HANKINSON & DE VRIES
[2015] FamCA 833
•25 September 2015
FAMILY COURT OF AUSTRALIA
| HANKINSON & DE VRIES | [2015] FamCA 833 |
| FAMILY LAW – DE FACTO RELATIONSHIPS – Where the applicant seeks a declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) that the parties’ relationship was a “de facto relationship” within the meaning of s 4AA of the Act – Whether the parties were living together on a “genuine domestic basis” – Period of de facto relationship – circumstances relevant to this relationship considered – Where relevant circumstances considered as a composite picture result in the conclusion that the parties relationship was a de facto relationship – Declaration made FAMILY LAW – DE FACTO RELATIONSHIPS – Property settlement proceedings pursuant to s 90SM of the Act – Approximate 14 year period of de facto relationship but only a little over 2 years of the parties living in a single or common shared residence – Applicant had sole responsibility for 3 young children from previous relationships at the outset of, and during, this relationship – No children of the de facto relationship – Initial capital of the respondent introduced at the outset remains as the majority of property interests considered – Assessment of contributions where separate households maintained and applicant’s household includes young children from previous relationships – Contribution entitlement determined to be 80 per cent / 20 per cent in favour of the respondent – Whether adjustment for s 90SF matters – Determined an adjustment in favour of the applicant ought be made – Adjustment of 5 per cent. |
| Family Law Act 1975 (Cth) |
| Briginshaw v Briginshaw (1938) 60 CLR 336 |
| APPLICANT: | Ms Hankinson |
| RESPONDENT: | Mr A De Vries |
| FILE NUMBER: | BRC | 6542 | of | 2011 |
| DATE DELIVERED: | 25 September 2015 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 3, 4 and 5 March 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Van Grinsven |
| SOLICITOR FOR THE APPLICANT: | Zande Law |
| COUNSEL FOR THE RESPONDENT: | Mr Kirk QC |
| SOLICITOR FOR THE RESPONDENT: | Charles Cooper Lawyers |
Orders
IT IS ORDERED THAT
Pursuant to section 90RD of the Family Law Act 1975 (Cth) it is declared that a de facto relationship existed between the applicant and the respondent in the period from January 1997 until 27 November 2010.
Pursuant to section 90SM of the Family Law Act 1975 (Cth) it is ordered as and by way of final orders for property settlement between the parties that:
(a)Within sixty (60) days of the date of these orders, the respondent pay to the applicant the sum of THREE HUNDRED AND FIFTY THOUSAND DOLLARS ($350,000.00); and
(b)Otherwise, each party retain to the exclusion of the other all property, superannuation and financial resources in the name, possession or control of that party; and
(c)The respondent indemnify the applicant, and keep her indemnified, in respect of any loan account with, or debt claimed by, D Pty Ltd including, but not limited to, any amount referrable to the purchase of the property at F Street, Suburb G in or about June 2009.
Each party’s costs of and incidental to these proceedings be reserved.
IT IS FURTHER ORDERED THAT
All extant applications be otherwise dismissed and removed from the list of cases awaiting finalisation.
Following the expiration of the Appeal period, all subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hankinson & De Vries has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 6542 of 2011
| Ms Hankinson |
Applicant
And
| Mr A De Vries |
Respondent
REASONS FOR JUDGMENT
Ms Hankinson (“the applicant”) applies for orders against Mr A De Vries (“the respondent”) for alteration of property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) (“the Act”).
In support of that application the applicant claims that a de facto relationship within the meaning of the Act existed between the parties from January 1997 until November 2010. The applicant seeks a declaration to that effect pursuant to s 90RD of the Act.
Taken from his Third Amended Response to Amended Amended Initiating Application filed on 18 February 2014, the respondent initially contended, primarily, that no de facto relationship within the meaning of the Act ever existed between the parties and that for this reason the jurisdiction under s 90SM to make a property adjustment order is not available.
That initial primary position of the respondent was tempered by the acknowledgement in the respondent’s final written submissions that “in the early period” of the parties’ relationship and whilst they were living in the same residence (implicitly a reference to the period from January 1997 until early 1998 given the chronology set out in those submissions) “the relationship was at its strongest and probably was a de facto relationship”.[1]
[1] Paragraph 2.3(a) of the respondent’s written submissions.
I interpolate here that the parties’ relationship was undoubtedly a de facto relationship within the meaning of the Act in the period referred to by the respondent. The parties’ circumstances included their cohabitation and was in the context that they were engaged to be married.
However, the respondent contends that such a characterisation of the relationship as a de facto relationship cannot be applied to it after early 1998. He contends that the parties then ended their engagement and so too ended a range of fundamental characteristics that had applied to their relationship up until then, including their cohabitation in a single residence, such that it could no longer sustain the characterisation of a de facto relationship.
Alternative contentions of the respondent to deny jurisdiction are thus:
a)That any de facto relationship between the parties ended prior to 1 March 2009, the commencement date of Part VIIIAB of the Act;[2]
b)That the period or total of the periods of the de facto relationship between the parties was not at least two years (s 90SB(a));
c)That the applicant did not make substantial contributions of a kind mentioned in s 90SM(4)(a), (b) or (c) such that failure to make the order or declaration will not result in serious injustice to the applicant (s 90SB(c)).
[2] Section 86 of the Commonwealth Powers (De Facto Relationships) Act 2003 (Qld); Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth); Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 (Cth); and Fenton v Marvel (2013) 51 Fam LR 142.
The respondent further contends that in the event that the Court makes findings such that jurisdiction exists, that it nevertheless would not be just and equitable for the Court to make any orders altering the parties’ property interests pursuant to s 90SM(3), given their existing interests; the circumstances of the relationship; and the findings sought by the respondent that the applicant did not make any substantial contributions within the meaning of s 90SM(4) of the Act.
The parties are in dispute about the contribution the applicant claims to have made throughout the relevant period. It is the respondent’s case that the parties kept all of their financial and family household expense components separate save for assisting each other by providing loans or equity or security for various property acquisitions and ventures.
The applicant disputes this and contends that she made contributions to the respondent’s business; both direct and indirect contributions to the acquisition, conservation and improvement of property during the relationship; and contributions pursuant to her role as homemaker, spouse and parent to both her own children and the respondent’s children.
The parties are also in dispute as to the identity and value of the items of property interests that should be considered in any adjustment of property interests.
Thus, the central issues for determination by the Court are:
a)Whether the parties were in a de facto relationship within the meaning of the Act and, if so, what was the duration of such relationship and are the jurisdictional facts established to enliven the jurisdiction under s 90SM?
b)If so, in all the circumstances of this case, is it just and equitable, within the meaning of s 90SM(3), to make orders for alteration of property interests?
c)If so, what is the identity and value of the property interests underlying the above determination and what order for alteration of property interests is appropriate within the meaning of s 90SM(1)?
The parties and the chronology of central events
Given that the central issues in this case include determining the status of the parties’ relationship over a period under consideration of almost 14 years, it is necessary to outline the chronology of central events, including property transactions which occurred, and to thereby highlight the centrally important disputed issues of fact between the parties.
The applicant was born in 1967 and is 48 years of age.
She has three now adult children from two previous relationships namely, Mr H born in 1987 and now aged 28 years; Ms I born in 1994 and now aged 21 years; and Ms J born in 1996 and now aged 19 years.
In January 1997 when the parties commenced cohabitation the applicant had then recently separated from her previous partner Mr K, the father of Ms I and Ms J. It seems Mr K had been domestically violent during that relationship and that as at January 1997 the applicant was in some fear of him. All three of her children were in her primary care and on the evidence their biological fathers played no role in their respective lives then or thereafter.
As at January 1997 Mr H was nine years of age; Ms I was only two years of age; and Ms J was only some seven months old.
The respondent was born in 1958 and is 57 years of age.
He has three now adult children from his former marriage to Mr L namely Ms M born in 1976 and now aged 39 years; Mr C De Vries born in 1983 and now aged 31 years; and Mr B De Vries born in 1984 and now aged 30 years.
In about the early or mid-1990s the respondent’s former marriage ended in final separation. At about that time his daughter Ms M commenced living independently whilst the respondent’s sons remained living in his full time care then and thereafter.[3]
[3] Respondent’s affidavit filed 24 October 2012 at paragraph 52.
As at January 1997 Mr C had recently turned 13 years and Mr B had recently turned 12 years of age.
It is not in issue that in January 1997 the applicant commenced employment in the respondent’s equipment supply business known as D, a business the respondent had commenced some 10 years earlier in 1987. As at January 1997 the business was owned and operated by the respondent’s private company D Pty Ltd (“D”).
It is also not in issue that the applicant, having commenced in her employment with the respondent/D as at January 1997 remained in that employment until the end of November 2010, the same period in respect of which the applicant contends that the parties were in a de facto relationship.
In January 1997 the parties commenced cohabitation together with their respective children referred to (other than the father’s already independent daughter Ms M) in the residential part of the property at N Street, Suburb O (“N Street”) a property the respondent had acquired in about 1995 and where the business of D was conducted. As already noted, it did not seem to be ultimately in issue that this was the beginning of a relationship meeting the description of a de facto relationship between the parties.
In 1997 the parties became engaged to be married upon the acceptance by the applicant of the respondent’s marriage proposal.
In late 1997 the respondent purchased a residence at P Street, Suburb Q (“P Street”) in his sole name. The parties and the children, Mr C, Mr B, Mr H, Ms I and Ms J moved into this property in about December 1997.
The respondent contends that in December 1997/January 1998, he and his sons moved back to N Street after a few weeks. The applicant contends that it was in or about March 1998 that both parties, and their respective children, moved back to N Street because the respondent was suffering from allergies at the P Street property.
The respondent contends (at least on one of his versions) that it was in December 1997 that he signed a pre-nuptial agreement which was signed by the applicant some time later.
