Kemp v French

[2010] NSWSC 971

CITATION:	Kemp v French [2010] NSWSC 971
HEARING DATE(S):	23 August 2010 24 August 2010 25 August 2010
JUDGMENT DATE :	25 August 2010
JUDGMENT OF:	Hallen AsJ
DECISION:	(a) Declare that the Plaintiff and the Defendant were living in a de facto relationship from in about June 2002 until about April 2005 and then from about October 2005 until about September 2007; (b) Order the Defendant to pay to the Plaintiff $88,750; (c) Parties to bring in short minutes to give effect to the reasons; (d) Parties to argue costs.
CATCHWORDS:	PROPERTY RELATIONSHIPS - de facto relationships - adjustment of property interests - s 20 Property (Relationships) Act 1984 (NSW) - when de facto relationship commenced and ended - contributions made by parties and by mother of the Defendant - evaluation of any non-financial contributions - whether adjustive orders just and equitable in all circumstances
LEGISLATION CITED:	Evidence Act 1995 Family Law Act 1975 (Cth) Property (Relationships) Act 1984
CATEGORY:	Principal judgment
CASES CITED:	Beattie v Reid [2002] NSWSC 1088 Beavan v Fallshaw (1992) 15 Fam L4 686 Bilous v Mudaliar [2006] NSWCA 38 Black v Black (1991) 15 Fam. LR 109 C v B [2007] 1 Qd R 212 Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360 Cureton v Blackshaw Services Pty Limited [2002] NSWCA 187 Deves v Porter [2003] NSWSC 625 Dion v Rieser [2010] NSWSC 50 Evans v Marmont (1997) 42 NSWLR 70 Fletcher v Furnance [2008] NSWSC 132 Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336 Henry v Ford (No 2) [2009] NSWSC 1254 Howlett v Neilson [2005] NSWCA 149 Jones v Dunkel (1959) 101 CLR 298 Kardos v Sarbutt [2006] NSWCA 11 M and M (1998) FamCA 42 McKone v Maretta (1999) DFC Paino v Paino [2008] NSWCA 276 Payne v Parker [1976] 1 NSWLR 191 Powell v Supresencia [2003] NSWCA 195 Re Q (Damages for sexual assault) (1994) 18 Fam LR 442 Reid v George (1996) Rose v Richards [2004] NSWSC 315 Ryan v Kalocsay [2010] NSWSC 620 Saric v Steward [2006] Selmore v Bull [2005] NSWCA 365 Sullman v Sullman [2002] NSWSC 169
PARTIES:	Stephen James Kemp Selena Jayne French
FILE NUMBER(S):	SC 2009/291590
COUNSEL:	N Jackson M Galvin

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HALLEN AsJ

25 AUGUST 2010

2009/291590 KEMP v FRENCH

JUDGMENT

This is an application brought by a man against his former de facto partner, seeking an adjustment of property interests. The claim, originally, included a trust claim as well, but the Plaintiff is no longer pursuing that claim.

2 The Family Law Act 1975 (Cth) was amended, with effect from 1 March 2009, applying to de facto relationships breaking down on, and after, that date, so as to confer on the Family Court of Australia, exclusive jurisdiction to hear, and determine, applications for adjustment of interests in property between persons who are, or have been, in a de facto relationship. In this case, since the parties are agreed that their relationship ended well before 1 March 2009, the Court is asked to exercise jurisdiction for the adjustment of property interests under the Property (Relationships) Act 1984 (“the Act”), which applies. The question for decision is what, if any, order should be made for adjustment of the interests of the parties with respect to the property of the parties having regard to the matters set out in s 20 of the Act.

3 There is no dispute that the Plaintiff and the Defendant were parties to a de facto relationship, and, therefore, parties to a “domestic relationship”: s 5(1)(a). A de facto relationship is one in which the parties live together as a couple, but are not married or related by family: s 4(1). The parties do not agree, however, upon the date when the de facto relationship started or when it ended. The Plaintiff asserts that the relationship started in about June 2002 and ended in September 2007 (a total period of about 5 years and 4 months). The Defendant asserts that it started in about December 2003 and ended in April 2005, but then recommenced in November 2005 and ended, finally, in April 2007 (a period, in total, of about 2 years and 11 months) although she admits that, until September 2007, they were separated under the one roof. Whoever is correct, the parties agree that the relationship was not a long one.

4 The Plaintiff commenced these proceedings by statement of claim filed on 4 December 2009. A further, or amended, statement of claim, was filed by him on 1 March 2010, consequent upon consent orders being made on 19 February 2010. In the second statement of claim, the Plaintiff seeks an order that he receive 50% of the proceeds of sale of a property at Willoughby and the amount of $175,000. During submissions, Mr N Jackson of counsel quantified the Plaintiff’s claim, in total, as about $300,000.

5 The Defendant, originally, contended that the Plaintiff should receive nothing by way of property adjustment. It was submitted that his claim was unmeritorious and that it should be dismissed, presumably, with costs. In his oral submissions, however, Mr M Galvin of counsel, whilst maintaining that submission as the primary one, accepted that there was evidence of some contributions made by the Plaintiff, which, if accepted, could found an adjustment of property pursuant to the Act. However, he submitted that any adjustment should not be in an amount anything like that sought by the Plaintiff.

6 Before considering the parties' relationship, it is necessary to identify the legal principles that apply to the determination of the matters in issue.

7 Section 14 of the Act, which is headed “Applications for orders under this Part”, provides:

(1) Subject to this Part, a party to a domestic relationship may apply to a court for an order under this Part for the adjustment of interests with respect to the property of the parties to the relationship or either of them or for the granting of maintenance, or both.

8 Section 15 of the Act provides two pre-requisites for the making of an order, namely, residence within New South Wales for a substantial period of the de facto relationship, and also substantial contributions of the kind referred to in s 20(1)(a) or (b) having been made in New South Wales by the applicant. There is no dispute that these pre-requisites are met, as the parties lived together in New South Wales between November 2005 and the end of the relationship. Both still reside in this State.

9 Section 17 of the Act provides a further pre-requisite, namely, one relating to the length of the relationship. Relevantly, the Court cannot make an order unless it is satisfied that the parties to the application have lived together in a de facto relationship for a period of not less than 2 years, or that there is a child of the parties to the application. Again, there is no dispute that this pre-requisite is also met. There is a child of the relationship, Tegan Jayne French (“Tegan”). She presently lives in a shared arrangement with the parties.

10 Section 18 of the Act provides:

(1) If a domestic relationship has ceased, an application to a court for an order under this Part can only be made within the period of 2 years after the date on which the relationship ceased, except as otherwise provided by this section.

(2) A court may, at any time after the expiration of the period referred to in subsection (1), grant leave to a party to a domestic relationship to apply to the court for an order under this Part (other than an order under section 27 (1) made where the court is satisfied as to the matters specified in section 27 (1) (b)) where the court is satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted.

(3) Where, under subsection (2), a court grants a party to a domestic relationship leave to apply to the court for an order under this Part, the party may apply accordingly.

11 In this case, there is no dispute, whoever is correct as to the date when the de facto relationship ended, that the proceedings were not commenced within the time period prescribed by the Act. The Plaintiff seeks leave, pursuant to s 18(2) of the Act.

12 There is no difficulty, procedurally, with an application for an extension of time under s 18 being combined in one statement of claim with the application for substantive relief under s 20, nor with all aspects of the statement of claim being dealt with by the Court on the one occasion: Reid v George (1996) Fam LR 374; (1996) DFC 95-173; Deves v Porter [2003] NSWSC 625 at [2].

13 In Selmore v Bull [2005] NSWCA 365; (2005) 34 Fam LR 488, Mason P, with whom Tobias JA and Brownie AJA agreed, said that it was not mandatory for an applicant for leave under the section to explain the delay in commencing proceedings under the Act (at [13]). His Honour said that what is required to be demonstrated is a preponderance of hardship to the plaintiff if leave is not granted than will be caused to the defendant if leave is granted. If such preponderance is shown, it does not automatically follow that leave is to be provided. There remains a residual discretion: see Beavan v Fallshaw (1992) 15 Fam LR 686; also see, Henry v Ford (No 2) [2009] NSWSC 1254 at [9] per White J.

14 In an earlier application dealt with on 19 February 2010, the Defendant consented to an order extending the time for the making of the Plaintiff’s application. I am satisfied, in all the circumstances that if an order is to be made in his favour, an order extending time, should be made.

15 It follows, from the above, that it is within the jurisdiction of the Court to make an order adjusting interests in the property of the parties if that course is appropriate.

16 Section 20 of the Act provides:

(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:

(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:
(i) a child of the parties,
(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.

(2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property.

