Lupton v Hodge
[2004] QDC 152
•9 March 2004
DISTRICT COURT OF QUEENSLAND
CITATION: Lupton v Hodge [2004] QDC 152 PARTIES: WAYNE NORMAN LUPTON
Plaintiff
and
COLLEEN MARGARET HODGE
Defendant
FILE NO: 138 of 2003 PROCEEDING: Claim for adjustment of former de facto partners’ property interests ORIGINATING COURT: District Court Southport
DELIVERED ON: 9 March 2004 DELIVERED AT: Southport HEARING DATE: 5 & 6 February 2004 JUDGE: Robin QC DCJ ORDER: Defendant to pay plaintiff $120,000.00 for cancellation of his interest in subject property CATCHWORDS: Property Law Act 1974 s 286 – adjustment of interests of former de facto partners
Cases cited:
Daniel v Rickett, Cockerell & Co Ltd [1938] 2KB 32
Re Kurilpa Protestant Hall Pty Ltd [1946] State Reports Queensland 171, 183
Sandhurst Trustees Ltd v Condah Bay Investments Pty Ltd [2003] QDC 438Sullman v Sullman [2002] NSWSC 169
COUNSEL: Ms Spence for the Plaintiff
Mr McGregor for the DefendantSOLICITORS: Evans & Company for the Plaintiff
Raeburn Solicitors for the Defendant
Both the claim and counterclaim in this proceeding seek relief under part 19 of the Property Law Act 1974 (the Act), in particular under s 286, subsection (1) of which provides that the court may make any order it considers just and equitable about the property of either or both of de facto spouses adjusting their property interests. The plaintiff, Mr Lupton, was first to court, filing his claim on 26th March 2003. The claim sought the following orders:
“a. That the Defendant pay to the plaintiff the sum of $120,000.00.
b.An Order that upon the Defendant paying the sum referred to in paragraph 1 hereof, that she retain as her sole property and be declared solely entitled to possession and ownership of:-
i.The real property at 11 Samuel Court, Jacobs Well in the State of Queensland;
ii.The furniture, bank deposits, investments and chattels in the possession of the Defendant; and
iii.The superannuation, long service leave, holiday leave entitlements, accrued sick leave and all other financial resources of the Defendant.
c.An Order that the Plaintiff retain as his sole property and be declared solely entitled to possession and ownership of:-
i.The furniture and chattels in the possession of the Plaintiff; and
ii.The superannuation, bank deposits, investments and employment entitlements in the possession of the Plaintiff.
d.An Order that the Defendant pay the Plaintiff’s costs of and incidental to these proceedings pursuant to Section 341(2) of the Property Law Act 1974 (Qld).”
For some reason the statement of claim sought payment of $105,000.00 only, but an amendment increased the claim to $220,000.00.
The Jacobs Well property is in the name of Ms Hodge, the defendant. She learned from the Registrar of Titles’ letter of 7 February 2002 of the lodgement of a caveat by Mr Lupton claiming “An equitable interest and a legal interest in and to the land” and entitlement to orders pursuant to Part 19; on 30th May 2002, after the obtaining of an appropriate District Court order the previous day (which Ms Hodge and/or her then lawyers, who had only very late notice of the relevant application which they decided not to oppose) a further non-lapsing caveat was lodged.
As a matter of history, it was the defendant who took the offensive first, when her solicitors wrote the following letter to the plaintiff on 29th January 2002:
“COLLEEN HODGE
We write to advise that we act on behalf of the abovenamed. Our client has sought preliminary advice from us in relation to the issue of property settlement. Colleen has instructed us as follows:
1.She lived in a de-facto relationship with you for approximately five and a half years;
2.Approximately six months into the relationship you purchased a unit at 5/9 Weemala Street Chevron Island for $80,000.00;
3.Throughout the time that you were residing in the unit you paid the mortgage, rates and body corporate levies and Colleen paid all household expenses. You also received $26,000.00 from the sale of vacant land at Sanctuary Point and approximately $11,000.00 from the estate of your late father;
4.Between February and May 2001 the unit was substantially renovated including the installation of a new kitchen and verticals, tiling, painting and general refurbishment. Through Colleen’s efforts you saved a substantial amount on refurbishment which ultimately led to a substantial capital gain on the sale of the unit;
5.The unit was sold in October 2001 for $119,000.00 and you received a net of approximately $115,000.00;
6.In August 2001 Colleen purchased her property at Jacobs Well. You advanced $75,000.00 to Colleen on the 15th of October 2001 to enable her to purchase the property. Colleen has provided us with a copy of a document dated the 26th of October 2001 confirming an “interest only loan” for 12 months at 5.19%. We note that the agreement provides for termination only in the event of a transfer of the property into joint names or a sale of the property “during this 12 months period”;
7.Separation occurred on the 19th of January 2002.
