Jeffs, Gail Mary v Hawking, Paul Edward
[2009] VCC 1124
•14 September 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
Case No. CI-05-02006
| GAIL MARY JEFFS | Plaintiff |
| v | |
| PAUL EDWARD HAWKING | Defendant |
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| JUDGE: | HIS HONOUR JUDGE MISSO |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 31 August, 1 and 2 September 2009 |
| DATE OF JUDGMENT: | 14 September 2009 |
| CASE MAY BE CITED AS: | Jeffs, Gail Mary v Hawking, Paul Edward |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 1124 |
REASONS FOR JUDGMENT
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Catchwords: PROPERTY LAW – Part IX of the Property Law Act 1958 – adjustment of interests in property – direct and indirect contributions – whether systemic violence made homemaker and parent contributions more arduous – whether contributions after separation should be taken into account – whether property is to be valued at the date of separation or trial – whether a global approach to determining an order adjusting interests in property permissible – what is just and equitable – s.285(1).
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms M Baczynski | Mirabellas |
| For the Defendant | Mr A F Skerlj | Hogg & Reid |
| HIS HONOUR: |
Introduction
1 The plaintiff commenced a proceeding by Writ filed on 22 September 2005 seeking, inter alia, an adjustment of interest in property pursuant to section 285(1) of the Property Law Act 1958 (“the Act”).
2 The defendant filed a Defence and Counterclaim essentially seeking the same relief as the plaintiff.
3 The pleadings relied upon by the plaintiff were largely ignored by the plaintiff and defendant.
4 Ultimately the evidence adduced by the plaintiff and the defendant was directed to the issues raised by section 285(1) of the Act.
5 Ms Baczynski appeared for the plaintiff and Mr Skerlj appeared for the defendant.
6 The plaintiff gave evidence and was cross-examined. She tendered the following evidence:
•
Contract Note for the sale of 91 Kenny Street, West Meadows, dated 23 April 1991: Exhibit A
• Application for an intervention order: Exhibit B • Bundle of housing loan repayments statements: Exhibit C • Bundle of notices of arrears of the mortgage: Exhibit D •
Agreement between the plaintiff and the defendant dated 29 November 1999: Exhibit E
• Photographs of the interior of Kenny Street taken in 2009: Exhibit F • Examples of outstanding accounts: Exhibit G •
Home loan programs of the Director of Housing dated 22 December 1999 and 19 May 2000: Exhibit H
• The plaintiff’s bank statements: Exhibit J • The plaintiff’s affidavits, sworn 7 June 2005: Exhibit K • An affidavit of Lynne Seddon, sworn 27 August 2009: Exhibit L • An affidavit of Philip Murray, sworn 27 August 2009: Exhibit M • Photographs of the bus and the parties’ children - circa 1999: Exhibit N • Further photographs of the interior of Kenny Street: Exhibit P • Photograph of the defendant: Exhibit Q • Photograph of the defendant at Kenny Street: Exhibit R • Superannuation documents of the defendant: Exhibit S. 7 Mrs Lynne Seddon gave evidence and was cross-examined.
8 The defendant gave evidence and was cross-examined. He tendered the following evidence: letters of the City of Broadmeadows dated 12 July 1991 and City of Hume dated 30 June 1995: Exhibit 1.
The Background Facts
9 The plaintiff was born on 28 September 1967. She is now forty-two years of age. The defendant was born on 18 October 1963. He is now forty-five years of age.
10 The plaintiff and the defendant met in about 1984 when the plaintiff was sixteen years of age and the defendant was twenty years of age. They commenced living in a domestic relationship in about February 1985.
11 The plaintiff and the defendant commenced living at the home of the plaintiff’s parents and subsequently in rented premises in West Meadows in 1988, and then Tullamarine in 1990.
12 On 23 April 1991, the plaintiff and the defendant signed a Contract Note to purchase 91 Kenny Street, West Meadows (“Kenny Street”).[1]
[1] Exhibit A
13 The Contract Note disclosed that the purchase price of Kenny Street was $102,500. The plaintiff and the defendant paid a deposit of $5,500, leaving a balance of $97,000. The balance was paid through finance obtained from the Director of Housing which operated a home loan program.[2] The finance was secured by a mortgage over Kenny Street.
[2] The plaintiff tendered correspondence with the Director of Housing demonstrating that finance was provided: Exhibits C, D and H
14 The plaintiff said that the defendant sold his Holden Commodore motorcar for about $5,500, which sum was used as the deposit to the purchase of Kenny Street. The defendant said that he sold the motorcar for about $5,500, and a boat for about $2,500, and a further sum of $6,000 was obtained as a gift to him from his father. These sums total $14,000.
