Haight and Balog

[2017] FCCA 1192

FEDERAL CIRCUIT COURT OF AUSTRALIA

HAIGHT & BALOG [2017] FCCA 1192

Catchwords:
FAMILY LAW – De facto relationship – whether the Court is satisfied pursuant to s.90SM(3) of the Family Law Act 1975 (Cth) that it would be just and equitable to make an Order altering the parties’ interests in property – held not satisfied pursuant to s.90SM(3) of the Family Law Act 1975 (Cth) – application dismissed.

Legislation:

Family Law Act 1975, ss.72, 79, 90SM

Cases cited:

Bevan and Bevan [2013] FamCAFC 116

Chapman and Chapman [2014] FamCAFC 91

Fielding and Nichol [2014] FCWA 77

Paxton and Paxton [2016] FCCA 1689

Scott and Danton [2014] FamCAFC 203

Stanford v Stanford (2012) 247 CLR 108

Applicant: MS HAIGHT

Respondent: MR BALOG

File Number: DGC 1431 of 2016

Judgment of: Judge Jones

Hearing date: 26 April 2017

Date of Last Submission: 26 April 2017

Delivered at: Melbourne

Delivered on: 10 July 2017

REPRESENTATION

Counsel for the Applicant: Ms Buchanan

Counsel for the Respondent: Mr Nicholson

Solicitors for the Respondent: Davison Family Lawyers

ORDERS

1. The application filed on 13 May 2016 for an alteration in the property interests of the parties under s.90SM of the Family Law Act 1975 (Cth) is dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Haight & Balog is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

DGC 1431 of 2016

MS HAIGHT

Applicant

And

MR BALOG

Respondent

REASONS FOR JUDGMENT

Introduction

1. This decision concerns an application by the Applicant for an alteration of the property interests between the Applicant and the Respondent following the breakdown of their de facto relationship. Specifically, the Applicant seeks an Order that she receive a payment equivalent to 40% from the net proceeds of sale of a property purchased in the Respondent’s name. This property is situated at Property A(omitted) (“Property A”). There is no agreement on the value of the Property A property. Neither party has provided the Court with an independent expert valuation of the Property A property. In his financial statement filed on 11 April 2017, the Respondent values the Property A property at $500,000.00 and identifies the mortgage over that property at $408,432.00.

2. The Respondent contends that it would not be just and equitable to make any Orders altering the parties’ property interests. The Respondent argues that, in the event that the Court is satisfied that it would be just and equitable to make Orders altering the parties’ property interests, an appropriate Order in the circumstances is not to make any adjustment to the interests of the parties in property.

3. In determining this matter I have had regard to all of the documents the Applicant and Respondent stated that they relied on at trial, including exhibits tendered by each of them.

Section 90SM of the Family Law Act 1975 (Cth)

1. In property settlement proceedings, after the breakdown of a de facto relationship, the Court may make such Orders as it considers appropriate altering the interests of the parties, in the property of the parties to the de facto relationship: sub-s.90SM(1) of the Family Law Act 1975 (Cth) (“the Act”). The touchstone section enlivening the Court’s jurisdiction to make such an Order is sub-s.90SM(3) of the Act, which provides:

   (3)  The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

2. This provision has its equivalent, in circumstances involving parties to a marriage, in sub-s.79(2) of the Act. This provision, as well as s.79 of the Act as a whole, was considered by the High Court in the decision of Stanford v Stanford (2012) 247 CLR 108 (“Stanford”). In Stanford, the High Court stated that which s.79(2) of the Act directs, namely that:

   …In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

   (footnotes omitted)

3. This requirement no less applies to a Court called upon to exercise its jurisdiction under s.90SM of the Act.

4. The High Court made it clear in Stanford that the requirements of sub‑ss.79(2) and (4) of the Act, which prescribe matters that must be taken into account in considering what Order (if any) should be made under s.79 of the Act, are not to be conflated. It further observed at [36] that:

   36.    The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations.  It does not admit of exhaustive definition.  It is not possible to chart its metes and bounds.

   (footnotes omitted)

5. The High Court proceeded to enunciate three “fundamental propositions” which it said “must not be obscured.” Relevantly for these proceedings, the third fundamental proposition identified by the High Court in Stanford was:

   40. Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

   (footnotes omitted)

6. The High Court further observed at [42]-[43]:

   42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship.  It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.  No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship.  That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship.  And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end.  Hence it will be just and equitable that the court make a property settlement order.  What order, if any, should then be made is determined by applying s 79(4).

