Hewitt v Purdie No. DCCIV-02-693
[2003] SADC 3
•29 January 2003
HEWITT v PURDIE
[2003] SADC 3Judge Lunn
Civil
This action is a claim by the plaintiff under the Defacto Relationships Act 1996 (“the Act”). Although there was no counterclaim by the defendant, it was accepted that the Court should bring into account her claims against the plaintiff in the orders which are to be made.
Both parties acted in person throughout the proceedings and apparently did not have the benefit of legal advice in respect of them. There was no proper pleading of either the claim or the defence. The purported pleadings were no more than a general statement of the relief sought by each party.
The trial was very short. Neither party was in a position to present their cases properly. Both wanted the matter resolved without delay. Very few documents were tendered in evidence. The oral evidence of what occurred was vague and generalised. The parties had little appreciation of what was relevant to the issues under the Act. Most of the evidence was elicited by my questioning the parties. There was virtually no cross examination. The only evidence was that of the parties themselves and what was contained in a few documents which were tendered. The plaintiff intended to call another witness, James Hann, but did not do so after it became apparent that his evidence related to matters in or before 1991 which were not relevant to the current dispute. I can only do my best to resolve the issues on the evidence, such as it is, which I do have.
As there were no proper pleadings, at the commencement of the trial I questioned the parties to elicit what were the relevant issues between them. Where their answers to my questions did not indicate a dispute I have treated the information given by the parties from the bar table as agreed facts. I confined my questioning of the parties during their sworn evidence to the topics which I believed to be relevant and in dispute from what I had been told earlier. However, it was a very rough and imprecise method of determining the issues. From some comments which were made later in the trial it appeared that there had been other disputes between the parties relating to various items of personal property and the like, but they had elected not to pursue them in this action.
On disputed matters I have no way of knowing whether the plaintiff or the defendant was the more credible witness. There was virtually no cross examination on credit. Other than a general perception that the defendant was probably more reliable on dates than the plaintiff, I am unable to find that one was any more credible than the other. I make my findings below based on the common ground between them, the contents of the documents and what in the other circumstances, as I find them to be, appears to be the most plausible and probable explanation of what occurred.
From what I was told by the parties in my preliminary questioning of them I am satisfied that this is an action in which this Court does have jurisdiction under the Act. The parties did “live together on a genuine domestic basis as husband and wife” for well in excess of three years and that relationship did not end until after 5 September 1996. The parties were resident in this State during the whole of their relationship and when the summons was issued on 9 May 2002.
On the plaintiff’s version of events the defacto relationship ended in late 1999, although the parties continued to live separately and apart in the same house until he moved out on 11 May 2001. The defendant maintained that the defacto relationship subsisted until 11 May 2001 and ended on that day. If the plaintiff is correct about the date of the end of the defacto relationship, his application is out of time under s9(3) of the Act as it was not brought within one year after the end of the relationship. However, even if that is correct, I would be prepared to extend the period to avoid serious injustice to him. Although the point was not raised at the trial, I infer that the defendant would not have opposed such an extension as she too wanted the property issues resolved by this Court without delay.
As best I can, on the evidence which I have I find the following relevant facts to have been proved on the balance of probabilities. In 1984 the parties commenced living together in a defacto relationship. They were never legally married. The defendant already had a son from an earlier relationship who lived with them in their family unit, but he was never adopted by the plaintiff. There were no children of the relationship between the parties.
Until about 1997 or 1998 the parties lived together in a house at Nuriootpa which was rented by the plaintiff alone from the South Australian Housing Trust. In about 1991 the defendant purchased a Magna car for $10,000 out of moneys she received from the settlement of a motor vehicle accident injury claim.
From 1984 to about 2000 the plaintiff had various employment as a labourer and a driver. He also had periods of unemployment when he received social security benefits. Prior to 1990 he had hurt his lower back which thereafter incapacitated him for work from time to time. As a result of this disability on occasions he received WorkCover payments, social security sickness benefits and apparently at some later time after about 2000 the equivalent of an invalid pension. During the defacto relationship he had no source of income other than these earnings, social security benefits and rent from certain properties which will be mentioned later.
In about 1993 the defendant fostered her sister’s daughter who lived with the parties as part of their family for some years. The defendant was paid a foster parent’s allowance of $200 per fortnight for caring for this child. Up until about 1996 when the plaintiff was not employed both parties received a single social security benefit. However, after about 1996 any social security benefit was apportioned between the parties and paid to them separately. From 1984 until May 2001 the defendant was not employed and did not have any income other than that mentioned.
During the relationship each party maintained a separate Bank account. The records of these accounts were not put into evidence. They never conducted any joint bank account. Most of their financial transactions during the relationship were conducted in cash and apparently few records were kept of them. Most of the plaintiff’s earnings, the social security benefits and the foster parent payments were applied to paying rent and other basic living expenses. There was generally no spare cash to save or invest. Until about 1997 they lived very much “from hand to mouth”.