15 The defendant said that he, the plaintiff, and his father attended at the office of a real estate agent, at which time $14,000 was handed to the real estate agent who conducted the sale of Kenny Street.
16 The defendant was unable to explain why it was that the deposit noted on the Contract Note that was $5,500, and that the amount of finance obtained from the Director Housing made up the balance of the purchase price of $102,500.
17 The defendant’s father paid for road-widening relevant to Kenny Street. The first sum was paid in about mid-1991 in the sum of $5,983.29, and the second was paid in about mid-1995 in the sum of $4,124.[3]
[3] Exhibit 1
18 At the commencement of the domestic relationship the plaintiff and the defendant were both working.
19 During the domestic relationship two children were born; namely, Karly Bree Hawking, who was born on 19 March 1989, and Mitchell Edward Hawking, who was born on 25 April 1994.
20 The plaintiff worked in a cafe before Karly was born. She estimated that she worked three to four times per week, usually from 10.00 am to 2.00 pm, and sometimes for longer periods of time. The plaintiff also undertook some babysitting, for which she was paid.
21 Subsequently, after the birth of Karly, the plaintiff received a family payment from the Federal government. There was very little evidence about the quantum of the family payment; however, I assumed that it was a payment for which the plaintiff was eligible as the parent of children.
22 During the whole of the domestic relationship the defendant was employed in his trade as a fitter and turner. Again, the evidence about the quantum of the defendant’s wages was unclear, but it would appear that he was earning somewhere around $400 to $500 net per week on average.
23 The plaintiff said that the defendant purchased tattooing equipment some time prior to their separation. She said that he used the shed at Kenny Street to undertake tattooing. She said that there were occasions when there were a number of people waiting to have tattooing performed on them by the defendant. She said the defendant was paid sums of cash by his clients.
24 The defendant said that he purchased tattooing equipment for about $250, but that he did not conduct a business of the magnitude described by the plaintiff from the shed or from anywhere else. He said he had assisted a friend who was undertaking tattooing by doing some tracing on clients for which he was paid a total of something approaching $100.
25 A great deal of time was expended by the plaintiff in particular, and to a lesser extent the defendant, giving evidence of each other’s misconduct during the domestic relationship. I will deal with the particular allegations made by each of the plaintiff and the defendant in some detail below.
26 The domestic relationship came to an end on 27 November 1999 when the defendant packed up his car and trailer with personal effects and tools and equipment and left Kenny Street. He moved to Wodonga.
27 At the time when the plaintiff and the defendant separated, the plaintiff was living in Kenny Street with Karly and Mitchell. She said that the defendant left Kenny Street with two station-wagon cars, a bus, a trailer, a motorbike, power tools, gardening equipment, a potbellied stove taken from the shed, and a bed, among other items.
28 The defendant said that when he left Kenny Street he took with him a 1983 XE Falcon, a trailer, a motorbike, tools of his trade, and personal effects.
29 Since the plaintiff and the defendant separated, the plaintiff has continued living at Kenny Street. She has paid the instalments on the mortgage to the Director of Housing, and all of the relevant outgoings and general living expenses for herself and the children.
30 Shortly after the separation the plaintiff obtained employment as an integration aide at the West Meadows primary school. She presently earns $826 net per fortnight. In addition, she receives a family payment from the Federal government, a part pension, and $50 per week by way of maintenance paid by the defendant.
31 The plaintiff extended the period of mortgage to twenty five years by negotiation with the Director of Housing. She has reduced the mortgage over Kenny Street to about $72,000.
32 The defendant is employed full-time as a maintenance fitter, earning $850 net per week. He has a superannuation standing to his credit in two super- annuation funds. One stands at $19,562 and the other at $27,921.
The Allegations of Misconduct
33 The plaintiff’s evidence was replete with allegations of serious misconduct on the part of the defendant. Ms Baczynski submitted that the evidence was relevant because it constituted a negative contribution by the defendant, which made the plaintiff’s contribution as a domestic partner, homemaker and parent all the more arduous.
34 The allegations made by the plaintiff essentially fell into two categories: one was the failure of the defendant to apply his income to the benefit of the domestic partnership; and the other was the direct acts of violence.
35 The plaintiff alleged that during the whole of the domestic relationship the defendant attended hotels and gambled and indulged himself in his hobby of speedway racing.
36 The plaintiff said that it was common for the defendant to often attend hotels where he drank excessively during an average week. He would also buy liquor which he would store in a fridge in the shed at Kenny Street.
