Gray v Burden
[2003] TASSC 105
•20 October 2003
[2003] TASSC 105
CITATION: Gray v Burden [2003] TASSC 105
PARTIES: GRAY, Patricia Anne
v
BURDEN, Roger Mark
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: M45/2002
DELIVERED ON: 20 October 2003
DELIVERED AT: Launceston
HEARING DATE/S: 13 October 2003
JUDGMENT OF: Blow J
CATCHWORDS:
Family Law and Child Welfare - De facto relationships - Adjustment of property interests - Particular cases - Inadequacy of child support - Pending application to vary parenting orders.
De Facto Relationship Act 1999 (Tas), s23(2)(e) and (m).
Aust Dig Family Law and Child Welfare [501]
REPRESENTATION:
Counsel:
Applicant: A Trezise
Respondent: In Person
Solicitors:
Applicant: A T Legals
Respondent: In Person
Judgment ID Number: [2003] TASSC 105
Number of paragraphs: 17
Serial No 105/2003
File No M45/2003
PATRICIA ANNE GRAY v ROGER MARK BURDEN
REASONS FOR JUDGMENT BLOW J
20 October 2003
This is an application pursuant to the De Facto Relationship Act 1999 ("the Act"), s16(1), for an order to adjust interests relating to property. The parties cohabited for just under 10 years, from July 1992 until 29 March 2002. They have one child, who was born in February 1993. The applicant is 51 years old, and is a disability carer. The respondent is 47 years old, and is a disability support worker.
The respondent participated in the hearing without legal representation. He submitted that he and the applicant had not had a de facto relationship, and that the Act therefore does not apply to them. I reject that submission. The Act, s3, defines "de facto relationship" to mean "the relationship between a man and woman who, although not legally married to each other, live together on a genuine domestic basis as husband and wife". There is uncontradicted evidence that the parties lived together for nearly 10 years, that their daughter lived with them from her birth until their separation, that they purchased a house in their joint names in 1992, that they bought a block of land in their joint names in or about 1996, that they built a house on it, and that they obtained mortgage loans as joint borrowers in respect of both properties. In her first affidavit, the applicant listed a number of domestic tasks which she said she undertook, or at least took primary responsibility for. The respondent said in an answering affidavit that all the matters referred to by the applicant were shared. Although there is a dispute as to what proportion of the domestic tasks was undertaken by each party, it is clear that the domestic tasks were somehow shared between them. The respondent said that he and the applicant lived as companions, had separate rooms, and "basically shared all the expenses and shared the care of the child equally". Even if the parties had separate bedrooms, did not sleep together, and kept their finances separate, I think their relationship had the essential features of a de facto marriage since they shared their first and second homes, shared their domestic tasks, and shared the parenting of their child. Taking all of these matters into account, I am satisfied that they lived together on a genuine domestic basis as if they were husband and wife, that their relationship was a de facto relationship as defined in the Act, that they lived together in that relationship for a continuous period of over two years, and that an order to adjust interests relating to property can be made pursuant to the Act, ss13(1) and 16(1).
When the parties commenced cohabitation, they had relatively little by way of assets. The applicant had only a 1980 motor vehicle, some furniture, and some other household contents. The respondent's assets were a less valuable motor vehicle, and his own furniture and household contents. It is common ground that the applicant's assets were of greater value than the respondent's assets. The applicant worked throughout the years of cohabitation, except for a short period at around the time of the birth of the child. The respondent worked throughout the years of cohabitation, except for several months when he was unemployed. Although their work seems not to have been highly paid, the parties managed to build up their assets over the years.
Their principal asset is their property at Newlands Street, Riverside. It is now worth $185,000. It is mortgaged to the Commonwealth Bank. The mortgage debt is $53,385. At separation, the respondent had a motor vehicle that was subject to finance. He sold it. I accept the applicant's affidavit evidence that the net proceeds of sale amounted to $4,400. She has a vehicle whose agreed value is $500. Each of the parties has some furniture and some household contents. The respondent contends that his furniture and household contents are of equal value to the applicant's, whereas she contends that hers are worth $2,000 more than his. She did not adduce any evidence to prove that claim, and it therefore fails. I will treat the furniture and contents of each party as being worth $3,000, as asserted by the respondent. At the time of separation, the applicant had $8,871 in a bank account, and the respondent had $10,064 in a bank account. I do not know their present bank balances.
The parties established a bank account for their child. It was apparently a trust account. At the time of separation it had about $3,500 in it. The applicant contends that the respondent withdrew and spent all of that money. He admits that he withdrew $3,300 of it. I have no reason to disbelieve his assertion that he did not withdraw the full amount. Under cross-examination, he said that he spent the $3,300 on the child, but he did not identify any item of expenditure other than ordinary living expenses. The money was the child's money. For the purpose of this decision, I accept that either party was at liberty to withdraw from that account and spend the money on the child's ordinary living expenses. Although the money in the account was not the property of the parties, it was a financial resource that either of them could have used for the maintenance of the child. I therefore consider it appropriate to bring that money into account in determining what adjustment of property interests, if any, would be just and equitable.
