Hogg v Roberts

HOGG v ROBERTS
[2003] SASC 410
Full Court: Doyle CJ, Perry and Gray JJ

DOYLE CJ: Ms Roberts and Mr Hogg lived in a de facto relationship between late 1994 or early 1995 and about May 2000. They had two children of the relationship.
After they separated Ms Roberts brought proceedings in the District Court under the De Facto Relationships Act 1996 (SA) (“the Act”). Ms Roberts claimed an order that a house in joint names at Goolwa North (“the Goolwa house”) be sold, that the proceeds be divided (presumably equally), that a payment be made to her by way of maintenance for the children of the relationship, and a further payment referable to Mr Hogg’s occupation of the Goolwa house.
Mr Hogg opposed the claim. He claimed a payment from Ms Roberts referable to debts incurred in a business which he said they conducted as partners. He acted for himself.
After a hearing over some nine days, the Judge ordered that Mr Hogg pay to Ms Roberts the sum of $56,000.00, in return for which she was to transfer to him her interest in the Goolwa house. If he did not make the payment, the Goolwa house was to be sold and the amount of $56,000.00 was to be paid to Ms Roberts. The house was valued at $140,000.00.
Mr Hogg appealed. He represented himself on the appeal. His grounds of appeal and written submissions are detailed. In effect, he has re-argued the whole case.
The Act
The power of the District Court judge is to be found in s 10 (1) of the Act, which provides as follows:
“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.”
The approach to be taken to the exercise of that power is governed by s 11 (1), which provides:
“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.”
In the present case there was no cohabitation agreement.
The Judge was required, as far as practicable, to resolve all questions about division of property and to avoid further proceedings: s 12.
The Act is in terms similar to legislation enacted in other Australian states relating to the division of property as between de facto partners. However, there are differences from state to state. In particular, not all states have an equivalent to s 11 (1)(d). While decisions under legislation in other states provide helpful guidance, one must be cautious about their application if there is a difference in the relevant legislation.
My understanding of the Act is that the requirement to make an order that is “just and equitable” does not give rise to a general and unfettered discretion. First of all, the court is dividing property, not settling all outstanding financial issues as between the partners. Secondly, s 11 (1) indicates that the contributions referred to in that provision are important considerations in deciding what is just and equitable. The initial and primary focus must be on the property in question, contributions to that property, contributions to financial resources and then contributions by one party to the other and to the children.
However, the obligation under s 11 (1)(d) to have regard “to other relevant matters” means the contributions are not the only matter for consideration. It is to be noted that the court must have regard to “relevant matters”. I think that must mean matters relevant to a just and equitable division of property. The provision is not as wide as, for example, a direction to have regard to such matters as the court thinks fit.
Bearing that in mind, I consider that it is not the role of the court to use the division of property to remedy any justified grievances that one party may have against the other, or to compensate one party for disappointed or unfulfilled expectations. The focus appears to me to be on a just and equitable distribution of property, after considering primarily contributions of the kind identified by s 11 (1) of the Act. The task of the court is a narrower one than the task of the court under s 79 of the Family Law Act 1975 (Cth). The relevant considerations are more narrowly confined. Matters that are likely to be relevant are the length of the relationship and the immediate needs of the parties. I say “immediate needs” because the court’s focus is on the division of property. In deciding what is “just and equitable”, the needs of the parties at that time will be relevant. However, the court is not dividing property with a view to providing, for example, for the continuing maintenance of the parties, or taking into account their future financial prospects.
Other matters may be relevant. It would be dangerous to try to draw a line here in the abstract. I go no further than to say that the focus is on the just and equitable division of property, and not on an order that is fair having regard to all the circumstances surrounding, and everything that happened during, a relationship.
I agree with the observations made in decisions in other states that the court is not concerned with attributing fault for the breakdown of the relationship; that contributions as home maker and parent are not to be treated as inferior to material or financial contributions, they are to be taken into account in a substantial way; that contributions of a non-material kind are to be assessed in a broad way, rather than by reference to the rate of remuneration payable to commercial providers of such services, and that there is no reason to approach the matter on the basis of an assumption that an equal division is appropriate, unless there is good reason to depart from that position. I draw those propositions from the reasons of Gleeson CJ and McLelland CJ in Equity in Evans v Marmont (1997) 42 NSWLR 70 at 74. Although the legislation under consideration there was relevantly different, I consider that these basic principles apply to the Act.
