Kaljo v Dwyer

[1993] HCATrans 27

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S109 of 1992

B e t w e e n -

ALDUR KALJO

Applicant

and

VICKIE ANNE DWYER

Respondent

Application for special leave

to appeal

MASON CJ

TOOHEY J

GAUDRON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 12 FEBRUARY 1993, AT 3.31 PM

Copyright in the High Court of Australia

Kaljo	1	12/2/93
MR _c_.c. BRANSON, QC:	May it	please the Court, I appear for

the applicant, with	my learned friend,
MR G.C. RICHARDSON.	(instructed by Glover &
Glover)

MR B.H. DONOVAN, OC:  May it please the Court, I appear for

the respondent, with my learned friend,

MS J.C. GIBSON. (instructed by Colin W. Love & Co)

MASON CJ:  Mr Branson?

MR BRANSON:  If_ Your Honours please. The application

concerns the correct interpretation of section 20

of De Facto Relationships Act, New South Wales,

which, Your Honours, effected a major social reform

in this area. The effect of the majority of the

Court of Appeal decision, Mr Justice Handley having

written the leading judgment, agreed in by Mr

Justice Priestley, is to introduce into the section

extraneous matter - - -

MASON CJ:	Do you mean paragraphs after (a), (b), A and B?
MR BRANSON:	By reading into the section, after the words

"having regard to", perhaps the words "but not

limited to".

GAUDRON J:  It is a question of who wants to write the words

in, is it not, Mr Branson?

MR BRANSON:  Your Honour, it is notorious that the words

"just and equitable" have a very wide connotation,

and the Court is familiar with them in the Family

Law context but, nevertheless, the statute does

purport to prescribe the matters to be taken into

account. Importantly, the legislation had its

genesis in a report of the Law Reform Commission

issued in June 1983, the bill being introduced in

October 1984. The then Attorney-General for the

State of New South Wales making it plain in the

second reading speech that the legislation was
founded upon the recommendations.	Now, they, the

Law Reform Commission, drew a very clear

distinction between the relief to be granted to a

de facto partner under this legislation as opposed

to relief that could be obtained by a spouse under

the Family Law Act and, moreover, drew a very clear
distinction between a property adjustment order,

with which we are concerned here, and an award of

maintenance under this legislation. In broad

terms, a property adjustment order being dependent

upon an assessment of contribution made by the

partners during the relationship as opposed to the

maintenance component, dependent upon needs and

means of the parties.

Kaljo 2 12/2/93

Now, I will take Your Honours very briefly, in

due course, to the extrinsic materials, and I

stress that there will be very sparing reference to

it, Your Honours, but suffice it to say at the

outset that the Law Reform Commission proposals

were very specific and drew this very clear

distinction between the property adjustment and

maintenance provisions of the Act. Indeed, they

pointed out that this legislation which, of course,

did effect this very radical reform, provided a

very limited basis for maintenance. Indeed,
confined to two situations: where there was a
child of the de facto relationship or the

applicant/spouse's earning capacity had been

impaired by reason of the relationship having

occurred. So that there is a very, very clear

distinction to be drawn between this Act and the

situation that the Court would be used to dealing

with in the Family Law area.

The public importance of the matter is to be

seen from the fact that in the Northern Territory

there is virtually identical legislation, passed in

1991.      In Victoria the Property Law Act, at least

in relation to disputes between de facto partners

concerning real property, has identi6al property

adjustment provisions, and there are proposals
emanating from the Queensland Law Reform

Commission - admittedly, there are two options given but one of them being identical with the New

South Wales provisions.

Now, what the Court of Appeal did in this case

was to overturn the decision of the trial judge.

The suit was heard in 1987; judgment being

delivered in early 1987. This appeal was not heard

until February last year, so that more than four

years elapsed. Judgment was given in August.

MASON CJ:  What was the reason for the delay?

MR BRANSON:  It was not satisfactorily explained to the court as both Mr Justice Mahoney and, particularly,

Mr Justice Handley have observed in their

judgments. Your Honours, I do not think I need to

go beyond that. There is nothing particularly

turns upon it for the purposes of arguing this

application. I could offer an explanation,

Your Honour, but I do not think it would be very

helpful, unless Your Honours wish to hear me on it.

MASON CJ:  No, I am not particular anxious to know except,

you know, it is a matter df concern - - -

MR BRANSON:  It is a matter of concern, Your Honour.

Kaljo 3 12/2/93

MASON CJ:  - - - that an appeal takes so long to come before

a court.

MR BRANSON:  It is, and if I might just say this - and I

think my learned friend would agree with this -
that one problem that confronted the respondent to

this application was a question of funding and I

believe that there was a legal aid application that

was extant for some time.

MASON CJ:  I see.

MR BRANSON: There may be other reasons, Your Honour, but, I

think, in fairness, that is the most apposite way
to put it. Your Honour, I interrupted myself

by - - -

MASON CJ:	I think I interrupted you, Mr Branson.
MR BRANSON:	Your Honour, I was talking about the lapse of

time. But the reason I mention it, Your Honour,

was that there were, between the time of the trial

judge's decision and the decision of the Court of

Appeal in this case, three decisions in the Court

of Appeal, none of which were founded upon a

construction of section 20 of the kind that

Mr Justice Handley invoked here. In essence, he

resorted to equitable principles. He paid regard -

I will take Your Honours to his judgment in a

moment - to what he said was the ability of the

Court of Chancery to award damages in limited

circumstances and drew an analogy with the decision

of this Court in Amann Aviation. As Your Honours

of course well know, it was concerned with the

bases of awarding damages for breach of contract.