   43.    By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order.  It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.

   (footnotes omitted)

7. Finally, it is relevant to note that (referring to the reasoning of the Full Court below), the High Court said at [52]:

   52. Whether it was just and equitable to make a property settlement order in this case was not answered by pointing to moral obligations. Reference to “moral” claims or obligations is at the very least apt to mislead. First, such references appear to invite circular reasoning. On its face, the invocation of moral claims or obligations assumes rather than demonstrates the existence of a legal right to a property settlement order and further assumes that the extent of that claim or obligation can and should be measured by reference to the several matters identified in s 79(4). Second, the term “moral” might be used to refer to a claim or obligation that is based on the kind of contribution described in s 79(4)(b) – “the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage... to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them.” But nothing is gained by describing such a contribution as founding a “moral” claim or obligation. Moreover, if the word “moral” was being used in this context with some wider meaning or application, it is important to recognise that it is used in a way that finds no legal foundation in the Act or elsewhere. It is, therefore, a term that may, and in this case did, mislead.

   (footnotes omitted)

8. It should be noted that the matters prescribed in sub-s.79(4) of the Act have their equivalents under sub-s.90SM(4) of the Act in relation to de facto relationships.

9. The exhortation in Stanford, that the considerations in sub-s.79(2) of the Act must not be conflated with those matters specified in sub-s.79(4) of the Act, has been the subject of somewhat divergent approach in the Family Court on appeal: cf Bevan and Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) and Chapman and Chapman [2014] FamCAFC 91; (2014) FLC 93-592 (“Chapman”).  In Bevan, Bryant CJ and Thackray J said at [84]-[85]:

   84. Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests.  However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added). 

   85. This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation. 

   (emphasis in original)

10. In Bevan, Finn J relevantly noted at [169]:

    169. Findings of fact concerning the parties’ financial history (i.e. their contributions) and their present circumstances and future prospects made in the context of s 79(4) will also assist, but such findings cannot (according to Stanford) be conclusive in determining whether or not it is just and equitable to make an order altering any particular property interest.

11. In Chapman, Strickland and Murphy JJ opined that the passages extracted above ([84]-[85]) from Bevan, suggested that the plurality considered that in determining whether it was just and equitable under sub‑s.79(2) of the Act, the matters in sub-s.79(4) of the Act must be mandatorily considered. Strickland and Murphy JJ opined that if this was the case, the plurality in Bevan were wrong: Chapman at [25]. Their Honours went on to state that the High Court in Stanford eschewed consideration of sub-s.79(4) of the Act matters so far as contributions were concerned: Chapman at [27].

12. This divergence was discussed by Thackray CJ in Fielding and Nichol [2014] FCWA 77. His Honour, by reference to the judgment of Bryant CJ in Bevan and the Full Court decision in Scott and Danton [2014] FamCAFC 203, opined that it “is open to a trial judge, in addressing the s 79(2) question, to consider matters that may be seen as arising under s 79(4), but consideration of those matters is no means conclusive in determining whether the “just and equitable” test has been meet (sic)”: Fielding and Nichol at [33]. With respect, until this seemingly divergence of views is authoritatively resolved, I concur with Thackray CJ’s opinion, which is to say that, in the judicial exercise of the Court’s broad discretion in determining whether an Order altering property interests is just and equitable, the Court may have regard to matters that may fall within the scope of sub-s.79(4) of the Act, provided this consideration does not limit or is determinative of the Court’s ultimate conclusion.

Background

1. The following sets out the relevant factual background.

2. At the time of trial, both parties were 51 years old. The Applicant is a (occupation omitted) and the Respondent is a consultant (occupation omitted).

3. The Applicant contends that the parties commenced their relationship in 2009. Both parties agree they commenced cohabitation on 29 March 2011, residing at a rental property in (omitted). The Applicant contends that the de facto relationship ended on 14 May 2014, whereas the Respondent contends the de facto relationship ended on 24 July 2013, although the parties remained separated under the one roof until 30 May 2014.

4. There are no children of the relationship. The Applicant’s son, [M] (born (omitted) 1998), who suffers from Schizoaffective disorder, lived with the parties during the period they resided in (omitted) and subsequently, in the Property A property. [M] remained living with the Applicant in the Property A property after the Respondent left that house in May 2014. The parties shared equally in the payment of the rent and mortgage, utilities, outgoings and living expenses during the period they lived in the (omitted) rental property and the Property A property.

