H, R T v E, C K
[2009] SADC 76
•24 July 2009
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
H, R T v E, C K
[2009] SADC 76
Judgment of His Honour Judge Tilmouth
24 July 2009
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - ADJUSTMENT OF PROPERTY INTERESTS
Consideration of the principles applicable to the determination of property under the De Facto Relationships Act 19966. Property adjustment orders made turning on the particular facts of the case.
De Facto Relationship Act 1996 (SA) s3; Domestic Partners Property Act 1966 (SA) s 3; Bugg v Day (1949) 79 CLR 442; Karpathiou v Clemente [2008] SASC 316; Smith v Champion [2009] ACTA 7; Giller v Procopets (2008) 40 Fam LR 378, (2008) 79 IPR 489, [2008] VSCA 236; H v G (2005) 34 Fam LR 35, [2005] SASC 344; McKean v Page (1999) 25 Fam LR, (1999) FLC 92-853; Arnold v Dalton (2002) 84 SASR 482; Norbis v Norbis (1986) 161 CLR 513, referred to.
Hogg v Roberts (2003) 87 SASR 248; Evans v Marmont (1997) 42 NSWLR 70; S v B [2005] 1 QdR 537; McKay v McKay [2008] NSWSC 177, applied.
H, R T v E, C K
[2009] SADC 76Preliminary
For a period of time the parties to these proceedings lived in a de facto relationship. The union dissolved in unpleasant circumstances. Each now seeks a division of assets under the De Facto Relationship Act 1996 (SA)[1] and if necessary under the Domestic Partners Property Act 1996 (SA).[2]
[1] The DFR Act
[2] The DPP Act
They are at loggerheads on practically every conceivable issue. Each gave evidence minimising the others’ and maximising their own contributions to the union. The court endured 11 sitting days and was taken in minute detail to items of expenditure by the plaintiff and to general assertions by the defendant. Accordingly it remains necessary to resolve multiple factual disputes. These include when the relationship began and ended, what the financial and other contributions of the respective parties were, the responsibility for the payment of school fees for the defendant’s daughter, the purchase of a car in joint names in early 2003, and the consequences of the defendant’s occupation of their home following separation. Additional questions raised by the court were dealt with by way of written submissions dated 6 July 2009 and 15 July 2009, respectively.
The early years of the relationship
The following summary of historical events is not in dispute unless otherwise indicated. The plaintiff and the defendant were born in October 1952 and in May 1957 respectively. Both had children from previous relationships, the plaintiff a son and a daughter, whom by and large remained cared for and living with their mother. The defendant’s two children Brian and Alexandra, lived with the parties whilst they were together. She separated from their father in 1993. On the whole of the evidence the plaintiff had little to do with his daughter Sarah. His son Jordan came to stay with him or them from time to time, mostly for short periods upwards of about a week or so, especially during school holidays.
The parties met in May 1996 when the defendant was working in a business “Stone Style”, where the plaintiff and his then wife were patients. Their relationship was first “consummated” in October that year.[3] He had suffered from chronic fatigue syndrome for some years beforehand.[4] Shortly thereafter he left his wife and moved into rental accommodation at Balhannah in the Adelaide Hills, so as to keep in touch with his children who were then residing with their mother in Mount Barker. Later he moved to Cherry Gardens also in the Adelaide Hills and towards the latter half of 1998, commenced an electrical business “Cooinda Electrical”, as he was an electrician by trade. The parties commenced living together at Cherry Gardens over a period of about five months during the latter half of 1998, although the defendant owned a home at Eden Hills jointly with her previous partner, the father of her two children. In early 1999 they all moved into Eden Hills for a period of four or five weeks. In late January 1999 the plaintiff purchased a home in Hahndorf which settled on 9 April 1999. He moved into it whilst the defendant and her children remained at Eden Hills. His son lived with him there for about half the time in this period as he held joint custody with his ex-wife. Both parties then continued to live in their respective homes and would stay with one another several times a week, more often on weekends. They were engaged in March 2000 but the question of engagement seemed very much to have been an on and off affair thereafter.[5]
[3] T429.27-.28, T555.25-.31
[4] T428.12-20
[5] T379.33-380.18, T560.18-.26
Unfortunately, in June 2002 the plaintiff suffered a serious accident at a BMX park in the Adelaide Hills. This resulted in concussion, hospitalisation and incapacity for work for over a year. He was supported in this period and cared for by the defendant. He did however receive the proceeds of an income protection policy between August 2002 and June 2004.[6] The defendant continued in various albeit consistent employment then, and for that matter throughout the entire course of their relationship and up to the present time. The evidence suggests overwhelmingly that she was an industrious, hardworking woman, holding responsible positions, suggesting she is organised and capable in money matters.
[6] T57.14, P29A and plaintiff’s written submission 6 July 2009
By early 2003 she was offered employment in Melbourne by her Adelaide employer. At one stage she was promised the use of a car - whether by way of salary sacrifice or as a condition of employment, is not clear. Thinking the employer would cover the costs, the plaintiff and defendant ordered a Toyota Avalon in the employer’s name. When the employer’s promise fell through, they proceeded with the purchase in joint names although they were not legally bound to, on the footing that the plaintiff “got the loan” and the defendant would “make the payments”.[7] This proved to be the case for a time as the defendant paid her Melbourne salary initially into one of his lines of credit to the extent of $12,200.[8] By April 2003 she had moved into Hahndorf so she could prepare the Eden Hills property to let, in the expectation of accepting the employment in Melbourne. The evidence was that some repairs and maintenance were carried out at about this time on the Eden Hills property for that purpose.
[7] T577.25-.32
[8] T742.2-.4
At all events the defendant moved into a rental property in the Melbourne suburb of Caulfield by late May or June 2003 and began working in St Kilda in a specialised natural health treatment centre “Inspiring Choices”. This kept her occupied for upwards of six days a week, more than eight hours per day.[9] In the meantime her children remained with the plaintiff in Hahndorf. They joined her in early July 2003. Jordan returned to his mother once the plaintiff went to Melbourne. The Hahndorf property was let in early October 2003 and has remained so ever since. He progressively gained work through the defendant’s employer, whilst continuing to receive the proceeds of the insurance policy, however that employment did not last for the entire time that they remained in Melbourne. “Inspiring Choices” was a fledgling business which may or may not have been struggling. In any case by about mid 2004, for whatever reason, the defendant was dissatisfied with the employment situation and commenced looking elsewhere for other opportunities.
[9] T583.17-.20
About this time they read of employment opportunities in Roxby Downs, and in June 2004 they travelled there to investigate further. They were impressed and made a joint decision to move there. The plaintiff remained in Roxby Downs as he immediately obtained employment as an electrical maintenance technician. Shortly thereafter a house became available to rent, a home later purchased by them as joint tenants. In one position or another he has remained in good remunerative employment at Roxby Downs ever since. For her part the defendant obtained employment with Western Mining Corporation as a secretary in about mid-November 2004.
Between that time and finishing her Melbourne employment in early August 2004, she refrained from seeking employment owing to a mutual decision to devote her time and energy in readying the Eden Hills property for sale.[10] It was intended to deploy the proceeds of that sale towards the purchase of the home in Roxby Downs. There is no reason to think that she could not have obtained employment earlier had she wanted to. Had she done so it would have proved quite impossible to secure the Eden Hills property for sale without greater expenditure, seeing that it was left in poor condition by previous tenants and bearing in mind there was a round trip between Adelaide and Roxby Downs of upwards of 1,100 km and more than 6 hours travelling time each way.
