Garcia & Milton
[2024] FedCFamC2F 1350
•3 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Garcia & Milton [2024] FedCFamC2F 1350
File number(s): ADC 5547 of 2022 Judgment of: JUDGE DICKSON Date of judgment: 3 October 2024 Catchwords: FAMILY LAW – PROPERTY – Final hearing – De facto relationship of some 30 years – Out of time issue – De facto husband seeks leave to proceed out of time and a property settlement of 55% in his favour – De facto wife opposes the out of time application – De facto wife argues that it is not just and equitable to alter the parties’ interests – Stanford sought to be applied – Assets and liabilities at trial in the individual names of the parties – Where the Court declares a de facto relationship existed between 1991 and 2021 – Just and equitable for there to be an adjustment of the parties’ interests – Orders made for the sale of real property – Division of property 45/55% in favour of the de facto wife – Justice and equity. Legislation: Evidence Act 1995 (Cth) s 140.
Family Law Act 1975 (Cth) ss 44, 75, 79, 90RD, 90SF, 90SM, 106A.
Cases cited: Babette & Falconer [2015] FamCAFC 124
Batty & Batty (1986) FLC 91-703
Bevan & Bevan (2013) FLC 93–545
Bolger & Headon [2014] FamCAFC 27
Crapp & Crapp [1979] FamCA 17
Dickons& Dickons (2012) 50 Fam LR 244
Dovgan & Dovgan [2021] FamCA 306
Fields & Smith [2015] FamCAFC 57
Fox & Percy (2003) 214 CLR 118
Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Ho v Powell (2001) 51 NSWLR 572
Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378
Jabour & Jabour [2019] FamCAFC 78
JEL & DDF [2000] FamCA 1353
Mallet & Mallet (1984) 156 CLR 605
Norbis & Norbis (1986) FLC 91-712
Pavey & Pavey (1976) FLC 90-051
Perrin & Perrin (No 2) [2018] FamCAFC 122
Steinbrenner& Steinbrenner [2008] FamCAFC 193
Stanford v Stanford [2012] HCA 52
Teal & Teal [2010] FamCAFC 120
Wei & Xia (No 5) [2023] FedCFamC1F 679
Williams & Oamra [2020] FCWA 109
Woollams & Woollams (2004) FLC 93-195
Division: Division 2 Family Law Number of paragraphs: 212 Date of hearing: 30 July 2024 to 1 August 2024 Place: Adelaide Counsel for the Applicant: I. Roberts Solicitor for the Applicant: Peter Fisher Lawyers Counsel for the Respondent: K. Tredrea Solicitor for the Respondent: Jordan & Fowler Family Lawyers ORDERS
ADC 5547 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR GARCIA
Applicant
AND: MS MILTON
Respondent
ORDER MADE BY:
JUDGE DICKSON
DATE OF ORDER:
3 OCTOBER 2024
THE COURT ORDERS THAT:
1.Pursuant to section 90RD (1) of the Family Law Act 1975 (Cth) it is declared that a de‑facto relationship existed between the Applicant and the Respondent from early 1991 until June 2021.
2.The Applicant retain for his use and benefit:
(a)The property situate at B Street, Suburb C in the State of South Australia being the whole of the land comprised and described in Certificate of Title Volume … Folio …;
(b)Motor Vehicle 1;
(c)All bank accounts held by the Applicant in his sole name and in his name jointly with a third party;
(d)Furnishings and effects in his sole possession;
(e)All superannuation entitlements; and
(f)Any other assets in his possession or control.
3.The Respondent retain for her use and benefit:
(a)The property situate at D Street, Suburb C in the State of South Australia being the whole of the land comprised and described in Certificate of Title Volume … 5257 Folio …;
(b)Motor Vehicle 2;
(c)All bank accounts held by the Respondent in her sole name;
(d)Furniture and personal effects in her sole possession;
(e)All superannuation entitlements (if any); and
(f)Any other asset in her possession and control.
4.Within fourteen (14) days of this Order, the parties shall agree in writing a sales agent to be engaged to sell the property situate at E Street, Town F in the State of South Australia being the whole of the land comprised and described as CT… (‘the E Street property’) and this Order is authority for the sales agent to be engaged jointly by the Applicant and the Respondent.
5.If the parties are unable to agree the identity of the sales agent pursuant to paragraph 4 herein, then such sales agent shall be appointed by the Secretary of the Real Estate Institute of South Australia.
6.The parties do follow all reasonable advice provided by the sales agent appointed in relation to the terms of sale, mode of sale and any offers made to purchase the E Street property.
7.Upon settlement of the E Street property the proceeds of sale are to be disbursed as follows:
(i)To pay all sales costs and commissions;
(ii)To discharge the mortgage to G Bank;
(iii)The sum of $5,433 to discharge the Respondent’s H Bank Visa and Mastercard;
(iv)The sum of $39,250 (or such other sum as the parties agree in writing) to be quarantined for the payment of Capital Gains Tax arising from the sale;
(v)A sum representing 45% to the Applicant and
(vi)A sum representing 55% to the Respondent.
(vii)WHERE:
A.= the assets retained by the Applicant – ($868,997);
B.= the assets and superannuation retained by the Respondent –($919,795);
C.= the net proceeds of the E Street property;
D.= AND WHERE A+B+C=I;
E.The Applicant shall receive a sum equal to (I x 45%) – A; and
F.The Respondent shall receive a sum equal to (I x 55%) – B.
8.Pending compliance with paragraph 7 herein, the Respondent is restrained and an
injunction is hereby granted restraining her from further encumbering or dealing with
the E Street property.
9.The parties shall indemnify the other in relation to all liabilities held in their respective sole names.
10.Pursuant to section 106A of the Family Law Act 1975 (Cth), in the event that any party should fail, refuse or neglect to execute any document necessary to implement the terms of these orders, then upon proof of such failure, refusal or neglect by affidavit, a Judicial Registrar or Deputy Registrar of this Honourable Court is hereby authorised to execute any such document on behalf of the defaulting party.
11.All extant applications are hereby dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE DICKSON:
INTRODUCTION
These proceedings concern competing applications for final orders for property settlement between the Applicant de facto Husband, Mr Garcia and the Respondent de facto Wife, Ms Milton.
Central to the dispute between them is whether Mr Garcia’s Initiating Application for final orders was filed out of time and whether it is just and equitable for the Court to order a division of property pursuant to section 90SM of the Family Law Act 1975 (Cth) (‘the Act’).
Mr Garcia’s case is relatively straight forward. Mr Garcia asserts that after a de facto relationship spanning 30 years, he is entitled to a just and equitable division of the parties combined assets and superannuation entitlements.
Ms Milton’s case is more complex. Ms Milton argues that Mr Garcia’s application for property settlement is ‘out of time’ and that Mr Garcia requires the Court’s leave to proceed. Further, that Mr Garcia has not established hardship so as permit the application to progress, and in the alternative, even if Mr Garcia can overcome these hurdles, there should be no adjustment of the parties’ assets and superannuation entitlements relying on the seminal decision of Stanford v Stanford [2012] HCA 52 (‘Stanford’).[1]
[1] Stanford v Stanford [2012] HCA 52.
These issues require a careful consideration of evidence over the course of the parties’ lengthy relationship and the applicable legal principles.
These are the Courts reasons following a Trial between the parties concerned.
DOCUMENTS RELIED UPON AT TRIAL
At Part C of his Amended Outline of Case Document filed 29 July 2024, Mr Garcia sets out that he relies upon the following documents:
(1)Fourth Amended Initiating Application filed 19 July 2024;
(2)Affidavit of Mr Garcia filed 11 March 2024;
(3)Financial Statement of Mr Garcia filed 11 March 2024;
(4)Affidavit of Mr Garcia filed 15 April 2024; and
(5)Amended Outline of Case filed on 29 July 2024.
In addition, Mr Garcia tendered and relied upon Exhibits A1 to A4 inclusive.
At Part C of her Amended Outline of Case Document filed 22 July 2024, Ms Milton sets out that she relies upon the following documents:
(1)Second Amended Response to Final Orders filed 8 April 2024;
(2)Trial Affidavit of Ms Milton filed 8 April 2024; and
(3)Financial Statement filed 8 April 2024.
In addition, Ms Milton tendered and relied upon Exhibits R1 to R6 inclusive.
ORDERS SOUGHT
The formal orders sought by each of the parties are set out in their respective applications and responses relied upon as above.
Applicant De Facto Husband, Mr Garcia
Mr Garcia seeks final orders in the following terms:
1. That pursuant to s90RD of the Family Law Act it is declared that a de-facto relationship existed between the Applicant and Respondent from [early] 1991 until June 2021.
2. In the alternative that pursuant to s44(6)(a) of the Family Law Act 1975 leave be granted the Applicant to nunc pro tune to issue proceedings seeking orders pursuant to s90SM of the Act on or before 6 December 2022.
3. That the Applicant retain for his use and benefit:
a.The property situated at [B Street, Suburb C];
b.[Motor Vehicle 1];
c.All bank accounts held by the Applicant in his sole name and in his name jointly with a third party;
d.Furnishings and effects in his sole possession;
e.All superannuation entitlements;
f.Any other assets held in his name solely or jointly with a third party; and
g.Responsibility for the liabilities in his sole name.
4. That the Respondent retain the following:
a.[D Street, Suburb C];
b.[Motor Vehicle 2];
c.Bank account savings in her sole name;
d.Furniture and personal effects in her sole possession;
e.Her superannuation entitlements;
f.Any other asset held in her name solely or jointly with a third party; and
g.Responsibility for liabilities in her sole name.
5. That the Respondent pay to the Applicant a cash sum to equalise the non-superannuation assets not including the property situate at [E Street, Town F] ("the [Town F] property") 55% to the Applicant and 45% to the Respondent.
6. That within 14 days of this Order, the parties agree to a sales agent to be engaged to sell the property situated at the [Town F] property and this Order is authority for the sales agent to be engaged jointly by the Applicant and the Respondent.
7. Upon settlement of the [Town F] property, the parties jointly engage [Mr J] of [K Company] to estimate the total capital gains tax payable (based upon the 2023/24 financial year taxable income of the Respondent) and such estimated sum be deposited into a joint interest bearing account and used to pay the capital gains tax when due and payable and any surplus to be divided between the parties 55% to the Applicant and 45% to the Respondent and any shortfall be met 55% from the Applicant and 45% from the Respondent.
8. The net sale proceeds from the sale of the [Town F] property be divided between the parties 55% to the Applicant and 45% to the Respondent.