5. In 2010, the Applicant sold a property she owned in the Property B (“the Property B property”). The net proceeds of sale the Applicant retained for her own use was $125,000.00.

6. On 16 August 2011, the Applicant purchased a property off the plan of a subdivision, being a unit of subdivision at Property C (“Property C”). She made a deposit of $41,990.00 for the purchase of this property. The Applicant paid for this deposit using the net proceeds of sale from the Property B property. Under the contract of purchase, the Applicant was due to pay the residue of the purchase price (together with additional items purchased) in an amount of around $419,000.00 by 5 August 2013. She failed to do so. A notice of recession was issued by the vendors on 7 February 2014. The Applicant lost the deposit she paid on this property.

7. In March 2013, the Respondent purchased the Property A property in his own name at a purchase price of $461,000.00. The Respondent paid a deposit of $46,000.00 from his savings and obtained a First Home Owners Grant to assist in the purchase in an amount of around $7,000.00. The Respondent took out a mortgage in his sole name. The parties and the Applicant’s son moved into the property on 12 July 2013.

8. From July 2013 to 30 May 2014, the Applicant made payments to the Respondent in amounts which were equivalent to 50% of the mortgage repayments the Respondent was responsible for. Each party paid half the utilities, outgoings and shared general living expenses.

9. In late May 2014, the Respondent left the Property A property. The Applicant and her son remained in the property and have continued to reside there up until trial. From June/July 2014 to December 2014, the Applicant continued to pay to the Respondent an amount equivalent to 50% of the mortgage. The Applicant characterises these payments as contributions to the mortgage whilst the Respondent contends they were rental payments made to him.

10. In January 2015, the Applicant agreed to pay an amount equivalent to 80% of the mortgage repayments over the Property A property. From January 2015 to January 2017, the Applicant made payments to the Respondent generally around $1,727.00 to $1,750.00 each month, although lesser amounts were paid for nine of the months in that period and no payments were made in two months of that period. The Applicant has not made any payments from February 2017 to the date of trial.

11. On 31 March 2015, the Respondent received an inheritance of approximately $31,000.00 from his father, who passed away in 2013.

12. The Applicant ceased working as (omitted) in December 2016, she says as a result of anxiety and depression. She has not filed admissible expert medical evidence regarding her condition, prognosis and capacity to work. She has, however, tendered as an exhibit a medical certificate issued by Centrelink, dated 22 March 2017, which states that the Applicant suffers from “severe anxiety/depression”, that her symptoms are ongoing and that she is unfit for work from 22 March 2017 to 22 June 2017 (exhibit A2). A further exhibit is a document issued by Centrelink on 28 March 2017, advising the Applicant that she is entitled to sickness allowance, energy supplement and pharmaceutical allowance totalling $427.19 per fortnight (exhibit A3). The Applicant says that she expects to be in receipt of wage insurance payments shortly and that the payments will be in the amount of $3,000 per month.

13. The Applicant and Respondent have interests in superannuation in amounts which are, respectively, $113,048.00 and $115,837.00.

Evidence

1. Both parties argued that the Court should draw adverse conclusions about the other party’s credibility. Whilst I am satisfied that both parties gave evidence at times in order to maximise their position, I am not satisfied that this is a sufficient basis to find that one party was less credible than the other. It is the case that the Applicant wrongly deposed in her affidavit filed on 13 May 2016, that she paid a mortgage over the Property C property and that she was a declared bankrupt. However, she conceded readily in cross-examination that this evidence was wrong. Generally, I found her to give evidence in a straightforward manner, although her evidence on certain matters was vague. The Respondent proved reluctant to concede certain matters in cross‑examination, such as the fact that the Applicant had assisted him, prior to the purchase of the Property A property, by connecting him to the mortgage broker she utilised when she purchased the Property C property. Otherwise, though, I found the Respondent’s evidence was given in a straightforward manner. Consequently, in making findings as to disputed evidence, I have not relied on the credibility of the parties.

2. I shall now consider the evidence in relation to the disputed matters.

The time at which the de facto relationship ceased

1. The Applicant asserts that the date the de facto relationship between the parties ceased was 14 May 2014. The Respondent asserts that the de facto relationship between the parties ceased on 24 July 2013.