Similarly, I will bring into account the superannuation resources of the parties. The applicant has superannuation entitlements with a current value of about $12,000. The respondent is a member of two superannuation funds. In one of them, his account balance throughout 2002 was $8,246. I infer that that figure has not changed. In the other, his account balance as at 30 June 2002 was $8,179. That balance appears to be growing at the rate of about $1,150 per annum. I infer that the balance is now about $9,500.
It seems the parties have no significant liabilities apart from the Commonwealth Bank mortgage. For the purposes of this decision, I calculate the value of their assets and financial resources to be as follows:
Equity in Newlands Street property ($185,000 less mortgage debt of $53,385) $131,615 Net proceeds of respondent's vehicle 4,400 Applicant's vehicle 500 Furniture and contents ($3,000 each) 6,000 Applicant's bank account 8,871 Respondent's bank account 10,064 Child's money spent by respondent 3,300 Applicant's superannuation 12,000 Respondent's superannuation ($8,246 plus $9,500) 17,745 TOTAL
$194,495
The applicant contended that, up to the time of separation, the contributions of the parties to the acquisition, conservation and improvement of assets, and as homemakers and parents, were equal. However, she contended that a 60:40 distribution of assets, in her favour, was just and equitable because of her future needs, and her ongoing care for the child. She also relied on the fact that the respondent has been able to spend less on accommodation since separation as a result of living in the jointly owned property, and having arranged with the bank to reduce the monthly mortgage payments so that they are now sufficient to cover only the interest. The respondent contended that the adjustment of property interests should be more favourable to him than a 50:50 split. He contended that his pre-separation contributions were greater than those of the applicant. He based that submission on evidence that he paid for extensions and improvements to the house with his own money. He submitted that there should not be any adjustment in the applicant's favour in connection with her care for the child since the child already spends five nights per fortnight with him, and since he is applying to the Family Court of Australia for the current order as to the child's residential arrangements to be varied so that she would spend the bulk of her time with him.
In relation to the parties' pre-separation contributions, I am required by the Act, s16(1)(a), to have regard to their financial and non-financial contributions made directly or indirectly to the acquisition, conservation or improvement of property, and by s16(1)(c), to have regard to their contributions made in the capacities of homemaker or parent. In his affidavit, the respondent said he believed he had paid over $25,000 from his own funds since moving to Newlands Street for house extensions, renovations, improvements and maintenance. The improvements included a garden shed, landscaping, a concrete deck, rooms under the house, and house extensions. At the trial he produced a bundle of invoices, statements, receipts and so forth, all in his name alone, evidencing the expenditure of thousands of dollars on the property. When he cross-examined the applicant as to this expenditure, she said that she had been paying for other items, such as bricks and wood, and that she had paid just as much as he had. She also said she was giving the respondent money each fortnight out of her wages. That assertion was neither challenged nor contradicted. It may very well be that the respondent's money was used to pay more than half the cost of the improvements and extensions at Newlands Street. However, I am not satisfied that the pre-separation direct and indirect financial contributions to the acquisition, conservation and improvement of the real estate of these parties were other than equal. Their earnings seem to have been approximately equal. There is no suggestion that either of them spent extravagantly or wasted money in any way. The building up of their assets suggests that they were both careful with money. It often happens that expenditure on improvements comes primarily from the earnings and savings of one partner, while day to day expenses of the household are met predominantly from the earnings of the other partner. That might well have been the case here. In that situation, one partner makes a direct financial contribution to the improvement of the property, while the other makes an indirect financial contribution to its improvement. I accept the applicant's evidence that she was giving the respondent money from her wages on a regular basis. All of the evidence as to the parties' financial arrangements suggests that their relevant financial contributions were approximately equal. Both parties made contributions as parents and as homemakers. I accept the submission of counsel for the applicant that up to the time of separation, their relevant contributions were approximately equal.
When the parties separated, their mortgage payments were about $500 per month. The payments at that rate more than covered the mortgage interest, with the result that the principal was being reduced each month. A few months after separation, the respondent arranged with the bank to make payments of interest only, at the rate of about $345 per month. Since separation the applicant has been living in rented accommodation. As at October 2002, her rent was $130 per week. As a result of remaining in the jointly owned house, and re-negotiating the mortgage payments, the respondent has had the advantage of cheaper accommodation. That is a minor factor that weighs in the applicant's favour in relation to the division of the parties' assets.
Since the parties' separation, the applicant has been the child's primary carer. A consent order was made by a registrar of the Family Court of Australia on 29 July 2002 in relation to the child. Under that order, the child resides with the respondent for five nights per fortnight, from 3.30pm on a Wednesday until 9am on the following Monday. Thus the applicant looks after the child for about two thirds of the time, and the respondent does so for about one third of the time. Thus, for the purposes of the Act, s16(1)(c)(i), the applicant's post-separation contributions as a parent to the welfare of the family have been greater than those of the respondent. This is another minor factor weighing in favour of the applicant.
