J v S
[2003] QDC 436
•27th November 2003
DISTRICT COURT OF QUEENSLAND
CITATION:
J v S [2003] QDC 436
PARTIES:
J Plaintiff
v
S Defendant
FILE NO/S:
214 of 2002
DIVISION:
Civil
PROCEEDING
Application
ORIGINATING COURT:
District Court
DELIVERED ON:
27th November 2003
DELIVERED AT:
Maroochydore
HEARING DATE:
11th November 2003
JUDGE:
K.S Dodds DCJ
ORDER:
$19 000 OF THE $22 000 RETAINED IN THE DEFENDANT’S SOLICITOR’S TRUST ACCOUNT BE PAID TO THE PLAINTIFF.
CATCHWORDS:
PROPERTY LAW ACT - DE FACTO RELATIONSHIP – PROPERTY ADJUSTMENT ORDER – NATURE OF DE FACTO RELATIONSHIP – wh parties living together in a de facto relationship for at least two years – wh relationship a genuine domestic relationship - wh plaintiff had made substantial contributions under s291 or 292
COUNSEL:
Ms P.J Sweetapple for the Plaintiff
Mr M Martin for the Defendant
SOLICITORS:
Rimmer Lawyers for the Plaintiff
Robert Bakker Lawyers for the Defendant
This is an application pursuant to part 19 of the Property Law Act 1974 (the Act) for a property adjustment order and if necessary for leave to make the application. Leave is necessary if the application is not made within two years after the day on which the de facto relationship ended.
The application was made 20th June 2002. According to the plaintiff pleadings, he and the defendant were in a de facto relationship from in or about December 1996 until in or about June or July 2000.
The provisions of part 19 of that Act are available to “de facto spouses” whose “de facto relationship” has ended. Section 260 of the Act defines a de facto spouse as one of two persons who are living or have lived together as a couple, that is to say if they live or have lived together on a genuine domestic basis in a relationship based on intimacy, trust and personal commitment to each other.
Section 287 of the Act provides that a property adjustment order may only be made if the de facto spouses have lived together in a de facto relationship for at least two years or the de facto spouse who has applied for the order has made substantial contribution of the kind mention in sections 291 or 292 and failure to make the order would result in serious injustice to that de facto spouse.
Section 286 of the Act provides that the court may make any order it considers just and equitable about the property of either or both of the de facto spouses adjusting the interests of the de facto spouses. In deciding what is just and equitable the court is directed to consider the matters set out in sections 291-309 of the Act inclusive.
According to the plaintiff’s pleading:
· At the commencement of the relationship the defendant owned three items of real estate;
§ a solely owned dwelling at Judith Street, Morayfield;
§ a unit at Grant Street, Caboolture,
§ a unit at McKean Street, Caboolture
both of which were owned in joint tenancy;
· In about April 1997 the plaintiff went to New Guinea to work;
· While away he authorised the defendant to draw money from his bank account:
o to repay various debts in his name, incurred for the benefit of both he and the defendant when both were unemployed;
o to make repairs to the defendant’s property in Judith Street;
o to pay a $2 200 deposit on a car for the defendant;
· The plaintiff return to Australia in December 1997 and resided with the defendant;
· In March 1998 the plaintiff returned to New Guinea;
· Between February 1998 and March 2000, J deposited $101 000 into his bank account and the defendant withdrew approximately $97 000 from the account;
· Of the $97 000 withdrawn, $22 565 was used to repay debts in the plaintiff’s name and approximately $12 020 was used to buy chattels for and effect improvements to the defendant’s property in Judith Street, the details of which were set out. The balance has been retained by the defendant for her own purposes;
· The plaintiff’s assets consisted of a Ford motor vehicle, household furniture and effects and an investment unit at Milton.
In her written defence filed in the proceedings, the defendant denied the existence of a de facto relationship between her and the plaintiff. There was never a relationship based on intimacy, trust or personal commitment, although sexual intimacy occurred on a ‘casual’ basis. Alternatively, any relationship which did exist between them ceased by the end of May 2000. She admitted:
· she owned the three properties referred to in the plaintiff’s statement of claim;
· that the plaintiff’s income was paid into the Commonwealth Bank in his name;
· she was authorised to withdraw funds from the Commonwealth account to pay debts in the plaintiff’s name;
· that plaintiff’s money was used to carry out some repairs and improvements to the Morayfield property;
· she paid debts in the name of the plaintiff in the sum of $22 565,
She denied using the plaintiff’s money to effect improvements to her Morayfield property except for items therein set out, the total cost of which was $4 300.
If it be accepted that $101 000 or thereabouts was put into the plaintiff’s bank account then, on the figures set out above, about $74 000 withdrawn is unaccounted for.
In the plaintiff’s case, he and a friend, a Mr Lange gave evidence.
In the defendant’s case, she gave evidence and called evidence from her daughter, a next door neighbour from Judith Street, Morayfield, a M/s Stevenson, and a friend, a M/s Cliffton.