[10] T347.14-.19
The evidence establishes both parties travelled down to Adelaide on no less than half a dozen occasions in this period for the purposes of attending to the Eden Hills property, to visit their respective families and in the case of the plaintiff, for access to his children. He also claims to have paid out $9,887.10 for various expenses associated with Eden Hills.[11] There was a sharp conflict in the evidence as to how many trips the plaintiff made for this purpose and how much work he precisely did assisting to prepare Eden Hills. The evidence was that whatever the situation, he was neither indolent, lazy, nor preoccupied with other distractions. The evidence of the defendant on this topic proved to be quite inaccurate. At first she asserted that he did so only “once or twice” but when confronted with documents plainly suggesting otherwise, she eventually and somewhat reluctantly conceded it must have been more.[12] And although the plaintiff may have had poor recall of precisely what jobs were performed there, such as taking down a small outdoor shed for instance, on the whole of the evidence I am satisfied that both parties put whatever spare time they did have when the opportunity arose preparing Eden Hills, although of course the defendant did more because she was not then in paid employment, for that very reason.
[11] Exhibit P8
[12] T791.6-T779.13
They signed a contract to rent and then purchase the Wangiana Street property in about mid-August 2004.[13] In the event, the Eden Hills property settled on 31 January 2005 at a price of $265,000. The net proceeds becoming available to the defendant was $213,738.15, after adjustments. A mortgage of $41,798.50 was discharged.[14] These proceeds were allocated to the purchase of Roxby Downs, as to which settlement was effected on 2 February 2008, at a purchase price of $255,000.[15] As will appear later, a balance of $27,913.91 needed to complete the purchase was supplied by the plaintiff. In the intervening period the rent for Roxby Downs was paid by the plaintiff, as conceded by the defendant.[16] Thereafter the parties continued to live and work from this address.
[13] Exhibit P9
[14] Exhibit P7
[15] Exhibit P9
[16] T807.6-.16
Apart from sharp differences as to the financial contributions, the parties were also at odds as to their respective non-financial contributions as well, by way of such activities as home maintenance, preparing meals and the usual chores of daily life. As to this issue the evidence of the defendant’s children Brian and Alexandra was to the effect the plaintiff attended to outside chores whilst their mother predominantly looked after those inside, throughout the entire course of the relationship. They accepted the plaintiff from time to time, (not infrequently) prepared the evening meals.[17] This evidence was surprisingly balanced given their potential interest in supporting their mother. It was therefore preferable and more convincing than that of either party although on the whole it was more consistent with that of the plaintiff than that of the defendant. At the end of the day little is to be gained by a close analysis of this material. The court finds both parties contributed to the necessary smooth running of the household, in ways that might have been expected of an ordinary domestic relationship with both for the most part holding down daytime jobs, as one very much equally sharing the responsibilities of domestic life.
[17] T530.28-T531.14, T533.30-T534.1, T894.12-T895.21
Both parties through their counsel, sought to score various adverse points as to the credibility of the other, buttressed by events occurring on Saturday 17 June 2007, when a kerfuffle erupted between the plaintiff, and Brian and his friends. I do not propose to go into this in any detail, as ultimately it throws no light in general on the credit worthiness of anyone. The situation was that by late 2006 and early 2007 the relationship began to deteriorate, to the point that when the plaintiff’s son Jordan came to stay for a week in January 2007, he shared a bedroom with his father, who moved out of the main bedroom, to which he never returned. The parties thereafter lived under the same roof leading separate lives. This was destined, as Brian rather prophetically said in evidence, for an inevitable rupture, which it did on the aforementioned Saturday.[18]
[18] T869.32
There were effectively suggestions that one had assaulted the other, but these contentions provide little assistance in the scheme of things. To the extent that the parties sought to ascribe blame or to prove that one was arrested for certain offences, or whether the plaintiff wielded an iron at one of Brian’s companions, those issues are collateral, whatever the merits. The incident sprung from a highly charged domestic context, so the events are not of such a nature as to tend to weaken the confidence in the credit of the respective participants, as to his or her character or trustworthiness as witness of truth: Bugg v Day.[19]To the extent that questions along such lines were disallowed, they were for those reasons.
[19] (1949) 79 CLR 442 at 467
The duration of the relationship
As mentioned earlier, issues remain as to when the relationship began and when it ended, although the parties were less at odds on this at the end of the trial than they were in the beginning. For his part the plaintiff claimed the relationship commenced in about July 2003 and that separation occurred in December 2006 or early 2007. Whereas in her defence, the defendant claims a genuine domestic relationship commenced in about July 1998, upon joint cohabitation at Cherry Gardens. This view of matters was not however pressed by her counsel at the conclusion of the trial. She claims they separated on or about 29 July 2007, a point fixed by the incident in the Roxby Downs house, which was proved to be around Saturday 17 June 2007.[20] In the end both accepted separation had effectively occurred by January 2007. They remained a month or so apart as to commencement. On the defendant’s case, that was from March 2003 and on the plaintiff’s no sooner than early July 2003, that is when he brought her children to Melbourne.
[20] T901.24-.38
Probably not a lot turns on this issue but it is necessary to resolve it because of the statutory definitions entailed. The DPP Act commenced operation on 1 June 2007, so that on any view practically the entire course of the relationship transpired before then. Otherwise the DFR Act applies to the situation. Section 11 of both empowers the court to make orders with respect to the property of “de facto partners” or “domestic partners” respectively, otherwise in identical terms. The precise terms of s 11 are referred to later in these reasons. For the present purpose s 3 of the DFR Act contains the following definitions of relevance to this question:
de facto partner means a person who lives in a de facto relationship and includes—
(a) a person who is about to enter a de facto relationship; and
(b) a person who has lived in a de facto relationship;
de facto relationship means the relationship between a man and a woman, who although not legally married to each other, live together on a genuine domestic basis as husband and wife;
These relationships are now those of “domestic partner” and “close personal relationship” as defined in s 3 of the DPP Act, as follows:
close personal relationship means the relationship between 2 adult persons (whether or not related by family and irrespective of their gender) who live together as a couple on a genuine domestic basis, but does not include—
(a) the relationship between a legally married couple; or
(b) a relationship where 1 of the persons provides the other with domestic support or personal care (or both) for fee or reward, or on behalf of some other person or an organisation of whatever kind;
Note—
Two persons may live together as a couple on a genuine domestic basis whether or not a sexual relationship exists, or has ever existed, between them.
domestic partner means a person who lives in a close personal relationship and includes—
(a) a person who is about to enter a close personal relationship; and
(b) a person who has lived in a close personal relationship;
It can be seen that under both regimes, the kind of relationship necessary to trigger the power contained in s 11, pivots around the concept of parties who “live together” in the relevant relationship under the old Act, or who “live together as a couple” under the new Act. Probably not a lot turns on the difference, although the latter, if anything, seems to imply a closer degree of cohabitation is necessary.
On the basis of the facts recited above, there is little doubt at all the parties entered into a de facto relationship within the meaning of the DFR Act as of about mid 1998 when they cohabited in Cherry Gardens, at least for a period of about five months. Thereafter they continued to see each other regularly, often staying overnight at their respective houses. On one view it is perhaps debateable whether the de facto relationship ever ended at that point in time.[21] The fact remains that they did not live together again under the one roof, except for a few weeks in late 1998 or early 1999, until resuming cohabitation again in Melbourne by mid-2003.