Now, Mr Justice Handley sat on one of these

earlier decisions - in Black v Black. It was a

judgment written by Mr Justice Clarke less than a

year before the decision in this case.

GAUDRON J: That was a property case?
MR BRANSON:	Yes.

GAUDRON J: That was a contributions to property case.

MR BRANSON:  Yes. I should say, with respect to the Court,

and in fairness to the respondent here, that the

three decisions of the Court of Appeal were

concerned with property as opposed to welfare

contributions. Here, the respondent/spouse based

her application solely on the welfare contribution

which had two components, both a homemaker role and

a role as a parent. So that certainly, Your Honour

Justice Gaudron, those decisions were not directly

concerned with section 20(b) of this Act.

Kaljo 12/2/93

However, the court on each occasion saw fit to

make some general comments about how the section

should be construed and, in particular, in Black v Black, a decision in which Mr Justice Handley took

part, Mr Justice Clarke, who wrote that judgment

said that he thought it was inappropriate to have

any regard to notions of promise or reliance which

were matters that Mr Justice Handley thought were

important in this case.

Your Honours, that is an overview of the

application before you today. Ultimately, the

award_made by the Court of Appeal was the sum of

$400,000 which, together, with interest, makes the

judgment sum well in excess of $600,000.	The
amount awarded by the trial judge,
Mr Justice Hodgson, was the sum of $50,000.

Now, Your Honours, can I indicate that we have

available some folders consisting of some extrinsic

materials and some cases. I propose merely to deal with them in summary form and with the exception of the Law Reform Commission Report there are several

passages I would wish to take the Court to.	My
actual reference to these materials will be

sparing. At first blush, it seems to be a large

mass of material but they are here in case

something arises during the argument, Your Honours.

I do not propose to take up any unnecessary time by taking Your Honours in great detail through them,

but if I may have Your Honours' permission just to

hand up these volumes.

MASON CJ: Thank you.

MR BRANSON:  Your Honours, the starting point for the

background to this legislation is some statistical

information which is to be found in the first

document which is headed, "An Outline of Report on

De Facto Relationships", and I will just summarize

that very briefly to inform the Court that the

information obtained from the Australian Bureau of

Statistics for the period over 1976 to 1982

indicated that something a little less than

5 per cent of all couples in Australia were living

in de facto relationships throughout Australia.

MASON CJ:	What is the relevance of all this?
MR BRANSON:	Your Honour, just briefly to illustrate the public importance of the matter. It is
self-evident; that lest it be thought that this
legislation is of very limited application.
MASON CJ:	I would not have thought that anyone would think

that.

Kaljo	12/2/93
MR BRANSON:	Your Honour, I will pass from it. It is there.

The next bundle behind tab 2 is the Law Reform

Commission Report. Now, Your Honours, if you would

turn to, firstly, page 146. Hopefully,

Your Honours, that will appear just behind a yellow

tag, and there is, "IV. PROPOSALS FOR REFORM", and

at the top of the page there should be 146. If I

just briefly indicate that the proposals for reform

there under the heading "A. Recognition of

Contributions", that makes clear, at about point 5,

that the mischief to be remedied was that the law

failed:

to give sufficient recognition to two kinds of

contribution to a de facto relationship -

and, in summary -

. indirect financial and non-financial

contributions -

to property, and welfare contributions. If the

Court were to go over the page to 147 at the top of

the page there are set forth the essence of the

recommendations made by the Law Reform Commission

which have found their way into section 20, save

and except that the opening words of sectLon 20 are

not contained there. What they have sought to do

is to specify the types of contribution: (a) being
the property-type contribution; (b) the

welfare-type contribution.

MASON CJ:  Mr Branson, could I ask you at this stage, does

the Act closely follow the draft bill that is

annexed to the report of the Commission?

MR BRANSON:  Yes, Your Honour.

MASON CJ:  There is no need to go to it now. You deal with

it in -

MR BRANSON:  It does. I do not want to labour this,

Your Honour. They are just two or three short

points out of this Law Reform Commission Report.

At paragraph 7.46, still on page 147, Your Honours

see they refer to an English statute and then:

That provision specifies the criteria to be

taken into account in determining whether to

make an order for settlement of property -

and so on. And then if you go over, please,

Your Honours, to 149, the heading at the top of the

page, "An Adjustive Jurisdiction", again, at about
point 5 there is a paragraph beginning under the

indent:

Kaljo 6 12/2/93

We think that the concern about certainty can

be met to a substantial extent by carefully

specifying the criteria to be taken into
account by the court when adjusting the
property rights of the de facto partners, and

by not simply leaving the matter to the

unfettered discretion of the court. The

language used in paragraph 7.44 should achieve

this result.

And that takes us back to the recommendations

which, Your Honours, were seen on 147.

Your Honours, the only other matters that I

would wish to take you to in the Law Reform

Commission Report, if you go over to 181 there

should be a yellow tag and in the first full
paragraph on that page there is a sentence, about

half-way down that paragraph:

We repeat that we contemplate a clear

distinction between the grounds on which an

order for adjustment of property may be made

and those on which an order for maintenance

may be made.