17 There is no definition of “contribution” in the Act. It can be seen, however, that s 20(1)(a) is directed to financial and non-financial contributions to the acquisition, conservation, or improvement, of the property of the parties, or either of them, or to their financial resources. The contributions of both of the parties must be taken into account (“of the parties to the relationship”). Further, it is the property of both parties, and the financial resources of both, which need to be taken into account. However, it is not any contribution that is made by a party in the context of the de facto relationship that counts. It is a contribution with a particular purpose, or effect, such that it can properly be described as a contribution “to the acquisition, conservation or improvement of… property”: Sullman v Sullman [2002] NSWSC 169 at [246].

18 Section 20(1)(b) is concerned, substantially, with contributions to the welfare of the other party, or of the family constituted by the parties and any child, or children, of them. However, by using the word “including” in the first line of paragraph (b), it is possible for a contribution to the welfare of the other party, or to the welfare of the relevant family, to be made in some capacity other than as homemaker or parent. Also, there is nothing in the language that requires contributions, which count for the purposes of paragraph (b), to be non-monetary: Sullman v Sullman. Contributions as homemaker, or by way of emotional support, are not less relevant, or less deserving, of weight than the material and financial contributions of the breadwinner and, in that sense, all forms of contribution are equal: Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550.

19 On an application to adjust interests with respect to property, the Court is empowered to make such order adjusting the interests of the parties in the property "as to it seems just and equitable", having regard to the financial and non-financial contributions described in s 20(1)(a) and in s 20(1)(b).

20 It is clear that the reference in the Act to “adjustment” of property interests does not convey an invitation to engage in an unbounded exercise in distributive justice: Evans v Marmont (1997) 42 NSWLR 70 per Gleeson CJ and McLelland, CJ in Eq at 79. The court does not commence with a presumption that, upon the conclusion of a de facto relationship, s 20(1) is intended to produce the result that each party will emerge with equality of property value. As Clarke JA made clear in Black v Black (1991) 15 Fam LR 109 at 113, a court is not entitled to work on any preconceived notions or adopt any formula as a starting point.

21 Their Honours also observed in Evans v Marmont that considerations of fault are not mentioned in the Act and there is no reference to means and needs of the kind referred to in the Family Law Act 1975.

22 In such an application, in order to determine whether and, if so, what, property order is justified in a particular case, the Court is required to:

(a) identify and value the property of the parties which determines “the divisible pool of property” — that is, “the property of the parties to the relationship or either of them”;

(b) determine whether any, and if so what, contributions of the type contemplated by s 20(1)(a) and s 20(1)(b) of the Act have been made and by which party – that is, the evaluation and balancing of the respective contributions of the parties of the types referred to;

(c) determine what order is just and equitable – that is, what order is required sufficiently to recognise and compensate the applicant’s contributions?
This approach has been followed in many cases, including, Howlett v Neilson [2005] NSWCA 149; (2005) 33 Fam LR 402; Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360; Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550; Paino v Paino [2008] NSWCA 276; (2008) 40 Fam LR 96.

23 The definition of “property” in s 3 of the Act is, unless the context or subject matter otherwise indicates, or requires:

in relation to parties to a domestic relationship or either of them, includes real and personal property and any estate or interest (whether a present, future or contingent estate or interest) in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any right with respect to property.

24 As can be seen, the definition is a wide one. Furthermore, the relevant property, for the purposes of s 20, is not only property held jointly by the parties, but also property held by one of the parties alone.

25 While the Court has “a broad discretion” in determining the approach to adopt in considering what order to make under s 20, two approaches are usually referred to, global and asset-by-asset: Saric v Steward [2006] NSWCA 260 at [63] per McColl JA (Handley and Santow JJA agreeing); Kardos v Sarbutt at [51]; Bilous v Mudaliar [2006] NSWCA 38 at [42]; (2006) 65 NSWLR 615 per Ipp JA (Giles and McColl JJA agreeing). Care must be taken when either is adopted to conduct that might be described as a cross-checking process as described by Ipp JA in Bilous v Mudaliar at [43]:

43 If a global approach is adopted, regard must still be had to the origin and nature of the different assets. If an asset-by-asset approach is adopted, care must be taken to avoid the risk of undervaluing domestic and non-financial contributions and regard must be had to the overall result: Kardos v Sarbutt at [51] and [54]. Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets.

26 Contributions by either party, after the termination of the relationship, are also relevant for the purposes of s 20. Thus, for example, the ongoing role of the Defendant, as the primary carer for the parties’ child, Tegan, as well as any payments made by her, after the relationship ended, in order to reduce the mortgage debt on real estate owned by her, may be relevant contributions for the purpose of s 20.

27 In this case, the parties agree that the approach that should be adopted is an asset by asset approach. As will be seen, there are four relevant assets, namely, the unit in North Sydney sold before separation for $325,000; the award of damages which yielded to the Defendant for about $600,000 and the Willoughby property, which was sold earlier this year for $1.2 million and the interest in the Limbar machine. (There is no suggestion of any relevant contribution to the superannuation, which is, in any event, tiny.)

28 The parties do not agree upon the date at which the value of each asset should be determined. In this regard, the Plaintiff contends that the extent, and value of the parties’ property, should be determined as at the date of separation in respect of one asset (the damages) and at the date of hearing (as to the Willoughby property). The Defendant says that the value of the property should be determined at the date of separation. As to the proceeds of sale of the North Sydney unit, the parties appear to have treated the net proceeds of sale as having being included in the amount available at the date of hearing.

29 In Kardos v Sarbutt at [30], the Court of Appeal said:

As to the first step, the exercise of the identification and valuation of the property of the parties is undertaken typically, though not invariably, as at the date of trial [see Parker v Parker (1993) 16 Fam LR 863 at 1993) DFC 95–139; Wells v Wells (1977) 29 FLR 383 ; (1977) 4 Fam LR 57 at 1977) FLC 90–285], though sometimes as at the date of separation [ Cozanitis v Cozanitis (1979) 34 FLR 523n; (1978) 4 Fam LR 709 at 1979) FLC 90–643]. The starting point is that ordinarily property is valued as at the date of trial [ Williams & Williams (1984) 9 Fam LR 798 at 1984) FLC 91–541; Hauff & Hauff (1986) 10 Fam LR 1076 at 1986) FLC 91–747]. The primary reason for this is that the jurisdiction under s 20 is to adjust interests with respect to “the property of the parties to the relationship or either of them” and speaks from the date at which the jurisdiction is exercised, so that what is in issue is the property of the parties and each of them at the date of trial. Establishing the divisible pool at any other date may lead to failure to have regard to relevant assets available for division, or to the bringing into account of property no longer available. Thus in Woodland & Todd (2005) 33 Fam LR 177 at 2005) FLC 93–217; [2005] FamCA 161, in which the property of the parties — which had been worth $873,000 when the husband and wife divided it between them in 1997 under an informal agreement which did not deprive the court of jurisdiction — had increased in value to $2.5 million when the matter came to trial years later, the Full Court of the Family Court held that the primary judge had erred in treating the case as concerning an asset pool as at the date of the informal agreement in 1997, and was required to address an asset pool that existed at the time of the hearing, not at the time of the prior agreement.”

30 The Court of Appeal, however, also recognised, as legitimate, an approach that has regard to the value of the property at the date of separation at [31]:

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. Thus the Full Court of the Family Court has said (in respect of proceedings under the Family Law Act , s 79, which for present purposes are akin to proceedings under the Property (Relationships) Act, s 20) that although ordinarily the parties’ property is to be valued at the date of trial, in a particular case there may be reasons to justify another date, which might be the date of separation [ Omacini & Omacini (2005) 33 Fam LR 134 at 2005) FLC 93–218; [2005] FamCA 195].

31 In light of the evidence, in relation to the damages claim, most of the amount received was used to pay part of the purchase price of the Willoughby property. The evidence in relation to that property is that the Defendant arranged to be carried out significant renovations to increase the value of the Willoughby property, which was purchased shortly before the end of the relationship, which property was still owned by her at the date of separation. It was agreed that the Plaintiff did very little to increase the value of that property after separation. The increase in its value appears to have been because of those renovations and also as a result of market forces.

32 In this case, at the date of hearing, there is simply a lump sum amount that is left, that being the amount that is left after the use of the damages proceeds and the sales of the North Sydney unit and of the Willoughby property. It is that lump sum which, it seems to me, may be adjusted.

33 However, I shall take into account the matters to which I shall refer as having been done by the Plaintiff, or by, or on behalf of, the Defendant, as part of his, and her, contribution to the property referred to.