[21] See Thompson v Badger (1989) 13 Fam LR 559, Roy v Sturgeon (1986) 11 NSWLR 454, Chadwick v Svingos [2009] SADC 65
The de facto relationship under the DFR Act was one that could not have commenced any later than early July 2003. As the defendant moved with her children into the Hahndorf property in April 2003 in order to prepare Eden Hills for let, and since they had made a mutual decision to move to Melbourne as of May 2003 at a time when they were living together at Hahndorf, and because the relevant relationship includes a person “who is about to enter” that relationship in both enactments, the court finds the probabilities are that such a relationship commenced by not later than early April 2003.
When it comes to cessation, clearly the parties lived together under the one roof in one sense, until mid-June 2007. But in another they did not live in what might be described on a “genuine domestic basis” as required under either legislation or as a couple, from early to mid January 2007. The evidence on both accounts was that Jordan came to stay for a week during the school holidays. He shared a bedroom with his father, who drove him back to Adelaide at the end of the visit. Upon returning the plaintiff refused to move back into the master bedroom, preferring to remain where he was. Thereafter they lived quite separate lives, purchased food individually, indeed used separate refrigerators, occupied separate bedrooms and ceased to socialise altogether.
In S v B[22] similar circumstances were considered to be indicative of separation for the purposes of this type of non-marital arrangement. A key issue on appeal was whether the trial finding that a de facto relationship persisted until late January 2000, was correct. The trial judge held that although the relationship clearly deteriorated by late 1999, as the appellant continued to permit the respondent to remain in the same house until late January 2000 when she changed the locks, it did not fail until then. Dutney J (McPherson and Williams JJA agreeing), took a different view:
[48] Applying the passage of Mahoney JA in Hibberson v George (1989) 12 Fam LR 725 at 739–40….a de facto relationship ends when one party decides he or she no longer wishes to live in the required degree of mutuality with the other but to live apart. It does not seem to me that it is necessary to communicate this intention to the other party providing the party that is desirous of ending the relationship acts on his or her decision. I do not think it is necessary that the other party agree with or accept the decision. Once the parties cease to jointly wish to reside together in a genuine domestic relationship, a situation usually ascertained by looking objectively at the whole circumstances of the relationship, the de facto relationship ceases. The relationship ceases even though one party is still anxious to try to save it.
…..
[51] In my view, the respondent failed to prove the existence of the required relationship as at the critical date. On the contrary, the evidence overwhelmingly supports the conclusion that the de facto relationship between the parties had ended sometime earlier. The date on which her Honour focussed, the date on which the locks were changed, was the date on which it appears that the respondent finally accepted the end of the relationship and abandoned her attempts to revive it. Focussing on the mutual acceptance by both parties that the relationship has ended is inconsistent with the line of authority to which I have referred…. .
These principles were later cited with approval in PY v CY.[23]
[22] [2005] 1QdR 537
[23] (2005) 34 Fam LR 245; [2005] QCA 247 at [7], & [31]
Consequently the court finds that the de facto relationship, or if applicable the close personal relationship, came to an end by late January 2007. As s 4 of the DPP Act applies to “a domestic partnership (other than a domestic partnership that was a de facto relationship) that ended before the commencement of this section”, it follows the DPP Act has no application to these proceedings, and which are therefore governed by the DFR Act.
The respective contributions to the relationship
The plaintiff pitched his case on a series of schedules first produced during the course of evidence-in-chief, said to detail various heads of expenditure by him towards the maintenance of the relationship. These were supported by copies of the underlying primary documents such as bank statements, credit card statements and the like. They related to his alleged contributions to expenses in Melbourne,[24] to Eden Hills,[25] Roxby Downs,[26] payments to Alexandra,[27] outstanding school fees,[28] expenditure for the defendant’s children,[29] and her contributions to two lines of credit he took out in late March 2003,[30] amongst others. These contained some inaccuracies, but on the whole were not ultimately substantially disputed by the defendant.[31]
[24] Exhibit P5 documents
[25] Exhibit P8
[26] Exhibit P11 documents
[27] Exhibit P12 & P12A
[28] Exhibit P13
[29] Exhibit P14
[30] Exhibits P15 & P18
[31] T962.14-T964.19
This mode of proof presents certain difficulties, as it is too focussed on generic items of expenditure, rather than on the overall financial contribution to the relationship. It misunderstands the nature of the inquiry, as explained by Bleby J in Arnold v Dalton:[32]
[25] There were limits to the extent to which the Judge could properly pursue every minor detail unless the trial were to take considerably longer than in fact it did. Doing justice and equity between parties does not require the examination in minute detail of the value and disposal of every small item of personal property. When dealing with the division of property following a breakdown of a de facto relationship, a judge will inevitably gain an understanding of how, in broad terms, the financial relationships of the parties were adjusted over time and how they contributed to the household and the acquisition of items of property used in the household and in recreational pursuits. The Judge did that in this case. An assessment was made of losses relating to some of the more substantial items. There was also a large number of what were described as "collectables". These included Dinky toys, Matchbox toys, old books and magazines and various tools.
[26] In relation to the property not subject to the order for return to Mr James, it was necessary for the Judge to wield a broad axe while considering evidence concerning particular major items of property, and who contributed to or disposed of them....
[32] (2002) 84 SASR 482, Doyle CJ and Besanko J concurring
The material contributions claimed by the plaintiff tabulate as follows:
Exhibit P5B
Melbourne
$ 39,865.03
Exhibit P8
Eden Hills
$9,887.10
Exhibit P11
Roxby Downs
$67,198.00
Exhibit P12
School Fees
Less amount paid back
(including interest)
$24,534.21
$20,756.09
$5,664.92
Exhibit P14
Expenditure on defendant’s children
$6,432.79
$129,047.84
The defendant approached the case from the opposite direction. She simply chose to tender her entire ANZ Blackwood bank account records, without any analysis at all.[33] She then presented a table of income of both parties for the period between 2001 and 2007,[34] with a view to demonstrating contributions greater than the plaintiff in dollar terms. Even then she made no attempt to trace to what ends her income was directed. This exercise was seriously flawed. The analysis was founded on taxable rather than disposable income, included child support entitlements earmarked for the defendant’s children, ranged wider than the period of the de facto relationship and failed to bring into account contributions by the plaintiff from other sources, such as the sale of his shares, the lines of credit, and his family trust.