The respondent’s evidence surrounding the pre-nuptial agreement will be further discussed but it is to be noted here that the respondent provided two versions of the pre-nuptial agreement, one of which is signed, witnessed and dated 7 May 1998 and the other which is dated 30 June 1998.[4] The applicant gave evidence, which I accept, that she did not date any document she signed. These documents have obvious significance to the respondent’s contention that the parties mutually agreed to end their engagement in late 1997 (or early 1998).
[4] Respondent’s affidavit filed 24 October 2012 at paragraph 21 and Annexure “A”.
The respondent contends that it was in late 1997 or perhaps early 1998 (his versions vary) that the parties mutually decided to end their engagement and agreed on fundamentally different terms upon which their future relationship would proceed. The respondent contends that the parties’ intention to marry, and hence the engagement, came to an end from discussions between the parties when he was at P Street in late 1997 or early 1998.
In contrast, the applicant contends that the pre-nuptial agreement was signed by her at about the time of the dates which they bear, namely May or 30 June 1998. The applicant emphatically rejects the respondent’s contentions concerning their engagement ending.
Moreover, the applicant maintains that she and the children also moved back with the respondent from P Street to N Street when the respondent and his sons moved there, but she says this occurred in March 1998.
The applicant contends that she and her children only again moved back to the P Street property in about March 1999 when that property was pending sale and issues had arisen with the property being left vacant during that time.
Thus a fundamental dispute between the parties is the applicant’s contention that the parties cohabitated in the same residences over the period from January 1997 until March 1999, a cohabitation which only came to an end in the circumstances the applicant describes; as compared with the respondent’s contention that cohabitation in the same residence ended, finally, no later than early 1998 in conjunction with the termination of the parties’ engagement and the fundamental changes in the character of their relationship. That is, the respondent contends that he and his sons were living in the N Street property from no later than March 1998 onwards whilst the applicant and her children remained at the P Street property.
In June 1999 the applicant purchased a property at R Street, Suburb O (“R Street”) with the respondent providing $7,000.00 towards the purchase price and a guarantee over the borrowings secured over his N Street property. The applicant and her children moved into the R Street residence upon settlement.
The applicant and her children lived in the R Street property until its sale in August 2007. Upon the sale of R Street the applicant and her two daughters moved into N Street with the respondent. Whilst the respondent agrees (at least on one of his versions) that this occurred, he contends that the applicant remained there for only approximately five weeks and that during that period the parties had separate bedrooms.
In September 1999 the P Street property was sold.
In September 2007, the applicant purchased a property at S Street, Suburb O (“S Street”) in her sole name. The applicant and her children commenced to reside there upon its purchase.
On 22 February 2008, the parties purchased property at T Street, Suburb O (“T Street”) as joint tenants, taking out a mortgage in joint names. Whilst the respondent deposed in his affidavits to the applicant being a “guarantor” for this property it is clear that the property was in fact purchased in joint names as joint tenants. The applicant’s S Street property was provided by the applicant as security for the borrowings used to purchase T Street.
The applicant asserts that it was in April 2009 that T Street was sold, due to concerns by the applicant and her daughters of intoxicated patrons from the pub nearby; the respondent asserts it was sold in February 2009.
In June 2009 the property at F Street, Suburb G (“F Street”) was purchased by the applicant in her sole name with the respondent via D providing $26,000 towards the deposit/purchase.
It is the applicant’s case that it was always mutually intended by the parties that this property be purchased for her son Mr H. It is her case that the $26,000 provided by the respondent/D was provided by way of a gift and not as a loan.
Whilst as will be discussed the respondent seemed to acknowledge in
cross-examination that he had always understood this property was intended to belong to Mr H, he maintained the position in this litigation that because the property was in the name of the applicant it should be treated as her property for the purpose of these proceedings. The respondent maintained in this litigation that the $26,000 advanced was advanced by way of a loan and not as a gift.
On 18 July 2009 the property at U Street (“U Street”) was purchased by D.
In either September or October 2009, the parties purchased a unit at V Apartments, W Street, Suburb X on the Z Region, as joint tenants. The unit at the Z Region is variously referred to in evidence as the V Apartment, the Suburb X Unit, or the Z Region Unit. For convenience, this property will be referred to as “the Suburb X unit”. The parties took out a mortgage in joint names (the respondent contends the applicant was the guarantor) and the applicant again provided S Street as security for the loan to fund this purchase.
A significant issue between the parties is the intention behind the purchase of the Suburb X unit. The applicant’s case is that this purchase was made with a view to the Suburb X unit being a holiday home for the parties and, ultimately, with their future retirement together in mind. The respondent refutes this and contends that this purchase was made solely to advance the business interests of D because of the need for him to attend auctions on the Z Region.
An event which assumed particular significance in the evidence was the parties’ attendance, on 22 January 2010, upon Mr AA, solicitor, regarding, inter alia, the making of a will for the respondent and wills for each of his two sons, Mr C and Mr B. The substance of those discussions will be discussed further later in these Reasons.
On 25 January 2010, the respondent hired Ms BB as his personal assistant. He asserts that on 1 August 2010, Ms BB advised him that the applicant had been:
…directing her to apply money received by the business on a cash basis to meet the applicant’s personal expenditures for a number of months, without the consent of [D].[5]
[5] Respondent’s written submissions filed 7 March 2014 – chronology page 4.
The respondent’s evidence is to the effect that he then put the applicant “under surveillance” until November 2010 when he confronted the applicant about stealing and consequently her employment ended in early December 2010.
On the applicant’s case the parties separated on a final basis on 27 November 2010 at the same time as she resigned from the business. That is, the applicant contends that the parties’ de facto relationship subsisted up until that point on 27 November 2010. She provides a variety of reasons for the parties’ final separation. I accept that the parties’ relationship ended on 27 November 2010.
On 6 December 2010 the parties signed a document described as a Separation Agreement which provided for, inter alia, the applicant to transfer her interest in the Suburb X unit to the respondent. Such a transfer was subsequently effected.
On 29 July 2011 the applicant filed an Initiating Application instituting these proceedings.
In the period under discussion, that is between January 1997 and November 2010 there were some other property transactions undertaken. These include that in about 1997 or 1998 a shed was constructed on the vacant land situated at 2 N Street, Suburb O, which land the respondent had purchased in 1994 at the time of purchasing the property at N Street, Suburb O.
In about November or December 1998 lots 66-68 N Street, Suburb O were purchased in the respondent’s name for the purpose of expanding the business of D. Sheds were built on those parcels of land over about a 12 month period from the date of their purchase.
There are significant disputed issues of fact between the parties on most aspects or circumstances of their relationship over the approximate 14 year period under discussion. Those issues surround the degree to which the parties displayed commitment to each other and their relationship and ultimately as to whether or not they had a relationship as a couple living together on a genuine domestic basis. They also surround the extent to which relevant contributions, within the meaning of the Act, were made.
Evidence
I record that each parties’ case outline document or outline of argument document filed in advance of the trial respectively listed numerous witnesses and affidavits of those witnesses to be relied upon.
The trial was set for three days of hearing and the prospect of completing the evidence within that time frame was remote if all witnesses on either side of the record were required for cross-examination.
In the result, by reference to the “list of material relied upon by respondent” contained in section 3 of the respondent’s outline of argument filed on 21 February 2014 the following affidavits/witnesses (adopting the numbering in the document) were not relied upon by the respondent:
3.3 Affidavit of Mr CC filed 12 October 2012;
3.10 Affidavit of Ms DD filed 23 October 2012 (together with the 3.9 Application in a Case filed on the same day);
3.23 Affidavit of Ms EE filed 23 April 2013;
3.24 Affidavit of Mr FF filed 23 April 2013;
3.25 Affidavit of Ms GG filed 23 April 2013;
3.26 Affidavit of Mr HH filed 23 April 2013.[6]
[6] Transcript of Proceedings 4 March 2014 at pages 154 to 165 and Transcript of Proceedings 5 March 2014 at pages 338 to 340.
Moreover, in the result not all of the witnesses in the case for either party were required for cross-examination upon the understanding that, given the affidavit evidence putting issues in contest in any event, the rule in Browne v Dunn[7] would not be applicable simply because counsel did not require a witness for
cross-examination.[8]
[7] (1893) 6 R 67.
[8] Browne v Dunn (supra).
Further, whilst at the outset of the trial I embarked upon the exercise of making rulings in relation to objections to evidence and dealt with the evidence of Ms II[9] cooperation thereafter between the respective counsel achieved the position that it was unnecessary for that process to be continued with respect to all objections initially taken given that counsel were ultimately able to agree upon the evidence to be excluded.[10] Exhibit 7 in the proceedings is the agreed list which rendered it unnecessary for the Court to make further formal rulings upon the affidavit evidence in respect to any objections initially taken.
[9] Transcript of Proceedings 3 March 2014 at pages 6 to 19.
[10] Transcript of Proceedings 4 March 2014 at pages 136, 137 and Exhibit 7.
Credit issues
Perhaps unsurprisingly, given the vast gulf between the versions of the applicant and the respondent on the central threshold question as to the nature of their relationship over a 14 year period, each party mounted a concerted attack upon the credibility of the other party and their evidence.
Each party seeks to have their own evidence (and where relevant that of the witnesses in their case) characterised as reliable and truthful evidence of an impressive witness on central disputed issues; with the corollary adverse findings being contended for as to the evidence of the other party (and where necessary that of their witnesses) on central issues.
It is necessary to the disposition of this case that credit findings be made.
