I and M

[2005] FCWA 40

JURISDICTION:

FAMILY COURT OF WESTERN AUSTRALIA

ACT:	FAMILY COURT ACT 1997
LOCATION:	ALBANY
CITATION:	I and M [2005] FCWA 40
CORAM:	HOLDEN CJ
HEARD:	11 & 12 APRIL 2005
DELIVERED:	28 APRIL 2005
FILE NO/S:	PT 2852 of 2004
BETWEEN:	I

Applicant/Father

AND

M

Respondent/Mother

Catchwords:

DEFACTO PROPERTY - 6 year relationship - significance of defacto applicant's significant initial contributions

Legislation:
Family Court Act, 1997, ss205ZG(3)(4), 205ZD(3)

Category: Not Reportable

Representation:
Counsel:

Applicant Father:	Mr F Castiglione QC
Respondent Mother:	Mr S Walker

Solicitors:

Applicant Father:	Hudson Henning & Goodman
Respondent Mother:	Helen Marshall

Case(s) referred to in judgment(s):

Nil

1 Before me for determination are the competing applications of a couple who formerly lived in a de facto relationship. Each seeks orders for settlement of property.

Background

2 These proceedings were commenced by Mr I (hereinafter referred to as "the applicant"). He was born on 8 April 1957 and is 48 years of age. The respondent is Ms M (hereinafter referred to as "the respondent"). She was born on 9 July 1955 and is 49 years of age. The parties met in late 1997 and commenced cohabitation in the home of the applicant any in January 1998.

3 The applicant had been previously married and had three children. When they commenced cohabitation the applicant's son, N, was residing with them. He was then approximately 13 years of age and lived with the parties throughout the relationship. His other son, B, was about 8 years of age. He was living with his mother in but came to stay with the parties for about half of most school holiday periods. The applicant also had a daughter, D, who was about 15 years of age when the parties commenced cohabitation. She lived with the parties for a period of approximately 12 months in the year 2000. The respondent had two children, S and T, who were aged 20 and 21 respectively at the time. Apart from short visits with their mother, they did not reside with the parties. The parties separated on about 12 January 2004. The relationship was therefore of 6 years duration. The case proceeded on the assumption that the relationship between the parties was such as to constitute a de facto marriage, thus attracting the relevant provisions of the Family Court Act 1997 (“the Act”).

4 Prior to the commencement of cohabitation and some years previously, the respondent had been in a de facto relationship with a Mr C. When she and Mr C separated in July 1996, they entered into an agreement whereby:

(a)

Mr C agreed to transfer all of his right, title and interest in a 1992 Holden Commodore to the respondent; and

(b)

to procure the payment by Mr C Pty Ltd of the sum of $1,000 per fortnight to the respondent for a period of 15 years. Although a copy of the agreement was annexed to the affidavit of the applicant, it was unsigned. It is unclear whether the agreement was ever signed but suffice it to say Mr C has honoured his obligations pursuant to the agreement and the case proceeded on the basis that he would continue to do so.

Assets as at commencement of cohabitation

5 Prior to the commencement of the relationship, the applicant had received a workers compensation payout in relation to a back injury he sustained while working. He received $205,000 net of which $30,000 was for general damages and $190,000 was for loss of future earning capacity. The bulk of the award was used by the applicant to fund the building of a home on the property and for the purchase of a motor vehicle. It was this home that the parties commenced cohabitation. I find that as at the date of commencement of cohabitation the applicant had the following assets:

DESCRIPTION VALUE

$

Home property	186,000.00
1/5th share another property	24,000.00
Bank accounts	10,281.00
Holden Berlina	15,000.00
Rodeo 4 wheel drive vehicle	19,000.00
Home contents	8,000.00
Tools	4,000.00
Business bank account	451.21
Telstra shares	1,170.00
Boat and trailer	900.00
Honda 3-wheel motor bike	500.00
TOTAL	269,302.21

6 The fact that the applicant was possessed of these assets at the commencement of cohabitation was contentious in only two respects. As a result of the cross-examination of the applicant's real estate valuer, the respondent asserted that the home property had a value of $186,000, and not $190,000. I am satisfied that as a result of the cross-examination of the valuer, the correct figure is $186,000. The reality is that whether it was worth $186,000 or $190,000 will have absolutely no impact on the outcome of this and one is left to wonder why the value remained an issue.