[33] Exhibit D41
[34] Exhibit D43
Based on the taxation records, the taxable income of the parties tabulate as follows for the financial years spanning the domestic relationship:[35]
[35] Exhibits P29, P29A-D, P33A, P34 and D40
Plaintiff
Year Notice of Assessment Taxable Income Gross Earnings Rent Business Income Taxable Income Tax Paid Net Income 2003 $16,807 No further information $16,807 $1,837.19 $14,969.81 2004
P29A & P34$25,412 Inspiring Choices $9,174 $10,620 gross
$3,306 net$5,551 loss $25,412 $4,176.78 $21,235.22 2005
P29BNo Notice Olympic Dam
$55,664$14,765 gross
$ 8,399 net$6,288 profit $67,524 $18,594.94 $48,939.06 2006
P29D,
P34$88,772 Olympic Dam $21,207
Olympic Dam
$69,244$15,250 gross
$8,031 net$6,278 loss $88,772 $26,915.82 $61,856.18 2007
P29 & P34$97,568 Olympic Dam
$93,024$16,088 gross
$8,788 net$3,635 loss $97,568 $28,340.72 $69,227.28 TOTALS
$279,276 $216,227.55
Defendant
Year Notice of Assessment Taxable Income Gross Earnings Rent Fringe Benefit Taxable Income
(minus deductions)Minus Tax Net Income 2003 $38,069 Samvat: $33,678
Inspiring Choices: $3,269$38,069 $8,371.73 $29,697.27 2004 No Notice Inspiring Choices $47,784
Plus allowance of $3,596$8,251 gross
$-2,245 net$48,941 $11,588.41 $37,352.59 2005 $34,446 Olympic Dam: $31,634
Inspiring Choices: $2,984$1,956 gross
$591 net$17,697 $34,446 $7,151.06 $27,294.94 2006 $54,041 Olympic Dam: $41,707
Olympic Dam: $12,720$17,282 $54,109 $13,596.15 $40,512.85 2007 $57,446 Olympic Dam: $57,734
$22,002 $57,446 $14,239.97 $43,206.03 TOTAL
$194,942 $178,063.68
It should be noted these figures represent the disposable income available to each party based on such of the taxation records as were tendered in evidence. In each case this includes the income by way of rent from the Hahndorf and Eden Hills properties. In the case of the defendant these exclude child support and employer educational allowances, for reasons explained later. It should also be observed that the figures for 2005 in the case of the plaintiff and for 2004 in the case of the defendant are estimates only, based on the applicable marginal tax rate,[36] as the relevant assessment notices were not tendered, reduced by a further 1.5% on account of the Medicare levy.
[36] >
Based on this approach, the parties had disposable income expressed in rounded terms of $215,000 and $180,000 respectively for the financial years 2004-2007, or 54 per cent for the plaintiff and 46 per cent for the defendant. In the period between April 2003 and January 2007, during which the court has found the parties were living in a de facto relationship, it is possible to approximate the relative level of disposable income by aggregating the net income of 3/12’s to 30 June 2003 (to reflect the first three months of the relationship) and 7/12’s of the income to 30 June 2007 (to reflect the last seven months to January 2007) and by adding the whole net or disposable income for 2004-2006 inclusive. On that footing those contributions were $176,155.49 on the plaintiff’s side and $137,788.20 on the defendant’s - approximately $38,000 more from the plaintiff. Reduced to round figures, combined contributions were $314,000. Expressed in percentage terms these are 56 per cent to the plaintiff and 44 per cent to the defendant. At this point, this analysis once again does not factor in other contributions by the plaintiff from sources other than his employment, such as those identified earlier.
On the whole of the evidence the court finds that the parties effectively pooled their income and resources, although they maintained separate bank accounts. What they had available by way of disposable income therefore provides a sound starting point from which to assess the respective levels of monetary contributions to the relationship. Because they pooled their resources to purchase Roxby Downs it is more appropriate to approach the question of contribution on a global rather than an “asset by asset” basis: Norbis v Norbis.[37] In addition the plaintiff committed funds from various other sources, particularly through his lines of credit, his GM card and the Visa and American express cards, for what can only be described as ordinary living expenses. The documents underlying his various schedules, amply demonstrate that much. The defendant frequently used a supplementary Visa credit card for which the plaintiff was solely responsible and her Blackwood ANZ cheque account, to the same ends. As might be expected, a number of transactions from the latter went to her children, especially her daughter during later school years. It will be necessary to return to these aspects of the defence case later.
[37] (1986) 161 CLR 513 at 523
Contribution of the parties – legal principles
Section 11 of the DFR Act provides:
Matters for consideration by the court
11(1)In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court—
(a)must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the de facto partners to—
(i)the acquisition, conservation or improvement of property of either or both partners; or
(ii) the financial resources of either or both partners; and
(b)must consider the contributions (including homemaking or parenting contributions) made by either of the de facto partners to the other partner or to children of the partners or either of them; and
(c)must have regard to the terms of any relevant cohabitation agreement; and
(d) may have regard to other relevant matters.
There is no material difference between this provision and its successor in the DPP Act: Karpathiou v Clemente.[38]
It is appropriate at this point to refer to the principles identified by Young J in Parker v Parker,[39] quoted and approved by Doyle CJ in Hogg v Roberts,[40] bearing in mind (as the Chief Justice cautioned) that the focus of the enquiry is ultimately on what is “just and equitable”, rather than what is fair having regard to all of the circumstances. Of course that approach is not inevitably applicable to all cases. Nor does the task entail a narrow approach carefully tracking contributions, but is rather “a reasonably broad and practical approach”.
[38] [2008] SASC 316 at [4]
[39] (1993) 16 Fam LR 836 at 870
[40] Above at [31]
It is appropriate to quote at some length key passages from Hogg v Roberts:
[11] My understanding of the Act is that the requirement to make an order that is "just and equitable" does not give rise to a general and unfettered discretion. First of all, the court is dividing property, not settling all outstanding financial issues as between the partners. Secondly, s 11(1) indicates that the contributions referred to in that provision are important considerations in deciding what is just and equitable. The initial and primary focus must be on the property in question, contributions to that property, contributions to financial resources and then contributions by one party to the other and to the children.
[12] However, the obligation under s 11(1)(d) to have regard "to other relevant matters" means the contributions are not the only matter for consideration. It is to be noted that the court must have regard to "relevant matters". I think that must mean matters relevant to a just and equitable division of property. The provision is not as wide as, for example, a direction to have regard to such matters as the court thinks fit.
[13] Bearing that in mind, I consider that it is not the role of the court to use the division of property to remedy any justified grievances that one party may have against the other, or to compensate one party for disappointed or unfulfilled expectations. The focus appears to me to be on a just and equitable distribution of property, after considering primarily contributions of the kind identified by s 11(1) of the Act. The task of the court is a narrower one than the task of the court under s 79 of the Family Law Act 1975 (Cth). The relevant considerations are more narrowly confined. Matters that are likely to be relevant are the length of the relationship and the immediate needs of the parties. I say "immediate needs" because the court's focus is on the division of property. In deciding what is "just and equitable", the needs of the parties at that time will be relevant. However, the court is not dividing property with a view to providing, for example, for the continuing maintenance of the parties, or taking into account their future financial prospects.
[14] Other matters may be relevant. It would be dangerous to try to draw a line here in the abstract. I go no further than to say that the focus is on the just and equitable division of property and not on an order that is fair having regard to all the circumstances surrounding, and everything that happened during, a relationship.
[15] I agree with the observations made in decisions in other States that the court is not concerned with attributing fault for the breakdown of the relationship; that contributions as homemaker and parent are not to be treated as inferior to material or financial contributions, they are to be taken into account in a substantial way; that contributions of a non-material kind are to be assessed in a broad way, rather than by reference to the rate of remuneration payable to commercial providers of such services, and that there is no reason to approach the matter on the basis of an assumption that an equal division is appropriate, unless there is good reason to depart from that position. I draw those propositions from the reasons of Gleeson CJ and McLelland CJ in Equity in Evans v Marmont (1997) 42 NSWLR 70. Although the legislation under consideration there was relevantly different, I consider that these basic principles apply to the Act.