Some errors or inconsistencies in evidence of a witness may be attributable to the inevitable fallibility of attempting to recount events or circumstances, years after they occurred, and which were not thought at the time to be of particular significance, in a completely accurate or reliable way. Reconstruction, rather than actual memory, may be in play when witnesses attempt to recount long past events or circumstances. This may produce honestly given, but wrong or inaccurate, evidence as opposed to evidence which is the product of deliberate obfuscation.
In my judgment, at least some of the errors or inconsistencies in the respective evidence of each of the applicant and the respondent are more likely than not attributable to these dynamics.
However, as will be discussed, not all of the errors or inconsistencies in their respective evidence are so explained and the applicant’s and respondent’s accounts on many centrally important matters are diametrically opposed.
I have concluded that whilst the applicant demonstrated some significant areas in which her evidence was implausible or unreliable and there are thus reasons to doubt her credibility in respect of some topics of evidence, as will be discussed; this was not to the extent demonstrated by the respondent.
There is an obvious reason for requiring witnesses, when they are sworn to give oral evidence, to tell not only the truth, but to tell the whole truth. Not only is the “whole” truth fundamental to the judicial process in determining the central issues, but confidence that a witness has provided the whole truth increases the Court’s confidence in the overall reliability of the evidence of the witness.
My reservations concerning the respondent’s evidence (and to some degree that of some of his witnesses) was that he (and they) demonstrated an unwillingness or reluctance to provide forthright or complete evidence, the whole truth, on some topics. As will be discussed, this seemed to be a feature of both the affidavit and oral evidence of the respondent and his adult children.
I do not accept that some important errors or inconsistencies in the respondent’s evidence on some fundamental issues can legitimately be attributed to the dynamics earlier discussed. It seemed to me that the respondent demonstrated a preparedness to tailor his evidence to suit the case he advances where he thought it necessary to do so. Moreover, inconsistency permeated much of the respondent’s evidence.
As but one simple but important (given the topic) example of the respondent’s capacity for inconsistency, is that when asked in cross-examination whether he ever considered the applicant to be his “partner” he denied that.[11] Yet in one of his affidavits, the respondent deposed to being “proud” to introduce the applicant to others as his “girlfriend or partner”.
[11] Transcript of proceedings 4 March 2014 page 182: 42.
If every inconsistency in the respondent’s evidence, affidavit and oral, were to be identified, these lengthy reasons would be much longer. I will include some, but not all, of the many inconsistencies in the respondent’s evidence to demonstrate the point that the respondent’s capacity for inconsistency casts a shadow over much of his evidence and leads to the conclusion that the respondent does not provide reliable evidence.
In an overall sense, and whilst certainly not true of every aspect of it, the applicant’s evidence was more persuasive because it did not appear to suffer from these defects.
Rather than separately categorising and discussing the credit findings reached, it is convenient that these be incorporated in the discussion and findings which follow concerning each of the topics of evidence discussed below where relevant.
Relevant to the topic of credit findings is my inordinate delay in finalising and delivering these Reasons and orders.
I record my unreserved apology to both parties for that delay.
However, I ought to emphasise that the credit findings recorded in these Reasons were formulated in the course of evidence from my contemporaneous notes of that evidence.
That formulation was refined to a limited extent with the benefit of the detailed written submissions filed on behalf of each party at the time those submissions were received, not long after completion of the evidence.
Thus, whilst my delay has necessitated my re-reading all the affidavits and documentary exhibits in the trial; as well as reading the transcripts of the evidence at trial in order to finalise these Reasons; the credit findings recorded within these Reasons are those which were formulated in the course of the trial as refined proximate to the trial at the time of receipt of the respective written submissions. Whilst on the topic of my delay I also record that the parties were given some weeks notice of the proposed date of delivery of this judgment rather than the usual notice of a day or so in case either thought it necessary to bring an application to re-open evidence prior to the delivery of judgment. In the event no such application was made.
De facto relationship – threshold issue
Both parties agree that a relationship of some kind existed between them for approximately 14 years. As already noted, the agreed facts are that the parties met in December 1996. Shortly thereafter, in January 1997, the applicant commenced employment at D and she and her children commenced living with the respondent and his sons and the parties engaged in a sexual relationship from this time which continued until 2010 but which, at least from about July 1998, was not an exclusive sexual relationship on the part of the respondent; and the parties’ relationship came to an end in November 2010.
The parties dispute the type of relationship that subsisted over that period and the circumstances surrounding its end, but it is agreed that there was a relationship of some sort that spanned over this period of time.
It is also agreed that on 14 February 1997 the parties became engaged to be married, however on the respondent’s version the parties chose to end their engagement in about early 1998, while the applicant maintains that they continued their relationship and engagement from 1997 until separation in November 2010.
The respondent submits that in the early period leading up to, on the respondent’s case, the decision not to marry in early 1998, and whilst the parties were living in the same residence, “…the relationship was at its strongest and probably was a de facto relationship. In this period the parties enjoyed an exclusive sexual relationship, but that too ceased after the engagement was called off.”[12]
[12] Respondent’s submissions filed 7 March 2014 at paragraph 2.3(a).
In what the respondent describes as “the next phase” of the relationship, from July 1998 to November 2010, the parties continued their sexual relationship. On the applicant’s evidence, from around 2006 until the parties’ separation in 2010, the relationship was “not happy”, stressful and featured diminished sexual activity.[13]
[13] For references to this point see - respondent’s submissions filed 7 March 2014 at paragraph 2.3(a); applicant’s submissions filed 14 March 2014 at paragraphs 2.78 to 2.79.
As already noted, the threshold issue for consideration is whether the parties were in a “de facto relationship” within the meaning of s 4AA of the Act; whether such a relationship existed for the requisite period of two years; and whether it ended on or after 1 March 2009.
The respondent’s case is, in essence, that over the approximately 14 years referred to by the applicant, whilst the parties engaged in a sexual relationship and a friendship and were work colleagues, they only lived together in the same household for an initial period of about 11 months and, after their engagement was terminated, the parties led separate lives albeit maintaining their friendship or a boyfriend/girlfriend type relationship, and their work colleague status.
Applicable law and principles
Pursuant to s 90RD of the Act the Court may declare that a de facto relationship existed or did not exist between two people, including the periods for which such a relationship existed.
Section 4AA of the Act defines the meaning of de facto relationship as follows:
Meaning of de facto relationship
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b)the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3)No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5)For the purposes of this Act:
(a)a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b)a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
(original emphasis)
These provisions render it self-evident that:
a)The focus of the inquiry in a given instance is upon all the circumstances relevant to the particular relationship under consideration to determine whether or not it is to be concluded, as a matter of fact, that the persons have a relationship as a couple living together on a genuine domestic basis (s 4AA(1)(c));
b)The circumstances to be considered may (or may not) include any of those nine circumstances identified in subsection (2) of s 4AA;
c)The interrelationship between subsections (3) and (4) means that the Court is entitled to have regard to such circumstances as considered necessary and a discretion exists as to the weight to be attached to any circumstance as considered appropriate;
d)Importantly, exclusivity (sexual or otherwise) is not fundamental or necessarily determinative given that subsection (5)(b) provides for a person to be in a marriage and a de facto relationship at the same time; or in multiple de facto relationships at the same time.
Numerous authorities have considered the meaning of the phrase “living together on a genuine domestic basis” including in various statutory contexts. Many of them are referred to in the parties’ respective written submissions. It is clear that each case depends on its own facts by weighing up the circumstances, including if relevant those circumstances outlined in subsection 4AA(2).
Whether these parties were in a de facto relationship will depend on an assessment of all relevant circumstances of this particular case. The Court has discretion to attach such weight to any matter as may be appropriate to the particular circumstances of the case but ultimately the question is a question of fact.[14]
[14] Sinclair & Whittaker (2013) FLC 93-551.
In Sinclair & Whittaker (2013) FLC 93-551, the Full Court, in the course of discussing s 4AA of the Act, cited with approval a statement of Fitzgerald J in the Federal Court in Lynam v Director-General ofSocial Security (1984) FLC 91-577 as follows:
51. In coming to the view that a couple had a relationship as a couple living together on a genuine domestic basis the court is to have regard to all of the circumstances of their relationship. Those circumstances may include those specified in ss 4AA(2).
52.Sub-section 4AA(3) highlights that no particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the subject persons have a de facto relationship.
53. Sub-section 4AA(4) provides:
A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
54. Thus, whether or not a de facto relationship, as defined, exists will depend upon an assessment of all of the circumstances of the relationship, each to be given the weight the court thinks appropriate.
55.In Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131 said:
Each element of a relationship draws its colour and its significance from the other elements, some of which may point at one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
56.Many of the submissions put by the appellant in the appeal sought to place significant, if not determinative weight, on particular circumstances. Dent the identification of an error on the part of the trial Judge it is difficult for such submissions to succeed. Merely because another judge may have weighed the circumstances differently does not, of itself, demonstrate error.
The onus is upon the applicant to establish, on the balance of probabilities that the parties were in a de facto relationship.[15]
[15] Briginshaw v Briginshaw (1938) 60 CLR 336; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; and Sinclair & Whittaker (supra).
In my judgment the following circumstances to be discussed comprise the relevant circumstances of these parties’ relationship central to the s 4AA(1)(c) determination. Whilst each of these are discussed in topic form it bears emphasis that each “draws its colour and significance” from each and all of the others and that it is the composite picture that is determinative.
Parties’ working relationship
It is a significant matter of context that throughout the 14 year period under consideration, from January 1997 to the end of November 2010, the parties shared their working lives in working together in the business of D.
Whilst each party obviously performed different roles within this small business and were not, as it were, working “shoulder to shoulder” performing the same job, the fact is that an integral part of the life of each party, their work, centred upon the D business with all of the interactions between them, on a working day-by-day basis, which that entailed over a 14 year period.
One of the numerous descriptors the respondent used in evidence in relation to the applicant and their relationship is that they were “very close work colleagues”.[16]
[16] Respondent’s affidavit filed 31 January 2014 at paragraph 21.