7 The other contentious item was the Holden Berlina motor vehicle. Neither party introduced any evidence as to its value although the applicant asserted it would have had a value at the time of $22,000, whereas the respondent stated it was worth $15,000. I am satisfied that the respondent's estimate is more likely to be accurate as the vehicle had been purchased for $27,030 over two years prior to the commencement of cohabitation and was sold approximately 13 months afterwards for $12,000. In any event, as in the case of the home property, not much hinges on this dispute as on any version of the evidence, the applicant introduced substantial assets.

8 The applicant also had a financial resource in the form of superannuation which had a value of $16,257.18 as at the date of commencement of cohabitation. In all probability so did the respondent but the evidence does not disclose what it was worth at that date.

9 The respondent, on the other hand, introduced the following:

DESCRIPTION VALUE

$

BankWest account	40,708.00
AMP shares	500.00
Caravan	13,000.00
TOTAL	54,208.00

10 Initially, the applicant did not accept that the respondent had a bank account of $40,708 because the account was in her name as trustee for her daughter. I am of the impression, however, that by the end of the trial there was no longer an issue that the respondent introduced these moneys. In any event, even if the issue remained, I am satisfied on the evidence that the money in fact belonged to the respondent.

Financial history of the relationship

11 At the commencement of cohabitation, the applicant had a small home handyman business. He deposes to the fact that the business "made enough to get by". He closed down that business in 1999. When he closed the business down he commenced to receive Centrelink benefits for N and a disability pension which he continued to receive throughout the relationship. He is still a disability pensioner. According to the respondent, he supplemented his pension by doing odd jobs for cash.

12 Throughout the relationship the respondent received $1,000 per fortnight tax free from Mr C. Apart from some limited casual work at a Chinese restaurant, she did not work outside the home during the relationship. In or about 2002, she also commenced receiving disability benefits from Centrelink.

13 In February 2001, the applicant purchased a property at a cost of $45,141. The parties then moved to live with the applicant's father on a rent-free basis for about six months whilst the house was being constructed on that property. The home property was sold and the applicant netted $213,516.38. The proceeds were applied to the purchase of the new property and the building of a home on that property. This property was sold in 2004 for $237,000. $85,000 was advanced to the applicant in order for him to purchase another lot in the same location. The balance of the proceeds of sale, together with interest, remain in a trust account pending the outcome of these proceedings.

14 Throughout the relationship, the applicant disposed of various assets which he had owned at separation, namely:

(a)	the Holden Berlina vehicle in February 1999 for $12,000 which was contributed to general living expenses;
(b)	the one-fifth share property. The proceeds of sale were used to purchase the Nissan Patrol motor vehicle and some Brambles and Coles Myer shares and the balance, which I cannot specify, was used for living expenses;
(c)	the Rodeo 4-wheel drive sold in October 2003 for $13,000, the proceeds being applied towards the purchase of the Nissan Patrol motor vehicle;
(d)	Telstra shares from which $4,200 was contributed to general living expenses;
(e)	boat and trailer sold for $600 or $700 in 1999 and the proceeds were applied to general living expenses; and
(f)	the Honda motor bike sold in 1999 for $500 which was again applied to general living expenses.

15 Approximately a year prior to the cessation of cohabitation, the applicant received a gift of $15,000 from his father. Upon the death of his father and post-separation, the applicant received a distribution from his estate of $41,407.80. Shortly before trial, he received from the estate 520 Wesfarmers shares which he sold for approximately $21,000. He also inherited a one-sixth share of another property at which, at trial, had an agreed value of $7,250.

16 During the course of the relationship, the respondent acquired various shares at a cost of in excess of $32,700.

Assets and liabilities as at the date of trial

17 I find the assets and liabilities as at the date of trial to be as

follows:

DESCRIPTION	APPLICA	RESPO
NT	NDENT

$ $

Solicitors' trust account 5,648 5,000

BankWest trust account	148,619
One-fifth share property	85,000
Nissan Patrol	17,000
Trailer	120

10,000 8,000

Household contents

Legal fees added back 35,000 9,926

Bank account	15,000
Shares	53,954
Jewellery	3,000
Caravan
6,850

TOTAL 301,387 101,730

18 Neither of the parties has any liabilities except for future legal fees. It therefore follows that the net value of the asset pool available for distribution between the parties is $403,117.

19 Each of the parties has a financial resource in the form of superannuation. According to their Form 13s, the applicant’s amounts to $23,897.40 and the respondent’s $11,051.00. These amounts are not to be regarded as property as the superannuation amendments have not yet found their way into the Family Court Act.

