G v B - [2006] SADC 44

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
G v B
Judgment of Her Honour Judge Simpson
26 April 2006
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - ADJUSTMENT OF PROPERTY INTERESTS
De Facto Relationship of 6 years - Division of property - Defendant taking no part in proceedings - hearing in absence of defendant - acquisition of real property in defendant’s name - plaintiff contributed financially to relationship in living expenses and acquisition of personal assets - non-financial contribution of plaintiff considered – Order that real property be sold and after deduction for repayment of loan moneys to mortgagee, selling expenses and defendant’s personal debt, net proceeds divided equally between the parties.
De Facto Relationships Act 1996 ss 9, 10, 11, 12, referred to.
Hogg v Roberts (2003) 87 SASR 248; Evans v Marmont (1997) 42 NSWLR 70; Parker v Parker (1993) 16 Fam LR 863; Theodoropoulos v Theodosiou (1995) 38 NSWLR 424; Davey v Lee (1989) 13 Fam LR 688; Norbis v Norbis (1985-1986) 161 CLR 513; Arnold v Dalton (2002) 84 SASR 482; Mallet v Mallet (1984) 156 CLR 605, applied.

G v B
[2006] SADC 44

This is an application brought by the plaintiff pursuant to section 9 of the De Facto Relationships Act 1996 (‘the Act’) for an order for the division of property.
Section 9 of the Act relevantly provides:
(1)After a de facto relationship ends, either of the de facto partners may apply to a court for the division of property.
(2)     However, an application for the division of property may only be made if—
(a)     the applicant or respondent is resident in the State when the application is made; and
(b)     the de facto partners were resident in the State for the whole or a substantial part of the period of the relationship; and
(c)     the de facto relationship existed for at least three years or there is a child of the de facto partners.
(3)An application for the division of property must be made within one year after the end of the de facto relationship unless the court, after considering the interests of both de facto partners, is satisfied that extension of this period of limitation is necessary to avoid serious injustice to the applicant.
…
A de facto relationship is defined in section 3 of the Act to mean “the relationship between a man and a woman, who although not legally married to each other, live together on a genuine domestic basis as husband and wife”.
I accept that the plaintiff had begun a serious relationship with the defendant when she was 16 years old, while she was still at school and living with her parents. In June 1997, the defendant had come to live with the plaintiff’s parents, while he was studying at Thebarton College. The plaintiff was then in Year 11 at school. The defendant was 20 years old. They became friends. Their friendship developed into a boyfriend and girlfriend relationship, and in about June 1997, the defendant went to live at the plaintiff’s parents’ house in Reynella, where after a time, they shared a bedroom.
Shortly afterwards, with the assistance of the plaintiff’s parents, the defendant obtained employment at Adelaide Mushrooms, and twelve months later, moved into accommodation of his own at Reynella. The defendant later found more work in a number of different industries, including factory work, pizza delivery and restaurant work.
I accept that the relationship continued over the time before the plaintiff moved in with the defendant. However, the plaintiff was not 18 years old, she was still at school, and she was living with her parents at their request to avoid distractions while she was studying. While I accept that the plaintiff spent time at the defendant’s first flat in Reynella, contributed to some expenses and did cooking and cleaning, and gave emotional and moral support to the defendant, as no doubt he gave her, I do not accept that the relationship could then properly be described as a de facto relationship.
After the plaintiff completed Year 12 at the end of 1998, or in early 1999, she and the defendant moved to a flat of their own at Reynella. The plaintiff began working full-time. They shared their living expenses. They had decided to get married. They bought matching engagement rings. The plaintiff bought a wedding dress.
It is the plaintiff’s case, and I accept, that she lived with the defendant in a de facto relationship from April 1999, when the plaintiff had just turned 18, until 29 April 2005, when she left the relationship and returned to live at her parent’s home in Reynella. They have no children.
The plaintiff is resident in South Australia, and she and the defendant were living in the State in a de facto relationship, which existed for about 6 years.
The summons, statement of claim and application for directions, all filed on 30 August 2005, were served on the defendant personally at his home address on 1 September 2005[1].