37 The plaintiff said that the defendant often gambled. She said that she had seen him gambling at local hotels.
38 The plaintiff said that the defendant had a number of motorcars, motorcycles and tools and equipment which he had purchased, swapped and traded. She said that he had a keen interest in speedway racing and would often go to race meetings.
39 The plaintiff said that the defendant had a violent disposition. She described a number of episodes where she was the target of his violence. The major allegations of violence were referred to in the plaintiff’s affidavit sworn 7 June 2005 in which she describes:
•
In 1990 being assaulted by the defendant, which resulted in her suffering a miscarriage;
•
In 1991 and 1992 being assaulted repeatedly, and on one occasion being pushed into mirrored tiles, resulting in her suffering cuts and bruises;
• Being head-butted by the defendant, causing her to suffer a broken nose; •
Being held by her wrists and restrained by the defendant, resulting in the necessity for wrist x-ray, which proved to be negative. The plaintiff suffered bruising and swelling to her wrists;
• Having her head pushed into a concrete driveway, resulting in bruising.[4] [4] Exhibit K, and in particular, paragraph 24
40 The plaintiff’s sister, Lynne Seddon, swore an affidavit on 27 August 2008 in which she described visiting the plaintiff on a weekly basis. She described the defendant as being temperamental, a poor provider, and a person given to violence directed at the plaintiff.
41 The allegations made by Ms Seddon were mostly general in nature. She referred to a particular incident when the defendant held the plaintiff up against a wall with a hand around her throat. She alleges that the defendant took Mitchell, who was being held by the plaintiff, and threw him across the room at her. She caught Mitchell. She said the defendant was drunk at the time.[5]
[5] Exhibit L, and in particular, paragraphs 5 and 6
42 The last-mentioned allegation is of the most serious kind. Ms Seddon repeated the allegation when she was cross-examined by Mr Skerlj. Despite it being such a serious allegation, the plaintiff did not refer to it in her evidence.
43 I was not impressed with the evidence of Ms Seddon. Her affidavit and her oral evidence were replete with exaggeration, and it was clear to me that, like the plaintiff, she has an axe to grind with the defendant. Her obvious dislike of the defendant was palpable. Furthermore, she swore that she had no doubt that the defendant had signed the agreement, when she was not only absent when it was allegedly drawn up by the plaintiff, but she was not present when the plaintiff says that it was signed. Ms Seddon recanted when pressed on that issue.[6]
[6] Exhibit L
44 The plaintiff said that the defendant’s misconduct overall led her to separate from him in 1993 for about six to seven months, and again in 1996 for about six to seven months, and then the defendant separated from the plaintiff in 1997/1998 for seven to eight months.
45 In August 1995, the plaintiff applied for an intervention order to the Magistrates’ Court at Broadmeadows. An order was made in her favour on 8 September 1995. The order remains current. The defendant did not contest the application.
46 It would appear that what precipitated the plaintiff’s application for the intervention order was an occasion when she says that the defendant drew down on his superannuation to the tune of $5,000. He used $2,000 to go to a speedway meeting in Queensland with two women, wives of his friends, and he secreted the remaining $3,000 in the shed at Kenny Street.
47 On his return from Queensland, the defendant could not find the $3,000. The plaintiff says that he accused her of stealing the money, and in act of retribution he slashed the tyres of her car and head-butted her, causing her nose to bleed. These allegations were part of the evidence produced by the plaintiff in support of her application for an intervention order.[7]
[7] Exhibit B
48 Despite the periods of separation, and despite the plaintiff obtaining an intervention order, the plaintiff and the defendant reconciled, before finally separating on 27 November 1999.
49 The defendant denied all of the plaintiff’s allegations of misconduct, save that he admitted that he did head-butt the plaintiff on an occasion when he says she was demonstrating a violent disposition toward him, screaming at him face-to-face in such close proximity that his anger got the better of him and he head-butted her.
50 The defendant said that it was the plaintiff who had the violent disposition. He said that he would come home after work to find the plaintiff seriously affected by the consumption of marijuana. He had observed the plaintiff sitting at the kitchen table with strangers smoking marijuana. He said that her obsession with consuming marijuana affected her capacity to look after the children and look after the home.
The Separation
51 The defendant said that he had essentially had enough, and decided to leave the plaintiff and his children. He said that he gave no warning to the plaintiff, nor indeed to anyone else, of his intention to leave. He said that he did not return to Melbourne for a year.
52 The plaintiff said that on 27 November 1999, it was clear that the domestic relationship was at an end. She said that she drew up an agreement, dated 29 November 1999, which she said both she and the defendant signed.[8]
[8] Exhibit E
53 Essentially, the agreement provided that the defendant would abandon any claim on Kenny Street and would transfer his interest in Kenny Street to the plaintiff, and that thereafter she would take over the mortgage and payment of all outgoings.