2. The Applicant’s evidence is that the Respondent continued to sleep in the same room and they had an active sex life until he left the Property A property in late May 2014. The Respondent’s evidence is that he allowed the Applicant and her son to move into the Property A property because he was aware the Applicant could not afford the rent on the Kew property and that there was nowhere else for her to live with her son. The Respondent further says that he only remained in the Property A property after 24 July 2013 because it was a condition of the First Home Owners Grant that he live in the property for a minimum of 12 months. He concedes that the parties shared a bedroom in the three-bedroom house, but said that this was because one of the three bedrooms was used as an office. He contends that there was no intimacy  between the parties.

1. I do not find the Respondent’s evidence plausible. There is no evidence which suggests that the Applicant could not afford rent on the (omitted) property. I find it unlikely that the Respondent would continue to share the same bedroom as the Applicant for almost one year, merely because the only other available bedroom was used as an office. Finally, if it was a condition of the First Home Owners Grant that he live in the property for 12 months, he failed to do this when he left the property on 30 May 2014. The evidence is that the parties moved into the Property A property on 12 July 2013.

2. Given the Respondent’s concession that the parties were in a de facto relationship, there is no evidence to suggest that anything changed after 24 July 2013, other than the Respondent’s evidence that he commenced dating his current partner.

3. In the circumstances, I find that the parties’ de facto relationship ceased on 14 May 2014.

The Property B property

1. The evidence is that the Applicant received $125,000.00 as net proceeds from the sale of property in the Property B, out of which she utilised $41,990.00 as a deposit on the Property C property. The evidence is that Applicant retained the residual amount, of around $83,000.00.

2. The Respondent’s evidence, not disputed by the Applicant, is that he knew nothing about the amount or disposition of the net proceeds of sale of the Property B property, save that after the event he was made aware that monies from the net proceeds of sale were used as a deposit on the Property C property.

3. In her affidavit filed on 13 May 2016 at [15], the Applicant deposed that the proceeds of sale were “contributed to the relationship by paying for [M]’s schooling, gifts for family members, rent, furniture, holidays and the deposit for our next property.” The reference to the deposit for the next property is a reference to the Applicant’s payment of the deposit on the Property C property. In cross‑examination, the Applicant said that of the residual $83,000.00, she also applied $30,000.00 to repay a loan. In examination in reply, she said that the loan had been made to her by a friend.

4. I find, on the balance of probabilities, that the Applicant retained the net proceeds of sale of the Property B property for her own benefit and use and that the Respondent was not involved in decisions as to how those funds would be dispersed.

5. I am not satisfied, in the absence of probative evidence, that the Applicant utilised the residual net proceeds of sale to repay a loan from a friend in the amount of $30,000.00. I find that the Applicant utilised the residual amount of around $83,000.00 as she saw fit. Even accepting that the Applicant utilised these funds for rental payments, her son’s schooling and general living expenses, I find the Applicant has failed to adequately explain the full disposition of these funds.

The Property C property

1. The Applicant’s contention is that the purchase of the Property C property was a joint investment decision made between the parties, which was designed to maximise their financial position. She contends that the Respondent was aware of, and involved in, the decision to purchase the Property C property. The Respondent denies discussing the purchase of the Property C property with the Applicant, or that he was involved in or aware of the financial arrangements underpinning its purchase.

2. The Applicant deposed in her affidavit filed 13 May 2016, at [16] to [19], that she and the Respondent purchased the Property C property, and that the Respondent agreed to share the costs of the mortgage. She then says that when the time came, the Respondent refused to share the costs of the mortgage. She deposed that she was responsible for the mortgage payments over the Property C property, until she could no longer afford to maintain those payments. Her evidence regarding the making of mortgage payments is wrong, as the Applicant never paid mortgage payments in respect of the Property C property. She conceded this fact in cross-examination. She also conceded that she was not, as she deposed in the same affidavit (at [22]), declared bankrupt. The evidence is that she entered into financial arrangements to discharge various debts she had incurred.

3. In examination-in-chief, the Applicant said that the joint investment was made for the benefit of both parties. Firstly, she said the Respondent needed to find work near the city. Secondly, the purchase of the Property C property in her name enabled the Respondent to take advantage of the First Home Owners Grant. The Respondent denied that there was an agreement between the parties that the Applicant purchase the Property C property in her name to enable him to take advantage of the First Home Owners Grant.