We have given Colleen preliminary advice in relation to her potential entitlement pursuant to part 19 of the Property Law Act. The Act takes into account our client’s financial and non-financial contribution to the “acquisition, conservation or improvement” of the unit. Our client instructs that her contribution in this regard was substantial.
We note that the document dated the 26th of October 2001 does not impose an obligation on our client to repay the “loan” until the 15th of October 2002. That issue does not disentitle our client from making an application for property settlement pursuant to the Property Law Act immediately. Our client has instructed, however, that with a view of avoiding the costs and trauma associated with protracted proceedings, she is prepared to resolve the property settlement issue with you on the basis of an immediate payment to you of $50,000.00.
In the circumstances, we invite you to seek independent legal advice in relation to the matter. We stress that all communications regarding this issue should be directed to this office and not our client.
If we do not hear from you within ten days Colleen will reluctantly have to give consideration to issuing appropriate Court proceedings. As part of that process we give notice that we will also be seeking a costs order against you.”
The defendant’s counterclaim proposes that upon payment by her of the sum of $40,000.00 within 28 days of the court’s order, her entitlement to the Jacobs Well property, her vehicle and other chattels including furniture and household items, her superannuation plan with AMP be declared, and that the plaintiff pay her costs.
In the end, neither party asked that the court be concerned with items of property other than the house and land at Jacobs Well. The parties’ superannuation entitlements are broadly similar, Mr Lupton’s being slightly greater, perhaps a reflection of his history of higher earnings. Essentially, Ms Hodge is left with all the furniture; she provided the bulk of the furniture at commencement of the relationship, when Mr Lupton moved into premises she was renting, bringing only limited items himself.
When the parties moved into the Chevron Island unit following completion of considerable renovations of it upon the purchase, Ms Hodge’s furniture was moved across, the furniture which came with the unit (and was considered inferior) being sold off at a garage sale conducted by Ms Hodge. The parties each claim that the other received the proceeds, which must have been modest. My impression is that, to the extent that furniture now with the defendant has been replaced over the years, the plaintiff has paid: for example, close to the death of the de facto relationship, he purchased a new microwave oven.
There is insufficient valuation evidence available to the court to permit any exercise under Part 19 focusing on the vehicles. My understanding is that the parties were inviting the court to disregard vehicles. Each of them owned more than one vehicle during the relationship, but they found it convenient to share vehicles for various reasons, so that, typically, each was using the other’s, on some basis of meeting running expenses which was regarded as acceptable.
At the beginning of the trial the court was informed by the plaintiff’s Counsel, Ms Spence that the parties had reached agreement on certain matters: that the Jacobs Well property is presently worth $310,000.00 (excluding furniture), that the parties commenced a de facto relationship in October or November 1996, and that it terminated in December 2001 or January 2002, the plaintiff contending for 9th January 2002, the defendant for 31st December 2001, but on the basis of the parties remaining under the same roof until 19th January 2002. I am not sure whether evidence given by Ms Hodge of the parties occupying separate bedrooms was intended to qualify the proposition that a de facto relationship relevantly existed: it should not be permitted to do so, given the way in which the trial was conducted on both sides.
[10] The court was provided with next to no detail of the romantic aspects of the relationship. It is clear that it was Ms Hodge who, some time after the parties moved into Jacobs Well in the first half of October 2001, terminated the relationship, “changing the locks” according to Mr Lupton. At first, he was not prepared to accept that the relationship was over.
[11] Apart from some valuation evidence in respect of Mr Lupton’s unit and other units in the same development on Chevron Island, the only evidence was that of the parties. Where their evidence conflicts, that of the plaintiff is to be preferred. In particular, that is so in respect of his assertion that a sum of $5,000.00 (which Ms Hodge paid into a bank account of his from which he used to draw to meet mortgage payments due in respect of the Chevron Island unit) was repaid to her in various instalments corresponding in date (but not in amount) to withdrawals from an account or accounts of his: receipt of monies into an account or account of Ms Hodge’s was established. While his version is less than totally satisfying, Ms Hodge seemed to me totally evasive and unhelpful on this issue. My assessment is that, throughout the relationship, while not being “petty” about things, the protagonists, broadly speaking, kept track of financial matters and saw to it that reimbursement of payments made against the obligations of the other was forthcoming. I think Ms Hodge would have made an issue of it at the time, had she not got her $5,000.00 back, one way or the other.
