Evans v Langton

NEW SOUTH WALES COURT OF APPEAL

CITATION: Evans v Langton [2002] NSWCA 208

FILE NUMBER(S):
40903 of 2001

HEARING DATE(S): 27/06/02

JUDGMENT DATE: 31/07/2002

PARTIES:
Frances Louise Evans
v
Ian Richard Langton

JUDGMENT OF: Meagher JA Santow JA Foster AJA

LOWER COURT JURISDICTION: District Court

LOWER COURT FILE NUMBER(S): DC 1796 of 2001

LOWER COURT JUDICIAL OFFICER: Patten DCJ

COUNSEL:
Appellant: Mr E White
Respondent: Mr R Maurice

SOLICITORS:
Appellant: John Byrnes & Associates
Respondent: Loder & Loder

CATCHWORDS:
Section 20 Property (Relationships) Act 1984 - de-facto relationship - whether the findings reflected the orders made by the trial judge - appeal allowed.

LEGISLATION CITED:
Property (Relationships) Act 1984

DECISION:
See Page 7 of Judgment.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40903 of 2001
MEAGHER JA
SANTOW JA
FOSTER AJA
Wednesday, 31 July 2002

FRANCES LOUISE EVANS v IAN RICHARD LANGTON

FACTS
The appellant, Ms L. Evans (“wife”), lived together in a de-facto relationship with the respondent, Mr R Langton (“husband”), from September 1993 until January 1999. The de-facto couple purchased a house (“the matrimonial home”) for $395 000, stamp duty and related expenses being $15 000. The appellant contributed $160 000 of the purchase price ($410 000) from her own resources, and the balance ($250 000) was borrowed jointly by the parties on mortgage from the National Australia Bank. As to the mortgage, it was agreed by the parties that the moneys would be repaid as to 82% by the respondent ($205 000) and as to 18% by the appellant ($45 000). In December 1996, the appellant contributed another capital sum of $40 000, thereby reducing her liability under the mortgage to $5000, and later paid a further $11 000. The respondent contributed about $110 000 towards repayment of the mortgage, of which $76 000 was credited against interest.
At the date of the hearing, it was agreed that the house was worth $740 000 and that the size of the mortgage debt was $174 000. The trial judge found that (i) the role of the plaintiff as homemaker was greater than that of the defendant, a finding which was not challenged on appeal, and (ii) the plaintiff had made substantial contributions for which she would not be adequately compensated if some order were not made in her favour under s 17 of Property (Relationships) Act 1984.
On appeal, the appellant contended that (i) neither of the findings was reflected in the sum of $80 000 in Order 2(b) made by the trial judge, and (ii) the orders achieved the result that the appellant was less well provided for under the Court’s orders than she would have been under the general law apart from statute.
HELD: Per Meagher JA (Santow JA and Foster AJA agreeing)
(i)Under the general law, one would sell the house and realise the sum of $740 000 from which sum one would pay the agent’s commission ($20 000), leaving the sum of $720 000 between the parties. By the agreement of the parties, the amount then owing on the mortgage ($174 000) should be deducted solely from the husband’s share, since the wife has paid her share of the mortgage. That would leave the wife with $360 000 and the husband with $186 000.
(ii)The trial judge’s orders, that both the $174 000 mortgage debt and the $80 000 would be deducted from the proceeds of sale before dividing the moneys between the parties, leaving him with $233 000 and her with $313 000, must be corrected. One would therefore end up with the wife receiving about $440 000 and the husband about $106 000.

ORDERS
Instead of Order 2, the following order should be made:

Order 2
2.“The Court orders that the net proceeds of sale, that is after the payment of agent’s commission, legal costs and the payment of other expenses connected with the sale, be applied as follows:
(a)First, a sum equivalent to one half of such net proceeds plus $80 000, be paid to the plaintiff, with no further deductions from such sum;
(b)Secondly, any sums owing to National Australia Bank be paid;
(c) Thirdly, the balance, if any, be paid to the Defendant”.
All mortgage instalments due after the parties’ separation are payable by the respondent, and insofar as the appellant has paid any such instalments the respondent should indemnify the appellant.
The respondent to pay the appellant’s costs of the appeal, but have a certificate under the Suitors’ Fund Act.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40903 of 2001
MEAGHER JA
SANTOW JA
FOSTER AJA
Wednesday, 31 July 2002