9. That the wife pay the husband's costs of and incidental to these proceedings.
10. Such further order as this Honourable Court deems fit.
Respondent De Facto Wife, Ms Milton
In in her Amended Outline of Case Document filed 22 July 2024 at Appendix A,[2] Ms Milton sought final orders in the following terms:
[2] The Court notes that the Orders Sought as contained in her Amended Outline of Case Document filed 22 July 2024 at ‘Appendix A’ are different to those sought in Ms Milton’s second Amended Response to Initiating Application filed 8 April 2024.
1. That the Applicant's Application for property settlement be dismissed.
2. That the Court declare pursuant to Section 90RD(2)(d) of the Family Law Act 1975 ("FLA") that the de facto relationship between the parties ended on 29 September 2020;
3. That the Respondent is hereby declared to be solely entitled at law and in equity to all property and financial resources in her name, possession and to which she is or may become entitled, including, but not limited to:
3.1. The property situate at and known as [D Street, Suburb C] in the State of South Australia and the associated mortgage;
3.2. The property situate at and known as [E Street, Town F] (sic) in the State of South Australia and the associated mortgage;
3.3. [Motor Vehicle 2] and the associated liability;
3.4. The Respondent's savings with [H Bank] and [G Bank];
3.5. The Respondent's business trading as [L Company];
3.6. The Respondent's superannuation with [Super Fund 1].
4. That the Applicant is hereby declared to be solely entitled at law and in equity to all property and financial resources in his name, possession and to which he is or may become entitled, including, but not limited to:
4.1. The property situate at and known as [B Street, Suburb C] in the State of South Australia;
4.2. [Motor Vehicle 2] and the associated liability;
4.3. The Applicant's savings with ANZ;
4.4. The Applicant's superannuation with [Super Fund 2].
5. That the Applicant do pay the Respondent's Costs of and incidental to these proceedings.
ISSUES TO BE DETERMINED
The issues for determination in this case are multilayered and are summarised as follows:
(1)Does Mr Garcia require leave of the Court to proceed with his application for property settlement because his application is filed ‘out of time’? Central to this question is a finding as to the final date of separation between Mr Garcia and Ms Milton;
(2)If the Court finds that Mr Garcia’s application is filed ‘out of time’, then should leave be granted by the Court pursuant to section 44(6)(a) of the Act to permit Mr Garcia to proceed with his property settlement application regardless;
(3)Self-evidently, if the answer to subparagraph (1) is ‘yes’ and the answer to subparagraph (2) is ‘no’ – then that is the end of the matter. The parties would then retain the assets and liabilities currently held by each of them in their sole names;
(4)If the answers to subparagraph (1) is ‘no’ and/or to subparagraph (2) is ‘yes’, then the Court must consider whether it is just and equitable to alter the interests of the parties in their property. Ms Milton’s position is that it is not just and equitable to make any order for the alteration of property interests and, therefore, no such order can be made. Mr Garcia argues that an order for the alteration of property should be made; and
(5)If the Court is satisfied in answer to subparagraph (4) herein, then the Court must consider what orders would be just and equitable in the circumstances of this case having regard to section 90SM(3) of the Act. Mr Garcia seeks that he be paid the sum of $171,215 which he says represents an adjustment in his favour of 55 per centum of the overall pool excluding the property at E Street, Town F in South Australia (‘the E Street property’). In addition, Mr Garcia seeks that the E Street property be sold, an amount quarantined for the payment of Capital Gains Tax and any remainder be divided in the same percentage basis between the parties. Ms Milton contends that even if Mr Garcia overcomes the threshold issues set out in subparagraphs (1), (2) and (4) above, there should be no adjustment of the parties’ interests in their respective assets.
EVIDENCE
The parties bear the onus of establishing their respective cases on the balance of probabilities.[3] In these reasons, findings of fact are made on the balance of probabilities based on the demeanour and evidence of each of the parties.[4] I am not required to refer to every piece of evidence nor refer to each argument or submission relied upon by the parties.[5] A written Judgment is not a transcript of the Trial. I have endeavoured to reach my factual conclusions based on contemporary materials, objectively established facts and on the apparent logic of events.[6]
[3] Evidence Act 1995 (Cth) s 140.
[4] Evidence Act 1995 (Cth) s 140.
[5] Housing Commission of New South Wales v Pastoral Company Pty Ltd [1983] 3 NSWLR 378, 385-386.
[6] Fox & Percy (2003) 214 CLR 118, [31].
In deciding facts according to the civil standard of proof, I have had regard to following:
(a)First, to consider not just what the probabilities are on the limited material which the Court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision; and
(b)Second, to have regard to the ability of the parties, particularly the party bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have done so.[7]
[7] Wei & Xia (No 5) [2023] FedCFamC1F 679, [151] citing Ho v Powell (2001) 51 NSWLR 572, [14]-[15].
I have read all the documents upon which the parties have relied and the exhibits that were tendered during the hearing.
In what follows, statements of fact constitute findings of fact. I have carefully considered the matter and in making findings to the requisite standard, I have observed each of the parties give their evidence orally, I have had regard to all the evidence, the nature of the proceedings, the issues in dispute and the consequences that flow from my findings.
BACKGROUND AND FINDINGS
The following evidence is largely uncontentious.
Mr Garcia was born in 1955 and is aged 69 years. Ms Milton was born in 1961 and is aged 62 years.
There are two adult children of the relationship, namely Mr M born in 1989 and Ms N born in 1991. Mr M and Ms N both live independently from their parents.
Prior to their relationship and in early 1986, Ms Milton purchased a property at O Street, Suburb C in South Australia (‘the O Street property’) for the sum of $60,500 plus costs having contributed the sum of $33,000 or thereabouts from her savings. I accept Ms Milton’s evidence that the sum of $33,855 came from monies received by her by way of compensation following a motor vehicle accident in 1983. The balance of the purchase price in the sum of $30,000 was borrowed by way of mortgage from P Bank. The O Street property uniquely comprised two separate dwellings on the one block. When not occupied by one or both of the parties, the dwellings were rented to tenants.
The parties met in 1986 when they both lived in Region Q, and they formed a sexual relationship in 1987. At the time, Mr Garcia owned a property at Town R in Region Q (‘the Town R property’) subject to mortgage and had an interest in a business in Region Q. Ms Milton stayed with Mr Garcia at the Town R property and rented out the O Street property.[8]
[8] Ms Milton says that she was a tenant staying in Mr Garcia's property at Town R and that the parties had a non-exclusive sexual relationship. I do not consider that anything turns on this as the parties agree that they did not commence a de facto relationship at this time.
In 1988, Ms Milton returned to live in one of the O Street dwellings. The parties maintained a sexual relationship. During a visit to Adelaide in 1989, Ms Milton fell pregnant with the parties’ son, Mr M.
In early 1990, Mr Garcia moved into the O Street property with Ms Milton and their infant son, Mr M. Ms Milton says that from this time forward, the parties were living in a de facto relationship in the O Street property.[9] Mr Garcia rented out the Town R property. The parties agree that Mr Garcia purchased some whitegoods for their joint use at O Street.
[9] It is not clear why Mr Garcia sought a declaration that the de facto relationship commenced in early 1991 when Ms Milton admits that the de facto relationship commenced in early 1990 in paragraphs 4 and 52 of her Trial affidavit filed 8 April 2024 and Mr Garcia says that he commenced “permanent residency” of the O Street property with Ms Milton in 1990 in paragraph 18 of his Affidavit filed 11 March 2024. Despite the evidence, the Court will adopt early 1991 as the commencement of the parties’ de facto relationship as formally sought in Mr Garcia’s Application..
Sometime in late 1990, Mr Garcia obtained ‘fly in fly out’ (‘FIFO’) work. Mr Garcia would work away from Adelaide for two weeks out of three. On his ‘down’ week, Mr Garcia returned to live with Ms Milton and Mr M. There is no dispute that Ms Milton made the repayments to the O Street mortgage from rent received from the tenant of the second dwelling. Ms Milton says that Mr Garcia’s income was used to pay liabilities for the business and the Town R property mortgage, and paid expenses for the children.[10] Mr Garcia’s evidence which I accept was that Ms Milton had unfettered access to his income to support herself and Mr M in this period.
[10] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 64.
Their daughter Ms N was born in 1991.
In 1991, Mr Garcia sold the Town R property and received net proceeds in the sum of about $70,000 which were deposited into a bank account in Ms Milton’s sole name in in early 1991. There is no dispute that Ms Milton was holding the funds for the benefit of Mr Garcia who was concerned about potential creditors following the sale of his business in Region Q. Money was also used to purchase a second-hand motor vehicle which was registered in joint names and used as a family car.
Also in 1991, Mr Garcia ceased working as a FIFO and commenced employment at S Company and then later at T Company. There is no dispute that these jobs required Mr Garcia to work long hours and that he often commenced work in the early hours of the morning.
In mid-1991, a property at U Street, Town V in South Australia (‘the U Street property’) was purchased in Ms Milton’s sole name using the monies from the sale of Mr Garcia’s Town R property. Ms Milton found the property and Mr Garcia agreed to its purchase for the sum of $70,000 plus costs. The parties had discussed constructing a home on the property. This opportunity did not eventuate due to difficulties in securing local council approval.
In late 1993, the business “W Company” was registered. The registered proprietors of the business were Mr Garcia and Ms Milton. The business operated as a partnership but with no formal partnership agreement being executed between them. The parties both worked in the business whilst maintaining alternate employment, with Ms Milton working from home and Mr Garcia working at T Company. Ms Milton ceased involvement in the business in or about 1997.
Sometime in 1993, the parties opened a joint business account.
In late 1993, the parties agreed to sell the U Street property. The net proceeds in the sum of $75,608 were paid into Mr Garcia’s bank account.
By 1995, the O Street property was becoming too small for their growing family. The parties looked for a bigger family home. They both inspected and agreed upon a property at D Street, Suburb C in South Australia (‘the D Street property’).
In early 1995, Mr Garcia purchased the O Street property from Ms Milton for the sum of $128,000 plus costs. The sale and transfer of the O Street property attracted stamp duty payable to the Commissioner of Stamps in the sum of $3,950 when registered in 1995.[11] The O Street property was thereafter tenanted until it was sold in 2017. The property was largely “positively geared” and the rent received was paid towards the mortgage with any surplus funds being deposited into Mr Garcia’s personal bank account.
[11] Exhibit R6.
Contemporaneously with Mr Garcia’s purchase of the O Street property from Ms Milton, she purchased the D Street property in her sole name. The property was purchased for $180,000 and secured by way of mortgage in the sum of approximately $76,000. The balance of $109,214 was paid from the proceeds of sale from the O Street property.