20 It is necessary for me to make a number of comments with respect to my findings as to the assets of the parties and they are:

(a)	I have not included in the list the following:
(i) one-sixth property share $7,250
(ii) applicant's BankWest account

$12,320

(iii) Hudson Henning and Goodman Trust

Account to the extent of $10,000

The reason they have not been included is that they can be directly traced to the applicant's inheritance post-separation. Counsel for the respondent conceded that the respondent had made no contribution to that inheritance and they have therefore not been included;

(b)	I have not included a Hyundai Sprint registered in the name of the respondent with an agreed value of $3,500. I am satisfied that on the evidence, even though the car is registered in the name of the respondent, it is the property of her daughter;
(c)	the respondent initially valued her jewellery at $1,310 whereas the applicant estimated its value to be $10,150. Neither of the parties produced any expert valuation evidence. In closing counsel for the respondent submitted that I should adopt a value of $3,000 which was consistent with the evidence of the respondent and the only sworn evidence of value. I intend to accede to that submission.

21 The applicant's assertion is based upon the fact that the respondent has in her possession an engagement ring given to her by Mr C. He asserts in his evidence that the respondent had once told him that the ring was extremely valuable and worth something in the vicinity of $27,000. The evidence does not satisfy me that the respondent has a ring with anything like that value. In any event, I accept her evidence that she has given the ring to her daughter and that she did so well before the cessation of cohabitation.

22 Having declined to take various of the applicant's assets into account for the purposes of the contribution issue, I am nevertheless mindful that they will be relevant when it comes to a consideration of the s 205ZD(3) factors as will the parties superannuation.

The case for each of the parties

23 It is the applicant's case that the proceeds of sale of the second home presently held in trust should be disbursed so as to divide the assets of the parties 27.5% to the respondent and 72.5% to him. I should pause to observe that he contended that the respondent's entitlement on the basis of contribution ought to be 25% in the event that I included assets that could be directly traced to his inheritance but that if I did not include them, then 27.5%. Given that I have found the asset pool to be $403,117, the effect of the applicant's proposal is that the respondent should receive assets to a value of $110,857. As she already has assets to a value of $101,730 this would require a payment to her of $9,127 from the trust account. He says that the 27.5% entitlement of the respondent ought to be based solely on contribution and there ought to be no adjustment for the s 205ZD(3) factors.

24 The respondent's case, on the other hand, is that she ought to receive 40% of the net value of the assets based entirely upon contribution. Her case is that if I award her any less than 40% then the balance ought to be made up as a result of a consideration of the s 205ZD(3) factors.

25 At the outset I wish to make it clear that, as so often happens in property cases, each of the parties has gone out of their way to maximise their contributions and minimise the contributions of the other. In this case this is more so on the part of the respondent.

26 In paragraph 39 of her affidavit of evidence, she said:
"39. For the entire period of the relationship save for 2

months in 2003 when I went to the eastern states to be with my daughter and wasn't physically present, I paid for all groceries, household supplies and cleaning products. I bought everything from washing powder to the applicants shampoo …"

27 In paragraph 51 of that affidavit, she said:

"51. Throughout the relationship I paid for all meals at cafes or restaurants, all hotels and motel and other accommodation and all fuel and food during the holidays the applicant and I took together."

28 It became apparent from the applicant's credit card statements that neither of these comments was true.

29 They disclosed various payments of the kind described by the respondent. In addition, the respondent admitted during the course of her oral evidence, that in respect of one of their trips to the Northwest of the State they had each contributed $1,000.

30 I am first required to consider the financial contribution made by each of the parties. I am satisfied that the respondent made a significant financial contribution. However, I am not satisfied that she contributed all of her income to the household. She came into the marriage with approximately $40,000 in cash. She was able to purchase in excess of $37,700 worth of shares. She was able to purchase a computer for herself and assist her children in significant ways. Furthermore, she was able to spend a considerable sum over the years at the casino. She was able to do all of these things but yet still leave the relationship with savings of approximately $21,000. Put another way, she materially improved her financial position during the course of the relationship. I am satisfied that she could not have done so had she contributed all of her money to the household. Having said that, I am satisfied that the evidence establishes that it was the respondent, more than the applicant, who provided and paid for the groceries and other household needs. Ultimately, during his cross-examination the applicant conceded that fact. Exhibit L to her affidavit of evidence, whilst not telling the whole story does, however, establish that it was the respondent who made the more substantial contribution in this regard. I am satisfied, however, that the applicant also contributed.