[12] The other respect, decisive for the outcome of the case, in respect of which Mr Lupton’s evidence must be preferred to Ms Hodge’s, concerns the basis on which a sum conventionally taken as $75,000.00 was contributed by Mr Lupton towards the purchase by Ms Hodge of the Jacobs Well property. The settlement statement (relative to sale of the unit), Exhibit 18, establishes that a bank cheque in favour of the vendors to Ms Hodge in the amount of $74, 287.40 was provided from the settlement monies otherwise due to Mr Lupton: the amount allocated to him was $40,429.05.
[13] The witnesses did not get into the topic of the secrecy or otherwise which might have attended Ms Hodge’s locating the Jacobs Well property (not the first she looked at) which she purchased under Exhibit 28, a contract dated 18th August 2001 for $147,500.00, on a deposit of $4,000.00 not actually paid until 24th September 2001. Ms Hodge had got into a position to effect such a purchase because of expectations in the estates of her parents who passed away in the year 2000; she received, in time to apply to her purchase, although perhaps inconveniently late, $57,684.78. Additionally, she obtained $30,000.00 from the sale of a book-keeping business which she established during the de facto relationship (indeed, which she operated for some months from home). As for the balance of the purchase price, Ms Hodge made arrangements towards borrowing $90,000.00 from the Commonwealth Bank. The evidence contains material from the bank said to represent loan approvals. No such loan ever eventuated.
[14] Ms Hodge says that Mr Lupton offered to make available the bulk of the proceeds of the sale of his unit which settled on 15th October 2001, that becoming the extended (by a week) date for settlement of Ms Hodge’s contract, on the basis of his having no immediate plans for use of the sum. This was an attractive proposition to her, because she would be spared the significant periodical and other charges the Commonwealth Bank proposed to make over and above interest.
[15] Mr Lupton’s version is that once he learned of the Jacobs Well purchase (located in a general area he was apprehensive about moving to, because he did not know it) the understanding was that it would be purchased in joint names (see Transcript p 54 ff). Early in the relationship and not long after the Chevron Island unit was purchased, the plaintiff invited the defendant to come in as a half owner on the basis “‘You come in as half and you pay for half’. And she said, ‘No’.” Mr Lupton’s evidence-in-chief (at p 54) went on:
“And then, a couple of years before we sold the property, she was getting a bit uptight and we were discussing the fact that she thought that she was putting – she’d contributed so much to the – to the unit but she wasn’t going to get anything out of it. And I said, ‘Well, okay, if that’s the way you feel, if you give me $15,000, I’ll put your name on the – on the register. You’ll be half owner of – of the unit.’ And she – she said that she’d already done enough. That she didn’t need to have to contribute anything else.
All right. And at that time, had you made a considerable – had you – you’d made considerable payments to the mortgage at that time?-- I certainly had. I’d put the – the monies from my inheritance, the monies from the sale of the land. I put that all into the property and plus, other payments back to the redraw account. So, I – I think about that time, the deficit would have been about $10,000.
All right. What, you mean, the amount you owed on the unit? -- I still owed about $10,000 on the unit.”
[16] Sale of the unit was under consideration for some years. The parties searched for a house which they might buy together to replace it in the Bundall/Ashmore/Benowa area. It might be noted that an additional reason for the defendant’s not becoming a legal owner of the unit is that the parties contemplated the purchase in her name of another unit in the same complex, which could be rented out, while they occupied Mr Lupton’s. Ms Hodge concluded that the asking price for what was available was too high.
[17] The parties effected some investments jointly, notably in shares, and had a joint bank account for share trading and like purposes. One use they proposed for joint funds was the registration of a business name (an amalgam of their names) which they envisaged using at some future time for joint business purposes. Another joint account came about to hold settlement monies which each received when they had the misfortune to be injured together in a road accident.
[18] It happened that Mr Lupton finally found a purchaser for his property (or a more effective real estate agent to market it) about the same time as the contract Exhibit 28 came about. Ms Hodge became apprehensive that she would not be able to complete and might lose her deposit. I think Mr Lupton (p 58) is close to the mark in his impression that there were delays with the Commonwealth Bank pending Ms Hodge’s providing financial information to satisfy the bank she was able to service the proposed loan, and also that there were delays in her parents’ estates being finalised. The closest he came to Ms Hodge’s version was in his description of his response to her distress:
“Look, you don’t have to worry. If the time comes that contract is to be finalised, if the bank doesn’t okay you a loan, then I’ll put the money in for the – from the sale of the unit.”