And it goes on, that it:

therefore differs from the theoretical

position under the Family Law Act.

And that is a theme that is developed in the

legislation.

Now, Your Honours, the next document is the

second reading speech of the Attorney-General upon

the introduction of the bill to the Parliament,

17 October 1984, and at about point 4 there, of the

second page, the Attorney makes it patently clear

that the bill is founded upon the recommendations

of the Law Reform Report. There is also an

explanatory note behind tag 3. That merely states

that clause 20 of the bill specifies the criteria

to be taken into account.

So, Your Honours, they are the extrinsic

materials to which the Court would have regard were

leave to be granted.

The Act itself is set out behind tab 8. There

is no need to take Your Honours to the comparable

legislation. Now, the structure of the Act is not

unimportant. There are, of course, definitional

sections as to the meaning of "de facto partner",

"de facto relationship'', and the like, section 3.

Importantly, section 7 provides that:

Kaljo 12/2/93

any -

other -

right of a de facto partner to apply for any

remedy or relief under any other Act or any

other law -

are preserved, in section 7. There is a power to

declare interest in property in section 8.

Section 9 deals with jurisdiction. Then Part III

of the Act deals with both property adjustment
orders and maintenance provisions. Section 14(2)

again makes it evident that any other relief

available to a de facto spouse is preserved. There

are certain prerequisites as to residence and so

on.

Now, section 17 provides a further

prerequisite, and it gives the court, as it were,

especial or exceptional jurisdiction so that even

where the relationship is less than 2 years, a

court can grant relief in the nature of property

adjustment if there has been a substantial

contribution which would otherwise not be

adequately compensated for and if the failure to do

so would result in a serious injustice.

We then come to section 20, which is in a

separate division, Division 2. Your Honours would

have, perhaps, seen it set out in the Court of

Appeal judgments. But the important words are

that the power to make an order adjusting the

interests is to be such -

as to -

the court -

seems just and equitable having regard to -

and the matters are enumerated. I repeat the claim

here by the respondent/spouse is based solely on

subparagraph (b), that is to say, the welfare

contribution. Here, the effect of the order that

the Court of Appeal made was a lump sum so that as

section 20(2), the court does not have to first

declare an interest in the property or any

particular parcel of property. It attaches, as it

were, in personam on the respondent and we will

see, when we come to section 38, there is power to

do that, as I say, notwithstanding that there is no

property contribution made by a spouse, merely a

welfare contribution, and the Parliament has seen

fit to empower the court to adjust the interests

even without declaring what that interest may be in

respect of any particular piece of property,

Kaljo 8 12/2/93

"property" having a very broad meaning in

section 3.

In Division 3, Your Honours, deals with

maintenance and you will see, importantly, that

section 26 provides that:

Except as otherwise provided by this Division,

a de facto partner is not liable to maintain

the other de facto partner -

and so on:

is not entitled to claim maintenance from the

other -

and then section 27 provides a very limited

entitlement to maintenance, in the first instance,

in subsection (l)(a), where:

the applicant is unable to support himself or
herself adequately by reason of having the
care and control of a child of the de facto

partners -

or, (b) where:

the applicant's earning capacity has been

adversely affected by the circumstances of the

relationship -

but they are the only circumstances in which a
de facto partner can obtain maintenance. It is

apposite to point out that in section 27(2)(d)

there is provision for the court to have regard to

any property adjustment order made in fixing an

order under 27(1).

The only other provision of significance is

over at section 38 which deals - it is Division 4,

still in Part III, dealing with the type of orders

that can be suitably framed, and the Court will see

that section 38(l)(d) empowers the court to order

a:

payment of a lump sum, whether in one amount

or by instalments.

So, that is the structure of the Act, and it

follows, substantially, the recommendations made in

the Law Reform Commission Report of June 1983.

May I just indicate I may have been less than

categorical when Your Honour the Chief Justice

asked me a question. Clause 20 of the bill

appended to the Law Reform Commission Report is

Kaljo 9 12/2/93

identical to section 20.	I apologize if I was
uncertain about that.

So, with that background in mind, can I take

Your Honours - if I just reiterate: section 20 is

contribution driven. There is nothing in the
language of section 20 that would authorize the

court to go beyond an assessment of the relevant

contributions, just looking at the language of the

section and having regard to the recommendations

that were clearly made in the somewhat limited form

by the Law Reform Commission.

GAUDRON J:	When you say it is "contribution driven", I dare say one could imagine a case where there was no
contribution of any kind, one would have a
situation different from what we are here
contemplating with, but to say it is "contribution
driven" does not tell you much about how you place
a value on that contribution at all.
MR BRANSON:	No, it is, with respect, Your Honour, somewhat

open-ended, in any event.

GAUDRON J:  And Mr Justice Handley really did no more than

set out the way in which, in his view, that value

should be assessed.

MR BRANSON:  Yes, I would have to respectfully agree with

thatj Your Honour. But may I just say this, that I
think that the real nub of the problem that we face

is that it is very difficult, indeed, to totally

disregard the financial circumstances of the

de facto partners when assessments of this kind are

being made. Now, true it is that from looking at

the extrinsic materials and the literal language of

the statute, there is no reference to needs or

means or financial circumstances. We would submit

that, of course, it would be totally unreal to

disregard the financial circumstances but they are

merely contextual. They do not provide a basis as

would an application for maintenance under the

Family Law Act for framing an appropriate order.