31 Even if, as I suspect, the respondent contributed more to the day-to-day operation of the household, the applicant (and for a period of 6 months, his father) provided the parties with rent-free accommodation throughout the relationship. Not only did they not have to pay rent but there were no mortgage payments. The applicant met all of the outgoings with respect to the former matrimonial home. In my view, when one takes this contribution into account, his contribution at least equal those of the respondent during the period of cohabitation.

32 In arriving at that conclusion I also take into account that in addition to his income the applicant also contributed funds from the sale of assets and the gift from his father as set out in paragraph 14(b) of these reasons.

33 I am required to take into account the non-financial contribution made by each of the parties. It is the applicant's case that these contributions were equal whereas it is the respondent's case that she made the majority of the non-financial contributions during the relationship. Here the dispute between the parties centres essentially around the improvement and maintenance of gardens. Again, I am satisfied that the respondent has deliberately tried to minimise the contribution of the applicant. The first house had gardens and the applicant freely admits that the respondent added flowers and plants. Insofar as the gardens at the second property are concerned, I am satisfied that it was the applicant who dug the garden beds and laid brick paving edges. It may be that the respondent planted more plants than the applicant did but that fact would not lead me to a conclusion that overall there ought to be a finding of unequal contribution. The applicant did other things such as erecting a shed and laying a concrete pad for it. He also built some sort of pine structure in the garden.

34 I should pause to observe at this point that extraordinary attention was paid to detail in this case. I did not find that attention to detail particularly helpful. In assessing the parties' contributions I have adopted a far more broad brush approach rather than concentrating on individual and minor contributions. I find that insofar as non-financial contributions are concerned and insofar as they are important, they are equal.

35 I am required to take into account the contributions made by each of the parties to the welfare of the family. Again, the respondent claims to have done almost everything save and except that she admits that after about a year the applicant cooked the majority of the meals. I am prepared to find that it is likely that the respondent did more of the cleaning washing and other household chores than the applicant. I accept, however, the applicant's evidence that in addition to cooking he also contributed in other ways. It is word against word. Neither of the parties has presented any other evidence besides their own to support their contentions concerning contributions. Where there is a conflict between the evidence of the parties, I prefer that of the applicant. He was prepared to make concessions when concessions were due. I gained the impression that the respondent was only prepared to make concessions when faced with documentary evidence which made it impossible for her to do otherwise. I do not find that either party contributed to the welfare of the family to a greater extent than the other.

36 Although the extent of the assistance which the respondent provided to the applicant's parents is in dispute, I am satisfied that she provided significant assistance to his parents before she was receiving the carer's pension for doing so. In my view, that is a factor that I should take into account under s 75(2)(o).

37 Leaving aside the question of the initial contributions of the parties to the relationship, I am not satisfied when I weigh up all of the various, but different contributions made by each of the parties that one contributed more than the other during the relationship.

38 Having determined the parties' contributions were substantially equal during the course of their cohabitation, it only remains to determine an appropriate division on the basis of contribution taking into account their respective initial contributions.

39 In Pierce v Pierce (1999) FLC 92-844 the Full Court said at

85,881:

“28.

In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the applicant and the respondent. In considering the weight to be attached to the initial contribution, in this case of the applicant, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial

contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J at page 10).”

40 The duration of cohabitation was about 6 years. The assets the applicant had at the date of commencement of cohabitation were considerable compared to those of the respondent. In addition to the other assets that he had as identified earlier in these reasons for judgment, he was the owner of an unencumbered home which became the home of the parties when they started to live together. Apart from some relatively minor renovations to the surrounding gardens, neither party alleges that they carried out any significant improvements or renovations to that property. The second property in which the parties lived, also unencumbered, was purchased entirely from the proceeds of sale of the home the applicant had at the commencement of cohabitation. Effectively, therefore, the applicant provided an unencumbered home for the parties to occupy throughout the entire duration of the partnership. The sale proceeds of that property represent over half the value of the assets available for distribution between the parties at the present time.

41 In the circumstances as set out above, I would attach significant weight to the initial contribution of the applicant and would therefore assess the respective contributions of the parties within the meaning of paragraphs (a) (b) and (c) of s 205ZG(4) as being 72.5:27.5 in favour of the applicant.

Section 205ZD(3) factors

42 The age of the parties is as set out at the commencement of these reasons for judgment. Neither of them produced any medical evidence as to their fitness for employment. The fact of the matter is, however, that they are both disability pensioners. Given their disabilities, their age and lack of formal qualifications, I would consider it likely that each of them for the most part will be reliant upon social security in the future.