The respondent makes child support payments which the applicant receives, but the amount that he pays is small. According to the applicant's second affidavit, the respondent paid $38 per month from March 2003, but a subsequent assessment resulted in that amount being reduced to $21 per month from August 2003. Under cross-examination, the respondent estimated that he was paying about $20 per fortnight, but that was obviously just an on-the-spot estimate, and I therefore accept the applicant's figures. Her counsel submitted that the child support payments were so small that her needs as the child's primary carer warranted a 60:40 division of the parties' assets and financial resources in her favour. When a parent with a healthy income pays child support at a rate determined in accordance with the child support legislation, thereby meeting his or her proper obligations to provide support, it will often be inappropriate for any adjustment to be made in relation to property interests on the basis of the payments being either generous or inadequate. See, for example, Borg and Borg (1991) FLC 92-215 at 78,450 - 78,451. But, in this case, the monthly payments are so small as to suggest that the respondent's income must be just above the threshold at which child support becomes payable. I am required to take into account under s23(2) the financial needs and obligations of the applicant (s23(2)(b)), the responsibilities of both parties to support the child (s23(2)(c)), the child support payments (s23(2)(e)), and the care and control of the child that each party has (s23(2)(f)). In the circumstances I think I must take into account in the applicant's favour the inadequacy of the present payments of child support.
As I have said, the respondent has applied to the Family Court of Australia for a variation of the parenting orders of 29 July 2002. The existence of his application, and any possibility of a change in the arrangements as to responsibility for the child, could only be taken into account pursuant to s23(2)(m), which requires a court to have regard to "any other fact or circumstances the court considers relevant". The respondent said in evidence that he had made his recent application to the Family Court because the applicant was working long hours and putting the child into child care, with the result that the child was getting up early and getting to sleep late, whereas he would be available mornings and nights. That is apparently the only basis upon which he is seeking a variation of the existing orders. If the applicant has made fresh child care arrangements since the making of the orders of July 2002, I very much doubt that those arrangements would be considered a sufficient change of circumstances to warrant the relitigation of the question of the child's residential arrangements, or to warrant a change to the status quo. Prima facie, I should have regard only to the existing arrangements, pursuant to s23(2)(f), which requires the Court to have regard to "whether either de facto partner has the care and control of a child of the de facto partner who is under 18". It is significant that that provision is expressed in the present tense. I see no real likelihood that the respondent's application will result in an alteration of the existing arrangements, and therefore will not take it into account pursuant to s23(2)(m).
Taking into account the respondent's occupation of the property since separation, the greater contribution of the applicant as a parent since separation, and the inadequacy of the child support payments, as well as all the other factors that I am required to take into account pursuant to ss16(1) and 23(2), I think it would be just and equitable for the applicant to have 60 per cent of the parties' assets and financial resources, and for the respondent to have 40 per cent of them.
It is common ground that the respondent should have an opportunity to acquire the Newlands Street property. I calculate the amount payable by him to achieve a 60:40 division to be $92,326. The division of assets and financial resources would thus be as follows:
Applicant Respondent Vehicles $500 $4,400 Furniture 3,000 3,000 Bank accounts 8,871 10,064 Child's money 3,300 Superannuation 12,000 17,746 Equity in house 131,615 Adjustment 92,326 (92,326) TOTAL $116,697 $77,799
The figure of $92,326 represents just over 70 per cent of the parties' equity in the property. In the event that the respondent does not acquire the property, it must be sold, and the net proceeds distributed 70 per cent to the applicant and 30 per cent to the respondent.
I therefore make the following orders:
1That within 21 days the respondent is to advise the District Registrar and the applicant's solicitor by letter whether he elects to acquire the applicant's interest in the property at 59 Newlands Street, Riverside, comprised in certificate of title volume 123218 folio 102.
2That, if the respondent so elects to acquire the applicant's interest in the said property, then on or before 28 November 2003:
(a)the respondent shall procure either a discharge of the mortgage over that property to the Commonwealth Bank of Australia, or a release of the applicant by that bank from her personal covenant in that mortgage;
(b)the applicant shall transfer to the respondent her interest in that property; and
(c)the respondent shall pay to the applicant the sum of $92,326.
3That, if the respondent does not elect to acquire the applicant's interest in that property, or if he does not comply with order 2(a) or 2(c) above, then the said property is to be sold and, after the payment of the amount required to discharge the said mortgage, any real estate agent's commission and expenses relating to the sale, and all legal costs and disbursements relating to the discharge of the mortgage and the sale, 70 per cent of the net proceeds of sale are to be paid to the applicant and 30 per cent thereof are to be paid to the respondent.
4That both parties have liberty to apply as to the implementation of these orders.
5That the chattels of the parties each vest in the party now having possession thereof.
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