The respondent also acknowledged in evidence to the effect that the applicant was committed in her work with D. Undoubtedly so too was the respondent.
The respondent sought to characterise some facts or events which, on their face, appeared to reflect a far deeper personal interrelationship between the parties, as being no more than the product of the respondent being his employed “personal assistant”. One example is the respondent’s use of this explanation for the fact that he selected the applicant as the person to be identified as his next of kin in hospital records dated 20 July 2000.[17]
[17] Respondent’s affidavit filed 24 October 2012 at paragraph 44.
I interpolate here that in paragraph 44 of his affidavit sworn and filed on 24 October 2012 the respondent asserted that he listed the applicant as his “emergency contact” because she was his personal assistant and asserts that his current emergency contact is his current personal assistant, Ms BB. However, only 12 days prior to swearing that affidavit, on 12 October 2012, the respondent listed his son Mr C as his next of kin on the JJ Hospital records and it was his son who took him to the hospital on that occasion.[18]
[18] Exhibit 21.
This is in my view but one simple example of the respondent seeking to tailor evidence that does not suit his case.
Another example, occurring on 22 January 2010, is the respondent explaining why the applicant would be present in the consultation with his lawyer, Mr AA, concerning such intimately personal matters as the wills to be made for each of the respondent and each of his sons, Mr C and Mr B, as will be further discussed later in these Reasons. For present purposes all that need be said is that offering this explanation does not survive scrutiny and is indeed an example of the kind referred to.
Other examples of this capacity include the content of correspondence authored by the applicant on behalf of the respondent, for example in relation to property transactions. That is, the respondent sought to explain away the personal or relationship connotations to any such documents by characterising the applicant as his “personal assistant” and his reliance upon her in that capacity.
One, perhaps ironic, outcome of the respondent’s characterisation (which I do not in any event accept as delineating the true limit of the parties’ relationship) is that it serves to emphasise the extent to which such a significant part of the lives of each of the parties, their work, intersected in their working lives together over the period of 14 years.
Moreover, the parties’ shared workplace of D was a focal point for other aspects of their respective personal lives. For example, each of the respondent’s sons, Mr C and Mr B respectively, commenced to work for D and be a part of that workplace. So too in due course did the applicant’s son, Mr H, commence (in about 2003) and continue his employment at D completing an apprenticeship in the process. The applicant’s daughter, Ms I, also spent some time on a part time basis working there.
Thus not only was D a focal point in respect of the parties’ relationship but was also a focal point for the relationships between each of them and the other’s children respectively.
Also relevant in this context is that in their working environment at D the applicant used the respondent’s surname. Such use was not exclusively in the workplace setting but the evidence which I accept establishes that this was largely the case, that is, that the applicant went by the respondent’s surname at D and for work purposes and otherwise mainly used her own surname.
The applicant did not do herself credit in denying that one reason for her use of the respondent’s surname was to afford herself some protection from her previous violent partner. Ms BB provided affidavit evidence to the effect that the applicant told her that one of the reasons that the applicant used the respondent’s surname was in relation to her former partner.[19]
[19] Affidavit of Ms BB filed 24 April 2013 at paragraph 17.
In responding to that deposition the applicant asserted in an affidavit that this was not one of the reasons for using the respondent’s surname.[20]
[20] Applicant’s affidavit filed 24 April 2013 at paragraph 115.
Cross-examined about an affidavit she filed in the Magistrates Court in 2010 concerning a proposed change of her daughter’s surname, the applicant had to concede that at least one reason for using the respondent’s surname was in relation to her former partner.[21]
[21] Transcript of Proceedings 3 March 2014 at pages 101 and 102.
However, the respondent also did himself no credit on this topic given the internal inconsistencies in his evidence about it. For example, his assertion in paragraph 132 of his affidavit filed 19 April 2013 that the sole reason the applicant used his surname was to protect herself from her former partner, did not rest comfortably with other affidavit evidence to the effect that he recognised advantage in suppliers and clients of the business believing that he and the applicant were married; nor his oral evidence under
cross-examination to similar effect.[22]
[22] Respondent’s affidavit filed 24 October 2012 at paragraph 45; Transcript of Proceedings 5 March 2014 at pages 276 to 278.
In my judgment, it is probable that at least one reason for the applicant adopting the respondent’s surname in the workplace was as a means of protection from her former partner. However, it is equally clear that this was not the sole reason, particularly as time went on. The respondent acknowledged, however reluctantly, that recognition by suppliers and customers of the D business of the applicant and respondent as married partners in a family business was to the advantage of himself and the business of D. The respondent did himself no credit in attempting to assert as part of his evidence that suppliers and customers might have surmised that the applicant was his sister rather than his wife.
The applicant acknowledged in her affidavit material that using the respondent’s surname did offer her some protection from her ex-partner but asserted that “…this was by no means the predominant reason for me adopting the surname…”[23] moreover the applicant deposes “…I used the surname [De Vries] to give the impression that D was a family business, and that we were [h]usband and [w]ife…I was proud to use the surname [De Vries], and proud of my status as the [r]espondent’s [w]ife”.[24]
[23] Applicant’s affidavit filed 31 January 2014 at paragraph 12.
[24] Applicant’s affidavit filed 31 January 2014 at paragraph 12.
I accept the applicant’s evidence in this respect.
The point in this context is that over the 14 years during which the applicant and respondent worked together in the D business, it is more probable than not that at least some suppliers and customers of the business believed them to be married partners and both parties were content to have that impression promoted to that section of the public.
The significant fact is that in determining the characterisation of this particular relationship an important context of their relationship is that the parties were, throughout the period under discussion, spending their day-to-day working lives together over a period of some 14 years.
Existence and duration of sexual relationship
There is no issue as between the parties that they engaged in and maintained a sexual relationship throughout the period under consideration from January 1997 until November 2010.
In the first of his affidavits filed on 26 September 2011 the respondent describes the parties as engaging in sexual relations a few times a week. [25] By necessary inference, taken from that affidavit, this remained the case throughout the course of the relationship.
[25] Respondent’s affidavit filed 26 September 2011 at paragraph 14(b) and page 9.
On the applicant’s evidence, which I accept on this point, it would seem that the only difference of any substance is the applicant’s evidence to the effect that whilst a sexual relationship was maintained throughout the relationship period under discussion, the incidents or frequency of sexual intimacy was reduced in the latter stages. While there is evidence from the applicant that their sexual relationship diminished from 2006, it was not non-existent and thus, on either party’s version, it continued until the conclusion of their relationship in 2010.[26]
[26] Respondent’s affidavit filed 24 October 2012 at paragraph 28.
It also seemed not to be in dispute that it was recognised by both parties that the applicant could not fulfil all of the respondent’s sexual desires and sexual proclivities. The respondent engaged in sexual pursuits with prostitutes, both male and female. The applicant is, in hindsight, unable to say for certain whether or not they had an exclusive sexual relationship in the initial stages (she obviously thought so at the time), but she acknowledges that the point was reached (it would seem by about mid-1998) that to the applicant’s knowledge the respondent was engaging in sexual exploits with others. For his part the respondent contends that he maintained an exclusive relationship with the applicant up until the time when, he says, their engagement terminated, a topic which will be discussed separately. For her part, and I accept this to be so, the applicant did not engage in sexual relations with anyone other than the respondent throughout the relationship.
It is the applicant’s case that whilst the respondent engaged in sexual relations with prostitutes and others she made a clear distinction between transient sexual encounters, on the one hand, and the maintenance of any emotionally attached relationship, on the other. That is, not only does the applicant reject the respondent’s contentions to the effect that she was merely one of the respondent’s “girlfriends” she rejects any proposition to the effect that during the period of the relationship she contends for, that the respondent maintained any emotionally attached or committed relationship with any person other than herself.
On this topic I find it instructive that in his first affidavit filed 26 September 2011 the respondent does not assert that he had other “girlfriends” as such in the sense of maintaining anything like the level of the relationship commensurate with that which he had with the applicant, even on any description he has of that.
In paragraph 14(c) of that affidavit the respondent refers to engaging in sexual relations “…with at least three (3) other women”. He also refers in subparagraph (d) to engaging the services of women in the sex industry from time to time. Whilst in subparagraph (c) the respondent makes reference to the person Ms KK living with him at the N Street property for a period of six months, the respondent does not there assert a relationship with that person and he does not dispute the applicant’s later affidavit response detailing the circumstances of Ms KK utilising the accommodation referred to which did not involve any sexual or intimate relationship.
Significantly as it seems to me the respondent does not in his affidavit refer to maintaining any other relationships as such nor indeed does he refer to having other “girlfriends”. He also there refers to “relations” with other women but not to any “relationships”. His affidavit is silent as to his pursuit of sexual encounters with males, as he later concedes occurred.
Cross-examined on this topic the applicant maintained the distinction she drew between her knowing and acquiescing in, reluctantly, the respondent pursuing sexual relations with others, as distinct from her permitting or acquiescing in him forming other “relationships”.[27] I accept her evidence.
[27] Transcript of Proceedings 3 March 2014 at page 70:15 to 20.
It is notable that whilst in his affidavit filed 26 September 2011, the respondent makes the specific reference referred to, to Ms KK, he makes no reference to Ms LL, yet in his later affidavit filed 24 October 2012 the respondent nominates “Ms LL” as a “girlfriend” with whom he was having sexual relations “from approximately 2002 until 2004”.[28]
[28] Respondent’s affidavit filed 24 October 2012 at paragraph 14.
Ms LL, the person identified, provided an affidavit relied upon in the applicant’s case and was cross-examined. At paragraphs 3 and 4 of her affidavit Ms LL describes becoming “very close friends with both [Mr A De Vries] and [Ms Hankinson]” and deposes that she had no romantic relationship with the respondent.