54 The defendant denied signing the agreement. He admitted that the signature on the agreement looks remarkably like his own signature. He attempted to explain the resemblance to his signature by saying that the plaintiff had signed documents for their bank for him. While the defendant fell short of accusing the plaintiff of fraudulently applying his signature to the agreement, it is clear that his denial that he signed the agreement must mean that someone else signed his name to the agreement.
55 Mr Skerlj cross-examined the plaintiff concerning the genesis of the agreement. He pointed out to the plaintiff that if it was drawn up by her on 27 November 1999 (Saturday), and signed by her and the defendant on that day, why was it dated 29 November 1999, which was the following Monday? The plaintiff said that she dated it the next following working day because it represented a business day.
Findings of Fact
56 My overall impression of the plaintiff and the defendant was that neither of them was telling the whole truth about their domestic relationship. It was clear to me that if the plaintiff’s evidence was to be believed, then the defendant had absolutely no redeeming features whatsoever. She used every occasion during examination-in-chief and during cross-examination to set up her case and to set up her attack on the defendant.
57 Whilst it is clear that the plaintiff and the defendant had a stormy relationship, I do not accept that the plaintiff and the defendant were able to purchase Kenny Street, raise two children, and live together, if their relationship was so spiteful. Even though they had separated on three occasions before 1999, they nonetheless reconciled, which is more consistent with co-operation than spite.
58 The defendant’s evidence was more conciliatory towards the plaintiff than was the plaintiff’s evidence towards him. Essentially, his evidence was that money was short. He and the plaintiff argued persistently about money. He did not deny that the plaintiff kept the home and was a reasonable parent.
59 It is clear that the defendant had an interest in speedway racing and had a group of friends with whom he associated regularly who had a like interest in speedway racing, and, later in his relationship with the plaintiff, in tattooing. I accept the plaintiff’s evidence that the defendant spent a lot more time pursuing his hobbies and his association with his friends, and probably did spend more money than was wise on alcohol, gambling, cars, motorbikes, and engaging in his interest in swapping and trading in connection with his interest in speedway racing and cars.
60 I consider that the defendant was understating the extent to which he applied his wages in that way. It occurs to me that to have obtained $5,000 when he terminated his employment, and to spend $2,000 going on a trip to Queensland and then secreting $3,000 away, is potent evidence of his own financial self-interest.
61 Furthermore, the fact that the defendant left Kenny Street without warning, and has only contributed $50 per week by way of maintenance when he is earning $850 net per week, and probably has done for many years, is also evidence of his own financial self-interest.
62 Despite my misgivings about the veracity of both the plaintiff and the defendant, I accept that both the plaintiff and the defendant were violent, but that the defendant was probably the major cause of the violence in the home. I accept the plaintiff’s evidence that there was a justifiable basis for obtaining the intervention order. I infer that the allegations she made against the defendant in support of the application for the intervention order were accepted by the defendant, because he chose not to challenge them.
63 I accept the plaintiff’s evidence that the defendant was someone who drank and gambled; however, I do not accept that he did so to the degree described by the plaintiff. It was obvious to me that the mortgage was being paid and that there was sufficient money in the home for the family unit to survive. That alone is contrary to the plaintiff’s evidence that a significant amount of money was being wasted by the defendant on his own pursuits.
64 On the same reasoning I reject the defendant’s evidence that the plaintiff was spending a significant amount of money on marijuana. It seems to me that it was probable that the plaintiff and the defendant were given to drinking and using marijuana as part of their lifestyle. Ms Baczynski cross-examined the defendant about his use of marijuana, producing a photograph of the defendant in the early part of his domestic relationship with the plaintiff smoking marijuana in a bong. It was conduct which I find was condoned and approved of by the plaintiff.[9]
[9] Exhibit Q
65 I accept the plaintiff’s evidence that Kenny Street was purchased for $102,500. I accept her evidence that the deposit of $5,500 was obtained from the sale of the defendant’s car. I reject the evidence of the defendant that his father contributed any sum at all at that stage. If his father did contribute moneys which were handed over at the real estate agent’s office, then it is contradicted by the Contract Note.
66 When I raised the issue of the Contract Note with Mr Skerlj, he submitted that the moneys provided by the defendant’s father were probably applied in covering legal expenses and other incidentals. However, that was not the evidence of the defendant, and is entirely contrary to his account that a fairly large sum of money was handed over the counter to a real estate agent at the real estate agent’s office.