The extrinsic materials and the statute make it

plain and evident that the needs and means of
de facto partners are of very limited relevance.

They are not to be totally ignored, and we complain that what Mr Justice Handley and

Mr Justice Priestley have done is to give them a

predominance and an importance that is nowhere to

be gleaned from the statute or the extrinsic

materials.

Perhaps before I go to the judgments in this

Court, could I just tell Your Honours briefly what happened in these Court of Appeal decisions. They

are respectively behind tabs 9, 10 and 11 in the

Kaljo 10 12/2/93

supplementary material. Now, bearing in mind that

these were concerned with property contributions

and not welfare contributions, in the first

decision, which is Miller v Barker, the Court of

Appeal was constituted by the Chief Justice

Mr Justice Gleeson, and Justices Priestley and

Meagher. Nowhere in that decision -

MASON CJ:  Mr Branson, I really think you are taking a lot

of time over this. It is an application for

special leave to appeal, it is not an appeal. I

think you ought to focus on the precise points and

what you are going to say about them.

MR BRANSON:  I take Your Honour's point and I am happy to

move on. Can I take Your Honours to the judgment

of Mr Justice Handley? It commences at page 57 of

the application book. It is true that the primary findings of the trial judge were not in dispute in

any significant way in the Court of Appeal and we
concede, at the outset, that the respondent/spouse

here did make a substantial welfare contribution.

Now, the material facts include the findings

made by the trial judge, of course, as to the

lifestyle and - - -

MASON CJ:  But we are not concerned with all that. What we

really want to do is identify what you say are the

errors of law made by the Court of Appeal.

MR BRANSON:  The error of law committed by the majority, we

submit - and I had hoped I had made this clear at

the outset - is the wrong construction placed upon

section 20. Now, I will move to that, Your Honour,

if the Court pleases.

Now, if we o to page 64 at line 25, the last

paragraph, Mr Justice Handley refers to the

submission that the trial judge had "been unduly

cautious and restrictive". There is reference to

Black v Black. The importance about Black v Black,

perhaps, in the context of this case was that in

the interval that had elapsed it was made clear
that it is not appropriate to compare the welfare

contribution by tendering evidence of housekeeping

rates.

Now, His Honour moved on to deal with

section 17(2) and the power under section 20, as he

said, to ensure that there be adequate

compensation, but it is not limited to that. There

is reference to Sharp v Wakefield.

MASON CJ:	Now, do you agree with that?
MR BRANSON:	Yes, we do, Your Honour.

Kaljo 11 12/2/93

MASON CJ: Because there is a contrast between 17(2) and

20(1).

MR BRANSON:  Yes. But compensation would only be used in

the term of a reward for a contribution.	Then in
the last paragraph:

The power to make a just order must

therefore authorise orders to remedy any

injustice the applicant would otherwise suffer

because of his or her reasonable reliance on

the relationship (a reliance interest) or his

or her reasonable expectations from the

relationship (an expectation interest). The

section would also authorise orders which

restored to the applicant benefits rendered to

the other partner during the relationship or

their value (the restitution interest).

Circumstances which gave practical content to

an applicant's reliance interest may also

establish a restitution interest. Compare the

expectation and reliance interests as

alternative bases for awards of damages for

breach of contract.

MASON CJ:  Now, are you objecting to that?

MR BRANSON:  We do. We would submit that there can be no

helpful analogy to be drawn from the principles

that emerge from this Court's decision in Amann,

particularly given that the contract setting, of

course, is dependent upon the movement of
consideration that arises out of an express

promise, the very antithesis of the relationship

which we have here.

GAUDRON J: But that really says no more, does it, than that

one should have regard to the opportunities,

presumably, that are reasonably expected to have

been foregone in the circumstances of a case such

as this?

MR BRANSON:  Your Honour, the hopes and expectations and

desires of the parties to any relationship of this

kind ought to be mutual but it is difficult, with
respect, to compare them directly to the sort of

commercial setting that the Court was dealing with

in Amann and, with respect to His Honour -

MASON CJ: Yes, Amann seems a little remote but the idea,

none the less -

MR BRANSON:  The idea is an attractive one, Your Honour, I

concede, but it is not in the statute and, really,

it does not enhance the force of what Mr Justice

Handley is putting, we say with respect, by

adverting to Amann. His Honour goes on:

Kaljo 12 12/2/93

There is no reason to treat the words

"just" and "equitable" as synonymous and every

reason to do otherwise .... In my opinion the

Court is authorised to apply equitable

principles by analogy. Equity would award

compensation for breach of equitable duties

but on its own principles. It also granted

relief which went beyond compensation by

requiring fiduciaries and wrongdoers to

account for profits which plaintiffs could

never have earned.

MASON CJ:  But when a court is empowered to do what is just

and equitable, having regard to considerations that

are mentioned, the court's jurisdiction is not

limited, is it, to merely valuing the contributions

that have been made?

MR BRANSON:  Your Honour, may I seek to answer that in

this - - -

MASON CJ:  When you have regard to the contributions and no

doubt you have regard to the value of the

contributions. But the jurisdiction of the court

to do what is just and equitable may go beyond

that. .

MR BRANSON: It is broad.

MASON CJ: Yes.