4. There is no evidence, other than the fact that the Respondent accompanied the Applicant to inspect a display suite of the proposed property, that the Respondent was involved in the Applicant’s decision to purchase the Property C property. I cannot accept that there was a joint investment decision made by the parties, in circumstances where the first step in the purchase for the property; namely, the deposit, was made from funds the Applicant had retained from the net proceeds of sale of the Property B property, and where the Respondent was ignorant of the amount of and disposition of those net proceeds of sale. The fact that the Applicant treated the net proceeds of sale of the Property B property as hers to dispose of, points to the Applicant conducting her financial affairs as separate from Respondent. I am satisfied that the Respondent was aware that the Applicant intended to purchase the Property C property, accompanied her on an inspection of the proposed suite and was aware, subsequently, that she had paid a deposit for the purchase of the property. However, the evidence simply does not support the Applicant’s case that the purchase of the Property C property was a joint decision of the parties. I find, therefore, that the purchase of the Property C property was a financial investment which the Applicant made herself independent of the Respondent.

5. The Applicant deposed in her affidavit filed 29 March 2017 at [15], that her decision to let the Property C property go was because of the Respondent’s distress that he would not be able to cover the mortgage on the Property A property by himself as he had been retrenched and had no job security. She says that she “made the decision to take the loss of the Property C property” so that she could cover the mortgage on the Property A property.

6. The Respondent’s evidence-in-chief was that he has always been employed on a contract basis, has never been retrenched, and that, during the period of the relationship, the Applicant worked full-time as a teacher. The Respondent said that he had asked the Applicant questions about the mortgage on the Property C property and was aware she was in discussion with lawyers in late 2013 but otherwise, he says he had no knowledge of the circumstances of the rescission of the contract. The Respondent denied that he told the Applicant he could not sustain the mortgage on the Property A property without help.

7. I find the Applicant’s explanation for not completing the purchase of the Property C property implausible. The Respondent had obtained a mortgage in his own name based on his income as a consultant website designer. As a consultant, there may have been gaps in the period during which he did not work but that there is no evidence that he was retrenched. Furthermore, at the time that the Applicant asserts that she, in effect, let go of the Property C property so she could assist the Respondent in his mortgage payments over the Property A property, the Applicant had already commenced contributing amounts equal to half of the mortgage repayments. Her evidence simply does not make sense.

8. It is relevant to note that I have already found that the Applicant has failed to explain the full disposition of the net proceeds of sale of the Property B property. In other words, why these funds were not available to her to assist in the completion of the purchase.

9. The Applicant has not provided any probative material regarding the reasons as to why she was unable to obtain a mortgage to complete the purchase of the Property C property. In examination-in-reply, she said that she had been in discussions through her lawyers with the property developer in late 2013 regarding the payment of $10,000.00 over one year. She asserted that she could not afford this amount. I am unable to accept this evidence, introduced in examination-in-reply, as I am not satisfied that she could not financially sustain the mortgage. In saying this, I have had regard to the unexplained disposition of funds the Applicant had available for her use from the net proceeds of sale of the Property B property. It seems, on the limited evidence, that the Applicant entered into the purchase of the Property C property without having made arrangements for a mortgage or loan from a financial institution to complete the purchase of the property. The Applicant has not given evidence as to why she embarked on this significant investment without having ensured that there were financial arrangements in place for her to complete the purchase.

10. In my view, the evidence, limited as it is, reveals that the Applicant‘s loss from this significant investment was due to the Applicant’s failure to ensure appropriate financial arrangements were in place. I reject her contention that she “made the decision to take the loss of the Property C property” so that she could cover the mortgage on the Property A property.

The Property A property

1. The disputed evidence in relation to the Property A property generally concerns the Applicant’s assertion that she has an interest in that property, arising from her contributions to the mortgage repayments during the period that she has lived there. She also relies on, what she alleges, are the Respondent’s proposals for settlement in relation to the property, and the assistance she says she provided to the Respondent in the acquisition of the property.

2. There is general agreement that the Applicant paid amounts to the Respondent which represented 50% of the mortgage repayments during the period the Respondent lived in the Property A property, and for around 6 months after that. From January 2015, the Applicant’s payments have ranged from around 80% of the value of the mortgage repayments to less than 50% of the value of the mortgage repayments and, on occasions, prior to February 2017 and since February 2017, she has made no payments. During the period the parties resided together at the Property A property, they shared the payments of utilities, outgoings and general living expenses. It appears that the Applicant paid for the utilities and outgoings of the Property A property after the Respondent left for at least a period of time. Since leaving the Property A property, the Respondent has been residing in a rental property. In his financial statement, he said that his share of the rent is $225.00 per week.