[16] In Parker v Parker (1993) 16 Fam LR 863 Young J suggested a four-stage approach which will often be helpful. The four stages he suggested (at 870) are:
"(i) to identify and value the assets of the parties;
(ii) to determine whether any, and if so what, contributions of type A or type B had been made by each partner;
(iii) to determine whether in the circumstances the contributions of the applicant had already been sufficiently recognised and compensated for;
(iv) to make the appropriate adjustment."
[17] Once again, he was concerned with different legislation, but the process he suggested is likely to prove helpful under the Act. However, I emphasise that this is simply one approach. In some cases a broader approach will work better. There is no need to take what might be called a narrow approach involving a careful tracking of income and expenditure, contributions made and benefits received. The legislation requires a reasonably broad and practical approach.
[18] Between stages (iii) and (iv) it will be necessary to consider whether there are "other relevant matters" to be considered. It will also be necessary to bear in mind that the object is to divide property in a "way that is just and equitable". As I have said, I do not treat that expression as opening up all aspects of the relationship, but it appears to me that the matters identified in s 11(1) of the Act do not alone dictate the order to be made under s 10(1). They are matters to be considered, they are important, but they will not necessarily be decisive.
[19] What I have just said does not provide any solutions. Difficult questions will arise along the way. I have done no more than identify what seems to be the appropriate process of reasoning.
The type A and B contributions referred to in the judgment of Young J quoted by the Chief Justice, derive from ss 20(1)(a) and (b) of the De Facto Relationships Act 1984 (NSW), the former essentially financial (or akin thereto) and the latter those made in the capacity of homemaker and parent.[41]
[41] See D v McA (1986) 11 Fam LR 214 at 228
Applying those principles to the facts in hand, Doyle CJ first considered the respective monetary contributions and those through time and effort spent, next the benefits contributed to the support of the family (which he treated as being “about equal”), then the contributions made to the general maintenance and upkeep of property, and finally the contributions as homemakers and carers of the children. His Honour also considered another relevant matter to be the purchase of a property acquired by Mr Hogg at the commencement of the relationship, a property to which no contribution was made by Ms Roberts. It is worth noting that this applies to the facts of this case in relation to the Hahndorf property, as the defendant made no relevant contribution to that.[42]
[42] T559.37-.38
From this point the Chief Justice proceeded to apply the respective proportions at present value, made no adjustment either way on account of contributions to the maintenance and upkeep of the properties, then made various adjustments to reflect the fact that Mr Hogg remained in occupation of the property, and on account of her greater contribution to the upkeep of the children and homemaking to the time of trial. Finally he paused to consider if any other matters called for further adjustment and in that exercise took account of the fact that the relationship was ‘not a long one’, that neither party held other assets nor income sources other than government payments, any implication to the parties of the sale of the joint home, before turning to consider whether the proposed adjustment was just and equitable.
In the other decision cited by the Chief Justice, Evans v Marmont, the majority (Gleeson CJ, McLelland CJ in Eq and Meagher JA; Mason P and Priestley JA dissenting) considered the provisions relating to contributions constituted:[43]
…the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. They are not merely two matters, or groups of matters, which take their place amongst any other relevant considerations. It is by having regard to those matters that the court may adjust property interest in a just and equitable manner.
The concept of remedying an injustice the applicant would otherwise suffer because of his or her reasonable reliance on a relationship or his or her reasonable expectations from the relationship seems to us, with respect, to involve a major shift in the focus dictated by s 20, as does the notion of importing, by analogy, the principles according to which equity awards compensation for breach of equitable duties. This appears to us to broaden the scope of the inquiry well beyond that contemplated by the legislature.
This view has since received wide acceptance in other jurisdictions: Smith v Champion,[44] Giller v Procopets,[45] H v G[46] and McKean v Page.[47]
[43] (1997) 42 NSWLR 70 at 80
[44] [2009] ACTCA 7 at [15] & [36], Higgins CJ, Refshange, Besanko JJ
[45] (2008) 40 Fam LR 378 (2008) 79 IPR 489; [2008] VSCA 236 at [108], [268], [343-249], Maxwell P, Ashley & Neave JJA
[46] (2005) 34 Fam LR 35 [2005] SASC 344 at [86], [100-105] Layton J, Sulan, White JJ concurring
[47] (1999) 25 Fam LR 15; (1999) FLC 92-853 at [57-58], Ellis ACJ, Kay and Mushin JJ
In summary, based on the authorities, the focal point of the inquiry must commence by reference to the property and contributions of the kind contemplated by s 11, incorporating matters relevant to the just and equitable division of property, such as the length of relationship and the “immediate” needs of the parties. Such an inquiry does not purport – nor can it settle outstanding financial issues or seek to make orders that are fair in any wider sense, such as to remedy grievances or to compensate for disappointment or unfulfilled expectations. As both parties in closing tailored their submissions along the lines suggested in the above cases, it is appropriate to proceed in that way.
The value of the assets of the parties
The principal asset belonging to the plaintiff is the Hahndorf property. This was purchased on 9 April 1999 for $169,000.[48] It had an agreed value as of May 2003 (approximately when the de facto relationship commenced) of $300,000 and $420,000 as of early November 2008.[49] He sold Commonwealth Bank shares in December 2003 for $12,400. The proceeds were initially placed into a Family Trust account, and from there dispersed by paying off the credit cards and lines of credit.[50] As of April 2003 the plaintiff held savings in the Hutchinson Family Trust account of $17,303.[51] He also owned a 1992 Holden Barina, which he retains and two vans and tools associated with Cooinda Electrical Pty Ltd. He uses them exclusively for business purposes. These are not particularly valuable and the defendant laid no claim to them, so they can be ignored for this exercise. Both held certain quite modest superannuation entitlements, but as the parties laid no stress on these, both can equally be ignored for present purposes.
