Gray v White

[2009] NSWSC 1441

CITATION:	Gray v White [2009] NSWSC 1441
HEARING DATE(S):	12 and 13 February 2009 6 and 7 August 2009
JUDGMENT DATE :	18 December 2009
JUDGMENT OF:	McLaughlin AsJ
DECISION:	1. I order that the claim of the Plaintiff and the cross-claim of the Defendant each be dismissed. 2. I make no order as to costs, to the intent that each party will bear her or his own costs of the proceedings. 3. The exhibits may be returned.
CATCHWORDS:	Family Law - de facto relationship - adjustment of interests of parties in property - respective contributions of parties - the Court should not be diverted from the clear words of the statute, which looks to past contributions actually made by the parties.
LEGISLATION CITED:	Property (Relationships) Act 1984
CATEGORY:	Principal judgment
CASES CITED:	Davey v Lee (1990) 13 Fam LR 688 Bilous v Mudalia [2006] NSWCA 38
PARTIES:	Deborah Anne Gray (Plaintiff) Peter Mitchell White (Defendant)
FILE NUMBER(S):	SC 5092 of 2004
COUNSEL:	Mr S. Bell (Plaintiff) Mr T. Hodgson (Defendant)
SOLICITORS:	Llyod Truman Sadiq (Plaintiff) BDA Legal (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Friday, 18 December 2009

5092 of 2004 DEBORAH ANNE GRAY –v- PETER MITCHELL WHITE

JUDGMENT

1 HIS HONOUR: These are proceedings under the Property (Relationships) Act 1984.

2 The proceedings were instituted by statement of claim filed by Deborah Anne Gray on 16 September 2004. The Defendant named in the statement of claim is Peter Mitchell White.

3 By that pleading the Plaintiff claims substantively an order pursuant to section 20 of the Property (Relationships) Act for the adjustment of the interests of the parties in property. The Defendant on 18 October 2004 filed a defence and a cross-claim, by which latter pleading he also sought relief pursuant to section 20 of the Act.

4 It should here be recorded that the Plaintiff in the statement of claim also sought a declaration that the Defendant holds certain real property (or a portion thereof) on trust for the Plaintiff. That claim was expressly abandoned by the Plaintiff at the outset of the hearing.

5 It was asserted by the Plaintiff that she and the Defendant were in a de facto relationship from July 1994 until September 2002, during which period the parties resided together. However, it was disputed by the Defendant that a de facto relationship obtained throughout the entirety of that period, although the defendant did not dispute that throughout that period the parties resided together and that throughout most of that period the parties were in a close personal relationship (of the nature recognised by section 5(1) of the Property (Relationships) Act). The Defendant, however, agreed that throughout the balance of the foregoing period while the parties were living together they were in a de facto relationship.

6 The Plaintiff (who was born in 1952 and is presently aged 57) met the Defendant (who was born in 1950 and is presently aged 59) in 1992. Of the relationship between the parties (whatever be the nature of that relationship) twin daughters, Elena and Claudia, were born on 31 July 1994.

7 At the time when the parties met in 1992 the Plaintiff was residing in an unencumbered house property owned by her at 1 Clifton Reserve, Surry Hills, whilst the Defendant was living a house property owned by him at 4 The Crescent, Beecroft.

8 On the day of the birth of their twin daughters, the Defendant moved into residence in the Plaintiff’s property at Surry Hills, and in the following month the Defendant sold his property at Beecroft.

9 The Defendant had previously been married and divorced, but the Plaintiff had never been married, at the time when their relationship commenced.

10 In her statement of claim the Plaintiff asserted that at the time of the commencement of the relationship she had the following assets, to which the following respective estimated values were attributed:

House property situate at and known as
1 Clifton Reserve, Surry Hills $300,000
1986 Toyota Corolla motor vehicle $6,000
Furniture and household effects $15,000
Savings $40,000
Deposit with Worldlink Trust $10,000
Deposit with AFT Property Trust $10,000
Loan $8,000
Superannuation $14,000
Shares in Australian College of English $5,000

11 Subsequently an agreed joint valuation gave to the Plaintiff’s Surry Hills property an estimated value of $220,000 at 31 July 1994.