In Parker v Parker (1993) 16 Fam LR 863 Young J suggested a four stage approach which will often be helpful. The four stages he suggested (at 870) are:
“(i) to identify and value the assets of the parties;
(ii)to determine whether any, and if so what contributions of type A or type B had been made by each partner;
(iii)to determine whether in the circumstances the contributions of the applicant had already been sufficiently recognised and compensated for;
(iv)to make the appropriate adjustment.”
Once again, he was concerned with different legislation, but the process he suggested is likely to prove helpful under the Act. However, I emphasise that this is simply one approach. In some cases a broader approach will work better. There is no need to take what might be called a narrow approach involving a careful tracking of income and expenditure, contributions made and benefits received. The legislation requires a reasonably broad and practical approach.
Between stages (iii) and (iv) it will be necessary to consider whether there are “other relevant matters” to be considered. It will also be necessary to bear in mind that the object is to divide property in a “way that is just and equitable”. As I have said, I do not treat that expression as opening up all aspects of the relationship, but it appears to me that the matters identified in s 11 (1) of the Act do not alone dictate the order to be made under s 10 (1). They are matters to be considered, they are important, but they will not necessarily be decisive.
What I have just said does not provide any solutions. Difficult questions will arise along the way. I have done no more than identify what seems to be the appropriate process of reasoning.
The Judge’s findings
Most of the Judge’s findings of fact appear to me to be fairly straightforward. Nothing was put to us by Mr Hogg that persuades me that the Judge has erred in his findings. Most of Mr Hogg’s criticisms went to the manner in which the Judge arrived at the order to be made.
The parties were in a de facto relationship for about five years between 1995 and 2000. They had two children born in 1995 and 1997 respectively.
Ms Roberts did not have paid employment during the relationship. She received social security payments that were applied to the support of the children and of the family unit. She spent her time caring for the children and for Mr Hogg, and contributing in other ways to the family. The Judge found that she put considerable efforts into establishing the garden of a property at Kanmantoo in which the parties lived in the first years of the relationship. She borrowed about $4,000 that was applied to renovations of the Kanmantoo property. She spent some relatively small amounts on items used for or at that property. When the Goolwa house was purchased she contributed to the purchase costs. The Judge did not make a finding as to the amount of that contribution. As best I can tell it was no more than a few thousand dollars.
Mr Hogg was a police officer when the parties met. He purchased the Kanmantoo property late in 1994 for about $45,000.00. Some time in 1995 he retired from the police force. He received a retirement payment of about $113,000.00. He used about $70,000.00 to pay the balance owing on the purchase of the Kanmantoo property, and to make improvements to the house on the property. He used about $30,000.00 to set up a boat building business. In short, the Kanmantoo property was paid for almost entirely by Mr Hogg.
In April 1999 the parties purchased the Goolwa house for $118,000.00. The Kanmantoo house was sold for $113,000.00, and the entire proceeds were applied to the purchase of the Goolwa house.
However, it has to be borne in mind that the Judge found that Ms Roberts had made a substantial contribution to establishing a garden at the Kanmantoo property. That probably added something to its value. She had borrowed about $4,000.00 that was applied to renovations to the property, and had spent some other smaller amounts on the property. She made a contribution to the gap between the proceeds from the Kanmantoo property and the amount that had to be paid for the Goolwa house.
Although the Judge did not take this approach, on his findings it appears to me that Mr Hogg paid about five-sixths, or a little more, of the purchase price of the Goolwa house. I would treat Ms Roberts as having added to the value of the Kanmantoo property, and would allow for her cash contribution to the purchase of the Goolwa house, in arriving at this conclusion.
The Goolwa house was put in joint names. Mr Hogg did this because he believed the relationship would be long term, and to protect the children in the event of death.
The Judge found that the Goolwa house was worth $140,000.00 as at trial.
I add that once Mr Hogg retired from the police force, on the Judge’s findings he was in receipt of either unemployment benefits or Austudy payments once he began to study for a new career. The Judge found that there was no evidence that the boat building business provided any significant income.
Accordingly, during the relationship Ms Roberts and Mr Hogg were both in receipt of government benefits of one kind or another, which they appear to have contributed to the support of the family unit.
Each of them had various items of personal property. There was some dispute before the Judge about who took what. My understanding is that the Judge took the view that these items were not significant in the overall scheme of things. The focus of the parties was on the Goolwa house.
