F, BA v D, BJ
[2010] SADC 92
•9 July 2010
District Court of South Australia
(Civil)
F, BA v D, BJ
[2010] SADC 92
Judgment of His Honour Judge Beazley (ex tempore)
9 July 2010
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS
Domestic partnership of six years duration ending August 2008 – parties respectively had nominal assets at commencement of relationship save for superannuation entitlements – no children from relationship – house property purchased jointly in May 2006 – the defendant continued to reside in house from August 2008 to October 2009 without contributing to rent nor to mortgage instalments – defendant did not file a defence nor appear at the trial – parties remain in employment and are in good health – plaintiff acknowledges that the defendant entitled to 50% of the net proceeds of house property upon sale and after deduction of certain credits to the plaintiff.
DIVISION OF PROPERTY
Approach to property adjustment – evaluation of contributions – application of principles in section 11 of the Domestic Partners Property Act 1996 – sale of house property for the purpose of formulating orders as at the date of hearing – each party to retain such personal property presently in their possession – specifically the plaintiff may retain such furniture and effects in his possession together with the Ford BAXR6 motor vehicle – each party shall retain such monies standing to their respective credit in their individual bank and superannuation accounts.
Held: It is just and equitable that orders be made for the sale of the house property with adjustments to the net proceeds of the sale of the house property reflecting payments made or to be made by the plaintiff.
Those orders are that:
1. The house property be sold.
2. Each party notionally receive one half of the net proceeds of sale.
3. The defendant be credited with the balance of one half of the net proceeds of sale after deducting from her account and crediting the plaintiff's account with the following sums:
3.1. the sum of $5,112.30 in respect of the Visa card debt incurred by the defendant.
3.2. the sum of $4,514.79 in respect of the Telstra debt, incurred by the defendant.
3.3. the sum of $769.64 being one half of maintenance expenses incurred by the plaintff.
3.4. the sum of $5,600 being one half of notional occupation rent, enjoyed by the defendant.
4. The defendant to pay the plaintiff's costs of action to be agreed or taxed on a party/party basis.
Domestic Partners Property Act 1996 ss9, 10-11, referred to.
H v D (2005) 34 Fam LR 35; Hogg v Roberts (2003) 87 SASR 248; Arnold v Dalton (2002) 84 SASR 482; Bilous v Mudaliar (2006) NSWLR 615; Manns v Kennedy [2007] 37 Fam LR 489; Baker v Towle (2008) NSWCA 73; Karpathiou v Clemente [2008] SASC 316; M, DA v P, N [2008] SADC 169, considered.
F, BA v D, BJ
[2010] SADC 92Introduction
This is an application brought by F, BA (“the plaintiff”) against D, BJ (“the defendant”) seeking orders, pursuant to s 10 of the Domestic Partners Property Act (1996) (“the Act”), for a division, as between them, of the property of the parties in a way that is just and equitable.
The Absence of the defendant
The defendant has filed neither an address for service, nor a defence to the action. When the matter was called on for hearing today, the defendant did not appear after her name was called on three occasions.
I am satisfied by the affidavit of a processer server, David Jeffrey Chambers, sworn on 21 July 2009, that the summons herein issued by the plaintiff on 8 July 2009, was duly served personally upon the defendant 15 July 2009.
Mr Stokes, counsel for the plaintiff, informed the Court that he had received an intimation from the defendant to the effect that she had decided not to attend the hearing.
I am also satisfied by the affidavit of Mr Stokes, sworn on 5 May 2010, that notification of today’s hearing date was properly effected upon the defendant in accordance with the Rules of Court.
I accordingly heard the action this day in the absence of the defendant. Notwithstanding the absence of the defendant, the plaintiff must establish on the balance of probabilities that he is entitled to relief under the Act.
The Pleadings
The Plaintiff
In his Statement of Claim, the plaintiff pleads as follows:
·That the plaintiff and the defendant commenced a close personal relationship within the meaning of the Domestic Partners Property Act in about 2003 which relationship was terminated in the month of August 2008.
·That in the month of May 2006 the parties jointly purchased a property situate at 13 Beadell Street Burton in the State (“the Burton property”) for the sum of $185,000, in respect of which, the plaintiff paid the sum of $9,000 as deposit and the balance in the sum of $180,000 was obtained by way of a loan in joint names from Savings and Loans secured by registered mortgage (“the mortgage”).
·That the Burton property has a net residual value of approximately $60,000 upon discharge of the mortgage.