12 The Plaintiff had no liabilities at the commencement of the relationship.

13 At the time of the commencement of the relationship the Defendant had the following assets, to which the following respective estimated values were attributed:

House property situate at and known as
4 The Crescent, Beecroft $210,000
1989 Toyota Camry motor vehicle $13,000
Furniture and household effects $2,300
Savings $5,000
Interest hearing deposits $8,000
Superannuation $32,000

14 The Plaintiff asserted that the Defendant in August 1994 was indebted to his mother in an unspecified sum, and that that debt was secured by way of mortgage over the Beecroft property. The Defendant denied that assertion, and there was no evidence to support it.

15 Before the birth of their twin daughters the Plaintiff had been in full-time employment as a teacher of English as a second language, receiving an annual salary of about $40,000. She gave up that employment before the birth of their twin daughters.

16 The Defendant at that time was in full-time employment as a probation and patrol officer, employed by the Department of Corrective Services, receiving an annual salary of about $41,000.

17 The Plaintiff resumed part-time employment in August 1996. From then until August 1997 she was earning about $12,500 a year. From 1999 to 2000 she was earning about $22,500 a year, and from July 2000 to the date of hearing of the present proceedings the Plaintiff held two part-time positions at Macquarie University, her total income at the time of hearing being about $41,000 a year. In addition, during the period of the relationship, the Plaintiff from April 1994 was receiving rent from her Surry Hills property. During the course of the relationship the Defendant continued in full-time employment, his earnings increasing from about $38,500 in 1994 to about $60,000 in 2002.

18 In February 1995, a residential property situate at and known as 23C Commissioners Road, West Ryde was purchased in the name of the Defendant for $315,000. It was asserted by the Plaintiff that she contributed at least $30,000 towards that purchase price, although that assertion was disputed by the Defendant. The parties and their twin daughters moved into residence in the West Ryde property in April 1995. They continued to reside there until April 2004. However, it was the assertion of the Plaintiff, which was admitted by the Defendant, that the domestic relationship between the parties came to an end on 18 September 2002.

19 The parties maintained a joint bank account with the Commonwealth Bank at Taylor Square, which was established for the purpose of meeting the mortgage payments on the West Ryde property. Most of the Defendant’s salary was paid directly into that account, which at the date of termination of the relationship held a credit balance of about $12,000. The Defendant had no authority to operate that account and had no access to it. The Plaintiff at no time deposited any moneys into that account or made any contributions towards it.

20 It was the case for the Plaintiff that she had made direct financial contributions to the acquisition, conservation, and improvement of the West Ryde property, both by way of contribution of $30,000 towards the purchase price, and by way of direct financial payments towards repairs and refurbishments of that property. She also asserted that she made indirect financial contributions towards the property and towards the financial resources of the parties, by way of paying for household expenses and outgoings, and for family holidays, and the like. The Plaintiff also asserted that she made direct non-financial contributions towards the improvement of the West Ryde property, especially by way of personal exertion in and involvement with the maintenance and repair of the property.

21 Whilst admitting that the Plaintiff made some non-financial contributions to the acquisition, conservation and improvement of the West Ryde property, the Defendant did not admit the extent of such contributions, and denied most of the specific allegations made by the Plaintiff in that regard.

22 It was the assertion of the Defendant that after the birth of their twin daughters, he and the Plaintiff did not have a sexual relationship. He said that they occupied separate bedrooms at all times. Although on occasion they went out together socially and went on some holidays together, it was the Defendant’s evidence that he and the Plaintiff essentially led separate lives while living under the same roof.

23 When the Defendant in 1994 sold his Beecroft property, which was unencumbered, he received net proceeds of sale in an amount of $227,000, which he used towards the purchase of the West Ryde property, as also he used the proceeds of sale of most of his furniture (for which he received about $2,200). The balance of the purchase price was funded by way of a housing loan, secured by mortgage. Repayments on that loan were met from the joint account to which reference has already been made.