In her cross-examination at trial Ms LL steadfastly maintained that she and the respondent did not ever have a romantic relationship nor did they ever have a sexual relationship. Ms LL confirmed that she had never had an intimate relationship with the respondent and she denied the respondent’s assertions to the effect that he and Ms LL slept together on the three different occasions put to her. She denied the respondent’s evidence to the effect that they ever shared a room at the Casino or indeed in any other places.[29]
[29] Transcript of Proceedings 4 March 2014 at pages 146-147.
Ms LL impressed me as an honest, forthright witness independent of any personal interest in the outcome of these proceedings and I accept her evidence. It follows, I find, that the respondent’s evidence in relation to Ms LL is not truthful.
It is submitted on behalf of the applicant that a Jones v Dunkel[30] inference ought be drawn against the respondent in circumstances where the respondent calls no evidence from any alleged “girlfriend” to support his case. It is contended on behalf of the respondent that the principle or inference does not have operation here because the applicant was aware of “the respondent’s sexual activity with others”.
[30] (1959) 101 CLR 298.
It seems to me that this submission on behalf of the respondent misses the point of the distinction between the respondent having casual sexual encounters with others (as the applicant agreed occurred) as opposed to maintaining a “boyfriend/girlfriend” relationship; or having a relationship with any degree of emotional attachment with anyone else that would support his proposition that the applicant was merely one of his multiple girlfriends (as disputed by the applicant).
In my judgment, an adverse inference can be drawn in these circumstances. More particularly the respondent’s failure to call any witness in this context; in circumstances where Ms LL gave the evidence she gave; leads me to the conclusion that the respondent cannot be believed in his assertions to the extent that these can be characterised as him asserting that any emotionally attached relationship, beyond casual sexual relations with any person, was maintained by him with anyone other than the applicant, at any time in the period under discussion.
In Sinclair & Whittaker (supra) one ground of appeal was the contention that the primary judge erred by failing to give adequate consideration to the appellant’s evidence that he maintained “relationships” with other women during the time of the alleged de facto relationship.
At paragraphs [72], [74] and [75] the Full Court, in dismissing this ground of appeal, observed as follows:
72.It is clear that the trial judge did not find that the appellant had other relationships at the time of his relationship with the respondent that were of the same kind and nature as that relationship. His Honour was critical of the lack of detail in the respondent’s evidence. His Honour was also critical of the failure of the respondent to call evidence from any of the persons with whom he asserted he had a relationship.
…
74.The trial Judge, not having accepted that the appellant was engaging in significant relationships with other women at the same time as that with the respondent, cannot be criticised for failing to give them adequate consideration. The determination of that factual issue was quintessentially a matter for the trial Judge.
75.The reasoning process that led his Honour to that view does not disclose any error. Whilst the evidence of the appellant was that he believed he was in a number of significant relationships similar to his relationship with the respondent that belief does not prove the existence of such relationships. The failure of the appellant, to call objective evidence of his own, or of other parties, to support his general statements, not surprisingly, failed to persuade the trial Judge that the appellant’s subjective belief was in fact the position.
(emphasis added)
In my judgment the same observations can be made as to the respondent and his case on this issue.
I do not accept that the respondent was, at the same time of his relationship with the applicant, engaged in other significant relationships of the same kind and nature as his relationship with the applicant.
Notably, in the course of his cross-examination the respondent himself acknowledged the difference or distinction between the applicant attending family functions and any “casual acquaintance”, by inference any person with whom he might have had a transient sexual encounter.[31]
[31] Transcript of Proceedings 8 March 2014 at page 178: 30 and page 179: 30-35.
In the case of the applicant she acknowledged, by reference to the evidence of Ms BB, that she did send photographs of herself naked or semi-naked over the internet to an unnamed man or men. She made reference in speaking to Ms BB to having a “harem”. The applicant’s explanation for this was to the effect that it was done by her to make herself seem more exciting to the respondent. Whilst I doubt this was done for the gratification of the respondent rather than for that of the applicant, I accept her evidence that she did not engage in sexual relationships with others during the subject period and nor did she form any relationship having any emotional attachment with anyone other than the respondent over the subject period.
Whilst the respondent’s submissions would seem to elevate exclusivity as a determinative factor, in my judgment whilst it is relevant that the respondent pursued sexual relations with other men and women, mainly prostitutes, during the subject period, I do not consider this to have the determinative significance sought by the respondent for the reasons already outlined including with reference to subsection (5) of s 4AA of the Act.
In this case there is no dispute between the parties that despite their ongoing sexual relationship, the applicant was unable to fulfil all of the respondent’s sexual desires and her acceptance or acquiescence in the respondent pursuing sexual relations with others does not, of itself, exclude the existence of a relationship which can be characterised as a de facto relationship between the applicant and the respondent.
Engagement and pre-nuptial agreements
It is not in issue that the parties became engaged to be married in February 1997. Then or soon after the respondent presented the applicant with an engagement ring and matching wedding band which the applicant wore continuously throughout the period thereafter until November 2010. Then or soon after their engagement the applicant presented the respondent with a St Christopher’s medal, rather than a ring, because of the respondent’s arthritis, which the respondent wore thereafter.
The parties never married. In different instances the applicant has provided different reasons for that. One reason, she says, is that advice was obtained from the parties’ then bank manager to the effect that the parties’ combined borrowing capacity would be greater if they remained unmarried rather than being treated as a combined single unit as married partners. On another version the applicant’s evidence is to the effect that she did not “need a piece of paper” to confirm the level of commitment between the parties. I interpolate here that even if, as Ms BB suggests (at a later point in time) that the applicant told her that she had no intention of marrying the respondent, that is not necessarily inconsistent with either of the applicant’s expressed reasons referred to.
However, there is a fundamental dispute on this issue because the respondent maintains (and the applicant adamantly denies) that their engagement was in fact terminated.
In considering this issue it is necessary to have regard to the agreements described as “pre-nuptial agreement” in evidence. It is not suggested by either party that such agreements comprise binding financial agreements within the meaning of the Act. Aside from the absence of relevant formalities the agreements were signed prior to the introduction of the amendments to the Act facilitating binding financial agreements.
The pre-nuptial agreements appear at Annexure “A” to the respondent’s affidavit filed 24 October 2012. For convenience I will refer to the agreement bearing the date 7 May 1998 as the “first agreement” and that bearing the date 30 June 1998 as the “second agreement”.
Whilst the substantial content of both agreements is the same it can be readily seen that they are two separate agreements in terms of being produced separately. This is evidenced by the feature that the first agreement has a typewritten comma in the first line where the agreement is to be dated whilst the second agreement does not. The first agreement has clause 6 as part of the first page with no page numbering on the second page and only the signatures appearing on the second page. The second agreement has only five clauses on the first page with clause 6 appearing on the second page, after the page numbering, where the signatures appear.
Moreover, simply by comparing the signatures on each document with those on the other it can be seen that they differ. That is, whilst it is not suggested they are not the signatures of the parties, what is clear is that they must have been signed separately. That is, the signatures are not photocopies.
The first agreement is witnessed by the person identified as Mr JI whilst the signatures of the parties’ upon the second agreement bears no witnessing signature.
The evidence does not address any reason for the existence of two differing iterations of the same agreement in content, or any reasons for the parties signing each iteration.
That aside, what is to be noted is that the first agreement, which was apparently witnessed by Mr JI, is dated 7 May 1998 and the second agreement, the signatures to which are not witnessed, bears the date 30 June 1998. The unchallenged evidence of the applicant which I accept is that she did not date any or either agreement.
It is thus significant to the following discussion that the only versions of the pre-nuptial agreement in evidence are dated 17 May 1998 and 30 June 1998 respectively. Notably it was the 30 June 1998 dated version that was first produced by the respondent in evidence as Annexure “JD1” to his affidavit filed 26 September 2011.[32]
[32] Respondent’s affidavit filed 26 September 2011 at paragraph 11 and Annexure “JD1”.
There are numerous inconsistences in the respondent’s evidence surrounding his case that the parties’ engagement was terminated by mutual agreement.
The respondent advances this case as part of his contention that the character of the parties’ relationship fundamentally changed upon the parties’ mutually agreeing to terminate their engagement.
These inconsistencies relate to the following:
a)The link the respondent seeks to establish between he and his sons (only) moving back from the parties’ then common residence at P Street in early 1998 to return to reside at the N Street property, with the termination of the engagement;
b)The link the respondent seeks to establish between the termination of the engagement and his case that the applicant and her children did not move back from the P Street property to the N Street property;
c)The fact that the respondent maintains the parties mutually agreed to terminate their engagement whilst they were living together at P Street (which ended no later than about March 1998 on the respondent’s case), yet both of the pre-nuptial agreements in evidence bear dates post-dating March 1998.
Paragraphs 11 to 13 of the respondent’s affidavit filed 26 September 2011 are as follows:
11.On or about 30 June 1998, the applicant and I entered into a
Pre-Nuptial Agreement. We signed it in front of a lawyer. Annexed hereto and marked with the “JD1” is a true and correct copy of that Pre-Nuptial Agreement.12.Approximately one (1) month later the applicant and I made a joint decision to end our engagement. The applicant and I had an argument about how she was parenting her children and as a result of that argument I said to the applicant words to the following effect:
“This is not going to work. I am happy to allow you to continue to work at the business and we can continue to have sex but I don’t want a serious relationship, I am going to have a vasectomy, I want to see other women and I don’t want to get married again”.
13.The applicant agreed and in fact said to me words to the following effect:
“I am glad. I want to keep my property separate and have my own life. I want to keep my independence and freedom. I don’t mind just being one of your girlfriends”.