[1] Ex P1 Affidavit of Paul John Kennewell sworn 1 October 2005
When the plaintiff left the relationship on 29 April 2005, after an argument with the defendant, she and the defendant were living in a house at 32 Simone Crescent, Morphett Vale. The defendant is the registered owner of the property, which is comprised in Certificate of Title Register Book Volume 5857 Folio 599. It is subject to a mortgage to Bendigo Bank.[2] The defendant has since remained living at the property.
[2] Ex P5 Affdiavit of the plaintiff sworn 21 April 2006 (Ex LMG 1 p1)
It is not relevant, and I am not asked to come to any conclusion regarding fault for the final collapse of the relationship. (Hogg v Roberts (2003) 87 SASR 248 at 250; Evans v Marmont, (1997) 42 NSWLR 70 at 74, 79, 87 and 98)
The defendant instructed solicitors to act on his behalf in November 2005[3]. The solicitors wrote to the defendant on 28 November 2005, advising the defendant of the need to observe strict timeframes for filing answering documents in the proceedings and requesting him to pay a sum of money on account of fees into the trust account of the solicitors. An address for service was filed on 6 December 2005 on his behalf. On 8 December 2005, the solicitors again wrote to the defendant at his home address, advising him that unless he responded to the correspondence, they would not be able to continue to act for him.
[3] Ex P2 Affidavit of Julie-Ann Simkin sworn 17 February 2006
On 2 December 2005, the plaintiff brought an application for leave to proceed ex parte and for an order, inter alia, that the property at Morphett Vale, in which the defendant was living, be sold and the net proceeds divided equally between the parties. The defendant’s solicitors enclosed a copy of the application in a letter dated 14 December 2005 sent to the defendant by registered post. The defendant was advised that the application was to be heard in this Court on 14 March 2006 and to contact his solicitors as a matter of urgency. It appears that the letter was received by the defendant on 9 February 2006, when the Delivery Confirmation – Advice Receipt[4] was signed.
[4] Ex P2 Affidavit of Julie-Ann Simkin sworn 17 February 2006 (Exhibit JAS 6)
As at 17 February 2006, no response had been received from the defendant and his solicitors applied for leave to cease acting for him. The application was sent by registered post to the defendant’s home address[5].
[5] Ex P4 Affidavit of Julie-Ann Simkin sworn 10 March 2006
A subpoena was issued to Bendigo Bank to produce documents in relation to the mortgage over the property at Morphett Vale, returnable on 14 March 2006. No documents were produced to the Court. However, it appears that copies of relevant documents were produced to the solicitors for the plaintiff, who became aware that Bendigo Bank had commenced legal action against the defendant in January 2006 to call in the mortgage and take possession of the property.[6] There is evidence that the defendant is no longer living at the home he and the plaintiff formerly shared and that it is not being maintained.[7]
[6] Ex P3
[7] Ex P5 Affidavit of the plaintiff sworn 21 April 2006
On 14 March 2006, a Master of this Court made orders that the solicitors for the defendant cease acting, the matter be referred for an urgent listing and the defendant’s solicitors notify the defendant of the orders made. The legal officer from the Bank advised the plaintiff’s solicitors on 17 March 2006 that the bank was unable to defer the action pending the outcome of these proceedings[8].
[8] Ex P6
The defendant had taken no part in the proceedings to the date of hearing, he had had no contact with his solicitors, and no address for service or defence had been filed after his solicitors ceased acting. When the matter came on for hearing on 21 April 2006, I was advised by counsel for the plaintiff that every effort had been made by the solicitors for the plaintiff to notify the defendant, and relatives of the defendant who may be in contact with him, of the time of the hearing. There was no appearance by or on behalf of the defendant on 21 April 2006. In the circumstances, I was satisfied that it was appropriate to proceed to hear the plaintiff’s application for relief in open court pursuant to Rule 75.19 of the District Court Rules 1992.
It follows that the Court has had to rely solely on the evidence presented by the plaintiff, by affidavit sworn on 21 April 2006, supplemented by oral evidence, which was not tested by cross-examination. However, the evidence given by the plaintiff was straightforward. My impression of the plaintiff was that she made no attempt to deny or minimise the contributions made by the defendant to the relationship or to assets, the subject of the application. I accept her evidence.