Mr Lupton was not saying he would replace the bank as lender - because he immediately identified his expectation, if he put in the sum under discussion, of $75,000.00, that “The house was half mine” – something he claimed (and I find) that he said to her. I accept his evidence that Ms Hodge said the reason she wished to buy Jacobs Well in her own name in the first place was so that she could receive the first home buyer’s grant, of $7,000.00 – a grant established by the Federal Government as part of compensation arrangements to make up for the inflationary impact of the Goods and Services Tax on construction costs. Ms Hodge obtained the grant and in time to employ the funds when she completed her purchase. I accept that Mr Lupton did make it clear he wanted his name on the title, which the parties discussed as something that could (consistently with the terms of the grant) and would occur after 12 months. I do not think that there was any mention of Mr Lupton playing the role of a lender. Of course, no security was offered to him. It is understandable that he became apprehensive about his interests if “anything should happen” before Jacobs Well was transferred half to his name. Both parties had children who had left home from former relationships. I thought I detected slight hints that there might be concerns among the children that expectations of enjoying benefits from their own parent might be frustrated.
[19] The parties, possibly thanks to Ms Hodge’s experience as a book-keeper, were prepared to embark on being their own lawyers. Recourse to kit or other material had produced at least one will of Mr Lupton’s during cohabitation. Exhibit 13 consists of reciprocal or mutual wills of the parties in draft. Neither was ever signed. Ms Hodge said there were many versions subsumed in later drafts. Even accepting her assertion that it was Mr Lupton who sought the provisions set out below, in my view the drafting was hers and represented arrangements which were acceptable to her, or, at least, to all appearances were acceptable to her. Clause 5 of the unsigned draft in her name is as follows:
“5. House at Jacobs Well
I give and devise my half share of the property situated at 11 Samuel Court, Jacobs Well to my Trustees to allow Wayne Norman Lupton to use the same as his principal place of residence for so long as he desires. During such time he is to be responsible for payment of all rates and taxes and other usual outgoings and to keep the property insured to the satisfaction of my Trustees. He is to be responsible for the day to day maintenance and upon him ceasing to use the property as his principal place of residence I give and devise my share of the property equally to my children Shane Robin Hopf and Melissa Joy Hopf. Provided however that should any child of mine be deceased their share shall then go to my sole surviving child.”Mr Lupton is residuary beneficiary.
[20] Clause 6 of the draft will in his name was:
“6. House at Jacobs Well
I give and devise my half share of the property situated at 11 Samuel Court, Jacobs Well to my Trustees to allow Colleen Margaret Hodge to use the same as her principal place of residence for so long as she desires. During such time she is to be responsible for payment of all rates and taxes and other usual outgoings and to keep the property insured to the satisfaction of my Trustees. She is to be responsible for the day to day maintenance and upon her ceasing to use the property as her principal place of residence I give and devise my share of the property equally to my children Lance Wayne Thomas Lupton, Jay Anthony Lupton, Matt Bradley Lupton and Daina Lorae Lupton (Horton).”
[21] In October 2001, no wills having been signed, and for reasons that may be partly related to concerns generated by the atrocity perpetrated at the World Trade Centre in New York on 11th September 2001, when Ms Hodge was planning to fly interstate for a family wedding, Mr Lupton became particularly concerned that should anything untoward happen to her, he have something in writing to evidence his interest.
[22] Exhibit 36 is another draft document prepared by Ms Hodge, which Mr Lupton did not recognise when it was shown to him. It provides:
“Friday, October 05, 2001
I, Wayne Norman Lupton of 5/9 Weemala Street, Chevron Island Qld, loan the sum of $75,000.00 to Colleen Margaret Hodge for the purchase of the property at 11 Samuel Court, Jacobs Well Qld.
This loan is to be an interest only loan at the rate of 5.20% for a period of 12 months commencing on Monday the 15th day of October 2001. This contract can be terminated if the property is transferred into joint names or the house is sold during this 12 months period.
Signed …………….”
[23] Exhibit 14 is a later version of the same document, signed and dated by the parties, unwitnessed. The date is changed to October 26th, 2001, the interest rate to 5.19%, consistently with a modest reduction in rates indicated by the Commonwealth Bank, according to Ms Hodge’s evidence. While the original of Exhibit 14 was doubtless valuable reassurance for Mr Lupton that Ms Hodge’s estate would have to recognise a substantial claim by him, it misdescribes the parties’ arrangements in the use of the word “loan”. No-one advanced any explanation as to what the implications of an “interest only loan” for 12 months would be. The final sentence in the document, in my opinion, strongly corroborates Mr Lupton’s version of what the parties’ agreement was.
[24] The plaintiff’s final contention, through Ms Spence, was that, in exchange for having full ownership of the Jacobs Well property confirmed as hers, Ms Hodge should be ordered to pay him $155,000.00, being half the current market value. Her final position, as advanced by Mr McGregor, was that the payment to the plaintiff in that regard - matters to do with the parties’ furniture, vehicles and other chattels and their superannuation entitlements being left as they lie - should be $84,331.08, if the court upholds the loan agreement, which involves application of an interest rate of 5.19% compounded annually to 6th February 2004. Alternatively, if the court embarked on a “Family Court” type exercise of quantifying the parties’ financial and other contributions in the course of the relationship, the sum suggested (after some revision) turned out to be $83,227.38.