·That in addition to the Burton property, the assets of the respective parties are the following:
oFurniture and effects, in the sum of $5,000.
oThe plaintiff’s Ford motor vehicle in the sum of $20,000.
oThe plaintiff’s superannuation entitlement of approximately $70,000.
oThe defendant’s superannuation entitlement of approximately $50,000.
·That in addition to the mortgage, the debts of the respective parties are:
oThe plaintiff’s personal loan from Savings and Loans, in the sum of $40,000;
oThe debt of approximately $5,000 incurred by the defendant in respect of a Savings and Loans Visa card in joint names;
oThe debt of approximately $4,500 incurred by the defendant in respect of Telstra, which account is in the plaintiff’s name.
·That the defendant has continued to reside in the Burton property since the termination of the relationship. The plaintiff claims an entitlement to be credited with $200 per week in rent from the date of separation to the date upon which the defendant vacates the Burton property.
·The plaintiff has continued to make instalment payments in respect of the mortgage secured by the Burton property.
The Defendant
As I have already noted the defendant has not filed any defence nor has she taken any part or steps in the proceedings.
Interlocutory Order
On 16 December 2009, in the absence of the defendant, a Master of the Court ordered:
1.That the property situate at 13 Beadall Street Burton, be sold by an agent appointed by the plaintiff.
2.That the Registrar of the Court be empowered to execute such documents as may be necessary to affect the sale of the said property on behalf of the defendant
3.That the net proceeds of the sale be paid into Court to abide the order of the Court.
4.That the action be listed for hearing.
5.Liberty to apply.
Pursuant to the order of the Master the plaintiff has appointed an appropriate land agent, however no completed sale has as yet been effected.
The Law
Remedy under the Act
Pursuant to s 9(1) of the Act upon the termination of a domestic partnership, either of the domestic partners may apply to the court for the division of property. I am satisfied that the pre-conditions for such an application as set out in s 9(2) and (3) of the Act are satisfied in this case.
Section 10 of the Act provides:
(1)On an application for the division of property after the end of a domestic partnership, the court may make such orders as it considers necessary to divide between the domestic partners the property of either or both partners in a way that is just and equitable.
(2) For example, the court may make orders for –
(a) the transfer of property from one domestic partner to the other; or
(b) the sale of property and the division of the net proceeds between the domestic partners in proportions decided by the court; or
(c) the payment by one domestic partner of a lump sum to the other.
Section 11 relevantly provides:
(1)In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court –
(a) must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to –
(i)the acquisition, conservation or improvement of property of either or both partners; or
(ii) the financial resources of either or both partners; and
(b) must consider the contributions (including homemaking or parenting contributions) made by either of the domestic partners to the other partner or to children of the partners or either of them; and
(c) must have regard to the terms of any relevant domestic partnership agreement; and
(d) may have regard to other relevant matters.
The principles
In Hogg v Roberts,[1] Doyle CJ (with whose reasons Perry and Gray JJ agreed)[2] made a number of observations as to the approach to be taken under s11, of the predecessor De Facto Relationships Act, saying that:[3]
My understanding of the Act is that the requirement to make an order that is ‘just and equitable’ does not give rise to a general and unfettered discretion. First of all, the court is dividing property, not settling all outstanding financial issues as between the partners. Secondly, s11(1) indicates that the contributions referred to in that provision are important considerations in deciding what is just and equitable. The initial and primary focus must be on the property in question, contributions to that property, contributions to financial resources and then contributions by one party to the other and to the children.
However, the obligation under s11(1)(d) to have regard “to other relevant matters” means that contributions are not the only matter for consideration. It is to be noted that the court must have regard to “relevant matters”. I think that must mean matters relevant to a just and equitable division of property. The provision is not as wide as, for example, a direction to have regard to such matters as the court sees fit.
[1] (2003) 87 SASR 248. See also M, DA v P, N [2008] SADC 169.
[2] Paragraphs [11] to [19] of the Chief Justice’s judgment were cited with approval by Gray J (with whose reasons Sulan and David JJ agreed) in Karpathiou v Clemente [2008] SASC 316 at [31].
[3] At [11]-[12].
The Chief Justice stressed that it was not the role of the Court to use the division of property to remedy any grievances or to compensate a party for disappointed or unfulfilled expectations. His Honour went on to say that matters that are likely to be relevant include the length of the relationship and the immediate needs of the parties. His Honour said that the Court, in this exercise, is not dividing property with a view to providing, for example, for the continuing maintenance of the parties, after taking into account their future financial prospects. His Honour stressed that the Court is not to be concerned with attributing fault for the breakdown of the relationship, and that the contribution as homemaker is not to be treated as inferior to material or financial contributions.