On an application for the division of property, pursuant to section 10 of the Act, the Court may make orders it considers necessary to divide the property of either or both the de facto partners between them in a way that is just and equitable. The Court may make orders, for example, for:
(a) the transfer of property from one de facto partner to the other; or
(b) the sale of property and the division of the net proceeds between the de facto partners in proportions decided by the Court; or
(c) the payment by one de facto partner of a lump sum to the other.
The relevant considerations are primarily determined by the provisions of the legislation. Section 11(1) provides:
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 de facto 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 de facto 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 cohabitation agreement; and
(d)     may have regard to other relevant matters.
There was no cohabitation agreement in this case.
Pursuant to section 12, the Court must (as far as practicable) finally resolve questions about the division of property between the de facto partners and avoid further proceedings between them.
It has generally been appropriate in a case such as this is to approach the application in four stages:
1.Identify and assess the value of the assets of the parties as at the date of the hearing;
2.Determine the respective financial and non-financial contributions of the parties;
3.Determine whether the contributions of the applicant have been already sufficiently recognised and compensated; and
4.Make the appropriate adjustment.
(Hogg v Roberts (2003) 87 SASR 248 at 250-251; Evans v Marmont (1997) 42 NSWLR 70 at 75-76; Parker v Parker (1993) 16 Fam LR 863 at 870, 874; Theodoropoulos v Theodosiou (1995) 38 NSWLR 424 at 432; Davey v Lee (1989) 13 Fam LR 688 at 689)
Assets of the parties
In this case, the identification of assets owned by the parties at the time of the hearing is straightforward. They are the same assets as at the time of their separation.
Furniture and household effects
Furniture and household effects have been divided between the parties as a result of the plaintiff taking with her at separation the following items:
Double bed and matching bedroom suite
Flat screen television, DVD player and video recorder
Computer, printer and computer desk
Lounge suite
Coffee table
Two wrought iron display units
Linen
Kitchen utensils, crockery and appliances
Ornaments - picture frames and decorative items
The following items were left with the defendant:
Queen size bed and bedroom suite
Refrigerator
Microwave
Washing machine
Xbox system
Stereo system and speakers
Sony 48 cm television provided by plaintiff’s parents
Light fittings (not installed)
Guitar
DJ set
Shares (Ion Automotive)
Gym equipment
Motor Vehicles
The plaintiff’s parents helped her to purchase her first car when she turned 18 with money they had saved for her university fees. Her parents provided $3,000 towards the deposit and the plaintiff contributed $1,000 for the 1994 Toyota Celica. The balance of the purchase price of $25,000 was obtained through a loan with the Commonwealth Bank, which the plaintiff has repaid herself.
The defendant had a number of motor vehicles over the course of the relationship. In 1999, he purchased a Suzuki Swift, obtaining a loan for it on his own account. In 2002, the defendant bought a Nissan Skyline for $20,000.
The defendant replaced the Nissan Skyline in 2004 with a 2005 Toyota Rav4. He is responsible for the loan for the motor vehicle, in the sum of $35,000.
The plaintiff contributed, although not in a major way, to the purchase of the defendant’s motor vehicles.
Superannuation
The plaintiff and the defendant each have some superannuation through their respective employment. It has not been quantified.
House Property at 32 Simone Crescent Morphett Vale
I accept that the plaintiff and the defendant decided to buy a house together in 2001. It was to be built in Morphett Vale by Devine Pioneer Homes. The house now built at Morphett Vale, which was valued at $205,000 in April 2005, is now the only substantial asset of the parties.
Financial Contributions made by the parties to the acquisition of property, financial resources and each other
The plaintiff had been working part-time at McDonald’s Restaurant while she was still at school. She continued working there after she finished Year 12. The plaintiff decided to commit herself to a relationship with the defendant, and to work to establish their home together. Although her parents had put money aside for her tertiary education, and she obtained a reasonable result in Year 12, the plaintiff gave up any thought of continuing her education at university in order to achieve that goal.
After the plaintiff left school, she was promoted to a position as manager at McDonald’s and began earning about $480 per week after tax. In 2002, the plaintiff began working as a customer attendant at Caltex on Brighton Road, North Brighton, earning at first about $490 per week after tax and by June 2005 about $580 per week. Since then she has reduced her hours of work and she earns about $540 per week after tax.