24 The major part of the Defendant’s salary was paid into the foregoing joint account of the parties. From that joint account the monthly mortgage payments of were made in respect to the housing loan on the West Ryde property. The Plaintiff never contributed any moneys to that joint account. At the outset an amount of $661 a fortnight from the Defendant’s salary was paid into that account. From February, 1995 that amount increased to $790 a fortnight. The amount further increased over the years, ultimately reaching an amount of $1050 a fortnight from August 2001 to October 2003. The Defendant closed the joint account in October 2003. It was his evidence that from February 1995 to October 2003 he had from his salary, paid into the joint account a total amount of $181,820.

25 According to the Defendant, he retained from his salary about $150 a fortnight, for such expenses as petrol, lunch money and personal needs. He also purchased various basic groceries with that amount.

26 The joint account (to which only the Plaintiff, not the Defendant, had access) was also used to meet household outgoings, including expenses relating to the children, household expenses being paid primarily from that account.

27 Although throughout the period of the relationship the Plaintiff had a tenant in the Surry Hills property, from whom she was receiving rent, the Plaintiff, curiously (indeed, quite unbelievably), asserted that she did not know, or could not remember, the amount of rent which she and the tenant agreed should be paid, or, indeed, the amount of rent which the tenant did, in fact, pay to her.

28 It was the Plaintiff’s evidence that at the outset she received the rental money from the tenant in cash. However, at some stage, according to the Plaintiff, the tenant obtained a credit card, and allowed the Plaintiff to use that card in order to withdraw money representing the amount of rent from the tenant’s bank account. According to the Plaintiff, moneys so withdrawn, from an indeterminate date until 1 September 2004, had accumulated to a total of almost $29,800.

29 I regarded the evidence of the Plaintiff concerning the rent which she received from the Surry Hills property throughout the relevant period as being totally unsatisfactory. The Plaintiff did not adduce evidence from the tenant, Ms Sheila Browne, which might have clarified the position, and no explanation was offered for the absence of such evidence.

30 Indeed, I regarded the totality of the Plaintiff’s evidence concerning her financial and monetary affairs as being completely unsatisfactory. It is difficult to conclude whether the unsatisfactory nature of that evidence was the result of the Plaintiff genuinely being an extremely poor historian, or whether it was the result of deliberate intent on the part of the Plaintiff to mislead and confuse the Court.

31 Where the evidence of the Plaintiff was in conflict with that of the Defendant, and where there was no documentary material corroborating the evidence of either of the parties, I preferred the evidence of the Defendant to that of the Plaintiff.

32 The evidence regarding the Plaintiff’s assets at the time of the termination of the relationship was skimpy in the extreme. At that time she owned (as she now still owns) the Surry Hills property, to which the joint valuation attributed a value of $550,000, and she continued to receive rent (in an unquantified amount) from that property. She had also been enabled to increase her savings during the course of the relationship from an amount of $40,000 to an amount of about $108,000. The Plaintiff under cross-examination was extremely vague as to the source of the increase in those savings, her only explanation being “I’m a good saver” (T43).

33 At the time of the termination of the relationship the Defendant’s assets consisted of the West Ryde property (which according to the agreed joint valuation had on estimated value of $535,000 at 18 September 2002); a 2003 Peugeot motor vehicle, which the Defendant inherited from his father; superannuation entitlements (of almost $224,000, together with what was described as a deferred pension, having a value of $21,158); savings, in an estimated amount of $1,600. The value of the Defendant’s superannuation entitlements is currently in an amount of almost $363,000, whilst the Plaintiff has a current superannuation entitlement of $70,000. At the time of hearing, the mortgage indebtedness of the Defendant in respect to the West Ryde property was in an amount of a little over $22,000, whilst the Plaintiff had acquired a mortgage debt over the Surry Hills property in an amount of $595,000.

34 The Plaintiff during the course of her oral evidence asserted that she was indebted to her father in respect to various amounts which she said had been lent to her. She initially said that she owed her father $110,000, later substituting an amount of $75,000. She did not, or could not, state how much she had repaid in respect to those alleged loans, or provide any details regarding the circumstances in which those alleged loans had been made. Those alleged loans were undocumented. The Plaintiff said that her father was too ill to participate in the proceedings. There was no suggestion that the Plaintiff’s father had ever sought repayment of those alleged loans.

35 I am far from satisfied of the existence of any indebtedness of the Plaintiff to her father. I do not consider that such alleged indebtedness should be taken into account in identifying what has been compendiously referred to as by Counsel for the respective parties during the course of the hearing as the pool of assets available to meet any orders for the adjustment of the interests of the parties in property.