34 What the Court should not do, in cases under the Act, has been considered by Master McLaughlin (as his Honour then was) in Rose v Richards [2004] NSWSC 315, in which he said:

37 In exercising the discretion vested in the Court by section 20(1) of the Property (Relationships) Act , it seems to me that, consonantly with the foregoing decisions of the Court of Appeal, the present financial and material circumstances of the Plaintiff and, in particular, her present needs, should not be taken into consideration. The Court should not be diverted from the clear words of the statute in exercising its discretion to “make such order adjusting the interests of the parties in the property as to it seems just and equitable”. The Court must have regard to the contributions of the nature then set forth in paragraphs (a) and (b) of the subsection. As I understand the foregoing decisions of the Court of Appeal, it is not legitimate for the Court to have regard to present or future needs of the parties; it should have regard only to contributions of the nature set forth in the subsection. (See, Matheson v Wallis [2001] NSWSC 931, McLaughlin M, 22 October 2001, an appeal from which was dismissed by the Court of Appeal on 11 October 2002, sub nomine, Wallis v Matheson [2002] NSWCA 350.)
38 It is clearly necessary in this regard to exercise the caution counselled by Powell J in Roy v Sturgeon . The principles disclosed in the relevant provisions of the two statutes are that the Property (Relationships) Act looks to past contributions, whereas the Family Law Act looks also to present and future needs.

39 I propose, therefore, in considering the claim of the Plaintiff for adjustment of interests in property under section 20(1) of the Property (Relationships) Act to disregard evidence concerning her present and likely future needs.

40 Similarly, I propose also to disregard evidence concerning various financial transactions (for example, withdrawal of moneys from the business), which occurred after the termination of the relationship. Those transactions can be in no way determinative of the outcome of the present proceedings.

41 In approaching the claim for the adjustment of interests of parties in property pursuant to section 20(1) of the Property (Relationships) Act , the Court should make a holistic judgment, and should not attempt to evaluate the respective contributions of the parties as if it were undertaking a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time consuming and expensive of litigious exercises) (see Davey v Lee (1990) 13 Fam LR 688).

35 His Honour added in Fletcher v Furnance [2008] NSWSC 132:

52 In considering the claim of the Plaintiff (and also the cross-claim of the Defendant) the Court should not be diverted from the clear words of the statute, where by section 20 (1) the Court is required to have regard to the respective contributions of the parties of the nature described in that subsection. The Court is not required to proceed upon the basis that the Defendant might have made greater contributions than he in fact made, if he had done other than he in fact did.

53 Each of the parties submitted that I should approach the matter upon the basis of what was described as the asset pool of the parties. (Indeed, the Defendant even went so far as to adopt what was referred to as a “three pool approach”.) I would here interpolate that I do not find the phrase “asset pool”, or even such a concept, as being particularly helpful in a claim under the Property (Relationships) Act . As I have already observed, the Court should not be diverted from the clear wording of the statute, which looks to past contributions that have been actually made by the parties.

54 The Plaintiff based her claim in part upon what was referred to as “a premature distribution” from the asset pool, and sought what was referred to as a “notional restoration” of certain assets to the asset pool. I consider such concepts, howsoever they may be appropriate to claims under the Family Law Act 1975 , to be quite inappropriate to a claim under the Property (Relationships) Act , a statute of New South Wales. The State Act looks only to past contributions, whereas the Commonwealth Act looks also to present and future needs.

55 To the extent that the claim of the Plaintiff is grounded in some way upon the failure of the Defendant to contribute more than he actually did contribute to the relationship, I reject that claim. The Court is required to look to the contributions of the nature set forth in section 20 (1) which were actually made by each of the parties. The Court cannot proceed upon some conjectural basis. Such concepts as a “premature distribution” from the asset pool or a “notional restoration” to that asset pool seem to me to be incompatible with the task imposed upon the Court, to exercise its discretion to “make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to” the contributions of the nature set forth in section 20 (1) of the Act. Moneys which were invested by one of the parties (as, for example, in the instant case, in superannuation funds by the Defendant) do not constitute such contributions. I do not see how those funds can be characterised in the fashion in which they have been in the written submissions of the parties (especially those of the Plaintiff, for the purpose of performing a detailed, and somewhat convoluted, arithmetical exercise, in order to establish a monetary entitlement to the Plaintiff).

36 Furthermore, as was noted by Slattery J in Ryan v Kalocsay [2010] NSWSC 620, at [19]:

The court is not required in proceedings under Property Relationship Act s 20 to undertake a reductionist process, examining every alleged contribution with a view to putting a money value on each in order to reach an accounting balance, which balance is then to be eliminated by the requisite financial adjustment in the s 20 order. Rather the court is required to make a holistic value judgment in the exercise of a discretion of a very general kind. Mathematical calculations, however, are of some use in guiding and testing conclusions about what is just and equitable, and also in promoting transparency and consistency in decision making: Kardos v Sarbutt (2006) 34 Fam LR 550; [2006] NSWCA 11 at [36] and [49] and Howlett v Neilson (2005) 33 Fam LR 402; [2005] NSWCA 149.

37 I also remember, in relation to the submissions made on behalf of the Plaintiff in regard to “addbacks”, what was said in M and M (1998) FamCA 42:

2.11 There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge.

Although that passage was stated in the context of the Family Law Act , in my view, the principle expressed is apt in cases under the Act.

38 There are dicta in Howlett v Neilson at [36] that the court is not authorised to make orders by reason of lost opportunities of a party to the relationship (but see, Powell v Supresencia [2003] NSWCA 195 at [83]; (2003) 30 Fam LR 463 per Einstein J). The role of the court is not to use the division of property to remedy any justified grievances that one party may have against the other, or to compensate a party for disappointed or unfulfilled expectations. As stated, where the fault for the breakdown of the relationship may lie, is irrelevant.

39 In this case, there were disputes about most assertions, as to contributions and otherwise. It has been necessary to closely evaluate the parties’ evidence. There was no affidavit or oral evidence given by any other person. I shall return to the last point later in this judgment.

40 The examination of some of the parties’ evidence is more difficult, because there is, with some exceptions, a lack of corroborative documentary, or other, evidence, which has resulted in a lack of particularity and support on several issues, including, importantly, the financial contributions.

41 Before turning to the areas of factual dispute, I set out the facts that are not in dispute or that have been established, clearly, by the evidence:

(a) The Plaintiff was born in May 1970 and is a New Zealand citizen;

(b) The Defendant was born in December 1976 and is an Australian citizen;

(c) In 1985, as a result of a motorcycle accident, the Plaintiff became a single leg amputee;
(d) The Plaintiff’s son, Tony, was born in September 1991;

(e) Between about 1994 and 2000, the Defendant was in a relationship with Timothy O’Connell;

(f) In about 1995, the Plaintiff developed the idea for a machine, which he described as a “Limbar machine” (an exercise device for amputees). From 2000 onwards, he continued to develop, trial and market that machine through a company, Hydraujoint Pty Limited, (“Hydraujoint”) which was incorporated in New Zealand, all shares in which were owned by the Plaintiff. That company has been de-registered. However, the Plaintiff retains all of the information that was accumulated in relation to the machine, and hopes to use it in the future to develop and sell the concept and the machine. He plans to travel to Los Angeles, at this time next year, to present and demonstrate the concept and the machine to organisations that are, or may be, interested.
(g) In about late 1996, the Defendant purchased a unit situated in North Sydney for $205,000;

(h) The Plaintiff’s son, Karl, was born in May 1997;

(i) The Defendant’s son, James, was born in March 1998;

(j) The Plaintiff and the Defendant who are first cousins, met (not for the first time) at a funeral in New Zealand in about October 2001. The Defendant was in New Zealand between 13 October 2001 and 5 November 2001;

(k) The Defendant returned to New Zealand in about June 2002; she remained there until about December 2002 (whether the de facto relationship commenced at this time is disputed);

(l) The Defendant returned, again, to New Zealand, in April 2003, when she stayed for about 5 months, until September 2003; she returned, again, in October 2003, and remained living in New Zealand, with the Plaintiff, until April 2005;

(m) On 17 January 2002, the Defendant was involved in a motor vehicle accident, in New South Wales, and sustained a lacerated bowel, broken scaphoid, musculoskeletal injuries to her neck, right shoulder, elbow and wrist;

(n) In April 2003, the Plaintiff, in the name of Hydraujoint, purchased a 3 bedroom house freehold at Bennydale, New Zealand for $2,000. He performed renovations, paying about $10,500 for these renovations. Thereafter, the company rented the property for $110 per week on a long-term contract;

(o) In 2004, the Plaintiff sold the Bennydale property for $32,000;

(p) The parties’ daughter, Tegan, was born in December 2004;

(q) In April 2005, the Defendant returned to New South Wales, with her three children; in October 2005, the Plaintiff came to live in New South Wales, with the Defendant; they remained living together in a de facto relationship until some time in 2007;