67 I accept the evidence of the plaintiff and the defendant that sums of money were given by way of gift by the defendant’s father to meet road-making charges. Mr Skerlj submitted that I should consider the gift as a direct financial contribution made by the defendant.
68 Mr Skerlj referred me to In the Marriage of Gosper[10] in which Fogarty J held that it is open to conclude that a gift of land made by parents to both parties of a marriage can be regarded as a financial contribution made by their child. He considered that the rationale behind that conclusion was that the gift was made only because of the relationship between the parents and their child and their intention to benefit their child.
[10] (1987) FLC 91-818
69 However, the extent to which such a gift should always be construed as the financial contribution of the child must be seen in the context of the size of the gift and the length of the domestic relationship. A gift made in a short relationship would probably survive as the direct contribution of the child; however, where the relationship is ten years, as in this case, I see no reason why a gift of this size should not merge into the relationship and lose its individual identity as that of the defendant solely. Mr Skerlj did not argue vigorously to the contrary.
70 In Conn v Martusevicius,[11] Vincent J concluded that it would be just and equitable to take into account the detriment suffered by a party to a domestic relationship which occurred as a result of physical and verbal abuse during the life of the domestic relationship as constituting a negative contribution.[12]
[11] (1991) 14 Fam LR 751
[12] 758
71 However, the mere presence of physical and verbal abuse does not per se give foundation to an additional adjustment of interests in property. In Giller v Procopets,[13] the Court of Appeal dealt with the nexus between physical and verbal abuse and the need to make an additional adjustment of interest in property. Ashley JA and Neave JA specifically accepted that the contributions made by a domestic partner might be rendered more arduous because that domestic partner is subjected to violence during the course of the domestic relationship.[14]
[13] [2008] VSCA 236
[14] Ashley JA, at paragraph 49, and Neave JA, at 288-300
72 The presence of domestic violence must have a nexus with rendering the plaintiff’s role as homemaker and parent more arduous. It seems to me that is inherent in the reasoning of Ashley and Neave JJA.
The Valuation of Kenny Street
73 Ms Baczynski and Mr Skerlj submitted that, for the purpose of this proceeding, the parties agreed that the valuation of Kenny Street as at 1999 was $140,000 and as at the date of trial, $345,000.
74 Ms Baczynski submitted that I should work on the basis that it would be just and equitable to adjust the interests of the plaintiff and the defendant in Kenny Street by reference to its value as at 1999.
75 Ms Baczynski submitted that I should follow the approach taken by Neave JA in Giller v Procopets (supra).[15] Neave JA referred, with approval, to Kardos v Sarbutt[16] and the judgment of Brereton J, who made the following observations:
“Although usually the preferable approach is to value property as at the date of trial, giving where appropriate separate and special consideration to contributions to value made between separation and trial, nonetheless the ultimate task of evaluating the respective contributions of the parties may sometimes be facilitated by adopting the date of separation for identifying and valuing the property, particularly when there have not been ongoing contributions by one party which have benefited the other since separation.”[17]
[15] Paragraphs 313 and 315-318
[16] (2006) 34 Fam LR 550
[17] 559
76 Mr Skerlj referred me to a number of authorities of the Family Court to the contrary which essentially stand for the proposition that the value of a property should not be determined at the date of separation, but at the date of trial.[18]
[18] In the Marriage of Wardman (1978) FLC 90-466; In the Marriage of Garside (1978) FLC 90-488; In the Marriage of Warne (1982) FLC 91-247, and In the Marriage of Gamer (1988) FLC 91-932
77 I am bound by Giller v Procopets (supra); however, it seems to me that the reasoning of Neave JA, and that of the Family Court, on the issue of whether a property is to be valued, are not significantly different. Ultimately, it seems to me that it is a question of fact, and largely to be determined upon whether the plaintiff has made contributions post-separation of such significance that it would be unjust and inequitable to allow the defendant to benefit from a current-day valuation when he has made no contribution directly or indirectly to Kenny Street since 1999.
78 I consider that it would not be just and equitable to determine the value of Kenny Street as at the date of separation. The evidence of the plaintiff did not persuade me that she has undertaken improvements to such a degree that the present value of the property is largely a reflection of the nature and extent of those improvements.
79 It is clear to me from the evidence of the plaintiff that she has conserved Kenny Street, but has not had the financial wherewithal to undertake any significant improvements. The photographs tendered by the plaintiff go a long way to establishing that fact. The photographs were tendered by the plaintiff to demonstrate the state in which the defendant left Kenny Street. It was the evidence of both the plaintiff and the defendant that what is seen in the photographs is consistent with what Kenny Street was like at the date of separation.[19]
[19] Exhibits F and P
80 The conclusion I have reached is that the valuation which I should use in adjusting the interests of the plaintiff and the defendant in Kenny Street is the current valuation of $345,000.