MR BRANSON: Yes, it has to be, Your Honour. It is

discretionary. But what His Honour is here saying

in this passage - and he mentions Muschinski v

Dodds, and Your Honours may recall there was there a commercial flavour to that particular de facto

relationship and that is why the Court found that

there ought to be a constructive trust because it

would have been unconscionable - a different case

to this one. His Honour goes on to say:

Similarly the Court may be entitled to find	that it would be equitable to treat de facto
applied to them.

couples as if the presumption of advancement

Well, Wirth v Wirth decided the opposite as did

Calverley v Green. So, that is not a correct

statement of principle. Your Honour

the Chief Justice well knows that prior to the
passing of Lord Cairns' Act in 1858 there were very

isolated circumstances in which equity would award

damages.

MASON CJ: Is this a sort of subtle reflection to my age,

Mr Branson?

Kaljo 13 12/2/93

MR BRANSON:	I was thinking about some interesting lectures that Justice Gaudron and I received in 1964,
perhaps. But, Your Honour, with respect, for
Mr Justice Handley to refer in his judgment to the
very limited circumstances in which equity would
award damages, and almost invariably as only
incidental or ancillary to the principal relief, is
not to the point of interpreting the statute, with
respect.
MASON CJ:	No, but it is an unnecessary display of learning

on the part of the judge, is it not?

MR BRANSON:  And, with respect, Your Honour, in the material

respect, not correct. Not correct in principle.

MASON CJ: That is one of the errors where - - -

MR BRANSON: Well, no, we cannot complaint that that is an

error per se.

GAUDRON J:	You come up to the sentence that commences the next paragraph. What you are complaining about is
just the context for this conclusion, and you have
already indicated you do not complain about the conclusion, that the power:

is not limited to orders which are merely

compensatory.

MR BRANSON:  No, that would be to put too narrow a

construction on it, with respect, Your Honour.

His Honour then goes on to talk about the

error and we would concede that this is so, that

you do not look at housekeeper rates. In looking

at the welfare contribution or the homemaker

contribution, decisions such as Mallet make it

clear that, in the Family Law context, the

homemaker contribution is prima facie as important

as the property-type contributions. So, all of

that we would concede. There is no vice in any of

that.

Then His Honour goes on - and he refers to

Mallet at the top of page 68 - to refer to certain

errors of principle he says that Mr Justice Hodgson

made.	He talks about the resale value of some
items of personalty that the respondent had.	Then
he refers to:

"the best years of a woman's life" -

in terms of a significant reliance interest.

MASON CJ:  That might be criticized by another section of the community.

Kaljo	14	12/2/93
MR BRANSON:	Yes, Your Honour, with respect.	Then

His Honour, at line 15, says it was wrong:

to minimise the significance of the

defendant's assets.

And then further down:

the defendant's wealth was not a "subsidiary

factor".

And then he says it:

should be treated as a most important factor

in the exercise of the Court's discretion

under s 20. The defendant clearly used his

wealth as an inducement to the plaintiff to
enter into the relationship and he used it to

support that relationship while it lasted.

The luxurious lifestyle maintained by the

defendant for the partners was no doubt partly

self indulgence but it also indicates his own

assessment at the time of the value that he

placed on the plaintiff's contributions to his

welfare. The defendant's conduct during the

relationship provides a far better benchmark

for the Court than the submissions of his

counsel -

Now, Your Honours, that is wrong, with respect.

His Honour made no such finding that the defendant used his wealth as an inducement to the plaintiff

to enter into the relationship and it was a subject

dealt with in Mr Justice Mahoney's dissenting

judgment at page 51, commencing at line 25.

Indeed, the very opposite appears. So,

Mr Justice Handley is clearly wrong in making that

statement that there was an inducement to the

plaintiff or, indeed, that there was any nexus

between the defendant's wealth and any reason why

this lady entered into this particular

relationship.

His Honour goes on there to talk about:

the reasonable expectations as to her living

standards identified by the Judge -

but, again, no finding made about what they may or

may not have been. It was not addressed by an

order of only $50,000. It uses the contrast with

the hypothetical case of the frugal millionaire

sharing a spartan lifestyle. And then, she:

sought an order for payment of $400,000. In

my opinion the justice of her case called for

no less.

Kaljo 15 12/2/93

So, there is a very slender reasoning process

exposed by the last several pages of His Honour's

judgment as to how, indeed, he came to the view

that the sum of $400,000 was an appropriate

recognition of the welfare contribution.

I will not take Your Honours to what

Mr Justice Mahoney said.	I think Your Honours
would have read it.	He takes a very different but,

we would say, sensible and persuasive view of the

section. He found no error in anything that

Mr Justice Hodgson did, although we would

acknowledge that to the extent that any regard was

paid to housekeepers' rates, that is singularly

inappropriate.

But, Your Honours, by reason of what the Court

of Appeal had done in these earlier decisions which

we have provided to the Court, there is an

inconsistency in approach taken. Admittedly, the

Court of Appeal is not a specialist intermediate

court dealing only with matters of this kind as the regard to what Your Honour the Chief Justice,

Mr Justice Deane and Mr Justice Brennan said in

Norbis about the desirability of laying down some

guidelines for the interpretation and application

of discretionary matters such as this, we would

respectfully submit that that is a reason why this

Court, having regard to the earlier Court of Appeal

decisions, would wish to grant special leave in

order to clarify - - -

MASON CJ:  I think you might say "should" rather than

"wish".