The defendant has maintained regular employment at least up until the time when he and the plaintiff separated. As well as his work at Adelaide Mushrooms, he had employment in factories, pizza delivery and restaurants. By 2001, the defendant’s earnings had increased from $200-$300 per week after tax to about $700 per week after tax, and with overtime, his wage increased to around $1,000 per week.
The plaintiff was not in a position to obtain finance, on her own account or jointly with the defendant, at the time the decision to buy a house was made. The defendant obtained a grant as a first homeowner in the sum of $14,000. He paid a sum of $1,000 towards the deposit and borrowed the balance of the total of $130,000, the cost of the house, from Bendigo Bank. The property was purchased in the defendant’s name and he executed transfer documents and a mortgage to Bendigo Bank in around October 2001.
The parties agreed to share their living expenses, with the defendant being responsible for the mortgage repayments and payment of council and water rates and taxes and electricity. The plaintiff was to pay for furnishings and furniture for the house and any other mutual living expenses, including their food. She also paid a significant amount towards a number of holidays they took – to Queensland, Victoria, New South Wales and Thailand.
The construction of the house was completed by around April 2002. The plaintiff was financially responsible for the furniture, furnishings, blinds, most appliances, linen, electrical goods, light fittings, fencing and paving, and garden planting. The defendant purchased a refrigerator with a small contribution from the plaintiff.
The defendant was responsible for payment of council and water rates and electricity, although from time to time the plaintiff paid the house bills, if the defendant could not afford to pay them, and for making the mortgage repayments. The information regarding payments which were the defendant’s responsibility is very limited. There is no evidence of council rates or expenses for utilities. Copy statements in respect of the defendant’s Bendigo Mortgage Loan Account commencing from 2 January 2002, disclose initial monthly repayments in the sum of $298 on borrowings of around $45,000.
After the loan was fully drawn down to a sum of around $116,000, weekly repayments in the sum of $200 were made by direct debit from 6 June 2002 until 8 April 2005, when the balance of the loan was a sum of $108,281.19. No further regular payments have been made against the mortgage since that time. The only repayment made by the defendant between 30 April 2005 and 1 January 2006, when the period covered by the statement ends, is the sum of $1,000 in September 2005.
The balance owing on the Bendigo Bank Mortgage Loan Account as at 1 January 2006 was a sum of $114, 235.99.
Non-financial Contributions
The contributions each partner makes to a relationship in the shared activities, companionship, encouragement, and emotional and moral support given to each other are not the less important because they are not capable of evaluation in monetary terms.
The plaintiff and her parents gave support to the defendant in a number of ways; the plaintiff and her parents gave the defendant assistance and encouragement in his study, finding employment and establishing some independence in a home of his own; the plaintiff supported him in times of difficulty and in his ambitions of a career in music or as a disc jockey.
The plaintiff throughout their relationship was responsible for the majority of the household chores, including cooking and cleaning. She looked after the defendant, and on two different occasions, his brother when he was staying with them. In 2003, each party signed a Will in which the other was the beneficiary.
The plaintiff suffered a miscarriage in 1999. Although there is no evidence from the defendant, I assume that during the relationship, he provided the plaintiff with the kind of support that goes with a loving relationship which each party hopes will be enduring and in this case, where both the plaintiff and the defendant were anticipating marriage.

Bearing in mind the circumstances of the acquisition of the assets of the parties and the contribution made by each party in respect of them, I take a practical and broad approach in determining the appropriate orders. (Hogg v Roberts above at 251; Norbis v Norbis (1985-1986) 161 CLR 513 at 523, 532-533)
I take into account:
1.   The length of the relationship between the parties, i.e., six years, and the mutual expectation of the parties that they would marry;
2.   The limited nature of their assets generally and in particular, their one major asset in the property at Morphett Vale;
3.   The personal circumstances and the assets of the parties at the time of the hearing;
4.   The acquisition of the property at Morphett Vale initially entirely from the financial resources of the defendant, who was until April 2005, paying regular mortgage repayments;
5.   The substantial financial contribution made by the plaintiff to:
(a)the conservation and/or improvement of the Morphett Vale property;
(b)personal assets acquired by the parties; and
(c)         the parties’ financial resources generally; and
6.    The non-financial contributions made by the plaintiff to:
(a)the conservation and/or improvement of the Morphett Vale property;
(b)the home life shared by the parties; and
(c)the care, comfort and support of the defendant over the course of their relationship.