Reference to exhibit 3, Commonwealth Bank statements, supports the plaintiff’s evidence that over $100 000 was deposited by him into his Commonwealth Bank Account between March 1998 and March 2000. There are also regular deposits by LJ Hooker Paddington which I take to be rental income from the investment unit he then owned. These sources make up almost the entirety of the deposits to that account. It is also apparent from exhibit 3 that this money has been withdrawn. There are numerous withdrawals, some plainly identifiable as expenditure on lifestyle items.
There was no dispute that over this period the defendant had a key card to this account. I accept the plaintiff’s evidence that the withdrawals he has indicated on exhibit 3 were made by the defendant. They amount to $97 000 more or less.
As mentioned above, in March 1996 the defendant owned three properties, one solely and two as a joint tenant. The two in joint tenancy were owned with her ex-husband. According to the defendant, ultimately her ex-husband got one of those solely and she the other, the Grant Street unit. It was not encumbered. She sold it in June 2000 for $96 000. In March 2003 $60 000 of that sum remained. According to the defendant there is none left now, she has spent it. She is not specific on what.
In December 2002 she sold the house at Judith Street, Morayfield for $126 350 (She had bought it for $90 000). The balance on settlement on 18th December 2002 was $120 556.72. The settlement statement, exhibit 10 shows $36 505.78 distributed to the defendant.
According to an early financial statement in this proceeding by the defendant, in March 2003, $36 000 of the money from the sale of the Judith Street property was retained in her solicitors’ trust account. In February 2003, she gave a written undertaking to instruct her solicitors to hold the proceeds from the sale of the Judith Street property in her solicitors trust account until the conclusion of this proceeding, save in the event that funds over and above the sum of $5000 were required to effect repairs requested by the purchaser of that property as a condition of settlement. According to the defendant’s financial statement filed by leave at the trial and dated 7th November 2003, only $22 000 of that money is now retained in her solicitors trust account. No explanation as to the $14 000 difference is offered other than that she has spent it paying some accounts.
According to the defendant’s evidence she used money she withdrew from the plaintiff’s Commonwealth account to pay for purchases for the plaintiff, such as guns, ammunition, food stuff, toiletries, and clothing. As mentioned above, it is apparent from exhibit 3 money was also spent on other lifestyle items.
I found the evidence of the defendant unconvincing. She had unfettered access via a key card to the plaintiff’s Commonwealth Bank account into which he put his earnings in New Guinea. She attended to regular repayments of his AGC debt and she paid other of his debts. She spent part of the money withdrawn on her property at Judith Street and for furniture for that property. She sent letters and cards (exhibit 4) to the plaintiff which are consistent with an ongoing loving relationship. She visited him in New Guinea. On her version, in June 1999 she became upset when she became aware he had possession of condoms. Her upset is consistent with an expectation of sexual exclusivity. According to the plaintiff the incident with the condoms was in September 1999 when he returned to Australia ill with Hepatitis A. They had been provided to him by the medical authorities in New Guinea because of his illness. There are inconsistencies between the defendant’s evidence and her filed defence. For instance, in her defence she admitted using the plaintiff’s money for, amongst other things, concrete drive way upgrade and repair and new dining table and chairs and furniture. In her evidence she said she had bought the dining table and chairs from her own earnings. As to the concrete driveway upgrade and repairs she said she was earning money at the time and she didn’t know whether money for that had come directly from the plaintiff’s money or whether she had contributed. In this regard she agreed that whenever something was needed for the Judith Street house like improvement of the driveway she used whatever money was available, the plaintiff’s or her’s. As to approximately $74 000 withdrawn but not specifically accounted for, her evidence consisted of general assertions that she spent it in buying items for the plaintiff. As to the plaintiff’s evidence that they had lived together in the Judith Street house from shortly after they met to when he went to New Guinea in April 1997, the defendant gave evidence, and evidence was given by other witnesses in her case, that she did not move into that house until May 1997. She was renting it out and lived in the Grant Street unit. That raises a query about why rental records were not forthcoming to support that contention or at least some explanation for their absence.
So far as it is possible to form an impression from observing witnesses and/or listening to their evidence, I found the plaintiff’s evidence internally consistent and convincing. His witness Mr Lange I considered to be careful to confine his evidence to what he recalled. I accept his evidence. He met the defendant through the plaintiff in about 1997. He thought of her as the plaintiff’s partner. He and his wife called into Judith Street unannounced on their return from an overseas trip in May 2000. Both the plaintiff and the defendant were there. The atmosphere appeared friendly and there seemed to be no tension or difficulty in the household. He was aware the plaintiff went away to Roma to manage a hotel in May 2000. On the 29th of June 2000 the defendant phoned him and because the incident was peculiar he noted it in his work diary. She said words to the effect that she was hiding the cheque book as far as the plaintiff was concerned, which he thought meant that perhaps the plaintiff had asked her to put money into the hotel venture in Roma. On 8th July 2000 the plaintiff phoned him and informed him that the defendant had phoned and faxed something regarding an alleged affair in New Guinea. On 16th July 2000 the defendant phoned again and told him the facsimile she had sent was to force the plaintiff into the open about his philandering in New Guinea. His impression was that she was upset. She had said, regarding the facsimile, that she had left the answering machine on whilst the plaintiff was talking to somebody on the phone about this woman in New Guinea.