[48] Exhibit P1
[49] Exhibit P2
[50] Exhibit P28
[51] Exhibit P28
The defendant’s principal asset was the Eden Hills property jointly owned with her ex-partner, which yielded the $213,000 in February 2005. She owned a 1985 motor vehicle which she sold in 2005 for $1,000, and some unvalued furniture and household effects. The latter items can also be ignored as being inconsequential in the scheme of things. The proceeds from Eden Hills were applied to the purchase of Roxby Downs for a price of $255,000; $266,651.86 was due at settlement.[52] This is presently held freehold. This property has an agreed current value of $435,000.[53] The parties accepted in the end that the plaintiff expended in the order of $8,602.10 on improvements of the Eden Hills property readying it for sale in the latter part of 2004. This was not seriously disputed by the defence.[54] In order to complete the purchase the plaintiff directly contributed sums made up as follows:[55]
13/08/04 Raine and Horne $ 5,000.00
23/08/04 Raine and Horne $20,000.00
31/01/05 Raine and Horne $25,000.00
01/02/05 Raine and Horne $ 3,115.21 $53,115.21
He also met the relocation costs.[56]
[52] Exhibit P9
[53] Exhibit P22 and D22A
[54] Exhibits P8 and P8A and T863.4 - .18
[55] Exhibit P9 & P15 (RC01 Business Account)
[56] Exhibit P15 (23/11/04 and 30/11/04) Exhibit P11B
On this simple analysis her contribution was then about 80 per cent and his 20 per cent, directly towards Roxby Downs. On the basis of the income tabulated earlier from April 2003 to the end of January 2005 immediately before Roxby Downs was purchased (April 2003 to January 2005), the disposable income devoted to the maintenance of the relationship, was $53,525.46 from the plaintiff and $60,698.95 from the defendant. However as has been demonstrated, the plaintiff further contributed in this period from sources outside work related income. The Family Trust Account TT02 was essentially used to pay off credit card debts to the point that by November 2003 it was practically at nil balance, so that $17,000 in round figures went into the relationship from this source.[57] In addition in December 2003 he applied $12,431 from the sale of his Commonwealth Bank shares, which he first deposited into the Hutchinson Family account on 24 December 2003, and then employed to service the credit cards.[58]
[57] Exhibit P28 & P28A
[58] Exhibit P28A
A final source of funds provided by the plaintiff was the income replacement insurance from Lumley Life Ltd, which so far as proved, were $18,748.39. However as these were (so far as the evidence goes) brought into account in the taxation records, it would be double counting to consider them again.[59]
[59] See plaintiff’s written submission 6 July 2009 – There were others not proved. Exhibit P29A
Contributions by the respective parties in Melbourne
There is no doubt that the plaintiff contributed $30,000 through the line of credit RC02 to purchase the Toyota Avalon in April 2003,[60] although there is a dispute about the extent of repayments by the defendant. Likewise the plaintiff financed numerous day-to-day expenses through his business line of credit. Both were secured over the Hahndorf property. By February 2005 when Roxby Downs was purchased, each was practically fully drawn down. The plaintiff also held a Bank of Adelaide visa card. A supplementary card was predominantly used by the defendant for what can only be described as essentially living expenses.[61] Only the plaintiff serviced this card. To 12 February 2005 he paid $17,613.97 into that account,[62] plus an additional $495 from the CR01 business account on 26 April 2003 and a further $180 on 15 December 2004.[63] The plaintiff also deposited $10,035.84 on 27 February 2005 into the defendant’s ANZ Blackwood account to allow her to make out cheques to pay for the rent for the property in Melbourne.[64]
[60] Exhibit P18
[61] Exhibit P24 & P24A
[62] Exhibit P24
[63] Exhibit P24A
[64] Exhibits P9 and P9A
Contributions to the purchase of Roxby Downs
To the date of purchase of Roxby Downs, the following picture emerges as to the direct monetary contributions of the parties towards the relationship and the acquisition thereof:
Plaintiff Defendant
Disposable income $ 53,525.46 $ 60,698.95
Funds from other sources $ 29,431.00 -
Roxby Downs $ 53,000.00 $213,000.00
$135,456.46 $273,698.95
Taking the broad approach contemplated by the case law, the overall direct contributions to the relationship was then about one-third by the plaintiff and two-thirds by the defendant.
The plaintiff maintained during his evidence there was an agreement at the time of purchasing Roxby Downs to the effect that they were to hold equal shares therein.[65] The fact that the property was registered as joint tenants throws no light one way or the other on this question. The defendant emphatically denies this.[66] On this topic the plaintiff was relatively vague as to the basis underlying such an agreement. It was unclear just why the defendant would virtually throw away her entitlement to a fair share of Roxby Downs. It may well be that he genuinely believed in light of his financial input until then, as he perceived it to be, that things stood more or less on an equal footing, but that is another matter. The court is not therefore satisfied on balance that any such agreement was reached, and even if it was, that would not absolve the court from the obligation to proceed in a way that was just and equitable.
[65] T193.20-.33, T425.2-.6
[66] T808.3-.16
Contributions at Roxby Downs
The plaintiff’s case for contributions in this respect are summarised in Exhibit P11 and the supporting documentation. These evince expenditure between January 2005 and January 2007 of something in the order of $67,198, principally in relation to food and wine, council rates, telephone expenses, utilities and hardware items. There is no doubt either that the defendant was contributing towards the relationship as her bank accounts indicate, although these have not been totalled or analysed in the same way.[67] They also disclose significant payments to her daughter, no doubt for schooling and associated expenses. The major item in contention in this period was the school fees for Alexandra amounting to approximately $30,000 per calendar year in each of 2005 and 2006, whilst Alexandra boarded in Adelaide at Pembroke school.
[67] Exhibit D41
The evidence of this from the plaintiff’s side was that he did not agree to Alexandra going to Pembroke and he did not commit to contributing to those fees. He agreed to assist the defendant although expected repayment. For her part the defendant’s case is confusing and unconvincing. There were several passages in her evidence highly suggestive of the fact that she herself personally assumed responsibility for these fees.[68] She maintained repeatedly that the plaintiff promised her the use of $30,000 from his lines of credit instead of using the proceeds of the sale of Eden Hills to meet the 2005 school fees, only to discover these funds were not available. At times she accused him of deceiving her about this.[69]
[68] T619.19-620.14, T623.17-624.28, T722.3-723.29, T729.32-732.35
[69] T722.18-.28
It is puzzling to understand how such an allegation can be sustained, when an examination of the lines of credit indicate most expenditure by the plaintiff was on what could only be called everyday expenses. There was the one item for the purchase of a motor-bike by him personally in July 2006 for roughly $10,000 and sold in June 2007 for $5,300, the proceeds being paid into the RC01 line of credit account.[70] Other than this, neither the defendant nor her counsel were able to point to one item of expenditure which was unreasonable, obviously outside the ambit of acceptable expenditure for the benefit of the relationship as a whole, or otherwise of a clearly personal or individual character. There is not the slightest proof that either was milking any of the accounts or the credit cards for extraneous purposes.
[70] Exhibit P16 statement 52, T324.2-.4, T446.3-.7, T628.27-629.8
Her endorsement on the facsimile on 7 September 2004 to the land agent dealing with the sale of Roxby Downs, shows she was aware the available lines of credit were already appreciably drawn down as of then.[71] The attachment showed just over $62,000 remained available, and since it was obvious that a further $53,000 was needed to effect the purchase, this would leave about $7,000 remaining, much less than the sums needed for Pembroke. These objective facts serve only to destroy her case in relation to the topic of the Pembroke school fees.
[71] Exhibit P10 & T738.4
Furthermore as the RC01 account was all but drawn down as of late January 2005, it is hardly likely he would be promising funds he knew would not be available. Although the defendant asserted she was not aware of the state of the account, she must have held a reasonably good picture of the overall expenditure as they both did the shopping, and the monthly statements from the Visa card which she had the use of, were addressed to her. As mentioned earlier, she had a good sense of budgetary matters. In any case it is difficult to see any practical consequence of this assertion. If she took the school fees out of the proceeds of Eden Hills, that would have correspondingly reduced her immediate contribution to Roxby Downs.
In relation to the Pembroke schools fees, there were a series of payments by the plaintiff from early November 2004 to early November 2006, in each instance refunded by the defendant. Given the consistent history of repayment by the defendant, it is impossible to accept the commitment to school fees was mutual. The conduct of the defendant is strongly indicative of the position being quite the reverse, especially given that she continued to make repayments after proceedings were issued and that after February 2005 when the school fees first fell due, she stopped contributing to the lines of credit herself and became preoccupied with the school commitments. Moreover she was in receipt of child support payments in the order of $15,600 and $20,390 in those two years and she received in kind, child support from her employer as a fringe benefit in years 2005 ($17,697), 2006 ($17,282) and 2007 ($22,002),[72] funds earmarked for her children. For these reasons it has not been shown the probabilities were that the plaintiff accepted responsibility for the payment of these school fees. Indeed the distinct probabilities are that he did no such thing.