36 At the time of the purchase of the West Ryde property, the parties consulted a solicitor, who at their request, prepared a draft deed, which, in the event, was never executed by them. However, that document is, at least to an extent, evidence of the intention of the parties at that time regarding the funding of the purchase of the West Ryde property. That document provided that the Plaintiff should make an initial contribution in the sum of $30,000 ($10,000 being stated to have already been paid by her towards the deposit) and that the Defendant should make an initial contribution of $215,000, as well as paying the legal costs, bank fees, and other costs associated with the purchase of the property.

37 It was asserted by the Plaintiff that she did, in fact, make a contribution of at least $26,000 towards the purchase of the property (her bank statement disclosing a withdrawal of that amount on 27 February 1995) and that there should also be taken into account, in respect to that purchase, a repayment made by the Plaintiff to the Defendant’s sister in the sum of $4,000.

38 The Defendant was cross-examined concerning the foregoing asserted contribution of $30,000 by the Plaintiff towards the purchase of the West Ryde property. He disputed that the Plaintiff had contributed that amount, whilst, as I understand it, conceding that she had contributed $4,000. However, he did not at that time, in conversation with the solicitor (who was, in fact, the Defendant’s cousin), dispute the assertion, which had been communicated by both himself and the Plaintiff to the solicitor, that the Plaintiff had contributed $30,000 toward the purchase of that property.

39 I am satisfied that the initial contribution of the Plaintiff towards the purchase of the West Ryde property was $30,000.

40 It was the case for the Plaintiff that her contributions in the capacity of homemaker or parent to the welfare of the Defendant and their children considerably exceeded the contributions made by the Defendant in those capacities. In this regard it must be appreciated that for most of the period of the relationship the Plaintiff was working only part-time, whilst the Defendant was in full-time employment. I am satisfied that the Plaintiff had the primary responsibility as homemaker and parent. Whilst not disregarding the contribution of the Defendant in those roles, I am satisfied that the contributions by the Plaintiff as homemaker and parent were considerably greater than the contributions of the Defendant in those roles.

41 It is in the light of the foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff and the cross-claim of the Defendant.

42 I have had the benefit of receiving a written outline of submissions and a chronology from Counsel for the respective parties. Those documents will be retained in the Court file.

43 The jurisdiction invoked by the parties in the present proceedings is founded upon section 20 of the Property (Relationships) Act, subsection (1) whereof provides:

On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:


(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and

(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:


(i) a child of the parties,

(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.

44 In approaching a claim for the adjustment of the interests of the parties in property pursuant to section 20 (1) of the Property (Relationships) Act, the Court must make a holistic judgment and must not attempt to evaluate the respective contributions of the parties as if it were undertaking a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time consuming of litigious exercises). (See Davey v Lee (1990) 13 Fam LR 688; see also Bilous v Mudalia [2006] NSWCA 38 at 43, where Ipp JA said that some situations do not lend themselves to either a pure global approach or a pure asset by asset approach in determining what orders should be made.)

45 In considering the claim of the Plaintiff and the cross-claim of the Defendant, the Court should not be diverted from the clear words of the statute, where, by section 20 (1), the Court is required to have regard to the respective contributions of the parties of the nature described in that subsection.

46 At the time of the commencement of the relationship the assets of the parties were more or less equal. Each owned an unencumbered residence. Nevertheless, throughout the period of the relationship the earnings of the Defendant were considerably greater than those of the Plaintiff, who was, at the outset, working only part-time, and, who, after the birth of their twin daughters, was not working at all for a period, before resuming part-time employment.

47 Apart from the initial contribution of $30,000 which I am satisfied the Plaintiff made towards the acquisition of the West Ryde property, the Plaintiff’s contributions to the relationship were essentially of an indirect and non-financial character. The Plaintiff paid for certain of the household expenses and outgoings, and performed certain refurbishment and maintenance work on the West Ryde property. However, it was the proceeds of sale of the Defendant’s property at Beecroft which, in an amount in excess of $200,000, was the substantial source of the funding of the purchase of the West Ryde property. It was the Defendant’s earnings, paid into the joint account, which entirely met the mortgage payments on that purchase, and also met a substantial part of the household outgoings. It would not be inaccurate to say that throughout most of the relationship the Plaintiff was living free of charge in the West Ryde residence.