(emphasis added)
Whilst there are some obvious errors as to dates in that affidavit, for example, the date of the parties’ engagement, and the respondent in evidence made it clear he was not “good with dates”, this does not explain poor recollection for events. As can be seen the respondent positively contends in paragraph 11 that the pre-nuptial agreement was signed “in front of a lawyer”. Mr JI is not a lawyer and there is no version of the agreement produced by the respondent which is witnessed by any lawyer.
Notably, on this affidavit the respondent has the sequence being that after the pre-nuptial agreement was signed on 30 June 1998 (as referenced to the date upon the document annexed) that it was about a month later that he asserts there was the mutual decision to end the engagement.
Despite any asserted difficulties with recollection, the respondent gives a direct speech version of the effect of the conversation that occurred between the parties. The problem with his attribution to the applicant of the words “I want to keep my property separate” is that the applicant had no property of any substance until June 1999 when the R Street property was purchased in the applicant’s sole name.
Notably, to the respondent’s knowledge as he was sitting in Court at the time, the respondent’s version of the conversation or exchange between the parties as recorded in his affidavit as outlined above was put to the applicant in the course of her cross-examination by counsel for the respondent. The applicant emphatically denied in cross-examination that any such conversation occurred. She acknowledged that there had been an issue between the parties about the respondent physically disciplining the children given her previous experience of a physically violent relationship, but she emphatically denied any suggestion that in consequence there was any termination of the parties’ engagement. She made the obvious point that she did not in fact own any property.
The respondent’s version as appearing in his affidavit was also put to the respondent in the course of his cross-examination. In that context the respondent completely changed his answers as demonstrated by the following exchanges:[33]
[33] All quoted Transcripts of Proceedings from Auscript contain errors as in original.
COUNSEL:Just to clarify, [Mr De Vries], you were in court when your barrister put this exact same conversation to the applicant, were you not?‑‑‑
RESPONDENT: In court where?
COUNSEL:Sitting right behind your lawyers ‑ ‑ ‑?‑‑‑
RESPONDENT: Yes.
COUNSEL:‑ ‑ ‑ when the barrister put this exact same conversation to [Ms Hankinson]?‑‑‑
RESPONDENT: Right.
COUNSEL: Do you recall that?‑‑‑
RESPONDENT: Yes.
COUNSEL:And do you recall her saying very emphatically that that conversation never occurred?‑‑‑
RESPONDENT: Okay. Yes. She said a lot of things that never occurred.
COUNSEL:All right. So you say that this is exactly the conversation that happened?‑‑‑
RESPONDENT: Okay. I think the property thing might have been a mistake. What she said is she was relieved. Because of the tension that she was under with – with [Mr K], she was relieved that she didn’t have to perform in the bedroom.
COUNSEL:All right. The affidavit that’s filed with the court as evidence in these proceedings ‑ ‑ ‑?‑‑‑
RESPONDENT: That’s right.
COUNSEL:‑ ‑ ‑ says, “I’m glad.” This is what you say she said:
“I want to keep my property separate and have my own life. I want to keep my independence and freedom. I don’t mind just being one of your girlfriends.”?‑‑‑
RESPONDENT: She probably did say that.
COUNSEL: All right. Okay?‑‑‑
RESPONDENT: But she didn’t have any property at that time.
COUNSEL:Okay. You say that this all occurred just before you moved back to [P Street] – back to [N Street], I apologise?‑‑‑
RESPONDENT: Back to [N Street], yes.
COUNSEL:Yes. And this all happened either December ’97 or January ’98?‑‑‑
RESPONDENT: Yes. That’s right.
COUNSEL:All right. Please tell the court why you and [Ms Hankinson] would enter a prenupt agreement in June of ’98? If your relationship had come to an end when you say it did ‑ ‑ ‑?‑‑‑
RESPONDENT: Yes.
COUNSEL:‑ ‑ ‑ why did you have to enter into a prenupt on that date that clearly says you were both contemplating marriage?‑‑‑
RESPONDENT: Because the dates weren’t on the prenup when I signed them.
COUNSEL:Are you saying that they had been ‑ ‑ ‑?‑‑‑
RESPONDENT: They were dated at a later date.
COUNSEL:Are you now saying that someone has doctored them?‑‑‑
RESPONDENT: They were dated at a later date. That’s what I’m saying. I signed it while I was at [P Street]. [Mr NN], my solicitor, came to [P Street]. He told me that I could sign it in front of him, but [Ms Hankinson] would need to get legal advice, and so they were left undated and unsigned by [Ms Hankinson]. Until this court case happened, and I found them, I didn’t know they were signed.
COUNSEL:Well, I suggest to you that the prenupt was signed in or about June of ’98?‑‑‑
RESPONDENT: Right.
COUNSEL: Yes?‑‑‑
RESPONDENT: Yes. If that’s ‑ ‑ ‑
COUNSEL:All right. And I suggest to you the reason that prenupt was signed at that date is ‑ ‑ ‑
HIS HONOUR: Can I just understand your last answer. Are you saying that the agreement was dated sometime later?‑‑‑
RESPONDENT: Yes, your Honour.
HIS HONOUR: So you don’t say you signed it in June of ’98. Is that ‑ ‑ ‑?‑‑‑
RESPONDENT: No. I didn’t sign it. I didn’t sign it in June of ’98. I signed it in December when [Mr NN] brought it to the property.
COUNSEL: All right. [Mr De Vries], where do we find in your affidavit material any reference at all to the prenupt being signed when you were in [P Street] in either December ’97 or January ’98? Where do we find that?‑‑‑
RESPONDENT: Okay. I – everything that I put in my affidavits is – is in there. I don’t know if I mentioned it in my affidavit. All right?‑‑‑I believe it – it could be, but if – if you give us some time, we will try and find it.
COUNSEL:All right. Well, I’m sure your lawyers are working on that?‑‑‑
RESPONDENT: Yes.
COUNSEL:In the meantime, you’ve been aware of that particular document since these proceedings have started, have you not?‑‑‑
RESPONDENT: That’s correct, yes.
COUNSEL:And in fact, it was attached to one of your own affidavits right at the commencement of these proceedings, wasn’t it?‑‑‑
RESPONDENT: That’s right. Well ‑ ‑ ‑
COUNSEL:Right. And that document had June of ’98 on it?‑‑‑
RESPONDENT: Yes. There was two floating around, yes. There was two ‑ ‑ ‑
COUNSEL: There’s two now floating around?‑‑‑
RESPONDENT: There was two floating around at one stage.
COUNSEL:Are you able to ask your lawyers to look for the second one, because I haven’t seen that?‑‑‑
RESPONDENT: Okay. Yes.
HIS HONOUR: You understand, don’t you, [Mr De Vries], that in the affidavit to which you’ve been referred, what you say – I had better show it to you. Have a look at paragraph 11. See, it’s not just attaching the agreement dated that. At paragraph 11, you say “on that date”; that is, the June ’98 date you entered into it?‑‑‑
RESPONDENT: Your Honour, I found the document, and that’s why I wrote it. I found the document when I was writing this, and I took it off the document – the dates. Okay. So I found the documents and I said:
On or about 30 June’ 98, the applicant and I entered into –
because ‑ ‑ ‑
HIS HONOUR: But you now say that’s wrong?‑‑‑
RESPONDENT: Well, I – I remember signing it in front of [Mr NN] at ‑ ‑ ‑
HIS HONOUR: No. Is that wrong – that date? That’s wrong to say “on 30 June”?‑‑‑
RESPONDENT: That’s what’s on the – that’s on there. That’s what’s on the – on the document.
HIS HONOUR: Yes. Is it now wrong? That’s all I want to know. Are you saying that’s wrong?‑‑‑
RESPONDENT: I signed it earlier, yes, and [Ms Hankinson] signed it later.
HIS HONOUR: Okay.
COUNSEL:All right. When did you come to the realisation that there was going to be a dispute about the dates on that prenuptial?‑‑‑
RESPONDENT: I didn’t know there would be.
COUNSEL:Well, your position is that it never happened in June ’98. When did you come to the realisation that the paragraph your Honour just took you to was wrong? Did you know that prior to just now?‑‑‑
RESPONDENT: When you say it’s wrong, I – I’m – I’m saying to you [Mr NN] came out. I signed it. Right? It went in my drawer at work.
COUNSEL: I will get to [Mr NN] in a second?‑‑‑
RESPONDENT: And that was it. That was the end of it for me, yes.
COUNSEL:I understand that. I’m asking you when in these proceedings did you come to the realisation that the date on top of that prenuptial agreement is incorrect in your evidence?‑‑‑
RESPONDENT: Well, I – I – I queried the idea, why is it signed so late, when my solicitors – when I showed it to my solicitors. They said, “Why is it signed in that – that date?”
(emphasis added)
Amongst other things it can be observed from the above evidence given in cross-examination by the respondent that he asserts that he signed the agreement in December 1997 and that his signature was witnessed by his solicitor. Two obvious problems with that are that the agreement, or both versions of the agreement in evidence, bear the typewritten date “1998”. Neither version bears the signature of the solicitor. Any suggestion that a senior experienced solicitor would take the trouble to attend upon a party and witness a party signing such a document, but not himself sign as a witness to that signature, is implausible. No “drawer” version of this agreement signed by the respondent and witnessed by his solicitor is produced. No explanation is given by the respondent as to how he could produce these two versions, but not some earlier version witnessed by his solicitor.
Plainly, by the time he was to be cross-examined, the respondent realised the difficulty with his version that the applicant had made reference to preserving her property at a time when she in fact had no property. Moreover, the difficulty with the proposition that the parties ended their engagement in late 1997 yet signed pre-nuptial agreements in mid-1998 would have been obvious.
In my judgment this is a prime example of the respondent completely altering or tailoring his evidence from time to time to be consistent with the case he propounds rather than being consistent with the truth.