[25] Mr McGregor’s exercise credits the plaintiff with bringing in at the outset $26,000.00 (being the net proceeds of sale of land of his at Sanctuary Point for $29,500.00) plus $5,000.00 savings and small amounts for vehicles and furniture. The defendant claims $10,336.00 for savings (as indicated by bank statements covering three accounts in the months before) and larger amounts for furniture and vehicles which, for reasons indicated, I think ought to be disregarded. For the six financial years of the relationship, the plaintiff’s gross earnings were $181,726.00, against which Mr McGregor identified tax and Medicare levies aggregating $11,866.00.
[26] The defendant’s aggregate income for the same period was $70,657.00. While in the first year her earnings were about 85% of the plaintiff’s, in the next four financial years she brought in a total of about $30,000.00, less than a quarter of Mr Lupton’s total; for 2001-2003 her relative performance improved to just over half. For four of the six financial years of the relationship, the defendant earned less than $10,000.00: in 1998-99 it was only $5,245.00. This was the time of the defendant’s establishing her business, during which she enjoyed the enormous advantage of secure accommodation for which she did not have to pay; without that, it would seem she could not have supported herself. The plaintiff was also able to bring in a sum of about $9,000.00 inherited from his father (elsewhere said to be $11,000.00) which he used to partly pay out the mortgage over the Chevron Island unit.
[27] Mr McGregor submitted that the parties’ financial contributions “to the date of sale” of the unit were $211,360.00 by the plaintiff, $118,993.00 by the defendant, the ratio of which is 64:36. The defendant’s allocation includes the $30,000.00 obtained on sale of her book-keeping business in August 2001. Disregarding motor vehicles and furniture, the “contributions” are approximately $210,000.00 from the plaintiff, $110,000.00 from the defendant.
[28] If there were to be some division based solely on financial contributions, upon the sale of the unit (and disregarding events to do with Jacobs Well, which in truth had already happened), then upon the $115,000.00 net proceeds of sale of the unit becoming available, the plaintiff was entitled to something over $95,000.00, the defendant to something under $50,000.00 of the parties’ revealed relevant aggregate assets, namely the $115,000.00 proceeds and the $30,000.00 obtained on sale of the book-keeping business. My impression is that the latter sum was kept aside by the defendant and applied in the purchase of Jacobs Well. Of his share, so calculated, the plaintiff put $75,000.00 or thereabouts into Jacobs Well, and (in the event) kept $20,000.00 for his own use, on top of which he had up to a further $20,000.00, which might have been the defendant’s on the approach being pursued for the moment. She was left with $30,000.00 from the business, set aside for application in her own interests, and that ultimately went towards Jacobs Well. Except to the extent that he might establish an interest in Jacobs Well, Mr Lupton obtained no benefit from it, disregarding his brief residence there. Since January 2002, Ms Hodge has enjoyed the full benefit of it.
[29] This whole approach is somewhat artificial. Certainly, it is at odds with the parties’ way of organising their affairs. Except for the purposes mentioned, they never operated joint accounts; they kept unspecified amounts available for private discretionary spending. A good deal of that was doubtless spent on things to their joint benefit, such as $4,743.30 which Exhibit 4 establishes Mr Lupton spent on his Commonwealth Bank Visa card on restaurant dining with the defendant (and on occasions members of her family). A lot of the parties’ expenditure was unproductive from the point of view of enhancing their worth, such as expenditure on holidays, which they shared on a mutually acceptable basis: as Ms Hodge put it (p 147), “He would pay accommodation, I would pay the meals”.
[30] So far as day to day expenses, including accommodation costs, were concerned, for the first few months of the relationship, in the defendant’s rented premises (rent was said to be $150 per week), the arrangement was said to be putting $100 per week each into a jar, which struck me as an insufficient amount. The defendant described succinctly at p147 the financial arrangements when the parties moved into Mr Lupton’s unit:
“Wayne paid the body corporate, the rates and the mortgage and I paid the groceries, the household expenses, the electricity and the telephone.”
She acknowledged there were rare occasions when Mr Lupton met expenses that were strictly hers.
[31] As to loan repayments, she asserted she paid $5,000.00 into the relevant account, which is established by Exhibit 16 as having occurred on 21st July 1997. As to whether this was reimbursed to her, I indicate elsewhere accepting the plaintiff’s evidence that it was. The exhibit shows he expended $117,205.00 on loan repayments. A schedule of “Household accounts paid for on Wayne Lupton’s Commonwealth Bank Visa card” establishes payment of $15,225.97 for Council rates, body corporate levies, Energex, Telstra, Optus, ambulance, insurance, pest control and health insurance. Exhibit 3 lists $4,878.60 applicable to purchases for the unit.