In about 1996 the plaintiff bought a second hand transportable home for $1,600 which he paid for by selling a car which he had. The plan was to then buy a block of land on which the house could be placed and to renovate the house so that it could be used as the family home. However, a number of complications thwarted the ready implementation of this plan.
In about 1997 the parties jointly bought a block of land at East Terrace, Truro (“East Terrace”) for $12,000. A deposit of $2,500 or $2,000 was paid on this purchase. That deposit came from $7,000 which was received on the sale of the Magna car which had been purchased by the defendant out of her accident settlement moneys in 1990. The plaintiff conducted the sale of the car on behalf of the defendant. It is unclear what happened to the balance of the proceeds of its sale. The balance of the price of East Terrace was obtained by vendor finance which required the parties to pay $200 per fortnight. There was a substantial, and apparently unexpected, delay between purchasing East Terrace and the transportable house being placed on it and being made ready for occupation.
At this point in the history there is much uncertainty and confusion about the dates when various events occurred. Some of the assertions about dates are probably wrong. As it is the evidence that there was only about $4,000 left owing on East Terrace at the time the debt was refinanced with the Commonwealth Bank, it is likely that there was a much greater interval between the purchase of East Terrace and the parties leaving Nuriootpa than the plaintiff suggested.
In what was probably about 1998 the parties jointly purchased a block of land at the Esplanade, Truro (“the Esplanade”) for about $33,000. That amount was wholly borrowed from the Commonwealth Bank on a joint mortgage. Another second hand transportable house was purchased for $2,000 and about $2,500 was paid for transporting it to the Esplanade property. Those amounts also came out of moneys borrowed from the Commonwealth Bank. Money was also borrowed from the Bank to pay for tradesmen to install the transportable house at the Esplanade property and also the one at East Terrace. The plaintiff also did some of the necessary work himself. However, it all took a substantial time. At some indeterminate point the loan from the Commonwealth Bank was extended to pay out the vendor finance on East Terrace. After all of these transactions, and the purchase of another car for the defendant for $2,700 out of moneys obtained from the Bank, about $67,000 was owed by the parties jointly to the Commonwealth Bank and apparently secured by mortgages over both East Terrace and the Esplanade. That loan has been repayable at the rate of $497 per calendar month.
On a date which is unclear, but which was probably not until 1998, the parties left the Nuriootpa house. It is uncertain whether they were formally evicted or not, but at the time there were substantial arrears of rent which have resulted in a debt for the plaintiff as at 30 September 2002 of $2,359. Some of this amount may be interest and/or charges. I accept because of its plausibility the defendant’s contention that these arrears accrued largely because the parties had over-committed themselves financially in making the vendor finance payments of $200 per fortnight on the East Terrace property.
Upon leaving the house in Nuriootpa the parties moved into the Esplanade house where they each continued to live until 11 May 2001. They moved into the Esplanade house because East Terrace was not then fit for habitation. Further work was done on East Terrace and during the year 2000 it was rented out for $120 cash per week. That rent was used to pay the instalments on the Commonwealth Bank loan. There was a vague suggestion that there was a Housing Improvement Act Order made on the East Terrace house which apparently restricted its letting but I have no details of it. During about early 2001 it was occupied by the defendant’s son who had by then apparently left the parties’ home, but he did not directly pay any rent for it.
From about late 1999 the relationship between the parties deteriorated. The plaintiff was in the course of forming a relationship with another woman, Michelle Matthews. It is impossible on the evidence to make any finding about when the parties ceased to live together on a genuine domestic basis. When I put to the defendant the question:
"Q“You heard him say that you were living separately and apart under the same roof since late 99, what do you say about that?”
She gave the somewhat strange answer:
"A“I wasn’t aware of that.”
It is likely from late 1999 until 11 May 2001 there was increasing animosity between the parties and a less close relationship than previously, but it is not likely that the previous relationship broke down completely until close to 11 May 2001.
On 11 May 2001, in a situation of high acrimony, the plaintiff moved out of the Esplanade house and went to live in Kapunda in a new defacto relationship with his girlfriend, Michelle Matthews. Within a short time of 11 May the defendant also moved out of the Esplanade house and went to live in the East Terrace house where she has lived on her own ever since. She has been unemployed and on various forms of social security benefits.
In mid August 2001 the plaintiff, without the concurrence of the defendant as its joint owner, rented out the Esplanade house for $120 per week. It has remained rented out on this basis until trial. The plaintiff has received the rent payments in cash which he says he has used to make repayments on the Commonwealth Bank loan. The defendant has unsuccessfully claimed an entitlement to these rent moneys. She has apparently claimed a share of them in her declarations of income to Centrelink and in her taxation returns, but I have no evidence to assess what the financial implications of this have been for her.