Further inconsistencies are revealed by reference to the respondent’s other affidavit evidence on this topic. For example, in paragraph 21 of his affidavit filed 24 October 2012 the respondent addresses this topic and notes there the identity of the witness as “Mr JI”. Then in his affidavit filed 19 April 2013 at paragraph 16, in responding to a deposition of the applicant, the respondent has his solicitor attending upon him and the applicant when they were living together at P Street to explain the document. He there suggests “[i]t is my recollection she did not sign the document until much later after she had purchased the property at [R Street] when she had assets to protect.” Of course it is not in issue that the R Street property was not purchased until June 1999, a year after the latest date of the two dated documents.
I note in passing that at paragraph 5 of his affidavit filed 16 January 2014 the respondent suggests that it was in November 1997 that he and his sons returned from the P Street property to live at N Street, an event the respondent contends occurred after the alleged mutual termination of the engagement.
I reject the respondent’s version that the parties’ engagement was terminated either by mutual agreement as the respondent contends or otherwise. Moreover the respondent’s lack of credibility and reliability on such a fundamental matter infects, in my judgment, his evidence concerning the related issue of whether or not the applicant and her children returned to reside in the N Street property with the respondent and his sons when that occurred, as will be discussed below.
In my judgment the existence of the pre-nuptial agreements dated May and June 1998 respectively (and I find it is more probable than not that they were in fact signed by both parties then), puts an end to the respondent’s case that the parties’ engagement was terminated. That has the consequence that his case that there was a mutually agreed upon and fundamental change in the character of the relationship upon the purported termination of the parties’ engagement, by reason of that, equally cannot stand.
Family characteristics
In his affidavit filed 26 September 2011 at paragraph 23 the respondent affirmed this to be the truth:
11.The applicant and I did not take on the role of “parental figure” to the other’s children.
In my judgment this is a stark example of the respondent’s capacity to be deliberately untruthful.
Not only did the applicant’s daughters Ms I and Ms J regard the respondent as their father, the evidence establishes that they actually believed that he was in fact their biological father over a period of years. The respondent conceded in cross-examination that Ms I and Ms J believed him to be their biological father until they were told otherwise upon the birth of his grandson, MM, “approximately six or seven years ago” when the respondent refers to his own mother telling the girls that they were “step”.
The respondent’s evidence does not permit of any firm quantification of a dollar amount or value as to his net worth or the net value of his capital contributed at the outset of the relationship. However, for the reasons which follow, I reject the applicant’s contention that the respondent’s initial contribution of capital was “not significant”.
It was in about mid-1994, some years before the commencement of the relationship, that the respondent purchased the properties at 1 and 2 N Street. Whilst the applicant agitates that mortgage debt existed in relation to these properties, the applicant also acknowledges that any mortgages were paid solely by the respondent via his wages and drawings from D.
Whilst it is true that a shed was constructed on 2 N Street in 1997/8 soon after the relationship had commenced, the applicant cannot sensible claim any relevant direct or indeed indirect contribution to that in that period, at least not any greater than that by the respondent, given the comparative circumstances of the parties at that time.
Likewise, that is so with respect to the acquisition of lots 3-4 N Street in November/December 1998 and the sheds constructed upon them.
The N Street properties now have a combined value of $2,140,000 or the equivalent of 80 per cent of the total combined property interests of the parties. Plainly, the respondent’s capacity to acquire these properties in the first place and to fund them thereafter to the point that they are debt free (but held as security for the D overdraft) derives from D.
Moreover, the respondent provided 1 N Street as a home for the applicant and her children, and then the P Street property (purchased in December 1997). Again, having regard to the relevant circumstances or the comparative circumstances of the parties at that time (the applicant having the fulltime care and support of three young children), the applicant cannot sensibly lay claim to any contribution that was not overwhelmed by that of the respondent.
The fact is that the respondent’s established business of D provided the means of the respondent to acquire and maintain these properties.
As already noted, the respondent commenced the business of D in 1987, about a decade prior to the commencement of the parties’ relationship. In June 1995, the company commenced operating the business.
Exhibit 6 contains the 1997 interim accounts for D to April 1997. I accept their accuracy and do not accept, as the applicant would have it, that the veracity of these accounts is to be doubted. I accept that the figures if extrapolated out for a full 12 month period reflect that in the 1997 financial year D probably generated an operating profit before tax in the order of $188,000.
In my judgment, the respondent can be seen to have made a very significant initial contribution of capital when regard is had to:
a)the fact that the business of D was well established and was a viable business;
b)D was the source of funding of the acquisition and debt repayments of the N Street properties, ultimately worth a combined $2,140,000 as above;
c)D as providing both parties with remunerative employment throughout the relationship.
It was from the earnings of each party from employment with D, and the capacity of the respondent as owner to draw from the profits of D over the period of the relationship, that provided the primary source of funding for the property now existing.
In this context, it is relevant to note in passing, matters of legal force and effect aside, that in entering into the pre-nuptial agreement in mid-1998, the applicant acknowledged that the respondent had commenced and established D; that D belonged to the respondent; and that she “has” no claim to it (clause 1).
Likewise, by clause 2 of that agreement, the applicant acknowledged the respondent having other assets, including “motor vehicles, boats, business equipment, stock and furniture” as at the commencement of the relationship to which the applicant had no claim.
Contributions during relationship
The applicant submits, in relation to D, that during the relationship she “made a significant contribution to the business, growing the business until termination of the relationship in November 2010.”
No specific evidence is identified in support of that submission.
Undoubtedly, as already referred to, the applicant applied herself to her work within D and reference has earlier been made to the potential benefit to D of customers and suppliers believing or assuming that the applicant and respondent were husband and wife.
However, this is not a case where a female partner in a relationship has worked for no remuneration or less than commercial remuneration in the male partner’s business. Outside of the brief period of months early in the relationship, which has earlier been referred to, when the applicant received Centrelink benefits whilst her wage from D was reduced, there is no evidence that the applicant was not properly remunerated for her work for D throughout the relationship. Undoubtedly, particularly in the early stages, the applicant’s earnings from employment (and then some) would have been required for the support of her three young children.
Moreover, comparison between Exhibit 6 and the historical summary of profit and loss statements at page 41 of the single expert’s report (Exhibit 4) and the content of that report more generally, does not lend support to any notion that the profitability of D significantly increased over the course of the relationship; or that there was a decline attributable to the applicant’s departure in November 2010.
At paragraph 2 of the single expert’s report (Exhibit 4) there is set out some detail as to the general operations of the D business. Notably, at paragraph 2.4 there is a description of the three primary activities of the D business. It is clear that the applicant undertook administrative tasks within D and also undertook a sales role and marketing, but there is no suggestion that the applicant had or utilised the technical skills involved in the underlying functions of the business. That was the respondent’s role, together, in time, with his sons (who became shareholders in 2005) and other employed staff.
I therefore do not accept that, outside of the scope of being a remunerated employee, the applicant can be said to have made a contribution to D in the form of “growing the business” over the period of the relationship; nor do I accept that her role went beyond that for which she was properly remunerated throughout the course of the relationship.
In discussing the threshold issue, it can be seen that numerous findings have been made to the effect that it was the respondent who provided the applicant with additional financial support in assisting her with the needs of her children and references are also made to the respects in which the respondent assisted the applicant financially in acquiring property interests. The $7,000 he provided to enable her to purchase the R Street property ultimately is reflected in the S Street property which the applicant currently holds.
It can be accepted that the applicant contributed her income to the acquisition, conservation and improvement of the property she now holds. The essential question though, in the peculiar circumstances of this case, is the assessment of contributions of each party in circumstances where, for most of the relationship, they each maintained separate residences.
It can be accepted that from her earnings, derived from D and social security payments, the applicant contributed to the mortgage and outgoings on the R Street property. That property was purchased in June 1999 with the respondent providing $7,000 for the deposit. From June 1999, the R Street property provided the primary residence, not only for the applicant, but for her three children. That remained the position until August 2007.
I have earlier recorded findings as to the extent of the respondent’s visits and thus use of that property, but so too, there were visits and use by the applicant of the respondent’s property at 1 N Street.
It can likewise be accepted that the applicant contributed her earnings to the mortgage and outgoings on the S Street property which she still owns.
I accept that the applicant paid electricity and telephone accounts for the T Street property together with some rates payments, over the period of about twelve months when that property was owned by the parties as joint tenants between about April 2008 and April 2009. However, it was the respondent who paid the mortgage for that property whilst the T Street property provided a home not only for the applicant but also her children, save in respect of Mr H who commenced living with Mr B De Vries in about 2007.
Notably, it was the respondent, via D, who provided $26,000 to enable the purchase of F Street, Suburb G for Mr H’s benefit.
It can be accepted as a contribution by the applicant, that she allowed the S Street property to be used as security for other purchases, such as T Street and the Suburb X unit and indeed she contributed via assuming the obligations of a joint mortgagor with respect to those acquisitions.
It can also be accepted that the applicant provided a financial contribution in the form of grocery items and meals shared by the respondent on his regular visits and I accept that the applicant would sometimes pay for meals out “when she could afford to do so”. However, it must also be acknowledged that the respondent’s financial support in this respect probably outstripped, by a significant margin, the applicant’s contribution.
Remembering that the proceeds of sale of the R Street property were ultimately applied to subsequent acquisitions, and effectively are reflected now in the S Street property, it is notable that the respondent acted as a guarantor for the applicant to purchase the R Street property initially.
The applicant, as already discussed, has acknowledged significant financial assistance from the respondent with respect to the financial needs of her children, including paying for their expenses, or assisting in that payment, and for such matters as, for example, contributing to Ms I’s orthodontic costs.