MR BRANSON:  I am sorry, "should" . I am sorry, Your Honour,

I beg your pardon. We submit, Your Honours, there

is just no basis to be found by a literal reading

of the relevant section, nor to be gleaned from the

extrinsic materials, as evidencing any intention on

means of the parties and to examine their financial	the part of the Parliament to go into the needs and
circumstances as forming some basis for these
notions of reliance or expectation and restitution
interests.
I thank Your Honours for the time Your Honours have extended to us. I think, unless there is
anything further, they are our submissions, if the Court pleases.

MASON CJ: Thank you, Mr Branson. Yes, Mr Donovan?

MR DONOVAN:  Your Honours, we say that special leave should

not be granted for two reasons: the first, in

effect, is that this is a case which involves a

Kaljo 16 12/2/93

local statute and involves exceptional

circumstances. This situation where there is a

very rich de facto husband and a very young

de facto wife is a very unusual one. It is not one

which, on its facts, is likely to call for any

particular special point of principle.

MASON CJ:  No, but the attack is upon the width of the

jurisdiction as it is seen by the Court of Appeal.

MR DONOVAN:  Yes. Could I come to that then in terms of the

second part which, what I was going to say,

Your Honour, was that the decision is clearly

correct. That perhaps picks up what Your Honour

just said, the width of the jurisdiction.

Your Honours, I will, in a moment, hand up

just a rough outline of what I have got here, but

can I try and shortcut it by saying this: the

section does not require a mathematical division of

contributions. It does not specify it in terms of

property situations or contributions to welfare.

Indeed, contributions to welfare would be

impossible to do. Its fundamental test is "just

and equitable". It then refers to "having regard

to contributions" but nowhere does it say, "having

regard solely to contributions". That in fact

contrasts with a lot of other Acts in New South

Wales, for example, the Bail Act, where there is a set of factors for bail and it says, "having only regard to these particular factors".

Indeed, it is conceded by my learned friend

that other matters must be looked at to some

degree: things such as financial circumstances;

things such as needs. I may be wrong, but it seems

to us, Your Honours, that what is being put forward

is that, "Yes, just and equitable is the test.

It's very wide. You have regard to contributions

but then you've got to be a bit careful where else

you go." Now, that may or may not be true. The

important thing is that wherever the borderline is

about where else you go, Mr Justice Handley has not

gone beyond it.

Indeed, the sort of major thrust seems to be

to attack the reliance interest and the expectation

interest. It may be worthwhile for me just to

point out to Your Honours that they are labels on

two matters - and Your Honour Justice Gaudron

referred to this.	They are labels which refer to
particular matters.	The expectation interest

referred to by His Honour, if I use that term, was

that she would have particular living standards.

Now, that is all the expectation interest in this

case refers to. That is at page 69, line 12, by

Mr Justice Handley.

Kaljo 17 12/2/93

The restitution interest is referred to by

Mr Justice Handley as being the best years of the

woman's life. That is page 68, line 10. Now, if

Mr Justice Handley had gone beyond those types of

things as expectation interests or restitution

interests, maybe I might have a bit of difficulty,

but limited the way it is, Your Honours, to those

two matters, no one can dispute that they are

relevant matters. The label that is put on them is

not important. Indeed, even Mr Justice Hodgson

referred to both those two matters in his primary

judgment and just to note them for

Your Honours -

MASON CJ: Whereabouts?

MR DONOVAN: Application book, page 19, line 10; application

book 23, line 20. They are both - I will not say

expectation interests - living standards or what

Mr Justice Handley referred to as expectation - - -

TOOHEY J:  I am sorry, where are you taking us, Mr Donovan?

MR DONOVAN: Application book, page 19, line 10; and 23,

line -

TOOHEY J: That is expectations of marriage, is it not?

MR DONOVAN:  No, let us go back for a moment:

promises or expectations of marriage -

it refers to "expectations".

TOOHEY J:  Is that the sense in which you are using

"expectations"?

MR DONOVAN:  It is perhaps not. Can I withdraw it and put

it this way: there is what might be called the

expectation interest but Mr Justice Handley has

only referred to standards of living.

Mr Justice Hodgson put other things notionally
within that concept.	Mr Justice Hodgson, of

course, never used the words "expectation

interest".

But, also, could I take Your Honours, on this

expectation factor - I will put it that way - to

page 23, line 20, where Mr Justice Hodgson does,

indeed, refer to the expectation matter in the same

terms as Mr Justice Handley.

I think I can take also into account

reasonable expectations as to a standard of

living which the period with the Defendant

would have given rise to.

Kaljo 18 12/2/93

That is identical in substance to what

Mr Justice Handley called the "expectation matter".

Dealing with the restitution matter,

Mr Justice Handley refers to that at page 68, line 10:

as "the best years of a woman's life" -

and the trial judge, Mr Justice Hodgson, referred

to it at application book, page 23, line 5:

F~rthermore, it seems to me that it is

relevant, despite the paucity of evidence, to

give some weight to the circumstance that the

relationship has lasted through important

years of the Plaintiff's life, namely the

years between the age of 22 and the age of 29.

Those are the years in which a person in the

Plaintiff's position may well have laid some

foundation for the rest of her life, either by

making some progress in her career, or by

marrying, or in some other way.

TOOHEY J:  Mr Donovan, how do you say that

Mr Justice Handley dealt with section 20(l)(b)?

Did he simply treat it as a consideration. that

Parliament has chosen to identify in the statute but as having no more or less importance than a

whole range of other considerations?