[32] It is appropriate for the court to consider the parties’ “title or rights” in respect of the Chevron Island unit and the Jacobs Well property, whether or not declarations are sought under s 280 or other orders giving effect to them. The unit, in my opinion, clearly belonged to Mr Lupton. The parties deliberately considered altering that situation, and determined not to do so. It is demonstrable that Mr Lupton paid the full acquisition costs. For a time, he may have had the advantage of Ms Hodge’s $5,000.00 in the “redraw” account. It is also the case that her payment of household costs (groceries, etc) made it easier for Mr Lupton to meet his obligations.
[33] On the other hand, Ms Hodge was the principal beneficiary of the expenditures she made, in that, normally, Mr Lupton was about the place only for up to three days per fortnight, having regard to the exigencies of his employment as an interstate driver. Most of the groceries must have been consumed by Ms Hodge herself; she derived greater benefit and pleasure, because she was the one in occupation, from her expenditures and efforts in keeping the unit clean.
[34] She made particular claims based on the trouble she took in organising renovation and/or refurbishment of the unit, selecting colours and finishes, for example. I accept Mr Lupton’s attitude that, by and large, he did not regard such “improvements” as necessary, although he approved them. I think they were (totally justified) improvements Ms Hodge organised to improve the amenity of the accommodation they shared. A valuer’s evidence suggested that, if the improvements enhanced the value of the unit when it was sold, this was a matter of a couple of thousand dollars only.
[35] Another basis of contribution for which credit might be allowed which was asserted on Ms Hodge’s behalf was based on work done about the unit by members of her own family, for example, one who was a qualified electrician. A further claim was based on Ms Hodge’s acting as hostess (and provider, at her expense, of food, etc.) for members of Mr Lupton’s family, who apparently visited quite regularly, attracted by the prospect of free accommodation on the Gold Coast.
[36] The restrictive definition of “‘child’ of de facto spouses” in s 259 of the Act (effectively the child must be or be accepted by both de facto partners as a child of the relationship or a member of their household) means that s 291 does not bring in contributions of a child associated with one of the partners only – likewise contributions by either of the parties to the welfare of a child of the other are not brought in by s 292(1)(b) (although I would accept that, in an appropriate case, such contributions might be seen as for the welfare of the de facto spouse whose children are benefited for purposes of s 292(1)(a)).
[37] Another consideration urged for Ms Hodge was the extensive support she provided for Mr Lupton’s cousin through a protracted illness; the services provided included regularly accompanying the unfortunate lady on trips to Brisbane required medically, being a support during hospitalisation for surgery, and the like. The lady and Mr Lupton were very close; indeed, having been raised by her mother, he regarded her as a sister. It would be unfair to Ms Hodge to suggest she resented offering the many kindnesses she did, or sought to place a monetary value on them. However, the point of raising these matters was a claim that they, along with other factors, including helping Mr Lupton with his banking and bill paying (often necessary when he was away) and preparing other documents for him (such as letters and a resumé for his seeking employment) and some book-keeping work she said she carried out for contractors in the kitchen and bathroom renovations (as payment for “extras”) “should reflect in an additional 7.5% in her favour in contributions” – so that her contribution to the unit should be seen as 45.8%. Consistently with comments made above, the admitted contributions of Ms Hodge to the welfare of Mr Lupton’s cousin do not count under s 292, except minimally, perhaps, under subsection (1) (a). It would have been a satisfaction to Mr Lupton to know the lady he cared for was being looked after.
[38] Mr McGregor says that, on this basis, Mr Lupton’s “contribution” to Jacobs Well was not $75,000.00, but only $48,679.85, something under a third. It was contended that he ought to give a further credit to Ms Hodge because he retained $40,000.00, the balance of proceeds of sale of the Chevron Island unit, 46.1% (sic) of which was claimed to belong to Ms Hodge. The appropriate payment from her to him to balance matters out would be $83, 227.38, less than he would get if relegated to his rights under the “loan agreement” (Exhibit 14). The imbalance, after adding back the $40,000.00 Mr Lupton kept (although on the evidence, it was quickly dissipated), given Ms Hodge’s retention of Jacobs Well, worth $310,000.00 (as agreed), seems unacceptable. Her remaining equity of nearly $247,000-odd, is more than double what Mr Lupton has – reversing their relative contributions during their cohabitation. Even bringing in Ms Hodge’s inheritance from her parents of $57,684.78, which was received during the continuance of the de facto relationship, this was insufficient to bring her total contributions up to the level of his. A 50:50 split would seem generous to Ms Hodge.