The Agreement
81 The plaintiff emphasised that the agreement[20] represented something of a settlement as between herself and the defendant regarding their respective interests in Kenny Street.
[20] Exhibit E
82 I have referred to the document allegedly executed by the plaintiff and the defendant on 27 November 1999 as an agreement because that was the expression used conveniently by the parties when reference was made to that document.
83 It is not an agreement in the sense that the expression is used in the laws of contract. It is more a declaration of the position of both the plaintiff and the defendant as at the date of separation.
84 However, what the document represents, and whether it should be correctly described as an agreement or not, depends upon whether I accept that the defendant signed the document.
85 Ms Baczynski referred the defendant to the Contract Note and asked the defendant to compare the signature on the Contract Note with the signature on the agreement. Although he admitted they are remarkably similar and that the signature on the agreement looks like his, he denied that he signed the agreement.
86 I have decided that the only way I can dispose of the controversy surrounding the signing of the agreement is to disregard the agreement altogether. It seems to me that it is not an agreement in the sense that it is enforceable contractually, and, in any event, section 285(1)(c) of the Act provides that my primary obligation is to make an order adjusting the interests of the plaintiff and the defendant in Kenny Street which seems to be just and equitable, and, in doing so, I can have regard to any written agreement entered into by the plaintiff and the defendant: that is, the presence of an agreement forms part of the evidence and no more.
87 It is clear that the legislature intended to avoid fettering the discretion vested in a trial judge by the presence of an agreement entered into privately between domestic partners. Given my views about the document said to constitute an agreement, I do not think it advances the plaintiff’s case much at all, so to ignore it does the plaintiff no injustice, and indeed, the existence of the agreement is a distraction from the real task which the legislature requires me to undertake. It was very evident to me during the trial that it was a serious distraction to the plaintiff, who persistently emphasised that a large part of her case was based upon the agreement.
88 I consider that the better view is to work on the present value of Kenny Street and to adjust the interest of the plaintiff and the defendant in that property according to their financial and non-financial contributions made directly or indirectly to the conservation and improvement of Kenny Street, rather than base the adjustment of interests on the value of that property in 1999.
Post-Separation
89 Coincident to the date upon which the plaintiff says that she and the defendant signed the agreement was a clear intention evinced by the defendant to separate from the plaintiff. The defendant said that all he wanted to do was “get out of there”, by which he meant that he wanted to end his relationship with the plaintiff and leave Kenny Street.
90 The defendant took with him all that he wanted, leaving the plaintiff to fend for herself with the children. I accept the plaintiff’s evidence that the mortgage payments were in arrears and there were amounts owing to the local municipality for unpaid rates.[21] The plaintiff was able to retain Kenny Street by negotiating with the Director of Housing to extend the period of the loan so that the recurrent instalments were set at a manageable amount.
[21] Exhibit G was an example of underpaid rates
91 Apart from the income derived by the plaintiff from her employment and what she is eligible for by way of a family payment from the Federal government, her only other source of income is a weekly sum of maintenance paid by the defendant of $50. The defendant has not made any other financial or non- financial contribution directly or indirectly to the conservation or improvement of Kenny Street.
92 At present the plaintiff is making mortgage payments of $165 per week; the repayments on a personal loan of $10,000 which she used to purchase a car; an AMEX credit card debt of $3,500; and other outgoings, such as municipal rates, car insurance and the general costs of living.
93 At present the defendant is earning $850 net per week, from which he pays $50 per week by way of maintenance. Otherwise the balance of $800 is applied for his personal use. He has superannuation totalling $47,483. The defendant did not give any evidence of the value of the items he took from Kenny Street. I can only speculate that they were of modest value, given that the income earned by the defendant up to 1999 was itself modest and would not have permitted him to purchase tools and equipment and personal belongings of any significant worth.
The Adjustment of Interests
94 At the time when the plaintiff and the defendant separated, the financial contributions made directly by the defendant were $5,500 paid as the deposit on Kenny Street, and the road-making charges paid by the defendant’s father amounting to about $10,000. In total, the defendant’s direct financial contributions, therefore, amount to about $15,500.
95 On the plaintiff’s side of the ledger she occupied the position of domestic partner, homemaker and parent, which constitute non-financial contributions made directly by her.
