LEES v COOPER

[2008] SADC 168

District Court of South Australia

(Civil)

LEES v COOPER

[2008] SADC 168

Reasons for Ruling of His Honour Judge Clayton (ex tempore)

5 December 2008

FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS

Application for division of property under s 10 of Domestic Partners Property Act 1996 and declaration that defendant holds property on trust. Submission of no case to answer.

HELD: Once the requirements of subs 9(2) of the Domestic Partners Property Act 1996 were satisfied the Court was required to proceed in accordance with s 11 and no case submission was inappropriate. The passing of the Domestic Partners Property Act 1996 did not alter the creation of a constructive trust. Application dismissed. Extension of time.

Domestic Partners Property Act 1996  ; Supreme & District Court Civil Rules 2006 6R 209, referred to.
Baumgartner v Baumgartner (1986) 164 CLR 137; Muschinski v Dodds (1985) 160 CLR 583; Piraj v Piraj (1997) 72 SASR 153, considered.

LEES v COOPER
[2008] SADC 168

1. In this action the plaintiff has sought relief pursuant to the De Facto Relationships Act 1996. The Act is now known as the Domestic Partners Property Act 1996.

2. In Part 2 of his Statement of Claim the plaintiff seeks a division of property under s 10 of the Act and/or a lump sum payment, and/or a declaration that the defendant holds the property referred to in paras 49 (a), (e) and (f) of the Statement of Claim on a constructive trust for herself and the plaintiff.

3. In addition, paras 15 and 16 of the Statement of Claim refer to matters being "agreed". On the basis of those pleas counsel for the plaintiff argued that in addition to the causes of action identified in Part 2 of the Statement of Claim the plaintiff also has a claim based in contract. The prayer for relief makes no reference to a claim in contract.

4. I am satisfied that the parties were in a domestic partnership and the requirements of subs 9(2) of the Act are satisfied. However the application for division of property was not made within one year after the end of the domestic relationship and the plaintiff requires an extension of the period of limitation created by subs 9(3) of the Act. That subsection provides:

   (3) An application for the division of property must be made within one year after the end of the domestic relationship unless the court, after considering the interests of both domestic partners, is satisfied that the extension of this period of limitation is necessary to avoid serious injustice to the applicant.

5. Accordingly I must consider "the interests of both domestic partners" and be satisfied that the extension of the period of limitation is necessary to avoid serious injustice to the applicant.

6. At the conclusion of the plaintiff's case counsel for the defendant submitted that there should be no extension of time and that there is no case to answer. I ruled that the defendant could put the submission of no case to answer without having to elect not to call evidence.

7. For the purpose of this application I am required to take the case of the plaintiff at its highest on the material before the court. Lunn 6R 209.65.5.

8. There is a dispute as to when the relationship ended. The defendant contends that it ceased in July 2003. The plaintiff gave evidence that the relationship ended in February 2004. On the plaintiff's case the proceedings should have been commenced no later than February 2005. In fact the proceedings were not commenced until 16 November 2006.

9. In my opinion the evidence adduced by the plaintiff establishes a prime facie entitlement to an extension of time. The plaintiff gave evidence that at the time cohabitation ceased the parties discussed the assets and that the defendant told him that superannuation, AMP shares and medical expenses would be his if they separated. The plaintiff gave evidence that the defendant said she had an accident claim pending and that she would pay him when the proceeds from that came along. He gave evidence of events in late February and early March 2004 and said that in May of 2004 he advanced the defendant $2,000 to enable her to submit her personal injuries claim. He said that recovery from the insurance company took a lot longer than they both expected and he initiated discussions again in September 2005. As at 25 September 2005 the plaintiff believed there was an agreement that the defendant would pay him $186,000.

10. On the basis of that evidence I would find that an extension of the period of limitation is necessary to avoid serious injustice to the plaintiff. The plaintiff had a belief, fostered by the defendant, that a division of property could be resolved without the necessity to resort to litigation.

11. However I have not yet heard the case of the defendant, and not having heard her case I am unable to consider her interests.

12. I refrain from making an order for the extension of the period of limitation until I have heard any evidence which the defendant may wish to bring forward.

13. However for the purpose of the submission that there is no case to answer I cannot assume that an extension of time will not be granted. Taking the plaintiff's case at its highest there is an argument for an extension of time.

14. On an application under the Domestic Partners Property Act 1996 the matters to be considered by the court are those set out in s 11. Subsection (1) provides that in deciding whether to make an order for the division of property under this part, and if so the terms of the order, the court "must consider" the matters referred to in paras (a) and (b) and "(c) may have regard to other relevant matters".

15. Because of the direction in paras (a) and (b) that the court "must consider" the specified matters I consider that an application pursuant to the Act is different from normal inter partes civil litigation. In my opinion the present application is not one in respect of which an application of no case to answer is appropriate. The plaintiff has satisfied the pre-requisites set out in subs 9(2) and the court is therefore required to proceed in accordance with s 11.

16. I reject the submission that there is no case to answer with respect to the claim under the Domestic Partners Property Act 1996.

17. Mr Heywood Smith QC argued for the defendant that the figures on the second page of a schedule which is annexed to his written submission establish that the plaintiff has no entitlement to an order. I do not accept that submission. As I have said the court must properly consider the matters referred to in subs 11(1) in order to assess the position of the parties.

18. As an alternative to the claim under the Act the plaintiff claims that there is a constructive or a resulting trust in respect of certain property. That claim is separate and distinct from the claim under the Act. There is evidence which supports the creation of a trust. To the extent that the defendant has argued that there is no case to answer with respect to the claim based on a trust, I reject that argument because there is evidence which could support the creation of a trust.

19. Mr Mellows, counsel for the plaintiff, also argued that his client has a claim in contract. There is a passing reference in the Statement of Claim to matters being "agreed", and there is some evidence which supports an agreement having been reached. Taking that evidence at its highest there is an argument that there is a claim in contract.

20. I acknowledge that there is an argument that the alleged agreement is contrary to Part 2 of the Domestic Partners Property Act 1996. Also there is some inconsistency between the claims that some items of property, such as AMP shares, are trust property and also the subject of a contract. There is also the question of whether the pleadings raise a claim in contract. These are matters which need to be argued. They do not provide the basis for a ruling that there is no case to answer.

21. I reject the submission of Mr Heywood Smith QC that the constructive trust cases such as Baumgartner vBaumgartner (1986) 164 CLR 137 and Muschinski v Dodds (1985) 160 CLR 583 should be read down because of the enactment of the De Facto Relationships Act 1996 and Domestic Partners Property Act 1996. That submission is contrary to s 16 of the Domestic Partners Property Act 1996.

22. The relevant principles for the creation of a trust were referred to in Baumgartner at para 32. They were followed by the South Australian Supreme Court in Pirajv Piraj (1997) 72 SASR 153,161. Those principles are not confined to claims relating to residences or domestic property, but apply to any property which can be the subject of a trust. At least some of the property which is the subject of this action falls into that category.

23. For these reasons I dismiss the defendant’s submission that there is no case to answer.