[72] Exhibits D33A & D41
In the result the court finds the parties committed themselves to a relationship of the kind contemplated by the DFR Act and as a matter of fact committed their financial resources from all sources available to them to support the union. This was subject only to the fact that the defendant personally retained responsibility for the school fees and living expenses of Alexandra whilst she was at boarding school. For that reason, monies devoted by her to that end should be excluded as relevant contributions and likewise the money she received by way of child support or from her employer by way of educational allowances, should equally be excluded from the resources available to her, as they were destined for those purposes.
Returning then to the period of cohabitation at Roxby Downs prior to dissolution in January 2007, the taxation records tabulated above suggest that for the period from February 2005, viz 5/12 of income to 30 June 2005, income for whole financial year 2006 and 7/12 of income to 30 June 2007, each party contributed disposable income of $122,630.02, in the case of the plaintiff and $77,089.25 for the defendant, or broadly speaking 60 per cent from the plaintiff and 40 per cent from the defendant; more than $40,000 more in his case.
Post separation Roxby Downs
On any view the plaintiff ceased living at the property on 17 June 2007. Since that time he has occupied rented accommodation in the township of Roxby Downs, initially costing him $360 per week and at the present time $375 per week. This is about $19,500 per year. According to the plaintiff’s calculations, this represents a total cost since separation of something in the order of $35,000. On the other hand the defendant has lived in the Roxby Downs property rent free since then. It emerged during the evidence that she received board from her children of approximately $8,000 at times when they lived there. That is no longer the situation.
Where there is a breakdown of a domestic relationship in the sense that it is no longer reasonable or practicably sensible to expect the partners to co-occupy the one property, so that one remains in possession and one vacates, it has been held that the one remaining may be taken to have excluded the other. If that is thereby truly the position, the occupying party may be liable to account to the other for an “occupation fee”, reflecting the value of the use by that party of the jointly held property. In McKay v McKay[73] Brereton J extensively outlined the applicable principles:
[48] The jurisdiction of matrimonial courts — including this Court in exercise of its jurisdiction under the (NSW) Property (Relationships) Act 1984 — to grant injunctions and make orders for the exclusive occupation of property is not fault based. The touchstone for such an order is that it is no longer reasonable or practicable to expect the parties to continue to live together in the same property [see, for example, In the Marriage of V and CL Fedele (1986) 10 Fam LR 1069 at 1073 and the cases there cited]. Once that finding is made, the decision is made according to the balance of the convenience including, for example, where one party has the custody of children, whether it is preferable that that party or the other continue to occupy the former matrimonial home. The explanation offered by Powell JA in Biviano v Natoli — that the result in Dennis v McDonald is to be explained on the basis of one party effectively being responsible for the other not being able to live there — does not, with respect, sustain examination in that context.
[49] It would be unfortunate if a party by vacating voluntarily, even in the face of a threatened application for exclusive occupation, could be regarded as having been excluded so as to claim an occupation fee, whereas one who was ejected by such an order after having opposed it, on considerations of balance of convenience but without fault, was not entitled to an occupation fee; yet that appears to be the effect of the current state of the authorities.
[50] In matrimonial proceedings, this situation is typically addressed by taking into account, in evaluating the respective contributions of the parties for the purposes of discretionary property adjustment, the fact that since separation one has had the benefit of exclusive occupation of the former matrimonial home — either as a contribution by the other, or as a benefit already received by the party who remains in possession.
[51] When, in cases such as Luke v Luke, it was said that an occupation fee was available only where there was a legal wrong, there was no jurisdiction to exclude a co-owner for personal reasons, despite the co-owner's legal rights; that jurisdiction, whether in the domestic violence provisions of the (NSW) Crimes Act 1900 or under matrimonial legislation, has been created since. When Long Innes J referred, in Luke v Luke, to the exclusion being a legal wrong, there was no difference between a positive (actionable) legal wrong, and the denial of a legal right. However, while a party who obtains an order for exclusive occupation or an APVO does no legal wrong by excluding the other, that other's legal rights as a co-owner to occupy are, nonetheless, denied. If a party is excluded by such an order, it can no longer be said to be a case of the party out of possession being one who merely chooses not to exercise his or her right of occupancy as a co-tenant; rather, he or she is prohibited from doing so. I, therefore, agree with Purchas J in Dennis v McDonald and Beazley JA in Biviano v Natoli, that the basic principle that a tenant in common is not liable to pay an occupation rent by virtue merely of his being in sole occupation of the property does not apply in the case where a matrimonial or similar relationship has broken down and one party is, for practical purposes, excluded from the family home. Upon breakdown of a domestic relationship, if it becomes no longer reasonable or practicably sensible to expect the partners to co-occupy the one property, the one who remains in possession may be taken to do so to the exclusion of the other, and to be liable to pay an occupation fee. At present, however, Biviano would seem to restrict that to a case in which the exclusion was not authorised by a court order — whether under matrimonial legislation or an APVO.
[52] In this case, the plaintiffs left the property, in a sense voluntarily, in February 2002. However, I think it was not reasonable or sensible to expect them to continue to live there with the defendant. That involves no attribution of fault, simply that it was no longer sensible to expect all three to live there when there had been unpleasant, even violent, incidents between them. That would, on my view, entitle them to an occupation fee. But in this case, there is, in any event, more. The plaintiffs returned to the property once, but on their second attempt to return, found that the gates had been locked. The mere placing of a lock on a gate may not be enough to amount to exclusion [Jacobs v Seward (1872) LR 5 HL 464 at 473]. However, in that case Lord Hatherley LC pointed out first, that there was no evidence as to whether the gate was kept locked or not — simply that there was a lock on it; secondly, that the defendant had allowed the plaintiff’s son to enter when a request had been made; and, thirdly, that there was no evidence as to what was the object and intent of putting on the lock. In the present case, the evidence is that the gate was in fact locked. Moreover, the plaintiffs requested they be provided with keys and there was no response to their requests. In the course of this oral evidence, Mr McKay — when asked what he would have done had the plaintiffs attended and asked to be let in — said, "I would have made sure I had a witness and if they'd asked to come in, I'd have let them in, but I wouldn't have let them come in the place when I wasn't present because I was fearful of goods being taken and I would not have wanted them to come in unless I had somebody with me because of their actions and the way they had been behaving towards me". That intent is quite inconsistent with the rights of the plaintiffs as co-owners to occupy the property and to come to and from it as they please.
[53] Thus, while it is true that in a sense they departed voluntarily from the property, that was in circumstances where it was desirable if not inevitable that one or other of the parties do so. After they departed, they were excluded physically by the lock on the gate, and that lock was accompanied by an intention inconsistent with their legal rights as co-owners. In those circumstances, I am satisfied that they were excluded in the relevant sense, and are entitled to an occupation fee against Mr McKay.
His Honour held the measure of the “occupation fee” appropriate to the circumstances was half the market rent over the period of exclusion.