3. The Applicant agreed, in cross-examination, that the going rate for a comparable rental property in the private rental market was around $420.00 to $450.00 a week. It was not disputed that the Applicant’s payments to the Respondent, which were applied to the mortgage repayments, were generally equal to or less than she would have had to pay in the rental market (see [54] below).

4. There can be no doubt that the Respondent benefited from the payments made by the Applicant to him, which he applied to the mortgage repayments. On the other hand, the Applicant benefited from being able to live in the Property A property with her son, especially in circumstances where utilities outgoings and general living expenses were shared. On the evidence, I am satisfied that after the de facto relationship ceased, the Applicant has paid amounts in the period up to the date of trial, which were equal to or less than that which she would have had to pay in the private rental market.

5. There is no evidence that either party contributed to improvements to the Property A property.

6. The Applicant claims that she assisted the Respondent in the acquisition of the Property A property by referring the Respondent to the mortgage broker she used to purchase the Property C property. The Respondent conceded this was the case. However, there is no evidence that the Applicant was involved with the Respondent in discussions with that mortgage broker subsequent to the introduction. I am not satisfied that the fact the Applicant introduced the Respondent to a mortgage broker which he used for the purchase of the Property A property assists in her case that she has an interest in the property.

7. The Respondent characterises the Applicant’s contribution as rent, and relies on a Debt Agreement Proposal made by the Applicant to the Australian Financial Security Authority on 14 March 2016 (annexure JSH-3 to the Applicant’s affidavit filed on 13 May 2016, annexure JSH-3). In that proposal, the Applicant describes her contributions to the Property A property as paying rent of $420.00 a week, and does not identify any legal or equitable interest in the Property A property. There is no evidence about why the Applicant characterised her payments in this proposal as rent. However, it is evidence that the Applicant was contributing, she says, $420.00 per week.

8. It seems to me that focusing on the characterisation of the Applicant’s payments to the Respondent is somewhat of a distraction. The fact is that the Applicant made payments to the Respondent which were credited to his mortgage account. The parties’ oral evidence suggests that the payments made by the Applicant to the Respondent were on the basis of some agreed proportion of the mortgage repayments.

9. The Applicant relies on correspondence sent by the Respondent to the Applicant, which she contends demonstrate that the Respondent was prepared to enter into a settlement with her in relation to the Property A property on the basis that she, by her financial contributions, had an interest in the property.

10. The first correspondence is an email sent by the Respondent to the Applicant on 10 July 2014 (Respondent’s affidavit filed on 27 July 2016, annexure SGB-1), in which the Respondent says:

    Please find letter attached for mortgage arrangements. It is just a letter to agree to pay until the end of the year as discussed.

    As far as settlement I haven’t really had chance as been busy with workload. Please go ahead with mulch for garden if you like.

11. In my opinion, this correspondence goes no higher than the Respondent stating that he has not had a chance to consider any settlement. Read fairly, it does not suggest that the Respondent conceded there should be a settlement involving the Property A property.

12. In her affidavit filed 13 May 2016 at [21], the Applicant stated that in January 2015, the Respondent proposed that if she made 100% of the mortgage repayments, utilities and maintenance for one year, he would sign consent Orders splitting the Property A property 50/50. She stated that, as this amount this was difficult for her, she proposed to make 80% of the mortgage repayments, utilities and maintenance for a year, after which she would sign consent Orders splitting the Property A property 40/60 in favour of the Respondent. She deposed that the Respondent verbally agreed to this agreement.

13. In support of her contention that there was an agreement to enter into consent Orders splitting the Property A property either 50/50 or 40/60 in favour of Respondent, the Applicant relies on correspondence sent by the Respondent to the Applicant on 10 August 2014 (exhibit A4). The correspondence commences by setting out the financial contributions of each party to the Property A property during the period July 2013 to December 2014. The Respondent’s contribution is identified as $69,159.00 and the Applicant’s as $19,947.00. The correspondence then states:

    So please justify why I would agree to a 50/50 split. If you wish to go halves then the amount you owe me is $49,212 to have a 50/50 claim on the property. I suggest paying this year’s mortgage which would make it $47,343. Then only would be a difference of $1,869.

14. In cross-examination, the Respondent stated that this correspondence was merely a reference to a “state of play” where the parties agreed to go halves. He denied that he had agreed to go halves.