There were various negotiations between the parties after May 2001 in an effort to resolve the property issues. Apparently the defendant moved into the East Terrace property on the basis that she would receive the whole title to that property. However, various other incidental matters could not be agreed and no legally binding agreement was ever reached. Under s67C of the Evidence Act what occurred in the course of those negotiations is not admissible in evidence in this trial.
As at 10 September 2002 the parties jointly owed $66,103 to the Commonwealth Bank on the loan. At trial the monthly repayments were in arrears by about $400. From the documents which she produced I accept the defendant between 19 November 2001 and 21 September 2002 has made six payments out of her own moneys off that loan totalling $1,525. I accept that the other repayments to date after the end of the defacto relationship have come from the rent received from the Esplanade house and from the plaintiff’s own money. On 5 October 2001 the defendant paid the Emergency Services Levy debt of $141 on both properties. The plaintiff has paid insurance premiums of $ 160.
At trial it was agreed that the current value of the Esplanade property was about $68,000 which was based on the latest Government valuation. There was a dispute about the value of East Terrace. The only evidence of its current value is the latest Government valuation of $55,000 and I accept that as being about correct.
Sections 10 and 11 of the Act provide:
“Power to make orders for division of property
10. (1) On an application for the division of property, the court may make orders it considers necessary to divide the property of either or both the de facto partners between them in a way that is just and equitable.
(2) For example, the court may make orders for-
(a) the transfer of property from one de facto partner to the other; or
(b) the sale of property and the division of the net proceeds between the de facto partners in proportions decided by the court; or
(c) the payment by one de facto partner of a lump sum to the other.
Matters for consideration by the court
11. (1) In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court-
(a)must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the de facto partners to-
(i)the acquisition, conservation or improvement of property of either or both partners; or
(ii)the financial resources of either or both partners; and
(b) must consider the contributions (including homemaking or parenting contributions) made by either of the de facto partners to the other partner or to children of the partners or either of them; and
(c) must have regard to the terms of any relevant cohabitation agreement; and
(d) may have regard to other relevant matters. .........”
Assuming the deposit on East Terrace to have been $2,500, and as there was $4,000 left owing on the vendor finance when it was paid out through the Commonwealth Bank loan, there must have been about $5,500 paid off that vendor finance on East Terrace by the instalments of $200 per fortnight. (There is no evidence there was any interest payable on the vendor finance.) This would suggest that there was about a year between the settlement on the purchase of East Terrace and its refinancing through the Commonwealth Bank loan. As the plaintiff was working in this period it would seem that most of this $5,500 came from his earnings.
Assuming that the Commonwealth Bank loan was taken out in about mid 1998, repayments under it at $497 per month until trial would have totalled about $27,000. (As about $66,000 was still owing at September 2002 it would suggest that little more than interest and any bank charges have been paid off.) As set out below about $15,000 was received in rent for the two properties until trial which was generally applied against the Commonwealth Bank repayments leaving an amount of about $12,000 which has been paid off the loan by the parties from their other individual or joint resources. It is likely that most of this $12,000 was paid before May 2001 as since August 2001 the rent from the Esplanade has been almost sufficient to pay the instalments. During the period from mid 1998 until 2000 when the plaintiff was working the portion of that $12,000 paid in that period would have come largely from his earnings, but when it was paid in times when he was not working and the parties were on social benefits, it would have been paid equally out of their social security entitlements. After May 2001 the defendant paid $1,525 off the loan. On a very broad axe basis, which is all that is available on the evidence, I find that of this $12,000, $8,000 was paid by the plaintiff and $4,000 by the defendant.
I find that the identifiable direct financial contributions of the parties to the acquisition of the East Terrace and Esplanade properties and the repayment of the Bank loan was as follows:
Contribution Amount of contribution From plaintiff From defendant Joint East Terrace transportable 1,600 1,600 Deposit East Terrace 2,500 2,500 Paid off East Terrace loan 5,500 5,500 Rent from East Terrace in 2000 6,000 6,000 Rent from Esplanade to trial 9,300 9,300 Other payments off mortgage as above 12,000 8,000 4,000 Total $36,900 $15,100 $6,500 $15,300
On the available evidence it is impossible to perform any meaningful accounting about the payments made by each party for rates, taxes, insurance premiums and other outgoings on the properties. Insofar as they are still outstanding they should be apportioned jointly between the parties. Insofar as each party has paid some of them they should each bear that without any further accounting for them. While an inquiry by a Master could be ordered in relation to them the costs and delay of it would not be warranted in view of the very broad axe approach the Court has been forced to take on other more substantial matters.