FRANCES LOUISE EVANS v IAN RICHARD LANGTON

Judgment

MEAGHER JA: This is an appeal by Mrs Frances Louise Evans, the plaintiff, from orders made on 17 October 2001 by Patten DCJ under s20 of the Property (Relationships) Act 1984. The defendant, the respondent in this appeal, was Mr Ian Richard Langton, her ex-de-facto partner. For simplicity’s sake I shall call them “husband” and “wife”.
Insofar as is relevant, the orders made by his Honour were:
1.I order that the parties take such steps as may be appropriate for the sale of the property known as 63 O’Connor Street, Haberfield.
2.I order that the net proceeds of sale, that is after discharge of the mortgage to National Australia bank the payment of agent’s commission and legal costs and the payment of other expenses associated with the sale, be applied as follows:
(a)A sum equivalent to one half of any arrears of the instalments payable to National Australia Bank as at the date of completion of the sale, to the Plaintiff.
(b) The sum of $80,000 to the Plaintiff.
(c)The balance remaining in equal shares to the Plaintiff and the Defendant.
It is agreed that the parties lived together from September 1993 until January 1999 in a de-facto relationship. As always, the facts are of some complication; but, for the purposes of this appeal, one can proceed as if there were only one asset, viz the “matrimonial” house, situated at Haberfield (which is said to be a suburb of Sydney). The parties lived there from the beginning of 1996 until the hearing before his Honour.
The house was purchased for $395,000, stamp duty and related expenses being $15,000. $160,000 of this purchase price of $410,000 was contributed by the wife from her own resources. The balance, $250,000 was borrowed jointly by the parties on mortgage from the National Australia Bank.
As to the mortgage, it was agreed by the parties that the moneys would be repaid as to 82% by the husband ($205,000) and as to 18% by the wife ($45,000). In fact, in December 1996, she contributed another capital sum of $40,000, thus reducing her liability under the mortgage to $5000. Nevertheless, generously but illogically, she continued to pay her agreed instalments under the mortgage. In fact, between the date of the payment of $40,000 and the date of hearing, she had paid a further $11,000 towards payment of the mortgage debt. She had thus paid more than her agreed share of the mortgage debt. The husband contributed about $110,000 towards repayment of the mortgage, of which $76,000 can be credited against interest.
On 14 May 1996 the parties executed a Deed, clauses 1 and 5 of which were as follows:
1.The parties acknowledge that the sum of two hundred and fifty thousand dollars ($250,000) borrowed by them from National Australia Bank to assist the finance of their purchase of the property was borrowed for their benefit in unequal shares as two hundred and five thousand dollars ($205,000) thereof was borrowed for the benefit of Ian Richard Langton and forty five thousand dollars ($45,000) thereof was borrowed for the benefit of Frances Louise Evans. Accordingly Ian Richard Langton shall pay eighty two per cent (82%) of each and every instalment or repayment which may have become or may become payable to the said bank in respect of the said mortgage debt and Frances Louise Evans shall pay eighteen per cent (18%) of each such sum that may have become payable or may be payable. The parties shall fully indemnify each other at all times and hold the indemnified party harmless in respect of the obligations acknowledged in this clause.
5.Subject to the making of any payment by one party to the other necessary to give effect to the indemnity provided for in clause 1 hereof the net proceeds of any sale of the property shall be divided between the parties hereto in equal shares.
At the date of the hearing, it was agreed that the house was worth $740,000 and that the size of the mortgage debt was $174,000.
His Honour, after a careful review of the evidence, made two findings of significance. The first is “In my view, the role of the plaintiff as home-maker was greater than that of the defendant”. This finding, although perhaps a little on the parsimonious side, was not challenged. It is to this view that the sum of $80,000 in Order 2 (b) may be attributed. The second is:
“In terms of section 17 of the Act, I am satisfied that the Plaintiff has made substantial contributions of the kind referred to in section 20 (i)(a) and (b) for which she would not be adequately compensated if some order were not made in her favour under the statute.”
The wife’s case is that neither of the crucial findings is reflected in the orders made by his Honour. As far as the $80,000 is concerned, taking it out of the joint property and not out of the husband’s share is to ensure that no such advantage is given to her. As far as the second is concerned, the orders made by his Honour achieve the result that the wife is less well provided for under the Court’s orders than she would have been under the general law apart from statute.
Under the general law, one would sell the house and realise the sum of $740,000, from which sum one would pay the agent’s commission ($20,000), leaving the sum of $720,000 between the parties. Each party would, prima facie, be entitled to one-half of that sum ($360,000). But, by the agreement of the parties, the amount then owing on the mortgage ($174,000) should be deducted solely from the husband’s share, since the wife has paid her share of the mortgage. That would leave the wife with $360,000 and the husband with $186,000.
Under the Deed, the result would be the same.
Under his Honour’s orders, both the $174,000 mortgage debt and the $80,000 would be deducted from the proceeds of sale before dividing the moneys between the parties, leaving him with $233,000 and her with $313,000.
These errors must be corrected.
To do so one will, on my computations, end up with the wife receiving about $440,000 and the husband about $106,000.
Instead of Order 2, the following order should be made:
2.“The Court orders that the net proceeds of sale, that is after the payment of agent’s commission, legal costs and the payment of other expenses connected with the sale, be applied as follows:
(a)First, a sum equivalent to one half of such net proceeds plus $80,000, be paid to the plaintiff, with no further deductions from such sum;
(b)Secondly, any sums owing to National Australia Bank be paid;
(c)Thirdly, the balance, if any, be paid to the Defendant.”
It is the Court’s intention that all mortgage instalments due after the parties’ separation are payable by the husband, and, insofar as the wife has paid any such instalments the husband should indemnify her; and the Court so orders.
The husband should pay the wife’s costs of the appeal, but have a certificate under the Suitors’ Fund Act.
SANTOW JA: I agree with Meagher JA.
FOSTER AJA: I agree with Meagher JA.

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LAST UPDATED: 31/07/2002

[2002] NSWCA 208

31 July 2002

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