(r) In January 2006, the Defendant received compensation of $700,000, gross, for the injuries, loss and damage she had sustained in the January 2002 accident. After making HIC and Centrelink refunds, and paying costs, disbursements and legal fees, she received about $600,000. She used part of this amount to repay the debt secured by the mortgage on the North Sydney unit ($176,000), and made other payments, leaving her with a balance of slightly less than $400,000;

(s) In about April 2006, the amount received, after some of it was used, was invested. By 31 March 2007, the value of the investment was about $369,000;
(t) In June 2007, the North Sydney unit was sold for $325,000; on 19 July 2007, the sale settled;

(u) On 27 June 2007, the Defendant purchased a property at Willoughby for $700,000;

(w) The Willoughby property was funded by a secured loan of $418,00, and the balance of the net proceeds of sale of the North Sydney property;

(x) The Plaintiff prepared for painting, and painted, the inside of the Willoughby property;

(y) Subsequently, the Defendant moved into the Willoughby property with her children and her mother;

(z) In April 2007, the Defendant was diagnosed with ideopathic pulmonary arterial hypertension; that is a serious progressive life threatening condition affecting the heart and lungs and “the symptoms include constant tiredness, dizziness, shortness of breath on even minimal exertion, palptations (sic), and peripheral and abdominal oedema”: see, Medical Certificate dated 19 July 2010, of Dr Alexander Holliday and the medical report dated 15 July 2010 from The Heart & Lung Transplant Unit;

(aa) In January 2010, the Defendant sold the Willoughby property for $1.2 million; completion of the sale occurred in March 2010; from the proceeds of sale, the debt secured on that property was repaid, being $420,761; $50,000 was paid to the Defendant (by order of the Court); about $4,000 was paid as costs and disbursements, including council rates; and $605,333.03 was retained in a controlled moneys account. Subsequently, after payment of the commission on sale, the balance of the deposit was added, with the result that on 12 April 2010, the total amount of about $694,500 was held in that account;

(ab) At no stage during the relationship, did the parties operate a joint bank account.

42 It is necessary for me, firstly, to determine the date at which the de facto relationship of the parties commenced. In this regard, I refer to what was said by Bryson AJ in Dion v Rieser [2010] NSWSC 50 at [14] that:

[14] A de facto relationship is a continuing course of conduct and behaviour, not an event at a fixed point of time. No matter how close their involvement in each other’s emotional lives, a conclusion that people are living together as a couple involves consideration of the circumstances in which they are living, including the places at which they are living. The test is not primarily locational, but it has a locational element. Judicial consideration of separation intervals during a relationship has not been extensive and has usually related to relatively short intervals such as holidays or hospitalisations. Once a de facto relationship exists its termination is not readily assumed. In Howland v Ellis [2001] NSWCA 456 at [20], Stein JA said:

20 However, more than a mere physical separation is required for a de facto relationship to come to an end. The physical separation of the parties must be accompanied by an intention on the part of either partner to permanently end the relationship.

Meagher JA and Ipp AJA concurred. Stein JA made this observation in relation to a well-established de facto relationship in which there was a physical separation when one party was arrested, held without bail and later sentenced to imprisonment. The relationship continued for several years in the intentions of the parties, and also according to their conduct subject to the severe limitations of imprisonment. This opinion establishes that physical separation is not inconsistent with the continuance of the relationship.

43 I find that the de facto relationship commenced in about June 2002, as submitted on behalf of the Plaintiff. (Whilst the Plaintiff, during his cross-examination, did say that he thought the relationship began in October 2001, he made it clear, in re-examination, that this was when a romantic, and an intimate, relationship, between the parties commenced, rather than when the de facto relationship commenced.)

44 I rely, in coming to the conclusion as to the date of the start of the relationship, particularly on the following:

(i) the Defendant, in a Statutory Declaration sworn on 16 August 2005, in support of her damages claim, acknowledged that she left Australia, for Palmerston North, New Zealand, on 12 June 2002, to stay with the Plaintiff, so as to receive the required support that she needed due to her injuries because there was no one else to look after her in Sydney; she makes no mention, in this document, of going there to visit, or to travel with, her aunt;

(ii) there is a Schedule of Damages prepared by the Defendant’s solicitors in support of her damages claim, to which reference will be made in more detail later, which depicts what the Defendant asserted the Plaintiff was doing to assist her, during this period;

(iii) there is a copy of an email, dated 12 June 2002, from the Defendant’s mother to the Defendant’s solicitors in the personal injuries proceedings, in which there is a reference to the telephone number at which the Defendant is said to be able to be contacted; which telephone number is said to be that of the Plaintiff; the email also states that the Defendant “will be staying at his home and he will be with her most of the time”; this email accords with the contents of the Defendant’s Statutory Declaration referred to above; there is no suggestion that there was any later email, from the Defendant, or her mother, correcting the contents of the email by the Defendant or her mother;

(iv) the Defendant made a Will dated 2 May 2002, in which she left a legacy of $25,000 to the Plaintiff; this suggests that a relationship beyond that of being cousins, had started; I do not accept the Defendant’s explanation that she made that provision for him because she felt quite sorry for the Plaintiff’s children and wanted to leave them something;

(v) there is a copy of a diary entry, under the date 15 May 2002, with the words “NZ HERE I COME”, handwritten on it by the Defendant;

(vi) there is a copy of a diary entry under the date 24 May 2002, in the hand of the Defendant, which includes:
a. “As long as we R happy who cares about any 1 else”;
b. “I can never have any more kids”;
c. “I’ve fallen in love with the idea of being in love”;
d. “You only like me ‘cause you don’t know me yet”


When the whole of this diary entry is read, it suggests that the references are to the Defendant having a relationship with the Plaintiff, rather than, as she suggested in cross-examination, to the resurrection of a relationship with her prior partner.

45 I also cannot accept the Defendant’s evidence that she did not commence to live with the Plaintiff until about September 2003. This is because:

(i) when asked where she had stayed on the occasions that she had returned to New Zealand from 12 June 2002, she could not remember the address of her aunt; if her evidence is correct, she had lived with her aunt for about 18 months;

(ii) there is a letter, dated 12 September 2003, from Inland Revenue, New Zealand, addressed to the Defendant at the home of the Plaintiff in September 2003;

(iii) In an affidavit filed in the Federal Court and sworn by the Defendant, she asserted that she moved to New Zealand “in February 2003”. She also asserted that “Stephen and I lived in New Zealand from February 2003 until April 2005…”. (I do not accept that there was a typographical error in that “2003” should have been “2004”);

(iv) I do not accept that the Defendant used the Plaintiff’s address only so that she could have her son admitted to a better school.

46 The Defendant remained in New Zealand from June until December 2002, and I accept, that for most of this time, she lived with the Plaintiff. I do not accept the Defendant’s evidence that during this period, she was visiting and travelling with her aunt. In addition, having regard to the Defendant’s evidence about her injuries and disabilities, as set out in her Statutory Declaration travelling would appear to have been extremely difficult for her.

47 In any event, the Defendant’s aunt did not give evidence to corroborate the Defendant’s evidence. The only explanation for her not having been called was that her aunt, who was in New Zealand, had been in Sydney for only about a week and did not have time to prepare any affidavit. I shall return to this aspect later.

48 The Plaintiff returned to New Zealand, again, in April 2003, and this time remained there until September 2003. She returned, finally, in October 2003 and remained there until April 2005. The Defendant accepted that there was a de facto relationship from, about October 2003 until she returned to New South Wales in about April 2005.

49 The next question, then, is when did the parties separate? The Plaintiff seemed to agree that there was a breakdown of the relationship in April 2005, when the Defendant returned to Australia. He accepted the breakdown was one that seemed to him had ended their relationship. Yet, each of the parties agreed that they started to communicate by telephone, within a short time, and then a few months later, their relationship recommenced when the Plaintiff came to Sydney.

50 I accept that if the parties to a de facto relationship intentionally separate, that may be the end of the de facto relationship. However, if they commence a de facto relationship in the future, it is a separate de facto relationship only if the facts of the matter demonstrate that to be the case

51 In this case, I doubt that the parties, themselves, thought that they had separate de facto relationships. I consider that they got back together and resumed their original relationship. To use the words of Master Macready (as his Honour then was) in McKone v Maretta [1999] NSWSC 438 at [60]; (1999) DFC 95-213:

In one sense having resumed their relationship one might regard it as a continuance of what was the former de facto relationship which existed...

52 I have come to the view that after their separation, the parties simply recommenced their former relationship – they did not start another one. I shall treat the relationship, albeit punctuated by a break of about 6 months, as one relationship. To do otherwise, would, in my view, create a fiction; it would ignore the important fact that the same two parties to the relationships were involved; that the time apart was relatively short, and during that time, they were in telephone contact.