There was some debate before the Judge about debts said to have been incurred by the parties as partners in the boat building business established by Mr Hogg. The Judge found that the claim by Mr Hogg for a payment to him in respect of his debts was not proved. Neither the basis of the claim was clearly made out, nor was the amount of the claim. In any event, the Judge found that Mr Hogg abandoned that claim during the proceedings. Although Mr Hogg complained of this on appeal, my view is that in light of the manner in which Mr Hogg conducted his case, the Judge rightly put that claim to one side.
Comment on findings
The Goolwa house was in joint names. Mr Hogg contributed at least five-sixths of the purchase price. Ms Roberts’ contribution of one-sixth came through the financial contributions referred to and through her work in establishing the garden at the Kanmantoo property.
During the relationship each party was in receipt of government benefits, which were contributed to the support of the family. There was no clear evidence about the amount of these payments, and the Judge was entitled to treat the contributions in this respect as about equal. The same can be said of contributions that each party made to the general maintenance and upkeep of the Kanmantoo house and the Goolwa house.
On the Judge’s findings Ms Roberts made a substantial and greater contribution than Mr Hogg as homemaker and as carer for the children. Her efforts enabled him to work in the boat building business, although that business appears to have generated no significant income for the family. It may also have enabled him to pursue his studies. Her greater contribution in this respect will provide a basis for ordering a payment to Ms Roberts that is greater than the approximate one-sixth of the purchase price contributed by her. But it has to be remembered that Mr Hogg was working in the boat building business, presumably with a view to benefiting the family.
My view is that contributions to “financial resources” could be put to one side. There appears to have been a general pooling of the government benefits that each party received, and no basis for treating either party as having made a greater contribution than the other in that respect.
A relevant matter is the fact that the Kanmantoo property was acquired with funds that Mr Hogg had or gained access to at the commencement of the relationship. They are an asset that he brought into the relationship. No contribution was made to these funds by Ms Roberts.
The Judge’s decision
Ms Roberts had been supporting the children of the relationship since the parties separated. Mr Hogg’s contribution to their support was minimal. She claimed a payment of $25,000.00. The Judge made no allowance for that.
The Judge made allowance for the fact that Mr Hogg had occupied the Goolwa house since November 2000. He noted that the likely rental value of the property was about $115.00 per week. He did not specify the allowance that he had made. Presumably it was of the order of about $12,000.00. (His decision was made in June 2003).
The Judge said that he took account of “the substantial financial contribution” by Mr Hogg to the purchase of the Goolwa property, the value of that property, Ms Roberts’ contributions to the Kanmantoo property, her homemaking and parenting contributions during the relationship, and the allowance that should be made for Mr Hoggs’ occupation of the house. On that basis he fixed the payment to Ms Roberts at $56,000.00. He gave no indication of how the matters referred to led him to that figure.
Issues on appeal
I have indicated why the Judge’s decision not to order Ms Roberts to make a payment in respect of the partnership debts was correct. For what it is worth, it may remain open to Mr Hogg to pursue Ms Roberts for those debts.
Mr Hogg argued that there was no satisfactory proof that Ms Roberts’ efforts at Kanmantoo added to the value of the property. The same could be said of various items of expenditure relied on by him. The Judge was entitled to decide that the work made some difference to the value of the property.
Mr Hogg objected that in allowing for the value of his occupation of the Goolwa property, the Judge failed to allow for outgoings Mr Hogg had met. That appears to be correct. I doubt whether this would have any significant effect on the final decision. He said the Judge should have allowed for the fact that Mr Hogg had given up his career in the police force, and was now studying to pursue another career. This affected his ability to earn income. I reject that submission. While the Judge appropriately would have regard to the means of the parties at the time, the Act did not authorise him to compensate Mr Hogg in some way for the loss of the career, or to penalise Ms Roberts for the fact that Mr Hogg had given up his career. However, in relation to the allowance for the occupation of the Goolwa house, I agree that the Judge should have allowed only an amount equal to half of the rental value, bearing in mind that Mr Hogg was a joint owner. On the information before the Judge any allowance in this respect in favour of Ms Roberts should not have exceeded about $5,000.00.
As to the claim by Ms Roberts in respect of the support of the children, Mr Hogg made some vague complaints that Ms Roberts was defeating the statutory scheme for child support. I did not understand his submission in this respect, but I am satisfied that there is no substance in it. It was proper for the Judge to make an allowance on the basis of Ms Roberts’ parenting contribution. Her contribution was greater than Mr Hoggs’. As well, this Court’s decision in Arnold v Dalton [2002] SASC 429; (2002) 84 SASR 482 required the Judge to make an allowance for the parenting contribution Ms Roberts made to the children, in the form of supporting them, between the end of the relationship and the hearing of the claim: at [50].