The parties and their children then moved into the D Street property, and it became their family home for the next 26 years. During this period of their relationship, both parties undertook renovations and improvements to the D Street property albeit that the extent of those contributions remained in dispute.[12]
[12] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 31, and the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 145.
In 2000, Mr Garcia contributed the sum of $25,000 received by way of inheritance from a relative to the O Street property’s mortgage.[13] Ms Milton does not deny that this occurred.[14]
[13] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 35.
[14] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 248.24.
In 2003, Ms Milton received a further compensation payment in the sum of $45,000 from her insurer of which she applied towards the purchase of a block of vacant land at E Street, Town F in South Australia (‘the E Street property’). The E Street property was purchased in mid-2003 for the sum of $55,000 and registered freehold in Ms Milton’s sole name.
Also in 2003, the parties sold the business “W Company” for $60,000. From this sum, Mr Garcia says that $30,000 was applied to the purchasing of the work van which was then used by Mr Garcia to work for a company called “X Company.” The balance was applied to purchase a family motor vehicle and to pay for a family holiday.[15] Ms Milton says that the proceeds of sale of about $70,000 was retained by Mr Garcia and agrees that around this time the parties went on a holiday.[16]
[15] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 38.
[16] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 124.
In 2006, Ms Milton received a compensation payment for an injury sustained.[17] There is some confusion as to the quantum received. I accept Ms Milton’s evidence that she received a payment of $14,000, and not $50,000 as suggested by Mr Garcia, from a class action brought on her behalf by Y Law Firm.[18]
[17] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 40.
[18] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 248.29.2 and 248.29.3.
In 2008, Ms Milton received a lump sum damages payment from Z Company in the sum of approximately $20,000 which she applied to the D Street property’s mortgage.[19]
[19] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 146.
In 2013, Ms Milton signed a contract with AA Company to build a dwelling on the vacant block of land at the E Street property. The cost of the build was approximately $162,462. A mortgage in the sum of $170,000 was taken out with G Bank and secured over the E Street property in Ms Milton’s sole name. Ms Milton has paid the mortgage repayments for this property to date. Both parties assert having made maintenance contributions to the E Street property.[20] The parties regularly travelled and spent time together at the E Street property on weekends.[21] Since mid-2023, the E Street property has remained tenanted.
[20] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 34, and the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 173.
[21] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 199.
In 2017, the O Street property was sold, and sale proceeds received in the estimated sum of $380,000. From this amount, Mr Garcia deposited the maximum amount available to him in the sum of $290,000 into his superannuation account. Further funds were expended to purchase Motor Vehicle 1 and to pay for miscellaneous expenses.
In mid-2019, Ms Milton registered a business called “L Company” which she continued to operate at Trial. Ms Milton is self-employed and works as a community support worker.
The parties do not agree on the date of final separation. Ms Milton asserts that the parties commenced living separately and apart under one roof from July 2020,[22] and with there being “no notion” of a relationship after September 2020.[23] Mr Garcia asserts the parties separated on a final basis in June 2021 when he says Ms Milton asked him to leave the former family home at D Street. This issue requires a finding from the Court as to the date of separation. My findings regarding the final date of separation are referred to later in these reasons.
[22] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 191.
[23] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 14.
In late 2020, the parties attended a family celebration. Reminiscent of the novel written by Chris Tsiolkas called “The Slap”, an incident occurred at the party (‘the cake incident’). It was Ms Milton’s view that her granddaughter had been “slapped” by her maternal grandmother, Ms BB. It was Mr Garcia’s view that rather than a “slap”, Ms BB had “pushed” the child’s hand away from a naked flame, being a candle on the cake. Ms Milton also became upset at the conduct of various adults that followed the cake incident when she observed her granddaughter to become distressed. The adult dispute continued on social media thereafter.
The fallout from this incident has had far reaching repercussions for the family. Mr Garcia disagreed with Ms Milton’s perception of what had occurred and supported Mr M and Ms BB. Ms Milton agreed in her evidence that she felt betrayed by Mr Garcia in taking this position. Ms Milton now has no relationship either with Mr M or her two grandchildren.
In late 2020, the parties travelled with another couple to Region CC for a joint holiday.
In December 2020, the parties celebrated Christmas with their daughter Ms N and extended family members. Mr M and his family did not join them because of simmering family tensions after the cake incident. That same month, Mr Garcia took Ms Milton to lunch for a special occasion.
In early 2021, the parties travelled together with another couple on a holiday.
In mid-2021, Ms Milton asked Mr Garcia to leave the D Street property.[24] Mr Garcia did not oblige. I accept his evidence that he began to look for other accommodation options at or about this time.
[24] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 53.
In late 2021, Mr Garcia informed Ms Milton that he was now in a relationship with Ms DD. Ms Milton deposes that Mr Garcia spent the night at Ms DD’s home.[25] Sometime in late 2021, the parties informed family and friends of their separation.
[25] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 216.
In late 2021, Ms Milton sent a text message to Ms DD requesting that she not attend at the D Street property.[26]
[26] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 204.
In late 2021, Mr Garcia settled on a property that he had purchased at B Street, Suburb C in South Australia (‘the B Street property’). The B Street property was purchased freehold for the sum of $431,800 with monies withdrawn from Mr Garcia’s superannuation entitlements.
A month later, Mr Garcia vacated the D Street property and moved into the B Street property.
At Trial, there is no dispute that Ms Milton paid the mortgage for the D Street and E Street properties during the relationship. There is no dispute that Mr Garcia paid outgoings for these properties by way of council rates, taxes, utilities and telephone accounts at least for the period from the date of purchase and up to Ms Milton’s asserted date of final separation. It is also agreed that during the relationship Mr Garcia paid all of the private health expenses for the family.
At Trial, there is no dispute that Mr Garcia and Ms Milton paid mortgages and outgoings for the O Street property when it was registered in each of their respective sole names during their relationship.
In 2022, Mr Garcia received an inheritance upon the death of his father in the sum of $122,000. From this amount, Mr Garcia paid $50,000 into his Super Fund 2. The balance of the monies has been spent on legal fees and living expenses.
On 6 June 2022, 11 July 2022 and 18 October 2022, correspondence was forwarded by Mr Garcia’s solicitors to Ms Milton regarding the question of property settlement.
In 2022, Mr Garcia retired and ceased working full-time for “X Company.” At Trial, it was not in dispute that Mr Garcia continued to work casually for the same company.
On 6 December 2022, Mr Garcia commenced proceedings for property settlement.
In June 2023, Ms Milton withdrew $60,000 from her superannuation entitlements and paid these monies towards an income tax debt, a credit card debt and outgoings for the D Street and E Street properties. Ms Milton paid the balance into her solicitors’ trust account.
It is common ground that for the duration of the relationship the parties did not have joint bank accounts or credit cards save and except for a joint business bank account when they operated the “W Company” business. Further, it is common ground that all real property has been purchased by the parties in their respective sole names.
There is no dispute based on Ms Milton’s oral evidence that she had nominated Mr Garcia as the beneficiary of her superannuation entitlements up and until the fund was closed in June 2023. Further, that at varying points in time during the relationship, Mr Garcia had been both a co-executor and a beneficiary of her Wills.[27]
ORAL EVIDENCE
[27] Corroborative primary source documents of Ms Milton’s nominated beneficiary of her superannuation fund and her respective Wills were not produced nor tendered into evidence at Trial.
Applicant De Facto Husband, Mr Garcia
Mr Garcia gave evidence in chief tendering a bundle of utility accounts paid by him for the E Street and D Street properties,[28] and a bundle of ANZ bank statements evidencing payment of expenses for the parties and the D Street and E Street properties.[29] For example:
(a)Payment of $1,788 in 2016 for a heater for D Street property;
(b)Payment of $6,388 in 2017 for renovations to the D Street property;
(c)Payment of $1,650 in 2016 for the D Street property’s bathroom;
(d)Payment of $340 in 2017 for the gutter guard on the E Street property;
(e)Payment of $500 in 2018 for a garage door for the D Street property; and
(f)The sum of $5,000 in late 2013 said to be paid to contractors working at the E Street property.
[28] Exhibit A1.
[29] Exhibit A2.
Mr Garcia denied that the parties had separated by July 2020 and that his relationship with Ms Milton ended when the parties began sleeping in different bedrooms in September 2020. He denied that the use of separate bank accounts signalled the end of the relationship because this was their practice during the relationship save for the joint account attached to the business. Mr Garcia volunteered in his oral evidence that he and Ms Milton had sexual relations in September 2020.[30]
[30] Ms Milton was not asked in cross examination whether she agreed with this evidence.
Mr Garcia agreed that he had not accepted Ms Milton’s version of the events which led to the family rupture at the family celebration party. Mr Garcia did not accept that Ms BB had struck the parties’ granddaughter on the hand. He agreed that as and from late 2020 Mr M has not had any relationship with his mother. Mr Garcia denied that he had sided with Mr M because his relationship with Ms Milton had already ended. Rather, it was because he considered that Ms Milton was “quite wrong in that situation.”
Mr Garcia was cross-examined about the disclosure of Ms Milton as a spouse in his various tax returns. Mr Garcia agreed that Ms Milton had been entered as his spouse in his 2019/2020 tax return.[31] Mr Garcia agreed that Ms Milton had not been entered as his spouse in his tax return for the financial year 2020/2021. Mr Garcia explained the entry by blaming his accountant. Mr Garcia accepted that he had read the draft tax return for the 2020/2021 year but added that he had not “read it carefully enough.” Mr Garcia denied providing his accountant with the instructions to remove Ms Milton’s name as his spouse. Mr Garcia considered that the explanation may be that his 2020/2021 tax return had not been prepared until 2022 when it was more likely that he would have informed his accountant of the parties’ separation at that time.
[31] Exhibit R1.
Mr Garcia was strongly challenged on his failure to discover his 2020/2021 tax return for these proceedings. He denied trying to “hide” this document. He agreed that the tax return had recently been disclosed by his solicitor undercover of letter dated 19 June 2024. This was after letters had been sent by Ms Milton’s solicitor to Mr Garcia’s solicitor on 31 July, 6 November 2023, 8 April, 17 April and 17 June 2024 seeking its production. Mr Garcia claimed to be unaware that by 6 November 2023, he had provided his tax returns for the financial years ending 2020 and 2022 but that his 2021 tax return had been omitted. He denied withholding the 2021 tax return because it did not nominate Ms Milton as his spouse. Inexplicably, Mr Garcia did not agree that it was not until 19 June 2024 that his 2021 tax return had been discovered despite the correspondence produced from his solicitor to the contrary.