53 I do not think that there was any real dispute that this is how the relationship was, or should be, treated. Of course, it would be appropriate to omit from the calculation of the length of the relationship, the period of time between April and October 2005, since the parties were not together and neither made any relevant contribution, at all, during this period, except in relation to their child, who was, throughout this time with the Defendant.

54 I then turn to the period between April 2007 and October 2007. The Plaintiff says that their relationship ended, finally, at the end of September 2007, whilst the Defendant says that the relationship ended in April 2007, but that the parties separated, but lived under the one roof, between April and October 2007.

55 I do not accept the evidence of the Defendant on this aspect. Whilst it may be that the Defendant was unhappy in the relationship, and, perhaps, she was considering ending it in April, she did not do so until September 2007.

56 I note, in the Progress Notes of the Northern Sydney Central Coast Health Service, that the following is stated:

(i) “3.04.2007 – lives with husband, Steven (sic), in rental accommodation; was living in NZ with Steven (sic) but became homesick and returned to Australia”;

(ii) “26.6.07 – After discussions with Selena and her partner, Stephen Kemp…”;

(iii) “26.6.07 – Selena provided with details of women’s legal advisory service and legal aid contact details so as she can seek guidance on her legal rights if she were to separate…”;

(iv) “27.6.07 - Selena and her partner Stephen report…”;

57 I accept that the relationship ended on, or about, 28 September 2007 when the Defendant considered that the relationship had ended and effectively told the Plaintiff that she was not returning to him. In my view, prior to this time, the parties remained living together in a de facto relationship.

58 It follows from the findings made so far that the Plaintiff’s claim under the Act must be approached on the footing that the relationship, in total, was of about 4 years and 9 months duration. As stated previously, it was a short relationship, which, I find, started in June 2002 and ended in September 2007, with a break in the relationship between April and October 2005.

59 At the commencement of the relationship, the Plaintiff owned the following property:

(a) a Ford motor car ($3,500);
(b) an Escort motor car ($6,000);
(c) a Mazda motor car ($3,500);
(d) a bank account containing $15,000;
(e) an interest in the company that was developing the “Limbar machine” (value, if any, not disclosed).

60 At the commencement of the relationship, the Defendant owned the following property:

(a) a unit in North Sydney (subsequently sold for $325,000);
(b) the balance of proceeds of sale of another property ($30,000);
(c) superannuation ($8,000);
(d) a cause of action for damages for injuries suffered in a motor vehicle accident in January 2002 (the ultimate value of which was $700,000 gross).

The Defendant had secured liabilities of about $176,000. I accept that she also owed her mother $30,000, and that she had credit card debts of about $10,000. (Subsequently, she repaid her mother.)

61 It can be seen that the financial position of the Defendant, at the commencement of the relationship, was better than that of the Plaintiff (even omitting the value of the cause of action for damages).

62 At the conclusion of the relationship, in October 2007, the Plaintiff owned the following property:

(a) a motor car ($27,000);

(b) an interest in a company which was developing “Limbar machine” (value, if any, not disclosed).

63 At the conclusion of the relationship, in October 2007, the Defendant owned the following property:

(a) a property at Willoughby (purchased shortly before separation for $700,000);
(b) AMP Flexible lifetime account ($369,300);
(c) ING account ($10);
(d) ANZ Access account ($700);
(e) superannuation ($13,000).


The Defendant had a debt of $418,000 secured by mortgage over the Willoughby property, and credit card debts of $7,500.

64 At the date of hearing, the Plaintiff owns the following property:

(a) an interest in the intellectual property relating to the development of the “Limbar machine” (value, if any, not disclosed).

65 At the date of hearing, the Defendant owns the following property:

(a) money held at St George - $695,425;
(b) balance of money held from advance on 19 February pursuant to consent orders - $25,000;

(c) net interest from St George - $1,827.

66 In relation to the Limbar machine, the Plaintiff asserted, and I accept, that he has done nothing in respect thereof since about November or December 2005. He says that until more recently, the development of the concept and the machine has been placed on hold. However, in the last 12 months, he has had the opportunity of getting another website up and developed. However, he still requires funds to enable him to proceed.

67 No evidence was advanced by either party as to the value, if any of the intellectual property in respect of the “Limbar machine”, which the Plaintiff retains. It is clear that the Plaintiff believes that the machine, if it can be developed, will have some value (as he intends to go to the United States to demonstrate it.) I accept that the Plaintiff will require at least USD$10,500 to purchase the necessary certification to enable the machine, if developed, to be sold in the United States. At the present time, he does not have sufficient funds to enable even this to occur.

68 Although the Plaintiff’s counsel disputed that the limbar machine was either property or a financial resource, I find that it has some value to the Plaintiff. For example, he intends, next year, to attend and present the concept and demonstrate the machine to the American Amputee Association and the Department of Veteran’s Affairs. He would not do this if he did not think that it might lead to the development of the machine and to some financial benefit.

69 In view of the admission made by the Defendant that she did not make any real contribution to the development or the machine, or its concept, I shall treat it as the property of the Plaintiff, which should not be the subject of any adjustment. At the present time, the value of this property, or financial resource, is negligible. In relation to the concept of the Limbar machine, I find that the Defendant’s contribution to this property was minimal. It was limited to her speaking as the voiceover on the movie demonstrating the machine on the Plaintiff’s website, and to attending on a couple of “cocktail nights” with investors.

70 Finally, there was a submission on behalf of the Plaintiff that the lack of the development of the concept and the machine by him, was due to the fact that he had spent so much time looking after the Defendant. To the extent that loss of opportunity is relevant, I do not accept that the lack of development was due to the time spent looking after the Defendant. To the contrary, I find that it had more to do with the Plaintiff’s lack of the capital necessary to enable such development to occur.

71 Next, a question was raised as to how the damages award made to the Defendant should be treated. I have already referred to the definition of “property” in s 3 of the Act, which includes “any cause of action for damages (including damages for personal injury)”. If the cause of action is included in the definition, the monetary sum for damages paid is property of a party, which is to be taken into account to the extent that it is in existence.

72 If further support for the conclusion, is needed, I refer to in Re Q (Damages for sexual assault) (1994) 18 Fam LR 442, a claim under the Family Law Act. In that case, the property of the parties at the date of trial, consisted of the former matrimonial home belonging jointly to the parties, the proceeds of the husband's superannuation payout and the balance of moneys received by the husband for damages for personal injuries suffered by him.

73 In relation to the moneys received for damages, it was said:

The damages award to the husband

The husband's action was compromised on the basis that he received a lump sum plus ongoing periodic entitlement. Involved in the compromise was necessarily moneys for past and future economic loss as well as pain and suffering. No attempt was made before me to identify what portion of the lump sum so received could be attributed to either area. McGovern J in In the Marriage of O'Brien (1982) 8 Fam LR 691; [1983] FLC 91-316 said at Fam LR 699 ; FLC 78,147:

I am mindful of the fact that a claim for damages for personal injuries is essentially a claim that is personal to the injured party and that the damages awarded are in the way of compensation for loss, usually assessed under the various heads, suffered by that person as the result of his injuries... the assessment of damages is directed to the loss of various descriptions suffered by the injured party himself. His is the cause of action, it is he who prosecutes the claim and, if successful, he is the person to whom the damages award are paid.
...


It will be seen that at common law an action for damages and its outcome have little to do with anyone other than the parties to it. There is nothing to suggest other than that, by and large, an award made therein belongs to anyone but the plaintiff himself or that anyone other than himself has an interest in it. The criteria upon which damages are assessed are directed to the various areas of loss which he has suffered and the award is made with the object of compensating him, and him alone, for the same.
It would seem to me, however, that these reflections may have little validity when it comes to considering the relevance of property in proceedings for settlement of property in the family law jurisdiction. In the present case the wife's interests are, as I see it, inextricably bound up with everything to do with the husband's accident and I do not think the fact that the damages were awarded with certain criteria relevant to that issue in mind has any particular bearing on the question of the property that must be brought into issue in the proceedings between the parties here.


In that case, the husband's damages award was reduced by virtue of his contributory negligence. As to whether the wife's share should be reduced because of the husband's negligence his Honour said at Fam LR 700; FLC 78,147:

To attempt a detailed analysis of what various portions of the property represented initially would seem to me a quite futile exercise. The only satisfactory way that I can see of assessing contributions in the circumstances is to consider the same in the perspective of the whole of the property, while keeping in mind at the same time the other very important factors to be considered.


His Honour then considered the various financial and non-financial contributions the parties had made, and their financial positions and awarded the wife $20,000 out of the husband's $163,000 damages settlement.