15. I am not prepared to accept that correspondence as a concession against interest by the Respondent. The correspondence relied on by the Applicant occurred in the immediate aftermath of the ending of the de facto relationship, and not in January 2015, as contended by the Applicant in her affidavit.

16. Any communication which preceded the correspondence dated 10 August 2014 is not in evidence. It is not referred to by the Applicant in her affidavit material, or during her evidence-in-chief. A fair reading of the correspondence suggests that, in my view, the Respondent is in fact responding to a proposal from the Applicant. This is contrary to the Applicant’s affidavit evidence. A fair reading also suggests that the Respondent is responding to a proposal for a 50/50 split of the Property A property. He commences the penultimate paragraph by stating, “So please justify…”. This is not suggestive of a person who has accepted that there should be some settlement in relation to the Property A property; in particular, an equal share. In my opinion, the Respondent can be read fairly as saying that, if there is to be a settlement, the Applicant owes him monies. He then suggests that the Applicant pay 100% of the mortgage for one year; that is, from August 2014 to August 2015. No subsequent correspondence has been produced by the parties and the undisputed evidence is that the Applicant continued living in the Property A property, making contributions at 50% mortgage until December 2014. On the evidence, an agreement that the Applicant pay 80% of the mortgage occurred in January 2015. However, I do not accept that the correspondence on 10 August 2014 can be said to be the basis for that agreement.

17. On the evidence, I am unable to find that the Respondent, by his conduct, regarded the Applicant as having an interest in the Property A property. Nor am I satisfied that there was any agreement in relation to the division of the property contingent on payments by the Applicant of particular amounts.

Superannuation beneficiary

1. The final issue in evidence relates to whether the parties made arrangements for the support of the other party.

2. A statement issued by one of Respondent’s two superannuation funds (omitted) dated 31 December 2015 (exhibit A6), lists the Applicant as a beneficiary. In cross-examination, the Respondent said that this was a mistake.

3. I am prepared to accept the Respondent’s evidence that the identification of the Applicant as the beneficiary in this superannuation statement was a mistake for the following reasons. Firstly, the statement was issued for the period of July to December 2015, one year after that the de facto relationship had ceased. It is unlikely that the Respondent would have consciously identified the Applicant as a beneficiary, after the cessation of the relationship. Secondly, there is no evidence that the Applicant was identified as a beneficiary to the Respondent’s superannuation fund interests during the period of the relationship. I have no doubt that had this been the case, a copy of the relevant statement would have been tendered in evidence.

The Applicant’s Plight

1. I have considered it appropriate to consider here the Applicant’s submissions regarding the circumstances she finds herself in. The Applicant submits that she entered the de facto relationship with legal interests in property, and that she contributed financially to the maintenance and conservation of the Property A property. She submits that absent any Orders under s.90SM of the Act, she will end up with nothing, in circumstances where she has mental health issues, does not have the capacity to work and cares for her son who suffers a significant mental disability. This argument, in my opinion, conflates the consideration of sub-ss.79(2) and (4) of the Act and assumes a moral obligation on the part of the Respondent to financially provide for the Applicant, because of the mere fact of the relationship. Both of these approaches or considerations were disavowed in Stanford.

1. However sympathetic a Court may feel, this cannot, in my opinion be a consideration which moves the Court to exercise jurisdiction under sub-s.90SM(1) of the Act. The proper approach is to carefully consider all the evidence, and the competing considerations revealed by findings made with respect to that evidence.

Findings

1. In the exercise of the discretion conferred upon me, I have determined that it would not be just and equitable to make any Order altering property interests in the present matter.

2. In arriving at my decision, I have taken into account the following findings of fact based on the consideration of evidence before me. The matters I have taken into account are in no particular order, rather, they reflect the totality of my considerations of the evidence. To the extent that they may appear to reflect considerations prescribed under sub‑ss.90SM(4) of the Act, this is merely because I have regarded the evidential considerations relevant to the exercise of my discretion under sub-s.90SM(3) of the Act:

   a)there was no intermingling of finances between the parties during the course of their de facto relationship, which subsisted for a period of around four years:

   i)the parties maintained separate bank accounts and were separately liable for their own debts;

   ii)the Applicant retained the net proceeds of sale of the Property B property to use as she wished. The Applicant applied the net proceeds of sale to the rent of the property the parties’ shared, general living expenses and used a part of these proceeds as a deposit to purchase a property in her own name in Property C. I have rejected the Applicant’s evidence that she applied $30,000.00 of the net proceeds of sale to a repay a loan from a friend. The application or use of the whole of the net proceeds of sale remains unexplained. The Respondent was not aware of the amount of the net proceeds of sale or its use, other than being made aware of the use of an amount for the deposit of the Property C property after the event;

   iii)the parties contributed equally to the rent/mortgage, utilities and outgoings on the properties in which they cohabited, as well as sharing everyday living expenses;

   iv)the decision to keep their financial affairs separately occurred in circumstances where each party was mature, intelligent and not in any way overborne by the other.