In response to a question as to why Mr Garcia had delayed property settlement negotiations until mid-2022, Mr Garcia stated that he had seen a solicitor for the first time in early 2022 after physically separating in October 2021. Mr Garcia claimed that at separation he had raised property settlement with Ms Milton who had responded by telling him that if he wanted a property settlement, “you can fight me for it.” Mr Garcia then stated that the relationship was over from June 2021. When asked why it had taken him until early 2022 to obtain legal advice knowing that he would be in for a “fight”, Mr Garcia answered that he had given himself “time and space.”
Mr Garcia confirmed that he had known Ms DD for 25 years. He and Ms Milton had holidayed together with Ms DD and her late husband who died in 2017. Ms DD is now 57 years of age and works full-time. She is the owner of a freehold property at Suburb C.
Mr Garcia and Ms DD have travelled together on holidays to Region Q, interstate and overseas. The costs of these trips had been shared between them.
Mr Garcia agreed that he had previously stayed overnight at Ms DD’s home but contended that he had not stayed overnight with Ms DD in the past two months. He described his relationship with Ms DD as currently being “just friends.” Mr Garcia explained that the situation was “too stressful” and that they had decided to “back off” after Ms Milton was observed driving up and down Ms DD’s residential street. Mr Garcia agreed that the last time Ms Milton had been observed doing drive-bys of Ms DD’s home was over 12 months ago. Mr Garcia considered that he would remain good friends with Ms DD and keep it “at that for a while.”
Mr Garcia was asked when he had first opened a joint bank account with Ms DD. He contended that the two joint bank accounts were opened at about the time when he and Ms DD commenced going out for meals together. He said that they had opened two bank accounts, one account for the payment of dinner expenses and the other for holidays. He and Ms DD pay $100 each per month into the accounts. Mr Garcia agreed that he had given Ms DD address as his residential address when the bank accounts were opened in early 2022 as the bank required one primary address and not two. Mr Garcia denied “living” with Ms DD at her home address at any time.
Mr Garcia commenced working as a FIFO worker in 1990. He stated that he paid his salary into his personal bank account. I accept his evidence that Ms Milton had access to his personal bank account in this period and that she accessed this account as needed. Mr Garcia agreed that from 1990 to early 1991, Ms Milton had the sole care of Mr M for two weeks out of three because he was working away.
Mr Garcia confirmed that the sale of the business “W Company” in 2003 was used to fund an overseas family holiday, a family motor vehicle and a work vehicle and I accept this evidence.
Mr Garcia agreed that in mid-1991, the sum of $70,000 had been used to purchase the U Street property which was registered in Ms Milton’s name. Mr Garcia agreed that the property had been placed into Ms Milton’s name because of concerns about being sued due to his earlier business arrangements. He went on to say that the “land was for us” and that the parties were proposing to build a house on the block. Mr Garcia was unsure of the date when the U Street property had been sold. He agreed that the net proceeds of sale had been banked into his personal bank account. Mr Garcia had no idea if any Capital Gains Tax had been paid or who had paid it.
Mr Garcia agreed that in 1995, he had purchased the O Street property from Ms Milton. He could not explain why he had purchased the property as a “sale and purchase transaction” rather than a simple transfer between them. This arrangement had resulted in the sum of $3,950 being owed to the Commissioner of Stamps for stamp duty on the transfer. When asked why this had occurred given that by this stage the parties had been in a relationship for five years, Mr Garcia explained that he was “naïve” and not understanding what went on.
In relation to the O Street property, Mr Garcia agreed that from the date of purchase in 1995 to the date of sale in 2017 he had retained all rental monies and had paid all the mortgage and outgoings. He agreed that the rent generally matched the outgoings and mortgage repayments. The O Street property had never been negatively geared for taxation purposes. Any surplus rent had been used to pay usual living expenses.
Mr Garcia stated that between 1990 to 1995, he had not provided Ms Milton with specific cash amounts for housekeeping. Rather, whatever the family needed, he paid for. Mr Garcia also stated that Ms Milton had unfettered access to his bank account especially when they had two young children and he was working as a FIFO. Mr Garcia denied that Ms Milton had undertaken all the grocery shopping or shopping for the children. He contended that these responsibilities were shared and I accept this evidence.
Mr Garcia’s stated that he never had a joint savings account with Ms Milton because it was “never suggested.” From his point of view, it was not the case that either party did not want a joint bank account but rather, having a joint bank account had never been discussed.
Mr Garcia accepted that when he came to live with Ms Milton in 1990 at the O Street property her asset position was about $108,000. He agreed that she had received a compensation payment in or about mid-2003 believing it to be about $45,000 in total.
Mr Garcia agreed that in 2013, a house had been built on the E Street property in Town F. Mr Garcia contended that the E Street property was selected after the parties looked at real estate together.
Mr Garcia agreed that the parties had travelled for holidays during their relationship, the cost of which had been shared between them.
Mr Garcia denied that Ms Milton had been responsible for the children’s schooling and medical needs. Whilst conceding that he had not taken the children to the dentist, Mr Garcia contended that both parties had taken the children to attend upon medical practitioners and both had been hands-on parents at the children’s school.
Mr Garcia stated that he had sold the O Street property in 2017 because the property “needed a lot of upkeep.” He stated that the parties had contemplated subdividing but when this was not possible, the parties had then discussed selling the O Street property and putting the money into superannuation for their retirement.[32] Mr Garcia agreed that Ms Milton had not wanted him to sell the O Street property. From the sale proceeds of the O Street property, Mr Garcia had deposited $290,000 into his superannuation account.[33] At the time of sale, the O Street property was mortgage free, and he was receiving approximately $450 per week by way of rental payments.
[32] See the Trial Affidavit of Mr Garcia filed 15 April 2024 at paragraph 60.
[33] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 20.
Mr Garcia agreed that Ms Milton had wanted to purchase the D Street property in her sole name. Mr Garcia then purchased the O Street property from Ms Milton and those funds assisted Ms Milton to purchase the D Street property. Mr Garcia did not question Ms Milton’s desire to purchase the D Street property in her sole name because he considered that they were a partnership and would not separate.
Mr Garcia was cross-examined at length in relation to the entries set out in paragraph 31 and 34 of his Trial affidavit regarding contributions to the D Street and E Street properties. He stated that he had not researched the entries and sums but rather, the evidence came from his recollection. Whilst some of the entries could be described as ‘guesstimates,” the answers given by Mr Garcia confirmed that contributions were made albeit not to the extent asserted in his Trial affidavit.
In the 26 years that he had lived at the D Street property, Mr Garcia denied that he had not contributed to housekeeping and outgoings. He asserted that the parties had undertaken shopping together and that each had purchased items for the children as required.
In response to a question put by Ms Milton’s counsel, Mr Garcia agreed that after separation he had asked her for property settlement. He considered that after a 30-year relationship and living in the D Street property, Ms Milton should have paid him the sum of $100,000 and he would “walk away.” Mr Garcia explained that Ms Milton had replied that he would “need to fight for it”, a comment which he accepted without asking why.
Mr Garcia agreed that he had paid nothing towards the mortgage secured over D Street property and this had “probably helped” him to pay down the O Street property’s mortgage.
Upon sale of the O Street property in 2017, the sum of $290,000 was paid into Mr Garcia’s superannuation fund as being the maximum he could pay in to superannuation at that time. The balance was paid into his personal bank account. When asked why he had not used this money to pay off the D Street property mortgage, Mr Garcia stated that he had “not been aware of the mortgage balance at the time” and because Ms Milton was opposed to him doing so. Mr Garcia was asked why he had not contributed money to pay down the E Street property’s mortgage. Mr Garcia stated that Ms Milton was opposed to him doing so but he did not understand the reason why. Mr Garcia denied that the superannuation deposit was for his financial future alone and described it as being for the parties’ joint financial future.
Mr Garcia was asked what he meant by the assertion in his Trial affidavit that Ms Milton had been “financially abusive” to him during the relationship.[34] He explained that he believed they should have been able to reach an amicable resolution of their property settlement. When challenged that Ms Milton had never been financially abusive to him during the period from 1990 to the date of separation, Mr Garcia readily accepted that proposition. Otherwise, Mr Garcia had no answer as to why the allegation as contained in his Trial affidavit under the heading “financial abuse” was in there.
[34] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraphs 59 to 62.
Mr Garcia confirmed that when he vacated the D Street property he had purchased the B Street property using money from his superannuation balance. Mr Garcia described that the uncertainty of his finances as referred to in paragraph 61 of his Trial affidavit, was the fact that he did not have enough money for his future and the uncertainty of these proceedings. He stated that he had been required to go on an aged pension which he never thought would happen after a lifetime of work.
Mr Garcia denied that he had an expectation of a future life together with Ms DD and claimed that they had never discussed it.
Respondent De Facto Wife, Ms Milton
Ms Milton agreed that, following the cake incident in late 2020, she and Mr Garcia had gone on two holidays together, the first being a holiday to Region CC and the second being interstate. On both occasions, the parties had holidayed with another couple. Ms Milton agreed that she and Mr Garcia had slept in the same bed in the same room for the Region CC holiday and that their companions were unaware of their separation. Ms Milton agreed that to the outside world they would have looked like an intact couple. In relation to the interstate holiday, Ms Milton agreed that they had shared a room but not always the same bed. She agreed that to all intents and purposes they would have been seen as an intact couple by their travelling companions who were unaware of the alleged separation.
Ms Milton agreed that Christmas 2020 celebrations had been spent together with their daughter, Ms N. Ms Milton conceded that Ms N was not aware at Christmas 2020 that her parents had separated as Ms Milton asserted.
For the period 1 July 2020 to 30 June 2021, Ms Milton instructed her accountant to record in her tax return for this period that she did not have a spouse.[35]
[35] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 206.
Ms Milton agreed that when Mr Garcia obtained FIFO work, he was contributing money to support the family. She did not recall being able to access Mr Garcia’s bank accounts. She agreed that during this period, they both had income and she did not recall ever being short of money. Ms Milton agreed that Mr Garcia had purchased a washing machine and a refrigerator for their joint use at this time.
Ms Milton agreed that after Ms N was born, Mr Garcia found a job in Adelaide and ceased FIFO work. Ms Milton agreed with the description of them being “a family unit”. She agreed that they were paying motor vehicle expenses and groceries together and that Mr Garcia had always paid for the family’s private health cover.
Ms Milton stated that she had nothing to do with the sale of Mr Garcia’s Town R property. She agreed that the sum of $70,000 had been deposited into her bank account and conceded that they both considered this sum to be “Mr Garcia’s money”. She agreed that a family car was purchased from the sale the Town R property assisted by the trading of an old motor vehicle. She conceded that the parties had “pooled” their resources at this stage.