Mr Hogg understandably pointed to the difficulty of his position. He is no longer in the police force. He is now studying for a new career, living on Austudy payments. He has nowhere else to live. He is unable to borrow on the Goolwa property, because he has no ability to repay any amount borrowed. It is a relevant factor that he has very limited income at present. I am prepared to accept that he would find it difficult to obtain employment, although there is no reason to think that is not possible. But Ms Roberts appears to be in a similar position. She also is living on government benefits, and would find it difficult to obtain employment while caring for the children. It seems to me that in this respect the parties’ positions are pretty much the same. If Ms Roberts had other assets, or other sources of income, Mr Hogg’s position might be a relevant matter, leading to the making of a lesser award in favour of Ms Roberts. But in the circumstances it seems to me that as the Goolwa house is the only available asset, the approach that the Judge took is correct (subject to the question of the amount).
Mr Hogg argued that the Judge had ignored his contributions to the Goolwa house and to the relationship. I do not accept this submission.
Accordingly, by and large I reject the submissions made by Mr Hogg.
Conclusion
Although I reject most of Mr Hogg’s submissions, there remains the question of whether the Judge’s order was appropriate.
The Judge’s reasons disclose no error of principle, although as I have mentioned he might have allowed too much for Mr Hogg’s occupation of the Goolwa house, and should have made an allowance in favour of Ms Roberts for the support of the children to the time of trial.
The only way to test the Judge’s approach is to consider for myself what appears to be an appropriate order, and then to see how that compares with the Judge’s order.

The relevant asset is the Goolwa house valued at $140,000.00. I put to one side personal property. This asset is almost entirely attributable to funds that Mr Hogg had at the commencement of the relationship. Treating the purchase price of this property as about $120,000.00, I estimate that his contribution represents at least $100,00.00 or at least five-sixths. Applied to the present value, that would suggest that Ms Roberts’ contribution to the Goolwa property should now be estimated at $23,000.00.
No adjustment should be made either way on account of contributions to the maintenance and upkeep of the Kanmantoo property or the Goolwa property. Their contributions in this respect are about equal. The same applies to their financial contributions to the family unit.
An adjustment of about $5,000.00 should be made in favour of Ms Roberts on account of Mr Hogg’s occupation of the Goolwa property. (That brings the adjustment in her favour to about $28,000.00). A further adjustment should be made in her favour because during the relationship her contribution to homemaking and parenting was greater. A further adjustment is to be made on account of her greater contribution to the upkeep of the children to the time of trial. This is difficult to assess, because it appears the government payments to Ms Roberts would have been a significant factor in supporting the children. But Ms Roberts has provided accommodation that the children use, undoubtedly has made a financial contribution to their upkeep, and has been the main provider of parenting. These two matters require recognition in a substantial way.
Doing the best I can, I would increase the adjustment in her favour from $28,000.00 to $40,000.00. This may seem a modest increase, but it has to be borne in mind that the adjustment is to be made only to the extent that her contribution in these respects is greater than that made by Mr Hogg, thus entitling her to an adjustment.
I cannot identify any other matters that are relevant, calling for a further adjustment. The relationship was not a long one. Neither of them has other assets nor income (currently) other than government payments. The sale of the Goolwa house (if it occurs) will cause hardship to Mr Hogg. But the court cannot refuse to make an otherwise appropriate order on that basis. Ms Roberts is entitled to a payment, and her financial position, is, broadly, no better than that of Mr Hogg.
I consider that an order for the payment of $40,000.00 to Ms Roberts is just and equitable. The difference between that amount and the amount that the Judge awarded is sufficient to indicate error on the part of the Judge.
I would allow the appeal, set aside paragraphs one and four of the judgment and orders of 18 June 2003, and substitute for those paragraphs an order that the plaintiff recover from the defendant the sum of $40,000.00 plus interest in the sum of $800.00, and a further order if that sum is not paid by 15 March 2004, the property be sold and the sum of $40,000.00 plus interest of $800.00 be paid to the plaintiff from the net proceeds of sale.
PERRY J: I agree with the order proposed by Doyle CJ and with his reasons.
GRAY J: This appeal should be allowed. I agree with the order proposed by the Chief Justice. I agree with his reasons.

[2003] SASC 410

18 December 2003