48 I have already referred to the totally unsatisfactory (almost unbelievable) evidence of the Plaintiff concerning the rent which she received from her Surry Hills property. I have also referred to the fact that there was no adequate explanation as to how during the course of the relationship, while the Plaintiff was either working only part-time, or not working at all, she was able to increase her savings very significantly, from about $40,000 to about $110,000. It is a legitimate inference that that increase in her savings had its source in the Defendant’s earnings, to the extent that it was the Defendant’s earnings, paid into the joint account operated solely by the Plaintiff, which were being used to support the household, whilst the Plaintiff was largely enabled to retain the rent which she was receiving from her Surry Hills property.

49 The Plaintiff claims an order that the Defendant pay to her a proportion of the value of the West Ryde property and other property of the Defendant. It was submitted that that proportion should reflect the direct percentage of her contribution towards the purchase of the West Ryde property expressed in current values, together with a sum representing her indirect contribution to the increase in the Defendant’s assets.

50 Counsel for the Plaintiff has calculated that the direct financial contribution of $30,000 towards the purchase of the West Ryde property represents 11.7 percent of the total purchase price and associated costs and expenses. Accepting, for the purposes of that calculation, that the present value of the West Ryde property is $685,000, 11.7 percent thereof is, in round figures, $80,000. That is the minimum amount claimed by the Plaintiff. In addition, she seeks a further sum representing her indirect contributions to the increase in the assets of the Defendant.

51 The Defendant however, submits that at the present time the Plaintiff has assets of some $1,263,618, whilst the assets of the Defendant have a total present value of $664,458. It was submitted on behalf of the Defendant that, after a relationship obtaining over some eight years, it would not be just and equitable for the parties to retain those respective assets positions. The Defendant submitted that a just and equitable result would be for the Defendant to receive an amount of $100,000 from the Plaintiff. That would leave the Defendant with total assets of about $764,500, and the Plaintiff with total assets of about $1,163,600.

52 I consider that the foregoing approach flies in the face of the express provision of section 20(1) of the Act. The Court must not be diverted from the clear words of the statute. In exercising the discretion vested in it by the foregoing statutory provision, the Court must have regard to the contributions of the nature set forth in that subsection. It is not of the slightest relevance to the exercise of the Court’s discretion that, either at the time of termination of the relationship or at the present time, the assets of one party, were or are considerably greater than those of the other party. The Court must look to the contributions made by the respective parties of the nature set forth in section 20(1) of the Act, and not to other matters which may have occurred before or after the termination of the relationship between the Plaintiff and the Defendant

53 In the instant case evidence was given regarding subsequent Family Court proceedings between the parties, regarding a subsequent de facto relationship of the Plaintiff and contested proceedings arising out of that relationship, and regarding the Defendant’s current expectations from the estate of his recently deceased mother. That evidence was totally irrelevant to the contributions of the parties to the relationship between them.

54 The financial contributions of the Defendant to the relationship (in particular, to the acquisition of the West Ryde property) were far greater than those of the Plaintiff. The non-financial contributions of the Plaintiff to the relationship (in particular, in her role as homemaker and parent) were significantly greater than those of the Defendant.

55 I am not persuaded, in the light of the respective contributions of the parties of the nature referred to in section 20(1) of the Act, that the Court in the exercise of its discretion should make an order which would have the effect of adjusting the present interests of the parties in the property of either of them. I consider that the contributions of each party (albeit of different kinds) were, in totality, more or less equivalent.

56 Accordingly, I propose to dismiss the claim of the Plaintiff and to dismiss the cross-claim of the Defendant.

57 Unless either party wishes to apply for some other costs order, I consider that there should be no order as to costs, to the intent that each party will bear her or his own costs of the proceedings.

58 I make the following orders:

1. I order that the claim of the Plaintiff and the cross-claim of the Defendant each be dismissed.

2. I make no order as to costs, to the intent that each party will bear her or his own costs of the proceedings.

3. The exhibits may be returned.
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