In Wagstaff v Wagstaff [1992] 1 FLR 333, Butler-Sloss LJ also treated the husband's award for damages as part of the asset pool of the parties and considered the contributions made by the wife to the award. At 337-8 her Ladyship said:

... the capital sum awarded is not sacrosanct, nor any part of it secured against the application of the other spouse. There may be instances where the sum awarded was small, and was specifically for pain and suffering, in which it would be unsuitable to order any of it to be paid to the other spouse. In some cases, the needs of the disabled spouse may absorb all the available capital, such as the requirement of residential accommodation... In general, the reasons for the availability of the capital by way of damages must temper the extent of and in some instances may exclude the sharing of such capital with the other spouse. It is important to stress yet again that each case must be considered on its own facts.

At 339, her Ladyship continued:

Weighing all the relevant factors, taking into account the criteria set out in s 25, in my judgment the wife is entitled to some capital sum to redress the disparity between the husband and herself and to do justice between the parties. It is impossible, on the special facts of this case, to work out a sum by any sort of effective calculation. It has to be a matter of impression.

Rather than endeavouring to divide the lump sum damages award into its component parts, it seems to me appropriate that I treat the wife as a minor contributor within the meaning of s 79(4)(a), (b) and (c) to those moneys received by way of an award for damages by the husband. Given that the settlement represented $125,000 out of a total pool of $400,000, it seems to me that the wife's contribution to the pool of assets represented by the house, the superannuation, and the damages award should be assessed at 40%.

74 Accordingly, I shall treat the damages award made to the Defendant as her property, although I shall consider the Plaintiff’s contribution to that property.

75 The Defendant alleged that, at the date of hearing, she had a debt owing to her mother of about $250,000. Her evidence was that the debt had been incurred as a result of her mother advancing moneys to the Plaintiff, or on her behalf. In support of the alleged debt, the Defendant tendered a bundle of bank documents, which, so it was said, had amounts advanced, highlighted in green, the total of which was nearly $270,000.

76 The Defendant also tendered a document dated 20 July 2010, addressed to her solicitor, apparently signed by the Defendant’s mother, which stated that:

I have loaned my daughter… in excess of $250,000 for renovations to [the Willoughby property] and for legal fees to do with custody disputes and various other litigation…. The amount was agreed to be paid back when the house was sold. This was always agreed to be a loan and not a gift. I need this money to be paid back now as a matter of urgency to enable me to buy my own accommodation…

77 Subsequent to the hearing, the Court was provided with a document by the parties, the effect of which was that about $178,000 was admitted as having been spent by the Defendant’s mother.

78 The Plaintiff disputes the alleged debt and says that even if any money was advanced, the Defendant’s mother may not, in fact, require it to be repaid. Mr Jackson, counsel for the Plaintiff, in this regard pointed out that the Defendant’s mother had not given evidence and, therefore, could not be cross-examined on the purported loan document.

79 The failure by the Defendant to adduce any evidence directly from her mother, and from her aunt, in this case is important. It is clear, from the Defendant’s evidence that her mother was in Sydney, at least, during the hearing. There is no explanation for the failure to have her swear an affidavit and/or to call her to give oral evidence (assuming that were permitted). This aspect is heightened since it has also been admitted by the Defendant that her mother played a role in assisting the Defendant in the claim for damages for personal injuries and was a witness in the Federal Court proceedings in which the parties were involved.

80 In relation to the Defendant’s aunt, I have referred to the relevance of her evidence previously, and the explanation advanced by the Defendant for not having her give evidence.

81 The so-called “rule” in Jones v Dunkel is really one of commonsense: Ghazal v Government Insurance Office of New South Wales (1992) 29 NSWLR 336. Kirby P (as His Honour then was) there observed at 343:

... The rule in Jones v Dunkel is one of commonsense reasoning. It provides that an unexplained failure by a party to call a witness may, in appropriate circumstances, lead to an inference that the uncalled evidence would not have assisted the case of the party who might be expected to call the witness. It is important to note that this is a facility. It is not an obligation in the reasoning of the decision-maker: cf Café v Australian Portland Cement Pty Ltd (1965) 83 WN (Pt 1) (NSW) 280 at 287; [1965] NSWR 1364 at 1370. The rule has no application if the failure to call the witness is satisfactorily explained or readily understood. The usual explanations are the absence of a witness from court and a reasonable explanation for not compelling the witness’ attendance by subpoena. But failure by a party to call a witness likely to be friendly to the interests of the other party has been held sufficient to entitle a court not to draw an adverse inference from such failure. …

82 The conditions for the operation of the principle are those laid down in Payne v Parker [1976] 1 NSWLR 191, at 201, by Glass JA:

(a) the missing witness would be expected to be called by one party rather than the other,
(b) his evidence would elucidate a particular matter,
(c) his absence is unexplained.

83 In this case, I would have expected her mother and her aunt to be called by the Defendant, rather than by the Plaintiff; the evidence of each, on different matters, would elucidate matters to which reference has been made; and that the absence of each is not satisfactorily explained.

84 Accordingly, so far as is presently relevant, I draw the inference that the evidence of her mother would not have assisted the Defendant. In the circumstances, and without more, I am not satisfied, on the balance of probabilities, that there is, in fact, a legally enforceable debt owed to her mother by the Defendant.

85 Yet, this does not mean I should ignore the amounts proved to have been advanced by the Defendant’s mother to, or on behalf of, the Defendant. Section 20 specifically refers to “financial …contributions made …by or on behalf of the parties to the relationship…”. I propose to treat the advances proved, or agreed to have been made, as a financial contribution made on behalf of the Defendant: Powell v Supresencia at [56]-[57].

86 It is next necessary to attempt to determine the other contributions said to have been made by, or on behalf of, each of the parties.

87 I should note, in this regard, that it was submitted, on behalf of the Defendant, that the relevant contributions to be taken into account are those made in New South Wales. No authority to support the proposition has been cited. I do not accept the submission. Nowhere in s 20 is there a geographical element limiting the nature of the contributions to those made in New South Wales. Section 15, as stated, only requires “substantial contributions… have been made in New South Wales” which suggests contributions made elsewhere may be relevant.

88 In C v B [2007] 1 Qd R 212, McMurdo J considered the territorial jurisdiction of the Queensland equivalent of s 20. His Honour held that:

[14] … The term "property" and "financial resources" are used without any express territorial limitation, such as property within Queensland. Nor is the occurrence of some relevant contribution, including a financial contribution, made expressly relevant or irrelevant according to its connection with Queensland.

[15] Some territorial limitation upon the operation of Part 19 must be implied. Part 19 cannot be understood as applying to the world, and to confer potential rights and impose potential obligations regardless of any connection with Queensland. …

89 The same can be said about contributions referred to in s 20 and New South Wales.

90 In his oral evidence, the Plaintiff said that he paid for virtually everything during the relationship. He says he did this either by paying for specific things directly, or indirectly, by giving cash to the Defendant, which she used to pay for things. The Defendant denied that this was so.

91 Having read the evidence and heard the parties being cross-examined, it seems to me that it is more probable than not that, during the time the parties were living in New Zealand, the Plaintiff did assist the Defendant financially. He was receiving at least $400 per week and, no doubt, for some of the period (about 9 months), he had other sources of income, being from his selling items at the markets and otherwise. It is not possible to work out the total amount of his income. In addition, throughout this period, the Defendant lived in a property rented by the Plaintiff.

92 The Defendant, during this period also had some income, being child support ($80 per week), which she received from the father of her son, and income from social security benefits which she received. It is also likely that she used this income for family expenses.

93 In the course of cross-examining the Defendant, Mr Jackson, counsel for the Plaintiff, indicated that he intended to ask her questions about the receipt of social security benefits in New Zealand. Objection was taken by Mr Galvin, counsel for the Defendant, generally to questions on the topic, by reference to s 128 of the Evidence Act 1995, that is, on the ground that the answer might tend to prove that the witness had committed an offence under New Zealand law in the period that the parties were living in New Zealand as a couple (on her evidence between about October 2003 until April 2005) and under Australian law in the period that the parties were living in New South Wales (about October 2005 until April 2007). The apprehended offence was, in substance, in each case, that she received social security payments at the single rate whilst she was a member of a couple with the Plaintiff.

94 With the express concurrence of the parties, and because I considered that the interests of justice required that the Defendant should give evidence (see, for example, Cureton v Blackshaw Services Pty Limited [2002] NSWCA 187), I required her to give evidence on the topic, but granted a certificate pursuant to s 128 of the Evidence Act in respect of that evidence. (The parties, in fact, joined in requesting that the court require the evidence to be given and did not require reasons for the grant of the certificate.)