[73] [2008] NSWSC 177, subsequently approved by the Court of Appeal in Callow v Rupchev [2009] NSWCA 148 at [59-60] at 51
Once the parties resumed occupation of separate bedrooms, it was obvious the relationship was doomed to failure; something was bound to give sooner or later. As it happened things thereafter imploded over this weekend in the middle of June. In that situation the plaintiff was constructively excluded from the house, although he continued to visit from time to time and use the office, a situation with which neither was particularly comfortable. The defendant changed the locks in late June or early July, thus cementing the situation.[74] Proceedings were issued in October 2007.[75]
[74] T642.1-.21
[75] In compliance with s 9(3) of DFR & DPP Acts
The valuer Mr Bell estimated a likely rental that could be achieved for Wangiana Street as of November 2008, of $500 per week, if not more. Taking $500 per week from mid-June 2007 to the present time, say two years, produces a sum of $50,000. On that basis the plaintiff would be entitled to half that amount, namely $25,000. However this is a gross figure – it must be remembered that the defendant is liable for outgoings and maintenance as well as the general upkeep of the property, the obligation for which the plaintiff is necessarily relieved. No actual costs were referred to by anyone during the trial, so the best the court can do is to deduct an arbitrary $10,000 for such expenses. By the same token he would not be entitled to any additional sum on account of board the defendant received because this corresponds with a reduction in her effective use of the premises. In any case it would amount to double compensation if so awarded.
Adjustments
The upshot of the above analysis is that the respective contribution of the parties through their income streams over the entire course of the relationship was broadly speaking 56 per cent by the plaintiff and 44 per cent by the defendant. The plaintiff has retained the use of the Hahndorf property. Even so the two lines of credit remain nearly fully drawn and secured over that property. It is therefore effectively encumbered to the extent of upwards of $130,000 at the present time. This situation has remained static for some time. As against that the defendant has the use of Roxby Downs unencumbered, she has retained the Avalon car which cost all but $30,000 in April 2003 and which was predominantly always used by her anyway. Each contributed more or less equally to maintaining the relationship in other than financial ways.
The defendant attempted to draw into account the income she derived during the earlier years before they commenced to live together in a strict de facto relationship and when the plaintiff earned less than he might have because of the chronic fatigue condition. Characterised as such, this does not fall within the definitions contained in either Act, that is as contributions “made directly or indirectly by or on behalf of the de facto partners”. It is nevertheless a relevant matter within the terms of s 11(1)(d) even though made prior to the commencement of the de facto relationship: Roy v Sturgeon.[76] It is not possible to quantify in dollar terms the extent of that contribution during the course of the relationship, in a way that might be done under s 11, so that necessarily a value judgment is required.
[76] (1986) 11 FamLR 271 at 276-278
There is no doubt the defendant continued to work during those earlier years. She encouraged, in fact energised the plaintiff out of his chronic fatigue syndrome, gradually bringing him back into the workforce. This may well have been achieved anyway without her assistance, but it is impossible to escape the conclusion that he probably reached that point sooner than he might otherwise have, or that he benefited from her financial as well as moral support and encouragement in that earlier period. Whatever allowance may have been appropriate, it is more than offset by the fact that the defendant has had sole use of the Avalon for two and a half years, bearing in mind that it is currently worth $7,000, and that she prematurely spent $11,000 during the relationship on a car for her daughter.[77]
[77] T627.32-T628.26
Weighing all these considerations, it becomes necessary to consider the appropriate property adjustment order(s) within the meaning of s 9 of the DFP Act. The court has found amongst other things that:
-Non-monetary contributions by each during the course of the entire relationship were about equal (at para [12]);
-Monetary contributions to the entire relationship via disposable income stood at about 56 per cent by the plaintiff and 44 per cent by the defendant (at para [30]);
-That $53,000 and $213,000 respectively, were directly contributed to the purchase of Roxby Downs (at para [39]);
-At the commencement of the relationship the Hahndorf property was worth $300,000 and is now worth $420,000 (at para [38]);
-Roxby Downs was purchased for $266,651.86 after adjustments and is presently worth $435,000 (at para [39])
-As of the purchase of Roxby Downs, the overall contributions to the relationship including the purchase thereof, were shouldered 1/3rd by the plaintiff and 2/3rds by the defendant (at para [43]).
Based on these findings, the most significant assets are obviously the real properties. As to the unencumbered Roxby Downs home, the plaintiff’s overall contribution of one-third expressed at present day value is $145,000. The defendant’s is $290,000. Given that the plaintiff remains liable for the $130,000 secured over Hahndorf owing to the contributions he made to the relationship by that means, and that the defendant made no contribution to Hahndorf, and that there was never any question of selling it to fund the purchase of Roxby Downs,[78] it is inappropriate to make any adjustment order with respect to the Hahndorf property.
[78] T602.19-.21
However it remains relevant to take into account the fact that the plaintiff remains liable to repay the advances by way of the lines of credit. No allowance is made for interest accrued since effective separation, as the plaintiff used those accounts thereafter for his own purposes, and for reasons best known to himself, has chosen not to reduce or repay those liabilities. On the other hand her greater contribution to the purchase of Roxby Downs enabled him to retain the Hahndorf property and consequently to acquire the benefits of capital appreciation and the income it produces.
Had they made equal contributions to the purchase of Roxby Downs in the first place, he would have needed to raise a further $80,000, and paradoxically, she would have needed $80,000 less. Although his overall contribution to the relationship was greater than hers in monetary terms, this consideration makes it appropriate, quite apart from the overall justice and equity of the outcome, to make an order for the division of the Roxby Downs property consistent with the respective degrees of contributions to the relationship as at the time of the purchase thereof, viz 1/3rd – 2/3rds.
Otherwise no other adjustments are necessary, for the reasons explained above or were suggested by either counsel. The defendant should retain and acquire full ownership of the Avalon, for reasons also expressed earlier and because the present day value is roughly equivalent to the $5,000 he unilaterally applied to the purchase of the motor-bike.[79]
[79] T628.27-629.8
A further sum of $15,000 in favour of the plaintiff is appropriate on account of the defendant’s occupation of Roxby Downs since separation. Accordingly it is proposed, subject to one final consideration, to make property adjustment orders to the intent that the Roxby Downs property and the Avalon be transferred solely to the defendant, following the payment by her to the plaintiff at what amounts to his contribution or “interest” in Roxby Downs ($145,000)-, plus $15,000 for an “occupancy fee”, a total of $160,000.
It then remains to consider if the proposed adjustment order is “just and equitable”. Both parties are in stable and relatively well-remunerated employ: the plaintiff at a better rate than the defendant, but involving longer work hours. They are now 56 and 52 years of age respectively. It was not an especially long relationship. It is clear the main assets they brought to the relationship were the two houses. The plaintiff retains the Hahndorf property, which improved in value by $120,000 (as of November 2008), and the rental income stream it produces. This “equity” is more than wiped out by liability for the $130,000 secured thereon.
For her part the defendant has effectively an interest in Roxby Downs valued at $290,000, which improves her asset base by just over $75,000. It would have been $25,000 more as of October 2008, but due to “the current economic situation … coupled with recent job losses in Roxby Downs …”, the value fell by that much as at 20 March 2009.[80] This was more than a year post separation.
[80] Exhibit D22A
Once she pays him the proposed $160,000, she will still have improved her asset base by about $40,000. His asset position is more or less unchanged, but he retains the income stream Hahndorf will continue to provide him to assist in clearing the lines of credit. On the other hand she retains the house (and the Avalon), but has to raise funds to pay the $160,000 presumably secured against the Roxby Downs property, which should be manageable given her employment situation. This outcome is broadly speaking a fair and equitable one.
Orders
The proposed property adjustment order then is that the Avalon and the Roxby Downs property be transferred to the defendant, once she pays to the plaintiff $160,000. Before judgment is entered the parties should be heard as to the precise terms of such orders, any consequential issues, interest (if any) and costs.
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