[39] The evidence shows Mr Lupton provided reciprocal services to Ms Hodge’s immediate family, by permitting them to stay at the unit, by making a point of visiting her mother when his work took him to Victoria, for example. The evidence does not permit a finding that what he did equalled in extent what Ms Hodge had done for members of his family; the point is that if non-financial contributions are taken into account, Mr Lupton ought to get some credit. It would seem reasonable to value the society he provided for her equally with the society she provided for him.
[40] This is not a situation where acknowledgement of either party’s non-financial contributions becomes appropriate on the basis that circumstances precluded easily quantifiable financial assessment of contributions. There were no obligations or arrangements requiring either party to stay home to care for children or the other party. Each had employment. From the point of view of the parties maximising their financial contributions, it might be noted that, in the interests of establishing her own business (and, presumably, a more congenial lifestyle), Ms Hodge gave up employment which she said brought in between $500 and $600 per week to work for herself; thereafter she brought in only $500-$600 or so monthly.
[41] I respectfully agree with the suggestion that may be found in Sullman v Sullman [2002] NSWSC 169 (354-359) that there are real problems about regarding expenditure on luxuries such as holidays (one might add certain non-financial contributions in certain circumstances) as eroding the equity of a de facto partner in his or her assets, in the absence of clear notice given at the time that something along these lines is intended.
[42] The parties here are relatively equally matched. The plaintiff was born on 19th October 1951, the defendant on 22nd November 1954. It was not suggested that any dependency there might be of Mr Lupton’s youngest child (a daughter, living with her mother) had any relevance. Otherwise, the parties’ children are grown up, living by themselves and apparently self-supporting. Mr Lupton has certain medical problems which limit his attractiveness to prospective new employers; he feels his present employment, in which he is undergoing some retraining, may be in some jeopardy; I can understand his anxiety to retain that employment. He has not shown a case for special consideration respecting earning capacity for purposes of s293 or s 306. Nor has Ms Hodge shown anything in this regard. So far as s 304 is concerned, it is clear that without Mr Lupton’s support, Ms Hodge would not have been able to implement her desire to establish her own book-keeping business; in that way, he contributed to her earning capacity, although in a new field in which it fell considerably short of her earning capacity in her previous line(s) of work. This was presumably her choice. There is nothing to show it was done in the interests of Mr Lupton.
[43] Neither party sought to attach blame to the other for the de facto relationship’s coming to an end, something which appears to have happened at the instance of the defendant, and which the plaintiff took a short while to accept.
[44] It would follow from the foregoing that Mr Lupton has established a half-interest in the Jacobs Well property. He does not need a property adjustment order under s 286. However, Ms Hodge may need such an order if she is to be relieved from having to make over to him a half interest in the property (as I am satisfied she agreed and represented that she would do). Joint ownership is now impractical; the court should assume that Ms Hodge requires the property as her home. The appropriate adjustment may be no more than converting Mr Lupton’s equity to a money sum, which the parties have all along seen as the inevitable outcome.
[45] Mr Lupton no longer seeks any variation of existing “rights” in his favour; Ms Hodge persists in seeking a variation in her favour which, in my opinion, ought to be made. The requirements of ss 287 and 288 are satisfied. It is difficult to feel satisfied that s 289 has been complied with, and particularly so in relation to Ms Hodge, who, surprisingly for a book-keeper, is years behind in preparing income tax returns; it is difficult to have much confidence in the very limited information vouchsafed by her. However, Ms Spence, for the plaintiff did not submit that s 289(2) applied to preclude a property adjustment order in favour of the defendant.
[46] The purpose of subdivision 2 of division 4 of Part 19 of the Property Law Act 1974, as set out in s 282 is “to ensure a just and equitable property distribution at the end of a de facto relationship”. S 286 authorises the court to “make any order it considers just and equitable about the property of either or both of the de facto spouses adjusting the interests”. The expression “just and equitable” which is found also in the headings to subdivisions 3 and 4 and in s 296 seems tautologous, but is increasingly encountered in legislation. An early instance was in relation to contribution among tortfeasors for purposes of apportioning liability (see Daniel v Rickett, Cockerell & Co Ltd [1938] 2KB 32); the “just and equitable” ground for winding up of companies is long established (see re Kurilpa Protestant Hall Pty Ltd [1946] State Reports Queensland 171, 183); more recently, the Body Corporate & Community Management Act 1997 calls for this court or a specialist adjudicator to determine what is “just and equitable” by way of relative lot entitlements of owners of lots in community titles schemes: see s 48 and Sandhurst Trustees Ltd v Condah Bay Investments Pty Ltd [2003] QDC 438, where the view was expressed at para 14, to which I adhere in the present context, that there is no single “just and equitable” solution. Both components of the expression “just and equitable” signify “fair”. I think that “just” has a connotation that the outcome is defensible in accordance with legal principles of the kind people would expect to be applied in a court.