MR DONOVAN:  No, no. He was emphasizing, of course, the

importance of the "just and equitable" part of it

and he did not emphasize so much the contribution

side of it because that had been the type of

narrower use of "contributions" which

Mr Justice Hodgson made. So, I would have to

accept, perhaps, Your Honour, that there is a bit

of emphasis going more to the "just and equitable",

partly to redress what Mr Justice Hodgson said and

also, perhaps more importantly, to emphasize to

first instance courts in New South Wales what had

been said in Black v Black, that the orders had to

be of some substance and significance because there

had been some difficulty of them being very small

orders, well outside what was just and equitable.

So, if Mr Justice Handley is emphasizing "just

and equitable" and not referring very much to (b),

that is the reason why. But, certainly,

Your Honour, he is not ignoring (b) by any means.

If I could just go back for a moment, I will try

and pick that up. You see, what His Honour is

starting off with, of course, is, if you go to

page 64, the contribution part of it, to the

welfare of the family - I am sorry, it should be a

Kaljo 19 12/2/93

little bit earlier perhaps. And then he talks

about the contributions to the defendant's son.

Could I just go back for a moment?

Your Honours will no doubt be aware that what

Mr Justice Handley was dealing with was the error

of what had been known as the "four-stage test", so

the issue of contributions starts to come into the

last two parts of that test and that really sort of

takes place on page 63, and you will see that there

are references to the contribution there.

His Honour does not say very much about it but
His Honour is certainly noting what has been said

about it and taking it into account.

TOOHEY J: Well, could I ask you then what you say about

paragraph (b), its role in the subsection?

MR DONOVAN: All right. Clearly, in the ordinary course, if

you are going to work out what is a fair result,

you are going to look at what each person has put

in by way of effort or money or emotion, or

whatever it might be, to the relationship. That is

the first step. That is what is meant, we say, by

"having regard to the contributions". That would

be, in the ordinary course, one's starting point.

That has got to be taken in the context of

what is "just and equitable" which expands the

discretion and in expanding the discretion the
court is then empowered to look at other matters
such as the total financial situation of the

partners because, as in this case, you may have one

partner who comes in with a huge amount beforehand

and one partner who comes in with nothing,

financially, I mean.	You would look at the
lifestyle, as is stated here.	You would look at
the needs.	You would look at what has been given
up by, in this case, the female partner.	You would
look at those sorts of things.

If one comes back to this question of contributions in the welfare context. I specified

a moment ago one would look at what the parties

bring in by way of contributions; that being the

effort and time spent on the relationship, the

emotion, the caring, those types of things. It is

very difficult in the ordinary course to say,

"Well, look, this bit of effort or this bit of love

is worth so much money", but nevertheless to some

extent that could perhaps be done by time. There

are all sorts of ways of working it out.

I have got to say, when you get to the welfare

part, paragraph (b), the valuing of contributions

does get much more difficult. No one would dispute

that. It may be, when you come to paragraph (b),

Kaljo 20 12/2/93

because the valuing of contributions becomes more

difficult, you need greater emphasis on the "just

and equitable" and things such as lost

opportunities which the non-financial partner has

given up or not been able to make use of.

Now, I am not sure I can put it too much

further than that. I mean, not at this level any

way. Obviously, at a different level, I could, but

that is probably as good an answer as I can give in

this brief time.

MASON CJ:  Can you explain to me how it was that the Court

of Appeal increased the award of $50,000 to

$400,000?

MR DONOVAN:	I can give a guess.
MASON CJ:	I wanted more than a guess.

MR DONOVAN:  Look, I cannot. I mean, at the end of the day

one comes back to what Mr Justice Handley says, and

maybe it works this way:  he said, "Look, she's

lost her lifestyle; she's lost opportunities; she's

lost the best years of her life; she's given a lot

to this relationship", and then His Honour simply

ends up by saying, "The justice of her cas.e called

for no less."

My impression on that, Your Honours - and I

should say that we did apply for leave to amend the

original summons to claim more than the $400,000

and that was not allowed - is that the result that,

if you sat down and worked it all out, you would

come up with something more. I do not say

significantly more; I do not know how much more,

did not need to do the calculation further.

but you would come out with something more.

MASON CJ:  Do you concede that the Court of Appeal's decision rests on matters other than paragraphs (a)

and (b); in particular (b)?

MR DONOVAN: If you say only (a) and (b), I would probably

have to say it does, but if you say it in the

context of "just and equitable", which is the words

just before (a) and (b) - - -

MASON CJ: 

I am not concerned with "just and equitable", I

am concerned with the paragraphs which, on one
view, prescribe the relevant considerations.

MR DONOVAN: 

Your Honour, could I just answer it by saying

this for a moment: it would be unthinkable; it

would be unthinkable that anyone would say, "This

section simply means a mathematical calculation of

Kaljo 21 12/2/93

contributions." However, let me then answer it.

If Your Honour takes out the first part, "just and

equitable", and does not let me use that in the

section - and I am going back to (b), the

contributions - no, I do not say the court has gone

beyond that, for this reason: the contributions

referred to there are not money, they are actions,

they are things that people do. So, in order to
assess the value of those, you have to look at

these interests.

MASON CJ: For example, by making a contribution over a

numbe~ of years as homemaker, you lose

opportunities, so obviously you would have regard

to lost opportunities.