Ms Milton explained that the O Street property only had two bedrooms. Mr Garcia had wanted to renovate the property to make the two units into one property. Ms Milton considered that the property was more valuable with two units on the one block.
Ms Milton agreed that the parties had discussed their housing arrangements. Ms Milton decided that a bigger property was required due to their growing family. She found the D Street property in the paper and having it inspected it herself, told Mr Garcia to “have a look.” Whilst considering that their relationship was in difficulty at this time, Ms Milton explained that they had travelled together to Region Q for a break. Upon their return, Ms Milton had decided that she would give the relationship “more of a go.” Ms Milton considered that the sale of the O Street property contemporaneously with the purchase of the D Street property (which she considered to be good purchase) was a way of “keeping our family together.”
Ms Milton denied that there was a sharing of the food shopping for the family during their relationship. She maintained that she had undertaken the food shopping for the family and that Mr Garcia had purchased his own personal items such as toiletries himself and speciality items.
Ms Milton agreed that the parties and their children had lived at the D Street property as a “family unit” from the date of purchase in 1995 until the date of separation. When asked as to whether the D Street property had been treated like a family home, Ms Milton stated “it’s where we lived.” She agreed that the children’s birthday parties and Christmas day events had all been celebrated there.
In relation to paragraph 31 of Mr Garcia’s Trial affidavit, Ms Milton did not deny that improvements had been made by Mr Garcia. Ms Milton denied that the works undertaken were “improvements” explaining that these things had “worn out and needed replacing.”
Ms Milton agreed that Mr Garcia had paid rates and taxes on the D Street property from the time the parties commenced occupation, and had paid rates and taxes for the E Street property. Ms Milton agreed with the general proposition that she had more disposable income available because Mr Garcia had paid those bills and that this had enabled her to pay more down the mortgage on the D Street property.
Ms Milton agreed that Mr Garcia had coached the children’s sport at school conceding that this had occurred for one season. She agreed that Mr Garcia had paid for the children’s sports and driving lessons. The parties had both paid for the children’s tutors.
Ms Milton denied that during the relationship the parties had slept in separate bedrooms due to Mr Garcia needing to start work at 3:30am. She stated that the parties had shared the same bedroom until 2020.
Ms Milton was cross-examined about correspondence sent to her by Mr Garcia’s solicitors. Those letters are dated 2 June 2022, 11 July 2022 and 18 October 2022 and raised the prospect of a property settlement for Mr Garcia. The only letter Ms Milton claimed to have received was the letter dated 18 October 2022 sent by registered post. In reply to this letter, Ms Milton had sent an email to Mr Garcia’s solicitors advising that she would be obtaining legal advice and thereafter respond. Ms Milton admitted that she had obtained the advice but did not respond. Ms Milton admitted that she had said to Mr Garcia that he would need to “fight” her for a property settlement. At Trial, Ms Milton still maintained the belief that Mr Garcia was “extorting” her.
Ms Milton stated that the E Street property is currently rented to a friend for the sum of $275 per week. Ms Milton denied that she and Mr Garcia would tidy the E Street property together. She recalled this having occurred only once because the council had sent out a notice regarding the state of the property. Otherwise, Ms Milton stated that she would pay for clearing costs. Ms Milton denied that Mr Garcia had attended appointments with the building contractor nor that he had selected tiles. She denied that Mr Garcia had been any part of any selection of anything for the E Street property. She denied that he ever paid for contractors and had no recollection of him giving her money to pay tradespersons.
Ms Milton agreed that she felt “betrayed” by Mr Garcia’s decision not to support her over the cake incident in late 2020.
If Mr Garcia was to be paid a settlement sum greater than $80,000, Ms Milton gave evidence that she would need to sell the E Street property. She agreed that if the E Street property was sold Capital Gains Tax would arise.
Assessment of the Parties’ Evidence
This case required the parties to go back in time over 30 years to remember events now pivotal to their respective applications.
It was my observation that each party gave evidence tailored to support the result they each hoped to achieve at Trial. For example, Mr Garcia was acutely aware of the ‘out of time’ issue. I do not accept his evidence as to the reason why his 2020/2021 taxation return was not produced by way of disclosure until June 2024. Nor do I accept Ms Milton’s evidence that she only received the one letter sent to her by registered post from Mr Garcia’s solicitors which sought to engage her in settlement discussions.
Mr Garcia tended to overstate his contributions to the D Street and E Street properties. Ms Milton was careful to do the exact opposite. I do not, for example, accept Ms Milton’s evidence that over a 30-year relationship resulting in two children, Mr Garcia did not buy any family shopping and only purchased food and speciality items for himself.
Mr Garcia and Ms Milton each have different perceptions about a number of important matters. I consider that their perceptions are likely motivated by a desire to achieve a particular result.
I consider that it is the actions of, and decisions made by, the parties over the course of a very long relationship that assist the Court in reaching a result that is just and equitable on the facts of this case.
LEGAL PRINCIPLES
Has Mr Garcia filed his application for property settlement ‘out of time’
The first issue for the Court to determine is whether Mr Garcia’s application for property settlement has been filed ‘out of time.’
Section 44(5) of the Act provides that a party to a de facto relationship may apply for an order for property settlement only if the application is made within the standard application period being two years after the end of the de facto relationship.[36]
[36] Family Law Act 1975 (Cth) s 44(5).
A Court may grant the party leave to apply after the end of the standard application if the Court is satisfied that hardship would be caused to the party if leave were not granted.[37]
[37] Family Law Act 1975 (Cth) s 44(6).
Mr Garcia’s Initiating Application seeking a property settlement was filed on 6 December 2022.
Mr Garcia contends that separation occurred in June 2021.[38] It is his case that he is not ‘out of time’ in relation to the filing of his application because it was filed within the two-year time period provided for in the Act.
[38] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraph 53.
Ms Milton contends that separation occurred in July 2020 or at the latest being 29 September 2020.[39] It is her case that Mr Garcia is out of time because his application was not filed within the two-year time period provided for in the Act.
[39] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 248.46.
A resolution of this issue requires a factual finding from the Court in considering all the evidence produced at Trial to delineate the legal ending of their relationship. Unlike married couples where a divorce may focus the question of the date of final separation, for de facto couples this is not so. For some couples there is no defining final event but rather ‘shades of grey’ where the relationship endures before finally petering out to an inevitable conclusion.
In Pavey v Pavey (1976) FLC 90-051 the Full Court said as follows:
Marriage involves many elements, some or all of which may be present in a particular marriage – elements such as dwelling under the same roof, sexual intercourse, mutual society and protection, recognition of the existence of the marriage by both spouses in public and private relationships and the nurture and support of the children of the marriage.
When it is asserted that a separation has taken place it may be necessary to examine and contrast the state of the marital relationship before and after the alleged separation. Whether there has been a separation will be a question of fact to be determined in each case.[40]
[40] Pavey v Pavey (1976) FLC 90-051.
In Batty v Batty (1986) FLC 91-703, Wilczek J provided a comprehensive list of the various elements that comprised a consortium vitae. These are:
·Sexual intercourse;
·Dwelling under the same roof;
·Giving society and protection to each other;
·Economical or fiscal unity or cooperation;
·Public recognition of each other as spouses;
·Private acceptance of each other as spouses;
·Communication between the parties sharing any separation;
·The nurture and support of the children of the marriage; and
·The extent of what marital services are still rendered by the parties to each other.[41]
[41] Batty v Batty (1986) FLC 91-703, 75,087
In this current matter, given these various considerations and on the evidence available to me I have formed the view that the de facto relationship between Mr Garcia and Ms Milton came to an end in about June 2021 as asserted by Mr Garcia.
Whilst I accept that the relationship between Mr Garcia and Ms Milton was under strain following the cake incident in late 2020, they continued to hold themselves out to their family and friends as a united couple. This is evidenced by the parties travelling together on two separate joint holidays with mutual friends and Ms Milton’s concession that to the outside world, their relationship would have appeared as normal. In addition, the parties enjoyed Christmas together with their daughter Ms N in 2020 who was unaware of the apparent demise of her parents’ relationship as Ms Milton contends.
I do not consider that a cessation of a sexual relationship nor sleeping in separate rooms for a couple who have been together for 30 years to be persuasive stand-alone factors heralding final separation.[42] Rather, it is the totality of the evidence which will inform the Court’s finding on this issue.
[42] Mr Garcia gave oral evidence that the parties last had sexual intercourse in September 2020. In the same month, the parties commenced sleeping in separate beds.
Mr Garcia’s evidence that his relationship with Ms Milton was over in June 2021 likely coincided with his increasing interest in pursuing a relationship with Ms DD.
In late 2021, Ms Milton became aware of Mr Garcia spending time with Ms DD[43] and that Mr Garcia had stayed overnight at Ms DD’s that same month. In late 2021, Ms Milton sent a text message to Ms DD warning her from coming to the D Street property.
[43] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 202
In June 2021, Ms Milton asked Mr Garcia to move out. Mr Garcia complied with this request after purchasing a home for himself in or about late 2021 and moving out the following month.
There is the issue of Mr Garcia’s 2020/2021 individual tax return.[44] Mr Garcia did not complete the spouse details for Ms Milton in his 2020/2021 tax return being for the period 1 July 2020 to 30 June 2021. He also obfuscated in providing a copy of this return by way of disclosure until June 2024. From Ms Milton’s point of view this is the “smoking gun” that supports her contention as to the date of separation.
[44] See Exhibit R2.
A closer inspection of ‘Exhibit R2’ shows Mr Garcia’s home address recorded as being the B Street property. It is an agreed position that the B Street property was purchased in late 2021. The tax agent’s declaration is dated June 2022. These discrepancies were not put to Mr Garcia either in cross-examination or by way of rebuttal evidence.
The tax agent declaration dated June 2022 in Exhibit R2 aligns with Mr Garcia’s evidence wherein he suggested that the 2020/2021 tax return was likely prepared at a much later date and not contemporaneous with the end of the relevant financial year. It cannot be possible that Mr Garcia entered an address for a property that he had not yet purchased prior to 30 June 2021. The declaration from the parties’ joint tax agent denotes a date of June 2022.
Even if I am wrong in relation to the preparation and lodgement date of Exhibit R2, the preponderance of evidence in relation to the party’s relationship, the holding out as a couple to the outside world, the decision to inform family members in late 2021 that the relationship was over, the discovery by Ms Milton that Mr Garcia had formed a closer relationship with Ms DD in June 2021 would all lead me to the same conclusion. I am able to confidently reject on all of the evidence Ms Milton’s assertion that the final date of separation was late 2020.