96 In Kenyon v Akeroyd,[22] the Court of Appeal observed that such a contribution is not susceptible of valuation in monetary terms, and any attempt to do so ignores a critical factor that most domestic relationships operate as a shared undertaking where the maintenance of the family unit depends in equal measure upon a contribution by the plaintiff in her role as domestic partner, homemaker, and parent, and the defendant as the breadwinner.[23]
[22] [2008] VSCA 277
[23] Paragraph 26-30. The Court of Appeal cited the judgment of Neave JA in Giller v Procopets (supra) at paragraph 330-331 with approval, where Neave JA made the same observations relevant to the assessment of contributions of homemaker and parent.
97 I see no reason why the contributions made by the plaintiff and the defendant as at November 1999 were essentially equal. Furthermore, I see no good reason why the direct contributions made by the defendant should continue to stand on his side of the ledger, because to do so would be to ignore a relationship of about ten years’ duration where the plaintiff made a considerable contribution to the worth of the family unit by devoting herself to the defendant as his domestic partner and occupying the important position of homemaker and parent.
98 I consider that it is only through the efforts of the plaintiff that Kenny Street has been conserved, and to some extent improved, by her efforts to at least maintain it and to undertake some improvements by undertaking painting and the fitting of soft furnishings.
99 I consider the contribution made by the defendant of $50 per week by way of maintenance to be a meagre contribution and hardly representative of the cost of raising children. In Giller v Procopets (supra), Neave JA made a number of observations in that connection relevant to the contributions of one domestic partner responsible for raising children when compared with the other domestic partner who has paid maintenance not commensurate with the real cost of and effort in raising children.[24]
[24] paragraphs 339-341 and 354
100 The Court of Appeal approved of the approach taken by Vincent J in Conn v Martusevicius (supra) and Kardos v Sarbutt (supra) that the approach that the trial judge is to take is to, firstly, identify the value of the assets of the parties; secondly, to assess the contributions of each party; thirdly, to determine whether those contributions have been sufficiently recognized and compensated for; and fourthly, to determine the orders to be made to ensure that the parties’ contributions are recognized and compensated for.[25]
[25] Kenyon v Akeroyd (supra) at paragraph 8, and Giller v Procopets (supra) per JA, at paragraph 314
101 I consider that I should make an order adjusting the interests of the plaintiff and the defendant in Kenny Street by recognizing that the contributions of the plaintiff and the defendant as at the date of separation were broadly equal for reasons which I have already explained.
102 Following the separation, the plaintiff was solely responsible for paying the arrears under the mortgage and the rates, and then negotiating a position which enabled her to maintain possession of Kenny Street by extending the period of the mortgage and reducing the weekly instalments to a manageable amount.
103 It was the plaintiff’s application to the conservation and modest improvement of Kenny Street which has placed it in a position where it has achieved its current market value of $345,000.
104 Since 1999, the plaintiff has been responsible for all of the outgoings on Kenny Street as well as the maintenance and support of the children, in the absence of any real contribution by the defendant, save for $50 by way of weekly maintenance, which I consider to be meagre, and which effectively threw nearly all of the responsibility, both financially and otherwise, onto the plaintiff to maintain and support the children.
105 I accept the defendant’s evidence that he removed from Kenny Street the items he referred to in his evidence. It is clear that they were sufficient for him to set up a domestic and working life in Wodonga and later in Melbourne. He also took with him his superannuation, part of which was no doubt attributable to contributions made during the domestic relationship.
106 I consider the submissions made by Ms Baczynski, that a just and equitable adjustment of interests in Kenny Street would be an order that the defendant convey his right, title and interest in Kenny Street to the plaintiff, and the submissions made by Mr Skerlj, that a just and equitable adjustment would be an equal division in the net equity, to be untenable.
107 I consider that it would be just and equitable to order an adjustment of interests in favour of the plaintiff to the extent of 85 per cent of the net equity in Kenny Street.
108 I consider that an adjustment of that order recognizes:
•
The plaintiff’s contribution made directly to the conservation and improvement of Kenny Street since 1999.
•
The violence of the defendant and his habit of expending his wages for his own use rather than for the plaintiff and his children, which worked to the detriment of the plaintiff, and made her task as domestic partner, homemaker and parent all the more arduous.
•
The meagre contribution made by the defendant in paying insubstantial maintenance, throwing any major responsibility in that regard onto the plaintiff since 1999.
•
The fact that the plaintiff has no assets of any kind save for her equity in Kenny Street, with an income which just enables her to survive, whereas the defendant is earning a considerably larger income of $850 net per week.
•
The fact that the plaintiff has no superannuation to speak of, whereas the defendant has superannuation totalling $47,482.