95 Mr Jackson submitted that I should ignore the Defendant’s use of any income from social security benefits received in New Zealand, it being said that as she had engaged in a criminal activity, the court should disregard the use of funds obtained thereby in considering the respective financial contributions of a direct, or indirect, nature. Reliance was placed on Beattie v Reid [2002] NSWSC 1088; (2002) 31 FamLR 204 and Fletcher v Furnance.

96 The period about which the submission could be made, was, according to the evidence of the Defendant, in the period of about 12 months or so, that is between February 2004 and April 2005.

97 Whether or not I take the Defendant’s contribution into account, in the circumstances, does not really matter, since I find that the Plaintiff’s financial contribution to the day to day living, and other, expenses of the parties was more significant than that of the Defendant during the period that they lived together in New Zealand. I find that he paid the majority of their expenses in this period. I do not accept that he used all of his income for the purposes of the relationship, since, later in his cross-examination, he asserted that he put a “fair bit” of his accident benefits into his company, Hydraujoint.

98 I cannot say the same for the period after October 2005. The Defendant received the amount of about $600,000 in respect of her damages claim, in early 2006. I accept that, thereafter, she was able to, and did, contribute to the household expenditure. In this regard, I note that there is a reference to the parties “living off savings and investments” in the Progress Notes (3.04.07). Also, the Plaintiff, in cross-examination, said that he “continued to fund everything for a further six months until she did get paid out” (T21).

99 During the period between about February 2006 to September 2007, I think it likely that the Defendant’s contribution to the living expenses was greater than that of the Plaintiff. In this period, his income appears to have been limited to receipt of accident compensation benefits of about AUS$386 per week. He accepts, also, that during this period, at least $20 to $50 per week was being spent by him on poker machines.

100 I do not consider that the money spent by the Plaintiff through gambling affects the assessment of the value of his contributions. The effect of his gambling was that he spent his own money so that it was not available to be applied to the family's needs. But that does not detract from the value of such contributions as he did make. However, the fact that he acknowledged that he spent money for that purpose does provide some additional support for acknowledging the contribution made by the Defendant following the receipt of the damages by her in early 2006.

101 One example of the major financial contribution by the Defendant appears to be in relation to the purchase of a car, in March 2006, for $27,000. The Plaintiff admitted that the Defendant had paid about $20,000 (she asserted that he paid only $5,000) towards the purchase price of the car. However, when it was sold in December 2007, he retained the whole of the proceeds of sale (of about $11,000). I treat this as the Plaintiff receiving about $7,500 more than he should have received, based upon the respective proportions of the purchase price paid by each of the parties.

102 I turn next to the contribution to the property and financial resources of the parties. I have no doubt that the whole of the purchase price of the North Sydney property was paid by the Defendant. In this regard, she purchased it in late 1996 or early 1997, for the amount of $205,000. Until her accident, in early 2002, she seems to have been able to financially look after herself, which includes making mortgage repayments. Thereafter, I accept that the Plaintiff did contribute to some of the mortgage repayments, although there was no attempt to quantify, precisely, the actual amount he paid, whilst they were living in New Zealand. Even assuming that he paid $80 per week, as he asserted, for the period between June 2002 and April 2005, this is about $10,500 for the whole of that period.

103 However, the Defendant paid the balance of the mortgage debt (about $176,000) from the amount awarded to her in early 2006. The sale price of this property was $325,000 gross.

104 I also accept that the Plaintiff did do some work maintaining the North Sydney property prior to its sale, but this seems to have been limited to preparing it for, and actually, painting, it once, and part of it twice. However, whilst it may have taken him three weeks to complete the preparation and painting, it was not a very big unit.

105 The Plaintiff was not cross-examined on his assertion that he managed various tenancy disputes in respect of this property, but it is impossible to determine what he did in this regard and the value if any of his contribution.

106 I do not accept that it was the Plaintiff who organised the sale of the North Sydney property. In this regard, I note that on the contract for sale, real estate agents were shown as the vendor’s agent and that advertising expenses ($97.52) and commission ($3,575 incl. GST) was charged, and paid, by the Defendant. In addition, the Plaintiff did not have a specific recollection of showing the actual purchasers the home unit, which, one might think he would have done, if he had been the effective cause of the sale of the unit to them.

107 I note that from the gross proceeds of sale, the Defendant received almost $280,000, although there was deducted almost $27,000 which was paid to the Office of State Revenue (which was the stamp duty on the purchase of the Willoughby property).

108 In relation to the purchase price of the Willoughby property, the Plaintiff does not assert any financial contribution to its purchase price, or otherwise. (I have already noted that the stamp duty was paid out of the proceeds of sale of the North Sydney unit.)

109 There is a dispute about whether he did anything in respect of its maintenance, after the Willoughby property was purchased, and if he did, whether he was paid $5,000 for the work that he did. I am of the view that the Plaintiff was, probably, paid for the work that he did because his only income was his accident compensation at this time, whilst the Defendant had, by then received the proceeds of sale of the North Sydney property and also the damages amount.

110 Whether the Plaintiff was paid, or not, I am of the view that any work that he did on the Willoughby property was minimal.

111 I also find that the Defendant’s mother assisted in paying for some of the renovations and the other expenses incurred by the Defendant in respect of the Willoughby property. The amount that I am satisfied that she paid is no less than $178,000. In the circumstances, I treat the amounts paid by the Defendant’s mother as a financial contribution made on behalf of the Defendant to the conservation or improvement of that property.

112 In relation to the contribution as a homemaker and parent, the Plaintiff first said that he did all of the work around the home and in respect of the Defendant’s child, James, (prior to the birth of Tegan) and then when Tegan was born, for both the children. When it was pointed out to him that, in his affidavit, he had referred to having done “most” of what was done at home, he said that he “could not remember” what the Defendant had done. He acknowledged only that the Defendant read books to Tegan.

113 The Defendant denied that the Plaintiff did all that he alleged, particularly between about June 2002 and April 2005. The difficulty I have accepting the Defendant’s evidence about this issue relates to what the Defendant, herself, stated in the litigation in which damages were claimed.

114 In the Statutory Declaration declared on 16 August 2005, the Defendant stated:

“105. In May 2002, I underwent the scaphoid reconstruction surgery in Sydney.

106. During the post operative recovery, my need for assistance increased significantly as my right dominant wrist remained in plaster for several weeks.

107. My mother had taken time off work for several weeks to look after me.

108. On average, from the date of the injury until mid 2002, when I left for New Zealand, I received at least twelve hours of care per day from my mother and, to a lesser extent, my brother.

109. I have experienced and continue to experience the following difficulties with respect to my activities of daily living as a result of the injuries suffered in the accident:

a) Difficulty turning taps due to right wrist pain and weakness and some weakness in my left wrist, which I favour. Prior to the accident I was right handed.

b) Restricted movement in my right wrist and reduced strength in my right hand and right arm.

c) Restricted and painful movement in my right shoulder. Restricted ability to lift and carry. I have basically no strength at all in my right wrist.

d) Difficulty reaching and lifting items in/out of kitchen cupboards.

e) Inability to lift items in/out of oven and on/off stove top due to reported left and right wrist pain and weakness.

f) Difficulty with food preparation such as chopping vegetables due pain and weakness in the injured wrist.

g) Inability to do grocery shopping (due to fear of driving and difficulty lifting and carrying. Also, I am unable to cope with the grocery shopping due to my potential to have panic attacks in the store or whilst travelling home by myself.

h) Difficulty completing laundry and house cleaning tasks, due to right wrist pain and weakness and limited physical endurance.

i) Inability to look after my daughter properly due to pain and stiffness in my injured arm, limited physical endurance and reduced frustration tolerance.

j) I was unable to flush the toilet for several months.
k) Inability to wash hair properly due to numbness in my hand and arm.

l) Inability to cut food right through, such as children’s school sandwiches.

110. Whilst living in New Zealand, my partner, Mr Stephen Kemp has provided me with a lot of care.

111. I have difficulty with fine movements. I am unable to hold a needle, do up buttons, or use scissors.

112. It is difficult for me to type. I am unable to rotate and apply strength when using my wrist or hold my arm in position for long periods due to numbness and pain.

113. It is difficult for me to cook, cut, chop, stir or hold pots. I am unable to grate cheese, cut pumpkin, mash potatoes, chop vegetables, lift pots, turn taps, lift dishes in/out of oven, use a knife in my right hand etc.

114. My wrist is worse in cold weather and with a change in weather.

115. We had a wood fire in New Zealand. I was unable to cut wood or carry wood.

116. I have difficulty cleaning. I am unable to mop the floor or do the scrubbing of the bathroom.

117. It is difficult for me to do the laundry and hang up washing.

118. I have difficulty opening jar lids and cans. I can’t easily use a can opener.

119. I am unable to make my bed, as I am unable to lift the mattress to tuck the sheet under.

120. I am unable to drive due to stress and anxiety and fear.

121. It is difficult for me to look after my children.

122. In New Zealand, Stephen drove my son to and from school. He spent at least one hour each day doing so.

123. On average, Stephen provided at least four hours of care per day, seven days per week, over and above what he would have provided me in any event.