I, therefore, find that the relationship between Mr Garcia and Ms Milton came to a mutual end in June 2021 and the parties continued to live separately and apart under the one roof until Mr Garcia moved out in late 2021. Consequent to this finding, Mr Garcia’s application for property settlement is within time and he can proceed without the need for the Court to consider the hardship provision as contained in subsection 44(6)(a) of the Act.
Is it just and equitable to alter the property interests of the parties?
The relevant sections of the Act as they relate to de facto property are contained in sections 90SM and 90SF respectively.
Section 90SM(1) of the Act provides that in property settlement proceedings after the breakdown of a de facto relationship, the Court may make such order as it considers appropriate. In considering what orders should be made under section 90SM, the Court must take into account the following factors.
(a) the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i) to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii) otherwise in relation to any of that last-mentioned property;
whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c) the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the de facto relationship; and
(e) the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.[45]
[45] Family Law Act 1975 (Cth) s 90SM.
The legal principles relevant to adjusting property interests on the breakdown of a marriage were considered by the High Court in Stanford.[46]
[46] Stanford & Stanford [2012] HCA 52.
In particular, the High Court identified:
(a)Firstly, that the Court must identify the existing legal and equitable interests of the parties in the property, liabilities and financial resources of the parties at the time of the hearing; and
(b)Secondly, and importantly, that in the application of section 79(2) of the Act the Court must not make any order adjusting the parties’ legal and equitable interests in property unless the Court is satisfied that “in all of the circumstances, it is just and equitable” to do so.
(c)If the Court determines that it would be just and equitable to make orders adjusting the parties’ interests in property, then section 79(4) of the Act requires:
(d)The consideration of the contributions made by the parties to the acquisition, conservation and improvement of any property, both of a financial nature but also of non-financial nature;
(e)The effect of any proposed orders on the earning capacity of each of the parties;
(f)Those relevant factors set out in section 75(2) of the Act;
(g)Any other order affecting each of the parties;
(h)Any child support either party has or is liable to provide, or might be liable to provide in the future for a child of the relationship; and
(i)Finally, the Court must consider the “justice and equity” of the actual orders to be made.
The Court must not make an order for the alteration of property interests unless it is satisfied that, in all the circumstances, it is just and equitable to do so. In Stanford, the High Court was dealing with a married couple. In the case at hand, the parties were never married but lived in a de facto relationship for about 30 years. It is a common position that the legal principles espoused by the High Court in Stanford apply equally to de facto couples but with reference to section 90SM of the Act.
Prior to the decision in Stanford, the appropriate approach in a property settlement case was well settled and had been distilled into the ‘four step process’ as identified by the Full Court in Hickey & Attorney-General (Intervener) (2003) FLC 93-143 as follows:
(a)Identification of the value of the property of the parties;
(b)Identification and evaluation of the contributions of the parties to the acquisition, conservation and improvement of the property;
(c)Identification and assessment of the relevant future needs factors of the parties; and
(d)Considerations of justice and equity.
The significance of the decision in Stanford, with reference to the four-step process, was discussed by the Full Court in Bevan & Bevan (2013) FLC 93–545. In that decision, the Full Court identified that the four-step process “merely illuminates the path to the ultimate result,”[47] but that the overarching obligation of the Court is not to make an order unless it is just and equitable to do so.
[47] Bevan & Bevan (2013) FLC 93–545 [71].
The just and equitable requirement is not a threshold issue; rather, it permeates the entire process. [48] The Court must be satisfied not only that it is just and equitable to make any order altering existing property interests, but that any order then proposed to be made is itself just and equitable.[49]
[48] Bevan & Bevan (2013) FLC 93–545 [86], citing Woollams & Woollams (2004) FLC 93-195 [53] and Teal & Teal [2010] FamCAFC 120 [70].
[49] Williams & Oamra [2020] FCWA 109.
I am required to consider the parties respective contributions both financial and non-financial, holistically over the whole period. The assessment does not require a causal relationship between contributions and a financial output of contributions.[50] There is no presumption of equality over a long marriage. Nor is there a requirement that the Court allocate a percentage entitlement of the property to each party.[51]
[50] Dickons& Dickons (2012) 50 Fam LR 244.
[51] Williams & Oamra [2020] FCWA 109 [34].
Finally, I am required to make orders which determine the financial relationship between the parties and to avoid further proceedings as far as is practicable.[52]
[52] Crapp & Crapp [1979] FamCA 17.
STEP 1 - THE PARTIES’ LEGAL AND EQUITABLE INTEREST IN PROPERTY
At Trial, the parties tendered a Joint Statement of Assets and Liabilities marked ‘Exhibit A2’ (‘the Joint Balance Sheet’) which identifies each of the parties’ asserted respective legal interests in property and superannuation. Neither party contended that they held any relevant equitable interest in property. The parties agreed to approach the asset pool on a global basis.
Most of the items in the Joint balance Sheet were agreed. Items 15, 16 and 17 being Ms Milton’s personal liabilities are not agreed. Item 18 is a contingent liability and would only be triggered if the E Street property was ordered to be sold. The parties have agreed add backs for the payment of legal fees.
I now refer to the Joint Balance Sheet as below:[53]
[53] The Joint Balance Sheet (Exhibit A2) omits a line item for the number ‘19’. The numbering in the Joint Balance Sheet has been maintained in accordance with Exhibit A2 as tendered at Trial.
ASSET OWNERSHIP MR GARCIA’S VALUE MS MILTON’S VALUE 1. B Street, Suburb C SA Mr Garcia $450,000 $450,000 2. D Street, Suburb C SA Ms Milton $825,000 $825,000 3. E Street, Town F SA Ms Milton $600,000 $600,000 4. Motor Vehicle 1 Mr Garcia $26,000 $26,000 5. Motor Vehicle 2 Ms Milton $27,250 $27,250 6. ANZ Savings Account #...36 Mr Garcia $20,662 $20,662 7. ANZ Account #...63 Mr Garcia $10 $10 8. ANZ Account #...78 Mr Garcia $98 $98 9. H Bank Savings #...40 Ms Milton $49 $49 10. G Bank #...89 Ms Milton $10 $10 11. G Bank #...40 Ms Milton $3,116 $3,116 12. R’s Business – L Company Ms Milton NIL NIL Assets Subtotal $1,952,195 $1,952,195 LIABILITIES 13. Town F Mortgage - G Bank Ms Milton $147,286 $147,286 14. Car Loan – EE Bank Ms Milton $19,251 $19,251 15. H Bank Visa #...08 Ms Milton Excluded $65 16. G Bank Visa #...11 Ms Milton Excluded $7,237 17. Mastercard Ms Milton Excluded $5,368 Subtotal Liabilities $166,537 $179,207 TOTAL NET NON-SUPERANNUATION $1,785,658 $1,772,988 CONTINGENT LIABILITIES 18. CGT on sale of Town F property Ms Milton E$39,250 E$39,250 TOTAL (INC. CONTINGENT LIABILITIES) $1,746,408 $1,733,738 SUPERANNUATION 20. Super Fund 2 Mr Garcia $291,750 $291,750 21. Super Fund 1 Mr Garcia $1,031 $1,031 22. Super Fund 1 Ms Milton NIL NIL Subtotal Superannuation $292,781 $292,781 TOTAL NET ASSET POOL (INC. SUPERANNUATION) $2,078,439 $2,065,769 TOTAL NET ASSET POOL (INC. SUPERANNUATION & CONTINGENT LIABILITIES) NR $2,026,519 ADD BACKS 23. Applicant’s paid Legal Fees and disbursements Mr Garcia $79,446 $79,446 24. Respondent’s paid Legal Fees and disbursements Ms Milton $83,621 $83,621 Subtotal Add Backs $163,067 $163,067 TOTAL NET ASSET POOL (INC. ADD BACKS) $2,241,506
Exc. CGT$2,189,586[54] Inc. CGT [54] The Joint Balance Sheet tendered (being Exhibit A2) incorrectly records this value as $2,195,019.
Items in Dispute
Item 15 – Ms Milton’s H Bank Visa #...08
Ms Milton seeks to include a balance of $65. I propose to include this item from the Revised Balance Sheet. Ms Milton was not challenged as to the quantum nor asked a question about the balance at separation. I propose to exercise my discretion and bring this to account in the overall adjustment between the parties.
Item 16 – Ms Milton’s G Bank Visa #...11
Ms Milton seeks to include a balance of $7,237. The G Bank Visa is used by Ms Milton for her business “L Company.”[55] The “L Company” business has an agreed value at ‘nil.’ I do not consider it just and equitable to include a business expense for an entity which has a ‘nil’ value in the Joint Balance Sheet. Any expenses are likely to be tax deductible. I propose to exercise my discretion and exclude this item from the Revised Balance Sheet.
[55] See the Trial Affidavit of Ms Milton filed 8 April 2024 at paragraph 239.
Item 17 – Ms Milton’s Mastercard
Ms Milton seeks to include a balance of $5,368 in the Joint Balance Sheet. Ms Milton was not cross-examined on the figure she sought to bring to account. I propose to exercise my discretion to include this item in the Revised Balance Sheet and will bring it to account in the overall adjustment between the parties.
REVISED BALANCE SHEET
Having determined the existing assets of the parties in property and superannuation and their liabilities, the Revised Balance Sheet is as follows:[56]
[56] The items included in the Revised Balance Sheet are itemised in accordance with the original Joint Balance Sheet as above taken from Exhibit A2.