The defendant was in a stronger financial position than the plaintiff. The defendant was responsible for obtaining the deposit and the finance for the house they built to live in together and for mortgage repayments. However, the plaintiff was working full-time during the relationship. She made a substantial contribution to their day-to-day living expenses and to their financial resources generally.
The plaintiff was also responsible for a significant non-financial contribution to the relationship. I have no reason to think that the defendant, at least for most of the relationship, did not also participate in maintaining a satisfying and fulfilling relationship with the plaintiff, although it is probable that the plaintiff’s was the greater contribution in a non-financial sense. The plaintiff’s contribution in those respects is not to be considered inferior to material or financial contributions; it is to be given full and proper value, notwithstanding the difficulty in attributing a money value to it and that it cannot be related directly to the acquisition of the property at Morphett Vale. (Hogg v Roberts (2003) 87 SASR 248 at 250; Evans v Marmont (1997) 42 NSWLR 70 at 74; Arnold v Dalton (2002) 84 SASR 482 at 491)
No adjustment needs to be made in relation to any difference in the assets of the parties as at the time of separation from assets held at the time of the hearing. As far as liabilities are concerned, I note that a judgment debt against the defendant in an unspecified amount was registered on the Certificate of Title of the property by Order of a Court on 6 April 2006.
There are in my opinion, no other matters which are relevant to a just and equitable division of property. In particular, a claim is made by the plaintiff against the defendant for a sum equivalent to fifty percent of the arrears of payments under the mortgage, on the basis that he should have been paying the mortgage after their relationship broke down, and the plaintiff should not suffer any loss occasioned by his default. The defendant was notified by Bendigo Bank by letter dated 6 January 2006 that his arrears under the mortgage were then in the sum of $3,028.81. There is no evidence otherwise as to the amount of any arrears.
In any event, I am not satisfied that the agreement between the plaintiff and the defendant regarding their respective contributions to their joint financial resources, or any other circumstance, obliged the defendant to continue to make mortgage repayments once the relationship had irretrievably broken down. The plaintiff was no longer contributing to their joint living expenses in any way. It is true that the defendant continued to live in the property, while the plaintiff had returned to her parents’ home. However, no claim for a payment equivalent to rent is made from the defendant. No evidence was produced regarding the amount of arrears as at the time of the hearing or as to the value of rent for the premises. I am not satisfied that any adjustment should be made in respect of the defendant’s default under the mortgage, or for notional rent.
It is not appropriate to assume that an equal division of property is the starting point, followed by an enquiry whether the circumstances of the case require some departure from that position. (Mallet v Mallet (1984) 156 CLR 605; Evans v Marmont (1997) 42 NSWLR 70 at 74; Hogg v Roberts (2003) 87 SASR 248 at 250)
However, in this case the evidence is that there is very little difference between the contributions made by the parties in building up their assets, when their contributions to their financial resources and to the relationship generally are taken into account.
In my opinion, it is just and equitable to order that the property at Morphett Vale be sold. The parties should have an equal interest in the proceeds of the sale of the property. The evidence is that the defendant has had no interest in maintaining the property and has failed to make regular payments under the mortgage. The value of the property is at risk of being diminished to the disadvantage of the plaintiff.
The interests of both parties are likely to be best served by appointing the plaintiff to have the conduct of the sale and to decide, in accordance with appropriate advice, the manner of the sale of the property. The net proceeds from its sale, after deduction of agent’s selling fees and commission, the amount owed to Bendigo Bank under the mortgage, and the judgment debt secured by court order, are to be paid by the plaintiff into Court.