43 I am conscious of the fact that the applicant will have significantly more assets than the respondent as a result of my assessment of contributions. The disparity in their wealth is even greater when I take into account other assets that the father has that I declined to include in the asset pool. Against this disparity there are, however, two other matters that I must take into account. The first of these is that the applicant is contributing albeit in a fairly modest way to the financial support and education expenses of his youngest son, B.

44 Another and far more significant factor is however, the fact that the respondent will be receiving from Mr C a tax free amount of $26,000 per annum for the next six years. For those six years her income will be significantly greater therefore than that of the applicant. According to his form 13 the applicant receives a disability support pension of $273 which is supplemented by share dividends of approximately $12 per week. The respondent also receives a disability pension amounting to $276 per week and receives dividends from shares. The respondent will therefore have a disposable income of $776 per week together with any income she derives from her investments. Put another way, over the next six years she will receive, tax free from Mr C, a total sum of $156,000. Throughout the course of the trial her counsel emphasised that she lived frugally. One would have thought in those circumstances that she will be able to increase her savings and/or assets fairly significantly over the next six years.

45 The applicant, by virtue of the disparity in assets will be able to either, invest so as to supplement his income or alternatively build or purchase accommodation for himself thereby relieving him of the obligation of paying ongoing rent. The respondent, for the foreseeable future, will not be able to acquire accommodation for herself and will therefore have an ongoing rental liability.

46 I also take into account that the applicant has greater superannuation benefits than the respondent and the assistance that the respondent provided to the applicant’s parents.

47 When I balance all of these factors, some favouring the applicant and some the respondent, I conclude that there ought to be an adjustment in favour of the respondent of 5% bringing her total entitlement to 32.5%.

48 Thirty two and a half percent of the asset pool of $403,117 is $131,013. The respondent has and will be retaining assets to a value of $107,730. It follows therefore of the money held in trust she ought to receive $29,283.

Proposed orders

1. The proceeds of sale of the second home be disbursed as follows:

(a)	By a payment of $29,283 to the respondent plus proportionate interest accrued since trial.
(b)	The balance to the applicant

2. That contemporaneously with the payment of the sum referred to in 1 above, the respondent forthwith do all things and sign such documents as may be necessary to remove the caveat lodged by her over the property which was purchased after the sale of the second property at her expense.

3. That any interest the respondent may have in:

(a)	the Nissan Patrol,
(b)	any superannuation entitlements accrued or accruing to the benefit of the applicant;
(c)	any bank accounts in the applicant’s sole name;
(d)	any interest of the applicant in the estate of C I;
(e)	any shares in the applicant’s name;
(f)	the property with caveat
(g)	any other property in the possession or control of the applicant as at the date of this order;

forthwith vest in the applicant.

4. That any interest the applicant may have in:

(a)	the Hyundai Sprint;
(b)	the Holden Commodore
(c)	any superannuation entitlements accrued or accruing to the benefit of the respondent;
(d)	any bank accounts in the respondent’s sole name;
(e)	the respondent’s caravan,
(f)	any shares in the respondent’s name;
(g)	any other property in the sole possession or control of the respondent as at the date of this order;

forthwith vest in the respondent.

5. That unless otherwise specified herein, the interest of the applicant or the respondent in property or chattels of whatsoever nature or kind in the possession, power or control of the other of them at the date of making of these orders be transferred and assigned absolutely to the party having the power, possession or control thereof.

6. That save as provided herein, each party be solely liable for and indemnify the other against any liability encumbering any item of property to which the party is entitled pursuant to these orders, and for any liabilities in the sole name of the party.

7. That each party forthwith sign all documents and do all such things as may be reasonably necessary to give effect to these orders.

8. Save and except for any application for the costs of these proceedings, all applications otherwise be dismissed.

Just and equitable

49 Section 205ZG(3) of the Act provides that I must make orders that I consider to be just and equitable. I am satisfied that the orders I propose meet that requirement. I am conscious of the fact that they leave the applicant with significantly greater assets than the respondent but that is more a reflection on what they each had at the commencement of cohabitation than what they did or did not do during their relationship.

Upon publication of these reasons for judgment I will hear counsel for each of the parties as to the form of orders that I propose to make and any other matters, including any application for costs arising out of these reasons for judgment.

I certify that the preceding [49] paragraphs are a true copy of the reasons

for

judgment delivered by this Honourable Court
Associate