ASSET OWNERSHIP VALUE 1. B Street, Suburb C SA Mr Garcia $450,000 2. D Street, Suburb C SA Ms Milton $825,000 3. E Street, Town F SA Ms Milton $600,000 4. Motor Vehicle 1 Mr Garcia $26,000 5. Motor Vehicle 2 Ms Milton $27,250 6. ANZ Savings Account #...36 Mr Garcia $20,662 7. ANZ Account #...63 Mr Garcia $10 8. ANZ Account #...78 Mr Garcia $98 9. H Bank Savings #...40 Ms Milton $49 10. G Bank #...89 Ms Milton $10 11. G Bank #...40 Ms Milton $3,116 12. R’s Business – L Company Ms Milton NIL Assets Subtotal $1,952,195 LIABILITIES 13. Town F Mortgage - G Bank Ms Milton $147,286 14. Car Loan – EE Bank Ms Milton $19,251 15. H Bank Visa #...08 Ms Milton $65 17. Mastercard Ms Milton $5,368 Subtotal Liabilities $171,970 TOTAL NET NON-SUPERANNUATION $1,780,225 CONTINGENT LIABILITIES 18. Capital Gains Tax on sale of Town F property Ms Milton E$39,250 TOTAL NET ASSET POOL (INC. CONTINGENT LIABILITIES) $1,740,975 SUPERANNUATION 20. Super Fund 2 Mr Garcia $291,750 21. Super Fund 1 Mr Garcia $1,031 22. Super Fund 1 Ms Milton NIL Subtotal Superannuation $292,781 TOTAL NET ASSET POOL (INC. SUPERANNUATION) $2,073,006 TOTAL NET ASSET POOL (INC. SUPERANNUATION & CONTINGENT LIABILITIES) $2,033,756 ADD BACKS 23. Applicant’s paid Legal Fees and disbursements Mr Garcia $79,446 24. Respondent’s paid Legal Fees and disbursements Ms Milton $83,621 Subtotal Add Backs $163,067 TOTAL NET ASSET POOL (INC. ADD BACKS) $2,196,823
(inc. CGT)
Based on the above Revised Balance Sheet, Mr Garcia will be retaining Items 1, 4, 6, 7, 8, 20, 21 and 23 and Ms Milton will be retaining Items 2, 3, 5, 9, 10, 11, 12, 13, 14, 15, 17, 24. Mr Garcia’s net assets are $868,997. Ms Milton’s gross assets are $1,539,046. Ms Milton’s net assets are $1,367,076. Ms Milton has $498,079 more in net assets than Mr Garcia.
STEP 2 - CONTRIBUTIONS OF THE PARTIES
In considering an evaluation of parties’ contributions, the Court must be careful to assess the totality of the contributions throughout their relationship together with contributions in the period post-separation.[57] The Court must assess their contributions at the date of Trial not at the date of separation. The Court is not required to undertake a mathematical exercise in assessing the contributions. Nor does the Court need to dissect each individual contribution and ascribe a percentage figure to it,[58] although an evaluation of each party’s respective contributions is necessary.[59]
[57] Dickons& Dickons (2012) 50 Fam LR 244.
[58] Bolger & Headon [2014] FamCAFC 27; Fields & Smith [2015] FamCAFC 57; Jabour & Jabour [2019] FamCAFC 78.
[59] JEL & DDF [2000] FamCA 1353.
In Mallet v Mallet (1984) 156 CLR 605, Wilson J said as follows:
15.… . However, equality will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in every way or she may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree. …[60]
[60] Mallet v Mallet (1984) 156 CLR 605, 636.
The weight to be attached to an initial contribution must be assessed against the rubric of all contributions, however made, over the course of their relationship.[61] All contributions must be weighed collectively. The Court would fall into error to segment the various contributions and weigh one against the remainder.[62]
[61] Jabour & Jabour [2019] FamCAFC 78.
[62] Dovgan & Dovgan [2021] FamCA 306.
The approach to be taken in assessing contributions has been described as a broad discretionary assessment which is “neither an accounting nor mathematical exercise” and which requires a “broad brush approach.”[63]
[63] Perrin & Perrin (No 2) [2018] FamCAFC 122; Babette & Falconer [2015] FamCAFC 124.
During closing submissions Ms Milton acknowledged that Mr Garcia had made numerous contributions during the relationship including to the welfare of the family and direct financial contributions to the property owned by the parties. Ms Milton argues that her contributions are greater than Mr Garcia’s. This assertion requires a closer scrutiny of the contributions made by each of the parties during the course of a 30-year relationship.
I now turn to considering the parties’ contributions holistically and with reference to section 90SM(4) of the Act.
The parties met in 1986 and commenced cohabitation in or about 1990 or 1991. I have found that the date of final separation is June 2021. The parties had a lengthy relationship of some 30 years.
At the commencement of their cohabitation in 1990, the parties lived in the O Street property which at that time was owned by Ms Milton in her sole name. In his oral evidence Mr Garcia agreed that Ms Milton had assets worth $108,000 at the start of their relationship.
It is agreed that at the date of cohabitation Mr Garcia had an interest in the Town R property purchased by him in 1984 and a business. There is no evidence nor concession by Ms Milton as to the value of Mr Garcia’s assets in 1990 because she was not asked the question.
The parties do agree that in 1991 Mr Garcia sold the Town R property and that $70,000 from the sale was deposited in Ms Milton’s bank account as a way of protecting the money from possible creditors.
I find that the parties made initial financial contributions at or near the start of their relationship in the amounts agreed above being $108,000 for Ms Milton and $70,000 for Mr Garcia.
In 1993, the parties started their “W Company” business. They both worked in the business and operated a joint business account.
By 1995, the O Street property was too small for their growing family. Ms Milton gave evidence that she had been contemplating a separation from Mr Garcia at or about the time that she came upon the D Street property advertised for sale in the newspaper. Ms Milton saw the D Street property as a good buy for an astute purchaser. Deciding to give the relationship another chance, Ms Milton gave evidence that she had encouraged Mr Garcia to “go and have a look” at the D Street property. Ms Milton then bought the D Street property in her name using monies paid by Mr Garcia to her for the contemporaneous sale of O Street property to him and a mortgage. By this arrangement, Ms Milton avoided sales and agent costs for the sale and Mr Garcia thereafter had a passive income from the rent received for the O Street property’s units.
In 2003, the parties applied the sale proceeds of their business “W Company” to the purchase of a work vehicle for Mr Garcia, a family motor vehicle and an overseas family holiday. These funds were applied for their mutual benefit.
Ms Milton gave evidence that she disapproved of Mr Garcia’s decision to sell the O Street property in 2017 because she considered it a good investment. Her opposition to Mr Garcia selling the O Street property is consistent with my observation that Ms Milton is more financially astute than Mr Garcia. I accept Mr Garcia’s evidence that it was Ms Milton who wanted the properties registered in their respective names and that he went along with what she suggested.[64] The evidence does not support the contention that there was a deliberate decision made by both Mr Garcia and Ms Milton to keep assets in their respective sole names. I accept Mr Garcia’s evidence that he never challenged the arrangements because at the time he did not consider that he would ever separate from Ms Milton.
[64] See the Affidavit in Reply of Mr Garcia filed 15 April 2024 at paragraph 25.
In 2003, Ms Milton bought the E Street property using monies that she had received in the sum of $45,000 from her insurer.
It was common ground that during the relationship:
(a)Each of the parties had paid mortgage repayments for the properties held individually in their respective sole names;
(b)Mr Garcia had paid outgoings for the D Street and E Street properties in Ms Milton’s name including but not limited to council rates and utilities. Mr Garcia also paid for health insurance for himself and Ms Milton up to early 2022;[65]
(c)Both parties had undertaken renovations and paid for repairs and maintenance to all the real properties acquired during their relationship. They may have disagreed as to the nature and extent of such contributions at Trial but over a long relationship, I am not required to assess such contributions on a percentage basis; and
(d)The contributions made by each party to household finances from their respective earnings in turn facilitated the application of other income to the payment of loans and the conservation and improvement of their assets.
[65] See Exhibits A1 and A3.
When asked by the Court, Ms Milton also conceded that at various points in their relationship, Mr Garcia had been an executor and/or beneficiary of her various Wills and had been nominated as a beneficiary for her superannuation entitlements. The parties shared a mutual accountant.
During their relationship, there is no dispute that the parties engaged in employment and homemaking and child rearing duties for their mutual benefit and that of their children. Neither party produced evidence of their income across the course of their relationship other than for Mr Garcia’s 2019/2020 and 2020/2021 individual tax returns.
I am satisfied on the evidence that during a long relationship each of the parties applied their income for the benefit of their family as a whole and for the acquisition, conservation and maintenance of assets. The fact that the parties had separate savings accounts does not in my view detract from the fact that those savings were ultimately applied for mutual benefit. The parties did agree to have a joint bank account when operating their business and this continued until the business was closed.
I am satisfied that Ms Milton undertook the preponderance of childcare duties when Mr Garcia was working as a FIFO or working long hours with “X Company” or at T Company. Whilst Ms Milton was caring for children, Mr Garcia was working in paid employment which was applied for the benefit of the family. Neither contribution on the facts of this case can be seen as superior to the other. I accept that Mr Garcia assisted with domestic chores and child rearing duties to the extent that he was able to do so taking on board his hours of employment. Likewise, Ms Milton worked around her parenting duties.
All the evidence in this case supports a finding that the parties contributed equally across the course of a long relationship in terms of their personal exertions by way of paid employment and homemaking duties for their mutual benefit and for their two children.
During the relationship, Ms Milton received several compensation payments during the relationship specifically $45,000 in 2003, $14,000 in 2006 and $20,000 in 2008.[66] The 2003 compensation payment was applied to the purchase of the E Street property. The 2008 compensation payment was applied to the D Street property’s mortgage.
[66] Ms Milton also received $33,855 by way of compensation after a motor vehicle accident in 1983 which she applied to purchase the O Street property.
Mr Garcia received $25,000 from a relative in or about 2000 which he applied to the O Street property’s mortgage,[67] and an inheritance of $122,000 in 2022. From this amount, Mr Garcia deposited $50,000 into his superannuation fund and used the balance for living expenses and legal fees.
[67] See the Trial Affidavit of Mr Garcia filed 11 March 2024 at paragraphs 35 and 36.
I accept Mr Garcia’s evidence that the parties discussed him depositing the maximum available to him into superannuation when the O Street property was sold. Mr Garcia was about 62 years of age. He had no need to consider housing at that time because he continued to reside in the D Street property which he considered to be his home as it had been for the past 22 years.
STEP 3 - RELEVANT SECTION 90SF(3) FACTORS
In relation to section 90SM(4)(e), which are colloquially known as ‘the future needs factors’, the Court is also to take into account the following matters contained in section 90SF(3) of the Act. I propose to address below only those matters relevant to this case.
Mr Garcia is aged 69 years. Ms Milton is aged 62 years. There is no evidence to suggest that either party suffers from a health complaint which should be brought to account at Trial.
Ms Milton has qualifications in health care and in education. She studied for four and a half years to obtain a university degree.
Mr Garcia receives the sum of $408.50 per week by way of Centrelink Aged Pension supplemented by casual income in the sum of approximately $250 (gross) per week.
Ms Milton continues to run her business and receives income of $1,192 per week.[68] For the purposes of these reasons, I consider that Ms Milton’s business will continue to operate for the foreseeable future. Ms Milton also receives combined rental income from tenants at the E Street and D Street properties in the combined sum of $523 per week.[69] The E Street property’s alleged rent in the amount disclosed of $270 per week just falls short of covering the mortgage in the sum of $275 per week. Historically, the parties had rented out rooms in the D Street property to overseas students to supplement their income.