The appropriate way to proceed[4] is in the subject case is to:
·identify the value of the assets of the parties;
·determine whether any and, if so, what contributions of the type identified in s11 of the Act had been made by each partner;
·determine the extent to which, if at all, the contributions of the plaintiff have already been sufficiently recognised and compensated for;
·identify and consider any other “relevant matters”; and then
·make the appropriate adjustment.
[4] Compare Parker v Parker (1993) 16 Fam LR 863 at 870 per Young J.
Fundamentally, however, the object of such an exercise is to effect a division of property between the parties in a manner which is “just and equitable”.
The evidence
The evidence called by the plaintiff was principally that contained in an affidavit sworn by him on 29 September 2009; and supplemented by some brief oral evidence and the tender of various documents, and photographs.
In his oral evidence the plaintiff substantially confirmed the matters pleaded in the statement of claim. I have no hesitation in accepting him as a truthful and reliable witness. Indeed at all times he adopted a most reasonable approach in explaining the joint contributions of both partners to the acquisition and maintenance of assets. Accordingly the following narrative constitutes my findings as to the relevant facts.
The plaintiff deposed that the relationship was of a close and personal nature, which commenced in mid 2002, and terminated in August 2008. At the commencement of the relationship, both were employed but had only nominal assets save for their separate bank and superannuation entitlements. Both parties remain fit and healthy, and in employment. There were no children from the relationship.
The only joint asset is the Burton property which was purchased by them in the month of May 2006, for the sum of $185,000. The plaintiff explained that the purchase of the property was financed by a deposit of $9,000 paid solely by him, with the balance provided by a loan in the sum of $180,000, from Savings and Loans, secured by a first mortgage over the property. He said that since purchase he has paid all of the mortgage instalments. The plaintiff conceded that both parties had contributed equally in various ways, to the general expenses and outgoings during the relationship, and that accordingly the defendant is generally entitled subject to adjustments, to a half share of the net proceeds of sale of the Burton property. The plaintiff said that, pursuant to the Master’s order he had placed the Burton property with an agent for sale. He explained that two contracts – one for $280,000, and the other for $360,000 had been entered into, however each prospective purchaser had cooled off.
He explained that between August 2008 and October 2009 the defendant remained in occupation of the Burton property rent free, while he was obliged to pay rent elsewhere. During that time and indeed since he solely has continued to meet the mortgage instalments. The plaintiff sought an adjustment in his favour to allow for the defendant’s occupation of the Burton property for 14 months. While the plaintiff suggested that an appropriate rental was $400 per week, there was no evidence to support that figure. I will fix as a starting point, a nominal rent at the rate of $200 per week. The plaintiff is entitled to one half of that sum as a joint owner.[5]
[5] See Hogg v Roberts (2003) 87 SASR 248 at 253.
The plaintiff gave evidence of the state of the premises when they were vacated by the defendant in October 2009. Photographs tendered by the plaintiff disclosed that during her sole occupation, the defendant had undertaken little or no maintenance. The premises were clearly in a poor state when she vacated. As a consequence the plaintiff had been obliged to expend the sum of $1,539.27 to enable the property to be put up for sale.[6]
[6] Exhibit P5.
He also produced the statements from Savings and Loans, and I am satisfied that the balance of the mortgage is the sum of $174,677.11.[7]
[7] Exhibit P7.
The plaintiff tendered a copy of an account, in his name, from Telstra in the sum of $4,514.79. He explained that that account was solely incurred by the defendant, despite Telstra pressing him for payment because it remains in his name.[8] He has undertaken to pay that sum in full from any adjustment to the net proceeds of the sale of the Burton property.
[8] Exhibit P2.
There was a dearth of evidence as to the parties respective bank accounts. Section 12 of the Act obliges the Court to finally resolve questions about the division of property. I am satisfied that any credit balances in the respective accounts would be modest. Accordingly I will make no adjustment in respect of them.
The plaintiff tendered a copy of the statement produced by Savings and Loans in respect of a visa card account in the joint names of the plaintiff and the defendant.[9]
[9] Exhibit P3.
That statement establishes that as at the date of the termination of the relationship the account was in debit in the sum of $5,112.30. The plaintiff explained that he did not have a card at the relevant time, and that the debt was solely incurred by the defendant. He has undertaken to discharge that debt from any adjustment to the net proceeds of sale.