The defendant has had the benefit of the occupation of East Terrace since May 2001. An appropriate notional rent should be brought into account against her to compensate the plaintiff for not having received a corresponding benefit from the properties in that period. While East Terrace was rented out for $120 per week in 2000 I do not accept that as being an appropriate rate of rent for this purpose. As rent for the Esplanade has been $120 per week, and that is substantially the better property, the appropriate notional rent to be debited against the defendant is 55/68ths of that rent, which is $97 per week. On the basis that it will take until at least the end of March 2003 to finalise the property division the defendant will be required to give a half share of this notional rent, being $4,000, to the plaintiff in the final accounting. Insofar as the finalisation of arrangements extends beyond the end of March 2003 the defendant is to be debited with half of $97 per week in the final accounting between herself and the plaintiff for any period after the end of March in which she remains in occupation of East Terrace.
Although this was a long defacto relationship the property acquisitions in issue only occurred in the last few years of it. While the plaintiff has made greater direct financial contributions to the acquisition of the properties than the defendant, allowance is to be made to the defendant for non-financial contributions made by her in the relevant period for her homemaker and domestic support role in the relationship. For this purpose I accept that the relationship lasted in some form until, or close to, May 2001. Both parties made contributions of labour to the general improvement and maintenance of the properties but it is impossible to quantify them. Under s10 of the Act I find it just and equitable, but subject to the other adjustments mentioned, the equity in the two properties should now be divided between the parties in the proportion of 55% to the plaintiff and 45% to the defendant.
I will direct that both properties be sold and all outstanding outgoings in relation to either property, the balance of the Bank loan and the debt of $2,359 for the Nuriootpa house be paid out of the proceeds of sale. The nett amount remaining is then to be divided between the plaintiff and the defendant in the proportion of 55/45, but with the defendant paying an additional $4,000 to the plaintiff and any further amount attributable to her occupation of East Terrace after March 2003.
As it was always the intention of the parties that the defendant should have the East Terrace property I will further order that if she so elects before 28 February 2003 in lieu of the East Terrace property being sold the plaintiff will transfer his interest in that property to her for $34,250 and she is to bear all of the transfer costs. If she makes this election, and the sale of the Esplanade is not sufficient to satisfy the Bank loan and the other liabilities, she will also have to pay to the plaintiff half of any deficiency and procure the plaintiff’s release from the Bank loan.
There will be no order in respect of the legal costs incurred by the parties in earlier negotiations or of this action.
The judgment of the Court made on 29 January 2003 after the trial of this action is:
1.That there be a division of property between the parties under Part 3 of the De Facto Relationships Act as follows:
(1)That the East Terrace and Esplanade properties each be sold by means as agreed by the parties or as fixed by a Master of this Court;
(2)Out of the nett proceeds of sale be paid:
(a) the amount required to discharge the Bank loan;
(b) all outstanding outgoings in respect of East Terrace and Esplanade;
(c) the $2,359 debt to the SA Housing Trust, and
(d) the balance divided as to 55% plus $4,000 to the plaintiff and 45% less $4,000 to the defendant.
(3)The defendant is to give vacant possession of East Terrace to enable its sale to be duly settled.
(4)If the defendant remains in occupation of East Terrace after 31 March 2003 in addition to the above payment she is also to pay $97 per week to the plaintiff for each continued week of her occupation of that property after that date.
(5)Insofar as either party has paid any outgoings in respect of either property out of his or her own money since 15 January 2003 that party is to be reimbursed in full for that payment in the final accounting between them.
2.That notwithstanding paragraph 1 above, if the defendant gives notice of election under this paragraph in writing to the plaintiff on or before 28 February 2003, the provisions in paragraph 1 will be varied as follows:
(1)The plaintiff will transfer his interest in East Terrace to the defendant at the cost of the defendant for the payment by the defendant to the plaintiff of $34,250, but only if he is given a complete discharge from the Bank loan.
(2)Insofar as the nett proceeds of the sale of Esplanade:
(a) are not sufficient to pay (2)(a), (b) and (c) and (5) above the defendant will pay half of the deficiency to the plaintiff on or before the transfer under (1);
(b) produce a surplus after the payments of (2)(a), (b) and (c) and (5) above that surplus will be divided as to 55% to the plaintiff and 45% to the defendant.
3.There will be no other orders for relief under the Act including any order as to the costs of this action.
4.The parties may apply to a Master for incidental directions for giving effect to this order.
I point out to the parties that each has a right under s43 of the District Court Act to appeal to the Full Court of the Supreme Court against this judgment. Any such appeal must be instituted within 14 days of the date of this judgment, or within such further time as the Supreme Court may allow, by lodging a notice of appeal in the Supreme Court, 1 Gouger Street, Adelaide and paying the necessary fee.
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