[68] See the Financial Statement of Ms Milton filed 8 April 2024 at Part D, paragraph 11.
[69] See the Financial Statement of Ms Milton filed 8 April 2024 at Part D, paragraph 15.
I consider that any orders made by the Court will result in each of the parties being able to maintain a standard of living that is reasonable. Each of the parties will retain a freehold property and have an income stream available to support themselves into the future.
It was not suggested that that any proposed order would affect their earning capacity.
Mr Garcia has more superannuation than Ms Milton. Ms Milton retains an asset (her home) which is considerably higher in value than Mr Garcia.
Mr Garcia has now formed a relationship with Ms DD. Ms DD is aged 57 years, works full‑time and owns a freehold property. Mr Garcia is not cohabiting with Ms DD. I accept his evidence that they have not commenced permanently cohabitating with one another. I do not accept his evidence that they are “just friends.” It is my impression from the evidence that the spotlight of these proceedings has impacted on Mr Garcia’s relationship with Ms DD. However, they continue to maintain joint accounts for their mutual benefit for the payment of social outings and holidays, and still see one another. I consider it more likely than not that their relationship will continue.
In closing submissions, Ms Milton submitted that she did not seek a finding pursuant to section 90SF(3)(m) of the Act in relation to Ms DD.
DISCUSSION AND CONCLUSIONS
Having carefully considered all the evidence, I have concluded that it is just and equitable on the facts of this case to alter the property interests of the parties.
The parties lived together for 31 years. They had two children together. Despite the lack of joint ownership of real property or personal (as opposed to business) bank accounts, they enjoyed the common use of property. The D Street property was their joint family home for 26 years. That common use of property ended when Ms Milton asked Mr Garcia to vacate their family home and live elsewhere.
During their long relationship and despite the real properties being registered in their respective sole names, the parties conducted themselves as a partnership and worked in unison with one another for the benefit of each other and their two children. They ran a business together, paid expenses for one another and jointly contributed to the acquisition and maintenance of their assets available at Trial.
Ms Milton submits that the parties went to great lengths to maintain separate finances during their relationship and that if this finding is made out, it is an important mitigating factor.
I accept Mr Garcia’s evidence that he did not question Ms Milton’s request for the properties to be in their own names because he did not consider that they would separate. The question of title holdings was a non-issue for him in those circumstances. It also accords with my impression of Ms Milton being more financially astute than Mr Garcia by insisting on real properties being registered in separate names.
As was observed by the Court in Williams & Oamra [2020] FCWA 109:
225.In my view, the unusual nature of the parties’ personal relationship, and the manner in which they communicated and dealt with each other, does not of itself influence a consideration of whether it is just and equitable to make an order. As Thackray CJ once observed in considering the construct of a “marriage-like relationship”, “married couples straddle the spectrum from the deliriously happy to the homicidally estranged”. There may be cases in which it could be argued that the extreme conduct of one party might mean that the making of a property order in favour of that party would be unjust and inequitable; this is not such a case.
On the evidence available at Trial, I do not accept that there was a complete lack of mutual discussion or strict separation of their financial affairs over a 30-year relationship. For example:
(a)The parties agreed for the sale proceeds of the Town R property which was owned solely by Mr Garcia to be paid into an account in Ms Milton’s name so as to protect the money from potential creditors;
(b)The parties agreed to purchase the U Street property in Ms Milton’s sole name using Mr Garcia’s net proceeds and then to later sell it. Ms Milton then cooperated in the sale proceeds being paid into Mr Garcia’s bank account;
(c)They agreed to move as a family from the O Street property to the D Street property in 1995. Ms Milton asked Mr Garcia to inspect the D Street property before it was purchased;
(d)The parties ran a joint business and agreed on how to disburse the net proceeds of sale;
(e)The parties agreed to each pay the mortgages for the properties registered in their own names but otherwise were content for the other to pay outgoings such as council rates, insurance and utilities which helped the other in a financial sense;
(f)The parties both paid for or undertook personally, repairs, maintenance and improvements to the O Street, D Street and E Street properties;
(g)Mr Garcia was included in Ms Milton’s wills and nominated as a beneficiary for the purposes of her superannuation entitlements should she predecease him; and
(h)The parties both applied their personal earnings for the benefit and support of their family unit;
(i)The rental of the O Street property by Mr Garcia provided a passive income stream for the family after payment of outgoings; and
(j)The parties applied their income to the benefit of the family in the payment of bills and the purchase of food and other necessities for the children.
I do not accept that there was no joint financial decision-making during their long relationship or a complete lack of reference to the other about financial decisions. The relationship had all the indicia of two persons working in unison for the benefit of all their family unit.
Further, the purchase and sale for each of the real properties and the title holding needs to be considered in the context of what was happening for each of the parties at that specific point in time. For example:
(a)Each party entered the de facto relationship in 1990/1991 already owning a property in their respective sole names - Ms Milton had the O Street property and Mr Garcia had the Town R property. The parties were not in a relationship when those properties were purchased by each of them;
(b)Mr Garcia’s Town R property was sold in 1991 and the sum of about $70,000 paid into Ms Milton’s bank account. To my mind, this demonstrates a significant level of trust and commitment by the parties in the relationship. The net proceeds were used to buy the U Street property in Ms Milton’s sole name;
(c)The parties co-operated in the simultaneous buying and selling of the O Street and D Street properties for their mutual benefit;
(d)Ms Milton purchased D Street property in 1995 during a period when she said asserted that she held some uncertainty about their relationship. Seen in this way, the purchasing of D Street property in her sole name was unremarkable and even understandable; and
(e)Mr Garcia purchased O Street property from Ms Milton which saved selling costs for Ms Milton but resulted in stamp duty payable by Mr Garcia. Ms Milton submits that the payment of stamp duty supports her argument that this transaction was arms-length. However, Mr Garcia’s counsel submits that there is a lacuna in the evidence as to how stamp duty arose. It is agreed on the facts that the transfer occurred whilst the relationship was intact and was not subject to Court order. There is an absence of evidence from the parties or the conveyancer as to whether the parties were able to avail themselves to stamp duty relief or not. The evidence does not permit me to make a finding on this issue because the evidence simply is not there. I cannot accept that the transfer attracting stamp duty demonstrated a strict arm’s length transaction any more than I can accept it occurred because the parties were not eligible for stamp duty relief because of their ongoing relationship.
Whilst it is true that the parties did not ‘pledge the credit of the other’,[70] they did co-operate in protecting money from potential creditors after Mr Garcia sold the Town R property.
[70] As submitted by Ms Milton’s counsel in Closing Submissions.
The overall assessment by the Court of the parties’ contributions and the relevant section 90SF(3) factors serves to confirm in my mind that it is just and equitable to make an order adjusting the parties’ legal interests in their property after the breakdown of a 30-year relationship which produced two children.
STEP 4 – CONCLUSION AS TO JUSTICE AND EQUITY
I am required to consider that the proposed orders are just and equitable in all the circumstances.[71] The Court must apply its various assessments to the assets it has identified. This has been described as a “leap from words to figures.”[72]
[71] Norbis v Norbis (1986) FLC 91-712.
[72] Steinbrenner& Steinbrenner [2008] FamCAFC 193, [234]
If no adjustment is made, Mr Garcia will retain net assets valued at $868,997 and Ms Milton will retain net assets valued at $1,367,076. This results in Ms Milton having $498,079 more than Mr Garcia. The difference in the ‘bottom line’ serves to bring into stark focus the inequity that will be served if no adjustment is made given the findings of the Court.
The fact that Ms Milton threw down the gauntlet for a “fight” over property settlement and has very firm views about Mr Garcia now extorting her for money, does not in my view change the Court’s view that it is just and equitable to alter the parties’ interests in their property.
Ms Milton submits that if her threshold arguments are not upheld, then there should be an adjustment in her favour of between 10 to 15 per centum on account of her contributions and with there being no adjustment on account of section 90SF(3) factors. In his final submissions Ms Milton’s counsel submitted that if the Court ruled against her threshold arguments, there was no opposition to the structure of the orders proposed by Mr Garcia. Ms Milton concedes that the E Street property will need to be sold if Mr Garcia is to receive a settlement sum greater than $80,000.
Mr Garcia submits that he should receive a five per centum adjustment in his favour said to be on account of his postseparation inheritance in the sum of $122,000, his lower income and Ms Milton’s superior income earning potential. No breakdown was provided by Mr Garcia to account for the disbursement of his inheritance other than $50,000 into his superannuation and the balance spent on legal fees and living expenses.
I conclude that in this case the most just and equitable outcome is to adjust the parties’ assets and for there to be a five per centum adjustment in Ms Milton’s favour to acknowledge the money paid by her for the purchase of the E Street property in 2003. Mr Garcia will retain Items 1, 4, 6, 7, 8, 20, 21 and 23 in the Revised Balance Sheet to the net value of $868,997. Ms Milton will retain Items 2, 5, 9, 10, 11, 12, 14, and 24 in the Revised Balance Sheet to the net value of $919,795. Based on Ms Milton’s evidence, the E Street property (being Item 3) will need to be sold and the mortgage to G Bank (being Item 13) discharged. This will trigger Capital Gains Tax which is identified in the Revised Balance Sheet as a contingent liability. I propose to order that the E Street property be sold, that after payment of sales costs and discharge of the mortgage, the payment of Ms Milton’s credit card debts (being Items 15 and 17) in the combined sum of $5,433 and money to be quarantined to pay Capital Gains Tax, that Mr Garcia be paid his settlement sum and the balance to Ms Milton in the percentage so ordered.
I propose to make an order restraining Ms Milton from further encumbering or dealing with the E Street property pending settlement of the sale proceeds. In her evidence in chief, Ms Milton updated the Court as to a loan that she had secured from a legal funding company prior to Trial for the payment of her legal fees. In order to secure the funds, Ms Milton had agreed to a caveat being registered by the company on the Certificate of Title of the D Street property. As the E Street property is registered in Ms Milton’s sole name, there is the potential for Ms Milton to deal with this property without Mr Garcia’s knowledge or consent as she did with the D Street property. Potentially, any such dealings could complicate or frustrate the terms of these orders.
It was Ms Milton’s case at Trial that the E Street property would have to be sold to satisfy any settlement sum to be paid to Mr Garcia which exceeded $80,000. Given the terms of my proposed orders, I see no prejudice to Ms Milton for such an order to be made pending implementation of those Orders.
For all the above reasons, the Court makes the orders as set out at the commencement of this Judgment.
I certify that the preceding two hundred and twelve (212) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Dickson. Associate:
Dated: 3 October 2024
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