Discussion
As is apparent from the matters expressed in s 11 of the Act, two relevant types of contributions must be considered. These are, on the one hand, the financial contributions made by each domestic partner to the acquisition, conservation and improvement of their asserts; and on the other, the non-financial contributions made directly or indirectly by each of the domestic partners. While there was a dearth of evidence as to the latter, I am satisfied that both parties made equal contributions in all respects save for the Telstra debt; the visa card debt; the maintenance costs after terminating and the rental of the property until October 2009.
I am satisfied that the defendant solely incurred the debts in respect of both the Telstra account and the visa card. Accordingly adjustments must be made in the plaintiff’s favour for the full amount of the Telstra debt and the visa card debt; and for half of both the nominal rental benefit to the defendant, and the maintenance costs of the property incurred by the plaintiff after the defendant vacated the Burton property in October 2009.
The plaintiff did not seek to recover any sum in relation to the deposit and mortgage instalments paid by him. He accepted that those payments were part of the ongoing domestic relationship.
The plaintiff acknowledged that the parties had resolved the issues of the furniture and effects from the Burton property, with each having taken an agreed portion of those items.
The plaintiff gave evidence that as at the month of September 2009, the plaintiff had a superannuation credit of $70,000 and the defendant, a credit of approximately $50,000.
In my opinion the differences in the respective superannuation credits simply reflect the parties pre-relationship entitlements, and they ought be put to one side. There ought not on the facts of this case be any adjustment in respect of those superannuation entitlements.[10]
[10] See Hogg v Roberts, supra, at p 253.
The plaintiff acknowledged that he was obliged solely to pay the personal loan of $40,000, which was largely incurred in his purchase of the Ford motor vehicle. In so doing, the plaintiff has not sought any adjustment from the defendant’s notional share in respect of the loan of $40,000.
It is entirely proper that the plaintiff should retain exclusive possession of the motor vehicle, now valued at $20,000, without any adjustment in favour of the defendant.
Conclusions
I am satisfied that the plaintiff was born on 16 October 1969 and the defendant on 26 April 1969; and that each of them remain in good health and in employment. There are no children of the relationship.
I am satisfied that in fact the relationship commenced in 2002 rather than 2003 as is specified in the pleadings. I am satisfied that it came to an end in August of 2008.
I am satisfied that for some six years the plaintiff and the defendant were in a close personal relationship, and parties to a domestic partnership as defined in the Act.
As I have found, the financial and non-financial contributions of the plaintiff and the defendant until termination in August 2008 should be regarded as equal contributions.
However the financial contributions of the plaintiff since termination and until trial clearly outweigh any financial or non-financial contributions which may have been made since August 2008 by the defendant.
There was no evidence led as to the payment of council rates. I was not invited by the plaintiff’s counsel to make any allowance notionally in favour of the plaintiff in respect of past or future mortgage payments, nor any allowance for rates.[11] I assume that the plaintiff has an expectation that the Burton property will shortly be sold. The property remains in both names and the liability for future mortgage payments and rates after judgment remains a joint liability.
[11] See M, DA v P, N [2008] SADC 169 at [125].
In this case, in light of the proper and reasonable approach taken by the plaintiff, it is not necessary to detail each partner’s precise contribution. The approach of the plaintiff to the adjustments, which has been identified, represents in my opinion a just and equitable distribution of the property of the parties.
As I have explained the only relevant property of the parties, is the residual value of the Burton property. Neither party is in a position to pay out the entitlement of the other, so as to retain the property. Accordingly the plaintiff seeks confirmation of the order of the Master, that the property be sold, with the net proceeds, subject to adjustments, being equally divided between the parties.
In my opinion it is just and equitable for orders to be made pursuant to section 10(2)(b) of the Act for the Burton property to be sold with the net proceeds to be notionally divided equally; and that the plaintiff be credited from the defendant’s notional share with:
·the sum of $4,514.79 in respect of the Telstra account discharged or to be discharged by him.
·the sum of $5,112.30 in respect of the joint visa card discharged or to be discharged by him.
·the sum of $769.64 being one half of the maintenance costs paid by the plaintiff.
·the sum of $5,600 representing approximately one half of the notional occupation rent as referred to above.
Mr Stokes submitted that the interlocutory order of the Master, requiring payment into Court, was made on the basis that the Court had not then fixed the appropriate adjustments to the parties respective entitlements. He submitted that there was no longer any need for the monies to be paid into Court. He sought an order varying the terms of the Master’s order, so that the net proceeds of sale be paid into his trust account.