In contrast to Mr Lange the impression I was left with regarding the defendant’s witnesses was that they were less careful about what they were prepared to swear to occurring four to five years ago.
The plaintiff was a mature man. He was not a stupid man, although with the benefit of hindsight he was foolish to provide the defendant with unfettered access to his earnings. His doing this, is in my view, strongly consistent with a man who so far as he was concerned was in a relationship with the defendant that was based on trust and personal commitment. There was also intimacy, although the physical aspect of that was intermittent because he was working away.
On the balance of probabilities I am satisfied that from early 1997 the plaintiff and the defendant were in a developing relationship. By later in 1997 when the plaintiff returned from New Guinea until he left for New Guinea again early in 1998 the relationship had developed into a de facto relationship as that term is used in the Act. On his return to New Guinea the implicit understanding between them was that he would work up there, bank his money, and the defendant would manage his funds. Amongst other things she would spend money on her house at Judith Street which ultimately on his return they would reside in together.
It follows that the relationship I have referred to existed for more than two years. It is unclear precisely when it finished. It was after the plaintiff went to Roma in May 2000 and may well have been sometime in June 2000. It was certainly unravelling. It seems the mutual trust had dissipated.
Counsel for the defendant submitted that even if the sort of relationship I have referred to existed, it could not be concluded that the parties lived together in such a relationship for two years because for the most part the plaintiff was living away in New Guinea.
I think the concept of living together as it is used in the Act where from time to time the parties are physically in different places is a question of degree. The Act does not require both to be physically in the one place for a total of two years. It rather requires the parties satisfy the description of living together as a couple on a genuine domestic basis in the relationship based on intimacy, trust and personal commitment even though from time to time, work commitments, for instance, may require one party to be physically elsewhere.
So far as the evidence discloses, for practical purposes the only property remaining over which a property adjustment order may be made is the sum of $22 000 in the defendant’s solicitor’s trust account.
The plaintiff has virtually nothing. The investment unit he once owned was seized and sold by the mortgagee when he could not continue to meet his obligations under the mortgage. He has a little furniture, is unemployed and still owes money to AGC.
$97 000 was withdrawn by the defendant from the plaintiff’s bank account. Over $74 000 of it was spent on chattels and improvements to the defendant’s Judith Street property and on other largely unspecific items. The chattels have been retained by the defendant. Putting to one side the garden table and pews over $11 000 was spent on chattels and improvements to the Judith Street property.
I find on the balance of probabilities that most of the unaccounted for money was spent by the defendant for her purposes and at her discretion. It is impossible to be precise. Some amount of it was spent for the direct benefit of the plaintiff.
In deciding what is just and equitable about the property of the parties, the court is required to consider the matters set out in sections 291-309 of the Act.
The plaintiff is 58, presently unemployed with two uncertain prospects of work in remote areas. He owns some furniture and owes money to AGC. There is no evidence of the defendant’s age, although I would estimate her age is in a range mid forties to mid fifties. She works as a commercial cleaner. Since she sold the Judith Street property she lives in a house owned by her brother. She says she pays an undisclosed amount of rent. She owns a car which she says is worth approximately $3 000.
I find the sale of the house at Judith Street realised the defendant’s equity therein. That appears to have been about $42 000 of which she received $36 505. $22 000 of that remains. Additionally she retains chattels purchased with the plaintiff’s money to a value of a little over $3 000.
The house at Judith Street is where the plaintiff came to, when he returned to Australia. To that extent it was utilised for the plaintiff’s use and comfort.
The defendant says she assists in caring for her father who has Parkinson’s disease.
The relationship lasted approximately 3 years.
When these matters are considered, in my opinion the only just and equitable order is that the bulk of the remaining $22 000 from the sale of Judith Street property be paid to the plaintiff. I intend to proceed on the basis that of the $74 000 mentioned above spent by the defendant, $60 000 of that was the plaintiff’s contribution to the relationship. I find the defendant’s contribution was $42 000, being her equity in the Judith Street house. I intend to regard the assets of the relationship as the sum of $74 000 and $42 000, that is $116 000. Proceeding on that basis the plaintiff’s $60 000 contribution amounts to 51% of the asset pool and the defendant’s $42 000, 36.2% of the asset pool. 51% of the realised equity in the Judith Street property is $18 619. 36.2% is $13 213. The defendant has retained the chattels she has purchased with the plaintiff’s money and has spent $14 000 of the $36 500 obtained from the sale of the Judith Street house.
Doing the best I can on the evidence I consider the property adjustment which is just and equitable in all the circumstances is that $19 000 of the $22 000 retained in the defendant’s solicitor’s trust account be paid to the plaintiff.
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