Thereafter, the plaintiff and the defendant are to share equally in the proceeds of sale of the property, save and except the defendant is to be solely responsible for the judgment debt against him and for the plaintiff’s costs of the application. In my opinion, he should also share in the expense, if any, required to offer the property for sale in its best lights. The property at Morphett Vale was always a venture shared in equally by the parties. There is no reason in my opinion, why that should not be the case in its preparation for sale. The defendant and the plaintiff should be equally responsible for any costs reasonably expended by the plaintiff, on the advice of a licensed land agent, to sell the property in its best lights.
I make orders as follows:
1.The property situated at 32 Simone Crescent Morphett Vale in the State of South Australia and comprised in Certificate of Title Register Book Volume 5857 Folio 559 (‘the property’) is to be sold.
2.Pursuant to Rule 70.04(a) of the District Court Rules 1992, the plaintiff is appointed as the person to have the conduct of the sale of the property.
3.Pursuant to Rules 70.04(b) and 70.05 of the District Court Rules 1992 at the election of the plaintiff:
3.1    The property may be sold by public auction in accordance with the conditions of sale for auctions approved by the Real Estate Institute of South Australia at such reserve price as shall be recommended in writing by a certified practising valuer who is a member of the Australian Property Institute, or
3.2    The property may be sold by private treaty at such price and upon such terms as shall be recommended in writing by a certified practising valuer who is a member of the Australian Property Institute.
4.Pursuant to Rule 70.04(c) of the District Court Rules 1992 the defendant is to join in and do all things including execute all documents necessary to effect the sale and transfer of the property, or in default, the Registrar of this Court is appointed to execute on behalf of the defendant all necessary documents to effect the sale and transfer of the property.
5.The plaintiff is to certify the result of the sale to the Court and after payment of the following amounts is to pay the net proceeds of sale forthwith into Court to the credit of this Action No DCCIV-05-1447 to abide the further order of the Court:
5.1    Payment of all proper expenses of the sale and transfer of the property, including all agent’s fees, commission and brokerage;
5.2    Discharge of Mortgage No 9212336 to Bendigo Bank Limited ABN 11 068 049 178; and
5.3    Discharge of the Judgment Debt, registered by Order of Court dated 6 April 2006 (no. 10434165) on Certificate of Title Register Book Volume 5857 Folio 559.
6.The plaintiff is to have the costs of and incidental to these proceedings to be taxed, the hearing certified fit for counsel. Compliance with the requirements of Rule 101A.02(1) is dispensed with pursuant to Rule 101A.02(1B) of the District Court Rules 1992.
7.From the net proceeds of sale paid into Court by the plaintiff (‘the said sum’);
7.1    The defendant is to be paid a sum calculated by deducting the following amounts from fifty percent (50%) of the said sum:
7.1.1The amount required to satisfy the Judgment Debt registered by Order of Court dated 6 April 2006 (no. 10434165) on Certificate of Title Register Book Volume 5857 Folio 559, proof of which is to be provided to the Court by the plaintiff; and
7.1.2          The plaintiff’s costs of the application in accordance   with the order in paragraph 6 above; and
7.1.3Fifty per cent (50%) of such sums as the plaintiff may reasonably have expended, as necessary to prepare the property for sale in its best lights, upon production by the plaintiff to the Court of the written advice of a licensed land agent appointed to effect the sale of the property, and receipts in respect of the sums claimed.
7.2    The plaintiff is to be paid the balance of the said sum remaining.
8.Until the completion of the sale of the property the defendant is restrained from transferring, mortgaging, charging, or otherwise dealing with his estate and interest in the property save and except in accordance with these orders.
9.Each party is to retain all personal property in his or her possession at the time of the hearing, in accordance with the division effected by the plaintiff at the separation of the parties, and his or her motor vehicle respectively, referred to in paragraphs 25, 26, 27 and 29 above.
10.Save and except for the liability of the defendant pursuant to the mortgage to Bendigo Bank and the Judgment Debt registered on Certificate of Title Register Book Volume 5857 Folio 559, already dealt with by the orders in paragraphs 1- 5 above, each party is to be severally responsible for his or her own personal liabilities as at the date of the hearing.
11.This judgment and orders are to be served personally on the defendant and endorsed in accordance with the requirements of Rule 83.04 of the District Court Rules 1992.
12.    Liberty to either party to apply at short notice.