I explained to Mr Stokes that while such a variation may be appropriate, that it was an onerous task that he was electing to undertake. The net proceeds would be held on trust for the respective parties. He would be obliged to act in accordance with the instructions of the defendant in respect of her adjusted share of the net proceeds of sale. He could not place himself in a position of conflict in respect of any claims upon trust monies held for the defendant including claims for costs or future mortgage payments.
Notwithstanding those difficulties, Mr Stokes submitted that it was in the interest of the parties that the proceeds be paid to his trust account to facilitate a speedy payment to the parties of their respective entitlements as adjusted in accordance with these reasons.
I have concluded in those circumstances that it is appropriate that the interlocutory order of the Master be varied so as to provide for the proceeds to be paid by the agent to the trust account of the plaintiff’s solicitor, Stokes Legal, rather than into Court.
The net proceeds of sale will be notionally divided equally between the parties. I direct that from the defendant’s notional 50% entitlement of the net proceeds of sale, the plaintiff’s solicitor be authorised to deduct the sum of $15,996.73 which will be credited to the plaintiff’s account, to reflect the respective adjustments of $5,112.30 for the Visa card debt; $4,514.79 for the Telstra debt; $769.64 for the property maintenance, and $5,600 for occupation rent, as specified in these reasons.
Costs
The plaintiff sought an order for costs.
As is plain the circumstances of this case are somewhat unusual in that the defendant has not taken any step in the proceedings. Indeed Mr Stokes explained that to date, the defendant has executed any contracts presented to her. He did however submit that the refusal of the defendant to consent to the orders sought by the plaintiff had led to the plaintiff incurring the costs of action. In addition the plaintiff had filed an offer in a Calderbank form, in quite similar terms to the orders made by the Court.
As I explained in M, DA v P, N (No2)[12] there is no rule or principle, in the case of domestic partners cases seeking relief under the Act, that the starting point ought be that each party bears its own costs of action.[13]
[12] [2008] SADC 180 at [17]-[19].
[13] cf. Kardos v Sarbutt (No2)(2006) NSWCA 2-6; Dunstan v Rickwood (No2)(2007) NSWCA 266.
Ultimately I have accepted the submission of Mr Stokes that the costs of action may have been avoided had the defendant either reached agreement with the plaintiff or filed an appropriate offer in the Court.
Accordingly I order that the defendant pay the plaintiff’s costs of the action to be agreed taxed on a party/party basis or otherwise agreed.
Orders
The formal orders of the Court are:
1. That the interlocutory order of the Master made on 16 December 2009 be varied so as to provide as follows:
1.1That the property situate at 13 Beadell Street Burton being the land comprised and described in Certificate of Title Register Book Volume 5066 Folio 650 be sold by an agent appointed by the plaintiff.
1.2In the event that the property is sold, and the defendant fails or refuses to execute the necessary documents to enable the sale to be completed; I direct that the Registrar of the Court be empowered to execute such documents as may be necessary to give effect to the completion of the sale of the said property on behalf of the defendant.
1.3That after payment of the costs of and associated with the sale and transfer of the said property, including the discharge of the mortgage and conveyancing fees, the net proceeds be paid by the appointed agent to the trust account of the plaintiff’s solicitor Stokes Legal to be dealt with in accordance with these orders.
2.That upon receipt of the net proceeds of sale the plaintiff’s solicitor is hereby authorised to notionally divide the proceeds of sale equally as between the plaintiff and the defendant, and then deduct from the defendants’ notional equal share; the sum of $15,996.73, which will be credited to the account of the plaintiff to reflect the respective adjustments herein of:
2.1The sum of $5,112.30, being the debt incurred by the defendant in respect of the Savings and Loans Visa card, which is to be paid in full by the plaintiff.
2.2The sum of $4,514.79, being the debt incurred by the defendant to Telstra, which is to be paid in full by the plaintiff.
2.3The sum of $769.64, being one half share of the maintenance expenses incurred by the plaintiff.
2.4The sum of $5,600 being one half of the notional occupation rent as fixed herein.
3.That after the adjustments are made in accordance with the directions in paragraph 2 hereof, the plaintiff’s solicitors will forthwith pay to the party the sums standing to the credit of that party unless specifically authorised by that party not to do so.
4.I give liberty to apply in respect of the payments to and from the trust account of the plaintiff’s solicitors of the net proceeds of sale.
5.That the defendant pay to the plaintiff the costs of action to be taxed on a party/party basis or otherwise agreed.
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