Just as the applicant provided grocery items and meals for the respondent’s benefit, so too did he provide a like benefit when the applicant was in attendance at his N Street premises.
The applicant acknowledges that it was the respondent who funded the parties’ holidays (mainly with the applicant’s children) and reference has already been made to the respondent’s provision of a nanny to assist the applicant with her young children over the period to approximately 2004.
The applicant acknowledges the respondent’s provision to her of motor vehicles and gifts.
In my judgment, the overarching and interrelated factors which particularly resonate in the assessment of the parties’ contribution-based entitlements over the period to trial are these:
a)There were no children born to the relationship, that is, there was no “child of the de facto relationship” within the meaning of s 90RB of the Act;
b)Both parties came to the relationship with children of previous relationships. However, the respondent’s sons Mr C and Mr B were significantly older than the applicant’s two youngest children Ms I and Ms J. To the extent that each party contributed via a parenting-type role of the children of the other, as they undoubtedly did, that role or contribution by the respondent to the applicant’s children subsisted for longer and was more intensive than vice versa, given the comparative ages of the respective children;
c)The applicant had to devote income she earned during the relationship to the financial support and care of her children throughout their childhoods and the period of the relationship rather than to the relationship itself or for the mutual benefit of both parties. Whilst that was true also to some extent of the respondent in the earlier years, he had greater income. Moreover, this factor is put in perspective when it is brought to mind that the respondent’s sons Mr C and Mr B commenced working and earning their own incomes at a time when the applicant’s daughters Ms I and Ms J were still in primary school. Ms I and Ms J were aged 16 years and 14 years respectively when the parties’ relationship ended in November 2010;
d)The respondent made overwhelmingly greater financial contributions for the benefit of the applicant’s children as compared with any contributions by the applicant to the respondent’s children;
e)Other than the common residence period between January 1997 and March 1999 (a little over two years out of about 14 years) each party essentially maintained their own primary residence. In that setting, the applicant’s homemaking role was primarily for the benefit of herself and her children. To an extent, the respondent benefitted from the applicant’s homemaking role, both pre and post the common residence period, but at the same time, throughout the post-common residence period, the respondent was maintaining his primary residence and was performing a homemaking role from which the applicant and her children benefited;
f)The comparative circumstances of the parties, from the outset of their relationship, dictated that, overwhelming, it was the respondent who provided the applicant and her children with significant financial other support;
g)The above factors are in the context of the stark disparity between the parties’ comparable circumstances at the outset and their initial capital positions.[100]
[100] In the marriage of Mehmet (No. 2) (1987) FLC 91-801 per Nygh J; In the marriage of Robb (1995) FLC 92-555; see also s 90RB of the Act “Meaning of child of a de facto relationship”.
To the above list may be added that over the more than three year post-separation period to trial, the applicant has maintained her property interests now representing about 11.2 per cent of the combined total, whilst the respondent has maintained 88.8 per cent of that total. As already discussed, the majority of the respondent’s property items were held by him from essentially the outset of this relationship or soon after its commencement from the respondent’s existing capital base.
Conclusion on contribution-based entitlements
Neither party contended for an asset-by-asset approach, and both adopted a global view of addressing contribution. I am satisfied that a global approach can be taken which legitimately achieves a just and equitable outcome.
Balancing the competing considerations in the unusual circumstances or factors of this case, it cannot be concluded that on an holistic assessment, the parties’ contributions can be assessed as anything close to equal or near-equal, as the applicant contends.
Conversely, I do not consider that a proper assessment of the parties’ contributions reflects, in the case of the applicant, that it ought not exceed the value or amount of her presently existing property, representing about 11.2 per cent of the combined total.
In my judgment, the appropriate assessment of the parties’ contribution-based entitlements is 80 per cent/20 per cent in favour of the respondent of the parties’ combined property interests (including superannuation).
Relevant s 90SF(3) factors
The parties’ respective written submissions identify and address the s 90SF(3) factors which are relevant to this case.
Taken from her Financial Statement, the applicant earns a gross annual income of $82,368. The respondent’s future earnings are “tied” (as the respondent’s submissions put it) to the earnings and destiny of D.
In the 2013 taxation year, the respondent’s salary was $100,000 gross and the single expert witness ascribes a commercial salary for the respondent’s work of $150,000 gross. Obviously, the trading performance of D dictates the payment of dividends.
Whilst the respondent will probably derive a greater income from D whilst he maintains his work within D, than will the applicant from her employment, it is relevant that:
a)The valuation of D undertaken by the single expert derives from the capitalisation of future maintainable earnings as assessed;
b)There was an existing earnings capacity disparity between the parties at the outset of the relationship and one far greater than the now existing figures demonstrate;
c)The applicant is almost ten years younger than the respondent. Whatever notional retirement age is selected, the fact is that the applicant will have about ten years longer than the respondent to continue to derive income from employment and to accumulate assets including superannuation. The value of that capacity is obviously significant in circumstances where it will be retained solely by the applicant.
The 60 per cent disparity produced by the 80 per cent/20 per cent contribution assessment equates to about $1.6 million of the combined net assets of the parties, including superannuation.
A 20 per cent outcome to the applicant equates to $534,134.20 in circumstances where, at the outset of the relationship, the applicant had no assets and the sole responsibility for three very young children. The applicant will retain her residence and her superannuation and will receive a lump sum cash payment from the respondent.
I am keenly aware of the need to distinguish between contributions under s 90SM(4) and the s 90SF factors[101] and the risk of “double counting”. However, inevitably, factors such as those expressed in sub-paragraphs (j) and (k) of s 90SF(3) and sub-paragraph (r) “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account” may require consideration of relevant circumstances in undertaking both the contribution assessment and the assessment of these factors. In this case, I have earlier identified what I have described as the over-arching factors of particular significance in the peculiar circumstances of this case.
[101] In the marriage of Horsley (1991) FLC 92-205.
An explanation for the significance or weight to be given to s 75(2) factors (the corollary of s 90SF(3)) in a given case was provided by Fogarty J in Waters & Jurek[102] as follows:
In some cases, an adjustment is called for because it would be unjust for the roles and activities of a party, which were recognised until separation, and which largely determined or influenced the personal development of that party and the arrangements between the parties, to suddenly count for little, while those of the other party, which were of equal significance during the marriage, to now have a far greater financial impact outside the home – in circumstances where it was the joint decision of the parties that that be the way in which they would conduct their affairs…
[102] (1995) FLC 92-635 at 82,379.
In my judgment, this case can be seen to be the antithesis of the kind of case referred to by his Honour in terms of the roles or activities undertaken by these parties during the relationship.
The Full Court has observed on several occasions that it is not the purpose of s 79 of the Act (or by inference s 90SF(3)) to enable the Court to engage in “social engineering” or to “even up” the parties’ financial positions on divorce.[103]
[103] For example, Waters & Jurek (supra) and Kennon v Kennon (1997) FLC 92-757.
In this case, the parties arranged their lives in a way which saw both of them working within D and in the case of the applicant, her acquiring property for herself as well as having the respondent’s assistance in acquiring property for her son.
It cannot be said that the employment role performed by the applicant during the relationship limited in any way the development of her skills for employment or was not given, during the relationship (given the applicant’s remuneration for her work), significance it will not in future have given her continued capacity for employment and the fact that she likely has an additional approximate 10 years of earnings as compared with the respondent.
Balancing the competing considerations by reference to the s 90SF(3) factors overall it is my assessment that an adjustment in favour of the applicant is required. Five per cent of the combined total worth, in dollar terms, is $133,530 (in round figures). Obviously an adjustment of 5 per cent in favour of one party produces a disparity between them of 10 per cent or the equivalent here in real value terms of about $267,000. In my judgment a 5 per cent adjustment properly reflects the outcome of the competing considerations.
An overall outcome to the applicant of 25 per cent represents a total of about $677,000 (in round figures). Taking into account the net value of the property the applicant holds (including superannuation) that outcome is achieved by requiring the respondent to pay to the applicant, in a rounded down figure, $350,000.
In considering the just and equitable requirement, which obviously permeates this exercise, whilst I recognise that the applicant may have a liability for legal costs, it is not appropriate, as the applicant contends, that orders be now made in respect of the applicant’s costs. That would be contrary to the authorities referred to in Chorn and Hopkins (supra), and in that case itself. Questions of costs are properly determined discretely from the outcome of property orders.
Orders
For the reasons already outlined, a Declaration is to be made pursuant to s 90RD of the Act in the terms sought by the applicant that a de facto relationship, within the meaning of s 4AA, existed between the applicant and the respondent during the period from January 1997 to November 2010.
There will not be the further Declaration sought by the applicant as to the ownership of D as I have determined otherwise.
As already noted, 25 per cent of the combined value of the parties’ existing property interests (including superannuation) is $667,000 in round figures.
The applicant holds property interests (including superannuation) worth $316,076. I am aware that the value of the superannuation the applicant holds ($73,214 in total) exceeds 25 per cent of the parties’ combined superannuation interests. However, given the parties’ respective ages, it is just and equitable that the applicant receive the adjustment amount in non-superannuation via a cash payment.
I consider it reasonable to allow the respondent 60 days to meet a cash payment of the adjustment amount, in a rounded figure of $350,000. It will thus be ordered by way of property settlement pursuant to s 90SM that the respondent pay to the applicant the amount of $350,000 within 60 days of the date of the orders.
No orders in default of payment being made were sought or argued.
There ought also be an order for the respondent to indemnify the applicant in respect of any claimed loan or debt via D referable to the F Street property given my findings.
For these reasons I make the orders set out at the commencement of them.
I certify that the preceding five hundred and eleven (511) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 25 September 2015.
Associate:
Date: 25 September 2015
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Jurisdiction
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Natural Justice
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Procedural Fairness
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Remedies
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Costs
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Appeal
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