MR DONOVAN: That is right, yes.

GAUDRON J:	Not in a particular or a precise way either.
MR DONOVAN:	No, but that would help to give you the

monetary value of what that contribution was, and

that is all Mr Justice Handley has done.

MASON CJ: What about expectations? What were the

expectations that he took into account? That is

one thing I am not clear in in my own mind at the

moment.

MR DONOVAN:  The expectations that are referred to - the

first one I will take Your Honours to is at page 69

of the application book, line 11:

Clearly the reasonable expectations as to her

living standards identified by the Judge were

not addressed by an order for payment of

$50,000.

Now, that is an expectation matter referred to by

Mr Justice Handley. That is the express one that he refers to there, the expectations of her living

style and living standards which, of course, in

this case could be judged to be fairly high or very

high.

Now, Your Honour the Chief Justice was asking

me about whether these matters came in under

"contributions". Certainly, what has been called
the restitution interest comes in under

"contributions". There would be little question of

that, I would submit. The expectation interest may

be - it is perhaps widening the concept of

"contributions" or the assessment of value of

contributions but certainly we would submit that it

is a matter which is relevant to contributions

although it may not be said to be a contribution in

Kaljo 22 12/2/93

the way that a restitution matter might be. I

think that is as far as I can answer at the moment.

MASON CJ: Yes, thank you.

MR DONOVAN:  Your Honours, I did have these brief

submissions I was just going to hand up. I do not

know whether they are of assistance to Your Honours

but certainly I might ask Your Honours to have a

quick look at those.

MASON CJ: Yes.

MR DONOVAN:  Your Honours, could I just perhaps come to the

end by saying this: on any view of it, there were

a number of significant errors by the trial judge.

We say that that gave the Court of Appeal the

discretion to relook at the matter. It may be - we

do not concede this in the light of what we have

said - that at some point Mr Justice Handley may

have used words to describe something but we say if

there is anything which is objectionable there, an

expression of learning, whatever it might be, at

the end of the day it makes no difference to the

amount which this respondent should have received,

particularly in the light of the more recent Court

of Appeal authority, particularly cases such as

Black v Black, particularly, if I might say, in the

light of two important matters: firstly, that the

section - in the Law Reform Commission Report at

page 149 it was suggested there that the approach

to be taken:

follow broadly the approach adopted by the

Family Law Act -

Now, if that is correct or if that is to be taken

into account, then the type of order of $50,000

just could not be sustained.

More importantly, perhaps, the second reading

speech of Mr Landa at page 2002, the second

paragraph, about half-way through, made similar

references:

The law Reform Commission found that as the

range of financial arrangements made by

de facto partners is similar to the range of

arrangements made by married couples,

analogous legal principles ought to be applied

to the resolution of financial affairs of

de facto partners. Under the legislation, the

court will be empowered to adjust property

rights on the basis of contributions, which

will largely follow the criteria laid down in

the Family Law Act.

Kaljo 23 12/2/93

And that does not just mean the criteria, but also

the types of orders - the quantum, to be quite

blunt - the quantum of orders that are made.

For a relationship which was nearly seven

years, for the best part of this young woman's

life - now I am going to the facts just for the

moment - with a man who was worth conservatively

$11 million, the award of $400,000 could in no way

be seen as an excessive order under the Court of

Appeal's discretion. At the end of the day, we

submit that that amount just cannot be changed

down. May it please Your Honours.

MASON CJ: Thank you, Mr Donovan. Mr Branson?

MR BRANSON:  I say three things very briefly, if the Court

pleases. Firstly, in relation to the comparison of

the Family Law Act, unlike the Family Law Act,

where section 79(4) expressly incorporates the

factors to be taken into account under 75(2), that

is, the needs and means of the parties, this

legislation, as Your Honours have seen, fails to do

that. Indeed, the Law Reform Report notes that and

emphasizes it.

Secondly, to the extent that

Mr Justice Handley has said that it is relevant to

look at the conduct of the parties in the context
of this section, that would seem to us to invoke
the notions of fault that certainly went by the

board when the Matrimonial Causes Act was repealed

and the Family Law Act was passed, coming into

force on 1 January 1976.

Thirdly, perhaps as best demonstrated by my

learned friend's inability to indicate to the Court

how it was that His Honour Mr Justice Handley came

to the figure of $400,000, the introduction by

His Honour of notions of reliance or expectation

and restitution are lacking in clarity and so vague	and uncertain as not to offer any reliable guide	for a consistent application of the section. If
the Court pleases.

MASON CJ:  Thank you, Mr Branson. The Court will take a

short adjournment in order to consider the course

it will take in this matter.

AT 4.37 AM SHORT ADJOURNMENT

Kaljo 12/2/93

UPON RESUMING AT 4.50 PM:

MASON CJ: Without endorsing what was said by

Mr Justice Handley, having regard to the width of

the discretion conferred bys. 20 of the De Facto

Relationships Act 1984 (N.S.W.), we are not

persuaded that the applicant's prospects of success

in challenging the amount awarded by the Court of

Appeal are sufficient to warrant the grant of

special leave to appeal.

The application is therefore refused.

MR DONOVAN:	We apply for costs, Your Honour.
MASON CJ:	You do not oppose costs, Mr Branson?
MR BRANSON:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 4.51 PM THE MATTER WAS ADJOURNED SINE DIE

Kaljo 25 12/2/93