124. I believe I require at least the same level of assistance in the future, and more care if and when my condition deteriorates.

125. I also require assistance with handyman tasks and lawn and garden maintenance.

126. I am unable to live on my own without assistance.”

115 In a “Schedule of Damages as at February 2005” prepared by the Defendant’s solicitors, it was claimed that:

“In New Zealand, the claimant's friend and then partner, Mr Stephen Kemp has been providing care to her.

From mid June 2002 until October 2003 the claimant remained in New Zealand receiving help from Stephen.

In October 2003, the claimant travelled to Sydney for an operation on her injured wrist - arthroscopic debridement.

During the post operative regime of approximately 3 weeks, the claimant required at last 12 hour care. The care has been provided by her mother.

Accordingly, the claimant claims:

$720.00 a week x 3 weeks (from 10 October 2003 until 31
October 2003) $2,160.00

Stephen looked after the claimant:

From mid June 2002 until October 2003; and
From November 2003 to date and continuing.

Stephen's assistance is required due to the claimant's following continuing problems caused by the accident:


1. Difficulty with fine movements.

2. Inability to hold a needle.

3. Inability to do buttons.

4. Difficulty typing as it makes her wrist sore.

5. Inability to rotate and apply strength when using her wrist.

6. Difficulty cooking (Inability to grate cheese, cut up pumpkin, mash potatoes, chop vegetables, lifting pots, turning taps, lift dishes in/out of oven, using knife in her right hand etc).

7. Inability to cut wood for wood fire. Inability to carry wood.

8. Difficulty cleaning (inability to mop the floor, scrubbing bathroom).

9. Difficulty in doing laundry. Stephen takes the washing basket out to the line. He also takes the washing out on the line.

10. Inability to open jars and cans.

11. Inability to make her bed as she cannot lift the mattress to tuck the sheet under.

12. Inability to drive (due to stress and anxiety. At the time of the accident, the claimant was only on her L's. After the accident, she was unable to go back to driving).

13. Difficulty looking after her children.

Driving children to school only takes Stephen an hour each day.

The claimant's need for assistance increased since the birth of her child in December 2004.

On average, Stephen has been providing at least 4 hours of care a day 7 days a week over and above of what he would have provided in any event.

Accordingly, the claimant claims 28 hours of voluntarily assistance provided to her by Stephen from Mid June 2002 until to date (apart from one month when the claimant was in Sydney for her operation - October 2003) at a cost of $19.00 per hour:

$19.00 per hour x 28 hours = $532.00 a week x 134.1 weeks
(2 years and 7 months) = $71,341.20”

116 I consider that I should have regard to the Statutory Declaration and the Schedule as the contents accord, broadly, with what the Plaintiff says that he did to assist the Defendant in the period between June 2002 and April 2005. It also provides me with a guide as to what was asserted, by those representing the Defendant, as the value of his non-financial contributions.

117 By the time the parties both lived in New South Wales together (from October 2005), it is likely that the Defendant’s condition may have improved as she asserted. I conclude however, that in April 2007, it became worse again, with the diagnosis of ideopathic pulmonary arterial hypertension. However, I am not satisfied that the Plaintiff made the greater proportion of the homemaker and parent contributions as he asserted during the whole of the period between October 2005 and October 2007.

118 In regard to this period, I note that in the Progress Notes referred to earlier, the following:

(a) “3/04/2007 – Prior to hospitalisation, the Defendant was managing most domestic duties and caring for daughter; still breast feeding;”

(b) “03/04/2007 – Hb: Steven (sic) was running business in NZ now trying to start business in Australia. Has put this on hold due to both his poor health and pts (sic). Steven (sic) has an amputated leg and stomach problems. Steven (sic) drives and can do grocery shopping. Steven (sic) is currently caring for the children;”

(c) “Selena and partner are living off savings/investments, Selena reports that due to assets she isn’t eligible for Centrelink pensions."

(d) “14.4.7 – J. Maude – OT - #41599

Issues Identified:

exercise tolerance and SOBOE and dizziness on standing all contributing to difficulty in performing domestic ADLs. Social situation as documented by SW confirmed; pt’s spouse is unable to manage domestic ADLs due to disability.

Impression: Pt usually lives busy life, previously active and cares for 2 children (2 y.o. + 9 y.o.). Appears to be accepting of current in functional capacity but is anxious re longer term implications, esp. in role as mother.”

(e) “27.6.07 – Due to current difficulties with functional ability and fatigue related to pulmonary hypertension Selena and her partner Stephen report they need equipment at home to improve functional ability as well as improve safety. They also require assistance to improve access in and out of unit as Selena is currently house bound and can only get in and out of unit in ambulance.”

(f) “26.6.07 – Selena reports concerns about her inability to care for her 2.5 yr old girl, tegan (sic) due to current medical condition.

While Tegans ( sic ) father currently provides primary care for her Selena reports he is finding it difficult due to his own disability (above knee amputation) and general stress and difficulty coping.”

119 In light of the above, I do not accept, as the Plaintiff asserted, that the Defendant did nothing in relation towards the welfare of the members of the household. I consider, having read the records to which I have referred, and having read the evidence of the Defendant, that the Defendant did as much as she was able, bearing in mind the disabilities from which she then suffered.

120 The task of identification and valuation of the property, as well as the identification of the contributions having been completed, I turn now to consider whether the Court should adjust the interests of the parties in the property in such manner as to it seems just and equitable having regard to the contributions identified within paras (a) and (b).

121 Looking at the property and the conclusions in respect of the s 20(1)(a) inquiry, I consider it to be just and equitable to make an adjustment of a small percentage of the proceeds of sale of the North Sydney unit, not only for the financial contribution towards the mortgage debt repayments but also for the preparation for painting and the painting, which I estimate to be calculated at about 3.5%of $307,000), or $10,750.

122 I do not consider that there should be any adjustment in respect of the Willoughby property, since I conclude that the Plaintiff was paid $5,000 for the work he did on that property. Otherwise, I am not satisfied that he did anything else in respect of this property. Even if he did, I have taken into account the amount of $7,500 retained by the Plaintiff from the proceeds of sale of the car in reaching the conclusion that no adjustment should be made.

123 As to the homemaker, domestic, or personal welfare aspects within s 20(1)(b), I find that until about January 2006, the Plaintiff’s contributions significantly outweighed those of the Defendant and that I should make an adjustment in respect of the damages claim. Taken with the non-financial contributions to her welfare made during this period, and for some of the time afterwards, I am of the view that I should adjust the property by an additional $78,000.

124 After January 2006, I consider that such contributions are slightly in the Defendant’s favour and I have taken this into account in coming to my figure of $78,000.

125 In determining what order is just an equitable, I remember that the parties had a relationship of slightly less than 5 years. They agreed that it was a short relationship. At the start of the relationship, the value of the property of the Defendant was greater than that of the Plaintiff. Thereafter, the Defendant’s property increased by the award of damages for personal injuries that she sustained. She used this, and other moneys, to purchase the Willoughby property. She was able to do this, at least in part, because, for a period of time, the Plaintiff assisted her financially. He also assisted her whilst she was suffering the disabilities to which she referred in the Statutory Declaration. The value of the Willoughby property increased because of the contributions made by, or on behalf of, the Defendant. That increase in value had nothing to do with the Plaintiff.

126 Making the kind of “holistic value judgment” which I must make, I find that it would be just and equitable to adjust the property of the parties by providing the Plaintiff with a lump sum to be paid by the Defendant to him of $88,750. As Bryson JA said in Chanter v Catts at [94]:

… The Master left the basis of the assessment of $95,000 unexplained; I am at a loss to see any other or better process for reaching a conclusion on that matter, and an attempt to reduce to arithmetic the assessment of the contribution made by the appellant staying at home and contributing to the family welfare to the respondent’s superannuation resources by some detailed process or calculation could not improve on the simple one-step process of evaluation which the Master used. There are many stages in the course of disposing of civil proceedings where resort to judicial wisdom and experience for evaluating in money terms something which has no essential relation with money and commercial dealings is the only means available; such assessments must often be required in coming to decision under s 20.

127 I am unable to give any additional or further explanation why the amount which I consider ought to be paid as a lump sum payment to reflect the Plaintiff's greater contribution under s 20 should be preferred to some other figure.

128 I shall hear the parties as to the precise orders that should be made to give effect to these reasons. I have not heard argument on costs. I shall also hear submissions on costs.

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