109 On the basis that the valuation of Kenny Street is $345,000, the net equity after reduction of the mortgage of $72,000 is $273,000.
110 The defendant has superannuation of $47,483. Not all of that can be attributed to the period of the domestic relationship. I consider that half should be attributed to the domestic relationship, amounting to $23,000 in round figures. The defendant chose not to lead any evidence of the period over which he has accumulated the superannuation benefit. It was probably small at the time when the domestic relationship commenced. The period since the domestic relationship commenced up to the present time is some twenty years. It seems to me that it is a fair conclusion that most of the superannuation benefit has been accumulated over that twenty-year period, and therefore, half of it should be attributed to the domestic relationship.
111 Therefore, the total net pool is the net equity in Kenny Street of $273,000 and $23,000 superannuation, amounting to $296,000.
112 I propose to the employ the global approach in assessing each of the matters referred to in section 285(1)(a), (b) and (c).[26] Having regard to the evidence which I accept, and applying a global approach, it occurs to me that if I had heard this proceeding in 1999 I would have concluded the proper order to make, adjusting the interests of the plaintiff and the defendant, which seemed to be just and equitable, to be equal.
[26] An approach now universally applied and approved of in Conn v Martusevicius (supra), Giller v Procopets (supra) and Kenyon v Akeroyd (supra)
113 However, since 1999 all of the financial and non-financial contributions to the conservation and improvement of Kenny Street have been made by the plaintiff, and all of the contributions in the capacity of homemaker and parent have been made by the plaintiff. Furthermore, the defendant’s conduct, constituted by his violence aimed at the plaintiff and the extent to which he applied moneys to his own hobbies rather than the family unit, weighs heavily in favour of the plaintiff.
114 I do not accept that because the plaintiff has been residing at Kenny Street she has in some way obtained an advantage by paying mortgage payments which are perhaps less than a commercial rental when the defendant has probably been paying rent.
115 In the end I consider that there should be an order adjusting the interests of the plaintiff and the defendant in Kenny Street of 85 per cent in favour of the plaintiff and 15 per cent in favour of the defendant. Therefore, applying the same simple arithmetic, that would provide an adjustment of interests to the plaintiff of $251,600 and to the defendant off $44,400.
116 In practical terms, the defendant must retain the $23,000 of his
superannuation which results in the plaintiff being required to pay him
$21,400.
Conclusion
117 After hearing parties on the orders sought which reflect what I consider to be a just and equitable adjustment of the interests of the plaintiff and the defendant in Kenny Street I will make the following orders:
(1) That the plaintiff pay to the defendant the sum of $21,400.00 (“the
payment”) on or before 12 January 2010 (“the date”).
That contemporaneously with the payment:
(a)
the defendant do all such acts and things and sign all such documents as may be required to transfer to the plaintiff at the expense of the plaintiff all his right, title and interest in the real property situate and known as 91 Kenny Street, Westmeadows being the whole of the land more particularly described in Certificate of Title Volume 8529 Folio 053 (“the real property”);
(b)
the plaintiff will indemnify the defendant against all payments and liability pursuant to the mortgage registered to the Director of Housing (retailer Stamfords) loan number 0000501238 (“the mortgage”) and all apportionable rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind; and
(c)
that the plaintiff will, as soon as practicable, discharge any liability that the defendant may have under the mortgage.
(2)
That in the event that the whole of the payment has not been made by the date as set out in paragraph 1 above, then the real property be forthwith sold by public auction (“the sale”) and upon completion of sale the proceeds of sale be applied:
(a) first to pay all costs, commissions and expenses of the sale; (b)
secondly, to discharge the mortgage and any other encumbrance affecting the real property;
(c)
thirdly, the defendant shall receive an amount of 15 per cent of the proceeds of sale after the deduction of the sum of $23,000.00 and the amounts set out in paragraphs (a) and (b) above; and
(d)
fourthly, the balance of the proceeds of sale shall be paid to the plaintiff.
(3) That pending the payment or completion of the sale:
(a)
the plaintiff have the sole right to occupy the real property and during such right of occupation the plaintiff pay all instalments pursuant to the mortgage and all rates and taxes as they fall due;
(b)
the parties hold their respective interest in the real property upon trust pursuant to these Orders; and
(c)
neither party encumber the real property without the consent in writing of the other party.
(4)
Save as hereinbefore provided by the Orders, each party shall be entitled to the exclusion of the other to all items of property and resources currently in their respective possession or control.
(5) Neither party shall make a claim in respect of the other’s superannuation. (6) Liberty to apply. AND THE COURT NOTES
That these Orders shall determine, as far as practicable, the financial relationship between the parties.
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