the context of section 285(1)(a) of the Act .
61        I think a fair translation of a prima facie defence on the merits is as I have chosen to transform it by asking the question whether the alteration of interests in property I made in favour of the plaintiff was, in the circumstances of the evidence adduced by the plaintiff and the defendant in this application seems to be unjust and inequitable.
62        After traversing the evidence adduced by both the plaintiff and defendant and synthesising it against the statutory regime and the authorities which provide me with guidance in relation to such cases, I do not consider that the alteration of property interests can be characterised as unjust and inequitable, but now having the benefit of the defendant’s evidence, I consider the alteration of interests in property which I made was perhaps on the conservative side.
63        For the foregoing reasons, the defendant’s summons is dismissed with costs.

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Citations

Eather v Schmohl [2009] VCC 298

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Giller v Procopets [2008] VSCA 236

(a)	He received a windfall of $160,000 from clients. The defendant admits that the plaintiff received a lump sum, but says that it was nowhere near as significant as $160,000. She does not say why she believed it was nowhere near as significant, nor does she say why it is that she does not believe the plaintiff can prove that he received that sum of money and that it was a gift.
(b)	The defendant owned a property at 80 Windsor Crescent, Mont Albert ("the Mont Albert property") before they commenced their domestic relationship. She sold the two-lot plan of subdivision of that property for a total of $375,000 in early 1994.
(c)	The defendant purchased the property at 46 Second Street, Black Rock ("the Black Rock property") for $194,000 in February 1994.
(d)	He loaned the defendant $150,000 toward the purchase of the Black Rock property. The defendant denies that the plaintiff loaned her $150,000, saying that it was her recollection that he loaned her $100,000 and that when the Black Rock property was sold he was repaid all but $10,000.
(e)	Renovations were undertaken on the Black Rock property of about $45,000 paid from the joint funds.
(f)	In September 1994, the defendant completed a two-lot plan of subdivision of the Black Rock property. The defendant built a rear unit for $150,000 using funds from the sale of the Mont Albert property.
(g)	In September 1996, the defendant sold the front renovated house on the Black Rock property for $2000 and after it was removed she built a unit on the land at a cost of between $200,000 and $225,000.
(h)	In April 1997, the rear unit at the Black Rock property was sold for $300,000.

(j)	In June 1997, the front unit of the Black Rock property was sold for $330,000.
(k)	In May 1997, the plaintiff purchased 130 Kearney Drive, Aspendale Gardens ("the Aspendale Gardens property") for $165,000. He paid $95,000 from his savings and borrowed $70,000 by way of mortgage finance and then undertook renovations at a cost of $20,000. The plaintiff and the defendant commenced living at the Aspendale Gardens property in mid-1997.
(l)	In late 1997, defendant purchased a block of land at Pelican Waters, Caloundra in Queensland ("the Pelican Waters property"). The funds for the purchase and the building of a house on the land came from the sale of the Black Rock property. There was a separation in about July 1998 when the defendant moved to Queensland.[3]
(m)	The plaintiff provided the defendant with money to live on while she was in Queensland and paid the telephone and electricity bills from time to time. He also purchased a black pearl necklace and ring valued at over $3000 for the defendant. The defendant denies that the plaintiff gave her money or paid any bills. She admitted receiving the jewellery and added that she purchased a gold watch and ring for the plaintiff valued at $3000.
(n)	In December 1999, the defendant purchased land at 17 Rockleigh Drive, Mount Martha ("the Rockleigh Drive property") for $192,500. The defendant said that she built a house on the land for $248,600 in 2003. It was financed by $90,000 from an annuity in her name and $136,373.11 borrowed by way of mortgage finance and with $172,000 from the sale of a property at 33 Caversham Drive, Mornington ("the Caversham Drive property").
(o)	The plaintiff sold the Pelican Waters property in June 2000 for $230,000. She returned to live with the plaintiff at the Aspendale Garden property. She lent the plaintiff $30,000 to pay out a credit card debt.
(p)	The plaintiff sold the Aspendale Gardens property for $219,500 and after discharge of the mortgage and payment of sale expenses, he received a net sum of $141,972.
(q)	The plaintiff and the defendant lived in rental premises in Mornington. The plaintiff paid the rent of $960 per month, for utilities and household expenses. The defendant was not working, nor had she during their relationship.
(r)	In February 2001, the plaintiff and the defendant purchased the Caversham Drive property for $58,500. It was funded by a deposit of $5,800 paid by the plaintiff. The balance of the purchase moneys were paid by the plaintiff from the investment in the AMP managed funds referred to in sub-paragraph (s) below. The plaintiff and the defendant borrowed $132,000 to build a house on the Caversham Drive property. He says that the defendant was put on the title to credit her for the $30,000 she loaned him to pay his credit card debt. The plaintiff said that he paid the instalments under the mortgage, insurances and rates on that property. The defendant said that property was sold for $172,000 and it was a property which they owned equally.
(s)	In March 2001, the plaintiff invested $127,400 from the proceeds of sale the Aspendale Garden properties into an AMP managed fund investment.
(t)	In May 2002, the plaintiff and the defendant purchased 15 Cassandra Drive, Mount Martha ("the Cassandra Drive property") for $95,500 which was wholly funded by borrowings.
(u)	In November 2002, the plaintiff and the defendant contracted to build a house on the Cassandra Drive property, borrowing $250,000 to build it. It was completed in late 2003. They moved into that property in December 2003. In August 2005, the Cassandra Drive property was transferred into the plaintiff's name.

(y)	The plaintiff paid the lease payments on a 2004 BMW motor vehicle and paid out the residual on the lease of $40,350 which came from the proceeds of sale of the Cassandra Drive property. The defendant is in possession of that motor vehicle.
(z)	The defendant sold the Rockleigh Drive property for $795,000 after which the plaintiff and the defendant rented a townhouse at Safety Beach. The defendant said that she obtained a net sum of $710,607.06 from the sale of that property.
(aa)	After an attempt to purchase another property the defendant effectively had sufficient moneys to purchase a property at 291 Dunns Road, Mornington ("the Dunns Road property") for the all up cost of $373,354.50. She admits to having $210,000 in one National Bank account and $100,000 in another National Bank account.

•	That he and the defendant were in a domestic relationship: Section 275(1)
•	That he and the defendant were domestic partners and lived in a domestic relationship for a period of at least two years, although the Court may make an order, where the relationship lasted less than two years, if there was a child of the domestic partners, or a failure to make the order would be a serious injustice because the plaintiff has made substantial contributions within the meaning of section 285(1)(a) or (b) or has had the care and control of the child of the other partner: Section 281
•	That he or the defendant lived in Victoria on the day the application was made: Section 280(a)
•	That he and the defendant have lived in Victoria for at least one third of their domestic relationship: Section 280(b)(i), or under Section 280 (b)(ii), the plaintiff has made a substantial contribution within the meaning of Section 285(1)(a) or (b).
•	That where the domestic relationship has ceased, the proceeding was commenced within two years after the date the relationship ended: Section 282(1). A court may grant leave to bring the proceeding out of time: Section 282(2).
•	That it is just and equitable to adjust the interests of the plaintiff and the defendant, or either of them, in real property because of the financial, non-financial, home-making and/or parenting contributions made by the plaintiff, or both of them, or any written agreement entered into by them: Section 285 (1) (a)-(c).

[2009] VCC 298

2 April 2009