   b)during the relationship, the parties purchased property independently and without the involvement of the other:

   i)the Applicant purchased the Property C property using a deposit from her own savings. Likewise, the Respondent purchased the Property A property with a deposit using his own savings;

   ii)the evidence does not support a finding that either party was actively involved in or supported the other’s independent property purchases;

   iii)the failure of the Applicant to complete her purchase of the Property C property, regretfully appears to be because of poor financial decisions made by her. Unfortunately, the Applicant failed to provide any probative evidence about her incapacity to complete the purchase. In the absence of adequate evidence, I am left to conclude that the Applicant entered into a contract to purchase without making satisfactory arrangements for a mortgage or loan to complete the purchase.

   c)neither party has contributed to the improved value of the Property A property by, for example, renovations;

   d)the parties’ assets during the relationship are not as they once were. The Applicant now has no equity in property. However, this is, sadly, because of her own financial mismanagement;

   e)on the evidence, I have found that neither party made provision for the other to receive an interest in their property in the event of their death;

   f)the Applicant made contributions to the mortgage over the Property A property both during and after the relationship:

   i)for the overwhelming majority of time, including when the parties lived in another rental property, the Applicant’s son lived with the parties and, after separation, remained living with the Applicant in the Property A property;

   ii)the Applicant contributed 50% of the mortgage from March 2013 to December 2014. From January 2015 to January 2017, the Applicant made contributions ranging mostly from 80% of the mortgage to no monthly payments. Since February 2017, the Applicant has made no contributions, whilst remaining living in the Property A property with her son;

   iii)the rent the Applicant would have been required to pay for a rental in the private rental market is equal to or more than her contributions to the mortgage;

   iv)since leaving the Property A property, the Respondent has rented a property, together with his current partner;

   g)there is no doubt that the Respondent has benefitted from the contributions the Applicant has made to the mortgage over his property. However, the Applicant has, in my opinion, derived considerable benefit for two reasons. Firstly, she has been able to accommodate her son, who clearly has special needs. Secondly, she has benefited from the fact that her contributions have, for the most part, been less than the rent she would be required to pay in the open rental market;

   h)at the end of the relationship, both of the parties were gainfully employed. According to their financial statements, the Applicant earned $1,742.00 a week and the Respondent earned $1,532.00 a week. The Applicant is no doubt in a parlous state presently. Her oral evidence is that she suffers from anxiety and depression. The Applicant has not provided any expert medical evidence regarding her prognosis. She maintains that she has not worked since December 2016 because of her condition. From March 2017, the Applicant has been in receipt of a sickness allowance from Centrelink. The Applicant referred to the fact that she was shortly to be in receipt of wage insurance, a form of income protection. In her oral evidence, she said she would receive $3,000 a month from this cover. There are no issues with the Respondent’s health. In the absence of medical evidence, I am unable to say how long the Applicant’s medical condition will affect her capacity to work and, in the absence of any evidence regarding the wage insurance, I am unable to conclude how long this will affect her income stream. The Applicant has no doubt been in financial stress since December 2016. On the other hand, until the date of this decision, she has lived rent free in the Property A property since February 2017; and

   i)the key difference in the parties’ circumstances at the finalisation of the relationship and at trial is that the Applicant has lost any equity in assets, and the Respondent owns equity in property. However, on the evidence, the Applicant’s loss of equity in a significant asset was of her own making. It is, in my opinion, neither just nor equitable to require the Respondent to take responsibility for this. This is particularly so when the Applicant has, taking into account her contributions, derived a significant benefit from living in the Property A property for almost five years. I have also taken into account the Applicant’s failure to adequately explain the disposition of the net proceeds of sale from the Property B property.

Conclusion

1. For the reasons set out in this judgment, I am not satisfied that, in all of the circumstances, it is just and equitable to make an Order altering the interests of the parties in the property of the parties to the de facto relationship. Accordingly, I will make an Order dismissing the Applicant’s application.

I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Judge Jones

Date: 10 July 2017