[47] The exclusion of Mr Lupton has resulted in Ms Hodge’s having made continuing contributions towards Jacobs Well after the initial acquisition and establishment of it as the parties’ residence for purposes of s 291 which are not reflected by continuing contributions from him (although she has obtained benefits from enjoyment of the property, from which she has been excluded). Otherwise, there seem to me no “matters” for subdivision 3 or subdivision 4 purposes to distinguish the parties’ positions, unless the Commonwealth first home buyer’s grant comes within s 302(1). (I am not sure how the legislature intends the $7,000.00 understood to be involved to be “considered”, but the relative impact would be slight in either direction). There was no application (or occasion) to delay resolution of this matter under subdivision 5 or subdivision 6.
[48] I have concluded it would not be “just and equitable” to require the defendant to pay $155,000.00 to the plaintiff. I take this approach because:
§Ms Hodge’s contributions (even though she largely took the benefit) have outstripped Mr Lupton’s under s 291;
§Realisation of the agreed $310,000.00 value cannot be regarded as assured and, in any event, selling costs would be incurred;
§Mr Lupton had the benefit of a substantial sum of $40,000.00 or thereabouts from the sale of the Chevron Island unit;
§Essentially, it represented the appreciation in value of the unit which he had acquired and held during the relationship;
§That sum was no longer held for the parties jointly;
§By contrast with Mr Lupton, so far as the evidence shows, Ms Hodge, on acquisition of Jacobs Well, contributed almost all she had to the acquisition, in which it remained “tied up”;
§Her contribution is enhanced by her having met other costs in the acquisition, such as stamp duty ($975.00 – see Exhibit 34);
§By Exhibit 35, Ms Hodge shows expenditure (in most instances receipted) of $10,727.24.
[49] (Something should be said about Ms Hodge’s contention that she had approval from the Commonwealth Bank of Australia for a loan of $90,000.00. Exhibit 29 is a letter to her of 29th August 2001 indicating an interest rate of 5.39% per annum and monthly repayments of $555.00, with all particulars subject to change when the bank furnished its “loan offer” which “will set out the full terms and conditions…including any special conditions you must satisfy before we will advance you the credit”. The loan offer came on 10th September 2001, in a letter of that date tendered (without enclosures, in particular the “Schedule” and the “Usual Terms and Conditions” which constitute the loan contract). By the letter, “This offer lapses if it is not accepted within 21 days from the Disclosure Date”. The letter, like its predecessor, rather suggests that Ms Hodge had suggested she would pay $635.00 per month, rather than the $555.00 the bank wanted. Plainly, nothing happened pursuant to the letter of 10th September 2001, as the next document in Exhibit 29 is another letter headed “Loan Offer”, of 4th October 2001, again minus the vital enclosures. An attached pro forma bank statement confirms an interest rate of 5.19% per annum and required payments of $545.00 per month, but is of little assistance, as every amount in it appears as nil. Plainly, Ms Hodge did not act within the 21 days allowed (or at all) to take up this loan. The evidence does not persuade me that Ms Hodge had the ability to service whatever loan the bank was contemplating. It was no more than common sense for Ms Hodge to avail herself of the bulk of the proceeds from the sale of the unit: Mr Lupton would not charge bank fees: he probably would not have insisted on the formality of a registered stamped mortgage. Ms Hodge has not persuaded me she could have completed the Jacobs Well purchase without Mr Lupton’s contribution.)
[50] In my opinion, a just and equitable order under s 286 is one requiring the defendant to pay to the plaintiff $120,000.00 as the price of having terminated by the court the plaintiff’s interest in the Jacobs Well property.
[51] The parties will have the opportunity to consider these reasons with a view to agreeing upon (or preparing submissions to the court as to) appropriate arrangements for the timing (and possibly the securing) of the payment(s) that might be appropriate.
[52] The parties may also wish to make submissions about costs, if that aspect cannot be agreed. Various offers were revealed to the court during the hearing. Those may not tell the whole picture. If they do, it appears the plaintiff should get costs, having done considerably better than he would have by accepting the defendant’s most generous proposal, for all that appears. As things have turned out, it was the defendant’s rather provocative resiling from her own thought (if she ever held the thought – it was not communicated to the plaintiff) that he was a lender of $75,000.00 and no more, by impounding a third of the “loan” in reliance on Part 19. One would not expect Mr Lupton to have provided the money had he been told about that.
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